Preferential Origin Under the EU-UK Trade and Cooperation Agreement

The TCA origin framework

The Trade and Cooperation Agreement between the European Union and the United Kingdom, in force since 1 May 2021, is the legal basis for preferential trade between the EU and the UK following the UK's departure from the EU customs union. The origin rules are in Protocol on Rules of Origin and Origin Procedures, which forms an integral part of the TCA and has the same legal status as the main agreement text.

The full text of the TCA including the origin protocol is published on EUR-Lex. The product-specific rules are in Annex ORIG-2, organised by HS chapter. This is the document you need when determining whether a specific product qualifies for preference.

Bilateral cumulation and its limits

The TCA provides bilateral cumulation between the EU and the UK. This means that materials originating in the EU can be counted as originating in the UK when they are used in UK production, and UK-origin materials count as EU-originating when incorporated into EU production. The bilateral cumulation mechanism significantly expands the range of products that can qualify for preference, because neither party's production needs to be self-sufficient in originating inputs.

However, the TCA does not extend cumulation to third countries. Materials originating in, for example, Japan or Turkey do not count as EU or UK originating for TCA purposes, even if those countries have their own FTAs with the EU. This is a deliberate design choice that keeps third-country inputs outside the TCA preferential framework. For industries with global supply chains, this can make origin qualification structurally difficult.

The absence of diagonal cumulation is particularly challenging for manufacturers in sectors where processing in pan-European or global supply chains is the norm. A Dutch manufacturer using Turkish steel to produce components exported to a UK customer cannot count the Turkish steel as EU-originating for TCA purposes, regardless of the EU-Turkey Customs Union.

Batteries and electric vehicles: special origin rules

One of the most commercially significant and technically complex aspects of the TCA origin protocol concerns batteries and electric vehicles. The product-specific rules for these goods include time-limited provisions that tighten over defined periods, with the stated objective of encouraging the development of EU and UK battery supply chains.

Under the original TCA provisions, the rules for electric vehicles and battery assemblies allowed higher levels of non-originating content during a transition period. As the transition periods have progressed, the maximum non-originating content percentages have been reduced, requiring manufacturers to source a larger proportion of battery components from the EU or UK to maintain preference eligibility.

The parties negotiated extensions and adjustments to these provisions after the TCA entered into force, reflecting the commercial reality that domestic battery supply chains in the EU and UK were not developing as quickly as originally anticipated. The current applicable thresholds and any extensions should be verified against the latest Joint Committee decisions published under the TCA framework, as these have been amended since the original text.

Proof of origin under the TCA

The TCA does not use EUR.1 certificates. Proof of origin takes the form of a statement on origin, which is a prescribed text placed on the invoice or another commercial document accompanying the goods. The statement text is defined in Article ORIG.19 of the TCA origin protocol.

The statement must be made by a registered exporter (REX-registered) for consignments with a customs value exceeding EUR 6,000. Below EUR 6,000, any exporter can make the statement without REX registration.

The statement must include the exporter's REX number and must be on a document that clearly identifies the goods. A statement that does not include the REX number, or that is made on a document that does not reference the specific consignment, is not valid proof of origin under the TCA.

The direct transport requirement

The TCA origin protocol includes a direct transport or non-alteration rule. This requires that goods do not undergo operations in a third country after leaving the exporting party and before arriving in the importing party, other than transhipment, temporary warehousing, or operations necessary for their preservation, provided they remain under customs supervision in the transit country.

In practice, this means goods transiting through Switzerland, Norway, or Turkey between the EU and UK can still qualify for preference as long as they are not processed or altered during transit and customs supervision is maintained. However, goods that are split, repacked with modification, or subject to manufacturing operations in a transit country lose their originating status.

The direct transport requirement is verified through the customs documentation chain: transit declarations, T1 documents, and storage receipts showing that goods remained under customs control and were not modified. If this documentation is incomplete, Dutch Customs can refuse the preference claim even if the goods genuinely had the required origin when they left the exporting country.

Obligations on the EU importer

As a Dutch importer of UK goods claiming TCA preference, you are responsible for: having a valid statement on origin from the UK exporter, verifying that the UK exporter's REX number is active in the EU REX database, retaining the statement on origin and supporting documentation for the customs retention period (typically three years from date of acceptance of the declaration), and being able to substantiate the origin claim if Dutch Customs requests verification.

If the UK exporter provides an incorrect statement on origin and Dutch Customs discovers this during a verification, your preference claim will be invalidated and a back-duty assessment will follow. For the detailed consequences of incorrect preference claims, see the article on what happens when you claim preference incorrectly.