Efforts to create a self- regulatory framework for clearing agents received a huge boost after the Tanzania Revenue Authority (TRA) accepted a request to champion the cause.
This followed a plea that was made by the Federation of East African Freight Forwarders Associations (FEAFFA) president through a letter in February this year seeking the taxman to help in the development of the proposed self-regulation law for custom agents and freight forwarders in Tanzania.
“The authority will offer officers to participate in meetings to review the draft bill and to take the lead in advocating the initiative within the government,” A J Kidata, Commissioner General of TRA said in a letter responding to FEAFFA president Mr. Fred Seka dated on 8th June this year.
FEAFFA, the brainchild behind the project, developed a draft bill that is at various stages of development in all its member states.
The initiative on self-regulation has been supported by Trademark East African (TMEA) through the East Africa Community Logistics Skills enhancement program. Under the program, TMEA is supporting the enactment of national laws meant to govern the freight logistics industry.
The proposed law will regulate individual practitioners, firms providing freight forwarding, trainers and training institutions delivering freight forwarding courses.
One of the key proposals in the Bill is the creation of a competent authority in the East Africa Community (EAC) to license customs clearing and freight forwarding practitioners. This law intends to create a competent authority that will regulate practice and conduct and ensure professionalism of the industry through registration.
Currently, the only competent authority in the East African Community (EAC) to license customs clearing and freight forwarding practitioners are the Customs Departments of the Revenue Authorities in the region.
Although the role of regulating clearing agents is provided for in the East Africa Community Customs Management Act (EACCMA), the role of the Freight Forwarders and custom agents have not been properly defined. The member countries are yet to develop regulations to operationalize the practicing of freight forwarders, exposing the industry to malpractices, corruption, lack of standards and compromised professionalism.
High competition in the market, according to drafters of the bill, leads to unfair pricing and practices which affect the integrity of both the customs and industry practitioners.
Some of the benefits of self-regulation include enhancement of quality service delivery by introducing the professional code of ethics and supplementing government regulations by filling up regulatory gaps.
Others include benefits include elimination of rogue agents through member registration and the creation a database of professional practitioners and protect the cargo owners, consumers of customs clearing and freight forwarding services and the Customs agents and freight forwarders by re-defining the existing liability clause.
If properly regulated, the industry will uphold standard through the implementation of standard trading conditions; enhance ties with other regional National Customs authorities for increased trade; conserve government resources spent on dispute resolution by setting up an internal dispute resolution mechanism under the law and lower cost of doing business through overall industry compliance and professionalism.
