The review of the SADC revised Regional Indicative Strategic Development Plan (RISDP) and subsequent approval by the Head of States and Government in August 2015 created new demands in the spheres of the regional integration agenda, in particular on the areas of trade facilitation to support the implementation of the SADC Industrialization Strategy and Roadmap to consolidate the SADC Free Trade Area (FTA).
In response to these demands, the Ministerial Task Force on Regional Economic Integration at its 16th meeting held in March 2016 developed and approved the SADC Trade Facilitation Programme which has 28 activities including the implementation of the electronic certificate of origin.
The certificate of origin is a required document by importing country for the purpose of granting duty free and tax free, statistics and risk assessment. It attests the origin of the goods as per the criteria provided in the Protocol on Trade. The Certificate of Origin presents the country were the goods was produced or manufactured and information regarding the product, its destination, and the country of export.
Since the start of the implementation of the SADC Free Trade Area, the certificate of origin has been processed manually by the competent or issuing authority in a country of origin of the goods as provided in Annex I of the Protocol on Trade. This process and procedures although they have been facilitating intra-Regional Trade, but over the year have proven to have some challenges with regards to issuing the certificate of origin, submission of the specimen, stamp and the list of authorised signatories of the respective Member States to Secretariat for inward circulation to other FTA Member.
The implementation of e-certificate of origin is one of the activities meant to support the industrialization strategy and roadmap as part of the consolidation of the Free Trade Area. It is expected that this instrument will overcome the challenges which Traders and Customs Administration are currently facing in the management of the certificate of origin.
In order to implement the e-CoO concept regionally, the Secretariat facilitated the development of the regional eCoO framework with the view to harmonise the process of automation for registration, issuance and transmission of the certificate of origin. The Framework was approved by the Sectoral Committee of Ministers of Trade at the 31st Meeting held in June 2019 in Windhoek, Namibia. The Framework presents appropriate security features which include barcode encrypt and decrypt system. Under this framework, the electronic certificate of origin will operate as presented in the chart below.
Use of Certificate of Origin (CoO)
The Certificate of Origin is a requirement specially in preferential agreements for export and import of the goods subject for duty free and quota free. The CoO is important because it helps to determine whether certain goods are eligible for import under the preferential arrangement or decide whether MFN rates should be applicable. Member States that are signatories of the Protocol on Trade and are participating in the Free Trade Area use the certificate of origin for duty free and quota free market access.
Operation of Electronic Certificate of Origin
The Electronic Certificate of Origin (eCoO) is a document processed and issued electronically by an issuing authority in the country of exportation and transmitted to the country of import through the appropriate protocol. It attests that goods declared by an exporter conform to specific rules of origin and is therefore qualified to be traded under duty free and quota free market access. The SADC e-certificate of origin presents security features which provide confidence and trust to all stakeholders along the chain. Its implementation will therefore overcome the challenge that the traders are currently facing by visiting the offices of the issuance authority for lodging application and getting response on the issuance.
Benefits of the Electronic Certificate of Origin
The implementation of the eCoO will reduce the time taken to process application and insurance since it will allow the trader to apply on-line, trace the application and get the response on the submission through the same platform. A reference number will be will issued for the purpose of process customs declaration at the country of exportation.
The eCoO systems is equipped with security features such as online eCoO authenticity verification, optical watermarking technology to distinguish between original and copies of CoOs issued, digital rubber stamps of the competent authority and signatures of authorized officials, microprint to deter unauthorized re-production of the certificate of origin, 2-D barcode to ensure data integrity, Public Key Infrastructure (PKI) technology to ensure data security and authenticity and printer control language is used to control the printing of only one original certificate of origin. The business community in the region has welcome the introduction of eCoOs as they speed up customs clearance and expedite clearance of the letters of credit by banks.
a) In manual environment; the exporters have to rely on getting certification from issuing authority (Chamber of Commerce or Customs Administration). This is monotonous since it called for exporters to:
(i) Manually fill in the certificate of origin;
(ii) Courier or deliver it to the issuing authority;
(iii) Wait until the authority official reviewed and certified the certificate;
(iv) Send it back to the exporter’s offices; and
(v) Send the certificate of origin through courier to the importer or attach it to the documents accompanying the cargo.
b) In electronic environment; The information required is basically the same for both paper and electronic certificates of origin. The difference is that instead of printing the certificate and taking it to the issuing authority to get it certified, the exporter needs to enter the information online and then the issuance authority will send certified certificate by express mail or via email depending on preference.
Currently, in the region, Botswana, Eswatini, Malawi, Namibia, Tanzania and Zambia have already developed their national module and are working on the component for transmission and receiving (outbound and inbound) of the e-CoO as per the specifications contained in the Framework and they will participate in the pilot phase. SADC Secretariat facilitated the backstopping mission on eCoO in these Member States in order to ascertain their readiness in the pilot exercise. Mauritius has already developed its eCoO module and is currently waiting to exchange with other Member States.
It is planned that the e-CoO will go live in May 2020 in six Member States and it will eventually be rolled out regionally afterwards. This will make the SADC be one of the first Regional Economic Communities (RECs) recognised by Africa Union to implement the e-CoO regionally for trade facilitation. The implementation of the e-CoO is expected to contribute to increased intra-SADC Trade within the realms of the Protocol on Trade and Free Trade Area and support industrialization through increased trade volume of goods produced in the region.
The implementation of the eCoO is expected to contribute to the reduction of non-tariff barriers to trade and enhance participation of SADC Member States in the regional value chain and ultimately, support successful implementation of the industrialization strategy and roadmap in the consolidation of the SADC FTA. This eventually will lead to the improvement of SADC Member States in their ranking in ease of doing business.