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Ukraine as a party of PEM Convention

Ukraine became a party to the Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin (hereinafter – the Convention) on 1 February 2018.

The Convention is an instrument that lays down identical rules of origin for goods traded under the relevant free trade Agreements concluded between its Contracting Parties.

The Contracting Parties to the Convention are: the EU; the EFTA States (Iceland, Liechtenstein, Norway, Switzerland); Albania; Algeria; Bosnia and Herzegovina; Georgia; Egypt; Israel; Jordan; Lebanon; Kosovo; Northern Macedonia; Morocco; Moldova; Palestine; Serbia; Syria; Tunisia; Turkey; Ukraine; Faroe Islands and Montenegro.

Ukraine's participation in the Convention potentially expands opportunities for export of goods at zero or reduced duty rate to promising foreign markets. The application of common rules of origin and the principle of diagonal cumulation also provides advantages for the development of trade relations between Contracting Parties and contributes to Ukraine's involvement in regional and international value chains.

The diagonal cumulation applies between more than two countries if they have free trade agreements containing identical rules of origin and cumulation provisions.

On the date of Ukraine's accession to the Convention Ukraine had existing free trade agreements with such Contracting Parties of the Convention: Georgia; the EFTA States; Northern Macedonia; Moldova; Montenegro. The creation of the deep and comprehensive free trade area is also provided for in the Association Agreement with the EU. All those Agreements contained protocols on rules of origin, specific to each Agreement.

Ukraine is amending its current free trade agreements with Contracting Parties by replacing the protocols with rules of origin of the Convention.

Ukraine – EU

From January 1, 2019, the provisions of the Convention apply to bilateral trade between Ukraine and the EU (DECISION No 1/2018 of the EU-Ukraine Customs Sub-Committee of 21 November 2018 replacing Protocol I to the EU-Ukraine Association Agreement, concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation)

Ukraine – Georgia

On March 26, 2020, the Protocol between the Government of Ukraine and the Government of Georgia amending the Agreement between the Government of Ukraine and the Government of the Republic of Georgia on Free Trade of January 9, 1995, entered into force (Law of Ukraine of January 14, 2020 № 450-IX;  Resolution of the Parliament of Georgia of March 17, 2020 № 5780‑ІІ)

On September 30, 2020, the Commission notice concerning the application of the Regional Convention on pan-Euro-Mediterranean preferential rules of origin or the protocols on rules of origin providing for diagonal cumulation between the Contracting Parties to this Convention (2020/C 322/03) was published in the Official Journal of the European Union.

The updated matrix of the Convention contains designations for the application of diagonal cumulation of origin for goods between Ukraine and Georgia. Thus, the conditions for the development of additional export opportunities in the Ukraine-EU-Georgia triangle have been created.

Ukraine – Republic of Moldova

On August 28, 2021 the Protocol between the Cabinet of Ministers of Ukraine and the Government of the Republic of Moldova on Amendments to the Free Trade Agreement between the Cabinet of Ministers of Ukraine and the Government of the Republic of Moldova of November 13, 2003, was signed in Chisinau. Procedures are carried out for the entry into force of the Protocol.

Ukraine – EFTA

Amendments to the Free Trade Agreement between Ukraine and the EFTA States and to bilateral agreements on agriculture between Ukraine and the Swiss Confederation, Norway and Iceland are being worked out. At the same time, the principle of diagonal cumulation has already been extended to certain types of goods.

The rules of origin of the Convention apply automatically in new agreements between Ukraine and Contracting Parties from the moment of their entry into force.

The Free Trade Agreement between the Cabinet of Ministers of Ukraine and the Government of the State of Israel (Law of Ukraine of July 11, 2019 № 2753-VIII) entered into force from January 1, 2021.

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