WEST AFRICAN MONETARY ZONE _WAMZ_ MEETING OF THE TECHNICAL

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WEST AFRICAN MONETARY ZONE _WAMZ_ MEETING OF THE TECHNICAL Powered By Docstoc
					 WEST AFRICAN MONETARY ZONE (WAMZ)




MEETING OF THE TECHNICAL COMMITTEE ON
    TRADE, INVESTMENT & TAX ISSUES
             APRIL 1 – 2, 2008
          BANJUL, THE GAMBIA




            FINAL REPORT
             APRIL 2, 2008
SECOND MEETING OF THE TECHNICAL COMMITTEE ON
TRADE, INVESTMENT & TAX ISSUES
APRIL 1-2, 2008, BANJUL, THE GAMBIA

1. INTRODUCTION

In accordance with the programme directed in the Banjul Declaration of
2005, the West African Monetary Institute (WAMI), in collaboration with
the Department of State For Trade, Industry and Employment, organized a
meeting of the Technical Committee on Trade, Investment & Tax Issues in
Banjul, The Gambia on April 1-2, 2008. Participants in the meeting were
representatives from The Gambia, Ghana, Nigeria and Sierra Leone.
Participants list is attached in Annex.

2. OPENING REMARKS

The opening ceremony was chaired by Mr. Yusupha A. Kah, Permanent
Secretary, Department of State for Trade, Industry and Employment. In his
opening remarks, he underscored the need for effective implementation of
the ECOWAS Trade Liberalisation Scheme (ETLS) as well as the protocol
on the free movement of goods and persons. He assured that The Gambia
would continue to give its support to the WAMZ programmes alongside the
ECOWAS integration programmes. In the opening remarks Mr. C.O.
Odiaka, Director of Operations, WAMI, on behalf of the Director General of
WAMI, Dr. O.J. Nnanna, thanked the Government of The Gambia for
hosting the meeting. He remarked that the West African Monetary Zone has
little meaning without trade facilitation and smooth movement of goods
through greater harmonization in customs evaluation, simplification of
procedures for movement of goods across borders, removal of barriers to
intra-investment and development of communication and transport
infrastructure. He urged the technical experts to come up with concrete
recommendations for the consideration of the Trade Ministers.

3. PRESENTATIONS

3.1 Presentation by WAMI
Dr. L. Harding, Chief of Trade, Development and Sensitisation of the West
African Monetary Institute, made a presentation on the Recent
Developments and Status of the Emerging Common Market & Trade
Facilitation in the WAMZ. He highlighted the status of implementation of
the customs union program of the Zone focusing on
   • Implementation of the ECOWAS Trade Liberalization Scheme
       (ETLS)
   • Free movement of persons
   • Right to establish
   • Application of the Interstate Road Transit Convention (ISRT)
   • Application of the ECOWAS Common External Tariff (CET)
   • The extent of intra-WAMZ trade

3.2 Country Experiences

3.2.1 Presentation by The Gambia
The presentation on country experience by The Gambia highlighted the
following:
    • In the Gambia, six companies are operating under the ETLS.
       However, they are experiencing constraints due to inadequate
       sensitisation of customs officials and the private sector in the sub-
       region.
    • The need for ECOWAS to have a computerized database which
       should be shared with government agencies in the region.
    • A National Approval Committee has been established.

3.2.2 Presentation by Ghana

The highlights included:
  • The efforts of the Joint ECOWAS-UEMOA Management Committee
      to resolve differences over applicable duties for 400 key tariff lines
      under Type B Exceptions are being hindered by economic policy
      differences between the UEMOA and the non-UEMOA member
      states, thereby making it difficult to commence implementation of the
      ECOWAS CET on January 1, 2008.
  • The need for the ECOWAS Commission to organize regular meetings
      to enable member states negotiate and realign their sensitive products
      to avoid the possibility of non-UEMOA countries to rubber stamp the
      UEMOA CET.
  • Ghana has activated the Electronic Transit tracking module in the
      GCNet to ensure that transit goods are not diverted into Ghana’s
      economy.


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   • Ghana and its neighbors have signed MOU for future single joint
     physical inspection at the major land borders to facilitate trade. The
     joint effort is complemented by financial support from the African
     Development Bank and the World Bank for the construction of the
     requisite infrastructure.

The Nigerian and Sierra Leonean delegates did not present country
experiences per se as their representatives did not come from the trade
ministries.

3.3. Deliberations
 The subsequent discussions of the country experiences of the four countries
(The Gambia, Ghana, Nigeria and Sierra Leone) centered on:
   (i)      Persistence of barriers to free flow of goods, services and
            people across borders.
   (ii)     The adverse effect of the non-enforceability of the ECOWAS
            trade related protocols on the integration and monetary union of
            the WAMZ.
   (iii)    Reluctance by member countries to adhere to integration
            programmes (such as elimination of tariffs) because of concerns
            over revenue losses.
   (iv)     Incapability of ECOWAS or the WAMZ to enforce compliance
            of protocols.

The presentation by WAMI, the country experiences and the subsequent
discussions underscored the challenges and difficulties encountered in the
implementation of the ECOWAS trade related protocols.


4. Observations

The following observations were made from the presentation and
submissions:

4.1 ECOWAS Trade Liberalisation Scheme (ETLS)

   (i)      The inability of some of the member countries to ratify the
            ETLS and therefore accordingly amend the Customs law has
            been a deterrent in effectively implementing the ETLS.



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      (ii)    Security features on the certificate of origin are not robust,
              thereby making falsification of the certificate very easy.
      (iii)   Cumbersome and long delays ranging between 14 – 30 days to
              confirm the authenticity of a certificate of origin when there is
              doubt.
      (iv)    A competent and accredited authority to determine the
              authenticity of a certificate of origin is absent in member
              countries, and this further exacerbates poor implementation of
              the Scheme.
      (v)     An established mechanism to readily verify the origin of goods
              traded under the Scheme is absent in some countries.
      (vi)    Most member countries do not have a readily available database
              of an updated list of registered industries and products.

4.2           ECOWAS CET

      (i)     The issue of alignment of tariff lines under the ECOWAS CET
              rates as well as determination of the need for a fifth band still
              persists.
      (ii)     Regional meetings to resolve the issue are irregular.


4.3           INTER-STATE ROAD TRANSIT (ISRT) CONVENTION

      (i)     Lack of electronic tracking system in most of the countries.
      (ii)    Some major transit routes are littered with numerous
              checkpoints.
      (iii)   Member countries, which have not widely deployed the
              ASYCUDA ++ are making efforts to do so at major ports and
              border posts

4.4           OTHER OBSERVATIONS

      (i)     Lack of sensitization of the private sector on ECOWAS
              protocols.
      (ii)    ECOWAS integration activities are not adequately funded by
              member countries, though the ECOWAS Commission annual
              budget makes available special ECOWAS funds to each
              member country for such activities.



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      (iii)   Meetings of established joint commissions between member
              countries are seldom held.
      (iv)    A company originating in the WAMZ, with a subsidiary in
              another member country, faces double taxation when it
              repatriates profits as there is no WAMZ-wide treaty or
              agreement on avoidance of double taxation.
      (v)     Admission of ineligible goods into the ETLS.
      (vi)    Complex rules of origin and ineffective compensation scheme.



5.            RECOMMENDATIONS

Based on the above observations, the following recommendations were
proffered by the committee:

5.1           Removal of road checkpoints

      (i)     Number of checkpoints along a transit route should be limited
              to one for every 300 km.
      (ii)    Inspecting agencies should do joint inspection and only at a
              designated checkpoint along the transit route.
      (iii)   Regular check on compliance with designated number of
              checkpoints along transit corridors should be undertaken by the
              Corridor Management Committees and periodically by WAMI.
      (iv)    WAMI should hold biannual review meetings to evaluate
              performance of member countries on compliance with
              ECOWAS trade-related protocols, including the number of
              checkpoints.
      (v)     Regular bilateral and tripartite meetings should be held by
              member countries with trading partners and the implementing
              agencies (Customs, Immigration and the Police in particular) to
              address related issues and copies of the reports made available
              to WAMI.

5.2           Speeding up customs procedures

      (i)     Each member country should adopt ECOWAS approved
              simplified and harmonized documentation for clearance of
              goods

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 (ii)       Automated systems by all ECOWAS member states should be
            deployed to facilitate customs clearance at all approved entry
            and exit points.
 (iii)      Transit fees and other charges should be harmonized across the
            Zone.
 (iv)       Member countries should agree on modalities for joint
            investigations of non-compliance with the criterion of origin
            under the auspices of the ECOWAS Commission.
 (v)        There should be a tripartite meeting involving ECOWAS,
            UEMOA and WAMI to resolve the issue of application of the
            ECOWAS CET and the fifth band as well as differences in
            policies.
 (vi)       There should be single joint inspection by the adjoining
            countries and an agreement needs to be signed by member
            countries to enforce protocols.
 (vii)      Member countries should comply with the provisions of the
            ISRT as it affects mode of presentation of goods and approved
            routes for transit routes, among others.
 (viii)     Member countries should establish a data base for ETLS
            registered companies and products for ease of reference by
            inspecting agencies and also for statistical and planning
            purposes.
 (ix)       Member countries should sign a common Treaty to enable
            businessmen have access to the ECOWAS court to address
            grievances.

5.3         Double Taxation

 There is need for a WAMZ-wide treaty or agreement on taxation with a
 view to avoiding occurrences of double taxation on parent and subsidiary
 companies operating in the zone. A draft text, on this and other related
 issues, prepared by WAMI should be presented at the next Convergence
 Council meeting for their consideration.

 5.4        Other recommendations

 (i)      Trade issues should always be on the agenda of meetings of the
          Convergence Council of the WAMZ, given the centrality of trade
          in monetary union.



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