Country of origin

[welcomebrand]

I was chatting with a friend recently who mentioned it would be worth checking on the country of origin we declare on products we send to customers.

We import Japanese chef knives (made in Japan) and some accessories (China) and pay the various import duties/tax to bring them into the UK and when we then send them back out to customers in EU/ROW, we put Japan as the country of origin but he mentioned as we've paid import duty to bring them into the UK we can declare the country of origin as UK which would be cheaper for customers paying tax when they import to their country.

Is this correct or should we just leave the country of origin as the actual place they were originally made?

Cheers

 

[Paul Kelly ICHYB]

There are two forms of origin that you are looking at - manufacture and shipping.

If the goods are made in Japan, that is their COO.

For sales and shipping, if the goods are cleared in the UK, they originate from the UK. If they are not customs cleared, they generally remain from Japan.

 

[DefinitelyMaybeUK]

For sales and shipping, if the goods are cleared in the UK, they originate from the UK.

I take it you're saying that in the OP case that the COO on the commercial invoice should remain as Japan?

Check your goods meet the rules of origin

Find out the rules to establish the country of origin of imported and exported goods and to help identify goods which qualify for lower or no Customs Duty.

www.gov.uk

If so, that was my understanding too, but otherwise would be pleased to see something from HMRC giving export preferential origin to non-processed imports

 

[Import Expert]

I was chatting with a friend recently who mentioned it would be worth checking on the country of origin we declare on products we send to customers.

We import Japanese chef knives (made in Japan) and some accessories (China) and pay the various import duties/tax to bring them into the UK and when we then send them back out to customers in EU/ROW, we put Japan as the country of origin but he mentioned as we've paid import duty to bring them into the UK we can declare the country of origin as UK which would be cheaper for customers paying tax when they import to their country.

Is this correct or should we just leave the country of origin as the actual place they were originally made?

Cheers

Hi,

Country of origin remains the same unless the products are 'significantly processed'. So, in your case country of origin will remain Japan/China,

 

[Deleted member 351022]

There are two forms of origin that you are looking at - manufacture and shipping.

If the goods are made in Japan, that is their COO.

For sales and shipping, if the goods are cleared in the UK, they originate from the UK. If they are not customs cleared, they generally remain from Japan.

To clarify and concur with Import Expert, if the goods are not processed significantly they will retain the coo of Japan which should be shown on the commercial invoice. This coo will be declared at import into the EU. The EU country of import will then levy the duty applicable to all countries ( known as the mfn rate).

The country of despatch (cod)for customs would be the UK but would have no impact on duties due in the EU.

The customs clearance status of the goods or whether duty has been paid in the UK also has no impact on the declared country of origin. Now we have left the EU customs union import duty if applicable will be due again at EU rates on import into an EU country.

Only UK manufactured goods meeting the specific criteria for the product type set out in the UK - EU trade agreement and supported by the correct statement on origin would be entitled to the 0% duty under the trade agreement. Even then the importer / their customs agent must actively claim the reduced duty rate.

 

[japancool]

Both the EU and the UK have a trade agreement with Japan that eliminates most duties on goods, so you're probably allright there.

 

[DefinitelyMaybeUK]

Both the EU and the UK have a trade agreement with Japan that eliminates most duties on goods, so you're probably allright there.

Are you saying a Japanese COO item in UK (as per OP case) which is then exported to the EU, will not be liable for duty as there's an EU-Japan FTA? That doesn't right to me

 

[japancool]

Are you saying a Japanese COO item in UK (as per OP case) which is then exported to the EU, will not be liable for duty as there's an EU-Japan FTA? That doesn't right to me

It's certainly true the other way round.

 

[DefinitelyMaybeUK]

It's certainly true the other way round.

That could just be luck or the order value was under £135 Joking aside, it would seem odd though, as even EU COO goods in free circulation in the UK are liable for duty when re-exported to the EU ?

 

[Deleted member 351022]

Are you saying a Japanese COO item in UK (as per OP case) which is then exported to the EU, will not be liable for duty as there's an EU-Japan FTA? That doesn't right to me

No it isn’t right. the Uk - Japan agreement is entirely separate to the EU - Japan agreement. Japanese preferential origin goods imported firstly into the UK under the UK Japan agreement cannot then be imported into the EU under the EU- Japan agreement. There is no mechanism in either agreement for re issue of a proof of origin .
Low value shipments below €150 will be exempted from import duty irrespective of the goods origin.

 

[Deleted member 351022]

That could just be luck or the order value was under £135 Joking aside, it would seem odd though, as even EU COO goods in free circulation in the UK are liable for duty when re-exported to the EU ?

That is the consequence of Brexit and the terms of the UK -EU trade agreement.
In short the EU doesn’t care if duty has already been paid in the UK.

 

[japancool]

No it isn’t right. the Uk - Japan agreement is entirely separate to the EU - Japan agreement. Japanese preferential origin goods imported firstly into the UK under the UK Japan agreement cannot then be imported into the EU under the EU- Japan agreement. There is no mechanism in either agreement for re issue of a proof of origin .
Low value shipments below €150 will be exempted from import duty irrespective of the goods origin.

Well, goods of Japanese origin imported into the EU that I then import into the UK are not subject to any duties. I can only speak to the goods that I import, however. And they certainly aren't under €150.

 

[JEREMY HAWKE]

I agree with the above your COO will be Japan .
You could get a Japanese fawarder to send them direct to your EU customers to avoid any charges in the UK

 

[Deleted member 351022]

Well, goods of Japanese origin imported into the EU that I then import into the UK are not subject to any duties. I can only speak to the goods that I import, however. And they certainly aren't under €150.

Maybe your goods are 0% duty irrespective of origin- there are many goods that have zero duty applicable On import into the UK
It really shouldn’t generally be the case that goods can obtain preferential duty rates if they have not been transported directly from the origin country.
HMRC can come back up to three years after import to ask for additional duty so I would strongly recommend you double check on the proof of origin you hold to claim preferential duty on import to the UK.

 

[Import Expert]

Maybe your goods are 0% duty irrespective of origin- there are many goods that have zero duty applicable On import into the UK
It really shouldn’t generally be the case that goods can obtain preferential duty rates if they have not been transported directly from the origin country.
HMRC can come back up to three years after import to ask for additional duty so I would strongly recommend you double check on the proof of origin you hold to claim preferential duty on import to the UK.

@japancool Ditto to Customs Geek's comment here. You need to check your goods are duty free (irrespective of any free trade agreement). If not, you may soon be receiving a back bill of underpaid duty from HMRC. There is something called the 'Direct Transport' rule which means that to claim any duty preference under a free trade agreement, goods must move 'Directly' from Country A to Country B. If they move via a 3rd country, unless they remain under 'customs control' ie. under bond or in transit, they lose the right to claim preferential origin (duty free status), so although country of origin remains the same, the free trade agreement would not be applicable.

 

[japancool]

@japancool Ditto to Customs Geek's comment here. You need to check your goods are duty free (irrespective of any free trade agreement). If not, you may soon be receiving a back bill of underpaid duty from HMRC. There is something called the 'Direct Transport' rule which means that to claim any duty preference under a free trade agreement, goods must move 'Directly' from Country A to Country B. If they move via a 3rd country, unless they remain under 'customs control' ie. under bond or in transit, they lose the right to claim preferential origin (duty free status), so although country of origin remains the same, the free trade agreement would not be applicable.

Well, according to the combined tariff site, my goods are duty free anyway, so I'm not concerned.

My understanding of the COO was wrong, fair enough.

 

[The Soup Dragon]

Who would decide what constitutes significantly processed? We bring a granule from the far east but it is not the correct size for our needs so we mill it and grade it to a smaller size ie process it further. I am assuming that we can then state COO UK on this material after milling?

 

[Import Expert]

Hi Soup Dragon. As a general rule the processing must change at least one of the first four digits of the customs tariff/commodidy code. So with your example its very unlikely to be sufficient.

 

[The Soup Dragon]

Hi Soup Dragon. As a general rule the processing must change at least one of the first four digits of the customs tariff/commodidy code. So with your example its very unlikely to be sufficient.

Very interesting indeed Japan Cool. While the commodity code isn't changed the physical nature of the product most certainly is

 

[Deleted member 351022]

Going back to your original about who would decide what constitutes sufficiently processed.

Things like cutting up, washing, sifting and screening are specifically listed in the rules/ legislation as ‘operations not constituting an important stage of manufacture’ .

When you export particularly under a trade agreement the receiving country customs can ask HMRC to verify with the exporter that the origin declared is correct.

So as import expert says it’s unlikely from what you have said the process is you are carrying out on the product is sufficient as is still the same thing but just in smaller pieces.

These insufficient processing rules apply to both non preferential and preferential origin( where using a trade agreement).

If you look up non preferential origin on the .gov website you should find this .

 

[japancool]

Very interesting indeed Japan Cool. While the commodity code isn't changed the physical nature of the product most certainly is

He's a different person to me.

 

[The Soup Dragon]

He's a different person to me.

ooops

 

[Imevaconsult]

I was chatting with a friend recently who mentioned it would be worth checking on the country of origin we declare on products we send to customers.

We import Japanese chef knives (made in Japan) and some accessories (China) and pay the various import duties/tax to bring them into the UK and when we then send them back out to customers in EU/ROW, we put Japan as the country of origin but he mentioned as we've paid import duty to bring them into the UK we can declare the country of origin as UK which would be cheaper for customers paying tax when they import to their country.

Is this correct or should we just leave the country of origin as the actual place they were originally made?

Cheers

Hi! The COO remains the same, unless the goods are significantly processed or modified.
If they were to have an audit, the companies in the EU would have to justify why the coo has changed to GB. However, as the exporter, you wouldn’t be liable.