Pan-Euro-Mediterranean cumulation: the PEM Convention and zones
How the PEM Convention creates a single cumulation zone spanning Europe, the Mediterranean, and beyond.
The Pan-Euro-Mediterranean Convention (PEM Convention) is a multilateral treaty framework enabling diagonal cumulation of origin between more than 20 countries around Europe and the Mediterranean basin. Its purpose is to allow production chains spanning multiple partner countries to qualify for preferential tariffs, without requiring each intermediate product to independently meet origin rules.
What the PEM Convention governs
The PEM Convention standardises origin rules between participating parties. When all involved countries apply the same origin rules and have mutual trade agreements, materials from any participating country may be counted when determining origin.
Participating countries and zones
| Zone | Participants |
|---|---|
| European Union | 27 EU member states |
| EFTA | Norway, Switzerland, Iceland, Liechtenstein |
| Western Balkans | Albania, Bosnia-Herzegovina, Kosovo, Montenegro, North Macedonia, Serbia |
| Turkey | Turkey |
| Mediterranean | Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestinian Authority, Tunisia |
| Faroe Islands | Faroe Islands |
| Moldova, Georgia, Ukraine | Via specific bilateral protocols |
Transitional rules versus revised PEM rules
Since 2021, two parallel rule sets exist within the PEM framework:
| Aspect | Transitional rules | Revised PEM rules |
|---|---|---|
| Status | Provisionally in force between consenting parties | Intended as definitive replacement of the old protocol |
| Origin rules | More lenient product-specific rules, higher tolerances | Modernised rules, closer alignment with current production processes |
| Drawback prohibition | Not always applicable | Lifted in many cases |
| Cumulation | Only with countries applying the same transitional rules | Only with countries accepting the revised rules |
| EUR-MED | Not required under transitional rules | Not required; regular origin statement suffices |
Important: An exporter must choose which rule set applies per consignment. Mixing the two rule sets within a single origin determination is not permitted.
EUR-MED statement and origin declaration
Under the classic PEM protocol:
- EUR-MED statement is mandatory when diagonal cumulation is claimed.
- The statement indicates that cumulation has been applied and with which country.
- Without the EUR-MED indication, the importing country may refuse diagonal cumulation.
Under the revised transitional rules, a regular origin declaration is sufficient, even with diagonal cumulation. The exporter does not need to use a separate EUR-MED document.
Practical supply chain examples
Example 1: Textile production via Turkey and the EU
- Cotton yarn is spun in Turkey (Turkish origin).
- The yarn is woven into fabric in Italy.
- The fabric is manufactured into clothing in the Netherlands.
- Export to Norway under the EU-Norway agreement.
Under PEM cumulation, the Turkish yarn counts as originating input, provided Turkey, the EU, and Norway all participate in the PEM Convention and apply identical origin rules.
Example 2: Electronic components via multiple PEM countries
- Printed circuit boards are produced in Morocco.
- Assembly takes place in Spain.
- The finished product is exported to Switzerland.
Provided all three countries apply the PEM Convention with compatible rules, the Moroccan circuit boards count toward the origin determination.
Steps for correct application
- Verify that all involved countries participate in the PEM Convention.
- Check which rule set (classic, transitional, or revised) each country applies.
- Ensure origin rules are identical for the relevant product across all involved agreements.
- Use the correct proof: EUR-MED under classic rules, regular origin declaration under transitional rules.
- Document the cumulation chain completely, including supplier declarations for each link.
Common pitfalls
- Assuming all PEM countries have automatically accepted the same transitional rules.
- Failing to request an EUR-MED statement while classic rules apply.
- Claiming cumulation with a country that has not yet ratified the PEM Convention for the relevant product.
The PEM Convention offers significant advantages for companies with multinational supply chains, but requires careful verification of which rule set applies per country and per product.
Related articles
- Preferential origin essentials for 2026: From ROSA to BOI: build defensible preference claims with audit evidence.
- Preferential origin explained: ROSA, BOI and the decision tree: A complete guide to preferential origin with explanation of ROSA, BOI, the decision tree for origin determination and common pitfalls.
- Generating REX statements: what every exporter needs to know: Everything about the Registered Exporter System: when REX is mandatory, how to generate statements correctly, and which mistakes to avoid.
Related downloads
- Whitepaper: Preferentiele oorsprong zonder risico: ROSA, BOI, and REX guidance with checklist templates for first audit sprint.
- AI-driven origin classification with explainability: How explainable AI improves origin classification accuracy, reduces disputes, and satisfies EU AI Act transparency requirements.
- Comparison: manual origin workflows vs PSRA: Showcase traceability and workflow speed-up versus spreadsheet process.
Related definitions
- Preferential origin: Preferential origin determines whether goods qualify for preferential treatment under a trade agreement.
- Supplier declaration: A supplier declaration captures the origin information a supplier provides for supplied goods.
- REX: REX refers to registered exporters that may issue origin statements under specific arrangements.
- BOI: BOI refers to a binding origin or information decision that provides legal certainty.