A new WCO study finds that recycled and remanufactured goods often fall through the gaps in preferential trade rules built for new products. Here is what it means for trade compliance teams.
Setting the Scene
Trade policy increasingly rewards recycling and remanufacturing. Preferential tariffs, sustainability commitments and circular economy targets all point the same direction: recover materials, extend product life, reduce waste. Customs rules have not caught up.
The World Customs Organization has published a new study examining how origin is determined for recycled and remanufactured goods, pointing to a real and practical gap between sustainability ambition and customs administration. The study was approved at the WCO's 147th and 148th Council Sessions on 28 July 2026.
Two Words, Two Very Different Processes
The WCO draws a clear distinction between remanufacturing and recycling, and the difference matters for origin determination:
- Remanufacturing: Described by the WCO as a closed-loop industrial process that intentionally recaptures the value-added component of a product, so it can lead additional useful lives rather than being landfilled or recycled.
- Recycling: Reduces a product to raw material, which can then be used again in new production.
Because these are different processes, the origin logic that applies to each should be different too. In practice, most rules of origin do not distinguish between them at all.
The Core Problem
Most preferential rules of origin were designed around the manufacture of new products. Applying them to recovered materials, used components and remanufactured goods creates uncertainty at every stage: classification, traceability and entitlement to lower tariffs. Environmental value does not automatically establish preferential origin.
What the WCO Study Found
The WCO identifies five recurring problems across the customs administrations it surveyed:
| 1. Clear definitions of recycled and remanufactured goods are missing from most free trade agreements. |
| 2. Documentation of the original materials used in a recovered or remanufactured product is often inadequate. |
| 3. Customs officers struggle to identify remanufactured goods at import without specific labelling. |
| 4. Supply chain traceability and record-keeping are insufficient to support an origin claim. |
| 5. In many cases, it is simply unclear whether preferential origin can be claimed at all for these product categories. |
Are Any Agreements Ahead of the Curve?
The EU-Mexico agreement includes a provision on inclusive green growth and the circular economy, while the EU's agreements with Australia and New Zealand include cooperation provisions on sustainable production and pollution abatement. A number of free trade agreements also apply differential tariffs at six-digit HS code level to recycled or remanufactured goods, showing what is possible when rules of origin are written with circular products in mind.
A Split Among Customs Administrations
The WCO approached all 78 of its Members, with only 19 responding (a 24 percent response rate). Of those 19, ten currently grant preferential treatment to recycled or remanufactured goods, and eight do not, generally because of procedural gaps. Even where customs authorities have engaged with the question, there is no settled consensus on how to treat these goods.
Part of a Wider Shift Toward Traceability
The WCO study does not exist in isolation. The EU's Ecodesign for Sustainable Products Regulation entered into force on 18 July 2024. Digital product passport requirements begin applying from 2027, starting with textiles. The EU Battery Passport becomes mandatory on 18 February 2027. Each instrument pushes toward the same requirement: full lifecycle traceability.
Three Actions for Trade Compliance Teams
| 1. Audit: Check whether your supply chain can currently document the origin of recovered materials, used components and remanufactured inputs. |
| 2. Check FTAs: Review whether the free trade agreements you rely on contain any provision specific to recycled or remanufactured goods, including six-digit HS level differentiation. |
| 3. Certification: Consider whether third-party certification would strengthen an origin claim in the absence of clear regulatory guidance. |
Where This Leaves ECTM Clients
For companies already investing in remanufacturing or recycled-content supply chains, the origin rules were not built with them in mind. This means the burden of proof sits more heavily with the exporter, and the businesses that invest early in traceability and documentation will be the ones best placed to claim preferential treatment.
