What is Preferential Origin?
In international business, the origin of goods determines which import duties and taxes you pay. When products have a preferential origin, it means that they fall under a trade agreement, which means that reduced or even zero tariffs apply upon import.
Examples of this are the trade agreements between the EU and countries such as Switzerland, Norway, or South Korea. Goods that comply with the rules of origin from these agreements receive a preferential status and are therefore eligible for lower import duties.
Want to know more about documentation in international trade? Read our article what you need for a correct customs declaration.
How Does an EUR.1 Certificate Work?
One of the most used documents to demonstrate preferential origin is the EUR.1 certificate. This certificate is issued by customs and proves that the goods originate from a country with which the EU has a trade agreement.
With a valid EUR.1 certificate, the importer in the country of destination can pay lower import duties. This saves considerably on costs and makes products more competitive.
In addition to the EUR.1 certificate, there are other documents, such as the EUR-MED (for countries in the pan-Euro-Mediterranean zone) and invoice declarations that exporters themselves may issue when they are registered as approved exporters.
Why is Preferential Origin Important?
Correctly applying preferential origin provides companies with direct financial benefits. Incorrect or missing certificates, on the other hand, can lead to additional assessments, fines, or delays at customs.
This requires specialist knowledge. The rules differ per trade agreement and the documentation must always be drawn up correctly. An error in an EUR.1 certificate can mean that you miss out on the preferential rights.
We also see the importance of certainty in customs clearance reflected in the benefits of AEO certification. Companies with this status benefit from fewer checks and faster processing.
Do you want to know what role a customs forwarder plays in origin documents? Discover it in our knowledge base.
The Role of Preferential Origin in Supply Chains
For companies with international chains, preferential origin is a strategic instrument. By making smart use of trade agreements, costs can be saved and markets become more accessible.
Collaboration with a logistics partner is essential here. A customs expert can advise on which documents are required, how to apply rules of origin and how to prevent goods from being taxed unfairly.
Want to know more about how supply chains work? Read also: what is 3PL.
Application in Practice
Suppose a Dutch company exports machines to South Korea. Thanks to the trade agreement between the EU and South Korea, the importer there can benefit from lower import duties, provided that the goods have a preferential origin. With a correct EUR.1 certificate, this benefit is applied directly.
Another example is the textile sector. For clothing produced in the EU, a preferential status may apply when exporting to certain countries. This makes products more competitive in price and increases export opportunities.
How Van Der Helm Helps with Origin Documents
Applying for and correctly using certificates such as EUR.1 requires experience and accuracy. At Van der Helm, we completely take this process out of your hands. We ensure that the correct documents are drawn up, check whether the goods comply with the rules of origin and submit the applications to customs.
This guarantees that your company benefits from the advantages of preferential origin, without the risk of delays or errors. Our knowledge of customs processes and international trade enables us to truly unburden companies.
Do you want to be prepared for checks? Read also how to prepare for a customs audit.
Conclusion: Saving Costs with Preferential Origin
Preferential origin and certificates such as EUR.1 are powerful instruments for companies that are active internationally. They make trade cheaper, faster and easier. The condition is that the rules are applied correctly and the documents are drawn up accurately.
At Van der Helm, we combine our customs expertise with practical support. This way we ensure that your company always benefits from the advantages of trade agreements and that your supply chain performs optimally.