Domestication of the customs agents and freight forwarders management Bill in Kenya - Federation of East African Freight Forwarders Associations (FEAFFA)

The clearing and forwarding industry in the region has been plagued with many challenges including inefficiency, low levels of compliance with existing regulations, lack of ethical standards, integrity challenges and skills and competency gaps.

A consultative process between clearing agents and freight forwarders, revenue authorities and the EAC Directorate of Customs with the support of JICA, led to the development of a regional policy framework for accreditation and self-regulation of the customs clearing and freight forwarding industry aimed at creating and establishing standards, guidelines principles and institutional arrangements to govern self-regulation and accreditation in the industry. This resulted in a model Bill to be adopted by the five EA governments.

The Model Bill was launched during the East African global logistics summit in Dar es Salaam Tanzania in August 2017. This Bill is intended to guide respectively East African countries in developing their respective laws and also ensure the laws are mutually recognised across the EAC. The Bill, if enacted, will be legal backing for self-regulation of customs agency and freight forwarding as a professional practice. During its development the Bill incorporated the views and recommendations of partner states, clearing agents and freight forwarders, the EAC Directorate of Customs, and the country Revenue Authorities.

Clearing agents and freight forwarders handle all goods entering or leaving an international space. In 2016 the volume of exports and imports handled by clearing agents and freight forwarders in Kenya was worth KShs. 578 billion and KShs. 1.4 trillion respectively.

Professionalism and compliance by clearing agents and freight forwarders handling that volume of trade, and the associated payment of duties and taxes, is essential to the free flow of goods. Effective trade compliance ensures that goods are classified correctly, origin and valuation of goods are accurately declared in accordance to the laws and regulations, and that the appropriate duties and taxes are paid to the relevant revenue authority. According to the Kenyan Anti-Counterfeit Agency, counterfeit and substandard goods cost the East African region over KShs. 50 billion in lost government tax annually. 2

To address these issues, FEAFFA, EARAs and the EAC Directorate of Customs developed the model Customs Agents and Freight Forwarders Management Bill 2017.

FEAFFA is supporting national associations, which are steering the process of enacting the Model Bill in their respective countries. Kenya International Freight and Warehousing Association (KIFWA), the national association for Kenya is leading this process in Kenya. KIFWA has a membership of 955 registered clearing agents and freight forwarders and will be the focal implementing entity.

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