An arrangement that will facilitate implementation of a fully fledged customs union among the East African Community (EAC) states is high on the agenda of the meeting of the region’s ministers, according to a top customs official.
Under a fully fledged Customs Union, goods originating from one partner state to another will circulate freely without incurring any duties.
The meeting is currently taking place in Arusha, Tanzania.
The ministers are expected to come up with a roadmap that will propose steps and actions including a new trade policy for implementation of a fully fledged customs union that is scheduled to commence in January 2010.
The customs union came into force in January 2005 in the community’s original states of Uganda, Kenya and Tanzania respectively.
According to earlier arrangements, Kenya’s exports to Uganda and Tanzania would maintain internal tariffs with intentions of phasing them (taxes) out gradually in five years.
However, Rwanda and Burundi new entrants to the community started implementing the customs union in July this year, and are also required to execute fully fledged customs union procedures if it comes into force in January.
“The treaty of EAC provides that any member who enters the community enters at the level of customs union. But there are still some gaps that have to be addressed. This will be decided upon by the Council of Ministers,” said Eugene Torero, the Deputy Commissioner General of Rwanda Revenue Authority (RRA).
Torero also doubles as the Commissioner for Customs Services.
Despite EAC’s implementation of the Customs Management Act as the main legal instrument guiding the movement of goods, Torero noted there is need for an institutional framework agreed upon by partner states to make the fully fledged customs union operational.
“Right now we still have borders but under a fully fledged customs union, the borders are not tied to territorial boundaries of a country. We have common law, procedures, rules of origin, Common External Tariff and are phasing out internal tariffs. Free circulation is not yet there,” he said.
The Commissioner also observed that a fully fledged customs union requires that the national customs departments harmonize their operations, something that has not yet been done.
Customs services are still handled by different revenue authorities in the five partner states.
Under a fully fledged customs union territorial customs borders will shift to the borders between EAC and third countries and goods entering the union shall be subjected to a joint customs control.
The need for a roadmap was agreed upon by the post –budget consultative meeting of finance ministers of the region last week.
The Ministers also directed the EAC Secretariat to convene a joint meeting of the Sectoral Committee on Trade and the Fiscal Affairs Committee to deliberate on practical interventions, mechanisms and enforcement measures for addressing the non-tariff barriers as the EAC commences implementation of the customs union.