::: SADC Certificate of Origin and the Zimbabwe Market :::
Why the Zimbabwe Market?
 South Africa and Zimbabwe have enjoyed a long history of inter-trade. Following a slump in the Zimbabwe economy, trade is once again picking up with the stabilisation of the country's economy. After attending the Zimbabwe International Trade Fair earlier this year, some saibl clients have secured export orders whilst others are in the process of negotiating potential exports with Zimbabwean companies.
In 2009 Zimbabwe adopted a multiple currency regime. The US dollar and the South African Rand are used interchangeably in all economic transactions. The use of the South African Rand helps mitigate against exchange risk. The country’s manufacturing base, although starting to strengthen, has a depleted capacity which has been substituted by imports.
From saibl's meetings during the fact finding mission, it became clear that there were opportunities in the FMCG sector, hardware products, construction products, as well as industrial supplies. During the peak of economic problems, the informal sector sprouted extensively, and the current government of national unity is in the process of formalizing this sector. The Africa Development Bank has availed US$100m, part of which is meant for the SME sector. This brings an opportunity to supply machinery for this sector.
As a result of the interest shown by our South African suppliers, saibl has taken the decision to appoint a short-term consultant to help identify export opportunities, to make follow ups, and assist clients visiting Zimbabwe.
Rules of Origin: SADC FTA and AGOA
The Rules of Origin are employed to ascertain the country of origin of a product, in the context of a particular unilateral, bilateral or multilateral (regional) free trade agreement. The two main types are preferential and non-preferential rules of origin, which are topics for another day. In summary, non-preferential rules of origin help determine the country of origin for such purposes as quotas, anti-dumping, anti-circumvention, statistics or origin labelling. Preferential rules of origin are part of a free trade area or preferential trade arrangement which includes tariff concessions. The rules of origin determine what products can benefit from the tariff concession or preference, in order to avoid transhipment.
 A Certificate of Origin attests to or authenticates from what country the consignment originates - that is where the goods are actually produced. Different agreements have different definitions in terms of acceptable levels of value-addition required to qualify as a product originating from a particular country. There are cases where less than 100% of the raw materials, the processes and the value-add are from one country. The certificate therefore confirms that goods in question are totally (or partially) from a particular country, thus qualifying under the requirements of a particular free trade agreement.
The primary purpose of a Certificate of Origin, as required by the importing country’s authorities, is to classify the goods in the customs regulations of the importing country, thus defining the duty payable. It is also important for import quota purposes, statistical purposes, health regulations and anti-dumping rules and determines if they should therefore benefit from preferential treatment. The importers also require the certificate of origin to determine price competitiveness, avoid potential problems with customs authorities, avoid forfeiting the goods (should they be found to be originating from a country with which the importing country has a trade embargo) and for establishing Letters of Credit.
SADC FTA
The 15 SADC member states have agreed on an Free Trade Area. A Certificate of Origin is imperative if an exporter from one member state wants to benefit from the free trade agreement. In the South African context, the exporter has to obtain the Certificate of Origin from the South African Revenue Service (SARS).
 See attached information regarding the SADC Rules of Origin
Visit the SADC FTA website for more information >>>
AGOA
Although this article focuses mainly on the SADC Certificate of Origin, it is useful to provide brief background on the AGOA for those saibl clients interested in the US market.
The African Growth and Opportunity Act (AGOA) was built on the Generalised System of Preferences (GSP) scheme and offers duty-free and quota-free market access to the United States for approximately 7000 products from 40 Africa countries, including South Africa.
For those interested in the US market, to qualify for duty-free access to the US, you have to meet Rules of Origin requirements such as:
- Products must be imported directly from the beneficiary country into the United States;
- Products must be "grown, produced or manufactured" in one or more of the beneficiary countries;
- Products may incorporate materials sourced from non-beneficiary countries provided that the sum of the direct cost or value (i.e. the transaction value) of the materials produced in the beneficiary countries, plus the "direct costs of processing" undertaken in the beneficiary countries, equals at least 35% of the product's appraised value at the U.S. port of entry.
Visit the AGOA website for more information >>>
Conclusion
It is imperative for a South African company planning to export to the SADC countries to obtain the Certificate of Origin if it wishes to benefit from the provisions of the Free Trade Agreement. The benefit of obtaining the certificate is also to make sure that the price of your products will be competitive when it reaches the consumer in the importing country. The members of the Southern African Development Community (SADC) are Angola, Botswana, DRC, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe.
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::: Forthcoming saibl Trade Visits :::
::: Botswana :::
::: Uganda :::
::: Zambia :::
