1. EU-SADC EPA Rules of Origin
Mission to Lesotho and Swaziland
14-20 March 2018
Roberto Cecutti
Trade Affairs Officer
for SADC EPA implementation
European Commission
Directorate-General for Trade
Unit D.2 Economic Partnership Agreements – Africa, Caribbean and Pacific, Overseas Countries and Territories

2. Definition of origin of goods
A link between a good/product and a country or territory, through:
- the location of its production: ‘territoriality’ of origin (“where the goods are made”)
the conditions of its production: ‘acquisition’ of origin (“how the goods are made”)
Rules of origin provide the method and criteria to determine the ‘national source’ of a product and the procedures to certify and verify it.

3. Use of origin for preferential purposes:
“Preferential rules of origin are those laws, regulations and administrative determinations of general application applied by any Member to determine whether goods qualify for preferential treatment under contractual or autonomous trade regimes leading to the granting of tariff preferences” (WTO Agreement on Rules of Origin)

4. Use of origin for preferential purposes
Preferential tariff measures resulting from:
preferential trade agreements (free trade agreements, EPAs) in accordance with GATT XXIV
preferential trade autonomous arrangements (e.g. GSP)
including:
preferential tariff quotas
preferential origin derogation quotas

5. Key features of all Rules of Origin
Distinction between:
products wholly obtained in a country
products resulting from the transformation in a country of imported materials
Existence of a list of wholly obtained products
Existence of principles and/or positive criteria (‘list rules’ or ‘PSR, product specific rules’) to determine the origin of products obtained from imported materials
Possible negative test of « minimal operations »
Declaration of the origin of goods on import

6. List of wholly obtained goods in EU-SADC EPA
Protocol 1 Article 7
mineral products extracted from their soil or from their seabed;
fruit and vegetable products harvested there;
live animals born and raised there;
products from live animals raised there;
products from slaughtered animals born and raised there;
(i) products obtained by hunting or fishing conducted there;
(ii) Products of aquaculture, where the fish, crustaceans, molluscs and other aquatic invertebrates are born or raised there from eggs, larvae or fry;
(g) products of sea fishing and other products taken from the sea outside the territorial waters of the EU or of the SADC EPA States by their vessels;
(h) products made aboard their factory ships exclusively from products referred to in point (g);
Etc.

7. List of working or processing required to confer originating status to non-originating materials in EU-SADC EPA
Protocol 1 Annex 2 (Product Specific Rules – PSR)
Example:
HS heading 2007:Jams, fruit jellies, marmalades, fruit or nut purée and fruit or nut pastes, obtained by cooking, whether or not containing added sugar or other sweetening matter
Manufacture in which: —all the materials used are classified within a heading other than that of the product; — the value of any materials of Chapter 17 used does not exceed 30 % of the ex–works price of the product ex 2008 – Nuts, not containing added sugar or spirit Manufacture in which the value of the originating nuts and oil seeds of heading Nos 0801, 0802 and 1202 to 1207 used exceeds 60 % of the ex–works price of the product .

8. List of minimal operations in EU-SADC EPA
Protocol 1 Article 9
(a) preserving operations to ensure that the products remain in good condition during transport and storage;
(b) breaking–up and assembly of packages;
(c) washing, cleaning; removal of dust, oxide, oil, paint or other coverings;
(d) ironing or pressing of textiles;
(e) simple painting and polishing operations;
(f) husking, partial or total bleaching, polishing, and glazing of cereals and rice;
(g) operations to colour sugar or form sugar lumps; partial or total milling of crystal sugar;
(h) peeling, stoning and shelling, of fruits, nuts and vegetables; (i) sharpening, simple grinding or simple cutting;
Etc. .

9. Cumulation No cumulation for Non-Pref Origin purposes
Cumulation for Pref Origin purposes:
an exception to/derogation from the principle of territoriality of RoO and the normal rules to determine originating status
a legal assimilation to materials originating in or of processing performed in the of exporting country materials originating in or of processing performed in another country

10. Cumulation Objectives Conditions and limits
Reinforce the economic integration between the partners to a preferential trade arrangement (‘bilateral’, ‘diagonal’/‘regional’ or ‘full’ cumulation)
Secure extra sources of supplies where required to allow products to acquire originating status and thus benefit from preferences (‘extended’ cumulation)
Conditions and limits
Cumulation between the partners may be subject to the performance of ‘minimal operations’
Extended cumulation should not become a system of ‘global’ cumulation or sourcing, akin of general and permanent derogation from PSRs, to the detriment of industrial development in beneficiary countries

11. Bilateral cumulation of origin
THIRD COUNTRIES
NOM
EU-SADC EPA Protocol 1 Article 3.2 and 3.3 EU
SADC EPA State
OM-EU
PSR
Processing
OM-SADC EPA State
Preferential Tariff Treatment EU
Bilateral
Cumulation:
OM-EU = OM-SADC EPA State
PSR positive test
Minimal Operations negative test

12. Bilateral « full » cumulation of processing
THIRD COUNTRIES
Bilateral « full » cumulation of processing
NOM
EU-SADC EPA Protocol 1 Article 3.4 and 3.5
SADC EPA State EU
Processing in SADC EPA State
NOM with process-A
Processing in EU
OM-EU
Preferential Tariff Treatment SADC EPA State
Full Cumulation:
Process-SADC EPA State = Process-EU
PSR positive test
Minimal Operations negative test

13. Diagonal « regional » cumulation of origin
THIRD COUNTRIES
NOM
EU-SADC EPA Protocol 1 Article 4
ACP EPA
SADC EPA State
OM-ACP EPA
PSR
Processing
Administrative Cooperation
OM-SADC EPA EU
Preferential Tariff Treatment EU
PSR positive test
Diagonal
Cumulation:
OM-ACP EPA = OM SADC EPA
Minimal Operations negative test

14. Diagonal « extended » cumulation of origin/processing
THIRD COUNTRIES
Diagonal « extended » cumulation of origin/processing
NOM
EU-SADC EPA Protocol 1 Article 5
COUNTRY X benefiting from MFN 0% when exporting to the EU
OM-X
SADC EPA State
Admin. Cooperation
PSR
Processing
OM-SADC EPA State EU
Preferential Tariff Treatment A
Extended
Cumulation
OM-X = OM-SADC EPA
PSR positive test
Minimal Operations negative test

15. DF-QF « extended » cumulation
THIRD COUNTRIES
NOM
EU-SADC EPA Protocol 1 Article 6
OM COUNTRY X
Preferential DF-QF when exporting to EU
SADC EPA State
PSR
Processing
Admin. Cooperation
OM-SADC EPA State EU
Preferential Tariff Treatment EU
DF-QF
Extended
Cumulation
PSR positive test
Minimal Operations negative test