Adopting a Harmonized Regional Approach to Customs Regulation for the Tripartite Free Trade Agreement

Jana, Vimbai Lisa Michelle

Adopting a Harmonized Regional Approach to Customs Regulation for the Tripartite Free Trade Agreement

Law - Civil / Private / Trade / Anti Trust Law / Business Law

Summary

The three regional economic communities (RECs) in Eastern and Southern Africa are the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC). Together, they have recognised the need to work towards regional cooperation aimed at the eventual creation of a single regional economic community or Tripartite Free Trade Agreement (TFTA). This will replace the existent RECs in Eastern and Southern Africa to which the member states of these two regions have multiple membership. The TFTA region comprises a total of 27 member states which have a combined population of 527 million people and a combined gross domestic product (GDP) of USD 624 billion. These statistics translate into a potential regional economic powerhouse for Eastern and Southern Africa.
One of the major goals of the TFTA is to harmonise trade arrangements among the three RECs, improve the movement of goods and persons within the single integrated region, facilitate the joint implementation of regional infrastructure projects and enhance co-operation of member states. This is a laudable initiative by the member states of the three RECs and it is recognised that regional integration is the first step towards integration into a multilateral trading system. For the TFTA member states, it is crucial that there is an awareness to move towards a review of domestic customs legislation and policy and to develop regional, supranational legislation and regulations in order to gain a stronger competitive edge in the global market.
This study shies away from proposing a „quick fix‟ or „instant benefit‟ to the harmonisation of TFTA member states customs legislative frameworks and policies and the development of a single automated, interoperable electronic customs system. Rather, it places its focus on long-term sustainable benefits which will be realised over time. The harmonisation of TFTA member state customs legislative policies and the resultant Information and Communications Technology (ICT) reforms to the customs processes of the TFTA member states, though not immediate or short-term, will strategically position the region to conduct business in an increasingly volume driven, fast paced, electronic global economy.

Excerpt

Jana, Vimbai Lisa Michelle: Adopting a Harmonized Regional Approach to Customs

Regulation for the Tripartite Free Trade Agreement, Hamburg, Anchor Academic

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DEDICATION

To my son Jordan, for giving me the strength to walk through the rain;

To my late father, Victor Lewis Jana for instilling in me the priceless value of an education;

To my mother Esther Jana, for shining like a beacon and leading by example;

To my sisters, Tsitsi and Tatenda for believing in me; and

To my aunts Senzeni and Netsai, thank you for being my pillars of support.

The joy of the Lord has truly been my strength.

ACKNOWLEDGEMENT

First, I would like to express my heartfelt gratitude to Professor Rieke Wandrag. Words are

inadequate to fully express my gratitude to you for transforming my dreams to reality through

enabling me to pursue this programme and affording me a once in a lifetime opportunity to

reach for the stars.

Secondly, I would also like to thank my supervisor, Professor Patricia Lenaghan, who has

been patient with me and has brought out the best within me. Thank you for constantly urging

me to dig deep within myself to reach for excellence. I am also deeply grateful for the

financial assistance given to me by the University of Western Cape and Australian Aid which

funded my LLM studies.

Thirdly, I would like to thank my family, especially my mother and my sisters Tsitsi and

Tatenda, for their unfaltering support, without which I could not have made it through with

my studies. I am truly thankful for their positive voices, their endless encouragement, their

prayers and much needed financial support. To my son, my sunshine Jordan, without

realising it, you have been my inspiration to go on. The mere thought of you has strengthened

my resolve to succeed.

Finally, I wish to thank my Lord, Jehovah Jireh, who has been faithful to me in all things and

through all things, providing to me all sufficient grace.

KEYWORDS

Automated System for Customs Data

Costs of Trade

Customs

Customs Union of the European Union

Doha Development Agenda

Harmonisation of National Customs Procedures

Information and Communications Technology

One Stop Border Post

Regional Integration

Regional Customs and Trade Policy

Single Automated and Interoperable Electronic Customs System

Single Window

Trade Facilitation

Tripartite Free Trade Agreement

ACRONYMS AND ABBREVIATIONS

AACE

African Alliance for E-commerce

AEC

African Economic Community

ASEAN

Association of South East Asian Nations

ASYCUDA Automated Systems for Customs Data

African

Union

CET

Common External Tariff

COMESA

Common Market for Eastern and Southern Africa

Customs Union

CTTTFP

Comprehensive Tripartite Trade and Transport Facilitation Programme

DFID

Department for International Development

EAC

East African Community

European

Community

ECSC European

Coal

and

Steel

Community

EEC

European Economic Community

European Union

FTA

Free Trade Area

GATT

General Agreement on Tariffs and Trade

GDP

Gross Domestic Product

ICT

Information and Communications Technology

OAU

Organisation of African Union

OSBP

One Stop Border Post

PAA

Pan Asia E-Commerce Alliance

REC

Regional Economic Community

RISDP

Regional Indicative Strategic Development Plan

SEA

Single European Act

SAD

Single Administrative Document

SADC

Southern African Development Community

TFTA

Tripartite Free Trade Agreement

United

Nations

UNCTAD

United Nations Conference on Trade and Development

USAID

United States Agency for International Development

WCO

World Customs Organisation

WTO

World Trade Organisation

TABLE OF CONTENTS

Dedication...i

Acknowledgment ... ii

Keywords...iii

Acronyms and abbreviations... iv

CHAPTER ONE: INTRODUCTION AND OVERVIEW

1.1 Background ...1

1.2 Research objectives...4

1.3 Research question... ...............................................................................5

1.4 Significance of research ...6

1.5 Research Methodology ...8

1.6 Scope of research...9

1.6 Overview of chapters...9

CHAPTER 2: THE SINGLE WINDOW EXPERIENCE

2.1 Introduction...11

2.2 Selecting a suitable single window model...17

2.2.1 The single authority model...17

2.2.2 Single automated system model for collection and dissemination of information...18

2.2.3 The automated information transaction model...18

2.3 Motivation for a regional single window model...20

2.4 Developing a bespoke single window model for the TFTA...22

2.5 Conclusion...26

CHAPTER 3: AN ANALYSIS OF TFTA EFFORTS TO HARMONISE CUSTOMS

LAWS AND POLICIES

3.1 Background...30

3.2 Tripartite developments in customs policy and legislative harmonisation...34

3.2.1 Customs information communications technology policy and connectivity...35

3.2.1.1 Electronic single window...38

3.2.2 Integrated border management...39

3.2.3 Regulatory reform...41

3.2.3.1 Customs tariff nomenclatures and statistical nomenclatures...42

3.2.3.2 The design and implementation of a harmonised regional customs bond...42

3.3 Customs and legislative procedures...43

3.3.1 Trade facilitation...44

3.3.2 Preservation, investigation and suppression of customs offences...44

3.4 Tariffs...45

3.5 Critical analysis of efforts in harmonisation...45

3.6 Conclusion...47

CHAPTER 4: THE CUSTOMS UNION OF THE EUROPEAN UNION-

DEVELOPMENT

AND

MODERNISATION

4.1 Introduction...50

4.2 Rationale for a customs union...50

4.3 Achievement of a customs union in the European Union...52

4.4 A modernised customs code for the European Union...56

4.5 Original and future successes in information and communications technology...58

4.5.1 The Single Administrative Document...59

4.6 Recommendations for the TFTA from EU experiences...60

CHAPTER 5: DEVELOPING A LEGAL AND ICT FRAMEWORK FOR THE TFTA

REGIONAL SINGLE WINDOW.

5.1 Introduction...64

5.2 Planning, preparation and implementation of the single window...66

5.2.1 Courting stakeholders and potential users of the single window...67

5.2.2 Formulating the design of the single window model...69

5.2.3 Obstacles to design and implementation...71

5.3 Coordinating efforts between agencies...72

5.4 Creating a regional legal framework for the single window...75

5.4.1 Adopting a regional protocol for the regulation of the single window...77

5.4.2 Developing an internationally accepted customs processing system...78

5.5 Post implementation challenges...81

5.6 Conclusion...84

CHAPTER 6: SUMMARY OF FINDINGS AND CONCLUSION

6.1 Findings...85

6.2 Recommendations...88

6.3 Conclusion...90

BIBLIOGRAPHY...94-102

CHAPTER ONE: INTRODUCTION AND OVERVIEW

1.1

BACKGROUND

The three regional economic communities (REC's) in Eastern and Southern Africa which are

the Common Market for Eastern and Southern Africa (COMESA), the East African

Community (EAC), and the Southern African Development Community (SADC) together

have recognised the need to work towards regional cooperation aimed at the eventual creation

of a single regional economic community or Tripartite Free Trade Agreement (TFTA) which

will replace the existent REC's in Eastern and Southern Africa to which the member states of

these two regions have multiple membership.

COMESA, EAC and SADC as the TFTA

region (`the region') combined comprises a total of twenty seven member states which have a

combined population of 527 million people, a combined gross domestic product (GDP) of

USD624 billion.

These statistics translate into a potential regional economic powerhouse for

Eastern and Southern Africa.

One of the major goals of the TFTA is to harmonise trade arrangements among the three

REC's, improve the movement of goods and persons within the single integrated region,

facilitate the joint implementation of regional infrastructure projects and enhance co-

operation of member states.

This is a laudable initiative by the member states of the three

REC's and it is recognised that regional integration is the first step towards integration into a

multilateral trading system. For the TFTA member states, it is crucial that there be an

awareness and move towards a review of domestic customs legislation and policy and the

development of regional supranational legislation and regulations in order to gain a stronger

competitive edge in the global market.

COMESA-EAC-SADC Tripartite - institutional framework available at

http://www.comesa-eac-TFTA-

tripartite.org/home

(accessed 4 May 2013).

COMESA-EAC-SADC Tripartite members and background information available at

http://www.comesa-eac-

TFTA-tripartite.org/members

(accessed 4 May 2013).

Mills G and E. Sidiropoulis `Trends Problems and projections in Southern African Integration' in Clapham C,

Mills G, et al `Regional Integration in South Africa: Comparative International Perspectives' (2001) 2.

TradeMark South Africa available at

http://www.trademarksa.org/node/1042

(accessed 4 May 2013).

Lamy P `The challenge of integrating Africa into the World Economy'' In Clapham C, Mills G, et al `Regional

Integration In South Africa: Comparative International Perspectives' (2001) 15.

While these aims may yet sound ambitious, the goals are indeed plausible and achievable.

The three REC's are now more than ever facing increased and unprecedented volumes of

trade due to the general increase in trade volumes on a global level.

It is of vital importance

that the TFTA be able to exercise flexibility and allow its trade facilitation policies to evolve

in order to adapt and keep up with global trends in trade. The borders of the envisaged single

regional economic community which will eventually replace COMESA, EAC and SADC

must now more than ever, be efficient and allow for the quicker processing of goods as trade

volumes into the region continuously increase.

In this singular spirit of regional economic development and integration, it becomes

worthwhile to draw a few lessons and pointers from the Customs Union (CU) of the

European Union (EU) which has over time, successfully managed to evolve to adapt to

changing trends in international trade and customs processing to efficiently manage vastly

increased cross-border movement of goods.

A single customs legislative framework for the

TFTA can become a reality through the driving of fundamental reforms in the area of

national customs policymaking and adapting domestic legislation to be developed to be

harmonised at regional level which will effectively and vastly reduce the costs of trade,

increasing trade volumes and minimising and simplifying bureaucratic processes at national

borders and points of entry into the region.

This process is no mean feat and will involve strong political willpower and cooperation from

the member states and a certain degree of surrendering national sovereignty

as the

development of a single automated and interoperable electronic customs system for the TFTA

will be a project of mammoth proportions requiring dedicated financial commitment from all

stakeholders involved.

This proposed introduction, development and maintenance of a

Evans D `Options for regional integration in Southern Africa' IDS Working paper 94. 5-8.

WCO: `There is strong commitment to customs modernisation in Africa' All Africa.com 14 March 2012

available at

http://allafrica.com/stories/201203141063.html

(accessed 4 May 2013).

Maitland C and Van Gorp, 2009, `Beyond Harmonization: ICT Policymaking in Regional Economic

Communities', Information Society, 25, 1, 27.

Messerlin P, Zarouk J, `Trade Facilitation: Technical regulations and customs procedures', World Economy 23,

(2000) Vol. 4 580-584.

Clapham C `The challenge of integrating Africa into the World Economy'' In Clapham C, Mills G, et al

`Regional Integration In South Africa: Comparative International Perspectives' (2001) 60.

UNCTAD Trust Fund for trade facilitation negotiations technical note 13 available at

http://www.unctad.org/technicalnotes

(accessed 4 May 2013).

single automated and interoperable electronic customs system will allow for the exchange of

information between customs offices within the region as a whole.

This mini-thesis shies away from proposing a `quick fix' or `instant benefit' to the

harmonisation of TFTA member states customs legislative frameworks and policies and the

development of a single automated and interoperable electronic customs system but rather

places its focus on long-term sustainable benefits which will be realised over time. The

harmonisation of TFTA member state customs legislative policies and the resultant

Information and Communications Technology (ICT) reforms to the customs processes of the

TFTA member states, though not immediate or short-term, will strategically position the

region to conduct business in an increasingly volume driven, fast paced, electronic global

economy.

This will in turn propel the TFTA as a regional economic block to realise greater economic

successes in the long run. A single automated and interoperable electronic customs system

will also cater for essential controls over customs duties and a common external tariff in a

consistent transparent manner across the region

. Harmonisation of national customs policies

and a common electronic customs system will be beneficial as it will provide vital

information and statistics with regards to every movement of goods exported or imported

from and into the TFTA.

With global trade volumes increasing phenomenally, customs processing technology will be a

major driver of regional economic development and fundamental over-arching reforms will

have to be undertaken in the realm of customs ICT, hardware and software in order to realise

the real financial benefits of creating of a common customs area for the region. This will

assist in the elimination of the duplication of customs processes.

A TFTA harmonised

customs system on a legal and technological front will increase the competitiveness of

businesses operating in the region, reduce wasteful costs of trade and improve regional

customs controls.

Wilson J, et al `Assessing the Benefits of Trade Facilitation: A Global Perspective' The World Bank, Institute for

International Economics, Washington DC, and Osaka University, Japan

UNCTAD Trust Fund for trade facilitation negotiations: technical note 13 available at

http://unctad.org/en/docs/TN13_DocumentSimplification.pdf

(accessed 4 May 2013).

In developing a regional customs legislative framework and policy, modernising the customs

systems of member states and developing a common electronic customs system, it may be

prudent to draw a few lessons from the CU of the EU which is one of the main pillars of the

EU, and whose creation, development, modernisation and simplification of a customs legal

and technological environment has taken place gradually over a period of several years

beginning with an amendment to the European Community (EC) Customs Code.

This major

amendment gave EU customs authorities the powers to implement some of the most

advanced security requirements in the world, while creating an environment which did not

disrupt or create blockages to legitimate trade.

The first step to the EU-wide electronic exchange of customs declarations was established

with the inception of its computerised transit system which started in 1997. As a contribution

to the `e-government' programme, in July 2003, the EC Commission

published its

communication on a paperless environment for customs and trade.

This official

communication provided a vision of a modern customs service for all the EU member states

communicating electronically. This vision was endorsed by the council resolution of

December 5, 2003

which recognised the importance of a paperless environment for customs

and trade, a common automated customs system and the inter-operability and exchange of

electronic information between member states.

1.2

RESEARCH OBJECTIVES

Due to current existing disparities in customs legislation and procedural aspects at a member

state level and the current move by the COMESA-EAC-SADC tripartite to work towards a

unified economic community, it has become crucial to rethink nationalist customs policies

EC Commission regulation 648/2005 of the European Parliament and of the Council amending Council

Regulation (EEC) No 2913/92 ; EC Commission regulation 2913/92 of 12 October 1992 establishing the

community customs available at

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32005R0648:en:HTML

(accessed 4 May 2013).

EC Commission regulation 2913/92 of 12 October 1992 establishing the community customs code available

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31992R2913:en:HTML

(accessed 4 May 2013).

COM/2003/452 OF 24/07/2003 A simple and paperless environment for customs and trade available at

http://ec.europa.eu/prelex/detail_dossier_real.cfm?CL=en&DosId=184452

(accessed 4 May 2013).

EC Commission regulation 2286/2003 of 18 December 2003 available at

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:343:0001:0123:en:PDF

(accessed 4 May

2013).

and strategies in order to allow for the adoption a supranational approach to customs

processes in order to realise the adoption of a single integrated regional approach to customs

and trade facilitation for the TFTA.

Unless a change to supranational thinking is adopted, the costs of trade for the region can

become significant and prohibitive for international traders and subsequently prove to be a

deterrent to investors from conducting business in the region as a whole due to unforeseen

and unpredictable costs and lack of familiarity with differing individual member state

customs processes which vary significantly from jurisdiction to jurisdiction. It is therefore in

the best interests of the TFTA region to formulate a simplified, single legal and technological

framework for a coordinated approach towards the creation of a uniform set of customs laws

and trade facilitation procedures which are easily accessible, adequately publicised in the

public domain and well-known by traders.

Customs today, as a sub-component of trade facilitation efforts, finds itself firmly positioned

at the interface of a rapidly dynamic global trading environment which is characterised by

rapid consumption patterns, increased trade volumes, terrorism, organised crime, and modern

hazards in the form of the movement of dangerous goods such as drug precursors.

The

members of the TFTA, in harnessing their full combined economic potential through trade,

must work together towards the harmonisation of their customs policies and develop a single

customs legislative framework which is supranational and takes precedence over national

domestic law. This is essential if the single integrated economic is to realise tangible and

measurable trade benefits.

1.3

RESEARCH QUESTION

In line with the above proposal, this mini-thesis puts forward the following questions:

Southern Africa Regional Integration strategy paper 2011 2015 African Development Bank (2011) available

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/2011-2015%20-

%20Southern%20Africa%20-%20Regional%20Integration%20Strategy%20Paper.pdf

(accessed 4 May 2013).

Southern Africa Regional Integration strategy paper 2011 2015 African Development Bank

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/2011-2015%20-

%20Southern%20Africa%20-%20Regional%20Integration%20Strategy%20Paper.pdf

(accessed 4 May 2013).

a) Is harmonisation of the customs legislation and policies of the member states of the TFTA

a necessity to achieve full regional integration and growth? and if so,

b) What are the benefits of harmonisation of regional customs systems in terms of a unified

legislative and technological framework for the TFTA?

c) What challenges and sacrifices are to be faced in the harmonisation of customs policies of

the member states in the TFTA on both a legal and technological level?

d) Is there hope in regional integration and what lessons may be drawn from the EU as an

advanced and relatively successful REC in terms of developing a legal and technological

framework for customs systems for the TFTA?

Through the harmonisation of national customs legislative frameworks policies and

technological systems, member states will be in a position to effectively contribute to the

lowering of costs of trade between governments and business and in turn attract investment to

the region. This mini-thesis therefore essentially, by and large seeks to draw a number of

lessons from the EU as a CU in mapping a way forward for the TFTA and drafting a road

map towards the development of common regional customs policies and systems whilst

recognising understandable region-specific, developmental and technological evolution

differences which may exist between the TFTA and the EU.

1.4

SIGNIFICANCE OF RESEARCH

Costs of trade are well recognised to be wasteful expenditure in international trade which do

not add real value to goods and result in artificially high valuation of products to the end user

at the bottom of the supply chain. The reduction of trade costs associated with conducting

business in the region which will follow as a result of the simplification, streamlining and

creation of uniform customs procedures and the development of an automated and

interoperable electronic customs system for the TFTA region, over the medium to long term,

will immensely benefit TFTA member states.

The heads of member states within the three REC's agreed to the establishment of a TFTA

which would combine the existing member states of the three existing REC's, at a tripartite

summit held in 2008.

This was in concordance with the vision propounded by the African

Union (AU) of `an integrated, prosperous and peaceful Africa, driven by its own citizens and

representing a dynamic force in the global arena'

which has been translated by the TFTA on

a sub-regional level to become a vision which aims to "improve the economic and social

welfare of the citizens of the TFTA region through promoting regional economic growth by

creating a conducive environment for regional trade to take place."

In turn the region as an economic block will begin to reap the benefits of a uniform customs

regime and system which is well known and easily understood by international traders and

simultaneously gear the region into a position to adequately handle the increase in trade

volumes and ongoing technological advances in the world of international trade and customs.

The proposal put forward by this mini-thesis to develop harmonised customs processes and

develop a single electronic customs system for TFTA member states will streamline customs

procedures at national borders and points of entry to increase regional economic

competitiveness and as a result, significantly reducing the costs of trade for international

traders.

This is an essential proposal which will promote the regional development of customs from a

legal and technological perspective and better position regional customs both for the medium

to long term growth of the region. The harmonisation of customs laws and customs electronic

systems will further give rise to legal and procedural certainty to international traders seeking

to conduct business in the region. It is to be reiterated that the development and subsequent

implementation of a single customs electronic system for the region will not be an event but a

long term process.

The process of simplification and harmonisation of customs legislation and policies for TFTA

member states can be achieved and will enable the adoption of a single automated and

interoperable electronic customs system for the TFTA. This mini-thesis will propose that

member states of the TFTA work towards the gradual development of a simplified, common

COMESA-EAC-SADC Tripartite - institutional framework available at

http://www.comesa-eac-TFTA-

tripartite.org/home

(accessed 4 May 2013).

COMESA-EAC-TFTA Tripartite - vision and strategy available at

http://www.comesa-eac-sadc-

tripartite.org/about/vision_strategy

(accessed 4 May 2013).

COMESA-EAC-TFTA Tripartite - vision and strategy available at

http://www.comesa-eac-sadc-

tripartite.org/about/vision_strategy

(accessed 4 May 2013).

electronic customs system for the region. This will see the creation of a single interconnected

regional electronic customs system which will eliminate national discrepancies in the

collection and calculation of customs duties and tariffs and usher in the introduction of a

single window

paperless environment in the administration of regional customs and trade

aimed at building a solid communication and administrative network linking all customs

offices within the region operating at national borders and points of entry.

1.5

RESEARCH METHODOLOGY

There exists a plethora of writings and information on the topic of customs and trade

facilitation from various sources including official documents and reports by the World Trade

Organisation (WTO), the United Nations Conference on Trade and Development (UNCTAD)

and the World Customs Organisation (WCO). This mini-thesis will critically engage current

academic debates and theories on the harmonisation of regional customs policies and customs

systems and further proceed to suggest a regional solution for the TFTA by proposing a

harmonised legal and technological framework for customs processes.

This proposal will be based on a deduction and comparative analysis of other writings and

academic sources on customs and trade facilitation processes by undertaking a critical

evaluation and analysis of the experiences and challenges faced by the EU as a CU in

creating a modernised customs code and developing a single streamlined interconnected and

interoperable automated customs system.

By critically evaluating the challenges of the TFTA in its collective drive towards

harmonisation of national customs processes and customs systems, this mini-thesis proposes

that the TFTA develop the single window system and adopt a single automated and

interoperable electronic customs system similar to that of the EU as an effort to make inroads

towards reducing wasteful costs of trade for international traders seeking to legitimately

conduct business in the TFTA region.

UNCTAD Trust Fund for trade facilitation negotiations: technical note 13 available at

http://unctad.org/en/docs/TN13_DocumentSimplification.pdf

(accessed 4 May 2013).

1.6

SCOPE OF RESEARCH

Due to the broad nature of the topic of trade facilitation and customs and the varied topics

which may be analysed under this discipline, this paper will place its focus specifically on the

development by the COMESA-EAC-SADC TFTA of a single set of customs legislation and

technological procedures for the region in an effort to increase certainty, efficiency and

minimise the costs of trade for international traders seeking to conduct business in the region

as a whole. The mini-thesis will undertake a study of the EU as a CU and seek to understand

how the EU has successfully developed and harmonised its legislative framework and

customs policies in order to create a single efficient automated and interoperable customs

system for its processes and administration.

In order for international trade to work to the best advantage of the TFTA member states,

bold steps should be taken to enhance the simplification of customs processes at a regional

level and reduce the costs of trade for international traders doing business in the region. In

developing the ideas of a harmonised regional customs framework and a single automated

and interoperable electronic customs system which will allow for the exchange of

information between national customs offices within the TFTA, it must be borne in mind that

a balance must be struck between the need to simplify and harmonise the customs laws and

develop a single automated and interoperable electronic customs system for the TFTA and

the indisputable fact that member states customs systems are currently not interconnected,

and are at varying stages of ICT development.

1.7

OVERVIEW OF CHAPTERS

This first chapter is an introduction and overview of the topic and identifies the salient points

which will be addressed by the mini-thesis as a whole in summary form. It shapes out the

arguments propounded by the paper and is a discussion of the background behind the topic

and explains the rationale of undertaking the proposed study and the research objectives of

same while identifying the limitations of the research undertaken.

Chapter two is an examination of the single window experience. It performs a study to

evaluate the single window experience and the benefits of implementing this system to the

TFTA area. This chapter further critically examines the single window experience of the EU

as a CU is also examined in order to achieve a holistic view and appreciation of this customs

processing system.

Chapter three is an analysis of current TFTA efforts to harmonise customs laws and policies.

This chapter seeks to undertake a critical analysis of the current efforts by TFTA member

states in creating and developing harmonised customs legislation and policies throughout the

region. These efforts will be critically evaluated by examining the efforts made so far,

successes achieved and implementational hurdles encountered in the process.

Chapter four takes a look at the Customs Union of the EU specifically with regards to its

development and modernisation. At this stage the mini-thesis undertakes a critical journey of

appreciating the EU customs union. It focuses on the development by the CU of the EU of a

modernised customs code, the migration of EU member states from single and fragmented

customs electronic systems to a single interoperable customs system. In addition a critical

look is taken at the challenges in implementation and disadvantages of a single interoperable

system for the various member states within the EU.

Chapter five discusses proposals for developing a legal and ICT framework for the TFTA

regional single window together with prospective challenges ahead which may be

encountered in the process of harmonising national customs laws and procedures. This

chapter seeks to critically evaluate whether the TFTA member states may make inroads at

regional level with respect to trade facilitation by developing a single automated electronic

customs system for the region. This is in addition to a look at some of the challenges to be

anticipated when implementing the harmonisation of the national customs laws of the

members of the TFTA.

Chapter six puts forwards recommendations and also presents a final conclusion to the mini-

thesis. This chapter concludes the mini-thesis by summarising the points discussed and

rounds off by proposing recommendations to address the anticipated challenges in achieving

harmonisation of the legal and technological aspects of customs in the TFTA.

CHAPTER 2:

THE SINGLE WINDOW EXPERIENCE

2.1

INTRODUCTION

This chapter undertakes a study which seeks to critically evaluate the single window

experience within customs processing and the corresponding benefits of implementing this

system for the members of the Tripartite Free Trade Agreement (TFTA). Businesses engaged

in cross border trade (import and export) are required on the whole, to prepare and submit

large volumes of information and documents to various governmental authorities in order to

fully comply with import, export and transit-related regulatory requirements on a regular

basis. This information and documentation oftentimes has to be submitted through several

different agencies, each having and prescribing their own customised requirements, systems,

forms and processes.

These extensive onerous requirements, together with their associated compliance costs, can

easily become a serious burden to both governments and the business community and pose a

serious barrier to the development of international trade for the TFTA. One approach directed

towards addressing the problem of import and export businesses dealing with multiple

regulatory agencies is the development of a single window processing system for customs.

This is a processing system whereby trade related information and supporting documentation

need only be submitted once at a single entry point by a trader or business entity.

This simplified procedure can vastly enhance the availability and handling of information,

expedite and simplify information flows between traders and government and can result in a

greater harmonisation and sharing of relevant data across governmental systems, bringing

meaningful economic gains to all parties involved in cross-border trade.

The use of the

single window facility by the members of the TFTA can result in improved effectiveness of

official controls and can reduce costs for both governments and traders due to more efficient

use of resources.

The single window customs processing system is a globally recognised trade facilitation

concept which `allows traders to lodge information with a single body to fulfil all import or

McLinden .G et al Border Management Modernisation (2011) 4.

export related regulatory requirements.'

The World Customs Organization (WCO) has in

place, a set of guidelines on single window data harmonisation which are designed to assist in

harmonising and standardising government international trade information and data

requirements in order to develop and implement a single window environment.

It denotes

the coordinated exchange of electronic information with a particular focus on legislation,

procedures, and Information and Communications Technology (ICT). It has an emphasis on

paperless trading for customs clearance, for licence and permit approvals by government

agencies, and in some cases, for transport and logistics activities associated with cargo

import, export, transit, trans-shipment, and border management.

The guidelines are based upon best practices and provide details on policy and organisational

matters necessary to achieve the aimed harmonisation. In addition, these guidelines also

provide tools which governments can employ to facilitate the harmonisation process and

details on harmonisation.

The single-window customs processing system enables international traders to comply with

customs regulations of a target market jurisdiction by allowing traders to submit all the

relevant regulatory documents required for the processing of the through fare of goods across

borders at a single location or regulatory entity. The regulatory documents would include

customs declaration forms, import or export permits, certificates of origin and trading

invoices among other documents which may be required for the clearance of goods.

A single window customs processing system creates a variety of benefits for a country or a

regional economic grouping as it reduces the overall time it would take to clear goods, lowers

associated processing costs, reduces paperwork and significantly reduces the costs of trade

for traders in their dealings with government authorities when obtaining the relevant customs

Economic Commission for Europe: `The Single Window Concept' available at

http://unpan1.un.org/intradoc/groups/public/documents/UNECE/UNPAN019892.pdf

(accessed 4 May 2013).

World Customs Organisation data model, Single window data harmonisation available at

http://www.mincomes.it/semproitalia/tavolo_strategico/8_documenti/WCO/Documenti/WCO_Data%20Mode

l_for_SW.pdf

(accessed 4 May 2013).

McLinden .G et al Border Management Modernisation (2011) 125.

SADC Draft guidelines for coordinated border management. Available at

http://www.trademarksa.org/sites/default/files/publications/Guidelines%20%7C%20Draft%20SADC%20guideli

nes%20for%20Coordinated%20Border%20Management%20%7C%20A%20Practical%20Guide%20on%20Best%

20Practices%20and%20Tools%20for%20Implementation.pdf

(accessed 4 May 2013).

Economic Commission for Europe: The Single Window Concept. Available at

http://unpan1.un.org/intradoc/groups/public/documents/UNECE/UNPAN019892.pdf

(accessed 4 May 2013).

clearances to transport goods across national or economic borders

. This is vastly different

from the traditional pre-single window processing environment where traders are required to

deal with multiple government agencies which may be located in different places before a

trader can obtain the requisite clearance documents to complete the processing of their

imports or exports.

The single window is therefore a practical application of trade facilitation concepts directed

at the reduction of non-tariff trade barriers which can deliver rapid benefits to all members of

the TFTA. In this regard, the single window system in the area of customs administration is

one of the most integral tools for simplifying international trade procedures. In its electronic

form it replaces the manual processing of customs documents by the computer assisted

treatment of electronically transmitted information. The use of the single window system for

the TFTA reduces the costs of trade on a regional level through the standardisation of forms

and documents, data requirements, simplification and computerisation of customs clearance

procedures to accelerate the clearance of goods.

The single window system also has the potential to strengthen regional customs operational

efficiency for control through the implementation of standard procedures and the provision of

full audit trails and mechanisms in addition to providing member states of the TFTA with

accurate and timely statistics on foreign trade and revenue. As a complement to regional

integration reforms for the TFTA, the single window system is an essential component of

customs modernisation which also encompasses the alignment of customs procedures and

documents with international standards, conventions and other instruments.

It must be

recognised as well that a single window system has the capacity to provide a wide variety of

services and facilities depending on its design and coverage.

The idea and attraction of a regional single window for the TFTA is also spurred on by the

increasing impetus in regional and international circles for greater connectivity between

National single window facilitates trade in the Philippines.

http://www.crownagents.com/national-single-

window-facilitates-trade-in-the-philippines.aspx

(accessed 4 May 2013).

UNCTAD Trust Fund for trade facilitation negotiations: technical note 13 available at

http://unctad.org/en/docs/TN13_DocumentSimplification.pdf

(accessed 4 May 2013).

UNCTAD Trust Fund for trade facilitation negotiations: technical note 13 available at

http://unctad.org/en/docs/TN13_DocumentSimplification.pdf

(accessed 4 May 2013).

countries, regions and across continents. The regional model of a single window system

contemplated in this mini-thesis foresees the supranational, nation-to-nation exchange of

trade information between national single windows of the TFTA.

From a comparative perspective of other regional economic communities, the Association of

South East Asian Nations (ASEAN) was one of the first REC's to conceptualise a regional

single window project. In 2005, it concluded the agreement to establish and implement the

ASEAN single window, and followed this through in 2006 with the establishment of a

protocol for that single window.

The ASEAN single window is the first regional initiative

which strives to enhance regional connectivity.

It is defined as

"The secured environment where national single windows integrate and operate. The ASEAN

single window constitutes a regional facility to enable a seamless, standardized and

harmonized routing and communication of trade and customs-related information and data for

customs clearance and release from and to national single windows. Trade and related

customs data and information will stay within, and belong to respective Member States."

It is also pertinent to take a look at the European Union (EU) and the efforts it has made in

achieving significant milestones towards developing an effective single window system. In

this regard, and from a European context, the EU has developed two major single window

initiatives which are firstly, the single window initiative of the Directorate-General taxation

and customs union which aims at a community-level single window, and secondly, the

maritime single window of the Directorate-General for mobility and transport which aims to

provide electronic exchange between the operators of maritime transporters within the EU.

In this context, the single widow is an attractive system because of its ability to connect

national single windows, including the existing evolutionary forms of single windows such as

Koh Tat Tsen. J Single Windows and Supply Chains in the Next Decade, ten years of single window

implementation: lessons learned for the future

Discussion paper Global Trade Facilitation Conference (2011)

available at

http://www.unece.org/fileadmin/DAM/trade/Trade_Facilitation_Forum/BkgrdDocs/TenYearsSingleWindow.pd

(accessed 4 May 2013). (Hereinafter referred to as Koh Tat Tsen. J (2011)).

Koh Tat Tsen. J (2011) available at

http://www.unece.org/fileadmin/DAM/trade/Trade_Facilitation_Forum/BkgrdDocs/TenYearsSingleWindow.pd

(accessed 4 May 2013).

Extract from the agreement signed by the ASEAN Economic Ministers at the 11

ASEAN Summit, Kuala

Lumpur December 2005.

Koh Tat Tsen. J (2011) available at

http://www.unece.org/fileadmin/DAM/trade/Trade_Facilitation_Forum/BkgrdDocs/TenYearsSingleWindow.pd

(accessed 4 May 2013).

customs specific single windows, in global networks that will facilitate cross-border trade and

the sharing of information between member states of the TFTA over the long term.

By improving communications, information exchange and mutual assistance of and between

the different border agencies of the TFTA, member state borders can be managed more

effectively.

The resultant deeper cooperation between member states of the TFTA in the

realm of customs may well be a powerful and effective tool to facilitate trade.

While the

TFTA will initially be a Free Trade Area (FTA) there are plans to gradually evolve the

grouping into a Customs Union (CU) thereby advancing the proposal and argument of

developing a single window system for the TFTA in the area of customs cooperation. The

planned evolution from an FTA through to a CU and finally progressing to becoming a

common market will demand effective controls of the internal borders and, eventually, of the

external borders of the common market.

A modern, automated customs administration can bring about substantial cost savings in

trade and transport logistics. The electronic lodging of customs declarations, document

processing and goods clearance brings substantial time savings and predictability to all

aspects of cross-border trade and limits the room for manoeuvre by unscrupulous traders and

customs officials alike to circumvent a system. The collection of taxes and duties is also

enhanced, as is the statistical database for fiscal and economic policy purposes. In addition,

as part of the process of the automation of customs, the working relationships between

customs and the private sector improve.

More specifically, the benefits of automation include the faster electronic lodgement of

customs declarations, the use of online connections, reduced customs clearance times and less

physical examination of shipments owing to the use of risk management applications,

increased collection of duties and taxes and less fraud due to the uniform application of laws

SADC Draft guidelines for coordinated border management. Available at

http://www.trademarksa.org/sites/default/files/publications/Guidelines%20%7C%20Draft%20SADC%20guideli

nes%20for%20Coordinated%20Border%20Management%20%7C%20A%20Practical%20Guide%20on%20Best%

20Practices%20and%20Tools%20for%20Implementation.pdf

(accessed 4 May 2013).

SADC Draft guidelines for coordinated border management. Available at

http://www.trademarksa.org/sites/default/files/publications/Guidelines%20%7C%20Draft%20SADC%20guideli

nes%20for%20Coordinated%20Border%20Management%20%7C%20A%20Practical%20Guide%20on%20Best%

20Practices%20and%20Tools%20for%20Implementation.pdf

(accessed 4 May 2013).

and regulations and the automated calculation of duties and taxes as well as built-in

security.

In practice, the single window processing system allows a trader to submit, either physically

or electronically, all data and documentation related to the release and clearance of goods by

one central agency which then has the function of informing other relevant agencies or

alternatively, directing or coordinating combined control over the entire process.

The creation and development of the TFTA regional single window for customs to facilitate

the efficient flow of goods across national borders within the region will be an important

factor in increasing the economic performance of the economic area. The TFTA covers a vast

area in Africa and seeks to integrate three Regional Economic Communities (REC's). This is

in itself a project of mammoth proportions but once implemented the issue of creating and

developing a single window system for the region will be a pertinent issue to be addressed

without delay if the TFTA is to bear any economic advantage for its member states.

The three REC's have to date identified infrastructure development and trade arrangements as

starting points and priority areas for harmonisation into the TFTA. This proposed

harmonisation being based on the premise that all the REC's will implement similar and

corresponding customs programmes. In the area of customs, the three REC's have agreed that

the desired focus will be on the harmonisation of among other things, customs laws, customs

valuations, tariff nomenclatures and customs documentation.

Building on this, the three

REC's have become conscious of the importance of a unified customs ICT system and as a

result, agreed to develop a common customs network to allow for information exchange and

transmission across the region.

UNCTAD Trust Fund for Trade Facilitation Negotiations Technical Note No. 3 Use of Customs automated

systems available at

http://r0.unctad.org/ttl/technical-notes/TN03_CustomsAutomationSystems.pdf

(accessed

4 May 2013).

Economic Commission for Europe: The Single Window Concept available at

http://unpan1.un.org/intradoc/groups/public/documents/UNECE/UNPAN019892.pdf

(accessed 4 May 2013).

Disenyana, Tsidiso. SAIIA Discussion Paper, `Towards an EAC, COMESA and SADC Free Trade Area: Issues and

Challenges.' available at

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Knowledge/2009%20AEC-

%20Towards%20an%20EAC%20COMESA%20and%20SADC%20Free%20Trade%20Area%20Issues%20and%20Ch

allenges.pdf

. (accessed 4 May 2013).

Disenyana, Tsidiso. SAIIA Discussion Paper, `Towards an EAC, COMESA and SADC Free Trade Area: Issues and

Challenges.' available at

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Knowledge/2009%20AEC-

%20Towards%20an%20EAC%20COMESA%20and%20SADC%20Free%20Trade%20Area%20Issues%20and%20Ch

allenges.pdf

. (accessed 4 May 2013).

Details

Pages
Type of Edition: Erstausgabe
Year: 2017
ISBN (PDF): 9783960676904
ISBN (Softcover): 9783960671909
File size: 866 KB
Language: English
Institution / College: University of the Western Cape
Publication date: 2017 (September)
Grade: 73
Keywords: International Trade Law Regional Integration Single Window SADC Customs Africa Southern Africa trade REC TFTA Tripartite Free Trade Agreement regional economic communities Eastern Africa COMESA

Author

Vimbai Lisa Michelle Jana (Author)

Adopting a Harmonized Regional Approach to Customs Regulation for the Tripartite Free Trade Agreement

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Author

Vimbai Lisa Michelle Jana (Author)