Recycle, reuse, remanufacture: the circular economy is revolutionizing not only production chains but also customs regulations. Because when a product begins a second life, a question must be asked: Does it retain its origin, or can it acquire a new one? The recent WCO study and developments in certain trade agreements—such as the one between the European Union and Mexico—show that this is no longer just a theoretical issue. For businesses, it is becoming a real challenge in terms of classification, proof, and, as always, traceability.
In late July, the World Customs Organization published a study specifically on this issue: “Study on the Origin Determination of Remanufactured and Recycled Goods.”
This topic is particularly timely, as more and more companies are repairing, recovering, recycling, or remanufacturing products, even though rules of origin were, for the most part, designed for much more conventional production chains
And the texts are also beginning to incorporate these new options.
The revision of the trade agreement between the European Union and Mexico, signed in May 2026, is a good example of this. It includes a specific provision on remanufactured products and specifies, in the rules of origin, that used items collected in one of the parties and suitable only for the recovery of raw materials—including the raw materials thus recovered—may be considered wholly obtained.
This isn’t a complete revolution: the previous EU-Mexico agreement already recognized certain used goods and waste as wholly obtained. But the new wording used in the agreement clearly illustrates how trade agreements are beginning to incorporate the realities of recycling and remanufacturing more explicitly.
However, a second life does not automatically mean new origin. The EU-Mexico agreement itself points this out in its own way: simply disassembling a product into parts or components is one of the operations considered insufficient to confer origin. And that is precisely where the subject becomes interesting—and more complex.
At what point does a recycled or remanufactured product cease to have the origin of its first life and acquire a new one? The question may seem theoretical. It is not. Origin is a factor in the application of tariff preferences, but also—when considering non-preferential origin—in anti-dumping duties, trade restrictions, quotas, prohibitions, or certain sanctions. And when a product is manufactured from used components that have passed through several countries, the answer becomes much less clear.
Recycling and Remanufacturing: A Key Distinction
The first point to keep in mind is that a distinction must be made between recycled products and remanufactured products, as they do not present exactly the same challenges. For recycled products, customs law already provides some guidance. Waste, scrap, or discarded items that can no longer be used for any purpose other than recovering raw materials may, under certain conditions, be considered “wholly obtained” in the country in question
It’s a fairly logical line of reasoning: the old product has lost its original function. It becomes a material destined to enter a new production cycle. Remanufacturing is different because, in this case, the recovered components often retain their original function. An engine remains an engine, a motherboard remains a motherboard, and a mechanical part can be inspected, repaired, and then reused in a new product. And it is this continuity that complicates the issue of origin.
The Challenge of Recycled Components
An example often speaks louder than a long speech: a machine manufactured in China, used for several years in Germany, is then disassembled in France. Some of its parts are salvaged, inspected, and incorporated into a new machine that is remanufactured in France.
How can we determine the origin of this new machine? At first glance, the problem seems almost impossible to solve. It may contain dozens of components from different countries. Some may have been replaced over the machine’s lifetime, and after several years of use and maintenance, the historical origin of each part is no longer necessarily documented.
However, an unknown origin does not automatically mean that it is impossible to determine the origin of the finished product. And that’s where European rules become interesting.
Dismantling does not automatically create a new origin
Simply disassembling a machine in a country is not sufficient to confer that country’s origin on it. Under the European version of non-preferential origin rules, the principle remains that of the last substantial transformation. Therefore, a sufficiently significant operation must have been carried out in order to attribute a new origin to the product. Mere disassembly, on its own, does not satisfy this rule.
However, this does not mean that recovered parts fall outside the scope of the original rules. For certain products, particularly those in Chapter 84, European rules provide a specific provision: parts recovered during dismantling may, under certain conditions, be deemed to originate in the country in which they are recovered, unless proof of another origin is provided.
And that’s where it gets interesting: it’s not the entire used machine that changes its origin because it has been disassembled. It’s the salvaged parts that can then become the “raw materials” used in the manufacture of the remanufactured product. From that point on, the reasoning changes completely.
We need to start with the finished product
The key question, therefore, is no longer what the origin of each part was, but rather to examine what is produced at the end of the remanufacturing process, what its tariff classification is, and, above all, which rule of origin applies to that tariff code.
This rule will determine whether the operations performed are sufficient to confer origin on the new product. And depending on the applicable rule, the lack of information on certain components will have very different consequences.
An unknown origin isn't always a deal-breaker
Let's consider the case of a rule based on a change in tariff classification. In this situation, it is not always essential to know the exact country of origin of each component.
A part of unknown origin may, as a precaution, be considered non-originating in the country where the remanufacturing takes place. It is then sufficient to verify whether its tariff classification still allows compliance with the rule applicable to the finished product. The same logic applies to certain value-based rules.
A company does not necessarily need to reconstruct the entire geographical history of each component if it can demonstrate, for example, the portion of value actually created during the remanufacturing process. In other words, the loss of a part’s historical origin is not necessarily a deal-breaker. It all depends on the requirement that must be met.
When the lack of traceability becomes a real problem
The situation becomes much more complicated when the residual rule is based on the majority of the value of the materials used. In this case, it is necessary to be able to assign a value to the various components and determine which countries to attribute them to. And that’s when a “country of origin unknown” column becomes a real problem.
If a significant portion of a product’s value comes from parts whose origin has not been recorded, it may become legally impossible to determine which country accounts for the majority of the value of the materials. The real problem with remanufacturing, therefore, is not necessarily the presence of components from various sources. It is the gradual loss of the customs information associated with these components.
The Real Issue: Traceability
This is likely one of the key lessons for manufacturers developing circular models. For a long time, traceability systems were primarily designed to track a part’s part number, supplier, serial number, date of manufacture, maintenance history, or technical condition
But when a part enters a second or even a third production cycle, other information may once again become essential. This includes its tariff classification, its known or presumed origin, its value, and the processes it has undergone.
Because data that was not retained during the product’s initial lifecycle can be extremely difficult to reconstruct five, ten, or fifteen years later.
However, this information may be precisely what the company needs to demonstrate the origin of the remanufactured product. In a circular economy, customs traceability is therefore no longer limited to the time of import. It may need to accompany the product throughout its entire lifecycle.
"Remanufacturing" does not necessarily mean making substantial changes
Finally, one key question remains: Is the remanufacturing process itself significant enough to create a new origin? Here again, the answer is not straightforward.
An international comparison shows that some governments, particularly in the United States, may consider that a remanufacturing process—even a relatively significant one—does not necessarily constitute a substantial transformation sufficient to confer new origin on the product
Conversely, a true recycling process—in which waste or end-of-life products are transformed into a new material and then, potentially, into a new product—is more conducive to the emergence of a new origin.
The distinction therefore depends less on the terminology used—recycling, reconditioning, remanufacturing—than on the actual industrial processes carried out.
In the end
The circular economy is based on a simple idea: extending the life of products, parts, and materials. Rules of origin, on the other hand, have historically been designed around a much more linear model: materials enter a factory, a product comes out, and its origin is determined based on that manufacturing process.
Remanufacturing turns this logic on its head. The same part can now be manufactured in one country, incorporated into a machine in a second, used in a third, disassembled in a fourth, and then reused in a new product.
In this context, simply asking, “Where was this product manufactured?” is no longer always enough. The question has become: Can a second life give a product a new customs origin? And the answer is yes, it’s possible, but it doesn’t happen automatically.
It all depends on the level of processing involved, the tariff classification of the resulting product, the applicable rule of origin, and, above all, the company’s ability to document the materials and components it reuses.
As is often the case with customs, the issue may seem primarily legal at first, but without an increasingly circular economy, it becomes above all a matter of data and traceability.
Written by: Jean-Marc Vandenbussche, Customs Consultant, MyTower
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