Overview of the RCTG Scheme

The COMESA Customs Bond Guarantee Scheme is a customs transit regime designed to facilitate the movement of goods under Customs seals in the COMESA region and to provide the required customs security and guarantee to the transit countries.

COMESA Regional Customs Bond Agreement was signed by the Heads of State and Government of the Preferential Trade Area (PTA), (now COMESA) Summit, held in Mbabane, Swaziland, in November 1990.  The COMESA Customs Bond Guarantee Scheme is a component of the COMESA Protocol on Transit Trade and Transit Facilitation and shall only be availed to carriers that use the COMESA Customs Document (COMESA-CD) are issued with the COMESA carrier Licence.

Without exception, all COMESA Member States have legislations that require customs guarantees to be taken out by persons responsible for the execution of a transit operation.  The objective of customs bond guarantees is to ensure that the government is able to recover duties and taxes from the guarantors should the goods in transit be illegally disposed of for home consumption in the country of transit.

Under the current nationally executed bond system, when goods cross the customs territory of one or more States in the course of goods in transit by road, the Customs Authority in each state applies national controls and procedures.  These vary from state to state, but frequently involve the inspection of the load at each national frontier and the imposition of national security requirements (guarantee, bond and cash deposit or both etc.) to cover the potential duty or taxes at risk while the goods are in transit through each territory.  These measures applied in each country of transit, cause considerable expense, delays, and interference with the regional transport and trade.

To address the difficulties experienced by transport operators, freight forwarders and clearing agents and at the same time to offer Customs Administrations a secured regional system of control replacing the nationally executed practices and procedures, while effectively protecting the revenue of each State through which goods are carried, COMESA Member states agreed to introduce a Regional Customs Bond Guarantee Scheme.  Furthermore, the provisions of the Protocol on Transit Trade and Transit Facilities, Annex I to the COMESA Treaty provides, inter-alias, for all Member States to implement transit and customs measures to remove trade and transport barriers in the region.

The operations of the RCTG system shall be as follows:

• The Customs Transit Guarantee/Bond shall be lodged with the Customs Authorities where the transit operator is resident or is established;

• Before a Customs Transit Guarantee/Bond is approved by a Customs Authority, it shall be signed by the transit operators, the Primary Surety and a witness.  Thereafter, the Customs Authority shall issue a Certificate of Guarantee to the principal or his agent, permitting the principal or his agent to obtain the COMESA Carnet from the Primary Surety in order to conduct a transit process for the particular cargo. The COMESA Carnet shall contain particulars of the National and Primary Surety and member National Sureties in the transit countries, customs office where the guarantee is lodged, countries in which the Certificate is valid and the amount of the guarantee cover;

• A COMESA Carnet is a document that indicates that  security of goods has been provided and is bound in book form with tear-out foils and counterfoils.  The tear-outs show the details of the guarantee and the counterfoil is for the stamp of the receiving Customs Authority.  There are two tear-outs for each country, one for transit commencement, and the other for discharge.  When both parts are received in the Central Transit Office, the Customs Authority can be satisfied that the transit movement has been successfully completed.  The two tear-outs are then sent to the National Surety who sends them to the National Surety in the country of commencement.  The driver of the vehicle retains the counterfoils until completion of the transit movement then he returns it, via his employer, to the National Surety for archiving along with all of the related tear-out portions;

• The COMESA Carnet would be valid for any COMESA transit operation undertaken on the basis of a COMESA Customs Document (COMESA-CD) from any Customs office of a Member State where the Certificate is valid;

• Goods in transit traverse a customs territory without breaching the customs laws of that territory.  Therefore, the bond, in so far as that territory is concerned shall be acquitted at the port of exit and the transit process will continue afresh at the port of entry into the next territory of transit until the territory of final destination;

• The guarantee that is lodged with the Customs Authority in the Members States, where both transit operators and the National Surety are established and give security to transit countries that are liabilities arising from import duties and taxes, would be paid in the event of transit irregularities.  The National Surety in each transit Member State undertakes on behalf of the other National Surety to pay to Customs Authority import duties and other charges that are payable should the goods fail to be accounted for;

• This means that the National Surety in each country shall be answerable for any queries that may be raised by the Customs Authority; and

• Acquittal of bond and Certificate of Guarantee would be expedited at the port of exit and final destination and return without delay to the port of entry and Primary Surety.

• If any claims arise, The Customs Authority in the country where the transit movement has failed (e.g. the goods have been stolen) demands payment from the National Surety of its country.  That National Surety pays the duties to customs and then requests reimbursement from the National Surety in the country of commencement (where the transit movement started).  The National Surety in the country of commencement reimburses, through the Reinsurance Pool, the other National Surety, and then reclaims their monies from the Primary Sureties (the guarantor).

The RCTG enables transit operators to execute guarantees for customs duties by providing adequate security to Customs Authorities in transit COMESA member States that customs duties on the goods in transit will be paid should the transit operation fail, for whatever reason and thereby facilitate the trade and transport in the region.  
The RCTG scheme provides a significant transport savings and contributes to trade and transport efficiency by eliminating the current practices of customs bond guarantee that have to be executed in each transit country.  The benefits include:

• Quicker clearance of vehicles.  Currently, vehicles carrying goods are delayed at border crossings, among other reasons, to raise customs security/bonds at each and every border entry post;
• As a result of this, the transit and the vehicle turn around time will result in increasing tonne/kilometres with a positive impact on freight rates;
• Reduction of administrative barriers and speeding of the carriage of goods and lowering of transit costs - at least 15% to 20% of the current estimated 60% freight rate for a given corridor; a truck delayed at the border costs over 300US$ per day;
• Reduction of the costs of raw materials and inputs for industries and reduction of prices for consumers;
• It also reduces costs of imported goods and make export competitive;
• Release of colossal sums of money of Clearing and Forwarding Agents, which is tied up as a guarantee and/or collateral in commercial banks and insurance companies for other investments;
• Providing Customs Administrations reliable security and improve collection of duties and taxes; it is envisaged to computerize the system to avoid malpractice;
• Providing simple and economical administrative system for carriers/transporters; and 
• Providing a simple and economical mechanism for sureties (financial institutions) to issue and manage customs bond and creating an opportunity to extend their cooperation.

The RCTG Scheme needs an information management system to manage the operations across all participant countries. The ECA AGCI Hub, as part of the technical assistance to COMESA, has designed such a system called the RCTG-MIS (Regional Customs Transit Guarantee – Management Information System).
The RCTG-MIS has modules for the following functionality:

• Information Dissemination Module (ID Module):

Serves as the visible part of the system and will disseminate relevant information on the RCTG system for example, information on the primary sureties and the national sureties including contacts and statistics on their performance, an interactive bulletin board and frequently asked questions (FAQ) section for RCTG issues etc.
It is basically an RCTG portal to serve as a one-stop-shop for all information regarding the RCTG scheme.

• COMESA Carnet Tracking Module (CCT Module):

Primarily, this module handles:
The monitoring of issuance of COMESA Carnets.
The monitoring of the movement of the carnet from one customs regime to the other on the transit route.
The close-out and acquittals of the carnet once the goods successfully transit the customs regimes.

• Claims Tracking and Management Module (CTM Module):

Primarily, this module will manage:
Monitoring of the registration of claims.
Monitoring of the payment and reimbursement of claims.
All other claims-related monitoring functions in the RCTG system.

• Reports and Statistics Module (RS Module):

This module will handle the following primary functions:
Generation of appropriate RCTG Management reports from the RCTG-MIS database.RCTG-MIS System Architecture

Diagram: High-level RCTG-MIS Deployment Architecture

• Preparation of a complete design document for the RCTG-MIS system which was presented and accepted by COMESA as sound.
• Development of the prototype of the RCTG-MIS system, features of which include:
• The complete Information Dissemination Module (ID Module).
• Prototypes of the COMESA Carnet Module (CCT Module), Claims Tracking and Management Module (CTM Module) and the Reports and Statistics Module (RS Module).
• Development of the Complete RCTG-MIS and hosting on the COMESA Servers and ECA AGCI Hub Server
• Training of COMESA Content Manager and handing over of the RCTG-MIS to COMESA in preparation for the pilot run on the Northern Corridor (Kenya, Uganda, Rwanda)

RCTG-MIS Screenshots

Screenshot 1: Information Dissemination Module

Screenshot 2: Carnet and Claims Tracking & Management Module including Reports