Customs transit bonds in East Africa

What a transit bond does

A bond lets a government recover duties and taxes from the guarantor if goods in transit are diverted for home use in a transit country ³. The RCTG Carnet is a contract between a surety, a principal and a customs administration. The surety guarantees the duties and taxes if the principal breaks the customs law of the transit country ¹.

Kenya Revenue Authority says a bond is required for goods declared for warehousing, temporary importation, transit or duty remission. No bond is needed where taxes have been paid at the destination ⁴.

National bonds and the regional bond

COMESA says national bonds have to be lodged in every transit country, which ties up collateral and causes delays at borders ¹. With the RCTG, collateral is attached once for the whole journey and clearing agent fees are paid in one country ¹. The guarantee equals the highest duty and tax along the corridor ¹.

Uganda Revenue Authority says the RCTG secures goods in transit within COMESA and the EAC, and that clearing agents must execute a regional bond guarantee ⁵.

What the RCTG costs

COMESA says the RCTG Council fixes the premium rate and gives the charged rate as 0.3% to 1.5% ¹. The same presentation says the rate was cut gradually over 10 years from 0.75% to 0.3%, and does not explain how the two statements fit together ¹.

COMESA reports a direct saving on premiums and clearing agent fees of about US$500 per container, and about US$20 per customs declaration ^1,2. Afreximbank joined the scheme in 2021 ².

Who is in the scheme

• COMESA lists 12 signatories: Burundi, Djibouti, DR Congo, Ethiopia, Madagascar, Malawi, Kenya, Rwanda, Sudan, Tanzania, Uganda and Zimbabwe ³.
• A June 2023 COMESA presentation gives Burundi, Kenya, Rwanda, Tanzania, Uganda and Afreximbank as fully operational in 2022 ¹.
• In December 2022 COMESA said Ethiopia, Djibouti and DR Congo were ready to start, Malawi and Tanzania had agreed to link their customs systems, and rollout on the North-South Corridor was delayed by concerns of Zambian clearing and forwarding agents ².

The EACBond

The EAC launched EACBond in Kampala on 4 August 2025. It is a regional customs guarantee that covers a trader's whole cargo journey across partner states, replacing separate bonds or cash deposits at each border ⁶. The pilot covers Uganda, Kenya and Rwanda ⁶. The EAC says it will release nearly US$2 billion of capital tied up in deposits ⁶.

The Insurance Regulatory Authority of Uganda says regional insurance regulators will carry out actuarial studies during the pilot to refine the bond's structure ⁷. The EACBond platform says applicants register online, pay an application fee and get a bond value based mainly on cargo value. It does not publish fee amounts ⁸.

When a bond is called

The EAC Customs Management Act, 2004 came into force on 1 January 2005 ⁹. In a judgment of 3 March 2025, the High Court of Kenya said section 108(1) of the Act treats a surety as the principal debtor. Section 109 lets the Commissioner demand payment of the security within 14 days and enforce it as unpaid duty ¹⁰.

In that case KRA called KSh 49,757,510.87 in general transit bonds over fuel declared for Uganda, DR Congo and South Sudan that it said had not crossed into Uganda in 2016. The court dismissed Kenfreight (E.A.) Limited's applications and said the tax dispute belonged before the Tax Appeals Tribunal ¹⁰.