If a product is to be given preferential treatment, it must be made entirely in or undergone some processing in Norway or in a country which is a contractual party.
|Note: An update of this article is pending. Please note that some terms and/or references may differ from the Movement of Goods Act and the Customs Duty Act that enters into force from the 1st of January 2023.|
Chapter 3 of the Customs Tariff covers fish and crustaceans, other molluscs and invertebrates living in water. Goods that fall under this Chapter may have undergone some working or processing, for example, filleting, smoking and production of salted fish, stockfish and clippfish.
In case of further processing, these will normally be classified in positions 16.04 or 16.05. Goods in these positions are, for example,
- Fish fingers;
- Boiled, cleaned shrimp, frozen or in brine;
- Other preserved fish.
The list rule for Chapter 3 and positions 16.04 and 16.05 in most of the free trade agreements requires that all materials from Chapter 3 must be produced entirely in the area of origin. In other words, other materials/ingredients that do not fall under Chapter 3 can be used freely, for example, in the manufacture of fish fingers under position 16.04.
This means that the fish raw material must be produced entirely in the EEA, whereas breadcrumbs, spices, eggs and other materials used may only need to change their position.
The formulation of the rules of origin is based on the premise that the finished goods are either "produced entirely" or that the used materials have undergone "sufficient working or processing". In other words, the goods are either:
"produced entirely" in Norway or in a country that is a contractual party;
an imported material, which does not originate in Norway or a country/area that is a contractual party, has undergone "sufficient working or processing" in Norway or a country that is a contractual party.
Scope of goods
The texts of the respective agreement stipulate what goods fall within the scope of the agreements (scope of goods).
A prerequisite for granting a product preferential tariff treatment in the importing country is for this product to fall within the scope of the respective agreement or, in other words, to fall within the scope of the agreement's goods.
When a company uses materials of various origins in its production, the materials must be stored physically separated. For example, Norwegian and Russian fish must be stored physically separated so that certificates of origin can be issued for the finished product originating in Norway.
Distributors (who do not have production of their own) must also keep originating and non-originating product, respectively, physically separated at their warehouses.
This is a requirement that must be met for each individual type of product.
Materials can be stored separately, or the two types of materials can be labelled clearly.
Manufacturers may be granted permission to store identical materials intended for use in production together. This system is called "accounting separation" and is based on keeping a separate accounting system.
In most cases, a free trade agreement only applies between two parties. There are some 60 different free trade agreements between various countries (in total 30 countries) in Europe. In 1997, these agreements were linked by harmonising the rights of origin in all of them. In other words, similar - if not outright identical - copyright rules were formulated in all agreements. This makes it possible for more countries to take part in the trade in a certain commodity without missing out on the tariff benefits. The EUR-MED certificate of origin must be used in connection with accumulation.
This made possible the establishment of the European accumulation area, something which means that a material/product with a certificate of origin from the contracting parties can be used freely in the entire area. In case of accumulation, originating product from all countries that are covered by the accumulation system can be used freely in the manufacture of a product which is exported to an one or multiple countries which are contractual parties.
For example, fish from the Faroe Islands can be used in Norwegian exports to the EU without losing its preferential tariff treatment. Where the fish is only re-exported or is not processed beyond minimal operations, the fish will maintain its Faroese origin, based on the agreement signed between the Faroe Islands and the EU. When processing in Norway is of a scope that goes beyond minimum processing, the fish will be assumed to have a Norwegian origin when exported to the EU. Nevertheless, it is a requirement to ensure that the origin of the Faroese fish can be documented with an included EUR-MED certificate of origin that is presented to the Norwegian Customs Service.
Frozen herring (0303.51) of a Norwegian origin is exported from Norway to the EU. The exporter issues an EUR-MED certificate of origin, and customs clearance in the EU is carried out as usual. The customer in the EU cannot re-export the herring to Turkey without a sufficient degree of processing. In this case, the fish will keep its Norwegian origin, and it will be the free trade agreement between EFTA and Turkey that will be used as a basis in connection with the import into Turkey.
The tariff rate for frozen herring in the agreement between the EU and Turkey is 30%, but since it is the agreement between Norway/EFTA and Turkey that is used as a basis for the preferential tariff treatment, the herring will be considered tariff-free.
Product specific rules
The process list determines what must be done with materials used in production. There may be requirements for the materials to be produced entirely, not to exceed a certain value or to undergo specific processing. The requirements in the list must be met for incorporated third-country materials in order for the finished product to be an originating product.