Tax Messenger

Non-preferential rules of origin. Current trends in customs control

18.06.2024

In accordance with Article 29 of the EAEU Customs Code, proof of the country of origin of goods is required where the application of tariff measures, prohibitions, restrictions and safeguard measures to protect the domestic market is dependent on the origin of goods.

For customs purposes, the country of origin is confirmed either by a declaration of origin or by a certificate of origin of a good.

It is already fairly standard practice to require proof of origin in the form of certificates for goods that are subject to safeguard measures (such as anti-dumping duties).

This practice is well known, for example, to importers of ball bearings, certain kinds of tubing, tires and various other goods: in accordance with the provisions of clause 6 of Article 314 of the EAEU Customs Code, if a certificate of origin (1) is not provided or (2) is improperly completed, the origin of goods will be deemed unconfirmed, and the maximum possible rate of anti-dumping duty for the goods concerned will be applied.

Since the beginning of 2024 importers have also come up against the need to provide proof of origin for goods in relation to which the Government has set higher import duty rates as “retaliatory” measures in response to actions of foreign states which encroach on Russia’s economic interests.

This stems from the entry into force on 08.02.2024 of the following amendments to Decision No. 49 of the Eurasian Economic Commission (EEC) of 13.07.2018 “Concerning the Approval of Non-Preferential Rules of Origin of Goods” (“Decision No. 49”).

the introduction in Decision No. 49 of the concept of “retaliatory measures” — measures taken by an EAEU member state on a unilateral basis in accordance with clause 2 of Article 40 of the Eurasian Economic Union Agreement of 29 May 2014;
the introduction in Decision No. 49 of the concept of “similar goods” — goods classified under the same EAEU Commodity Nomenclature (TN VED) code and having the same description as goods which are the subject of retaliatory measures or safeguard measures conditional on the origin of goods;
the addition to the section entitled “Proof of origin of goods” of a clause 36 in accordance with which, “where a good is a similar good relative to a good in relation to which a member state applies a retaliatory measure conditional on the origin of a good, the fact that the good concerned has its origin in that member state shall be confirmed by a certificate”.

It will be recalled that retaliatory measures were established, inter alia, by the following decrees of the Russian Government:

Decree No. 788 of the Government of Russia of 06.07.2018 – in relation to industrial tools and equipment, vehicles for the transport of loads and special-purpose vehicles classified in Chapters 82, 84 and 87 of the EAEU TN VED and originating in the USA – in the form of increased import duty rates of 25%-40% of the customs value.
Decree No. 2240 of the Government of Russia of 07.12.2022 – in relation to certain types of alcoholic products, cosmetics, household chemicals, weapons and various other goods originating in foreign states which commit unfriendly acts in relation to Russia (Directive No. 430-r of the Government of Russia of 05.03.2022) – in the form of increased import duty rates of 20% (but not less than USD 1.5 per litre) – 50% of the customs value.

Thus, for goods specified in the above-mentioned government decrees, it is now necessary to provide a certificate of origin to prove that the goods do not originate in states in relation to which retaliatory measures have been adopted. If a certificate is not provided, or it contains errors, or information contained in it is incomplete or incorrectly stated, the customs authorities will treat the country of origin of the goods as unconfirmed and apply higher import duty rates to those goods in the same way as goods on which anti-dumping duties have been imposed.

In view of the above, it is worth considering a few frequently asked questions related to proof of origin.

Question: On what grounds can the customs authorities refuse to accept a certificate of origin?

Answer: The most common reasons are as follows:

the certificate was issued in a country other than the country of origin or shipment;
the product description in the certificate cannot be matched to the description in goods declarations/invoices;
product codes are not stated in the certificate;
the certificate does not specify an invoice made out to a Russian recipient;
the certificate is made out not to the Russian importer but to a foreign seller which purchased the goods from the manufacturer and then resold them to the Russian importer;
the quantity of goods is improperly stated in the certificate;
the stamp of the official who issued the certificate is not clear.

Question: Can a certificate of origin be provided after goods have been cleared?

Answer: Yes.

In accordance with clauses 22 and 24 of Decision No. 49, a certificate may be issued either before or after goods are shipped (post factum) and is valid for 12 months from the date of issue.

In this regard, customs legislation does not prevent foreign trade companies from providing certificates of origin after goods have been cleared.

We have seen instances of overpaid anti-dumping duty being refunded as a result of the submission of certificates of origin after goods had been cleared.

Question: Can a certificate of origin only be obtained in the country of origin?

Answer: No, a certificate can be obtained either in the country of origin or in the country of shipment. In accordance with clause 1 of Article 31 of the EAEU Customs Code and clause 25 of Decision No. 49, a certificate may be issued by a competent authority (1) of the country in which the good originates, or (2) of the country from which the good is exported to the customs territory of the EAEU.

Question: Can the customs authorities refuse to accept a certificate issued in a country which is neither the country of shipment nor the country of origin?

Answer: Yes. Below is a detailed analysis of a situation of this kind based on the example of Court Case No. А56-9358/2023 (the courts of all three instances ruled in the customs authority’s favour).

Description of the situation

Arguments of the court and the customs authority

The standard certificate of origin was issued by a competent authority of a country other than the country of departure and the declared country of origin, which is contrary to the provisions of clause 1 of Article 31 of the EAEU Customs Code.
Although the certificate provided was issued by a member state of the European Union – Belgium – the Belgian Chamber of Commerce is not a competent organization authorized to issue certificates of origin on behalf of the EU.
The origin could have been accepted as confirmed in the following circumstances:
- if the certificate had been issued in Saudi Arabia or Estonia as the countries of origin and shipment;
- if the certificate had been issued by a competent organization of the EU, since the country of exportation (Estonia) is a member state of the EU;
- or if the country of exportation of the goods had been Belgium.

Conclusion

To confirm the country of origin of goods which are the subject of retaliatory measures or safeguard measures, importers must provide customs authorities with properly completed certificates of origin issued either in the country of shipment or in the country of origin of the goods. Otherwise, the imported goods may have higher rates of import duties or anti-dumping duties imposed on them.

How can we help?

Advising on matters relating to the origin of goods, including matters relating to the proper completion of certificates in accordance with the requirements of legislation and related practice.
Liaising with foreign chambers of commerce to obtain properly completed certificates of origin.
Support in making changes to goods declarations after clearance for the purpose of providing certificates to customs authorities and obtaining refunds of overpaid customs charges and anti-dumping duties.
Lodging administrative and judicial appeals against decisions of customs authorities.