Discussions
Zimbabwe transit management system and the international best practice
Elisha Tshuma, Customs and Trade Facilitation Expert, discusses the challenges facing Zimbabwe with regards to transit cargo processing and customs management
Zimbabwe recently gazetted statutory instrument 113 of 2017 which provided for the following:
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Containers and vehicles conveying goods through Zimbabwe shall not be opened whilst in Zimbabwe
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Any seals or electronic seals which are found or placed on the containers and vehicles shall not be broken or tampered with
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All road vehicles and containers conveying goods through Zimbabwe shall be fitted with a device to facilitate Customs sealing
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Where there are no such locking systems on the road vehicles and containers, the hinges shall be so made and fitted that doors and closing systems cannot be lifted off the hinge pins once shut. Screws, bolts, hinge pins and fasteners shall be welded to the outer part of the hinges
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A fee of US$30 shall be payable on all road vehicles conveying goods and break-bulk cargo through Zimbabwe, where such seals and/or magnetic sealing cables are placed on the cargo;
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Road vehicles conveying break bulk cargo through Zimbabwe should be covered with a single tarpaulin tent with reinforced holes at the edges for placement of magnetic sealing cable and electronic seals
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On road vehicles carrying abnormal break bulk loads which cannot be covered by a single tarpaulin tent, written permission to allow the transit of such cargo should be sought from the Commissioner General of ZIMRA
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Other road vehicles which cannot be covered or sealed as required by the Commissioner General shall be escorted at the sole discretion of the Commissioner General, and costs shall be borne by the operator of the road vehicle so requiring it to be escorted
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The flanges (filler caps), drain corks, and man holes of tank wagons shall be so constructed and have holes that are intact, not broken and of a size to facilitate Customs sealing
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Tank wagons shall not have interlinking trailers
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Where seals are tampered with, lost or there is unauthorized breaking of electronic seals placed on a road vehicle, the offender shall be liable to a penalty of US$1,300
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The transporter shall be liable to a penalty US$2,000 for diversion from the route specified by the Commissioner General of ZIMRA
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The transit period of three (3) days for cargo shall include weekends and public holidays. (Zimra Public Notice Number 33 of 2017)
These measures have resulted in complaints from transporters. Several complaints have been registered on the non-tariff barrier reporting website. For example, complaint number NTB-000-783 and NTB Type 2.8. Lengthy and costly customs clearance procedures reads “Zimbabwe Revenue Authority (ZIMRA) is not adhering to their new procedure for handling transit cargo thereby causing serious delays in clearance of trucks at the Beitbridge border post.
Truckers are experiencing serious delays because ZIMRA is not adhering to the procedure it stipulated in its communication documents. ALL transit cargo is being fitted with seals, despite the cargo already being sealed by client at loading point. Communication from drivers indicated that, currently only 5 trucks being sealed per day.”
Another is complaint number NTB-000-782 and NTB Type 8.7. Costly Road user charges/fees which reads “Transporters are experiencing the following delays and other administrative costs as a result of the sealing process by ZIMRA:
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The vehicles are delayed up to 24 hours while waiting for the seals
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ZIMRA Officials remove existing seals to fit their seal and then do not replace the seals when their electronic seals are removed
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ZIMRA Officials have refused to endorse the documents when seals have been removed
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They have damaged transporters equipment and gone so far as to use a drill on a loaded fuel tanker to drill a large hole to fit their seal. This is completely unacceptable!
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Where one of their seals was incorrectly fitted and fell off the truck, they then cut other seals and drew samples of the product to ensure it had not been contaminated. No explanation was given and our customer consequently rejected the load as the integrity had been corrupted
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Transporters are expected to adhere to routes stipulated by ZIMRA. We have Route Risk Assessments on all our routes. The route is determined due to a number of factors including distance and safety. This is pertinent to Zimbabwe where the road infrastructure is failing
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Beyond the instruction to pay for the sealing, transporters are further expected to pay the costs of escorts”
It has been reported that transit cargo passing through Zimbabwe had gone down by 60% since the introduction of the cargo tracking system and Zimra considered that as a measure of success as it proved that a lot of cargo declared to be in transit ended up being consumed in Zimbabwe (Bulawayo 24). However according to a non-tariff barrier report, some truckers in transit are now shunning Zimbabwe and preferring to use Botswana. NTB-000-751 and NTB Type 8.7. Costly Road user charges/fees reads “Transporters have noted the many benefits of using Botswana as a transit instead of Zimbabwe. It is a well-known fact that Zimbabwe borders are slow and congested, there are many tolls we pay (for no service), numerous road blocks (harassment of drivers and lack of adherence to SADC appreciation of the Sovereignty of Foreign COF's), high fuel costs and failing road infrastructure. The completion of the Kazungula Bridge is a much anticipated event that will give transporters access to an efficient and cost effective transit to Zambia…”
It has been claimed that the levels of transit fraud were very high in Zimbabwe and the transit management measures were introduced to curb such fraud. However, there is no study that has been made public to prove such a claim and justify the measures taken.
It is important to observe that Zimbabwe is a member of the World Trade Organisation (WTO) and the Zimbabwe Revenue Authority (Zimra) is a signatory to the World Customs Organisation’s Revised Kyoto Convention (RKC).
Article 11 of the WTO trade facilitation agreement provides for sealing of goods in transit. Paragraph 11.5 states that “Each member may require the use of customs convoys or customs escorts for traffic in transit only in circumstances presenting high risks or when compliance with customs laws and regulations cannot be ensured through the use of guarantees. General rules applicable to customs convoys or customs escorts shall be published in accordance with Article 1.”
The Trade Facilitation Agreement promotes the risk management approach to transit management as opposed to the gate-keeper approach which is the case with Zimbabwe where all trucks in transit are either sealed or escorted without taking into consideration the level of risk. Some have argued that Zimbabwe is free to do as it wishes because it is yet to ratify the agreement. However, there is need for a cost benefit analysis of the new transit management system introduced in Zimbabwe. According to FERSATA “the cost of a 30 ton load (or container), from Durban to DRC is approximately $10,200 made up of 25-30% taxes and charges; 25-30% by delay costs and approximately 50% for the actual cost of transporting the load.”
Apart from raising costs of cross border trade, the measures taken by Zimbabwe are reported to have caused chaotic scenes at Beitbridge and Forbes border posts. This poses safety and security risks at the border posts. FERSATA noted that “It will hopefully bring home to the Zimbabwean Authorities the dangers of staging large numbers of vehicles in uncontrolled areas with no security or facilities for extended periods of time. The drivers and others stuck in the queue for several days must cook, eat, and pollute, all of which contributes extreme danger to the chaotic situation, with over 100 vehicles full of fuel, as well as fertilizer and more perishable cargoes.”
Apart from the WTO Trade Facilitation Agreement, the issue of seals and customs escorts is also covered in Chapter 1 of the specific Annex E of the WCO Revised Kyoto Convention. Paragraph 11 provides a recommended practice as follows “Where the accompanying documents make it possible unequivocally to identify the goods, the latter should generally be transported without a Customs seal or fastening. However, a Customs seal or fastening may be required:
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Where the Customs office of departure considers it necessary in the light of risk management;
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Where the Customs transit operation will be facilitated as a whole; or
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Where an international agreement so provides”
It should be noted that the provision in the WCO Revised Kyoto Convention is the same as the provision in the WTO Trade Facilitation Agreement. They both advocate for a risk management approach to transit management that is, reserving customs seals for high risk cargo. This is meant to expedite movement of transit cargo across borders and reduce costs associated with border waiting time. However, the WCO Kyoto Conventions are just recommendations for the best practice and are difficult to enforce hence Zimbabwe can do as it pleases even though it acceded to it.
Traders cannot force Zimbabwe to comply with the WTO Trade Facilitation Agreement because it is yet to ratify the agreement and WCO Revised Kyoto Convention are mere standards that are difficult to enforce. This scenario has resulted in transporters resorting to the non-tariff barrier reporting system though complaints take long to resolve. Another alternative would be to approach the COMESA Court of Justice since Zimbabwe is a member of COMESA and COMESA has aligned its Customs Regulations to both the WTO trade facilitation agreement and the WCO Revised Kyoto Convention. However, this requires exhaustion of local remedies before approaching the COMESA Court of Justice which may prove to be expensive to do on the part of traders.
References
http://preview.mailerlite.com/i9v3m8/720787178405237648/n3f3/
http://bulawayo24.com/index-id-news-sc-national-byo-118057.html (Treasury toughens stance on errant transit truckers)
http://www.tradebarriers.org/active_complaints
WCO Revised Kyoto Convention
WTO Trade Facilitation Agreement