EU-UK TCA rules of origin: can second-hand clothing get zero duty?

This recording examines a recent Lithuanian Supreme Court ruling on whether second-hand clothing imported from the United Kingdom qualifies for zero preferential duty under the European Union–United Kingdom Trade and Cooperation Agreement (EU-UK TCA). For importers, exporters, and customs professionals working with TCA preferential origin, the case highlights how ambiguity in the rules of origin can expose businesses to substantial duty liabilities — in this instance, hundreds of thousands of euros — even when supplier explanations, exporter-level guidance from partner-country customs, and preferential origin documents are in place.

Topics covered:

• The factual background of the dispute: how a Lithuanian importer applied the zero TCA rate to second-hand textile shipments from the UK, and how a Lithuanian customs audit triggered years of litigation across multiple court instances
• Change of tariff heading for worn clothing: how Harmonised System (HS) headings 61 and 62 for new clothes relate to heading 6309 for worn clothes, and whether the product-specific rule of origin is met
• Whether wearing constitutes "production" under the TCA: examination of the TCA definition of production as "any kind of working or processing, including assembly" and its application to worn garments
• Whether wearing is a sufficient operation: discussion of the argument that, because wearing is not listed among insufficient operations, it may confer origin
• Administrative cooperation between customs authorities: the role of cooperation provisions in free trade agreements, what happens when the partner country's customs do not respond to a request, and whether non-cooperation can result in a finding of non-originating status
• The Lithuanian Supreme Court's reasoning and final decision: including its treatment of UK customs' opinion, the binding nature (or otherwise) of partner-country guidance, and its decision not to refer questions to the Court of Justice of the European Union (CJEU)
• Unresolved interpretation at TCA committee level: the status of worn textiles in the March 2025 committee report and what this signals about ongoing compliance risk areas for businesses

For a broader overview of the topic, please watch the full recording. The slides are available in the Resources section.

Please note that this summary was generated using AI, based on the recording and available slides.