Free trade
PEM zone: New rules of origin in effect since January 2025
The pan-Euro-Med zone has introduced modernized rules of origin on January 1, 2025. Find out more about changes, timetable, and countries involved.
22.01.2025
The EU and its fellow contracting parties in the Pan-Euro-Mediterranean (PEM) zone have, following several years of negotiations, agreed on reforms to the rules of origin under the Regional Convention.
The Regional Convention on PEM preferential rules of origin came into force in 2012. It gradually replaced the rules of origin in many of the bilateral agreements between the contracting parties.
The goal was to modernize the rules of the Regional Convention. Not all contracting parties initially agreed to the revised rules, so they have been available to companies as transitional rules for some agreements since 2021. These transitional rules expired at the end of December 2024 when the revised rules of the Regional Convention, which have now been adopted, came into force.
Pan-Euro-Med matrix - which countries are included?
All contracting parties are listed in the Pan-Euro-Med matrix: the European Union, Switzerland, Iceland, Liechtenstein, Norway, the Faroe Islands, Turkey, Morocco, Algeria, Tunisia, Egypt, Israel, Jordan, Lebanon, the West Bank and Gaza Strip, Georgia, Moldova, Ukraine, Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia, and Kosovo.
The Pan-Euro-Med matrix shows which countries have concluded agreements with each other and which rules of origin the agreement follows. In the simplified table, the application of the previous Regional Convention or the equivalent previous rules of origin is indicated with a “C”. Agreements in which the Regional Convention is applied with the revised rules of origin are marked with an “R”.
If a “CR” is used in the simplified matrix, either the old or new rules can be applied in 2025. This was made possible by the transitional provisions adopted at the end of 2024. However, they are not applied by all countries.
The fact that the same rules of origin no longer apply to all countries in the matrix has resulted in two cumulation zones:
- On the one hand, the agreements using the revised Regional Convention (new PEM rules).
- On the other hand, the agreements that still use the old PEM rules.
In principle, goods that have acquired their origin in one zone in accordance with the rules applicable there can no longer be used as being entitled to preference in the other zone. However, the transitional provisions, if they can be applied, in many cases provide for a permeability from the generally stricter old rules to the newer ones.
The EU Directorate-General for Taxation and Customs Union (TAXUD) provides information on its website Pan-Euro-Mediterranean cumulation and PEM Convention.
For Switzerland, the Swiss Federal Office for Customs and Border Security (BAZG) explains the current status on its website Rules of origin of the revised PEM Convention.
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PEM rules of origin - key changes
The revised rules of origin can be summarized in the following simplifications:
- Streamlined handling and processing rules
Elimination of cumulative requirements, lower thresholds, consolidation of rules of origin, and elimination of many former rules for HS headings and subheadings - Option to calculate ex-works price and value of non-originating materials on the basis of average values during a fiscal year
- Increase in general tolerance from 10% to 15%
- Introduction of weight rules, particularly in sections 1 to 24
- Option for textiles to achieve originating status through a wider range of processing steps
- Full cumulation for most goods
- Weakening of the no-drawback rule
Option of duty drawback (for inward processing, for example) for most products
Proofs of origin - current and future
The EUR-MED and the EUR-MED declaration of origin have been eliminated. EUR.1 and the declaration of origin remain in use. Approved exporters can also submit declarations of origin for consignments over 6,000 euros. It is also possible to agree bilaterally that, in lieu of the declaration of origin, a statement on the origin can be submitted by an exporter registered in an electronic database.
Together with the transitional provisions, the Regional Convention was also supplemented in December 2024 with provisions on electronically issued proofs of origin.
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