Trade and market are at the heart of Ecowas’ aims and objectives. Article (3) of the Revised Treaty of Ecowas stipulates the removal of trade barriers and harmonization of trade policies for the establishment of a free Area, Customs Union, a common market and an eventual culmination in to a monetary and economic union in West Africa.
Article 3 of the Ecowas revised treaty highlights one of the main objectives of Ecowas as promoting economic integration in the region by, among others, creating a common market. One essential step towards realizing the objective was setting up the Ecowas Trade Liberalization scheme (ETLS). The ETLS is a tool to facilitate the working of the free Trade Area. It ensures that goods can be circulated freely without the payment of Customs Duties, taxes, prohibitions, quotas or any such restrictions with similar effects on imports. It also includes putting in place measures aimed at facilitating trade by reducing Red Tape and paperwork at borders.
The ETLS came into existence first in 1979 and only covered agricultural goods and artisan handcrafted products at that point. However, in 1990, it was expanded to include industrial goods. The following categories of goods can benefit from ETLS, provided they originate from the Ecowas region:
Agricultural goods
Livestock
Unprocessed goods
Artisan handcrafts
Industrial goods.
RULES OF ORIGIN
If an importer wants to trade industrial goods duty free within the region; he/she needs an ETLS Certificate of origin. To get this certificate, the products must comply with one of the following rules called the Rules of Origin. These rules determine whether an industrial product can be classified as originating from the Ecowas region.
Rule 1: Whole Produced Goods
Goods are regarded as wholly produced within the Ecowas, if at least 60% of their raw materials used in their production originate from the ECOWAS region.
Rule 2: Change in Tariff Heading
The World Customs Organization has developed a Harmonized Commodity Description and Coding System known as the HS System which provides a standardized system for classifying traded products for the purpose of charging customs duty, although every country is allowed to charge its own tariff rate. The HS system uses number codes to classify products under different chapters, headings and subheadings. An exporter’s finished product will fall under a specific ‘Chapter’ and ‘Heading’ and in some cases a ‘Sub-heading’ in the HS coding system. If the finished product was manufactured with the exclusive use of materials which is classified under a different ‘Heading’ from the finished product, it can be traded duty free.
Rule 3: A harmonized ECOWAS/UEMOA Certificate of Origin is given to exporters as proof of origin and is issued by an appointed recognized institution in each member state. In Nigeria, the National Association of Chambers of Commerce Industry, Mines and Agriculture (NACCIMA) is responsible for issuing the Certificate of Origin.
PROCEDURE FOR OBTAINING A CERTIFICATE OF ORIGIN IN (CoO) NIGERIA
1. The importer obtains an application form from NACCIMA.
2. The exporter fills the CoO application form providing details of his/her enterprise and the export transaction for which the CoO is sought.
3. The form is submitted along with supporting documents and documents and payment of processing fees to NACCIMA.
4. A CoO is issued to the exporter upon verification and approval by the National Approvals Committee.
The only allowable payment on this scheme is the payment of the Comprehensive Import Supervision Scheme (CISS), which is 1% of Freight on Board (FOB) value; and ETLS Levy which is 0.5% x Cost of imported items, insurance value and freight (CIF) charge.
Oscar Ivara
Blog Contributor at HOG furniture.
