Sinlge Customs Territory External Operations

Q: What is a Single Customs Territory (SCT)?

A: A Single Customs Territory is described as a stage towards full attainment of the Customs Union which is achievable by the removal of restrictive regulations and /or minimization of internal border controls on goods moving between the Partner States with the ultimate realization of free circulation of goods.

Q: What is SCT all about?

A: It is about achieving free circulation of goods in the Customs Territory in order to reduce the cost of doing business.

Q: What are the features of SCT?

A: The following are the features of the SCT

  • Goods are cleared at the first point of
  • One Customs declaration is made at the destination
  • Taxes are paid at the point of destination when goods are still at the first point of
  • Goods are moved under a Single Regional Bond from the Port to
  • Goods are monitored by electronic cargo tracking
  • Interconnected Customs
  • Minimized internal controls /

 

 

Q: When was the SCT implemented?

A: The SCT commenced on 1st January 2014 as a pilot on the Northern Corridor (Kenya, Uganda, Rwanda). The pilot on the Central Corridor (Tanzania, Burundi) commenced in April 2014.

Q: What is the Current status of the SCT implementation?

 

A: A number of processes have been rolled which include;

  • All intra region trade cargo moving within the EAC Partner States is cleared under the SCT
  • All maritime cargo at the Ports of Mombasa and Dar-es-salaam is cleared through SCT processes on both the Northern and Central

 

  • Direct exports from Uganda where rolled out through the Port of Mombasa on the Northern
  • Importation of cargo through the airports has not yet been rolled out under SCT. It is cleared using the normal processes upon arrival at the

Q: What are the benefits from the SCT? A: The benefits of SCT include;

  • Reduced administrative costs and regulatory
  • Enhanced the relationship between the private and public sectors.
  • Enhanced application of Information Technology and data collection at the regional
  • Reduced cost of doing business by eliminating duplication of
  • Realization of economies of scale and optimal use of resources in clearance of goods in
  • Enhanced attraction of foreign, domestic and cross border investment.
  • Creation of a mechanism for prevention of smuggling at a regional
  • Reduced risks associated with non-compliance on the transit of
  • Creation of an efficient mechanism of revenue
  • Increased business turn-around times due to the elimination of duplicated processes along the
  • Support of the EAC Common Market and creation of an Internal Single
  • Elimination of Non-Tariff Barriers (NTB) to enhance seamless flow of goods within the EAC region

 

 

Q: Which Countries are involved in the SCT?

A: The current East African Community (EAC) Partner States are;

  • Burundi
  • Kenya
  • Rwanda
  • Tanzania
  • Uganda

 

Q: Will importing/ destination Partner states deploy officials at the first points of entry?

A: Revenue Authorities have deployed officials to the first points of entry to facilitate the smooth operations of the SCT. URA deployed officers at the Port of Mombasa, Nairobi, Naivasha, Nakuru, Eldoret, Kisumu,  and  at  the  Port of Dar es salaam.

Q: Who are the key stakeholders in the SCT clearance Processes? A: The key stakeholders involved in the SCT include:

  • Importers and exporters
  • Customs Agents
  • Transporters
  • Bonded warehouse owners
  • Container Freight Stations (CFSs)
  • Ports Authorities
  • Shipping Line Agents
  • Insurance Companies
  • Other Government     Agencies     g.     Standards Bureaus,                               Transport Authorities, etc

Q: Are there any requirements for stakeholders to transact under  the SCT?

A: Yes, Key stakeholders must fulfill some requirements to be able to smoothly transact under the SCT clearance procedures.

Importers & Exporters

  • Appoint a licensed clearing agent/or get licensed for own
  • Develop a working relationship with shipping line
  • Knowledge on SCT process and

Customs Clearing Agents

  • Acquire license from respective Revenue
  • Execute a Regional Bond
  • Register with Port
  • Develop a working relationship with shipping line
  • Acquire knowledge in SCT & training in other Revenue Authorities Customs
  • Acquire access rights in the Revenue Authorities Customs

 

  • Sensitize their

Transporters

  • Acquire Transit License from the respective Revenue Authorities

Q: Are the Customs Clearing Agents involved in the clearance process required to relocate to Mombasa and/or Dar es Salaam as first points of entry respectively?

A: Customs Clearing Agents involved in the clearance process may choose to operate under the Mutual Recognition of Customs Agents and/or relocate to the first points of entry (Dar es Salaam and Mombasa).

Note: Those who wish to operate businesses in  other  Partner  States  must meet the legal requirements for business registration in that Partner State.

Q: What is Mutual Recognition of Customs Clearing Agents?

A: Customs Clearing Agents that are licensed by one Partner State are recognized in the other Partner States and are granted access rights to operate in the respective Customs Systems to facilitate the clearance of cargo destined to and from their respective countries.

Q: How can a Customs Agent handle Kenya Ports Authority (KPA) or Tanzania Port Authority (TPA) processes if they have no presence at the Port?

A: The Customs agent may nominate another agent to handle Port Processes, the nominated agent known as the “Third-Party Declarant” or “Forwarder” who is captured in Box 51 on the SCT declaration/ entry.

Q: Whose is a Third-party declarant/ forwarder?

A: Is a clearing agent with presence either at the Port of Mombasa and/ or Port of Dar es Salaam nominated by another clearing agent in Uganda with no presence at the Ports of entry to carryout cargo clearance at the Port.

 

 

Q: Are Mombasa and Dar es Salaam Ports the only first points of entry into the EAC Region?

A: No. Airports and other border intra-region loading points are also considered as first points of entry. Border intra-region such as Vurra, Elegu, Oraba, Mpodwe, Busunga, Afogi, Lia, Ishasha River etc.

 

Q: How are goods cleared under the SCT? A: Under the SCT;

  • A customs declaration is made in Uganda after manifest has been received in the Asycuda system and payments made where
  • Document Processing Center (DPC) will handle the customs formalities and release the declaration for further clearance at the
  • After release by DPC, the clearing agent that made the declaration will submit request for generation of exit notes (IM4s) or departure of T1s using the Touchpoint
  • Upon receipt of the exit note or departed T1, the third-party agent or forwarder will proceed to clear cargo out of the Port with the relevant Port
  • Before departure from the Port, the respective Revenue Authority will generate a C2 for cargo movement to the inland

Q: Is it possible to declare transit within the EAC under the SCT?

A: No. Transit declaration shall only apply to goods originating from foreign countries and destined to countries outside the EAC  region.  Movement  of goods within the EAC Partner states is referred to as “transfer of goods”.

Q: Is bond guarantee applicable under the SCT?

A: A regional Bond guarantee is applicable for goods declared for warehousing, temporary importation, transit and on duty remission/ exemption. There’s no bond guarantee for goods where taxes have been paid at destination.

Q: If a consignment is selected for physical examination at the Points of entry, who is responsible for supervising the goods on behalf of the importer?

A: The Customs Agent responsible for the clearance of  the  cargo  shall supervise the physical examination of the goods.

Q: Is it possible to dispose off / sell  goods  in  any  Partner  State  other than Uganda after payment of taxes?

A: Yes, it is possible to sell goods where duties and taxes have been paid in Uganda to another Partner State subject to approval from the Commissioners of Customs of Uganda and the Partner State where the goods are to be sold.

 

Q: Are internal borders of importing/ destination Partner States still handling cargo clearance?

A: Yes but with reduced controls at the internal border stations. Such borders include Malaba, Busia, Mutukula, Katuna, Cyanika, Lwakhakha etc.

Q: How are locally produced goods treated under the SCT?

A: These are called intra-regional transfers. Goods produced in the region are not subjected to import duty when transferred to another Partner State if they meet the EAC Rules  of Origin criteria. However, these goods shall be subjected to domestic taxes (such Value Added Tax, VAT and excise duty) which must be paid before the goods move from the country of origin to the destination Partner State.

Q: Is the Regional Electronic Cargo Tracking System (RECTS) free of charge; if not who meets the cost?

A: The RECTS is free of charge.

Q: How is the SCT addressing the problem of several weigh bridges along the transit/ transfer routes?

A: Partner States reduced the number of weigh bridges.

Q: How are Revenue Authorities ensuring that the networks are stable?

A: The Revenue Authorities have dedicated teams to monitor the systems performance and ensure continuous stability.

Q: Who is responsible if the bonded cargo does not reach its intended destination in Uganda?

A: The clearing agent executes a regional Bond Guarantee for Bonded Cargo and is therefore responsible for ensuring that it reaches the final destination.

Q: How are the Other Government Agencies (OGAs) in Uganda involved in the clearing process conducting their mandates in SCT environment?

A: Some Government agencies have positioned their staff at the first points of entry and/or developed working relationships with the relevant OGAs in the Partner State of the first point of entry. While others have been integrated in the Asycuda system to clear the goods before being evacuated.

Q: Who is responsible for the security of goods along the corridors?

A: Whereas the Partner States provide security, the responsibility of securing the goods lies with the customs clearing agent, the transporter and the owner.

 

Q: Hasn’t SCT lead to loss of jobs?

A: The SCT has provided for a larger scope of operations and business opportunities.

Q: How is information relayed between the Partner States and the Port Authorities?

A: There is ICT interconnectivity between Revenue Authorities and the Port Authorities to enable real time information exchange on each consignment.

Q: What is a C2?

A: It is a cargo movement document issued by the Partner State where the goods are originating from. It is sometimes referred to as a “cargo manifest.”

Q: What is the C11/ C9 process?

A: Is the Kenya Revenue Authority process used to manage manifest amendments ONLY initiated by the shipping line. The amendments arise to make corrections on the manifest used to make a Customs declaration.

Q: What are the requirements for the C9/ C11 amendment?

A: The shipping line or shipping line agent lodges a request with URA providing supporting documents;

  • Manifest corrector from the Shipper in country of
  • A letter of indemnity from the shipper
  • A copy of the original bill of
  • An Affidavit sworn in Uganda) by the buyer and proof of payment of stamp duty for the
  • TIN Certificate of the buyer

Q: What are CFSs?

A: Container Freight Stations are extensions of the Port which are licensed by the Commissioner of Customs for the purpose of storage and clearance of goods and to ease congestion at the Port.

Q: How are containerized motor vehicles handled under SCT?

A: They are consigned to a general goods bonds and NOT a motor vehicle bond where stripping is carried out to remove the motor vehicles from  the containers.

 

Q: How are re-exports to Partner States handled under SCT?

A: Step by step process (Currently working in Rwanda and Burundi ONLY, pending development in the other three (03) Partner State systems in Kenya, Tanzania and Uganda.)

  1. The Agent presents the purchase documents/ sales contract and a copy of the IM7 to the bond
  2. Bond officer generates a manifest with as per the documents presented by
  3. Bond officer issues the manifest to the clearing agent to enable capturing of an SCT declaration in the country of
  4. The agent includes manifest number in SCT declaration that is generated in the destination country
  5. SCT declaration     is    released    in     the destination                   country              and transmitted into URA ASYCUDA system
  6. Bond officer assesses the declarations, confirms the declaration and uploads a verification
  7. Bond officer generates a cargo movement document (C2) and issues it to
  8. Cargo is flagged
  9. Customs officer at the border ‘exits’ the consignment upon arrival at the exit

Q: Do SCT Clearance procedures cater for cross-border trade?

A: No, SCT clearance procedures do not cater  for  cross  border  trade.  These are verified and processes on arrival at internal border stations. These are cleared under the simplified trade regime on arrival  at  internal  border stations.

Q: Do SCT Clearance procedures cater for bus cargo?

A: No, SCT clearance procedures do not cater for cargo carried in buses from Partner States. The cargo will either be declared at the border stations of entry or Central Bus Terminal in Nakawa.

Q: What happens if a client imports a motor vehicle alongside some few goods (inside the motor vehicle)?

A: The agent is required to capture two (02) separate entries; one entry for the motor vehicle (either a WT8) or an IM4) and another one IM4 for the goods. Both entries should be inspected accordingly.

 

Goods declared under a WT8 entry move through the Partner State using the Regional Guarantee Bond while goods declared on IM4 pay taxes while still at the first points of entry.

Q: What happens when an importer imports more than  one  motor vehicles on the same bill of lading but one motor vehicle is a contraband?

A: The importer through his/ her shipping line will be required to apply for manifest splitting to create a manifest for the contraband motor vehicle to either be declared to a non-Partner State or re-export it back to the country of origin. Importation of contrabands is prohibited under S200 of the EAC CMA, 2004 and such a motor vehicle will not be allowed into the country.

Q: How are exempted goods treated under SCT?

A: All exempted goods are cleared under the Warehousing Regime (WT8). The goods are secured under an RCTG bond, and an exemption entry processed on arrival in the country.

Q: Are there goods exempted from a certificate of origin

A: A product sent as a small package from a private person in a Partner State to a private person in another Partner State,  whose  value  does  not  exceed USD 500 or which forms part of travelers’ personal luggage whose value does not exceed USD1,200 are admitted as originating  product  without  requiring the submission of a proof of origin, provided that  the product  is not imported by way of trade and has been declared to meet the requirements of these Rules of Origin and where there is no doubt as to the veracity of such a declaration.

Q: What does a client do in case an SCT consignment does not arrive in the country due to occurrences like accidents, thefts, fire, etc?

A: The following is the procedure;

  • Obtain incident and scene of crime report from Police Authorities, Revenue Authority of the Partner State where incident happened, nearest URA office and any other related evidence e.g. Pictures of the Scene
  • Obtain a taxes demand note from the Partner State of
  • Submit report or refund claim (for IM4s ONLY) to the Assistant Commissioner Enforcement for further investigations and

 

Q: Is stripping/ de stuffing of containers possible for goods imported through the Port of Mombasa Port?

A: Yes, it is possible. A client is required to seek formal approval from the Manager Mombasa URA and Manager Enforcement KRA before such an entry is captured. The goods eligible for stripping are; containerized motor vehicles, cargo on open top or flat rack containers and machinery.

The Goods are captured as bulk goods and processed as such attaching the approval letter is attached on the entry.

Q: What happens if Ugandan destined goods arrive at the Ports and are not entered for Customs clearance?

A: Goods not declared within 21 days are liable for auction. (S.34 of the EAC CMA, 2004).

Q: How is groupage or consolidated cargo handled under SCT?

A: All groupage cargo is cleared under the warehousing regime (WT8) as declared on the master bill of lading. Deconsolidation/ breaking bulk shall be done when goods arrive at destination partner state.

Q: How is fuel handled under SCT?

A: The importer has ten (10) days to make a Customs declaration/ entry for fuel product after discharge from the vessel. Beyond 10 days after discharge, a penalty of 2% is imposed on the undeclared fuel according to S.249 of the EAC CMA, 2004.

All fuel pays taxes at the Ports of entry (Mombasa and  Dar  es  Salaam)  and none is clearing using the warehousing regime (WT8).

Q: How is a bill of lading with several units/ containers destined to different bonds handled?

A: The bill of lading will be cleared on one entry i.e. total write off of bill of lading (apart from bulk consignments like wheat, fuel, Crude Palm Oil (CPO) etc where part clearance can be done) and thereafter, a bond to bond effected at arrival at the bond of destination respectively.

Q: How is excess and short landed cargo managed?

A: Short landing and/ or excess landing are  detected  after  completing discharge and outturn reports issued. An importer/  Clearing Agent through

 

the shipping line submits a manifest amendment request of quantities and/ or packages from the Revenue Authorities before making a declaration.

A declaration made without manifest amendment where a short landing/ excess landing has been identified contravene Customs procedures and is subject to a penalty.

Q: How are exports cleared

A: Transfer of goods for export from a Partner State shall be covered by a single bond guarantee and monitored by the Electronic Cargo Tracking System (ECTS). Levies and charges on exports where applicable shall be made in the Partner State of export.

Q: What is RCTG?

A: This is the Regional Customs  Transit  Guarantee  Bond  that  is  used  to secure warehoused goods (WT8)  that are  on transit within the COMESA and the EAC Regions. The RCTG is housed and managed in the RCTG MIS system by the COMESA RCTG Technical team.

Q: At what point is the RCTG bond retired?

A: The RCTG Bond is retired at assessment of subsequent IM7 or IM4.

Q: Can a declarant use an RCTG bond Number that belongs to another declarant in the declaration (WT8).

A: No. RCTG numbers are configured in the system and tagged to the respective declarant’s TIN.

Q: Who Monitors RCTG bond account performance?

A: It is the responsibility of the declarant to monitor the performance of their RCTG accounts. e.g. bond balances, active carnets  etc.  the  declarant  can acquire rights in the MIS system from COMESA RCTG technical team

Q: How are temporary imports Cleared

A: Duty paid goods which are transferred from one Partner State to another for temporary use move under bond guarantee.

Q: Whom do I contact for any inquiries and clarifications on SCT?

A: The Partner states have created SCT liaison offices for efficient coordination of SCT activities.

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