u003cpu003eu003cstrongu003eAs the Polytol case (the u0026ldquo;Caseu0026rdquo;) follows its course through the COMESA Court of Justice (the u0026ldquo;Courtu0026rdquo;), it breaks new grounds and invites the development of African jurisprudence. The recent preliminary decision has far-reaching consequences for businesses across the COMESA. From a domestic perspective, this case provides opportunities for local businesses to reclaim customs duty suffered on the import of goods originating from the COMESA Free Trade Area.u003c/strongu003eu003c/pu003eu003cpu003eu0026nbsp;u003c/pu003eu003cpu003eu003cstrongu003eThe COMESA Free Trade Area (FTA)u003c/strongu003eu003c/pu003eu003cpu003eu003cstrongu003eThe COMESA Treaty establishes an area free from customs duties on goods originating from participating members.u003c/strongu003eu003c/pu003eu003cpu003eThe Common Market for Eastern and Southern Africa (COMESA) was established by Treaty in 1994 with the vision to enhance economic prosperity of its members through regional integration. One of its objectives is the creation amongst its signatories – currently 19 Member States (including Mauritius) – of a customs union, an area free from customs duties and other equivalent charges.u003c/pu003eu003cpu003eThus, by a decision of the Council of Ministers of the COMESA, by 31 October 2000 participating Member States were required to remove customs duty on goods originating from participating Member States.u003c/pu003eu003cpu003eIn 2000, in compliance with the COMESA Treaty, Mauritius eliminated customs duty on imports of goods originating from within the FTA (subject to presentation of a Certificate of Origin upon import) but in 2001 re-imposed duties on specific items.u003c/pu003eu003cpu003eu0026nbsp;u003c/pu003eu003cpu003eu003cstrongu003eThe Polytol case u003c/strongu003eu003c/pu003eu003cpu003eu003cstrongu003ePolytol reclaims Rs13M of customs duty on imports from Egypt.u003c/strongu003eu003c/pu003eu003cpu003eThe basis of the Case is the re-imposition from 2001 to 2010 of 40% customs duty on paint and varnish originating from Egypt.u003c/pu003eu003cpu003eu0026nbsp;Polytol argues that the imposition of this duty was in breach of the COMESA Treaty and seeks repayment from Mauritius of duties in the sum of around Rs13m suffered on imports from Egypt. The company sought remedy before the Supreme Court but the court found that it did not have jurisdiction to hear matters relating to the COMESA Treaty.u003c/pu003eu003cpu003eRepresented by Counsel Razi Daureeawo and Rubna Daureeawo Daood, Polytol referred the matter to the COMESA Court of Justice in Zambia.u003c/pu003eu003cpu003eIn its defence, the Government of Mauritius raised a preliminary objection questioning the Courtu0026rsquo;s jurisdiction to hear the matter. The Court, presided by the Chief Justice of Rwanda, considered the point at a hearing held in December last year and decided unanimously in favour of Polytol.u003c/pu003eu003cpu003eReacting to the decision, the Director of Trade of the COMESA acknowledged the decision as a landmark decision in that it confirms that companies can have recourse to the Court where there are alleged violations of the COMESA Treaty, thereby giving another dimension to the COMESA Treaty.u003c/pu003eu003cpu003eThe recent decision therefore confirms the Court as a forum for businesses to address any issues relating to the Treaty. Thus, for example, there is now a mechanism to challenge denial of COMESA duty exemption through rejection of Certificates of Origin by customs.u003c/pu003eu003cpu003eThe main case is expected to be heard later in the year.u003c/pu003eu003cpu003eu0026nbsp;u003c/pu003eu003cpu003eu003cstrongu003eThe opportunityu003c/strongu003eu003c/pu003eu003cpu003eu003cstrongu003ePotential refund on imports of other products.u003c/strongu003eu003c/pu003eu003cpu003eWhilst the Polytol case challenges the imposition of customs duty on imports of paint and varnish from Egypt in the period from 2001 to 2010, in the same period customs duty was also imposed (potentially in breach of the Treaty) on other products originating from Egypt: soap, detergents and similar organic active products, paper based products including serviettes, and napkins for babies amongst others. Thus, a decision in favour of Polytol may also imply refunds of duties to businesses who have suffered duty on other imports originating from COMESA member states.u003c/pu003eu003cpu003eu0026nbsp;u003c/pu003eu003cpu003eu003cstrongu003eShould you wish to discuss this case, please contact:u003c/strongu003eu003c/pu003eu003cpu003eu003cstrongu003eAnthony Leung Shing, Tax Partner or Razi Daureeawou003c/strongu003eu003c/pu003eu003cpu003eu003cstrongu003eEmail : anthony.leung.shing@nullmu.pwc.comu003c/strongu003eu003c/pu003eu003cpu003eu003cstrongu003eTel. +230 404 5000u003c/strongu003eu003c/pu003e
The Polytol case: A landmark case offering opportunities for customs duty reclaim
