T CUSTOMS AND TRADE FACILITATION FORUM: Rules of Origin : The Example of the Regional Convention for the Pan-Euro-Med Area JOINT CUSTOMS AND TRADE FACILITATION FORUM: A CUSTOMS STRATEGY FOR THE CONTINENTAL FREE TRADE AREA (CFTA) T CUSTOMS AND TRADE FACILITATION FORUM: Guillaume DOREY DG TAXUD B3 Rules of origin

General Presentation of the rules of origin for the pan-Euro-Med zone

Pan-Euro-Mediterranean free trade zone and its rules of origin Network of bilateral free trade agreements between the EU, EFTA members, Faroe Islands, Turkey and Mediterranean countries participating in the Barcelona process (16 partners in total) A system of pan-Euro-Mediterranean cumulation operates on the basis of identical rules of origin (PEM protocol on rules of origin) annexed to these free trade agreements Cumulation concept: "what is mine/yours is yours/mine" Tool of regional integration/enhanced sourcing possibilities The Euro-Mediterranean Partnership was launched with a joint declaration of the Foreign Ministers from the European Union and Mediterranean Partners in Barcelona in November 1995 - hence also called the "Barcelona Process". Its overall objective is to provide a framework for strengthened dialogue and comprehensive co-operation in the Mediterranean. The Partners have agreed upon a strategy aiming at creating an area of peace, stability and shared prosperity through the progressive establishment of free trade between the EU and its Mediterranean partners and amongst the partners themselves by 2010. The first step towards the creation of this free trade area is the conclusion of a full set of Euro-Mediterranean association agreements between the EU and its partners in the Mediterranean, granting reciprocal trade preferences. These agreements replace the co-operation agreements concluded in the 1970s, which implied unilateral trade preferences. The only co-operation agreement still in force is with Syria. From 1998 to date, Euro-Mediterranean association agreements with Algeria, Tunisia, Morocco, Israel, Jordan, Lebanon, the Palestinian Authority and Egypt have entered into force. The association agreement with Syria was initialled on 18 October 2004. For more detailed information on the Barcelona Process, see the websites of DG Trade and of DG External Relations. A system of Pan-Euro-Mediterranean cumulation of origin is being created. For this purpose the Council of the European Union on 11 October 2005 approved a Commission proposal to amend protocols on rules of origin annexed to the various agreements (IP/05/1256  ). The system will be applicable between the EC and Algeria , Egypt , Israel, Jordan , Lebanon , Morocco, Syria, Tunisia , West Bank and Gaza Strip , the EEA / EFTA countries (Iceland , Norway and Switzerland (including Liechtenstein) ),  the Faroe Islands and Turkey (including coal and steel and agricultural products). 3

PEM cumulation 40% max non-originating 1.000 € 4.000 € 1.000 € EU Morocco Turkey 4.000 € Tunisia 1.000 € 10.000 € Russia 2.000 €

Turkey EU Norway Bosnia and Herzegovina Switzerland/ Lichtenstein Montenegro Iceland Kosovo/UNMIK How does PEM cumulation work? There are FTAs linking all /some of the Members Each bilateral FTA contains a Protocol on origin All the Protocols on origin contain identical RoO Every time a modification in the RoO is needed, all the Protocols need to be adapted. Faeroe Albania Morocco Croatia Algeria Former Yugoslav Rep. of Macedonia Tunisia Serbia Egypt Lebanon Syria Israel Jordan West Bank and Gaza Strip 5

Matrix of PEM cumulation 01/12/12

replaces each Protocol Turkey EU Norway Bosnia and Herzegovina Switzerland/ Lichtenstein Montenegro Iceland Kosovo* The PEM Convention: A common Protocol on RoO, which replaces each Protocol to each FTA Faeroe Albania Morocco Croatia Algeria Former Yugoslav Rep. of Macedonia Tunisia Serbia Egypt Lebanon Syria West Bank and Gaza Strip Israel Jordan 7

PEM Convention – concept and benefits Will base diagonal cumulation of origin on a single legal instrument. No more separate protocols on RoO. Will allow easier revision and update of RoO. Will include entire Western Balkans region into in the pan- Euro-Mediterranean zone of diagonal cumulation. Will allow accession of neighbouring countries in the pan- Euro-Mediterranean cumulation zone.

CONTRACTING PARTIES OF THE PEM CONVENTION WESTERN BALKANS Albania Bosnia and Herzegovina Croatia Kosovo* the former Yugoslav Republic of Macedonia Montenegro Serbia PEM system of cumulation EU SAA cumulation Turkey EFTA Norway Switzerland Lichtenstein Iceland MEDS Algeria Egypt Israel Jordan Lebanon Morocco Syria Tunisia West Bank and Gaza Strip Faroe Islands

Contact: TAXUD, unit B3 (Rules of Origin) Email: TAXUD-UNIT-B3@ec.europa.eu