Uganda WT/TPR/S/4
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IV. TRADE POLICIES BYMEASURE
(1) Overview
1. Since themid-1980s, Uganda hastaken avariety ofinitiatives aimed atredressing imbalances
intheallocation system, encouraging sectoral diversification, andrestoring thecredibility offiscal
andmonetary policies. Trade andexchange rateliberalization hasplayed avitalrôleinthiscontext,
complemented bytheabolition ofmarketing monopolies, thereduction ofadministrative redtapeand
thegradual introduction ofamore rational taxandtariff structure. Abroader taxbaseisexpected
tostabilize theGovernment 'sfiscal balance and,thus, facilitate further tariff liberalization.
2. Withquantitative andotherimport restrictions being removed, theGovernment hascome under
pressure tousetariffs assubstitutes. However, while improving transparency andraising fiscal revenue,
newtariffs riskperpetuating remaining structural distortions. Consolidation ofongoing liberalization
efforts through external policy commitments, atbothmultilateral andregional levels, mayhelpcontain
suchrisksandpromote Uganda 'sattraction forinvestment andtrade.
(2) Measures Directly Affecting Imports
(i) Registration anddocumentation
3. Alltraders inUganda, whether engaged inlocalorinternational trade, mustberegistered with
theMinistry ofJustice andlicensed bythecompetent municipal authorities.1Applicants forregistration
andlicensingmustproduceaTaxpayerIdentificationNumber(TIN)fromtheUgandaRevenueAuthority
(URA); theTINhasrecently beenintroduced toimprove taxadministration.2
(ii) Customs procedures
4. Uganda 'scustoms procedures arelaiddown intheCustoms andExcise Management Actof
1970. TheActiscurrently being revised tocover excise andsalestaxation. ATechnical Committee
hascompleted itswork, andconsolidated textsaretobepublished shortly.3
(a) Customs clearance
5. Customs clearance issubject tothefiling ofacustoms declaration. Itmustbesupported by
relevant additional documents, suchasanimport certificate, commercial invoice, certificate oforigin,
health certificate (forliveanimals), sanitary certificate andplantimport permit (forfresh fruit, plants
andseeds) andcertificate ofdisinfection (forusedclothing, bedding andsimilar items intended for
sale).4
1Only registered andlicensed traders canobtain animport certificate from theMinistry ofTrade andIndustry
(Section (2)(vi)).
2Inmid-1994, 40,000 businesses and200,000 individuals were inpossession ofaTIN; MFEP (1994a).
3MFEP (1994a).
4Dun&Bradstreet (1994); BNA (1993).WT/TPR/S/4
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6. According totheauthorities, customs clearance generally takesabout 48to72hours; atinland
ports, likeMalaba andBusia, itislessthan12hours. Despite recent improvements, delay and
inefficiency incustoms treatment remain ofconcern tobusinesses.5They areattributed mainly to
insufficient staffing andtoinfrastructure bottlenecks. TheGovernment iscurrently preparing the
computerization ofprocedures, withtrialrunsbeing undertaken atthemainstations: Kampala, Entebbe
Airport, Busia andMalaba.
(b) Customs valuation
7. Uganda 'scustoms valuation ispresently based ontheBrussels Definition ofValue (BDV).6
Inpractice, valuation generally relies ontheactual transaction value, including freight, insurance, and
other incidental charges, butnotthe2percentimport commission (c.i.f. value). Intheabsence of
areliable basis, theauthorities mayusealternatives, forexample thevalue ofsimilar goods, orthe
wholesale price withretroactive adjustments. Therelevant legislation iscurrently being aligned with
thedefinition oftheWTO Customs Valuation Agreement (Agreement onImplementation ofArticle VII
oftheGeneral Agreement onTariffs andTrade 1994); Uganda hasuntil1January 2000 tobring its
valuation procedures inlinewiththeAgreement.7
8. ImportsintoUgandavaluedatmorethanUS$10,000c.i.f.aresubjecttocompulsorypreshipment
inspection ofquality, quantity andprice (PSI), carried outbyaspecialized foreign company (Société
générale desurveillance ,SGS). ThePSIincludes bothaphysical examination todetermine whether
thegoods conform tocontractual requirements aswellastonational andinternational standards and
apricecomparison toestablish whether theinvoice value iswithin "reasonable" limits oftheprevailing
export market priceofidentical, similar, orcomparable goods.8TheUganda Revenue Authority (URA)
maydisregard thevalues established bySGSandseekadditional information, forexample from the
customs authorities ofthecountry ofexport.9Allsecond-hand vehicles andpharmaceutical areto
bevalued bytheURA andthePharmacy Board, respectively, andsome specified goods aresubject
toofficially fixed reference prices (Section (2)(iii)).
9. While acknowledging itspositive contribution torevenue collection andimport procedures,
theauthorities intend togradually abandon thePSIrequirement. Thethreshold forPSIwasraised
from US$2,500 toUS$10,000 inJuly1994.
10. Appeals against customs decisions canbelodged withtheCommissioner ofCustoms andExcise
attheUganda Revenue Authority and,ifrejected, withtheMinister ofFinance andEconomic Planning
5UMA (1994).
6TheBrussels Definition defines the"normal price" ofgoods imported forhome consumption as"theprice
which theywould fetch atthetimewhen thedutybecomes payable onasaleintheopen market between buyer
andseller independent ofeach other" (Article I).
7TheAgreement provides that,subject tonotification, developing country Members, which were notparty
totheTokyoRoundCustomsValuationAgreemen t,maydelayitsapplicationforaperiodnotexceedingfiveyears
(Article 20).
8BNA (1993).
9Uganda 'smanufacturers criticize suchpractices forhaving created delays andimposed "unbearable added
costs" onimporters (UMA (1994)).Uganda WT/TPR/S/4
Page 37
(MFEP). Theestablishment ofanindependent Appeals Commissioner and,possibly, ofanAppeals
Tribunal iscurrently under consideration.10
(c) Regional co-operation (COMESA)
11. UndertheCOMESATreaty,memberStatesarecommittedtointensifyingco-operationincustoms
management,includingthesimplificationandharmonizationofcustomsformalitiesandtradedocuments,
theadoption ofauniform tariff classification, andtheestablishment ofastandard system ofcustoms
valuation (Articles 63,64,69). Tocombat smuggling, theTreaty provides formutual exchange of
information ongoods subject toimport restrictions, theintroduction ofexport prohibitions onsuch
goods, intelligence onidentified illicit traffic, intensified mutual consultations, andstrengthened border
surveillance (Article 66).
(iii) Tariffs, other levies andcharges
(a) General features
12. Uganda levies fourtypes ofcharge ongoods; while customs duties andanimport commission
apply toimports only, salesandexcise taxes alsoaffect domestic production. Therelevant taxrates
donotingeneral varybetween domestic andforeign goods. Anexception forthefurniture industry,
which relies strongly ondomestic inputs, isgeared toalleviating thecascade effects ofsalestax(see
Section (d)below).11
13. Since 1987, thefocus ofimport policy hasshifted fromrestrictive non-tariff protection -import
licensing coupled withforeign exchange rationing -towards atariff- andtax-based regime. Itsstructure
appears tohavebeenmotivated byrevenue considerations, rather thanperceived protective needs.
Recently, tariffs andtariff exemptions have been used, atleastinsome cases, tocompensate for
reductions inprotection coming from abolition ofimport restrictions orbans.
14. Uganda 'spolicy reorientation sincethemid-1980s hasbeenaccompanied byattempts towiden
thetaxbaseandreduce tariffdispersion. TheGovernment hassought, inparticular, tolimitthenumber
andscope oftaxexemptions andstrengthen thetaxcollection system. Theintroduction ofaValue
Added Tax,scheduled for1996, isviewed asanimportant stepinthiscontext.
15. Reflecting changes inthetaxandtariffstructure aswellasthegrowth oftheeconomy, import
duties havebecome thelargest component ofGovernment revenue (Chart IV.1). Despite reports of
continued highsmuggling, inparticular offuel,beer,cigarettes andsoftdrinks, andsignificant imports
entering under dutyexemptions, tariffproceeds accounted forsome 40percentoftotalfiscal revenue
in1994/95.12Onasemi-annual basis, frommid-1993 toend-1994, imports subject todutyexemptions
amounted tobetween onequarter andovertwofifths oftotalimports.
10MFEP (1994a); UMA (1994).
11According totheauthorities, allother splittaxrates have been abolished.
12TheUganda Manufacturers 'Association (UMA) estimates themarket share ofsmuggled products at15
to20percentforbeerandcigarettes, and5to10percentforsodas (UMA (1994)). Theshare oftariffs in
totalrevenue isbound todecrease significantly asaresult ofthesubstitution ofexcise taxes forthecustoms duties
onpetroleum products (seebelow).WT/TPR/S/4
Page 38Trade Policy Review
(b) Structure andform oftariffs
16. Uganda'stariffisbasedontheHarmonizedSystem(HS),withsome5,300tarifflinesatsix-digit
level. TheHSwasintroduced in1993. According totheauthorities, some reclassification work is
stillunder way. Asageneral principle, luxury goods aretobearhigher ratesthanessential products.13
17. Uganda 'scurrent tariff hasfivesteps, comprising ratesofzero, 10,20,30and60percent.
Alltariffs areadvalorem; theyapply throughout theyearwithout variations. More than95percent
ofalltariff linesbearratesbetween 10and30percent(Chart IV.2); thepeakrateof60percent
appliesonlytosixtobaccoproducts(HS24.02to24.03).Mostagriculturalinputs(fertilizers,pesticides,
seeds, machinery andtools), pharmaceutical andmedical equipment, representing some 4percent
ofalltariff lines, enter dutyfree.
13MFEP (1994a).Uganda WT/TPR/S/4
Page 39
18. Uganda 'stariff hasbeenrationalized inrecent years. Forexample, in1993/94 duties of40
and50percentwerereduced to30percent. In1994/95, tariffs ontobacco products wereraised from
30to60percentinconjunction withtheabolition ofanimport ban.Hightariffs onpetroleum products,
atratesbetween 90and145percent,werereplaced byequivalent excise taxes. (Thelatter move was
connectedwiththeimplementationoftariff-reductioncommitmentsvis-à-visotherCOMESAmembers.)
19. In1994/95, Uganda 'ssimple average tariffacross alllineswas17.1percent,varying between
13.9percentformining and20.9percentforagriculture (Table IV.1). Acloser lookshows that
hightariffs arewidespread infarm-related sectors, including foodprocessing, beverages andtobacco
production, andinlabour-intensive manufacturing areas, suchasleather, footwear andfurniture
(Table AIV.1). Thefactthattheratioofduties collected tototalimports -13percentin1994 -is
significantly lessthantheaverage tariff maybeduetofactors such asthedeterrent effect of
above-average tariffs onimport demand intherelevant categories, theoperation ofdutyexemptions
andtheincreasing importance ofpreferential imports from other COMESA members.
20. Overall, thereisnoapparent escalation intariffs between primary, semi-processed andfinished
goods. Theaverage tariff forfully-processed products (18.4 percent)isevenslightly below thatfor
primary products (18.7 percent) (Table IV.1). However, amore detailed sectoral presentation
(Table AIV.1) exhibits considerable escalation inareas suchastextiles (ISIC 321), paper (ISIC 341),
petroleum andcoal(ISIC 354), rubber (ISIC 355), andnon-ferrous metals (ISIC 372). Escalation
would beevensharper andpossibly affect more product areas, iftheoperation oftaxexemption and
remission schemes onrawinputs were taken intoaccount (seebelow).WT/TPR/S/4
Page 40Trade Policy Review
Table IV.1
Main features oftheUgandan tariff schedule,1994/95
Simple
average
tariff
(percent)Tariff dispersion
Tariff range
(percent)Standard
deviationaCoefficient of
variationa
Alltariff lines 17.1 0-60 9.1 53.1
Bysectorb:
Agriculture andfisheries 20.9 0-30 10.7 51.2
Mining 13.9 10-30 6.4 46.0
Industry 16.9 0-60 8.9 52.9
Bydegree ofprocessing:
Primary products 18.7 0-30 10.1 53.9
Semi-processed products 14.1 0-30 7.4 52.4
Finished goods 18.4 0-60 9.3 50.4
a Thestandard deviation measures theabsolute dispersion ofadistribution; thecoefficient ofvariation isameasure ofrelative
dispersion, defined asthestandard deviation divided bytheaverage.
b Based onISICclassification.
Source: WTO Secretariat.
21. Likeallother participants intheUruguay Round, Uganda -which hadnotmade anytariff
bindings before -agreed tobindallitstariffs onagricultural items.14Thebindings aremostly atceiling
ratesof80percent,except forsome 60products whose bound tariffs varybetween 40and70percent.
Tariffs onsome 70other items, including fisheries products, photographic goods, rubber, andcertain
machinery, were bound atratesbetween 40and80percent. Asaresult, 24.5percentofalltariff
linescurrently carry bound ceiling rates. Inmany cases, these arewellabove theapplied rates.
22. There arenocountries towhich Uganda accords lessfavourable thanm.f.n. tariff treatment.
(c) Tariff preferences
23. Uganda 'sonlytariff preferences aretowards other participants intheCommon Market for
Eastern andSouthern Africa (COMESA; Chapter II(5)(ii)(a)). COMESA, which became effective
inlate1994, builds onthePreferential Trade Area forEastern andSouthern African States (PTA),
whosemembercountriesoriginallyextendedtariffpreferencesonover700goodscontainedinaCommon
List.PTAcountries agreed inJanuary 1993tophase outalltariffs by2000; under COMESA, members
14Therelevant definition inAnnex IoftheAgreement onAgriculture generally covers rawandprocessed
agricultural goods, butexcludes fisheries andmarine products.Uganda WT/TPR/S/4
Page 41
havesinceagreed toestablish acommon external tariffby2004.15ByDecember 1994, however, only
afewCOMESA members appeared tohavecomplied withthephasing-out programme.16
24. ThePTA/COMESAratesinUganda's1994/95TariffScheduleprovideforsubstantialpreferences
across almost allsectors, withthemain exceptions ofbeverages, tobacco, furs,soaps, andengines
andturbines (Table AV.1).17Preferential ratesaveraged 11.7percent, some 5.5percentage points
below theaverage m.f.n. rate.
(d) Other levies andcharges
25. Inaddition tocustoms duties, allimported goods aresubject toanimport commission and,
asthecasemaybe,tosalesandexcise taxes.18Intheabsence ofexemptions orremissions, these may
translate intohighoverall taxincidences, particularly forluxury goods (Table IV.2). Sales taxatthe
applied rateisbound inUganda 'sUruguay Round schedule onitems subject totariff bindings.
Table IV.2
Main taxes andcharges levied onimports ofselected products, 1994/95
(Percent; index =100)
Raw materials Intermediate goods Finished goods
Wheat andmeslin
(HS1001.90.00)Flat-rolled
stainless steel
(HS7219.21.00)Medium size
passenger car
(HS8703.23.30)Manufactured
tobacco
(HS2403.10.00)
Rate Value Rate Value Rate Value Rate Value
(1) Value f.o.b. (=100) n.a. 100.0 n.a. 100.0 n.a. 100.0 n.a. 100.0
(2) Freight andinsurance
(approximately)n.a. 5.0 n.a. 5.0 n.a. 5.0 n.a. 5.0
(3) Value c.i.f. n.a. 105.0 n.a. 105.0 n.a. 105.0 n.a. 105.0
(4) Import commission 2 2.1 2 2.1 2 2.1 2 2.1
(5) Customs duty 10 10.5 20 21.0 30 31.5 60 63.0
(6) Import price n.a. 117.6 n.a. 128.1 n.a. 138.6 n.a 170.1
(7) Excise tax 0 0.0 0 0.0 30 41.6 100 170.1
(8) Sales tax 10 11.8 12 15.4 30 54.1 30 102.1
(9) Sales price n.a. 129.4 n.a. 143.5 n.a. 234.2 n.a. 442.3
Source: Government ofUganda.
15Intra-PTA tariffs weretobereduced to40percentofthebasem.f.n. ratesby1993, andscaled down further
in10percentinstalments in1994, 1996, 1998 and2000 (GATT (1995b)).
16COMESA (1994b).
17Rates higher thanm.f.n. tariffs inthese sectors result from theapplication ofthePTA reduction formula
tothebaserates of1984. Inpractice, thelower current m.f.n. rates areapplied insuchcases toimports from
COMESA members.
18Proceeds from the2percentImport Commission, estimated atUS$10 billion in1994/95, arepartly used
tofundtheUgandan National Bureau ofStandards (UNBS), theUganda Export Promotion Council (UEPC),
andtheUganda Tourism Board (Sections (2)(xii) and(3)(xii)).WT/TPR/S/4
Page 42Trade Policy Review
26. Sales taxislevied atadvalorem rates of10,12,20,and30percentonallgoods sold
domestically, except agricultural inputs, pharmaceutical andmedical equipment. While rawmaterials
andbasic necessities aregenerally taxed at10or12percent,luxury items bearthe30percentrate.
Asaresult, theaverage taxburden varies between 11.3percentinagriculture and15.1percentin
themanufacturing sector (Table AV.1). Sales taxiscollected from registered manufacturers and
importers; thetaxischarged onthewholesale price orontheimport value, inclusive ofcustoms and
excise duties.
27. Imports aregenerally accorded national treatment, barring some items. Forexample, while
locally produced furniture istaxed at10percent,imported products bearasalestaxof30percent.
Suchdifferential treatment isintended tooffset thecascading effects ofthesalestaxon,andtheimplicit
discrimination against, companies atthelower endofadomestic processing chain.19
28. Excise taxes arelevied ondomestic salesofsome 90goods at8-digit HSlevel(Table AIV.2)
including petroleum products, cigars andcigarettes, beer, softdrinks, alcoholic beverages, cosmetics,
jewellery, television sets,andmotor vehicles. Thetaxes apply totheex-factory price, ortheimport
values inclusive ofcustoms duties, atratesbetween 10percent(e.g.lubricating oils)and225percent
(motion spirit). According totheauthorities, nodistinction ismade between imports anddomestic
production.
29. Excise taxes haverecently beensubstituted forcustoms duties insome cases. In1993/94,
tariffs onsome luxury goods, exceeding 30percent,werereplaced byexcise taxes atequivalent rates
(e.g.motor vehicles arenowsubject toexcise taxesof30or50percent,depending onengine capacity).
Similarly, asnoted earlier, thecustoms duties onpetroleum products werereplaced byexcise taxes.
30. A15percentCommercialTransactionLevy(CTL)isimposedonvariousservices(TableIV.3).
Medical services, public transport andservices related directly toexports ofgoods areexempt.
31. Avalue added tax(VAT), scheduled forintroduction inJuly1996, isdesigned toreplace the
sales taxandtheCTL. Since thestructural distortions ofthecurrent sales taxwillconsequently
disappear, theauthorities envisage eliminating anytaxdifferentials between localandimported products.
TheVATisexpected toyieldatleastthesamerevenue asitspredecessors; inthelonger term, abroader
taxbaseandamore neutral incentive structure aredeemed likely togenerate additional proceeds.
32. TheVAT isduetoapply toallsupplies ofgoods andservices provided bytaxpayers whose
annualturnoverexceedsUSh20million.Exemptionsareforeseenforsuppliesofunprocessedfoodstuffs
bytheinformal sector; petroleum products; financial services (including lifeinsurance); educational
services; medical, dental andnursing services; andpassenger transport. Theauthorities arecurrently
thinking ofasingle taxratebetween 15and20percenttobelevied onalldomestic salesoftheaffected
products.20In1994/95, asaninitial steptowards theintroduction ofVAT, theGovernment raised
to12percenttherateofsalestaxonmost products hitherto taxable at10percent.
19MFEP (1994a). Differentiated rateswere more widely usedinthepast, complemented byataxsuspension
system (UNDP/IBRD, 1990).
20Exports would carry zerorates.Uganda WT/TPR/S/4
Page 43
Table IV.3
Rates oftheCommercial Transaction Levy (CTL), 1993/94
(Percent)
Service Taxrates
1 Accommodation andlodging 15
2 Entertainment 15
3 Medical anddental services Free
4 Advertising 15
5 Accounting andauditing 15
6 Charitable services Free
7 Water, electricity, andtelecommunications 15
8 Hair-dressing, beautifying andtailoring 15
9 Drycleaning andlaundering 15
10 Transport
(i)Hireoftransport 15
(ii)Public transport Free
11 Construction, painting, decorating, andplumbing 15
12 Restaurants 15
13 Services connected withexports ofgoods Free
Source: Government ofUganda.
(e) Taxexemptions andremissions
33. Uganda maintains anumber ofmechanisms under which duties andtaxes maybesuspended
orrefunded. They include:
(i) dutyandtaxexemptions orremissions for:
(a) goods imported forusebythediplomatic corps orinternational organizations;
(b) plant, machinery, equipment andspecialized vehicles imported bylicensed
investors, domestic orforeign, provided thatthegoods arenotlocally available
andnotmore thanfiveyears old(Chapter III(2)(i)); and
(c) arange ofnotlocally available rawmaterials usedasinputs by"important and
highvalue-added industries" asspecified bytheMFEP inconsultation with
theUganda Manufacturers 'Association (Table AIV.3).
(ii) adiscretionary taxexemption foranyproducts whose importation isconsidered in"the
national interest" (e.g. relief supplies, arms andammunition, imports by
non-governmental organizations (NGOs)); and
(iii) dutydrawbacks forallimported inputs incorporated inexports (Section (3)(ix)).
34. While intended toalleviate thetaxburden ondomestic producers, andreduce consequent
disincentives, theseexemptions donotnecessarily fitintoUganda 'sgeneral policy ofstreamlining and
rationalizing thetaxandtariff structure, scaling down intersectoral discrepancies inprotection, andWT/TPR/S/4
Page 44Trade Policy Review
broadening theGovernment 'srevenue base. TheMinister ofFinance andEconomic Planning seems
tohaveacknowledged these problems, calling inthe1994 Budget Speech formeasures tocontain
"large-scaletaxevasion"anddrasticallyreducetaxexemptions.21Inthiscontext,theMinisterannounced
thetermination oftax-exclusive tendering forgovernment- anddonor-funded projects aswellasof
certain taxprivileges forparastatal organizations (e.g. tax-free fuelfortheUganda Railways
Corporation). TheGovernment isalsoreviewing thescope ofstatutory exemptions accorded to
international organizations, including NGOs; according totheauthorities, theseexemptions havebeen
widely abused.22
(iv) Minimum import prices
35. According totheauthorities, Uganda doesnotmaintain anyprescribed minimum prices for
imports. However, theURA issues reference prices forfuelandvalue guidelines forsugar, wheat,
andgrainproducts, forvaluation purposes. Reference prices forfuel-intended tosecure taxcollection -
wereintroduced inJanuary 1994inconjunction withdomestic pricederegulation. Therelevant prices
correspond totheinternational spotprice augmented byfreight, insurance andtransport cost; they
arepublished every month bytheURA. Thevalue guidelines forother products, calculated onthe
basis ofECcommodity price indices, arenotmade public.
(v) Import prohibitions andrestrictions
36. Uganda maintains various general import prohibitions andcontrols forhealth, security and
similar reasons. They apply tocounterfeit currency; arms, armoured vehicles andfirearms forwar;
toxic materials; anddrugs andnarcotics.23
37. According totheauthorities, Uganda doesnotapply quantitative restrictions toanyimports.
(vi) Import licensing
38. Virtually allimports currently enter Uganda under anImport Certification System (ICS) and
arethussubject toautomatic licensing. Animport certificate, valid forsixmonths andrenewable,
canbeobtained within onedayfromtheMinistry ofTrade andIndustry. Apart from theirbusiness
registration andtrading licence, applicants mayhavetoproduce supplementary documents depending
onthenature ofthegoods.24
39. Before theentry intoforce oftheICSin1991, Uganda operated twovariants ofanimport
control andlicensing system, which werelinked totheallocation offoreign exchange. While under
theOpen General Licence (OGL) scheme, foreign exchange wasmade freely available toenterprises
importing inputs intenkeysectors (soaps, tobacco, beverages, textiles, cement, mattresses,
21MFEP (1994a).
22MFEP (1994a).
23Under theCOMESA Treaty, member States areallowed tomaintain trade restrictions orprohibitions on
thefollowing grounds: application ofsecurity laws; control ofarms; protection ofhuman, animal orplant
lifeandhealth; protection ofpublic morality; transfer ofgoldandsilver; protection ofitems deemed tobe
of"national importance"; andmaintenance offood security intheevent ofwarandfamine (Article 50).
24Intheevent ofrejections, theresponsible officer must clearly indicate thereasons.Uganda WT/TPR/S/4
Page 45
pharmaceutical, aluminum, nailsandsugar), exchange allocation under theSpecial Import Programme
(SIP) wasonafirst-come first-served basis. TheSIPapplied, interalia,toimports ofagricultural
products, transport equipment, building andconstruction materials, education andsports equipment,
health andconsumer goods. Licences werealsoissued toimporters relying on"own" foreign currency,
obtained either through exports orontheparallel exchange market.25However, thisimplied significant
cost,given thegapbetween theovervalued official exchange rateandthemarket rateatthetime.
40. Thecurrent ICSexcludes onlyanarrow range ofgoods figuring ona"negative list". Apart
fromproductcategoriesreferredtoinSection(v)above,thecurrentnegativelistcontainscommunications
equipment; pornographic material; specialized electrical equipment; beer; softdrinks (sodas); motor
vehicle batteries; usedmotor vehicle tyres; andimports banned under international agreements to
which Uganda isasignatory, including theConvention onInternational Trade inEndangered Species
ofWild Fauna andFlora (CITES). Listed products maybeimported onlyunder special conditions
orbyspecified target groups (e.g.diplomats). According totheauthorities, allrestrictions areapplied
onanon-discriminatory basis; imports ofbeer, softdrinks, motor vehicle batteries andusedtyres
havebeenlimited forreasons ofinfant industry protection.26
(vii) Import surveillance
41. According totheauthorities, Uganda doesnotmaintain anysurveillance measures onimports.
However, thedomestic sugar market isregularly monitored toensure anadequate levelofstocks.
(viii) Trade sanctions
42. Uganda applies various tradesanctions based onUNSecurity Council Resolutions; embargoes
ontrade withIsrael andSouth Africa were lifted in1993.
(ix) State-trading enterprises
43. According totheauthorities, therearecurrently noenterprises withexclusive rights orspecial
privileges intrade (seealsoSection (3)(vi)).
(x) Import cartels
44. TheUgandan Government isnotaware ofanycartels operating onimports. There arenocartel
lawsornotification requirements (Section (4)(i)).
(xi) Countertrade
45. With serious foreign exchange shortages inthelate1980s, boththeUganda Government and
private firms wereinvolved innumerous countertrade agreements, worth overUS$400 million atthe
time(Table AIV.4). Reflecting improved foreign exchange earnings andthegeneral policy shifttowards
liberalization, Uganda hasrefrained fromsuchdeals since January 1990, according totheauthorities.
25IMF (1992); UNDP/IBRD (1990).
26While COMESA members arecommitted toremoving allnon-tariff barriers (Article 49),theymayimpose
restrictions, forspecified periods, togrant infant industry protection oraddress balance-of-payments difficulties
(Chapter II(5)(ii)).WT/TPR/S/4
Page 46Trade Policy Review
(xii) Standards andother technical requirements
(a) Technical regulations, standards andconformity assessment
46. TheMinistryofTradeandIndustry(MTI)isresponsiblefordefiningandimplementingUganda's
general standardization policy.27TheUganda National Bureau ofStandards (UNBS), astatutory agency
established in1989, operates asthecountry 'sgeneral standardization bodyunder theaegisoftheMTI.
Itrelies entirely onpublic funding, including revenue from theimport commission.28TheUNBS 's
statutory functions include specification ofnational standards; adoption ofinternational orforeign
specifications; enforcement ofstandards toprotect thepublic; promotion ofinternational andregional
standards harmonization; andconformity testing (Section 2oftheUNBS Act). TheUNBS isamember
oftheInternational Organization forStandardization (ISO) andoperates asthecontact point forthe
FAO/WHO Codex Alimentarius.
47. Intheareaofvoluntary standardization, theCouncil defines astandard specification and,with
Ministerialapproval,determinesamarkofconformity.OnrecommendationoftheCouncil,theMinister
maydeclare, bynotice intheOfficial Gazette, thatastandard specification beconverted intoa
compulsory technical regulation. Atleasttwomonths before making itsrecommendation, theCouncil
must publish anotice ontherelevant specification andallow interested parties tomake comments.
Importation, distribution, manufacture andpossession ofgoods notconforming toofficial technical
regulations areprohibited, andmaycarry finesofuptoUSh20,000 and/or imprisonment ofupto
oneyear.
48. Using elements ofexisting international standards, theUNBS hassofarspecified 34national
standards, mostly related toagricultural products. Ofthese, theCouncil hasrecommended 31for
conversion intotechnical regulations.29
49. Presentation offoreign testresults mayobviate conformity testing bytheUNBS. Uganda
generally recognizes testsperformed bybodies thathavebeenrecognized orapproved bytheauthorities
oftheirhome country.
50. Other statutory bodies withstandards-related mandates include thePharmacy andDrugs Policy
Authority (Ministry ofHealth) forpharmaceutical, andtheAgricultural Chemicals Board (Ministry
ofAgriculture) foragro-chemicals. Noagricultural chemical, whether imported ormanufactured in
Uganda, maybeusedunless itisregistered with, andcertified by,theAgricultural Chemicals Board.
51. TheCOMESA Treaty encourages theremoval ofstandards-related impediments. Themember
Statesaretodevelopacommonstandardizationpolicy,promotestandardizationthroughtheestablishment
ofnationalstandardsbodies,andaccedetotheAfricanRegionalOrganizationforStandardization(ARSO)
27Theauthorities generally view standardization, including export quality controls, asinstrumental in
strengtheningexportcompetitiveness.Someprivateoperatorshaverecentlycalledforthestrengtheningofnational
standards inorder torestrict "substandard" imports, which areconsidered toundermine theposition ofUgandan
producers intheir home market (UMA (1992b)).
28TheBureauisheadedbytheNationalStandardsCouncil,composedof15memb ersappointedbytheMinister.
These areaChairman, aChief Executive Officer, sixformer public officers, andseven persons withexperience
incommerce, industry orwithtechnical experience orqualification (Section 3oftheUNBS Act).
29Government ofUganda (1994).Uganda WT/TPR/S/4
Page 47
(Article 112). National standards aretobeformulated according touniform rules andprocedures,
andpreference istobegiven toAfrican or,ifnotavailable, tosuitable international standards
(Article 113).
(b) Sanitary andphytosanitary regulations (SPS), andhealth-related controls
52. Allimports ofliveanimals, plants andseeds aresubject toquarantine regulations andmay
enter onlyatdesignated ports.30Toprevent theintroduction ofinfectious diseases, theMinister of
Health mayrestrict theentryofanyperson oranimal under thePublic Health Act,andimpose necessary
requirements orconditions (medical examination, detention, quarantine, disinfection, orisolation).
TheMinister isalsoempowered tomake rules regarding themanufacture, importation, storage and
saleofanyfoods, including import prohibitions onproducts which arenotclean, wholesome, andfree
ofanydiseases.
53. TheFood andDrugs Act1959 prohibits, interalia,thesaleandpossession ofanyfoodunfit
forhuman consumption, andanyfalseormisleading labelling andadvertisement offoods anddrugs.
Tothiseffect, anauthorized officer may"atallreasonable times" examine foodsoldorstored, aswell
asanyvehicle orcontainer used. Where necessary, theofficer mayprohibit orrestrict transport of
imported foodforupto48hours.
(xiii) Government procurement
54. Centralgovernmentprocurementisgenerallycarriedoutbyindividualministriesanddepartments.
Exceptions are"common useritems" whose procurement isinthehands oftheGovernment Central
PurchasingCorporation(GCPC).31Ineithercase,theCentralTenderBoard(CTB)isrequiredtoapprove
individual awards. Local andregional authorities, aswellaspublic enterprises, apply theirown
purchasing procedures.
55. TheGCPC wasestablished asaseparate body in1990 withtheaimofimproving expertise
andefficiencyinpublicprocurement.32TheauthoritiesareconsideringtheexpansionoftheCorporation's
financing, currently US$2 million ayear, toallow ittoperform broader functions thanthepurchase
ofcommon useritems.
56. Government procurement maybecarried outbyopen, selective orsingle tendering, depending
onthecontract value. Theprincipal structure isasfollows:
(i) purchases ofgoods andworks worth lessthanUSh50million aremade through
solicited tendering ordirect negotiation;
(ii) purchases ofgoods worth uptoUSh100million andworks contracts ofupto
USh300million aresubject tolocalcompetitive tendering; and
30BNA (1993). Theplant quantitative service unitunder theMinistry ofAgriculture, Animal Industry, and
Fisheries regulates theexitandentry ofliveplants andseeds.
31Common useritems are:roadvehicle spare parts, accessories andtyres; office equipment anddomestic
furniture; office anddomestic furnishings; andbulkbuilding materials forgovernment construction.
32Before 1990, theCorporation operated asaDirectorate under theMinistry ofFinance.WT/TPR/S/4
Page 48Trade Policy Review
(iii) contracts beyond thesethresholds areawarded viainternational competitive tendering.
According totheauthorities, some 80percentofcentral government procurement isnormally subject
toopentendering (local orinternational).
57. In1993/94, central government procurement ofgoods andservices totalled USh50billion,
ofwhich approximately 80percentwasimports. Themaincriteria forassessment oftenders forgoods
aretechnical specification, price, delivery time, aftersalessupport, andguarantee. Inservices areas
(including consultancy), emphasis isplaced onexperience ofthefirm, qualifications andexperience
ofitspersonnel, familiarity withthelocalenvironment, thework planandterms ofreference. Local
suppliers ofgoods aregenerally accorded a15to20percentpreferential margin overimports; the
preference forlocalservices isintheorder of5to7percent. Projects relying onforeign funding
(e.g. World Bank, IDA, USAID, EC), which may account foravery significant portion of
government-mandated purchasing, arenormally subject totheirowncriteria andthresholds.
58. Uganda wasnotasignatory totheTokyo Round Agreement onGovernment Procurement
andhasnotyetacceded tothePlurilateral Agreement onGovernment Procurement signed inMarrakesh
inApril 1994.
(xiv) Local content schemes
59. According totheauthorities, Uganda hasnolawsorregulations prescribing localcontent or
aiming atincreasing theshare ofdomestic value-added inspecified products, services orindustries.
Asnoted inChapter III(2), however, provisions intheInvestment Code (Sections 13,19and23)are
aimed atencouraging theuseoflocalcontents.
(xv) Rules oforigin
60. TheCOMESA Treaty makes theextension ofcommon market treatment subject torules of
origin, which aretobeagreed onthebasisofastudy currently under way. Intheinterim, theCouncil
ofMinisters decided in1994 torelyonkeyconditions oftheformer PTArules.33They provide that
aproductistoberecognizedasoriginatinginthePTA/COMESAarea,ifitisconsigneddirectlybetween
member States andhasbeen:
(i) "wholly produced" intheconsignor State; or
(ii) produced intheconsignor State from imported materials if
(a) theirc.i.f. value didnotexceed 60percentofthetotalcostofproduction
materials; or
(b) thedomestic value added accounted foratleast45percentoftheex-factory
cost; or
33Protocol ontheRules ofOrigin forProducts tobeTraded between theMember States oftheCOMESA
(PTA, 1994a).Uganda WT/TPR/S/4
Page 49
(iii) produced intheCOMESA area,listed bytheCouncil among the"goods ofparticular
importance totheeconomic development ofthemember States", andincorporates at
least25percentintra-COMESA value added.
Thecurrent study focuses onthefuture useoftheabove value-added criteria. Inaddition tothese
conditions, theformer PTArules oforigin contained criteria focusing onachange oftariff heading
andsubstantial transformation, andrequired eligible goods tobeproduced byenterprises thatwere
majority owned andmanaged bynationals ofmember States (Chapter III(2)(ii)).34
(xvi) Anti-dumping andcountervailing measures
61. Uganda 'sCustoms (Dumping andSubsidies) Actprovides thecurrent legal framework for
anti-dumping andcountervailing measures. TheAct,which dates backtotheformer EastAfrican
Community (EAC); Chapter II(5)(ii)), deals onlywithdumped orsubsidized imports from outside
"thePartner States", i.e.,Uganda, Kenya andTanzania (Section 2).ThePresident ofaPartner State
may, subject toapublic-interest clause, impose anadditional dutyondumped orsubsidized imports
which cause, orthreaten tocause, material injury toanestablished domestic industry; therelevant
rateistobedetermined bythePresident ortheMinister ofTrade andIndustry.35TheActexplicitly
requires thatanysuchaction beinconformity withthemembers 'obligations under theGATT. The
authoritiesenvisagelegislativechangesfollowingtheratificationoftheWTOandCOMESAAgreements.
62. While nomeasures weretaken under these provisions overthelastdecade, Uganda levied a
surtax during 1993/94 onarange ofimports from Kenya.
63. TheCOMESA Treaty bansdumping practices which cause, orthreaten tocause, material injury
toanestablished industry inamember State. Tocounteract infringements, anti-dumping duties may
beimposed atalevelnotgreater thanthedumping margin. Subsidies areconsidered "incompatible"
withtheCommon Market iftheydistort, orthreaten todistort, competition andaffect intra-area trade.
They maydrawcountervailing duties, subject tothesamecriteria andconstraints asabove. Offsetting
duties mayalsobeimposed ondumped orsubsidized imports fromthirdcountries. Themember States
areheldtoco-operateindetectingandinvestigatingdumpingandsubsidypracticesandimposingremedial
measures.
(xvii) Safeguard measures
64. According totheauthorities, Uganda hasnospecific safeguard legislation corresponding to
Article XIXoftheGATT. TheGovernment intends toinitiate suchlegislation onthebasis ofthe
Uruguay Round Agreement onSafeguards.
34Thecriteriaconcerningthechangeoftariffheadingandsubstantialtransformationwereconsideredas"highly
complex, time-consuming andcostly toprescribe andimplement" (PTA, 1994a). They were eliminated in
November 1993.
35"Dumping" isdefined asexporting goods atlower than"thefairmarket price" intheexporting country
(Section 3(2)). The"fair market price", inturn, isdetermined onthebasis of(a)thehome market price or,
intheabsence ofsuchaprice, (b)theexport price ofidentical orcomparable goods or(c)theactual orestimated
costofproduction (with additions forselling costandprofit). "Subsidies" aredefined asdirect orindirect support
fortheproductionorexportofgoods,whetherthroughgrants,loansortaxreliefs(Section3(3)).Theinvestigation
istobecarried outbytheCommissioner-General ofCustoms.WT/TPR/S/4
Page 50Trade Policy Review
65. Asafeguard clause intheCOMESA Treaty (Article 61)allows formeasures tobetaken, if
serious economic disturbances ariseasaresult oftradeliberalization under theTreaty. Themeasures,
which arenotfurther specified, aretobeapplied onanon-discriminatory basis; theycanbemaintained
foruptooneyearandmaybeextended onlybyadecision oftheCouncil ofMinisters.
(xviii) Measures implemented inexporting countries
66. Accordingtotheauthorities,noagreementsexistwithforeigngovernmentsorcompanieslimiting
thevalue orquantity ofgoods exported toUganda; noristhere evidence ofsuchagreements between
domestic andforeign companies.
(3) Measures Directly Affecting Exports
(i) Registration, documentation
67. Asimporters, allexporters mustpossess aTaxpayer Identification Number (TIN), abusiness
registration andatrading licence. Allexports mustbedeclared attheportofexitandsupported by
therelevant documents (e.g.export certificates; Section (v)).
68. Under theCoffee Regulations 1994, allbuyers, processors, andexporters ofcoffee mustbe
registered with, andcertified by,theUganda Coffee Development Authority (UCDA; Chapter V(2)).
Toqualify foracoffee exporter 'scertificate -valid forone"coffee year" ofOctober-September and
renewable, butnottransferable -anapplicant musthaveaccess toacoffee processing factory, provide
aperformance bondofUS$25,000 (notincash), andpaytheannual registration feeofUSh15million.
Inaddition, individual consignments aresubject toquality certification bytheUCDA.
(ii) Export taxes, charges andlevies
69. Anexport taxoncoffee, which generated uptoonehalfofgovernment revenue inthe1980s,
wasabolished in1992/93 (Chart IV.1). Thetaxhadbeencollected intheform ofaresidual taxby
theprevious Coffee Marketing Board, which transferred thenetvalue ofcoffee export proceeds, after
deduction ofapre-determined producer price andamarketing margin, totheGovernment.
70. Inviewofasudden riseinworld coffee prices andtheresulting upward pressure ontheUganda
Shilling, theGovernment introduced aCoffee Stabilization TaxinOctober 1994. Thetaxislevied
atarateof32percentonallcoffee export receipts above aprice threshold ofUSh1,100/kg.
(Chapter V(2)).36Theintroduction ofthetaxwasmotivated byequity considerations andfiscal policy
objectives -theaimofbroadening thetaxbase-aswellasaperceived needtoeasepressure onthe
exchange rateanditsadverse impact onother segments oftheexternal sector.37Lessthanaquarter
ofthetaxreceipts, estimated atUSh60billion in1994/95, willaccrue tothepublic coffers and,to
avoid inflationary spending, willbesetaside forfuture use. Theremainder iscredited toaspecial
account intheBank ofUganda andmaybespent onforeign exchange intervention. Theauthorities
arecurrently studying theeconomic impact ofthetaxwithaview toitspossible extension beyond
1994/95. There arenosuchmechanisms inanyother sector oftheeconomy.
36Original proposals envisaged atwo-tiered rate: 20percent intheevent ofprices exceeding
USh1,100 perkg.and40percentabove athreshold ofUSh2,200 perkg.(MFEP, 1994a).
37MFEP (1994a); Nachrichten fürAußenhandel, 28October 1994.Uganda WT/TPR/S/4
Page 51
(iii) Minimum export prices
71. Under theCoffee Regulations 1994, coffee export prices areguided byanindicative price,
which issetbyaPrice Committee chaired bytheManaging Director oftheUCDA (Chapter V(2)).
According totheauthorities, there arenoother price controls orregulations onexports.
(iv) Export prohibitions andrestrictions
72. Apart from internationally agreed measures, e.g.under CITES, Uganda doesnotmaintain
anyexport prohibitions orembargoes. With aviewtocombatting illicit trade, COMESA members
arecommitted toexchanging listsoftheirprohibited imports andrestricting theirexports accordingly
(Article 66).
73. Under theCoffee Regulations 1994, theUCDA mayuseitsregistration procedure forcoffee
exporters toencourage restraints "inlinewiththedemands ofinternational obligations" (Section 12(3)).
Inpursuit oftheCoffee Retention Planadopted bymajor coffee producing countries witheffect from
October 1993, Uganda implemented aretention requirement ofbetween 10and20percentofdomestic
productionin1993/94(ChapterV(2)).38Thisrequirementwassuspendedafterseveralmonths,following
asteep recovery ofworld coffee prices due,interalia,toalowharvest inBrazil. According tothe
authorities, there arenocomparable instruments inanyother area.
(v) Export licensing, certification andquality control
74. Reflectingthestreamliningofimportprocedures,Ugandareplacedexportlicensingrequirements
byanExport Certification System inSeptember 1990. Under thesystem, theholder ofanexport
certificate isallowed toexport anygoods except those specified inanegative list:waste andscrap
offerrous castiron; wood charcoal; timber from anytreesgrown inUganda; coffee husks; game
trophies; andunprocessed fresh fish(Nile perch andtilapia). Thecertificate isvalid forsixmonths
andrenewable.
(vi) State-trading enterprises
75. Inthe1980s, Uganda 'sexports wereexclusively effected byStatemonopolies suchastheCoffee
Marketing Board (CMB); theLintMarketing Board (LMB); Uganda Hardware (fortimber); and
theProduce Marketing Board (forfoodcrops).39Uganda Railway Corporation (URC) wastheonly
carrier allowed totransport coffee abroad.
76. According totheauthorities, allsucharrangements havebeenterminated. Forexample, the
monopoly oncoffee exports wasabolished in1990 andtheCMB wasreorganized asapublic limited
company, competing withsome 100private exporters. TheLMB wastransformed intoapurely
regulatory body, theCotton Development Organization (CDO).
38MFEP (1994b).
39Inmany cases, themonopolies setaproducer price considerably below itsworld market equivalent. The
deterrent effects onproduction were often exacerbated bycompulsory surrendering oftheexport proceeds at
theover-valued official exchange rate(UNDP/IBRD, 1990).WT/TPR/S/4
Page 52Trade Policy Review
(vii) Export cartels, voluntary restraints, surveillance andsimilar measures
77. Theauthorities arenotaware ofanycartels orother restrictive practices operating onexports
from Uganda (see,however, Section (iv)above)).
(viii) Export subsidies
78. Theauthorities donotgrant anysubsidies specifically designed topromote exports.
(ix) Duty andtaxconcessions
79. Imported inputs usedforexport production areeligible forremission ofcustoms duties, sales
taxesandexcise taxesifany. Since aprocedural reform inJuly1994, dutyrefunds aregranted directly
bytheURA ondocumentary proof ofexportation. Alternatively, regular taxpayers, whoareregistered
withtheURA, canapply fortaxcredits.
80. Inthecontextofthe1994/95budget,theGovernmentannouncedtheabolitionoftheCommercial
Transactions Levy (CTL) onexport-related services.40Under theplanned value added tax,allexports
ofgoods andservices arescheduled forzerorating.
(x) Export finance, insurance andguarantees
81. TheBankofUganda operates anExport Refinance Fund (ERF), which wasestablished in1991
andendowed withabout US$2 million. TheFund isaimed atpromoting exports ofnon-traditional
products, including maize, beans, fish,flowers, clothing, andcrafts, andoffers short- andmedium-term
credits atinterest ratesslightly below prevailing market rates.
82. TheERFiscomplemented byothergovernment ordonor-sponsored assistance schemes, which
mayhaveanindirect impact onexport performance. These include theCrop Finance Support Fund,
established in1989 withUS$4 million, andtheInvestment Term Credit Refinance Fund, established
in1993 withanIDAcredit ofUS$24 million. Thelatter Fund isprimarily geared tofinancing the
rehabilitation ofpublic enterprises scheduled fordivestiture.
(xi) Export promotion andmarketing assistance
83. Asnoted above, Uganda 'straditional exports were previously channelled through State
monopolies under conditions thattended todiscourage, rather thanpromote, exports. These monopolies
havebeenreplaced by,ortransformed into,statutory agencies mandated toregulate orpromote private
activities, including theUganda Coffee Development Authority (UCDA), theCotton Development
Organization (CDO) andtheUganda TeaAuthority (Chapter V(2)).
84. Themainpromotionagencyfornon-traditionalexportsistheUgandaExportPromotionCouncil
(UEPC), aparastatal affiliated withtheMinistry ofTrade andIndustry. TheCouncil 'sactivities include:
dissemination oftradeinformation; development ofpromising export markets through tradefairsand
trainingprogrammes;advisoryservicesonproductdesign,qualitystandards,exportfinancing,marketing
andpackaging; market surveys; andco-ordination ofprivate andpublic sector export initiatives.
Allservices aregenerally provided freeofcharge.
40MFEP (1994a).Uganda WT/TPR/S/4
Page 53
85. TheUEPC 'sactivities appear tohavesuffered fromlimited staffing andfunding and,possibly,
alackoffocus duetoinsufficient private sector involvement. TheCouncil relies exclusively ona
Government grant ofUSh400million perannum, paidfrom proceeds generated bytheimport
commission.41TheGovernmentisconsideringlegislativechangeswithaviewtoredefiningtheCouncil's
objectives, increasing itsautonomy, enhancing theprivate sector 'sinput, andcreating anindependent
andreliable source offunding.
(xii) Export performance requirements
86. Under theInvestment Code, theUganda Investment Authority istoconsider export-related
criteria before granting acertificate ofincentives (Chapter III(2)(ii)).
(xiii) Free-trade zones andexport-processing zones
87. While there arecurrently nofree-trade zones inUganda, feasibility studies areduetostart
inearly 1995.
(4) Measures Affecting Production andTrade
(i) Competition policy
(a) Legislation
88. Ugandahasnocompetitionlaworotherlegislationbanningorsanctioningcollusiveorrestrictive
business practices, suchasprice cartels, price maintenance, bid-rigging andboycotts.42Private
monopolies arenotsubject torestrictions orcontrols.
89. Under theCOMESA Treaty, member States areheldto"prohibit anyagreement between
undertakings orconcerted practice which hasasitsobjective oreffect theprevention, restriction or
distortion ofcompetition within theCommon Market" (Article 55). TheCouncil ofMinisters may
exempt anyagreement orpractice, which improves production ordistribution ofgoods orpromotes
technical oreconomic progress andaffords consumers afairshare ofthebenefits.
(b) Price controls
90. According totheauthorities, Uganda doesnotadminister orcontrol prices ofanygoods and
services. Controls onpetroleum prices wereeliminated inJanuary 1994(Section IV(2)(iv)).43While
theUCDA maypublish "indicative prices" forvarious types andgrades ofcoffee, thesearenotbinding
"butshallonlyserve toindicate toboththegrower andbuyer theapproximate levels atwhich thetype
orgrade ofcoffee maybesoldorbrought" (Coffee Regulations 1994, Section 24).
91. Mostbasicservices continue tobesupplied bypublic enterprises, which holddefactoordejure
monopoly positions andareallowed todetermine theirprices subject toMinisterial approval. These
41Total annual revenue from theimport commission isintheorder ofUSh10billion.
42However, Uganda 'spatent lawexplicitly prohibits patent owners from making licensing contingent on
anti-competitive practices (Section (iv)(b)).
43MFEP (1994a).WT/TPR/S/4
Page 54Trade Policy Review
includetheNationalWaterandSewerageCorporation;theUgandaElectricityBoard(UEB);theUganda
Railway Corporation (URC); andtheUganda PostandTelecommunications Corporation (UPTC).
(c) Public enterprises andprivatization
92. Since the1970s, Uganda 'spublic enterprises (PEs) haveincreasingly suffered fromtheabsence
ofclearly defined policy targets andcontrols, lowcapitalization, alackofadministrative coherence
andsupervision, andmanagerial deficiencies. Streamlining theparastatal sector andreducing direct
government involvement werethusamong thekeyobjectives oftheEconomic Recovery Program of
1987, andinspired thePublic Enterprise Reform andDivestiture Program (PERD) of1993.44
93. In1993, thethen-existing 107public enterprises wereearmarked foreither continued complete
Statecontrol (10enterprises); majority Stateownership (17); minority Stateparticipation (20); full
privatization (43); orliquidation (17). Tospeed upthepaceofreform, allpublic enterprises, except
thetentoremain completely Statecontrolled, haverecently beenclassified aspossible candidates for
fullprivatization (Table IV.4).45Todate, 18former PEshavebeenfullyorpartially privatized and
11liquidated and4repossessed. Theprivatization process issettobecompleted by1997.
94. Asshown inTable IV.4, thePERD willaffect alleconomic sectors, particularly themining
andmanufacturing industries, whose 70-odd PEsaretobeeither privatized orliquidated. Intheservices
area, arange ofpublic facilities, including electricity generation andrailtransport, willretain their
status. Efforts arebeing made, however, toimprove theirtechnical efficiency andcommercial focus.
95. Ownership ofaPEisgenerally offered through open tendering.46According toUganda 's
Divestiture Guidelines, theprincipal award criteria aretheprice andtheterms ofpayment offered by
thebidder; hiswillingness totakeontheexisting debt; anyundertakings tomaintain orimprove the
operation oftheenterprise; anagreement toprotect theinterests ofcurrent employees; anopportunity
forthestafftoownpartofthevoting share capital; andutilization ofappropriate technology. Foreign
anddomesticbiddersaregenerallytreatedequally;accordingtotheauthorities,virtuallyallprivatizations
todatehaveinvolved foreign investors. Thenewly privatized companies areeligible forincentives
under theInvestment Code 1991(Chapter III(2)(ii)) asiftheyhadstarted operation aftertheenactment
oftheCode.
44According toitsPreamble, thePERD isdesigned to"reduce thedirect rôleofGovernment intheUgandan
economy andtopromote acorrespondingly greater rôlefortheprivate sector", andto"improve theefficiency
andperformanceofthePEsthatwillremainundertheownershipandcontroloftheGovernment".Theprogramme
isimplemented byaDivestiture andReform Implementation Committee (DRIC) chaired bytheFinance Minister,
andincluding theAttorney-General; theMinister forPrivatization (reporting totheMinister ofFinance); the
Chairmen oftheNRC Committee ontheEconomy andtheCommittee onParastatal Bodies; theChairman of
theUgandaInvestmentAuthority(UIA);andthreeeminentUgandansappointedbythePrimeMinisteronCabinet
advice. While alldivestiture operations must beapproved bytheCommittee, theconceptual andtechnical work
islargely inthehands ofthePERD Secretariat, reporting totheMFEP.
45Theclassification maybechanged bytheFinance Minister withCabinet approval (Section 31ofthePERD
Statute).
46Theenterprise concerned isadvertised inadvance. Astock exchange, although planned, hasnotyetbeen
established inUganda.Uganda WT/TPR/S/4
Page 55
96. Allproceeds fromdivestitures aretobeusedforUgandan entrepreneurs topromote industrial
development (Section 21). TheNRC iscurrently examining individual areas forspending suchas
infrastructure investment orsubsidization ofspecific industries.
(ii) Assistance toindustries
97. Investors holding acertificate ofincentives qualify forvarious taxandtariff exemptions, if
arange ofprescribed conditions, including export, employment andlocal content criteria, aremet
(Chapter III(2)(ii)).
98. According totheauthorities, therearenosubsidies, whether direct payments ortaxprivileges,
supporting current production inanyindustry.
(iii) Regional assistance
99. Regional andruraldevelopment objectives appear tohavegained prominence inrecent years.
TheGovernment seesaconsiderable resource potential inrural areas, whose mobilization, and
incorporation intheformal sector, could further improve thecountry 'sgrowth performance andits
fiscal andexternal accounts. Inthe1994/95 budget, a100percentdepreciation provision was
introduced,withaviewtoencouraginginvestmentoutsideexistingurbanareas(i.e.Kampala,Jinja/Njeru
andEntebbe). Allinvestment categories, i.e.plant, equipment, andstocks, arecovered bythescheme.
(iv) Protection ofintellectual property
100. While Uganda hassigned theParis Convention ontheprotection ofindustrial property (e.g.
patents, industrial designs, trade-marks, service marks, tradenames andappellations ororigin), ithas
signed neither theBerne Convention northeRome Convention.47
47TheParis Convention contains provisions ofinternational public lawregulating rights andobligations of
themember States andofprivate parties insofarasthese areaffected bytheapplication ofdomestic law(e.g.
obligation togrant national treatment). TheBerne Convention aims toprotect therights ofauthors withregard
totheirliterary,scientificorartisticworks,irrespectiveoftheformormodeofexpression.TheRomeConvention
regulates theprotection ofperformers, producers andphonograms andbroadcasting organizations; liketheBerne
Convention, itprovides fornational treatment among signatories. Thegeneral period ofprotection under the
Berne Convention isthelifeoftheauthor plus50years, under theRome Convention itisatleast20years from
thedateofperformance, broadcast, etc.WT/TPR/S/4
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Table IV.4
Privatization ofpublic enterprises (PEs)
Agriculture andfoodprocessing Mining andmanufacturing Services
Enterprises toremain State-owned (10PEs)
Uganda Coffee Development Authority (none) Uganda Development Corp.
Uganda TeaAuthority Ugadev Properties
National Water andSewerage Corp.
Uganda Development Bank
Uganda Electricity Board
Uganda National Parks
Uganda Prisons Industries
Uganda Railway Corp.
Enterprises tobeprivatized orliquidated (97PEs)
Uganda Livestock Industries Kilembe Mines Apollo Hotel Corp.
Coffee Marketing Board (CMB) National Vision Printing andPublishing Corp. National Insurance Corp.
LintMarketing Board (LMB) Uganda Printing andPublishing Corp. National Housing andConstruction Corp.
Uganda Dairy Corp. Steel Corp. ofEA Uganda Commercial Bank
Kinyara Sugar Works Uganda Cement Industries Transocean Uganda
Produce Marketing Board Uganda Spinning Mills Uganda PostandTelecom Corp.
Uganda Grain Milling Company Lake Latwe SaltProject NileHotel andInternat. Conf. Centre
Agricultural Enterprises Ltd. Uganda Garment Industries Lango Development Company
Agip Uganda Clays Uganda Hotels
BAT Total Development Finance Comp. ofUganda
Uganda Meat Packers Ltd. Uganda Leather andTanning Industry Uganda Consolidated Properties
Uganda TeaCorp. African Ceramics Company Industrial Promotion Services
Kibimba RiceCompany Associated Paper Industries Uganda Airlines Corp.
Foods andBeverages Chillington Tool Gobbot
Uganda Fisheries Enterprises Uganda Metal Prod. andEnamelling Comp. Uganda HirePurchase Company
Jubilee IceandSoda Works Uganda Bags andHessian Mills Housing Finance Company ofUganda
Kakira Sugar Works Associated Match Company NYTIL
Sugar Corp. ofUganda PAPCO Industries Uganda Crane Estates
Uganda FishMarketing Corp. Sukulu Mines Wolfram Investment
Fresh Foods Uganda Crane Industries Ugadev Bank
Uganda Industrial Machinery Uganda Aviation Services
Uganda Pharmaceuticals Uganda Air
Cable Corp. UGMA
Uganda General Merchandise Toro Development Corp.
Uganda Hardwares People 'sTransport
Uganda Motors Uganda Libyan Arab Holding
Uganda Oxygen Uganda American Insurance Company
Winits Uganda Transport Company
African Textile Mills Kulubya Properties
Motor Craft andSales Uganda Wildlife Development Company
Paramount Manufacturers Uganda Tourist Development Corp.
Printpak IntraAfrica Traders
Blenders R.O. Hamilton
Gomba Motors Uganda ToniServices
Agro-Chemicals Uganda Tours andTravel
Itama Mines
Lebel
Comrade Cycle
Domestic Appliance
International TVSales
Republic Motors
Namalere Farm Machinery
Source: Government ofUganda.Uganda WT/TPR/S/4
Page 57
(a) Copyrights
101. Theprotection ofcopyrights inUganda isgoverned bytheCopyright Actof1964, which is
currently under comprehensive review. The1964 Actcovers literary, musical, orartistic works,
cinematograph films, gramophone records, andbroadcasts, butnotcomputer programs anddata
compilations. Protection forpublished literary, musical orartistic works isgranted for50years from
theyearoffirstpublication; published films andphone records areprotected for45years from the
yearofpublication; andbroadcasts for50years from theyearofproduction. Theprovisions for
unpublished works areslightly different. Inorder forawork toqualify forprotection, itsauthor must
beacitizen orresident ofUganda orofacountry listed intheSecond Schedule oftheAct; thelist
iscurrently under review.48
102. Thecopyright holder isgenerally entitled tocontrol thedistribution ofcopies, anypublic
performances forpayment andbroadcasts. Intheevent ofinfringements, hemayseekcompensation
fordamages, aninjunction torestrain further violations (including border measures), andaninjunction
requiring thedestruction ofcopies. Whenever thecompetent Minister considers thatalicensing body
"unreasonably" refuses togrant alicence orimposes "unreasonable terms orconditions", hemaylift
existing restrictions, subject topayment ofanappropriate fee.According totheauthorities, therehave
beennosuchcases todate.
(b) Patents
103. Under thePatent Statute of1991, protection isgranted foranyinventions, whether products
orprocesses, thatare"new, involve aninventive stepandareindustrially applicable".49Apublic interest
provision allows forastatutory decision, validforuptotwoyears, thatexcludes certain kinds ofproduct
orprocess inventions from patentability. Theexclusion istobeapplied onacase-to-case basis, but
hasnotbeenusedtodate. Thepatent period is15years fromthedateofgranting andmaybeextended
forfiveyears. Anannual maintenance feemustbepaid.50Thepatent owner hastheexclusive right
toexploit theinvention and,intheevent ofinfringements, mayinitiate proceedings intheHighCourt
fordamages, aninjunction (including border measures) andother remedies.
48Thecountries are: Andorra, Argentina, Austria, Belgium, Brazil, Burundi, Cambodia, Canada, Chile,
CostaRica,Cuba,Czech Republic,Denmark,Ecuador,Finland,France,Germany,Ghana,Guinea,Haiti,Iceland,
India, Ireland, Israel, Italy, Japan, Laos, Lebanon, Liberia, Liechtenstein, Luxembourg, Mali, Mexico, Monaco,
Nicaragua, Nigeria, Norway, Pakistan, Panama, Paraguay, Philippines, Portugal, Rwanda, Slovak Republic,
Spain, Sweden, Switzerland, United Kingdom, United States, andVatican.
49Noteligible arediscoveries andscientific mathematical theories; plant oranimal varieties oressentially
biological processes fortheproduction ofplants oranimals; schemes, rules ormethods fordoing business;
surgery ortherapy methods forhumans oranimals; andmere presentation ofinformation (Section 8).Under
theprevious regime, patents were onlyobtainable asconfirmation ofU.K. patents and,thus, hadtoberegistered
intheUnited Kingdom (Dun &Bradstreet, 1994).
50USh48,000forthefirstyear,andUSh12,000thereafter.Thefeesareinadditiontotheoriginalapplication
feeofUSh180,000 andtheapplication feeofUSh60,000 forthefive-year extension.WT/TPR/S/4
Page 58Trade Policy Review
104. TheStatute provides fortwotypes ofcompulsory licence:
(i) Onthegrounds of"vital public interest", government agencies ordesignated persons
mayatanytimeobtainMinisterialauthorizationtoexploitapatentedinvention,provided
thatthepatent owner orlicensee hadanopportunity tocomment andthatadequate
remuneration ispaid(Section 30); and
(ii) Ugandan courts maygrant acompulsory licence afterspecified periods ifthepatented
invention hasnotbeenworked inUganda; theexisting degree ofworking doesnot
meetdomestic demand; working ishindered orprevented bytheimportation ofthe
patented product; ortheowner hasrefused togrant licences onreasonable terms, thus
unfairly andsubstantially prejudicing domestic industrial orcommercial activities or
export possibilities (Section 31).51
Todate, nocompulsory licences havebeengranted.
105. Patent owners areheldunder thePatents Statute nottoimpose "unjustified restrictions" on
anylicensee which are"harmful totheeconomic interests ofUganda". TheStatute lists18prohibited
restrictions, including certain exclusive dealings, limitations onproduction andexportation ofpatented
products, andsaleorresale price maintenance requirements (Section 40).
(c) Trademarks
106. Under theTrade Marks Actof1964, anymark (including names, signatures, orwords) may
beregistered withtheRegistrar ofTrade Marks.52Theinitial registration isvalidforseven years and
mayberenewed for14-year periods. Registration maybecancelled ifthemark wasregistered without
anyintention tobeusedandhasactually notbeenused, orifithasnotbeenusedforacontinuous
period ofatleastfiveyears. TheTrade Mark Actdoesnotspecify remedies against infringements,
norarethere provisions forcompulsory licensing. TheActiscurrently being reviewed toinclude
service marks.
51Compulsory licensing isnotpossible within fouryears from thefiling ofapatent application orthree years
from granting thepatent.
52Application feesvarybetween US$150 andUS$250 forforeign applicants andUSh2,000 andUSh4,000
forUgandanapplicants,dependingonthescopeofprotection.AnadditionalUS$250andUSh4,000,respectively,
must bepaidonregistration.