ECOWAS trade liberalisation scheme (ETLS)
The ECOWAS Trade Liberalisation Scheme (ETLS) is a tool for the effective implementation of the free trade area. The ETLS mechanism ensures the free movement of goods originating from ECOWAS without the payment of customs duties and taxes of equivalent effect on importation into the ECOWAS space (this exemption does not include Value Added Tax (VAT) and excise duties if they are in force in one of the Member States).
The ETLS was introduced in 1979 and at that time only covered agricultural products and handicrafts.
Then, in 1990, it was extended to industrial products. This expansion necessitated the formulation of rules on the definition of the concept of ECOWAS “originating products” and the establishment of “Rules of Origin”.
The ETLS is open to any company that is located and operates in one of the 15 ECOWAS member states and intends to export its products within the region.
All companies are required to comply with the rules set out in the protocols and regulations governing the ETLS, notably Protocol A/P1/1/03 of 31 January 2003 and Regulations C/REG.3/4/02, C/REG.4/4/02, C/REG.5/4/02 of 23 April 2002 (available on the following websites: www.etls.ecowas.int , www.ecowas.int and from the ECOWAS Commission and ECOWAS National Cells) – (See http://www.etls.ecowas.int/fr/).
The following product groups benefit from the ETLS, provided they originate from the ECOWAS region:
- Agricultural and livestock products.
- Products from sea, river or lake fishing.
- Mining products.
- Approved industrial products (conforming to ECOWAS rules of origin).
They can be traded duty free in the region. A ETLS certificate of origin must accompany the product for each shipment, except for the products included in the limited list below:
- Agricultural and livestock products (an appropriate sanitary or phytosanitary certificate must be obtained in the country of origin for agricultural and livestock products).
- Articles made by hand, with or without the aid of tools, instruments or devices operated directly by the manufacturer.
The rules of origin underlying this concept are defined in the ECOWAS Protocol A/P1/1/03 of 31 January 2003 concerning the definition of the concept of products originating in ECOWAS Member States. It defines an ECOWAS originating industrial product if the product complies with at least one of the following rules:
- Rule 1
- Rule 2
- Rule 3
Wholly obtained products
Products are considered to be wholly obtained within ECOWAS if at least 60% of their total raw materials, by quantity, originate from ECOWAS
Change of tariff heading
Goods that are not fully processed but whose production requires the use of materials that will be classified under a different tariff subheading than the product. Each product can be classified according to a list developed by the World Customs Organisation: the HS tariff classification.
The list is composed of figures broken down as follows:
- “Chapters”: 2 digits,
- Headings”: 4 digits,
- Subheadings”: 6 digits.
If the finished product requires the exclusive use of materials which are classified under a tariff heading other than that of the finished product, it may be traded duty free. This rule is accompanied by a list of exceptions indicating the cases in which the change of heading is not decisive or imposing additional conditions).
Value added criterion
Goods which are not fully processed but the production of which requires the use of materials which have an added value of at least 30% of the ex-factory price of the finished products. If the raw materials contain an added value of at least 30% of the ex-factory cost price of the finished products, the goods are considered as originating and can be traded duty free within the space.