Import trade

Imports are classified into the following two types:

i. Direct import: Direct import refers to the process where a buyer purchases products directly from a foreign producer without involving middlemen or independent agents. The buyer handles all aspects of the transaction, including communication, negotiations, market research, contracts, payments, and shipment. This means the buyer is fully responsible for managing the importation process.

ii. Indirect import: Indirect import occurs when the buyer uses intermediaries to import products. These intermediaries can be merchant importers, import houses, or importer brokers, who act on behalf of the buyer. The buyer does not deal directly with the foreign sellers but relies on third-party agents to handle various functions related to the importation process.

Basis of comparison	Direct import	Indirect import
i. Meaning	Import activity is directly carried out by the buyer or importer of the goods.	The importer hires the services of an import intermediary to import on their behalf.
ii. Market information	The importer gets first-hand market information for the business.	The importer gets information from intermediaries.
iii. Control	All import activities are controlled by the importer.	All activities are handled by import agencies.
iv. Price	Imports can fetch lower prices if purchased directly from the manufacturer.	Imports may fetch a higher price due to the intermediaries' margin.
v. Suitability	Suitable for large businesses as it involves huge costs and resources.	Suitable for small businesses as they may find it difficult to import directly.
vi. Reputation	Easy to earn goodwill because of direct contact with the exporter.	The importer may not earn a reputation because of lack of direct contact with the exporter.
vii. Risk	Direct importers bear more risks.	Indirect importers bear fewer risks.

i. Find the supplier of the product: The initial step is identifying the supplier abroad. This involves screening potential suppliers based on contact details, past business dealings, and delivery frequencies. It may also require consulting banks for international settlements or seeking advice from other local traders with experience in international dealings.

ii. Check on importation conditions and making payments: After finding a supplier, the importer checks the importation conditions, ensuring the product is permitted, restricted, or limited. The importer then places an order and makes the payment through a bank.

iii. Preparation of documents: After payment, the importer prepares the necessary documentation. This includes customs declaration forms, which describe the goods' nature, value, recipient, and destination. The importer also arranges transport from the supplier's country to Tanzania by land, sea, or air. A clearing and forwarding agent (CFA) is also appointed at this stage.

iv. Appointment of clearing and forwarding agent: The importer must appoint a licensed Clearing and Forwarding Agent (CFA) to handle the clearing of goods. These agents, licensed by the Commissioner of Customs and Excise, facilitate the processing of documents and clearing of goods from customs control.

v. Secure documents by CFA: The CFA secures necessary documents, including import permits from regulatory bodies (e.g., Tanzania Bureau of Standards, Zanzibar Bureau of Standards, Tanzania Medical and Drugs Authority), packing lists, final invoices, transport documents, agent's authorization letters, and any exemption documents if applicable.

vi. Lodge documents with customs authority: The CFA submits the documents electronically through the Tanzania Customs Integrated System (TANCIS). The system checks for accuracy and either accepts or rejects the declaration. If rejected, the CFA is required to submit a new declaration.

vii. Processing of documents: The documents are processed either manually or online to facilitate the payment of customs duties. This is typically done within seven days before the arrival of the goods.

viii. Review and confirm cargo manifest (physical verification of cargo): The customs authority reviews the cargo manifest and verifies it against the actual cargo offloaded at the port. The manifest is registered by the customs officer and submitted to a supervisor for approval.

ix. Receiving acceptance with a payment notice for approval: After the manifest is confirmed, the CFA receives an acceptance notice along with a payment notice, based on the declared values. If rejected, the CFA will receive an amendment notice, which must be validated and resubmitted.

x. Receive and submit final assessment notice: Once the amendment (if necessary) is approved, the CFA receives the final assessment notice. The CFA can either accept or reject it. If rejected, the CFA must amend the declaration and resubmit it.

xi. Making payment: Once the assessment notice is accepted, the importer makes payment for import duty and other required customs clearance duties.

xii. Release or receipt of the goods: After the payment and inspection are completed, the CFA receives a release order for the goods, allowing them to be received and cleared from customs.