After years of heated discussions on modernising the 2013 WEP agreement, participating countries were unable to reach unanimous agreement in 2019. As an alternative solution and awaiting adoption by all members, the European Commission (EC) has adopted a number of proposals to apply the modernised rules of origin in the MSP region bilaterally and as a transitional manner. The new MSP rules will lead to significant simplifications for both manufacturers and commercial companies wishing to benefit from preferential tariffs within the pan-Euro-Mediterranean area. During the transition period, companies in countries where the new PEM rules have been ratified can choose to apply the new or old PEM rules, but they must ensure that the rules are followed uniformly. The long-awaited simplifications will facilitate the automation of origin determination and allow companies to benefit from the MSP agreement with much less administrative effort. In order to apply the rules of origin and cumulation of origin on the basis of the pan-European-Mediterranean preferential rules of origin, the protocols of origin of the existing free trade agreements were replaced by the rules of origin of this agreement: the regional agreement on pan-European-Mediterranean preferential rules of origin, also known as the MSP Convention, subsequently replaces the protocols of origin of each free trade agreement in force. between the parties. Decision No 1 of the EFTA-Albania Joint Committee, approved on 24.6.2021, ratified by Law 99/2021 of 07.07.2021 amending Protocol B to the Free Trade Agreement between the EFTA countries and the Republic of Albania as regards the definition of the concept of `originating products` and methods of administrative cooperation, with the transitional provisions of the MSP Convention as applicable alternative rules, and the amendment of the agricultural agreements between the Republic of Albania and the Swiss Confederation and the Republic of Albania and the Republic of Iceland as an integral part. Since one of the objectives of free trade agreements (FTAs) is the elimination of tariff barriers, at the heart of most agreements are rules of origin, which contain rules on the requirements that a product must meet in order to acquire originating status and be subject to preferential tariff treatment. In this context, the term «preferential origin» refers to the «economic nationality» of the goods traded. Free trade agreements between two parties are considered «bilateral» (e.B. EU-CH or CN-CH) and therefore «bilateral cumulation» is applied. If a free trade agreement is concluded between more than two parties, this can lead to a «diagonal cumulation», i.e.
. B if raw materials from Israel are processed in the EU into semi-finished products, which are then assembled in Switzerland. Diagonal cumulation requires harmonised rules of origin and agreements between all parties concerned. Diagonal cumulation takes place between several different countries that have the same rules of origin and have concluded trade agreements between them. This is when a producer of goods in both countries can import and use materials as if they came from their own country. For example, under the MSP Convention, a Moldovan trader who produces garments for export to the EU may use fabrics originating in Moldova, Georgia and Ukraine (and/or another party to the MSP Convention) to manufacture the garments. The requirement of dual conversion (i.e. yarn) has been met and the garments are considered to originate in the Republic of Moldova when exported to the EU and will therefore benefit from free access to the EU market. The next steps in this process will be the submission by the Commission to the Council of proposals to amend the original protocols contained in the bilateral agreements between the EU and interested countries and their adoption by the Council, which should be completed before the summer. The competent authorities under the bilateral agreements should then adopt the revised protocols as soon as the parties concerned have completed the internal procedures necessary for their consent.
Before the entry into force of the revised rules, the Commission will publish detailed guidelines on their application and organise seminars to explain how they work for the benefit of economic operators and customs. The revised rules will be more business-friendly and better adapted to the current needs of business and trade, and will also be more closely aligned with the rules introduced in recent EU trade agreements. The main improvements that have been introduced are: the aim is to modernise the EU`s preferential trade agreements with 20 MSP trading partners by making the relevant «rules of origin» in these agreements more flexible and business-friendly. The 20 Parties to the MSP Convention are Iceland, Liechtenstein, Norway, Switzerland, the Faroe Islands, Turkey, Egypt, Israel, Jordan, Lebanon, Palestine (this designation should not be understood as recognition of a State of Palestine and does not affect the individual positions of Member States on this issue), Georgia, the Republic of Moldova, Ukraine, Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia and Kosovo. .