Agreement in the form of an exchange of letters between the EU and Norway on applying similar rules of origin

KEY POINTS

Generalised system of preferences (GSP)

• The GSP is a system of tariff preferences granted to developing countries (‘beneficiary countries’). For the least developed countries, duty is removed for virtually all their exports.
• The EU and Norway (along with Switzerland and Turkey) have very similar GSP systems and thus can be linked.

Rules of origin

• To benefit from tariff preferences, products must be shown to originate from a beneficiary country.
• Origin refers to where a product is produced or manufactured, not where it is shipped from.

Cumulation

‘Cumulation’ describes the system that allows products originating in country A to be further processed or added to products originating in country B, as if they had originated in country B. The resulting product would have the origin of country B. It can only be applied between countries operating with identical origin rules.

Agreement between EU and Norway

• Under the EU GSP’s ‘extended cumulation’, materials originating in Norway, Switzerland or Turkey that undergo more than a minimal operation in a beneficiary country are considered to originate in that beneficiary country, and may benefit from preferences when imported to the EU, Norway, Switzerland or Turkey.
• This agreement requires the EU and Norway to have similar rules of origin covering the following principles:
  • a definition of ‘originating products’ based on the same criteria;
  • rules for regional cumulation¹ of origin;
  • rules for applying cumulation to materials that originate, within the meaning of their GSP rules of origin, in the EU, Switzerland, Norway or Turkey;
  • rules for a general tolerance of non-originating materials;
  • rules for non-alteration of products from the beneficiary country;
  • rules for issuing or making out replacement proofs of origin;
  • requirement for administrative cooperation with the authorities in the beneficiary countries on the matter of proofs of origin.
• This agreement replaces a similar reciprocal agreement between the European Community and each of the European Free Trade Association countries that granted tariff preferences under the GSP, for goods originating in Norway or Switzerland.