ECJ case regarding non-preferential rules of origin
03/11/25
Recent judgement in ECJ case C-86/24 reaffirms that failure of the non-preferential origin rules established in Annex 22-01 DA UCC on what qualifies as the last substantial, economically justified processing for certain products, does not necessarily prevent production processes from conferring non-preferential origin.
What does this mean for your company
Although this judgement is sector specific, it can be relevant for all businesses importing and exporting goods. Especially those facing trade restrictions and/or tariffs on their products due to the changing trade landscape. Since, these trade measures are often based on the non-preferential origin of goods, and this judgement confirms once more that from a European perspective nonpreferential origin could possibly still be acquired if the processing in a given country qualifies as the last substantial, economically justified processing, even if an origin rule of Annex 22-01 is failed.
Therefore, it is important for companies to critically review the origin determination of their products also keeping this in mind, to avoid unnecessary payments of additional tariffs.
Background ECJ case
The case involved imports of seamless stainless-steel pipes made in China classifying under commodity code 7304 11 and coldprocessed in India, then declared in the EU under commodity code 7304 41. The referring court questioned the validity of Annex 2201’s primary rule of origin for commodity code 7304 41, given its different treatment of processing starting from commodity codes 7304 11 versus 7304 49.
The Court upheld the rule of origin. It confirmed the Commission may differentiate where justified and held that cold reduction of pipes already classified as commodity code 7304 11 generally does not change their intended use or composition, so origin remains with the country of hot finishing.
How can PwC help
PwC has extensive experience in determining the origin of products. We can help your company assess the non-preferential origin of your products which is a necessity in the current trading landscape with more trade restrictions and additional tariffs being implemented. Which are based on the non-preferential origin of products.
Furthermore, we can assist your company in updating or implementing origin procedures and origin management software so that you remain compliant, correctly apply the rules of origin, and are able to provide the appropriate evidence required to issue certificates of origin.
Where needed, we can also assist with post clearance discussions and applications for binding origin information (BOI) to secure certainty.
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