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THE EASTERN AFRICA CUSTOMS AND FREIGHT FORWARDING PRACTICING CERTIFICATE (EACFFPC)
CUSTOMS LAWS AND PROCEDURES
OCTOBER 2012
THE FEDERATION OF EAST AFRICAN FREIGHT FORWARDERS ASSOCIATIONS
In Collaboration with
EAST AFRICA REVENUE AUTHORITIES
With Support from
TRADEMARK EAST AFRICA (TMEA)
FOREWORD Clearing agents in the East African Community (EAC) region play a vital role in facilitation of trade particularly in regard to tax assessment and collection; this in turn facilitates cargo movement and clearance from all requisite ports.
It is important to note that clearing agents who also double up as customs agents in the region work very closely hand in hand with customs authorities to ensure that trade in the region is facilitated.
Whereas customs officers have continued to be trained and refreshed developing experts from their work force, the same has not been the case with their work counterparts; the customs agents.
The need to train and capacity build the customs agents has never been more necessary particularly after it has become imminent that the requisite knowledge gap continues to widen.
The customs agents who also double up as freight logisticians have a wider scope compared to customs officers creating need for more attention on their ability to deliver professionally.
Most development partners have been focusing more on training customs officers who apart from having better resources have better entry points. On the other hand the clearing agents do not have a defined academic entry point or defined resources for training.
This has resulted to a struggling clearing agent trying to catch up with the knowledgeable counter parts in the customs, yet both MUST work together.
Customs agents originate documents that facilitate movement and clearance of cargo culminating into errors that slow down the flow of business.
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Movement of cargo depends on how fast and perfect the documentation is done by Customs agents that are verified by the respective customs authorities. A delay in customs clearance increases the cost of doing business.
The intervention by Trade Mark East Africa (TMEA) came at the right time to facilitate revision of EACFFPC training materials to enhance training and capacity build the private sector with emphasis on the practicing customs agents in the EAC region.
This support has not only focused on revision of the materials but also brought together the private sector and the regional revenue authorities’ experts who have worked together to come up with EACFFPC training materials acceptable to both parties.
With these revised materials, the road to enhancing training for clearing agents has earnestly begun.
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ACKNOWLEDGEMENT
The Curriculum Implementation Committee (CIC) is grateful to the National Revenue
Authorities and the National Freight Forwarders Associations for accepting to release their staff
and members to carry out the development of the training materials. CIC acknowledges the
FEAFFA secretariat for excellent co-ordination of the process of materials development and the
eventual compilation of the manuals.
Special thanks go to William Ojonyo who steered the team of experts that developed the
materials.
The tremendous support provided by our development partner, Trade Mark East Africa (TMEA),
cannot go unnoticed bearing in mind that they provided all financial support that culminated
into the development of the training materials.
A big THANK YOU to the following individual subject experts who took their valuable time and wide experience in developing this CUSTOMS MODULE- CUSTOMS LAWS AND CLEARANCE PROCEDURES UNIT that have gone down the history lane.
1. Ahmed Mohamed 2. Erizaphan Siringi 3. Felicite Nibigira 4. Joy Basabe 5. Lilian Baguma 6. Wambura Waryuba 7. Jean-Marie Vianney Bakanibona
……………………………………………………………………………..
Lillian Umuhire RugambwaChairpersonCurriculum Implementation Committee (CIC)
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TABLE OF CONTENTS
LIST OF ABBREVIATION................................................................................................................................................v
Unit I: CUSTOMS LAWS................................................................................................................................................1
Overview on Customs laws of the East African Community.........................................................................................1
Customs Laws under article 39 of the protocol establishing EAC Customs Union...................................................1
Other Laws and regulations impacting clearing and forwarding environment........................................................3
CUSTOMS LAW (EACCMA)...........................................................................................................................................3
Structure of the EACCMA........................................................................................................................................4
Compliance related provisions in clearance of goods from Customs (i.e. clearance at port, airports , border post and post office, transit, ICD and Warehouses).........................................................................................................9
Offences.................................................................................................................................................................12
Legal Proceedings and Appeals..............................................................................................................................13
Legal Proceedings..............................................................................................................................................13
Appeals..............................................................................................................................................................15
Exemption under 5th Schedule.........................................................................................................................15
Remission of duty..............................................................................................................................................16
Refunds and Drawbacks....................................................................................................................................17
Refunds of Duty.................................................................................................................................................17
Duty Drawbacks................................................................................................................................................19
Customs Agents.....................................................................................................................................................20
Sample Question...................................................................................................................................................22
Restrictions and Prohibitions.....................................................................................................................................24
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Conventions Governing Prohibitions and Restrictions...........................................................................................25
Prohibitions and Restrictions on Specific Imports/Exports Under EAC Customs Laws...........................................27
Restricted and Prohibited Imports and Exports Under the EAC Customs Management Act..................................28
Agencies That Enforce Prohibitions and Restrictions.............................................................................................33
OVERVIEW OF THE EAC CUSTOMS REGULATIONS (EACCMR)....................................................................................35
Structure of the EACCMR.......................................................................................................................................35
Customs Forms......................................................................................................................................................38
Fees and Penalties.................................................................................................................................................44
Other Regulations–................................................................................................................................................55
Duty Remissions,...............................................................................................................................................56
Enforcement and Compliance Regulation.........................................................................................................57
sample questions...................................................................................................................................................57
UNIT II: CUSTOMS CLEARANCE PROCEDURES............................................................................................................59
IMPORT PROCEDURES...............................................................................................................................................59
Reporting procedures for means of conveyance...................................................................................................59
Categories of imports............................................................................................................................................67
Import process.......................................................................................................................................................67
Importation documents.........................................................................................................................................68
Assessment of duties and taxes.............................................................................................................................69
Customs Declaration..............................................................................................................................................85
Meaning and Purpose of Customs declaration..................................................................................................85
Legal provisions for Customs declaration..........................................................................................................86
Obligation of Declarants....................................................................................................................................87
Identify various Customs regimes.....................................................................................................................87
Customs Procedure codes.................................................................................................................................88
Verification and release of imported goods......................................................................................................91
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Case study:............................................................................................................................................................93
EXPORT PROCEDURES................................................................................................................................................96
Categories of exports.............................................................................................................................................96
Export process.......................................................................................................................................................97
Export documentation and declaration.................................................................................................................97
Conditions for exports...........................................................................................................................................98
Verification and release of goods for export.........................................................................................................99
Procedures for Outward Clearance of means of conveyance..............................................................................102
Export Promotion Schemes.................................................................................................................................103
Manufacturing Under Bond.............................................................................................................................103
Export Processing Zones..................................................................................................................................105
Duty Remission................................................................................................................................................107
Duty Draw Back...............................................................................................................................................107
Inward /Outward Processing...........................................................................................................................110
Outward processing........................................................................................................................................113
Customs bond securities..........................................................................................................................................114
Customs bond security........................................................................................................................................114
Bond Execution, cancellation and enforcement..................................................................................................115
Processes/transactions that require Customs security bonds.............................................................................118
Benefits of Security bonds...................................................................................................................................118
Challenges in the management of Customs security bonds................................................................................119
Warehousing procedure..........................................................................................................................................119
Types of Warehouses..........................................................................................................................................120
Conditions for licensing bonded warehouses......................................................................................................122
Declaration and documentation of warehoused goods.......................................................................................125
Transit and Transhipment procedures.....................................................................................................................132
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Transit..................................................................................................................................................................132
Transshipment.....................................................................................................................................................133
Declaration of Transit and Transshipment cargo.................................................................................................133
Customs Control of Transit and Transshipment...................................................................................................134
Challenges in the Control of Transit fraud...........................................................................................................135
References...............................................................................................................................................................137
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LIST OF ABBREVIATION
EACCMA East African Community Customs Management Act
ASYCUDA Automated Systems for Customs Data
AWB AirWay Bill
BIF Bond in Force
COMESA Common Market for Eastern and Southern Africa
CPC Customs Procedure Codes
EAC East African Community
EACCMR East African Community Customs Management Regulations
EACCMRR East African Community Customs Management (Duty Remission) Regulations
EPZ Export Processing Zones
GATT General Agreement on Tariffs and Trade
ICD Inland Container depot
ICT Information and communication Technology
MUB Manufacturing Under Bond
SAD Single Administrative Document
SADC South African Development corporation
TREO Tax Remission Office
VAT Value Added Tax
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UNIT I: CUSTOMS LAWS
This course is intended to enable the participants to correctly apply provisions of the customs law in the process of clearing and forwarding goods.
VIEW ON CUSTOMS LAWS OF THE EAST AFRICAN COMMUNITY
Sub-topic
CUSTOMS LAWS UNDER ARTICLE 39 OF THE PROTOCOL ESTABLISHING EAC
CUSTOMS UNION
Introduction
Over view of the East African Community Customs Union Protocol
The three Partner States of East Africa signed a treaty for the establishment of the East African
community. This treaty came into force on 7th July, 2000. These Partner States undertook to
establish among themselves a Customs Union as an integral part of the community.
A Customs union is an agreement between two or more countries to remove trade barriers
with each other and establish a common tariff and non-tariff policies with respect to imports
from countries outside of the agreement.
A Protocol for the establishment of the East African Community Customs Union was signed by
three East Africa Heads of State for Uganda, Kenya and Tanzania on 2nd March, 2004 in Arusha,
Tanzania. Later on, both Rwanda and Burundi joined the East African Community in the year
2007.
Customs Laws of the Community (provisions of Art. 39)
This unit will enable trainees to correctly apply provisions of the Customs law in the process of
clearing and forwarding goods.
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According to article 39 of the protocol, the Customs law of the Community shall consist of:
(a) Relevant provisions of the Treaty;
(b) The Protocol for the establishment of EAC and its annexes;
(c) Regulations and directives made by the Council;
(d) Applicable decisions made by the Court;
(e) Acts of the Community enacted by the Legislative Assembly; and
(f) Relevant principles of international law.
The Customs law of the Community shall apply uniformly in the Customs Union except as
otherwise provided for in the Protocol. The Partner States shall conclude such annexes to this
Protocol as shall be deemed necessary.
OTHER LAWS AND REGULATIONS IMPACTING CLEARING AND FORWARDING
ENVIRONMENT
The clearing and forwarding environment is governed by various laws apart from the Customs
laws of the Community. That being the case, a Customs agent within the community is
supposed to be aware of the laws and regulations prior to engagement within the industry. The
regulations cater for the establishment of a company to practice within a clearing industry.
Whereas the EACCMA and its Regulations harmonizes the licensing and Customs Agents’
practices across the EAC, it is important to note that there are other National laws and
regulations impacting on establishment and registration of Companies such as :
a) Provision of Company’s Ordinance/Act with regards to establishing of a company. This
differs in each Partner States
b) Registration requirements from the registrar of companies.
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c) Business Licensing requirements from the specific government organs.
d) Any other Laws or regulations necessary to be completed prior to starting a business.
A Customs agent is supposed to know all the stakeholders of the respective Partner States and
the relevant laws and Regulations as well as the respective Authorities granting them powers to
operate. It is the duty of the agent to know the various relevant laws and to fulfill regulatory
obligations.
CUSTOMS LAW (EACCMA)
Specific Objectives:
At the end of this topic, trainees should be able to:
i. Describe the structure of the EACCMA
ii. Comply with the provisions related to clearance of goods.
iii. Apply provisions related to valuations of goods and assessment of taxes
iv. Demonstrate understanding of Customs offences and offence procedures and
consequences of non-compliance.
v. Explain legal proceedings
vi. Exercise right to appeal
vii. Apply provisions related to exemption, remission, refunds and drawbacks.
viii. Comply with legal requirements for operationalization of Customs Agents.
STRUCTURE OF THE EACCMA
The EAC CMA is comprised of twenty one parts, two hundred and fifty three sections, and five
schedules as follows:
PART I:Preliminary provisions to include
Short title, application and commencement
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Interpretation
PART II: Administration
The Directorate of Customs and its functions
Provisions relating to staff, Customs seal and flag
Officers to have powers of Police and hours of attendance
Offences by, or offences in relation to officers
Exchange of information and common border controls
PART III: Importation
Prohibited and restricted imports
Power to prohibit, etc, imports
Exemptions of goods in transit.
Procedures on arrival
Reports
Arrival overland
Entry, examination and delivery of cargo
PART IV: Warehousing of goods
Dutiable goods may be warehoused
Entry and removal of warehoused goods
Operations in the warehouse
Penalty for unlawfully taking, etc., warehoused goods
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Bonded warehouses
PART V: Exportation
Prohibited and restricted exports
Exemption of goods in transit
Entry of cargo for export
Vehicles departing overland
Treatment of goods under transit and transshipment
PART VI: Departure and clearance of aircraft and vessels
Clearance required for departure to foreign port
Deficiency or surplus in cargo or stores
PART VII: Importation and exportation by post
Application of Act to postal articles
Time of entry of postal articles
Registered couriers companies to land, stores, etc
PART VIII: Carriage coastwise and transfer of goods
Meaning of carriage coastwise and transfer
Loading, etc. of coastwise and transfer cargo
Transire to be delivered on arrival
Examination of coasting vessels and goods
PART IX: Provisions relating to securities
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General provisions relating to giving of security
Enforcement of bonds
PART X: Liability to duty
Rates, etc, of duty
Preferential tariff treatment under COMESA and SADC
Exemption regime
Goods imported duty free liable to duty
Time of entry determines rate of duty
Value of goods for export
Allowance for tare
Agency notices
Anti-dumping and countervailing duties
Drawback, remission, rebate and refund
PART XI: Customs agency
Licensing of agency
Liability of duly authorized agent
Liability of owner for acts of agents
PART XII: Prevention of smuggling
Power to require vessels, etc, to bring to or to depart
Power to stop vehicles
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Power to search persons
Power to require production books, etc.
PART XIII: Manufacturing Under Bond
Licensing of bonded factories
Manufacturer to provide facilities
Goods from bonded factory may be entered for home consumption
PART XIV: Export Processing Zones and Freeports
Goods entering Export Processing Zones or Freeports
Designated areas in Export Processing Zones or a Freeports
PART XV: Inward and Outward Processing
Procedure of Inward operations
Compensating products and rate of yield
Authorization for Outward Processing
Relief from payment of duty
PART XVI: Application of information technology
Customs formalities may be carried out by ICT
Unauthorized access to or improper use of Customs computerised system
PART XVII: Offences, penalties, forfeitures and seizures
Offence with violence
Offences related to prohibited, restricted and uncustomed goods
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General penalty
Restoration of seizures
PART XVIII: Settlement of cases by the Commissioner
PART XIX: Legal proceedings
Actions by or against the Commissioner
Protection of witnesses
Power of officer to prosecute
PART XX: Appeals
PART XXI: Miscellaneous provisions
SCHEDULES:
First schedule: Declaration of Officer
Second schedule: Prohibited and Restricted Imports Generally
Third schedule: Prohibited and Restricted Exports Generally
Fourth schedule: Determination of Value of Imported Goods Liable to Ad Valorem
Import Duty
Fifth schedule: Exemption Regime
Sixth schedule: Warrant of Distress
COMPLIANCE RELATED PROVISIONS IN CLEARANCE OF GOODS FROM CUSTOMS (I.E.
CLEARANCE AT PORT, AIRPORTS , BORDER POST AND POST OFFICE, TRANSIT, ICD
AND WAREHOUSES)
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Introduction
The term compliance means adherence to the provisions or guidelines in relation to something.
For the case of Customs compliance to the laws is thus adherence to the provisions of Customs
laws in each and every aspect. The compliance provisions range from adherence to controls of
goods, movement of passengers as well as means of conveyance.
Compliance during Clearance of goods
According to the EACCMA, Customs operations are conducted within the specified places
identified as Customs areas. Those Customs areas are clearly mentioned in the Act (section 12).
Other than Customs areas, the Act also provides for appointment of ports, airports and places
of loading and unloading. The need to have all these is to ensure control of goods, means of
conveyance as well as passengers.
The role of agents is to comply with all procedures for the clearance of goods depending on
where goods are located. The necessary considerations by an agent before starting the
clearance process include the following:
i. Submission of Reports to the proper authority such as Port Authorities and Revenue
Authorities
ii. Legality of the places where the goods are to be loaded/unloaded
iii. Having in place the necessary documents
iv. Time limit for the entrance of goods and the implications of the time of entry
v. The implications of the regimes for which the goods will be entered
vi. The Customs controls in force for the goods.
Submission of reports
The major role of Customs agent is to clear goods from Customs area and deliver them to the
owner. Before a Customs agent starts the clearance process, he/she is supposed to know
whether goods have already been unloaded from the importing vessel and a report submitted
to the Proper Officer. Depending on the means of conveyance, the task to report is vested to
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different persons but there should be a report before Customs authorize goods to be delivered.
Hence it is the role of a Customs agent to be aware on whether the report is already within the
Customs department.
Places of loading and unloading
These are places appointed for loading and unloading goods subject to Customs control.
The entry and exit to these Customs areas is restricted.
The discharge of goods in the proper place of loading is thus facilitated by a competent
Customs agent who should know all the places for discharge at a Customs area and how goods
must be so discharged. The master who fails to discharge the goods commits an offence and
will be held liable.
Time within which clearance must be effected
Imported goods must be cleared by the owner within 21 days from the date of discharge from
the means of transport on which they were imported. An Agent should inform the owner that
goods which remain un-entered after this period shall be removed to the Customs warehouse.
Accordingly, goods entered but not removed from the first place of entry within fourteen days
will attract Customs warehouse rent.
Customs controls of goods
A Customs agent has to understand his role in facilitating the clearance of goods under Customs
control as well as the purpose of Customs control of imported goods. Customs emphasis on
controls is to ensure that:-
the revenue due on imported goods is charged and collected;
prohibited goods are not imported;
allowed goods are imported in accordance with all the conditions governing their
importation; and
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goods whose duty free importation is conditional upon the status of the importer
and/or their end use are imported and used in accordance with such conditions.
It is the role of a competent agent to inform the importer that goods under customs control are
subject to the following:
any officer may at any time examine such goods; and
no person may interfere in any way with such goods except in a manner authorized or
prescribed under the EACCM Act.
OFFENCES
Customs offences
This unit will enable trainees to understand how offences committed during the process of
clearing and forwarding of goods under Customs control are dealt with.
A Customs offence is any breach or attempted breach of the statutory or regulatory provisions
which are provided in the East African Community Customs Management Act (EACCMA) .
Customs offences may be dealt with by the Customs authorities, in accordance with procedures
laid down in the EACCMA, 2004.
Customs offences are committed when any person contravenes any of the provisions Act.
Offences are generally covered by part XVII of the EACCM Act. The sections under this part spell
out how a particular offence should be dealt with. Some of the offences covered in the Act
include the following:
i. Section 200- offences related to prohibited, restricted and unaccustomed goods
ii. Section 202-offences related to import or export of concealed goods
iii. Section 203-offences to make or use false documentation.
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It is important to note that most of the offences are covered in sections 193-208 of the
Act.
Offences commonly committed
1. Misdeclarations in the following areas:
Tariff- example refrigerated container declared as cooling unit
Quantity- declare less weight or pieces
Wrong item e.g. mineral water yet its wine
Year of manufacture/registration especially on motor vehicles.
2. Smuggling /diversion
3. Concealment
4. Under-valuation
5. Abuse of temporary importation procedures
6. Counterfeit/prohibited goods
7. Abuse of transit/warehousing procedures.
LEGAL PROCEEDINGS AND APPEALS
Introduction
The East Africa Community Customs Management Act (EACCMA) 2004 provides various
measures for enforcing the compliance with the provisions of the Act and /or procedures
related thereto. The non-compliance with the provisions of the Customs laws is an offence for
which measure for enforcing compliance can be instituted. The measures include Tax recovery
measures and/or measures for non-compliance with any other provisions of the Customs laws.
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The provisions of the Act empowers the Commissioner of Customs to apply measures, such as
compounding offence(s), recovery of tax by distress warrant, Agency notice etc; to recover
unpaid tax and/or enforce compliance with any provision(s) of the Act; whether for tax
recovery or mere compliance with the provision(s) of the Customs Law .On the other hand, the
compliance can also be enforced by instituting legal proceedings in the Court of law.
LEGAL PROCEEDINGS
Authority
Sections 220 and 221of the EACCMA 2004, legal proceedings can be instituted in the court of
law and suing done in the name of the Commissioner. However, some Acts establishing some
East African Revenue Authorities carry provision(s) stating that the suing should be done in the
name of the Commissioner General of the Revenue Authority.
Court proceedings may be instituted where the Commissioner is satisfied that an offence has
been committed.
Violations leading to Legal proceedings
Generally the violation of the requirement(s) of the provisions of Customs law(s) is an offence
for which legal proceedings can be instituted in the court of law. Penalties, fines and/or
imprisonment upon conviction are prescribed in various provisions of the EACCMA 2004.
Particularly sections 193 to section 208 of the Act state some of the offences and how they are
dealt with. Such offences include:
i. Conspiring to contravene the provisions of the EACCMA.
ii. Maliciously shooting at an aircraft, vessel, vehicle in the service of Customs.
iii. Being armed while committing offense under this Act.
iv. Rescuing person arrested for any offense under the Customs Law.
v. Removing or defacing a Customs seal
vi. Inducing another person to commit offence.
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vii. Warning an offender with the intent to obstruct the proper officer in the
execution of his/her duty.
viii. Assuming character of a proper officer.
ix. Importing or carrying coastwise prohibited goods.
x. Importing or carrying coastwise restricted goods contrary to the conditions
governing their importation or carriage coastwise.
xi. Making or using false document(s)
xii. Refusing to produce document(s).
APPEALS
Various provisions of the EACCMA 2004, including sections 193 to 208 lists areas where offence
can be raised and legal proceedings be instituted, by the Commissioner of Customs, in a court
of law. On the other hand, the Commissioner is empowered by the EACCMA 2004 to make a
decision, assessment of tax or to determine the value of imports/exports within the framework
of the Customs laws. In the process, the assessment made can aggrieve a taxpayer, who may be
an importer or exporter. The aggrieved person may decide to apply for review or appeal against
the decision. An application for review or an appeal can be effected by an importer/exporter,
Customs Agent. Where an appellant is not satisfied with the Commissioner’s verdict, he/she
may appeal to the Tax Tribunal. In case one is not satisfied with the Tribunal’s decision may
appeal to a judicial Court. The appeals mechanisms are provided for under section 229 of the
Act.
EXEMPTION UNDER 5TH SCHEDULE
The 5th schedule to the Act provides for general and specific exemptions.
Specific exemptions cater for the following:-
a) The presidents,
b) Partner States Armed forces
c) Commonwealth and other governments
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d) Diplomatic and first time arrivals
e) Donor Agencies with bilateral or multilateral agreement with Partner States
f) International and regional organizations.
g) The war graves commission
h) Disabled, blind and physically handicapped persons
i) Rally drivers
j) Goods and equipment for use in Aid funded projects
Likewise general exemptions provide narrative explanations for the importation of the
following:
a) Aircrafts operations
b) Container and Pellets
c) Deceased person’s effect
d) Fish, crustaceans and molluscs
e) Passengers Baggage and personal effects
f) Samples and Miscellaneous Articles
g) Ships and Other vessels
h) Preparation for cleaning diary apparatus
The complete list with the conditions for exemption is found in the fifth schedule and the agent
is urged to understand those conditions before clearance with Customs. It is also essential for
the agent to have all documents to justify qualification for specific exemptions.
REMISSION OF DUTY
Section 140 of the EACCMA 2004, empowers the EAC Council to grant remission of duty on goods imported for manufacture of goods for export or for home use in case of an urgent national need. The procedure for approval of goods, for which remission may be granted, is provided for in the East African Community Customs Management (Duty Remission) Regulations (EACCMRR) 2008.
EACCMRR 2008 regulation 6 provides that the remission of duty granted shall be valid for a
period of twelve months from the date of the publication of the grant in the Gazette.
15
Application for remission
An application for remission of duty shall be made to the Council through the Commissioner in
a specified form (Form R 1) in the Schedule to Remission Regulations.
Upon receipt of an application for remission, the Commissioner shall forward the application to
the Committee established to oversee to remission applications for its comments.
The Commissioner shall after receiving the comments forward the application together with his
or her comments to the Council.
The Council may for reasons to be communicated to the applicant reject or approve an
application for remission under the Regulations.
Maintenance of records
One of the mandatory task for a manufacturer is to maintain records for the goods produced.
When it comes to the issue of duty remission, a manufacturer is expected to maintain separate
books and records relating to the following;
(a) locally sourced goods;
(b) goods imported by the manufacturer;
(c) goods received by a manufacturer by way of transfer under regulation 11 of the Remission
Regulations.
All these records have to be availed for audit by the Commissioner as per section 236 of
EACCMA 2004. It is therefore the duty of the manufacturer to maintain those records for the
period specified under the Customs laws.
REFUNDS AND DRAWBACKS
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REFUNDS OF DUTY
Refund of duty is the payment of import duty or part of it, previously paid on imported goods
which has been damaged or pillaged during the voyage or damaged or destroyed while subject
to Customs control. The refund also refers to the payment of import duty or export duty paid in
error.
Conditions for refund of duty
A refund claim may be effected where the commissioner is satisfied that:-
i. The description, quality, state and condition of the goods; for which a refund is claimed,
was not in accordance with the contract or that the goods were damaged before
delivery out of Customs control or the goods with consent of the seller are returned
unused or destroyed
ii. The goods for which a refund is claimed, were damaged or pillaged during the voyage or
damaged or destroyed while under Customs control. A refund in this case will be
proportional to what has been damaged, pillaged or destroyed
iii. Import or export duty was paid in error
iv. A claim for refund must be presented to the Commissioner within twelve months from
the date of payment of duty.
Circumstances under which refund may arise include:
i. Double lodgments where two entries are lodged and paid for to clear the same cargo
ii. Valuation dispute where a higher value led to over payment
iii. Tariff dispute where an issue under dispute led to overpayment
iv. Short landing whereby less quantities are received
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v. Payment under protest
vi. Undelivered cargo
vii. Goods imported are not in accordance with the contract of sale and if returned to the
seller
viii. Goods are damaged or destroyed while under Customs control
ix. Goods are damaged or pillage during voyage
DUTY DRAWBACKS
Duty drawback is a refund of all or part of any import duty paid in respect of goods exported.
This is a facility adopted within revenue administration to facilitate trade and encourage
production of goods for export using imported inputs. During importation the manufacturer will
pay duties for the imported inputs and will claim a refund when the final goods are exported or
used in a manner or for a purpose prescribed as a condition for granting a duty drawback. The
goods under duty drawback are subject to Customs control as per section 16 of EACCMA.
Conditions for granting duty drawback
Sections 138 to 139 of the EACCMA 2004 provides for conditions under which duty drawback
can be allowed:
i. The goods should be entered in a prescribed form and manner; and produced for
examination by proper office prior to exportation.
ii. A person claiming drawback should Complete and subscribe a declaration on a
prescribed form.
iii. For goods exported or put on board any vessel/aircraft for use as stores the conditions
include that:
The goods have been exported or put on board as stores.
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The owner, at the time of declaration of the goods for drawback was and
continues to be entitled to drawback
iv. The goods, after having been put on board any vessel/aircraft for exportation or use as
stores have been destroyed by accident and/or abandoned to Customs.
v. For goods imported for use in the manufacture of goods which are exported,
transferred to a free port or transferred to Export Processing Zone(EPZ) ,the drawback
is allowed if the goods exported, transferred to a free port or EPZ are a direct result of
the imported goods used in the manufacture of such goods.
vi. The claim for drawback is presented within twelve months from the date of exportation
of the goods or performance of the conditions for which a drawback is allowed.
CUSTOMS AGENTS
A Customs Agent is a person who is licensed by the Commissioner for transacting business
relating to the declaration or clearance of goods or baggage (other than accompanied un-
manifested baggage) subject to Customs control of a person travelling by air, land, or sea; on
behalf of the owner.
Section 145 of the EACCMA 2004 empowers the Commissioner of Customs to license or to
decline. The Commissioner may refuse to issue a license, suspend, revoke any license or decline
to renew such license if the agent has failed to meet certain conditions for licensing or
contravened the law.
A Customs Agent performs his/her duties under the authority of the owner of the goods. In
accordance with section 146 of the EACCMA 2004, the agent has to be authorized in writing by
the importer/exporter.
The importance of a Customs Agent
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Declaration and /or clearance of goods through Customs, requires a professional knowledge
and competences without which the clearance of goods can be delayed or fail. A Customs
Agent with a professional knowledge and Competences in the clearance of goods through
Customs and subsequent forwarding them to the importer minimizes delays associated with
clearance and forwarding of goods to final destination(s). He uses his/her professional
knowledge for easy compliance with various laws and procedure related to clearing and
forwarding of goods; thus minimizing delays, costs and penalties associated with non-
compliance of the provisions of the laws governing clearance and forwarding of goods.
Importance of customs agents is reflected from the roles of customs agents which are;
i. Acts as an intermediary between an importer/exporter and other parties in clearance of
goods and border protection.
ii. Customs clearance of goods by capturing declarations and performing related activities
involving paper work in trade facilitation involving international shipping process
iii. Provide bond guarantees for goods under clearance where necessary
iv. Facilitate refund claims such as duty draw back claims
v. Prepare and facilitate goods for examination
vi. Facilitates and avails warehousing facilities
vii. Provides import/export consultancy services
viii. Acts as a freight forwarder on behalf of his clients
ix. Provide related transport/shipping and logistical services
x. Provides network with related government officials and agencies
Licensing procedures:
20
A person intending to be a Customs agent has to apply for a license in a prescribed form to
Commissioner. The application shall be accompanied with an application fee as may be
prescribed by the Commissioner.
Where the application is approved, the applicant shall pay the license fee and execute a
security bond of such amount as the Commissioner may require.
Conditions for licensing
The applicant must have the following:
He or She must have established office with office equipment including computers
capable of being connected to customs computer network
Employees with minimal acceptable qualifications according to customs regulations.
Documentary evidence regarding establishment of the customs agency.
Liability of a duly-authorized Agent:
The Customs agent shall be deemed to be the owner of the goods and hence:
•Be liable to pay all Customs duties and taxes.
•Be able to answer all questions asked by the proper officer in relation to a particular
transaction.
Role and Liability of owner
The owner of goods who authorizes an agent to perform any business transaction under
Customs control on his/her behalf, shall be liable to the declaration made by the agent and be
prosecuted for any offence committed by such agent, unless such offence is committed by the
agent due to his/her negligence.
21
For clearance purposes, the owner-the importer or exporter- will have to submit documents
related to the imported goods or goods under export to his/her Customs Agent.
SAMPLE QUESTION
Exercise I
The students from Masai Mara Girls School were on a study tour in Dar es Salaam being hosted
by Institute of Tax Administration (ITA) in collaboration with Tanzania Freight Forwarders
Association (TAFFA). The students had planned to visit Dar es Salaam Port and other customs
areas to gain expertise in various customs issues. On the part of TAFFA, you had been
appointed to head the delegates. Miss Kidunducy, one of the talkative students asked,
a) “You said most of the goods in customs area are there for the purpose of control. What
types of goods specifically should we expect to find in those customs areas?”
b) “What can we understand by the term goods being under Customs control?”
c) “What is the reporting procedure for a ship coming from Mombasa to the Port of Dar es
Salaam?”
TASK
Respond to her properly basing on the EACCMA 2004.
Exercise II
Mr. Nkosi arrives for the first time in Tanzania through Tunduma Border accompanied by his
wife, Nadhipa and Two Children using his Toyota Hiace with Zambia registration. The family
expects to pay a visit in various national parks before going back to Zambia.
TASK
What restrictions have been imposed to the use of the motor vehicle as far as temporary
importation is concerned?
22
RESTRICTIONS AND PROHIBITIONS
Specific Objectives
At the end of this topic, the trainee will be able to:
i. Differentiate between prohibitions from restrictions
ii. Identify specific provisions on prohibited and restricted imports/exports
iii. Identify prohibited and restricted imports and exports under the Customs law
iv. Identify various regulatory authorities administering restrictions
v. Identify legal requirements for complying with restrictions on specific imports/exports
INTRODUCTION
Movement across the border involves goods which are of different categories. These goods
may be acceptable either as they are or under certain specification in one region but banned in
the other. Prohibited goods are goods that are not allowed to be imported, exported or
transferred into or outside any of the Partner States. i.e These are goods that are banned to be
traded and cleared through Customs.
Restricted goods are goods whose importation or exportation is subject to meeting specific
conditions before they are allowed to be cleared through Customs. The importation or
exportation of such goods is controlled by specific government agencies depending on their
23
nature. According to the EACCMA 2004, restricted goods are any goods the importation,
exportation, transfer or carriage coastwise must abide with any set conditions regulated by or
under the Customs laws”.
It means therefore, that the importation of the identified goods will only be granted against
import permits, certificates or any other authority issued by a relevant agency before
importation or exportation.
CONVENTIONS GOVERNING PROHIBITIONS AND RESTRICTIONS
There are various international conventions regulating production, possession and movement
of certain goods. Countries signatories to these conventions must adhere to them and fulfill all
requirements. There are conventions relating to narcotic drugs, psychotropic substances,
intellectual property etc
International conventions on narcotic drugs
Shanghai Convention 1909
The control of narcotic drugs has been of global concern ever since the first international
conference on the subject, held in Shanghai in 1909.
The international control system has been built up step by step, continuing from 1920 under
the auspices of the League of Nations, and since 1946 by the United Nations
A series of treaties adopted under the auspices of the UN require that:
Governments exercise control over production and distribution of narcotic drugs and
psychotropic substances.
Governments combat drug abuse and illicit traffic.
24
Governments maintain the necessary administrative machinery and report to
international organs on their actions.
The Single Convention on Narcotic Drugs, 1961
This convention replaced the treaties concluded before the Second World War on opiates,
cannabis and cocaine.
At present, control is exercised over more than 116 narcotic drugs, including opium and its
derivatives as well as synthetic narcotics such as methadone and pethidine.
The Convention on Psychotropic Substances, 1971
This Convention controls drugs not covered by previous treaties. Substances under control
include; hallucinogens, amphetamines, barbiturates, non-barbiturate sedatives and
tranquilizers.
About 105 psychotropic substances are controlled, most of them in pharmaceutical products
acting on the central nervous system.
The Convention on psychotropic substances has judged some of these substances to be
particularly dangerous, such as LSD, and made calls to place them under even stricter control
than narcotic drugs. Furthermore, the convention calls for substances with very wide
legitimate medical use to be controlled in a less stringent way not to hamper their availability
for medical purposes but on the other hand to avoid their diversion and abuse.
The United Nations Convention against illicit Traffic in Narcotic Drugs and Psychotropic
Substances, 1988
This convention urges the member countries to;
i. Prevent the laundering of money obtained from illicit trafficking.
ii. Provide concrete instruments for international law enforcement cooperation.
25
iii. Provide legislation covering the tracing, freezing and confiscation of proceeds and
property derived from drug trafficking.
OTHER INTERNATIONAL CONVENTIONS/AGREEMENTS
i. CITES- Convention on International Trade for Endangered Species
ii. Basel (1992)-hazardous wastes /disposal
iii. Stockholm (2004)-Persistent Organic Pollutants (POPs)
iv. Rotterdam-prior informed consent on chemicals
v. Montreal (1987)-Ozone depleting substances
vi. Chemical weapons conventions-weapons
vii. Lusaka task force
PROHIBITIONS AND RESTRICTIONS ON SPECIFIC IMPORTS/EXPORTS UNDER EAC
CUSTOMS LAWS
Prohibition and restrictions of goods is governed by the provision of section 18, 19 and 20 of
EACCMA 2004 for imports and section 70, 71, 72 for exports.
Prohibited and Restricted Imports Legal Compliance
Goods specified in Part A of the Second Schedule are prohibited goods and the importation
thereof is prohibited (Sec 18 (1)). The list of prohibited items is however not exhaustive. Other
prohibited items are found in the national laws in a respective Partner States.
Goods specified in Part B of the Second Schedule are restricted goods and the importation
thereof, save in accordance with any conditions regulating their importation, is prohibited (Sec
18 (2))..This subsection provides a stepping stone for goods which are restricted within the
Partner States. The goods can be imported or exported upon complying with conditions
26
governing their importation/exportation. Apart from restrictions at EAC regional level, each
Partner State has laws governing restricted import/exports.
Prohibitions and restrictions are monitored by the council through publication in gazette. The
council is mandated to publish a list of goods which are prohibited or restricted either generally
or in relation to any Partner States. The order, in respect prohibited or restricted goods, made
by the Council will provide goods or class of goods, importation of which is prohibited or
restricted in the Partner State or any of its area. The Council may also limit, in respect of any
Partner State, the application of the provisions of the Second Schedule in respect of all or any of
the goods specified in the order.
Prohibitions and restrictions do not apply to goods imported in transit, or for transshipment, or
as stores of any aircraft or vessel, unless:
o The goods are within paragraph 2 of Part A of the Second Schedule of EACCMA, 2004
(that is: false money, counterfeit currency notes and coins and any money with no
established standard in weight or fineness) or
o The goods are expressly prohibited or restricted in any order made under the Act
prohibiting or restricting the importation of goods.
However, such goods shall be re-exported within such time and subject to such conditions as
the Commissioner may specify otherwise they will be deemed to be prohibited goods, or
restricted goods, as the case may be, and to have been imported on that date they were
required to be re-exported.
Prohibited and Restricted Exports
According to the EACCMA, goods specified in Part A of the Third Schedule are prohibited goods
and the exportation of the goods is prohibited and goods specified in Part B of the Third
Schedule are restricted goods and the exportation of the goods, save in accordance with any
conditions regulating their exportation, is prohibited (Sect 70 –Exports).
27
RESTRICTED AND PROHIBITED IMPORTS AND EXPORTS UNDER THE EAC CUSTOMS
MANAGEMENT ACT
Part A and Part B of the Second Schedule to the EAC Customs Management Act 2004 list
prohibited and restricted goods.
Part A - Prohibited Goods
i. All goods the importation of which is for the time being prohibited under this Act, or by
any written law for the time being in force in the Partner State.
ii. False money and counterfeit currency notes and coins and any money not being of the
established standard in weight or fineness.
iii. Pornographic materials in all kinds of media, indecent or obscene printed paintings,
books, cards, lithographs or other engravings, and any other indecent or obscene
articles.
iv. Matches in the manufacture of which white phosphorous has been employed.
v. Any article made without proper authority with the Armorial Ensigns or Court of Arms of
a partner state or having such Ensigns or Arms so closely resembling them as to be
calculated to deceive.
vi. Distilled beverages containing essential oils or chemical products, which are injurious to
health, including thijone, star arise, benzoic aldehyde, salicyclic esters, hyssop and
absinthe. Provided that nothing in this paragraph contained shall apply to "Anise and
Anisette" liquers containing not more than 0.1 per centum of oil of anise and distillates
from either pimpinella anisum or the star arise allicium verum.
vii. Narcotic drugs under international control.
viii. Hazardous wastes and their disposal as provided for under the base conventions.
28
ix. All soaps and cosmetic products containing mercury.
x. Used tyres for light Commercial vehicles and passenger cars.
xi. The following Agricultural and Industrial Chemicals:
(a) Agricultural Chemicals
1. 2.4 - T
2. Aldrin
3. Caplafol
4. Chlordirneform
5. Chlorobenxilate
DDT
6. Dieldrin
7. Dibroacethanel (EDB)
8. Flouroacelamide
9. HCH
10. Hiplanchlor
11. Hoscachlorobenzene
12. Lindone
13. Mercury compounds
14. Monocrolophs (certain formulations)
15. Methamidophos
29
16. Phospharrmion
17. Methyl - parathion
18. Parathion
(b) Industrial Chemicals
1. Crocidolite
2. Polychlorominatel biphenyls (PBB)
3. Polyuchorinted Biphenyls (PCB)
Polychlororinated Terphyenyls (PCT
4. Tris (2.3 dibromopropyl) phosphate
5. Methylbromide (to be phased out in accordance with the Montreal
6. Protocol by 2007).
(c) Counterfeit goods of all kinds
PART B- RESTRICTED GOODS
1. All goods the importation of which is for the time being regulated under this Act by any
written law for the time being in force in the Partner State.
2. Postal franking machines except and in accordance with the terms of a written permit
granted by a competent authority of the Partner State.
3. Traps capable of killing or capturing any game animal except and in accordance with the
terms of a written permit granted by the Partner State.
4. Unwrought precious metals and precious stones.
30
5. Arms and ammunition specified under Chapter 93 of the Customs Nomenclature.
6. Ossein and bones treated with acid.
7. Other bones and horn - cores, unworked defatted, simply prepared (but not cut to
shape) degelatinized, powder and waste of these products.
8. Ivory, elephant unworked or simply prepared but not cut to shape.
9. Teeth, hippopotamus, unworked or simply prepared but not cut to shape.
10. Horn, rhinoceros, unworked or simply prepared but not cut to shape
11. Other ivory unworked or simply prepared but cut to shape.
12. Ivory powder and waste.
13. Tortoise shell, whalebone and whalebone hair, horns, antlers, hoovers, nail, Claws and
beaks, unworked or simply prepared but not cut to shape, powder and Waste of these
products.
14. Coral and similar materials, unworked or simply prepared but not otherwise Worked
shells of molasses, crustaceans or echinoderms and cattle-bone, Unworked or simply
prepared but not cut to shape powder and waste thereof.
15. Natural sponges of animal origin.
16. Spent (irradiated) fuel elements (cartridges) of nuclear reactors.
17. Worked ivory and articles of ivory.
18. Bone, tortoise shell, horn, antlers, coral, mother-of pearl and other animal carving
Material and articles of these materials (including articles obtained by moulding).
19. Ozone Depleting Substances under the Montreal Protocol (1987) and the Vienna
Convention (1985).
31
20. Genetically modified products.
21. Non-indigenous species of fish or egg of progeny.
22. Endangered Species of World Flora and Fauna and their products in accordance with
CITES March 1973 and amendments thereof.
23. Commercial casings (Second hand tyres).
24. All psychotropic drugs under international control.
25. Historical artefacts.
26. Goods specified under Chapter 36 of the Customs Nomenclature (for example,
percuassion caps, detonators, signalling flares).
27. Parts of guns and ammunition, of base metal (Section XV of the Harmonised Commodity
Description and Coding System), or similar goods of plastics under Chapter 39 of the
Customs Nomenclature.
28. Armoured fighting vehicles under heading No 8710 of the Customs Nomenclature.
29. Telescope sights or other optical devices suitable for use with arms, unless
30. Mounted on a firearm or presented with the firearm on which they are designed to be
mounted under Chapter 90 of the Customs Nomenclature.
31. Bows, arrows, fencing foils or toys under Chapter 95 of the Customs Nomenclature.
32. Collector's pieces or antiques of guns and ammunition under heading No 9705 or 9706
of the Customs Nomenclature.
AGENCIES THAT ENFORCE PROHIBITIONS AND RESTRICTIONS
Apart from the regional prohibitions and restrictions, Partner States have the power to
prohibit/ restricts some goods entering or leaving the country. However, this should be known
32
to others for the sake of harmony. Apart from Customs authority there are other government
organs administering the prohibitions and restrictions. The respective organs from each Partner
States are as hereunder (the list is not exhaustive):
i. Tanzania
a. Tanzania foods and Drugs Authority
b. Tanzania Bureau of standards
c. Fair Competition Commission
d. Ministry of Home Affairs- Police force
e. National Environmental Management Council ( NEMC)
ii. Kenya
a. Kenya Bureau of Standards
b. Public Health
c. National Environmental Management Authority (NEMA)
d. National Radiation Management Board.
iii. Rwanda
a. Rwanda Bureau of Standards
b. Rwanda Environmental Management Authority (REMA)
c. Ministry of Internal Affairs – Police Force department
iv. Burundi
a. Burundi Bureau of Standards
33
b. Ministry of security
c. Ministry of Health
v. Uganda
a. Uganda National Bureau of Standards (UNBS)
b. Wildlife Authority
c. National Drugs Authority
d. Ministry of Internal Affairs -Narcotics Squads division
e. National Environmental Management Authority (NEMA)
OVERVIEW OF THE EAC CUSTOMS REGULATIONS (EACCMR)
Specific Objectives
At the end of this topic, trainees should demonstrate the ability to;
i. Describe the structure of the EACCMR
ii. Identify and appropriately use prescribed forms under the EACCMR
iii. Identify fees and penalties applicable under specific provisions
iv. Comply with other regulations applicable in clearing and forwarding process
STRUCTURE OF THE EACCMR
The EAC Customs Management Regulations were made by the Council of Ministers under
section 251 of the EAC CMA to give effect to the Act. The commencement date of the EACCM
Regulation 2006 was on 01/01/2007. Currently, the regulations applicable is East African
Community Customs Management Regulations 2010 which revokes the EACCMR, 2006.The
structure of the East African Community Customs Regulations is composed of eighteen parts
namely;
34
PART I: Preliminary Provisions
Citation and commencement
Interpretation.
PART II: Administration
Delegation of powers of Commissioner
Working days and hours.
Overtime fees
Fees to Customs revenue.
Customs Union Seal and Flag.
PART III: Importation
Arrival and Report of Aircraft and Vessel
Arrival Overland
Entry, Examination and Delivery
PART IV
Internal Container Depot
PART V
Warehousing of Goods
Bonded Warehouses
Government Warehouses
PART VI
35
Exportation
Entry Outward and Loading of Aircraft and Vessels
Departure Overland
Goods in transit or for transshipment
Goods in transit
Transhipment
PART VII
Clearance and general declaration for aircraft
Departure and Clearance of Aircraft and Vessels
PART VIII
Importation and Exportation by Post
PART IX
Importation and Exportation by Registered Couriers
PART X
CARRIAGE COASTWISE AND TRANSFER OF GOODS
PART XI
DUTIES
Goods imported for temporary use or purpose
Duty Drawback
Remission or refund
36
Rebate
Refund
PART XII
CUSTOMS AGENTS
PART XIII
MANUFACTURING UNDER BOND
PART XIV
EXPORT PROCESSING ZONES
PART XV
FREE PORTS
PART XVI
INWARD AND OUTWARD PROCESSING
Inward processing
Outward processing
PART XVII
SETTLEMENT OF CASES BY THE COMMISSIONER
PART XVIII
MISCELLANEOUS PROVISIONS
SCHEDULES
FIRST SCHEDULE Consists of various customs forms used in the process of clearing goods
37
SECOND SCHEDULE is the East African Community Customs Union Flag that symbolizes
the unity among the Partner States
CUSTOMS FORMS
Under EACCMA 2004 read with EAC Customs Management Regulations 2010, there are various
forms that a Customs Agent should be well conversant with in the process of clearing goods.
There are C-forms and CB-forms which are harmonized within the regions and serves as
documentary evidence when used within Customs department. The forms may be used either
as it is or as an attachment to another Customs forms or documents. Below is the current list of
the harmonized Customs forms together with the applicable regulations.
Table: the list of Customs forms
No
.
FOR
M
No.
FULL TITLE OF THE FORMAPPLICABLE
REGULATION
1 C 1 Overtime Request Regulation 5 (1)
2 C 2 Report Inward/Outward of Vessel/Aircraft/Vehicle
Regulations 11 (1),
12 (2), 20 (1), 88,
110, 112 (2)
3 C 3 Parcels List Regulation 11 (2)
4 C 4 General Declaration – AircraftRegulation 12 (1) (2),
109 (1) (2) (3) (4)
5 C 5 Cargo Manifest – Aircraft Regulation 12(2),
38
No
.
FOR
M
No.
FULL TITLE OF THE FORMAPPLICABLE
REGULATION
20(1), 21,109(3)
(4)110,111(2
6 C 6 Passenger List/ManifestRegulation 15 (1), 93
(1), 111 (1) (2) (3)
7 C 7Declaration of Consumable Stores on Board
VesselsRegulation 15 (1) (b)
8 C 8Application to Break-bulk Prior to Making Report
and Unloading Goods Prior to EntryRegulation 22
9 C 9 Application to Amend Inward/Outward Manifest Regulation 110
10 C 10Application to Proceed to Sufferance Wharf or
other Unapproved PlaceRegulation 30, 90
11 C 11 Landing Certificate Regulation 38
12 C 12Application for Release of Perishables or Other
Goods Prior to Payment of DutyRegulation 49 (1)
13 C 13 Application for Inward/Outward Processing
Regulation 185 (1),
186 (2), 192 (1), 193
(2)
14 C 14 Certificate of Clearance Regulation 107
39
No
.
FOR
M
No.
FULL TITLE OF THE FORMAPPLICABLE
REGULATION
15 C 15 Request to Repack Warehoused Goods Regulation 70 (1) (2)
16 C 16Request to Transfer Ownership of Warehoused
GoodsRegulation 71
17 C 17A Single Administrative Document (SAD) – ASYCUDARegulation 39, 89,
104, 105
18 C 17B Single Administrative Document (SAD) – SIMBARegulation 39, 89,
104, 105
19 C 18
Application for License of Premises to be used as a
Bonded Warehouse/Factory/Internal Container
Depot (ICD)
Regulation 57 (1), 74
(1)
20 C 19Licence for Private/ General Bonded
Warehouse/Factory/Internal Container Depot
Regulation 57 (3), 74
(4), 153 (4)
21 C 20 Application for Customs Agents’ LicenseRegulation 149 (1)
22 C 21 Customs Agents’ License Regulation 151 (3)
23 C 22 Application to Ship Goods Prior to Entry Regulation 94 (1)
24 C 23 Application to Reload Goods Unloaded in Error Regulation 95 (1)
25 C 24 Application to Ship Stores Regulation 96
40
No
.
FOR
M
No.
FULL TITLE OF THE FORMAPPLICABLE
REGULATION
26 C 25 Application to Transfer Stores of Aircraft/Vessel Regulation 98
27 C 26Application for Refund of Deposit/Cancellation of
Bond
Regulations 104 (15),
148 (2)
28 C 27 Transire Regulation 123
29 C 28 Vehicle/Vessel License for Conveying Transit GoodsRegulation 104 (5)
(a) (b)
30 C 29Certificate of Approval for Licensed Motor
Vehicles/Vessels from COMESA/SADCRegulation 104 (10)
31 C 30 Duty Drawback Rate of Yield Notification Form Regulation 139 (2)
32 C 31 Duty Drawback/Debenture Form Regulation 139 (3)
33 C 32
Temporary Importation of Road Vehicles from
COMESA, SADC and Countries with Bilateral
Arrangements with the Partner States -
Declaration of Importation
Regulation 136 (2)
34 C 33
Application for Remission /Refund of Import Duty
on Abandoned/Damaged/Pillaged/Destroyed
Goods
Regulation 143 (2),
145, 147
35 C 34 Application for Remission /Refund of Import Duty Regulation 146 (2)
41
No
.
FOR
M
No.
FULL TITLE OF THE FORMAPPLICABLE
REGULATION
on Re-exported Goods (a)
36 C 35 Request for Settlement of a Case Regulation 196
37 C 36Declaration of Particulars Relating to Customs
Value
Regulation 197 (1)
(2)
38 C 37 Notice of Seizure Regulation 200
39 C 38Application for Payment of Proceeds of Sale of
GoodsRegulation 208
40 C 39Application for Licensing Vessel/Vehicle for
Conveyance of Goods Under Customs ControlRegulation 210 (1)
41 C 40Vehicle/Vessel Licence for Conveying Goods under
Customs ControlRegulation 210 (2)
42 CB 1Bond for Delivery of Perishable or Other Goods
Prior to Payment of Duties/Taxes
Regulations 49 (1),
171 (2)
43 CB 2Bond for Removal of Goods from One Port/Place to
be Examined and Entered at Another Port/PlaceRegulation 179 (2)
44 CB 3Bond for the Warehousing of Goods or Removal of
Warehoused GoodsRegulation 68 (1)
45 CB 4 Bond for Exportation Regulation 94 (2)
42
No
.
FOR
M
No.
FULL TITLE OF THE FORMAPPLICABLE
REGULATION
46 CB 5 Bond for Shipment of StoresRegulation 68 (1),
(99)
47 CB 6 General Bond for Security of Warehoused Goods Regulation 76, 155
48 CB 7 Bond for Goods to be Shipped Prior to Entry Regulation 94 (2)
49 CB 8 Bond for Transit Regulation 104 (3)
50 CB 9 Bond for Transhipment of GoodsRegulation 55 (2),
105 (1)
51 CB 10Bond for Re-Exportation of Imported Goods
Delivered without Payment of DutyRegulation 173 (3)
56 CB 11 Bond for Customs Agents Regulation
57 CB 12Bond for the Conveyance of Goods Subject to
Customs Control
Regulation 104 (9),
211 (1)
58 CB 13
General Bond for Ensuring Compliance with
Customs Laws and Securing Duties on Goods
Deposited into an Inland Container Depot
Regulation 57 (5)
59 CB 14Bond for Removal of Goods from/to Export
Processing Zone
Regulation 169(2),
172(2), 174
43
Apart from the above mentioned forms there are other forms which are recognized in
individual Partner State for administrative purposes and may differ from one Partner States to
another though serving the same purposes. For examples while Tanzania is using F88 to assess
accompanied passenger’s baggage, Uganda is using Passenger Baggage Assessment forms (PB-
forms).
FEES AND PENALTIES
To ensure compliance to the Customs laws and regulations, the Act provide for penalties in case
of non- compliance. These are charges imposed for either doing what is not supposed to be
done or abstain from doing the rightful act within the premises of the laws and regulations.
There are penalties applied in respect to Customs offences for example;
Offence on arrival (Sec 21)
i. Landing a vessel, aircraft or vehicle at place other than authorized port or are
within the Partner States
ii. Departing from the authorized place of unloading without clearence from the
proper officer
iii. The return of a vessel, aircraft or motor vehicle into Partner State after depature
to foreign without authority of the Proper Officer while on any voyage to a
foreign port, bring the vessel or aircraft into within the Partner States except in
accordance with the Act.
iv. A person should consult a Proper Officer before boarding a vessel. If he/she does
it commits an offence and shall be liable to a fine not exceeding $25O (Sec 23).
It is an offence to remove goods from a Customs area without payment of duty. Once removed,
these goods shall be liable to forfeiture (Sec 39).
44
It is an offence for people to disembark from an aircraft or vessel. A place shall be appointed in
accordance with section 11 of the Act (Sec 44).
Warehoused goods can be delivered as stores provided they shall not be used as stores for a
vessel of less than 250 tons. Contravention of this provision is an offence (Sec 55).
Taking warehoused goods unlawfully is an offence, once committed, there is a penalty of an
emprisonment term not exceeding two years or a fine equal to 25% of the dutiable value of
goods (Sec 61).
Failure to enter cargo for exportation in the prescribed manner and lack of documentary
evidence of the goods referred to in the entry is an offence (Sec 73).
Deficiency in cargo is when the goods are reported on arrival as remaining on board and yet
upon inspection, the goods are actually not on board.This is also an offence (Sec 91).
Surplus in cargo is when goods which are not contained in the manifest are found on an aircraft
or vessel. Any goods in respect of which such offence has been committed shall be lable to
forteiture.
The transire should be delivered to the proper officer immediately, but in the case of a vessel of
250 tons register, such transire may be delivered within 24 hrs of arrival. ( Sec 101)
Goods on transit should be conveyed on routes approved by the Commissioner. A person who
does not follow the specified route commits an offence. (Sec104)
The owner of goods shall be prosecuted for any offence committed by his authorized agent as
if the owner has himself committed the offence. (Sec 160)
It is an offence for any person to use his premises for manufacture under bond without a
license and on conviction will be liable to a fine not exceeding $5000 or imprisonment for a
term not exceeding three years or both. (Sec 160)
45
It is possible for a licensee to alter the premises of a bonded factory as long as he/she has prior
permission from the commissioner. (Sec 161)
It is an offence to remove goods from an export processing zone or freeport for home
consumption without prior authority from the Commissioner. The offender shall be liable to a
fine of $5000 or 50% of the value of the goods, whichever is higher. ( Sec 168)
Any individual person who accesses Customs computerized system without prior authorization
commits an offence and is liable to an imprisonmet for a term not exceeding two years or a fine
not exceeding five US thousand dollars.
In the case of a corporate body , a fine not exceeding twenty five thousand US dollars.
Any person who conspires with others to act contrary to the CMA commits an offence
punishable by 5 years imprisonment if convicted.
Aperson who for no reason shoots at any aircraft , vessel or vehicle belonging to Customs,
wounds an officer on duty in the process or commits any form of violent acts commits an
offence punishable by improsonment for a period not exceeding 20 years.
A person who commits an offence with any firearm or other weapons and is found with goods
that should be detained commits an offence punishable by imprisonment for a period not
exceeding 10 years
Aperson who commits a crime in disguise and poses illegal goods whilw doing so commits an
offence punishable by imprisonment for a period not exceeding 3 years
A person who breaks, destroys or throws seized goods off an air craft, vessel or vehicle, rescues
any person arrested for any offence or obstructs any officer commits an offence.
46
Any person other than the proper officer found interfering with any lock,seal, mark or other
fastening placed by an officer on any building, room or place commits an offence whose penalty
is imprisonment for maximum period of 3 years or a fine of less than $2,500.
If goods in a sealed building are a miss, the owner of the building or the occupant commits an
offence whose penalty imprisonment for a maximum period of 5 years or a fine equal to 25% of
the value of the goods.
The penalty for committing an offence with violence is the imprisonment for a term not
exceeding twenty years. Sec 194)
A person who commits an offence while armed with fire arm or other offensive weapon shall be
liable on conviction to imprisonment for a term not exceeding ten years.
And, any person who commits an offence under this Act while disguised in any way shall be
liable on conviction to imprisonment for a term not exceeding three years.
A person who willfully removes any Customs seal from any ship, aircraft, vehicle, train or
package without the proper authority commits an offence and shall be liable on conviction to
imprisonment for a term not exceeding three years or to a fine not exceeding usd 250 or to
both. (Sec 195)
A person convicted of inducing another to commit an offence shall be liable to imprisonment
for a term not exceeding one year. (Sec 196)
A person who warns an offender shall be liable on conviction to imprisonment for a term not
exceeding two years or to a fine not exceeding two thousand five hundred dollars or to both.
(Sec 196)
Assuming character of an officer
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It is an offence under the law for a person, who is not an officer, to takes or assumes the name,
designation, character or appearance of an officer. (Sec 198)
The impersonation will on conviction lead to an imprisonment for a term not exceeding three
years.
Smuggling using (Sec 199)
When a vessel/aircraft is used for smuggling, A master of that aircraft or vessel, and any person
in charge of a vehicle, commits an offence. A vessel is said to be used for smuggling if it has any
secret or disguised place adapted for concealing goods.
In the case of the master of a vessel of less than two hundred and fifty tons register, he shall be
liable to a fine not exceeding seven thousand dollars and in the case of the master of any
aircraft or vessel of two hundred and fifty tons register or more, to a fine not exceeding ten
thousand dollars.
A person in charge of a vehicle, used for smuggling shall be liable to a fine not exceeding five
thousand dollars.
Offences related to prohibited, restricted, and uncustomed goods? (Sec 200)
A person who;
1. Imports or carries coastwise any prohibited or restricted goods contrary to any
condition regulating the importationof such goods.
2. Unloads after importation or carriage coastwise any prohibited goods; or any
restricted goods which have been imported or carried coastwise contrary to any
condition regulating such importation;
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3. Exports, carries coastwise, or puts on board any aircraft, vehicle or vessel, or
brings to any Customs airport, Customs area, or place, to be put on board, for
exportation or for use as stores or for carriage coastwise any prohibited or
restricted goods contrary to any condition regulating that process.
4. Acquires,has in his or her possession, keeps or conceals, or procures to be kept
or concealed, any goods which he or she knows, or ought reasonably to have
known, to be prohibited goods; or restricted goods which have been imported or
carried coastwise contrary to any condition regulating such importation or
carriage coastwise; or uncustomed goods.
On conviction for offences related to prohibited, restricted, and uncustomed goods, a person
shall be liable to emprisonment for a term not exceeding five years or to a fine equal to fifity
percent of the the dutiable goods involved or both. ( Sec 200)
One conviction for an offence, a person is liable to pay a fine, and unless the goods are
prohibited goods or are ordered to be forfeited under this Act, payment of duty shall be made
in addition to the fine. ( Sec 201)
A person who imports or exports any goods that are concealed in any way commits an offence
and shall be liable on conviction to emprisonment for a term not exceeding five years or to a
fine equal to fifty percent of the value of the goods involved. ( Sec 202)
A person who, in any matter relating to the Customs, makes use of false documents commits an
offence. (Sec 203)
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On conviction, a person making or using false documents shall be liable to imprisonment for a
term not exceeding three years or to a fine not exceeding ten thousand dollars.
A person who interferes with any aircraft, vessel, vehicle, buoy, anchor, chain, rope, mark, or
other thing used for the purposes of the Customs commits an offence. (Sec 205)
On conviction, a person who interfers with Customs gear shall be liable to a fine not exceeding
two thousand five hundred dollars. ( Sec 205)
A person who, on finding any uncustomed goods and fails to report such discovery to the
nearest officer commits an offence and shall be liable to a fine not exceeding two thousand five
hundred dollars. (Sec 206)
A person who commits an offence under this Act for which no specific penalty is provided shall
be liable to a fine not exceeding five thousand dollars.
On conviction, the court may impose a fine not exceeding three times the value of any goods in
respect of which the offence was committed or the specified amount, whichever is the greater.
(Sec 209)
The table below gives a summary of penalties as emanated from the offences.
PENALTY GUIDELINES
Section of the
EAC CMA
Summary of the offence Forfeiture Penalty
9 Bribery and Corruption of Officers - X
15 Failure to enter or leave or bring goods into or out of
appointed entrance or to enter or leave Customs area
when required to do so
X X
16 Interfering in any way with goods subject to Customs X X
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control
21 Failure by Master of aircraft or vessel to come to an
approved port and report
- X
23 A person who other than health officer boards a vessel
before the proper officer
- X
24 A master or agent of aircraft or vessel who makes a false
or incorrect report
X
25 Failure by Master or agent of aircraft or vessel to answer
questions or produce documents
- X
26 Failure by owner or agent of aircraft or vessel to account
for any goods within the period allowed
- X
28 Failure by master or agent to report vessel or aircraft lost
or wrecked, etc.
X
29 Failure by owner of vehicle arriving overland to report to
Customs, etc.
X X
33 Unloading of goods in an unapproved place X X
36 Failure to furnish entry within forty-eight hours, in case
of provisional entry of goods
- X
39 Delivery from Customs area in special circumstances not
returned
X X
48 Removing goods to the warehouse and in packages in
which they were imported or re-packed
X X
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51 Contravening a condition imposed in the operation in
bonded warehouse
X X
53 Failure to return goods temporarily removed from
warehouse
X X
55 Warehoused goods entered as ship stores not delivered
as such
X X
59 Gaining access to a bonded warehouse without the
presence of a proper officer
- X
61 Removing or destroying goods in a warehouse - X
62 Using premises as a bonded warehouse without
authority or contrary to conditions of license
X
64 Failing to provide facilities in a Customs bonded
warehouse
- X
65 Interfering with warehoused goods X X
67 Failing to produce warehoused goods when required to
by a proper officer
- X
74 Master or agent of aircraft or vessel who fails to enter
outwards vessel or aircraft and goods
- X
73 Owner who fails to enter goods for export by aircraft or
vessel
X X
75 Goods loaded on board aircraft or vessel without entry
etc.
X X
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76 Contravening conditions to load goods without entry etc. X X
77 Offloading of exports within the country etc. X X
78 Contravention of conditions for bonded goods entered
for export
X X
79 Failure to export goods entered as stores X X
80 Short-shipped goods not reported within forty-eight
hours
X X
88 Departure of an aircraft or vessel without clearance - X
89 Failure by master or agent of vessel to fulfil undertaking
or return cancelled certificate or clearance
- X
90 Failure of master or agent of aircraft or vessel to produce
clearance certificate
X
91 Possession in an aircraft or vessel of goods not declared
in the manifest or found short
X
92 Failure to bring aircraft or vessel to a boarding station
when required to do so
- X
83 Failure to answer questions put up by a proper officer to
a person about to depart to foreign
X X
99 Loading or unloading coastwise goods onto or from
aircraft or vessel at unapproved place etc.
X X
100 Giving incorrect or false information on Transire - X
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101 Failure by master or agent or aircraft or vessel to
produce Transire on arrival
X
102 Contravening conditions for loading or unloading of
coasting vessel
X X
104 Coasting aircraft deviating from its voyage or failing to
report wreck etc.
X X
105 Refusal by master of aircraft or vessel to answer
questions or making incorrect reply.
X
160 Use of unlicensed premises to manufacture under bond
or contravention of licence conditions
X X
162 Failure to enter goods, equipment etc. on expiry of
licence
X
163 Failure of Manufacturer to provide facilities, records etc. - X
164 Failure to enter and properly store materials in the raw
material stockroom
X
166 Goods from bonded factory entered for home
consumption
X X
164 Imported machinery and raw materials not delivered
from bonded factory
X
The Act however provides for general penalties in case of any act that no specific
charges/penalty has been imposed. This is according to section 209 of EACCMA 2004.
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OTHER REGULATIONS–
DUTY REMISSIONS,
In 2008 the EAC Council ratified the remissions regulations to cater for the matters pertaining to
the remission of duties. The regulation is cited as East African Community Customs
Management (Duty Remission) Regulations 2008. The purpose was to put in place a
harmonized mechanism for duty remission in all the Partner States.
ARRANGEMENT OF REGULATIONS
Regulation Title
1. Citation and commencement.
2. Interpretation.
3. Goods on which remission may be granted.
4. Duty Remission Committee.
5. Application for remission of duty.
6. Publication of goods and manufacturers.
7. Conditions attached to remission of duty.
8. Entry and bond for goods imported.
9. Cancellation of bond.
10. By-products scrap or waste from process of manufacture
11. Transfer, etc. of goods.
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12. Commissioner may authorise re-exportation.
13. Maintenance of books and records.
14. Powers of a proper officer.
15. Revocation of grant.
ENFORCEMENT AND COMPLIANCE REGULATION
As at time of publication of this material, the enforcement and compliance regulation has not
been ratified. Once ratified, the regulation will be enforceable and will become part of the
training material.
SAMPLE QUESTIONS
1. The East Africa Community Management Act (EACCMA, 2004) the Regulation thereto
provides control measures and procedures for unloading and removal of cargo imported
in a vessel from Customs area.
Briefly explain the procedure applied and control measures in the unloading and
removal of imported goods from a Customs area.
2. With specific examples, briefly explain what you understand by;
a) Prohibited goods
b) Restricted goods
3. Identify International Conventions on Prohibited and Restricted goods and give their
role in controlling prohibited and restricted goods.
4. Discuss reasons for imposing restrictions and prohibitions
5. An applicant for Customs Agent license is required to meet certain conditions in order to
be issued with a license. Briefly identify and explain conditions governing Customs Agent
licensing.
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6. What do you understand by the term compliance? Give six examples where compliance
is required.
7. List the commonly committed Customs offences.
8. Explain how a Customs offence of misdeclaration can be settled by the Commissioner
under section 219 of the Act.
9. In certain cases, a Customs Agent is required to defend the rights of an importer against
certain decision of the Commissioner of Customs. Briefly explain legal measures and
processes the Agent can take to ensure that his/her client is not affected by the
wrongful decision or omission of the Commissioner of customs.
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UNIT II: CUSTOMS CLEARANCE PROCEDURES
This course unit will impart skills and knowledge on how to clear goods through Customs in
compliance with Customs laws and regulations
Sub-Units
IMPORT PROCEDURES
Specific Objectives:
At the end of this course, trainee shall demonstrate the ability to:
i. Explain reporting procedures for means of conveyance
ii. Use various regime for Customs clearance for imported goods
iii. Prepare Customs declarations using relevant supporting documents and attached
those supporting documents.
iv. Assess duty and taxes
v. Facilitate activities involved during verification and release of declared goods
REPORTING PROCEDURES FOR MEANS OF CONVEYANCE
There are various Customs formalities to be accomplished when goods are brought into a
Customs territory in order to ensure compliance with Customs law. These are the operations
that must be carried out by both the persons concerned with the goods and by Customs in
order to comply with the statutory or regulatory provisions which Customs has responsibility to
enforce. However as the goods arrives from the foreign destination it is first essential to
identify the means of conveyance used to bring those goods and the reporting procedure of
such means which entails the control purposes from the Customs perspective as the control of
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goods and vessel under Customs control is very important for the sake of combating revenue
loss.
REPORT OF VESSELS, AIRCRAFTS, AND VEHICLES
Inward report of vessels, aircrafts, and vehicles
This is a Customs procedure where a master of every aircraft or vessel arriving from a foreign
port at any port, make report of such aircraft or vessel, and of its cargo and stores, and of any
package for which there is no bill of lading, to the proper officer on the prescribed form and in
the prescribed manner.
Outwards report of vessels, aircrafts, and vehicles
This is a Customs procedure where the master or agent of every aircraft or vessel in which any
goods are to be exported make a reports of such aircraft or vessel to the proper officer on the
prescribed form and in the prescribed manner
All Aircrafts, Vessels and Vehicles etc, from Foreign must report at appointed ports. When
reporting at appointed ports they must go straight to mooring areas and or landing or boarding
areas.
Once the vessel reports, it is not allowed to depart to another port within the country unless
the proper officer has granted permission to the Master.
Once the Master departs to foreign, is not allowed to call at any place within the country unless
the proper officer according to the law has granted him the permission. (Section 21 (1) and (2))
The proper officer may direct the vessels or aircraft place of mooring (Section 22)
Restriction on Boarding Vessel before Proper Officer
Once arriving at the place of mooring it is the duty of proper officer to board the
vessels/aircraft. The agent should know that it is only Proper Officer who is responsible to
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board vessels/ aircraft and the agent should facilitate such role in a manner allowed within
Customs laws. In some occasion, port pilot, the health officer or any other public officer in the
course of performing his duties and duly authorized, may board before the proper officer (S 23).
The Act provides such exclusion, Provided that prior permission from the proper officer has
been granted.
Making formal reports (S 24 of EAC Customs Management Act, 2004,
The Master of the vessel, Aircrafts or vehicle when arriving from foreign must furnish a formal
report to the proper officer on arrival using the prescribed Customs forms. The report should be
within 24 hours before arrivals in case of vessels and immediately after taking off from the last
point of departure to the Partner States in case of Aircraft. Every report must show goods to be
unloaded, in transit; transshipment and those remain in the aircraft or vessel. Goods in transit,
for transshipment, and goods remaining on board for other ports must be shown separately.
Amendment of report S.24 (5)
In case of obvious error or any omission which result from accident or inadvertence, the agent
may be allowed to amend the report or submit supplementary report.
The Master or Agent may ask for the amendment of the report – (Manifest) using prescribe
form. He must satisfy the officer that:
i. Goods were not shipped
ii. Landed at a previous port or
iii. Over carried and landed at a subsequent Port and
iv. If over carried, have been returned to a Port in the Territory
v. Lost at sea
vi. Stolen or destroyed before arrival
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All correspondences on short landed goods must be filed in the manifest file.
Each page of the report must be signed initialed, numbered and sealed together by the master
or his agent, if required, signed in the presence of the proper officer.
LANDING PERMIT
Landing permit is required for goods declared as parcel using parcel list. The agent should know
the time limit for the landing permit at the time of submitting it.
The information about the value, classification and taxes with respect of the goods are entered
on the reverse of Landing Permit.
GOODS IN TRANSIT SHED
Due to some working environment some goods may be unloaded in a transit shed. However,
Goods in a transit shed are deemed to be in the importing vessel/aircraft until they are
delivered and the owner or agent shall continue to be responsible.
i. Where goods reported for discharge are not dully unloaded and deposited in a
transit shed or Customs area the master/agent must pay the duty thereof unless he
explain to the satisfaction of the proper officer. (Section 26)
ii. The owner of vessel or aircraft or his agent, or the transit shed owner who fails to
count for the goods in ones custody commits an offence.
iii. The owner of vessel or aircraft or the owner of a transit shed is liable to pay for the
reshipment or for destruction of the goods condemned.
iv. The owner or agent of an aircraft or vessel or owner of a transit shed who fails to
meet the costs of reshipment or destruction of any condemned goods commits an
offence.
Goods Reported to be unloaded but not unloaded:
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When goods which are supposed to be unloaded and the goods are not in effect not unloaded
in a transit shed the masters or agent of the aircraft or the vessel shall pay duty on the goods
unless acceptable explanation is given to the proper officer.
Shipwrecked or Damaged in an accident in transit
The master of an aircraft or vessel accidentally forced to land in the East African Community
States must report immediately on the cargo and stores to the nearest Customs officer or
Administrative Officer. The cargo and stores of an abandoned vessel or aircraft will be
subjected to seizure unless the master o agent gives satisfactory explanation to the proper
officer.
In case of loss or wreck of ships or air craft master or agent of aircraft or vessels shall, with all
reasonable speed make report of such aircraft or vessel and its cargo and stores to the nearest
officer or administrative officer. (Section 28)
Manifest, Bill of Lading and Airway Bill
Manifest
A manifest is a list of goods by consignments to be landed at one particular port within the
country. If vessel or aircraft is going to land or call at more than one port a separate manifest
should be prepared.
A manifest is a report presented to Customs Department pertaining to goods being conveyed
by vessel aircraft or vehicle arriving from or departing to a foreign port/airport.
The Customs Agents’ Role in Manifest Section
I. To submit reports of all aircrafts, vessels and vehicles arriving from or leaving for a
foreign port
II. To apply and recheck the rotation/Manifest numbers allocated by Proper Officers in
respect of all vessels, aircrafts and vehicles arriving from or departing to foreign ports
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III. To liase with the officers in case of amending the manifests as applied for by shipping
agents/ Customs agents and submit the reasons advanced in respect of the applications
in satisfaction of the Customs Laws and regulations
IV. To advise the client on the Customs Warehouse Date
V. To ensure that all documents necessary to facilitate compilation of the ships files have
been submitted to Customs
VI. To compile ships files
Manifest information (the minimal)
Ships details (Ship’s name, ship’s tonnage)
Voyage details( departure/destination date, departure/ destination port)
Owner – supplier names
Consignee’s name, address
Description of goods (types, Weight of packages etc)
Marks/numbers of packages,
Arrival of goods by overland route
Arrivals by vehicles
A person in-charge of the a vehicle whether carrying any dutiable or un-dutiable goods which
arrives overland at a frontier of a partner state from outside the East African Community must
adhere to the following procedures before unloading or depositing the vehicle or goods at the
frontier port. Report his/her arrival to the Customs officer stationed at the relevant frontier
port he/she enters the Partner State.
i. Fill in information in prescribed form about the vehicle and the cargo.
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ii. Sign a declarations ;s to the truth of all particulars filled in the form
iii. Fully and immediately answer any relevant questions put to him/her by the proper
of about the vehicle and cargo.
iv. Produce all consignment note.
v. Unless provided otherwise in the Customs laws make due entry of the vehicle and
any such goods conveyed. Section 29 of the EACCMA of 2004 provides that the
goods and the vehicle which are dutiable will not be removed from the Customs
area until after due entry and permission to remove the vehicle and the cargo from
the Customs area. A person who contravenes the above procedure commits an
offence and may render the goods and vehicle liable to forfeiture.
Arrivals by International trains
With arrival by international trains the Customs area is the border railway station. The
stationmaster or other person in-charge of the railway station acts on behalf of the Railway
Company or corporation.
The procedure then is as follows;
i. The station master or any other person in-charge of the railway station on the arrival of
the train at the port submits to the proper officer copies of invoices, consignment notes,
way bills or other documents relating to the goods in wagons, which are subject to
Customs control received by her/him at the station or supposed to be entered at the
station.
ii. The station master or other officer in-charge of the railway station must not allow any
goods to leave the Customs area without the permission of the proper office because
removal of such goods without permission constitutes an offence.
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iii. A station master or other person in-charge of the railway stations hall not, without
written permission of the proper officer deliver to the consignee or other person’s
goods require to be entered at any other station.
iv. An owner or user of a private railway siding shall not receive wagons containing goods
subject to Customs control into a private railway siding unless he/she is granted
permission from the commissioner of Customs and excise.
v. Any person who contravenes these provisions as per section 30 of the EACCMA of 2004
may tender the goods subject into seizure.
Arrivals overland by other means
If a person arrives by land into a Partner State with any goods in his possession shall before
disposing of the goods must follow the following procedure;
i. Report to the proper officer at the nearest point of entry into the Partner of State.
ii. Finish information about the goods in his/her possession in a prescribed form
iii. Declare and sign that all the particulars given in the form are true.
iv. Answer fully and immediately all question asked by the proper officer about the goods.
v. Produce all consignment notes and other documents demanded by the proper officer.
vi. Make entry of such goods unless the Customs laws state otherwise.
vii. Removal of goods received in a Customs area at any place of entry into Partner States is
prohibited except with the permission of the proper officer.
viii. The commissioner however subject to conditions he/she may specify may exempt any
person or a class of persons from the provisions in section 31 of the EACCMA of 2004.
However contravening these provisions may render the goods in question liable to
forfeiture.
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Clearance by pipeline:
Pipelines are means of conveying goods such as petroleum or gas. The owners of the pipelines
are like vessels and aircraft's. The procedure for arrivals of such goods is a follows;
i. The nature and quantities of goods imported or exported through a pipe line shall be
recovered and reported by the operator of the pipeline in a manner the
commissioner may direct.
ii. For the purpose of recording and reporting the commissioner may specify the
apparatus and appliances to be used by the operators of the pipeline at their
expense.
CATEGORIES OF IMPORTS
The role of Customs agents in the process of clearance is to act on behalf the owner of goods.
During importation it is thus necessary for them to understand various regimes under which
goods are imported
The entry when delivered to the proper officer by the owner must have particulars, which are
fully supported by documentary evidence.
From the above, the imports has been divided into four
1. Direct imports
2. Temporary imports
3. Re-imports
4. transfer
IMPORT PROCESS
Under the EAC Customs Management Act, 2004, no goods may be removed from the port area,
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unless they have been duly reported, entered and the proper officer has given authority for
their removal or delivery. (Section 34). This entails us to the first process of importation which is
unloading of goods. Unloading is authenticated by the report presented to the Customs which
is manifest.
After the Manifest has been received, the Importer or his authorized agent may enter goods on
Single Administrative Document.
Entries must be supported by documents showing the value of goods at the place at which they
were purchased together with the freight, insurance and other charges.
The owners or their authorized agents shall enter the whole of the cargo of any aircraft or
vessel, which is unloaded, or to be unloaded either for:
i. Home consumption
ii. Warehousing
iii. Transshipment,
iv. Transit
v. Export Processing Zone
IMPORTATION DOCUMENTS
The owner of the goods is required to produce documentary evidence as a proof of the
declaration made to the Customs. This is according to section 34 (2) of EACCMA. Most of these
documents may be used by other organs with the same merit as Customs as as the frontline
officers, Customs has the mandate to require the owner/agent to them to evidence the
transactions in hand. As the Customs agent, you should appreciate this role of Customs and
facilitate the production of those documents.
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Documents produced will depend on the nature of goods imported, thus an agents is supposed
to have a prior knowledge of the documents required for each type of goods imported. Some of
the documents are as follows;
I.Supplier’s invoice
II.Bill of lading
III.Certificate of origin
IV.Customs declaration of value
V.Freight invoice
VI.Taxpayer/personal identification number
VII.Health certificate
VIII.Parking list
IX.Permits, etc
ASSESSMENT OF DUTIES AND TAXES
The clearance of goods usually involves the lodgment of a Goods declaration with/without
supporting documents (e.g. import/export permit, certificates of origin, etc.) and the payment
of applicable duties and taxes. General release is granted as long as payment has been entered
into the books of the importer. Most Customs administrations allow payment to be deferred
and made on a transaction-by-transaction or periodic (usually monthly) basis, provided the
importer/owner meets certain conditions. Security may be required to guarantee payment.
Under the Kyoto convention it is stated that the National legislation shall define the
circumstances when liability to duties and taxes is incurred or the point in time to be taken into
consideration for the purpose of determining the rates of duties and taxes.
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Such circumstances arise when goods are cleared for home use after their arrival in the
Customs territory or when they are cleared for home use from a free zone or a warehouse.
Similarly other circumstances may also arise in administrations that have export duties and
taxes when the goods are exported from the Customs territory. In addition, goods under a
temporary admission procedure that are not exported within the stipulated time period may
also be subjected to duties and taxes.
The Kyoto convention specifies that National legislation shall specify the point in time used for
determining the rates chargeable, for example, be the time when the goods arrive, the time
when the Goods declaration is lodged, the time when the declaration is accepted by Customs,
the time when the duties and taxes are paid, or the time when the goods are released. Most
administrations choose the time when the declaration is accepted by Customs. Whichever time
is chosen, Customs must ensure that it is specified in national legislation
Determination of value of imported goods liable to ad valorem import duty
For most commodities, the duty is expressed as an ad valorem rate (i.e. a percentage of the
value), while for others, the rate is specific, e.g. so much money per litre. Occasionally, the rate
is expressed as some combination of ad valorem and specific rates. The duties are generally
found in the Customs tariff and, in other legislation also. Various rates of duty may be indicated
for each item.
Once the appropriate rate of duty is established, the basis on which the duty is calculated
(value for duty) must be determined.
Usually this is the price paid or payable. The Agreement on the Implementation of Article VII of
the General Agreement on Tariffs and Trade (GATT), generally known as the Customs Valuation
Code (the Code), is the basis used for most domestic Customs valuation systems. Article VII of
the GATT deals with the issue of valuation for Customs purposes by providing basic Guidelines
for national legislation. The Code is based on the application of the transaction value method
69
for determining the Customs value for imports which is the price the importer and exporter
agree to pay for the particular import, subject to specified adjustments.
Under the EACCMA, Where imported goods are liable to import duty ad valorem, then the
value of such goods shall be determined in accordance with the Fourth Schedule and import
duty shall be paid on that value.
Upon written request, the importer shall be entitled to an explanation in writing from the
proper officer as to how the Customs value of the importer’s goods was determined.
Where, in the course of determining the Customs value of imported goods, it becomes
necessary for the Customs to delay the final determination of such Customs value, the delivery
of the goods shall, at the request of the importer be made: Provided that before granting such
permission the proper officer may require the importer to provide sufficient guarantee in the
form of a surety, a deposit or some other appropriate security as the proper officer may
determine, to secure the ultimate payment of Customs duties for which the goods may be
liable.
The proper officer must satisfy him/herself as to the truth or accuracy of any statement,
document or declaration presented for Customs valuation purposes and nothing in the Fourth
Schedule shall be construed as restricting or calling into question the rights of proper officer to
do so.
In the course of applying or interpreting this section and the provisions of the Fourth Schedule
due regard shall be taken of the decisions, rulings, opinions, guidelines, and interpretations
given by the Directorate, the World Trade Organization or the Customs Cooperation Council.
Decisions and Rulings made by the Custom should be published and should be easily accessible
by clients in the form of directive memoranda, electronic database publications, Internet web
sites, etc.
Duties/taxes under the importation
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Import duty
It is Customs duties and other charges of equivalent effect levied on goods by reason of their
importations. Import duty is paid at the rate in force at the time when the goods liable to such
duty are entered for home consumption
Customs tariff may be
a. Ad-valorem. The duty levied at an ad-valorem rate on the CIF value of goods
imported into the country. It is a percentage of the value of the imported products.
In this context, the duty is levied on the transaction value.
b. Specific. This is the tax levied on the certain properties or goods. For example, the
length of a film or a given amount of money per physical unit like a litter of wine,
c. Combination of the two: This is ad-valorem plus unit of currency per litter.
In practice most tariff are ad valorem. Advalorem rates are more transparent, and are
indexed. They maintain an automatic link between the domestic and foreign prices; ensure
that the most efficient supplier will continue to save the market, ensure that there is no
discrimination, reduce lobbing. Under the ad valorem an increase in value of the goods the
tariff revenue will keep pace with price increase. Specific tariff have the advantage of not
requiring Customs Authority to determine the value of imports when entering the country
and are not sensitive to changes in the value of the goods
ii. Value Added Tax (VAT),
VAT is the amount of tax on output tax over input tax. It is the last consumer of goods or
services who bears the burden.
iii. Excise duties
It is tax levied on imports and certain local produced goods. The excise duty is used as an
instrument to influence consumer behavior. In case of Tanzania, excise duty on imports is
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paid on alcohol, wines, spirits and beers. Each of these specific taxes is charged per unit (e.g.
per pint, per gallon, per liter, etc) and it is not entirely clear who carries the tax burden. The
seller of the products will usually strive to pass on the tax incidence to the purchaser by
raising the price accordingly.
Tax rates /bands on import and its reasons
Customs administrations have an obligation to raise government revenue, provide protection to
domestic producers, provide supply chain security, prevent the importation of prohibited or
restricted goods, and combat the trade of narcotics through the implementation of laws and
regulations that are in line with the World Trade Organization commitments Simplification of
procedures are required in order to facilitate international trade. The harmonized system (HS)
of tariff nomenclature is used as a facilitating tool for the collection of Customs duties and
international trade statistics by WTO member state.
In East Africa there are three tax bands on imports (Zero, ten, and twenty five percent).
i. Zero-rated
Some imports are zero rated so as to encourage investments, agriculture and mining. These
includes agricultural tractors, fertilizers, pure breeding animals, motor vehicles in complete
knocked down (CKD) form, raw materials, capital goods, computers, and supplies imported by
mining companies or their sub-contractors up to the first year of production. Inputs for
horticulture and agriculture, solar equipment and accessories
ii. Ten percent rate
Fully processed inputs for industries and semi-produced inputs are imported at the rate of ten
percent to encourage industrial development. These goods are like motor vehicle spare parts
pen nibs, lubricating greases, etc
iii .Twenty five percent rate
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Final consumer goods are imported at the rate of twenty five percent. The reason behind is to
discourage importation of final consumer goods so as to promote local production as well as
investment.
Note that some goods are charged at the higher rate than twenty five percent with the
intention of protecting environment as well as industries. These goods include all types of
sacks, plastic bags and worn clothes
Computation of Duty
According to section 120 of the EACCMA, 2004 time of entry determines rates of duty. Import
duty therefore is paid at the rate in force at the time when the goods liable to such duty are
entered for home consumption.
Where goods are entered before arrival of the aircraft or vessel, import duty is paid at the rate
in force at the time of arrival of such aircraft of vessel.
Goods are supposed to be entered within 21 days after commencement of discharge in the case
of vehicle on arrival or such further period as may be allowed by the proper officer (section 34
of the EACCMA, 2004). Once goods have been entered they should be removed from the first
point of entry within 14 days
STEPS DO DETERMINE TAX LIABILITY
STEP1: Determination of Customs value:
The Customs value can either be in foreign or local currency. It the duty of the Customs agent
to establish the correct Customs value for computing the correct amount of taxes and duties.
Failure of which it amount to false declaration.
STEP 2
Apply the current exchange rate to convert the Customs value to local currency, if it is in foreign
currency.
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For example: If US$ 100 is the Customs value and UGX 1747.64 is the current exchange rate.
Then the Customs value is $US100 x UGX 1747.64 = UGX 174,764. If exchange rate is quoted in
ASK- BID form then buying rate is used for export and while selling rate is for import
STEP 3
Compute the duties and taxes appropriate for the consignment. In most cases, The following
are the taxes applicable on imported goods.
(a) Import duty
(b) Excise duty
(c) VAT
Given the correct Customs value (CIF) and HS Code the taxes are calculated as followed:
(d) import duty (ID) = ID rate x Customs value(CIF)
(e) Excise duty (ED) = ED value (Customs Value + Import duty) x ED rate
(f) VAT =VAT Value (CIF+ID+ ED) x VAT rate
(g) The total tax liability is the sum of all taxes/duties above. i.e Import duty, excise
duty and VAT
Where the product in question does not attract excise duty then:
VAT = (ID+ CIF) x VAT rate i.e. (ID+ 0 + CIF) x VAT rate.
Incase ID is nil then VAT = CIF x VAT rate i.e. (CIF+0 +0) x VAT rate
NB: This is VAT on imported goods.
Under the Kyoto convention, In order for importers and brokers to be able to establish what
the actual rate is on the determined date, there should be a published list of the rates for
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exchanging foreign currencies to the domestic currency on that particular day in question for
each import transaction. Customs should not be arbitrary in preparing these lists and they
should be market based, i.e., rates could be sought from the central bank of the nation.
Under Sec 122 of the EACCMA 2004, the rate of exchange to be used for determining the
equivalent of a Partner State currency of any foreign currency shall be the selling rate last
notified by the Central Bank of the respective Partner State when an entry is presented to and
accepted by the proper officer.
Useful consideration in determination of duty/tax liability
a) Adjustment for fractions of a dollar.
The Kyoto convention states that National legislation shall specify a minimum value and/or a
minimum amount of duties and taxes below which no duties and taxes will be collected.
With the advent of the next millennium the number of transactions that will occur over the
Internet will increase tremendously in the next few years. Electronic commerce (E-commerce)
has become a very convenient shopping choice for consumers. Normal duty and taxes systems
will still be effective in the collection of the relevant duties and taxes on these transactions as
these purchases will still entail the physical delivery of these goods at the border. Of course, the
number of low value shipments and deliveries by couriers will increase along with the number
of these electronic transactions. Customs must ensure that they are ready to respond to this
flourishing trend.
However, the collection and payment of duties and taxes should not be required for negligible
amounts of revenue that incur costly paperwork, both for the Customs administration and the
importer/exporter. Customs administrations must establish and specify in national legislation
amounts below which duties and taxes need not be collected or paid. Under the EACCMA 2004,
where the total amount of duty computed with reference to any one Customs document-
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is equivalent to1.5 dollars or less, no duty shall be collected;
exceeds the equivalent of 1.5 dollars and includes a fraction of a dollar the fraction shall
be treated as a complete dollar and duty shall be collected
b) Computation of Duty on gross weight of package.
Consider a situation where goods liable to duty according to weight are imported in any
package, and the goods are intended for sale, or are normally sold retail, in the package then, if
the package-
is not marked or labelled with the net weight of the contents; or
is not commonly sold as containing, or as reputed to contain, a specific quantity or
weight, and in either such case,
the owner of the goods is unable to satisfy the proper officer of the correct net weight
thereof,
Then the goods shall be liable to duty according to the gross weight of such package and its
contents
c) Computation of Duty on reputed quantity.
Consider another situation where goods liable to a specific duty are imported in any package
and the goods are intended for sale or are normally sold retail, in the package, then, if the
package-
is marked or labelled as containing a specific quantity of such goods; or
is commonly sold as containing, or as reputed to contain a specific quantity of the
goods,
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Then the package shall be deemed to contain not less than such specific quantity.
d) Allowance for tare
The Commissioner may fix the allowance for tare that may be granted and the conditions under
which any such allowance may be granted, for the purpose of the computation of the duty.
Depreciation of motor vehicles is a good example of allowance of tare allowed by the
commissioner for Customs under section 128
e) Duty on package
Goods may be imported or exported in any package which, in certain cases in the opinion of the
Commissioner-
is not the normal or proper package of the goods; or
is designed for use, subsequently to such importation or exportation, other than as a
package for any goods of the same or a similar nature,
The package shall be liable to duty as if it were a separate article and shall, for all the purposes
of the Customs laws be deemed to be a separate article.(Sec 129).
Recovery of duty
Under the Kyoto convention the National legislation shall specify the period within which the
Customs may take legal action to collect duties and taxes not paid by the due date
When duties and taxes are not paid by the due date, it may be necessary for Customs
administrations to take legal action to collect the duties and taxes. The period within which
they may do so must be indicated in national legislation. The period may vary, depending on
the reasons for the late payment. For example, there could be harsher time limits if a false
declaration has been submitted
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a) Recovery of duty by distress 130.
The Kyoto convention states that it is necessary that national legislation specify the person(s)
responsible for the payment of duties and taxes. It should stipulate whether it is the importer,
agent, broker, or transporter who is accountable, to provide clarity for Customs and the trading
community. In some instances two or more persons can be held jointly responsible.
Under the EACCMA 2004 where any goods are liable to duty, then such duty shall constitute a
civil debt due to a Partner State and be charged on the goods in respect of which the duty is
payable; and such duty shall be payable by the owner of the goods and may, without prejudice
to any other means of recovery, be recovered summarily by legal proceedings brought by the
Partner State.
Goods under Customs control which belong to any person from whom duty is due, and any
goods afterwards imported or entered for export by that person, shall be subject to a lien for
such debt and may be detained by the Partner State until such duty is paid and the claim of the
relevant Partner State shall have priority over the claims of whatever nature of any other
person upon the goods and the goods may be sold to meet the duty due if the duty is not paid
within two months after the goods are detained.
Unpaid duty
Where any duty payable to a Partner State as penalty under this Act by a person is not paid one
month after the due date of payment, the Commissioner may authorise distress to be levied
upon the following items-
goods, chattels and effects;
material for manufacturing or plant of a factory;
premises, vehicles or other property;
animals,
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The above will be withheld if they are in the possession or custody of-
that person;
his or her agent; or
any other person on his or her behalf.
A person authorised to distrain may, if necessary break open any building or place during the
daytime with the assistance of a police officer or other person who can lawfully give assistance.
A person authorized to distrain shall keep the item distrained at the expense of the owner for
fourteen days from the date of distress or until the amount due together with the costs and any
other charges are paid in full before the end of the fourteen days and if payment is not effected
after that period the person authorized to distrain may sell the item.
Where an item is sold the proceeds of the sale shall be applied as follows-
payment of the tax due to the relevant Partner State ;
payment of any fine imposed for non-payment of the tax, if any;
payment of the expenses or other charges for levying of distress and for the sale.
The balance of the proceeds shall be paid to the owner, on application to the Commissioner
within twelve months from the date of the sale of the item.
b) Recovery of duty by Agency notices.
The Commissioner may, by written notice addressed to any person (in this section called the
agent) appoint that person to be the agent of another person (in this section called the
principal) for the purposes of collecting duty due under this Act from the principal where the
Commissioner is satisfied that the agent—
owes or is about to pay money to the principal;
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holds money for or on account of the principal;
holds money on account or some other person for payment to the principal;
has authority from some other person to pay money to the principal;
holds goods belonging to the principal which are liable to duty and on which duty has
not been paid, and the
Commissioner shall in the notice specify the amount of duty to be collected by the agent, which
amount shall not exceed the amount, or value of the goods, held or owing by the agent for or
to the principal.
The Commissioner may, by notice in writing, require any person to furnish the Commissioner
within thirty days from the date of service of the notice, with return showing details of any
moneys or goods which may be held by that person from whom duty is due under this Act.
This section shall apply to an agent appointed as though he or she were a duly authorized agent
acting on behalf of the owner.
Notification to the Commissioner for non compliance
An agent who is appointed under and who claims to be, or to have become unable to comply
with the notice for any reason shall notify the Commissioner accordingly in writing stating the
reasons for his or her inability, and the Commissioner may accept, amend or reject the
notification as the Commissioner may deem fit.
Consequences for non-collection and remittance of duty
Where an agent fails to remit any amount of duty specified in the notice addressed to him or
her within thirty days of the date of service of the notice on him or her, or, of the date on which
any moneys came into his or her hands or become due by him or her to his or her principal,
whichever is the earlier and he or she has not complied with the provisions of this Act relating
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to the collection and recovery of duty shall apply as if it were duty due and payable by him or
her from the date when such duty should have been paid to the Commissioner.
An agent who has made payment of duty under this section shall for all purposes be deemed to
have acted therein with the authority of his or her principal and of all other persons concerned,
and shall be indemnified in respect of that payment against any proceedings civil or criminal
and all process, judicial or extra judicial, notwithstanding any provisions to the contrary in any
written law, contract or agreement.
Offence and fine for false statement
A person who, in giving a notification, wilfully makes any false or misleading statement, or
wilfully conceals any material fact, commits an offence and shall be liable on conviction to a fine
not exceeding two thousand five hundred dollars or to imprisonment for a term of not more
than three years or to both. (Sec 131) of the East African Community Customs Management
Act, 2004
c) Security on property for unpaid duty
If the owner of land or buildings situated in any Partner State, fails to pay any duty or other
sum of money due and payable under this Act, the Commissioner may by notice in writing
inform that person of his or her intention to apply to the Registrar of Lands for the land or
buildings to be the subject of security for the duty or other sum of an amount specified in the
notice.
If a person on whom a notice has been served under this section fails to pay the whole of the
amount specified in the notice within thirty days of the date of service thereof, the
Commissioner may by notice in writing direct the Registrar of Lands that the land or buildings,
to the extent of the interest of that person therein, be the subject of security for duty or other
sum of a specified amount, and the Registrar shall, without fee, register the direction as if it
were a mortgage over or charge on the land or buildings and thereupon the registration shall,
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subject to any prior mortgage or charge, operate while it subsists in all respects as a legal
mortgage or charge to secure the amount payable.
The Commissioner shall, upon the payment of the whole of the amount by notice in writing to
the Registrar of Lands, cancel the direction made under that subsection and the Registrar shall,
without fee, record the cancellation. (sec 132)
Effects of obligation to pay duty.
Where any obligation has been incurred, whether by bond or otherwise, for the payment of any
duty, then such obligation shall be deemed to be an obligation to pay all duties which are or
may become payable or recoverable under the provisions of this Act.
Where the Commissioner is satisfied that the whole or any part of duty or tax due under this
Act from any person cannot be effectively recovered by reason of impossibility, or undue
difficulty or excessive cost of recovery, he or she shall notify the Council in writing, who shall
consider the matter, and with the approval of the East African Legislative Assembly, remit or
write off in whole or in part the duty. (sec 133)
Effect of alteration in classification of goods.
Where any practice or method of procedure of the Customs approved by the Commissioner or
arising from a ruling by the Directorate or the Customs Co-operation Council relating to the
classification or enumeration of any goods for the purposes of the liability to duty is altered
with the result that less duty is thereafter charged on goods of the same class or description, no
person shall become entitled to any refund of any duty paid before such alteration took effect.
(sec134) Of The East African Community Customs Management Act, 2004 .
Short levy or erroneous refund.
Under the Kyoto convention If the Customs find that errors in the Goods declaration or in the
assessment of the duties and taxes will cause or have caused the collection or recovery of an
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amount of duties and taxes less than that legally chargeable, they shall correct the errors and
collect the amount underpaid. However, if the amount involved is less than the minimum
amount specified in national legislation, the Customs shall not collect or recover that amount.
Under the EACCMA 2004, where any duty has been short levied or erroneously refunded, then
the person who should have paid the amount short levied or to whom the refund has
erroneously been made shall, on demand by the proper officer, pay the amount short levied or
repay the amount erroneously refunded, as the case may be; and any such amount may be
recovered as if it were duty to which the goods in relation to which the amount was short
levied or erroneously refunded, as the case may be, were liable.
Under the Kyoto convention the National legislation shall determine the rate of interest
chargeable on amounts of duties and taxes that have not been paid by the due date and the
conditions of application of such interest.
Also, late accounting penalties may be levied in certain circumstances. The penalties should be
applied for each transaction not accounted for in the time specified. The application of these
penalties could vary depending upon the value of the shipment, e.g. higher penalties or shorter
time limits for high value shipments. Importers and brokers should be made aware of any
overdue releases by means of a daily report issued by Customs, such as an Outstanding
Transaction Status Client Report.
Importers and brokers, who, notwithstanding the levying of the initial penalty, still delay
accounting for the payment of duties and taxes, may be issued with a notice as a final reminder
to comply within a specified time. Failure to do so may subject the importer or broker to an
additional penalty. Also, in the case of deferred payment regimes, a client who continues to
delay in accounting for the payment of duties and taxes may loose future deferred payment
privileges.
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Under the EACCMA 2004, Where a demand is made for any amount the amount shall be
deemed to be due from the person liable to pay it on the date on which the demand note is
served upon him or her, and if payment is not made within thirty days of the date of such
service, or such further period as the Commissioner may allow, a further duty of a sum equal to
five percent of the amount demanded shall be due and payable by that person by way of a
penalty and a subsequent penalty of two percent for each month in which he or she defaults.
The proper officer shall not make any demand after five years from the date of the short levy or
erroneous refund, as the case may be, unless the short levy or erroneous refund had been
caused by fraud on the part of the person who should have paid the amount short levied or to
whom the refund was erroneously made, as the case may be. (Sec135) Of The East African
Community Customs Management Act, 2004
Samples may be taken without immediate payment of duty.
The proper officer may, subject to such conditions as he or she may impose, permit the owner
of any goods subject to Customs control to take samples of the goods without payment of the
duty thereon at the times the samples are taken.( Sec 136) of the EACCMA 2004
CUSTOMS DECLARATION
MEANING AND PURPOSE OF CUSTOMS DECLARATION
Customs declaration means the entry of cargo in Customs prescribed forms furnishing full
particulars of the goods. It is the process of filling the Customs documents as stipulated by the
Customs laws/regulation and any other practicing guidelines
The purposes of cargo declaration are as follows:-
a. Tax assessment
b. Tax payments or arrange for payments of any relevant taxes and dues
c. Determination of bond in force (BIF)
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d. To process the documents across the various institutions timely,
e. Obtain genuine and authentic clearance from various institution involved in clearing
process
LEGAL PROVISIONS FOR CUSTOMS DECLARATION
In accordance with section 34 of EACCMA, goods are to be entered within 21 days from the
date of discharge. However, the commissioner may allow goods to be entered prior to arrivals
of the importing aircrafts or vessels.
Goods deemed to be entered
It is essential for the person acting as an agent to understand the provision of laws under which
duty liability is determined. Duty becomes liable when goods arrive within the boundary of the
Partner States but first the goods need to be entered. Under the EACCMA, 2004 goods shall be
deemed to be entered when the entry in the prescribed manner is made and lodged by the
owner and any duty due or deposit required under the EACCM Act in respect of the goods has
been paid, or security has been paid, or security has been given for compliance with the EACCM
Act. When this condition is satisfied and goods are declared for use in the Partner States, then
the goods are deemed to be entered for home consumption.
Time of importation
Time of importation shall be deemed to be time at which the goods come within the
boundaries of the partner state.
Time of entry determines rate of duty
Duties must be paid at the rate in force at the time when the goods liable to such duty are
entered for home consumption. That is the rate applicable at the time the entry is passed, and
taxes paid. (Section 120) of the EACCMA2004
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Importation by post
In case of importation by post, time of entry is deemed to be the time, when the duty thereon
is assessed by the proper officer, except in the case where actual entry is required.
Importation overland
In case of Importation overland time of entry of such goods for home consumption shall be
deemed to be time when import duty thereon is paid.
OBLIGATION OF DECLARANTS
a. Capturing of Customs entries electronically
b. Avail proper accompanying documents to Customs
c. Respond to queries from customs related to declarations
d. Assessment of proper taxes
e. Pay appropriate taxes in time
f. Facilitating Customs examinations of goods
g. Delivery of goods to the owner
IDENTIFY VARIOUS CUSTOMS REGIMES
Customs regimes are given numerical codes that identify the type of Customs Transactions for
which declarations are made. However, the codes have alphabetical character prefixes which
may differ from one Partner State to another.
The following are the different types of Customs Regimes:-
1. Exports 1
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2. Temporary Exports 2
3. Re-Exports 3
4. Imports for home use 4
5. Temporary Imports 5
6. Re-imports for home use 4
7. Warehousing 7
8. Transit 8
9. Other procedures 9
CUSTOMS PROCEDURE CODES
These are the extended digit codes however; the additional codes will be dealt with under the
different electronic data processing systems of the Partner States.
i) Domestic Exports with CPC for the under listed Customs transactions:-
Direct Exports of home produced goods
Direct Exports of home produced goods incorporating imported materials
Direct Exports of home produced goods under the Export promotion program
Direct exports of shipstores
ii) Temporary exports for the underlisted Customs transactions:
Temporary exports for return in an unaltered state
Temporary exports for repairs
Temporary exports for outward processing
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iii) Re-exports with the underlisted Customs transactions:-
Ex-warehouse export
Ex-warehouse export for shipstores
Ex-MUB export
Ex-EPZ export
Re-exports after temporary importation for repair
Re-exports after temporary importation
Re-exports under drawback
iv) Imports for home use with the underlisted Customs transactions:-
Imports for home use duty paid
Provisional Import Declaration
Release of perishables or other goods
Imports for home use tax free by tariff
Ex-warehouse home use duty paid
Ex-warehouse home use duty paid for regional market
Ex-warehouse home use tax free
Ex-warehouse home use duty exempt under 3rd schedule of the EACCMA, 2004
Home use after temporary importation in unaltered state
Home use after temporary importation for repair
EX-EPZ home use
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Ex-MUB home use
Imports for home use duty exempt under 3rd schedule to the EACCMA, 2004
v) Temporary imports for the underlisted Customs transactions:-
Temporary importation for return in unaltered state
Temporary importation for repair
vi) Re-imports for home use for the underlisted Customs transactions:-
Re-importation of goods after temporary export for renovation or repair, where repair
charge has been raised
Re-importation of goods after temporary export for renovation or repair, where no repair
charge has been raised
Re-importation of goods after temporary export , where the goods have substantially
changed their character on tariff classification
Re-importation of rejected or returned exports
vii) Warehousing for underlisted Customs transactions:-
Warehousing of goods
Warehousing of goods for regional market
Warehousing of goods for crude petroleum products
Ex-warehouse removal
Entry into an MUB from foreign
Entry into an EPZ from foreign
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Entry into an MUB of home produced goods
Entry into EPZ of home produced goods
Transfer from one MUB to another
Transfer from one EPZ to another
viii)Transit for the underlisted Customs transactions:-
Transit inward
Transit outward
Road Customs transit manifest
ix) Other Customs procedures for the underlisted transactions:-
Accompanied baggage
Unaccompanied baggage
Transshipment
Post parcels
Courier AWB
VERIFICATION AND RELEASE OF IMPORTED GOODS
This is the physical examination of goods entered in accordance with section 34 of the EACCMA,
2004.
The verification is to ascertain that the declaration made is correct for purposes of tax
collection as provided for under section 41 of the EACCMA, 2004.
The verification should target to confirm among others the following:-
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Description of the goods vis-à-vis the declaration made
Declaration of value
Declaration on quantity
Declaration on type
Declaration on tariff code etc.
The verification findings commonly referred to “Examination Account” should be captured
online by the Customs examination officers to facilitate clearance and release of goods.
Release of goods
Release of goods means system authorization of final clearance of goods and the subsequent
physical removal of goods for delivery from Customs area to the importer.
This is usually done upon payment of duties or execution of sufficient security bond to secure
the taxes payable.
Once the goods have been released in the respective Customs system, the cargo is delivered to
the owner by the clearing agent and this may then be followed with the process of bond
cancellation for bonded cargo.
Direct Release of the goods after payment of taxes
Goods declared shall be released as soon as the Customs have examined them or decided not
to examine them, provided that:
i. no offence has been found;
ii. the import or export licence or any other documents required have been acquired;
iii. all permits relating to the procedure concerned have been acquired; and
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iv. any duties and taxes have been paid or that appropriate action has been taken to
ensure their collection.
Once Customs is satisfied that the physical goods are in compliance with the basic requirements
of the procedure to be applied, the goods should be released to the declarant as soon as
possible.
Release of Goods Under bond
Goods may be released to the owner before payment of taxes by execution of bond security.
Normally, the bond security will cover the total revenue liability of the goods.
CASE STUDY:
1. Mr. Banjumni arrives in Tanzania by road at Tunuma Border accompanie by his wife
Saadie and two children using a Toyota Hiace with Zambia registration. What Customs
procedure will Mr.Banjumnin and family adhere to arrival, if they do not expect to
return to Zambia
2. Mr. Akber is the owner of Maski Drink Ltd. He engages more with the distribution of
various drinks. Recently he scored a deal and become the country distruvutor of STOUT
beerfrom UK. Being unfamiliar with Customs procedure, Mr. Akber appoints you as his
Customs Agent. On your part you know very well that, as far as VAT is concerned the
product is a taxable supply at a standard rate of 18%, 25% Import Duty and 6% exercise
duty of 60%. The first consignment was 20 containers each having 3200 cartons of beer.
The parking list shows that one (1) carton has 16 cans of 270ml each. The contract price
charged to Mr. Akber is $ 1.65/ lit (C & F). Freight charge is $1,500 while insurance paid
for the consignment was $2,000.
Required
a) Establish the total quantity in litres imported by Mr. Akber
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b) Compute the customs value in local currency
c) Compute import duty, exercise duty and VAT to be paid by Mr. Akber if the
exchange rate on the date of entry was shs .1,210 per one USD.
3. Miss Amina of Bujumbura imports two motor vehicles on June 11, 2009.
The detail of each motor vehicle is as depicted in the following table:
Toyota CALDINA
Toyota CARINA
1 Purchasing Price $ 1800 $ 2400
2 Year of Manufacturer 2000 2001
3 Engine Capacity 1950 1648
4 Transmission Auto Manual
5 Inspection Fees $200 $200
6 Other charges in Japan $100 $ 100
The two motor vehicles were imported in a 1X 20’ PCIU 967511-4. The transport charges for the container were as follows:
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Amount
1 From Yard to Port (Japan) $250
2 From Port to Dar es Salaam $3200
3 Dar es Salaam to Bujumbura Shs 1,000,000
4 Insurance cover $ 300
5 Port Charges at Japan $ 150
REQUIRED
Determine the Import duty, Excise Duty (if any), VAT and total tax payable for each vehicle
given the following information;
i. Import Duty rate is 25%
ii. Excise Duty Charged for motor vehicle manufactured more than 10 years is 20%
iii. Excise duty is charged for motor vehicle of more than 1500 C.C. is 5%
iv. The cost charged for container is distributed equally to the vehicle
v. The current exchange rate is applicable.
EXPORT PROCEDURES
Objectives:
By the end of this topic, trainees shall be able to:
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i. Demonstrate understanding of categories of export and the export process
ii. Apply the procedures for outward clearance of means of conveyance
iii. Comply with conditions for exports and export documentation
iv. Apply procedures under Export Promotion Schemes
CATEGORIES OF EXPORTS
Exportation means the movement of goods from one country to another. In accordance with
the EACCMA, 2004 S.2 (1), the term export means to take or cause to be taken out of a Partner
State. There are three types of exportations, namely outright exportation, temporary
exportation and re-exportation. Transit and Transshipment are also considered as exports.
Outright exportation
This covers goods which are exported out of the country with the intention to remain there
permanently or to be consumed in those foreign countries e.g manufactured goods like sugar,
coffee, tea, nuts etc.
Temporary exportation
This covers goods which are exported out of the country for special purposes and will be
brought back e.g. goods exported for renovation, exhibition or entertainment and declared on
the respective procedure code whereby the re-importation certificate is issued as confirmation
that the goods have left the country and may be re-imported.
Re–exportation
Re–exportation is the Customs procedure whereby goods that were imported for temporary
use or purpose are to be exported after the end of the intended activities, examples are goods
for exhibition or entertainment. Such goods have to be entered properly and be secured with a
Customs security bond.
Re-exportation is normally checked against the preceding entry to ensure that the re-export
entry match/tally with the previously temporary importation entry.
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EXPORT PROCESS
For goods to be exported they need to be entered for export. Once the Customs agent makes
an entry then goods are to be physically examined before being loaded for export. The export
process is terminated i.e comes to an end, when vessel carrying goods for export leave the
boundary of Partner States to foreign destination.
EXPORT DOCUMENTATION AND DECLARATION
Before export of goods, the owner of the goods is expected to formalize all the procedure for
exports. These include the following;
(i) has to obtain an export license upon the meeting the business requirements.
(ii) All goods to be exported should be loaded onto any aircraft or vessel departing to a
foreign part within the boundaries of the port.
(iii) The goods to be loaded for export should be entered on the export entry (SAD) in
quadruplicate copies and the owner shall be required to furnish full particulars,
supported by documentary evidences. i.e. Commercial invoices, permits, receipts etc
that relate to the goods for export.
(iv) The entry must show the following details:
a. Name and address of exporter.
b. Name and address of importer.
c. Name and address of Customs agent.
d. Country of destination.
e. Commodity code and description of goods.
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f. Value of goods and total amount of duty payable.
g. Marks and number of transporting vessel, aircraft, or vehicle.
h. Total number of packages
i. All other information as appeared in SAD
(v) The goods to be exported are grouped into three categories of which are to be
entered separately according to Customs procedure codes:- (CPC) as shown below:
Exports of domestic goods free of duty.
Exports of domestic goods liable to export duty.
Re-exportation of goods not under drawback.
Other trade related documents are also important as they may be required when goods arrives
at the intended destination. These include certificate of origin, health certificate, certificate
from Standard Bureau etc
CONDITIONS FOR EXPORTS
Loading of goods on any aircraft or vessel or vehicle departing to a foreign should be done
subject to the permission of the proper officer or conditions as he/she may impose.
The following conditions must be fulfilled before loading any aircraft or vessel:-
(a) Goods shall only be put on board any aircraft or vessel when they are dully entered.
(b) Goods shall only be put on board any air craft or vessel within the time prescribed by
the Commissioner.
(c) Goods shall only be put on board any aircraft or vessel from an approved place of
loading or from a sufferance wharf.
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(d) Goods shall only be put on board any aircraft or vessel after an entry outward of such
vessel has been made.
(e) Goods shall be put on board any vessel to be loaded on to any aircraft or other vessel
only when such goods may be directly put on board such aircraft or other vessel.
(f) Goods put on board any vessel to be loaded on to any aircraft or other vessel within
the limits of the port.
The agent should be aware that, no goods that have been put on board any aircraft or vessel for
export should be discharged at any place within the Partner States without a written permission
of the proper officer. This is an offence as per the provision of EACCM Act.
VERIFICATION AND RELEASE OF GOODS FOR EXPORT
The Document Processing unit may, before processing of export entries refer them to the
Customs port of loading or entry for any necessary clarifications. The Unit shall ensure that the
declarations in the registered entry conform to the verification reports.
In case of restricted exports, they must be covered by the appropriate export permits while for
goods on which drawback is to be claimed, the particulars on the entry shall be compared with
the particulars of the respective import entry for conformity.
There should be proper manning of entry gates by Customs enforcement Officers, to confirm
the correct verification report and container details before allowing export containers into the
port.
All exports are subject to Customs control, hence a Customs Officer has the power to examine
such goods, but any other person has to seek for authority from the Commissioner of Customs
to intervene in any way on such goods. Goods shall be examined at the risk and expense of the
owner, thus the owner is required to unpack, sort, pile, or otherwise prepare the goods for
examination. Exports are referred for physical examination or scanning before they are
exported. Examining Officers must ensure that the supporting documents have correct
information in respect to quantity, weight and value.
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Upon satisfaction that the declaration is correct in every aspect, an examination account is to
be put in the Customs system (ASYCUDA/SIMBA) for the export entry to be passed and if liable
to any export duty its then collected. If duty is advalorem then The value of goods for export
shall include-
the cost of the goods;
transport and all other charges up to the time of delivery of the goods on board the
exporting aircraft or vessel, or at the place of exit from the Partner State.
If the cost of the goods cannot be determined under the above, the cost of similar or
identical goods exported from a Partner State at about or the same time shall apply.
After payment of export duty if any, export entries shall be referred to the officer in-charge of
the export station for the purpose of allocating officers to witness loading and sealing of
containers at the exporters premises.
After the verification process, all packages in the consignment are to be sealed with Customs
tamperproof seals before leaving the manufacturer’s premises.
Exportation of Bonded Goods:-
At the Customs port of exportation, the Customs Officer has to confirm exportation by
endorsing the hard copies of the export entry with export certification. Similar certification of
shipment account is to be posted against the respective customs entry.
This account together with the Certificate of Export will be used by Security Bonds
Management office for bond cancellation, or at the border, in the case of automatic acquittal of
the bond.
Agent has to make sure that goods loaded for export are loaded in presence of customs officer
as no export cargo shall be received at Export Stations without evidence that it was loaded
under Customs supervision. At export stations, releasing Officers have to check and satisfy
themselves that seals have not been tampered with.
If seals are interfered with, 100% physical verification must be done before release for export.
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At all times the releasing Officers have to endorse their findings in form of an examination
account.
Once satisfied that the cargo is correctly entered as per inspection results its released with an
online Release Order and issue a certificate of export.
Certificate of Exports
A Certificate of export is issued upon confirmation of exportation by the exporter/Clearing
agent presenting endorsed copy of the original bill of lading from the shipping line confirming
that the goods were exported.
The proper Officer has to confirm both the information on the Bill of Lading and the Customs
entry.
If the information matches/tallies then the Officer issues a certificate of export to allow the
clearing agent cancel his security bond incase of bonded goods.
Certificates of Origin
Certificates of Origin are issued to facilitate privileged Customs treatment of goods exported
from a Partner State to countries with which the Community has preferential trading
agreements.
These Certificates of Origin are issued in respect of qualifying goods upon payment of the
appropriate fees.
The certification of Certificate of Origin is done by Officers specially appointed for that purpose
and whose stamps and signatures are registered and circulated to the respective trading
partners/blocs.
Where the provisions of the trade agreement allow retrospective issuance of Certificates of
Origin in respect of goods exported without such a certificate, then the certificate may be
issued provided all the documentation is in order.
A Certificate of Origin can only be issued by the Officer authorised to sign it after confirmation
of exit of goods and It cannot be substituted by any other document, except where the export
destination or Consignee has changed and this should be done before the goods are exported
and approval is granted by the Officer in-charge of administering the rules of origin.
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Trade agreements provide for co-operation between trading partners in the investigation of
fraudulent claims on certificates of origin. Accordingly, requests made for assistance should be
fast tracked with thorough investigations.
The designated Officer should ensure that requests for assistance under the terms of a trade
agreement are expedited and that officers of sufficient seniority and experience are appointed
to undertake the investigations. The Investigation findings are to be conveyed to the foreign
Customs Authorities through the office of the Commissioner of Customs as a matter of
acceptable operational protocol i.e (exchange or information.
PROCEDURES FOR OUTWARD CLEARANCE OF MEANS OF CONVEYANCE
The master or agent of every aircraft/vessel or vehicle in which any goods are to be exported,
should make entry outwards to the proper officer on the Customs prescribed form. Such entry
outwards should only be made after the whole of the cargo reported for discharge has been
discharged.
Goods which have been put on board any aircraft or vessel for export, or for use as stores, or as
passengers’ baggage, should not be discharged at any place within the Partner States, except by
written permission of the proper officer and in accordance with such conditions as he or she
may impose.
For the case of a vehicle, A person in charge of a vehicle or not departing from a partner state,
whether or not such vehicle is conveying goods, should depart through the appointed port
under Section 11 and before departing he/she should do the following:-
(a) Report his/her intended departure to Customs officer.
(b) Furnish on the prescribed forms all information related to the vehicle and goods for
exports.
(c) Fully and immediately answer all relevant questions put to him/her by the proper
officer.
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(d) Produce any consignment notes or any relevant documents demanded by the
proper officer.
(e) Make due entry of the vehicle and goods for exports.
EXPORT PROMOTION SCHEMES
Export promotion schemes are schemes designed to promote production of goods for export.
Partner States have agreed in the protocol for the establishment of customs union to engage in
some of the export promotion schemes with a motive to promote trade. Some of the schemes
are Manufacturing Under bond, Export processing zones or special economic zones,
Inward/Outward Processing.
MANUFACTURING UNDER BOND
Manufacturing under Bond is a facility extended to manufacturers to import plant, machinery,
equipment and raw materials tax free, for exclusive use in the manufacture of goods for export
The EACCMA empowers the Commissioner of Customs to license any person who wishes to
manufacture goods under bond subject to condition he/she may impose.
Conditions for licensing
i. Application for a licence to be made in a prescribed form specifying the purpose for
which each building, room, place or item of plant is to be used.
ii. A security to be furnished as the Commissioner may think appropriate.
iii. Suitable office accommodation to be provided to Customs officer.
iv. Premises for manufacturing process must be approved by commissioner as to suitability
and safety. The Customs officer can inspect the premises to that effect.
v. A prescribed annual licensing fee to be paid.
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vi. No alterations to be made on the premises without prior permission of the
commissioner
vii. violation of the of the terms or conditions for licensing is an offence and one who
commits such offence shall be liable on conviction to a fine not exceeding five thousand
dollars or to imprisonment for a term not exceeding three years or to both; and any
goods in respect to which an offence has been committed shall be liable to forfeiture.
Responsibility of a bonded factory Licensee
i. Make an entry, prior to commencement of manufacturing under bond, in the prescribed
form specifying the purpose for which each building, room, place or item of plant is to
be used.
ii. Provide office accommodation and scales, measures and other facilities materials or just
weights, for examining and taking account of goods and for securing them as the proper
officer may reasonably require;
iii. Keep a record of all types of plant, machinery and equipment, raw materials and goods
manufactured in the factory and keep that record at all times available for examination
by the proper officer;
iv. Provide all necessary labour and materials for the storing, examining, packing, marking,
coopering, weighing and taking stock of the goods in the factory whenever the proper
officer so requires.
v. Non compliance with set conditions may result into suspension, revocation or refusal to
issue a license by the Commissioner
EXPORT PROCESSING ZONES
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EPZs are specialized areas in the EAC Customs Union where imported goods are offered duty
free treatment for purposes of processing or manufacturing for export under given
conditions.
According to the EACCMA an export Processing Zone is a designated part of the Customs
territory where any goods introduced are generally regarded for the purpose of import
duties and taxes as being outside the Customs territory but are restricted by controlled
excess and to which benefits provided under the Regulations made under Article 29 of the
East African Community Customs Union Protocol.
Application, Licensing and approval of EPZ
Applications for investment in any EPZ, must be made in the first instant to the
relevant Authority.
For operational purposes, export processing zones are considered to be foreign
territories for the purposes of the application of the Customs and Excise Act.
However, the removal of goods from port to an EPZ enterprise must be covered by a
bond. Any goods leaving the Zone into the Partner State must be considered as
imports and are subject to the importation rule and duty. Local goods supplied to as
EPZ enterprises are considered as exports and must comply with all conditions
governing such exports.
The Objectives of the EPZ
i. To attract export led industrialization for diversification and enhancement of
competitiveness.
ii. To earn more foreign currencies.
iii. To increase employment and develop the capacity of skilled labour.
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iv. To benefit from technology transfer and
v. To process more local materials for export.
Obligations of EPZ investors
i. To produce for Export markets.
ii. To provide details of all raw materials received at the site of manufacturing during
the previous quarter of the year.
iii. To produce semi-finished or finished products including by products exported or
off-loaded in the Customs territory.
iv. To provide details of waste-products and how they are disposed.
v. To provide accurate records of losses through evaporation, spillage, leakage or
other causes.
vi. To produce balances of law materials and semi finished products including stocks
of by products at the premises of manufacture and transit.
vii. To facilitate inspections and examination by the Customs.
viii.To take all measures to reduce the fears of task cheating in a way that Tanzania
Investment Centre cannot provide.
Treatment of Goods Deposited in EPZ
Section 191(2) required all goods imported for EPZ to be entered in SBE together with cargo
receipt and lending account book and a bond in the form of EPZRI shall be executed. The goods
must be destined in sealed containers, boxes or vehicles except in case of exceptionally bulky
loads. Goods imported to EPZ from the custom territory must be treated in the same manner
as if such goods were
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DUTY REMISSION
Section 140. (1) Of the East African Community Customs Management Act 2004 provides
that The Council may grant remission of duty on goods imported for the manufacture of
goods in a Partner State.
The Council may prescribe regulations on the general administration of the duty remission
under this section.
The manufacturer, and the approved quantity, of the goods with respect to which remission
is granted under this section shall be published by the Council in the Gazette.
Section 141of the same Act provides that where any goods are lost or destroyed by accident
Either on board any aircraft or vessel; or in removing, loading, unloading, or receiving them
into, or delivering them from, any Customs area or warehouse; or in any Customs area or
warehouse, before the goods are delivered out of Customs control to the owner, then, if the
Commissioner is satisfied that such goods have not been and will not be consumed in a
Partner State, the Commissioner may remit the duty payable in respect of the goods.
DUTY DRAW BACK
Most administrations have in place procedures which help promote export trade and are in
the interest of the national economy. Drawback is one such procedure. This procedure
grants repayment of import duties and taxes paid on:
Goods used in the processing or manufacture of exported products,
Materials contained in the goods or consumed in the manufacture of the exported
products, or
Imported goods re-exported in the same state.
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The repayment may be partial or total. Drawback is one of the several procedures which
provides relief from duties and taxes for the manufacture of exported goods and is
extensively used. Some administrations may allow it in combination with other procedures
like inward processing, temporary admission or Customs warehouses.
“Drawback procedure” means the Customs procedure which, when goods are exported,
provides for a repayment (total or partial) to be made in respect of the import duties and
taxes charged on the goods, or on materials contained in them or consumed in their
production.
Economic benefits
The imported goods are used to process or manufacture goods for export by the domestic
industries. The use of domestic labour and processing or manufacturing of goods add value
to the finished goods for export. The repayment of duties and taxes paid on the imported
goods enables domestic industries to offer the goods at competitive prices on international
markets.
Some administrations restrict the categories of goods qualifying for drawback. This is usually
an economic consideration and is designed to encourage the use of equivalents of imported
goods which are produced within the country by domestic industry.
Where it may be difficult to identify certain exported goods as being those that were
originally imported or those resulting from the processing of imported goods,
administrations should allow the exportation of equivalent goods (e.g. compensating goods
equivalent in all respects to the goods which should normally have been re-exported) and
apply the drawback procedure to repay import duties and taxes where goods or materials
are replaced by equivalent goods or materials. This is a practice which is recommended in
this Chapter.
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Countries wishing to encourage trade through free zones in their territory may also apply the
drawback procedure to goods that are re-exported into these zones.
Usually goods imported with the intention to re-export them, other than those used for
processing or manufacture, are not permitted to be used during their stay in the Customs
territory. If such use is allowed, administrations usually have provisions under which the
amount of drawback granted is reduced according to the extent of the resulting
depreciation.
Some administrations use the term drawback for refund of taxes on imported goods that are
not according to specification and are returned to the seller, or goods used in manufacture
for home consumption, or imported goods that are obsolete, etc. The procedure covered by
this Chapter does not relate to such goods. This issue is covered in Standard 4.19 of the
General Annex.
The drawback procedure will not apply to repayment of or relief from other taxes (e.g. sales
tax, value added tax) or to items which may be aids to the manufacturing process that are
granted relief or repayment under other provisions.
Other economic benefit of the Duty Drawback System of drawback procedure offers distinct
benefits to national administrations and interested persons in that it:
Generates domestic economic activities,
Provides for revenue protection on imported goods released into the Customs
territory, and
Offers options to interested persons when other procedures such as temporary
admission cannot be applied to the goods.
When Customs administers the drawback procedure by implementing modern control
techniques of selective verifications, risk assessment of users, post-audits of users’ records
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and electronic data exchange and transfer of payments, drawback can be well managed and
offers the full array of economic incentives to national economies. (See Chapter 6 of the
General Annex and its Guidelines.)
Interested persons have import options regarding whether to make the financial
commitment to pay the duties and taxes and wait for repayment to be completed under
drawback after the goods are exported, and whether this affects the competitive pricing of
exported goods.
INWARD /OUTWARD PROCESSING
The Commissioner of Customs is given power by the law to allow temporarily importation or
exportation of goods for processing operations free from tax provided that the ownership of
such goods shall remain to the exporter, and importer shall only process them under contract.
The Commissioner may also allow the importation of equivalent goods to replace the
temporarily exported goods for outward processing.
Inward processing means the Customs procedure under which certain goods can be brought in
a partner state conditionally exempted from duty on the basis that such goods are intended for
manufacturing, processing or repair and subsequent exportation.
Procedure of operation:
The operator shall apply for authorization to the commissioner in a prescribed form to carry out
the inward processing operations. The application detailing the intended inward processing
shall be made in advance prior to importation of the goods subject to the process.
Conditions for granting an authorization
i. The applicant offers the necessary guarantee for the proper conduct of the
operation
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ii. The administrative arrangements and supervision of the process are not
disproportionate to the economic needs of the applicant.
iii. The applicant is established in the community except where imports of non
commercial nature are involved
iv. The imported goods can be identified in the processed products
v. The applicant has provided Customs security.
Entry and examination of goods
Goods imported for inward processing shall be entered in Customs prescribed form on
production of:
(a) Original inward processing authorization
(b) Original invoices and other supporting documents.
The proper officer shall examine such goods at the port of entry or at the owners premises
before release for inward processing.
The person authorized shall keep all records of the inward processing activities and the records
shall indicate:
i. The description of quantity of goods entered for the procedure.
ii. Date of importation.
iii. Details of processing.
iv. Correct amount of duty and taxes payable.
v. Disposal of goods and waste or scrap or by-products.
vi. Compensating products obtained.
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Time limit for inward processing:
Inward processing procedure shall be terminated upon:
(a) Re-exportation of the compensating product in one or more consignments
within a period of one year.
(b) Re-exportation of the goods in the same state as imported immediately.
(c) Release of processed products to circulation under duty relief.
(d) Placing the goods in free zones.
(e) Entered for home consumption
However, the commissioner may prescribe specific time limit for in-ward processing.
Exportation of compensating products:
The goods may be exported through a Customs office other than the office through which the
goods under in-ward processing were imported, either in full or in parts under separate entries
Compensating products entered for home consumption:
When goods placed under in-ward processing are entered for home consumption either
compensatory products or goods in an unaltered state, the import duty shall be computed on
the basis of the nature, quantity, Customs value and duty rate applicable to the goods at the
time they were entered for in-ward processing
OUTWARD PROCESSING
Outward processing means the Customs procedures under which goods which are in free
circulation in a partner state may be temporarily exported for manufacturing, processing or
repair outside the partner state and then re-imported.
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The Commissioner shall only authorize goods to be exported temporarily from the partner state
when:
a) The exporter confirms that the compensating product shall result from the
processing operation
b) The outward processing procedure does not affect the interest of the partner state
c) The compensating products shall be re-imported within a period of one year from
the date of export
During re-importation, the compensating products may be re-imported through a Customs
office other than the Customs office through which the goods were exported either in full or in
partial consignment under separate entries. Goods may also be re-imported in an un-altered
state.
The imported compensating products or unaltered goods may be granted total or partial relief
from payment of duty when are cleared for home consumption in the name of
(a) An authorized person
(b) Any person with the consent of the authorized person
(c) Where the re-imported goods were repaired and such repair could not have been
undertaken in the Partner States
(d) Equipment or other goods were added to the exported goods that could not be
added within the partner state.
Processing or manufacturing was done on the re-imported goods and the goods exported were
the product of, and originated within the Partner States.
CUSTOMS BOND SECURITIES
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Objectives:
By the end of this topic, trainee shall be able to:
i. Demonstrate an understanding of the concept of Customs securities
ii. Comply with conditions of Customs processes requiring security guarantees
CUSTOMS BOND SECURITY
This is a contract executed under seal whereby the party or parties entering into it bind
themselves to pay to some other person or body a specified sum of money, referred to as the
penalty to bond, if any of the conditions of the bond are not performed. It is required either to
protect revenue or to ensure due compliance.
Penalty to bond
This is the amount of money specified in the bond as payable if the conditions of the bond are
not met or are contravened. It is the Bond In Force (BIF) that is enforceable in case the
conditions of the bond are contravened (Sec.109 of the EACCMA, 2004).
The Principal
This is the person or party that undertakes to fulfill the conditions of the bond and also to pay
the penalty to the bond. This is either an importers or his/her appointed clearing agent.
The Guarantor
This is the person or party that undertakes to pay penalty to bond if the principal fails to fulfill
the conditions of the bond. This is either an insurance company or banking institution.
Classes of bonds
They are two classes of bonds namely;
Particular Bonds
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General Bonds
Particular bonds
These are bonds that cover only single specified transactions and are valid for a period ranging
from 48 hrs to twelve months. They are executed in accordance with the provisions of Section
117 of EACCMA, 2004 and have no provisions for further extensions. They are
retired/discharged upon completion of the Customs transaction.
General bonds
These are bonds that cover many transactions and are valid for duration of three years. They
are executed in accordance with Section 107 (3) of EACCMA, 2004 and are replenishable.
BOND EXECUTION, CANCELLATION AND ENFORCEMENT
Bond execution is the processing of the security bond through the filling of the bond form;
signing; sealing; witnessing; approval and capture in the system for use in Customs
transactions.
Customs security bonds can be executed in accordance with Sections 106-109 of the EACCMA,
2004.
In the process of bond execution, the following have to be observed:-
i) Bond forms should be fully completed , signed and sealed
ii) Be white in colour and size A4
iii) Be submitted in four copies, each clearly marked;
Original,
Duplicate,
Triplicate and
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Quadruplicate.
iv) Show full address of the principal; guarantor and their identification numbers
v) Show total bond amounts in both words and figures
vi) The declared Bond In Force amount be supported by attachments
vii) The signatories to show their full names and ranks
viii) Be executed under relevant regulations as to bond types under the EACCMR, 2010
ix) The forms be signed by authorized signatories who should be either, Directors or
Company Secretaries and for officers of ranks below that, authority of the Board be
obtained and Power of Attorney given.
x) To affix revenue stamp on original bond
xi) Signatories to appear physically before a Customs Officer at specified times for
confirmation and updating of the specimen signatures
xii) Bonds should not be; transferred to other parties, punctured, perforated, erased or
altered.
The executed bond upon approval is captured in the system for use by the importer/clearing
agent in readiness for registration of entry(ies).
Bond cancellation
This is the process of bond termination upon completion of the specified Customs
transaction(s) within the stipulated time limits. Cancellation of Customs security bonds is
provided for under Section 108 of EACCMA, 2004. To facilitate bond cancellation/discharge,
the importer or clearing agent is expected to make an application by filling a bond cancellation
form (C29) for processing and acquittal. The application has to be supported by documentary
evidence that the secured goods have been treated as stipulated in the Customs law.
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Withdrawal will be complete when the letter of discharge is given by Customs to the Guarantor
with original copy of the bond so that the Principal is discharged from the obligations of paying
premiums.
Bond security enforcement
Bond enforcement is the process of recovery of revenue on the bond in force once the principal
flouts any of the conditions of the bond.
Bond enforcement can be effected in the following manner:-
Where the conditions of any bond have not been complied with, the Commissioner may
by notice in writing require the person who has given security under it to pay to him or
her the amount of the security within fourteen days of the notice; and on failure to
comply with the notice, the Commissioner may enforce payment of the security as
though it were duty due and unpaid (Section 109 of the EACCMA, 2004)
When the importer fails to meet the conditions of the bond or defaults, he/she commits
an offence for which legal action shall be taken in accordance with the Customs offence
compounding procedures (Section 219 of the EACCMA, 2004)
Seize the goods and have them forfeited to the state (Section 210 of the EACCMA, 2004)
Recover the amount of the Bond In Force from the surety, which is referred to as bond
liquidation or penalty to bond.
PROCESSES/TRANSACTIONS THAT REQUIRE CUSTOMS SECURITY BONDS
Bond securities are used for different Customs transactions/regimes where duty is not paid
upfront for imported cargo such as:
i) Goods in Transit and transshipment
ii) Goods to be warehoused
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iii) Goods for projects
iv) Perishable goods
v) Shipstores
vi) Temporary imports
vii) TREO, EPZ and MUB goods etc.
BENEFITS OF SECURITY BONDS
The following are the benefits accruing from the usage of Customs security bonds:-
i) It is sort of credit given to importers as their cash is not tied up in upfront tax payments,
thus boosting their cashflow
ii) It facilitates international trade, thus conforming to the tenets of the WTO Revised
Kyoto Convention
iii) It is convenient to manufacturers who import raw materials to manufacture goods for
both local consumption and for export, thus boosting the growth of local industries
leading to the creation of job opportunities
iv) The secured revenue is easier to recover in case of fraud or tax evasion
v) Cargo clearance time is minimized, which is cost saving.
CHALLENGES IN THE MANAGEMENT OF CUSTOMS SECURITY BONDS
Challenges are many given the dynamics of the ever changing business trends and amongst
them are the following:
i) Tax payment is delays for a long time, thus denying the Government revenue
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ii) Guarantors giving unilateral notifications to Customs to their decision to withdraw from
guaranteed security bonds to some principals and expecting Customs to exonerate/exempt
them from liabilities already incurred
iii) Use of forged/fake security bonds leading to loss of revenue
iv) Difficulties in recovery of revenue from outstanding security bonds from Principals and
Guarantors who have prematurely wound up
v) Some guarantors and principals failing to honour their obligations
vi) Tendency of most Guarantors to engage Customs in prolonged correspondences when
called upon to honour demand notes on outstanding security bonds
vii) It increases Customs administrative costs in the control of the uncustomed cargo under
bond.
WAREHOUSING PROCEDURE
Specific Objectives
i) Identify various types of warehouses
ii) Comply with conditions for licensing bonded warehouse, bonded factory and Inland
Container Depot.
iii) Describe procedures for declaration and documentation of warehoused goods
iv) Apply the correct procedures in the treatment of goods entered for warehousing
TYPES OF WAREHOUSES
A warehouse is a building where goods are stored pending clearance through Customs. There
are various types of warehouses depending on the purpose for which they are licensed or
approved by the commissioner, with due considerations of ownership. Under Customs
procedure, Warehouses are broadly categorized as Government warehouses, Customs bonded
warehouses and Customs warehouses. The three broad categories are further sub-divided into
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public and private warehouses. Section 62-69 of the Act provides for warehousing of goods and
regulation 64-87 gives the procedure for warehousing.
Government warehouses
A Government Warehouse is any building or place provided by the Government in a partner
state, and approved by the Commissioner Customs for the deposit of dutiable goods on which
duty has not been paid and which have been entered to be warehoused.
Customs bonded warehouses
A bonded warehouse is any building or place licensed by the Commissioner Customs for the
deposit of dutiable goods on which duty has not been paid, and which have been entered for
warehousing (S62-69 of the CMA).
There are two types of Customs bonded warehouses as described here below
a) General Bonded Warehouse are licensed premises used for warehousing goods for the
general public;
b) Private Bonded Warehouses are licensed premises used for warehousing goods of
the licensee.
General or private bonded warehouses include
Vehicle Bonded warehouses
These are designed to store only imported vehicles.
Specialized Bonded warehouses
These are specially designed to store goods such as bonded oil installations and those that store
explosives such as the armory.
Factory Bonds
These are used store raw materials in factory establishments to be used in the manufacturing
process
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Duty Free Shops:
For storage and sell of dutiable goods, duty free to entitled persons and organizations.
Customs warehouses
A Customs Warehouse is "any place approved by the Commissioner for the deposit of
un-entered, unexamined, detained or seized goods for the security thereof or of the
duties and taxes due thereon." Any place or premises may be deemed to be a Customs
warehouse by a proper officer where the situation so warrants.
TYPES OF GOODS DEPOSITED IN A CUSTOMS WAREHOUSE.
(a) Seized goods.
(b) Unclaimed goods.
(c) Un-entered goods.
(d) Goods for which the Proper Officer for any reason has withheld release.
(e) Goods removed from licensed bonded warehouses in accordance with sections 56 and 69
of the Act,
(f) Abandoned and derelict goods.
(g) Any goods dealt in contrary to the Customs law.
CONDITIONS FOR LICENSING BONDED WAREHOUSES
Application for the approval and licensing of any premises, as a bonded warehouse must be
submitted to the Commissioner Customs in the Form C22, which must be accompanied by a
plan of the proposed building and its situation in relation to other buildings and thoroughfares.
A security Bond to secure the duty on the goods deposited in the bonded warehouse, when
licensed, is to be given by the applicant in accordance with the Form C B.6. The applicant is to
comply with the bond security amount and additional request for collateral security fixed or
requested for by the Commissioner Customs.
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The prospective licensee should prepare for an inspection to be undertaken by a Customs
officer to satisfy him/herself that the premises are:-
(i) safe, secure, waterproof and pest-proof
(ii) suitable for use as a bonded warehouse as far as construction and situation in
regard to other buildings and accommodation are concerned:
(iii) fitted with adequate lights and suitable ventilators, and
(iv) fitted with doors capable of being secured by Customs locks in addition to the
licensee's locks.
(v) prospective licensees should be instructed to arrange that only one door is locked
from the outside and that all the other doors are locked from inside the premises. When
the premises are fitted with sliding doors, the Inspecting Officer must see that suitable
stopping arrangements are provided on the rails to prevent the doors from being slid off
when locked.
(vi) have suitable office for Customs which is furnished with the necessary equipment
including but not limited to a connection to the Customs computerized business system.
(vii) have weights, scales, measures and other facilities necessary for examining and
taking account of goods and for securing them.
Provision OF SEPARATE COMPARTMENT :
Where necessary, the applicant or prospective licensee should provide a compartment for the
storage of sensitive goods within the warehouse; such as spirituous liquors and tobacco and
must be separately walled off' from the rest of the bonded warehouse space and provided with
a door capable of being locked with a Customs lock. The Inspecting Officer must state in his
recommendation whether or not a special compartment is provided.
If a separate compartment is not provided, it is the policy of the Department to limit the type of
goods, which may be stored in the proposed bonded warehouse by excluding sensitive goods
such as spirituous liquors and tobacco. Intending licensees should be informed of this limitation
and given an opportunity to make necessary structural alterations if they so desire.
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Marking of Warehouse:
Numbering and marking must distinguish a Bonded Warehouse. When a Bonded warehouse is
licensed, the words "Customs Bonded Warehouse" and the number allocated to the warehouse
must be clearly marked on the principal entrance to the warehouse, or elsewhere as Customs
may approve. These markings must be removed when a Warehouse ceases to be licensed
under the Customs Laws, and prior to the cancellation of the security, an officer will inspect the
building and ensure that the markings have been removed.
License Fees:
In the event of a change of name of a licensed company, a fresh application for a license is to be
made as provided for under the CMA. Such a license when granted is to be treated as a new
license, for which the appropriate fee is to be charged whether or not the annual license fee
has been paid by the previous company.
Under Sect. 62 of the Act it is clear that it is the building which is licensed and that any such
building must be the subject of a newly granted license specific to that building. It follows
therefore that when a building ceases to be licensed, the license must be revoked and there is
no provision whereby the unexpired part of any such license may be applied to any other
building.
Closing Down of a Bonded Warehouse
If a bonded warehouse is to be closed down, either by voluntary action on the part of the
licensee or because of the cancellation of the warehouse license by the Commissioner Customs,
the provisions of Sect. 62 of the Act are to be applied. The Customs locks are not to be removed
off the doors of the warehouse and the bond security is not to be cancelled until all the goods
in the warehouse have been accounted for to the satisfaction of the Customs Regional
Manager, and the markings on the building have been removed. No License Fee or part thereof
is refundable.
Warehouse-keeper to Notify Owner
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Where a warehouse licensee does not wish to renew his license, he is required under Section
63 of the Act to notify the owners of the goods warehoused therein. In addition, where a
license for a bonded warehouse has been revoked or has expired, then, within such time as the
Commissioner Customs may direct, all goods therein must be entered and delivered for home
consumption, exportation, removed to another licensed bonded warehouse or use as
ship/aircraft stores. If goods are not entered and delivered accordingly, then the Customs may
arrange for their removal to the Customs Warehouse. On receipt into the Customs Warehouse,
such goods are to be dealt with in accordance with Section 42 of the Act.
Structural Alterations
No structural alterations to a bonded warehouse may be made without permission from
Customs. Care should be taken to see that all structural alterations are made under official
supervision, and do not interfere with the suitability of the warehouse.
Customs Locks Opening of Bonded Warehouses
All Bonded Warehouses must be secured with locks provided by a licensee and approved by
Customs and no warehouse may be opened except in the presence and/or with the authority of
the proper officer.
Duties of Licensees of Bonded Warehouse
Every warehouse licensee must : -
a) provide such office accommodation and weights, scales, measures and other facilities
for examining and taking account of goods, and for securing them as the proper officer
may require.
b) keep a record of all goods warehoused therein and shall keep such record at all times
available for examination by the proper officer,
c) stack and arrange the goods in the bonded warehouse so that reasonable access to and
examination of every package may be possible at all times, and that the package marks
are clearly visible at all times; Provide all necessary labor and tools for the examination,
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packing, marking, coopering, weighing and taking stock of the warehoused goods
whenever the Bond officer so requires,
d) maintain the packages in which warehoused goods are contained in a proper state of
repair;
e) pay the Import Duties and any other taxes on all warehoused goods removed from his
warehouse except by authority and on all warehoused
goods not produced to the officer on demand unless such goods are
accounted for to the satisfaction of the Customs.
f) Bond Officer must report particulars of any dereliction of the above duties to the
Customs Regional Manager at once.
DECLARATION AND DOCUMENTATION OF WAREHOUSED GOODS
Warehoused goods may be delivered from a warehouse for 4 main reasons:
Home use
Exportation
Removal/Transfer
Used as stores in aircraft or ship.
Home consumption
This is when goods are entered first into their respective entries by owners before delivery from
a bonded warehouse. These goods are intended for a delivery into home use and duty due on
them must be paid before delivery.
After making the correct ex-warehouse entry and has been passed, the owner of goods goes
and presents his/her goods to the proper officer for examination before delivery.
Re-exports: Numbering of warehoused export entries is done in registers for record purposes
and g
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Removal/Transfer
Removal of bonded goods from one warehouse to another is done with the submission of ex-
warehousing SBL.
Cargo receipts are to be prepared for removal of warehoused goods.
Aircraft/Ship stores
-Aircraft/ship stores delivery register is to be kept;
-the kids are delivered to ship or aircraft representative;
-the ship representative gives receipt for the registered goods;
-consolidated entry will be prepared on weekly basis.
Procedure for warehousing
Goods may be entered for warehousing upon arrival at the frontier port (IM 7). The physical
entry will be submitted to the Customs Business Center supported by proceeding documents
such as the Bill of lading/airway bill/railway consignment note, Customs Transit documents (T1
or RCTD). The entry is assessed to ascertain the Bond in Force. The entry is then released for
the goods to be moved to the destination Bonded warehouse. The proper officer should not
pass an IM7 entry unless it is supported by a formal acceptance in accordance with Regulation
69 of the EAC-CMR 2006 (Form C) by the bonded warehouse keeper to have the goods
warehoused in his bonded warehouse.
Goods not entered for direct warehousing at the entry point will be consigned to an Inland
station or bonded warehouse on a C17 under IM 8 procedure. The physical entry will be
submitted to the Customs Business Center supported by preceding documents such as the Bill
of lading/airway bill/railway consignment note, Customs Transit documents ( RCTD). On
processing of the IM8, taxes are assessed to ascertain the Bond In Force and a T1 to accompany
the goods is generated. The T1 is then released for onward transit to the destination Customs
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station/bonded warehouse from where a warehousing entry will be made.
Provisional declaration to Warehousing Entry
The Proper Officer may permit under Section 37 and 38 of the Act, that the goods with no or
insufficient documents/information may be entered on the usual form of Warehousing Entry
(SAD/C17.A Regime IM.7), the value being declared approximate, and that such entries shall be
submitted and dealt with in accordance with the above sub-paragraphs.
Goods declared on approximate value to Warehousing Entries must be examined to the same
scale and in the same manner as goods entered for Home Consumption. Such estimated duty
shall be allowed and a bond equivalent to such estimated duty furnished. The taxpayer
(importer) may make an undertaking to produce the required information.
Amendment of Warehousing Entries
Where the required supporting documents in regard to provisional entries are furnished the
provisional entry shall be appropriately amended. Where a warehousing entry has been
amended, the warehousing registers are to be appropriately amended to reflect the correct
Bond in Force (BIF).
Security
The importer of goods entered for warehousing must give security for the removal of goods
from the landing station (Frontier station/ICD) to the bonded warehouse and storage in the
bonded warehouse. A particular bond may be given for each transaction or a general bond to
cover the amount likely to be outstanding at any one time in respect of the transactions of a
particular agent/importer
(ii) Where goods are entered for warehousing/removal to another warehouse as provided in
Sect. 54 and Regulation 68, the delivery of goods should not exceed 24 hours in the case where
the Warehouse is at the station of entry and for removal to other Warehouses the period
should not exceed 48hours.
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Bond in Force
The amount of Bond required in the case of particular bonds or allocations in the case of a
general bond will be determined from the genuine documents accompanying the SAD as
declared to Customs by the clearing and forwarding agent during the declaration process. In
cases where documentation may be found inadequate, a detailed examination account of the
goods must be done to enable determination of value using other methods.
When there is adequate bond security available on the electronic bond security account of the
bonded warehouse to which the goods are destined, the warehousing entry is passed and the
bond guarantee reference number is reflected on the entry. In case of a manual process, the
Proper officer establishes that there is adequate bond before the warehousing entry is passed,
the particulars of the entry and the amount of bond executed are to be recorded in the Bond
Allocation Register, and all copies of the entry are to be stamped;
DISCHARGE OF SECURITY - (Allocation Register)
(a) The discharge of security given can only be permitted when a full and proper account has
been made by the clearing and forwarding agent of all the goods covered by the bond security.
(b) Notification of the account of goods will be recorded on the right hand side of the Bond
Allocation Register and these accounts will stem from the receipt of documents relevant to
the particular cargo.
e.g. Form F.7: Certificate of receipt of goods into Bonded warehouse.
Report : of return of shipment of Bonded goods. Reg. 66
Report: of Short landed goods - (Goods entered for warehousing).
Form F. 119: Cargo Receipts.
All such forms/reports are to be numbered in annual series commencing with number 1, date
and stamped, serial number and number of packages on the form
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relevant to a particular entry are to be endorsed in the right hand side of the Register on the
same line as that used when the allocation was brought into force.
Electronic accounts or book balances in the manual format are to be adjusted by posting entries
or deductions as specified by corresponding warehousing entries or ex warehousing entries to
or from the total BIF.
ENFORCEMENT OF BOND SECURITY
Where an allocation remains outstanding for more than the prescribed period (2 days in case of
transit or 6 months in case of warehoused goods), from the date when the entry was passed,
the Importer/Agent is to be called upon, in writing, to pay the duty.
Evidence of payment must be produced by owner/agent to allow cancellation of BIF.
Warehousing Procedure
Warehousing is a Customs procedure whereby goods liable to Customs duty on first
importation are entered for custody without payment of duty, for the purposes of protecting
government revenue and other security reasons.
Warehousing of goods must be done in compliance with specific provisions of the CMA in
particular Section 34 and Regulation governing goods transiting to the warehouse and
warehousing requirements applicable to warehoused goods.
A Customs clearing and forwarding agents must observe the period; within which goods must
be entered for warehousing after the commencement of discharge of imported goods, this is
referred to as Customs warehousing dates, which is the 21st day (excluding Sunday and public
holidays).
Also for transit goods expected to be entered into a warehouse, for goods to be re-warehoused
at the expiry of the warehousing period, beyond which goods released from the warehouse
must be delivered once they have been entered for ex warehousing
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Want of Entry Lists
Upon receipt of the advice mentioned in paragraph 12, the Handling Agents will prepare a
want of entry list, in quadruplicate, which will be sent to Supervisor Station to be checked
against the relative inward report
Goods may be entered at the entry point for warehousing inland or they may be consigned and
delivered on transit documents at the destination warehouse after which the process of
entering the goods will start.
Reporting procedure at the Bonded warehouse should be observe and clearing and forwarding
agent must facilitate the loading/off loading, depositing, stacking of goods and taking of
account of warehoused goods on arrival at warehouse in accordance to section 64 of the Act.
Receipt of goods into any bonded warehouse must be authorized in writing in form of a
“Licensee's Certificate of Agreement” accepting goods into the bonded warehouse by the
warehouse keeper.
Examination Account
An examination account must always be prepared (section 47 CMA) for all goods entered for
warehousing after they are examined. The account shall be recorded on the SAD, in the
warehousing register and where applicable captured in the system.
The proper officer in-charge of the warehouse will prepare for each warehousing entry an
examination account reflecting the entered particulars and there after forward the entry and
accompanying documents for further processing at the processing centre.
Warehousing Period
All warehousing goods, which have not been removed from the warehouse in accordance with
Section: 57 of the Act, within six months from the date on which they were warehoused may
with the written permission of the Commissioner be re– warehoused for a further period of
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three months. Thereafter, they shall be sold by public auction after one month’s notice of such
sale.
Types of Goods, which May be warehoused in a Bonded Warehouse
All goods may be warehoused in a Bonded Warehouse with the exception of-
i. acids for trade and business;
ii. Ammunition for trade and business;
iii. Arms for trade and business;
iv. Chalk;
v. Explosives;
vi. Fireworks;
vii. Dried fish;
viii. Perishable goods;
ix. Combustible or inflammable nature, but not including petroleum products for storage in
approved places;
x. Matches other than safety matches
xi. Goods the Commissioner gazettes as not to be warehoused
TRANSIT AND TRANSHIPMENT PROCEDURES
Objectives:
At the end of this topic, the trainee should demonstrate the ability to:
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i) Describe the concept of transit and transshipment
ii) Apply the declaration process under Transit and transshipment
iii) Apply the procedures for handling goods in Transit
TRANSIT
Transit means the movement of goods imported from a foreign place through the territory of
one or more of the Partner States, to a foreign destination (Section 2(1) of the EACCMA, 2004).
Transit shed or Transit godown
Transit shed means any building appointed by the Commissioner in writing for the deposit of goods subject to Customs control (Section 2(1) of the EACCMA, 2004).It’s important to note that similar premises located outside the port licensed by the Commissioner for the deposit of transit cargo awaiting transportation to the final destinations are known as transit godowns.
Types of Transit
There are two transit types namely; Transit Inwards and Transit Outwards
Transit Inwards
Transit Inwards means the movement of imported transit goods from a foreign place into a
Partner State (s) to a foreign country
Transit Outwards means the movement of transit goods from a foreign country through
Partner State(s) destined for export, for example Diamond in transit from DR Congo into
Tanzania destined for a third country
TRANSSHIPMENT
Transshipment means the transfer, either directly or indirectly of any goods from an aircraft,
vehicle or vessel arriving in a partner State from a foreign place, to an aircraft, vehicle or vessel
departing to a foreign destination (Sec.2(1) of EACCMA, 2004).
Types of Transshipment
They are two namely; Direct Transshipment and Indirect Transshipment
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Direct Transshipment means the transfer of goods directly from the incoming aircraft or vessel
into the outgoing aircraft or vessel
Indirect Transshipment means the removal of goods from the incoming aircraft or vessel and
transfer of the same later into another aircraft or vessel.
DECLARATION OF TRANSIT AND TRANSSHIPMENT CARGO
Transit and transshipment are goods under Customs control (Sec. 16 of the EACCMA, 2004)
It’s a legal requirement that all transit and transshipment goods on importation into the
country be entered in a prescribed Customs form (C17B) within 21 days from date of discharge
(Sec. 34 of EACCMA, 2004)
The entry should be supported with attached documents to ascertain the taxes payable, such
as:-
Invoice
Bill of lading
Log book
Packing list
Manufacturer’s literature etc.
The appropriate Customs security bonds as per the East African Community Regulations 2010,
should be executed to cover the transit and transshipment transactions.
In the case of direct transshipment, involving the direct transfer of goods from the incoming
aircraft or vessel to the departing ones, then security bond may not be necessary as the goods
have to be transshipped under Customs supervision.
It is important to note that even duty free transit goods have to be bonded, with nominal bond.
The Customs security bonds for both transit and transshipment goods shall be
cancelled/acquitted, upon confirmation that the goods have left partner State(s) in the same
state as declared (Sec. 87 of the EACCM Act, 2004)
CUSTOMS CONTROL OF TRANSIT AND TRANSSHIPMENT
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The control of Transit and Transshipment goods is anchored in Sections 85, 86 & 87 of the East
African Community Customs Management Act, 2004 and Regulations 104 to 106 of the East
African Community Customs Management Regulations, 2010
The following are some of the measures that have been put in place by Customs
administrations to control transit and transshipment goods to minimize cases of fraud:-
i) The requirement that transit goods should be shown separately in the Inward Report
(Manifest) of the importing vessel or aircraft to enable Customs to identify transit goods from
local ones before they are entered so that they are monitored at manifest level
ii) Legal requirement that all transit goods on importation into the country be entered in a
prescribed Customs form (C17B) within 21 days from date of discharge (Sec. 34 of EACCMA,
2004).
The entry should be supported with attached documents to ascertain the taxes payable, such
as:-
Invoice
Bill of lading
Log book
Packing list
Manufacturer’s literature etc.
iii) Transit goods either inward or outward should be covered by a Customs security bond which
must be equivalent to taxes payable (BIF) if those goods were to be consumed locally
iv) Transit cargo is to be transported in covered body trucks or in containers. The body trucks
should have both sides boldly printed “TRANSIT GOODS”
v) Transit goods be occasionally loaded under Customs supervision and be sealed with Customs
seals, which are affixed to the containers or vehicles carrying the goods.
vi) Transit cargo can be subjected to Customs and police escorts or Electronic Cargo Tracking
System (ECTS)
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vi) Transit cargo must be transported on the transit routes gazetted by the commissioner of
Customs and any deviation of the transit truck from the gazetted route is a punishable offence
vii) Transit goods are selectively scanned to monitor any cases of; concealment, misdeclaration
etc.
viii) Both containerized and loose transit units moving along the gazetted transit routes must
stop at all transit check points on the route and be rotated as one of the Customs control
measures
ix) Transit cargo should be exported within 30 days from the date of passing of the entry or
within a further period as the Commissioner may allow
x) Once Transit goods have been exported, the clearing agent should apply for bond
cancellation not later than 30 days from the date of exportation (Reg.104 (17)).
xi) Where quantity of transit goods is found to be less at the port of exit, the importer shall pay
penalty to bond proportionate to the discrepancy (Reg. 104(14))
xi) Where there’s attempted diversion of Transit goods, but the goods are recovered, the
agent/importer shall pay fine of 50% the value of the goods and the subject goods shall be
liable to forfeiture. This deterrent control measures
CHALLENGES IN THE CONTROL OF TRANSIT FRAUD
The challenges in the control of transit fraud and tax evasion are many. Some of them are as
follows:-
i) Use of forged stamps by agents/importers to fraudulently certify false transit exportations
leading to tax evasion
ii) Cases of falsified certification of transit exportations through collusion with Customs Officers
and other players
iii) Undervaluation and misdeclaration by agents/importers with intent to dumb transit cargo
into the local market
iv) Substitution of high value imported transit goods by agents/importers
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v) Poor record keeping and risk profiling of agents, importers, suppliers etc by Customs
authorities
vi)Use of forged Customs security bonds and fake truck registration numbers
vii) Lack of serious attention by Customs Officers to check on declared values.
viii) Conealment of transit cargo to evade tax
ix) Prolonged storage of transit goods in transit godowns and transit sheds with motives to
divert into the local market
x) Political interference from within and outside dictating clearance of certain transit cargo
xi) Low staffing levels in the Customs administrations
xii) Lack of enforcement tools for Customs Officers
xiii) Unupgraded systems leading to cargo clearance delays
REFERENCES
Baker.T. (2002), Dealing with Customs and Excise; Administration, Appeals, Disputes and Investigation, Tolley Publishing
International Convention on CITES
Lawrence J. Bogard, (1983) Customs Laws and Administration, Oceana Publication
Montreal Protocol (1987) on Ozone Depleting Substances
Partner States Legislation relevant to Customs Operations
135
Protocol on the establishment of the EAC Customs Union
The EAC Customs Management Act, 2004
The EAC Customs Management Regulations, 2010
The EAC Customs Procedures Manual
The EAC Customs Training Material, 2011
The EAC Duty Remission Regulation, 2008
The EAC Rules of Origin
The EAC website: www.eac.int
Uganda Revenue Authority Customs Departmental Instructions Revised, 2009
Uganda Revenue Authority Customs Procedure Manual, 2010
United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, 1988
WCO Revised Kyoto Convention
WCO SAFE Framework of Standards
WCO website
Wulf, & Jose’ B. Sokol (2004) Edited Customs Modernization Hand book
www.click.wcoomd.org
http://www.clearedanddelivered.com
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