EU-UK Trade and Cooperation Agreement: When you cannot use Tolerances under Rules of Origin

There are tolerance rules to allow you to use a limited quantity of non-originating materials that are normally prohibited by the product-specific rule.

While this cannot be used to “deflate” the % requirement and is not available to originating products, it does allow some limited quantities of raw materials of processed tobacco and other parts classified to be used in the production of this process, which would normally be prohibited by the tolerance rule.

Here is the description in the EU-UK TCA:

Article 42 Tolerances

1. If a product does not satisfy the requirements set out in Annex 3 due to the use of a non-originating material in its production, that product shall nevertheless be considered as originating in a Party, provided that:

(a) the total weight of non-originating materials used in the production of products classified under Chapters 2 and 4 to 24 of the Harmonised System, other than processed fishery products classified under Chapter 16, does not exceed 15 % of the weight of the product;

(b) the total value of non-originating materials for all other products, except for products classified under Chapters 50 to 63 of the Harmonised System, does not exceed 10 % of the ex-works price of the product; or

(c) for a product classified under Chapters 50 to 63 of the Harmonised System, the tolerances set out in Notes 7 and 8 of Annex 2 apply.

2. Paragraph 1 does not apply if the value or weight of non-originating materials used in the production of a product exceeds any of the percentages for the maximum value or weight of non-originating materials as specified in the requirements set out in Annex 3.

3. Paragraph 1 of this Article does not apply to products wholly obtained in a Party within the meaning of Article 41. If Annex 3 requires that the materials used in the production of a product are wholly obtained, paragraphs 1 and 2 of this Article apply.