Transitional rules of preferential origin of the pan-Euro-Mediterranean Convention

 The objective of the new rules is to modernize and update the rules of origin included in our country's free trade agreements with countries in the Pan-Euro-Mediterranean (PEM) region, making them more flexible and easier for users. The transitional bilateral application («transitional period») will end on 31 December 2024, as the revised PEM Convention will enter into force on 1 January 2025.

Some of the benefits of the revised rules of origin are:

The "Full cumulation" rule will apply to most products of the goods nomenclature, with the exception of textiles (Chapters 50-63). Based on this cumulation, the operations or 'added value' required for a product to acquire preferential origin, can be divided between the countries participating in its production and applying the revised rules. For products included in Chapters 50 to 63 and only for the purposes of bilateral trade, the participants in the Stabilization and Association Process of the European Union and the Republic of Moldova is considered an applicant Contracting Party. The parties to the Convention may extend full cumulation to textiles and textile products unilaterally.

The rules applicable to specific products are also more flexible and easier to meet: thresholds for the use of non-originating materials or ingredients have been increased from 10% to 15%.

For most products, the current prohibition on the return of customs duties is lifted. Therefore, customs duties paid on non-originating materials imported and included in the final products exported as originating may be reimbursed (except for products classified in Chapters 50 to 63).

There have been other improvements in the field of logistics, where the current rule of "Direct transport", which makes it difficult for goods passing through a third country to maintain their preferential origin, has been replaced by a "flexible" rule "Non-manipulation".

In the field of customs procedures, the issuance of proof of origin is facilitated, as the origin is proved only through the certificate EUR.1 and the Declaration of origin, as well as the issuance and electronic submission of movement certificates of origin EUR.1 (certificate of origin EUR MED and statement of origin EUR MED will no longer be issued). Also their validity has been extended, from 4 to 10 months;

The PEM Convention will remain in full force among all its Contracting Parties as is currently the case. However, business and industry will have the opportunity to apply the new rules to the goods they trade instead of the current PEM ones, whenever it suits them. Their use is therefore an additional opportunity, not an obligation.

These rules will be applied as alternatives to those of the PEM Convention pending the completion of the review process of the PEM Convention.

The following decisions have been taken to implement these alternative rules:

- Decision 1/2021 of The EU-Albania Stabilization and Association Council amending the Stabilization and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Albania, of the other part, ratified by Law no. 98/101 of 07.07.2021, by replacing Protocol 4 thereto concerning the definition of the concept of "originating products" and methods of administrative cooperation. New transitional rules of preferential origin of the pan-Euro-Mediterranean Convention are applicable since 1 September 2021.

- Decision no. 1 of the EFTA-Albania Joint Committee, approved on 24.6.2021, ratified by Law 99/2021, dated 07.07.2021, amending protocol B of the FTA between the EFTA countries and the Republic of Albania, regarding with the definition of the concept of "originating products" and methods of administrative cooperation, with the Transitional Rules of the PEM Convention as alternative applicable rules, as well as the amendment of agreements on agriculture between the Republic of Albania and the Swiss Confederation, and the Republic of Albania and the Republic of Iceland, as an integral part of it.

- Decision no. 1 of the EFTA-Albania Joint Committee, approved on 24.6.2021, ratified by Law 99/2021, dated 07.07.2021 and Law nr 122/2021, dated 17.12.2021, amending protocol B of the FTA between the EFTA countries and the Republic of Albania, regarding with the definition of the concept of "originating products" and methods of administrative cooperation, with the Transitional Rules of the PEM Convention as alternative applicable rules, as well as the amendment of agreements on agriculture between the Republic of Albania and the Swiss Confederation, and the Republic of Albania and the Republic of Iceland, and the Republic of Albania and the Kingdom of Norway. New transitional rules of preferential origin of the pan-Euro-Mediterranean Convention are applicable since 1 January 2022.

- Decision no. 1/2021 of the Joint Committee of the CEFTA Agreement, ratified by Law No. 101/2021, dated 07.07.2021, amending Annex 4 to the CEFTA 2006 Agreement, which lays down the protocol concerning the definition of the concept of "originating products" and the methods of administrative cooperation referred to in Article 14, paragraphs 1 and 3, and repealing and replacing Decision no. 3/2013 and Decision no. 3/2015 of the Joint Committee of the CEFTA Agreement, is applicable since 1 February 2023.

• The matrix related to the implementation of diagonal cumulation based on transitional rules of origin in PEM zone:

On 7 December 2023, the Joint Committee of the PEM Convention adopted a new set of rules of origin applicable as of 1 January 2025.
DECISION No 1/2023 OF THE JOINT COMMITTEE OF THE REGIONAL CONVENTION ON PAN-EURO-MEDITERRANEAN PREFERENTIAL RULES OF ORIGIN of 7 December 2023 on the amendment of the Regional Convention on pan-Euro-Mediterranean preferential rules of origin