Rules of Origin The Example of the Regional

Rules of Origin : The Example of the Regional Convention for the Pan-Euro-Med Area JOINT CUSTOMS AND TRADE FACILITATION FORUM: A CUSTOMS STRATEGY FOR THE CONTINENTAL FREE TRADE AREA (CFTA) T CUSTOMS AND TRADE FACILITATION Guillaume DOREY FORUM: TAXUD B 3 A CUSTOMS STRATEGY FORDG THE Rules of origin CONTINENTAL FREE TRADE AREA (CFTA)

General Presentation of the rules of origin for the pan-Euro-Med zone

Pan-Euro-Mediterranean free trade zone and its rules of origin • Network of bilateral free trade agreements between the EU, EFTA members, Faroe Islands, Turkey and Mediterranean countries participating in the Barcelona process (16 partners in total) • A system of pan-Euro-Mediterranean cumulation operates on the basis of identical rules of origin (PEM protocol on rules of origin) annexed to these free trade agreements • Cumulation concept: "what is mine/yours is yours/mine" • Tool of regional integration/enhanced sourcing possibilities 3

40% max non-originating PEM cumulation 1. 000 € Turkey EU 4. 000 € Morocco Tunisia 1. 000 € 10. 000 € Russia 2. 000 €

Turkey Bosnia and Herzegovina EU Norway Switzerland/ Lichtenstein Montenegro Iceland Kosovo/UNMIK How does PEM cumulation work? • There are FTAs linking all /some of the Members Albania Faeroe • Each bilateral FTA contains a Protocol on origin • All the Protocols on origin contain identical Ro. O Croatia • Every time a modification in the Ro. O is needed, all the Protocols need to be adapted. Former Yugoslav Rep. of Macedonia Morocco Algeria Tunisia Serbia Egypt Lebanon Jordan West Bank and Gaza Strip Israel Syria

Matrix of PEM cumulation 01/12/12

Bosnia and Herzegovina Turkey EU Norway Switzerland/ Lichtenstein Montenegro Iceland Kosovo* Albania Croatia Former Yugoslav Rep. of Macedonia The PEM Convention: A common Protocol on Ro. O, which replaces each Protocol to each FTA Faeroe Morocco Algeria Tunisia Serbia Egypt Lebanon Jordan West Bank and Gaza Strip Israel Syria

PEM Convention – concept and benefits • Will base diagonal cumulation of origin on a single legal instrument. No more separate protocols on Ro. O. • Will allow easier revision and update of Ro. O. • Will include entire Western Balkans region into in the pan. Euro-Mediterranean zone of diagonal cumulation. • Will allow accession of neighbouring countries in the pan-Euro -Mediterranean cumulation zone.

CONTRACTING PARTIES OF THE PEM CONVENTION WESTERN BALKANS PEM system of cumulation EU Turkey Albania Bosnia and Herzegovina Croatia Kosovo* the former Yugoslav Republic of Macedonia SAA Montenegro cumulation Serbia EFTA Norway Switzerland Lichtenstein Iceland Faroe Islands MEDS Algeria Egypt Israel Jordan Lebanon Morocco Syria Tunisia West Bank and Gaza Strip

Contact: TAXUD, unit B 3 (Rules of Origin) Email: TAXUD-UNIT-B 3@ec. europa. eu •