The 2017 Budget Statement made some far reaching proposals in relation to the licensing of Customs Clearing Agents in order to better regulate their operations. These proposals have since been legislated through the amendment of Section 30 of the Customs and Excise General Regulations 154 of 2001.
For a long time, the Customs Clearing profession has not been properly recognised and prone to abuse by “magumaguma”. Even omalayitsha pretend to be Clearing Agents at ports of entry.
These shenanigans occur despite the fact that the Customs Legislation clearly provides for a level seven fine and or imprisonment for up to six months if one is caught impersonating a clearing agent.
Other Government department employees stationed at the ports of entry were also causing confusion at the ports of entry prompting the 2015 budget proposal to propose a raft of measures to clear the ports of entry thereby unintentionally also safeguarding the inviolability of the Customs Clearing profession.
Before the year 2000, the customs department acted as agent to enforce any controls the other departments enacted.
In the event of irregularities which needed the attention of the affected department, the goods could either be quarantined or placed under controlled delivery to the importer’s premises or such premises prescribed by the principal controlling authority.
These other Government departments included EMA, Agriculture, Veterinary Department, Plant Inspectorate, the National Bio-Technology Authority, ZINARA and Port Health.
This means that the number of government officials found in restricted areas of the border was considerably much less therefore it was easier to manage staff discipline.
“Magumagumas” and other unscrupulous elements found it difficult to enter the restricted areas and pretend to be Clearing Agents as the area was not congested.
ZIMRA on their part contributed to the confusion due to the decentralised and uncoordinated nature of their Clearing Agent licensing processes. This resulted in a lot of bogus Agents finding their way into the controlled areas of the border.
Even before the introduction of the current legislation ZIMRA had already made great strides in correcting this problem. In 2016 Agent licensing was centralised to Harare.
A dedicated team of trained compliance officers now handle all licensing processes. Ports are now only responsible for just approving agent employees by issuing IDs.
The only challenge is that port requirements are not uniform within ZIMRA and between other border agencies. For example, some ports require further finger print vetting at port while some accept that their head office vetting as adequate.
Despite all these efforts, ZIMRA is still inundated with a high number of clearing company agent licensing applications. The proliferation of clearing companies is due to lack of barriers to entry in the industry and the deplorable employment conditions at most clearing companies.
There are still a lot of briefcase clearing companies finding their way into the system by virtue of them being members of any one of the ZIMRA affiliated associations like SFAAZ, SFFAZ, ISFAAZ, ZIFFA and ZNCEE.
I found a certain 2015 budget proposal to deem clearing agent value of service for VAT purposes at $50 laughable. Due to high competition rates can slide to a paltry $25. I do not remember this proposal being legislated?
The amendment to the customs legislation has brought a new twist to the clearing agent’s licensing dilemma. In addition to the usual requirements ZIMRA now also demands CVs, certified academic and professional certificates for employees who are authorized to lodge entries with ZIMRA.
ZIMRA expects any executive directors, managers, partners, and employees of the clearing agent to have the usual 5 O-Levels, and at least a diploma from a recognised academic institution or a professional body.
In order to cater for those who are already in the profession without the qualification, a grace period of three years is being given in order to attain these requirements.
From the ZIMRA list of requirements, a further clarification is given. Proof of formal training in customs clearance, regulations, procedures and a minimum of two years experience in customs clearance may also be accepted. An interview by ZIMRA may also be conducted with the applicant’s directors and employees.
The customs clearing profession had been closed and the privy of ex-department of customs and ZIMRA people. When you look at the new qualification requirements, you are inclined to think that the new trajectory is geared towards opening the profession to any Zimbabwean who makes effort to acquire the necessary skills through formal routes.
This opening up has, however, not been well coordinated with the situation on the ground. Except for the FIATA International qualification facilitated by SFAAZ, our local educational market had not formalised the attainment of a customs qualification.
There are rumours that ZIMRA may reject the SFAAZ facilitated CLP (Customs, Legislation and Procedures) National Diploma on the basis that SFAAZ is not a Ministry of Higher and Tertiary Education institution? This is the only ‘qualification’ facilitated by well trained former customs officers at the moment.
If this is true then hundreds of people are going to get a raw deal as SFAAZ has churned out hundreds of certificates since early 2000. While some of these hold Logistics and Business Degrees, which I assume ZIMRA will accept, others have the CLP as their only qualification. We wait and see as the 2019 licensing season just began on 1 October 2018.
If you are objective you will understand why ZIMRA is making all these demands. For its entire technical staff, ZIMRA has always been recruiting graduates and then subjecting them to a two stage rigorous training programme where a Certificate and Diploma are issued. Having gone through the same program, I can understand why ZIMRA is reluctant to licence anyone without comprehensive and specific Customs training.
Even with my first degree in hand, I could not effectively discharge the role of a Customs officer without specific training. Just like in the Chartered Accountancy profession, there is no room for trial and error as huge amounts belonging to clients are at stake.
It’s worse for the Agents being on the other side of the counter. Huge fines, imprisonment, high value properties belonging to the agent company directors are also at stake in the event of an error.
Another confusing requirement that ZIMRA is demanding is proof of contracts or agreements signed by directors of at least five prospective clients? My question is that is it possible to obtain this if you are a bona fide, honest start up? Who, in their right mind, will sign a clearing contract with a nonentity? It means you must have been trading to have this in place. Is this meant to encourage illegal operations? Testing, Testing. Or is it meant to keep new entrants out?
Finally, we hope ZIMRA will accept the SFAAZ Diploma for a period, say three years while it regularises its accreditation so as not to disadvantage those who have already trained with it. SFAAZ should hold off running this training course until it regularises with the Ministry of Education.
It is suggested that ZIMRA could run a three month course for the holders of the certificate to validate it. ZIMRA should also do away with its prospective contracts requirements.
Let the ambitious ex-clearing agent employees also enter into business if they so wish.
Disclaimer: This Article is not meant to create a consultant/client Relationship. Readers are advised to consult their Consultants for specific advisory services.
About the author: Gertrude Mawire is a Fiscal Compliance and Investment Advisor based in Harare. She writes in her personal capacity. Gertrude, a member of ZNCEE ( customs & excise experts) holds an MSc in Finance & Investments (NUST) Bachelor of Business Studies (UZ), IOBZ Diploma various other Certificates. She can be contacted on email@example.com, firstname.lastname@example.org and 0712 437 256, 0772 336936