Preferential origin provides full or partial exemption from customs duties in the trade with countries and unions with which Republic of Moldova (RM) has a free trade regime, namely:
- EU – according to the DCFTA (Deep and Comprehensive Free Trade Agreement between the Republic of Moldova and the European Union), which is part of the Association Agreement. The Regional Convention on pan-Euro-Mediterranean preferential rules of origin (PEM Convention) is applied in order to determine the origin.
- CIS – according to the Treaty on a Free Trade Area between members of the Commonwealth of Independent States.The rules of origin set out in the Agreement on Rules for Determining the Country of Origin of Goods in the Commonwealth of Independent States, signed in Yalta on 20 November 2009, shall apply to the determination of origin.
- CEFTA – according to the Central European Free Trade Agreement, the members of which are Albania, Bosnia and Herzegovina, North Macedonia, Moldova, Montenegro, Serbia, UNMIK/Kosovo. The provisions of the PEM Convention are applied in order to determine the origin.
- Turkey – in line with the Free Trade Agreement between the Republic of Moldova and the Republic of Turkey. The provisions of the PEM Convention are applied in the trade with Turkey.
At the same time, some countries offer preferences to the Republic of Moldova under the Generalized System of Preferences (GSP), namely: Switzerland, Norway, Japan, the USA and Canada. Origin of goods exported from the Republic of Moldova is confirmed by Certificate of Origin Form A, while in case of exports to Switzerland and Norway it is confirmed via the Registered Exporter System (REX system).
I. Determination of preferential origin
In order to obtain preferential origin, goods must comply with the conditions provided for in the international treaties concluded by the RM with the aforementioned countries.
Originating goods:
- Wholly obtained goods
- Sufficiently worked or processed products
a) Wholly obtained goods
In order to obtain the status of originating goods, the rules state that goods must be wholly obtained in the respective country. This category includes:
- mineral products extracted from the soil;
- vegetable products harvested in the country;
- live animals born and raised in the country and products obtained from live animals;
- products obtained from hunting and fishing.
To be treated as wholly obtained in a given country, goods must not include any components of foreign origin.
The full list of wholly obtained goods is provided for in the aforementioned international agreements.
b) Sufficiently worked or processed products
If foreign/with undetermined origin raw materials were used for the production of the finite product, then origin is determined based on the criterion of sufficient processing.
Each of the aforementioned agreements includes a list of minimum processing of non-originating raw materials that have to be observed for the final product to obtain the originating status. Usually, the list of processing includes the following:
|
Heading in the Harmonized System |
Description of product |
Working or processing, carried out on non-originating materials, which confers originating status |
|
|
1 |
2 |
3 |
4 |
|
Specify the tariff heading in the Harmonized Commodity Description and Coding Systems (HS)
|
Specify the name of goods corresponding to the heading in the first column. |
The stated rule sets the minimum level of working or processing to be carried out on the non-originating raw materials. These rules apply only to non-originating components. If for one tariff heading rules are mentioned both in columns 3 and 4, then only one of them is applied, at the exporter’s choice. |
|
c) Additional requirements for applying preferential origin
The preferential origin rules apply only if the following principles are adhered to:
- Principle of territoriality, according to which the processing operations must be carried out in full on the territory of the exporting country, with no interruption.
- Direct transport – goods must be transported from the exporting country directly to the importing country. However, it is allowed to transit the territory of third countries, as well as to store the goods temporarily, if necessary, provided that they stay under customs supervision.
- Duty refund and ‘no drawback’ – principle applied under the PEM Convention. It prohibits the refund (drawback) or exemption from customs duties for the non-originating raw materials used to manufacture the final product and for which no customs duties were paid.
- Cumulation. The Republic of Moldova may apply the origin cumulation with EU Member States, with CEFTA Member States, with Turkey under the PEM Convention, but also with CIS countries, in line with the CIS rules of origin. Thus, the raw materials originating from countries with which the RM applies the cumulation rule, used when manufacturing a final product exported from the RM will be accepted as originating from the RM and it will not have to be subject to sufficient processing.
Legislation:
The Agreement on the Rules for determining the country of origin of goods in the Community of Independent States, signed in Yalta on 20.11.2009, ratified by the Law no. 93/12.11.2011
Government Decision no. 1599/13.12.2002 on the rules of origin of goods
FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND THE REPUBLIC OF MOLDOVA
