Origin of goods
In general, rules of origin of goods can be divided into:
- preferential origin and
- non-preferential origin,
and as a result, the goods acquire preferential or non-preferential origin.
Preferential origin of goods is granted to goods from certain countries, which allows them to apply more favorable customs treatment, which means that customs duties are lower or non-existent. Preferential origin of goods means that the goods were obtained in a country in accordance with a certain preferential regime. Rules on preferential origin which goods must meet in order to obtain more favorable treatment, are determined by:
1. Free Trade Agreements, or
2. Generalized System of Preferences (GSP).
1. The Free Trade Agreement, or rather its Protocol on the Origin of Goods, establishes that preferential origin is proven by presenting proof of origin, namely: a movement certificate EUR. 1 or a Declaration of Origin.
The EUR.1 movement certificate is issued by the customs authority of the exporting country, in Bosnia and Herzegovina it is the Indirect Taxation Authority, while the Declaration of Origin is made by the exporter.
The Protocol on Origin from the Free Trade Agreement that Bosnia and Herzegovina has with: the European Union, the European Free Trade Association (EFTA), the Central European Free Trade Agreement (CEFTA 2006) and the Republic of Turkey, is the Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin of Goods, published in the Official Gazette of BiH - International Agreements, 15/14 (PEM Convention).
The text of the PEM Convention can be found here .
The PEM Convention was amended by Decision no. 1/2023 of the Joint Committee of the Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin (PEM Joint Committee), which was adopted at the 15th meeting of the PEM Joint Committee held on 7 December 2023. Decision no. 1/2023 of the PEM Joint Committee on amendments to the Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin (Revised PEM Convention) was published in the Official Gazette of BiH - International Agreements, 8/24. The Decision entered into force on 1 January 2025 for all free trade agreements containing a so-called ‘dynamic reference’ to the PEM Convention and for those PEM Contracting Parties that have completed their internal procedures for the implementation of this Decision.
Text of Decision no. 1/2023 of the PEM Joint Committee you can find here .
The 16th meeting of the PEM Joint Committee was held on 12 December 2024. Two Decisions were adopted at this meeting.
First decision adopted is Decision no. 1/2024 of the PEM Joint Committee amending Decision no. 1/2023 of the PEM Joint Committee concerning the use of movement certificates issued electronically under the Revised PEM Convention, as from 1 January 2025. According to this Decision, PEM Contracting Parties may agree to establish a system allowing proofs of origin to be issued electronically and/or submitted electronically. Until such a system is established, PEM Contracting Parties shall accept movement certificates issued electronically when presented at the time of import, provided that they meet the specified conditions.
Text of Decision no. 1/2024 of the PEM Joint Committee you can find here .
The second decision adopted is Decision no. 2/2024 of the PEM Joint Committee amending Decision no. 1/2023 of the PEM Joint Committee concerning transitional arrangements necessary to clarify the preferential treatment granted to goods exported from a PEM Contracting Party before the application of the Revised PEM Convention, i.e. before 1 January 2025, and imported into another PEM Contracting Party after 1 January 2025. Pursuant to this decision, Annex I of the PEM Convention and the Revised PEM Convention will apply in parallel between PEM Contracting Parties until 31 December 2025, for which the conditions for such application are met.
The text of Decision no. 2/2024 of the PEM Joint Committee can be found here .
By 31 December 2025, all PEM Contracting Parties should complete their internal procedures so that only the Revised PEM Convention can be applied no later than 1 January 2026.
2. The Generalized System of Preferences (GSP) is the best-known form of unilateral preferential arrangements by which developed countries of the world grant preferences to developing countries and least developed countries. The system was adopted at the UNCTAD Conference in 1968 with the aim of greater integration of developing countries into the international trading system. Developed countries grant duty-free imports from developing countries through the Generalized System of Preferences, primarily for industrial products and a fewer number of agricultural and food products.
Rules of origin are a key component of all GSP schemes. In order to qualify for preferential treatment under the GSP scheme, products exported from a GSP beneficiary country must comply with the rules of origin of the respective GSP granting country. The rules of origin can be found as a Manual on the websites of the granting country institutions (for example: Ministry of Trade, Customs Authority, Chamber of Commerce, etc.). Under the GSP, origin is proven by presenting a Certificate of Origin FORM A, which in Bosnia and Herzegovina is issued by the Foreign Trade Chamber of Bosnia and Herzegovina, i.e. Public Documents Department.
More information about the GSP scheme and the manuals mentioned above can be found at: http://unctad.org/en/Pages/DITC/GSP/Generalized-System-of-Preferences.aspx .
Bosnia and Herzegovina benefits from the GSP scheme by the following countries: Australia, Japan and New Zealand.
The Ministry of Foreign Trade and Economic Relations has been officially notified that the legal approval for duty-free treatment under the GSP program of the United States of America has expired on January 1, 2021. Bosnia and Herzegovina is a beneficiary of this program, along with 122 other countries. As a result, goods imported into the USA that were eligible for duty-free treatment under the GSP until 31 December 2020, and from 1 January 2021 is subject to the regular rate or the MFN customs rate.
The United States Congress unilaterally makes all decisions on whether or when to extend the US GSP Program, both for Bosnia and Herzegovina and for all program beneficiary countries.
More information can be found at: https://ustr.gov/issue-areas/preference-programs/generalized-system-preferences-gsp/gsp-program-information .
By decision of the Council of the Eurasian Economic Union of 17 March 2022, the Eurasian Economic Union (the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Republic of Kyrgyzstan and the Russian Federation) removed 75 developing countries (including Bosnia and Herzegovina) and two least developed countries from the list of countries eligible for GSP preferences because they no longer meet the criteria for enjoying economic assistance from the Eurasian Economic Union.
You can find more information on this topic at: https://eec.eaeunion.org/en/commission/department/dotp/tariff_preferences.php
Non-preferential origin of goods determines their origin but does not confer any more favourable customs treatment. Non-preferential origin is used for statistical purposes, for the application of quantitative restrictions, as well as for determining whether goods are subject to the application of trade policy measures (anti-dumping, etc.). Since non-preferential rules of origin are not harmonised, each country lays down its own rules for acquiring non-preferential origin. Non-preferential origin is proven by presenting a Certificate of Origin, which in Bosnia and Herzegovina is issued by the Foreign Trade Chamber of Bosnia and Herzegovina, Public Documents Department.
Decision on Non-preferential Origin of Goods (Official Gazette of Bosnia and Herzegovina, 37/19).