Registered Exporter System Explained: Purpose, Registration, and Benefits for Exporters

The Registered Exporter (REX) system is a streamlined, self-certification system introduced by the European Union (EU) that enables exporters to declare the origin of their goods independently. This system, effective since January 2017, has simplified the process by which exporters certify the origin of products, reducing the cost and effort involved in shipping to the EU. By enabling exporters to handle certification independently, the REX system supports the EU’s Generalized System of Preferences (GSP) and certain Free Trade Agreements (FTAs). Below, we’ll explore what the REX system entails, how to register, and how exporters benefit from this self-certification model.

What is the REX System?

The REX system allows exporters to certify the origin of their goods themselves by providing a “statement on origin.” This statement replaces the traditional certificates of origin issued by competent authorities. Exporters who register under this system are known as “registered exporters,” and they can provide their statements on origin to meet the requirements of the EU’s GSP or certain FTAs, which grant tariff reductions for imports from developing countries.

In essence, the REX system covers:

• Self-certification of goods’ origin, where exporters state the origin themselves.
• A registration process through which exporters can independently declare the origin of goods, simplifying compliance with EU rules.
• A more efficient, cost-effective process for exporting to the EU and benefiting from trade agreements.

The Purpose of the REX Certificate

The REX certificate makes it easier for exporters to prove the origin of their products, especially when sending goods to the EU under preferential trade agreements. This system minimizes the administrative burden, as exporters don’t need to liaise with authorities for every consignment. Instead, they can issue their own certificates of origin, significantly reducing the time and cost required for shipping.

Key objectives of the REX certificate include:

• Enhanced Convenience: Exporters can self-certify, reducing the need for frequent involvement from authorities.
• Cost Reduction: By eliminating the need for official certificates for each shipment, the REX system reduces the costs associated with exporting goods to the EU.
• Faster Processing: Exporters can process documentation swiftly and independently, which helps avoid delays.

REX Registration: How to Become a Registered Exporter

To issue statements of origin under the REX system, exporters must be registered. This registration is managed by local competent authorities, who ensure the verification of applications.

Steps for REX Registration:

• Application Submission: Exporters submit a REX application, which includes details about the exporter and the products.
• Verification: Local authorities verify the information provided by the exporter to ensure it meets the requirements.
• Assignment of REX Number: Once approved, exporters receive a unique REX number that allows them to issue statements of origin.

Exporters are required to keep their information up to date; any changes must be communicated to the authorities. Additionally, an exporter’s REX registration can be revoked upon their request, if the business closes, or in cases of fraudulent activity.

Understanding the REX Number

When an exporter registers under the REX system, they are assigned a unique REX number. This number, which follows a format specific to each country, is essential for validating the exporter’s identity and ensuring compliance with the REX system. For Indian exporters, for example, the REX number begins with “INREX” and includes additional information such as the exporter’s Importer Exporter Code (IEC) and other identification codes.

The REX number is included in the statement of origin for goods, acting as a verification marker that simplifies customs processes and confirms the eligibility of goods for preferential treatment under the GSP.

REX Statements: What Exporters Need to Include

The statement of origin is a document that accompanies goods exported to the EU. This statement must be provided to the EU-based buyer and should include specific details as listed on the Directorate General of Foreign Trade (DGFT) website. The statement, which must be issued for each consignment, is valid for a period of 12 months. However, in certain cases, such as for products imported in installments, a single statement of origin may cover multiple shipments.

Key details required in a REX statement:

• Identification of the exporter and buyer.
• A detailed description of the goods and their origin.
• The REX number, which confirms the exporter’s registration.

REX Registration in India: Step-by-Step Guide

In India, the Department of Commerce oversees the REX system, with 16 local authorities acting as Local Administrators for registration. These authorities, including entities like the DGFT, the Textiles Committee, and various Special Economic Zones (SEZs), handle the registration process for Indian exporters.

Steps for REX Registration in India:

• Administrator Login: Local Administrators access the REX system through an EU-provided web application, enabling them to manage the registration process.
• Nomination of Local Users: Local Administrators nominate Local Users who provide information to exporters, accept registration applications, and verify submitted information.
• Processing Applications: Local Users cross-verify the information provided by exporters, using details such as the IEC code.
• Registration and Updates: Upon verification, Local Users register exporters in the system. If the exporter’s business or registration details change, they must notify the authorities for updates.

Each Local Administrator ensures the authenticity of registrations and processes requests for revocation if exporters discontinue operations or act against compliance guidelines.

Benefits of the REX System for Exporters

The REX system introduces several advantages for exporters, especially those involved in regular trade with EU countries:

• Ease of Compliance: With self-certification, exporters don’t need frequent approval from authorities, simplifying the process.
• Reduced Costs: Exporters avoid the fees and additional costs associated with traditional certification.
• Enhanced Market Access: Through self-certification, exporters can access preferential tariffs under GSP and FTAs with less administrative burden.
• Improved Efficiency: Self-certification allows exporters to avoid delays that typically arise from document processing with authorities.
• Streamlined Operations: Since the REX system requires only an internet connection, exporters can quickly register, submit statements, and update information as needed.

The Role of Competent Authorities in the REX System

Competent authorities are responsible for managing the REX registration process, verifying applications, and ensuring compliance. In the REX system, there are two primary types of competent authorities:

• Competent Authority for Administrative Cooperation (ADC): This authority handles communication with the EU and oversees policy matters related to the EU’s GSP.
• Competent Authority for Registration (REG): This authority manages registration tasks, verifies applications, and updates exporter information.

Each authority appoints Local Administrators, who are responsible for creating Local Users. Exporters interact with Local Users for registration and updates.

FAQs on the REX System

Conclusion

The REX system has transformed the way exporters certify the origin of their goods, making it easier, faster, and more cost-effective to trade with the EU. By enabling self-certification, the REX system removes many of the traditional hurdles involved in exporting under preferential trade agreements. For exporters, understanding the REX registration process, knowing how to apply for a REX number, and using the statement of origin properly are key steps to leveraging the benefits of this system effectively. As trade between the EU and developing countries continues to grow, the REX system represents an essential tool for efficient and compliant export activities.

Also Read: Everything About Export Finance Scheme