“Best Practices in TF” By James S. Kuleiye

East African Community Secretariat

1. Introduction to EAC: Quick Facts about EAC, EAC Treaty

2. EAC Customs Union: Objectives and legal instruments

3. Regional Trade Facilitation initiatives

4. Comparative TF Indicators5. Challenges of TF in the EAC

Indicators BR KE RW TZ UG EACPopulation (in mill) 8.4 40.5 10.6 44.8 33.4 137.8GDP per capita (2010) in current US $

192 795 530 524 509 576

Total Imports (2009) mill.$ 345 10,202 1,112 6,531 4,247 22,437Total Exports (2009) mil. $ 113 4,463 261 2,982 1,568 9,387Share of total EAC imports, 2009

2% 45% 5% 29% 19%

Share of total EAC Exports, 2009

1% 48% 3% 32% 17%

Source: World Bank: “World Development Indicators” (data base accessed June 2012)

◦ The Treaty for the Establishment of the East African Community, was signed on 30 November 1999 and came into force on 7 July 2000, with membership being: United Republic of Tanzania, Republic of Kenya and Republic of Uganda. Burundi and Rwanda joined the Community on July 1, 2007

◦ The Broad objective of the Community shall be to develop policies aimed at widening and deepening cooperation among Partner States in the political economic, social research and technology,defence, security and legal and judicial affairs, for the their mutual benefit.

Established under Article 75 of The EAC Treaty. the entry point to economic integration

process concluded and signed in March 2004 Ratified in December 2004 Commenced 1st January 2005 progressive in the course of transitional

period of Five years which ended in 2009 A decision on the Single Customs Territory was made by the

Summit in 2010 and process is going on!

1. Further liberalisation of intra-regional trade in goods.

2. Promotion of efficiency in production within the Community;

3. Enhancement of domestic, cross-border and foreign investment in the Community; and

4. Promotion of economic development and diversification in industrialisation in the Community.

◦

Under the CU, Partner States agreed to initiate trade facilitation by: Reducing the number and volume of documentation Adopt common standards of trade documentation and proceduresEnsure adequate co-ordination and facilitation of trade and transport activitiesReview procedures adopted in international trade and transport facilitation in order to simplify and adopt them in the EAC

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Collect and disseminate information on trade and trade documentation

Promoting and development and adoption of common solutions to problems in trade facilitation

Establishing joint training programmes

Adoption of the regional of customs laws and regulations since 2004 which are applied uniformly. The CMA contained a number of TF measures.

Development and adoption of the harmonised EAC customs procedures with reduced and standardised customs forms, to ensure standard practices. C17A for ASCUDA and C17B for SIMBA

Interconnectivity of customs systems Project being funded by ADB to build on the RADDEX Project.

Sharing experience on Reforms and Modernisation through the Committee on Customs.

Application of risk management in customs operations

Partial Application of the Authorised Economic Operators scheme (AEO) which is being scaled up to the regional level under the WCO-EAC Project

Establishment of One Stop Border Posts (OSBP) to reduce delays in clearance of goods at border posts as part of the IBM Strategy. The OSBP Bill has been finalised and is to be tabled in the Regional Parliament (EALA).

Programmes to enhance integrity and fight corruption in customs- a regional framework of cooperation on customs integrity matters in line with WCO’s Arusha Declaration has been developed.

Harmonization of Business Hours and attempt to operate on 24 hours in some borders stations

Strengthen the NTB’s monitoring mechanisms in each Partner State: Program on elimination of NTB is implemented and coordinated by EAC. The Regional Law to address NTB is being developed.

Use of the EAC Passport to facilitate ease cross borders movement .

Time Release Study- to measure the bottlenecks in the supply chain and to develop measures to addressed them.

Strengthen the mutual recognition of harmonized EAC Standards certificates.

Harmonization of Transport regulations and standards (weighbridges, axle loads etc) to reduce delays and cost of doing the business. The Load Control Bill has been finalized and is waiting enactment by EALA.

Consolidation of the gains recorded in the EAC-COMESA-SADC TF negotiations (trade documents and procedures)

Logistics performance index scores

Burundi Kenya Rwanda Tanzania Uganda

Benin

Singapore

Efficiency of Customs Procedures 1 ( worst) to 5 (best)

1.67 2.08 2.27 2.65 2.82 2.59 4.13

Percentage of Cargo inspected

60% 25% 25% n/a 35%+ 11% 1%

Documents needed for imports

10 7 8 6 9 8 4

Docs for Exports 9 8 8 6 9 7 4

Days to import 54 24 31 24 34 32 4

Days for exports 35 26 29 18 37 30 5

Source: World Bank “ Logistics Performance Index” 2010-12 and World Bank Doing Business Report 2012

Each PS faces unique challenges in improving its trade and Transport facilitation.

EAC requires large number of trade documentation

Low level of the application of Risk based inspections systems hence high level of inspection of imported goods.

Take off from the Port ….very slow due to cumbersome procedures, poor infrastructure and insufficient equipment!

A quick survey conducted by EAC on WTO’s TF measures under negotiations suggests that Partner States are implementing some of the elements of TF at different paces.

Some measures like advance rulings, requires both Policy and legal framework

Capacity Building is needed to consolidate some of the existing TF measures such as Risk Management, AEO and Post Clearance Audit (PCA).

Consolidation and develop Regional trade facilitation instruments based on the WTO’s TF measures.

Harmonization of Customs and non customs procedures though an integrated Border Management framework.

Finalize the interconnectivity of Customs Systems from RADDEX to a more vibrant and integrated systems

Development of legal framework to address NTBs across the supply chain that will impose sanctions and penalties.

Fully employment of Risk Based Management System in Customs Process

Implementation of SAFE framework of Standards under WCO-EAC Project

Develop mechanism for implementation of the Single Customs Territory! [Revenue Management, Free Circulation of Goods and Legal and Institutional Framework of the SCT]

Accelerating trade and transport facilitation in Infrastructure ……supply side constraints! Investment in infrastructure is key to unlock the potential of the EAC!!

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But we have our own But we have our own challengeschallenges

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…………. and at considerable . and at considerable costcost

…. With devastating consequences

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