PEM Convention: Pan-Euro-Mediterranean cumulation and the 2025 rules

The Pan-Euro-Mediterranean (PEM) Convention gives the EU, the EFTA States, Türkiye, the Western Balkans, North African and Middle Eastern partners, Moldova, Georgia and Ukraine one set of preferential origin rules. Materials originating in one party can be used in another and the product keeps its origin when exported within the zone, and the revised rules in force since 1 January 2025 add more flexible cumulation, duty drawback for most products and a 15% tolerance.

Checked against official sources: 2026-10

At a glance

Contracting Parties25: the EU, Switzerland, Norway, Iceland, Liechtenstein, the Faroe Islands, Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestine, Syria, Tunisia, Türkiye, Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia, Kosovo, Moldova, Georgia, Ukraine

Diagonal cumulationOriginating materials from one party used in another keep their status, if FTAs link all the parties concerned

Revised rulesIn force since 1 January 2025 (Joint Committee Decision No 1/2023)

ToleranceNon-originating materials allowed up from 10% to 15% under the revised rules

Other changesFull cumulation for most products, duty drawback for most products, non-manipulation instead of direct transport

Transition1 January to 31 December 2025: the 2012 and 2023 rules applied side by side (Decision No 2/2024)

Proofs of originEUR.1 or EUR-MED certificates, or invoice declarations by approved exporters or for consignments up to EUR 6,000

Share of EU tradeAbout 60% of the EU's preferential trade

How cumulation works

Diagonal cumulation means that materials originating in one PEM party can be used in products made in another, and the products remain originating when exported to a third PEM party, provided there are FTAs between all the parties concerned (the variable geometry rule). Full cumulation, under which working done in several parties counts together, applies within the EEA and between the EU and Algeria, Morocco and Tunisia.

The PEM Convention, published in the Official Journal on 26 February 2013, replaces around 60 bilateral origin protocols with a single instrument. Pan-European cumulation began in 1997, was extended to Türkiye's industrial products in 1999 and to Barcelona Process partners in 2005.

What the revised rules change

They entered into force on 1 January 2025 under Joint Committee Decision No 1/2023, adopted on 7 December 2023.
Tolerance for non-originating materials rises from 10% to 15%.
Duty drawback is allowed for most products.
Full cumulation becomes possible for most products, and product-specific rules are simpler.
A non-manipulation rule replaces the direct transport rule.
From 1 January to 31 December 2025, the 2012 and 2023 rules applied in parallel, and operators could choose the set that suited their supply chain.

Proofs of origin

Origin is proved with a EUR.1 or EUR-MED movement certificate issued by the customs authorities of the exporting country, or with an invoice declaration (or EUR-MED invoice declaration) made out by an approved exporter, or by any exporter for consignments up to EUR 6,000. Electronic EUR.1 certificates are covered by Decision 1/2024, applicable from 1 January 2025. Commission Implementing Regulation (EU) 2025/1728 sets the framework for EU suppliers' declarations under both sets of rules.

Step by step

Check that the exporting and importing countries are both PEM parties and that an FTA links them.
Check the product-specific rule for your HS code and the 15% tolerance under the revised rules.
If you use materials from other PEM parties, collect their proofs of origin or suppliers' declarations for cumulation.
Issue the proof of origin: a EUR.1 or EUR-MED from customs, or an invoice declaration as an approved exporter or for consignments up to EUR 6,000.
Keep the records that show how the product qualifies.

Documents you usually need

EUR.1 or EUR-MED movement certificate
Invoice declaration or EUR-MED invoice declaration
Suppliers' declarations for materials used
Production records and bills of materials

Common problems and how to avoid them

Materials from a PEM country are cumulated with a partner that has no FTA with it.

What to do: Diagonal cumulation needs FTAs between all the parties concerned; check the PEM matrix.

A product fails origin with 12% non-originating materials.

What to do: Under the revised rules the general tolerance is 15%, up from 10%.

Goods are routed through a third country and lose preference.

What to do: The revised rules use a non-manipulation rule instead of direct transport; keep evidence the goods were not manipulated.

An invoice declaration is used above EUR 6,000 without approved exporter status.

What to do: Above EUR 6,000, use a EUR.1 or EUR-MED or become an approved exporter.

Sources

The Pan-Euro-Mediterranean cumulation and the PEM Convention European Commission (DG TAXUD)

Rules change often. This note is practical guidance based on the sources above, not legal advice. Confirm current requirements with the authority, your importer or a licensed customs broker before you ship.

Port codes by country

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Trade notes

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Common questions

What is the PEM Convention?

A regional convention on Pan-Euro-Mediterranean preferential rules of origin that replaces bilateral origin protocols with one set of rules for 25 Contracting Parties.

What is diagonal cumulation?

Using originating materials from one PEM party in a product made in another while keeping originating status, if FTAs link all the parties concerned.

When did the revised PEM rules start?

On 1 January 2025, with a transition in 2025 during which the 2012 and 2023 rules applied side by side.

What tolerance applies?

Up to 15% non-originating materials under the revised rules, up from 10%.

Which proofs of origin are used?

EUR.1 or EUR-MED movement certificates, or invoice declarations by approved exporters or for consignments up to EUR 6,000.

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