Arne Mielken
- Jan 28, 2022
- 3 min read

Euro-PEM: Cumulation matrix for transitional, preferential Rules of Origin

(S,P) The EU's second Euro-PEM Matrix allows firms to benefit from diagonal cumulation under the transitional rules of origin. Download the matrix + explanation.

Three ways to catch up

In a previous article, we explained the concept of the Euro-PEM matrix under standard, normal rules of origin: https://www.customsmanager.org/post/eu-med-pem-convention-cumulation_matrix
There is also a specific Expert Blog entry which explains the background of the alternative Rules of Origin, which you can revisit here: https://www.customsmanager.org/post/eu-pem-new-alternative-rules-of-origin-from-september-21
We have also dedicated a 60-minute webinar to the PEM Euro Agreement, which can be viewed on-demand here: https://www.customsmanager.org/pan-euro-mediterranean-rules-of-origin

Also, do not forget that there are rules of origin HUB, with all the information you need to understand Rules Of Origin: https://www.customsmanager.org/rules-of-origin

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Once you have reviewed these materials, you will be in a great position to understand this notification.

Notice

As per the PEM Convention and the revised, rules, the EU Commission has to publish a notice concerning the application of the transitional rules of origin providing for diagonal cumulation between the applying Contracting Parties in the pan-Euro-Mediterranean (PEM) zone.

It's for Diagonal Cumulation

For the purpose of the application of diagonal cumulation of origin among the applying countries (Contracting Parties), the countries that use the transitional RoO notify each other, through the European Commission, of the origin rules in force with the other applying countries.

FYI - The EU speaks in her language of ’applying Contracting Party. This means a Contracting Party to the PEM Convention that incorporates the PEM transitional rules of origin in its bilateral preferential trade agreements with another Contracting Party to the PEM Convention.

Conditions to meet

It is recalled that diagonal cumulation can only be applied if three conditions are met:

The country of final manufacture and of final destination have concluded free trade agreements.
This FTA contains identical rules of origin
All the other countries involved in the transaction (formally: participating in the acquisition of originating status, i.e. with all countries from which the materials used originate) have the same rules of origin

Non-originating materials

Materials originating in a country that has not concluded an agreement with the country of final manufacture and/or of final destination shall be treated as non-originating.

Codes of Countries

The codes for the countries listed in the tables are given here below.

European Union: EU
EFTA States:
Iceland IS,
Switzerland (including Liechtenstein): CH (+ LI). Switzerland and the Principality of Liechtenstein form a customs union.
Norway: NO
The Faroe Islands: FO
Jordan: JO
Palestine: PS
Albania: AL
North Macedonia: MK
Georgia: GE

What does the EU's Commission Notice show?

Based on the notifications made by the countries to the European Commission, the tables that the commission specify show:

Table 1 – a simplified overview of cumulation possibilities.

In Table 1, an ‘X’ marks the existence between 2 partners of a free trade agreement containing rules of origin allowing cumulation based on the transitional rules of origin.

To use diagonal cumulation with a third partner, an ‘X’ should be present in all the intersections of the table between the 3 partners. Here is the example of October 2021. Besides bilateral cumulation with the EU, there was no country combination that would allow for diagonal cumulation to be allowed with other countries.

In January 2022, this looked like this:

Table 2 – the date from which diagonal cumulation becomes applicable.

In Table 2, the dates mentioned, refer to the date of application of diagonal cumulation. In that case, the date is preceded by ‘(T)’. In this example, one can see that cumulation, in September 2021, was only allowed between the EU and other countries, but not amongst these countries, too.

In January 2022, this looked like this:

Download

PEM EU Matrix update of 21 Jan 2022

CELEX_52022XC0121(01)_EN_TXT - PEM Cumulation Table

.pdf

Download PDF • 408KB

PEM EU Matrix published in October 2021

PEM-EU Matrix - CELEX_52021XC1021(01)_EN_TXT