The Tanzania government recently said it has began to issue simplified Certificates of Origin (COs).

This is the paperwork attesting that goods in a particular export shipment are wholly obtained, produced, manufactured or processed in a particular country. COs also constitute a declaration of accountability by the exporter and one cannot do without them in the international market.

According to the International Chambers of Commerce (ICC), around 15 million COs are certified by Chambers globally each year.

However, the origin is not the country from which the goods are shipped, but the country where the goods were made. Failure to have a correctly completed and certified Certificate of Origin can result in goods being held up by Customs authorities, and can delay payment for your shipment if you are supplying under a Letter of Credit.

Having the proper paperwork and getting it processed and approved is often the most frustrating factor in trade. Missing or inaccurate documents can increase risks, lead to delays and extra costs, or even prevent a deal from being completed.

However, it is a credit to the East African Community (EAC) members states that they are adopting a common documentation and the One Stop Border Posts (OSBP) that are easing procedures and saving business people considerable time and money.

During a recent speech to the East African Legislative Assembly, Majaliwa Kassim Majaliwa, the Tanzania’s Prime Minister said, the government has issued 3,222 simplified certificates as of June last year compared to 2,355 issued in 2014.

This is commendable, but perhaps Tanzania and the EAC as a whole, should move away from this officialdom and help empower the relevant national Chambers of commerce and industry to play a part. These institutions are closer to the ground which gives them a far better understanding of the technicalities involved with COs.

In the more advanced countries, national Chambers have been issuing non-preferential COs for well over a century and more recently, closely working with Customs authorities, issuing preferential COs. Preferential COs enable products to enjoy tariff reduction or exemption when they are exported to countries extending these privileges.

With sub-Saharan Africa steadily moving towards closer trade links to turnaround the current situation when most exports are skewed to the northern hemisphere, easy but authentic documentation is vital.

By the way, intra-African trade is less than 15% compared to say Asia where over 50% of the trade is amongst themselves. The proposed Tripartite Free Trade Area (TFTA) could halt this trend by stimulating intra-regional trade through the linkages already set up via the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), and the EAC.

Trading across borders gives consumers and countries the opportunity to be exposed to goods and services not available in the domestic market. Since the proposed integration of African states through free trade areas also stands on the pillar of preferential treatment, COs are going to be a sensitive and crucial area to deal with.

The EAC can do itself a huge favour by coming out with a streamlined regional system that is efficient and carries no ambiguities to meet the challenges ahead. Also one that beefs up the responsibilities of the national Chambers.

In 2013 ICC launched its International Certificates of Origin Accreditation Chain. It has an easily recognizable international quality label, to reassure business, traders, banks and customs administrations together with participating chambers have issued COs according to internationally accepted best practices. With the proposed Tripartite Free Trade area coming in during 2017, the EAC should look into this.

Although not for certain, there are chances that some countries will take advantage of the free trade area to dump goods at the expense of regional businesses. Lets hope the EAC system will be in place to guard against this possibility.

Source: Business Week

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.