Archives For transit goods

ZIMRAaaaaaaaZimbabwe’s Deputy Finance and Economic Planning Minister Terrence Mukupe has estimated that the country has lost an estimated $20 million in revenue receipts since ZIMRA’s automated Customs processing system (ASYCUDA World) collapsed in the wake of server failure on 18 December 2017.

During a site visit of Beit Bridge border post earlier this week, it was revealed that ZIMRA collects an estimated $30million per month in Customs duties at its busy land borders. The Revenue Authority has since instituted manual procedures.  Clearing agents are submitting their customs documents accompanied by an undertaking that they will honour their duties within 48 hours. That is, when the ASYCUDA system is finally resuscitated and this is totally unacceptable.

Furthermore, Zimbabwe lies at the heart of the North-South Corridor which handles a substantial volume of transit traffic. The threat of diversion due to lack of proper Customs control and opportunism will also create both a fiscal and security headache. The deputy minister stated that the government was considering abandoning the Ascyuda World Plus system to enhance efficiency and the ease of doing business. “We need to benchmark it with what our neighbours in the region are using”.

It has also been suggested that the ZIMRA board have been complacent in their oversight of the affair. While it is a simple matter to blame systems failure, the lack of management involvement in taking proactive steps to ensuring redundancy of the country’s most crucial revenue collection system has been found wanting.

This calamity undoubtedly signals a huge concern for several other African countries who are likewise supported by UNCTAD’s ASYCUDA software. Many question post implementation support from UNCTAD, leaving countries with the dilemma of having to secure third party vendor and, in some cases, foreign donor support to maintain these systems. The global donor agencies must themselves consider the continued viability of software systems which they sponsor. Scenarios such is this only serve to plunge developing countries into a bigger mess than that from which they came. This is indeed sad for Zimbabwe which was the pioneer of ASYCUDA in sub-Saharan Africa.

This development must surely be a concern not only for governments, but also the regional supply chain industry as a whole. While governments selfishly focus on lost revenue, little thought is given to the dire consequence of lost business and jobs which result in a more permanent outcome than the mere replacement of two computer servers.

Under such conditions, the WCOs slogan for 2018 “A secure business environment for economic development” will not resonate too well for Zimbabwean and other regional traders tomorrow (International Customs Day) affected by the current circumstances. Nonetheless, let this situation serve as a reminder to other administrations that management oversight and budgetary provisioning are paramount to maintaing automated systems – they underpin the supply chain as well as government’s fiscal policy.

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Is the time for a regional transit bond nigh? Given prevailing draconian measures to ensure security and surety, the message is clear that customs brokers, freight forwarders or clearing agents need to demonstrate financial security over and beyond what they are accustomed to. Question – is the transit business lucrative for agents? Why not refuse the business – its just not worth the risk.

A requirement by the Kenya Revenue Authority demanding that all imported transit vehicles above 2000cc be cleared against cash bonds or bank guarantees has been opposed by clearing agents in Mombasa. The agents, under their umbrella Kenya International Freight and Warehousing Association, have threatened not to pay taxes if the regulations are not withdrawn by the tax collector. The agents said that the stringent measures by KRA may stifle trade in the region and may also see the port of Mombasa losing some foreign importers to the port of Dar es Salaam in Tanzania. “We as clearing agents cannot pay the bonds for the importers”.

On August 31, KRA directed all clearing agents that with effect from September 1, all transit vehicles exceeding 2000cc would be cleared against a cash bond or bank guarantees paid by the agents. The forwarders also said that Uganda, Rwanda and DR Congo business class was considering ditching Kenya as an import avenue for Dar es Salaam port. Source: The Star (Nairobi)

Below is a situation which might have been avoided if trader registration/licensing was properly addressed by the Namibian Authorities. With the likes of SADC and COMESA encouraging the implementation of regional transit guarantees, trade operators need to clearly address their obligations and liabilities. Moreover, any suggestion of authorised economic operator (AEO) programme in the Southern African region needs to fully align its requirements with the standards being applied by other countries across the globe. It is therefore clear that no preferred trader scheme can be implemented across the Trans-Kalahari Corridor or across SACU if such disparities of knowledge and practice exist. While one might have compassion for possible job redundancies and the pleas expressed by certain clearing agents, they evidently do not understand the game they are playing in and will drastically need to redress their understanding of the role they play in the supply chain. International clearing and forwarding is not a game for sissies, or people who want to try their hand at a quick buck. A bold stance by the Ministry of Finance.

The Namibian Ministry of Finance’s decision to ban clearing agents from using guarantees and bonds from third parties as security to move goods has caused an uproar among clearing agents. The Deputy Minister of Finance, Calle Schlettwein, explained that the decision that became effective on July 26 was taken to protect the taxpayer. Clearing agents aren’t closed down, and neither are they stopped from using their own security to move these goods, he said. As from July 26, the agents are simply not allowed to use a bond or guarantee issued to another clearing agent as security for their goods in transit, the ministry said.

Before the clampdown, clearing agent A used to ‘borrow’ guarantees or bonds, backed by financial or other institutions from clearing agent B to clear any goods coming through Namport and destined for landlocked countries such as Botswana, Zambia and Zimbabwe. However, should a problem develop with agent A’s consignment, the guarantee or bond would be worthless to Government, as the financial institution agreed to back only agent B’s guarantee or bond. “We don’t know how or when the practice started, but it is illegal,” a ministry spokesperson said.,

Schlettwein said Government stood to lose out on duties and customs through the practice, and the taxpayers would have ended up having to pick up the tab. The ministry’s announcement was met with considerable protest from the smaller clearing agencies, claiming that they didn’t have the money or financial backing to secure the necessary bonds or guarantees. Nampa reported that 76 small and medium enterprises (SMEs) operating as clearing agencies at the coast have been affected. At the Oshikango border post and at Helao Nafidi in the North, 30 agencies with more than 100 employees are affected.

Regina Amupolo of Pride Clearing and Forwarding Agent has called on the ministry to urgently look into this matter, because many trucks with goods and containers are stuck at the Oshikango border post, Walvis Bay harbour or at other border posts. Their customers have already complained that they are losing business because of this, Amupolo said. Amupolo said most SMEs don’t have the money to obtain bonds or guarantees. She said ministry officials said anyone who wants a bond must have collateral of N$1,6 million. “We are small business people, trying to employ ourselves and some of our fellow men and women in our societies, but now the Government, the Ministry of Finance, is making things difficult for us. How are we going to make a living if the ministry is cutting off our jobs in this way?” she asked.

In a letter written to all clearing agents at Oshikango, the controller customs and excise officer, Festus Shidute, said the practice of using third-party bonds or guarantees posed a serious challenge to customs administration and control of guarantees in the event of liabilities by third parties. Amupolo and Rejoice Nangolo from Flora Clearing Agent said they have already paid N$20 000 to obtain a clearing licence, while they have to pay Namport another N$20 000. She said they are losing thousands of dollars as a result of this unexpected prohibition by the ministry and are demanding an extension to allow them to take the matter up with the ministry.

Nangolo said her business has branches at other border posts like Omahenene, Katwitwi, Ngoma, Wenela, Trans-Kalahari, Ariamsvlei, Noordoewer, Walvis Bay, Hosea Kutako International Airport and Oshikango. Her Angolan customers have threatened to stop moving their goods through Namibia and only to use their own ports, she said. At Oshikango there are only two big companies, Piramund and CRN, that can guarantee bonds and assist them as SMEs clearing their work effectively. According to Amupolo and Nangolo, they started with their clearing business in Oshikango in 2000 and were doing well until the ministry imposed the ban.

Speaking to Nampa, Lunomukumo Taanyanda of Oluvanda Clearing and Forwarding Close Corporation (OCFCC) said his company has been operational for two years and deals mostly with car consignments from countries such as the United Kingdom (UK) and Dubai.Before clearing the consignments, OCFCC has to declare the consignment at the Namport customs desk. However, before they can fill in a customs declaration form to clear the transit goods, the goods need to be secured and this is where the company (OCFCC) requires the assistance of third parties such as Wesbank Transport, Transworld Cargo and Woker Freight Services.

These smaller companies acquire assistance from bigger companies (the third parties) as they experience problems when trying to obtain their own bonds and guarantees. According to Taanyanda, it is a very costly and time-consuming process. “We agents do not have enough collateral for bonds, which start at N$350 000, and now the ministry has stopped us from borrowing bonds from third parties,” he said. Source: The Namibian

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http://www.namibian.com.na/news/marketplace/full-story/archive/2012/august/article/clearing-agents-want-answers-today/