East African Community Adopts 35% Duty on Imported Finished

The East African Community issued a statement announcing that it has officially adopted the fourth tranche of the common external tariff and decided to set the common external tariff rate at 35%. According to the statement, the new regulations will come into effect on July 1, 2022. After the new regulations take effect, furniture, ceramic products, paints, leather products, textiles, cotton, steel and other products will be subject to a unified import tariff of up to 35%. Previously, the EAC common external tariff rate structure was divided into three grades. The import tariffs for raw materials, means of production and finished products were 0%, 10% and 25%.

The members of the East African Community include: Kenya, Uganda, Tanzania, Burundi, Rwanda, South Sudan and the Democratic Republic of Congo, the seven East African countries. Specific commodities planned for inclusion include: dairy products, meat products, grains, edible oils, beverages and alcohol, sugar and confectionery, fruit, nuts, coffee, tea, flowers, condiments, furniture, leather goods, cotton textiles, clothing, Steel products and ceramic products, etc.

The introduction of the common external tariff of 35% this time is a positive step towards promoting the development of the industrial sector and maximizing the benefits of the African Continental Free Trade Area (AfCFTA) by encouraging the development of local manufacturing as well as increasing the value-added and The degree of industrialization to stimulate the development of intra-regional trade.

Special reminder: Kenya and Uganda have always been high-incidence areas of commercial fraud in Africa. After the tariff adjustment, the import cost will increase. Please be sure to pay attention to the risk prevention of exporting to relevant areas!

The main characteristics of a liar:

- Buyers are mostly middlemen;

- Most of the buyers are new customers of the exporter, and there is no transaction history between the two parties;

- The buyer pretends to be another legitimate business enterprise, embezzles or illegally obtains registration documents, and cooperates with the exporter to provide registration information, financial report information, address, contact information and other forged information to deceive the trust of customers, so as to achieve the purpose of fraudulent transactions

The tricks of the liar:

- Fake the name of a well-known Ugandan or foreign company (or its subsidiaries), register an intermediary company in Uganda, use its popularity and information to defraud, forge documents, signatures and employee identities, and sign false contracts;

- Transactions with high-risk payment methods. Taking advantage of the lack of understanding of the new market and the eagerness to expand the trade volume of our export enterprises, I require the use of credit sales (O/A) and other payment methods with high risks for the seller to conduct transactions, and refuse to pay or even lose contact after delivery.

Points to note when trading:

- Avoid transactions with the above-mentioned high-risk payment methods, and try to pay by letter of credit to reduce the risk of

low risk;

- Carefully choose trading partners, carefully screen foreign information, and use multiple channels to understand the credit status of the other party, including calling the company headquarters to verify the authenticity of branches and orders;

- After the case occurs, take appropriate legal measures to protect their own rights and interests in a timely manner, such as reporting the case to the China International Criminal Police Organization, etc., and assign personnel to the location of the goods to handle the return or transshipment of the goods, try to minimize losses, and report to the competent authorities and embassies Business office reports the situation.