The SACU is the oldest existing customs union in the world. It was established in 1910. The first customs union in the area was established in 1889 between the British Cape Colony and the Boer republic of the Orange Free State. In 1891 British Bechuanaland and Basutoland joined, followed by Bechuanaland Protectorate in 1893 and Natal in 1899. Parallel to this process, the Boer republic of the South African Republic and Swaziland (then a protectorate of the South African Republic) formed a customs union in 1894.

After the Second Boer War, the agreement signed in 1910 and creating the Customs Union Agreement (CUA) was in place in 1969 when fresh negotiations were held between the sovereign states, with Botswana and Lesotho having achieved independence a few years before. In accordance with the new arrangement, the Customs Union Agreement became the Southern African Customs Union (SACU). The currencies of member states were pegged to the South African rand.

The union meets annually to discuss matters related to the Agreement. In addition, the Customs Technical Liaison Committee, the Trade and Industry Liaison Committee, and the Ad hoc Sub-Committee on Agriculture meet three times a year.

Its aim is to maintain the free interchange of goods between member countries. It provides for a common external tariff and a common excise tariff to this common customs area. All customs and excises collected in the common customs area are paid into South Africa's National Revenue Fund. The revenue is shared among members according to a revenue-sharing formula, as described in the agreement. South Africa is the custodian of this pool. Only the BLNS Member states' shares are calculated, with South Africa retaining the residual. SACU revenue constitutes a substantial share of the state revenue of the BLNS countries.

According to Wikipedia