Apr 30 , 2022

The fate of hundreds of customs clearing agents hangs in the balance as the three-month grace period granted for permit renewal ends this week.

Close to 60pc of the 1,000 clearing agents working on import and export facilitation complied with the initial deadline in January this year set by the Customs Commission. The Commission suspended the permits of 482 agents due to failure to meet the terms of a directive it had introduced two years ago. It compels individual transitors to hire at least one professional to conduct business other than themselves, while companies must hire two.

Companies and individual agents are also required to submit rental agreements authenticated by the Documents Authentication & Registration Service. The agents have to register with the Ministry of Trade & Regional Integration (MoTRI) and acquire trade licenses as part of the renewal process.

The Ethiopian Customs Clearing Agents Professional Association, comprising over 350 individual agents and companies, pleaded with the Commission to loosen the requirements introduced in the directive, claiming its members cannot afford to hire more staff. The lobby group says the task is made more difficult due to a decline in the import-export business.

Nonetheless, over half of the remaining clearing agents have renewed their permits during the three-month grace period. Officials warn there is no hope for agents who fail to renew their permits before the deadline to continue in business.

“Their permits will be revoked permanently,” said Filagot Bedane, legal advisor for the customs compliance division at the Commission. “The Commission has no choice except to enforce the law.”

An agent who has worked as transitor for more than 13 years and who requested anonymity said it is not an ideal time to onboard more staff members.

"Business is slow,” he said.

The agent claims he was forced to lay off three of his employees last year, whose gross monthly salary was between 20,000 and 30,000 Br, due to the slowdown of the import-export business.

Eyasu Adane, an agent who has managed to renew his permit, agrees.

“The circumstances do not allow us to hire more staff,” Eyasu, who has been in the business for 20 years, told Fortune.

Transitors cite the recently amended commercial code, which allows the establishment of a sole proprietorship, allowing individuals to run businesses on their own.

Yehualashet Tamiru, a legal consultant and researcher, concurs. The labour proclamation grants employers not to be obligated to hire staffs they do not need.

"Staff hiring must be conducted voluntarily,” he said.

Two months ago, 133 agents and companies which are members of the Addis Abeba Chamber of Commerce & Sectoral Associations urged the Chamber to intervene. The leadership of the Chamber acted quickly, according to Seyoum Chane, manager of policy research and advocacy. Signed by Mesenbet Shenkute, president of the Chamber, a letter sent to the Commission urges the authorities to relent.

“We wanted to mediate between agents and the Commission to find a lasting solution for the problem,” said Seyoum.

He argues that transitors play a vital role in the logistics sector. This is especially true in developing countries like Ethiopia, where complex and time-consuming customs procedures exist. These procedures, applied by authorities, are categorised into eight sections such as permanent, temporary and re-export and import.

Agents are responsible for the declaration of complete and accurately completed documents. All goods imported to Ethiopia must be declared using the Single Administrative Document, the main customs form used in international trade. An insurance certificate, bill of lading, commercial invoice and packing list are some of the documents required to obtain clearance for imports. Businesses that do not fulfil the requirements risk having their goods delayed in transit.

During a performance evaluation meeting organised by the Ministry of Transport & Logistics two weeks ago, Dagmawit Moges, minister of Transport, said that the waiting time at dry ports has dropped to nine days from 12 days a year ago. Still, this is longer than the global container ship average waiting time of two days. Taking the role agents play in the sluggish logistic sector, Mesenbet urged the Commission to give agents six additional months before its officials revoke permits.

“We're thinking of conducting a study in six months and determining whether the agents' claims are valid,” said Seyoum. “The response from officials was not encouraging.”

PUBLISHED ON Apr 30,2022 [ VOL 23 , NO 1148]

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