Goods exported from Botswana to any other country will, where applicable, be charged customs duties and local taxes at the destination country unless there is a Trade Agreement between Botswana and that country exempting goods coming from Botswana from such payment.
To that end, Botswana has entered into some Trade Agreements through which certain goods under some given conditions enjoy some customs duty and quota concessions when exported there.
Companies wishing to enjoy these benefits are required to register with the Department of Customs and Excise.
Exportation to European Countries
Goods originating from Botswana may be exported to European countries without payment of customs duties at country of destination. However, this is subject to the goods satisfying the origin of goods status criterion of exporting to European countries as laid out in the Cotonou Agreement and the owner of goods obtaining a certificate of origin (Euro 1) from the Department of Customs and Excise.
In order for the goods to be circumscribed as originating from Botswana they must be wholly obtained or sufficiently worked or processed in Botswana. In more precise terms, the goods must be:
- raw materials, animals or plants extracted from, grown and raised or grown in Botswana respectively. Products of these are also considered as wholly originating. Since the Cotonou Agreement considers African Caribbean Pacific (ACP), European Community (EU) and European Overseas Countries and Territories (OCT) as one territory, goods wholly obtained from these countries and territories are considered as originating from Botswana if the last process of working or processing is done in Botswana. However, it is important to note that if the materials were sourced from an ACP country, the working or processing done in Botswana should exceed the insufficient operations listed in Article 3(3) a, (b) and (d) or a combination thereof.
- where materials sourced from outside ACP, EC or OCT are used to produce a given product, the product will be deemed to be originating from Botswana if the manufacturing process, which the raw materials are subjected to, is sufficient to give the product a different tariff heading to the raw materials. However, this is provided that the total value of the non-originating materials does not exceed 15% of ex-works price of the final product and subject to conditions laid down in Annex I and II of the Cotonou Agreement.
When the goods satisfy the above requirements, a Euro 1 certificate can then be purchased from licenced clearing agents or Customs headquarters at P3.50 per certificate. Prior to exportation, the certificate must be taken to the nearest Customs office for processing because an unendorsed Euro 1 certificate will not confer preferential treatment on the goods at country of destination. Processing of the certificate involves customs officials visiting the exporter's manufacturing factory to ascertain that the manufacturing process taking place is in conformity with origin requirements under the Cotonou Agreement.
When goods are ready for exportation, the relevant export form to fill out is CE 23 and CE 25 for goods from a bonded warehouse and those from manufacturing establishments not operating bonded warehouses, respectively. These forms must be counter-signed by Botswana Customs prior to exportation.
Exportation to the United States of America
Botswana exporters may export their eligible products under the African Growth Opportunity Act (AGOA) scheme because Botswana government has rectified all requirements of the Act. Under the AGOA scheme, Botswana traders can export to USA under benefit of preferential treatment on customs duty and quotas until 2015. Products that can be traded under this scheme are both non-textile and textile products.
In order for a non-textile product to become eligible, it first needs to be included in the list of the 6,500 products listed under the Act (this list can be obtained from any Customs and Excise office). Once that is satisfied, the next step is to determine if the product is wholly produced or grown in Botswana or a beneficiary Sub-Saharan country. If the raw material is sourced from outside any of the beneficiary Sub-Saharan countries, it must be ensured that the last stage of the manufacturing process takes place in an AGOA beneficiary country. In addition, only products meeting a minimum of 35% value added can qualify to enter the USA market under the AGOA scheme. This value added calculated on the basis of either the cost of materials produced in an AGOA beneficiary country or the US or the cost of direct processing. However, up to 15% of the 35% value added may be of raw materials sourced in the USA.
Textile materials qualify for trade under the AGOA scheme in the event they are wholly assembled in one or more lesser-developed AGOA beneficiary countries. What is of importance in this case is for the last stage of manufacturing to be done in Botswana. Since Botswana enjoys a grouping 5 status under AGOA, fabric or yarn enjoys the benefit of having no restriction on their origin status (they may be imported from anywhere in the world). There is however a quota restriction on the amount of textile products that may be exported to the USA under AGOA.
Exportation benefits accorded under AGOA are extended on condition that exporters, for either or both non-textile and textile products, are registered with the Department of Customs and Excise prior to exportation. This registration involves submission of written application to export, stating type of raw materials to be used in production, their country of origin and manufacturing process and customs inspection of the manufacturing plant and company documents. In addition, manufacturers and exporters of textile and apparel products are required to complete customs application forms (form CE 48 A 1.03 and form CE 48 A 1.02 respectively).
It must be noted that transshipment of goods is not allowed under AGOA except for cases such as is the case with Botswana, where a country relies on sea ports of its neighbouring countries to export to USA.
Exportation to other Developed Countries
Goods originating from Botswana can enjoy some preferential treatment when exported to developed countries under the General System of Preference (GSP) scheme. Goods that qualify under this scheme are those that have been wholly obtained or produced in Botswana. These are goods/materials extracted in Botswana, animals born and raised in Botswana, as well as plants grown in Botswana. In addition, products of the foregoing are treated as wholly originating products. Goods produced from non-originating materials will only qualify if the materials are subjected to a sufficient manufacturing process that will change their tariff heading.
Since every importing country may have its own tailor-made preferential scheme, it is beneficial for a trader to check prevailing requirements of the product s/he intends exporting. This can be done at Customs & Excise headquarters (Valuation Unit).
Once all requirements have been met, a Certificate A (which is the relevant movement certificate) may be obtained free from Customs and Excise headquarters (Valuation Unit). Export documents to fill out are CE 23 and CE 25.
Exportation to SADC Countries
The SADC Trade Protocol provides that SADC Member States shall accord each other Most Favoured Nation Treatment on goods traded between them. This covers import and export duties, non-tariff barriers as well as quantitative import and export restrictions. This means that goods originating from Botswana and destined for any of SADC member states will on arrival at country of destination enjoy reduced tariff rates, no non-tariff barriers and reduced quantitative restrictions.
In order for the goods to enjoy this trade concession, they must be sufficiently worked as per the SADC Trade Protocol.
Prior to exportation, a SADC Certificate of Origin must be obtained from the Department of Customs & Excise headquarters (Valuation Unit). The appropriate exportation documents to fill out are CE 24 and CE 25.
Exportation to other members of the Common Customs Area
As indicated in the opening paragraph, Botswana is a contracting member of the Southern African Customs Union, hence goods exported to South Africa, Namibia, Lesotho and Swaziland enjoy free movement without payment of customs duties and quantitative restrictions. Only local taxes, such as sales tax and Value Added Tax, are levied on goods coming from Botswana at destination country. Where there are some import prohibitions or restrictions, they will usually be confined to instances where the security, economic, social, and cultural interests of the importing country will be put at stake by such importation.
Exportation to Zimbabwe
There is an arrangement under the Botswana/Zimbabwe Trade Agreement that accords goods originating from either of the trading partners to enjoy some preferential treatment in the form of tariff concessions. Goods which meet a minimum 25% local content is, as per this trade agreement, exempted from payment of customs duty. Excise duty and local taxes will be due and payable where applicable.
Traders (manufacturers or their agents and wholesalers) who wish export to Zimbabwe under this Trade Agreement must register with the Department of Customs and Excise headquarters (Valuation Unit). The Department will then visit the prospective registrant's establishment to ascertain that indeed a manufacturing process is taking place. According to Article 4 of the Botswana/Zimbabwe Trade Agreement, where goods are manufactured using materials from outside the two trading partners, the manufacturing process must change the tariff heading of the goods involved. What is also taken into account is that the last process of manufacturing should take place in Botswana. The prospective registrant will then be requested to submit costing data for the purposes of calculating the local content of the goods under trade.
If the local content of the goods meets the minimum 25% required, the company will be registered to export to Zimbabwe and given a registration number. Companies dealing in wholly originating products qualify for automatic registration without going through the process of determining local content.
A bill of entry CE 61 may then be filled out and presented at the border/airport at time of exportation. Conversely, goods coming from Zimbabwe under this Trade Agreement must be accompanied by Form 59.