CUSTOMS BOND SECURITIES

RCTG & CB6

Okoya ALFRED
 Definition/Purpose
• A Customs bond is a contract between three parties (Customs -
beneficiary, a principal (i.e. an importer), and a surety/guarantor;
• The purpose is to ensure that all the duties and fees associated with
the rules and regulations of importing or other Customs activities
are paid to Customs by the principal/surety
• Customs Bonds are legal documents which must be meticulously
prepared and properly executed.
• All bonds must be sealed and signed by properly authorized
persons representing the surety, the principal debtor and Customs.
• All Bonds should always be prepared in the original. Signatures on
photocopies cannot be allowed.
• All bonds executed in favor of the Commissioner are normally
underwritten by a bank or a reputed Insurance Company.
 Why do we need security?
• For the due compliance with the Act & generally for
protection of the Customs revenue and for the due
compliance with the provisions of the EAC-CMA and
Regulations.
• The nature of the security can be either
(a) by bond, in a sum & subject to conditions imposed
& with sureties the Commissioner may approve; or
(b) by cash deposit; (Cheque/Bank guarantee)
(c) partly by bond & partly by cash deposit.
Duration & discharge of a bond
• The bond has a life span of 3 years from date of
execution.
• Once a general/Particular bond has been in use for three
years, the Principal or his agent should be advised in
writing to account for all outstanding obligations under
the bond. The bond should, thereafter, not be used to
cover any fresh transactions.
• Upon due performance and proper reconciliation, the
bond is discharged by its cancellation and an
endorsement to that effect made thereon.
 BOND ENFORCEMENT
• S.109(1) EAC CMA. Upon failure to comply with the bond
conditions, a 14 days notice is issued for the payment of the due
amount.
• Upon failure to pay, the debt is enforced as if it were duty due and
unpaid. (duty enforcement)
• If the principal debtor fails to honour his or her obligations within 14
days of being called upon to do so, the bond will be called up and
the surety asked to honour the obligations.
• Under no circumstances may the surety’s obligations under the
bond be extinguished before satisfaction of the conditions of the
bond.
 Cancellation of Bonds

• Cancellation of Bonds
• Bonds remain valid until cancelled and cancellation of a bond is considered
only on application by the principal except where the bond is due for review
after at the expiry of three years from the date of original issue at which time
a fresh bond must be called for.
• Cancellation will only be authorized after the principal produce acceptable
evidence that all the conditions for such cancellation have been met such
production of the certificate of exportation in respect of transit goods or ex-
warehouse goods exported.
• When considering cancellation of general bonds particular care should be
exercised to ensure that all the principal’s obligations have been met.
• Upon application and successful cancellation of a bond, the original and
duplicate copies are discharged and returned to the undersigned a covering
letter with a copy made to the guarantor.
 BACKGROUND - BOND
FORMATS
• The following bond forms were in use before merging of
the bonds
• CB1. Bond for Delivery of Perishables or other Goods
prior to Payment of Duties / Taxes
• CB2. Bond for removal of goods from one Port or Place
to be examined and entered at another Port or Place
• CB3. Bond for the Warehousing of Goods or Removal of
Warehoused Goods.
• CB4. Bond for Exportation
• CB5. Bond For Shipment Of Stores
• CB6. General Bond For Security Of Warehoused Goods
 BOND FORMATS CNTD
• CB7. Bond for Goods to be Shipped Prior to
Entry
• CB8. Transit bond
• CB9. Transhipment bond.
• CB10. Bond for the re-exportation of temporarily
imported goods
• CB11. Bond for customs agents
• CB12. Bond for the conveyance of goods
subject to customs control
 BOND FORMATS CNTD
• CB13. General bond for ensuring compliance
with customs laws and securing duties on goods
deposited into an inland container depot.
• CB14. Bond for removal of goods to/from export
processing zone
 BOND FORMS CONTD
• With the upgrading of Asycuda++ to Asycuda
world, the bonds were merged as below
• CB2, CB4, CB8 – all of which were transit bonds
were merged into RCTG COMESA Bond.
• CB3, CB6, CB13 – bonds were merged into CB6
warehouse bond.
 RCTG & CB6 BONDS
• RCTG - The Regional Customs Transit Guarantee (RCTG) is
a Regional transit bond that secure goods cleared under SCT
(Single Customs Territory) Warehousing Regime as they are
moved within the EAC Region. It is one of the licensing
requirements for Customs Agents. ... Each Customs Agent is
responsible for monitoring the performance of their RCTG
bond. The RCTG is housed and managed by COMESA
system - the RCTG WEB APP under the single window, and
is interconnected with Asycuda to enable real time exchange
of data.
• CB6. this is a General Customs Bond for Security Of
Warehoused Goods. This bond is managed in Asycuda
System.
 Bond execution process
• The Bond application and the bond instrument is received from the
client by the Customs Officer, who studies and verifies  the
authenticity and completeness of the bond instrument.
• Where the bond application and bond instrument meet the
requirements, the bond instrument will be signed and sealed on
behalf of URA;
• The bond instrument will then be recorded  in a manual & electronic
register by the Customs Bond/Legal officer  
• Where the bond does not meet the set requirements it is sent back
to the insurance company for correction or provision of required
information. The bonds are then activated in Asycuda world and
RCTG Bond is also activated in the COMESA RCTG Web
application under the Uganda Electronic single window portal.
 Bond requirements
• Stakeholders/parties to the bond should
be licensed – Clearing agent (Principal)
and the surety (Insurance Company)
• Authorized signatures and company seals
for the surety and principal, should be
verified
• Stamp duty certificate should be attached.
• Original copies of the bond duly endorsed.
 Bond activation
• RCTG Bond activation
1.Copy of the executed bond – amount of bond
guaranteed & RCTG number
2.License and TIN of the clearing agent
• CB6 Bond activation
1.Copy of the executed bond – amount of the bond
and the bonded warehouse number e.g W0027
2.License of the bonded warehouse and the TIN of
the bond
 Bond activation contd
• Activation – practical walk through
• Question/comments/additions

• Thank you