Customs Procedure Presentation

Customs Procedures
Sisay Asres W/Mariam

Certified Trainer and Consultant
November, 2023
Addis Ababa
Sisay Asres- Bios
Current Position:
• Consultant in LSCM and Customs, Astro Consulting and Training Center, (January
2014 – Present)
• Certified trainer of FIATA Diploma in International Freight Forwarding (January
2018 – Present)
Work Experience (20+ years):
• Over 16 years of work experience in Ethiopian Revenue and Customs Authority in
different position from officer to Managerial position. (Specialized in Customs
Matters)
• Over five years’ experience in Consulting in LSCM and customs;
• FIATA certified trainer of International Freight Forwarding for the last three
consecutive years.
Academic Background:
• Master’s Degree in Logistics and Supply Chain Management, Addis Ababa University
• BSC Degree in Management Information System, Unity University, Addis Ababa
• Diploma in Marketing Management, Addis Ababa University, College of Commerce
Module title and date

Sisay Asres- Bios
ASTRO CONSULTING AND TRAINING CENTER

Training and Consultancy on:
Customs Procedures and Technics,
International Trade and Import Procedures of Ethiopia,
Logistics Management,
Supply Chain Management,
Freight Forwarding Services,
Multi-Modal Transport Practice,
Customer Service.
astroconsulting.logistics@gmail.com; 0911227903

Customs Procedures
Learning Objectives:
❖ The student must understand the role of the
international Customs with its economic and fiscal
mission in a trade facilitation driven world economy
development.
❖ He must be aware of the Ethiopian Customs
nomenclature, the rules and regulations governing
the Ethiopian Customs declaration and the various
controls and customs facilitation measures for
trade.
Customs Procedures, January 2022
Customs Procedures
1. General Introduction
1.1 Introduction
1.2 What is customs?
1.3 Role of customs administrations
1.4 Organization
1.5 Important rules affecting customs
clearance
1.6 WCO SAFE
1.7 WTO FTA Single Window
1.8 Key customs terms
Customs Procedures
2. International laws and Conventions related to customs
operations
2.1 International Laws Related to customs operation
2.2 The Revised Kyoto Convention
2.3 The Harmonized System Convention
2.4 GATT – General Agreement on Tariffs and Trade
2.5 Customs preferences for goods from developing
countries
2.6 ATA (Admission Temporaire/Temporary Admission)
Convention

Customs Procedures
2.7 TIR Conventions
2.8 Convention on International Trade in Endangered
Species of Wild Fauna and Flora (CITES)
2.9 Bali Agreement Trade Facilitation
2.10 The Regional Comprehensive Economic Partnership
(RCEP)
2.11 The Agreement concerning International Goods
Transport by Rail of the Organization for Cooperation
between Railways (SMGS)
Customs Procedures
3. National Customs Procedures
3.1 Customs transit
3.2 Customs warehouse
3.3 Customs clearance
3.4 Simplified procedures
3.5 Collection of customs fees, customs
statistics, exchange of customs
information

Customs Procedures
4. National customs techniques
4.1 National customs tariff
4.2 Structure of the customs tariff
4.3 Significance of the customs nomenclature
4.4 National customs valuation
4.5 Rule of origin
4.6 Calculation of customs duties and taxes
4.7 Customs forms
Customs Procedures
5. Liability of the freight forwarder
5.1 Responsibility of the Freight
Forwarders and Clearing Agents towards
the Customs administration and the
Customer
5.2 Liability of carriers
5.3 Responsibility of warehouse operator

Customs Procedures
6. Customs offences, penalties and appeal

procedure
6.1 Customs offences,
6.2 Appeals in customs matters
6.3 penalties

Objective:
❖ The student should be aware of the role of customs
administrations, main Customs policies and organization
structure of Customs administrations.
❖ The student should be aware of the main sources of law
regulating Customs procedures.
❖ The student should understand the key terms related to
customs operation.

1.1 Introduction
• In the world today, there has been a shift from the
economic protection function of customs to a broader
protection of society and the citizen.
• To day, Customs administrations around the world are

responsible for implementing a broad range of government
policies.
• The traditional role of customs as the

‘gatekeepers’ has now been replaced by the
new and more challenging role, that is based
on three crucial concepts:
➢trade facilitation,
➢border protection, and
➢revenue collection.

1.2 What is customs?
The World Customs Organization (WCO) formally
defines Customs as:
‘…the government service which is responsible for
the administration of Customs law and the
collection of import and export duties and taxes
and which also has responsibility for the
application of other laws and regulations relating,
inter alia, to the importation, transit and
exportation of goods.’

There are two main tools of the Customs state policy:
➢Protectionism
It is the economic policy of restraining trade between
countries, through methods such as high Customs
tariffs on imported goods, in an attempt to protect
industries in a particular locale from competition.
➢Free trade
It is an economic policy supporting increases in the
unhindered flow of goods and services between
countries.

1.3 Role of customs administrations
The responsibilities of Customs administrations vary from
country to country. These areas as diverse as :-
intellectual property cultural heritage
protection of society border security
environmental
protection revenue collection
collection of trade
trade compliance
data

• It must be noted that customs administrations are
generally responsible for managing the
administrative arrangements associated with
matters for which other government departments
and agencies have policy responsibility , such as:
➢health,
➢immigration,
➢agriculture,
➢environment,
➢international trade & commerce,
➢trade statistics etc.
• These ‘border control’ responsibilities stem from the
more traditional Customs role of collecting duties on
internationally traded commodities.
• A common extension of this is a responsibility for
collecting other forms of tax, such as Excise Tax, Value
Added Tax, Sur Tax and Withholding Tax.
• Additionally, Customs administrations tend to carry out
border control functions on behalf of other agencies.
• These activities are likely to be undertaken on behalf of
and/or in conjunction with.

• In those countries where import duties and related taxes
represent a significant proportion of the national revenue, you
will generally find that the principal focus of Customs is
revenue collection.
• Where this is not the case, however, the principal focus is
likely to be border protection, with particular emphasis on
the enforcement of import and export prohibitions and
restrictions.
• With the current trend towards global free trade and
heightened international terrorism concerns, most developed
economies are now placing an increasing emphasis on border
security, with customs playing a key role.
• So the Customs administrations of today faced with
strong demands that they adapt their
➢organizations,
➢structures, and
➢methods of operation
to effectively fulfill their role and responsibilities and
to efficiently meet the evolving requirements of:
➢industry,
➢community and
➢government.

1.4 Organization
• The Customs administration organization structure may
depend on
➢a technical minister (Ministry of Finance, Ministry of Budget
Resources) or
➢the President of the country or
➢Simply as an administrative service.
• In most of the European countries, the Customs
administration belongs to the Ministry of Budget or
Finances.

• In Ethiopia, the customs administration established
for the first time in 1889 during Minilik period, to
collect government revenue.
• During 1889-1923 it was under Finance &
Treasury Ministry.
• From 1923-1996 reorganized under the new
Ministry called Ministry of Finance.
• Then after in 1997 reestablished under Ministry
of revenue.
• In July 2008 merged with the Ministry it self &
FIRA and become one institute and named Ethiopian
Revenue & Customs Authority, directly accountable to
prime Minster Office.
• Recently, it is reorganized as the Ministry of revenue
under the prime minister and appointed a Customs
Commission.
• But its power becoming very less in contrast with the
previous structures.

1.5 Important rules affecting customs clearance
• The main sources of rules:
➢International conventions
➢National law…
• Additional sources:
➢Resolutions of international organizations
➢Judgments

1.6 WCO SAFE Framework
• What is WCO Safe Framework?
• The SAFE Framework of Standards is a set of recommendations to

the customs organizations, which include issues as:
➢integrated Customs control procedures for Integrated Supply
Chain Management. authority to inspect cargo, and use modern
technology in doing so. ... identification of high-risk cargo and
container shipments.

1.6 WCO SAFE
In June 2005 the WCO Council adopted the SAFE
Framework of Standards to Secure and Facilitate Global
Trade (SAFE Framework) that would act as:-
➢a deterrent to international terrorism,
➢to secure revenue collections and
➢to promote trade facilitation worldwide.

What are the three 3 pillars of the SAFE framework?
• The SAFE Framework, rests on the three pillars of:-
➢Customs-to-Customs network arrangements,
➢Customs-to-Business partnerships and
➢Customs-to-other Government Agencies co-
operation.

• The SAFE Framework has emerged as the global Customs community’s
concerted response to threats to supply chain security, equally
supporting facilitation of legitimate and secure businesses.
• It prescribes baseline standards that have been tested and are working
well around the globe.
• This unique international instrument endeavors to usher in a safer world

trade regime and also heralds a new approach to working methods and
partnership for both Customs and business towards a common goal based
on trust.

• The Framework has been regularly updated to effectively
address new and emerging developments in international
supply chains. Notable additions were provisions on:-
• AEO Programme,
• Coordinated Border Management and Trade Continuity
and Resumption,
• Pillar 3 (Customs-to-Other Government and Inter-
Government Agencies), and
• Pre-loading Advance Cargo Information (ACI) for air
cargo.
The 2021 version of the SAFE Framework:
• strengthens co-operation between Customs and Other
Government Agencies;
• promotes smart security devices to optimize Customs
control and
• effectively monitor the movement of goods in a real-
time basis.

1.7 WTO FTA Single Window
• Single window in the context of the WTO Trade
Facilitation Agreement;
• A single window is a facility that allows parties
involved in trade and transport to lodge
standardized information and documents with a
single entry point to fulfill all import, export and
transit-related regulatory requirements.

1.8 Key customs terms
• Customs Law: is the statutory and regulatory
provisions on customs matters.
•It generally includes provisions concerning:
➢structure and organization of Customs
administrations and their functions,
➢powers and responsibilities,
➢rights and obligations of the persons concerned,
➢Customs procedures, the conditions and

formalities relating to their applications,
➢The application of import and export duties and
taxes,
➢The nature and legal consequences of Customs
offences
➢The ways and means of appeal
• Customs territory:
• The territory in which the Customs law of a State applies in full.
• The Customs territory :
➢corresponds to its national territory including land, sea and air
space.
➢Certain portions of the national territory may be excluded. E.g.
free zones or the waters between the coastline and the State’s
territorial boundary at sea.

• According to Ethiopian Customs proclamation no 859/2014, Customs territory
is defined as:-
➢ “customs territory” means the territory of Ethiopia (Art. 2/7; and
➢ “customs crossing” means a designated point of crossing of the customs
boundary line for persons and means of transport as well as for import,
export and transit goods, and includes international border traffic routes
(Art. 2/43);
➢ “customs frontier strip” means a 15 kilometers wide part of the customs
territory from the customs boundary line of Ethiopia (Art. 2/44)

• Customs declaration
• There are two types of declaration,
➢the cargo declaration (sometimes referred
to as the manifest) and
➢the goods declaration (also known as the
customs declaration or entry).
• Cargo declaration: applied to the documents providing the

particulars required by the Customs concerning the cargo
(freight) carried by commercial means of transport.
• Goods declaration: a statement made by which the person

interested indicate the Customs procedure to be applied to
the goods and furnish the particulars which the Customs
require to be declared for the application of that procedure.

• Carrier
➢Carrier is the person actually transporting or in
charge of or responsible for the operation of the
means of transport.

• Customs clearing agent vs. declarant

➢Customs Clearing Agent is a person who carries on the
business of arranging for the Customs clearance of
goods
➢Declarant is any natural or legal person who makes a
customs declaration or in whose name such as a
declaration made.

• Customs formalities
➢Customs Formalities are all the operations which must be
carried out by the person concerned and by the Customs in
order to comply with the statutory or regulatory provisions
➢These formalities may include those relating to
phytosanitary, veterinary, immigration, currency and
licensing regulations.

• Customs office
• ‘Customs Office’ is the Customs administrative unit
competent for the performance of Customs formalities,
• In practical terms, the Customs operation at an airport in
a territory is one Customs office and the Customs
operation at a sea port in the same Customs territory is
another Customs office.

• Customs control
➢Customs Control is measure applied to ensure compliance with
the laws and regulations which the Customs are responsible
for enforcing.
• Customs fraud
➢Any act which a person deceives, or attempts to deceive, the
customs and thus evades, or attempts to evade, wholly or
partly, the payment of import or export duties and taxes or
the application of prohibition or restrictions laid down by law.

• Examination and sampling of goods

➢Physical inspection of goods by the Customs to satisfy
themselves that the nature, origin, condition, quantity
and value of the goods are in accordance with the
particulars furnished in the Goods Declaration.

Release of goods
• Release of goods is action by the Customs to permit
goods undergoing clearance to be placed at the disposal
of the person concerned.
• Customs is the final authority to grant release of goods.
• Customs cannot authorize release of the goods, without

approval for release granted from the border agencies,

2. International laws and Conventions
related to customs operations
Objective:
❖The student should be aware of the international laws
that have impact on customs operation.
❖The student should be aware of the relation ship

between international laws and domestic laws related to
customs operation.

2.1. International Laws Related to customs operation
There are many recognized subsets of International Law, including:
✓Public International Law
✓International Business Law;
✓International Trade Law;
✓Law of the Sea;
✓International Maritime Law;
✓International Air and Space Law; and
✓Law of International Organizations

• International law can now influence both:
➢the way in which Customs conducts its
operational activities, and
➢the way in which Customs is administered.

• The doctrine of sovereignty, is gradually being modified by
the emergence of international instruments designed to
create:
➢uniformity,
➢simplicity and
➢predictability throughout the world.
• Countries with domestic legal regimes that do not respond to
these changing expectations may find themselves left behind.

• Many of the international agreements that have a
significant impact on Customs matters are either
sponsored or are at least administered, by the WCO.
• Some of these agreements include:
➢Convention establishing the Customs Co-operation
Council
➢Convention on the Harmonized Commodity Description
and Coding System
➢Customs Convention on the temporary importation

➢Customs Convention on the ATA carnet for the
temporary admission of goods
➢International Convention on the simplification and
harmonization of Customs procedures
➢International Convention on Mutual Administrative
Assistance in Customs matters
➢ Customs Convention on Containers …..

• Other agreements that have a significant impact on
Customs include, among others:
➢Convention on the Law of the Sea
➢Convention on International Trade Law
➢Universal Postal Union and Universal Postal Convention
➢International Convention for the Unification of Certain
Rules relating to International Carriage by Air
➢Convention for the Unification of Certain Rules of Law
relating to Bills of Lading….

2.2. The Revised Kyoto Convention
• The Revised Kyoto Convention (RKC), this is one of the
major international instruments developed by the WCO
(1994).
• The Revised Kyoto Convention (RKC) on the Simplification

and Harmonization of Customs Procedures, 1999,
specifically designed to regulate customs issues.

• The Customs Cooperation Council (CCC), which is the
forerunner of the WCO, has, since its inception in 1952,
been working to develop modern principles that would
bolster effective customs administrations.
• In 1973, the CCC adopted the International Convention

on the Simplification and Harmonization of Customs
Procedures, known as Kyoto Convention.

• The Kyoto Convention came into force in 1974.
• However, the following reasons forced WCO and its

members to review and update the KC.
➢advances in information technology
➢rapid transformation of international trade patterns
➢globalization,

• It is recognized as an international standard, and used as a
benchmark, for the global Customs community.
• It helps to minimize the level of Customs intervention in cargo
movements and maximize the level of trade facilitation.
• It also helps to achieve a modern Customs administration by
➢eliminating divergence between the Customs procedures and
practices of contracting parties,
➢meeting the needs of both international trade and Customs
authorities

➢ensuring appropriate standards of Customs control
➢enabling Customs authorities to respond to major changes

in business and administrative methods and techniques
➢ensuring that the core principles for simplification and

harmonization are made obligatory on contracting parties
➢Providing Customs authorities with efficient procedures,

supported by appropriate and effective control methods

• The Revised Kyoto Convention elaborates several key
governing principles:
➢transparency and predictability of Customs actions;
➢standardization and simplification of the goods
declaration and supporting documents;
➢simplified procedures for authorized persons;
➢maximum use of information technology;

➢minimum necessary Customs control to ensure

compliance with regulations;
➢use of risk management and audit based controls;
➢coordinated interventions with other border agencies;
➢partnership with the trade.

• The revised Kyoto Convention promotes trade facilitation
and effective controls through its legal provisions
• The revised Convention also contains new and obligatory

rules for its application which all Contracting Parties
must accept without reservation.

• The Convention, as amended, consists of
➢the Body,
➢the General Annex and
➢a series of Specific Annexes from A to K.
• The RKC entered into force in 2006.

• The Revised Kyoto Convention 2000 has 10 chapters of
the General Annex:
➢Chapter 1: General Provisions
➢Chapter 2: Definitions
➢Chapter 3: Clearance of Goods
➢Chapter 4: Duties and Taxes (Assessment, Collection
and Payment; Deferred Payment; Repayment)

• Chapter 5: Security
• Chapter 6: Customs Control and Risk Management
• Chapter 7: Use of Information Technology
• Chapter 8: Relationship between Customs and Third
Parties
• Chapter 9: Customs Information, Decisions and Rulings
• Chapter 10: Appeals in Customs Matters

• National legislation of the contracting parties of the
convention preserve:
➢The standards,
➢Transitional standards, and
➢Recommended practices
• National legislation includes national law, regulations,

directives, decrees, operating instructions, and official
documents. Module title and date
• More than 55 countries and members of EEC have
accepted the Kyoto Convention:
• More than 14 African countries ratified the convention,
• Contracting parties of the convention, as of March 2021

are 126.
• Ethiopia is not yet ratified the Revised Kyoto Convention.

2.3. The Harmonized System Convention
• The Harmonized Commodity Description and Coding
System convention:
➢One of the most important of the WCO’s Conventions,
➢ensure world uniformity of tariffs,
➢WCO developed a nomenclature in the 1970s and
1980s,

• Some 200 countries and Customs or Economic Unions in
the world using HS nomenclature,
• To date, 49 of the 54 African countries have ratified
the HS Convention but only 29 apply the HS 2017.
• The HS Convention consists of 20 Articles and an
Annex,

• The HS Annex has more relevance for everyday use by
customs administrations.

• It comprises:
➢Sections
➢Chapters
➢headings and subheadings (the goods’ descriptions and
their numerical classification codes)
➢legal notes
➢rules for the classification of goods.

• The Harmonized System is a structured nomenclature
comprising descriptions of goods that are set out under
4-digit classification numbers called headings.
• The essence of the HS is to have one unique

international 6-digit code that identifies a particular
commodity throughout its economic lifespan.

• Contracting parties of the convention, as of February
2019:
➢More than 175 counties,
➢The European Economic Union (EEU)
➢Represents 98% of the world’s trade

• Complementary publications and Data Bases:
a) Explanatory Notes
b) Compendium of Classification Opinions
c) Alphabetical Index
d) HS Commodity Data Base
e) Correlation Tables


• The HS Convention provides a basic structure and
nomenclature for a unified global tariff.

2.4. GATT – General Agreement on Tariffs and
Trade
• The General Agreement on Tariffs and Trade (GATT)
functioned as the precursor to the WTO.
• GATT was created by the Bretton Woods meetings in 1944.
• An institutional body is built by the World Trade Organization

that was established in 1995.

• WTO is one of the youngest of the international
organizations.
• The GATT is now the WTO’s principal rule-book for

trade in goods.
• The system was developed through a series of trade

negotiations, or rounds, held under GATT.

• The first round dealt mainly with tariff reductions but later
negotiations included other areas such as anti-dumping.
• The Uruguay Round (1986-94)–led to the WTO’s creation.
• In February 1997 agreement was reached on

telecommunications services, with 69 governments agreeing to
wide-ranging liberalization measures.

• In the same year
➢40 governments successfully concluded negotiations for
tariff-free trade in information technology products,
and
➢70 members concluded a financial services deal
covering more than 95% of trade in banking,
insurance, securities and financial information.

• WTO AGREEMENTS:
➢The agreements deal with,
✓how to ensure that trade is as fair as possible, and
✓as free as is practical by negotiating rules and
abiding by them.
➢These rules or agreements are the result of
negotiations between the members.

• The current set were the outcome of the 1986-94 Uruguay
Round negotiations which included a major revision of the
original General Agreement on Tariffs and Trade (GATT).
• The complete set runs to some 30,000 pages consisting of
about 60 agreements and separate commitments
• Through these agreements, WTO members operate a non-
discriminatory trading system that spells out their rights and
their obligations.

• Each country receives guarantees that its exports will be
treated fairly and consistently in other countries’
markets.
• Each promises to do the same for imports into its own

market.
• The system also gives developing countries some

flexibility in implementing their commitments.

2.5 Customs preferences for goods from developing
countries
• preferential tariffs means, reducing or eliminating import duties on
goods imported from developing countries.
• Preferential tariffs are of great importance to developing

countries because of the impetus that they give to their exports,
• This in turn enable these countries to import badly needed

equipment and machinery from the industrialized countries.

• While all developing countries and a good many
industrialized countries believe in the necessity of
preferential tariffs, some industrialized countries are
concerned about the effects that such tariffs would have
on their own domestic industry and also on trade among
themselves.

2.6. ATA (Admission Temporaire/Temporary
Admission) Convention
• It is concerned with the temporary admission of
merchandizes in to a territory for a specific period of
time and covers a specified categories of items that are
free from Customs duties and taxes and are intended to
be re-exported into the home country after they have
served their purposes.
• ATA carnet Convention which was developed in 1961 and
administered by CCC (now the WCO) for temporary admission
of goods,
• The goods are covered by a single document known as the

ATA carnet that is secured by an international guarantee
system (cash deposit, a bank guarantee or an insurance
policy) .

• ATA carnet:
➢It is book of tickets,
➢ a uniform international Customs document that replaces
Customs declaration,
➢a system that allows the free movement of goods across
frontiers
➢It is issued by certain Chambers of Commerce as agents for
the International Chamber of Commerce based in Paris.

• The carnet is in loose leaf form and will consist of:
➢ green-cover;
➢ yellow-export and re-import vouchers;
➢ white-import and re-export vouchers for each country in which

the goods are to be used;
➢ blue-transit vouchers - two for each country transited which

the goods will travel without being used.

• The carnet is valid for 12 months although the
guarantee has a total life of 31 months.
• More than 87 countries are parties to the ATA carnet
regulations,
• Six African countries ratified. (Algeria, Ivory coast,
Senegal, South Africa, Morocco and Tunisia)
• Ethiopia not yet ratified The ATA conventions.

• The following goods may be covered under an ATA carnet
when temporarily imported:
➢Commercial samples and advertising film.
➢Goods for international exhibition.
➢Scientifically and cultural goods
➢Goods for sport events.
➢Vehicles

2.6. TIR Conventions
• The Customs Convention on the International Transport of
Goods under Cover of TIR Carnets (TIR Convention) was
drafted in 1975.
• The objective of the TIR Convention is to facilitate

international transit through a simplified Customs transit
procedures and an international guarantee system.
• The convention has now 68 contracting parties.

• The Convention has two parts which deal with the
approval of vehicles and containers
• The TIR Carnet is a document containing pairs of

vouchers with corresponding counterfoils bound in a cover
with one voucher being given up on entry to each country
and another on exit.
• Carnets TIR are normally valid for 45 days.

• The TIR system is:
➢a common customs document,
➢a common guarantee system,
➢the mutual recognition of customs controls and
➢secured vehicle and containers.

• Usage of the TIR system is limited to authorized
operators.
• An international transit operation under the TIR system

does not require national customs documents and a
national guarantee.
• Because of the securisation of the containers, the goods

are also not subject to physical inspection.

• The International Road Transport Union (IRU) is the
international issuing body and appoints national member
organizations to issue carnets in their own countries.
• The issuing association will require a guarantee or cash

deposit from individual hauliers wishing to use carnets.
• Such guarantees are typically for €5,000 (plus €50,000

to cover sensitive goods).

• Before a vehicle or container can be used under the TIR
scheme, it must be approved by the relevant authority in
the operator’s home country to ensure compliance with
the requirements of the Convention.

2.8 Convention on International Trade in Endangered
Species of Wild Fauna and Flora (CITES)
• CITES; the Convention on International Trade in
Endangered Species of Wild Fauna and Flora, is an
international agreement between governments.
• Its aim is to ensure that international trade in
specimens of wild animals and plants does not
threaten the survival of the species.

• Wild fauna and flora means wild species of animals and
plants subject to the respective national laws of the
Parties governing conservation, protection and trade.
• wild fauna and flora in their many beautiful and varied
forms are an irreplaceable part of the natural systems
of the earth which must be protected for this and the
generations to come
• Recognizing the ever-growing value of wild fauna and
flora from aesthetic, scientific, cultural, recreational
and economic points of view;
• peoples and States are and should be the best
protectors of their own wild fauna and flora;
• in addition, that international co-operation is
essential for the protection of certain species of
wild fauna and flora against over-exploitation
through international trade.
• Convinced of the urgency of taking appropriate
measures to this end.

2.9 Bali Agreement Trade Facilitation
• The Bali Package is a trade agreement resulting from the
Ninth Ministerial Conference of the World Trade
Organization in Bali, Indonesia on 3–7 December 2013.
• It is aimed at lowering global trade barriers and is the

first agreement reached through the WTO that is
approved by all its members.
• Essentially, the Bali package contains a subset of issues
from the broader Doha Development Agenda (Qatar
2001).
• Of particular interest in the Bali Package is the trade
facilitation (TF) component because it holds tremendous
potential for African countries
• It complements a lot of the infrastructure investments
that are being undertaken across the continent
particularly in the transport sector.

2.10 The Regional Comprehensive Economic
Partnership (RCEP)
• The Regional Comprehensive Economic Partnership (RCEP)
is a free trade agreement among the Asia-Pacific nations
of Australia, Brunei, Cambodia, China, Indonesia, Japan,
South Korea, Laos, Malaysia, Myanmar, New Zealand,
the Philippines, Singapore, Thailand, and Vietnam.

• It is the first free trade agreement among the East Asian China,
Japan, and South Korea, three of the four largest economies in
Asia.
• As of 3 December 2021, six of the ten ASEAN and all five of the
non-ASEAN signatories have deposited their instruments of RCEP
ratification with the Secretary-General of ASEAN.
• The trade pact is projected to enter force on 1 January 2022.

• The RCEP includes a mix of high- middle- and low-income
countries. It is expected to eliminate about 90% of the
tariffs on imports between its signatories within 20 years of
coming into force.
• Several analysts predicted that it would offer significant
economic gains for signatory nations, boost post-pandemic
economic recovery,
• The RCEP has been criticized for ignoring labor, human
rights, and environmental sustainability issues.
• Any other country or separate customs territory in the region
can apply to join the pact 18 months after it takes force.

2.11 The Agreement concerning International
Goods Transport by Rail of the Organization for
Cooperation between Railways (SMGS)
• SMGS means the Agreement concerning International
Goods Transport by Rail of the the Organization for
Cooperation between Railways.

• A Customs Procedure means a particular course of
action accepted or prescribed by law or regulation,
which follows a definite order of steps with a view to
obtaining the required authorization to import or
export goods.

• Article 2/22 of the customs proclamation no.

859/2014 defined “customs procedure” as:-
“customs procedure” means all customs operations

which shall be carried out by the persons concerned
and by the Authority in order to comply with
customs law.

• Customs procedure covers the whole spectrum of the

Customs system of control and facilitation of:
➢imported and exported goods,
➢the movement of passengers, and
➢goods in transit.

The general provision of part two of the proclamation

defined the basic principles of the proclamation as
follow:-
The customs operations shall:

1.Promote self assessment;
2.Be based on the principles of risk Management,
transparency, accountability and be predictable;
3. promote and support manufacturing industry and
economic development;
4. provide clear information to the customers through
internationally accepted information technology
systems; and
5. prevent illegal practices by promoting self-
compliance

• Customs procedures which are dealt in part three of the

proclamation includes the following provisions:-
➢ Goods declaration ( chr.1);
➢ Customs transit and transshipment (chr.2);
➢ Customs procedures for clearance of goods (chr.3);
➢ Customs procedure for travelers (chr.4);

➢Customs procedure for importation and exportation of

goods through the postal system (chr.5);
➢Customs procedure applicable to means of transport
for commercial use and stores (chr.6);
➢ Consignment for emergency relief (chr.7);
➢Customs warehouse procedure( chr.8);

➢Customs procedure for inward or outward processing (chr.9);
➢Customs procedure for processing of imported goods for home
use under customs control (chr.10);
➢Customs procedure for temporary importation or exportation
and re-importation or re-exportation of goods (chr.11);
➢Completion of customs procedure through the use of electronic
information exchange system (chr.12); and
➢Simplified customs procedure(chr.13)

• Different customs regimes:

➢Clearance for home use,
➢temporary importation
➢Re-importation,
➢Inward processing,
➢Outright export,
➢Temporary Export,

➢re-exportation
➢Outward Processing,
➢The goods may be warehoused,
➢the goods may be moved to duty free zone,
➢Special Free Zones,
• The RKC Specific Annexes provide the international rules
for each of these different regimes.
115
• The following supporting documents shall be submitted,
together with the customs declaration:
✓ transportation document;
✓ invoice;
✓ bank permit;
✓ packing list;
✓ certificate of origin and other documents
• Where there are adequate reasons, the Authority
may accept only copies of the supporting documents.
• The Authority may, upon requiring a guarantee, allow
the documents to be presented within a specified time
after providing the service.

• As per customs declaration directive no. 151/2019, the

types of guarantee:
➢Letter guarantee for Government budgetary institutions;
➢Good imported by air transport;
✓For TT (Telegram transfer) 50%፣
✓For L/C (Letter of Credit) and
✓For CAD (Cash Against Document) each 25% of the exact duty
and tax amount

➢Good imported by other methods of transport;

✓For TT (Telegram transfer) 5%፣
✓For L/C (Letter of Credit) and
✓For CAD (Cash Against Document) each 2.5% of the
exact duty and tax amount

• Generally Customs Procedure comprises:

➢Transit Procedure;
➢Warehousing Procedure and;
➢Clearance Procedure.

3.1 Customs Transit Procedure
• Customs Transit means Customs procedures under
which goods are transported under Customs control
from one Customs office to another.
• Transit goods shall not be subject to the payment of

duties and taxes.

• Types of Transit:
➢International Customs transit:
✓Through transit :From an office of entry to an office
of exit
✓Inward transit : From an office of entry to an inland
Customs office
✓Outward transit : From an inland Customs office to an
office of exit

➢ National Transit :
• Interior transit : From one inland Customs office to
another inland Customs office

APPROVED PLACE OF ENTRY/EXIT:
➢Goods arriving in the Customs territory may only
enter/exit through approved entry/exit points.
➢Approved points of entry/exit may be specified by
national legislation or by public notices

• CUSTOMS APPROVED ROUTE

➢Any road, railway, waterway and any other route must be
approved for:
✓Customs transit,
✓importation and
✓exportation of goods.

• Customs Office of Departure
Means any Customs office at which a customs transit

operation commenced,
• Customs Office of Destination
Means any Customs office at which a customs transit

operation terminated,



• Transit Operators contribute Value Added service for
transit operation. They are:
➢Authorized Forwarders,
➢Multimodal Transport Operators (MTOs),
➢Customs Agents/Brokers,
➢Port Terminal Operators,

➢Shipping Lines,
➢Ship Agents,
➢Transport Operators,
➢Cargo consolidators,
➢Warehouse Operators,
➢Insurance Companies, Banks, etc.

• Transit Documentation
➢Transport documents (Bill of Lading, Air Way Bill, Truck
way Bill, …etc)
➢Commercial document (invoice)

•The Customs transit control includes:

➢The goods declaration
➢Transit Manifest
➢Affixing customs seal on transit goods
➢Patrolling
➢Appling modern technologies (GPS, Cargo Scanning …etc)

The provisions of proclamation no.859/2014 related to
Customs transit
Goods may be allowed to be transported under customs
control in the customs territory:
➢from a customs station of entry to a customs
station of exit;
➢from a customs station of entry to an inland
customs station;
➢from an inland customs station to a customs
station of exit; and
➢from one inland customs stations to another inland
customs station.

• Sealing and Identification of Consignments
➢Good in transit shall be sealed with customs seal



Customs seals and identification marks affixed by
foreign customs shall be accepted for the purposes of
the customs transit operation unless:
➢they are considered not to be sufficient;
➢they are not secure; or
➢the Authority proceed to an examination of the
goods.

• Procedures En Route (Art. 20)
➢Transfer of goods from one means of transport to

another shall be allowed without authorization by the
Authority, provided that any customs seals or fastenings
are not broken or interfered with.

• The Authority may allow goods to be transported under

customs transit in a transport-unit carrying other goods
at the same time.
• The declarant or the carrier shall report accidents or

other unforeseen events directly affecting the customs
transit operation promptly to the nearest customs station
or other appropriate government body

Termination of Customs Transit(Art. 21)
• To terminate a customs transit operation, the goods and the
relevant goods declaration shall be presented to the customs
station of destination:-
➢ within the time limit fixed;
➢ without the goods having undergone any change and without
having been used, and
➢ with customs seals, fastenings or identification marks intact.

• If goods on transit are not presented to the customs

station of destination within the prescribed time limit
for reasons not specified in the directive to be
issued by the Authority, the guarantee shall be
forfeited to the government.

•Types of Transit Procedures
➢ Transit procedure for Multimodal Transport System;
➢ Transit procedure for Uni-Modal Transport System;
and
➢ Transit procedure in the case of established Common
Boarder control Post.

Multimodal Transport System
•“ ‘International multimodal transport /MTS/’ means the

carriage of goods by at least two different modes of
transport on the basis of a multimodal transport contract
from a place in one country at which the goods are taken in
charge by the multimodal transport operator to a place
designated for delivery situated in a different country...”

• ‘Multimodal transport operator’ means any person who on

his own behalf or through another person acting on his
behalf concludes a multimodal transport contract and who
acts as a principal, not as an agent or on behalf of the
consignor or of the carriers participating in the
multimodal transport operations, and who assumes
responsibility for the performance of the contract.”

• Simply, Multimodal Transport can be viewed as “the chain

that interconnects different links or modes of transport
-air, sea, and land into one complete process that
ensures an efficient and cost-effective door-to-door
movement of goods under”.
the responsibility of a single transport operator (MTO), on
one transport document


• Historically multimodal transport developed in connection
with the so called container revolution during the 1960s
and ‘70s and today containerized transports are by far
the most important multimodal consignments.

The main features of a multimodal transport
• the carriage of goods by two or more modes of
transport,
➢under one contract,
➢one document and
➢ one responsible party (MTO) for the entire
carriage,

• MTO might subcontract the performance of some, or all
modes, of the carriage to other carriers.

•Different types of multimodal transport operations
involving different combinations are taking place, such as:
➢Land-Sea-Land
➢ Road/Air/Road
➢Sea/Air/Sea
➢Rail/road/inland waterways/sea

• Advantages of multimodal transport ‘MT’

➢Minimizes time loss at trans-shipment points
➢Provides faster transit of goods
➢Reduces burden of documentation and formalities
➢Establishes only one agency to deal with
➢Reduces cost of imports and exports

• Unimodal Transport System
Uni-modal Transport: means the carriage of goods by

a single mode of transport by one or several carriers,
from the place of loading till the place of unloading.

• Basic shifts of the new Transit system
➢Allow transit goods to be transported directly to and
terminate the transit operation at any authorized
places
➢Commencing transit operation from place of goods
departure
➢Allow transit without payment of duty and tax,

➢Transit control system has shifted form checking post
control system to patrolling control system and
application of technology devises such as electronic
cargo tracking system.
➢Designed transit procedures for all (4) types of
transit
➢The new designed transit procedures ( ie., Inward,
Outward and through Transit) are considered the
establishment of common border control post with
neighboring counties.

3.2. Customs Warehouse
• Types of Customs Warehouses
➢Temporary Storage,
➢Customs (Bonded) Warehouse,
➢Government Warehouse

1. Temporary Storage
Article 2(10) of Customs Proclamation no.859/2014 defined

temporary storage as follows:-
“Temporary Storage means enclosed or unenclosed premises including

dry ports, where Import/ Export goods are stored under customs
control until they are released upon completion of customs
formalities or they are transferred to bonded customs warehouse or
government customs warehouse, as the case may be”

• Goods are placed in temporary storage,
➢after the cargo declaration has been lodged, but
➢before the goods declaration has been lodged and the

goods are cleared.
• Goods can be worked on while in temporary storage to

ensure their preservation and preparation for further
transport ;

• All temporary storage facilities must be approved by

Customs, who reserve the right to request security in
an acceptable form.
• Types of Temporary storages facilities:
➢Air Port Transit Sheds;
➢Sea Port Transit
➢Container Terminals/Depots/Dry Port;

•Types of Temporary storages facilities:
➢Air Port Transit Sheds;

➢Sea Port Transit

➢ Container Terminals/Depots/Dry Port;

2. Customs (Bonded )Warehouse
Article 2(11) of Customs Proclamation no.859/2014
defined Bonded Customs Warehouse as follows:-
“Bonded Customs Warehouse means a warehouse under

which imported goods are stored under Customs control
without payment of duties and taxes, and includes duty
free shops and bonded factories.”

Article 2(11) of Customs Proclamation no.859/2014

defined Bonded factory as follows:-
“Bonded factory means a factory which produces goods,

under customs control, using raw material and accessories
acquired without payment of duty and taxes.”

• Purpose and features customs (bonded) warehouse
➢It is a trade facilitation concept.
➢Goods may be entered for warehousing and held there until

they are required for home consumption, at which time an
entry for home consumption is made and duty paid.
➢Warehousing occurs after the goods declaration has been

lodged

• Goods stored in customs warehouse not known at the

time of importation how those goods will finally be
dealt with.

• Types of Customs (Bonded) Warehouse
➢Public Customs Warehouse:
✓Open to any person having the right to dispose of the
goods.
➢Private Customs Warehouse:
✓Solely used by specified persons.
✓often close to, or on the manufacturing premises of, the
persons concerned

• Advantage of Customs Bonded Warehouse
➢To delay payment of import duty and taxes.
➢To get Customs service at own premises.
➢To minimize the damage arise from market demand
fluctuation.
➢ To enjoy discount from bulk purchase.
➢To store temporarily imported goods such as goods temporarily
imported for demonstration or exhibition.

• Establishment and Types of Customs Warehouses
(Art.177)
➢Temporary customs storages and bonded customs

warehouses may be established for rental or
private use upon obtaining permits granted by the
Authority.

• Public temporary customs storage or public bonded
customs warehouse may be established, for rental use,
by:
➢ Freight transport enterprise;
➢ Warehouse service provider;
➢Industrial zone services provider;
➢Customs clearing services Provider; or
➢ Any other person specified by directives of the
Authority.
•Warehousing of Goods (Art.50)
➢Goods arriving at any customs port shall be deposited
in temporary customs storage or bonded customs
warehouse.
➢Particulars of goods stored in temporary customs
storage shall be registered in the warehouse register
book.

➢Goods to be deposited in a bonded customs warehouse

shall be entered in a warehouse declaration and
presented to the Authority for approval.
➢The only document to be required when goods are
placed under temporary storage shall be that used to
describe the goods when they are produced to the
Authority.
• Time Limit of Storage in Customs Warehouse (Art.51)

➢Goods imported and stored in a temporary customs
storage shall undergo customs procedures and be
removed:-
✓For goods transported by sea or land transport
within 15 days from the date of storage.
✓For goods transported by air transport within 10
days from the date of storage
➢ Goods stored in custom bonded warehouse shall undergo
customs procedures and be removed :-
✓ For any commercial good other than goods in a duty
free shop stored, within four(4) months from the date
of storage
✓For any machinery, equipment and input to be used for
producing goods for domestic consumption, within one
year from the date of storage.

• Goods owned by a person who is permitted to use bonded

warehouse but mistakenly stored in temporary customs
storage shall, within 5 working days, be transferred to
the bonded warehouse.
• Goods stored in temporary customs storage or bonded

warehouse may not be kept for more than 2 working days
after the completion of customs formalities.

• The owner of the goods stored in government customs
warehouse, may clear the goods upon payment of customs
duties and taxes as well as other costs and administrative
penalties within seven working days before the goods are
disposed.
• The commission may with sufficient reason extend the time
limit provided under this Article 13 of proclamation no.
1160/2019

•Operations Permitted in Customs Warehouse (Art.54)

➢The Authority may authorize the owner, possessor or
person having control over goods to make:-
✓operations necessary for the preservation of the
goods;
✓repacking,
✓breaking bulk or grouping of packages.

• Customs Control on Customs Warehouses (Art.56)

➢ Any customs warehouse and goods deposited in the
warehouse shall be under customs control.
➢ No person, other than authorized by the Authority,
may enter a customs warehouse.

•Warehouse Fee (Art.59)
➢Warehouse fees for goods stored in a temporary customs
storage or bonded customs warehouse, established for
rental use, shall be calculated:-
✓ from the date of deposit until released upon completion
of customs procedures; or
✓from the date of deposit until transfer to another
customs warehouse;

• Transfer of Ownership of Goods in Customs Warehouse
(Art.60)
➢ Transfer of ownership of the goods stored in customs
warehouse may permitted.
➢ The person to whom ownership of goods stored in customs
warehouse is transferred shall have the obligation to
observe the obligations and restrictions imposed on the
previous owner

• Goods abandoned and transferred to government warehouse

shall be disposed by the Authority (Art.61& 62) :
➢ by way of sale, if they have market value; or
➢ By transferring to the appropriate government bodies or
charity organizations: or
➢ by other means, if they have no market value or goods

prohibited.

• Proceeds of Sale and Cost of Disposal (Art 64)
➢ The proceeds obtained from the sale after deducting:
✓ duties and taxes;
✓ expenses incurred by the Authority in relation to the
goods;
✓ the warehouse fee and transportation expenses; and
✓ interest calculated at bank lending rate on the amounts
referred to expenses paid;

• In the preceding order be paid to the owner of the

goods, if he/she claimed within six months from the date
of sale of the goods.

•Document Required for Goods Storage
➢For Temporary storage:

✓For Air transport- Cargo Manifest,
✓For sea/Road Transport-Transit document (T1)
where termination of transit approved.
➢For Bonded Warehouse- Warehouse (S) Declaration

• To discharge good from a warehouse involves submitting goods
declaration to Customs. The type of declaration depends on
the procedure applied.
• Document Required for The discharge procedure
➢ Clearance/Release document (Manual/Electronically
Registered )
➢ Warehouse fee payment document ( For rental
storage/warehouse)

• Free Trade Zones
A ‘free trade zone’ (or ‘foreign trade zone’, ‘free port’,

‘free warehouse’, etc.) is a special commercial/industrial
area, usually in or near a port of entry where foreign
and domestic goods, including raw materials, components,
and finished goods, may be brought in without being
subject to payment of Customs duties.

• Goods brought into these zones can be:

➢ stored,
➢sold,
➢exhibited,
➢repacked,
➢assembled,
➢sorted,
➢graded,
➢Cleaned…

•Duty Free Zones
➢Utilized to encourage the development of export trade
and international commerce in general,
➢Can have different types and sizes, ranging from
large ports and surrounding territory to relatively
small industrial estates.

3. Clearance procedure
Clearance means the accomplishment of the

customs formalities necessary to allow goods to
enter home use, to be exported or to be placed
under another customs procedure.

• Basic Functions of Clearance Procedure

➢Lodgment of Customs Declaration
➢Application of Risk Management
➢Checking of Declaration
➢Examination of Goods
➢Release of goods

1. Lodgment of Customs Declaration
Customs Declaration means a statement made in the

manner prescribed by the customs, by which the persons
concerned indicate the customs procedure to be applied to
the goods and furnish the particulars which the customs
require for its application;

• The importer and/or exporter/agent are required to

complete the customs declaration.
• It is the responsibility of the importer and/or

exporter/agent to ensure that the declaration is fully
and accurately completed and all supporting documents
are produced.

• Declaration type
➢Export
✓EX 1 Exportation
✓EX 2 Temporary Export
✓EX 3 Re-export
✓EX 8 Transit to export

➢IMPORT
✓IM 4 Entry for home use
✓IM 5 Temporary Importation
✓IM 6 Re-importation
✓IM 7 Entry for warehousing
✓IM 8 Import Transit

• Supporting documents attached with customs declarations:
➢Transport documents( B\L, Airway bill,…etc)
➢Invoice,
➢Packing list,
➢Certificate of origin
➢Bank Permits and
➢Other necessary documents

2. Application of Risk Management
• Risk is the possibility or likelihood of the evasion of taxes, or
of the evasion of the prohibition on importation or
exportation, taking place.
• Customs import risk levels:
➢Green (Automatic release of goods)
➢Yellow (Verification customs declaration)
➢Red (Verification customs declaration an examination of goods)

3. Checking of Declaration
➢The presence of necessary documents,
➢Checking the correctness of data filed in the
declaration against the supporting document
➢Classification & valuation
➢The calculation of duties & taxes

• Bases for Customs duty & Tax Assessment

➢ Duty & Tax Rate;
➢Duty Paying Value (DPV);
➢Origin of Goods; and
➢Customs Procedure Code (CPC)

• Duty & Tax Rate
➢Bases for duty & tax determination

✓Duty & Tax rate determined by MOFC, and
✓The regulation ratified HS commodity Classification
and coding is a base for application of duty & tax
rate;

• National HS tariff book Structure

➢Has two schedules ( 1st and 2nd schedules)
➢COMESA Tariff rate
➢Different categories of tariff rate (0%, 5%,…)

• Duty Paying Value (DPV)
➢ DPV means the total price actually paid for the good
imported or exported, where:
✓ CIF for import and
✓ FOB for export

• Origin of goods
➢ To determine the actual value of the goods;
➢ To execute bilateral and regional agreement related

to preferential tariff treatment;
➢ To execute other policy issue; and
➢ To compile international trade statistical.

• Customs Procedure Code (CPC)
➢It is used to manage the various customs formalities
or procedures
➢There are different customs procedures on how to
import or export goods.
➢These codes could vary from country to country either
in their contents or in their quantities.

• The different customs procedures are:

➢Transit procedure
✓Through transit
✓Inward transit
✓Outward transit
✓Interior transit
➢Warehouse procedure
✓Temporary storage
✓Customs bonded warehouse
✓Government warehouse

➢Clearance procedure
✓Import clearance
oDirect import
oTemporary Import
oRe import
✓Export clearance
oDirect export
oTemporary export
oRe export
➢ To determine appropriate duty and tax ;
➢ To identify import and export regime; and
➢ To execute privileges.


➢It is a seven digit code;
➢It comprises two parts:
✓Extended Procedure Code (EPC)and
✓Additional Procedure Code (APC)

• Extended Procedure Code (EPC)

➢It is a four digit code;
➢It comprises two parts:
✓Requested Procedure Code (RPC)and
✓Previous Procedure Code (PPC)

• Extended Procedure Code (EPC)

➢We call the first two digits as 'Requested Procedure
Code' (RPC)
➢ the second two digits as the 'Previous Procedure
Code'; (PPC)
➢The Previous Procedure Codes differ from '00' only
when a previous customs procedures were applied.

• Since each one of them (Export, Import,

Transit and Warehousing) is different from
one to the other the approach or the
technique to manage them will also differ from
one another.

• Extended Procedure codes (EPC)
➢Export Extended Procedure codes (EPC)
✓1000_______DIRECT PERMANENT EXPORT
✓1040_______DIRECT PERMANENT EXPORTATION AFTER
ENTRY FOR HOME USE (1022 new)
✓1071_______Direct Export from Export warehouse
✓2100_______Temporary Export for return in unaltered
state.
✓2200_______Temporary Export for outward processing.

✓3040 (new)
✓3051_________Re-export after temporary import
✓3052_________Re-export after customs inward
processing procedure
✓3071 (new)
✓3081 (new)

➢IMPORT Extended Procedure codes (EPC)
✓4000_______Direct entry for home use
✓4051_______Entry for home use after TI and return in unaltered
state
✓4052_______Entry for home use after TI for inward processing
✓4071_______ Entry for home use after customs warehousing
procedure
✓4081 (new)

✓4100________Direct Importation under 2ND

SCHEDULE procedure
✓4152________Entry for home after temporary
importation for inward processing (2nd)
✓4171________Entry for home after Warehousing
under 2nd Schedule
✓4181 (new)

✓4200________direct importation under 2-2

schedule
✓4252________Entry for home use after temporary
importation for INWARD proces.(2_2)
✓4271________Entry for home use after
warehousing (2-2 Sch)
✓4281 (new)

✓5100________Temporary import for return in

unaltered state.
✓5200________Temporary import for customs
inward processing procedure
✓5271________Temporary import for customs
inward processing after warehousing (5290/ 5291)

✓6010________Re-import after direct export

✓6021________Reimport after TE for return in an
unaltered state
✓6022________Reimport after TE for customs
outward processing
✓6071________Withdrawal of goods for home use
from export customs warehouse
✓6030 (new) Module title and date
➢WAREHOUSING Extended Procedure codes (EPC)
✓7100_______Direct entry for customs
warehousing procedure

➢TRANSIT Extended Procedure codes (EPC)
✓8000_______Through Transit
✓8100______Inward transit
✓8200______Outward transit
✓8300______Inland transit

• Additional Procedure Code (APC)
➢Once we identify that goods are for export, import, transit or
warehousing we could easily classify them according to our
taxation and statistical rules and needs.
➢We may need to waive all duties from import/exports , to levy
excise tax on certain imported goods, to request additional
bond guarantee on transit goods, to get statistics on goods
imported by government, by diplomats or by investors.

• Additional procedure codes (APC)

➢Now we attach a three digit Additional procedure
codes to the already established four digits, Extended
Procedure codes.
➢Once we have the full appropriate and correct customs
procedure codes of 7 digits, we can fill or input the
declaration.

• Tax type codes and their descriptions
Code Description Rate
01 IMPORT CUSTOMS DUTY Tariff
02 EXPORT CUSTOMS DUTY Tariff
03 EXCISE TAX Tariff
04 VALUE ADDED TAX 15%
05 GOODS LIABLE TO SURTAX 10%
13 CHARGE FROM REX/GOODS AT PORT 5%
15 GDS. LIABLE TO WITH HOLDTAX 3%
16 SCANNING FEE (CHARGES FROM TOTAL DPV) 0.07%

4. Examination of Goods
• Examination of Goods means the Physical inspection of goods
by the Customs to satisfy themselves that
➢the nature,
➢origin,
➢condition,
➢quality and value of the goods

• Provisions of the proclamation related to Examination of

Documents and Goods (Art.23)
➢The Authority may examine the goods and take

samples for examination and analysis.
➢The declarant shall be entitled to be present when

the goods are examined or samples are taken

➢ Where only parts of the goods covered by the goods
declaration are examined, the result of such examination shall
apply to all goods indicated by the declaration.
➢ Where the declarant considers that the result or partial

examination is not valid as regards the remainder of the goods,
he may request further examination of the goods and shall
cover the expenses incurred by such examination.

5. Release of goods
Release of goods means the action by the customs to

permit goods undergoing clearance to be placed at the
disposal of the persons concerned;

• Provisions of The Proclamation Related to Release of
Goods for Free Circulation (Art.27)
➢ Unless otherwise provided by law, any goods may not be
released before the payment of duties and taxes.
➢ Any imported goods that have completed the necessary customs
formalities and released for free circulation shall be considered
as domestic goods.
• Goods released for free circulation shall lose the

status of domestic goods where:
➢the goods declaration for their release for free circulation
is invalidated;
➢they are imported for inward processing and treated under
the duty draw back or voucher scheme;
➢they have to be re-exported in accordance with the terms
of the contract due to the fact that they are defective or
fail to meet the required standards;

• Types of Customs Clearance

➢Cargo Clearance;
➢Passenger Clearance; and
➢Postal Parcel Clearance

• Import Cargo Clearance
➢Clearance for home use (Direct import),
✓"clearance for home use" means the Customs procedure
which provides that imported goods enter into free
circulation in the Customs territory upon the payment of
any import duties and taxes chargeable and the
accomplishment of all the necessary Customs
formalities;

➢Temporary admission
✓ goods to be able to enter a Customs territory for
a limited period of time and then to be removed
from the territory, unchanged, and without any
duty liability arising.

• The following goods can be temporary admitted :

➢ trade promotion;
➢ technology transfer;
➢ tourism and cultural exchange;
➢ construction works;
➢ consultancy services; or
➢ relief may temporarily be imported,

• key principles of temporary importation:
➢goods that are granted temporary admission status are
intended to be exported once the term of the temporary
admission has been completed
➢the goods must be identifiable so that Customs is able to
ensure that the goods presented at re-exportation are the
same as those which were presented at temporary
importation

➢securities may be required to cover the risk that the
goods will not be exported but will enter into local
consumption without authorization
➢Customs will specify a time limit at which point the goods
must be exported
➢in principle, the goods can circulate freely within the
country, but their use is limited to the purpose of the
temporary admission.

➢Spare parts and other consumable goods shall not be
temporarily imported.
➢The Authority may permit the transfer of temporarily
imported goods for construction works or consultancy
services,
➢Duties and taxes shall be paid on the depreciated values
of temporarily imported goods upon their re-exportation
based on the tariff currently applicable.

➢ The project owner shall inform the authority, in writing,
the completion of the project, prior to settlement of
final payments, or any period of extension of the
project.
➢ The conditions under which temporarily imported goods
may be allowed to remain at home and the manner of
payment of duties and taxes shall be determined by the
directive to be issued by Ministry.

• Imported goods for the following reasons shall be re-

exported with specified time limit ( Art. 73):-
➢ for tourism, cultural exchange or technology

transfer -within six months;
➢ for trade promotion and welfare services -within two

months from the date of completion of the business

➢ for construction works, or consultancy services as

per a project agreement -within the period specified
in the project agreement or within three months
after the completion of the project;
➢ The Authority may extend the time limit on

acceptable ground

• The security provided for temporarily imported goods

shall be transferred to the government treasury, if:-
➢ the goods are not re exported within two months
after the completion of the specified period, or
➢ the period is not extended

➢Re-importation
✓Re-importation is importation into a Customs territory of
goods previously exported from that territory.
✓Re-imported goods may be taken into home use free of
import duties and taxes, provided that they have not
undergone any manufacturing, processing or repairs abroad.
✓relief from duties and taxes or of any subsides or other
amounts granted at exportation, must be paid.

• Customs Clearance Procedures

➢ Simplified Clearance Procedure;
➢ Pre-arrival Clearance Procedure; and
➢ Normal Clearance Procedure

• Simplified Clearance Procedure

➢Simplified Clearance Procedure means release of goods
for free circulation based on limited declaration
information using simplified declaration produced for
this purpose, before or upon arrival of the goods.
➢Finally the trader submits detail declaration with the
time limit prescribed by the law.
•Who is allowed to use the procedure?

➢Authorized Manufacturers who produce for export
market;
➢ Authorized Manufacturers where produce for local
market;
➢Direct Exporters; and
➢Authorized Economic Operators (AEO’s)

•What are the requirements to use the procedure?
➢Authorization certificate issued by concerned

authority;
➢ Security ( General insurance bond); and
➢ Simplified declaration, electronically filled and

submitted

• Pre-arrival Clearance
➢The importer or his agent may lodge his declaration with
supporting documents prior to the arrival of the goods and may
request for a pre-arrival clearance to be issued upon
examination of the declaration and supporting documents.
➢The pre-arrival clearance procedure allow traders to submit
clearance data, using modern ICT systems, to Customs ahead
of the goods arriving in the country.

➢Customs systems will process the data automatically,
including:-
✓ screening through risk management profiles;
✓ calculation of duties and taxes; and
✓ release the goods on line — even before actual arrival
of the goods.
➢In case the goods are selected for physical inspection, the
importer will be advised on line.

➢Who is allowed to use the procedure?
✓Government Organizations;
✓ Any traders authorized to use simplified clearance

procedure; and
✓Importers whose using Multimodal Transport System

➢What are the requirements to use the procedure?
✓ Simplified declaration, electronically filled and

submitted;
✓ Duty and tax payment receipt or exemption letter

• Export Cargo Clearance

➢The Revised Kyoto Convention pays only limited
attention to exports.
➢In many countries, Customs authorities have been
keen to provide maximum facilitation for exports so as
to assist with trade as much as possible.

➢many countries exempt exports from goods and

services taxes, and so accurate records of exports
are necessary to reduce the risk of fraud
➢balance of payments data depend on accurate export
statistics
➢some countries require pre-shipment inspections in the
country of origin of the goods ( eg. USA).

• Types of Exportation
➢Outright exportation
➢Temporary exportation( exhibition, out ward
processing, maintenance ,project)
➢Re-Exportation

• Provisions of the proclamation Related Re-exportation
& Re-Importation of goods (Art. 76)

➢ Goods imported and declared for home use may be
re-exported at the request of the importer before
completing customs formalities upon payment of 5%
of the duties and taxes to be paid on the goods.

➢Exported domestic goods that have been returned

within one year shall be relieved from duties and
taxes.
➢The one year period may be extended at the request
of the interested party on justifiable grounds.

4. Customs techniques
Objective:
• The student should be aware of the customs

techniques of the Ethiopian Customs authority.

4.1 National customs tariff
• The Ethiopian import tariff is based on the internationally
accepted Harmonized Commodity Description and Coding
System (Harmonized System, HS),
• Ethiopia Ratified the HS under Proclamation No. 67/1993.
• At present, tariff classification in Ethiopia is governed under

the terms of Article 102 of the Customs Proclamation.

• All customs tariff revisions and amendments since 1993

have been done based on the HS.
• The current version of the national tariff book is in

accordance with the 2022 version of the HS.
• “Nomenclature’’ is a system of naming and categorizing

objects in a particular science, discipline or art in a given
category

• Tariff means;
➢A system of duties imposed by the government of a
country upon goods imported or exported.
➢A customs tariff shows how much duty is payable on
imported or exported goods
• “Tariff classification” is the process of determining the

particular tariff heading or sub heading of a commodity.

• Tariff classification is important to ensure that the
declarant:
➢Pays the correct amount of duty and tax;
➢Receives any manufacturers tariff advantage;
➢Contributes to the accuracy of import and export trade
statistics;
➢Declares the origin of goods; and
➢Contributes to the control of restricted/prohibited/goods.

• If classification is done incorrectly:

➢A penalty may be applied at customs entry;
➢Arrears plus interest, of duties and taxes that have
been incurred over the previous five (5) years may be
charged; and
➢Goods may be delayed.

• HS Users:
➢Governments
➢International Organisations
➢Importers and exporters
➢Manufacturers
➢Traders

➢Shipping agents
➢Transporters
➢Port Authorities
➢Statisticians

• Classification is done on the basis of the following:
➢Description of the commodity;
Proper identification of the commodity to be classified is
very important.
➢Composition and other technical specification;
Material used ( e.g. plastic materials ch. 39, Rubber
products ch.40, etc)
➢Manner of presentation (e.g., packing for retail sale);
➢Degree of manufacture; and
✓It is normally used for industrial Products.
✓ Degree of manufacture can be subdivided in to the
following levels;
• Raw materials
• Un-worked products
• Semi-finished products
• Finished products
By degree of manufacture
Commodity Description Degree of Manufacture Chapter
Wood in the rough Raw material 44
Chemical wood pulp Unprocessed 47
Newsprint paper Semi-finished

48
Newspapers Finished goods

49

• Function or use.
➢ Classification on the basis of the use or function of the goods is
used especially for products in the manufacturing industries, for
example;
➢Fuels;
➢Medicines;
➢Capital goods;
➢ There are many types of goods that can be described by simply
referring to their function, for example transport goods.

4.2 Structure of the customs tariff

• The HS comprises;
➢Sections
➢ Chapters
➢ Headings
➢ Subheadings

➢General Rules for the interpretation of the

system(GIRs)
➢Legal notes


• 21 Sections – broad range of goods
• 96 Chapters –In use- narrow range of goods Chapter 77

reserved for future use
• 1244 Headings- more specific
• 5212 Subheadings (HS code) identified by a 6-digit code,

very narrow range/very specific

• Principles of the arrangement of Sections

➢Based on material content e.g. vegetable products in
Section II, Textiles and textile articles Section XI
➢Based on usage or function e.g. Vehicles, Aircrafts,
vessels Section XVII

• Stage of processing
Live Cattle Hides Shoes
Sect.I Sect.VIII Sect.XII

• Numbering of Sections and Chapters

➢Sections are numbered in Roman numerals for example
I,II,III up to XXI
➢Chapters are numbered in Arabic numerals for
example 01,02, 10,15 up to 97

• Principles of the arrangement of Chapters
➢The same principles used in the arrangement of the
Sections also apply to the arrangement of Chapters
➢Materials content
Example;
✓Rubber –Chapter 40
✓Wood - Chapter 44
✓Cotton- Chapter 52
• Usage or function
Example;
✓Pharmaceutical- Chapter 30
✓Motor Vehicles- Chapter 87
✓Arms and Ammunition- Chapter 93

• Stage of processing or manufacture

➢Paper Pulp Chapter 47
➢Paper- Chapter 48
➢Books- Chapter 49

• Number of Chapters in a Section

➢A Section may contain one or more Chapters e.g.
✓Section I has 5 Chapters
✓Section III has only One Chapter (Chapter 15)

• Number of Headings in a Chapter

➢The number of headings may also vary from Chapter
to Chapter e.g.
✓Chapter 13 has 2 headings
✓Chapter 84 has 87 headings

• Division of Chapters into sub-Chapters

➢A Chapter may be subdivided into sub-Chapters to
identify certain classes of goods within the Chapter.
➢This shows a level of processing or a combination
thereof .

• Example;
➢ Chapter 71 is divided into 3 Sub-Chapters;
✓Sub Chapter I
✓Sub Chapter II
✓Sub Chapter III

• Headings
➢Provide a more specific grouping of goods and
approximate description
➢Consist of a four digit number(01.04)
➢ Describes the commodity (terms of the heading)

• Sub-Headings
➢A heading may be further subdivided into subheadings,
where deemed appropriate, individualizing narrower
categories of commodities.
➢In the case that a heading is not further subdivided ,
two zeros are added to the four digits code number.

• Stage of processing within a Chapter

➢Example Chapter 79 (Zinc and articles thereof);
✓79.01,79.02 Raw material
✓79.03, 79.04,79.05 Semi finished and finished
✓79.06, 79.07 Finished articles e.g. Zinc tubes

• The Six digit only apply at International level
• Regional tariff has 8 digits and may be division into 3

groups:
➢Heading
➢Subheading
➢Regional subdivision

• For Example ;
➢84.44 Heading
➢8444.00 Subheading (International level HS code)
➢8444.00.00 Regional subheading or Tariff number.

• General Interpretative Rules
➢There are 6 General Interpretative Rules(GIRs) which govern
classification of goods;
➢The six General interpretative rules are:
✓GIR1 General rule (Terms of the Heading; Section/Chapter Notes)
✓GIR 2(a) Incomplete or unfinished; unassembled or disassembled
✓GIR 2(b) Mixtures or combinations

✓GIR 3 Two or more headings

• GIR 3(a) Most specific
• GIR 3(b) Essential character
• GIR 3(c) Last in numerical order

✓GIR 4 Most akin

✓GIR 5(a) Special containers
✓GIR 5(b) Packing materials and containers (for
Repetitive use)
✓GIR 6 subheading texts, notes and GIR 1 to 5

• National HS tariff book comprises the following:

➢Two schedules
✓First Schedule,
✓Second Schedule, (Special, special second)
➢COMESA Tariff rate

• First Schedule Tariff:

➢Import Tariff at Basic rates, which begin with the
General Rules for the Interpretation of the
Harmonized system.

• Second Schedule Tariff:

➢To encourage business organizations involved in
activities such as producing goods and services, special
privileges granted to them.
➢The second schedule contained two parts, A and B,
which listed conditional exemption at nil or reduced
tariff rates.

• Special Customs Tariff rates

➢Applicable to goods produced in and Imported from
COMESA Member countries (Preferecial rate ),
➢COMESA means common market for eastern and south
Africa.
➢Members of COMESA are: Burundi, Djibouti, Egypt,
Ethiopia, Kenya, …..etc

• Types of Duty and Tax Imposed on Imported goods

➢Customs Duty
➢Excise Tax
➢Value Added Tax
➢Sur Tax
➢Withholding Tax
➢Social Welfare Tax

• Excise Tax
➢The excise tax is levied on the selected goods such as
luxury goods and basic goods which are demand in
elastic.
➢The minimum excise tax rate applied excisable goods
is 10% while the maximum is 400% .

• Value Added Tax ( VAT);

➢VAT is levied on imported goods at a flat rate of
15%.
➢The following types of supplies of goods, services and
imports are exempted from payment of VAT.
✓Supply of food grain e.g Teff, Wheat, Maize,
Sorghum, and other cereal;

✓Materials for making mosquito net such as fiber

(thread), label, plastic for packing & polypropylene bag;
✓Pickle, wet blue, and crests imported by leather
factories;
✓Import of mosquito net & import of cloth, immersed in
chemical, for sewing mosquito net;
✓Import Of wheat by government;

• Sur Tax
➢A Sur Tax 10 percent is introduced on all goods
imported to Ethiopia except for the followings:
✓fertilizer, petroleum & lubricants,
✓motor vehicle for fright and passengers, & special
purpose motor vehicles,

✓aircraft and parts there of,

✓Investment goods and goods exempted from
customs duty and goods covered under second
schedule are exempted from the Sur Tax.

• Withholding tax
• Withholding tax is collected on goods imported for commercial use at
the rate of 3%.
• Goods imported by the following individuals and firms are exempted
from withholding tax.
✓Federal and regional government offices,
✓Non profit NGOs and associations, subject to the provision of
registration certificate issued by ministry of justice and
authorized body.

✓International organizations, foreign diplomat, consular

missionaries, and their members
✓Importers under second schedule with the permit from
the ministry of finance , Ethiopian Investment
Authority, etc
✓Personal effects of Ethiopian returns
✓Other importers with permit the ministry of finance.

Social Welfare Tax
• Social Welfare Levy on Imported Goods Regulation No.
519/2022
• It is collected for the rehabilitation and construction of
education, training and medical facilities and expansion of other
social services.
• It is imposed on all imported goods.
• Imported goods subject to Sur tax are exempted from Social
Welfare tax.

• Social Welfare Tax is collected on goods imported at
the rate of 3%.
• The base of computation for goods imported into the
country is the sum of cost, insurance, freight and other
charges multiplied by the Social Welfare Tax rate.

Harmonized Commodity Description and Coding
System
E.g Cocoa Powder w/out sweetening
Section IV
Prepared foodstuffs; beverages, spirits

and vinegar; tobacco and manufactured
tobacco substitutes
(Chapter 16, 17 and 18)

System
• Chapter 16
– Preparations of meat, of fish or of
– crustaceans, molluscs or other aquatic
– invertebrates
• Chapter 17
– Sugars and sugar confectionery
• Chapter 18
– Cocoa and cocoa preparations
System
4.3 National customs valuation
• “Customs valuation” refers to methods used by customs
authorities to allocate a value to imported goods for the
purpose of determining the correct import duty.
• Ethiopian Customs Commission normally charges customs

duty and tax as a percentage of the duty paying value of
goods.

• It is the sum of the amounts paid for the imported goods

up to the point of entry into the customs territory,
Namely,
➢the cost of the good,
➢insurance,
➢freight and
➢other charges.

• One of the cardinal authorities on customs valuation that

is widely accepted is the WTO Agreement on
Implementation of Article VII [Customs Valuation],
• The Article establishes a fair, uniform and neutral

system for the valuation of goods that precludes the use
of arbitrary or fictitious customs values.

• Although Ethiopia is not yet a WTO member, the Ethiopian

customs valuation methods, which are laid out in Articles 89-
100 of the Customs Proclamation no 859/2014 and in the
Customs Duty Paying Value Determination Directive No.
158/2019, have been designed in line with the WTO
Agreement.
• ECC recognizes six (6) different customs valuation methods.

• The transaction value method. (Method 1)
• Alternative valuation methods

➢Transaction value of identical goods; (Method 2)
➢Transaction value of similar goods; (Method 3)
➢Deductive value; (Method 4)
➢Computed value; (Method 5)
➢Fallback method. (Method 6)

• The application of methods is strictly hierarchical.
➢Method 1
➢Method 2
➢Method 3
➢Method 4
➢Method 5
➢Method 6

• Method 1 (Transaction Value Method)
• The transaction value of imported goods is the price that is
actually paid or payable for the goods when sold for export to
Ethiopia.
• There are three key elements of the transaction value that
include:
➢ sale,
➢ price actually paid or payable; and
➢ the goods sold for export to Ethiopia.

• If there is no sale of the good, the transaction value
method cannot be used and Method 2 must be tried.
• If ERCA has doubts about the stated transaction value,
more information is requested.
• Then, ERCA uses the other alternative valuation methods
for determination of the duty payable value.

• Method 2 (Transaction Value of Identical Goods Method)
• Where the transaction value of imported goods cannot be
determined on the basis of Method 1, it is determined
by taking the transaction value of identical goods sold
for export to Ethiopia:
➢at the same commercial level, and
➢substantially the same quantity.

• “Identical goods” are goods produced:

➢in the same country as those being valued.
➢They must also be the same in all respects, such as
✓physical characteristics,
✓quality and reputation, and
✓imported within ninety (90) days of the goods to be valued.

• If it is impossible to get same commercial level and

quantity, the transaction value is determined as follows:
➢The transaction value of identical goods sold at the
same commercial level, but sold in different quantities;
➢The transaction value of identical goods sold at a
different commercial level, but sold at the same
quantity;

➢The transaction value of identical goods sold at a

different commercial level or in different quantities by
making adjustments to take account of differences
attributable to the commercial level or to the
quantity.

• The adjustment shall take into account the differences in
➢transport,
➢loading, unloading, handling and
➢insurance costs associated with the transport of the imported goods
• If the transaction value of identical goods declared by the

declarant is not accepted, ERCA may take the transaction
value of identical goods from the organized customs valuation
database.

• Method 3 (Transaction Value of Similar Goods Method)
determined on the basis of Method 1 or 2, it is
determined by taking the transaction value of similar
goods sold for export to Ethiopia
➢at the same commercial level and
➢substantially the same quantity.

• “Similar goods” are goods that differ in some respects

from the goods being valued, but they:
➢Are produced in the same country;
➢Can carry out the same tasks; and
➢Are commercially interchangeable.

• Where similar goods are not made by the producer of the

goods to be valued, similar goods produced by a different
producer that are imported within ninety (90) days may be used.
• If it is impossible to get same commercial level and quantity,

the transaction value is determined as follows:
➢The transaction value of similar goods sold at the same
commercial level, but sold in different quantities;

➢The transaction value of similar goods sold at a different

commercial level, but sold at the same quantity;
➢The transaction value of similar goods sold at a different

commercial level or in different quantities by making
adjustments to take account of differences attributable to
the commercial level or to the quantity.

• Method 4 (Deductive Value Method)
determined on the basis methods 1 to 3, it is be determined
by using deductive value method.
• It is unit price of identical or similar goods imported within

ninety (90) days that are sold in Ethiopia in their original
state in the greatest aggregate quantity to persons who are
not related to the seller and reducing some costs.

• The costs that are deducted from sale price are the following:
➢The commission usually payable or the profit and general
expense equal to that usually reflected in sales within Ethiopia
of such goods;
➢The usual charges for the transport, insurance and other
related costs to be incurred within Ethiopia for the goods; and
➢Import duties, taxes and other charges payable with respect to
the goods.

• Method 5 (Computed Value Method)
• The computed value method is based on the cost of
production of the goods and must be used if the
transaction value of imported goods cannot be determined
by methods 1 to 4.

• The computed value consists of the sum of the cost of
manufacturing or processing of the goods; such as
➢An amount representing the general expenses and profit equal
to that usually reflected in the sale of goods of the same class
or kind by producers in the country of export; and
➢The transport, loading, unloading, handling and insurance costs
associated with the transport of the goods to the port of
entry.

• Method 6 (Fallback Method)
• This method can be applied only if all other methods have
failed.
• Under the fallback method, the customs duty paying value is
determined based on data available in Ethiopia as follows:
➢it is determined by taking the transaction value of identical or similar
goods sold for export to Ethiopia at the same commercial level and in
substantially the same quantity imported within one hundred eighty
(180) days;

➢Where the identical or similar goods are not produced in

the same country as those being valued, the customs value
is determined by taking the transaction value of identical
or similar goods produced in a country with the same level
of economic development; or
➢The value is determined by the deductive and computed
value method.

• Exchange Rate
➢Any foreign currency amount to be taken in to account in
valuation must be converted into Ethiopian birr.
➢For conversion, the official exchange rate declared by the
National Bank of Ethiopia for the day when the goods
declaration is registered must be used.
➢Official exchange rates are released every Wednesday
and are valid for a week, starting on Thursday.

4.4 Rule of origin
• “Country of origin of goods” Means the country in which
the goods have been produced or manufactured,
according to the criteria laid down for the purposes of
application of the customs tariff, of quantitative
restrictions or of any other measure related to trade;

• “Rules of Origin” means the specific provisions, developed

from principles established by national legislation or
international agreements (“origin criteria”) , applied by a
country to determine the origin of goods;

•Main Objectives of the Customs Origin

➢Trade Statistics for decisions on Trade policy –
economic integration
➢Safety policy for society (Morality, Security,
Health...)
➢Preferential treatment
➢Revenue Collection

• Types of Origin:
➢Non-preferential origin merely confers an "economic" nationality
on goods and does not confer any benefit on them.
➢Preferential origin is conferred on goods from particular
countries when they have fulfilled certain criteria. Preferential
origin criteria generally demand that goods undergo more
working or processing than is required to obtain non-
preferential origin.

• Criteria To Determine Origin Of Good
• The originating criteria is determined by the good is:

➢Wholly obtained, or
➢substantial transformation or sufficiently worked or
processed

• Substantial transformation or sufficient working or

processing is defined by:
➢change of tariff classification;
➢the ad valorem percentage criterion; and
➢the criterion of manufacturing or processing
operation.

• Determination of Country of Origin (Art.104)

➢Where two or more countries are involved in the
production of a product, the origin of the product
shall be the country in which the last substantial
manufacturing or transformation process of economic
value took place.

• Conditions not Considered when Determining Country of
Origin(Art.105)
➢operations carried out to insure that the goods are
preserved in good condition during transport or storage;
➢operations carried out to facilitate transportation of
goods;
➢operations carried out to package or prepare goods for
sale;

➢simple operations on goods such as ventilation,

spreading out, drying, cooling, crashing, etc. ;
➢simple assembly of parts to constitute a complete

product;
➢any combination of the above.

Origin Marking (Art.107)

➢The name of the country of origin of imported goods
shall be affixed, in English, on each good and the
package.
➢It shall not be a requirement for personal effects not
destined for commercial use.

4.5 Calculation of customs duties and taxes
• To calculate the actual customs duties and taxes,
determine:
➢Duty paying value
➢Tariff rate of goods must be determined.
➢Origin of goods
➢Customs Procedure Code

• In Ethiopia customs duties and taxes are calculated as the sum of:
➢ Customs duty = [Duty-paying value * Customs duty rate]
➢ Excise tax = [(Duty-paying value + Customs duty) * Excise tax rate]
➢ Value added tax = [(Duty-paying value + Customs duty + Excise tax) * 15%]
➢ Surtax = [(Duty-paying value + Customs duty + Excise tax + Value added
tax) * 10%]
➢ Withholding tax = [(Duty-paying value) * 3%]

5. Customs offences, penalties and
appeal procedure
•"Customs offence" means any breach, or attempted breach, of
Customs law.
• Types of Customs offences
➢Administrative offence (no revenue prejudice)
➢Less serious offence(no deliberate attempt , revenue
may be prejudiced)
➢Serious offences (smuggling, evasion of duty , unlawful
activity)

appeal procedure
• Appeal Procedures
• Appeal means the act by which a person who is directly

affected by a decision or omission of the customs and
who conceders himself to be aggrieved thereby seeks
redress before a competent authority;

appeal procedure
•Complaint Handling Procedures
✓A complaint or an appeal shall be submitted in writing
within 15 days from the date of the written decision
causing the grievance. (Art. 154(1))
✓A complaint or an appeal may be signed and submitted
by the aggrieved person or his agent.

appeal procedure
✓Any complaint shall be reviewed and decided within a
period specified by directives of the Authority and shall
be communicated the decision in writing to the complainant;
✓Any complaint review section shall, if totally or partly
rejects a complaint submitted to it, state in its decision
the complainant's right to lodge an appeal pursuant to the
provisions of this Proclamation

appeal procedure
•Appeal Procedures (Art. 155)
✓ Any person who is aggrieved by the decision of the
Commission may lodge an appeal to the Tax Appeal
Commission established under the Income Tax
Proclamation within 30 days from the date such
decision.

appeal procedure
✓ If the appeal is with respect to payment of duties and
taxes, the Tax Appeal Commission shall not admit
lodging of the appeal unless the disputed duties and
taxes are paid.
✓ Any party dissatisfied with the decision of the Tax
Appeal Commission may appeal to the Federal High
Court within 30 days from the date of such decision.

THE END
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Customs Procedure Presentation

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Customs Procedures

Sisay Asres W/Mariam

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ASTRO CONSULTING AND TRAINING CENTER

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6. Customs offences, penalties and appeal

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• To day, Customs administrations around the world are

• The traditional role of customs as the

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protection of society border security

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• The SAFE Framework of Standards is a set of recommendations to

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➢to secure revenue collections and

➢to promote trade facilitation worldwide.

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• This unique international instrument endeavors to usher in a safer world

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➢Customs procedures, the conditions and

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• Cargo declaration: applied to the documents providing the

• Goods declaration: a statement made by which the person

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• Customs clearing agent vs. declarant

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• Examination and sampling of goods

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• Customs is the final authority to grant release of goods.

• Customs cannot authorize release of the goods, without

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❖The student should be aware of the relation ship

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• The Revised Kyoto Convention (RKC) on the Simplification

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