The procedure for determining the country of origin of goods in the Customs Code of Ukraine has been brought in accordance with EU legislation. What's new?

On 14 July, the Verkhovna Rada of Ukraine adopted the Draft Law №5353-d dated 06.07.2023 "On Amendments to the Customs Code of Ukraine on Bringing the Procedure for Determination of Origin of Goods in Accordance with the Customs Code of the European Union and Ensuring the Implementation of Ukraine's Free Trade Agreements"

The Draft Law aims to adapt Ukrainian legislation to the legislation of the EU member states in terms of determination non-preferential origin when importing/exporting goods and introducing alternative rules of preferential origin.

After the start of the full-scale invasion, martial law was introduced in Ukraine and some border crossing points were temporarily closed. As a result, the logistics chains of supply of goods have changed, making it impossible to comply with the rules of preferential origin under certain existing international free trade agreements.

The adopted Draft Law temporarily, for the period of martial law, allows the movement of goods through the territories of third countries, except for the aggressor state, subject to documentary evidence of the goods being under customs control in transit countries. 

The Draft Law amends Section II "Origin of Goods" of the Customs Code of Ukraine and sets it out in a new revision, thus implementing the provisions of the Customs Code of the European Union related to:

• the purpose of determination the non-preferential origin of goods; 
• peculiarities of determination the origin of equipment, spare parts and tools, neutral elements and packaging;
• a list of goods fully produced in a given country;
• criteria for sufficient processing of goods produced using materials of foreign origin;
• a list of simple operations;
• the procedure for verification by customs authorities of certificates of origin (including e-certificates of origin) after customs clearance.

The adoption of the Draft Law was also stipulated by the need for foreign economic operators to use the current version of the preferential rules of origin in their relations with the EU.

In particular, the simultaneous use of alternative rules of origin of the Pan-Euro-Med Convention, which provide for a number of clarifications and simplifications, promotes the development of foreign economic activity and allows importing of a wider range of Ukrainian goods to the EU and goods from these countries to Ukraine at the lowest possible duty rates or without paying customs duties.

Alternative rules of origin are set out for:

• simplification and acceleration of procedures for confirming the preferential origin of goods supplied under the terms of the Association Agreement; 
• reduction in the number of supporting documents, the possibility of using electronic documents on the origin of goods;
• extending the validity of documents of origin from four to ten months; 
• liberalization of the criteria of origin (rules of origin for goods), which will allow Ukrainian producers to increase exports of goods from Ukraine to the EU markets.