News

20.06.2014

Non-preferential origin of goods or Made in Germany

Changes in the law of origin threaten export marketing", "Made in Germany in danger" and other headlines make it to the front pages of the economic section of national newspapers more and more frequently. But very few people really know about the interactions between the various legal sources on the subject of origin and provenance.

On the subject of "Made in Germany" there is often only superficial knowledge.

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Hardly anyone can correctly classify the terms "non-misleading indications of source", "last essential processing" and "Made in Germany". When do percentage rules apply? And how high are these actually? Does non-preferential origin law apply to imports and exports?

However, half-knowledge can have an expensive repercussion for companies - at the latest when the customs authorities do not give up the delivery of the goods and the customer slowly becomes angry. So there is no need for warnings and complaints from competitors or consumer protectors. It is therefore important to prevent sales abroad from promising things that cannot be kept at the company headquarters later or that can only be repaired with difficulty.

Background for the recent wave of inquiries for the marking of goods "Made in Germany" are two legislative projects of the EU: The modernization of the customs code and the new version of the product safety regulation (Consumer Product Safety Regulation). Even if the "Made in" provisions are not to be changed directly, i.e. in the Madrid Agreement, the changes planned by the EU in customs law and product safety will inevitably have a strong impact on this form of product labelling in foreign trade.

In addition, the new Consumer Product Safety Regulation is intended to make the marking of origin obligatory for consumer products and thus for numerous product groups in the electrical industry.

Orientation of the "Made in ..." law on the law of origin

In order to determine what is misleading, the opinion of the relevant public is taken into account before the courts. That is why the "Made in ... "law, there is always a certain uncertainty as to what is actually permitted and what is prohibited. The electrical engineering and electronics industry with its rapidly changing products is particularly affected by this. This is why it has become common practice to focus on the topic of non-preferential origin and thus on the IHK certificate of origin.

The non-preferential certificates of origin issued by the Chambers of Industry and Commerce in Germany are usually issued according to a simple, generally applicable rule laid down in the Customs Code of the European Union. The standard for the issue of a certificate of origin is the "last essential working or processing". This simple rule is now no longer enough for the EU Commission and should therefore be backed by concrete percentages for each product group. (Note: Since June 2014, the EU Commission has presented a proposal which favours the so-called tariff jump instead of percentages. This approach, too, is not geared to the quality aspects of a product that are important for consumers, but merely makes it easier for customs officials to allocate goods for tax purposes.)

Only preferential origin so far with list rules

Such precise rules of origin, laid down in various Free Trade Agreements (FTAs), are already in use today for obtaining tariff preferences. The meticulous observance of the rules for preferences and the associated bureaucratic effort are "rewarded" with sometimes considerable customs advantages when importing into a free trade zone. Companies are free either to take advantage of these customs advantages and the associated additional work, or simply to pay the required customs duties.

Tendencies in case law towards "Made in Germany"

There are two trends in court rulings. On the one hand, there is a higher demand on consumers to inform themselves. The fictitious reference individual is now the "averagely informed and circumspect consumer". On the other hand, it is increasingly assumed that the target public expects that all essential manufacturing steps must have taken place in Germany. The Düsseldorf Higher Regional Court even goes so far as to expressly reject percentage rules and the "last essential processing" as decisive criteria. The consumer's expectations alone are therefore decisive.

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