The Swiss-Chinese Free-Trade Agreement: Making sense of the Rules of Origin

After an initial analysis of the text of the agreement, we have put together the following summary of the main Rules of Origin of the free-trade agreement (FTA) between China and Switzerland. The Rules of Origin are comparable with those of existing agreements, although there are a few specificities.

As usual, the origin is determined, on the one hand, by the entire production of the products occurring in one of the State Parties and, on the other hand, by a sufficient level of processing of the products. This is regulated by the so-called list rules, which are rather more global per product category than the Pan-Euro-Mediterranean protocols of originating products. Accumulation is only possible between Switzerland and China – ‘diagonal’ cumulation involving third countries (including, for example, EU members) is excluded.

To benefit from the preferential treatment, the products must be transported directly between Switzerland and China. Consignments may be split up under the supervision of the customs authorities. This may lead to cost advantages, for example if several consignments from Switzerland to Asia can be consolidated and then split up once the products arrive in the region.

A movement certificate has to be issued as proof of the originating status. In Switzerland, the ‘EUR.1’ movement certificate is used (with information on the originating criterion in cell 8). A form with similar information is envisaged in China.

Companies with Approved Exporter (AE) status may issue a supplier’s declaration on the commercial documentation (on the invoice, delivery note or similar documents). One particularity of the provisions regarding the supplier’s declarations is that they must be numbered consecutively. A comparable rule has not been part of previous free-trade agreements and clearly represents a new challenge for Approved Exporters as well as for the customs authorities (the numbering series for each AE must be communicated).

The direct advantages of the free-trade agreement can be exploited immediately after its entry into force. The period before the entry into force of the agreement should be used with all urgency to review delivery structures and prepare any potential changes. Additionally, forward-looking scenarios for the exploitation of further advantages should also be considered.

You will find further information on the free-trade agreement between Switzerland and China in the next Customs Communiqué on this page. You will also find the previous issues here.

This entry was posted in Bilateral Agreement, FHA, Free Trade Agreement, Freihandelsabkommen and tagged , , , , . Bookmark the permalink.

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