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National Monitoring Committees on NTBs
Towards a fully-fledged Single Customs Territory in EAC
 
Posted on : 20 - Aug - 2015 - Viewed : 855 times
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The Single Customs Territory is a functional customs union where duties and other restrictive trade regulations are eliminated with respect to trade between states and, the same duties and other regulations of commerce are applied by each of the states to the trade with third parties.

The Single Customs Territory is attainable by the removal or minimization of internal border customs controls on goods moving between Partner States with an ultimate realization of free circulation of goods within a regional community.

In the EAC, the Extra Ordinary Summit of Heads of State of 28th April 2012 adopted in principle the destination model of Single Customs Territory of clearance of goods where assessment and collection of revenue is made at the point of entry. The Summit was concerned that internal controls were hindering the region from the full benefits of the Customs Union.

Transformation of the EAC into a Single Customs Territory is what was required to spur liberalized trade as goods would circulate freely through the Territory.
To work effectively, a Single Customs Territory requires, among others, a common legal framework ; circulation of goods with minimal or no border controls ; harmonization of standards for goods moved through the Territory ; an interconnected payment system ; and collection of Customs duties at the first point of entry. There would also be no requirement for strict bond controls and there would be no need to track consignments to ports of destination, allowing for faster movement of goods and ultimately lowering the cost of doing business in the region.

The 1st Summit of the Northern Corridor Integration Project Initiatives, held in June 2013 in Entebbe, was attended by Kenya and Uganda, later joined by Rwanda where facilitation issues were essentially limited to an agreement to strengthening the Single Customs Territory and implement all the provisions therein, where taxes will be collected at the entry points. Clearance of transit cargos at the Mombasa Port, which includes allowing clearing agents to pay at the port duties due at final destinations, began in late 2013 on a trial basis, for a limited list of commodities. Other facilitation issues discussed included disruption on movement of goods on Northern Corridor, the need to fully train and accredit clearing agents on the two computer systems the ASYCUDA World and SIMBA systems and reiterated the need to remove all NTBs.

As of January 2015, Uganda and Rwanda have Customs officers and clearing agents within the Mombasa port, connected with both ASYCUDA WORLD (utilized by the inland countries for Customs control and SIMBA (utilized by Kenya).
All Northern Corridor member states who are also EAC members (Kenya, Uganda, Rwanda, and Burundi) have now harmonized Customs legislation, based on the EAC Customs Management Act.

Since the first Summit, a number of additional specific regional initiatives or targets have been agreed upon. The current list includes :

  1. Multiple security bonds not required under SCT ;
  2. Multiple customs declarations not required under SCT ;
  3. Differences in customs laws and instruments eliminated ;
  4. Customs systems interfaced ;
  5. Multiple Customs verification replaced by joint verification ;
  6. Road, police and customs roadblocks eliminated ;
  7. Multiple weighbridges en-route reduced to two + high speed weigh-in-motion system ; and
  8. Congestion at the port and border posts eliminated.

Institutional change under the Single Customs Territory is substantial. Implementation of those changes at the port and at border posts is ongoing. Delays within the port have been substantially reduced, with about half of the current day dwell time being accounted for by delays that are the responsibility of shippers.
Goods imported into the Customs Union enter only once in the country of destination and released at the first port of entry to the destination Partner State. This has reduced the turnaround time for trucks from 18 to approximately 7 days from Mombasa to Kigali. It also allowed removal of most of road blocks and reduced customs documentation and declaration.

The Single Customs Territory is also being implemented on the Central Corridor from Dar es Salaam port to transit countries such as Rwanda, Uganda and Burundi since July 2014. Since the implementation of the initiative, it has been reported that time to export/import cargo to/from Dar es Salaam has significantly reduced to between 3-6 days from 15-17 days in 2010.

It is further reported that the cost to move containerized cargo from the ports to Kigali has reduced from 6,500 to 4,833 USD from Mombasa between 2010 and 2015 and from 4,990 to 4,740$ from Dar es Salaam for the same period.

Apart from facilitating decongestion at both Mombasa and Dar es Salaam ports through improving infrastructure and supporting the move to 24 hours operations, the Single Customs Territory has helped to simplify customs procedures, easing border crossings and has reduced barriers such as weighbridges, customs checks and police road blocks.

 
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