SIC Insurance on Tuesday signed a memorandum of understanding with the Burkina Faso Chamber of Commerce for the implementation of the single transit guarantee system.

In order to promote the free movement of goods within the sub-region, the Economic Community of West African States (ECOWAS) has adopted Protocols relating to the Inter-State Road Transit of Goods (ISRT) and to establish a mechanism to facilitate the movement of goods in the West African sub-region.

The Protocol enjoins Member States to adopt a community-guarantee scheme that allows the transportation of goods by road from one Customs Office in a Member State to Customs office in another Member State exempt of duties, taxes and restrictions while in transit.

Tuesday's event marked the start of the implementation of the Single Transit Guarantee Scheme on the Ghana-Burkina Faso Corridor.

Managing Director of SIC Insurance, Stephen Oduro, said the scheme, which involved the transportation of imported goods by road from Ghana’s ports to Burkina Faso, would also facilitate the documentation process and reduce paperwork as well as the collection of a single premium at the onset of the journey to cover the entire movement of the goods on the corridor.

SIC Insurance and Burkina Faso Chamber of Commerce are serving as national guarantors for their respective countries.

“Typically, any person importing goods for transit must deposit a security in the form of cash, insurance bond or bank guarantee to cover payment of customs duties or other charges due on the goods in every transit country in case the goods in transit are short landed or diverted.

“However, the current practice has been criticized as a serious drawback to trade because of its cost as a result of the premium rates, bank charges and bond fees,” he said.

He also said the Single Transit Guarantee Scheme when implemented will improve efficiency in Customs Operations and bring relief to traders and shippers by reducing the turn-around time for securing transit bond from every country that the cargo passes through.

This is expected to also reduce the cost of transit trade and vehicle turn-around time.

“Besides curbing cargo theft, the system will also help to seal loopholes that cause member countries loss in revenue through suspected under-declaration of the value of export or cargo theft.

“Again the implementation of the Single Transit Guarantee Scheme will help remove the opportunities presently exploited by some middlemen at our ports who use fake tax identification numbers (TIN) to clear goods for transit and in turn divert them into the local market.

“A single guarantee system requires the issuance of a single bond to cover the entire journey from the port of departure to the destination. This will ensure that customs officials in the transit country receive proper payment of duties for any goods moved through their territory.”  

Seth Dwirah, Deputy Commissioner in charge of Operations at the Customs Division of the Ghana Revenue Authority (GRA), commended the move indicating that transit trade had been a serious challenge with customs adding recalcitrant traders smuggled goods leading to revenue leakage, and the under-selling of those who paid their duties.

Emmanuel Yoda, deputy Director General of the Burkina Faso Chamber of Commerce, in a remark, said the move was critical to show to ECOWAS that the national guarantors could establish the mechanism.

He, therefore, called on customs administration, clearing agents, importers and exporters of both countries to ensure that the system implementation was successful.