SACU and its Response to COVID-19 – Approaches for Building Resilience for Customs Administration - PowerPoint Presentation

1. SACU and its Response to COVID-19 – Approaches for Building Resilience for Customs AdministrationsMbakiso MagwapePrincipal Legal Officer, Legislation & ComplianceBotswana Unified Revenue ServiceDoctoral Candidate (University of Pretoria)

2. Objectives of PaperExamines trade and customs related responses and measures from SACU following the outbreak of the COVID-19 pandemic;Explores other relevant measures Countries, and Customs Administrations have adopted to address COVID-19 challenges;To build resilience for SACU (institutional) and for Members and Customs Administrations, for future emergencies and pandemics.

3. Background - SACUSouthern African Customs Union is the oldest Customs Union in the world (entered into force in 1910);Current Member States - Botswana, Lesotho, Namibia, South-Africa and Eswatini;The primary objective - to maintain common external tariffs; and2002 amendment brought about the most institutional changes; to facilitate greater equality of Member States; andTo facilitate industrial development policies of its member States.

4. Background – SACU…continuedArticle 2 of the 2002 SACU Agreement, Objectives expanded to inter-alia;to facilitate the cross-border movement of goods between the territories of the Member States;to promote conditions of fair competition in the Common Customs Area; enhance the economic development, diversification, industrialization and competitiveness of Member States; andfacilitate the development of common policies and strategies.

5. Challenge/ProblemThe COVID-19 pandemic has resulted in trade and supply-chain related challenges, and bottlenecks in the SACU region;Trade and Customs administration related challenges within SACU;Restrictions on the movement of persons (importers and exporters affected) – inadvertent reduction in trade; closing down various borders causing logistical challenges for traders; imposing mandatory Covid-19 screening and testing measures and quarantine of importers/exporters and business-persons - customs procedures delayed due to health protocols; andslowed Customs processes at borders (limited number of Customs officers);

6. Challenge/Problem…continuedCustoms processes in region are predominantly un-automated – means further delays in clearances;SACU Member Statesare largely non-manufacturing Countries – results in shortages of COVID-19 medication, PPEs and ventilators;Access to critical medication, timely clearance by Customs of goods, import tax and duties, competition rules regarding price-fixing are critical issues to addressed by SACU; andFood shortages - particularly economies which largely depend on imports, BLNS.

7. SACU COVID-19 Related Trade Measures and Responses1. SACU Customs Modernisation Programme (to facilitate trade during COVID-19);Based on WCO RKC, and WTO TFA, particularly with regards to all-digital clearance processes, and efficient risk management;Further, technology and digital clearance enables remote clearance protecting the health of Customs officers and importers/exporters to be protected - Objective - lesser human intervention;WCO-SACU Connect Project is a Customs Modernisation Programme- focus to enhancing regional integration and trade facilitation, covering the areas of Customs Legislation, Risk Management and Enforcement, Trade Partnerships, and IT Connectivity. 

8. SACU COVID-19 Related Trade Measures and Responses…continuedExecutive Secretary at meeting of SACU Council of Ministers (11 June 2020) indicated that there is need to prioritize and speed up implementation of key areas under the SACU Modernization Programme, specifically to minimise direct contact, and enhance compliance with COVID-19 Protocols.No clear way forward – specific action items to fastrack Programme – High-level (Council), there is need to make clear decision, and cascade through structures.

9. SACU COVID-19 Related Trade Measures and Responses…continued2. Coordinated Efforts by Competition Authorities; SACU Members to collaborate on stabilising prices of essential supplies required to address COVID-19.in line with Article 2 of the SACU Agreement which seeks “to promote conditions of fair competition in the Common Customs Area.”Interventions undertaken within SACU Member States relating to Competition Authorities Price market surveys Botswana, South-Africa regulations on excessive pricing, deal with pricing and supply matters during the national disaster. 

10. SACU COVID-19 Related Trade Measures and Responses…continued3. Coordinated Approaches to Essential Supplies ; coordinated approach undertaken to ensure access to essential supplies “where these are not sufficient or available in the sub-region”;Council took the decision to harmonise and adopt a common list of goods for the fight against COVID-19 in the SACU region. Member States agreed on a collated list.

11. Comparative Approaches to Consider to build ResilienceRecognition and Acceptance of Electronic Certificates of Origin; Elimination of unnecessary trade costs;Reduce physical human interface;Short term approach - temporary acceptance of electronic documentation of origin for COVID-19 related emergency medical supplies, PPE’s and goods by SACU Customs Administrations;Challenges – require infrastructure, I.T connectivy and training;

12. Comparative Approaches to Consider to build Resilience2. Establish a Medicine Registration and Harmonization CommitteeCommittee to improve public health by increasing rapid access to good quality, safe and effective medicines;East Africa Community (EAC) Medicines and Food Safety Unit – structured to “ensure a high level of consumer protection and restore and maintain confidence in the quality and safety of medicines, food and health products;Anticipated Outcomes; Access to safe effective medication, and Improved public health conditions ;More effective medicines control by the strengthened national drug regulatory authorities;Improved procurement practices for securing priority medicines.

13. Comparative Approaches to Consider to build Resilience3. Common Strategies on Customs Duties and VAT on Essential Medical Supplies and Basic FoodAligned to primary SACU objective to facilitate the development of common policies and strategies;SACU Member States to develop strategies that are adept to aiding them in importing affordable, accessible critical supplies;Waiving duties and taxes, or exemptions on VAT – Challenge is varying Policy consideration of various Member States- Particular SACU Members may be considerably reliant on duties and taxes;

14. ConclusionCOVID-19 could Potential fastrack WCO-SACU Connect Project, motivate political buy-in, and prioritisation by Member States;There is a need to reconcile roles relating to functions, and objectives between SACU and SADC (duplicity in certain areas, i.e electronic Certificate of Origin for effective responses;Important to efficiently take decisions at Council level, and cascade throughout during times of emergencies;Recommendations - SACU to consider relevant comparative measures and structures - eCoO, Medicine Registration Committee, and develop Common Strategies on Customs Duties and VAT in order to build resilience.