The Mercosur Origin Regime (ROM), which defines the rules to determine whether a product can be considered to originate from one of the bloc's member countries, will undergo significant changes starting July 18. The changes, which had been agreed upon by the bloc's summit in July of last year, aim to facilitate intra-bloc trade and directly impact companies that export and import products within Mercosur.
End of mandatory Certificate of Origin — One of the main changes is the end of the mandatory issuance of a Certificate of Origin for products exported between Mercosur countries. In force for decades, the document is required to prove the origin of the goods and ensure the application of the bloc's preferential tariffs. From now on, Brazil will be able to request that Mercosur members accept the “self-declaration of origin”, a faster and less bureaucratic procedure. However, it is worth noting that this request must be made six months before the implementation of self-certification.
The new model provides ease and cost reduction by allowing the use of a faster and less expensive proof of origin. The end of the mandatory document will result in an estimated saving of R$10 million per year for exporters. Approximately 600,000 certificates are issued annually, of which 351,000 are addressed to Mercosur.
The certification of origin, however, remains valid. The hybrid model meets the needs of different types of Brazilian producers and exporters, especially small and medium-sized companies that need assistance in proving their origin.
Less bureaucracy and more agility in releasing goods — Customs authorities of importing countries may, when deemed necessary and sufficient, make simple inquiries directly to producers or exporters, without the need to open a formal origin investigation procedure. In this way, it will be possible, in such cases, to release commercial transactions under question more quickly, reducing the burden on exporters and importers, thus meeting another important demand of the Brazilian industry for speed in any origin investigations.
This new form of investigation also reduces administrative costs for governments. At the same time, these procedures aim to provide better control and inspection conditions for the Brazilian Federal Revenue Service, investing more time and resources in applying risk management to combat fraud.
Increase in the limit of foreign components — The Regime of Origin also defines a maximum percentage of foreign components that a product can have to be considered originating from a Mercosur country. This limit, which was 40%, will increase to 45% as of July 18. Therefore, in order to be considered national, a product can have a maximum of 45% of raw material purchased from countries outside Mercosur. This flexibility applies to 100% of industrial products and 80.5% of agricultural products – the other 19.5% had the percentage maintained at 40%.
Export from another country — Another new feature brought by the new rules is the possibility of exporting a Brazilian product from a customs warehouse in a third country. This measure aims to facilitate logistics and reduce costs for exporting companies.
The new ROM began to be negotiated in 2019, based on the most modern trade agreements in the world.
For the Vice President and Minister of Development, Industry, Commerce and Services, Geraldo Alckmin, the measures are designed to simplify processes and reduce costs, improving the business environment in the country. “This is our obsession. Reducing bureaucracy and reducing costs for producers and exporters are essential to boosting industry and foreign trade,” he says. He points out that, although the economy is globalized, the strength of international trade is essentially intraregional.
“The changes to the Mercosur Origin Regime are an important step towards facilitating intra-bloc trade and strengthening the economic integration of member countries. The new rules favor the flow of trade between countries, boosting the competitiveness of companies and generating new business opportunities,” says Tatiana Prazeres, Secretary of Foreign Trade at the MDIC.
It is important to highlight that the new rules of the Mercosur Origin Regime are only valid for trade between the bloc's member countries. In other words, exports to third countries continue to follow the specific rules of each country.
Secex recommends that exporting and importing companies familiarize themselves with the new rules of the Mercosur Origin Regime in order to adapt to the changes and take full advantage of the benefits of the new measures. For more information, companies can consult the Mercosur New Origin Regime Manual.
