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COMESA Trade Rules: High Court holds that a Missing Exporter’s Signature Invalidates a Certificate of Origin

In the case of Kuku Foods Uganda Ltd v. Uganda Revenue Authority (Civil Suit No. 0036 of 2021), the High Court of Uganda has addressed issues related to preferential tariff treatment under the COMESA Treaty and the implications of an exporter not signing a certificate of origin.

What is the background?

Kuku Foods Uganda Ltd, a franchisee of KFC, imports French fries for its business in Uganda. The Uganda Revenue Authority (URA) had previously granted the company preferential tariff treatment under the COMESA Treaty. However, in May 2018, a post-audit review by URA found that 7 certificates of origin, which allowed for this preferential treatment, had not been duly signed by the exporter. URA declared these certificates invalid and assessed import duties against Kuku Foods.

Kuku Foods objected to this assessment, but URA upheld its decision. Kuku Foods then appealed to the Tax Appeals Tribunal, which ruled in favour of URA, leading the company to further appeal to the High Court.

What was the issue for determination?

The question for determination was whether or not the omission by an exporter to sign a certificate of origin invariably invalidates that certificate and automatically disentitles all the goods to which that certificate relates to preferential tariff treatment under the COMESA Rules of Origin.

What was the decision of the court?

The court held that;

Conclusion

This decision emphasises the importance of strict adherence to the rules governing preferential tariff treatment under the COMESA Treaty. It clarifies that a valid certificate of origin, complete with all necessary signatures and authentications, is non-negotiable. Importers must ensure full compliance with these requirements, as any deviation, specifically with the important areas mentioned above may lead to the loss of tariff benefits and additional tax liabilities. It also serves as a critical reminder to businesses engaged in cross-border trade within COMESA to always verify their documentation.

DISCLAIMER: This article is for general information only and it reflects the position at the date of publication. It does not constitute legal advice. For any further information or advice relating to this article, please contact us.



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