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AN ANALYSIS OF THE TRADE (LICENSING) (AMENDMENT) BILL, 2012

By JACQUILINE PIMER

An Analysis of the Trade (Licensing) (Amendment) Bill 2012 The Trade (Licensing) (Amendment) Bill that is currently before the Committee of Tourism, Trade and Industry in the Parliament of Uganda seeks to amend some of the sections of Principal Act the Trade (Licensing) Act Cap 101--to make it consistent with Ugandas commitments under the East African Community Common Market Protocol. The Common Market Protocol was signed by Uganda in 2009 as part of the integration into a Common Market of the East African Community (EAC). States in a Common Market commit to a free movement of goods, services, labor and capital within the region. The rationale for the Common Market is to enable all the Partner States of the EAC to achieve better economies of scale due to the free movement of production; common policies on product regulation; increased competitiveness; and make the EAC region an attractive investment destination. To implement the Common Market, all Partner States need to fulfill their commitments made under the Protocol; one of which includes reform of legal provisions to eliminate barriers relating to nationality amongst the EAC citizens. The Trade (Licensing) Act provisions are quite discriminatory in as much as they treat Ugandan traders differently and more favorably than traders from other EAC countries, in terms of restricting areas and products they can trade in. After Uganda signed the EAC Common Market Protocol in 2009, it made a commitment to free the movement of trade and traders. In simple terms, every citizen of the EAC can trade anywhere within Uganda and in any product. Under the current Trade (Licensing) Act Cap 101, non-Ugandan traders cannot trade outside of a city centre or town; there are also some products in which they cannot trade. The Trade (Licensing) (Amendment) Bill seeks to address some of the provisions that limit trading by the citizens of other East Africa Community Partner States in the follow ways: 1) Redefining the term trade to include trade in services: The rationale for this is that trade within the region is not just in goods but also trade in services. Examples of the services include transporters, wares housing for storage and customs clearances. There is another category of services that is requires special treatment. These are known as professional services and are regulated by the various professional bodies. Even though these professional services require certification to be performed, they cannot be regulated by the Ministry of Trade or local government due to the specific requirements for practice in these areas. Examples of these professional services includeegal services (lawyers), who are regulated by the Uganda Law Council (ULC) and the Uganda Law Society (ULS), the bodies in charge of issuing practicing certificates for lawyers and for ensuring that lawyers operate under ethical rules in

conducting their business. Engineers, architects and accountants, to mention but a few, all require certification and have bodies that regulate the certification for their practice. 2) The Bill seeks to remove the limitations set on the other citizens of the EAC. The principal Act provides that non-citizens cannot trade outside of the city, municipality or town. It also makes limitations on some of the products that non-Ugandans can trade in, thereby limiting the trade of the other citizens of the EAC to trading only within the city centers and towns. The Bill, by inserting a provision (under subsection 4) that the section did not apply to citizens of the East African Community, seeks to treat the EAC citizens as Ugandan nationals are treated. In essence, the location they trade in is not restricted, the kind of goods or services that they can trade in is also not restricted, and they can also act as Agents for Ugandan traders. The advantage of this provision is that EAC citizens will have access to all of the territory of Uganda and trade within those territories. The consumers in the remote territories will not have to rely only on Ugandan traders reaching their areas to deliver these goods and services, which may translate into easier access to the goods and services in remote areas. Some other amendments that the Bill proposes are: to redefine the validity of trade license to a 12 months period from the date of issue. What the Act provides for now is that a trading license expires on the 31 st December of any given year. This means that if a trader acquired a trading license in November 2013, he would have to apply for a new license from the 1st January 2014 as the last one would already have expired. This system obviously was more costly for traders. Furthermore, the Bill seeks to amend the provisions relating to hawkers acquiring trading licenses. Instead of acquiring the license from the local government as is the case now, hawkers will get their licenses from the Ministry of Trade. The advantage to this amendment is that hawkers who operate in more than one local government do not have to acquire separate licenses for each local government area. The holder of a license for a specific jurisdiction may change his premises and apply under the same license for the new premises to be endorsed. In conclusion, the Trade (Licensing) (Amendment) Bill 2012 brings with it positive changes to Ugandas laws in light of its EAC integration commitments as well as seeking to make the necessary adjustments to the law that would make it more relevant to the countrys current condition.

Jacquiline Pimer the writer is the Executive Director of the East Africa Center for Trade Policy and Law (EACTPOL) www.eactpol.org