FREIGHT CERTIFICATES

FAST FACT

In response to the COVID-19 pandemic, merchandise in Africa trade dipped 16 per cent in value in 2020, compared with a global average of 7.6 per cent. Source: World Trade Organization

Getting your papers in order

Accurate freight documentation is essential to passing customs, levies and taxes getting paid, and ensuring the smooth flow of goods between countries, writes ANTHONY SHARPE

In any sort of trade scenario, there’s typically a lot of paperwork to have in order. However, the most important documents for customs clearance purposes are the commercial invoice and the transport document (the airway or ocean bill, road consignment note or rail note).

“These are the two critical documents for customs clearance,” says Vincent Zikhali, senior customs manager at Barloworld Logistics. “In addition, a certificate of origin might be required and/or what is called a EUR1 certificate/movement certificate, which determines the origin of the product.” Zikhali says an import permit will also be required, but this depends on the particular country and whether or not the goods are controlled.

Free to trade

Free trade agreements allow for the buying and selling of goods across borders with the minimum of tariffs, quotas, prohibitions or subsidies. Proper documentation makes this all possible. “If the member countries are both members of a free trade agreement, the certificate of origin and movement certificate play a very important role in enabling the goods to enjoy a preferential duty rate and/or benefits,” says Zikhali. These certificates are not difficult to obtain, but traders need to bear in mind the rules of origin, which are agreed upon between member countries

Vincent Zikhali and used as a framework to determine the originality of the product. “At a high level, the framework for the rules of origin is normally the same in all free trade agreements,” elaborates Zikhali. “However, these rules do get broken down per product or tariff code at a manufacturing or processing level so that the trader can determine whether – based on the input materials and all the processes to manufacture the product – their product qualifies to be determined as originating from the member state.”

If the product qualifies, the trader can apply to the customs authorities for the certificate of origin or movement certificate. “Take note that some customs authorities do sometimes outsource this function – for example to the chamber of commerce or similar entity – but in South Africa, our customs authority is responsible for issuing these,” says Zikhali.

DID YOU KNOW?

The Automated System for Customs Data (commonly known as ASYCUDA) is a computerised customs management system that deals with manifest and customs declarations, accounting, transit and suspense procedures. It’s used by more than 20 states across Africa – though South Africa is not one. Source: ASYCUDA

Country to country

Ensuring the correct documentation for country of origin is all well and good, but traders must also ensure they comply with customs procedures in every country through which their goods pass, says Robbie Forbes of Transcom Services, OGEFREM DRCappointed principle agent for Southern and Central Africa for the Democratic Republic of the Congo.

“To ensure compliance, most importers and exporters make use of freight forwarders in the countries being transited and the ports of exit or arrival,” says Forbes. “You’ll find most of them know exactly what is required, because if a shipment is held up anywhere, that’s the last time they’ll be used by that client.”

Transiting numerous countries, unfortunately, carries with it some risks. “Goods may be exported from China, for example, and documented to arrive in the DRC,” explains Forbes. “But they never arrive, instead being sold off somewhere along the way. These goods end up in a transit country, but duties and VAT are not paid because the product is unknown to the authorities.” Forbes adds, however, that proper customs documentation in conjunction with enforcement at borders can bring about effective control.

Levelling the playing field

It’s no secret that intra-African trade is essential to economic growth across the continent. In terms of the regulatory environment, Forbes says things are improving greatly throughout Southern and Central Africa through groupings like the Common Market for Eastern and Southern Africa and the Southern African Development Community.

“The playing field is being levelled for shippers, importers and exporters, which promotes equal opportunity trade for all. At the same time, regulations are in place that ensure the correct taxes are charged in the countries of transit and arrival. Coupled with the proper documentation, this contributes to the fiscus of all these countries for improving infrastructure, which further promotes investment while enhancing the lives and opportunities of the regional populace.”

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