In a move to solidify trade relations post-Brexit, the Southern African Customs Union (SACU) member states and Mozambique have embarked on a new chapter with the United Kingdom (UK) through the Southern African Customs Union-United Kingdom Economic Partnership Agreement (SACUM-UK EPA). The agreement, which took effect on January 1, 2021, establishes a bilateral Free Trade Agreement (FTA) between the UK and SACU, signifying a significant milestone in international trade dynamics.
The SACUM-UK EPA builds upon the foundation of the Southern African Development Community-European Union Economic Partnership Agreement (SADC-EU EPA), which previously governed trade between the parties. As the UK pursued its post-Brexit policies, it sought to establish new FTAs with its trading partners, and the SACUM-UK EPA emerged as a result of successful negotiations conducted while the UK was still a member of the European Union (EU).
One of the critical aspects of the SACUM-UK EPA is the seamless transition of tariff commitments from the SADC-EU EPA. Both the UK and SACUM have committed to maintaining the same tariff preferences for each other’s goods as previously agreed under the SADC-EU EPA. This continuity ensures a stable trading environment for businesses, as the UK applies the same preferences to goods from SACUM as the EU did under the previous agreement, and vice versa.
To facilitate the implementation of the SACUM-UK EPA, the South African Revenue Service (SARS) made essential enhancements to its customs systems. These updates, which were launched on July 14, 2023, allow traders to register and lodge customs declarations under the new agreement, as well as the previous SADC-EU EPA. With the removal of the UK from the EU trading block, traders now have to be cautious in selecting the correct country code when submitting declarations to avoid any potential rejections.
One of the significant changes for traders lies in the validation process of EUR1 movement certificates of origin. Under the SACUM-UK EPA, SARS has implemented a two-pot system to differentiate between goods destined for the UK and those intended for the EU. Traders are required to ensure the proper use of EUR1 certificates acquired specifically for the SACUM-UK EPA, as those obtained under the SADC-EU EPA will not be valid for trade under the new agreement.
For Approved Exporters who previously utilized the SADC-EU EPA to export to the UK, a mandatory application and registration process with SARS to become Approved Exporters under the SACUM-UK EPA is now in place. This step ensures compliance with the new agreement’s regulations and allows traders to fully benefit from the trade opportunities it offers.
To provide further clarity and assistance regarding the SACUM-UK EPA, traders are encouraged to contact Ms. Jennifer Mokwele and Ms. Thea Roux at rulesoforigin@sars.gov.za.
As the SACUM-UK EPA sets a strong framework for trade relations between the UK and Southern African nations, traders and businesses are poised to explore new horizons, leverage the benefits of the agreement, and contribute to the economic growth and prosperity of the region.
