eBusiness Weekly
Gertrude Mawire
The mere mention of the phrase “SI 64” inspires a lot of divergent reactions from different people. The cross border traders loathed it because they saw it as a great nemesis of their activities, some local manufacturers adored it as they believed that it would bring them relief from the unwarranted foreign competition.
Clearing agents were of mixed feelings, for some, it was a new business opportunity to get more from their clients through processing of the required licenses, while for others these increased compliance requirements and added to their workload.
I read somewhere that a politician blamed it for his loss in an election. Statutory Instrument 64 has since been repealed and replaced by Statutory Instrument 122 of 2017.
But what exactly are we going on about? What are these Statutory Instruments (SIs) about, how are they crafted, by who and why?
In Customs lingo, these SIs are classified as Import Controls and Export Controls. In the Financial Times Lexicon, the definition of import control is as follows: An action taken by a government to limit the number of goods that can be brought into a country from abroad to sell. The main forms of controls are Tariffs (duty), licenses and quotas, restrictions and prohibitions.
In Zimbabwe, any Government ministry can be the author of an SI, depending on the intended control effect. So far, the Ministry of Industry and Trade has introduced the most topical SIs.
This article’s focus is on the Ministry of Industry’s Open General Import License Legislation. The Rhodesia Government Notice 766 of 1974 is the mother legislation of the current legislation. Statutory Instrument 122 of 2017 and 132 of 2015 are two of the most topical and most relevant “children” of RGN 766 for local international traders.
RGN 766 was introduced to control the import and export of goods into the country. Being a replacement for several pieces of laws dating back to 1967, it meant to rationalise the legislation controlling the imports and exports into the country. This short piece of law now required a permit/license to be issued for certain goods in order to be traded across the country’s borders. An implied license (Open General Licence) was given to all the goods which crossed borders except those that were stated in the Government Notice. Those that were specified were either prohibited or controlled. The prohibited ones were completely banned from being traded while the controlled ones would need an import permit/license or export permit/license to be traded. The Ministry of Industry and Trade would issue the license.
The RGN 766 was amended several times by legislation like RGN 1099/1974, 287/1975, SIs’ 557/1982, 179/1990 until Statutory Instrument 64 of 2016. In between came a schedule to the law piece, SI 8 of 1996 I believe, I guess they realised they couldn’t keep adding non OGIL items in the body of the law? All products which are listed in the first schedule require a Ministry of Industry and Trade License in order to be imported.
Before S1 64 was issued, several other notable SIs’ amending the mother RGN were issued. I wonder why they did not raise as much dust as did SI 64. SI 8 of 1996 introduced a schedule with six items which now required an Import License in order to be imported into Zimbabwe.
These included fuel, radioactive and associated materials and cooking oil and second hand under-garments “mabhero”. Three further amendments later the list had 23 lines of products, which could not be imported under OGIL (Open General Import License). And these are really the contentious products e.g. at number 8 on the list, poultry products, then pork, sugar, milk, potatoes, biscuits, soap, tubes, pipes of rubber, candles and floor polish.
In mid June of 2016 the great SI 64 came. When I consider the items 24 to 36 listed in the Statutory Instrument, I am tempted to think that the outward reaction was really a manifestation of something else other than that these products now needed an import license to be imported.
Being in the thick and thin of Customs Compliance work at the time it came, I found that there was something inherently wrong with the process of introduction of the Statutory Instrument.
For me it appeared as if Ministry of Industry officials just sat down and said ‘look, we no longer want cereals to be imported into Zimbabwe.
One of them picked up a Customs Tariff handbook and said yes, this one right here on 1904:1010. So item 30 of the SI listed ‘Cereals classified under headings 1904:1010 of the Customs Tariff’’ as controlled.
Then all hell broke loose. For the Customs practitioner tariff 1904:1010 is not the tariff for “cereal” as per layman’s jargon. It is for Corn Snacks and Puffs which we normally give to the kids.
Things like Jiggies for example. As a Customs Practitioner, I am put in a catch 22 position. What do I tell my client who wants to import some Kelloggs Breakfast Cereal? I decide to be a Customs Practitioner and advise them not to bother with the license. I figure the language I understand better is the 1904:1010 one, so the next time my client wants to import, Jiggies I will tell them it needs a license. ZIMRA are also expected to have linked the 1904:1010 tariff line to a license requirement in their ASYCUDA.
If they do link 1904:1090 or any other line under the same heading, this would be objectionable. It would mean they used they used a method other than a direct and simple translation of the legislation.
(To be continued next week)
Disclaimer: This Article is not meant to create a consultant/client Relationship. Readers are advised to consult their Consultants for specific advisory services.
About the author: Gertrude Mawire is a Fiscal Compliance and Investment Advisor based in Harare. She writes in her personal capacity. Gertrude, a member of ZNCEE ( customs & excise experts) holds an MSc in Finance & Investments (NUST) Bachelor of Business Studies (UZ), IOBZ Diploma various other Certificates. She can be contacted on [email protected], [email protected] and 0712 437 256
