Program Overview
Definition of the EAC Bond
An online EAC project makes it possible to provide a customs bond for each of the seven partner states. It is supported by the same technology as the Regional Electronic Cargo Tracking System (RECTS), which gives revenue authorities, insurers, clearing and freight agents, and transporters access to real-time cargo tracking, monitoring, and reporting. Existing RECTS, which must have interfaces with revenue agency systems, serves as the risk mitigator under the EAC Bond. EAC Bond Platform is integrated with Customs Management System, Insurance Regulatory Authority System, Port Authority System & etc.
Customs bonds can be obtained by importers, exporters, and other parties involved in international trade, such as customs brokers or freight forwarders. These bonds help facilitate trade by providing assurance to customs authorities and mitigating the financial risks associated with the movement of goods across borders. In the event of non-compliance or default, customs bonds can be used to cover any unpaid duties or penalties.
- The EAC introduced t he Single Customs Territory (SCT) in 2014, requiring all partner states to use a single document for Customs Union implementation.
- A regional bond is necessary where duty is not paid at the first point of entry to have a single document utilized in multiple countries.
- At the start of SCT, there was just one Regional Bond option: the COMESA Regional Customs Transit Guarantee (RCTG), which the region took on in 2015 to facilitate SCT in the interim.
About
Introducing EAC Bond++: Streamlining Trade Across East Africa
The EAC Bond++ program aims to enhance customs bond management and enforcement. The program utilizes the EAC Bond Platform, which streamlines the application process, facilitates payment reconciliation, supports cargo declaration and examination, and provides real-time status monitoring.
It also emphasizes the liability and accountability of principals, while allowing insurers and guarantors to pursue claims for losses. The platform integrates with customs management systems and offers features like application tracking, communication tools, and reporting capabilities. Additionally, the program ensures compliance with customs protocols, enables the retirement of bonds, and provides insurance coverage for transit goods.
Comprehensive Coverage for penalties, fines, and claims, with rights for claims by insurers and guarantors.
Seamless Integration with customs systems, ensuring smooth data flow and synchronization (Asycuda, SIMBA, iCMS etc.).
Transparent and Accountable, with real-time status monitoring for all stakeholders.
Strong Risk Mitigation, emphasizing liability and accountability for duties, taxes, and container condition.
Fundamental Principles
Empowering Business Mobility, Responsive by Design
Wide Scope
It will cover warehouses, transfers, and commodities in transit.
Information Technology
The product is technologically driven, with information systems management for bond creation, utilization tracking, retirement, and replenishment, resulting in efficient bond management.
Integration with existing regional tools
The system will be integrated with regional customs systems, centralized Single Customs Territory platform, and Regional Electronic cargo Tracking Systems
Institutional Framework
The scheme will be managed by an agreed institutional framework that includes member countries, the EAC Secretariat, banks, insurance companies, and the trading community.
Financing
The system will be self-sustaining, with premiums going towards keeping the scheme running and supporting existing ICT solutions such as Single Customs Territory (SCT) platforms and RECTS.
Responsiveness
A bond for the region intended to be more adaptable to the region's demands.
Risk Reduction and Cost Savings
Utilizing regional tools like RECTS, allowing real-time visibility of tracked bonded cargo to banks and insurance companies, can reduce risk and lower premium costs.
How it works
EAC Bond++ Program and EAC Bond Platform: Streamlining Bond Applications, Execution, and Insurance in East Africa
Application Submission
Submit an application for the EAC Bond++ program through the EACBond Platform, providing all necessary information and documentation.
Application Review and Approval
The EAC Administration and Coordination Unit reviews the application and approves or rejects it based on compliance with program requirements.
Payment of Bond Premium
Once the application is approved, pay the bond premium through the EACBond Platform to activate the bond.
Cargo Declaration and Examination
Lodge a customs transit declaration, including supporting documents and destination details, via the EACBond Platform. Customs authorities examine the declared cargo and issue e-Seals and a Transit Document upon satisfaction.
Bond Execution Notice
Upon approval, the EACBond Platform issues a Bond Execution Notice with the unique identifier, bond amount, charges/fees, taxes, VAT, etc. The information is synchronized with customs management systems for seamless integration.
Customs Transit Bond and Insurance Issuance
The issuance of the Bond Execution Notice automatically onboards the Customs Transit Bond, Inland Goods in Transit Insurance, and Container Guarantee to their respective platforms for separate visibility to stakeholders.
Commencement and Tracking
As all clearance formalities are completed, customs authorities flag the status of the EAC Bond++ as commenced on the EACBond Platform. The generation of a Transit Document and e-Seal provides tracking visibility for customs authorities and stakeholders in the transit corridor.
Bond Retirement
When the transit is completed, the bond retirement voucher (Form C26) is lodged with supporting documents. It is reviewed and processed by the Customs Transit Bond officer/supervisor to ensure compliance with conditions and checklist. If compliant, the bond is retired.
Opportunities
Seize the Potential of Intra-EAC Trade by Partnering with EACBond++
1
Utilising existing RECTS technology for risk identification and mitigation
2
Utilisation of an integrated system for automation in order to eliminate human intervention and increase efficiency
3
Increased insurance capacity and interest in custom bonds
4
Increased insurance capacity and interest in custom bonds
5
Using technology to simplify the bond issuance process
6
Use of the aforementioned methods as the foundation for a favourable EAC Bond insurance rate
Benefits
Transform Your Supply Chain with EACBond++
Covering the expense of electronic cargo tracking (2024/2025 onward)
Tracking for free
Access to the EACBond Platform and information on Marine Cargo Insurance and Container Guarantee (No Cash Deposit required)
Reduced administrative responsibilities - EAC will oversee
Our clients receive complete support.
More money retain in EAC because up to 35% of premiums will be retained within EAC.
What about stakeholders?
Revenue Authorities
- Enforcement & Adherence to laws on custom bonds on importation of goods
- Efficiency in issuance of custom bonds
- Increased custom duty collection
- Increased domestic taxes
Port Authorities
- Efficiency in clearance of goods by use of technology
- Assurance of compliance with law via unified services (RECTS & EAC Bond)
Insurance Industry
- Facilitate adherence to law by issuing affordable custom bonds
- Increase in insurance penetration and insurance premiums underwritten across the region
Importers
- Future proofed businesses through enhanced compliance to law
- Cost efficiency in acquisition of custom bonds and other import trade insurance solutions
Economy
- Reduction of illegal goods through use of technology to reduce dumping
- Increased transparency on transit trade
- Effectively reduced cost of goods
- Creation of sustainable employment opportunities