Customs - Developments in relation to REX and the EU-Vietnam FTA

03/02/21

We would like to bring two recent developments to your attention in relation to preferential origin.

The first in relation to the Registered Exporter (REX), that since 1 January 2021, the transition period for applying the REX system in relation to the Generalized System of Preferences (GSP) has ended.

The second is that from 23 December 2020, under the EU-Vietnam FTA cumulation in Vietnam with textiles and garments originating from South Korea is possible.

What does it mean for your company?

The rules for determining the origin of goods under the GSP scheme of the EU remain unchanged with the application of the REX system. Only the method to certify the origin of goods has changed. There was a transition period in which the switch was made from the use of Form A’s to REX origin statements, this period has ended. As such, you should be aware that in case you still receive From A’s, this is incorrect.

In relation to the new possibility of cumulation in Vietnam with textiles and garments originating from South Korea, this might bring new opportunities. That products from HS chapters 61 and 62 upon import in the EU could now qualify more easily for preference (i.e. zero or lower duty rates) with the help of textiles and garments originating from South Korea, since these can now be considered for the origin calculation under the EU-Vietnam FTA.

Main Facts

REX

REX allows registered exporters to use origin statements instead of official certificates of origin (i.e., Form A). Exporters need to obtain a REX registration to be entitled to self-issue statements of origin.

REX has been gradually implemented in relation to GSP as of 1 January 2017 and replaces the Form A certificates issued by (customs) authorities in the exporting countries. The REX system's rollout started at different times for the GSP countries, with an ultimate implementation date of 30 June 2020 to fully deploy the REX system. Due to the COVID-19 pandemic, the EU Commission allowed an extension of the transition period to 31 December 2020.

EU-Vietnam FTA

From 23 December 2020 the EU-Vietnam FTA allows the application of cumulation for textiles and garments originating from South Korea. Accordingly, fabrics originating from South Korea that are further processed or incorporated into products of HS chapters 61 and 62 (articles of apparel and clothing accessories, (not) knitted or crocheted) will be considered as originating in Vietnam if they undergo sufficient working or processing in Vietnam. The rules of origin and the proof of origin as determined in the FTA between the EU and South Korea will be applicable for determining whether textiles and garments originate from South Korea. The proof of origin to be used in this respect is an approved exporter's origin declaration.

How can we help you?

We can support you in understanding whether your products can benefit from preferential origin in the context of GSP, the EU-Vietnam FTA or any other preferential arrangement/FTA based on your supply chain and your products' classification.

We assist in performing a thorough analysis of your products by analyzing their composition and the processing applied as well as guide you in understanding what kind of evidence is required to claim preference upon import.