R 181358Z NOV 08
FM AMEMBASSY MBABANE
TO SECSTATE WASHDC 3322
INFO SOUTHERN AF DEVELOPMENT COMMUNITY

UNCLAS MBABANE 000355 
 
 
FOR USTR/GBLUE 
FOR STATE EB/TPP/BTA 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EFIN WZ
SUBJECT: SWAZILAND: 2009 NATIONAL TRADE ESTIMATE REPORT 
 
REF:  STATE 088685 
 
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IMPORT POLICIES 
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¶1. TARIFFS 
 
Swaziland is a member of the World Trade Organization (WTO), the 
Southern African Customs Union (SACU), the Southern Africa 
Development Community (SADC), and the Common Market for Eastern and 
Southern Africa (COMESA).  As a member of SACU, Swaziland's tariff 
policies are generally determined by and integrated with SACU, in 
accordance with the 2002 SACU Agreement.  Accordingly, Swaziland 
applies the SACU common external tariff.  However, Swaziland 
introduced a 14 percent sales tax for goods coming through its 
borders regardless of the SACU member country of origin. 
 
Swaziland's continued retention of its COMESA status is uncertain as 
the COMESA Heads of State and Government continue to give Swaziland 
one year derogations.  The present derogation ends in December 2008. 
 COMESA plans to establish a Customs Union by December 2008, making 
Swaziland's multiple memberships in SACU and COMESA a challenge. 
The government of the Kingdom of Swaziland (GKOS) has engaged the 
USAID Southern African Competitiveness Hub to do a study to assess 
the economic importance of the COMESA market to Swaziland. 
Swaziland exports four main products to this market, the largest 
being soft drink concentrate, produced by Coca Cola Swaziland. The 
study has made recommendations which the GKOS is still to adopt. 
 
¶2. NONTARIFF MEASURES 
 
There are no restrictions on imports into Swaziland and few 
prohibited imports (except illicit drugs, pornography and arms). 
Permits are required for certain imports, including all agricultural 
products, mineral fuels, used clothes, mineral oils, motor vehicle 
parts, used cars, medicinal drugs, and electrical appliances. 
Licensing permits issued by the Ministry of Finance are generally 
easy to obtain and are valid for one shipment.  Goods imported to 
Swaziland from outside SACU must be cleared through customs at the 
first port of importation into SACU.  A bill of entry must be 
completed and submitted to customs, along with copies of the 
supplier's invoices and a Swaziland import permit. 
 
A cited nontariff barrier to trade was the October 2008 introduction 
of the Automated Systems for Customs Data (ASYCUDA) to all border 
posts.  Although ASYCUDA is a significant improvement from the 
previous system, it does not communicate with South Africa's customs 
system, necessitating traders to declare their goods twice. 
 
Another nontariff barrier is SADC's Single Administrative Document 
500 (SAD 500) form.  The form is used for multiple border crossings 
and is supposed to standardize the number of forms needed for 
transporting goods between SADC countries.  Entrepreneurs trading 
between SADC countries find the form cumbersome.  The business 
community has inundated the Federation of Swaziland Employers and 
Chamber of Commerce with complaints.  Large businesses are coping 
with the requirement by designating employees to complete the form. 
However, small entrepreneurs, with fewer employees and resources, 
become reliant on makeshift offices opened at the borders to 
complete the forms.  These offices often charge exorbitant fees. 
 
Other nontariff barriers to trade commonly cited are levy charges 
and sales tax on some products like agricultural products, mineral 
fuels, electronic equipment, etc. 
 
--------------------------------------------- --- 
STANDARDS, TESTING, LABELING, AND CERTIFICATION 
--------------------------------------------- --- 
 
In April 2008 the Swaziland Standards Authority (SSA) became fully 
operational.  The aim of this institution is to eliminate 
Swaziland's reliance on the South African Bureau of Standards 
(SABS), but it will work closely with SABS. 
 
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GOVERNMENT PROCUREMENT 
---------------------- 
 
Although the government may accord local businesses a 15 percent 
price preference in tendering for government contracts, it appears 
that this preferential treatment is not always granted.  South 
African and other southern African countries are selected for a 
large portion of government contracts.  However, for small- and 
medium-sized tenders, bidding companies must be registered in 
Swaziland.  The government inspects the premises of all suppliers 
prior to awarding the tender.  The government's withholding of a 10 
percent tax from local government suppliers has been removed. 
 
The government issues tender notices 7 to 30 days before tenders are 
due, depending on the size of the contract.  Potential suppliers 
must pay a fee to obtain tender documentation and participate in 
government procurements.  Tenders must be submitted to the Central 
Tender Board and suppliers are invited for the opening of the 
tenders.  In some instances, a Ministry can apply for a waiver of 
the tender procedure if there are too few companies that supply a 
particular commodity. 
 
The Ministry of Finance has drafted a new Public Procurement law. 
Currently, the Ministry is consulting with stakeholders about the 
draft bill.  The bill will establish a public procurement regulatory 
authority, other public procurement institutions, and provide 
regulation and control of practices in respect to public procurement 
of goods, works and services by procuring entities. 
 
Although the draft bill says there will be no discrimination, GKOS 
will facilitate participation by Swazi companies in public 
procurement. 
 
Swaziland is not a signatory to the WTO Agreement on Government 
Procurement. 
 
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INTELLECTUAL PROPERTY RIGHTS (IPR) PROTECTION 
--------------------------------------------- 
 
Swaziland is a party to the WIPO Convention, the Berne Convention 
for the Protection of Literary and Artistic Works, and the Paris 
Convention for the Protection of Industrial Property.  Swaziland is 
also a party to the Protocol Relating to the Madrid Agreement 
Concerning the International Registration of Marks and the Patent 
Cooperation Treaty.  Swaziland is a signatory to the Patent Law 
Treaty and the Trademark Law Treaty. 
 
Protection for patents, trademarks, and copyrights in Swaziland is 
inadequate. 
 
Updated patent legislation has been in draft form for the past four 
years.  When the new legislation is passed and enacted, the African 
Regional Industrial Property Organization is expected to help 
Swaziland with technical assistance in granting patents. 
 
Copyright protection is also limited, as the copyright statutes are 
not adequately implemented.  The Ministry of Justice and 
Constitutional Affairs has drafted an updated Copyright Act, based 
on the World Intellectual Property Rights Organization (WIPO) model. 
 
 
----------------- 
SERVICES BARRIERS 
----------------- 
 
Foreign participation in the services sector is generally not 
restricted.  In 2007, the GKOS de-monopolised the insurance 
industry, and a number of insurance companies are now operating in 
the country. 
 
MTN Swaziland is the only mobile telecommunications provider.  MTN 
Swaziland was given a 10 year monopoly that ends in 2008. 
 
The Swaziland Post and Telecommunications Corporation is the sole 
provider of the fixed-line telecommunications services. 
 
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INVESTMENT BARRIERS 
------------------- 
 
Swaziland does not have an investment code.  The emphasis on foreign 
investment is more a matter of policy statements by the government 
and individual ministers than a matter of laws and institutions to 
support such policies.  Calls for the streamlining of procedures to 
start a business have gone unheeded.  Few suggestions from the 
USAID-funded 2005 Investor Road Map report have been implemented. 
 
Major legislation to support a solid investment climate is lacking 
in Swaziland.  There is a need for a Securities Code to support 
investors who buy shares in the securities market.  A Securities 
Bill has been proposed, but not yet passed.  Related legislation 
known as the Financial Services Regulatory Authority Bill has not 
reached Parliament.  The legislation would bring under one 
regulatory net all non-bank financial institutions such as insurance 
firms, retirement funds, building societies, capital markets, and 
intermediaries. 
 
The outdated Companies Act of 1912, which was retooled from an 1889 
South African law, has finally been replaced.  In 2008 the 
"Companies" law passed through parliament and now awaits the King's 
signature.  The law would regulate incorporation, registration, 
management, administration, and dissolution of companies.  While 
foreign businesses currently operating in Swaziland complain about 
the lack of regulations, some also emphasize that it would be a 
mistake to decide against investing in Swaziland for this reason 
alone. 
 
There are no formal policies or practices that discriminate against 
foreign owned investors and companies in Swaziland.  Foreign 
investors are free to invest in most sectors of the Swazi economy; 
however, investors should be aware of state-run or state-sanctioned 
monopolies.  Pineapple canning, cellular and fixed line 
telecommunications, and water are all state- sanctioned or 
state-owned monopolies.  The Trade and Business Facilitation Bill, 
originally drafted in 2001, requires specified sectors to maintain a 
certain degree of Swazi ownership, and encourages small scale 
entrepreneurship in rural areas.  The bill is waiting for 
consideration by parliament. 
 
The Cabinet has approved a privatization policy, and the GKOS is 
taking steps to implement the policy.  The privatization process 
will create a Public Enterprise Agency charged with ensuring that 
public enterprises are managed efficiently and are not a drain on 
the nation's resources.  A key parastatal being targeted for 
privatization, with the possibility of joint ventures for foreign 
investors, is the Swazi Post and Telecommunications Corporation 
(SPTC).  The Swaziland Electricity Act 2007 outlawed the Swaziland 
Electricity Board's previous monopoly.  The Swaziland Electricity 
Board is now a private company, although still wholly owned by the 
Swazi Government.  It is hoped that the GKOS will set up the office 
of the Energy Regulator and also open the sale of shares in the 
Electricity Company this year.  There is room for improvement, as 
GKOS efforts are moving slowly. 
 
Land acquisition is a barrier to investment in Swaziland.  Large 
plots of land not designated as Swazi Nation Land (under the control 
of local or national officials), are difficult to find, and 
companies, especially those in agribusiness, are therefore finding 
it difficult to expand their operations. 
 
PARKER