Transit Bond Requirements

Customs duties are not imposed on goods-in-transit. Nevertheless, shippers are required to execute Customs Transit Bonds in the transit country. In Kenya, the current procedure requires importers of transit goods to secure a Customs bond issued by an insurance company, whilst 'sensitive' cargo such as clothes, wines and spirits, tyres and tubes, shoes, electronic goods, second-hand clothes, food commodities (sugar and rice) require a bank guarantee or cash guarantee.

The customs bond in Uganda is issued by an insurance company and is cancelled upon presentation of a copy CD-COM duly stamped by customs officers of the post of exit. Rwanda also requires a bond in cash.

However, the value of customs bonds vary from country to country because of different duty rates and valuation of goods. The adoption of Common external tariffs and the introduction of a regional bond guarantee scheme should solve this problem.

Cancellation of the customs bond

The bond will be in force until the office of exit receives and endorsed copy of the RCTD from the office of entry in the following country.

The office of exit shall return this copy to the office of departure (or the previous office of entry).

The bond in force shall be cancelled at the office of departure/entry on the day when either the returned copy or the one presented by the declarant has been received and verified by this office, provided that it is endorsed.

Special bond for transit trucks in Kenya

A special bond for trucks had been introduced for trucks involved in transit traffic in Kenya. The Sh1,000,000 cost of the bond was prohibitive to most transporters and has been abolished by the Kenyan authorities with effect from 1 July 2003.

Common External Tariff (CET)

Both COMESA and the EAC are planning to implement a common External Tariff by December 2004. When implemented, the Common external tariff will enhance the implementation of the CD-COM and the Regional Customs Bond Guarantee Scheme.

The introduction of CET is also expected to minimise customs fraud and diversion.

Towards a Regional Customs Bond Guarantee Scheme

Faced with a fragmented system of national bond requirements that tie up colossal sums of money, the TTCA is urging member states to adopt the COMESA Regional Customs Bond Guarantee Scheme, which will eliminate the necessity to execute separate customs bond guarantees for each country transited.

Only four COMESA states - Ethiopia, Malawi, Uganda and Zimbabwe - have ratified the customs guarantee scheme, while nine countries are required for the scheme to become effective.

Implementation of the scheme in the Northern Corridor could be realised if Burundi, DR Congo, Kenya and Rwanda ratify the system.