Protocol on the Establishment of the East African Customs Union
Done at: Arusha
Date enacted: 2004-03-08
In force: 2005-01-01
Content
- Part A - Interpretation
- Part B - Establishment of the East African Community Customs Union
- Part C - Customs administration
- Part D - Trade liberalisation
- Part E - Trade related aspects
- Part F - Export promotion schemes
- Part G - Special economic zones
- Part H - Exemption regimes
- Part I - General provisions
Pursuant to the provisions of Article 75 of the Treaty for the Establishment of the East African Community, the provisions for the establishment of the East African Customs Union are hereby set forth:
Preamble
Whereas the Republic of Uganda, the Republic of Kenya and the United Republic of Tanzania (hereinafter referred to as "the Partner States") signed the Treaty for the Establishment of the East African Community (hereinafter referred to as "the Treaty") on the 30th day of November, 1999;
And whereas:
a. |
under the provisions of Articles 2 and 5 of the Treaty, the Partner States undertake to, inter alia, establish among themselves a customs union, as a transitional stage to, and an integral part of the Community; and |
b. |
under the provisions of paragraph 2 of Article 75 of the Treaty, the Partner States have determined that the establishment of a customs union shall be progressive in the course of a transitional period; |
And whereas by the provisions of paragraph 7 of Article 75 of the Treaty, the Partner States agreed to conclude the Protocol on the Establishment of a Customs Union within a period of four years;
And whereas by the provisions of paragraph 1 of Article 151 of the Treaty, the Partner States undertook to conclude such Protocols as may be necessary in each area of co-operation, which shall spell out the objectives and scope of, and institutional mechanisms for co-operation and integration;
And whereas the Partner States, while aware that they have reached different stages of development with each Partner State having a comparative advantage on trade in some commodities, are resolved and determined to reduce existing imbalances and to foster and encourage the accelerated and sustained development of the Community;
And whereas the Partner States are desirous to deepen and strengthen trade among themselves and are resolved to abolish tariff and non-tariff barriers to create the most favourable environment for the development of regional trade;
Recognizing that a customs union would enhance economic growth and the development of the Community;
Conscious of their obligations, as contracting parties to the Marrakesh Agreement Establishing the World Trade Organisation, 1994 (the WTO Agreement), and to the Convention Establishing a Customs Co-operation Council, 1950 to contribute, in the common interest, to the harmonious development of world trade;
Conscious of their other individual obligations and commitments under other regional economic partnerships;
Resolving to act in concert for the establishment of a Customs Union;
Agree as follows:
Part A - Interpretation
Article 1
Interpretation
1. |
In this Protocol, except where the context otherwise requires:
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2. |
In this Protocol, a reference to a law or protocol shall be construed as reference to the law or protocol as from time to time amended. |
Part B - Establishment of the East African Community Customs Union
Article 2
Establishment of the East African Community Customs Union
1. |
In order to promote the objectives of the Community provided under Article 5 of the Treaty and in accordance with the provisions of this Protocol, the Partner States hereby establish a customs union as an integral part of the Community. |
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2. |
The Customs Union established under Paragraph 1 of this Article, shall be called the East African Community Customs Union (hereinafter referred to as "the Customs Union"). |
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3. |
The Customs Union shall be managed in accordance with the customs law of the Community. |
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4. |
Within the Customs Union:
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5. |
In accordance with the provisions of Article 75 of the Treaty, this Protocol, inter alia, provides for the following:
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Article 3
Objectives of the Customs Union
The objectives of the Customs Union shall be to:
a. |
further liberalise intra-regional trade in goods on the basis of mutually beneficial trade arrangements among the Partner States; |
b. |
promote efficiency in production within the Community; |
c. |
enhance domestic, cross border and foreign investment in the Community; and |
d. |
promote economic development and diversification in industrialisation in the Community. |
Article 4
Scope of co-operation in the Customs Union
1. |
The provisions of this Part of the Protocol shall apply to any activity undertaken in co-operation by the Partner States in the field of customs management and trade and shall include:
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2. |
For purposes of sub-paragraph 1(a) of this Article, the Partner States shall co-operate in:
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Part C - Customs administration
Article 5
Communication of customs and trade information
The Partner States shall exchange information on matters relating to customs and trade and in particular:
a. |
the prevention, investigation and suppression of customs offences; and |
b. |
the operation of a harmonised information system to facilitate the sharing of customs and trade information. |
Article 6
Trade facilitation
The Partner States shall initiate trade facilitation by:
a. |
reducing the number and volume of documentation required in respect of trade among the Partner States; |
b. |
adopting common standards of trade documentation and procedures within the Community where international requirements do not suit the conditions prevailing among the Partner States; |
c. |
ensuring adequate co-ordination and facilitation of trade and transport activities within the Community; |
d. |
regularly reviewing the procedures adopted in international trade and transport facilitation with a view to simplifying and adopting them for use by the Partner States; |
e. |
collecting and disseminating information on trade and trade documentation; |
f. |
promoting the development and adoption of common solutions to problems in trade facilitation among the Partner States; and |
g. |
establishing joint training programmes on trade. |
Article 7
Simplification, standardization and harmonization of trade information and documentation
1. |
The Partner States agree to simplify their trade documentation and procedures in order to facilitate trade in goods within the Community. |
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2. |
Subject to the provisions of Article 6 of this Protocol, the Partner States agree to design and standardise their trade information and documentation in accordance with internationally accepted standards, taking into account the use of electronic data processing systems in order to ensure the efficient and effective application of the provisions of this Protocol. |
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3. |
For purposes of this Article:
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Article 8
Commodity Description and Coding System
1. |
The Partner States agree to harmonise their customs nomenclature and standardise their foreign trade statistics to ensure comparability and reliability of the relevant information. |
2. |
The Partner States hereby adopt the Harmonised Commodity Description and Coding System specified in Annex I to this Protocol. |
Article 9
Prevention, investigation and suppression of customs offences
1. |
The Partner States agree to co-operate in the prevention, investigation and suppression of customs offences within their territories. |
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2. |
For purposes of paragraph 1 of this Article, the Partner States shall:
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3. |
The implementation of this Part of the Protocol shall be in accordance with the provisions of the customs law of the Community. |
Part D - Trade liberalisation
Article 10
Internal tariff
1. |
Save as is provided in Article 11 of this Protocol, the Partner States shall, upon the coming into force of this Protocol, eliminate all internal tariffs and other charges of equivalent effect on trade among them, in accordance with the provisions of Article 14 of this Protocol. |
2. |
The Council may, at any time, decide that any tariff rate shall be reduced more rapidly or eliminated earlier than is provided for in accordance with paragraph 1 of this Article. |
Article 11
Transitional provisions on the elimination of internal tariffs
1. |
The establishment of the Customs Union shall be progressive in the course of a transitional period of five years from the coming into force of this Protocol. |
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2. |
The Partner States agree that upon the coming into force of this Protocol and for the purpose of the transition into a Customs Union:
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3. |
Goods from the Republic of Kenya into the Republic of Uganda and the United Republic of Tanzania shall be categorised as follows:
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4. |
Category B goods from the Republic of Kenya into the Republic of Uganda shall have a phase out tariff reduction period of five years for all products as follows:
as specified in Annex II to this Protocol. |
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5. |
Category B goods from the Republic of Kenya into the United Republic of Tanzania shall have a phase out tariff reduction period as specified in Annex II to this Protocol. |
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6. |
Internal tariffs specified under the provisions of this Article shall not exceed the Common External Tariff with regard to any of the specified products. |
Article 12
Common external tariff
1. |
The Partner States hereby establish a three band common external tariff with a minimum rate of 0 per centum, a middle rate of 10 per centum and a maximum rate of 25 per centum in respect of all products imported into the Community. |
2. |
The Partner States hereby undertake to review the maximum rate of the common external tariff after a period of five years from the coming into force of the Customs Union. |
3. | |
3. |
The Council may review the common external tariff structure and approve measures designed to remedy any adverse effects which any of the Partner States may experience by reason of the implementation of this part of the Protocol or, in exceptional circumstances, to safeguard Community interests. |
4. |
For purposes of this Article, the Partner States shall use the Harmonised Customs Commodity Description and Coding System referred to in Article 8 of this Protocol. |
Article 13
Non-tariff barriers
1. |
Except as may be provided for or permitted by this Protocol, each of the Partner States agrees to remove, with immediate effect, all the existing non-tariff barriers to the importation into their respective territories of goods originating in the other Partner States and, thereafter, not to impose any new non-tariff barriers. |
2. |
The Partner States shall formulate a mechanism for identifying and monitoring the removal of non-tariff barriers. |
Part E - Trade related aspects
Article 14
Rules of origin
1. |
For purposes of this Protocol, goods shall be accepted as eligible for Community tariff treatment if they originate in the Partner States. |
2. |
Goods shall be considered to originate in the Partner States if they meet the criteria set out in the Rules of Origin adopted under this Article. |
3. |
The Partner States hereby adopt the East African Community Rules of Origin specified in Annex III to this Protocol. |
Article 15
National treatment
1. |
The Partner States shall not:
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2. |
No Partner State shall impose, directly or indirectly, on the products of other Partner States any internal taxation of any kind in excess of that imposed, directly or indirectly, on similar domestic products. |
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3. |
Where products are exported to the territory of any Partner State, any repayment of internal taxation shall not exceed the internal taxation imposed on them, whether directly or indirectly. |
Article 16
Anti-dumping measures
1. |
The Partner States recognise that dumping is prohibited if it causes or threatens material injury to an established industry in any of the Partner States, materially retards the establishment of a domestic industry therein or frustrates the benefits expected from the removal or absence of duties and quantitative restrictions of trade between the Partner States. |
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2. |
The Secretariat shall notify the World Trade Organisation on the anti-dumping measures taken by the Partner States. |
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3. |
The implementation of this Part of the Protocol shall be in accordance with the East African Community Customs Union (Anti Dumping Measures) Regulations, specified in Annex IV to this Protocol. |
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4. |
For purposes of this Article, the term "domestic industry" shall be interpreted as referring to the domestic producers as a whole of the like products or to those of them whose collective output of the products constitutes a major proportion of the total domestic production of those products, except that:
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Article 17
Subsidies
1. |
If a Partner State grants or maintains any subsidy, including any form of income or price support which operates directly or indirectly to distort competition by favouring certain undertakings or the production of certain goods in the Partner State, it shall notify the other Partner States in writing. |
2. |
The notification in paragraph 1 of this Article shall contain the extent and nature of the subsidisation, the estimated effect of the subsidisation, the quantity of the affected product or products exported to the Partner States and the circumstances making the subsidisation necessary. |
Article 18
Countervailing measures
1. |
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2. |
The implementation of Articles 17 and 18 of this Protocol shall be in accordance with the East African Community Customs Union (Subsidies and Countervailing Measures) Regulations, specified in Annex V to this Protocol. |
Article 19
Safeguard measures
1. |
The Partner States agree to apply safeguard measures to situations where there is a sudden surge of a product imported into a Partner State, under conditions which cause or threaten to cause serious injury to domestic producers in the territory of like or directly competing products within the territory. |
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2. |
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3. |
The implementation of this Article shall be in accordance with the East African Community Customs Union (Safeguard Measures) Regulations, specified in Annex VI to this Protocol. |
Article 20
Co-operation in the investigation of dumping, subsidies and application of safeguard measures
1. |
The Partner States shall co-operate in the detection and investigation of dumping, subsidies and sudden surge in imports and in the imposition of agreed measures to curb such practices. |
2. |
Where there is evidence of any sudden surge in imports, or dumping, or export of subsidised goods by a foreign country into any of the Partner States that threatens or distorts competition within the Community, the affected Partner State may request the Partner State in whose territory there is a sudden surge in imports, or goods are dumped or subsidised, to impose anti-dumping duties or countervailing duties or safeguard measures on such goods. |
3. |
If the Partner State to which the request is made does not act within thirty days of notification of the request, the requesting Partner State shall report to the appropriate customs union authority which shall take the necessary action. |
Article 21
Competition
1. |
The Partner States shall prohibit any practice that adversely affects free trade including any agreement, undertaking or concerted practice which has as its objective or effect the prevention, restriction or distortion of competition within the Community. |
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2. |
The provision of paragraph 1 of this Article shall not apply in the case of:
which improves production or distribution of goods, promotes technical or economic development or which has the effect of promoting consumer welfare and does not impose restrictions inconsistent with the attainment of the objectives of the Customs Union or has the effect of eliminating competition. |
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3. |
The implementation of this Article shall be in accordance with the East African Community competition policy and law. |
Article 22
Restrictions and prohibitions to trade
1. |
A Partner State may, after giving notice to the Secretary General of her intention to do so, introduce or continue to execute restrictions or prohibitions affecting:
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2. |
A Partner State shall not exercise the right to introduce or continue to execute the restrictions or prohibitions conferred by this Article in order to restrict the free movement of goods within the Community. |
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3. |
Notwithstanding the provisions of Article 10(1) of this Protocol, the Partner States agree to specify in the customs law of the Community goods to be restricted and prohibited from trade. |
Article 23
Re-exportation of goods
1. |
The Partner States shall ensure that re-exports shall be exempt from payment of import or export duties in accordance with the customs law of the Community. |
2. |
Paragraph (1) of this Article shall not preclude the levying of normal administrative and service charges applicable to the import or export of similar goods in accordance with the national laws and regulations of the Partner States. |
Article 24
East African Community Committee on Trade Remedies
1. |
For purposes of this Protocol, there is hereby established an East African Community Committee on Trade Remedies (hereinafter referred to as "the Committee") to handle any matters pertaining to:
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2. |
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3. |
Each Partner State shall notify the Committee, of the investigating authority within its territory designated to initiate and conduct investigations on behalf of the Committee. |
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4. |
The functions of the Committee shall be to:
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5. |
Except as otherwise provided under the East African Community Customs Union (Dispute Settlement Mechanism) Regulations, or under any other regulation under this Protocol, the decisions of the Committee with respect to the settlement of disputes shall be final. |
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6. |
The Committee shall determine its own procedure. |
Part F - Export promotion schemes
Article 25
Principles of export promotion schemes
1. |
The Partner States agree to support export promotion schemes in the Community for the purposes of accelerating development, promoting and facilitating export oriented investments, producing export competitive goods, developing an enabling environment for export promotion schemes and attracting foreign direct investment. |
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2. |
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3. |
The sale of goods in the customs territory shall be subject to authorisation by a competent authority and such sale shall be limited to 20 per centum of the annual production of a company. |
Article 26
Duty drawback schemes
1. |
The Partner States agree that, upon exportation to a foreign country, drawback of import duties may be allowed in such amounts and on such conditions as may be prescribed by the competent authority. |
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2. |
Duty drawback shall be paid:
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3. |
The implementation of this Article shall be in accordance with the duty drawback schemes specified in the customs law of the Community. |
Article 27
Duty and value added tax remission schemes
1. |
The Partner States agree to support export promotion by facilitating duty and value added tax remission schemes. |
2. |
For purposes of this Article the Partner States may establish duty and value added tax remission schemes. |
3. |
The implementation of this Article shall be in accordance with the duty and value added tax remission schemes specified in the customs law of the Community. |
Article 28
Manufacturing under bond schemes
1. |
The Partner States agree to support export promotion by facilitating manufacturing under bond schemes within their respective territories. |
2. |
The procedure for manufacturing under bond shall allow imported goods to be used in a customs territory for processing or manufacture. |
3. |
Duty and taxes shall be payable on compensating products at the rate of import duty appropriate to them. |
4. |
The implementation of this Article shall be in accordance with the manufacturing under bond schemes specified in the customs law of the Community. |
Article 29
Export processing zones
1. |
The Partner States agree to support the establishment of export processing zones. |
2. |
Entry into an export processing zone shall allow total relief from payment of duty on imported goods used directly in the production of goods for export by a person authorised to carry out that activity in the zone. |
3. |
The implementation of the provisions of this Article shall be in accordance with the East African Community Customs Union (Export Processing Zones) Regulations, specified in Annex VII to this Protocol and the customs law of the Community. |
Article 30
Other export promotion schemes
The Council may, from time to time, approve the establishment of such other export promotion schemes, as may be deemed necessary.
Part G - Special economic zones
Article 31
Freeports
1. |
The Partner States may provide for the establishment of freeports for the purpose of facilitating and promoting international trade and accelerating development within the Customs Union. |
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2. |
The functions of the freeports shall include the following:
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3. |
Goods entering into a freeport shall be granted total relief from payment of duty and any other import levies except where the goods are removed from the freeport for home use. |
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4. |
For purposes of this Article, the Partner States may establish an authority to manage the freeports. |
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5. |
The implementation of this Article shall be in accordance with the East African Community Customs Union (Freeport Operations) Regulations, specified in Annex VIII to this Protocol. |
Article 32
Other arrangements
1. |
The Council may, from time to time, approve the establishment of other special economic arrangements for purposes of the development of the economies of the Partner States. |
2. |
Freeport zones may be established at seaports, riverports, airports and places with similar geographic or economic advantage. |
Part H - Exemption regimes
Article 33
Exemption regimes
1. |
The Partner States agree to harmonise their exemption regimes in respect of goods that are excluded from payment of import duties. |
2. |
The Partner States hereby agree to adopt a harmonised list on exemption regimes which shall be specified in the customs law of the Community. |
Part I - General provisions
Article 34
Administration of the Customs Union
The administration of the Customs Union, including legal, administrative and institutional matters, shall be governed by the customs law of the Community.
Article 35
Measures to address imbalances arising from the establishment of the Customs Union
For purposes of this Protocol, the Council shall approve measures to address imbalances that may arise from the establishment of the Customs Union.
Article 36
Safeguard clause
1. |
In the event of serious injury or threat of serious injury occurring to the economy of a Partner State following the application of the provisions of this Protocol, the Partner State concerned shall, after informing the Council through the Secretary General and the other Partner States, take necessary safeguard measures. |
2. |
The Council shall examine the method and effect of the application of existing safeguard measures and take appropriate decisions. |
Article 37
Trade arrangements with countries and organisations outside the Customs Union
1. |
The Partner States shall honour their commitments in respect of other multilateral and international organisations to which they belong. |
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2. |
The Community shall co-ordinate its trade relations with foreign countries so as to facilitate the implementation of a common policy in the field of external trade. |
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Article 38
Inter-linkages with other areas of co-operation
1. |
The application of this Protocol shall take cognisance of the provisions of the Treaty on other areas of co-operation including co-operation in:
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2. |
The Partner States shall conclude protocols on the areas of co-operation specified in paragraph 1 of this Article, which shall spell out the objectives, scope of co-operation and institutional mechanisms for co-operation. |
Article 39
Customs law of the Community
1. |
The customs law of the Community shall consist of:
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2. |
The customs law of the Community shall apply uniformly in the Customs Union except as otherwise provided for in this Protocol. |
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3. |
The Partner States shall conclude such annexes to this Protocol as shall be deemed necessary. A |
Article 40
Annexes to the Protocol
Without prejudice to the provisions of Articles 39(3) and 43 of this Protocol, the Partner States agree to conclude, before the Protocol comes into force, the annexes specified in this Protocol and such annexes shall form an integral part of this Protocol.
Article 41
Dispute settlement
1. |
Each Partner State affirms her adherence to the principles for the administration and management of disputes and shall in particular:
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2. |
The implementation of this Article shall be in accordance with the East African Community Customs Union (Dispute Settlement Mechanism) Regulations specified in Annex IX to this Protocol. |
Article 42
Amendment of the Protocol
1. |
This Protocol may be amended by the Partner States in accordance with the provisions of Article 150 of the Treaty. |
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2. |
Subject to the provisions of paragraph 1 of this Article, the Council may:
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Article 43
Entry into force
This Protocol shall enter into force upon ratification and deposit of instruments of ratification with the Secretary General by all the Partner States.
Article 44
Depository and registration
1. |
This Protocol and all instruments of ratification shall be deposited with the Secretary General who shall transmit certified true copies of the Protocol and instruments of ratification to all the Partner States. |
2. |
The Secretary General shall register this Protocol with the African Union, the United Nations, the World Trade Organisation, the World Customs Organisation and such other organisations as the Council may determine. |
Done at Arusha, Tanzania, on the 2nd day of March in the year Two Thousand and Four.