Verification of Proof of Origin and Resolution of Disputes and Queries

Stephen Otieno

Verification of Proof of Origin and Resolution of Disputes and Queries

Verification of Proof -Rule 24

In cases of doubt, a competent authority in the importing Partner State may require further verification of information contained in a Certificate of Origin or an origin declaration. The request for such further information will be made to the competent Authority of the Exporting Partners State. The issuing authority has to submit its reply within three months in the form prescribe under the Fifth Schedule of the rules.
However, importing partner states shall not prevent an importer from taking delivery of goods solely on the grounds that it requires further evidence. In such a case the Customs of the importing partner state may require security on any duty or charges payable to it and release the goods. The security will be held until the matter is cleared and may be actioned by the customs authority for duties if the goods are found not to have originated or refunded to the importer if the claim of origin was genuine.

Joint On-the-spot Investigations

Where serious doubts persist, the importing Partner State shall apply Chapter 3.3.4 and 3.4.4 of the Manual on the Application of the EAC Customs Union (Rules Of Origin) Rules, 2015 to request the exporting for a Joint Verification. The joint verification can also be initiated by the exporting state. Below are examples of cases where serious doubts may arise:

- A claim of “wholly produced” is made for certain kinds of machinery;
- The description of goods on the invoice is different from that appearing in the certificate of origin;
- There is indication of dubious transport route used;
- The proof of origin has not been signed or dated by the competent issuing authority;
- The stamp used to endorse the proof of origin is different from the one that was notified to the Secretariat; or
- The proof of origin has not been signed by the exporter.
- The two States will conduct a joint verification, which includes visiting the premises of the exporter, examination of the exporter’s documents. These documents will include customs entries for importation of raw materials and exporting records. The two countries will then draft report with their findings.
- Upon conclusion of the joint-on-the-spot verification, the importing Partner state shall notify the EAC Secretariat of the results. The EAC Secretariat shall in turn notify the other Partner States. Where the doubts involve more than one country, the EAC Secretariat organizes and facilitates a joint verification to be attended by all Partner States.

Dispute Resolution Process

Section 3.4.7 of the Manual provides for disputes to be resolved as follows

Any dispute between Partner States relating to the application of the provisions of the EAC Rules of Origin shall, in so far as is possible, be settled by negotiation between them. A dispute which is not so settled shall be referred to the Committee on Trade Remedies which shall in accordance with the EAC Dispute Settlement Regulations establish a Dispute Settlement Panel or an Arbitration Panel.
The parties to the dispute shall supply all documents and/or information to the Dispute Settlement/Arbitration Panel. The documents and/or information so supplied, shall also be supplied at the same time, to the other party to the dispute and the Secretary General.
The Dispute Settlement/Arbitration Panel shall conduct its proceedings in such manner as it considers appropriate provided that the parties to the dispute shall be treated with equality and that during the proceedings, each party shall be given a full opportunity of presenting its case.
Upon request by any party to the dispute during the panel proceedings, the panel shall hear evidence, oral or written, from any witness including experts invited by any party to the dispute.
The general terms of reference of the Dispute Settlement/Arbitration Panel shall be as provided in the EAC Dispute Settlement Regulations.
The Dispute Settlement/Arbitration Panel shall consider the submissions from the parties to the dispute and any witness(es) and may request additional information or clarification from the parties to the dispute or the Secretary General, and make its recommendation(s).
In making its recommendations, the Panel shall, in addition refer to any relevant authorities and provisions whether or not cited by the parties to the dispute.
If the Dispute Settlement/Arbitration Panel is unable, through its findings and recommendation(s), to resolve the dispute in a manner consistent with the overall development objectives of the region and to the satisfaction of the parties to the dispute, it shall refer the matter, through the Secretary General, to the Court of Justice for a final ruling which shall be binding on all parties.

Infringements and Penalties (Rule 26)

Where a false claim of origin is made to an importing Partner state, the importing state informs the exporting Partner state and takes action to in accordance with the provision of the EACCMA, 2004. This means that the mere information of the infraction to the exporting Partner State, does not bar the importing Partner State from raising and offence under the relevant provisions of the EACCMA, 2004 on the importer.
The exporting Partner State has three months to take remedial action on the exporter, failing which, if further infringements are made, the importing Partner State refers the matter to the Committee on Trade Remedies, which takes action in accordance with the provision of the Treaty Establishing the EAC.
If the infringements by a Partner State persists, the matter is referred to the Council for resolution in line with the provisions of the Treaty.

Conclusion

The EAC Rules of Origin are the cornerstone of the EAC internal trade regime. The determination of the eligibility of products to EAC origin and the granting of preferential
Community Tariff treatment to goods originating in the Partner States are important processes in the implementation of the provision of the EAC trade regime. The effective and uniform implementation of the provisions of the EAC Rules of Origin by the Partner States is important as it helps in strengthening the EAC trade regime.
The implementation of the EAC Rules of Origin requires Partner States to apply common procedures in determining the eligibility of products to EAC origin and the granting of Preferential Community Tariff Treatment as provided under the EAC trade regime.

Student Activities

In groups discuss and make a presentation with relevant examples on one of the following topics:

- The principles of Cumulation and absorption, distinguishing them and explaining how they are applied in the EAC Rules of Origin
- Computation of Ex-Factory Price.
- Interpretation of part I of the first schedule to the EAC Rules of Origin, 2015.
- Seven scenarios that are to be considered in-sufficient to grant origin.

Assignment

Explain the principle of cumulation as it is applied under Rule 8 of the EAC-ROO, 2015.
Explain the difference between Cumulation and Absorption.
What is tolerance?
A manufacturer in Burundi transfers his products to a customer in Kenya. The products are transported by road via Uganda.

Explain direct consignment.
What conditions must be fulfilled by the goods during transportation for them not to violate the principle of direct consignment?

Giving four examples, explain what processes are considered insufficient and this cannot confer origin.