WHAT IS AGOA?
The African Growth and Opportunity Act (AGOA) is the cornerstone of U.S. commercial relationship in trade and investment with Africa. It was first signed into law on May 18, 2000 and has now been extended through 2025.
The act accords duty-free treatment to virtually all products exported by beneficiary sub-Saharan African (SSA) countries to the United States markets accorded to any country or region that has not negotiated a free trade agreement with the United States.
AGOA benefits are currently extended to 38 SSA countries and to more than 1,800 tariff line items, in addition to the 4,600 items already enjoying duty-free status under the U.S. Generalized System of Preferences (GSP), a program aimed at promoting economic growth in the developing world by providing preferential duty-free treatment for product from designated beneficiary developing countries (BDCs), and may least-developed beneficiary developing countries (LDBDCs).
AGOA has added to the GSP list of duty-free products, major import-sensitive items such as apparel, footwear, luggage, handbags and watches.
AGOA offers special provision such as the “third country waiver”. This means that under AGOA, SSA countries eligible for the textile visa can purchase fabric from anywhere in the world, then cut, sew, package and export the resulting garment to the U.S. as an AGOA eligible product.
AGOA provides incentives for African countries to become more globally competitive by making economic and commercial reforms. The main incentive is the opportunity to export goods from a list of nearly 7,00 qualifying products to the U.S. without paying import duties.
Exporting can be a challenging process, but it can also be profitable for the individuals or company that manages to do it successfully. Exporters must follow two sets of procedures:
· Local laws and regulations that govern the export process.
· Laws and regulations that govern the destination country’s imports—in this case, the U.S.
Regulations vary according to the product being exported, and exporters must conduct research to ensure that their products meet the necessary requirements for export as stipulated under AGOA product eligibility.
This tool kit assumes that the exporter or potential exporter has already conducted the necessary market research, and is ready to export. Therefore, this tool kit only highlights the process of exporting goods from West Africa to the U.S. under AGOA.
STEPS TO EXPORT YOUR GOODS TO THE U.S. UNDER THE AFRICAN GROWTH AND OPPORTUNITY ACT.
A. Prepare Shipment - Prepare your goods for shipment using packaging and labeling that meet U.S. standards. When your shipment is ready.
B. Prepare Commercial Invoice – Before preparing the commercial invoice it is necessary to determine the proper HTSUS classification for the goods. Without this, it is not possible to ascertain whether the goods are eligible for AGOA. The invoice should also have a detailed description of the merchandise, the quantities, and purchase price in U.S. Dollars.
C. Obtain Certificates of Origin (COO) – NB: The process varies from country to country.
· Non-textile goods: A standard COO covers non-textile goods only. This will certify that the goods are in fact originating from an AGOA-eligible country. Producer/exporter must check with country of origin’s Trade/Commerce Ministry, Revenue authority, or Chamber of Commerce to get this document. To determine whether a product is eligible you must look under the “Special” column in Column 1 of the HTSUS to see whether there is a “D” classification, which means that the product is AGOA eligible.
· Textile and apparel goods: Obtain instead a textile Certificate of Origin, which is a U.S. Government document. The exporter is responsible for obtaining a copy from the customs authority or chamber of commerce of the country of origin and filling it in properly. It can also be downloaded from:
http://otexa.trade.gov/pdfs/certificate_origin.pdf. Textiles will not have a “D” in the “Special” column. To determine eligibility for textiles, see Chapters 98 of the HTSUS. To find the proper classification numbers, see chapters 1-97. You should write both the Chapter 1-97 number and the Chapter 98 number on the invoice. An exporter of apparel/textiles wishing to obtain the preferential treatment available under AGOA (i.e. duty-free treatment) for specific apparel/textile products must complete the certificate and provide it to the importer, which is importing the apparel/textiles to the United States. The certificates must be available to U.S. Customs on request but does not accompany the actual shipment.
D. Obtain Customs Clearance – Producer/exporter sends goods to the customs authority in the country of origin for inspection, customs approves and gives clearance for shipment. For eligible textile and apparel goods, customs will stamp the invoice with the AGOA Textile Visa Stamp.
E. Export Logistics – Producer/exporter transmits export documents to U.S. based buyer or his broker. Documents required include all of the above, as well as the bill of lading and the package list.
F. Customs Declaration – Provided with the export documents, the U.S. based buyer or broker clears the shipment and declares the goods to U.S. Customs authorities at the port of entry.