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League of Arab states

General Secretariat
General Department for Economic Affairs
The Great Arab free Trade area

General Rules

Resolution No. 1336, of the Economic and social council, dated September 17, 1997

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Arab Rules of origin
of the Agreement to facilitate
and develop trade Among Arab states

Giving effect to the provisions of Article Nine of the Agreement to facilitate and develop
trade among Arab states, stipulating the following:
To treat a good as Arab for the purpose of this Agreement, it shall meet the rules of origin
determined by the council, and the value added as a result of its production in a party state shall not
be less than 40 percent of the value of the good when finished.
According to what has been mentioned in the executive program as for establishing an Arab
free trade area, the rules of origin shall be as herein set forth:
Rule 1, Definitions:
For the purposes of this Agreement, the following words and phrases have the respective
meanings herein set forth:
a- Manufacturing : the process or series of processes which include the production inputs for
producing materials products or goods
b- Production Material: Raw materials or and primary materials or and semi finished goods
or/ and intermediate materials used in goods production.
c- Products: Manufactured products, even if they were production inputs for another manufacturing
process.
d- Goods : finished goods arising from mining, extraction, agriculture, fishing or those arising
from manufacturing process.
e- Less-developed Arab states: The states considered by the Economic and Social council as
such.
Rule 2: origin criteria: For the purposes of implementing the Arab rules of origins, without
prejudice to Rule 5, the following goods and services shall be considered of national origin:
a- Products acquired completely from any party-state in accordance with the provisions of Rule
(7).
b- Goods manufactured by any party–state, which includes input(s) from other party-state, and the
added value of these good shall not be less than 40 percent according to the provisions of Rule
(3), taking into consideration the provisions of Rule (4).
Rule 3
Criteria of defining the added value:
The added value shall be defined according to the factors and criteria herein set forth:
1- All wages and salaries: Including cash and in kind wages, training fees, various advantages,
leaving indemnity, social insurance for production workers and for the workers of the Adminis-
trative and technical body, who are directly connected with production, such as supervisors and
workers of quality control: Storing and wrapping, or indirectly, such as, Administrative and ac-
counting body, and marketing employees.
2- Fixed Assets Depreciation: including depreciation of industrial buildings, equipment and
machines, in addition to residential buildings owned by the company, and aren't included in the
provision of rentals, and directly connected with manufacturing activity, according to deprecia-
tion rates approved by the official concerned authorities, no asset depreciation shall be included
in the added value, when the book value is zero.
3- Rentals: including renting industrial lands, warehouses, industrial buildings, product market-
ing shops (exhibition halls dedicated to factory products) staff abodes non owned by the facility.
4- Financing cost: including total cost paid on loans used to fund the above mentioned fixed as-
sets, the direct activities of the organization, or the costs of these loans in accordance with the
system applied in each country.
5- Intermediate Raw Materials of National origin: including basic raw materials and in-
termediate materials used in the production processes. The concept of National origin covers
what has been produced in a member state and meets the criteria of national origin.
6- Other Fees: including the costs of lab analyses, the costs of research and development, insur-
ance and risks fees on buildings and machines, costs and fees of patents and rights of invention
and Arab intellectual property, related to production, and cost of renting the machines used in
the production process.

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7- Energy, Electricity and water: including all the fees of energy, electricity and water used
in the production process.
8- General and Administrative Expenses: including expenses of mail, telegraph, telephone,
publications and subscriptions……..etc.

Firstly: Explaining how to calculate the added value, the added value should be cal-
culated according to one of the following two methods:

1- According to the assembly formula for the elements of the added value as follows :
The added value percent = the added value (the total of elements from 1 to 8 x100
Ex factory Definite value of the goods

Ex factory product value = added value + foreign inputs (minus levied fees and taxes)
2- According to the definite value of the goods as follows:
Ex factory product definite value – value of the imported materials included
In manufacturing process (minus levied fees and custams)
x100
Ex factory Definife value of the goods

The added value should be calculated, according to this, as:


The difference between the definite value of the produced goods until the end of the mamuf acturing
process and the value of the imported materials included in the production process (minus levied
taxes and fees), this doesn't apply to the materials of national origin or these imported from An Arab
party–state in this Agreement, or any other Arab state involved in an integration or cooperation
Agreement, are treated as local goods or materials.
The definite value of the produced good according to (the value cost of this good) the defi-
nite value of the good doesn't include any sums paid for custom or local production fees imposed on
it or on its production inputs.
The value of the materials included in the production process shall be calculated according
to the price by which there were purchased from abroad and the custom value approved by the state
upon the arrival of the materials to the production state, and it doesn't include the expenses of inter-
nal transportation or any other expenses that aren't directly connected with the production process.
Rule 4:
In accordance with the provisions of this agreement the criterion of the added value percent should
be considered as a base to define Rules of origin for Arab goods, taking into account one of the two
following criteria:
A- Criterion of changing custom provision, provided that it will obviously include general provi-
sions and sub–provisions.
B- Criterion of manufacturing processes, provided that it will precisely mentions the processes
which determine the origin of the concerned goods.
Rule 5:
Rules of accumulative origin:
Imported production inputs from another Arab state shall be treated as national inputs if the per-
centage reached 40% in the country of origin.
Rule 6:
In order to maximize the usefulness to the party–states, there should be consultations among them in
the future to adapt their rules of origin according to what will be agreed upon, in addition to any
International or regional economic gatherings with no prejudice to their commitments in this re-
gard.
Rule 7:
Completely acquired products:
According to Rule (2/A) the following items shall be considered a completely acquired products in
the exporting member–state:
A- Mineral or raw materials that are extracted from its land, water or seas.
B- Agricultural products harvested in it.
C- Animals born and brought up in it.
D- Products acquired from Animals brought in it.
E- Products acquired from hunting or fishing in it.
F- Fishing and other sea products acquired from their seas by its ships.

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G- Products prepared or/ and manufactured on this country's shipboards from the products set
forth in paragraph (G) exclusively.
H- Used products that are assembled in this country and are of no use but to acquire raw materi-
als.
I- Remnants and scraps arising from manufacturing processes taking place in it.
J- Exclusively produced goods included in the products mentioned in paragraphs (A) to (I).
Rule 8:
Secondary processes:
For the purposes of rule (2/B) of the Arab rules of origin the following processes shall be considered
as secondary and in sufficient manufacturing processes to give the product the characteristic of na-
tional of origin.
A- Preservation processes for the purposes of transportation, storing (ventilation or salting), re-
moving spoilt part, or any similar purposes.
B- Packaging and simple assembly processes, and retail selling processes (wrapping up or re –
wrapping up).
C- Other simples manufacturing processes, such as :
1- Simple dissolution by water, any other dissolvent, or by mixing and combining two or
more substances.
2- Cleaning, including the removal of rust, grease, paint, or any similar substances.
3- Trimming or clipping off the ragged edges.
4- Examination, tests, numbering, marking, sorting or grading.
5- Painting, washing or sterilization.
6- Textiles decoration in the framework of textile production such as folding, trimming,
simple decoration and embroidery and other similar processes.

Rule 9:
Executive procedures related to national rules of origin set by the Arab state shall constitute no re-
strictions on trade exchange among them.
Rule 10:
Implementation of the Arab rules of origin shall not result in restrictive, defaming or violating im-
pacts on the Arab trade, and it shall impose no restrict, unnecessary conditions or require meeting a
certain condition irrelevant condition to manufacturing as a basic condition to define country of ori-
gin.
Rule 11:
Rules of origin of every Arab state shall be implemented in a consistent, unified, fair and acceptable
manner.
Rule 12:
Rules of origin of the Arab states shall depend on a positive criterion(rules that grant origin), and
the negative criterion as means to explain a positive criterion, or in individual cases when the posi-
tive identification of origin is unnecessary.
Rule 13:
In accordance the principle of transparency, the Arab states shall inform the General secretariat,
during the transitional period, about their laws, systems and provisions of implementing their rules
of origin, until trey finish preparing the detailed rules of origin.
Rule 14:
Whenever there are amendments on national rules of origin, or new rules of origin, the Arab states
shall not implement these amendments retroactively.
Rule 15:
Any administrative procedure taken by an Arab state and violating the approved rules of origin
shall be reviewed by especial technical body dedicated to settle as such disputes, in accordance with
the provisions of chapter 4 of Agreement to Facilitate and Develop trade among Arab states.
Rule 16:
Proof of origin
A-Products of national origin according to the Arab rules of origin and are exchanged among
party–states and for the purposes of making use of the Agreement and the Executive program to
Establish pan-Arab Free Trade Area, shall be accompanied by a national certificate of origin ac-
cording to the (attached) authorized form, and it shall fulfill all its requirements.
B-Issuing and ratifying certificate of origin.

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1-Certificate of origin shall be granted to the Arab goods of national origin (every country
shall define the authority of issuing and ratifying its certificates of origin).
2-Certificate of origin shall include name, address and location of the factory, in addition to
the number and date of the shipping invoice by the exporter.
3- Certificate of origin form shall be filled up with printed letters, and the description of the
goods shall be in its appropriate place of the form. With no space to omission or addition.
4- Certificate of origin of such goods shall be issued upon exporting, and it may be, under
extra ordinary circumstances. Issued after exportation or from the country of exporting place when
there is a mistake or explaining the circumstances, under which this certificate is issued.
5-Each issuing and ratifying authorities of certificates of origin shall maintain a copy of
these certificate, in addition to the attached documents for three years from the date of issuance,
according to rules applied in the two sides
6-Certificate of origin shall be valid for (four months) from the date of issuance in the ex-
porting country. And shall be submitted during this period
7-Certificate of origin shall be submitted to custom authorities in the importing country
upon clearance provided that the certificate is less than four months from the date of issuance.
8-In case of loss or damage of the certificate of origin, the exporter shall call upon authori-
ties issued the certificate to provide him with another copy according to the form of its exporting
documents. In such a case, this certificate shall clearly bear the following sentence (unoriginal second
copy) (damage substitute)

C- A clear and irremovable sign of origin shall be placed on the goods according to the nature of the
goods.

Rule 17:
Direct transportation:

Products of a party –state origin shall be transported directly without passing by other regions ex-
cept Arab states regions, however, these products may be transported through regions other than
regions of the party-states, including shipping or transitional storing in such regions as far as this is
for geographical reasons, and as far as these products are under the supervision of the custom au-
thorities of the passing- by or lodging country, and aren't submitted to processes other than these of
unloading, reshipping or other processes aiming to maintain their conditions.

Rule 18:
Administrative cooperation:

The concerned authorities (ratifying such certificates) in the party- states shall provide each other
with the models of the seals prepared to ratify certificates of origin, in addition to the address of the
official authorities responsible for issuing such certificates ,and a copy of it shall be deposited with
the general secretariat of the League of Arab states.

Rule 19:

A- The concerned authorities in the party-states shall cooperate and work together on reviewing
certificates of origin
B- The concerned authority in the party-state may call upon its counterpart in the other party-state
to conduct following initial review to the data of the certificate of origin highlighting the factors that
need further explanations: in this case, the goods related to the certificate of origin subjected to the
following review is allowed to enter into the importing country, accompanied with temporary guar-
antee (refundable) to the due fees and taxes according to arrangements and procedures applied in
the importing country.
Rule 20:
Settlement of Disputes:
Disputes arising from the implementation of the Arab rules of origins shall be referred to the com-
mittee of settlement of disputes in order to investigate and deal with complaints and determine the

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method required to settle and avoid reoccurrence of such disputes, including the prohibition of deal -
ing with the source proved to willingfully violate the applied laws and regulations in each party-
state, provided that the other party shall be notified of these procedures at that time.

Rule 21:
Final provisions:
These rules shall become effective and necessarily applicable three months after its ratification by
the economic and social council.

Rule 22:
Preferential treatment to less developed Arab states:
Without prejudice to rule (3) of the rules of origin, the patents and fees paid for its use within the
Arab added value shall be accounted in the less developed Arab states.

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A model form of the Arab certificate of origin

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Form and content of certificate of origin

-The model shall be unified and bear the logos of the Arab League and the exporting country

-The certificate shall include enough information about the goods including its kind, weight, number
of packages, the trademarks of the goods and its value

-The certificate shall include the name of the producing company, the exporter (if it isn't the produc -
ing company) and the importer.

-The certificate shall include the number and date of manufacturing.

-The definite value of the goods shall be defined, at manufacture's Price without adding fees, cus-
toms and profits.

-There shall not be any space in the certificate in order to avoid manipulation,

-The official seals shall be clear.

-Determining the authorities responsible for issuing and ratifying the certificate and which will rat-
ify it in each country and informing the General Secretariat of the Arab League with their names in
order to distribute it total member-states in the agreement.

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In the name of Allah, The most Gracious,
The most Merciful.

Country: ……….. Logo of the


…………………… exporting country

Certificate of origin
By virtue of the agreement to facilitate
and develop trade among Arab states

The exporter & address: …. The producer: …….


The importer & address: …… No &date of the bill: ….
Quantity & type & no Type of goods weight Quantity Value in the
&marks of the packages national cur -
rency
Gross Net

Total value in numbers and letters:-

Production factors statement

Factors of a foreign cost: Quantity Value


Returns for foreign authority:
Total:
Final cost of production:

The exporter statement: we state that the abovementioned information and that the goods origin
is……and that the percentage of the national added value is….. (in numbers& letters) of the total
cost of production. Signature…….
……certify that the origin of the goods described above is ……. and that the percentage of the na-
tional added value is ….. (in numbers & letters) of the total cost of pr oduction.
Dated ………………..

Ratification of the concerned governmental authority

Signature and seal of the authority issued the certificate

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