Rules of origin of the revised PEM Convention

PEM-uberienkommen-v4

With the revision of the PEM Convention, the rules of origin for the PEM zone were reviewed. The majority of the contracting parties, including Switzerland, have decided to apply the revised rules bilaterally on a transitional basis. This is intended to allow the companies of these contracting parties to already benefit from the revised rules of the Convention, making the administration of the rules of origin more flexible and simpler. The transitional bilateral application («transitional period») will end as soon as the revised PEM Convention is adopted. The Parties have decided that the «transitional period» will start on 1.9.2021. Due to the bilateral approach, the free trade agreements (FTA) in the PEM zone must be adapted accordingly. The transitional rules are already applicable in the following FTAs of Switzerland/EFTA:

  • 1.9.2021: CH-EU

Impact on businesses

During the transitional period, exporting companies can apply either the rules of origin of the current Convention or the revised rules of origin. However, they must determine which rules they will choose before calculating origin.

In principle, the cumulation zones of the PEM Convention and the transitional rules are to be regarded as two separate zones. Thus, the transitional rules do not provide that proofs of origin issued under the PEM Convention can be used for cumulation under the transitional rules.

At the formal level, a distinction is made between proofs of origin issued under the current PEM Convention and those issued under the revised rules. The latter must be supplemented with the English reference «TRANSITIONAL RULES» (for movement certificates EUR.1) or «according to the transitional rules of origin» (origin declaration). It is the responsibility of companies to ensure that input materials which have obtained preferential originating status under the (usually more liberal) revised rules are not used as preferential input materials in a production chain with cumulation under the rules of the current Convention.

Transitional rules

The transitional rules bring administrative simplifications, namely through the deletion of the proofs of origin EUR-MED and the standardisation of the product-specific list rules. In addition, new possibilities were created with the introduction of full cumulation, the abolition of the no-drawback rule and calculation using average values.

Information on the subject of «transitional rules» and their application can be found here:

https://www.ezv.admin.ch/content/ezv/en/home/topics/ursprungsregeln-revidiertes-pem-uebereinkommen.html