Customs Agents,  CRFFN Confused In POF Calculus

Customs Agents,  CRFFN Confused In POF Calculus The controversy flowing from the recent meeting where Customs agents and freight forwarders agreed that declarants collect 35% of the Practitioners Operating Fees (POF) continues to grow by the day.

There are several issues that have been raised since the agreement was reached. Who is a declarant, a freight forwarder or a Customs licensed agent? What ratio should the associations get out of the 35%? Does one need to belong to an association to qualify as a declarant?

It should be noted that the registration process under Section 18 of the CRFFN Act only recognizes organizations and firms, excluding the association from their object clause.

Section 40 of the Nigerian Constitution, which states:- Every person shall be entitled to assemble freely and associate with other persons, and in particular he may form or belong to political party, trade union or any other association for the protection of his interest, which is in contrast to the CRFFN Act.

The National Association of Government Approved Freight Forwarders (NAGAFF) was the first to oppose the 35% Practitioners Operating Fee sharing formula reached by agents and freight forwarders. According to NAGAFF, the associations had no legal right to vote over the disbursement of the POF, referring to the process as “trying to amend an extant law through the back door”.

“CRFFN is an Act establishing a Council for the Regulation of Freight Forwarding in Nigeria and charged with the responsibility, amongst others, of determining the standards of knowledge and skill to be attained by persons seeking to be registered members of freight forwarders of Nigeria in accordance with the provisions of the act and related formalities.

“The point herein canvassed is to state that it is an individual rather than corporate body who is principally the freight forwarder because he/she can read and write, see, hear, act and undergo professional qualification examination as approved and certified by the Council. It is a law that CRFFN recognizes individuals, corporate and associations in the statute book whereas CEMA recognizes firm, individual and corporate to undertake documentation, clearance of cargo out of Customs control and carriage of goods to the final destination.  A Licensed Customs Agent undertakes to clear goods primarily out of Customs control of a state (seaports, airports and border)” NAGAFF said.

NAGAFF also argued that the CRFFN Act under Section 19 (a & b) and 28 (1 & 2) indicated the superiority of CRFFN Act to CEMA regulation under Section 153, 154, 155 and 156.

“In the implementation of the statute of CEMA, the Customs Board operationally deals with corporate body licensed by the Customs to perform functions in relation to cargo clearance along the approved entry points of Nigeria” NAGAFF noted.

While NAGAFF posited that what happened at the Minister’s meeting with stakeholders, including CRFFN accredited associations, was a scenario “where the issue of ‘declarant’ which is unknown to law in this circumstance, is now incorporated into the sharing of the POF, is tantamount to amending a law procedurally passed by the National Assembly”, the representative of the Association of Nigerian Licensed Customs Agents (ANLCA), Mr. Pius Ujubuonu who voted for ANLCA at the meeting maintained that ANLCA was fully behind the agreement that the declarant gets the 35% POF.

Ujubuonu had noted that he appended his signature to the agreement because he feared that several associations are angling to be part of the POF and if drastic decisions were not taken, by the end of 2016 there could be over 20 associations all vying for the POF.

However, he noted that ANLCA did not support the October 24th scheduled for the POF take-off.

According to Ujubuonu, “An association is not a declarant. Associations should look for ways of generating funds from their members. The major problem we have is that associations are only there to get monies from POF”

Ujubuonu  maintained that if associations were to benefit from the POF, “each association should benefit according to its strengths in terms of the number of declarants. An association that has just two licenses should not be ranked with another which has over 3,000 declarants”

Since a declarant is the individual or company who has a Customs license or who has been accredited by the Council for the Regulation of Freight Forwarding in Nigeria, there are suggestions that individual agents and freight forwarders have become wary of the financial strings of the association.

Mr. Frank Ukor, the President of the Association of Registered Freight Forwarders in Nigeria (AREFFN)   noted that, according to the CRFFN laws every declarant must belong to an association as the money would be paid through the association.

He also revealed that several associations have been meeting to renegotiate the sharing of the 35% accrued to declarants so that associations can get some percentage directly.

“We are saying that the associations can take 25% while the individual declarant of company takes 10%”, Ukor opined.

Meanwhile the factional president of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Mr. Lucky Amiwero has stressed that the Council/ Governing Board is the only authority to collect money on behalf of Council and not the registrar/ staff or any organ of government and the legality of the collection of POF.

Amiwero said that the provision of Section 6-(2) a, b & c, only authorizes the dissolved Council to collect annual subscription as payable by freight Forwarders (only persons) registered, not Associations, not company or Licensed Customs Agents Transaction or practitioner operating fees POF are not contained in the provision of the Act and not allowable by law for such collection.

He stated that there is no provision in the Act that authorizes the Registrar or any other organ of government to act on behalf of the dissolved Council, “the Registrar or any organ of government, cannot perform any function of the Council without the elected and appointed members of the Council under Section 2, which conferred authority on the Chairman and Vice elected to perform the function”

However, when our correspondence reached the Registrar of the Council for the Regulation of Freight Forwarding in Nigeria, Sir, Mike Jukwe, he told MMS Plus that the Council was working assiduously to resolve the POF issues.

He refused to comment further after revealing that CRFFN would be sending out a press release to address the POF issues.

However, it is obvious that the associations have not got their acts right because of the following questions begging for answers: Must every agent belong to an association to be registered by CRFFN? How does CRFFN or associations determine the percentage due to a declarant  without a professional service fee benchmark? Is the 35% POF a profit or service charge? What is the basis for the 35% or 100% calculation?  This calculus is really a puzzle waiting to be solved.

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