Transit bonds and the RCTG regional guarantee

Why transit goods need a bond

The EAC Customs Management Act defines transit as the movement of goods imported from abroad through one or more Partner States to a foreign destination ⁴. Transit goods not re-exported within the Commissioner's time limit are treated as prohibited or restricted goods (section 20(2)) ⁴. Sections 106 to 109 let the Commissioner require security and set out rules on sureties and the enforcement of bonds ⁴. The 2025 amendment replaced the word surety with bond in section 108(2)(d) ⁸.

COMESA says customs bond guarantees protect governments. If transit goods are diverted for use in the transit country, the government can recover the duties and taxes from the guarantor ¹.

How the RCTG Carnet works

The UNESCAP Cross-Border Paperless Trade Database, updated on 5 June 2024, says one RCTG guarantee covers the duties and taxes at risk for the whole transit. The Carnet serves as a bond or guarantee exemption certificate in every member state the goods pass through ². Goods travel with a customs transit declaration and all carriers in transit must be licensed ².

The same record says the online system manages bonds, clearing and forwarding agents, guarantors, T1 entries and Carnets. It links to national customs systems to receive transit declarations in real time and records bond cancellation when the Carnet is acquitted ². It lists insurance companies, banks and clearing and forwarding agents among the entities taking part, and keeps guarantor data on insurers ².

Who takes part

Sources list members differently. They are shown with their dates.

Costs and results reported

The EastAfrican reported on 4 October 2014 that over 200 bonds worth $100 million had been executed in under three years. It said the Comesa bond rate was cut from 0.75 percent to 0.5 percent, against a Uganda national bond rate of 0.25 percent ³. It said the scheme had earned over $600,000 in premium income from sureties covering 194 clearing and forwarding agents ³.

The UNESCAP record gives a cost saving of 15% in one field and 10 to 15 percent in its text ². It names unreliable internet and delays in buying equipment in some member states as challenges ².

National bonds that still apply

• Tanzania: transporters of goods under customs control give a security bond of Tanzanian shillings 10,000,000 for a C.28 or C.40 licence, or 50,000,000 for both, and pay US$200 per carrying unit ⁶
• Tanzania: new clearing agents execute a customs bond of Tshs 100,000,000 ⁶
• Kenya: renewing customs agents must show a Certificate of Bond and Debt clearance ⁷
• Tanzania: under the SCT, EAC goods move after taxes are paid or a bond guarantee is given ⁵