As the title suggests, the World Customs Organization, with the support of the European Union, recently published a guide to the practical implementation of Annex 2 of the Protocol on Trade in Goods concerning Rules of Origin. The guide is aimed at assisting the private sector in the practical implementation of Annex 2, which has at its core a set of transparent, clear and predictable criteria required to determine suitability for preferential treatment according to the AfCFTA.
Annex 2 further seeks to:
- “(a)deepen market integration at regional and continental levels;
- (b) boost intra-Africa trade;
- (c) promote regional and continental value chains; and
- (d) foster economic transformation of the continent through industrialisation”
The practical guide provides crucial information in relation to goods that need to comply with the AfCFTA Rules of Origin. The latter rules and regulations determine the ‘economic nationality’ of a product and, more specifically, which conditions need to be fulfilled by a certain product in order for it to be classified as originating in an area governed by the AfCFTA.
If a company complies with the conditions provided in Annex 2 and Appendix IV of the Protocol, companies could apply for preferential treatment provided by the AfCFTA. To comply, goods must essentially be ‘wholly obtained’ in the area or have undergone ‘substantial transformation’. To fall within the latter category, goods must either undergo a change in tariff classification, originate from certain processes, undergo a degree of ‘value-add’ or be classified as a non-originating raw material used in the production of an AfCFTA originating content.
Further to the abovementioned conditions, goods need to satisfy two more Rules of Origin requirements, namely the principle of territoriality and direct transportation requirements.
In addition to the preferential treatment provided in the AfCFTA, goods could also be imported into a State Party with certain preferential treatment, granted that the goods are considered as being of AfCFTA origin.
For more information, the quick guide is accessible here: https://www.wcoomd.org/-/media/wco/public/global/pdf/topics/origin/instruments-and-tools/afcfta/quick-guide-on-afcfta_en.pdf?db=web