EAC Compliant Companies Awarded Regional AEO Certificates

EAC CompliantThirteen compliant companies across East Africa were awarded Regional Authorized Economic Operator (AEO) certificates jointly by Partner States Commissioners of Customs and Director Customs, EAC at a ceremony held at Serena Kampala, Uganda on 24th July 2015.

The Commissioner Customs, URA Mr. Dickson Kateshumbwa who represented the URA Commissioner General was the chief guest during the award ceremony. The Chief Guest observed that with the award of Regional AEO certificate, the project had now come of age and indeed puts EAC on the global map of being the first region to implement a regional AEO programme. The Director Customs, Mr. Kenneth Bagamuhunda congratulated the thirteen companies and remarked that the AEO programme will go a long way in supporting the SCT implementation and eventually spur the growth of intra and extra trade. The SCT Coordinators recited each company profile before all the commissioners and Director Customs awarded the Regional AEO certificate to each of the awardees.

The companies were selected after meeting the set admissibility as set out in the AEO selection criteria. The awarded companies participated in the project pilot phase of the project but have continued to demonstrate and maintain high compliance to the set standards. The companies, from different sectors have continued to move consignments under the AEO scheme and in return have been offered benefits that are now currently under review to ensure they are not only tangible but are attractive enough to draw interest from other traders. Source: WCO

URA Introduces Electronic Cargo Tracking System

ura-logo-fireworks-advertisingA goods-laden vehicle arrives at a Uganda border where a declaration is made for transit to another country. But after clearance by customs officials, it disappears before exiting and the goods are sold on the local market. This causes undue competition as such goods are often low priced. And if that status quo does not change, local industries are affected gradually. Although such practices have occurred in the past, the future is bright owing to the introduction of a system that can track the movement of goods and give real-time updates.

Costing $5.2m, the Electronic Cargo Tracking System (ECTS) has been introduced by URA to improve efficiency and reduce the cost of doing business. The government, World Bank and Trade Mark East Africa, a trade facilitation organization, have supported the project, which is expected to be ready for testing by the end of August, and be fully implemented by end of November. URA Commissioner General Allen Kagina and BSMART Technology boss Stephen Teang this week signed a memorandum of understanding regarding the plan. This was at the URA head office in Nakawa, Kampala.

Kagina, who referred to it as a “landmark initiative”, praised the fact that customs officers would have regular updates regarding merchandise. She also hailed the fact that the provider would train staff, giving them much-needed skills.

The system will facilitate trade through timely execution and cancellation of customs bond guarantees for cargo in transit, making the transit process faster, more efficient and secure. Furthermore, this will enhance trade facilitation and business competitiveness countrywide.

How it works – ECTS relies on a control centre and automatic devices. The devices are attached onto a truck and constantly give feedback to the team at the control centre. Among others, the feedback includes include location of a vehicle, speed and status of the container (truck tampered with or not). If the device gives information that is contrary to that declared earlier, for example, goods being dumped here instead of being exported, customs officials make a decision accordingly. The system will be pioneered on high-risk goods like sugar, wines and spirits, textiles, explosives, and cigarettes. Thereafter, it will be rolled out to other types of merchandise.

Advantages – The system enables parties like customs officials and transporters to receive fulltime and real-time updates. URA has over the years introduced initiatives such as One-Stop Border processes and 24-hour operations at the major entry/exit points but the business community has sometimes not realized the benefits due to the numerous unwarranted stopovers. ECTS makes this a thing of the past. Source: The Observer (Kampala)

Uganda prepares to introduce AEO

Authorised Economic Operators (AEO), a scheme focusing on compliant companies to facilitate trade starts before the year ends. The Uganda Revenue Authority (URA) Public and Corporate Affairs Assistant Commissioner Sarah Banage recently disclosed that AEO is meant to enhance compliance “by removing barriers for the most complaint taxpayer”.

“Under the scheme, the benefit of being complaint will be red-carpet treatment offered by URA,” she stated, adding, “we want to demonstrate that there are rewards for being compliant.” Banage cited electronic submission of declaration without supporting documents, pre-arrival clearance of cargo, and self-management of bonded warehouses as some of the benefits. Others are: priority treatment when cargo is selected for control, choosing the place for examination, automatic renewal of licences and withholding tax exemption status.

Because the relationship between URA and its clients is “symbiotic”, it is expected that there will be an increase in taxes, Banage argued. Potential beneficiaries of AEO are: agents, importers, exporters, shippers, internal container depot operators, and others involved in international shipment of goods, among others.

To be eligible, Banage said, one should be involved in international trade, have a good compliance history, be financially sound, install and use customs automated systems like e-tax and should implement the AEO compliance programme. To be authorized, companies/organizations will apply to the commissioner, after which a preliminary consultation is done.

“We will then determine who should formally apply. Officials will adjudicate submitted documents before a site is inspected to ensure compliance with guidelines,” she said. Subsequently, a one-year certificate will be issued.

“An AEO is an individual, a business entity or a government department that is involved in international trade and is duly authorized by the Commissioner of Customs of Uganda Revenue Authority.”

Banage said that implementing AEO does not only have short-term results but also resultant long-term benefits to the business community. These include reduction of the cost of doing business and increased turnover over time, among others. In the middle of April, customs officials held a breakfast meeting at Serena hotel, Kampala where Chief Executive Officers of major organizations were sensitized about the plan.

Later, customs officials interacted with personnel of the Auditor General, Export Promotion Board, the Trade, Industry and Cooperatives ministry, the Agriculture, Animal Industry and Fisheries ministry and Uganda National Bureau of Standards. Also at Serena, it was meant to “share with them the programme in order to capture their ideas,” according to Banage.

Weeks ago, URA asked companies to express interest in joining the scheme. Over 20 organizations applied and are currently involved in talks expected to culminate in attaining AEO status. “Admission to the scheme will depend on how the companies implement the compliance programme. By December, some companies should be authorized,” Banage added. Among others, those expected to benefit from the first phase are importers, clearing agents and transporters.

Regarding the East African Community (EAC), customs administrators have adopted an AEO policy framework. It was adopted in 2010 as a basis for implementing trade facilitation initiatives that drive economic development for the EAC. Under AEO’s mutual recognition arrangement, a government formally recognizes the AEO programme of another country, thereby granting benefits to the AEOs of that country. Under a regional project, companies in the five countries receive benefits related to the scheme. Among the benefits is priority treatment at customs points. Source: The Observer (Kampala)