EAC’s joint cargo clearance deal bears fruit for traders

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Cargo at the port of Mombasa.

Traders are saving up to $300 (Sh30,600) per transaction through more efficient joint clearance of cargo by EAC partner states at Mombasa port.

An audit of the Single Customs Territory (SCT) system that was recently adopted by Kenya, Uganda, Rwanda, Burundi and Tanzania also showed that cargo clearance time at the port has dropped to an average of four to six days, from 18 to 22 in 2013.

Under the SCT deal that began in 2014, clearing agents within EAC have been granted the rights to relocate and carry out their duties in any of the partner states as part of a strategy to improve flow of goods and curb dumping.

Traders are saving up to $300 (Sh30,600) per transaction through more efficient joint clearance of cargo by EAC partner states at Mombasa port.

An audit of the Single Customs Territory (SCT) system that was recently adopted by Kenya, Uganda, Rwanda, Burundi and Tanzania also showed that cargo clearance time at the port has dropped to an average of four to six days, from 18 to 22 in 2013.

“Customs documentation requirements have been reduced by over 50 per cent and one customs agent is required to clear goods right from the Port of Mombasa or Dar-es-Salam to the Ugandan destination,” the Uganda Revenue Authority revealed in a performance update.

The SCT system allows joint collection of Customs taxes by the East African Community partners.

Under the SCT deal that began in 2014, clearing agents within EAC have been granted the rights to relocate and carry out their duties in any of the partner states as part of a strategy to improve flow of goods and curb dumping.

Kenya, Rwanda and Uganda were the first to take up the SCT arrangement on phased-pattern starting April 1, 2014 with Tanzania joining the scheme two months later. The system is expected to be fully implemented by June 2016.

Importers of commodities covered under the SCT are required to lodge import declaration forms in their home country and pay the relevant taxes to facilitate the export process.

The tax authorities in the respective countries then issue a road manifest against the import documents submitted electronically by the revenue authority of the importing country.

“Transporters can now make three round trips per month (Mombasa – Kampala) instead of the one roundtrip in 2013, and over six trips/month for goods loaded from Kisumu, Eldoret and Nakuru,” the URA said.

Kenya, Rwanda and Uganda in January struck a deal to jointly clear cargo at the Kilindini port and monitor consignments on transit on a single electronic platform.

READ: Kenya, Uganda and Rwanda ink joint cargo tracking deal

Kenya Revenue Authority (KRA) commissioner-general John Njiraini said the regional cargo tracking system would enable the three countries to seamlessly monitor goods from Mombasa to Kigali and eventually Juba, curbing revenue leaks.

“This approach will remove the opportunities currently exploited by crooks at the changeover of seals at border points by requiring affixation of only one seal to be disarmed on arrival at destination,” he said.

The tracking system comprises satellites, a central monitoring centre and special electronic seals fitted on cargo containers and trucks, which give the precise location of goods in real time.

The system triggers an alarm whenever there is diversion from the designated route, an unusually long stopover or when someone attempts to open a container.

Besides curbing theft of cargo, the system also helps to seal loopholes that cause the country losses in revenue through suspected under-declaration of the value of exports or theft of cargo.

In addition to customs, the system will also provide real time information on the location and status of the cargo to transporters and cargo owners or their agents as the goods are transported along the Northern Corridor.

Source: Business Daily