Federation of East African Freight Forwarders associations

1. Federation of East African Freight Forwarders associations

3. Overview Brief on FEAFFA Logistic Chain Actors Positive Developments Interventions

4. Brief on FEAFFA A federation of national associations in the region engaged in freight logistics i.e. customs agents, freight forwarders, transporters and open to all in the supply chain. Registered in the United Republic of Tanzania in 2006

5. Current membership: ABADT (Burundi), ADR (Rwanda), KIFWA (Kenya), TAFFA (Tanzania), UFFA ( Uganda). Brief on FEAFFA

6. Brief on FEAFFA Our Vision To be a model professional association upholding ethics and integrity in the freight forwarding and related activities and an authority of growth and development of the industry in the Region. Our Mission ‘To promote growth, development and cooperation of freight forwarding industry while advancing professionalism, ethics and integrity among the practitioners.

7. ACHIEVEMENTS Federation of the associations Establishment of national associations in all countries Developing (together with EARA and EAC Secretariat) a curriculum for training Customs agents, freight forwarders, (open to customs officers)–East African Customs Freight Forwarding Practising (Thanks to USAID) Designed and adopted a Code of conduct for the region and customised to national relevance. Dissemination of information to Members

8. Formed strong partnerships with our key stake holders mainly the EARAS, EAC Directorate of Trade &Trade, port authorities, shippers council etc Forging more partnerships with key Ministries e.g. of Transport, Trade and other bodies, like NCTTCA, ISCOS, etc.. Membership of EABC ACHIEVEMENTS

9. Actors in Freight Logistics sector Governments e.g. Customs administrations (Revenue collection/protection), law/policy formulation and enforcement – others health/standards bodies, immigration, etc... Shippers – (owners of goods) conveyed on the freight logistics chain Service providers –Port operators, carriers, Freight Forwarders including (Customs agents) etc.

10. Role of Customs agents (CAs) Trade facilitators Agents of Shippers Agents of Customs administrations

11. Positive Developments Automation of business processes Training – capacity building (seminars, workshops: over 1000 persons trained under EACFFPC. Initiative to anchor CAs’ training programme under EAC Secretariat Authorised Economic operator initiative Introduction of risk management One Stop Border Post

12. Positive Developments Notable simplification of Customs clearance procedures (No longer cumbersome) 24-hour operation Public/private sector partnership. Cargo tracking (Kenya) Regional Customs Bond Guarantee RADDEX Pre-clearance of goods.

13. Improvement areas Uncompetitive supply chains Blame game…each party posting clean bill and passing the back. Clearing Agents often blamed for the logistics chain inefficiencies Interpretation and applications of EAC legal instruments not harmonised within all member states Risk-based Customs clearance not fully deployed. Automated alongside manual system Customs clearance systems.

14. Improvement areas Multiple data capture by Customs administrations Tax evasion – compliance by business Counterfeits & contraband goods – business involvement Ad hoc procedures change Lack of mechanism for dispute resolutions More focus to Revenue collection than Trade facilitation Skill limitations for freight forwarders

15. Improvement areas Licensing of international road carriers-Restriction of foreign trucks from picking return and local cargo Problems with automated Customs systems i.e. capacity, downtime etc Infrastructure challenges especially at border stations e.g. Power supply, communication for Customs and other users, verification sheds etc. Weak business associations Customs licences valid for one year (disincentive to investment)

16. Proposed interventions Customs agents (CA) – Entrenchment of the rights of CAs/carriers in the EAC Customs Union legal instruments. Public Private Sector Partnership (PPP)- Transforming the PPP into a structured formal/legal relationship Attitude –All stakeholders should cultivate positive attitude towards each i.e. Mutual respect, true partnership and appreciation of the role of each player in the logistic chain.

17. Proposed interventions Service standards -Establishment of performance benchmarks, with objective indicators supported by a system of incentives and sanctions- Dispute Resolution - Development of a structured dispute resolution mechanisms i.e. system of classification of offences, based on severity, frequency and corresponding sanctions. Harmonisation - Harmonisation in the interpretation and application of the various legal instruments

18. Proposed interventions Risk Management – Full deployment of risk management tools e.g. Value of bond should be commensurate with the risk status of the goods, shipper and forwarder and not necessarily the full amount of tax obligation; shift to post clearance audit. Customs securities – acceptance of other forms of securities Compliance – Focus on compliance support a system of incentives. AEO programme should be harmonised and regionalised. Profiling of Customs and shippers Institutional strengthening- Strengthening capacity for business associations

19. Proposed intervention Capacity Building –Training of Customs officers on: Basics of business. Handling of Dangerous Goods Capacity building –Capacity building for Customs agents and other parties that interact with Customs Capacity building – Joint training between Customs and CAs on the interpretation and application of Customs legal instruments and relevant documents Licences- Valid for longer duration

20. Proposed interventions Changes – Adequate notice for smooth transaction Simplification of Customs process Data captured by one Customs administrations should accepted by the rest Integration and automation of the various Customs computer systems in the Region. Customs clearance should be diagnosed to determine critical procedures & documents- benchmark with practice e.g. France –two documents.

21. Other interventions Enhancement of professional ethics and integrity – Customs, forwarders, transporters etc Code of Conducts for Customs agents, self regulations, etc Enhancement of the capacity and functionality of automated Customs systems Provision of requisite infrastructure especially for border operations. Monitoring and evaluation

22. Benefits Reduced clearance time, which translates into: Reduced cost of doing business Higher return on investment Increased government revenue Reduced cost of revenue collection Competitiveness Enhanced safety and security

23. We know what to do….so lets do it.