REX System Transition Period Ends June 30th
The REX IT system has been developed by the European Commission. The Member States of the European Union, Generalized System of Preferences (GSP) beneficiary countries, and Overseas Countries and Territories (OCTs) can use the system.
According to the European Commission, the REX system is:
a system of certification of origin of goods based on a principle of self-certification. The origin of goods is declared by economic operators themselves by means of so-called statements on origin. To be entitled to make out a statement on origin, an economic operator has to be registered in a database by his competent authorities. The economic operator becomes a “registered exporter”.
The REX system is the term used to designate the system of certification of origin as a whole, and not only the underlying IT system which is used for the registration of exporters.
Functionalities of the REX System
The REX System is used to register exporters. To become a Registered Exporter, exporters fill out a registration form and submit that to the customs authority.
If there is a change to any of the registration data, the exporter is obligated to notify the customs authority of these changes, so the REX System can be updated.
The customs authority can revoke the Registered Exporter status of an exporter if the company ceases to exist, or if the registered exporter commits fraud.
Application of the REX System in the EU
According to the European Commission, the REX system is applied to:
In the EU, the REX system is applied by the economic operators in the following cases:
- EU operators exporting originating goods to GSP beneficiary countries for the purpose of bilateral cumulation of origin
- EU operators exporting originating goods to OCTs for the purpose of bilateral cumulation of origin or for the purpose of benefiting from unilateral preferences granted by an OCT to the EU
- EU operators exporting originating goods to third countries with which the EU has free-trade Agreements which provides that the origin of goods is declared by exporters registered in the REX system;
- For the time being, the following Agreements are concerned:
- The Agreement between the EU and Canada (CETA)
- The Agreement between the EU and Japan
- The Agreement between the EU and Vietnam
- The stepping stone EPA between the EU and Cote d’Ivoire
As from 1 September 2020, the interim EPA between the EU and Eastern and Southern Africa (ESA).
The Agreement between the EU and Singapore which entered into force very recently (November 2019) provides that the origin of goods originating in the EU is declared by approved exporters and not by registered exporters. This is because the Agreement between the EU and Singapore was concluded many years ago, before that the REX system was existing.
- EU re-consignors replacing proofs of origin (Form A certificates, EUR.1 certificates, origin declarations, statements on origin, …) where there is re-consignment within the EU or to Norway or Switzerland (in the GSP).
Implications of the REX System
When you are importing goods from third countries a lower import tariff might be applicable. For this lower rate to apply, the importer needs to be able to have an original preferential document, like a EUR.1 or a Form A.
With the REX system, this will change. For countries using the REX system, a REX declaration will suffice. A EUR.1 and a Form A are no longer used.
There are already many countries that work with the REX system. Countries that implement the system always have a transition period in which both the EUR.1 and Form A documents and the REX declaration can be used. After the transition period, only REX declarations can be used.
As the European Commission states:
At the end of the transition period, consignments above 6 000 EUR will be entitled to GSP preferential tariff treatment in the EU only if accompanied by a statement of origin made out by a registered exporter.
Transition Period Ending This Month
At the end of this month, the transition period for several countries is ending. Among these countries are Bangladesh, Burkina Faso, Cambodia, Cabo Verde, Indonesia, Madagascar, the Philippines, and Vietnam. You can find an overview of countries that have implemented the REX system here.
For some countries, it will be difficult to reach the deadline. COVID-19 is disrupting many facets of the economy. The European Commission has announced that it is willing to grant an extension of the transition period for countries that are struggling to meet the June 30th deadline. The transition period will then be extended to December 31st 2020.
Exceptions for Consignments of Goods below EUR 6000
When the originating goods have a total value below EUR 6000 exporters don’t need to be registered in the REX system to be allowed to make out a statement of origin.
For consignments above EUR 6000 exporters need to be Registered Exporters and have a valid registration.
For the full explanation of the REX system, please see the European Commission website’s REX page.
Take the Load Off Your Mind
If you have any questions on Statements of Origin and the REX system, please contact one of our specialists. They are happy to help and to take the load off your mind.