NEW SACU AGREEMENT

PROVISIONS OF 1969 AGREEMENT RETAINED Free trade in locally produced goods Free movement of goods once cleared by customs Common external tariff Common excise tariff Infant industry protection for BLNS Similar customs and excise legislation Import control – each Member State has own regulations – no intra SACU restrictionsallowed for protecting an industry Freedom of transit and non-discrimination on transport rates.

MAIN NEW PROVISIONS SACU established as an international organisation with legal personality and headquarters in Windhoek Provision for accession of new Members New institutions – democratised structures Cooperation on Customs, industrial development, competition, agriculture, unfair trade practices, dispute settlement New revenue-sharing arrangements

Institutions INSTITUTIONS Council of Ministers Customs Union Commission Secretariat Tariff Board Technical Liaison Committees (Agriculture, Customs, Trade & Industry and Transport ) Tribunal

COUNCIL OF MINISTERS Supreme decision making authority Determines policy and functions of other institutions Appoints Executive Secretary and Tariff Board members Approves budgets of Secretariat, Tariff Board and Tribunal Approves customs tariff Meets at least quarterly Chair of Council to be held for twelve months by a Member State. Rotational basis.

CUSTOMS UNION COMMISSION Commission consists of most senior officials Responsible and reports to Council Oversees implementation of Agreement and Council decisions Supervises work of Secretariat and determines its staffing Meets quarterly Oversees management of the Common Revenue Pool Chairperson appointed by Member State chairing the Council

SECRETARIAT Day to day administration of SACU Coordinates and monitors implementation of Council and Commission descisions Arranges and keeps minutes of all SACU meetings Headed by Executive Secretary Keeps record of all Common Revenue Pool transactions Coordinates and assists in trade negotiations Depository of all SACU records

TARIFF BOARD Consists of experts drawn from all Member states Makes recommendation to the Council on all matters relating to the customs tariff Terms of reference, policy mandates, procedures and regulations determined by the Council

TECHNICAL LIAISON COMMITTEES Four Committees advise and assist the Commission: Agricultural Liaison Committee Customs Technical Liaison Committee Trade and Industry Liaison Committee Transport Liaison Committee

TRIBUNAL Ad hoc body normally composed of three persons In cases of dispute, Tribunal decides by a majority vote and decisions are final and binding Tribunal may assist the Council by making recommendations only in certain cases In cases of dispute, parties to the dispute choose members of the Tribunal from amongst a pool of names I

NATIONAL BODIES All Member States to establish specialised, independent and dedicated National Bodies to receive requests or applications relating to the customs tariff and other related SACU issues In South Africa ITAC will be the National Body

Revenue-sharing Pool may be managed by a Member State or an institution South Africa will manage pool for first two years Study on all issues pertaining to the management of the pool to be finalised by September 2003

Revenue sharing (cont.) Member States will share in the common revenue pool of customs and excise duties from three distinct components – Customs component Excise component Development component

CUSTOMS COMPONENT SHARE Share of any one Member: A/B X Customs component where A=Intra-SACU imports of a Member in year x B=Total intra-SACU imports of all Members in year x

SHARE OF EXCISE COMPONENT EXCISE COMPONENT (85% OF EXCISE DUTIES) Each Member’s share is calculated: A/B X Excise component where A=GDP of a Member in a certain year B=Total GDP of all SACU Members for such year

SHARE OF DEVELOPMENT COMPONENT (15% OF EXCISE) Each Member’s share A/B – 1 where A=GDP/capita of Member in a certain year and B=Mean GDP/capita of all Members in such year Deflate the relative difference by a factor of 10 Subtract from 1 Multiply by 20 Apply the percentage to the component

FINAL PROVISIONS Annexes to the main Agreement may be developed and will form an integral part of the Agreement Agreement can be amended by decision of the Council Agreement to be signed and ratified by all member States Agreement enters into force only after these procedures have been followed

FINAL PROVISIONS (CONT.) Instruments of ratification and all records of SACU will be deposited with the Secretariat A Member State may withdraw from the Agreement giving twelve monts’ notice Provisions for transitional arrangements The 1969 Agreement will terminate on entry into force of the new Agreement