WT/TPR/S/17 Trade Policy Review
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III TRADE POLICIES AND PRACTICES BYMEASURE
(1) Overview
1. Since late1991, Zambia hasimplemented afundamental change inpolicy direction, away from
import substitution tooutward orientation. Thetrade régime hasbeenconsiderably liberalized and
simplified.Thishasbeenaccompaniedbydecentralizationandderegulationinotherspheresofeconomic
activity: domestic prices havebeende-controlled andgovernment intervention inmarketing steadily
reduced; andpara-Statal reform andprivatization issignificantly reducing government involvement
inbusiness activity. Inallofthisthere arenospecial cases; forexample, thenational airline has
beenliquidated, theGovernment 'sholding company formanufacturing enterprises hasbeenclosed
andthecoppercompany,ZambiaConsolidatedCopperMines(ZCCM) ,whichgeneratesover80percent
ofexport earnings, istobeprivatized.
2. Tariffs arenowthemain instrument oftrade policy inZambia. Thetariff structure hasbeen
simplified; itnowcomprises fourbands, withratesranging upto25percent. Likeother members
oftheWTO, Zambia bound allitstariff linesinagriculture attheendoftheUruguay Round. Afew
linesinnon-agricultural sectors arealsobound. Animport declaration feeof5percentwasintroduced
in1995. Quantitative restrictions havebeeneliminated; import controls aremaintained onlyforhealth,
sanitary, phytosanitary andsecurity reasons.
3. Zambia hasvirtually noexport restrictions; scrap metal issubject toanexport limitation and
some prohibitions aremaintained forenvironmental reasons. InApril 1996, Zambia lifted atemporary
export banonmaize. Zambia hasnoexport subsidies andallspecific incentives provided toexporters
ofgoods havebeenabolished. Inaddition, Zambia provides nospecial assistance toindustry. Ithas
recently introduced competition lawandisintheprocess ofaligning itslegislation onemergency actions
andtheprotection ofintellectual property rights withtheprovisions oftheWTO Agreements.
(2) Measures Directly Affecting Imports
(i) Registration anddocumentation
4. Alloperators indomestic orinternational tradeinZambia mustberegistered with, andlicensed
bytheMinistry ofCommerce, Trade andIndustry (MCTI). Trading activities areopentoZambians
andforeigners. Registration andlicensing feesamount tosome K20,000 forZambians; foreigners
payafeeofUS$100.
5. Import consignments forcommercial purposes havetobedeclared onanImport Declaration
Form (IDFO) iftheyareworth more thanUS$500. Theform must besubmitted infourcopies to
acommercial bankuponconfirmation oftheimport order together withthepro-forma invoice orother
relevantdocuments.ApurposeoftheIDFO,besidesdatacollection,istodeterminewhethera5percent
Import Declaration Fee(IDF) istobepaid(section (iii)(d)). TheIDFO, which isrequired forcompletion
ofpreshipment inspection andcustoms procedures, wasintroduced inOctober 1995, andreplaced the
Export Retention Scheme form, which wasanapplication forforeign exchange.Zambia WT/TPR/S/17
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(ii) Customs procedures
(a) Customs clearance
6. Toclearmerchandisethroughcustomsanimportermustpresenttheusualcommercialdocuments,
theIDFO andevidence ofhaving paid, ifapplicable, theassociated fee,andaclean billoffinding
from aclearing agent forpreshipment inspection. Forgoods tobecleared attheborder, theagent
completes a"Customs Form 21",which isthenpresented totheCustom Office forfinalclearance.
Ingeneral, given thatalldocuments areinorder, customs clearance iseffected within twodays. To
improve theprocess, thecomputerization ofcustoms procedures withasingle administrative document
andaself-declaration process isunder preparation
7. Forgoodstobeclearedthroughaninlandport,aRemovalInBond(RIB)ispreparedonCustoms
Form 29andpresented, forstamping, toCustoms atthepoint ofentry. Thegoods aremoved toa
Transit ShedClearing Agent; theimporter isgiven aperiod of10daystoclearthemerchandise, with
theusual documentation. Ifthegoods arenotcleared within thisperiod, thentheimporter incurs
accumulative interest onthetotalamount oftheduties andvalue-added tax(VAT) payable; theinterest
rateisequivalent tothemarket, commercial bank rateplustwopercentage points. TheRIBForm
istobeacquitted attheentry point within 42daysofinitial stamping.
8. Animporter whoisnotsatisfied withacustoms decision canappeal totheCommissioner of
Customs andExcise, whose ruling isfinal.
(b) Customs valuation
9. Customs valuation inZambia isbased ontheBrussels Definition ofValue (BDV). Inaccordance
withtherequirements oftheWTO Agreement onImplementation ofArticle VIIoftheGATT 1994,
which provides forspecial anddifferential treatment fordeveloping countries, Zambia hasuntil
1January 2000toadapt itslegislation, anditscustoms valuation procedures toa"transactions value"
basis, asrequired under theWTO provisions. Theauthorities plantomake therequired adjustment
before thedatefixed under theAgreement.
10. Imports intoZambia ofanf.o.b. value ofUS$2,000 ormore aresubject tocompulsory
preshipment inspection (PSI)ofquality, quantity andprice, carried outbyaspecialized foreign company
appointed bytheGovernment, theSociété Générale deSurveillance (SGS), S.A.1Onthebasis of
information contained intheIDFO andtheproforma invoice, theinspecting SGSoffice sends aRequest
forInformation (RFI) totheseller mentioned inthedocuments, toarrange forthephysical inspection
inthecountry ofsupply before thegoods areshipped. Once inspection isarranged, clearance ofthe
merchandise bySGSisnormally within twodays.
11. After completion oftheinspection andonthebasis ofthefinalinvoice andrelevant bills
submitted bytheseller, SGSissues aClean Report ofFindings (CRF). Thereport contains details
ofthetransaction andSGS'opinion astothemostappropriate tariffline(under theHarmonized System
(HS)) forthegoods, andtheir dutiable value forcustoms purposes. Inthecaseofsuspected
undervaluation ofthegoods, theimporter isasked toproduce certified invoices, which areverified
against catalogues orsimilar units orquantities.
1Until December 1994, imports valued atlessthanUS$5,000 were notsubject toPSI. PSIcurrently covers
about 90percentoftotal imports toZambia.WT/TPR/S/17 Trade Policy Review
Page 24
12. Ifforsome reason goods subject toPSIareshipped without inspection, theimporter isrequired
toapply toCustoms Headquarters foradestination inspection. Forthis,apenalty of5percentof
thec.i.f. value ofthegoods concerned, payable totheZambia Revenue Authority, hasbeenlevied
since September 1995. Animporter isallowed atmosttwolapses ofthePSIrequirement; subsequent
shipments bythatimporter thathavenotappropriately undergone PSIinthecountry ofsupply are
either tobere-exported orseized byCustoms.
13. PSIfeesarepaidtotheSGSbytheMinister ofFinance; suchfeesareequivalent, according
totheauthorities, to0.9percentofthec.i.f. value ofthemerchandise. According totheauthorities,
Zambia isconsidering asystem ofselective PSIbased ona"risktorevenue" profile; atleast25percent
ofexports toZambia during eachcalendar quarter willbeexamined.
14. Currently exempt from PSIare:
(a) goods destined forapproved duty-free zones;
(b) goods destined forenterprises inapproved export-promotion zones;
(c) goods destined forapproved manufacturing bond (manufactured under bond);
(d) accompanied orunaccompanied personal luggage;
(e) ammunition, weapons andimplements ofwarimported bytheGovernment;
(f) household goods andpersonal motor vehicles, provided theyqualify forexempt entry
asnewresidents 'effects orthereturning residents 'entitlement;
(g) current newspapers andperiodicals;
(h) parcel postandgifts byforeign Governments orinternational organizations for
foundations, charities andrecognized humanitarian organizations;
(i) personal giftssentbyforeign residents totheirrelations inZambia fortheirpersonal
use;
(j) gifts andsupplies toDiplomatic andConsular Missions andtoUnited Nations '
Organizations, imported fortheirownneeds; and
(k) goods imported under dutyexemption inaccordance withtheterms ofatechnical
assistance agreement withtheGovernment.
(iii) Tariffs andother levies andcharges
(a) General features
15. Goods imported toZambia aregenerally subject tofourtypes ofcharges: tariffs andtheIDF,
bothofwhich onlyapply toimports; andexcise dutyandVAT, which apply equally toimports and
todomestic products.
(b) Tariff structure
16. Zambia hasconsiderably simplified itstariffinrecent years. Since 1991, themaximum tariff
hasbeenlowered from 100percentto25percent; tariff categories havebeenreduced from 12to
four; andvirtually allsuspensions andexemptions havebeeneliminated. Under the1996 Budget,
themaximum tariff waslowered by15percentage points, from40to25percent; thetariff structure
wasrationalized, particularly byreducing thenumber ofbands fromfivetofour; andmany exemptions
were eliminated. Thus, thetransparency ofthetariff hasbeenconsiderably improved, andrates
substantially lowered. According totheauthorities, future tariffsimplification willdepend onthetariff-
rateelasticity ofgovernment revenue under the1996changes, which areconsidered asatest;budgetaryZambia WT/TPR/S/17
Page 25
constraints andpreferential treatment under theCommon Market forEastern andSouthern African
States treaty arethemain constraints tothefuture reduction oftariff rates.
17. Zambia accords atleastm.f.n. tariff treatment toallcountries. Since 1988, Zambia 'stariff
hasbeenbased ontheHarmonized System (HS); the1996tariffhas6,006 linesattheeight-digit level.
Virtually alltariffs areapplied onanadvalorem basis. Zambia hadabolished specific duties in1991,
butin1996itreintroduced themonusedandreconditioned tyres(K500perkg.); aminimum specific
alternative customs dutyofK500,000 hasalsobeenapplied sinceJanuary 1996onusedimported motor
vehicles worth lessthanUS$2,000.
18. IntheUruguay Round, Zambia bound 186tariff linesonnon-agricultural products, equal to
3.6percentofthetotalnumber oflinesinthesectors concerned: 23linesarebound atceiling rates
of60percent, including air-conditioning machines, refrigerators, freezers, dry-cleaning machines
andsome categories ofdrying machines; 22lineshaveceiling bindings of45percent,including dish-
washing machines ofthehousehold type, machinery forcleaning ordrying bottles orother containers,
packing orwrapping machinery andcertain categories ofmower; 107linesat40percent,including
chemical products, rubber andarticles thereof, printed matter, jute,tools, cutlery, spoons andforks
ofbasemetal, certain categories ofmachinery andoftractors, among others; 30linesat35percent,
including mineral andchemical fertilizers andmachinery forthemanufacture ofconfectionery, cocoa
orchocolate; andfourlinesat30percent, forphotographic items. Thesimple average bound rate
onthese goods is42percent.
19. Likeother Uruguay Round participants, Zambia bound allitsagricultural items; except for
21tariff lines, ceiling bindings apply toallproducts inthissector. Thesimple average bound rate
is123percentinagriculture: themaximum bound rateissetat125percentandapplies toabout
97percentofthetariff linesinthesector. Thetariff ratewasbound at45percentonwheat and
"meslin", rye,barley andoats; 50percentoncocoa beans, cocoa paste, cocoa butter, fatandoil,
andchocolate andother foodpreparations containing cocoa; and60percentoncocoa powder ,not
containing added sugar orother sweetening matter.
20. Zambiadidnotlistany"otherdutiesandcharges"initsUruguayRoundtariffSchedule.Zambia
isintheprocess ofrenegotiating itsGATT Schedule LXXVIII thatcontains thetariff concessions of
thedefunct Federation ofRhodesia andNyasaland; therelated bindings mostly concern industrial goods,
including tractors, motorcycles, television receivers, pumps andpaints.
21. Zambia applies tariffs tothec.i.f.value ofimports. Suchtariffs andother charges arenormally
calculated onthebasis ofthedutiable value shown ontheCRFissued bytheSGS. Border charges
arecollected byanindependent institution, theZambia Revenue Authority (ZRA), setupbya
Parliamentary Actin1994toimprove revenue performance. They account formore than50percent
ofbudget revenue (excluding capital andgrants) (Table III.1). Thedecline intheratioofborder charges
toimports, from almost 40percentin1991 to20percentin1994, isindicative ofthesubstantial
simplification ofthetariff, andlowering ofrates, undertaken byZambia. However, according tothe
authorities, tariff evasion, through misclassification ofitems, smuggling, under-invoicing orfalse
declaration oforigin forpurposes ofpreferential treatment, remains aproblem; efforts areunder way
toimprove theeffectiveness inthecollection ofborder charges. Success inthisareacould contribute
toafurther lowering oftheZambian tariffWT/TPR/S/17 Trade Policy Review
Page 26
Table III.1
Border charges, 1991-94
1991 1992 1993 1994
(million kwacha)
Border chargesa24,571 62,299 148,820 145,830
Total budget revenueb41,602 113,628 212,093 237,206
Imports c.i.f 61,537 144,109 434,650 727,708
Shares ofimport dutiesc59.1 54.8 70.2 61.5
"Collection" ratiod39.9 43.2 34.2 20.0
a Border charges include tariffs, import declaration fee,excise duties andsales tax(through 1994) applied toimports.
b Total revenue excludes capital andgrants.
c Share ofborder charges intotalrevenue
d Theratioofrevenue from border charges tothec.i.f. value ofimports.
Source: Dataprovided bytheZambian Revenue Authority.
22. Zambia 'ssimple average m.f.n. import tariffin1996is13.6percent,withastandard deviation
of9.3percent(Table III.2). Theaverage tariff ishighest inagriculture, where itis18.2percent2;
averages inmining andindustry are7.5and13.5percent, respectively. Relative tariff dispersion
ishighest inmining, followed closely byindustry.
Table III.2
Main features ofZambia 'sm.f.n. tariff, 1996
Tariff dispersion
Simple average
m.f.n. tariffRange Standard deviationaCoefficient of
variationa
Alltariff lines 13.6 0-25 9.3 68.6
Bysectorb:
Agriculture andfisheries 18.2 0-25 8.5 46.7
Mining 7.5 0-25 5.9 79.1
Industry 13.5 0-25 9.3 69.3
Bydegree ofprocessing
Primary products 14.4 0-25 9.2 63.8
Semi-processed products 9.5 0-25 8.8 92.4
Finished goods 16.5 0-25 8.6 52.3
a Thestandard deviation measures theabsolute dispersion ofadistribution; thecoefficient ofvariation isameasure ofrelative
dispersion, defined asthestandard deviation divided bytheaverage.
b Based onISICclassification.
Source: Dataprovided bytheZambian authorities; andcalculations bytheWTO Secretariat.
2Agricultural products comprise rawandfirst-stage processed goods from thesector, including fishery and
forestry products.Zambia WT/TPR/S/17
Page 27
23. Zambia 's1996 tariff hasfourtiers, ofrateszero, 5,15and25percent. About twothirds
ofalltariff lines bearrates of15or25percent, while some 20percentoflineshavezerorates
(Chart III.1). Ingeneral, thezeropercentrateapplies toimports ofsome categories ofrawmaterials,
including natural rubber, sulphur ofallkinds, gypsum, anhydrite andbalata; items ofproductive
machinery, suchasagricultural, horticultural/forest machinery forsoilpreparation/cultivation, lawn-
rollers, milking machines, dairy andbee-keeping machinery, poultry incubators, machines for
cleaning/sorting seeds andgrain andmachinery forsorting mineral products andbinding books; and
certain "merit" goods, including books, fertilizers andsurgical instrument. Other rawmaterials and
industrial machinery aresubject toanimport tariffof5percent. The15percenttarifftierisgenerally
usedforintermediate goods, suchasnatural cork(debacked/roughly squared orinrectangular blocks),
articles ofnatural cork, agglomerated cork, residual lyesfrom themanufacture ofwood pulp, some
categories ofpaper andpaperboard, cocoa andcocoa preparations, tobacco andwool.3Theauthorities
intend toreduce thetariff onimports ofintermediate goods to10percentin1997. Most imports of
finalproducts arepresently subject tothe25percentrate; theauthorities plantolower therateon
consumer goods to20percentin1998.
3However,theclassification"intermediate"issometimesmisleading:highertariffratesapplytorawmaterials
which are,orcanbe,locally produced; therateis15percentoncopper, aluminium, rawhides andskins and
leather; and25percentonlogging, andsome fruitandanimal, products.WT/TPR/S/17 Trade Policy Review
Page 28
24. Inaggregate, Zambia 'stariff displays negative escalation from primary tosemi-processed
products, withaverage ratesinthecategories declining from 14.4to9.5percent; however, rates
escalate to16.5percentforfinished goods (Table III.2andChart III.2). Escalation ismoderate in
foodproducts andinfactnegative infoodmanufacturing from semi- tofully-processed items, e.g.
thetariff rateonmeatis25percentwhereas 5percentapplies tosome animal fatsandtheircleavage
products andtosome preparations ofmeat(Table AIII.1). Escalation ismost pronounced inpaper
products, withratesrising from5percentonaverage forrawmaterials toanaverage of23.5percent
forfinished goods; other sectors withsubstantial escalation aretextiles, leather products, industrial
chemicals, petroleum products andrubber andnon-ferrous metal items.
(c) Tariff preferences
25. Zambia accords tariff preferences toitsimports fromother members oftheCommon Market
forEastern andSouthern African States (COMESA). Under the1996 Budget, therateonZambia 's
COMESA imports is40percentoftheapplicable m.f.n. rate. Therulesoforigin applied byZambia
forCOMESA trade aredetailed insection (vii), below.
26. Under COMESA treaty, which replaced thePreferential Trade AreaforEastern andSouthern
African States (PTA) inlate1994, member countries agreed toliberalize tradeandtoestablish acommonZambia WT/TPR/S/17
Page 29
external tariffbytheyear2004.4Negotiations areunder wayforfreemovement ofcapital andlabour
between member countries.
(d) Other levies andcharges
27. Most imports aresubject totheIDF. Thefeewasintroduced, forfiscal reasons, in
October 1995. Itislevied atarateof5percentonthec.i.f. value ofcommercial goods worth at
leastUS$5005;thelistofitems exempt from theIDFisidentical tothose exempt frompreshipment
inspection (section (ii)(b)). According totheauthorities, thefeeistobewithdrawn byend-1996.
28. TheIDFiscollectedbycommercialbanksuponreceiptoftheImportDeclarationFormsubmitted
byimporters; thefeeisremitted totheBank ofZambia. Customs requires evidence ofitspayment
fortherelease oftheimports towhich theIDFapplies. Where animporter failstoprovide such
evidence, customs officials compute thefeepayable fromtheavailable dataandprovisionally release
thegoods uponpayment bytheimporter ofacashsurety ofnotlessthantwice theamount ofthefee.
Goods imported incontravention oftheprovisions ofthelegislation covering theIDFaresubject to
apenalty equal totheamount ofthefee.
29. Zambia levies excise duties oncertain products atratesranging from10to125percent. The
dutyiscollected oncaneandbeetsugar andsome oftheirderivatives, beverages, tobacco andsome
derivatives andsubstitutes, petroleum products, tyresandtubes, andonmotor carsuntilFebruary 1996
(Table III.3). Theratesarethesame whether thegoods aredomestically produced orimported. On
imports, excise dutyisapplied tothec.i.f. value pluscustoms duty.6Onlocally produced goods, it
ischarged onthe"sales"price (production costs plusmark-up). The1996 Budget introduced arate
of3percentonallelectricity bills, withtheproceeds going toaspecial fundforruralelectrification.
The1996 Budget alsoraised thespecific excise dutyonfuelfrom K30toK40perlitre. Zambia
levies asurtax of15percentonlocally produced opaque beer.
30. InJuly1995, Zambia replaced asales tax(of23percent) withavalue-added tax(VAT).
TheVAT iscollected atastandard rateof20percentonbothgoods andservices; onimports, VAT
islevied ontheirc.i.f.value plustariffs, andondomestic goods thebaseisthe"sales" price. According
totheauthorities, VAThasbeenintroduced toenhance Zambia 'sexport competitiveness byeliminating
thecostofinput salestaxforexporters andbyremoving thedistortions created bythecascading of
thesalestaxandsome ofthe"nuisance taxes", including theinsurance levyandthetaxonairline tickets,
which inhibit enterprises.
31. Forsocial reasons, VAT doesnotapply tohealth, education, busfares, domestic kerosene
(paraffin), funeral services andhouse rents. Inaddition, insurance andfinancial services, gaming and
betting supplies, thesupply ofgoldinbullion form, supplies toprivileged persons, purchases andsales
ofshares incompanies listed ontheLusaka Stock Exchange, aircraft licensed tocarry 14ormore
4Intra-PTA tariffs weretobephased outbytheyear2000: thetariffs weretohavebeenreduced to40percent
ofthebasem.f.n. rates by1993, andin10percentinstalments every twoyears from 1994 (GATT(1995), and
WTO(1995).
5Ifthec.i.f. value isnotavailable, theIDFisapplied to122percentofthef.o.b. value ofimports.
6Thevalue basis forpurposes ofcalculating theexcise dutywasamended bythe1996 Budget toinclude
theimport tariff.WT/TPR/S/17 Trade Policy Review
Page 30
passengers, andairline tickets arenotsubject toVAT. Arefund ofVAT isavailable ongoods with
avalue ofmore thanUS$100 iftheyareexported bytourists.
Table III.3
Excise taxes, 1996
HScategory Description ofgoods Duty rate
(percent)
17.01 Cane orbeetsugar andchemically puresucrose, insolid form 10
Ex. 22.01 Waters, including natural orartifical waters, aerated, notcontaining added sugar or
other sweetening matter norflavoured25
Ex. 22.02 Waters, including mineral waters, aerated, containing added sugar orother
sweetening matter orflavoured, andother aerated non-alcoholic beverages25
Beermade from malt:
22.03.00.10 Opaque beer 35
22.03.00.90 Other, including ale,lager andstout 125
22.04 Wine offresh grapes, including fortified wines, grape must other thanthatof
Heading No.20.09125
22.05 Vermouth andother wine offresh grapes flavoured withplants oraromatic
substances125
22.06.00.00 Other fermented beverages (forexample, cider, perry, mead) 125
22.07.10.00 Undernatured ethyl alcohol ofanalcoholic strength byvolume of80%vol.or
higher125
Ex. 22.08 Undernatured ethyl alcohol ofanalcoholic strength byvolume oflessthan80%
vol; spirits, liqueurs andother spirituous beverages125
24.02 Cigars, cheroots, cigarillos andcigarettes, oftobacco oroftobacco substitutes 125
24.03 Other manufactured tobacco andmanufactured tobacco substitutes; "homogenized"
or"reconstituted" tobacco; tobacco extracts andessences125
Petroleum oilsandoilsobtained from bituminous minerals, other thancrude;
preparations notelsewhere specified orincluded, containing byweight 70percent
ormore ofpetroleum oilsorofoilsobtained from bituminous minerals, these oils
being thebasic constituents ofthepreparations:
27.10.00.19 Petroleum spirit (motor spirit) 45
27.10.00.30 White spirit 15
27.10.00.39 Other lightoils 15
Ex. 27.10.00.40
Ex. 27.10.00.40Kerosene (paraffin)
fordomestic use
forindustrial use15
45
Ex. 27.10.00.50 Low-sulphur gas-oils 45
27.10.00.60 Automotive gas-oils (diesel) 45
27.10.00.70 Other fueloils 45
Ex. 27.11 Petroleum gasses andother gaseous hydro-carbons 45
Tyres andtubes:
40.11 Pneumatic tyres ofrubber 10
Ex 40.12 Retreaded pneumatic tyres ofrubber; solid orcushion tyres, interchangeable tyre
treads andtyreflaps, ofrubber10
Table III.3 (cont'd)Zambia WT/TPR/S/17
Page 31
HScategory Description ofgoods Duty rate
(percent)
40.13 Inner tubes ofrubber 10
Motor carsandother motor vehicles principally designed forthetransport of
persons (other thanthose ofHeading No.87.02 andother thanambulances, prison
vansandhearses), including station wagons andracing cars:a
Ex 87.03.10.00
87.03.21.90
87.03.22.90
87.03.31.90
Ex. 87.03.90.90Ofacylinder capacity notexceeding 1,500 c.c. 10
Ex. 87.03.10.00
87.03.23.90
87.03.24.90
87.03.32.90
87.03.33.90
Ex. 87.03.90.90Ofacylinder capacity exceeding 1,500 c.c. 20
- Goods fortheexclusive useoftheGovernment ofZambia oranyother country or
aninternational organization withadiplomatic mission inZambia; subject tothe
condition thatacertificate under thehand ofanofficer authorized inthatbehalf by
theGovernment orthediplomatic mission, asthecasemaybe,isfurnished tothe
proper officer, certifying thatthegoods arefortheexclusive useoftheGovernment
orthediplomatic missionFree
a Theexcise taxonmotor carswaseliminated inFebruary 1996.
Source: Information provided bytheZambian authorities.
32. Goods notsubject tothestandard VAT rateareclassified under twocategories: zero-rated
goods, towhich theprovisions oftheVAT Actapply, although taxisnotpayable (i.e.theVAT rate
onthegoods iszero); andexempt goods, which arenotsubject tothetax.Thisdifferentiation has
beenintroduced fordrawback purposes: zero-rated items qualify forVATrefunds while exempt goods
donot.Products oftheZambia Consolidated Copper Mines (ZCCM) wereswitched witheffect from
1April 1996 from theexempt tothezero-rated category. Thelistofzero-rated supplies comprises:
(a) export ofgoods from Zambia byoronbehalf ofataxable supplier;
(b) basic agricultural products andfoodstuffs, including sugar;
(c) thesupply ofservices, including transport andancillary services thataredirectly linked
totheexport ofgoods under item(a).
(d) thesupply ofaviation kerosene;
(e) thesupply ofgoods byaduty-free shop, approved under theCustoms andExcise Act,
forexport bypassengers onflights todestinations outside Zambia;
(f) thesupply ofgoods, including meals, beverages, duty-free goods, foruseasaircraft
stores onflights todestinations outside Zambia;
(g) thesupply ofservices thatarephysically rendered outside Zambia;
(h) thesupply ofgoods orservices toadonor inZambia forofficial purposes;
(i) goods orservices supplied under atechnical aidprogramme orproject thatare:
- paidthrough donor funding; and
- provided bythedonor, orbyacontractor ofthedonor under awritten
agreement withtheRepublic ofZambia;
(j) export salesofcopper andcobalt; andWT/TPR/S/17 Trade Policy Review
Page 32
(k) tourpackages (under specified conditions).7
(e) Duty andtaxexemptions andrefunds
33. Zambia usedtohavenumerous dutyandtaxexemptions andrebates. They were generally
grantedàlacarte.8Underthe1993InvestmentAct,farmers,non-traditionalexporters,import-competing
firms andsmall-scale andvillage enterprises qualified forsome incentives, suchasexemption from
tariff andsales taxes onallmachinery andequipment (other thanmotor vehicles) required fortheir
establishment, rehabilitation orexpansion. Thelistofproducts exempt fromimport duties (tariffs and
import taxes) included:
(a) some capital goods imported byinvestors holding aninvestment license;
(b) government imports;
(c) medicaments;
(d) goods imported inthecontext offoreign aidprogrammes;
(e) goods imported byforeign missions (diplomats);
(f) goods donated tocharitable organizations;
(g) goods imported bychurches;
(h) goods imported byhospitals andschools;
(i) returning residents 'andnewresidents 'effects;
(j) relief granted toindividuals bytheMinistry ofFinance through Statutory Instruments;
(k) goods imported bythePresident; and
(l) rawmaterials asstipulated inthe1995Budget (organic andinorganic chemicals, iron
andsteel, rubber andplastic).
34. Followingthereductionincustomsdutiesandinordertocompensatefortherevenuelossarising
fromexemptions, the1995 and1996 Budgets removed mostoftherebate, remission andsuspension
provisions, leaving inplaceessentially onlythoseonselected goods andthoseagreed under international
conventions oragreements (e.g.diplomatic imports). TheGovernment ofZambia, schools, hospitals
andnewinvestors nolonger receive dutyexemptions. Goods imported bythemining industry, motor
vehicles imported bynewresidents, donated goods andpetroleum oilfeedstock imported through the
pipeline arenowsubject toborder charges. A1994 suspension ofsalestaxandimport duties ona
certain category ofbuses, extended during 1995 onallbuses, hasalsobeenlifted.
7Products under item(b)were exempt until 30June 1996, although agricultural products were zero-rated
when exported. Goods under item(i)became zero-rated on1April 1996.
8In1995, remissions ofpayable duties onsome specified imported spare parts andequipment were granted
tocompanies suchasBurrow Binnie Zambia Limited, Zambia Railways Limited, PepStores Limited, Africa
Supermarkets Limited/African Retail Properties, andMultichoice Kaleidoscope Zambia.Zambia WT/TPR/S/17
Page 33
35. Selective suspensions ofdutyonmanufacturing inputs canstillbegranted bytheMinister of
Finance uponrequest frommanufacturers producing inZambia. Under theprovisions oftheStatutory
Instrument 23of19949,theapplicant must submit written evidence that:
(a) therateofimport dutyontheinputs forthegood tobemanufactured ishigher than
therateapplicable tolikeimported finished goods;
(b) theinputs must besolely usedformanufacturing purposes andconstitute atleast
25percentofthefactory costofthegoods tobemanufactured; and
(c) thecostofproduction based onnormal customs dutyratesonthemanufacturing inputs
would render theoutput uncompetitive against similar imported goods.10
36. Statutory Instruments 12of1996 suspended thecustoms duty onmaize (HSheading
No.1005.90.00), theaction wastaken because Zambia 'srecent drought; customs andexcise duties
onvehicles imported incompletely knocked down (CKD) form have been suspended since 1993
(Statutory Instrument 16of1993). In"compensation" fortheremoval ofrebates andsuspensions,
the1996Budget reduced therateofcustoms dutyonproductive machinery foragriculture andmining,
andsome "merit" goods suchasbooks, fertilizers andsurgical instruments from20tozeropercent;
andrawmaterials thatwere dutyfreecontinue toenjoy thisstatus.
37. Under theprovisions oftheStatutory Instrument 16of1996, thefollowing rebates, refunds
andremission remain ineffect:
(i) refund orremission ofexcise dutyorsurtax ongoods destroyed orreturned tolicensed
premises;
(ii) remission orfull/partial refund ofdutyon:
- goods destroyed byaccident orlostbyaccident while under customs control;
- goods forapproved technical assitance orexperts;
(iii) partial orfullrefund ofdutyon:
- defective goods surrendered after having been released from customs
control;
- goods re-imported intoZambia afterhaving beenexported from Zambia;
- petty consignments;
- goods imported bytourists;
- commercial travellers 'samples, andnewresidents 'effects (except motor
vehicles);
- travellers 'effects;
- materials tobeusedinoccupational therapy orfortheoccupational training
oftheblind;
- goods imported orpurchased bytheZambia/Tanzania Railway Authority
(Tazara) foritsownuse;
- goods imported ortaken outofbond foranapproved pipeline project;
9AStatutory Instrument isthelegal mechanism forMinisters togiveeffect toadecision: itisusedtoenact
orimplement some laws adopted byParliament (Chapter II(2)).
10Four suchsuspensions havebeen granted; oneforimports ofhammermill components andtheothers for
imports ofinputs forpharmaceutical products.WT/TPR/S/17 Trade Policy Review
Page 34
- aircraftstoresandequipmentforaircraftengagedininternationalairnavigation,
search orrescue;
(iv) partial orfullrefund ofcustoms dutyongoods temporarily imported intoZambia and
onfuel,lubricants andconsumable technical supplies forcertain aircraft, including
anypublic transport aircraft;
(v) remission ofdutyondeficiencies inwetgoods inbulkconsigned toZambia; and
(vi) remission, orpartial orfullrefund ofdutyforscientific, relief orother programmes
orschemes orbusiness enterprises.
38. Refundsandremissionsarealsograntedunderprovisionsofinternationalconventions,including
theConvention ofInternational Civil Aviation andtheVienna Convention onDiplomatic Relations.
(iv) Import prohibitions andlicensing
39. Zambia completed thedismantling ofimport licensing in1995. TheImport Declaration Form
submitted tocommercial banks serves dataandtaxcollection purposes (section (i)).Thedismantling
ofthelicensing system started in1992 withtheintroduction ofanExport Retention Scheme (ERS).
Under thisscheme, foreign exchange purchased fromexporters (mainly ZCCM) orprovided bydonors
wassoldbytheBank ofZambia (BOZ) forimports under anOpen General Licence (OGL) system.
Foreign exchange allocated bytheBOZ forpayments ofOGL imports wasdisbursed onlyagainst
irrevocable documentary letters ofcredit.
40. TheOGL scheme operated onthebasis ofanegative listwhich, attheendof1994, included
gold, silver, platinum, jewellery, weapons andammunition, alcoholic beverages, tobacco, televisions,
radios, videocassette recorders andcamcorders, andpassenger automobiles. Alicence wasnotrequired
forimports covered bythescheme andforpersonal andhousehold effects, trade samples, diplomatic
shipments, andvehicles temporarily imported toZambia: theERSform wasusedasanapplication
forforeign exchange, animport licence andpreshipment inspection. Ingeneral, evidence wasrequired
thatthemost competitive international price wasobtained forimports (mainly imports worth more
thanUS$500,000).11TheOGL scheme ended afterthesuspension oftheExchange Control Actin
1994(Chapter I(Annex I.1)). Since thenZambia hasnotexercised licensing requirements onimports.
41. According totheauthorities, Zambia nowonlymaintains import prohibitions andcontrols for
environmental, health andsecurity reasons, andunder international conventions. Thelistofgoods
banned from importation comprises:
(a) baseorcounterfeit coins;
(b) anygoods thatareindecent, obscene orobjectionable;
(c) anygoods thatmight corrupt themorals oftheinhabitants ofZambia;
(d) prison-made andpenitentiary-made goods;
(e) quilika (adrug);
(f) spirit-based beverages thatcontain preparations, extracts, essences orchemical products
thatarenoxious orinjurious;
(g) left-hand driven vehicles;
(h) firearms andammunition;
11International Monetary Fund (1995).Zambia WT/TPR/S/17
Page 35
(i) radio-active minerals; and
(j) endangered species.
42. Theimportation intoZambia ofstillsandallapparatuses, ortheirparts, capable ofbeing used
fortheproductionorrefiningofalcoholisprohibitedexceptwiththewrittenpermissionoftheController
ofCustoms andExcise.
(v) Trade sanctions
43. According totheauthorities, Zambia currently applies notrade sanctions, either nationally
orinternationally, except inconformity withUnited Nations 'Resolutions.
(vi) Emergency actions
(a) Safeguard measures
44. ZambiahasnolegalinstrumentthatincorporatesthesafeguardprovisionsofGATTArticleXIX,
although theauthorities areconsidering theintroduction ofsuchlegislation. There isasafeguard clause
intheCOMESA Treaty.12
(b) Anti-dumping andcountervailing measures
45. Sections74and74-AofZambia'sCustomsandExciseAct(Chapter662oftheLawsofZambia)
provide thelegalbasis foranti-dumping andcountervailing measures, respectively. Inconsequence
ofitsratification oftheWTO Agreements inthese areas, Zambia plans toupdate itsanti-dumping and
countervailing legislation, inorder tobring them intocompliance withZambia 'sWTO obligations.
There areprovisions under theCOMESA Treaty foranti-dumping andcountervailing measures.13
46. Acomplainant inZambia whoconsiders thatacountervailing orananti-dumping dutyought
tobeimposed onimported goods mustprovide necessary information insupport ofhisrequest tothe
Controller ofCustoms andExcise, whoisresponsible fortheadministration oftheCustoms andExcise
Act,including itsanti-dumping andcountervailing provisions. Onreceipt ofacomplaint, theController
undertakes aninvestigation intotheimports concerned andreports theresults totheMinister ofFinance
whomakes thefinaldecision (inconsultation withtheMinister responsible fortrade). Thelegislation
doesnotapply togoods imported toZambia under rebate oftheordinary duty.
47. Thelevelofananti-dumping dutytobelevied must beequivalent to:
(i) anamount bywhich thedomestic value (inthecountry ofexport) exceeds theexport
price (ifany)oftheconcerned goods; or
12WTO (1995).
13WTO (1995).WT/TPR/S/17 Trade Policy Review
Page 36
(ii) anamount tobedetermined bytheController (ofCustoms andExcise) ifthere isno
export price ordomestic value.14
48. Ananti-dumping dutyof15percenthasbeenineffect since theearly 1970s onwindows and
doors, andwindow anddoorframes, ofironorsteel(HSheading 73.08.30.00). Itapplies tothec.i.f.
value ofthese goods, irrespective ofthecountry ofexport.
49. StatutoryInstrument54of1994laiddowntheinvestigationsrequiredforimposingcountervailing
duties on"subsidized imports" toZambia. Itrequires thatprocedures andconditions beinconformity
withthose stipulated inanyinternational tradeagreements towhich Zambia isasignatory. Theamount
ofcountervailing dutypayable must beequal totheamount ofanyexport compensation, incentive,
subsidy orother payment paidorpayable toanexporter, manufacturer orsupplier inrespect ofthe
export ofthegoods concerned.15According totheauthorities, Statutory Instrument 54hasnotbeen
effectively enforced.
(vii) Rules oforigin
50. Section 73oftheCustoms andExcise Act(Chapter 662oftheLaws ofZambia) defines the
origin ofanymanufactured good asthecountry inwhich thelastprocess ofmanufacture hasbeen
performed. Forpurposes oflabelling, Statutory Instrument 133of1978 attributes theorigin ofa
processed foodtothecountry inwhich itchanges itsnature, i.e.which theauthorities define asachange
intariff classification.
51. Under theTreaty oftheCommon Market forEastern andSouthern Africa (COMESA),
preferential treatment (lower tariff rates) isgranted toimported goods thatare:
(i) wholly produced inamember State(i.e.nomaterials fromoutside theCOMESA have
beenused); or
(ii) produced inthemember States andthec.i.f. value ofanynon-COMESA materials
useddoesnotexceed 60percentofthetotalcostofallmaterials usedintheproduction;
or
(iii) produced inmember States insuchmanner thatthevalue-added resulting from the
process ofproduction accounts foratleast45percentoftheex-factory costofthe
goods; or
(iv) ofparticular importance totheeconomic development ofthemember States andcontain
atleast25percentvalue-added notwithstanding theprovision in(iii).
14"Domestic value" means themarket price atwhich, atthetimeofexportation toZambia, agood orasimilar
itemisfreely offered forsale, forconsumption intheexporting country, toanypurchaser trading atthesame
orsubstantially thesame level oftrade asthatoftheimporter inZambia. Itshall notinclude anydrawback
ofdutyallowed orother taxation remitted bytheGovernment oftheexporting country. "Export price" ofa
good means thef.o.b. price atwhich itissoldtotheimporter inZambia.
15Under Statutory Investment 54,"subsidized imports" means goods inrespect ofwhich anyexport
compensation, incentive, subsidy orother payment isorwillbegranted toanexporter, manufacturer orsupplier
ofthegoods.Zambia WT/TPR/S/17
Page 37
(viii) Local-content schemes
52. The1996Budget Speech revoked thelocal-content requirements thathadbeeninforce under
the1993 Investment Act.16Under theAct,aninvestor qualified forspecial incentives byusing a
significant proportion oflocalrawmaterials (40percentinpractice); thiswasexpected toresult in
netforeign exchange savings. These incentives consisted ofexemption fromcustoms duties andsales
taxonallmachinery andequipment (other thanmotor vehicles) required fortheestablishment,
rehabilitation orexpansion oftheindustry. They weregranted inaddition toother general incentives
(section(2)(iii)(e)). According totheauthorities, Zambia currently hasnolawsorregulations prescribing
localcontent.
(ix) Standards andother technical requirements
(a) Standardization, testing andcertification
53. InZambia, theStandards ActNo.20of1994, arevision oftheStandards ActNo.22of1982,
provides forthedevelopment ofstandards andforschemes fortheirimplementation, including product
certification.UndertheAct,threestandardscanbeestablishedinZambia:voluntarystandardspublished
bytheZambia Bureau ofStandards (ZABS); compulsory standards forthepromotion ofpublic safety
orinthepublic interest; andexport standards forthepromotion ordevelopment ofexports.17The
lasttwoarepublished bytheMinister ofTrade andtheybecome mandatory oncedeclared, which none
havebeentodate. Local exporters areallowed toproduce goods thatcomply withtherequirements
setbyforeign importers evenifsuchstandards aredifferent from those inforce inZambia. Under
theAct,asupplier ofdangerous ordefective products istobeprosecuted, butinpractice such
prosecutions arerare.
54. Zambian standards aremainly based onthoseoftheInternational Standards Organization (ISO),
theCodex Alimentarius, andothersuitable foreign sources. TodateZABS hasapproved 230standards,
mainly intheareas ofconstruction andfood.18Forproducts thatmeetZambian standards, aZABS
mark isavailable. Themark isusedby12Zambian-based companies; itisalsoavailable toforeign
companies.
55. TheZambia Bureau ofStandards (ZABS) implements theStandards Act,buthascurrently
notesting laboratories ofitsown.19Itoperates anaccreditation scheme using laboratories thatmeet
asetofcriteria forcompetence. ZABS hasplans tobuild itsowntesting facilities. ZABS hasno
formal mutual recognition agreements withforeign standards agencies. However, adraftagreement
onco-operation between ZABS andtheMalawi Bureau ofStandards provides formutual recognition
ofstandards, testing régimes andproduct certification. Further, agentlemen 'sagreement exists in
16Therevocation waseffected through anamendment tothe1993 Investment Act.
17Allstandards areinitially voluntary.
18There isnonational building Code. Inpractice, builders generally usetheir ownstandards.
19ZABS isgoverned bytheStandards Council ofZambia; theCouncil issubject tothecontrol anddirection
oftheMinister ofTrade.WT/TPR/S/17 Trade Policy Review
Page 38
theSouthern Africa Development Community (SADC) under which member States areexpected to
recognize eachothers 'schemes. Zambia unilaterally recognizes foreign certifications.
56. Theauthorities areconsidering plans tolevyontraders astandard development levy, not
exceeding 2percentofafirm'stotalannual turnover, topartially finance ZABS.
(b) Health, sanitary andphytosanitary regulations
57. Zambia 'shealth, sanitary andphytosanitary measures areadministered, asappropriate, bythe
Ministries ofAgriculture andHealth. Allimports ofliveanimals, plants andseeds intoZambia are
subject toquarantine regulations, irrespective oftheircountry orregion oforigin. Bothimports and
exports offoodmustsatisfy theprovisions oftheFood andDrugs ActofSeptember 1978. TheAct
specifies packaging andlabelling requirements forfood, andstandards formaize samp, riceandbread.
Unlabelled foodandbabies 'foodcontaining afoodadditive isgenerally notallowed tobesold.20Under
theActandforpurposes oflabelling, thecountry oforigin ofaprocessed foodisthecountry inwhich
theproduct undergoes processing andchanges itsnature.
58. Inaccordance withtheprovisions ofthePlan, PestsandDiseases Act(Chapter 346oftheLaws
ofZambia), agricultural imports, butmainly those exceeding K50invalue, aresubject toapermit
costing K1,000, tocheck fordisease. Inthecaseofliveanimals, asanitary certificate from the
exporting country isrequired asaprerequisite totheissuance oftheveterinary permit. Health certificate
feespaidbothforimports andexports amount toK1,500 pertenlarge ruminants, suchascattle,
K600pertensmall ruminants, suchasgoats, andK1,000 persmall animal, suchasdogs; lower
feesarepaidforbirds. Aphytosanitary certificate isrequired when importing grains.
59. Except insuspicious cases, products arenotgenerally tested attheborders. Inspectors collect
samples from localshops foranalysis. Theresults ofphytosanitary inspections arereported tothe
Minister ofAgriculture andthose ofsanitary inspections aresenttotheMinister ofHealth. Unlawfully
importedgoodscanbedestroyedwithoutcompensation.Zambiamaintainsplantquarantinerequirements
based ontheWeed Act. Quarantine canbeinstituted onmammals.
(x) State trading
60. According totheauthorities, noState-owned orother company currently holds amonopoly
orhasexclusive privileges, fortheimportation ofanygoods intoZambia. However, theZambia
National OilCompany (ZNOC) is,defacto, thesoleimporter ofpetroleum feedstock (Chapter IV(5)(i)).
InlinewithZambia 'songoing liberalization programme, suchprivileges havebeeneliminated and
concerned companies were either privatized orearmarked forprivatization (section (4)(iii)(c)).
(xi) Government procurement
61. Zambia isnotamember of,noranobserver to,thePlurilateral Agreement onGovernment
Procurement signed inMarrakesh inApril 1994. NorwasZambia asignatory totheTokyo Round
Agreement onGovernment Procurement.
20Babies 'food containing afood additive canbesoldunder permission oftheMinister ofHealth.Zambia WT/TPR/S/17
Page 39
62. Under theprovisions oftheStatutory Instrument 151of1995, allprocurement ofgoods and
services overK25million bytheGovernment andparastatal bodies mustbeexamined andauthorized
byaCentral Tender Committee. Ministry Tender Committees areempowered toactfortheirMinistries
onpurchases uptoK25million. There arealsoLocal Government andParastatal Tender Committees
thatperform functions similar tothose oftheMinistry Tender Committees. Procurement ofthesame
typeofgoods orservices within theabove thresholds isnottobeundertaken more thanonceevery
threemonths inorder toavoid asubdivision oranunderestimation bringing thetotalvalue within these
limits.
63. Formal tenders arerequired forpurchases tobeauthorized bytheCentral Tender Committee
aswellasforprocurement worth between K5million andK25million tobeauthorized byaMinistry
orProvincial Tender Committee. Suchtenders areadvertised intheGovernment Gazette, unless they
are"special" (selective). Thelatter tenders aretonominated firms andarepermitted incases of
emergency (e.g.purchases ofmaize during drought orofdrugs inperiods ofepidemic) andforpurchases
from well-known markets/suppliers e.g.purchases ofvehicles. Government purchases ofuptoan
estimated value ofK5million aremade through informal tenders; thelatter areinvited fromatleast
threesuppliers.21Dependingonthenatureofthepurchases(perishableorfragilegoods),singletendering
maybepermitted. Alltenders areopened inpublic attheoffices oftheCentral Tender Committee
ortheapplicable Ministry, Local Government orParastatal Committee. There arenodejurepreferences
forlocalsuppliers but,according totheauthorities, inpractice, forlimited orders andmanufacturing
supplies, andforservices fromagents, tender committees havelimited discretion tofavour localsources.
In1995 about 29percentoftenders above K25million were subject tocompetitive tendering,
33percenttoselective tendering, 13percenttojointtendering, and22percenttosingle tendering.
64. Non-refundable tender document charges arelevied, intheamount ofK2,000 forprocurement
estimated atuptoK10million; K2,000 foreachadditional K10million orpartthereof; and
K200,000 foralltenders above K1billion.
(xii) Measures implemented inexporting countries
65. According totheauthorities, Zambia hasnoagreements withforeign governments orenterprises
designed toinfluence thequantity orvalue ofgoods andservices exported toZambia; further, there
arenosuchagreements between companies operating inZambia andforeign enterprises.
(xiii) Other measures
66. Zambia doesnotmaintain anysurveillance measures onimports, according totheauthorities.
Inaddition, Zambia hasnoofficial countertrade arrangements. However, domestic legislation does
notprevent private firms frombeing involved incountertrade arrangements. Import, andexport, cartels
areprohibited inZambia under the1994 Competition andFairTrading Act.
21Formal tenders areadvertised intheGazette andinother publications, while informal tenders arenot.
Specialformaltendersarenotadvertisedbutgenerallysubjecttothesamerequirementsasformaltenders.Special
formal tenders areinvited from nominated forms.WT/TPR/S/17 Trade Policy Review
Page 40
(3) Measures Directly Affecting Exports
(i) Registration anddocumentation
67. Exporters mustcomplete anexport declaration form, mainly forstatistical purposes, andsubmit
ittoabankforapproval. Theforms arefreely provided bybanks totheirclients; afee,which varies
fromonebanktoanother, ischarged fornon-clients. Once approved, theformispresented, together
withtheconsignment, atthepoint ofexit. Registration andclearance ofgoods forexport normally
takes about twodays.
(ii) Export taxes, charges andlevies
68. According totheauthorities, Zambia hasnoexport taxes, charges andlevies. Ataxcollected
onexports ofgemstones wasabolished in1993.
(iii) Export prohibitions, controls andlicensing
69. Zambia prohibits exports ofsawntimber, logs,charcoal, game trophies, rhino hornandelephant
tusks. Some ofthese products areprohibited from export forenvironmental reasons orunder
international conventions towhich Zambia isasignatory (e.g.theConvention onInternational Trade
inEndangered Species ofFauna andFlora (CITES). Scrap copper fromZambia Consolidated Copper
Mines (ZCCM) isexportable onlybyZCCM, although anycompany mayexport scrap, including of
copper, fromsources other thanZCCM. Prior toexport, scrap metal mustbeinspected andvalued,
inorder, according totheauthorities, toprevent theftofcopper anditsproducts. Depending onthe
levelofnational foodreserves, exports ofmaize, which isthestaple foodinZambia, arebanned from
timetotimeforfood-security reasons; thiswasthecasefrom August 1995 toApril 1996.
70. Nolicenses arerequired toexport goods from Zambia.
(iv) Export quotas andvoluntary restraints
71. Except forprohibited goods, theauthorities arenotaware ofanyretention requirements or
restrictive practices operating onexports from Zambia.
(v) Export subsidies
72. According totheauthorities, Zambia doesnotsubsidize anyofitsexports ofgoods orservices.
(vi) Duty andtaxconcessions
73. Exporters areentitled toadutydrawback oninputs usedforexport production. Goods stored
inbonded warehouses ormanufactured under bondarenormally exempt fromcustoms duties andtaxes
iftheyaretobeexported. Inaddition, under the1993 Investment Act,aconcessional income tax
of15percent, compared tothestandard rateof35percent, isgranted tonon-traditional exportersZambia WT/TPR/S/17
Page 41
whoholdaninvestment licence.22These exporters arealsoexempted from customs dutyandVAT
onimports ofmachinery andequipment. Non-traditional exports andcopper andcobalt soldbyZCCM
arezero-rated forpurposes ofVAT refunds, andexporters ofzero-rated products qualify forVAT
drawback forallimported inputs incorporated intheirexports (section 2(iii)(d)).23
74. Tariff refunds takeabout threemonths tobeprocessed andpaid; claims aregenerally approved
within amonth (provided documentation isavailable) bytheMinistry ofFinance andonthe
recommendation oftheZRA. Since 1995, thedrawback system hasbeenunder review tocorrect delays
related torefunds. Inconsequence, agroup ofCustoms andExcise officers hasbeentrained todeal
withthesystem. Thedrawback scheme hasbeenextended tothird-party exporters incases where
theinputs arenotdirectly imported bytheproducers/exporters; claims canbemade byeither importers
oftheinputs orexporters.
75. Achange wasalsointroduced in1995toallow theconversion ofdrawbacks tocredits (deposits)
against future import taxliabilities; thepurpose oftheinputs mustbeindicated ontheimport declaration
form. Also, exporters arenolonger required toobtain proof ofexport receipt from thecountry of
destination; official proof from Zambia (e.g.customs documentation) isdeemed tobesufficient.
(vii) Export finance, promotion andassistance
76. TheExport Board ofZambia (EBZ) isastatutory government agency established in1985 to
promote, develop andencourage theexport ofnon-traditional goods fromZambia.24TheEBZismostly
financed bytheGovernment; itsmembers payanannual membership feeamounting toUS$50 and
contribute tocosts ofpromotional activities, including trade fairs. TheBoard alsoexecutes projects
financed byforeign funds relating toitsactivities.
77. Since 1993, under aLomé IVConvention programme, theEuropean Union hasfinanced an
Export Development Programme intended toaddress Zambian production andexport market constraints
for"non-traditional goods", suchashorticultural andfloricultural products, tobacco, coffee, textile
andcotton. Theprogramme isfinanced through theExport Development Fund (EDF) andconsists
ofexport finance facilities (ECU 5million) andtechnical assistance (ECU 5million) overaperiod
offiveyears. Itsmain objective istodouble export revenues from theabove products.
78. Eligibility fortheEDF isbased onexport performance (proven export records) rather than
onproduction. TheEDF operates asanexport revolving fund. Credits aregranted inconvertible
currencies andareusedtofinance pre-andpost-shipment, airfreight costs, seasonal andproduction
inputs andminor capital items. Aninterest rateequal totheLIBOR plushalfapercentage point is
22"Non-traditionalexporters"meansexportersofgoodsotherthanrawcopper,lead,zincorcobalt.Investment
licencesaregrantedbytheInvestmentCentreforallactivities,excludingbanking,insurance,miningandquarrying.
Mining andquarrying licences aregranted bytheMinistry ofMines; insurance andbanking licences aregranted
bytheMinistry ofFinance.
23Before April 1996, ZCCM copper andcobalt sales were exempt from VAT. Therefore, their sales did
notqualify forrefunds ofVAT ongoods andservices supplied tothecompany.
24Foritsday-to-day operations, EMZ comes under theauthority oftheMinistry ofCommerce, Trade and
Industry.WT/TPR/S/17 Trade Policy Review
Page 42
charged. Repayments, inconvertible currencies, aredueafteraperiod notexceeding 12months.
According totheauthorities, thelevelofloanrecovery hasgenerally beengood.
79. In1994, theWorld Bank provided Zambia withshort-term credit facilities forpre-export
preparation andhandling ofgemstones; human resource development tofacilitate export ofprocessed
timber andboost thesector 'scontribution toforeign exchange earnings andemployment creation;
promotion ofZambia 'sproducts inregional markets; andthepublication oftheZambia Export
Directory.
(viii) Freeandindustrial zones
80. Zambiadoesnothaveanyexport-processingorindustrialzones.However,thetermsofreference
fortheirestablishment havebeendrawn upunder theEU/World Bank funded Cross-Border Initiative
(CBI). Aworking committee chaired bytheExport Board ofZambia hasbeenformed andafeasibility
study isunder way.
(ix) Other provisions
81. Exporters arefreetocontract insurance andexport credit guarantees withforeign companies.
There arenoprice controls orregulations onexports. Reflecting thecompletion oftheabolition of
exchange controls in1994, allexporters havea100percentforeign-exchange retention right. ZCCM,
which contributes nearly 90percentofZambia 'sforeign exchange earnings, waslimited toaretention
rateof55percentofitsreceipts untilApril 1996, atwhich timeitsretention rightbecame 100per
cent, inaccord withallother exporters (Chapter I(Annex I.1)).
82. Export boards which hadmonopolies intheexport ofanumber ofproducts, including cotton,
coffees, tobacco andmetals, have hadtheir special trading privileges eliminated since 1992
(section (4)(iii)(c)). Atpresent ZCCM istheonlyenterprise thatretains anexport monopoly inthe
areaofgoods, forscrap metal; Zambia Electricity Supply Corporation andZambia Telecommunications
retain certain monopoly rights intheareaofservices (Chapter IV(5)). Theauthorities arenotaware
ofanycartels orother restrictive practices operating onexports from Zambia.
(4) Measures Affecting Production andTrade
(i) Subsidies andother concessions
83. Alldirectproductandconsumersubsidieswereeliminatedin1991.Inaddition,the1996Budget
removed thespecial incentives, including exemption fromtariffs andtaxes, provided under the1993
Investment Acttonon-traditional exports, agriculture, import-substitution industries withasignificant
utilization oflocalrawmaterials andtoinvestment inruralareas. However, some incentives arestill
provided under theInvestment andtheMines andMinerals Acts; e.g.income received fromfarming
andexport ofnon-traditional products istaxed atarateof15percentinstead ofthestandard rateof
35percent(section (3)(vi)).
84. Under theInvestment Act,capital expenditure allowances, deductible inascertaining profits,
arepermitted, interalia,forfarmimprovement; growing tea,coffee, banana plants, citrus fruittrees
orother similar plants ortrees; andfarmworks. Inaddition, therearedeductible allowance for"wear
andtear" ofbuildings andequipment inthefarming, manufacturing andtourism sectors. DividendsZambia WT/TPR/S/17
Page 43
fromfarming areexempt fromincome taxforthefirstfiveyears ofoperation. Under theMines and
Minerals Act,anyinvestment, including prospecting, byaholder ofamining rightcanbededucted
from income tax,andimports ofproductive mining equipment areexempt from import duties. The
1996 Finance Actreduced therateofcompany taxfrom 35to30percentforcompanies listed on
theLusaka Stock Exchange, andabolished thesuper taxonprofits made bylarge-scale mining
enterprises. The1995Budget allowed allproducers toreclaim thesalestaxandVATpaidonelectricity.
85. Under theEmergency SeedDistribution Programme, theGovernment hasassisted farmfamilies
adversely affected bydrought forthelastfourseasons. TheProgramme 'sbudget, estimated at
US$4.5 million, islargely financed byforeign donors. Launched in1995, theAgricultural Sector
Investment Programme (ASIP), financed bytheWorld Band (US$350 million), istoprovide loans
tofarmers (Chapter IV(2)(ii)). TheGovernment alsohasplans toimprove farmers 'financial position
ingeneral, andsmall farmers 'access tocredit andother financial services (Chapter IV(5)).
(ii) Assistance toadjustment, research anddevelopment
86. Zambiahassoughttoimprovetheprovisionofcredittosmall-scaleindustriesthroughthecreation
ofspecialized banks, which nevertheless charge market rates. TheSmall Scale Industry Development
Organization(SIDO)createdin1981hasbeenstrengthenedtoprovidetechnicalandmanagementtraining,
counselling, marketing services, consultancy andcredit ona"single window" basis. Preferential
treatment isgiven tosmall-scale enterprises ingovernment andparastatal procurement (section (2)(xi)).
87. Zambia hasaTechnology Development Advisory Unit(TDAU) based attheUniversity of
Zambia, which theGovernment hasundertaken tostrengthen. TheUnitprovides training information
andguidance, andactsasabridge toresearch anddevelopment centres. TheTDAU alsoprovides
design andtesting services, andadvice tosmall-scale industries inselecting andprocuring plant,
equipment andspare parts. Research activities havebeenundertaken, interalia,inlivestock andpest
control, treeimprovement, water resources, building industry andfoodtechnology.
88. Zambia alsoplaces emphasis onruraldevelopment; under theInvestment Act,aruralenterprise
isallowed anincome taxreduction ofoneseventh forthefirstfiveyears ofitsactivity.
(iii) Competition policy
(a) Legislation
89. TheCompetition andFairTrading Actwasenacted in1994 andcame intoforce in
February 1995. TheActisaimed atpromoting economic growth byensuring thebestuseofresources
andbysafeguarding consumer welfare. Itintroduced acodeofconduct forallbusiness entities and
prohibits anti-competitive tradepractices, including theformation ofcartels andcollusive tendering.25
Inconsequence, acartel thatheldamonopoly intrading oilwasdismantled.
90. TheActprovides foranimplementing agency, theZambia Competition Commission, which
willbeestablished before theendof1996. TheCommission willmonitor restrictive business practices
25Under theAct,anti-competitive practices means agreements, decisions andconcerted practices toprevent,
restrict ordistort competition toanappreciable extent.WT/TPR/S/17 Trade Policy Review
Page 44
byprivate firms andactasanadvocate forcompetition policy intheelaboration ofother government
policies suchasprivatization. Under theAct,theCommission willalsokeepthestructure ofproduction
ofgoods andservices inZambia under review anddetermine where aconcentration ofeconomic power
exists whose detrimental impact ontheeconomy outweighs theefficiency advantages, ifany. The
Commission willconsist of:
(a) arepresentative from eachoftheMinistries responsible forfinance, andcommerce
andindustry;
(b) arepresentative oftheZambia Bureau ofStandards;
(c) tworepresentatives from theZambia Council ofCommerce andIndustry, each
representing different sections ofthatbody;
(d) arepresentative oftheLawAssociation ofZambia;
(e) arepresentative oftheZambia Federation ofEmployers;
(f) arepresentative oftheZambia Congress ofTrade Unions;
(g) twopersons representing consumer interests andappointed bytheMinister;
(h) arepresentative oftheEngineering Institution ofZambia;
(i) arepresentative oftheaccounting profession; and
(j) theEconomics Association ofZambia.
91. Allmembers willbenominated bytheirrespective institutions andappointed bytheMinster
ofTrade.AChairmanandaVice-chairmanwillbeelectedfromamongthemembersoftheCommission,
excluding those appointed under items (a)and(b).AnExecutive Director (aChief Executive Officer)
willbeappointed bytheCommission andwillberesponsible foritsadministration. TheCommission
willalsoappoint aSecretary andsuchother staffasitconsiders necessary fortheperformance ofits
functions.
92. TheCommission mayregulate itsprocedures. TheExecutive Director oranyofficer may
seekacourt warrant granting authority toenter anypremises oraccess to,orproduction of,any
documents oraccounts ifhehasreasonable cause tobelieve thatanoffence hasbeen, orisbeing,
committed under theCompetition andFairTrading Act. Infringers areliable toafinenotexceeding
K10million orimprisonment foratermnotexceeding fiveyears, orboth.
(b) Price regulation andcontrols
93. Zambia maintains administered prices forpetroleum products, electricity andtransportation
services. In1992, price regulations andcontrols were abolished forallother goods andservices,
includingstaplefoods,pharmaceuticals,telecommunications,andbasicbuildingsupplies,suchascement.
(c) Privatization
94. Reflecting Zambia 'songoing liberalization efforts, Stateparticipation inproductive andtrade
activities hasdeclined. Marketing boards foragricultural products andbranches ofactivities (including
imports andexports) overwhich Stateenterprises hadexercised monopoly power havebeeneliminated.
However, according totheauthorities, theZambia Consolidated Copper Mines (ZCCM), theZambia
Electricity Supply Corporation (ZESCO), theZambia National OilCompany, andtheZambia
Telecommunications Ltd.(ZAMTEL) stillholdmonopolies orexercise rights intheirrespective fields
ofactivities. Theauthorities areintheprocess ofexamining modalities fortheprivatization ofZCCM
(Chapter IV(3)).Zambia WT/TPR/S/17
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95. ZambiahasplanstoprivatizealmostallState-ownedenterprisesthroughtheZambiaPrivatization
Agency (ZPA) (Tables AIII.2, 3and4).26Once targeted forprivatization, enterprises arevalued by
private (foreign orZambia) agents. Shares canbesoldtoZambians andtoforeigners; Zambians are
allowed todefer payment.27TheFinance Minister may,ontheadvice oftheNational Assembly, retain
apartofaprivatized enterprise andconvert itintoa"golden share"; suchashare awards the
Government special rights tointervene, inthenational interest, intheoperation ofafirm. Acertain
percentage ofshares isreserved foremployees upon consultation.
96. Provided thattheenterprise issoldforitsmarket value, theZPAmayemploy thefollowing
modes ofprivatization:
(a) public offering ofshares;
(b) private salesthrough negotiated orcompetitive bids;
(c) offer ofadditional shares toreduce Government share holding;
(d) saleoftheassets andbusiness;
(e) reorganization oftheenterprise before itspartial orwhole sale;
(f) management oremployee buyouts;
(g) lease andmanagement contracts; or
(h) other methods deemed appropriate.
97. Accordingtotheauthorities,tenderinghasbeenthemostfrequentlyusedprivatizationprocedure.
BytheendofFebruary 1996, thetotalworking portfolio oftheZPA consisted of208enterprises.
Theprivatization of113ofthese enterprises hasbeencompleted; about 67percentofprivatized
enterprises havebeensoldtoZambians. Under thePrivatization Act,proceeds fromsalesofshares
andassets arepaidintoaPrivatization Revenue Account heldattheBank ofZambia. Theproceeds,
which amounted toK29billion byend-February 1996, areused, interalia,toimprove theefficiency
andperformance ofpublic enterprises earmarked forprivatization.
98. According totheauthorities, andinlinewithprivatization, theGovernment willrefrain from
making newinvestments inproductive activities. Rather, itwillinvest ininfrastructure, which has
received about 75percentoftheGovernment 'scapital expenditure since 1990; extension services
inagriculture; andinthesocial sector.
(iv) Protection ofintellectual property rights
99. Theintellectual property legislation ofZambia comprises:
(a) the1957 Patent Actwhich covers allfields oftechnology andprovides forapatent
termof16years withthepossibility ofafive-year extension;
26Established under the1992 Privatization Act, theZPA plans, manages, implements andcontrols the
privatization ofState-owned enterprises. TheAgency mayliquidate State-owned enterprises inaccordance with
theCompanies Act. TheZPA alsooversees newpublic investment.
27Foreigners whoacquire shares maybeentitled toincentives under theInvestment Act.WT/TPR/S/17 Trade Policy Review
Page 46
(b) the1958 Registered Designs Actwhich provides afive-year term ofprotection,
renewable fortwoconsecutive periods offiveyears, butiswithout anopposition
procedure;
(c) the1958 Trade andMerchandise Marks Act(excluding services) which provide for
aregistration system, thepublication ofapplications, anopposition procedure anda
termofprotection ofseven years, indefinitely renewable forperiods of14years; and
(d) the1994Copyrights andPerformance Rights Actwhich covers literary, music, sound
recordings,audio-visualandartisticworks,broadcasts,cableandcomputerprogrammes.
100. These Actsprovide fornational treatment forforeigners. However, non-residents mustappoint
anagent inZambia tolodge theapplication ontheir behalf. Marks mayberemoved after an
uninterrupted period ofnon-use offiveyears. There arenospecific provisions onwell-known marks.
Geographical indications, undisclosed information, plantvarieties, arenotprotected. TheGovernment
intendstoalignitslegislationwiththeWTOAgreementonTrade-RelatedAspectsofIntellectualProperty
Rights (TRIPS) before theendof1996.
101. Upon request oftheowner ofaright, parallel imports toZambia canbeprevented orbanned
fromcommercial distribution. Under theCopyrights andPerformance Rights Act,allworks deemed
toinfringecopyrightscanbeseizedbytheControllerofCustomsattheborders,uponwrittennotification
bytheowner oftheright.28Infringements ofcopyright areactionable incourts atthesuitoftheowner.
BoththePatent andTrade Marks Actsprovide foratribunal (thePatent Tribunal) tohearappeals against
decisions oftheregistrar; appeals against thetribunal 'sdecisions canbemade totheHigh Court.
102. TheZambia Industrial Property Office wasestablished inSeptember 1968, principally togrant
andprotect industrial property rights andtoactagainst related unfair trading practices. Feesassociated
withthegrant orprotection ofproperty rights arepayable totheRegistrar, withtheamount dependent
onthecaseinhand. Payments bylocalfirms, corporations andindividuals aresetinkwacha; foreigners
payhigher fees,denominated inU.S.dollars. Trademarks arethemostfrequently registered/granted
property right(Table III.4). Patents aremostly related tomining andowned byforeigners (mainly
from South Africa).
28Some goods have recently been seized forinfringement, including pirated cassettes.Zambia WT/TPR/S/17
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Table III.4
Industrial property rights inZambia, 1993-95
1993 1994 1995
Patents
Lodged 64 38 43
Renewed 271 265 242
Registered 34 25 43
Lapsed 26 20 56
Inforce 925 1,195 1,324
Trademarks
Lodged 460 567 801
Renewed 845 846 666
Registered 193 71 36
Lapsed 673 524 526
Inforce 20,908 21,324 21,500
Registered designs
Lodged 11 4 7
Renewed 2 8 5
Registered 2 3 10
Lapsed 0 2 0
Inforce 40 48 63
ARIPO applicationsa104 77 56
a ARIPO -African Regional Industrial Property Organization.
Source: Information provided bytheZambian authorities.