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Pan Euro Mediterranean (PEM) Updates

The Pan-Euro-Mediterranean cumulation system and the PEM Convention are an integral part of the European Union’s trade policy, designed to facilitate and streamline trade across a wide network of countries. As we move towards 2025, significant changes will come into play in this area to improve and simplify trade within the Pan-Euro-Mediterranean zone. Let’s delve into what these systems entail and the main changes.

In this blog we will go through the following topics:

What is PEM Cumulation of Origin?

The Pan-Euro-Mediterranean (PEM) cumulation system facilitates diagonal cumulation of origin between the European Union (EU), European Free Trade Association (EFTA) States, Türkiye, participants of the Barcelona Process (which includes 27 EU member states, Turkey, Croatia, and North Macedonia, along with the non-EU Mediterranean partners: Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, the Palestinian Authority, Syria, and Tunisia), Western Balkans, the Faroe Islands, Georgia, Republic of Moldova, and Ukraine. Moreover, materials obtaining originating status in one Contracting Party can be used in another without losing their origin status when traded within the PEM zone. Furthermore, the system is founded upon free trade agreements with identical rules of origin.

PEM pan euro mediterranean

The PEM Convention Explained

The Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin, more commonly known as the PEM Convention, aims to unify and harmonise the rules of origin across member countries. By replacing numerous bilateral protocols with a single, consolidated legal instrument, the Convention seeks to ensure that trade rules are more manageable and adaptable to modern economic realities.

Key features of the PEM Convention include:

  • Better Integration: It creates new trade opportunities by unifying the rules for cumulation.
  • Single Legal Instrument: The Convention replaces numerous bilateral agreements with one governing document.
  • Wide Participation: It includes the EU, EFTA states (Switzerland, Norway, Iceland, Liechtenstein), the Faroe Islands, and countries in North Africa and the Middle East.

Key Changes for 2025

Starting January 1, 2025, the PEM Convention will introduce several changes to improve trade:

  • Transitional Provisions: The Joint Committee has added transitional provisions to ease the shift to new rules. As of 2025, businesses can choose between the 2012 and 2023 rules based on their supply chains. Goods that follow the 2012 rules can still be considered as originating under the 2023 rules for cumulation, as long as certain conditions are met.
  • Updated Cumulation Rules: The new rules expand diagonal cumulation to include more Contracting Parties. This ensures better market integration across the expanded PEM zone, making trade smoother.
  • Simplified Proof of Origin: Companies can now use movement certificates EUR.1 or EUR-MED, or invoice declarations by approved exporters to prove origin. This change reduces the administrative burden on businesses.
  • Retrospective Application: The new rules will apply retroactively from September 1, 2021, within the European Economic Area (EEA). This includes the EU, Iceland, Liechtenstein, and Norway. Goods exported before January 1, 2025, but imported after this date, will still comply with the new rules.
  • Enhanced Trade Integration: The PEM Convention will allow full cumulation within the EEA and partial cumulation with other PEM zone partners. This means that materials from one country can be processed in another, while still keeping their origin status.

Overall, the transition of the PEM Convention into a unified legal framework represents a significant step towards enhanced trade efficiency within the Pan-Euro-Mediterranean zone. In summary, the 2025 changes simplify rules of origin, introduce flexible cumulation rules, and provide transitional provisions to establish a more efficient trading environment.

At customs complete,  we specialize in simplifying  customs clearance and logistics for companies trading under the PEM Convention.  Available 24/7, our multilingual team ensures efficient movement through key ports and borders, guaranteeing compliance and optimal trade processes.

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