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By the initiative of EBA Customs Committee, Ukraine gives the green light to diagonal cumulation

21/ 09/ 2020

In response to EBA’s request, we received the official confirmation about the possibility of diagonal cumulation from the EU Commission, Delegation of the EU in Ukraine, and Customs Office of the Kingdom of Norway at the end of last week. The Deputy Minister of Economic Development, Trade Representative of Ukraine Taras Kachka also noted about the launching of the diagonal cumulation on his social media page.

Thus, Ukraine confirms the possibility of practical realization of the PEM Convention and Free Trade Agreement between Ukraine and EFTA states (Switzerland, Norway, Iceland, and Liechtenstein).

The diagonal cumulation is the possibility of reprocessing goods from EU or EFTA states in Ukraine and acquiring Ukrainian origin for their further export to the EU or EFTA markets.

It is worth mentioning that not all goods can acquire Ukrainian origin through sufficient processing (such as fish or seafood). But in consequence of the diagonal cumulation, for example, Norwegian and Icelandic fish products could acquire Ukrainian origin while exporting to the EU. At the same time, duties on fish products from the EFTA countries in the EU are much higher than those originating from Ukraine (for example, mackerel – 20% compared to 0%, the same applies to trout, salmon, etc.).

The EBA Customs Committee has been actively working on this issue last year. So the business welcomes the positive response also from the Ukrainian authorities. 

However, the diagonal cumulation should have been launched on the 1st of January 2019. But due to delays of the controlling authorities, the official confirmation of this opportunity has been provided only now.

Soon EBA will hold an event to discuss the practical realization of diagonal cumulation in order to understand all the features of its accomplishment.

 

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