RULES OF ORIGIN : PRODUCTS ELIGIBLE FOR BENEFITS OF THE EPA
Rules of origin are an essential element of any trade agreement because, by defining the country of origin of a product, they determine whether a given product is entitled to preferential access (for example duty-free or with a reduced duty rate) to the markets of other countries covered by the agreement.
Cameroon and the EU are currently negotiating a common reciprocal regime governing rules of origin, which will be annexed as a protocol to the EPA. In the absence of such a protocol, Cameroon benefits from the general rules of origin included in the EU Market Access Regulation, and in particular Appendix 2 of this Regulation specifying the product specific rules. On its part, Cameroon has published a Decree on the rules of origin applicable to products imported from the EU which contains rules practically identical to those in the EU Regulation.
A product is considered to originate in Cameroon or the EU if it is:
- Either produced 100% in the exporting country (also referred to as wholly obtained);
- Or if it has been sufficiently processed in the country of export, according to the applicable rules of origin.
- “Wholly obtained” Products
Wholly obtained products are finished products that do not contain any material from another country. These are, for example, mineral products extracted from their soils, sea or ocean bottoms; vegetal products harvested there; live animals born and raised in their territories or products from live animals farmed there.
- “Sufficiently Worked or Processed” Products
Products containing imported materials may be considered as originating from Cameroon if the final product has been sufficiently worked or processed in Cameroon according to the defined conditions. Three types of criteria determine sufficient working or transformation:
- Added value: The value of materials not originating in Cameroon must not exceed a certain percentage of the ex-factory price of the finished product. The general tolerance within the framework of the EPA is 15%. This means that the value of all non-originating materials used must not exceed 15% of the ex-works price of the product.
- Change in tariff classification: Imported materials used in the production process must be classified under a different tariff heading of the Harmonized System (HS) than the finished product.
- Specific rules: Beyond general tolerance concerning the value of non-originating materials, products may be subject to specific criteria. For instance, a particular process must be made on non-originating materials according to prescriptions different from those meeting the general tolerance, or the product must be manufactured from a specific raw material.
- Insufficient Working or Processing The other way round, some working and processing operations are considered as insufficient to make the final product Cameroonian. For example, changes of packaging and breaking up and assembly of packages, or the simple placing in bottles, flasks, bags, cases, boxes, fixing on boards, etc., as well as all other simple packaging operations.
- The Rule of Cumulation of Origin: The cumulation of origin is a rule that makes it possible for parties to the EPA to use raw materials and inputs originating in some other countries, disregarding their value, without losing preferential access to the EU market. In this way, a Cameroonian cosmetics producer can use odoriferous substances coming from an oversea territory of one of the EU Members, and the final product will be considered originating from Cameroon and eligible to enter the EU market duty-free.