Currently, in order for a recipient to be eligible to claim a duty reduction under a preference agreement (e.g. FTA), the rules of origin for a given commodity code must be checked by the exporter and a specific test performed. The test is dependant on the terms of the trade agreement and so varies between country. The test often requires calculating a percentage value of non-originating materials used in manufacture compared to the Ex-Works price or sometimes may involve checking that items used in the manufacture of a product have changed tariff heading at time of export.
If the origin test is not met and proven by a UK exporter, the recepient cannot claim preference (a duty reduction) under the agreement.
The EU’s Market access database allows the Rules of Origin test to be checked for a specific commodity code sold to a specific country:
Where a country is selected that has an FTA with the EU (such as South Korea) and a relevant code is selected (e.g 8413) - clicking on “RoO” along the relevant line provides the origin/percentage test to use in order to be eligible for preference and a link to the relevant legislation.
To my knowledge HMRC does not currently offer an equivalent tool and instead only provides relatively confusing rules of origin schedules in Notice 828.
Once the UK leaves the EU, will a similar feature be provided by HMRC so that there is easy reference for the preferential rules of Origin test to use for a specific commodity code (as dictated by the terms of any new UK free trade agreements)?