Are your “UK made” products – actually made in the UK, or are you potentially misleading your customers?
To label your products as being made in the UK, you will need to demonstrate that there is either a ‘substantial transformation’ and/or that at least 50% of the manufacturing of / value added to such products is completed in the UK.
Please read through our guide below and let us know if you would like us to advise on the origin / labelling requirements for any products you sell. (NB: Our guidance is based on the law as it applies in the UK. The destination countries of any products you export to are likely to have their own product labelling laws.)
- Origin of Goods
There is extensive guidance on both Preferential rules of origin and Non-Preferential rules of origin. In summary however, Preferential origin is used to provide duty benefits through free trade agreements. Non-Preferential origin will apply when countries wish to identify the origin of goods for other reasons, such as for statistical reasons or trade control purposes.
(a) Preferential Origin
To qualify for “Preferential Origin”, at least 50% of a particular product’s value must be added in the country to which it is claimed the product originated from. Therefore, if less than 50% of the value of the products you supply has been added in the UK, they would not qualify for preferential origin. The scope for misinterpretation of these rules is clear and can cause difficulty and it is always better to discuss individual or borderline cases.
(b) Non-Preferential Origin
Non-Preferential rules of origin are decided by each country to which they are being imported to, and are generally based on two criteria:
(i) Wholly obtained: these are products which are obtained entirely in the territory of one country without the addition of any non-originating materials.
(ii) Last substantial transformation: in a case where more than one country was involved in the production of the products, the country where the last ‘substantial transformation’ took place determines the origin of the products. Therefore, if your products are manufactured in the UK, whether they qualify for Non-Preferential Origin or not would depend on the level of manufacturing which took place in the UK before being finalised.
2. Sale of Goods Act 1979
If you unwittingly mislead your customers as to the origin of your products, you risk being in breach of the Sale of Goods Act 1979 (SGA) to the extent that the sale of your products is governed by this act (i.e. if you are selling your products in the UK). You may also be at risk of equivalent laws in your products’ destination country.
Section 13 of the SGA states that if there is a contract for the sale of goods by description, there is an implied condition that the goods will correspond with the description. As such, if a customer makes an order from you on the basis that their product of choice originates in the UK, it would be misleading to provide them with a product which originates elsewhere, as it would not correspond with its description as advertised.
In addition, some customers may be more comfortable with purchasing or leasing products which are UK made due to a perceived standard of quality and regulation. For example, the British Standards Institution (BSI) publishes standards, guidelines and specifications to help companies meet certain technical standards for their products.
How we can help
To determine whether or not your products can/should be labelled as being “made in the UK”, a full analysis of the manufacturing and production processes which take place in the UK will need to be undertaken.
If you think you require advice on this and if you would like us to advise on the origin / labelling requirements for any products you sell, contact our Commercial and IP team on 0161 926 9969 or email@example.com to receive expert legal advice for your business.