Breaking Down Rules of Origin under the African Continental Free Trade Agreement (AfCFTA)
Emara & Soliman International Law Firm
Business Incorporation | Corporate Governance | Compliance | Competition Law | Merger & Acquisitions | IP Rights
Written By - Abdel Hamid Soliman - Managing Partner
The African Continental Free Trade Agreement (AfCFTA) is a game-changer for trade across Africa, offering a unified market for goods and services. One key feature investors and traders must understand is the Rules of Origin (RoO), which ensure that only products originating from AfCFTA member states benefit from preferential tariffs. Here’s what you need to know:
?? What Are the Rules of Origin?
The Rules of Origin determine whether a product qualifies as “originating” from an AfCFTA state and is eligible for tariff preferences. Goods must either:
→ Be wholly obtained (entirely produced within a member state without external materials, e.g., minerals or agricultural products).
→ Undergo substantial transformation, like value addition or specific manufacturing processes, if non-originating materials are used.
?? Key Criteria for Determining Origin
1?? Wholly Obtained Goods: Products made entirely from resources within a member state (e.g., fish caught in territorial waters, crops grown domestically).
2?? Change in Tariff Heading (CTH): Products qualify if the processing results in a new tariff classification. For instance, raw cotton processed into fabric.
3?? Value-Added Thresholds: Non-originating materials must not exceed 60% of the product's ex-works price in most cases.
?? Practical Flexibility for Businesses
→ Cumulation: Manufacturers can combine inputs from multiple AfCFTA states, and the final product is treated as originating in the state where the last substantial transformation occurred.
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→ Tolerance Rule: A small percentage (up to 15%) of non-originating materials can still qualify products for preferential treatment in certain cases.
→ Absorption Principle: Intermediate products that already meet origin criteria don’t need reassessment when used in further processing.
?? Why This Matters for Investors ??
The Rules of Origin are designed to foster intra-African trade, reduce reliance on external inputs, and encourage investment in local industries. By aligning supply chains to meet these criteria, businesses can maximize cost efficiency, expand their market reach, and take full advantage of duty-free access.
How Emara & Soliman Can Help?
Navigating the Rules of Origin can be complex. Emara & Soliman International Law Firm, with its deep expertise in trade laws and local partnerships, helps businesses:
1?? Interpret and apply Rules of Origin criteria for product qualification.
2?? Secure the necessary certifications like Certificates of Origin.
3?? Structure supply chains to maximize compliance and benefits under AfCFTA.
Ready to leverage Africa’s unified trade platform?
Reach out to Emara & Soliman today! https://emarasoliman.com/
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