SACU member states target illicit trade

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Windhoek

Recent joint risk management and enforcement operations by the Southern African Customs Union members states uncovered the smuggling of more than 9 million tobacco cigarettes and a total of 40 000 litres of un-denatured alcohol (100 percent alcohol with no additives) whereby 14 arrests were made across the region.

The operations, codenamed Gryphon and TopLiq, also detected combined revenue loss of N$308 million comprised of customs duties, value added tax (VAT), and excise duties that would have been collected under legitimate declaration processes.

“The outcomes of these operations highlight the benefit derived from joint and regionally coordinated initiatives. These will be further enhanced through strengthened and closer collaboration between governments and the business community,” said SACU executive secretary, Paulina Elago, during a meeting last week that focussed on trade facilitation between the public and private sector.

The gathering, co-hosted by the SACU Secretariat and the Ministry of Finance, took place under the theme “Trade Facilitation in SACU: the role of trade facilitation in supporting business: the national chapter-Namibia”.

Elago added that governments and the private sector stand to benefit from trade facilitation as efficient border controls reduces instances of fraud and illegal entry of undeclared goods, whilst business can become more competitive as fast clearances will improve the speed by which their products reach the consumer.

“At the risk of stating the obvious, trade facilitation is all about simplifying and harmonising trade procedures at point of entry into a country and exit. In other words, trade facilitation is aimed at reducing and minimising the cost of the trade transactions and ensuring that all these activities take place in an efficient, transparent and predictable manner. This is especially important for the small and medium enterprises involved in international trade,” Elago remarked.

A 2015 Organisation for Economic Co-operation and Development (OECD) study, estimated that government revenue loss from inefficient border procedures has been estimated at more than 5 percent of Gross Domestic Product (GDP) in some cases.

The OECD also estimated that for lower middle income countries, streamlining border procedures is estimated to have a 3.9 percent impact on cost, while harmonising and simplifying trade documents and automating trade and customs procedures would reduce costs by 3.5 percent and 2.9 percent respectively.

“Given the clear benefits associated with trade facilitation, including efficient border procedures and cost-reduction for businesses, the SACU Heads of State and Government have included trade facilitation amongst its six priority areas of focus”, Elago noted.

A Doing Business Survey conducted by the World Bank in 2014 indicated that import procedures for containerised cargo in the SACU countries takes on average 26 days (Botswana-35, Lesotho-33, Namibia-20, South Africa-21, and Swaziland 23). This includes document preparation, customs clearance, technical control, ports and terminal handling, as well as inland transportation handling.

Elago said a lot more needs to be done through a regionally coordinated approach in order to address bottlenecks and constrains in the release and clearance of goods, border cooperation, procedures on importation and exportation of goods, freedom of transit and customs cooperation.

She noted that the successful implementation of these initiatives would create a conducive and predictable trade environment, resulting in less cumbersome formalities and procedures at ports of entry and exit, automated processes and procedures to allow for the timely exchange of information, a culture of conformity to rules and procedures by the business community, and greater focus on risk management by customs.

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