Pan-Euro-Mediterranean (PEM): Change at the start of 2025

At the turn of the year 2024/2025, far-reaching changes are planned in the area of origin of goods and preferences. These require adaptations of the AEB Origin & Preferences software as well as the cooperation of those responsible in the companies that use this software.

The changes 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.


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

Which preparations do you need to take?

Technical information and instructions

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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 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. From then on, the free trade agreements referred only to the rules of the Regional Convention for the origin protocol, which sets out the rules for the preferential origin of goods. 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, national confirmations of the amendments are required, which is why the amendments 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 change in the rules from January 1, 2025 is marked with an "(R)".

Not all free trade agreements have yet been converted to the Regional Convention. It is to be expected that free trade agreements will continue to switch to the new rules beyond January 1, 2025 and that information will be published on how to proceed until then.

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 rule change will enter into force on January 1, 2025 as Revised Rules to the Regional Convention. As of this date, the new rules apply to the agreements marked with "(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 ratify these transitional provisions. The ratification of the transitional provisions in accordance with Decision No. 2/2024 is marked with ‘CR’ in the matrix of cumulation options.

Effects on the AEB software and your processes

• As soon as the widget is made available with the service pack, all data imports and exports from and to O&P are interrupted and only executed again after the widget has been completed.

EU location:

German Customs provides information on the current status in ATLAS-Info 0697/25. The following countries only apply the revised rules of the regional convention:

• Albania
• Montenegro
• Ukraine
• Jordan

For the EU jurisdiction, the widget for the changeover for these agreements is delivered.

Switzerland location:

In a notification dated January 16, 2025, the Federal Office for Customs and Border Security (FOCBS) provides information on the current status. The following countries only apply the revised rules according to the current matrix:

• Albania
• Montenegro

For the CH jurisdiction, the widget for the changeover for these agreements is delivered.

AEB continues to monitor the situation for Switzerland and the EU and possible short-term ratifications and announcements for both locations. You will be guided through all the necessary steps via a widget.

For the software operated in the cloud, the service pack will be installed automatically. If you are running Origin & Preferences as an on-premises installation, you will need to install the service pack yourself.

How do you proceed?

• Continue to follow the information in this article.
• Allocate sufficient specialist resources, e.g. for rule assignment and, if necessary, the creation of manual list rules. For a direct comparison of the old and new rules, you can find help in the article PEM rules 2025: Comparing new and old list rules.
• The changeover via the new widget must be carried out by an administrator with specialist knowledge. This is a prerequisite for you to be able to continue working with Origin & Preferences. Also take this into account for substitution situations such as vacation or sick days.
• If you use customized forms in Origin & Preferences, these only need to be adapted in special cases. You can find information on this in the article PEM rules 2025: Challenges and your next steps.

Technical information and instructions

Prepare yourself for the changeover. You can find information on your next steps in the article PEM rules 2025: Challenges and your next steps and the other articles in this section.

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