UK: FTA Errors Cost Importers Dearly

Arne Mielken
Jun 4
4 min read

Updated: Jun 10

Tiny typos in preference claims are triggering massive costs. Learn why HMRC is zooming in—and what you can do to stay safe.

The world of Customs Compliance is a game of precision, especially when it comes to claiming preferential origin under a Free Trade Agreement (FTA). For those trading between the EU and UK, the Trade and Cooperation Agreement (TCA) offers duty savings—but only if the rules are followed word for word. Recently, HMRC reminded us all: "close enough" doesn't count.

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Key Questions Covered in This Blog

Why are slight errors in preference statements triggering HMRC audits and duty demands?
What wording is required in a preference statement under the UK–EU TCA?
Why does the REX number matter, and how do you verify it?
Can you still claim preference if the origin is stated as Germany instead of EU?
What should importers do to stay compliant and avoid future penalties?

Downloads & Resources

📺 Watch our 40+ minute in-depth introduction video, where we break down Rules of Origin in detail—covering key concepts, trade agreements, and compliance strategies. Explore two online support tools from the EU and the UK in two further videos to help you find and apply the Rules of Origin with ease.

Abbreviations Used In This Blog

FTA – Free Trade AgreementTCA – Trade and Cooperation Agreement (EU–UK)REX – Registered Exporter SystemHMRC – His Majesty’s Revenue & Customs

"When it comes to preference claims, there’s no room for interpretation—just replication. The wrong word can cost you everything."Arne Mielken, Managing Director, Customs Manager

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Why are slight errors in preference statements triggering HMRC audits and duty demands?

Because in the eyes of Customs authorities like HMRC, compliance isn’t about intent—it’s about precision. A recent case shows that even a minor typo in a REX number or a small deviation from the required FTA origin wording can void the entire claim. Customs professionals must recognise: these statements are legal declarations, not flexible interpretations. And HMRC is looking at them under a microscope.

What wording is required in a preference statement under the UK–EU TCA?

The required wording is laid out verbatim in Annex ORIG-4 of the TCA. It must be replicated word for word, including exact phrasing, structure, and language. Deviations—no matter how small—create a non-compliant statement. This is not just bureaucracy for the sake of it; it’s a core requirement of the agreement. Like reciting a legal clause in court, getting it 99% right is still 100% wrong.

Why does the REX number matter, and how do you verify it?

The REX number proves that the exporter is authorised to make a statement of origin without needing a movement certificate like EUR.1. If the REX number is invalid, misspelt, or incorrectly formatted (e.g., "IE!" instead of "IEREX"), your preference claim collapses. You must verify every REX number against the EU REX database before importation. Think of it like checking a boarding pass: one wrong digit and you're not boarding that customs benefit.

Can you still claim preference if the origin is stated as Germany instead of EU?

No. The TCA requires the origin to be stated as "EU" or "United Kingdom", depending on the direction of trade. Stating "German origin" may be factually correct, but it is not legally compliant. It’s like presenting an ID card when a passport is required—it won’t work, no matter how legitimate. Customs consultants must make sure that their clients understand this nuance.

What should importers do to stay compliant and avoid future penalties?

Importers must become surgical in their due diligence. That means: validate the exact preference wording, confirm the REX number format, check for agreement-specific terminology ("EU origin"), and retain all documents at the time of import. Your import regulations knowledge must be more than functional—it must be flawless. And if in doubt, consult a Customs Consultant before making the claim.

Arne’s Takeaway

Preference under a Free Trade Agreement can deliver powerful cost savings—but only if it’s handled with absolute precision. The TCA isn’t just a free pass; it’s a rulebook. And HMRC is enforcing every word. Don’t gamble with your duty savings—audit your origin statements today.

Expert Recommendations

Never deviate from the FTA wording—copy/paste from official sources.
Use a checklist and peer review system before lodging claims.
Always verify the REX number online and check its formatting.
Train your team: one mistake in origin wording can trigger a five-figure penalty.
Partner with a Customs Compliance consultant for a full import statement audit.

Upcoming Live Training

Explore our Live Instructor Online Origin training on origin here: www.customsmanager.org/events.

Disclaimer

This blog is for educational and informational purposes only. It does not constitute legal advice. Always consult a qualified customs or legal professional before acting.