What is trade facilitation and how is it relevant to local businesses?
By the end of this article, you will have a solid understanding of local trade facilitation efforts.
While there is no universally accepted definition of trade facilitation, the term generally refers to the policies and procedures developed to make international trade simpler and more efficient. The WTO refers to trade facilitation as the “the simplification, modernization and harmonization of export and import processes.” These processes involve activities related to collecting, presenting, and processing data required for international trade. This may include initiatives to improve transport infrastructure, crackdowns on government corruption, modernization of customs departments, the removal of non-tariff trade barriers, as well as the marketing and promotion of exports. The overall objective is to minimize delays, remove red tape, and reform policies for the benefit of international and domestic trade.
There are several key areas that the Government of The Bahamas has focused on to facilitate trade:
- Trade Agreements – The Bahamas has signed on to multiple trade agreements with the US, Canada, UK, and the EU. These agreements benefit Bahamian exporters by allowing goods from The Bahamas to enter these markets without incurring duties. For a more detailed look at each trade agreement that The Bahamas has signed on to, click here.
- Customs Export Policies – The Export of Goods is regulated by the Bahamas Customs Department. Exports from The Bahamas are duty free but there may be some processing fees and royalties that apply to certain goods.
Anyone seeking to export goods must get all necessary clearances and certificates from the relevant departments and regulatory bodies. For example, a business seeking to export seafood must obtain a Certificate of Inspection and a Certificate of Health from the Ministry of Agriculture and Marine Resources. If exporting to the European Union under the Economic Partnership Agreement, an EUR1 form must be completed and submitted.
Getting customs clearance requires the review of all shipment-related documents, the filling out and submission of all customs forms, an inspection of all the merchandise to be shipped, stamping of all relevant customs forms, and an official witness of the sealing of the container.
- Customs Import Policies – Imports also fall under the Customs Department. Anyone who has brought goods into the country after a vacation is likely familiar with the import procedures. Importing goods into the country involves submission of any supporting documents (invoices, permits, certificates, identification, etc.), and the payment of tariffs/duties, Value Added Tax, and fees (environmental fees, processing fees, customs broker fees, etc.) where applicable.
- Bahamas Electronic Single Window (Click2Clear) – Single Window Systems allow a single trader to provide required information to multiple agencies via a single process, saving time and money. Click2Clear (C2C) was launched by the government in 2018 as a single window solution, replacing and improving upon the old system. The C2C system is a fully integrated digital platform connecting multiple government agencies, functioning as a centralized access point for all traders and businesses engaging in trade in The Bahamas. The system significantly decreased the wait time for many processes related to trade – processes that took hours can now be done within a few minutes, dramatically improving system efficiency and user experiences.
For more detailed information on the C2C system, click here.
- Incentives – The government has provided for a number of incentives to facilitate trade in The Bahamas. Specific laws providing incentives for trade include:
- The Tariff Act, which provides customs duty exemptions for Agriculture and Fisheries-based imports.
- The Industries Encouragement Act, which provides concessions and custom duties exemptions for local manufacturers.
- The Hotels Encouragement Act, which provides concessions and exemptions for real property tax and customs duty on supplies, materials, and equipment used in the construction of hotels.
With other developments like the eventual WTO accession and the trading of digital assets on the horizon, the government is constantly exploring ways to better facilitate trade within The Bahamas.