The signing of the EAC Customs Union Protocol was scheduled for 30 November 2003. However, due to unforeseen circumstances, this was postponed and re-scheduled for 16 February 2004. At the preparatory meeting for the November 30th 2003 Summit, the mood was that all outstanding matters were to be cleared in time for the signing ceremony. However, postponement of the meeting made officials to relax and push matters for future finalization.

There are two issues in the protocol which are subject of on going consultations by the Heads of State and the Council, respectively, namely:

1. Whether there should be a progressive reduction of the maximum rate of the Common External Tariff from 25% to 20% within 5 years, following coming into force of the Customs Union Protocol; and
2. Whether excise duties and other forms of indirect taxation applicable to trade between the Partner States should be harmonized.

Other on going related work is in respect of the following:

1. The EAC Common Customs Law (a working group drafting the EAC common customs law was scheduled to finalize its work on 31 January 2004)
2. Establishment of the EAC Common External Tariff
   • Unresolved tariff lines within the EAC-CET (an expert team is undertaking work in this respect. However, the unresolved tariff lines are less than 2%)
   • Proposed EAC-CET tariff splits;
   • Criteria for selection of sensitive products on the basis of impact on public revenue;
   • List of unresolved sensitive products;
   • Additional measures for application to the sensitive products already adopted by the Council.

With agreement reached on the two articles (12(2) and 15(4)), the protocol would be ready for signature. Other outstanding work highlighted in paragraph 14 above relates mainly to implementation and, therefore, cannot impede the signing of the protocol which has been scheduled for 2nd March 2004.

The Council at its 6th meeting in November 2003 adopted an Indicative Programme for implementation of the Customs Union Protocol. Within that programme, implementation of the Customs Union Protocol is due to commence on 1st July 2004. In the intervening period, Partner states are expected to undertake protocol ratification. Other important activities lined up include enactment of the EAC Common Customs Law.