Inside track on how to use Free Trade Agreements correctly

FTAs bring many benefits - if you know how to use them correctly. You are only human if you make a mistake here, but this can have unpleasant consequences. Common mistakes (and how to avoid them).

1. Having a Certificate of Origin will always give me access to preferential tariffs or exemption.

(Wrong. For my originating goods to be imported to the destination country under preferential tariffs or exemption under the Free Trade Agreement, a movement certificate or record of origin on the invoice is required.)

2. If I buy shoes from an Italian supplier, the origin of the shoes is Italy.

(No. It might also be the case that the shoes were not manufactured in Italy or not processed or finished there to a sufficient degree in order to have Italy as their origin).

3. All of my goods have a preferential origin as they are at least 50% Swiss.

(Wrong. Goods only have preferential origin when the list rules of the individual Agreement are complied with. For certain products, it is entirely possible for an Agreement to limit the value of all primary materials used to only 30% of the ex-works price of the manufactured goods, or for there to be a position jump in addition to the factor of the value criterion.)

4. The Arab Gulf States (Bahrain, Qatar, Kuwait, Oman, Saudi Arabia and the United Arab Emirates) are only permitted to use Movement Certificate EUR.1 as sole proof of preferential origin.

(Wrong. It was decided at the Joint Committee for the EFTA-GCC Free Trade Agreement that countries belonging to the Gulf Cooperation Council are also allowed to use a special Certificate of Origin instead of the Movement Certificate. See here (in German) also.)

5. Consignments for China may be distributed to third countries.

(Under the Free Trade Agreement with Switzerland, consignments to China can also be distributed to non-contracting parties (meaning countries outside China and Switzerland) for onward dispatch where the consignments do not undergo any treatment other than unloading and loading, and where the goods have remained under the control of customs in the non-contracting countries.)

6. I should use the customs tariff number for my consignment that gives me a more preferential tariff for importing.

(Wrong and prohibited. You must use the customs tariff number that best applies to the product. The Customs Tariff Department of the Swiss Customs and Excise Authority provides binding information on customs tariff numbers. If you are caught using the wrong customs tariff number, you may receive a hefty fine.)

7. I can have as many positions on the EUR. 1CN Movement Certificate as I like.

(Wrong. You are only allowed to enter a maximum of 20 positions on the EUR. 1 CN Movement Certificate, and they have to be numbered. The same applies to Approved Exporters. They too can only enter up to 20 positions on their invoices.)

S-GE Impulse FTA (10 November in Basel) : we tell you what else to look out for with Free Trade Agreements, the countries that Switzerland is negotiating FTAs with, how Swiss companies are using Free Trade Agreements (with practical examples) and what the Free Trade Agreement being negotiated between the USA and the EU (TTIP) means for Swiss companies.

You will also find lots of really useful information on our web site (Free Trade Agreement File).

Most common mistakes when using the Free Trade Agreement (and how to avoid them)

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