border posts. However, up to 17 agencies are said to operate at the Beach Ngobila in Kinshasa. The DRC’s main employer organization, FEC, has repeatedly brought the issue of paying fees without corresponding service to the attention of the Ministry of External Trade. Fear of foregoing income opportunities and relevance has led to strong resistance by relevant agencies to withdraw from border sites in line with the Presidential decree.

# **<mark>Box 3: DRC Trade Policy</mark>**

**<mark>The DRC’s official schedule of import duties consists of four tariff bands of 0, 5, 10 and 20 percent with a simple average of 12.3 percent.</mark>** <mark>Tariffs for raw materials and intermediate products are lower than those for consumer goods, while capital goods are taxed with lower rates of 7.4 percent on average according to the statutory rates. Changes to the tariff schedule are made upon proposal by the Tariff Committee to the Ministry of Finance.</mark>

**<mark>The simplicity and moderation of the statutory tariff code is offset by a range of additional border levies, customs delays and bureaucratic vagaries.</mark>** <mark>In fact, customs duties represent only a relatively small share of the administrative and economic costs of importing to or exporting from the DRC. Excise duties are levied on numerous products at the ports, and imports have to pay a sales (turnover) tax of between 3 and 13 percent. More importantly, various agencies present at border posts collect a multitude of levies cloaked as “service fees” even though corresponding services are not necessarily rendered (for more detail see World Bank, 2010c).</mark>

**<mark>DRC is a member of three regional integration organizations but shows only limited commitment and/or capacity for implementing regional integration initiatives.</mark>** <mark>DRC is a member of, the Economic Community of Central African States (ECCAS), the Common Market for Eastern and Southern Africa (COMESA), and the Southern African Development Community (SADC). All neighboring countries in the West (Central African Republic, the Republic of Congo, and Angola) are also members of ECCAS. They too are members of multiple other regional integration organizations. DRC has repeatedly asked SADC for moratoria on FTA implementation. Similarly, DRC has asked for moratoria to implement any COMESA commitments.</mark>

**<mark>In principle, the ECCAS free trade area should facilitate cross-border trade in the Lower Congo region, but effective economic implementation remains limited here as well.</mark>** <mark>ECCAS is one of the pillars of regional integration identified by the African Union and was established in 1993 between the members of CEMAC and the Economic Community of the Great Lakes States (CEPGL), as well as Sao Tome and Principe. Angola joined in 1999. However, the envisaged removal or tariffs on intra-regional trade are yet to be implemented, with ratification by the DRC still pending.</mark>

**<mark>The establishment of full customs unions looking rather unlikely in the near term, the DRC could currently start by implementing preferential free trade for locally produced goods with regard to all regional integration agreements.</mark>** <mark>Coordination among the three DRC ministries (Ministry of External Trade, Ministry of Finance, and Ministry for Regional Cooperation) involved in such negotiations is weak. Currently, the Ministry of Finance through DGDA seems to be the most active branch of government in this matter. Partially encouraged or motivated by the ongoing negotiations among the former ACP states and the EU on asymmetric free trade agreements, some consolidation in these regional arrangements is currently on the agenda. DRC is negotiating an agreement with most but not all ECCAS members. However, there seems to be considerable political private-sector willingness in DRC to focus regional integration efforts on SADC. While SADC and COMESA (and the EAC) are moving closer together through the Tripartite FTA, the DRC will ultimately have to decide whether it will join a Tripartite or an ECCAS customs union.</mark>

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