The Single Customs Territory Experiences ‘IT-connectivity’ Startup Problems

EAC-logoSince July 2014, EAC revenue officers work together to facilitate trade within the community. Some improvements remain made; the Single Customs Territory (SCT) does present some advantages. Since the single customs territory is operational, clearing processes are established in the country of destination while the goods are still at the port of Dar es Salaam”, explains Leah Skauki, a SCT liaison officer at the Tanzania Revenue Authority (TRA).

Once the declaration is over, when custom duties and taxes are paid, TRA verifies the physical goods. “The office grants a notification testifying that the goods fulfil all requirements in order to get the exit note.” Within the new system, the number of weighbridges and non-tariff barriers are reduced because “truck drivers only have to show the documents which certify that the goods have undergone verification.”

Massoundi Mohamed Ben Ali, Administrative Director in Charge of Human Resources and Import – Export at the Bakhresa Grain Milling Burundi, is pleased with the new development. “Before the system was implemented, Bakhresa used to import 3800 Tonnes of wheat (40 trucks) and we were obliged to declare each truck with a different clearing agent. We now fill in one statement with one clearing agent. The procedures are done quickly with a small of amount of money”, he points out.

Clearing agents testify that the number of statement on the borders is reduced. “Before, transporters had to fill in a transit declaration (T1) on each border”, one of the clearing agents in the Dares Salaam port relates.

Aimable Nsabimana, a focal point of SCT in Dar es Salaam for the Burundi Revenue Authority, indicates that the computerised system they use is different in each country.”It is not easy to exchange data. We are forced to print documents for verification. And when the goods arrive in Tanzania, they are in the hands of the TRA which has its own software”, he notes.

Inter-connectivity of software would facilitate verification and avoid fraud. This opinion is shared by many clearing agents: “If we were interconnected, the Tanzanians would be able to easily access Burundian data and vice versa”, one of them says.

Léonce Niyonzima, programme and monitoring officer at OBR and the national coordinator of SCT, agrees that the lack of interconnectivity causes delays in the transmission of documents.

He says that all EAC countries should have been interconnected by June 2014, but due to technical problems Tanzania and Burundi still lag behind. “There is a technical committee responsible for monitoring and evaluation which will draw up the balance sheet of the challenges before ending the pilot stage at the end of this year.”

The Single Customs Territory is funded by Trademark East Africa with an amount of USD 450 thousand for the redeployment of staff, travel expenses, inspection and supervision, information technology, office equipment and assistance. Source: http://www.iwacu-burundi.org

EAC Single Customs Territory launch postponed to June

Presidents Uhuru Kenyatta (Kenya), Paul Kagame (Rwanda) and Yoweri Museveni after the trilateral talks in Entebbe, Uganda. President Jakaya Kikwete of Tanzania and Pierre Nkurunziza of Burundi stayed out of the loop of the third infrastructure summit in Kigali, Rwanda on Monday. [Photo/PPS]

Presidents Uhuru Kenyatta (Kenya), Paul Kagame (Rwanda) and Yoweri Museveni after the trilateral talks in Entebbe, Uganda. President Jakaya Kikwete of Tanzania and Pierre Nkurunziza of Burundi stayed out of the loop of the third infrastructure summit in Kigali, Rwanda on Monday. [Photo/PPS]

Kenya, Uganda and Rwanda have postponed the single customs territory (SCT) roll-out, giving Burundi and Tanzania more time to prepare for the shift.

East Africa Community (EAC) secretariat custom officer Ally Alexander told the committee on Communication, Trade and Investment in Mombasa that the implementation of the model would begin in June.

“We are looking at reducing the costs and number of days to clear the cargo from Mombasa to Kampala to take three days instead of the previous 18 days,” Mr Alexander said.

The SCT was initially planned to begin in January with the three countries moving their revenue staff to common entry and exit points to begin goods clearance. But Tanzania and Burundi protested their exclusion in the arrangement after Kenya announced in January that it was ready to start accommodating revenue officials from the two landlocked states in Mombasa, prompting the three States to go slow on their plans.

On Monday, Mr Alexander told East African Legislative Assembly that SCT would reduce the cost of doing business and bring efficiency in trade. He said for exports within the region, a single regional bond for cargo would be issued to cater for goods from the port of Mombasa to different destinations.

An electronic cargo tracking system would also be used to avoid diversion of goods into the transit market. Under the model, goods will be checked by a single agency on compliance to regional standards and instruments.

“We want to avoid agencies replicating checking on standards, when it is done once this will not be repeated,” he said.

Mr Alexander said goods would be released upon confirmation that taxes have been paid and customs procedures fulfilled.

However goods heading to the Democratic Republic of Congo which is not a member of EAC will be cleared on a transit basis.

The establishment of SCT has raised concerns among stakeholders, key among them the registration of clearing agents and job losses. Kenya Revenue Authority deputy commissioner customs Nicholas Kinoti said the concerns would be addressed through legislations. Source: http://www.businessdailyafrica.com

East African Single Customs Territory Will Cut Delays

East%20Africa%20mapIn the spirit of stronger East African integration, the revenue authorities of Kenya, Uganda and Rwanda have started preparations for the implementation of a Single Customs Territory. The Commissioners’ General of the three East African countries deliberated on the mechanisms to operationalize the decisions of the heads of state who have continuously called for its fast tracking.

On June 25, 2013 at the Entebbe State House in Uganda, a Tripartite Summit involving the three heads of state issued a joint communiqué directing among other things the collection of customs duties by Uganda and Rwanda before goods are released from Mombasa. The leaders also agreed that traders with goods destined for warehousing should continue executing the general bond security.

During the meeting, the Commissioners’ General of the three countries put in place joint technical committees on ICT, Business Process, enforcement, change management, legal and human resource to discuss the implementation road map.

In a statement signed by the three Commissioners’ General, they said that the development of a Single Customs Territory will positively impact on the trading activities of the three countries as it will ensure that assessment and collection of taxes is done at the country of destination before cargo moves out of the port.

“As a result, the East African Community Customs Union will join the ranks of other Customs Union such as South African Customs Union and the European Union among others. Under this arrangement, restrictive regulations are eliminated as the corridor is now considered for customs purposes. For clarity, circulation of goods will happen with no or minimal border controls,” reads the statement in part.

Kenya said it would cut red tape holding up millions of dollars of imports into its landlocked neighbours Rwanda and Uganda, by letting the countries collect customs on goods as they arrive in its port at Mombasa. Goods can currently face long delays as agents process the paperwork to release cargoes from warehouses at east Africa’s biggest port, and later make separate arrangements to pay import duties at Kenya’s borders with Uganda and Rwanda.

Officials said the new system, due to be introduced in August, would clear inefficiencies and blockages seen as a major barrier to trade in the region. But clearing agents in Kenya said it could also cost thousands of jobs in warehouses, freight firms and almost 700 clearing and forwarding companies operating in the country.

Kenya, Uganda and Rwanda, together with Burundi and Tanzania, are members of the regional East African Community trade bloc, with a joint gross domestic product of $85 billion.

Kenyan tax officials said the new system would allow a “seamless flow of goods” and make it easier to stop goods getting through the system without customs payments. “Once cleared at the port, there will be no stoppages at borders and checkpoints along the corridor,” the Kenya Revenue Authority’s commissioner of customs, Beatrice Memo, told a news conference.

Under the system, Rwandan and Ugandan clearing agents and customs officials would be able to set up their own offices to clear cargo and collect taxes directly at the port. The Kenya International Freight and Warehousing Association said that meant up to half a million jobs could be lost to Uganda and Rwanda. “The Government has not consulted us … and we totally reject it,” said  Association chairman Boaz Makomere. Sources: East African Business Week (Kenya) & The New Vision (Uganda).