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Distr\.
__RESTRICTED__
__SN/IC/CVTFS/1__
October 2019
Original: __ENGLISH__
__COMMON MARKET FOR EASTERN AND__
__SOUTHERN AFRICA__
__Report on COMESA Virtual Trade Facilitation System \(CVTFS\)__
__*THEME: COMESA \- Towards Digital Economic Integration*__
SN/2019
Contents
__PART I:__ __BACKGROUND__ 3
__1\. __ __Introduction__ 3
__2\.__ __CVTFS Objectives__ 3
__PART II:__ __CVTFS IMPLEMENTATION STATUS UPDATE__ 4
__3\. __ __Commercialization__ 4
__4\. __ __Operations__ 5
__PART III:__ __FINANCING__ 5
__5\. __ __Outstanding Loans__ 5
__6__ __Expected Receivables__ 5
__7__ __Repayments of Loans__ 6
__8__ __Cash flow projections__ 7
__PART IV:__ __RECOMMENDATIONS__ 9
__1\.__ __Commercialization__ 9
__2\.__ __Repayment of loans to related parties__ 9
# <a id="_Toc3108491"></a><a id="_Toc433377273"></a>__PART I: BACKGROUND__
<a id="_Toc433377274"></a>__1\. Introduction__
This Report provides an update on the status of implementation of COMESA Virtual Trade Facilitation System \(CVTFS\) with regards to operations, commercialization, financing and repayments of loans\.
<a id="_Toc433377275"></a>__2\. CVTFS Objectives__
CVTFS was developed by the COMESA Secretariat in line with the provision of the __COMESA Treaty, in particular Annex 1 of the COMESA Protocol on Transit Trade and Transit Facilities __and it was presented to the Council of Ministers for approval\. In the Fourth Extra –Ordinary Meeting of the Council of Ministers that was held in Lusaka, Zambia from 4\-5 October 2012,<a id="footnote-ref-1"></a>[\[1\]](#footnote-1) Council approved the implementation of CVTS and urged the Secretariat to speedily implement the system\. The decision of the Extra\-Ordinary Council of Ministers was endorsed by the Thirty First Meeting of the Council of Ministers which was held in Kampala, Uganda from 19 to 20 November 2012\.<a id="footnote-ref-2"></a>[\[2\]](#footnote-2)
The primary objective of CVTFS is to facilitate regional trade through addressing challenges in the movements of goods such as cargo dumping, pilferage, long transit and release time, delays in clearance at the borders as well as diversion of goods in transit\.
CVTFS is a very critical programme in terms of boosting regional cooperation and trade facilitation among COMESA Member States\. Once fully implemented and commercialised, CVTFS is expected to play a crucial role in regional trade facilitation through introduction of transparency and the simplification of procedures and controls governing the movement of goods across national borders\.
Revenue Authorities in participating Member States, namely Democratic Republic of Congo \(DRC\), Malawi and Zambia, have reported that the implementation of CVTFS has enabled them to monitor __100%__ of the transit cargo trucks that have been sealed with Electronic Cargo Tracking devices, thereby curbing smuggling and other associated vices\. This has resulted in an increase in the revenue collection base and hence a substantial rise in the amount of revenue collected by Revenue Authorities\. In addition, through curbing the scourge of smuggling, CVTFS promotes economic growth and development\.
For COMESA to realize the full potential of CVTFS, it should operate under commercial principles\.
# <a id="_Toc433377276"></a>__PART II:__ __CVTFS IMPLEMENTATION STATUS UPDATE__