General Provisions of the Agreement
Cumulative Principle
- Cumulation provides flexibility to the EAC rules of Origin by allowing producers in the Partner States to use materials from cumulating partners without losing origin thereby enhancing economic relations between the partners. The following forms of cumulation are provided in Rule 8:
- Full cumulation (Rule 8(1) allows performing sufficient working or processing in the EAC customs territory. It means that all operations carried out in the EAC customs territory are taken into account when assessing the final origin of the finished product. All the processing that is necessary to confer originating status on a product is carried out not in the territory of a given Partner State, but in the entire area of the EAC Customs Union.
Cumulative Principle
- Rule 8 (2) allows producers in the EAC Partner States to use materials originating from countries or Regional Economic Communities (RECs), with which the EAC has concluded a Free Trade Area agreement with and such materials shall be considered as originating in the Partner State. Documentary evidence of originating status of raw materials is given by a Certificate of Origin issued by the competent authority in the exporting country or REC that EAC has concluded an FTA with.
- Rule 8(3) allows producers in the EAC Partner States to use materials originating in the countries or group of countries with which the countries or RECs referred to in 2 (Rule 8(2)) have concluded a FTA Agreement with. Materials sourced from these countries or RECs will be considered as origination in the Partner state and they will be considered as if they originate in the EAC Partner States. This provision shall however not apply to materials contained in the Second Schedule of the EAC CET. (Rule 8(4)
- Rule 8 (5) allows producers in the EAC Partner States to use materials imported from any country in the world which according to the EAC CET are duty free. However, agricultural products are excluded from cumulation.
Unit of Qualification- Rule 9
- Rule 9 provides that each item in the consignment be considered separately.
- However, where goods are classifiable within the single heading in accordance with the HS Code interpretative rules, such goods shall be treated as one.
- This means that the way the goods are treated for tariff classification purposes is the same way they should be treated for purposes of determining the origin.
Treatment of Sets- Rule 10
- Rule 10 states that when considering the originating status of a set, the origin of the individual components that make up the set be determined separately.
- If all the components are originating then the whole set is originating.
- However, sets containing originating and non-originating components may also be regarded as originating in a Partner State if the value of the non-originating components does not exceed 15% of the ex-works price of the set.
Separation of Materials- Rule 11
- This Rule provides that where a producer uses materials of similar character but different origin, and it is not commercially practical to keep separate stocks of such materials the producer may determine origin of those goods based on any of the standard inventory accounting methods (e.g., FIFO, LIFO).
- The aim is to ensure that no more goods are deemed to originate as would have been if the materials were practically separable
Treatment of Mixtures- Rule 12
- This rule provides that where a mixture is not a group of a set; A claim of origin maybe refused where the characteristics of the product resulting from mixing with goods that originate with non-originating goods as a whole are not different from the characteristics of the goods that have been mixed.
- Origin will be granted in cases of particular products where it is recognised by the council that mixing is desirable, in respect of that part of the product that may be shown to correspond to the quantity that is originating in a Partner State used in the mixture.
Treatment of Packaging- Rule 13
- Packaging shall be considered as forming part of a whole if it is ordinarily sold at retail together with the product and it is not merely for transport or storage e.g. milk is normally retailed in packets, such packets will be considered as part of the milk.
- Containers and other packages used only for transport or temporary storage of the goods and are to be returned or they are not the normal retail packages of the product are not to be subject to the customs duty or other equivalent effect, unless these the particular products being traded.
Other Relevant Rules
- Neutral Elements Rule 14
This rule provides that where electrical energy and fuel, plant and equipment, machine and tools, and goods that do not enter or are not intended to enter into the final composition of the final product, are used in the manufacture of a product, it shall not be necessary to determine their origin as these are considered to be NEUTRAL ELEMENTS.
- Approved Exporters Rule 20
Exporters who make frequent exports of originating products, upon application and satisfaction to the competent issuing Authority in their Partner state of compliance to the Customs Laws, may make origin declarations (Fourth Schedule) on commercial documents instead of filling the Certificate of Origin.
- Validity of Proof Rule 21
A Certificate of Origin or Origin Declaration shall be valid for six months from the date of issue of declaration and shall be submitted within that period to the customs of the importing partner state.
- Exemptions from Certificate of Origin Rule 21
Products whose value does not exceed USD 500 where sent in small packages from private person to private person, and are not intended for trade, and goods not exceeding USD 1200 in value which form part of a traveller’s luggage, shall be admitted as originating without requiring submission of the proof of origin. This applies to non-trade items.
- Re – Exportation
Re-exporting of EAC originating goods shall be allowed only when goods remain under customs control and do not undergo any operations except those meant to preserve the goods, unloading and reloading
Minor Queries (Manual on EAC ROO 3.3.3)
- Minor inaccuracies or omissions of a clerical or similar nature detected on a proof of origin, may be allowed to be put right by the importer without rejection of the claim to EAC preferential tariff treatment. Similarly, it may become necessary in some cases to direct that the goods be physically examined to dispel any doubt or uncertainty that may have arisen in the course of the processing of the import entry as regards the origin of the goods, without at that stage making a formal query or questioning eligibility for EAC preferential tariff treatment.
- The Manual also states that foreign markings on the goods or other physical evidence (e.g. instructions in a foreign language, packaging of an unrelated kind) should not be overlooked in the Customs examination as these may point to the need for further enquiry into the claim to EAC preferential tariff treatment.