European methodology for rules of origin for diamonds

14.9.2018

Question for written answer E-004675-18
to the Commission
Rule 130
Hilde Vautmans (ALDE)

Most of the rough and cut diamonds exported from Europe do not benefit from preferential import tariffs that have been negotiated in the framework of free trade agreements.

This is because the activities that take place here, such as the sorting and grading of diamonds, do not change the tariff code nor alter the product to such an extent that the origin of the product itself changes. The European methodology for rules of origin adheres to the concept of physical transformation when granting the EU preferential origin.

For this reason, most diamonds exported from Europe retain their origin, which in the case of rough diamonds means the country where the diamond was extracted from the mine, and in the case of polished diamonds, the country where the stone was cut (in 92% of cases this is India).

Consequently, these goods do not benefit from a preferential tariff in the framework of European free-trade agreements, despite the essential role of trade and distribution centres within the global value chain.

The European economy is evolving to a great extent from a manufacturing economy to a service economy. It therefore seems appropriate that the European Commission shall be prepared to reformulate the current framework for rules of origin according to the needs of the European economic fabric. Is the Commission planning appropriate action in this respect?