7 April 2014

Uganda: Consumer Rights Body Backs PVOC On Imported Cars

The Uganda Consumers' Protection Association (UCPA) has urged the standards agency to stand firm in the face of "blackmail" by used car dealers to fail imports verification tax procedures.

On March 25, many importers of used cars in Kampala closed their depots to protest "unfair fees" under the Pre-Export Verification of Conformity to Standards (PVOC) arrangement. PVOC, enforced by the Uganda National Bureau of Standards (UNBS), verifies the conformity of all regulated products and enforces their standards to protect consumers from dangerous and substandard goods.

Compliance to PVOC requirements is applicable, in addition to any existing import processes. Every consignment of regulated products exported to Uganda requires a certificate of conformity.

Since June last year, UNBS introduced PVOC on imported used motor vehicles to have them tested for quality and road worthiness before being shipped into the country.

However, nine months later, used car importers complained that the inspection fees did not benefit Uganda but the countries of origin.

Through the Used Car Association of Uganda (UACU), importers wanted the inspections suspended. UACU claimed its members could remit an estimated Shs 65bn at the end of the year to the three firms (Japan East Africa Automobile, Jabal Kilimanjaro and Javic) subcontracted by UNBS to conduct the pre-export verifications.

They also argued that such inspection fees led to car price increments by a minimum of Shs 1.8m. However, the consumer protection body has rejected the demands. In a press statement, UCPA executive director Sam Watasa says used-car importers are using "blackmail and falsehoods" to undermine PVOC.

"This is yet another case of attempts at blackmailing regulators, more specifically UNBS and URA, and undermining consumers' right to quality products," Watasa states.

He notes that importers want to hide behind the guise of "increased cost of doing business" to threaten regulators.

UCPA says its investigation found that out that only 1750 out of 11,000 used cars imported into the country every month went through PVOC between June and December 2013.

Watasa argues that it is better to inspect in the country of origin where the capacity to do a thorough inspection is found. It is cheaper in the long run because any faults can be handled before incurring costs of shipping. In the event that vehicles are found to be sub-standard and costly to rectify, it is reported that the usual practice for importers is to abandon such units.

Watasa said when abandoned, such vehicles would become an environmental hazard and costly to dispose of especially if the failure were a result of nuclear radiation contamination.

"No consumer in Uganda has the ability, capacity and competence to detect such radiation, nor do government institutions have the capability to dispose of nuclear radiation contaminants," he adds.

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