1 FREIGHT SUBSIDY SCHEME TO AFRICAN PORTS Enterprise Mauritius 9 July 2014

The Freight Subsidy Scheme as announced in Budget 2014, consists of a 25% refund of freight cost, up to maximum of US$300 per 20-feet container for export to selected approved Ports of Africa, excluding South Africa & Madagascar. The scheme has entered into force on 1st June Freight Subsidy Scheme 2

Designing the Scheme Stakeholders Enterprise Mauritius MEXA Board of Investment Mauritius Port Authority Ministry of Finance and Economic Development All shipping lines serving Mauritius Major exporters to Africa 3

Objectives  Immediate to ensure the competitiveness of our exports to Africa vis- à-vis exports from Asia  Short term to catalyse exports to the Region  Long term to create the necessary conditions for the establishment of a feeder shipping facility on Africa 4

Desired Outcomes Shorter shipping time Greater frequency of service Lower cost of freight Enhanced the competitiveness of Mauritian products 5

Port to which Scheme applies 1. Mombasa (Kenya) 2. Dar es Salaam (Tanzania) 3. Beira (Mozambique) via Madagascar (cargo shipped to Beira on vessels transiting in Madagascar may be included) 4. Moroni (Comoros) 5. Victoria (Seychelles) 6

Eligibility  Exporters of goods produced/manufactured in Mauritius  Freeport operators exporting goods locally manufactured or goods manufactured in the Freeport Zones 7

Conditions of the Scheme 1. Shipping Time to destination is Minimum Time to destination is a critical element in the success of the Scheme, it is expected that shipping lines will substantially reduce transit time (which is presently around 30 days or more) so as to bring it to a more reasonable time frame (e.g., Mauritius to Mombasa in 12 to 15 days). In this connection, it is expected that exporters will favour shipping line/s with reduced transit time. 2. Refund will apply on aggregate cost of freight excluding: ( a) Loading Charges MPA, (b) Landing Charges, (c) Marine Charges, and (d) CCS Fee. 8

Conditions of the Scheme 3. Categories of goods eligible for Subsidy 1. Goods that are wholly grown or produced in Mauritius. 2. Goods that are exported under an IOC, COMESA or SADC certificate of origin. 3. Goods manufactured/processed in a Freeport Zone, wholly or partially from imported materials by a process of manufacture/production: a) resulting in a change in tariff classification (either Change-in-Tariff Heading or Change-in-Tariff Sub-Heading); or b) Involving a value addition of not less than 20% of the ex-works costs (excluding profit) of the finished goods. 9

Important Note 1 The scheme will exclude:  Simple Transhipment  Simple Re-Export (Bulk breaking and simple transformation in the Freeport)  Transhipped Containers 10

Important Note 2 It should be noted that goods manufactured or processed in a Freeport Zone which have undergone the following ‘minimal processes’ would not qualify under this scheme:  Operations to ensure the preservation of products in good condition during transport and storage;  Simple operations* consisting of removal of dust, sifting or screening, sorting, classifying, matching, washing, painting and cutting up;  Changes of packing and breaking up and assembly of consignment; simple bottling and packing operations;  Affixing of marks and labels;  A combination of two or more operations specified above; and  Slaughter of animals. *Note: Simple operations mean operations where neither special skills nor machines, apparatuses or tools especially produced or installed for those operations are required for their performance. 11

12 Application of Subsidy Application has to be submitted in the Prescribed Form* to Enterprise Mauritius, 7 th Floor, St James Court, St Denis Street, Port Louis, together with the following supporting documents: 1. Copy of Bill of Lading 2. Copy of Commercial Invoice 3. Copy of Export Declaration (Custom Declaration Form) 4. Receipts of payments from Shipping Agent/ Freight Cargo Receipt 5. Written statement from exporter on source of goods exported and any other supporting documentary evidence (for Wholly grown or Produced; or) 6. Copy of Certificate of Origin (for Exported under IOC, COMESA or SADC) or 7. Written statement on process of manufacture and certificate from a qualified accountant on breakdown on and % of value addition (This applies for products not wholly produced or processed and those not accompanied by Certificate of Origin). *Prescribed form can be downloaded on Enterprise Mauritius’ Website:

Freight Subsidy Committee for Refund Enterprise Mauritius MEXA MRA Customs Department 13

Freight Subsidy Scheme For more information Visit 14

Contact Details Enterprise Mauritius 7 th Floor, St James Court, St Denis Street, Port Louis Tel: – – For any additional details please contact: Mr Pravin Soburrun - Tel: Mrs Reshma Napaul - Tel: