WORLD TRADE  
ORGANIZATION  WT/REG231/2 
3 October 2008 
 (08-4703) 
Committee on Regional Trade Agreements  
 
 
 
    
 
 
FACTUAL PRESENTATION 
 
Southern African Customs Union  
(Goods) 
 
Report by the Secretariat 
 
 
 
 
This report, prepared for the consider ation of the Southern African Customs 
Union, has been drawn up by the WTO S ecretariat on its own responsibility and 
in full consultation with the Parties.  The report has been drawn up in accordance 
with the rules and procedures containe d in the Decision for a Transparency 
Mechanism for Regional Trade Agreements (WT/L/671). 
 
Any technical questions arising fro m this report may be addressed to 
Ms. Jo-Ann Crawford (tel: +41 22 739 5422).     
 
 WT/REG231/2 
Page iii 
 
 
  TABLE OF CONTENTS 
 
 
Page 
 
I. TRADE ENVIRONMENT 1  
II. TREATY CHARACTER ISTIC ELEMENTS 9  
A. B ACKGROUND INFORMATION  9 
III. NATIONAL TREATMENT AND MARKET ACCESS PROVISIONS OF THE 
AGREEMENT 9 
A. I MPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  9 
1. General provisions 9  
B. R ULES OF ORIGIN  10 
C. E XPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  10 
D. C OMMON EXTERNAL TARIFF  10 
E. R EGULATORY PROVISIONS OF THE AGREEMENT  11 
1. Standards 11  
(a) Technical barriers to trade 11 
(b) Sanitary and phytosanitary (SPS) measures 11 
2. Safeguard mechanisms 11  
(a) Infant Industry Safeguards 11 
3. Anti-dumping and coun tervailing measures 11  
4. Subsidies and state aid 11  
5. Other regulations 12  
(a) Customs Related Procedures 12 
(b) Competition Policy 12 
IV. GENERAL PROVISIONS OF THE AGREEMENT 12  
A. E XCEPTIONS AND RESERVATIONS  12 
B. A CCESSION  12 
C. I NSTITUTIONAL FRAMEWORK  12 
D. D ISPUTE SETTLEMENT  14 
E. R ELATIONSHIP WITH OTHER AGREEMENTS CONCLUDED BY THE PARTIES  14 
ANNEX  16 
 
 
 
 
 
 WT/REG231/2 
Page 1 
 
 
  SOUTHERN AFRICAN CUSTOMS UNION (GOODS) 
 
Factual Presentation by the Secretariat  
  
I. TRADE ENVIRONMENT 
1. The Southern African Customs Union (hereaf ter SACU or "the Agreement") comprising 
Botswana, Lesotho, Namibia, South Africa, and Sw aziland ("the Parties"), was established in 1910 
and is the world's oldest customs union.  Its five member States are at quite different levels of economic development:  Botswana and South Africa are considered upper middle-income developing 
countries, Namibia and Swaziland as lower middle-in come developing countries, and Lesotho is a 
least-developed country.    2. The Parties' ranking in global merchandise trad e as well as their trade to GDP ratios vary 
considerably as shown in Table I.1.  Botswana ran a global trade surplus in 2005, while the other 
four SACU countries ran trade deficits in the same year.  South Africa is by the far the largest 
economy of the five and dominates its SACU part ners:  its imports accounted for 0.57 % and its 
exports for 0.49 % of world trade in 2006, and for roughly six times the total of its SACU partners.  
Its GDP of US$240 billion is roughly twelve times the total of the other four SACU countries.  
Swaziland has the highest trade to GDP ratio of the SACU countries and South Africa the lowest.    
Table I.1 
SACU Members' Merchandise Trade Profiles  
 
Merchandise trade - 2005 Rank in world trade 
- 2005  
GDP 
US$ billion Member 
Exports US$ 
billion % world 
exports Imports 
US$ billion % world 
imports Exports Imports  Trade to 
GDP ratio – 
2003-05 
Botswana 4.4 0.04 3.2 0.03 94 112 6.1 90 
Lesotho 0.6 0.01 1.3 0.01 148 146 1.4 148.5 
Namibia 2.1 0.02 2.5 0.02 114 121 9.3 83.1 
South Africa 51.6 0.49 62.3 0.57 39 34 240.1 54.9 
Swaziland 2.0 0.02 2.1 0.02 116 130 2.7 172.8 
Source: WTO Secretariat 
3. Developments in intra and extra SACU trade in the period 2000-06 are pictured in Charts I.1 
and I.2.   WT/REG231/2 
Page 2  
 
  0510152025303540
2000 2001 2002 2003 2004 2005 2006012345678Chart I.1
Intra-SACU trade 2000-2006
Source :  UNSD, Comtrade database.
Note:       Does not include data for Lesotho (2003, 2006);  and Swaziland (2006).US$ million US$ billion
Imports from SACU excluding South Africa
Exports to SACU excluding South Africa Left-hand scale:
Imports from SACU
Exports to SACURight-hand scale:
 
 
012345678910
2000 2001 2002 2003 2004 2005 20060102030405060708090100Chart I.2
Extra-SACU trade 2000-2006
Source :  UNSD, Comtrade database.
Note:       Does not include data for Lesotho (2003, 2006);  and Swaziland (2006).US$ billion US$ billion
Imports from world  excluding South Africa
Exports to world excluding South Africa Left-hand scale:
Imports from world
Exports to worldRight-hand scale:
  WT/REG231/2 
 Page 3 
 
 
  4. The commodity structure of trade among the Parti es, as well as of their imports and exports to 
the world in 2004-2006, is shown in Charts I.3-I.7, on the basis of HS section product categories.1   
 5. Botswana's imports from South Africa accounted for 84.4% of its total imports in 2004-06 
and closely resemble the product composition of  its total imports;  imports from its other 
SACU partners accounted for 0.5% of its tota l imports during the same period.  Three product 
categories – chemicals, vehicles, and textiles – accounted for 90% of Botswana's imports from Lesotho;  three product categories – minerals, pr epared foods, and machinery – accounted for 83.5% 
of its imports from Namibia;  and four product categories – textiles, machinery, vehicles, and prepared foods – accounted for 79.9% of its imports from Swaziland. 
 
6. Lesotho's imports from South Africa accounted fo r 82.6% of its total imports in 2004-05;  
imports from its other SACU partners accounted fo r 0.005% of its total imports during the same 
period.
2  A single product category – textiles, and prep ared foods  – accounted for 100% of Lesotho's 
imports from Botswana and Namibia, respectively,  in 2004-05;  miscellaneous products accounted for 
97.3% of its imports from Swaziland in the same period.  Four product categories – minerals, 
prepared foods, vegetables and machinery – accounted  for 42.9% of its imports from South Africa.   
 7. Namibia's imports from South Africa accounted for 84.6% of its total imports in 2004-06 and 
closely resemble the product composition of its tota l imports.  Imports from its other SACU partners 
accounted for 0.5% of its total imports during the same period.  Three product categories – machinery, 
vehicles, and base metals – accounted for 48% of Na mibia's imports from Botswana in 2004-06;  one 
product category – vehicles – account ed for 86.9% of its imports fro m Lesotho;  and three product 
categories – chemicals, prepared foods, and minera ls – accounted for 96.5% of its imports from  
Swaziland.   
8. South Africa's imports from its four SACU pa rtners accounted for only 0.5% of its total 
imports in 2004-2006.  Imports from Botswana, Lesotho and Namibia in 2004-06 were comprised 
almost entirely of HS Section XIV, precious or se mi-precious stones and precious metals;  its imports 
from Swaziland were more diversified with machin ery, optical products and base metals accounting 
for 95.6% of its total imports.    
9. Swaziland's imports from South Africa accounted for 87.5% of its total imports in 2004-06 
and closely resemble the product composition of its to tal imports with the exception of textiles which 
are Swaziland's fourth largest global import, but acc ount for only 4.8% of its imports from South 
Africa.  Imports from Swaziland's other SACU pa rtners accounted for 0.02% of its total imports 
during the same period.  Three product categori es – chemicals, wood pulp and prepared foods – 
accounted for 79.7% of Swaziland's imports from Botswana in 2004-06;  three product categories – 
machinery, chemicals and plastics – accounted fo r 85.3% of its imports from Lesotho;  and one 
product category – chemicals – accounted for 65.8% of its imports from Namibia.  
 
 
                                                     
 
1 For Lesotho, no data for this period was available from COMTRADE.  Data for 2004-2005 were 
supplied by the Parties. 
2 Latest data available from COMTRADE. WT/REG231/2 
Page 4  
 
  Chart I.3
Botswana and SACU: product composition of merchandise trade, annual 
average 2004-06
Botswana's imports from Lesotho Botswana's imports from Namibia
 Source:  UNSD, Comtrade database.Per cent
Total:  US$235,832 Total:  US$16.5 million
Total:  US$2.7 billion Total: US$198,195
Total:  US$3.2 billion Total:  US$4.1 billionBotswana's global imports Botswana's global exportsBotswana's imports from South Africa Botswana's imports from SwazilandChemicals  
49.1
Diamonds 75.2Machinery
26.3Animals 2.4
Minerals 
17.1
Chemicals 
8.3Textiles 17.2
Pulp of wood  2.8
Machinery
17.1Other 
10.7Other 
6.7
Base metals 8.0Textiles 4.0Machinery 1.8
Vehicles  23.7Minerals 48.3
Base metals 8.7
Plastics 4.1Base metals 
11.9 Textiles 28.3
Vehicles 12.4Prepared foods 28.8
Prepared foods 6.6Miscellaneous 2.4Other 8.1Other 7.9
Animals 2.1Other 
11.0Machinery 6.4Vehicles  4.8Animals 3.7
Minerals 19.6
Machinery 15.3
Vehicles  11.5
Chemicals  
8.8Prepared foods 7.3Vegetables 5.2Plastics 4.3Textiles 3.8Pulp of wood  2.9Miscellaneous 2.6Other 
7.7
Vehicles  17.0Prepared foods 8.3Miscellaneous 6.8Chemicals  2.3
Vegetables 4.5Textiles 3.8Vehicles  2.2
 
  WT/REG231/2 
 Page 5 
 
 
  Chart I.4
Lesotho and SACU: product composit ion of merchandise trade, annual 
average 2004-05
Lesotho's imports from Botswana Lesotho's imports from Namibia
 Source:  Data provided by LesothoPer cent
Total:  US$ 77.7 Total:  US$89.6
Total:  US$721.2 million Total: US$40,017
Total:  US$872.9 million Total:  US$722 millionLesotho's global imports Lesotho's global exportsLesotho's imports from South Africa Lesotho's imports from Swaziland 
Animals 5.9
Minerals 
12.3
Chemicals 5.8Pulp of wood  3.2
Machinery
7.5Other 
14.4Other 
4.5
Base metals 5.2Textiles 78.2Plastics 2.1
Vegetables 9.4Base metals 4.8
Plastics 4.5
Vehicles 6.1Prepared foods 8.9Miscellaneous 3.1
Animals 4.9Minerals 14.8
Machinery 7.1
Vehicles  7.0Chemicals  
6.3Prepared foods 10.7
Vegetables 10.3Footwear 2.3
Textiles 6.9Pulp of wood  3.1
Miscellaneous 3.8Other 
14.9
Miscellaneous 97.3
Textiles 14.6
Diamonds 8.4Footwear 2.8
Machinery 4.1Prepared foods 2.2Textiles 100 Prepared foods 100
Pulp of wood  2.5
 WT/REG231/2 
Page 6  
 
  Chart I.5
Namibia and SACU: produc t composition of merch andise trade, annual 
average 2004-06
Namibia's imports from Botswana Namibia's imports from Lesotho
 Source:  UNSD, Comtrade database.Per cent
Total:  US$5.9 million Total:  US$19,983
Total:  US$2.2 billion Total: US$5.4 million
Total:  US$2.6 billion Total:  US$2.8 billionNamibia's global imports Namibia's global exportsNamibia's imports from South Africa Namibia's imports from SwazilandChemicals  8.3
Diamonds 30.5
Animals
20.9Stone, cement 2.2
Minerals 4.4
Chemicals 
10.1Raw hides 3.0
Pulp of wood  3.6Machinery
19.5Other 
6.0Other 
6.7
Base metals 7.9Machinery 19.8
Vehicles  16.2
Base metals 8.6
Plastics 4.3
Base metals 
11.9 Minerals 17.9
Vehicles 17.8Prepared foods 8.3
Prepared foods 10.4Miscellaneous 2.8Other
 9.2
Animals 2.8Other 
0.9Machinery
1.4
Vehicles  86.9
Animals 3.0
Minerals 4.0Machinery 18.1
Vehicles  16.7
Chemicals  
10.4Prepared foods 10.9Vegetables 3.5
Plastics 4.5
Textiles 5.3Pulp of wood  3.9Miscellaneous 2.7Other 
6.2 Vehicles  2.6
Prepared foods 24.0
Machinery 2.3Chemicals  54.6
Vegetables 3.7
Textiles 4.7Vehicles  2.4Base metals 12.0
Miscellaneous 10.8Plastics 4.6Minerals 3.2Pulp of wood  2.6Textiles 2.1Base metals 11.7
Stone, cement 2.0
Minerals 7.6Pulp of wood  7.5Prepared foods 5.9Chemicals 4.1
 
  WT/REG231/2 
 Page 7 
 
 
  Chart I.6
South Africa and SACU: pr oduct composition of m erchandise trade, annual 
average 2004-06
South Africa's imports from Botswana South Africa's imports from Lesotho
 Source:  UNSD, Comtrade database.Per cent
Total:  US$190.3 million Total:  US$148,735
Total:  US$87.9 million Total: US$55,782
Total:  US$57.3 billion Total:  US$46.8 billionSouth Africa's global Imports South Africa's global exportsSouth Africa's imports from Namibia South Africa's imports from SwazilandDiamonds
99.8
Diamonds 19.0Machinery
76.8
Vegetables 3.5Plastics 1.9
Diamonds 1.8Animals 0.4
Minerals 
16.7
Chemicals 
8.7Textiles 3.2Pulp of wood  2.2Machinery
26.1Other 
17.6Other 
4.1
Base metals 4.5Textiles 1.5
Machinery 10.4Vehicles  10.3Chemicals  6.9
Optical  3.3
Minerals 15.2Base metals 5.7
Plastics 3.7Base metals 
19.9 Footwear 2.8
Vehicles 12.6Prepared foods 3.8
Prepared foods 1.8Miscellaneous 1.4Other 0.2
Diamonds
96.9Other 0.3
Diamonds
99.6 Optical  13.1Plastics 3.4Other 
1.0
 
 WT/REG231/2 
Page 8  
 
  Chart I.7
Swaziland and SACU: pro duct composition of merch andise trade, annual 
average 2003-05
Swaziland's imports from Botswana Swaziland's imports from Lesotho 
 Source:  UNSD, Comtrade database.Per cent
Total:  US$52,242 Total:  US$26,416
Total:  US$203,792 Total: US$1.4 billion
Total:  US$1.6 billion Total:  US$1.8 billionSwaziland's global imports Swaziland's global exportsSwaziland's imports from Namibia Swaziland's imports from South Africa Chemicals  
37.8
Machinery 14.2
Animals 4.3
Minerals 
11.6Chemicals 
12.4Pulp of wood  4.7Machinery
14.1Other 
6.8Other 
10.0
Base metals 6.5
Textiles 21.2Plastics 5.0
Vegetables 6.0Minerals 5.5
Base metals 7.0
Plastics 4.8
Prepared foods 7.8Miscellaneous 2.4Other 4.9
Animals 4.0Other 
7.1
Minerals 4.7
Machinery 8.0
Vehicles  9.1Chemicals  
65.8Prepared foods 2.5
Vegetables 6.5Optical 5.3Textiles 4.8
Pulp of wood  7.0
Textiles 10.3Other 
6.8
Prepared foods 8.6Miscellaneous 2.2
Chemicals 43.6Pulp of wood  22.9Animals 5.6Machinery 3.5
Vehicles 8.7Pulp of wood 7.3Machinery 3.5
Prepared foods 14.4Prepared foods 19.0Textiles 3.8Base metals 2.4
Machinery 38.7
Chemicals  
32.9Plastics 13.7Pulp of wood  7.2Other 
2.0
Chemicals  
13.4
Minerals 13.0Pulp of wood  4.9
 
  WT/REG231/2 
 Page 9 
 
 
  II. TREATY CHARACTERISTIC ELEMENTS 
A. BACKGROUND INFORMATION  
10. The Southern African Customs Union was estab lished in 1910 between the then Union of 
South Africa and the then High Commission Territo ries of Bechuanaland, B asutoland and Swaziland. 
With the advent of independence for the Territories, the 1910 Agreement was updated and 
re-launched on 11 December 1969 with the signi ng of an agreement between the Republic of 
South Africa, Botswana, Lesotho a nd Swaziland.  The updated Agreemen t officially came into force 
on 1 March 1970.  After Namibia's independence from  South Africa in 1990, it joined SACU as its 
fifth member.  The 1969 Agreement was re-negotia ted in 1994 leading to the current SACU 2002 
Agreement which was signed on 21 October 2002 and entered into force on 15 July 2004. 
 
11. On 25 June 2007, the Parties notified SACU to the WTO under Article XXIV:7(a) of the 
GATT 1994 and the Understanding on the Inte rpretation of Article XXIV of GATT 1994 
(WT/REG231/N/1).  The text of the Agreement is availa ble, together with its Annexes, on the Parties' 
official website (URL addresses:  http ://www.sacu.int or http://www.sars.co.za). 
 
12. The Agreement is composed of 9 Parts, comprising 51 Articles and a single Annex as shown 
in Table II.1.   
Table II.1:  Table of Contents of the SACU Agreement 
Part/Annex Title/Description 
Preamble  
Part 1  Definitions and Objectives 
Part 2  Establishment and Legal Status 
Part 3 Institutions 
Part 4  Meetings 
Part 5 Trade Liberalization 
Part 6 Common Revenue Pool 
Part 7 Revenue Sharing 
Part 8 Common Policies  
Part 9 Final Provisions 
ANNEX 1  Revenue Sharing Formula 
Source:  Southern African Customs Union Agreement 
III. NATIONAL TREATMENT AND MARKET ACCESS PROVISIONS OF THE 
AGREEMENT 
A. IMPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
1. General provisions 
13. Article 18 of the Agreement provides that goods grown, produced or manufactured within the 
area of SACU are free of customs duties and qua ntitative restrictions when imported from one 
SACU Party to another, unless provided for elsewhe re in the Agreement.  Goods which are imported 
from outside the Common Customs Area are not subj ect to duties when imported from another SACU 
member (Article 19).   
 WT/REG231/2 
Page 10  
 
  14. Article 21 provides for the Parties' Finance Ministers to meet and agree upon rates of specific 
and ad valorem  excise duties and specific and ad valorem  customs duties to be applied to goods 
grown, produced or manufactured in or im ported into the Common Customs Area (CCA).
3   
 15. Customs duties to be applied to goods importe d into the CCA from third parties are approved 
by the Council of Ministers, upon recommendation fro m the Tariff Board (Article 20).  The Parties 
apply identical rebates, refunds or drawbacks of customs duty on imported goods.  Rebates on 
customs duties may be applied where such rebates ar e for the relief of the distress of persons in cases 
of famine and other national disasters;  under a technical assistance agreement;  in compliance with an obligation under any multilateral agr eement to which such a SACU memb er is party;  or for such 
other purposes as may be agreed upon by the Parties.
4 
 B. R
ULES OF ORIGIN  
16. There are no rules of origin provisions in the Agreement.5 
C. EXPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
17. There is no provision in the Agreement for the elimination of export duties and charges and 
quantitative restrictions.    D. C
OMMON EXTERNAL TARIFF  
18. Article 22 of the Agreement provides for the Partie s to apply similar legislation with regard to 
customs and excise duties.  The current SACU comm on external tariff has been applied since the new 
2002 Agreement came into effect in July 2004.6  However, the SACU countries have applied a 
common external tariff since 1910.  
19. Articles 32-37 and Annex 1 detail the common revenue pool and revenue sharing formula 
which is composed of the customs,  the excise, and the development components.  Each Party's share 
of the customs component is calculated from the CI F value of goods imported from all other Parties 
into the territory of each Party as a percentage of  the total CIF value of intra-SACU imports.  The 
excise component is calculated from the value of a Party's GDP in a specific calendar year as a percentage of total SACU GDP in such year.  Th e development component is initially set at 15% of 
the excise component, but is to be reviewed from time to time and adjusted if agreed to by all Parties.
7   
20. Any dispute arising out of differences relating to trade data is first referred to the Parties' 
customs and excise authorities for resolution.  If th e customs authorities fail to resolve the dispute 
within the elected time, the dispute can be referred to the Council of Ministers.  
                                                      
3 The SACU Tariff Bo ok is available on the following webpage:  
http://www.sars.gov.za/home.asp?pid=2630.   Swaziland charges excise dutie s on alcohol produced in the 
Common Customs Area. 
4 According to Swaziland, rebates of customs duties are also generally granted on products and 
machinery for use in the manufacture, processing, finishing, equipping or packing of products exclusively for 
export. 
5 According to the Parties, rules of origin apply on imported goods:  once a good enters the customs 
union there is free movement of goods among SACU members. 
6 The general incidence calculation of the SACU co mmon external tariff prepared by the Secretariat 
has been circulated in document WT/REG231/1. 
7 According to the Parties, no changes have be en made to the calculation of the development 
component thus far.  For a fuller explanation of the SACU revenue-sharing formula, see Box II.1 of the 2003 
Trade Policy Review of the Southern African Customs Union.    WT/REG231/2 
 Page 11 
 
 
  E. REGULATORY PROVISIONS OF THE AGREEMENT  
1. Standards 
(a) Technical barriers to trade 
21. Article 28 of the Agreement provides for the Par ties to apply product standards and technical 
regulations in accordance with the WTO Agreement on Technical Barriers to Trade  and to strive to 
harmonize product standards and technical regul ations within the Common Customs Area. 
 (b) Sanitary and phytosanitary (SPS) measures  
22. In Article 30 the Parties recognize the impor tance of measures prescr ibing zoo-sanitary and 
phytosanitary requirements aimed at the preventio n of the spread of animal and plant diseases, 
parasites and insects and agree to consult from time to  time to achieve this aim with due regard to the 
need to facilitate the flow of trade in products aff ected by such measures.  SACU members reserve the 
right to apply SPS measures in accord ance with their national SPS laws a nd international standards.   
2. Safeguard mechanisms 
(a) Infant Industry Safeguards 
23. Article 26 provides that Botswana, Lesotho,  Namibia or Swaziland may, as a temporary 
measure, levy additional duties on imports to enable  infant industries to meet competition from other 
producers or manufacturers in the Common Customs Area, provided that such duties are levied equally on goods grown, produced or manufactured in other parts of the Common Customs Area and on like products imported from third parties, irrespective of whether imported directly or from the area of another Party and subject to the applicable payment of the customs duties.
8  Such protection is 
valid for a period of eight years, unless otherwise determined by the Council of Ministers. 
3. Anti-dumping and countervailing measures 
24. There is no provision in the Agreement for the Parties to impose anti-dumping and 
countervailing measures on intra-trade.  The SACU countries may impose anti-dumping and countervailing duties on a custom union wide basis to imports from outside the common customs area 
(Article 11.2). 
25.  Article 41 provides for the Council, on the advi ce of the Commission, to develop policies and 
instruments to address unfair trade practices.  Such  policies and measures are to be annexed to the 
Agreement.
9 
4. Subsidies and state aid 
26. There is no provision in the Agreement on subsidies and state aid. 
 
                                                      
8 Infant industry refers to an industry which has been established in the area of a Party for not more 
than eight years. 
9 According to the Parties, an Annex containing such policies is due to be implemented soon. WT/REG231/2 
Page 12  
 
  5. Other regulations 
(a) Customs Related Procedures 
27. Article 23 of the Agreement provides for the Pa rties to take appropriate measures, including 
arrangements regarding customs cooperation, to en sure that the provisions of the Agreement are 
effectively and harmoniously applie d.  In particular, Members agree to take measures necessary to 
facilitate the simplification and harmoniza tion of trade documentation and procedures.
10 
28. In recognition of the need for a comprehens ive approach in securing and improving trade 
facilitation within SACU, a programme was adopted by the SACU Council in December 2004 for five 
customs initiatives, prioritising the following areas:  introduction of a Singe Administrative Document 
as a common customs declaration form;  establishment of one-stop border arrangements;  introduction 
of joint border controls;  use of electronic data interchange by customs authorities;  and 
implementation of a capacity enhancement programme.11 
(b) Competition Policy 
29. The Parties agree to cooperate with each other with respect to the enforcement of competition 
laws and regulations (Article 40)   Article 41 provides for the Council of Ministers, on the advice of 
the Commission, to develop policies and instruments to address unfair trade practices between 
SACU Parties.12   
IV. GENERAL PROVISIONS OF THE AGREEMENT 
A. EXCEPTIONS AND RESERVATIONS  
30. According to Article 18.2, the Parties may im pose restrictions on imports or exports in 
accordance with national laws and regulations for th e protection of health of humans, animals or 
plants;  the environment;  treasures of artistic, hist oric or archaeological value;  public morals;  
intellectual property rights;  national security ;  and exhaustible natural resources.   
31. Article 25 provides for the Parties to prohibit or restrict the import or export of any goods for 
economic, social, cultural or other reasons as may be agreed upon by the Council of Ministers.   
B. ACCESSION  
32. The SACU Agreement is open to accession by any state upon approval by a unanimous 
decision of the Council of Ministers which determin es the procedures and criteria for the admission of 
new members (Article 6). 
C. INSTITUTIONAL FRAMEWORK  
33. Article 7 of the Agreement provides for the establishment of a number of institutions 
including the Council of Ministers which consists of at least one Minister from each SACU member 
                                                      
10 According to the Parties, a Mutual Administrati on Assistance Annex and a Verification of Suppliers 
Declaration Annex were approved by the SACU Council in 2005 and 2007, respectively.  These Annexes have 
not yet been fully implemented by SACU members.   
11 According to the Parties, this is still work in progress. 
12 According to the Parties, no such policies on a SACU wide basis have been developed.  However, 
competition policy is being discussed in the Commission, but this is still at a very early stage.  WT/REG231/2 
 Page 13 
 
 
  state and is the supreme decision making authority of SACU matters (see Box IV.1).  In accordance 
with Article 17 of the Agreement, decisions of the institutions of the SACU are made by consensus. 
 
Box IV.1:  Institutional Structure of the SACU 
Body/Functions 
Council of Ministers 
• Overall policy direction and functioning including formulation of policy mandates, procedures and 
guidelines for SACU institutions. • Approves the budgets of the Secret ariat, Tariff Board and Tribunal. 
• Approves customs tariffs, rebates, refunds or drawbacks and trade related remedies. 
• Has authority to create additional technical liaison committees and other additional institutions. • Composed of at least one Mini ster from each member state. 
• Meets at least once each quarter of a fi nancial year, unless agreed otherwise. 
• Subordinate bodies are Customs Union Commission and Tariff Board. 
Customs Union Commission 
• Responsible for implementation of the Agreement. 
• Ensures implementation of decisions of the Council. 
• Oversees management of the Common Revenue Pool.  
• Composed of senior officials at level of Permanent S ecretaries, Directors General,  Principal Secretaries or 
other officials of equivalent rank. 
• Meets at least once each quarter of a fina ncial year or at request of a Party. 
• Subordinate body is the Secretariat. 
Secretariat 
• Responsible for day-to-day administration. 
• Coordinates and monitors implementation of all decisions of the Council and Commission. 
• Arranges meetings, disseminates information and keeps minutes of meetings of SACU institutions. • Assists in harmonization of national policies and strategies of Parties. 
• Responsible for keeping a record of all transactions in and out of Common Revenue Pool. 
• Coordinates and assists in negotiation of  trade agreements with third parties. 
• Headed by an Executive Secretary wh o is a citizen of a member state. 
• Other staff as may be determined by the Commission from time to time.  
Tariff Board 
• Makes recommendations to the Council on level and changes of customs, anti-dumping, countervailing and 
safeguard duties on goods imported from outside the CCA, rebates, refunds or duty drawbacks based on directives given by the Council. 
• Consists of experts drawn from the Parties. 
Technical Liaison Committees 
• Four Technical Liaison Committees assist and advise the Commission in its work: 
a) Agricultural Liaison Committee 
b) Customs Technical  Liaison Committee 
c) Trade and Industry Liaison Committee 
d) Transport Liaiso n Committee;  and 
e) Finance Technical Liaison Committee.  
Tribunal 
• Settles disputes regarding interpretation or application of Agreement or at request of the Council. 
• Composed of three members, unless otherwise determined by the Council. 
National Bodies 
• Receive requests for tariff changes and other related SACU issues.   
• Carry out preliminary investigations and recommend any changes necessary to Tariff Board. • Study, investigate and determine the impact of tariffs and propose changes/make recommendations to the 
Commission through th e Secretariat. 
Source : SACU Agreement. 
 WT/REG231/2 
Page 14  
 
  D. D
ISPUTE SETTLEMENT  
34. Article 13 provides that any dispute regardi ng the interpretation or application of the 
Agreement, or any dispute arising thereunder at th e request of the Council, is to be settled by an 
ad hoc Tribunal.  The Tribunal is composed of three members, unless determined otherwise by the 
Council.  Decisions taken by the Tribunal are by ma jority vote and decisions are final and binding.  In 
any matter referred to the Tribunal, the Parties to  the dispute are to choose the members of the 
Tribunal from a pool of names, approved by the Council and kept by the Secretariat. 
35. Article 15 provides for general consultations in the event of any difference or dispute which 
does not directly affect the interests of all SACU memb ers.  The results of such consultations are to be 
reported to the Commission before its next meeting. 
E. RELATIONSHIP WITH OTHER AGREEMENTS CONCLUDED BY THE PARTIES  
36. Article 31 states that the Parties may maintain preferential trade and other related 
arrangements existing at the time of entry into for ce of the SACU Agreement.  The Parties agree to 
establish a common negotiating mechanism for the pur pose of undertaking negotiations with third 
Parties.  No Party may negotiate or enter into new preferential trade agreements with third parties or 
amend existing agreements without the consent of other Parties.   
 37. When goods imported by a Party from outside the Common Customs Area under a 
preferential agreement are exported to another Party,  the normal import duty applicable to such goods 
when imported into the rest of the Common Custom s Area is charged.  Any difference between the 
normal duty and the duty originally charged on such  goods is paid into the Common Revenue Pool. 
 
38. Article 51 of the Agreement provides for th e termination of the 1969 SACU customs union 
agreement upon entry into force of this Agreemen t.  A commission, technical liaison committee or 
any other institution, obligation or arrangement of SACU which exists immediately before the entry 
into force of the Agreement can continue to subsist until the Council determines otherwise. 
 
39. Table IV.1 lists the regional trade agreements  (RTAs), (notified and non-notified to the 
GATT/WTO and in force), as of June 2008 to which SACU countries are parties.  All SACU countries are members of the Southern African Development Community (SADC) while Botswana, Namibia and South Africa also maintain preferential partnerships with varying subsets of the SADC 
membership.  Swaziland is a member of the Co mmon Market for Eastern and Southern Africa 
(COMESA).  In addition, South Africa has a free tr ade agreement with the European Communities;  
by virtue of the SACU, the other four SACU count ries thus de facto apply preferential tariffs to 
EC imports.   WT/REG231/2 
 Page 15 
 
 
  Table IV.1  
SACU members:  Participation in RTAs (notif ied and non-notified in force), February 2008 
GATT/WTO Notification Partner/ 
Agreement Date of entry  
into force Type of 
agreement Year WTO Provision 
BOTSWANA  
SADC 01.09.00 Goods 2004 GATT Art. XXIV 
Malawi 1956* Goods Not Notified 
Zimbabwe 1956, amended in 
1988* Goods Not Notified 
LESOTHO  
SADC 01.09.00 Goods 2004 GATT Art. XXIV 
NAMIBIA  
SADC 01.09.00 Goods 2004 GATT Art. XXIV 
Zimbabwe  Goods Not Notified 
SOUTH AFRICA  
SADC 01.09.00 Goods 2004 GATT Art. XXIV 
EC 01.01.00 Goods 2000 GATT Art. XXIV 
Mozambique 07.07. 89 Goods Not Notified 
Zimbabwe 01.12. 64 Goods Not Notified 
Malawi 20.06. 90 Goods Not Notified 
SWAZILAND  
COMESA 08.12.94 Goods 1995 Enabling Clause 
SADC 01.09.00 Goods 2004 GATT Art. XXIV 
*  Dates of signature. 
Source: WTO Secretariat. 
 
COMESA: Common Market for Eastern and Southern Africa; As  per WTO Notification WT/COM TD/N/3 dated 29 June 1995, 
COMESA Members are: Angola, Burundi, Comoro s, Eritrea, Ethiopia, Kenya, Lesotho, Ma lawi, Mauritius, Rwanda , Sudan, Swaziland, 
Tanzania, Uganda, Zambia, Zimbabwe.  Current  membership is as follows: Burundi, Comoros, D.R. Congo, Djibouti, Egypt, Eritrea, 
Ethiopia, Kenya, Libya, Madagascar, Mala wi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, Zimbabwe. 
 
SADC:  Southern African Development Community; As per WTO Notification WT/REG176/N/1/ Rev.1 dated 27 August 2004, 
SADC Members are Angola, Botswana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia, 
Zimbabwe.   Current membership is as follows: Angola, Botswana , Lesotho, Madagascar, Malawi, Ma uritius, Mozambique, Namibia, So uth 
Africa, Swaziland, Tanzania, Zambia, Zimbabwe .  The Democratic Republic of Congo and th e Seychelles are members of SADC, but ar e 
not parties to the Trade Protocol.. WT/REG231/2 
Page 16  
 
  ANNEX 
 
Indicators of SACU's tariffs as applied to third parties
 
 
1. A breakdown of SACU's MFN rates (based on av ailable data) is shown in Table A.1.  
SACU 's MFN tariff is variable in structure.  It s (unweighted) average MFN rate (2003) is 6.4% on all 
goods, with a lower average tariff applied to non-agri cultural goods than to agricultural products.  In 
2005, its (unweighted) average MFN rate was 8.0%.  However, given the high number of non ad valorem  lines in the 2003 tariff, these figures are not comparable. 
Table A.1 
SACU:  Indicators of MFN tariff rates  
ALL PRODUCTS Agricultural products a  Non-agricultural products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin 
of goods Year 
Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) 
MFN 2002 6.6 15.7 57.8 9.4 17.9 47.8 6.2 15.2 59.3 
 2003 6.4 15.3 58.2 7.9 16.0 50.9 6.2 15.2 59.3 
 2005 8.0 17.5 54.3 7.8 15.9 50.8 8.0 17.7 54.8 
 2007  7.9 17.9 55.8 8.5 16.4 47.9 7.8 17.9 56.8 
 
a  WTO Definition. 
 
MFN (2002) based on a total of 5,933 ad valorem  lines (1,978 additional lines in the tari ff schedule are subject to specific duties) 
MFN (2003) based on a total of 5,899 ad valorem  lines (2,010 additional lines in the tari ff schedule are subject to specific duties) 
MFN (2005) based on a total of 6,465 ad valorem  lines (209 additional lines in the tariff schedule are subject to specific duties) 
MFN (2007) based on a total of 6,449 ad valorem  lines (203 additional lines in the tariff schedule are subject to specific duties)* 
 
Source:  WTO Secretariat estim ates based on IDB data (2002, 2003, 2005) and data provided by South Africa (2007) . 
 
__________