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Why Do Firms Use Preferential COs?
What are the (Additional) Benefits of Preferential COs?
Why Do Firms Use Non-Preferential COs?
What are the Costs and Challenges of Claiming Origin?
The traditional economics literature on Rules of Origin (see online Appendix: blogs.sussex.ac.uk/ uktpo/ publications) has identified compliance as a necessary requirement for utilising preferential trade deals, which can create serious hurdles for traders. These problems can occur at several levels. There is a cost, not always financial, of understanding the Rules of Origin, particularly in the context of Free Trade Agreements where utilisation of the Rules allows preferential tariff treatment. There is also the cost of setting up systems to ensure compliance. Our study largely covers firms who have overcome these problems in the current EU context, though we have identified some issues regarding whether firms always understood existing Rules of Origin correctly. Finally, there is the actual ongoing operational cost of compliance. We find that the cash outlays involved in the last stage appear small but there are doubts about the ability (a) of firms not currently using origin declaration for trade within the EU dealing with the need for proof of origin, and (b) of existing users to cope with a new situation post-Brexit involving a multitude of Free Trade Agreements each containing their own Rules of Origin discipline.
Proving origin will be a far bigger issue than it is now for UK business exporting to the EU after Brexit. About half of UK exports go to the EU, and hence face minimal customs procedures at the present time. This will change post-Brexit. As a Customs Union which collects import duties at the external border, all goods produced in the EU or imports from third countries that have cleared customs are in “free circulation” within the EU and need no proof of where they originated. Before complete unification of the EU’s common commercial policy there were some anomalies leading to the need to demonstrate the origin of goods within the Common Market, notably where Member states had different quota regimes. But since 1993 there has been no need for UK firms selling in the EU to prove the origin of their goods.
However, in any form of Free Trade Area, as opposed to a Customs Union, there is a need to prove origin. This will be the case after Brexit occurs.
Presently, goods coming from non-EU European Economic Area (EEA) states (Norway, Liechtenstein and Iceland) need to prove their origin to determine whether they are exempt from tariffs under the terms of the EEA, or subject to EU tariffs as nonEEA products. This is important for goods involved in global value chains crossing through the EEA states, whose origin may not be easy to measure. After Brexit, the UK and EU may sign a Free Trade Agreement (FTA) and hence be subject to the same sort of procedure requiring exporters to prove origin in order to obtain preferential tariff concessions. Rules of Origin (RoOs) spell out how sellers must demonstrate the origin of goods, and these are likely to be complex and differ between products. UK firms will have to prove the UK origin of their goods in order to benefit from a UK-EU FTA — as well as for any potential FTAs with third (non-EU) countries.
As with many other forms of non-tariff barriers, the issue of the substance of RoOs is distinct from the procedure under which firms prove that they actually comply. This procedure is not up to the UK alone. The World Customs Organisation (WCO) has disciplines around procedure, in Annex K of the Revised Kyoto Convention, which attempts to harmonise world practice on Origin procedures. The EU or other new FTA partners will discuss in negotiations the conditions under which they will give preferential access to UK products, and vice-versa, as well as the options for demonstrating origin as per the global standards.
The purpose of this paper is to explore, in particular, the experience of UK firms with using Certificates of Origin, how well they understand the process, and why they choose this or any other option to declare origin. We discuss below the several different options for proving the origin of goods.
Rules of Origin (RoOs) are used by importing Customs authorities in the international trading system to determine if a product is considered as sufficiently linked to the exporting country to count as originating there, in order apply preferential or MFN (Most Favoured Nation) rates of tariff to the goods, and to check for quota, anti-dumping and related compliance. The importance of RoOs is due to the fact that duties and restrictions in many cases depend upon the source of imports.[1]
Under a Free Trade Agreement (FTA), RoOs are used to establish whether a product can receive the preferential rate of duty, usually a reduced tariff as negotiated by the parties to an FTA. In cases where there is no FTA in place, importing countries sometimes, but not always, require origin to be proved for reasons of national trade policy, including antidumping and quota compliance on imports.
Rules for determining preferential origin (origin that is eligible for preferential tariff rates) are made at the product level by FTA partner countries on the importing side. Non-preferential RoOs are set by importing countries for purposes including statistical requirements, quota monitoring, and anti-dumping amongst other purposes.[2]
RoOs usually fall into one of four types:
1. That the product is fully originating from that country (‘wholly obtained’ or WO).
2. That at least a certain percentage of value-added parts or components is derived from the FTA area, or that the product contains a maximum share of non- originating materials (‘regional value content’ or RVC).
3. That a change of classification has taken place within the FTA area because of a change in the nature of goods — imported inputs are transformed to a new commodity product code under the Harmonised System classification that is used in international trade (‘change in tariff classification’ or CTC).
4. That a specific process has been carried out, or a particular input obtained, within the FTA area (‘substantial transformation’ and ‘cumulation’).[3]
UK exporters can currently find the exact rule that applies to their product for each importer country by using the EU’s Market Access Database.[1] For export destinations outside the EU, UK exporters are required to know and adopt the Rules of Origin either for MFN trade, or under a preferential regime, or in circumstances where non-UK goods are exported from a non-UK country to an import destination under a foreign Free Trade Agreement (subject to ‘third-party’ invoicing).
Origin can be declared in several ways. Usually the exporting producer supplies documents — Certificates of Origin (COs) — to the importer for presentation to the importing country’s customs authorities:
Preferential COs certify that goods qualify for reduced tariffs or exemptions when they are exported to countries that are members of a Free Trade Agreement. Preferential COs are a frequent and wellused document in international trade generally, and will likely be a discipline that UK exporters will need to know post Brexit to take advantage of future FTA. In the EU trading context, this type of CO is known as an EUR1 Movement Certificate. In the UK, they can be obtained quickly and easily from a Chamber of Commerce.[4] In addition, the “A.TR” certificate entitles goods, which are in ‘free circulation’ within the EU, to receive preferential import duty treatment when shipped to Turkey.[5]
The UK Chambers of Commerce assist the exporter to select the right form under the relevant trade scheme, check that applications are completed correctly, advise of any errors on the form, inform the exporter of their respons ibilities, then stamp the document with a customs stamp in order to give Government backing to the exporter’s claim. Chambers of Commerce certify COs on behalf of Her Majesty’s Revenue and Customs.
In foreign Free Trade Agreements, which will become part of the UK export discipline post-Brexit, exporters are required to maintain evidence of origin claims, and risk private commercial liability from the importer in the event a false claim is made.
In relation to the EUR1 CO for goods trade presently within the EU, the exporter does not have to provide evidence that the goods meet the relevant rule of origin in order to obtain an EUR1, but must declare that they do meet the rules and the exporter has a responsibility to keep evidence of compliance. Declarations of origin under the present EU scheme that are challenged by customs authorities in importing countries can lead to HMRC inspections.
For low value consignments, usually under €6,000 (£5,700), companies can make an invoice declaration —a specially worded and signed statement on the export invoice or other commercial document relating to the consignment.[6]
Under the present EU system, EU firms can apply for Approved Exporter[7] (AE) status from their national customs authorities, allowing them to make statements of preferential origin using an invoice declaration[8] (with no upper limit on value) instead of using an EUR1 form. There is no fee for getting AE status but the application involves submitting documents to HMRC which might be time-consuming.
Following Brexit, the EU’s Approved Exporter Status will either be transferred into a Free Trade Agreement obligation for UK businesses, or potentially be unavailable to exporters. Inclusion of the system in any future EU-UK FTA will require negotiation in the Brexit trade discussions to come.
Under the current system, HMRC states[9] that a firm may be authorised as such if HMRC is satisfied that 1) the firm exports or intends to export on a regular basis; 2) the goods to be exported satisfy the relevant origin rules and; 3) the firm will correctly complete the documents and take proper care of them. Approved Exporter status in the EU pertains only to specified goods and is not a general authorisation of the exporter.
Approved Exporter status in the EU, as the system currently stands, is the only option, except for the low value-exemption described above, under which a company can claim preference under the EU-South Korea Free Trade Agreement (so an exporter to South Korea cannot use a Preferential CO to claim preferential tariff rates).
Once a UK firm has EU-type Approved Exporter status it continues to have a responsibility to keep the documentation required to prove origin, as per the relevant EU rules. Customs authorities in foreign jurisdictions with which the EU has Free Trade Agreements can conduct random checks, and origin can be challenged in the importing country, as with preferential COs (see above), triggering exporter country authorities to conduct checks. We were unable to find data on the incidence of checks.
REX is an online database of registered exporters that was launched by the European Union at the start of 2017 with a focus on trade with countries under itsGeneralised System of Preferences (GSP). The GSP relates to developing countries importing goods into the EU. After Brexit, the UK will no longer be a destination for GSP goods under the REX system. At present, REX mostly concerns imports from GSP countries. However, we understand the EU wants to roll out REX to all its future trade agreements, starting with the EU- Canada Comprehensive Economic and Trade Agreement (CETA)[10]. It is possible that UK exporters will become subject to REX requirements, in the same way that developing country exporters and exporters under the Canadian-EU FTA (CETA) are subject to the REX system at present.
With REX, a statement on origin by the firm replaces a Certificate of Origin, making it a similar system to the EU’s Approved Exporter system.[11] Compliance is monitored and adjudicated by the EU, rather than by the authorities in the exporting destination. This would mean that the UK authorities have limited control of the adjudication of whether a good under REX is compliant with the EU’s assessment of origin, and therefore whether the goods are subject to tariff reduction and quota/anti-dumping restrictions.
Assuming that there will be an FTA with the EU-27, UK firms will be required to prove origin using one of the methods detailed above.
We understand that the EU’s ambition is to use the REX system for all of its future trade agreements. If the UK agreed to sign up to this system, all firms selling to the EU-27 would have to apply to HMRC for registration. But we do not know what final decision will be taken. The current preferential certificate of origin could also be used as will be the case for most other trade outside the EU, possibly alongside the EU’s REX or Approved Exporter mechanisms, and would involve the least change in current processes.
Finally, in a no-deal scenario, UK firms may be required to obtain non-preferential Certificates of Origin to export to the EU-27 as is the case for non FTA partners now (and also to export to current EU FTA partners with whom the UK does not put an FTA in place by the leaving date[12]).
The academic and policy literature (see online Appendix: blogs.sussex.ac.uk/uktpo/publications) tends to conclude that certifying origin often represents a large cost for business, and that firms will not claim eligible preferences if the cost exceeds the saving on duty. The current cost of a Certificate of Origin in the UK is approximately £30, however, and we note in this paper that duty savings under preferential schemes usually run into the thousands of pounds per shipment.
In order to better understand this issue, we conducted a series of interviews with small and medium-sized UK exporters, and conducted a shorter online survey with a larger group.
The sample of interviewed firms should not be thought of as a random or representative sample: it was composed of firms that were proposed by BCC member Chambers as known users of COs. As such, these firms are all using the current CO system but there might perhaps be other firms who are not exporting at all, precisely because of the difficulty they experience using that system. While we cannot draw strong conclusions from such a sample, it provides valuable information as a fact-finding exercise and a series of case studies.
We conducted twelve interviews by telephone in late August-early September 2017, with participants including Chief Executive Officers, Chief Financial Officers and Export Managers. The interviews were based around a template asking about firms’ use of certificates, the costs and benefits of the ways they prove origin, the rules they face and the documentation they keep, but allowed respondents to discuss aspects relevant to their role and the firm’s activity in trade.
Firms ranged in size from 10 to 500 UK employees. They represented a range of manufacturing sectors such as machinery, textiles and medical devices. Exports made up at least 30% and up to 95% of firms’ sales with all exporting to the EU and at least some non-EU countries. Frequency of export shipments ranged from multiple times per day, to once a fortnight.
We would like to take this opportunity to thank all the participants.
The correlation — or lack of it — of preference utilisation rates with the level of preference margins is a key theme of the academic literature on Certificates of Origin. From the point of view of the UK firms we spoke to, however, the take-up of preferences appears almost entirely driven by the demands of the foreign customer and market conditions, and we do not know whether preference margins given the size of the shipment or the restrictiveness of the RoO are the reasons behind the importer seeking a CO.
Asked whether the firm always uses preference certificates whenever they are available, only half of interviewees said ‘yes’. The remainder obtained an EUR1 certificate only if a customer requested one. This is understandable since the requirement of obtaining the certificate falls on the exporter. However, the customs duty is payable by the importer at the point of entry — so it is possible that importers in EU FTA partners are not always aware of potential duty savings. Indeed, in the mirror image situation we spoke to one UK-based import- export business that was not aware of the procedure required to save them duty on their imported inputs arriving from FTA partners.
“We operate in such a competitive market that we always get an EUR1 [preferential Certificate of Origin] if it’s available.”
Because the UK is inside the EU, the current preferential CO document in use by UK business is usually the EUR1 Certificate. In discussions, some firms cited benefits to the EUR1 system over and above the duty saved. For two respondents, the declaration of EU origin was seen by customers as a mark of quality, one of which also said that it “probably” helped to clear importing customs. However, the overriding benefits, as expected, were the duty savings for the customer.
“Duty savings are a big commercial driver for the business so we always get an EUR1 [preferential Certificate of Origin] form where possible.”
Some countries require some imports to have a CO even if it does not grant preferences. These non-preferential COs have their own rules – determined by the importing country, or if this does not have its own rules, then by the country of the exporter. Many firms we talked to did not understand the system and, among those that did, customer requirements were the main reason for use. One firm cited banking requirements for letters of credit. Two firms making products classified as medical devices provide COs as part of broader regulatory requirements.
A non-preferential CO does not help the goods qualify for any reduction in duty rates, except in so far as it may provide evidence for importing customs authorities to determine Most Favoured Nation (MFN) treatment. It is also often a component in an assessment of risk-based treatment of products coming into a country. Not all non-preferential trade requires a CO, and sometimes it is a commercial requirement rather than a customs requirement. COs may, for instance, be needed at a buyer’s request, or to prove that goods do not originate in countries that face sanctions in the importing country, or for antidumping enforcement, or for regulatory or statistical purposes.
A non-preferential CO can be obtained from a Chamber of Commerce.[13] Costs vary, depending on the Chamber and whether the firm is a member but is around £20-£50 [14] per certificate. A CO can be obtained online. The process is electronic, and the document is ultimately produced as a paper document as is stipulated by the World Customs Organisation.
Four of our interviewees said they were Approved Exporters under the EU scheme that the UK is currently part of, but there was not wide awareness of the existence of the system among the others. The Approved Exporters were unanimous in describing the benefits as savings in time and cost of applying for EUR1 preferential certificates, with the most frequent exporter explaining that the 20-30 minutes per shipment saved is the equivalent to two employee hours per day, in addition to the certificate and courier charges.
None of the twelve exporters we spoke to at length — eight of which were not Approved Exporters and therefore relied on the Certificates of Origin system — considered the origin certification process to be excessively costly. Typically, interviewees — all firms that regularly used the system – cited a time cost of approximately 20-30 minutes per shipment to request, fill in and return a certificate. Usual charges cited for a certificate are around £30 from a Chamber of Commerce, with some firms facing additional courier costs.
Firms also face an administrative cost to ensure a product meets the relevant RoO before claiming preferences on an EUR1 certificate, and then managing and tracking the relevant documentation in case the status of the product is questioned by importing-country customs authorities, as is requested under the terms of a Free Trade Agreements.
This was a topic with widely varying responses and it was not always clear that the individuals we interviewed knew the specific rules that they are required to meet, or whether the firm itself did.
One trade consultant summed up the situation:
“I would say the majority of manufacturing businesses do not under stand RoOs. Others don’t do it at all, or do it only when the y are asked by their customer.”
Some firms appeared to be unclear on even what type of RoOs they need to comply with. We asked ten of the firms whether they knew the type of RoO which they faced (for instance, transformation, minimum content or specific process) and only five said they were sure.
Only two out of twelve firms mentioned obtaining supplier declarations as part of the origin-documentation process, while others keep track of the origin of inputs through ERP (Enterprise Resource Planning) business management systems. This appears often to be for non-origin related reasons: businesses might for instance offer guarantees or warranties and therefore need to ensure they know where particular components were sourced. Among those which had processes in place, the set-up was the most time-consuming element.
“Putting in place a full customs compliance system has taken time and involved getting long term supplier declarations, but once that is done for a product it is relatively easy to manage.”
The businesses that we spoke to tended to be very focused on customer requirements, seeing RoOs as a relatively minor bureaucratic process to go through when exporting but not generally a particularly time- consuming or costly one. However, these interviews have also revealed that firms are not always entirely sure of the rules they face and thus there may be errors in compliance. For example, one respondent assumed that all intermediates bought from sellers in the UK automatically counted as ‘originating’ for the purposes of calculating the origin of the final product.
The introduction of post-Brexit origin requirements might therefore require a push to better inform firms about what constitutes compliance, particularly in the context of a multitude of future UK Free Trade Agreements emerging, each requiring UK exporters to comply with a unique set of Rules of Origin.
In order to further investigate firms’ use of COs, we turned to a larger sample of firms available through the British Chambers of Commerce annual International Trade Survey (ITS). The ITS is an annual survey of members of the UK Chambers of Commerce which, in 2017, was carried out online in late September to early October. Respondents were primarily at senior management level. In 2017 it had over 1,600 respondents. Respondents were filtered for those that said they exported to non-EU countries, giving a sample of 679 firms.[15] Small firms (0-49 UK based employees) represent 76% of the sample.
Even among this sample of firms that export to non-EU countries, a substantial fraction claim not to use any type of CO (Figure 2). There could be several reasons for this. For instance, these firms might not be exporting to preference-granting countries (i.e. to EU FTA partners) and they might be exporting products for which the importing country does not require a non-preferential CO. Firms could also be making shipments below the €6,000 maximum size for certificate-free exports or be part of the EU’s Approved Exporter scheme (see Figure 5).
Our interviews indicated that customer (foreign importer) requirements were the key determinant of whether firms use COs, either preferential or nonpreferential. This is supported by the larger sample of firms in the survey. This question allowed firms to select multiple reasons for using a preferential CO. ‘Duty reduction’, ‘Supply contract’ and ‘Supply chain’ were all heavily selected. However, the most commonly cited reason was a ‘customs authority requirement’. While some countries explicitly require non-preferential COs, in many cases, it is only a customs requirement if the firm wants to claim the preferential rate of duty, so we interpret this as firms, or their customers, seeking the lower duty rate. Finally, for a smaller fraction of firms, the demands of financial institutions for a letter of credit are also cited as a reason for using a CO.
For non-preferential COs, a ‘Letter of Credit’ is a more common reason provided than was given for preferential COs. ‘Supply contract’/ ‘Supply chain’ reasons also appear frequently.
Question 4 asked exporters to non-EU countries that do not use any type of CO why not. The largest category of response was ‘Don’t know’. This may be related to the functional role of respondents, i.e. they were not in a position to know the reason for a company’s policy but analysis of the other responses provides some useful information about the behaviour of UK firms.
For example, over 30% of the smallest firms admitted to lacking understanding of COs, so if there is an expansion of the system under a future trade agreement with the EU, providing these firms with more information might be helpful in export promotion for small businesses.
The Approved Exporter scheme appears more popular with larger exporters while, as could be expected, smaller firms are more likely to ship small consignments and so not require a CO.
Notably, though, no category of firm highly cited the difficulties of actually complying with RoOs, whether in terms of sourcing inputs or dealing with the rules themselves, as a reason for not using COs.
This lends weight to the argument that, for most firms, it does not appear to be the details of the rules in place that are the greatest barrier to trade but that firms often lack the knowledge of how to use COs to obtain preferential market access.
Note: Large firms (UK employees > 250) not shown due to low number of responses (4)
The International Trade Survey supported the case study evidence that the use of Certificates of Origin is largely driven by importing-customer requirements and not by the RoOs themselves. There also appears to be a substantial minority of firms that lack understanding and information about the options to prove origin. We predict the requirements around knowledge of RoOs will only increase, as future UK Free Trade Agreements will require understanding of the origin requirements per agreement, in order to make use of the tariff concessions negotiated by UK Government.
As we noted earlier, the traditional economics literature on Rules of Origin has identified compliance as creating serious problems for traders. Exporters in the UK are only presently obliged to understand and comply with the EUR1 Certificate of Origin and EU-related Free Trade Agreements wherever they apply to goods trade. After Brexit, the Rules of Origin arising from each Free Trade Agreement concluded by the UK will mean an increase in compliance requirements per agreement. Our work suggests that the problems must be unpacked. There is a cost, not always financial, of understanding the rules, and these costs are likely to multiply post-Brexit as the complexity of multiple FTAs increases. Our study largely covers firms who think they have overcome this problem, though they may not always understand the rules correctly. There is then the cost of setting up systems to ensure compliance, and finally the actual ongoing operational cost of compliance. We find that the cash outlays involved appear small.
This paper has presented new evidence on UK firms’ approach to Certificates of Origin, through one-on-one interview case studies and an online survey. The current system appears to work well in practice, with the tried-and-tested use of COs to prove origin not seeming to be unduly onerous, especially when combined with the EU’s Approved Exporter scheme for frequent shippers. Post-Brexit, these systems may not apply to UK-EU goods trade, depending upon the outcomes of negotiations between the UK and EU in the lead-up to the scheduled Brexit date.
The CO system overseen by the Chambers of Commerce is also scalable to a large post-Brexit expansion and offers a private sector solution to proving origin. The EU Approved Exporter scheme offers the possibility of streamlining individual shipments for firms, but at the cost of large numbers of exporters requiring approval from HMRC. HMRC would thus need the staff to monitor the initial approval of every firm trading with the EU after Brexit, without necessarily reducing inspection costs later, even though firms’ compliance costs would be lower.
However, all businesses are likely to have to rethink their RoO compliance post-Brexit as previously ‘originating’ inputs change status, particularly as new Free Trade Agreements – each with their own Rules of Origin – are concluded between the UK and other countries after Brexit [16]. In terms of firms currently trading with non-EU importers, those firms already comfortable with RoOs would have to extend their activity to trade with the EU-27 and they might also have to adjust to the imposition by the EU on the UK of a new system, such as REX. Firms currently only trading with the EU, and therefore not having to meet or show compliance with RoOs, would also have to learn new methods of RoO compliance.
Our evidence shows that there is weak understanding of the current rules on the part of business. This could potentially present problems if the system the EU presently uses is expanded and applied to the UK post-Brexit, leading many more firms to require COs in the future. Problems relating to RoOs could become more of an issue if the atmosphere surrounding UK-EU trade deteriorates. It therefore appears to be important that small and medium-sized firms are provided with adequate support to navigate future RoOs with the European Union, and also under any potential new Free Trade Agreements made between the UK and non-EU countries post-Brexit. This would allow UK business to take advantage of any preferential tariff rates that might be negotiated both with the EU and with other countries post-Brexit, as well as to maintain continuity in the means by which firms declare origin.
An Online Appendix, available at: blogs.sussex.ac.uk/uktpo/publications contains a literature review and a full bibliography for this Briefing Paper.
The authors are extremely grateful for funding provided by the British Chambers of Commerce, and for comments and advice from Anastassia Beliakova (BCC), Jim Rollo and L. Alan Winters, as well as to participants in our interviews.
The authors assert their moral right to be identified as the authors of this publication. Readers are encouraged to reproduce material from UKTPO for their own publications, as long as they are not being sold commercially. As copyright holder, UKTPO requests due acknowledgement. For online use, we ask readers to link to the original resource on the UKTPO website.
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[1] https://www.wto.org/english/tratop_e/roi_e/roi_info_e.htm
[2] See https://ec.europa.eu/taxation_customs/business/calculation-customs-duties/rules-origin/nonpreferential-origin/introduction_en. WTO rules leave importers broad discretion although there is a longstanding attempt to harmonise, see Hoekman and Inama (2017).
[3] See: http://madb.europa.eu/madb/indexPubli.htm
[4] As an example, the London Chamber charges £20.70 to members and £41.70 to non-members for an EUR1 certificate.
[6] See: https://www.gov.uk/government/publications/notice-827-european-union-preferences-export-procedures/notice-827-europeanunion-preferences-export-procedures.
[7] Approved Exporter status needs to be distinguished from ‘Authorised Economic Operator’ status, which helps with guaranteeing the authenticity of paperwork accompanying exports, as well as helping companies go through customs checks more quickly, but does not itself provide a way to establish origin. See https://www.gov.uk/guidance/authorised-economic-operator-certification
[10] Under CETA, Canadian exporters to the EU will be registered in Canada. See: https://ec.europa.eu/taxation_customs/sites/taxation/files/registered_exporter_system_rex_-_guidance_document_v1_en.pdf
[14] For instance, the London Chamber of Commerce charges £24.30 for members and £48.60 for non-members. See http://www.londonchamber.co.uk/lcc_public/article.asp?aid=103
[15] There was a substantial non-response rate among these firms to the detailed questions which follow. Sample counts are given in each figure.
[16] Firms that currently only export to the EU would be drawn into the RoO process under an FTA and would need to keep records proving the origin of their goods, whereas as now they do not require a CO.
