FAQs

Legal bases of ETLS

Protocol  A/P1/1/03 of 31st January 2003

Regulations C/REG.3/4/02,

C/REG.4/4/02,

C/REG.5/4/02 of 23 April 2002

 

Definition of terms and acronyms

  • Common Market: In a Common Market there are no barriers to the movement of goods, services and factors of production.
  • Customs Union:  A Customs Union consists of a group of countries that remove tariff and non tariff barriers to substantially all trade among them. In addition, they create and apply a common external tariff for goods from non member countries.
  • ECOWAS: Economic Community of West African States.
  • UEMOA/WAEMU: West Africa Economic Monetary Union.
  • ECOWAS Certificate of Origin: A certificate that identifies and confirms goods as originating in ECOWAS and therefore eligible to benefit from ETLS.
  • ETLS: ECOWAS Trade Liberalization Scheme.
  • Ex-Factory Price: This refers to the price of the product at the factory gate. It includes the cost of production but excludes other costs e.g consumption tax.
  • Free Trade Area: A Free Trade Area consists of a group of countries that remove tariff and non tariff barriers to substantially all trade among them.
  • Member States: These are the 15 member countries that make up ECOWAS.
  • Tariff: A financial charge in form of a tax imposed on imported products. (There are also export tariffs but these are uncommon.)
  • Third Country: Any country that is not one of the 15 ECOWAS countries.
  • Value Addition: The process of adding value to a product before offering it to consumers.

 

What is the ETLS

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 realising this objective was the setting up of the ECOWAS Trade Liberalization Scheme (ETLS).

The ETLS is a tool to facilitate the working of a Free Trade Area. It ensures that goods can be circulated freely without the payment of customs duties and tariffs. Aside from this, 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 but only covered agricultural goods, livestock, unprocessed goods and artisan handcrafted products at that point. However, it expanded in 1990 to also include industrial goods. This created the need for rules which determine whether industrial goods originate within the region or meet other criteria conferring origin. The “Rules of Origin” were therefore spelt out (see page 5). An industrial good which complies with these Rules of Origin is eligible to benefit from ETLS.

 

The Scheme has undergone a series of transformation in respect of the categories of goods that are covered.

The first category was defined when the scheme first came into existence in 1979. At that time, agreement was reached on only agricultural, artisanal handicrafts and unprocessed products to benefit from the scheme. Following this, in 1990, further agreement was reached and industrial products could be approved to take part in the scheme.

With industrial products being accepted, it became imperative to define what products were “originating” from the ETLS region. The rules of origin which guide this concept are defined in the ECOWAS protocol A/P1/1/03 of 31st January 2003. It defines out originating products as follows:

  • Wholly produced goods; goods whose raw materials completely originate from the region.
  • Goods which are not wholly produced but their production requires the exclusive use of materials which are to be classified under a different tariff sub-heading from that of the product.
  • Goods which are not wholly produced but their production requires the use of materials which have received a value added of at least 30% of the ex-factory price of the finished goods.

It must be noted that goods manufactured in free zones or special economic schemes involving suspension or partial or total exemption of entrance fees do not qualify for originating products status.

Objectives of the 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 and taxes with similar effects on imports. Aside from this, it also includes putting in place measures aimed at facilitating trade by reducing red tape and paperwork at borders.

Who can benefit from the ETLS?

The ETLS is open to every enterprise located and operating in any of the 15 ECOWAS Member States that intend to export the product within the region. All enterprises are bound by the rules spelt out in the protocols and regulations governing the ETLS. These protocols include: A/P1/1/03 of 31st January 2003 and Regulations C/REG.3/4/0, C/REG.4/4/02, C/REG.5/4/02. (See Protocols and Regulations governing the ETLS available on www.etls.ecowas.int, www.ecowas.int, the ECOWAS Commission and ECOWAS National Units).

Enterprises from Export Processing Zones or Free Zones and any other special economic schemes or customs territory may not benefit from the ETLS

What goods can benefit from the ETLS?

The following product groups benefit from ETLS , provided they originate from the ECOWAS region:

  • Agricultural and livestock products
  • fishery products from the sea, rivers or lakes
  • artisanal handicrafts
  • industrial goods
  • Agricultural and livestock products
  • handmade articles manufactured with or without the use of tool, instruments, or  implements directly operated by the craftsman

How to get a Certificate of Origin for approved industrial goods?

If an enterprise wants to trade industrial goods duty-free within the region, it needs a certificate of Origin. it will get this certificate, if the product complies with one of the following rules.

These Rules of Origin ” defines whether an industrial product can be considered as originating from the ECOWAS region.

Rule 1 :Wholly Produced Goods

Goods are regarded as wholly produced within ECOWAS, if at least 60% of the total quantity of raw materials used originated from the ECOWAS region.

Rule 2: Change in Tariff Heading 

Every product can be classified according to a list developed by the World Customs Organisation (the HS tariff classification). This list is made up of numbers broken down in

. ”Chapters”    – 2 digits ,

. ”Headings”  -4 digits and

.  ”Sub-headings” -6 digits.

if the finished product requires the exclusive use of materials which are classified under a different tariff heading from that of the finished product, it can be traded duty-free

Rule 3 : Value Added Criteria

If the input materials receives a value addition of at least 30% of the ex-factory price of the finished goods, the goods are considered as originating from the region and can be traded duty-free within the region.

 Note 

Exemption from customs duties and from taxes with similar effects does not however include Value Added Tax (VAT) and excise duties if they prevail in a Member State.

Also industrial goods in transit, proceeding to and from Member State are exempt from Customs duties and Taxes with similar effects

What are the steps for manufacturers of industrial goods to trade under the ETLS?

  • First, collect an application form from the competent authority in your country which is designated for that purpose (see below for a list of focal points in each Member State).
  • Fill out and send these application forms back to the competent authority who forwards the applications to a Committee responsible for the ETLS known as the National Approvals Committee.
  • Wait for the applications to be reviewed by the National Approvals Committee.
  • The list of approved and disapproved enterprises is submitted to the ECOWAS Commission for validation and notification to all ECOWAS Member States.

The competent authority informs you when an ETLS Certificate of Origin is ready to be collected after approvals have been made and the Commission has notified all other Member States. The Certificate of Origin contains a 10-digit ETLS approvals number. The Certificate of Origin is valid for six (6) months commencing from the date of its issuance. However, it is valid for one product only and so the number of products applied for must be specified in the application form.

 

  • Export your goods to any of the 15 ECOWAS Member States duty free using your Certificate of Origin. Please ensure to have your certificate in hand before attempting to export.                                                                                                                                                                              Please,  Kindly click on the link below for a  more information       http://etlsx.ecowas.int/approval-procedures/

What documents are needed for applying for acceptance into the ETLS?

  1. For applying for acceptance into the ETLS
  • An ETLS application form containing:

* A full description of the identity of the enterprise.

* A full description of goods and raw materials used in the production in sufficient    detail and in accordance with the commercial practise.

* A full description of the manufacturing process and the items and all other costs such as salaries and wages.

  • Copies of statutes, company certificates and all documents to support company registration.
  1. For bringing industrial goods duty-free across the border
  • An original copy of the ECOWAS Certificate of Origin.

Where can I get information on the ETLS?

ETLS information can be gotten from our experts present in the fifteen member. please, kindly click on the link below to select the ELTS Mmeber state you would like to contact.

http://etlsx.ecowas.int/contact/

Can one (1) Certificate of Origin be used for several products so long as it is the same enterprise?

No, each Certificate of Origin covers one type of good and so applications must be made for each type of good that is to be exported.

How do I know if my goods are prohibited from being imported into another ECOWAS Member State?

It is the responsibility of the exporter to enquire about rules on the export of the said product and prohibitions lists before importing into a country. This information is available at the focal point of the ETLS in Member States.

What national rules and regulations do I need to know when I export under the ETLS ?

Before you export a good, you must make inquiries regarding the national rules  in the destination country, especially with regards to norms and quality.

Can I use one (1) Certificate of Origin to export to different or several countries?

No, the ETLS Certificate of Origin is issued for one specific product and can only be used for one specific recipient (with name, trade name and complete address)  of the ECOWAS region.

How often can I use my Certificate of Origin?

The Certificate of Origin can be used each time you export and is valid for six (6) months commencing from the date of its issuance.

Are there taxes which I have to pay despite the approval of my product into ETLS ?

Yes, even an approved product has to pay Value Added Tax (VAT) and, if applicable, exercise duties.

CALCULATIONS FOR ETLS CRITERIA FOR APPROVAL

 

  • Calculation of the proportion of 60% local content of products (b) to (i) cited in article 3, paragraph j of the ECOWAS Treaty:
    {∑ QLocal ⁄ ∑Q (Local + Foreign)} × 100 ≥ 60%
  • The criteria for change of tariff headings, which must be reflected in the first 4 digits of the HS code
  • The calculation of value-added which must be at least 30% of the ex-factory price minus taxes of the products (article 4, paragraph 2 of the mentioned protocol):
    VA⁄Ex-factory Price × 100 ≥ 30%
    Valued Added (VA) is the total ex-factory price minus CIF Value (or taxes) of raw materials and consumables. Components determining ex-factory cost price include: Raw materials, consumables, packaging and other expenditure borne by the company. Please note: Salaries and wages must not be more than 20% of the ex-factory cost price. Works, supplies, and external services must not be more than 10% of the ex factory cost price and must be directly tied to production. Financial charges must not be more than 30% of the ex factory cost price.”

 

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