Origin and Preference are complicated areas of international trade, and traders can experience several pitfalls if they don’t understand the difference between Origin and Preferential Origin.

Preferential Origin differs from Origin in that it entails a deliberate selection or Preference based on eligibility for trade benefits, while Origin denotes where the goods originate. For instance, while goods may be labelled as ‘made in the UK,’ they may not necessarily satisfy the preferential rules of origin stipulated within a trade agreement, thus affecting their eligibility for preferential treatment, and potentially exposing traders to tariffs or other trade barriers.

A Certificate of Origin is an official document verifying the source of goods involved in an import or export and is usually issued by a Chamber of Commerce; a UK Certificate of Origin is common. Customs authorities in the recipient nation may require this certificate to ascertain Tariff rates and the country of origin of the goods. This document aids in determining the legality of importing a product, mainly when the importing nation imposes bans or sanctions on goods from specific countries. This statement of origin is generally allowed to be made within the exporter's commercial documentation, such as the invoice. However, it's important to note that even though a Certificate of Origin confirms the Origin of the goods, it typically cannot be utilised to claim Preferential Origin benefits, unless explicitly stipulated in a trade agreement.

Verifying that the product being exported adheres to the regulations outlined in the specific trade agreement is imperative to provide your customer with a document allowing them to claim preferential status under a particular trade agreement between the UK and another country. There's no universal solution applicable to all scenarios. A product might comply with the Origin requirements of one trade agreement but may not align with those of another.

Furthermore, various methods exist for asserting Preferential Origin. This can range from physical documentation such as a UK EUR1 or a Form A, used into the UK under the Developing Countries Trading Scheme (DCTS, formerly GSP) to declarations in a prescribed format, which may include an EORI number, a REX authorisation, if goods move from EU to the UK under the Trade Cooperation Agreement, or it might require the exporting company to become an ‘Approved Exporter’. The applicability of these methods depends on whether you're importing or exporting and is intricately tied to the specific trade agreement you seek to leverage. The structure and requirements of these declarations can differ significantly; for instance, the declaration mandated by the UK-EU Trade and Cooperation Agreement vastly contrasts with that of the UK-Australia trade agreement.

Achieving success in international trade depends on accessing information to navigate the correct processes and procedures effectively. There's no ‘one-size-fits-all' solution for proof of Preferential Origin; specific requirements are outlined within each trade agreement.

Therefore, mastering the skill of navigating these agreements is invaluable and should not be underestimated.

With thanks to Lucille Roche for this month's Spotlight On.

If you are interested in exploring this topic further, you might find it worthwhile to consider the training courses and live clinics offered by Strong & Herd LLP: