Technical Report: Integrated Border Management (IBM) - BOA Tunduma / Nakonde

Transcription

1 Technical Report: Integrated Border Management (IBM) - BOA Tunduma / Nakonde Work Plan Activity: I Magdeline Mabua, Transit Specialist Agnes Katsonga-Phiri, Customs Consultant Lawrence Kubanga, Monitoring & Evaluation Specialist Nomasomi Mpofu, Gender Integration Specialist Submitted by: AECOM International Development Submitted to: USAID/Southern Africa August 2011 USAID Contract No. 674-C DISCLAIMER The author s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. PO Box Plot 50668, Tholo Park, Fairgrounds Gaborone, Botswana Phone (267) Fax (267) info@satradehub.org

2 Table of Contents Table of Contents... 2 LIST OF ACRONYMS... 3 EXECUTIVE SUMMARY INTRODUCTION BACKGROUND OBJECTIVES SCOPE OF WORK METHODOLOGY Border Operations assessments Baselines FINDINGS Border Operations Review Border Operation Hours (CAT) Description of Border Operations and the Role of Different Agencies Clearance Process for Commercial Goods from Tanzania to Zambia Challenges with Clearance Processes for Commercial Goods and ICBTs at Nakonde Fees charged by different public and private agencies Clearance Process for Commercial Goods from Zambia to Tanzania Agricultural products Traded Through Tunduma/Nakonde Informal Cross Border Trade Infrastructure Baselines Volumes Crossing times Traffic from Tanzania to Zambia Traffic from Zambia to Tanzania Summary of Challenges and constraints to Efficient Border operations Recommendations to Address Challenges Annex 1: List of Persons Interviewed Annex 2: Border Post Questionnaire Annex 3: Fees Payable Annex 4: Time Baseline Report

3 LIST OF ACRONYMS ASYCUDA A-PAD BOA CAT CBTA CFA COMPETE DTI DRC FOB IBM ICBT ICT JBC OSBP PAD RTSA SADC SATH STR TCMS TFDA TIP TRA USAID ZABS ZK ZRA Automated System for Customs Data Assessed Pre Arrival Declaration Border Operations Assessment Central Africa Time Cross Border Traders Association Clearing and Forwarding Agent Competitiveness and Trade Expansion Program Direct Trader Input Democratic Republic of the Congo Free on Board Integrated Border Management Informal Cross Border Trader Information and Communication Technology Joint Border Committee One Stop Border Post Pre-Arrival Declaration Road Transport and Safety Agency Southern African Development Community Southern Africa Trade Hub Simplified Trade Regime Transit Control Movement Sheets Tanzania Food and Drug Authority Temporary Import Permit Tanzania Revenue Authority United States Agency for International Development Zambia Bureau of Standards Zambia Kwacha Zambia Revenue Authority 3

4 EXECUTIVE SUMMARY The high cost of exporting and importing goods to, from and within Southern Africa discourages international trade, makes commerce and industry less competitive and contributes to food insecurity. Some of the main contributors to the high cost of trade are delays at the border posts. The main aim of the IBM program is to reduce the time goods take to cross borders and therefore reduce the cost of trade. As one of the initial steps in the implementation of the IBM, SATH conducted a border operations assessment (BOA) at the Tunduma/Nakonde border which lies along the Dar es Salaam Corridor from 1-7 June The primary purpose of the BOA was to analyze what the current border operations are with a view of making recommendations that would reduce the time and cost of transportation of goods and to set time baselines to assess the impact of IBM recommendations. In recognition of the critical role played by informal traders in the SADC region s economies, the border assessment also covered the clearance procedures for goods from small traders/ informal cross border traders (ICBTs). The assessment interviewed both public and private agencies at Tunduma and Nakonde borders to understand their roles and processes they follow in the clearance of commercial goods. To understand processes for clearance of goods for small traders, interviews with customs officials responsible for clearing small value consignments were conducted as well as randomly selected interviews with traders as their goods were being assessed. To establish time baselines, data collectors were used to record truck entry and exit times at the border or customs documents for trucks cleared while parked away from the border. Findings of the BOA identified the following: Uncoordinated work between border agencies leads to duplication; Unharmonized working hours for border agencies at both Tunduma and Nakonde; The road between the borders is a serious hindrance to the movement of traffic across the border; Short border operation hours (06:00hrs 18:00hrs) No sharing of information between border agencies Lack of information by small traders on issues relating to agencies processes and requirements, rebates, tariffs as well as trade instruments. On average trucks leaving Tanzania took about 3.72 days to cross both the Tunduma and Nakonde borders into Zambia. The clearance process for trucks going into Zambia could not be separated for each border as trucks are cleared on both Tunduma and Nakonde before they are allowed to leave Tanzania. The time baselines established for traffic from Zambia into Tanzania was an average of 1.26 days to cross the Nakonde border and another 2.54 days to cross the Tunduma border, making an average of about 3.8 days to clear both the borders. Key recommendations from the BOA were to establish a Joint Border Committee (JBC) that includes representatives from public and private sector agencies and that a JBC Action Plan should be developed to address the identified challenges. SATH, in collaboration with the Zambia Government (Ministry of Trade), will hold a national workshop as well as a workshop at Nakonde to bring together key stakeholders in 4

5 border operations to share with them the Border Operations Assessment findings. The findings and recommendations are inputs in the development of an Action Plan or the Joint Border Committee to be established to address challenges found, that will be implemented with assistance of SATH and other donors. 5

6 1. INTRODUCTION The (SATH) is a regional project to increase international competitiveness, intra- regional trade and food security in the Southern African Development Community (SADC) region. Through trade facilitation, SATH aims to improve transit corridors by improving and streamlining customs and transit systems. To support SADC in its effort of reducing the high cost of transport in the region, SATH is embarking on an initiative called Integrated Border Management (IBM) Program to improve border management efficiency and reduce the time and cost for goods crossing borders. One of the initial steps in the implementation of the IBM Program is conducting border operations assessments (BOA) to understand border clearance processes as well as challenges border agencies face in executing their work. 2. BACKGROUND Several studies conducted in the region have established that the high cost of exporting and importing goods in the Southern Africa region discourages international and intraregional trade, makes commerce and industry less competitive, and contributes to food insecurity. The ports and border post delays have been identified to contribute significantly to the high cost of transportation in the region. According to the LPI Index Results (2010), it takes about 3-4 days to cross the land borders along the Dar es Salaam Corridor borders. A 2010 World Bank Report on Africa s infrastructure also highlighted that out of the average eight days taken to do a journey of 2,500 kilometers from Lusaka in Zambia to Durban South Africa, four of the eight days are spent at border crossings. The report further states that the cost of delays for an eight axle interlink truck has been estimated at about US$300 a day. While not all of this time and related cost can be eliminated, they can be reduced. In addition to the formal sector, the informal sector is also affected by delays at the borders. Decreasing rates of employment in the public and private sectors and formal sector retrenchments have resulted in many people in the region seeking alternative ways of earning a living. Informal Cross Border Trade (ICBT) has become an important means of employment and income generation. Statistics show that a significant amount of trade is conducted by small traders. For women especially, ICBT provides economic empowerment. To improve management efficiency at the borders and improve trade facilitation in the region, SADC is promoting the establishment of Integrated Border Management (IBM) or Coordinated Border Management, One Stop Border Post (OSBP) and Single Windows at both national and regional levels. SATH is prioritizing the implementation of the IBM Program in realization of the immediate results that can be achieved from this initiative as opposed OSBP and Single Window which will take longer to implement due to the legislative and physical infrastructure requirements. IBM is expected to bring quicker results and would lay a good foundation for these other initiatives by ensuring there is coordination amongst border agencies for effective and efficient border clearance procedures. Conducting a BOA is the first step in the IBM implementation process. This is followed by workshops to disseminate and discuss the BOA findings and to form a Joint Border Committee (JBC) consisting of public and private sector stakeholders to arrive at consensus on an Action Plan. Implementation of the JBC Action Plan will be done with assistance from the SATH and other donors. 6

7 3. OBJECTIVES The overall objective of the Tunduma/Nakonde Border Assessment was to analyze the current border operations with a view of making recommendations that would reduce the time and cost of transportation of goods as well as to set time baselines to assess implementation. The BOA recommendations will inform the development of a JBC Action Plan by the stakeholders. Specific objectives for the assessments are as follows: Establish baselines for the time for trucks to pass through Tunduma and Nakonde borders by gathering arrival and departure times of trucks at border complex entry and exit gates; as well as the time it takes ICBTs to clear the border. Establish if time spend at border posts is a result of time required for formal clearance procedures or may be due to other reasons; Identify specific issues that impede the free movement of agricultural products and staple food crops across borders; Identify specific issues that impede the free movement of general cargo across borders including informal cross border trade; Identify current processes to address problems experienced by border agencies; Identify current mechanisms of communication between border agents and assess their effectiveness; Assess the adequacy of the infrastructure (parking, access roads, electricity, water, telecommunications, buildings, inspection sheds and other requisite infrastructure) at the border; Recommend practical and achievable measures to promote seamless operations at the borders to reduce time and costs for goods crossing borders. 4. SCOPE OF WORK This assessment was undertaken at the Tunduma/Nakonde border complexes which form the border between Tanzania and Zambia. The BOA documents the roles and processes of the different agencies operating at Tunduma and Nakonde borders in clearing commercial trucks and informal cross border traders and produces an assessment of the operations at the Nakonde 1 border, and establishes border crossing times for both borders. 1 Although the documentation of clearance processes for both Tunduma and Nakonde was done, an analysis of the efficiency of processes was only completed for Nakonde processes as the analysis of Tunduma processes was carried out by USAID COMPETE. 7

8 5. METHODOLOGY SATH travelled to Tunduma/Nakonde borders between 1 and 7 June 2011 to assess the processes for clearance of goods and to determine the time it takes trucks to clear the borders. In recognition of the critical role played by informal traders in the SADC region, the border assessment exercise also covered the clearance procedures of goods for small traders/ informal cross border traders (ICBTs). 5.1 Border Operations assessments Interviews carried out were guided by a questionnaire to gather information on coordination, clearing processes, infrastructure, agricultural products, informal traders, weighbridges and general issues. The names and contacts of officials interviewed are attached as Annex 1, and the questionnaire used to guide discussions is attached as Annex 2. Interviews were conducted with public and private sector agencies on both side of the borders to determine what role they played in the clearance of goods, challenges they faced in effectively executing their operations and how things could be improved. In addition, SATH recorded independent observations of the processes, facilities, and infrastructure at these borders. Interviews at Tunduma were carried out with TRA, Port Health, Plant Health, TFDA and as well as clearing and forwarding agencies. An attempt to interview drivers at parking areas in Tunduma was unsuccessful due to the language barrier. In Nakonde, meetings were held with ZRA, Immigration, RTSA, ZABS, Ministry of Agriculture, Ministry of Health, the Finance Bank, Insurance Company and an International Clearing and Forwarding Agency. To understand the processes for clearing goods from ICBTs, interviews with customs officials responsible for clearing small value consignments were conducted. Interviews were randomly conducted with selected traders as their goods were being assessed by Customs Officials and at waiting shelters. Informal transporters, clearing agents, bus drivers and conductors were also interviewed. Interviews were granted on the condition the identity of the informants was not noted and revealed in any report. In addition, the average time it took to cross the border, customs procedures that traders were subjected to and modes of transporting goods by small traders were observed. 5.2 Baselines To establish time baselines for trucks crossing through these borders, quantitative data specifying arrival and departure times was recorded as well as use of official border records where arrival and departure times could not be physically recorded. Through this data, volumes of traffic across the borders, types of goods transported and times taken to cross the borders were determined. Data was collected over a six day period. (a) Traffic from Tanzania to Zambia Due to the unavailability of parking space within the border perimeter, trucks park outside of the border perimeters about 10km away from the border. The driver proceeds to the border through other transportation means e.g. taxis to reach the border to process the declaration of goods. Due to this operation, it was not possible to physically record arrival 8

9 and departure times for trucks crossing the Tunduma border into Zambia. The only record of date and time of arrival of trucks at the border was noted in the Transit Control Movement Sheets (TCMS), and the data was therefore extracted from TCMS. These forms were issued at the Dar es Salaam port to escort the trucks through the corridor, recording release time at the port, the times trucks passed the two customs checkpoints along the course, arrival at the border and final clearance for exit. The TCMS only indicates the date of departure without reflecting the actual time. This resulted in making the actual measurable time to days instead of hours and minutes spent at the border. Due to ongoing construction on the Zambian side, there was not enough space for the two-way movement of trucks between the borders.trucks crossing from Tanzania and those crossing from Zambia had to alternate to move across the borders. TRA officers at the control barrier only checked consignment documents, recorded exit dates and allowed trucks to quickly cross in order to allow as many trucks as possible. For all traffic exiting Tanzania, release orders (the dates of which were indicated as exit dates in the TCMS) were issued when the truck clearance process was completed on both the Tanzanian and Zambian border posts. Cleared trucks then moved out of the border on the same day or on the following day, depending on the movement of traffic that particular day. To verify actual exit dates against exit dates recorded in the TCMS, 43 trucks were physically followed and they all exited on the date indicated in the TCMS. A total of 665 records of trucks going out of Tanzania were entered for analysis. Empty trucks from Tanzania did not have any TCMS data and therefore could not be reliably recorded. All recorded trucks exiting Tanzania were therefore only loaded trucks. (b) Traffic from Zambia to Tanzania For trucks from Zambia to Tanzania, clearance processes were separate and transit times could be measured separately for the two border posts. On the Nakonde border, also due to the lack of space at the border, trucks going into Tanzania parked at the dry port about 7 km away from the border and documents were taken to the border for clearance. Data collectors were stationed at the dry port to record trucks entering the dry port gate and the time of their departure. Arrival and departure times at this place were used to represent arrival and departure from the border and they were recorded in hours and minutes. When trucks were cleared to cross the Zambian border, they left the dry port and crossed the border without any further delays. On the Tunduma side, entry traffic from Zambia was recorded on Transit Control Movement Sheets specifying arrival and departure date. This information was extracted and analyzed to determine the average time (in days) trucks took to cross the border. TRA cleared trucks when they were parked in Tunduma village at a customs controlled parking space (privately operated) whether they were crossing to Zambia or into Tanzania. Trucks from Zambia were allowed to cross the border into Tanzania while their documents were being processed. No reliable record of arrival date existed except in the TCMS, which only recorded arrival date, not time. A total of 413 loaded trucks entering Tanzania from Zambia were recorded for analysis. 9

10 6. FINDINGS 6.1 Border Operations Review Border Operation Hours (CAT) The border operating hours shown in Table 1 below are based on the official times Customs and Immigration open and close the borders. Some of the agencies at the border involved in the clearance of goods operated on times that are not aligned to business hours for Immigration and Customs but rather in line with the normal operations of their offices inland, for example from 07:30hrs to 17:00hrs. There is also a difference in the morning opening hours between Tanzania and Zambia with, Zambia starting one hour earlier. Table 1: Customs/Immigration Border Opening Hours 2 Opening Closing Tunduma 07:00hrs 18:00hrs Nakonde 06:00hrs 18:00hrs Description of Border Operations and the Role of Different Agencies In addition to the customs authorities collecting duties and taxes on imports at the borders, there are a number of different agencies mandated with responsibilities for ensuring safety and quality of goods imported to each country. All these agencies rely on CFAs to bring up documents to their offices for clearance before the goods are cleared with Customs. A brief description on the roles and processes of the agencies operating at Nakonde border is noted below. Zambia Bureau of Standards (ZABS) ZABS role at the border is to ensure that goods entering Zambia are of the acceptable quality and that they are safe for consumption. The procedure is that all goods coming into Zambia have to be cleared by ZABS before customs clearance. ZABS controls a total of 64 products. Products that do not fall within the 64 and transit cargo get a stamp to ensure the officer has seen the document. The office normally receives the documents before the truck arrives at the border and decides whether physical inspection is required or not. Where physical examination is required, ZRA informs the clearing agent the driver to bring in the truck for physical examination. Fees charged by ZABS are shown in Annex C. Ministry of Agriculture The role of the Ministry of Agriculture at the border is to ensure that plant products coming into the country or transiting Zambia have the relevant documents required for importation and to ensure they are free from pests and disease. The Agency also inspects plant products and carries out the required treatment on plants when necessary. Agricultural products have to be cleared first with the Ministry of Agriculture before proceeding to customs clearance. The agency checks to ensure that the consignment has a phytosanitary certificate, fumigation certificate and that the importer has an importer 2 Times are presented in Central Africa Time (CAT) to allow direct comparison without converting between different time zones. 10

11 permit. When satisfied that all the required documents are available, the officer signs and stamps the documents to confirm that he has seen them. Where the necessary documents are not adequate, the officer alerts Customs to ensure they do not clear the consignment until permitted. Ministry of Health The Ministry of Health s role is to protect Zambia s industries and consumers as per the Food and Drug Act. Importers of food and medicines are required to get a health clearance certificate. The certificate will show laboratory analysis results which the health inspector will compare with the Food and Drug Act for conformity. For transit goods, the health inspector checks for the fumigation certificate and declaration documents and if in order, issues a health clearance certificate. For imports, the health inspector checks to ensure the consignment has the Health Clearance certificate which is issued by Head Office in Lusaka. The process of acquiring a Health Clearance takes up to 14 days after lodging the application. When satisfied with the documents, the Health Inspector signs and stamps to show that he has cleared the consignment. Road Transport and Safety Agency (RTSA) The role of the RTSA office is to collect toll fees and road license fees of foreign vehicles. This process is normally done when cargo has been cleared by ZRA. The Agency requires the following documents for processing tolls and road license: Customs declaration; Copy of driver s passport; and Insurance and Vehicle registration document. Toll fees are charged on the basis of distance and number of axles of a vehicle, and are payable in US$ while road license fees are payable in ZK. Zambia Council District The Zambia Council District council levy office requires all foreign trucks to pay the council levy when entering Zambia. Returning Zambian registered vehicles also pay the levy when they return loaded. The cost for the levy is ZK35,000 for a horse and ZK45,000 for a horse and trailer. The office is open daily from 07:00hrs-17:30hrs but the levy can be paid at the barrier gate a few kilometers into Zambia, in cases where the office is closed. However to encourage that the levy is paid during the office working hours, an additional ZK10,000 is charged when payment is made at the barrier gate. The barrier gate s main role is to ensure that the levy is paid. Clearing and Forwarding Agents (CFA) Clearing agents are critical to the entire goods clearance process. Clearing agents are the linking agent between the exporter/importer/driver and all the border agencies responsible for the clearance of goods. When the driver arrives at the border, he contacts the clearing agent who prepares a declaration for the goods and ensures that all other agencies controlling the products endorse the documents, submits declaration to customs, and ensures duties and other payables fees are remitted. All agencies responsible for control checks depend on clearing agencies to deliver documents for checking and testing, where required, before proceeding to Customs clearance Clearance Process for Commercial Goods from Tanzania to Zambia It was established that Tunduma and Nakonde have an administrative agreement that trucks exiting Tanzania should not leave Tunduma unless Nakonde (ZRA) has cleared 11

12 them and duties have been paid, or when a bond has been generated. The agreed process between TRA and ZRA is used as a control mechanism to ensure transit goods do not end up in the local market and addresses the problem of inadequate parking at Nakonde. With this arrangement, goods are cleared by Customs on both TRA and ZRA before TRA can release the truck into Zambia. The process followed from the time the driver arrives at the border to the time of leaving the border is presented below and summarized in figure Process for clearance of goods from Tanzania to Zambia 1. Driver parks the truck and takes the documents to a clearing agent 2. Clearing agent registers the documents and drivers contact details, then opens a file 3. Agent makes copies, a set for the driver to register at Tunduma entry gate (Gate 1) and a set to pass on to the Nakonde clearing agent 4. Driver goes to pay council levy 5. The driver takes council levy receipt, his passport and documents to Tunduma entry gate (Gate 1) for registration; 6. Clearing agent passes on the documents to Nakonde (Zambia) clearing agent 7. The TRA officer at Tunduma entry gate registers documents and retains them (movement sheet and supporting documents); 8. TRA officer at Tunduma entry Gate (Gate 1) passes over the documents to the Gate 2 office where they are kept until the clearing process at Nakonde has been completed and the truck is ready to depart. 9. In Nakonde (Zambia) clearing agent prepares declaration submits to DTI (Direct Trader Input) Bureau for data capture; DTI produces computer generated declaration which shows duty payable; 10. Clearing Agent proceeds to the bank to prepare a bank check for payment DTI passes on the captured declaration to ASYCUDA hall for verification. 12. ZRA Examining officer checks declaration: if it is transit, officer generates a T1 document for transit and a bond cover; if declaration is for importation into Zambia, agent pays duty, processing fees, carbon tax. 13. ZRA officer issues release order (goods for consumption) or T1 (goods for transit) to the clearing agent. 14. Agent registers release order at Gate 1 in Nakonde and collects a gate pass. 15. Nakonde agent passes over the gate pass and the release order or T1 to Tunduma Clearing Agent 3 Due to the risks associated with handling of cash, ZRA receives payment in the form of bank certified checks. ZRA accepts cash only when the bank is closed on Sundays and public holidays in order to facilitate trade. Bank charges for certified checks are ZK 75,000 (US$16) for individuals and ZK65,000 ($14) for corporate clients. 12

13 16. Tunduma Agent lists the truck for exit and forwards his list to TRA for compilation of Master exit list. 17. TRA confirms list of trucks for exit based on allocated time of exit If confirmed for exit, the clearing agent tells the driver to bring the truck to Tunduma exit gate (Gate 2). There is an exit barrier where Customs officers inspect the truck to confirm details against documents, verify if the seal is intact for consignments, then endorses the date the truck exits on the movement sheet. 19. The Customs officer then takes documents to ASYCUDA office to acquit bond after the truck has exited. 20. Truck enters Nakonde (Zambia)Gate 1 where ZRA officer checks the release order and the gate pass as they were already registered by the clearing agent (step 14), and allows the truck to proceed to Gate At Gate 2, the driver surrenders the gate pass, shows the release order and other border agencies (Bureau, RTSA, Health, Agriculture), checks documents to verify that the truck has all the necessary permits, licenses and that toll fees have been paid. 22. If all documents are in order, the trucks are allowed to enter Zambia. 4 Due to the current status of the road infrastructure at Tunduma/Nakonde, trucks cannot move in opposite directions and a time schedule to alternate the movement of trucks in different directions has been agreed. 13

14 Figure 1: Goods Clearing Process in Tunduma for Traffic Going to Zambia Driver Gives docs to CFA Driver Pays Council levy Takes doc copies from CFA, levy receipt, and passport to Gate CFA Makes copies to pass to driver, Nakonde agent Nakonde CFA Receives docs and prepares declaration and submits to DTI TRA Officer at Gate 1 Receives docs from driver, registers them and passes to Gate 2 TRA Officer at Gate 2 Receives docs and keeps them until completion of clearance process at Nakonde CFA lists truck for exit Submits exit list to TRA gate 2 for integration into master exit list TRA confirms exit list looking at allocated time CFA If truck confirmed for exit, notifies driver DTI Produces computer generated declaration showing duty payable Passes declaration to ASYCUDA Hall For verification ASYCUDA Hall Examining Officer checks declaration If transit, officer generates T1 doc and bond cover If import, agent pays duty, processing fee and carbon tax Officer then issues release or T1 to CFA CFA Goes to bank to prepare check for payment Driver Drives truck to Tunduma Gate 2 CFA registers Release order or T1 at Nakonde Gate 1 and collects gate pass Nakonde agent passes gate pass, release order/t1 to Tunduma CFA Gate 2 Exit barrier: TRA inspects truck against documents, verifies if seal is intact Endorses date of exit Truck leaves for Nakonde gate 1 Nakonde Gate 1 ZRA checks release order/t1 & gate pass against register Truck proceeds to Gate 2 Nakonde Gate 2 Driver surrenders gate pass Other agencies check docs to verify compliance with their requirements, permits, licenses etc 14 Truck If all is in order truck enters Zambia

15 Detailed Process of Goods Clearance in Nakonde for goods From Tanzania entering Zambia After receiving the documents from the Tunduma clearing agent, the clearing agent in Nakonde prepares a declaration for the goods. For goods requiring clearance by other agencies before Customs, the clearing agent physically takes the copy of the declaration and supporting documentation to each relevant agency for their endorsement before filing with Customs. Some clearing agents have the resources to file their declarations to Customs electronically while others do not. Clearing agents that can file the declaration electronically files and prints a copy showing duty payable. They make payment and deliver physical copies to ASYCUDA hall. For the agents who cannot file declarations electronically, the agents take the declarations to the DTI Bureau for data capture. DTI prints and gives the agent a computer generated declaration with all duties computed. The agent then goes to prepare a bank check for payment of duties. In the meantime DTI forwards the documents to ASYCUDA hall where verification of declaration is done to assess if computed duties are accurate. Where duties are found to be not accurate, ZRA charges a penalty of ZK5000 ($11) in addition to the additional payable duties. If the declaration is not queried, the ZRA officer issues a T1 for transit goods or a release order in the case of imports to Zambia. The agent then takes the release order to Nakonde Gate 1 to get a gate pass. Once clearance with customs is complete, the driver pays for Insurance, Road Tolls, and council fees and clears Immigration in Nakonde. He then proceeds to clear Immigration in Tunduma and waits to be advised by the agent on when he can drive through the border. The dispensation of goods to move on bond for clearance inland was the prerogative of the officer in charge. Figure 2 illustrates the detailed process followed in Nakonde before a truck leaves Tunduma to go into Zambia. 15

16 Figure 2: Process in Nakonde for Trucks arriving from Tunduma Driver pays fees below 1.Tunduma agent Passover documents to Nakonde agent 4b.Insurance is bought 2.Nakonde agent prepares declaration.- if controlled goods like medicines, food, plants or seeds CFA takes the documents to relevant departments to endorse & stamp declaration e.g health or bureau of standards or Agriculture, then submits declaration to DTI or E- Files from his office 3. DTI - DTI captures data into ASYCUDA and gives CFA computer generated document showing duties payable 5.T1 or release order taken to gate 1 by agent, register get gate pass -pay toll fees road permit -council fees ZK35000 ($8) horse if horse & trailer ZK45000 ($10) -driver clear immigration in Tunduma then Nakonde 3. Electronically file - After e-filing physically delivers copy to ZRA for processing 4a. Asycuda hall - Verification officer checks declaration, passes it on to assessor - duties computed +ZK50,040 ($11) processing fee. - If declaration is queried, amendment fee and penalty ZK ($1) + ZK 77,092 ($17) levied. - Release order is then issued once payment done. If transit, officer checks if bond is sufficient and T1 is generated 16

17 When the truck enters Nakonde from Tunduma, it has already been cleared by ZRA. The officer at Nakonde gate 1 checks if the driver has a gate pass and a release order. The truck is then allowed to proceed to Nakonde gate 2 where a number of agencies (Road Transport & Safety Agency RTSA, Health Bureau of Standard) check for road tolls on foreign trucks, road permits, the Bureau of Standards and Health Department stamps. The ZRA officer at gate 2 checks the release order and collects the gate pass from the driver, allowing the truck to enter Zambia. A few kilometers from Nakonde is a road barrier for the Nakonde District Council where the council official confirms the council levy has been paid. A penalty is payable when one cannot produce the receipt. ZRA too has a road block 7 kilometers from the border on the turn off to the dry-port where trucks have to stop for Customs document check again. The Road Transport and Safety Agency (RTSA), in addition to stationing someone at the gate into Zambia, have patrols on the road to countercheck permits and toll fees documents Goods Controlled by Other Government Agencies Where the type of products imported to Zambia fall within those that are controlled by other government agencies, e.g. medicines, food, plants or seeds, the agencies responsible for controlling such products, e.g. Health, Bureau of Standards or Agriculture, must endorse and stamp the declaration to confirm the imports meet the required standards before ZRA can process the declaration. Approved importers / exporters or clearing agents can then file their declaration electronically to the ASYCUDA, while all others can use the Direct Trade Input system to lodge their declarations and documents to Customs Goods from Tanzania Selected for Physical Examination by Nakonde Border Agencies At times the ZBS, Agriculture or Health may request a physical examination, or shipment may be selected by Customs ASYCUDA for a physical examination. In this case, the agent will be issued with an examination request slip by the authority requiring the physical examination. Due to insufficient parking at the border, physical examinations are conducted at the dry port, which is inland Zambia. (The dry port is managed by a private company and a flat rate of US$7 is levied as parking fees on each truck for the period it is parked at the parking area). The agent notifies the driver to pay the toll fees using an examination slip, since the truck will be allowed to enter Zambia for the purpose of the required examination. The agent then registers the examination slip at the entry gate and collects a gate pass. Due to the scheduling in the movement of trucks across the borders, the truck waits for the time allocated for trucks movement into Zambia, which could be the following day. When crossing the border, the driver leaves the gate pass at gate two and drives to the dry port for examination. After the examination, the truck remains at the dry port, documents are returned to the border for normal clearance procedures and duties to be paid to Customs. Once cleared by customs and a release order issued, clearance documents and release order are taken to Nakonde entry gate 1 to register them and collect a gate pass for entering Zambia. (Note the first entry was to facilitate the movement of truck into Zambia for physical examination to be conducted). If the truck is foreign registered, all other necessary fees payable to Zambia are paid (insurance, council levy, carbon tax, etc.). The gate pass is surrendered at Nakonde gate 2. The release order is 17

18 taken to the ZRA check point which is 7km into Zambia and close to the dry port. The driver then departs from the dry port and proceeds inland. As there is no scanner used for physical examinations, vehicles are physically inspected which takes more time and contributes further to delays at the border. Some consignments required special equipment for loading and offloading, and such equipment is not available at the border Process for Informal Cross Border Traders at Nakonde Border The process of clearance for ICBTs is different from commercial goods due to the value of goods declared. Buses are the most commonly used means of transport by ICBTs crossing the borders legally. Taxis, bicycles, pushcarts, wheelbarrows and human head portage were also observed to be the main modes of transporting goods from one border to the other. Upon arrival at Nakonde, ICBTs formally crossing the border disembark within the complex and proceed to complete immigration and customs formalities. Due to space limitations within the Nakonde border post, buses are cleared outside of the official border premises. It was observed that the majority of small traders at Nakonde do not pass through the official channels. Traders complete customs declaration forms, duties and taxes are calculated, and payment effected through the bank. A Customs Officer then conducts a physical inspection of all the goods in the bus to determine whether the goods declared correspond with the declaration, in terms of quantity, type and value. Valuation is a major challenge as some traders do not declare, undervalue and underestimate their goods. In instances where the Customs Officer identifies discrepancies, uplifts and penalties are applied. Goods valued at US$500 and below, that are of a personal nature are duty free. While this duty rebate is intended for personal goods some traders, especially women, use it for small consignments of commercial goods. On average, time taken for clearance of buses carrying ICBTs at Nakonde is three hours Challenges with Clearance Processes for Commercial Goods and ICBTs at Nakonde There is little interaction and a lack of inter-agency coordination among border agencies although they use similar information from the importer to carry out their duties. This leads to a duplication of similar processes, e.g. Ministry of Health, Ministry of Agriculture and Bureau of Standards all inspect food items and medicines. Streamlining of inter-agency operations and coordination of cargo inspections by all agencies involved in cargo clearance would reduce time delays at borders. Collaboration and team work is required to achieve this. The fact that some border agencies business hours are not aligned to border opening hours delays the clearance for goods, as according to the operations, all the border agencies responsible for any control checks at the border have to clear goods first before they can be cleared by Customs. Despite the very limited space at the Tunduma/Nakonde border, the clearance process emphasizes payment of duties at the border as opposed to encouraging trucks to proceed 18

19 on bond for inland clearance. Inland clearance, if practiced, would reduce the serious congestion found at Nakonde border. Whereas permits are required for the conveyance of certain commodities, officials at the borders are not mandated to issue permit. Logistics in obtaining permits is problematic as they are issued hundreds of kilometres away from the border. This situation negatively impacts the cost of transportation and is an obstacle especially to small traders who would not have the means to travel the long distances to process permits. The practice of having all other agencies personnel waiting at the last gate (entry to Zambia) and individually checking their permits is not effective. The check could be conducted by one personnel if information on what all agencies require is understood by all agencies. The lack of a scanner at Nakonde border for goods inspection also contributes negatively to the time trucks spend at the border. Physical inspection takes more time. It was also noted that while some consignments required special equipment for loading and offloading, such equipment was not available at the border. The major challenge with the clearance of ICBTs goods is the unwillingness of traders to declare true values and quantities of goods. This results in comprehensive physical checks by ZRA which is timely Fees charged by different public and private agencies In addition to the normal duties and taxes payable on goods to Customs Authorities, trucks also incur the following costs: Customs Handling Fees per declaration Council levies per trip Clearing Agents Fees per declaration Parking Fees Toll Fees Road Permit Fees Insurance Fees Carbon Tax Fees Bureau of Standard Testing, Certification and Inspection Fees Fumigation Certificate Fees (Agricultural products) Phytosanitory Certificate Fees (Agricultural Products) Import Permit Fees (Agriculture Products) While these fees may have an economic justification, they certainly result in higher transport operating costs, increased paperwork which further increases costs, and creates the need for drivers to carry cash which is a security risk. A table showing identified fees payable is attached as Annex 3. 19

20 6.1.6 Clearance Process for Commercial Goods from Zambia to Tanzania 5 Traffic from Nakonde into Tanzania, unlike from Tanzania to Zambia, is cleared at Nakonde and released to Tunduma to carryout the clearing process for Tanzania. Trucks not originating from Zambia must proceed to the dry port, 7 kilometres from the border while waiting for their documentation to be processed and their turn to cross the border. The driver finds public transport to go to the border for immigration formalities, and gives the agent the vehicle documents to acquit the bond and collects a gate pass from entry gate to Nakonde. Zambia then releases the truck to exit Nakonde once the bond is acquitted, or export document is registered at the entry gate. The driver then proceeds to Tunduma for clearance formalities in Tanzania. The clearance process is detailed below Clearance Process for transit cargo from Zambia to Tanzania (Nakonde) The trucks park at the dry port 7kms before Nakonde border Driver travels to the border by taxi. Driver gives documents to Nakonde agent; The agent processes acquittal of bond at ZRA, then registers at gate one and collect gate pass; Driver clears through Immigration, then proceeds to line up for exit at allocated time; Driver brings truck from dry port; shows gate pass at gate 1 on entry into Nakonde, then proceed to gate 2 Driver surrenders the gate pass at gate 2 then exits Nakonde to Tunduma and gives Tunduma Agent documents for all the formalities required by Tanzania. Due to parking space limitation at the border, the truck is allowed to go into Tunduma to park at a customs controlled parking areas within the village while awaiting clearance. While the clearing agent is preparing the declaration, the driver pays for toll fees, council fees and Temporary import permit (TIP) for foreign registered trucks Clearance Process for transit cargo from Zambia to Tanzania (Tunduma) The clearing agent processes a transit The driver pays Council levy at Tunduma District Office, parking fees where he is parked, and toll fees and temporary import permit at TRA then clears immigration A Transit document (T1) is processed by TRA and the truck proceeds into Tanzania to the port or exit border, if going to other countries. 5 The assessment only documents the process for clearance of goods entering Tanzania without any further analysis as the recommendations from the BOA are primarily for implementation by Nakonde border agencies and the government of Zambia. Some recommendations may require agreement with the Tanzania Government. 20

21 All transit cargo is given time within which to report to the next Customs checkpoint until arrival at the port or border. Failure to comply with the transit time attracts a penalty Clearance Process for Zambia Exports into Tanzania (Nakonde) For goods originating from Zambia into Tanzania, there is no bond involved. The process followed to clear goods originating from Zambia to Tanzania is as follows: Trucks park at the dry port The driver travels to the border and takes documents to the agent who registers them at gate 1 and collects a gate pass. The driver clears through immigration and waits for exit time On exiting Nakonde driver surrenders gate pass at gate 2 and enters Tunduma for entry formalities Nakonde agent passes on consignment documents to the Tunduma agent to process the declaration Clearance Process for Goods Entering Tanzania for Consumption Imports into Tanzania are cleared at the border, however, there are very few imports into Tanzania from Zambia, DRC and other countries coming in through Tunduma border. Although imports are cleared at the border (Tunduma), the clearance process of goods for consumption is centralized at the Head Office in Dar Salaam using a system called Pre Arrival Declaration (PAD). Before goods arrive, the clearing agent submits an application electronically noting description, quantities, origin and value of the goods. The application is submitted together with scanned supporting documents to Head office. The central processing office sends the clearing agent a pre-pad. If the agent agrees with the assessment, he signs the document and sends it back. The central office then issues an A-PAD (Assessed pre arrival declaration). The agent can opt to pay the duty in advance even before goods arrive using the A-PAD. When goods arrive, the agent prepares a declaration which is submitted through ASYCUDA attaching the A PAD and receipt for payment of duties. If there are no irregularities, TRA processes, and issues a release order. It is very rare when A-PAD is issued that the entry is rejected. If on the other hand, TRA finds some discrepancies, details are sent to the central processing office for amendment and if there is an additional duty to be paid as a result of the amendment, the payment should be made before the release order is issued. There is generally a 100% physical inspection of goods by TRA at Tunduma to ensure the truck is transporting what is noted on the declaration Physical Examination in Tunduma, Tanzania When a truck has been released from Nakonde to enter Tunduma, if a physical examination is required by any of the border agencies, all the stakeholders are notified and the physical examination is carried out as a team. In case of irregularities, a query is raised and the agent will be notified. Where the query requires an amendment, the necessary amendment will be processed in ASYCUDA and additional duties paid before the release order is issued. 21

22 6.1.7 Agricultural products Traded Through Tunduma/Nakonde The movement of agricultural products in the SADC region is important to ensure adequate food security. Trade in agricultural products is highly controlled /restricted by the different government agencies in the roles and responsibilities of each agency. This is meant to ensure that the quality of products is acceptable and to control the spread of disease. Importation/Exportation of agricultural products requires documentation to be complete before the consignment is transported. For example, an importer of plant products into Tanzania must first get an import permit from the Head Office in Dar es Salaam. The importer then has to take his import permit to the country where he is importing from to get an export permit. The country of export requires the import permit before issuing their export permit to ensure the importing country permit conditions. In Zambia, an importer would apply for his permit in Lusaka. The restriction on imports and exports of agriculture products can be a serious barrier to food circulation and the trading in food crops in the region if not effectively managed. 6 The main agricultural products imported into Zambia from Tanzania are rice, potatoes onions, beans and wheat flour. Some of these products, especially beans, potatoes and wheat flour, are in transit to DRC. Zambia exports finger millet, groundnuts, beans and rice, which is milled in Tanzania. At the time of the BOA, there was an export ban on sugar, beans, rice, potatoes and maize from Tanzania. All cereal crops needed a special permit for export and the permits are issued from the Ministry of Agriculture in Head office. Zambia had a ban on the importation of wheat grain from Tanzania. Noncompliance to procedures by importers was found to be high among small traders especially the locals at Tunduma/Nakonde border as in most cases they would not have the means to take samples for testing and do permits which would also require them to travel to head offices where these processes are done. Porosity of the border also makes it easy for them to bypass check points Informal Cross Border Trade The Tunduma and Nakonde borders are a transit point for a large numbers of ICBTs from DRC, Zambia and Zimbabwe due to the lower prices of goods in Tanzania. Both women and men were found to be involved in cross border trade in almost equal numbers. Reasons for engaging in ICBT by both women and men interviewed were attributed to declining formal sector employment opportunities. 6 For example, one driver at the agriculture office at Nakonde was waiting for a week to export maize from Zambia to Kenya. The problem encountered was that Zambia could not issue him an export permit unless he produced an import permit from Kenya: Kenya had ceased issuing import permits. According to the driver, Kenya discontinued issuing import permits because most importers were cheating by not providing actual samples from the import source when asked to provide samples for testing. This resulted in government lawsuits when authorities rejected actual shipments which were found not to comply with the standards. The importers argued that they were importing on the basis of the licenses already issued by government, and they won the cases. The driver had been to several offices in Lusaka but could not get an export permit issued. He was left with no choice but to smuggle the crop out across the border. 22