List: 131 Ugandan companies contributed Shs 180 billion in Customs Revenue in 2021/22 FY

The Authorized Economic Operator program recently marked 10 years of allowing compliant companies enjoy fast clearance of their goods through simplified procedures and reduced inspection. James Malinzi, the Assistant Commissioner Customs Audit on in this Q and A shares the progress and new innovations of the project since inception in 2013.

Tell us about the AEO program?

The Authorized Economic Operator(AEO) program is about facilitation and the security of global trade. It is an international program based on the World Customs Organization instrument known as the WCO SAFE Framework of Standards. The program works on the principles of voluntary compliance and the rewards that comes with it. The program requires Customs and other trade regulators to identify low risk and reliable traders/operators, form partnership with them and provide benefits which will allow them move their cargo through the supply chain faster and more easily. The program is also voluntary.

What are the direct benefits to the taxpayers?

The taxpayer benefits in having fast clearance which in turn reduces on the cost of doing business. There is improved coordination and working relationship between Taxpayer and the Revenue Authority. Self-management of warehouses and choice of area to physically verify their goods. The corporate image is enhanced among the business community.

However, there can be more benefits for clients under the AEO status.

How many companies do we have currently and how does one qualify to be a member?

Currently there are 131 AEOs of which 39 are also accredited as the East African Community(EAC) Regional AEOs. In order to become an AEO, one has to submit a letter of expression of interest to the Commissioner Customs. After that, the applicants will be provided with self-assessment. An officer is assigned to support the company until the application process is completed. This officer acts as an expert advisor to the company during this period.

How is URA supporting local companies to enrol on the program?

URA is encouraging the local companies that are eligible by providing as much information as possible on what is required to be compliant and meet the requirement of the program through its Taxpayer education programs, including Webinars, Workshops, trainings, Media awareness programs among others.

Is the program for small companies too?

The AEO program is open to any size of operator, big or small and joining is voluntary and free. The only qualification parameters are; 1- The applicants’ operations must be along the International Trade Supply Chain, and regulated by Customs. 2- The applicant should have appropriate record of compliance over the last 3 years.

What entails the status that an AEO acquires?

The AEO status bestows trust. An AEO is considered a trusted and reliable partner of URA and for that matter, URA provides a number of benefits that allows the AEO to conduct his/her business faster without hustles. This is mainly because URA subjects such an operator to less checks and there are some privileges that accompany the status. When doing business with other operators within the country or internationally, other business partners will look at the AEO as a trusted and reliable partner. In case the AEO is doing business outside Uganda but in a country where we have a Mutual Recognition Arrangement for example; China or South Africa, the AEO will be accorded some benefits by those Customs Administration to facilitate his/her business.

How much access of self-assessment does an AEO have, is it 100% or partial?

The AEO does 100% self-assessment. The Customs Officers who carry out the vetting process only validates if the self-assessment that has been done by the AEO is correct.

Please share a breakdown of what is involved before a company/individual qualifies as an AEO?

The process involved in one becoming an AEO is referred to as the Authorization process; There is a set of criteria against which an applicant is assessed. Currently this includes;

Application – through submission of letter of expression of interest to the Commissioner Customs

The applicant is taken through the process of preliminary consultation by URA AEO experts who explain the concept and the requirement for eligibility in detail.

The applicant conducts a Self-Assessment against the criteria.

A validation team from URA and other government agencies conduct validation of the information provided in the Self-Assessment form and the application to ascertain accuracy. This exercise involves visiting the physical location of the applicant and conducting assessment of some for the criteria. If the application passes, then the application is approved for authorization(certificate)

After approval, the applicant signs a memorandum of understanding with URA and is issued a certificate.

What are the main trading areas for AEOs and where else do we hope to extend?

AEOs trade all over the world, however, to ensure that AEOs receive extended benefits when trading outside Uganda, URA is engaging its counterparts in some of the main trading partners to get Ugandan AEOs recognized and facilitated while training in those countries.

Currently, URA has concluded Mutual Recognition Arrangement with China and South Africa. China Arrangement was signed in May 2021 and operationalized on the 1st June 2023, meanwhile the South African Arrangement was signed on the 28th February 2023, we hope to operationalize it soon, the technical issues for operationalization is resolved. URA is also implementing the EAC Regional AEO program that allows the Ugandan AEOs that join the regional program to be recognized in all EAC Countries.

How many AEOs do we have currently?

As at 31st October 2023, there were 131 National AEOs, of which 39 have joined the EAC Regional program implying that they are recognized in all EAC countries. Attached is a list of AEOs

What measures are in place to grow more numbers?

URA has planned a big sensitization drive to reach as many eligible operators as possible. Automation of the processes is also in final stages to ensure efficiency in the management of the processes, both in the pre and post authorization phases. The benefits scheme has been revised and improved and a new AEO benefits manual has been launched to guide the process of ensuring that AEOs are according benefits they deserve. A tier system will also be rolled out with the roll out of the Automated system to give room for growth within the AEO system and to allow the system to accommodate the small companies that require nurturing while they join the AEO program.

How much of revenue do we earn from AEOs annually?

AEOs have contributed about 180 billion in Customs Revenue in the last financial year 2021/22.

How is the performance of the AEO program in Uganda compared to that in the region in terms of numbers and revenue?

Uganda has 131 national AEOs and 39 EAC Regional AEOs. The Total number of EAC Regional AEOs is 201 as at the end of October 2023. The Ugandan National AEOs cover about 40% of the International Trade value, While at EAC the 201 cover about 12%.

Any message to companies/individuals that have not yet enrolled?

The AEO program is here to provide you the benefits and facilitation that you need from URA. It is free and voluntary, but has immense value for your business. Joining the program is easy and URA has put in place system to support you.

List of AEOs

Comfoam Ltd

Jaffer Freight Ltd

Blow Plastics (U) Ltd

Unistrong Investments Ltd

Tian Tang Group Ltd

Uganda Tobacco Services Ltd

Nile Roofings Ltd

Hong Hai Wood (U) Ltd

Luuka Plastics Ltd

Ada’s Enterprises

Mandela Millers Ltd