Disparate regimes complicate compliance

Compliance in Africa would be much easier if authorities established similar tariff regimes for services – along with dedicated government accounts for payments. According to Johny Smith, chief executive officer of the Walvis Bay Corridor Group, this is, however, not an easy task to accomplish, given the unique African environment. “If you look at SADC you will find that governments are meeting regularly and signing agreements to improve compliance, but at the end of the day nothing is implemented,” he said. “The first step is to develop a partnership with one country and get that right before we go too big.” According to Neil Gardener, logistics and trade compliance manager sub-Saharan Africa for Baker Hughes, big corporates establish their compliance teams on a global level and then cascade them down to regional level to ensure that all transactions undertaken are compliant. This is crucial in the modernday business environment where companies are being fined millions of dollars for non-compliance. Siemens and Pfizer are two companies that in recent years have had to pay more than $50 million each for non-compliance. According to Michael Wragge, president of the Maritime Law Association of South Africa, there are two categories of compliance – trade compliance and business compliance. He advises companies to ensure they sign water-tight contracts with clients, suppliers and sub-contractors to ensure they are meeting all the necessary compliance requirements. “In Africa the different regulations from country to country make it difficult to always be compliant as there is no specific standard. It is therefore important to ensure you are trained to trade in Africa and know what to expect,” said Gerald Povey, global vice president for projects, mining and energy, UTi. “Non-compliance can lead to massive penalties or fines, but also to an entire consignment of cargo being confiscated.” According to Gardener, too many countries in Africa work in isolation. “Each country has its own import and export regulations, its own inspection regulations and its own tariff rates for services. Implementing a less complex system would bring about more compliance.” CAPTION Johny Smith ... agreements signed but no implementation.