To identify the origin of your goods, you first need to get a commodity code for the goods you’re importing or exporting.
How to get a commodity code
To find the product specific rule for the goods you are importing or exporting, you need to use the trade tariff tool to classify your goods to:
- a 10-digit commodity code when importing them into the UK
- an 8-digit commodity code when exporting from the UK
You may also need to know the commodity code of some of the inputs that went into or make up the good, depending on the product specific rules. An input is any element that makes up part of a good. For example, a certain ingredient in a food.
After you have classified your goods
Once you have classified your goods, you will need to check they meet the rules of origin. The main categorisations for products are:
- chapters (2-digit level or first 2 digits of the commodity code)
- tariff headings (4-digit level of the commodity code)
- tariff subheadings (6-digit level of the commodity code — sometimes referred to as a Harmonised System (HS) code)
Product specific rules and examples
Every product traded under a free trade agreement has a product specific rule that must be met to show the product:
- originates in the free trade area
- qualifies for preferential tariff treatment (reduced rate of Customs Duty)
Each rule describes the nature or value of processing that must be carried out on any non-originating materials so that the final product meets the origin requirements.
Check the rules agreed by the UK and the EU that are set out in Annex 3, page 1021 (Product specific rules of Origin) of the Trade and Cooperation Agreement.
There are 4 types of rule that a product may need to meet (on their own or in combination) to be granted origin.
The types of rule are:
- wholly obtained
- change of commodity code to classify your goods
- value added or percentage rule
- specified processes
You’ll need to decide the correct commodity code for the exported product to find the relevant rule in the Trade and Cooperation Agreement product specific rules list.
Once a product has gained originating status, it is considered 100% originating. This means that if that product is then used in the production of another product, its full value is considered originating and no account is taken of non-originating materials within it.
For example, if a UK-manufactured engine contains 30% non-originating content but meets its rule of origin, if that engine is used in the production of a car in the UK or EU, 100% of the value of that engine can be counted towards the originating content of the car.
Many product specific rules, including for products used in the following examples, give manufacturers the choice of several different rules. The manufacturer will decide and to select which rule to apply to their exported product.
Types of product specific rules in Trade and Cooperation Agreement and examples
Wholly obtained requirement
If a product specific rule of origin requires that a product is wholly obtained, the product must be made only from UK (or EU materials that are further processed).
Agri-food examples
Harmonised System (HS) code: 10
Product: cereals
Rule: production in which all the materials of chapter 10 used are wholly obtained
If barley is grown and harvested in the UK, then the product is ‘originating’.
Harmonised System (HS) code: 0203
Product: meat
Rule: production in which all the materials of chapters 1 and 2 used are wholly obtained.
If meat is produced from animals born, raised and slaughtered in the UK, then the product is ‘originating’.
Change in commodity code (HS Code) used to classify goods
A change in commodity code means non-originating materials must have a change on the correct level to be able to have originating status. The change can be on a chapter (2-digit level of the Harmonised System), heading (4-digit level of the Harmonised System) or subheading (6-digit level of the Harmonised System) and usually applies to all non-originating materials.
You will need to decide the classification of all non-originating materials and parts to make a change in commodity code so that you can demonstrate a change in classification has taken place.
There are no limits on the amount of originating material you can use, regardless of their HS code.
To show the rule has been met, you will need to know the HS code of your exported product and:
- all of its inputs
- the origin of the inputs
Change of chapter (CC)
Any non-UK or non-EU originating materials or components used in the product must be classified in a different HS chapter (2-digit HS code).
Agri-food example
Harmonised System (HS) code: 160419
Product: prepared or preserved trout (Oncorhynchus mykiss)
Rule: CC (change of chapter)
The rule can be fulfilled if prepared or preserved trout is manufactured from non-originating trout from Harmonised System (HS) chapter 3. This is because the non-originating materials used are not classified under Harmonised System (HS) chapter 16.
Manufactured goods example
Harmonised System (HS) code: 8903
Product: yachts
Rule: CC (change of chapter)
The rule is fulfilled if a yacht is manufactured from non-originating parts from chapters other than Harmonised System (HS) chapter 89 (ships, boats and floating structures). For example, unlimited non-originating parts of steel (Harmonised System (HS) chapters 72 and 73) or glass (Harmonised System (HS) chapter 70) could be used, regardless of their value, as they are classified in a different chapter to the final product.
But the rule would not be met by a yacht imported from a country outside of the UK and EU with only fitting-out work carried out in the UK before being exported to the EU, because the finally exported yacht would stay in the same Harmonised System (HS) chapter as one of the inputs.
Change to tariff heading
Any non-UK or non-EU originating materials or components used in the product must be classified in a different HS heading (4-digit HS code).
Agri-food example
Harmonised System (HS) code: 150110
Product: lard
Rule: Change to tariff heading (CTH)
The rule can be fulfilled if lard is manufactured from non-originating pig fat of Harmonised System (HS) heading 0209. This is because the non-originating materials used are not classified under Harmonised System (HS) heading 1501.
Manufactured goods example
Harmonised System (HS) code: 8528
Product: televisions
Rule: Change to tariff heading (CTH)
The rule can be fulfilled if a television is manufactured from non-originating parts provided they are all from any heading (4-digit Harmonised System (HS) codes) other than Harmonised System (HS) 8528.
For example, unlimited non-originating ‘parts suitable for use….with the apparatus of headings 8525 to 8528’ — that is, television parts (Harmonised System (HS) 8529) — may be used, regardless of their value, as they are classified in a different Harmonised System (HS) heading to the final product.
Change to tariff subheading
Any non-UK or non-EU originating materials or components used in the product must be classified in a different HS subheading (6-digit HS code).
Agri-food example
Harmonised System (HS) code: 151219
Product: sunflower-seed oil
Rule: Change in tariff subheading (CTSH)
The rule can be fulfilled if sunflower-seed oil is manufactured from non-originating crude sunflower oil of Harmonised System (HS) subheading 152111. This is because the non-originating materials used are not classified under Harmonised System (HS) subheading 151219.
Manufactured goods example
Harmonised System (HS) code: 392330
Product: plastic carboys, bottles, flasks and similar articles
Rule: Change in tariff subheading (CTSH)
The rule can be fulfilled if a plastic flask is manufactured from non-originating parts from any Harmonised System (HS) subheadings (6-digit Harmonised System (HS) codes) other than Harmonised System (HS) 392330.
For example, unlimited non-originating ‘stoppers, lids, caps and other closures’ (Harmonised System (HS) 392390) may be used, because they are classified in a different Harmonised System (HS) subheading to the final product.
Manufacture from materials of any heading, including other materials of the same heading
If a product specific rule of origin allows production from non-originating materials of any heading, the product can include non-originating materials of the same heading.
This means that a change of heading does not need to take place. Originating materials of any heading can also be used. To satisfy this rule, there must be some level of processing by the exporting party. This must go beyond the processes listed in the ‘Insufficient Production’ clause.
Find out more information about insufficient production.
Agri-food example
Harmonised System (HS) code: 090412
Product: crushed or ground pepper
Rule: production from non-originating materials of any heading
Pepper and ground or crushed pepper are classified in the same heading. If crushing or grinding takes place the rule is fulfilled regardless of the originating status of the pepper, as the processing goes beyond ‘insufficient operations’.
Manufactured goods example
Harmonised System (HS) code: 2701
Product: coal briquettes
Rule: production from non-originating materials of any heading
Coal and briquettes of coal dust are classified in the same heading. The process to transform coal into briquettes (including applying intense pressure) goes beyond the processes listed in ‘insufficient processing’ and so the briquettes can be considered ‘UK originating’ regardless of the originating status of the coal used to produce the briquettes.
Value and weight limit for non-originating materials
Under a value limitation rule, the value of non-UK or non-EU originating materials may not go over a given percentage of the ex-works price of the product.
Sometimes, the limit might apply only to the value of specific types of inputs to a product. If the use of an ingredient, material or component is limited by value, the rule concerning tolerance cannot be relied upon in addition to the threshold.
Annex 2, page 1004 (Introductory Notes to Product Specific Rules of Origin) sets out the definition of ‘ex-works price’.
Manufactured goods example
Harmonised System (HS) code: 920120
Product: grand pianos
Rule: MaxNOM 50% (Maximum 50% non-originating material)
The rule states that the product must contain a maximum of 50% (of the ex-works value) material that does not originate in the UK or EU. This means that if a grand piano has an ex-works value of £1,000, no more than £500 worth of non-originating parts may be used in its manufacture.
Average pricing rules
The value of the non-originating materials used in production may be calculated on the basis of the weighted-average value formula, or other inventory valuation method under generally accepted accounting principles in the UK.
This only applies to the price paid for the materials. The accounting method utilised for determining the average value of input non-originating materials may be different to the accounting principles adopted by the business for its general accounting purposes.
Weight and value limitations
For some agricultural products, limitations on non-originating materials can apply by weight, by value or there can be choice of meeting either criteria in certain instances.
Agri-food example
Harmonised System (HS) code: 17049030
Product: white chocolate
Rule: Change to tariff heading (CTH), as long as a) all the materials of chapter 4 used are wholly obtained and b) either:
i) the total weight of non-originating materials of headings 17.01 and 17.02 used does not go over 40% of the weight of the product
ii) the total value of non-originating materials of 17.01 and 17.02 does not go over 30% of the ex-works price of the product
Part (a) of the rule is explained in the products made using materials originating from one country section of the check your goods meet the rules of origin page. In relation to part (b), if the manufacturer uses non-originating sugar (Harmonised System (HS) heading 1701) with a weight of 22.2g in a white chocolate bar that has a net weight of 60g then part (b)(i) of the rule can be met as the non-originating sugar only makes up 37% of the net weight of the product.
Alternatively, the manufacturer could use non-originating sugar that has a value of £0.20 in a white chocolate bar that has an ex-works price of £0.80. This would allow part (b)(ii) of the rule to be met as the value of non-originating sugar only makes up 25% of the ex-works price of the product.
Read more about combinations of several rules.
Applying the rules
If a product specific rule specifically excludes certain non-originating material or provides that the value or weight of a specified non-originating material shall not go over a specific threshold (read the following example), these conditions do not apply to non-originating materials classified elsewhere in the Harmonised System.
Example
When the rule for heading 35.05 (dextrins and other modified starches, glues based on starches, and so on) requires ‘Change in Tariff Heading except from non-originating heading 11.08’ then the use of non-originating materials classified elsewhere than 11.08, such as materials of chapter 10 (Cereals is not limited).
Specified operations
Specified operations are particular to certain specialised industries or products. Rules may include the re-treading of tyres to take place in the UK for a tyre to be originating, or a chemical reaction to take place for chemical products.
As well as the chemicals sector, these rules are common in textiles and clothing and may specify that the weaving and cutting of fabric to make garments must take place in the free trade area for the product to be originating.
Combinations of several rules
Different product specific rules can be combined to make a rule whereby all the listed conditions must be fulfilled.
Agri-food example
Harmonised System (HS) code: 18069011
Product: milk chocolate bar
Rule: Change to tariff heading (CTH), provided that a) all the materials of chapter 4 used are wholly obtained and b) either:
i) The total weight of non-originating materials of headings 17.01 and 17.02 used does not go over 40% of the weight of the product
ii) or the total value of non-originating materials of 17.01 and 17.02 does not go over 30% of the ex-works price of the product
The manufacturer could use non-originating cocoa paste from Harmonised System (HS) heading 1803, non- originating cocoa butter of Harmonised System (HS) heading 1804 and palm oil of Harmonised System (HS) heading 1511 and would meet the change to tariff heading (CTH) part of the rule. These headings are all different to that of the final product (1806).
To meet part (a) any materials from chapter 4, which includes milk and milk powders, would need to be obtained in the UK or alternatively from the EU (using bilateral cumulation). For milk, this would mean from a live animal raised in either the UK or EU.
In terms of part (b) of the rule, either part (i) or part (ii) could be met by the manufacturer to complete the product specific rule for the product.
Exclusions
A product specific rule may include a restriction on certain materials and components being used in the production of a product.
Agri-food example
Harmonised System (HS) code: 2204
Product: wine of fresh grapes
Rule: Change to tariff heading (CTH), except from non-originating materials of headings 22.07 and 22.08, as long as:
- all the materials of subheadings 0806.10, 2009.61, 2009.69 used are wholly obtained
- all the materials of chapter 4 used are wholly obtained
- the total weight of non-originating materials of headings 17.01 and 17.02 used does not go over 20% of the weight of the product
If wine of fresh grapes is produced from non-originating fresh grapes of Harmonised System (HS) subheading 080610 then it is not considered ‘originating’ as in the production of this final product material from the 5 excluded headings and subheadings was used.
Manufactured goods example
Harmonised System (HS) code: 2710
Product: petroleum oils and oils obtained from bituminous minerals, other than crude
Rule: Change to tariff heading (CTH) except from non-originating biodiesel of subheading 382499 or 382600
If biodiesel of Harmonised System (HS) subheadings 382499 or 382600 is used in the production of an oil of Harmonised System (HS) heading 2710, the oil will not be considered originating even if all the non-originating inputs change to tariff heading (CTH) as the rule requires any biodiesel of these subheadings used in the product to be originating.
Treatment of packaging materials
Packaging materials are generally not considered when determining the origin of your product. Read Article 45 of the TCA (Packaging materials and containers for retail sale).
There are limited exceptions, for example if a product specific rule limits a non-originating material by value of the final product or value tolerance is applied, the value of originating packaging materials can be taken into account when determining the value of the goods.
