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Sunday, 5 February 2012

Preference: Supplier Declarations - do you know your responsibilities?

Supplier Declarations are more commonly used to support the issuing of preference documents, eg EUR1 Forms, invoice declarations (approved or low value) and ATR Forms (Turkey).

As the Preferential Trade Agreements (PTA) are governed by specific rules, relating to the manufacturing origin of the goods and often the percentage of components or materials bought in from a country not covered by the PTA, anyone issuing preference statements must ensure they know the status of any bought in finished goods or components/materials BEFORE issuing the preference declaration.

Companies can be asked to provide “Supplier Declarations” to customers in other EU countries, including the UK, so they can establish if the goods qualify for preference when shipping them out to other countries. These statements have the same legal responsibility as issuing the EUR1 Forms or preference statements therefore companies must have a clear procedure and control over this activity.

Any company buying goods from UK or EU suppliers cannot assume these goods meet preference conditions UNLESS they have a Supplier Declaration. These declarations are to be obtained on an annual basis and must be used when assessing if export shipments meet the rules of preference origin. Any goods, components or raw materials bought in NOT supported a Supplier Declaration must be declared as NOT QUALIFYING.

The use of these Supplier Declarations are now been extended by companies to include a statement from the supplier as to the ORIGIN (ie where it was made) and commodity code applicable to the goods.

What are your experiences of issuing or obtaining Supplier Declarations?
Do your sales people understand the importance of these forms if requested by customers?
Is issuing invoice declarations, EUR1 Form or ATR Forms treated as just another documentary requirement without management understanding there could be 5 years imprisonment in the background!

Also see article: EU Preference System: Overview
Training: The Export Course
Understanding Origin and Preference
Preference and Origin Rules Explained
Essential Guide to Customs Procedures