The new Interim Trade Agreement between the European Union and Chile will enter into force on 1 February 2025.
This agreement is the result of the modernisation of the Association Agreement concluded between the European Union and Chile in 2002. The negotiations between the EU and Chile led to the adoption of two instruments:
An Advanced Framework Agreement (“AFA”) including provisions on “policy and cooperation” and also on “trade and investment”.
An Interim Trade Agreement (“ITA”), covering only “trade and investment” provisions.
This association agreement will eventually enable 95% of trade between these two territories to benefit from a reduction in or exemption from customs duties.
Modernisation of rules of origin
On the customs side, the agreement also provides for the modernisation of the rules of origin, with the aim of facilitating the use of these tariff preferences:
Authorisation for accounting separation of fungible materials.
Application of the non-modification rule instead of the direct transport rule, which implies that the product originating in a State Party must not have been handled in another country, apart from the operations necessary to maintain the product in good condition in third-country platforms and as long as the latter remains under customs supervision.
Goods exported from one State Party to the other State Party to the ICA will benefit from a presumption of nonmodification.
New provisions on tolerances to simplify the acquisition of originating status.
The possibility of applying extended cumulation, i.e. with countries outside the EU-Chile Agreement. This anticipates the possible entry into force of the EU-Mercosur Agreement.
These facilitation measures are therefore an incentive to seize even more of the opportunities offered by this agreement, as part of strategies for setting up or expanding in this market.
Our customs and tax department at DS Paris, and our DS Abogados Chile office, are at your disposal to help you master the tax and customs issues involved in your projects.