From 1 January onwards new rules of origin will be applied to products imported under the generalised system of preferences (GSP). A new Regulation adopted by the European Commission on 19 November will relax and simplify rules and procedures for developing countries wishing to access EU preferential trade arrangements, while ensuring the necessary controls are in place to prevent fraud.

The Regulation adopted by the Commission will considerably simplify the rules of origin so that they are easier for developing countries to understand and to comply with, therefore simplifying EU's trade policy towards developing countries and facilitating access to the generalised system of preferences (GSP). The new rules take into account the specificities of different sectors of production and particular processing requirements, amongst other things. In addition, special provisions are included for Least Developed Countries (LDCs) which would allow them to claim origin for many more goods which are processed in their territories, even if the primary materials do not originate there.

Main features of the revised rules of origin under generalised system of preferences (GSP) scheme

• Appropriate rules determining the acquisition of origin: The rules for determining whether goods have been sufficiently worked or processed are adapted to each sector. The rules are based on value added, change of tariff heading or a specific processing requirement, according to the case. There are many simplifications compared to the current rules, plus targeted relaxation, in particular for the least developed countries. It also further relaxes the non-manipulation clause which was already proposed in October 2007 to replace the current burdensome direct transport rule.
• Cumulation of origin: Regional cumulation of origin is maintained, but the conditions are relaxed, which will allow it to work more effectively.
• Efficient procedures / responsibilities of operators and authorities in establishing and controlling origin: As envisaged by the communication and already proposed in October 2007, a clarification and re-balancing of the rights and obligations of both operators and administrations. In particular, the current system of certification of origin by the authorities of the beneficiary country concerned would be replaced by statements on origin to be given directly by registered exporters. The authorities of the country concerned would concentrate on more effective post-export controls.

Rules of origin are used to determine whether imported goods really originate in countries covered by the EU's preferential trade arrangements, thereby making them eligible for a preferential customs tariff. The current rules of origin, which date back to the 1970s, have been criticised for being too complex, too stringent and out-of-date.

The European Commission adopted a communication in 2005 which argued that the rules needed to be made simpler and more development-friendly, while at the same time management and control procedures needed to be improved to combat fraud. This communication was based on three pillars: appropriate rules for the determination of origin; efficient procedures; and a secured environment for legitimate trade: the three elements which are now part of the Regulation.