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Long-Term Supplier's Declarations: Ensuring Origin Compliance

FTA & Preferential Origin 8 min read
Long-Term Supplier's Declarations: Ensuring Origin Compliance

Quick answer

A long term supplier declaration (LTSD) is a written statement from a supplier confirming the origin of goods supplied to an EU business, valid for an extended period to facilitate origin compliance and preferential tariff claims. It is essential for EU companies to obtain and manage LTSDs properly to meet customs obligations and avoid risks of non-compliance.

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Key takeaways

  • An LTSD certifies the origin of goods over a defined period, simplifying customs procedures for EU importers and traders.
  • EU businesses must request LTSDs from their suppliers when relying on preferential origin to claim reduced or zero customs duties.
  • LTSDs must contain specific information and be accurate to withstand customs verification.
  • Failure to obtain or maintain correct LTSDs can lead to customs penalties, delays, and loss of preferential treatment.
  • Best practices include verifying supplier information, regularly updating LTSDs, and maintaining proper records.
  • Expert advice may be needed for complex supply chains or disputes regarding origin compliance.

What is a Long-Term Supplier’s Declaration (LTSD)?

A long-term supplier declaration (LTSD) is a formal document provided by a supplier to an EU business, confirming that the goods supplied originate from a specific country or territory under the rules of origin applicable in the EU. Unlike single transaction declarations, an LTSD covers multiple shipments over a defined period, typically up to 12 months. This facilitates smoother customs clearance and enables EU importers or traders to claim preferential tariff treatment under trade agreements or EU origin rules without needing to obtain a new declaration for each shipment.

In practice, the LTSD acts as proof that the goods meet the origin criteria set out in the relevant EU trade legislation or preferential trade agreement, allowing the importer to benefit from reduced or zero customs duties. The declaration must be accurate and based on verifiable information from the supplier to ensure compliance with EU customs rules.

Why are LTSDs Crucial for EU Businesses?

For companies operating within the EU single market, LTSDs are vital for ensuring origin compliance, which directly impacts customs duties and trade facilitation. When importing goods or purchasing from suppliers outside the EU, businesses often rely on preferential trade agreements to reduce customs costs. To do so, they must prove the goods’ origin according to the EU’s rules of origin.

An LTSD provides a practical and efficient way to manage this proof over time, reducing administrative burdens and speeding up customs procedures. It enables EU businesses to:

  • Demonstrate compliance with origin requirements during customs declarations.
  • Claim preferential tariff rates under EU trade agreements.
  • Avoid customs delays, penalties, or additional duties resulting from insufficient origin evidence.
  • Maintain audit-ready records for customs controls or post-clearance verifications.

Without a valid LTSD or equivalent origin documentation, EU businesses risk non-compliance, which may lead to investigations, duty recovery, or reputational damage.

Who Needs to Provide or Request an LTSD?

The obligation to provide or request a long term supplier declaration depends on the role of the business in the supply chain and the nature of the transaction.

  • Suppliers: Companies supplying goods to EU businesses must issue an LTSD upon request, confirming the origin of the goods for the specified period. This applies especially when the goods qualify for preferential treatment under an EU trade agreement or EU origin rules.

  • EU Importers and Traders: EU businesses importing goods or acquiring goods within the EU single market for further processing or resale should request an LTSD from their suppliers when they intend to claim preferential origin. This declaration forms part of the evidence required to support customs declarations and preferential tariff claims.

  • Customs Authorities: While not directly involved in issuing LTSDs, customs authorities in the relevant Member State rely on these declarations as part of the documentary evidence during import controls or audits.

The LTSD is particularly relevant for businesses involved in regular, repeated transactions with the same supplier, as it covers multiple shipments within the validity period, reducing the need for repeated origin confirmations.

Key Information Required in an LTSD

To be valid and effective for customs purposes, a long term supplier declaration must contain specific information that allows the EU business and customs authorities to verify the origin of the goods. Although the exact format may vary depending on the trade agreement or national customs requirements, the LTSD generally includes:

  • Supplier’s Identification: Name, address, and contact details of the supplier issuing the declaration.
  • Importer’s Identification: Name and address of the EU business receiving the goods.
  • Description of Goods: Clear description of the goods covered by the declaration, including commodity codes (CN codes) where applicable.
  • Origin Statement: A declaration that the goods originate in a specific country or territory according to the applicable rules of origin.
  • Period of Validity: The start and end dates for which the declaration applies, usually up to 12 months.
  • Supplier’s Signature and Date: Confirmation by the supplier that the information is accurate and truthful.

The supplier must base the LTSD on accurate and verifiable information, ensuring it reflects the actual origin of the goods supplied during the declared period.

Risks of Inaccurate or Missing Origin Documentation

Failing to obtain or maintain a correct long term supplier declaration exposes EU businesses to significant risks:

  • Customs Penalties and Duty Recovery: Customs authorities may reject preferential tariff claims if origin documentation is missing or inaccurate, leading to the payment of full customs duties and possible fines.
  • Delays in Customs Clearance: Insufficient origin evidence can cause delays at the border, disrupting supply chains and increasing costs.
  • Reputational Damage: Non-compliance with origin rules may harm business relationships and credibility with customs authorities.
  • Legal Consequences: In cases of deliberate misrepresentation or fraud, legal actions including sanctions may be pursued.

The EU has mechanisms to investigate and verify origin claims, and businesses must be prepared to provide LTSDs or equivalent documentation upon request. The case of circumvention practices involving false origin claims illustrates the importance of accurate and transparent origin declarations [1], [2].

Best Practices for Managing LTSDs

To ensure compliance and minimise risks, EU businesses should adopt best practices in managing long term supplier declarations:

  1. Request LTSDs Proactively: Obtain an LTSD from each supplier when preferential origin is relevant, before importing or purchasing goods.
  2. Verify Supplier Information: Confirm the supplier’s identity and the accuracy of the origin statement, including reviewing supporting documents or certifications.
  3. Monitor Validity Periods: Track the start and end dates of LTSDs to ensure declarations are current and renew them as needed.
  4. Maintain Proper Records: Keep copies of LTSDs and related documentation securely for the period required by customs authorities for audits.
  5. Train Staff: Ensure that customs and procurement teams understand the importance of LTSDs and the procedures for obtaining and managing them.
  6. Use Standardised Templates: Where possible, adopt standard formats for LTSDs aligned with EU customs requirements and trade agreements.
  7. Conduct Periodic Reviews: Regularly review supplier compliance and the accuracy of LTSDs, especially in complex supply chains.

Adhering to these practices helps maintain smooth customs operations and supports preferential tariff claims.

When to Seek Expert Advice

While many EU businesses can manage LTSDs internally, expert advice may be necessary in certain situations:

  • Complex Supply Chains: When goods undergo processing or transformation in multiple countries, determining origin can be complicated.
  • Disputes or Audits: If customs authorities question the validity of LTSDs or origin claims, professional guidance can help respond effectively.
  • Changes in Trade Agreements: Updates or amendments to EU trade agreements may affect origin rules and documentation requirements.
  • High-Value or High-Risk Goods: For goods subject to anti-dumping, countervailing duties, or other trade remedies, expert input ensures compliance and risk mitigation.

Engaging customs consultants or legal experts can provide clarity and support in maintaining origin compliance.

Next steps

  1. Request a long term supplier declaration from each relevant supplier confirming the origin of goods supplied.
  2. Verify the accuracy and completeness of each LTSD, ensuring it contains all required information and covers the intended period.
  3. Record the validity period of each LTSD and set reminders to renew or update declarations before expiry.
  4. Maintain secure and accessible records of LTSDs to support customs declarations and audits.
  5. Review your supply chain for origin compliance risks and seek expert advice if complexities or disputes arise.

FAQ

What is a long-term supplier declaration?
A long-term supplier declaration is a written statement from a supplier confirming that goods supplied originate from a specific country or territory under the applicable rules of origin, valid for multiple shipments over a defined period [1:1].

How long is a long-term supplier declaration valid for?
Typically, an LTSD is valid for up to 12 months, covering multiple shipments within that period, but the exact duration may vary depending on the trade agreement or national customs requirements [1:2].

Who is responsible for issuing a supplier’s declaration?
The supplier of the goods is responsible for issuing the long term supplier declaration, confirming the origin of the goods supplied to the EU business [1:3].

Can a supplier declaration be retrospective?
Supplier declarations generally apply prospectively for a defined period and are not intended to be retrospective. Origin declarations must be based on accurate and verifiable information at the time of issuance [1:4].

Sources

  1. Commission Implementing Regulation (EU) 2016/185 of 11 February 2016 extending the definitive anti-dumping duty imposed by Council Regulation (EU) No 1238/2013 on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People’s Republic of China to imports of crystalline silicon photovoltaic modules and key components (i.e. cells) consigned from Malaysia and Taiwan, whether declared as originating in Malaysia and in Taiwan or not, Article 13

  2. Commission Implementing Regulation (EU) 2016/185 of 11 February 2016 extending the definitive anti-dumping duty imposed by Council Regulation (EU) No 1238/2013 on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People’s Republic of China to imports of crystalline silicon photovoltaic modules and key components (i.e. cells) consigned from Malaysia and Taiwan, whether declared as originating in Malaysia and in Taiwan or not, Article 13

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