In the midst of a protectionist context, the European Union -UE- once again opts for commercial openness and regional market integration by fully ratifying the Free Trade Agreement signed between the EU and Singapore.
The agreement will enter into force this Thursday, November 21, and adds to the list of “new generation” trade agreements designed and signed recently by the EU, in which, in addition to the automatic elimination of customs duties to the importation and facilitation in investments, includes important advances in intellectual property protection, sustainable development and public procurement.
Benefits in the international supply chain
Taking into account the economic reality and the added value contributed by the regional integrations, one of the main novelties of this agreement is that, some of the goods produced “regionally” among the ASEAN countries (Indonesia, Philippines, Malaysia, Thailand, Vietnam, Brunei, Cambodia, Laos and Myanmar) will qualify as originating in Singapore, within the framework of the allowed regional accumulation of the Agreement, with tariff preferences upon the importation in the EU Member States.
Elimination of customs duties
Goods originating in the EU will enjoy a complete and immediate exemption of import duties in Singapore, benefiting local importers, manufacturers and distributors, as well as the more than 10,000 European companies established in that territory.
As for goods originating in Singapore, their import into the EU will be exempt from customs duties from the entry into force, except for the following:
- i) Textiles and carpets - customs duties will be eliminated in their entirety, within a period of three years
- ii) Bicycles, fruits, cereals and sports shoes - tariff duties will be eliminated in their entirety, within a period of five years
Proof of origin
The proof of origin that justifies the preferential treatment in the exchange of goods between the EU and Singapore will be the origin declaration through an approved exporter. The approved exporter status simplifies export formalities by allowing the approved exporter to certify the preferential origin of goods himself by including a specific declaration on the invoice or another commercial document identifying the exported products.
AEO mutual recognition
The conclusion of this agreement is the precedent of an imminent mutual recognition action for the operators of both territories certified as Authorized Economic Operator -AEO-. Although this is not a Customs Simplification Agreement per se, it configures the elements of trust necessary for the parties to recognize, in the near future, the figure of the AEO and grant, mutually, the benefits that this certification entails.
How can we assist you?
From Salinas & Partners, with more than 30 years of experience in international trade operations, we can help you in the design of the international value chain, in the preferential customs treatment granted by this Free Trade Agreement, as well as in the management and surveillance of compliance with the conditions underlying the granting of the benefits set forth in the agreement.
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