Navigating rules of origin demands clear understanding

To qualify for European Union and United Kingdom preferential tariffs, goods need to have fully tracked provenance. The rules of origin regulations relate to the last SADC EPA (Economic Partnership Agreement) country where processing has taken place as the place of origin. Goods which were not finished in an SADC EPA country do not qualify for preferential access. This prevents the transhipment of goods through SADC EPA by countries which are not part of the agreement. However, the EU has introduced a “non-alteration” rule which allows for transhipment, storage and splitting of consignments in the territory of third countries within the SADC. Agricultural goods are the easiest to certify as products which contain only materials sourced from an SADC EPA country automatically qualify for preferential access. It gets more complicated when the product contains any materials sourced from non- SADC EPA countries. Manufacturers should look to source raw materials and components from the 33 countries which qualify for MFN duty-free access to the EU. They include Kenya, Cameroon, Caribbean countries, Pacific islands, Vietnam, Japan, Canada, Singapore and Mexico. There are specific rules of origin for the materials and components imported from these countries, as well as the final goods. An example is SA producer of Heat Shields (HS 8708). Aluminium imports from India would disqualify it for preferential access, but sourcing from Kenya and adding some value will put the product in the duty-free zone. Inputs sourced from EU countries qualify automatically if they meet the EU rules of origin requirements. A textile product can enter the EU duty-free if at least one stage in its production – such as weaving or knitting – took place in an EPA country. There are varying requirements for the percentage of value addition for finished goods and products to qualify for zero tariffs. ER