Diagonal cumulation
Mechanism allowing materials originating in third countries linked by cross-cutting free trade agreements to be used as if they originated in the exporting country.
Definition and principle
Diagonal cumulation is an advanced preferential rules of origin mechanism that allows a manufacturer in country A to use materials originating in country B to produce goods destined for country C, without losing preferential treatment — provided all three countries are linked by free trade agreements containing identical origin rules.
Legal framework
In the European context, diagonal cumulation primarily operates within the Pan-Euro-Mediterranean (PEM) system (revised PEM convention), which includes the EU, EFTA countries, Turkey, Barcelona Process countries, and other partners. Articles 3 and 4 of the origin protocols in the relevant agreements govern this mechanism. The UCC (Regulation EU 952/2013) and its delegated acts (Regulation 2015/2446) frame the practical application.
Practical operation
- Materials originating in country B are treated as if they originated in country A when exporting to country C
- Essential condition: all three countries must have cross-cutting agreements with compatible origin protocols
- Diagonal cumulation only applies if the materials have acquired originating status in the supplying country; it does not extend to non-originating materials that were merely processed
- Proofs of origin (EUR.1, EUR-MED, or origin declarations) must mention the cumulation applied
Common mistakes
- Assuming diagonal cumulation works automatically between all partners of the same agreement: each bilateral relationship must be covered by an agreement in force
- Confusing diagonal cumulation with full cumulation: diagonal requires materials to already be originating in the supplying country, unlike full cumulation
- Omitting the cumulation mention on proofs of origin, which invalidates the preferential benefit