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Pan-Euro-Mediterranean (PEM): Changes at the start of 2026

Kerstin Graf
  • Updated

At the turn of the year 2024/2025, there were already extensive changes in the area of origin of goods and preferences. These required adaptations of the AEB Origin & Preferences software as well as the cooperation of those responsible in the companies that use this software.

The changes will continue to affect companies in the EU and Switzerland that use AEB software. Companies in the UK are not affected. The rules will not be changed for countries outside the PEM zone, such as South Korea, Mexico, Japan, and Canada.

This article is the central location for all currently known and forthcoming specialist information, instructions, and calls to action (as of 10/2025). If you use the Origin & Preferences software from AEB, it is essential that you read and implement the following instructions.

What will change in the Origin & Preferences software on January 1, 2026?

  • In AEB's Origin & Preferences (O&P) software, only individual agreements have so far been converted to the new rules. As of January 1, 2026, all affected agreements will be converted in the software to the rules of origin of the revised convention. For more details, see the section Further background information below in this article.
  • The changeover takes place as part of a service pack that contains the widget "FTA reform guide". It will support you step by step with all the necessary adjustments.
    AEB plans to make this available with the December 2025 service pack. Since there may also be short-term changes, stay informed through a subscription in the AEB Help Center about this at all times:

What is important for you now? What steps do you need to take?

Preparation

What is the process for the actual changeover?

  • As soon as the widget is provided with the service pack, all data imports and exports from and to Origin & Preferences (O&P) are interrupted. These are only executed again after the widget has been completely executed for all clients.
  • An administrator with specialist knowledge must run the widget after the turn of the year. The widget will guide you step by step through the changeover. Work in Origin & Preferences can only be continued after the widget has been fully executed in all clients. Also take this into account for substitution situations such as vacation or sick days.

Your duty to cooperate

  • Subscribe to this Help Center article to stay updated on the information. With this, you make sure you are always informed by email about updates. This will allow you to stay up to date and make your own active contribution.
    You have never subscribed to an AEB Help Center article before? No problem, you will find a short description on how to proceed here.
  • Please note:
    • At least one responsible person in your company must subscribe to this Help Center article as part of your obligation to cooperate and initiate the necessary steps for your company. If necessary, forward this article to the person responsible in your company.
    • You will need the information provided there to ensure that everything goes smoothly at the turn of the year. AEB is not responsible for the consequences of non-compliance with the information provided and any resulting disruptions in your business processes.
    • AEB will exclusively use the Help Center to provide application-related information for your company.

Further background information

What are PEM and the Regional Convention?

What will change?

When will the change come into force?

Effects on the AEB software and your processes

What are PEM and the Regional Convention?

The Pan-European Mediterranean zone of origin (short: Pan-Euro-Med or PEM zone) is a group of countries that have concluded numerous bilateral free trade agreements (FTAs) with each other since 2005, using the same rules of origin and thus creating the basis for the Pan-Euro-Mediterranean cumulation.

It turned out to be difficult to amend a large number of agreements at the same time. The aim was not to jeopardize the system of identical rules of origin. For this reason, the rules of origin were combined into a separate set of rules in 2013 – the so-called Regional Convention. In the free trade agreements, the so-called dynamic reference was henceforth used in the origin protocol, in which the rules for preferential origin of goods are established, to refer to the rules of the Regional Convention. In order to change the rules of origin, the change only needs to be made in the Regional Convention and no longer needs to be implemented in all bilateral preferential agreements. Nevertheless, amendments require confirmation at national level, which is why they cannot enter into force on the exact date.

The contracting parties have agreed on such a change to the rules of origin from January 1, 2025. The Pan-Euro-Med matrix describes which countries from the PEM zone have concluded agreements with each other and are therefore allowed to cumulate. The application of the Regional Convention is indicated by a date with the suffix "(C)". The use of the revised rules is marked with an "(R)".

Not all free trade agreements were converted to the Regional Convention (including dynamic reference) by the deadline. Even beyond January 1, 2026, free trade agreements will switch to the new rules.

What will change?

Viewed in isolation, the new rules are easier to comply with. The main long-term simplifications coming into force are the following:

  • Increase in general tolerance from 10% to 15%
  • Changes to the content and structure of the list rules, in particular through:
    • Increase in the proportion of permitted non-originating materials depending on the ex-works price; ergo higher percentage
    • Reduction of combination rules
    • Introduction of weight rules
    • Simplifications for the textile and chemical sectors through special procedures, additional textual rules that may apply
    • Many header rules are summarized in the chapter rules; i.e. omission of many ex-rules for HS heading or HS sub-heading
  • Movement certificate EUR-MED and declaration of origin on the invoice EUR-MED are no longer required

As a result of these changes, existing rule assignments must be dissolved and rules reassigned. Accordingly, the calculations and assessments must be carried out again.

When will the rule change come into force?

The new rules came into force on January 1, 2025, as revised rules to the Regional Convention. The agreements to which these rules apply are marked with an "R" in the matrix.
In addition, on December 12, 2024, the Joint Committee of the Regional Convention decided to extend the existing rules of the Regional Convention in addition to other transitional provisions. This means that the previous rules can be used for a further year, provided that the parties to the agreement have ratified these transitional provisions on a national level. The ratification of the transitional provisions pursuant to Decision No. 2/2024 is marked with "CR" in the cumulation options matrix. Agreements that are still based on the old set of rules are marked with a "C" in the matrix.

As of January 1, 2026, the transitional provisions will end and exclusively the revised rules of the Regional Convention will apply to agreements that currently have at least one "R" in the matrix.

Effects on the AEB software and your processes

  • Until December 31, 2025: If an agreement converts from "C" to "R" without the "CR" marking in the matrix, AEB converts this agreement to the revised rules of the Regional Convention to ensure continued legal compliance. This is necessary because in this case it is unclear when and whether the change to "CR" status will take place before the end of 2025.
    If a changeover takes place, it is delivered by service pack to the agreement reform assistant.
  • As of January 1, 2026: All agreements that are marked with at least one "R" in the matrix will be converted to the revised rules of the Regional Convention on January 1, 2026. AEB has deliberately chosen this date as LTSDs are typically valid for one calendar year, thus reducing the impact as much as possible.

EU location:

The customs authority's technical report Regionales Übereinkommen of December 16, 2025 contains an overview of the current status in German. The Pan-Euro-Med matrix  is updated regularly.
For the EU jurisdiction, the following agreements were converted to the revised rules of the Regional Convention in the software by February 2025:

  • Albania
  • Montenegro
  • Ukraine
  • Jordan

Switzerland location:

On December 5, 2026, the Federal Office for Customs and Border Security (BAZG) published a circular on the revised PEM Agreement with notes on its definitive application in German, in which it also refers to the current matrix.
For the Swiss jurisdiction, the following agreements were converted to the revised rules of the Regional Convention in the software by February 2025:

  • Albania
  • Montenegro

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