COMESA SIMPLIFIED TRADE REGIME FACILITATING Cross Border Trade COMESA SIMPLIFIED TRADE REGIME (COMESA-STR) SAMPLING,INSPECTION AND GRADING OF MAIZE 2016
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COMESA Simplified Trade Regime (COMESA-STR) COMESA Simplified Trade Regime (STR) Introduction The objective of this handbook is to explain to small-scale cross-border traders how the COMESA Simplified Trade Regime (COMESA-STR) works and how they can benefit from using it. What is the COMESA-STR? The Common Market for Eastern and Southern Africa (COMESA) was established in 1994. This followed a successful implementation of the Preferential Trade Area (FTA) which was initiated in 1981 as part of the wider African Union (AU) agenda seeking to liberalize trade in the region. The main objective of COMESA is to increase trade and investment amongst its members. The COMESA-STR is a programme initiated by COMESA to help increase trade by small scale cross border traders dealing in small quantities of goods. The programme aims at simplifying clearing procedures as well as reducing the cost of trading. This is by making it possible for the small scale cross-border traders goods to benefit from the removal of customs duty (COMESA Preferential treatment) if those goods are on the Common Lists. Small-scale cross border trade is important to COMESA countries as it is carried out by a lot of people in COMESA Member States and therefore provides a good source of income for the traders, especially women. More trading opportunities and reduced costs mean more employment and increased income. This improves their living standards as they are able to buy more food and send their children to school, enabling them have a better future. Why was the COMESA-STR introduced? The COMESA-STR was introduced to simplify the procedure for clearing goods through Customs and to enable the small scale cross-border traders to benefit from the import duty exemption on traded goods on the Common Lists. This removes the problems faced by small-scale cross border traders that prevent them from benefitting from trading with other COMESA countries. Such problems include: 1
FACILITATING Cross Border Trade 1. Lack of knowledge of the benefits of trading with other COMESA countries; 2. Lack of written rules resulting in difficulties for the trader in knowing their rights and obligations (no transparency); 3. Payment of Customs duties on goods that attract no Customs duties owing to a lack of knowledge of the COMESA Free Trade Area; 4. Complex documents and complicated processes of filling them; 5. Lack of documentation that enable small scale cross border traders to benefit from paying little or no Customs duty; 6. The cost and time lost by small scale cross border traders when dealing with the documents to enable them to pay little or no customs duties; 7. Seizure of goods by customs officials because of incorrect payment or non-payment of Customs duties; 8. Payment of bribes by some traders to border agents; 9. Harassment, especially against women, who are the majority of small scale cross border traders; 10. Lack of knowledge of COMESA documents by some Customs officials at the border. When can you use the COMESA-STR The COMESA Simplified Trade Regime (STR) has been introduced to solve the problems faced by small scale cross border traders. It can be used by COMESA and non-comesa small scale cross border traders: 1. who are importing or exporting goods worth the value of the STR threshold or less per consignment; 2. with goods listed on the Common Lists that qualify under the COMESA STR and 2
COMESA Simplified Trade Regime (COMESA-STR) 3. with goods that the trader will be going to sell. Travellers who do not have goods for sale should NOT use the COMESA STR. Traders have to fill in the COMESA Simplified Customs Document The Simplified Certificate of Origin is still in use in some countries. Traders handling larger consignments with a value above the STR threshold and would like to benefit from duty-free entry of their goods must use the normal COMESA Certificate of Origin (CoO) and Customs Document. Advantages of the COMESA Simplified Trade Regime Advantages to the Trader: 1. The process of crossing borders with goods is made simpler and clear to the trader and the border officials. The customs and border officials MUST follow the written procedure; 2. The trader has better knowledge of their rights and obligations resulting in a reduction of bribes to border officials and in cases of smuggling goods across borders; 3. Payment of the correct amount of duties (tax); 4. Reduced cases of harassment and seizure and loss of goods; 5. The cost and time of clearing goods will be reduced, helping to lower prices of goods and increase the earnings for the trader; and 6. Simplified clearing procedures that reduce the cost and time of clearing goods will allow more trips to be made across the border Advantages to the COMESA Countries 1. There will be more goods produced thereby creating more employment and more people earning an income. This will lead to improved standards of living of the people in the COMESA region. 2. The COMESA countries will collect more money to finance their national development 3
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COMESA Simplified Trade Regime (COMESA-STR) as there will be no need for the traders to smuggle goods. 3. Through the Trade Information Desks, COMESA countries will be able to collect better statistical information of the goods, values and quantities traded which will help in planning and decisionmaking by the stakeholders. How to Use the COMESA STR FLOW CHART Step 1 Are you qualified to use the COMESA STR? You can use the COMESA STR if you meet any of these conditions. o The goods will be sold in your neighbouring country and not in transit (the country you are passing through) o o The goods are worth the STR value threshold or less. The goods appear on the Common List of goods (you do not pay any duty for goods in the Common List). Please ask customs officials/trade Information Desk Officer (TIDO) for this list if it is not shown at the border on any notice board near you If you encounter any of these conditions above please follow the steps given below: Step 2 Do you have all your travel documents? Before you set off for your journey make sure you get: 1. Visas and travel documents to enter the country you are travelling to. 2. Foreign exchange/ currency if the country you are travelling to has foreign exchange controls/restrictions. Some countries will only allow you to enter or leave the country with a certain amount of national and foreign currency. Excess currency may be confiscated by these countries. 5
FACILITATING Cross Border Trade 3. Documents that you may need to import or export certain goods, such as agricultural foods and animal products, into a country. Some products on the Common List may require sanitary and phyto-sanitary (SPS) certificate applied to both exports and import, especially agriculture products. FOR ALL TRAVELLERS WHETHER THEY ARE BUS PASSENGERS, DRIVING THEIR OWN CARS, RIDING A BICYCLE OR ON FOOT: Make sure to update your health vaccinations, such as yellow fever. If you are travelling by car, buy your COMESA Yellow Card vehicle insurance. Ask your local insurance office for more details on COMESA schemes for insuring vehicles and goods. Step 3 Clear Immigration Upon arrival at the border post clear all immigration procedures to allow you to enter or leave the country you are importing or exporting the goods into or from, or transiting through. Step 4 Follow the Food Safety, Protection Against Pests and Diseases Procedure If you are carrying chemicals, agricultural foods, plant and animal products such as pesticides, oranges, bananas, milk, eggs, fish, meat or chicken, report to the offices of the Ministry of Health, Ministry of Agriculture and the Ministry responsible for environmental protection. The purpose is to stamp any documents required for the importation or exportation of these goods or to certify that the goods imported or exported comply with food safety, plant and animal health regulations, including environmental protection. This is important to guard against the spread of pests and diseases, and to protect human lives as well as the environment. Step 5 Sort out Your Goods If you are importing goods separate your goods into the following categories: a. goods produced in the COMESA region that appear on the Common List on which no duty is paid; b. goods produced in COMESA countries that do not appear on the Common List on which duty may be paid; and c. goods produced in non-comesa countries on which duty must be paid. Step 6 Get the Simplified Certificate of Origin Stamped by a Customs Officer The COMESA Simplified Certificate of Origin has to be signed and stamped by a Customs official for 6
COMESA Simplified Trade Regime (COMESA-STR) all goods that appear on the Common List. DO NOT PAY the customs official any money for him to fill out this form. Step 7 Fill in Your Simplified Customs Document Forms Declare those goods that appear on the Common List on a Simplified Customs Document form. YOU WILL NOT PAY ANY DUTY ON THESE GOODS. Declare those goods that do not appear on the Common List ON ANOTHER SIMPLIFIED CUSTOMS DOCUMENTS form. YOU MAY BE ASKED TO PAY DUTY ON THESE GOODS. Some COMESA countries may charge you a maximum of US$1 or its local currency equivalent as an STR fee to facilitate the COMESA STR process at the time of declaration of goods. This fee is payable to the Trade Information Desk. The Cross Border Trade Information Desk officer at the border will help you fill in this form or answer queries that you may have. Step 8 Declaring Your Goods a) Goods for Final Clearance i) If you have reached your final country of destination, proceed to customs to declare your goods. It is important for you to declare your goods even though you have the COMESA Certificate of Origin exempting you from paying duty on these goods. The reason is that in some countries, you may be exempted from paying duty but you may be required to pay Excise Duty or VAT or both, depending on the nature of the goods you are carrying. Although you do not have to pay duty on these goods the customs officers may ask to see the goods declared and the COMESA Certificate of Origin to ensure that no duty is payable on the goods. ii) If you have goods that do not appear on the Common List, report to a Customs official who may inspect these goods. You will be asked to pay duty on these goods. Remember, traders and customs officials are partners in trade. It is therefore important for customs officials to treat traders with respect and equality, and for 7
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COMESA Simplified Trade Regime (COMESA-STR) traders to cooperate with Customs officials. b) Goods in transit If you are in transit (passing through another country to your country of final destination) note that your goods may be inspected by Customs officials any time after leaving the border and during your journey to your country of final destination. Upon entering your country of final destination you must follow Steps 3 to10. c) Goods bought in transit If you buy any goods in a country you are passing through on your way to your country of final destination you must declare them on a Simplified Customs Document and upon entering your country of final destination you must follow Steps 3 to 10. Step 9 Payment of any Duties and VAT Customs Duty on goods that appear on the Common List are not payable (if the countries involved are participating in the COMESA Free Trade Area). However, you may still have to pay Excise duties and/or Value Added Tax (VAT) on these goods. Customs Duties are different from Excise Duties. Excise Duty is normally payable on certain goods such as carbonated drinks, spirits, cigarettes, cosmetics and other goods imported into a country. You now need to proceed to the Cashiers to pay any Customs duty, Excise Duty and/or VAT that is due. After you complete all the requirements, you will be allowed to leave with your goods. If you do not understand or require more information on the COMESA STR please contact the following: Trade Information Desk (TID) located at the border, your national focal point local customs office or your Ministry responsible for commerce or trade. 9
This publication has been produced by COMESA under the Great Lakes Trade Facilitation Project (GLTFP) supported by the World Bank Group. The objective of the GLTFP is to facilitate small scale cross border trade especially among women traders at selected borders point between the Democratic Republic of Congo and Rwanda and Uganda Contacts Common Market for Eastern and Southern Africa (COMESA) Secretariat Ben Bella Road P O Box 30051, Lusaka, ZAMBIA Tel +260 221 229725/32 Fax +260 221 225107 Email: info@comesa.int Website: www.comesa.int