Preferential origin in Switzerland
In a previous post, we informed you that Switzerland has decided to abolish all duties for industrial products starting from January 2024. However, it is useful to provide a general overview of the current situation to understand the magnitude of the upcoming change and to have a clear picture of the present scenario. Abolishing the duties does not automatically make all goods of preferential origin; instead, it means that no payment of a duty is required based on the weight of the cleared goods.
In detail, when a product is considered to have preferential origin, it means that it meets certain production criteria specified in free trade agreements. Switzerland has entered into such agreements with various foreign countries to obtain tax privileges. Having a preferential origin certificate allows exemption or reduction of the customs duty rate for the importer, who would otherwise pay the full duty calculated based on the gross weight multiplied by an applicable duty rate depending on the customs classification.
Proof of origin
This article does not claim to be an exhaustive piece on the subject, as discussing it thoroughly would take hours, and even then, we would not achieve a complete picture. It only seeks to attempt to provide a general explanation of a subject that is as vast as it is delicate, within the context of common cases. It is worth noting that import duties constitute one of Switzerland’s most significant sources of revenue and also play a crucial role in customs sanctions (since the duty are calculated based on the gross weight of the shipment, during a customs inspection, a higher gross weight physically found compared to the one declared could result in a fine imposed on the declarant).
To benefit from exemption or reduction of the import duty, a specific merchandise must have a proof of origin compliant with the corresponding free trade agreement. In Switzerland, the recognized proofs of origin are:
- Certificate of Circulation of Goods (CCM) – EUR1 / EUR-MED / EUR1 CN
- Declaration of Origin on the invoice
EUR1 and COO
The EUR1 serves as proof of origin in most free trade agreements. The exporter completes the form or authorizes the transporter to issue the CCM. It is an official document that must adhere to formal requirements, including specific physical characteristics and filling rules. The original CCM is usually printed on a green-patterned paper (which is gradually being replaced by a digital version). It can be filled out by hand or printed, and any modifications must be validated by the competent authority. The designated sections are fixed, and especially the mandatory ones must adhere to precise rules. The CCM must be issued while the goods are still in the territory of departure; otherwise, it should mention “ISSUED RETROSPECTIVELY.” It should be stamped and signed manually, both by the exporter and the validating authority.
The COO (Certificate of Origin) is a certificate similar to the EUR1 but valid for trades between Switzerland and Japan or Switzerland and China. All the details required for the EUR1 also apply to the COO, which must be written in English.
Declaration on Invoice
The declarations of origin on invoices must accurately reproduce the words specified in the free trade agreement (minor typos may be tolerated, but synonyms or other significant changes are not accepted). In English, the text to be included is as follows (official specific translations are available in all languages on the Swiss customs website):
“The exporter of the products covered by this document declares that, except where otherwise clearly indicated, these products are of …………….. preferential origin” (indicating the specific country of origin or a group of countries).
This declaration on the invoice can only be issued if the total shipment value does not exceed CHF 10’300,- and it must bear the original handwritten signature with the addition of the signatory’s date, name, and printed surname. An exception is made for the declaration of origin if the exporter is an Authorized Exporter: in this case, in addition to the declaration, the authorization number is mentioned, and there is no longer a value limit per shipment. Similar to this declaration is the REX declaration, reserved for trades between Switzerland and developing countries.
As mentioned at the beginning of the post, this topic cannot be fully covered in a few lines, nor can it be confined to precise general rules, as it is subject to decisions by various countries concerning trade and free trade, constantly changing in a rapidly evolving and ever-moving global market. In the case of significant and imminent updates, you will find relevant information on these pages, and if you have any questions, please do not hesitate to contact us!
