1) Why was the EU-Jordan Association Agreement developed?

From its earliest years, the EU inclined to a policy aimed at bringing its relations with all Mediterranean countries within a single comprehensive framework of co-operation.
The Mediterranean is in fact one of the EU's main trading partners but most of the Mediterranean countries rely even more on the EU market for over 50% of their exports.Such ill-matched interdependence means that there must be a co-operation aimed at progressively rebalancing relations and achieving more intensive and self-reliant development of the countries concerned
The co-operation agreements between EU and Mediterranean are concluded for an unlimited period. Only the financial provisions being governed by five-year protocols

2) What are the EU-Jordan agreement main titles?

• Political Dialogue
• Free Movement of Goods
• Right of Establishment and Services
• Payments, capital movements and other economic matters
• Economic co-operation
• Co-operation in Social and Cultural matters
• Financial Co-operation
• Institutional, General and Final Provisions
  Finally, there are 7 Annexes and 4 protocols.

3) What if working or processing is carried out on non-originating materials?

The Jordanian producer has two options in order that his products confers an originating status, either:

• Manufacture in which all the materials used are classified within a heading other than that of the product, means of Jordan origin.
• However materials classified within the same heading may be used provided their value does not exceed 20 % of the ex works price of the product.
• The ex works price is normally the factory gate price excluding all direct and indirect taxes and all delivery costs outside the factory
  Or:
  
  • Manufacture in which the value of all materials used does not exceed 40% of the ex-works price of the product.
• The value of a non-originating product, the importation of which must be proved accurately, is the customs value at the time of importation.
  So an absolute correct assessment of the customs value at the time of importation of the raw materials is of highest importance when calculating the production cost against the ex-works price of the goods.

4) What is the bilateral accumulation rule?

The bilateral accumulation rule states that the material originating in the partner-country is equal to those of the other partner.

5) What is the diagonal accumulation rule?

The transfer of specific parts of the manufacturing process due to lack of own capacity is allowed into other contracting countries without losing the qualification for the origin of the finished goods. Prerequisite for the contracting parties are:

• Being member states of such an accumulation zone
• Having harmonised origin rules

6) What are the general rules for a Jordanian exporter planning to export to the EU?

• No new duties or any other charges on imports shall be introduced on the trade.
• Imports into the EU originating in Jordan shall be allowed free of customs duties and of any other charges and free of quantitative restrictions and equivalent effective measures (Art. 9).
• List of products that are exempted from the EU-Jordan Agreement is defined in Annex II.
• The concept of "originating products" and the methods of administrative co-operation relating to them are set out in Protocol 3. (229 pages, 8 titles and 4 Annexes).

7) How does the highest value share rule apply within the agreement?

• Provisions can include the retention by the EU of an agricultural component in respect of goods originating in Jordan according to Annex I.
• The agricultural component may take the form of a flat rate amount or an ad valorem duty.
• The agricultural component which Jordan may charge on imports from the EU shall not exceed 50 % of the basic duty rate on imports from countries which do not benefit from preferential trading arrangements but benefit from the most-favoured nation treatment.
• Jordan may enlarge the list of goods to which the agricultural component applies, provided the goods are included in Annex 1.

8) What are the general rules governing the EU's exports to Jordan?

• Jordan shall apply for the products listed in Annex II customs and duties not higher than those in force of Jan 1, 1996.
• Customs and duties on products originating in the EU imported into Jordan others than those listed in Annexes II, III, IV shall be abolished upon entry into force of the agreement.
• Customs and duties on products originating in the EU listed in Annex II, in list A and B of Annex III, imported into Jordan shall be progressively reduced and finally abolished after 12 years.
• Jordan may increase or reintroduce for a period of 5 years during the transition period customs duties on infant industries or certain sectors undergoing restructuring or facing serious difficulties especially if they lead to major social problems.

9) How will the EU-Jordan Association Agreement apply to Agricultural Products?

• Gradually greater liberalisation of the reciprocal trade in agriculture products shall be implemented.
• Products originating in Jordan shall benefit on import into the EU from the provisions set out in Protocol 1.
• Products originating in the EU shall benefit on import into Jordan from the provisions set out in Protocol 2.
• The term originating in EU / Jordan is fulfilled if the provisions of Protocol 3 are complied.
• In many food processing the fruits or vegetables must be wholly obtained in Jordan (or within the EU) or the non-Jordan ingredients shall not exceed 25-30-40-50 % of the EXW price of the product (see Annex II to the Protocol 3 for each product) that is unbalanced due to the different natural conditions and potentials in Jordan and EU.
• From 1.1.2002 EU and Jordan shall assess the situation with a view to determining the liberalisation measures to be applied by both sides with effect from 1.1.2003.
• -EU and Jordan may examine on a regular basis product by product on a reciprocal basis; the possibilities of granting each other further concessions.
• No new quantitative restrictions on imports shall be introduced and existing quantitative restrictions on imports shall be abolished upon entry into force of the agreement.
• Dumping within the meaning of the GATT Art. VI shall be dealt with according to GATT procedures.

10) What is meant by Free Movement of Goods?

The Basic Principle of Free Movement of Goods is the Gradual establishment of a free trade area within a transitional period of maximum 12 years in conformity with the GATT 1994

11) As a Jordanian Company, what are my Rights of Establishment?

• Starting with the entry into force of the agreement Jordan grants for the establishment of EU companies, subsidiaries, branches in Jordan a treatment no less favourable than that accorded to its own companies or to companies of any third country or to Jordanian subsidiaries or branches
• Exceptions are made for air transport, inland waterways transport and maritime transport and reservations are defined in Annex V and VI.
• Starting with the entry into force of the agreement Jordan grants for the establishment of EU companies, subsidiaries, branches in Jordan a treatment no less favourable than that accorded to its own companies or to companies of any third country or to Jordanian subsidiaries or branches.
• Exceptions are made for air transport, inland waterways transport and maritime transport and reservations are defined in Annex V and VI.
• Jordan and EU companies, branches, subsidiaries in the EU respectively in Jordan shall be entitled to employ nationals of Jordan respectively the EU provided they are key personnel, i.e. persons in senior positions (MD, Gen. Supervisors) or persons with uncommon knowledge essential to the work of the establishment.
• Residence and work permits of such employees shall only cover the period of such an employment.

12) What is the main objective of the Cross border Supply of Services rule?

The main objective of the Cross border Supply of Services rule is to allow progressively the supply of services of Jordan enterprises in EU / EU enterprises in Jordan (for transportation, cargo, maritime and air transport.

13) What is the basic principle of Payments and Capital Movements within the Association Agreement?

The basic principle can be summarized as follows:

• Current payments connected with the movement of goods, persons, services and capital within the framework of the agreement shall be free of restrictions.
• No restrictions on the movement of capital.

14) Who should know the Rules about Origin and Preferences?

• On the import side:
  • Any individual or company that imports goods from a beneficiary country (can claim a tariff preference due to the origin of goods).
  • Custom officers (detect any misuse of trade rules).
• On the export side:
  • Any exporter of goods into a country (check whether there are any preferential agreements with the consignees' state. If yes evaluate the conditions to be met by the exported product in order to qualify for a reference).

15) What are the consequences of a wrong declaration of the origins of goods?

Wrong use of origin rules may lead to serious consequences such as:

- Revocation of the certificate.
- Post collection of duties in the country of importation.
- Back duty to the exporter.
- Prosecution procedures.
- As a follow up possible loss of clients or even markets abroad.