Provisional application of CETA

Following our earlier news alert on the Canada-EU Comprehensive Economic and Trade Agreement (CETA) please note that it has been agreed between the EU and Canada to provisionally apply CETA as of September 21, 2017. We advise companies to assess whether they have flows of goods that can benefit from the reduced import duty rates CETA offers.

Provisional application anticipating ratification CETA
Earlier this month a joint statement was issued by the EU Commission together with the Canadian Government on this provisional applications (the agreement can only definitely enter into force once all EU member states have ratified the agreement).

When an agreement provisionally enters into force, usually the trade component will be part of that and as such reduced import duty rates will become available on for CETA qualifying goods as of 21 September 2017 for EU and Canadian importers and exporter.

Requirement provisional application CETA
To be able to apply these reduced import duty rates the products need to be of preferential EU or Canadian origin. In the free trade agreements the EU has concluded up till now this proof of origin was an EUR.1 certificate, however under CETA the Registered Exporter system (REX) will be used. This is the same mechanism that was implemented as of January first this year for some of the GSP countries which allows registered exporters to use an origin declaration.

Under REX, an exporter only has to register with its local customs authorities that it wants to include an origin declaration for its goods and declares that it will not unrightfully do so. Once registered the company will be able to include the origin declaration, without needing to go through Customs/Chamber of Commerce to obtain proof of origin to accompany its goods.

Takeaway
We advise companies to assess whether they have flows of goods that can benefit from the reduced import duty rates CETA offers. Whether they have goods that qualify (i.e. are of EU or Canadian preferential origin under CETA) and whether they comply with the documentation/administrative requirements, e.g. have a REX registration.

If you have any questions regarding CETA or REX or require any assistance, please do not hesitate to contact Claudia Buysing Damsté (+31 (0)88 792 3811) or Suzanne Bras (+31 (0)88 792 4267).

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