The EU and Canada just celebrated the third anniversary of the Comprehensive Economic and Trade Agreement (CETA), which took effect on September 21, 2017. For the first three years after entry into force, Article 2.5 of CETA provided the possibility for customs duties paid on imported goods to be refunded (known as the “drawback rule”). Companies should be aware that as of September 21, 2020, duty drawbacks are prohibited.
This means that if you are an EU company that is importing non-originating raw materials into inward processing and manufacture a finished product for export to Canada, a proof of origin cannot be issued until the customs duties on raw materials are paid. Obviously, to be sure that your product can be considered of EU origin under CETA, you should fulfil all the criteria for these rules of origin. At the end, the economic operator will have two choices:
- Not pay customs duties in the EU using inward processing, or
- Pay customs duties in the EU but obtain a tariff preference upon import into Canada.
If you need help determining rules of origin, C4T’s Managed Customs Services and Expert Services team can help you track the origin of goods for both preferential and non-preferential rules of origin and step in to provide proof of origin or request Certificates of Origin. In addition, our CAS Special Procedures Module supports Inward Processing and optimises your customs flows.
Get in touch now to ensure your trade under CETA is in compliance.