A legal opinion presented by Barrister Okwudili Alagbu and the Legal Committee of NAGAFF over the seeming conflict between the provisions of the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) Act 2007 and the Customs and Excise Management Act (CEMA) 1958.
1.0 Introduction
1.1.1 The gist of this discussion is to analyze the applicable regulatory framework inherent in the Council for the Regulation of Freight Forwarding in Nigeria Act No. 16 of 2007 and the Customs and Exercise Management Act, 1958 regime with a view to exposing the areas of actual or imagined
conflicts in order to resolve such conflicts if any or harmonize their complimentary enforcement.
1.1.2 In understanding the logic of this discussion, it is instructive at this stage to know that the purpose of any piece of legislation is to serve as a legal framework for the development of the sector on behalf of whom it was enacted.
1.1.3 This therefore underscores the need to timeously identify the areas of conflict between any two enactments that govern one industry or sector, or else, they will operate to their mutual annihilation with negative consequences to industry growth and development.
1.2 For the purpose of precision however, we wish to limit the thrust of this discourse to the specific provisions of the two legislations relating to Customs license regime and training.
2.0 Customs license as an instrument of regulating Customs Brokerage
2.1.1 It must be emphasized ab-initio that when two legislations make provisions concerning one or similar issues(s), with one earlier in time and making specific provisions of the concerning the self-same subject, the provision of the later law shall prevail in resolving any conflict between the two.
2.1.2 The Customs and Excise Management Act which was enacted in 1958 made provisions in Section 153(2)(b) as follows: Section 153(2) Subject to subsection (1) of this section , anything required by this Act to be done by the importer or exporter of any good or an excise trader may, except where the Board otherwise requires, be done on his behalf by:- 2(b) – a person licensed as a customs agent or excise agent in accordance with regulations made under Section 156 of this Act.
Section 156(1) of CEMA on the other hand, provides as follows: “The Minister may make regulations with respect to the Licensing of Customs agents and excise agents and without prejudice to the generality of the powers conferred by this sub-section, regulations may in particular
provide for:- (a) the fees to be paid and the security to be given by such agents; (b) the form of application for any such License”.
2.1.3 The provisions of Section 156(1) of CEMA has effectively begotten a regulatory framework titled the “CUSTOMS AND EXCISE AGENTS (LICENSING) REGULATIONS” otherwise tagged Regulation 95 of 1968.
2.1.4 The provisions of CEMA and the subsidiary legislation deriving there from constitute the legal framework that sustains the regulatory regime existing under the Customs and Excise Management Act which is exercised by the Nigeria Customs Service to control a segment of the Logistic Chain
called Customs brokerage.
2.2.0 The regulatory framework under the Council for the Regulation of Freight Forwarding in Nigeria Act, 2007
2.2.1 The Council for the Regulation of Freight Forwarding in Nigeria Act, No. 16 of 2007 was enacted to:-
“Establish a Council for the Regulation of Freight Forwarding in Nigeria and charged with the responsibility of 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 provision of this Act”.
2.2.2 It goes without saying therefore that the CRFFN Act represents a legislative framework that establishes a new profession known as the Freight Forwarding Profession and accordingly vests the Governing Council of CRFFN with the responsibility of regulating and controlling it in order to attain international best practices.
2.2.3 In Section 30, the Act defines freight forwarding in ‘persona’ through the phrase “freight forwarder” as “any person or company who arranges the carriage or movement of goods and associated formalities on behalf of an importer or exporter along the international boundary of seaports, cargo airports or land border stations”.
2.2.4 It would appear quite clearly from the above definition that the scope of the practice of freight forwarding goes far beyond customs brokerage which in the above definition is subsumed in the omnibus definitional phrase, “associated formalities”.
2.2.5 BY the standard of this definition of freight forwarding under the cited provision of the CRFFN Act, it can safely be concluded that Customs brokerage is a trade while freight forwarding is a profession with Customs brokerage forming an integral part of it.
CRFFN vis-a-vis the Customs License
2.2.6 It stands to reason, therefore that being a mere aspect in a long chain of Logistics known as freight forwarding services, Customs brokerage, irrespective of its longer history, is liable to, or otherwise forms part of the activities to be regulated or controlled by the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN).
2.2.7 The Customs License regime as an instrument of sectoral control would seem to have earned the respect of the draftsman in the CRFFN Act, who made unequivocal efforts to save its use and administration.
2.2.8 Thus in Section 19(1), the CRFFN Act provides as follows: “Notwithstanding the provisions of any other laws, any government agency responsible for granting of permits, approvals and licenses to freight
forwarders shall in addition to any other requirement, require the applicant to submit a certificate of registration as a registered freight forwarder issued by the Council.
2.2.9 As if to preclude any ambiguity, the CRFFN Act went ahead to provide in more specific terms in subsection 2 of Section 19 thus, “Every freight forwarder licensed under the Customs and Excise Management Act prior to the coming into force of this Act, shall immediately after the commencement of this Act, submit to the Nigeria Customs Service and any relevant authority, a certificate of registration issued by the Council”.
2.2.10 The combined effects of the provisions of Section 19(1) and (2) of the CRFFN Act is that the Customs License is saved or retained as an instrument of controlling the practice of Customs brokerage subject to the overriding controlling power of CRFFN exercisable through the instrument of membership registration and regulation.
2.2.11 The professional registration of freight forwarders with the CRFFN is therefore a condition precedent for issuance of Customs License with the result that any person or company who did not obtain a certificate of registration with the CRFFN before seeking a customs license shall not be issued with such a license and any license issued by the Customs in contravention of Section 19 of the CRFFN Act is invalid.
2.2.12 For the avoidance of doubt however, the CRFFN Act in Section 14(2) expressly forbids any person or company from practicing in any branch of freight forwarding without first registering in accordance with this Act.
Subject to the provisions of this Act, a person shall not practice or carry on business under any name, style or title containing the words “freight forwarder unless he is registered under this Act”.
3.0 Training as an instrument of regulating the freight forwarding profession
3.1.1 Professional training or continuous professional training is a must area in the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN Act) that has vested exclusive or overriding regulatory power of the Council.
3.1.2 This power is secured for the CRFFN under Sections 15, 16 and 17 of the Act and is exercisable inter-alia through the Accreditation of training institutions, approval of training courses, recognition or
rejection of already acquired training certificates on any branch of freight forwarding as well as supervision or monitoring of training programmes etc.
3.1.3 The combined effects of the provisions of the CRFFN Act cited above includes but perhaps not limited to the fact that no institution, including those existing prior to the coming of the CRFFN Act, shall be entitled to organize or give training in any aspect of freight forwarding without first submitting the training facility itself, including its course contents for approval by the CRFFN and even after approval to
continue to update the Council with details of its training programmes and related activities.
3.1.4 Among other institutions, the Nigeria Customs Service has been organizing formal training on Customs formalities and brokerages with the aim of imparting or enhancing the knowledge and skill of some category of freight forwarders who major in Customs related matters.
3.1.5 However, it has been observed that the Nigeria Customs Service is still in the habit of organizing such training programmes at the end of which they issue certificates which tend to portray the recipients as possessing the level of knowledge and skills which such certificates symbolize.
3.1.6 We therefore submit that in so far as such training programmes were organized without a recourse to the CRFFN, such a training exercise violates the provisions of Sections 15 – 17 of the Act and any certificate issued thereof is invalid and accordingly cannot confer on the recipient any respect or benefit which such certificates would ordinarily command and in particular, it cannot be accepted by the CRFFN for the purpose of registering the recipient as a freight forwarder.
3.1.7 For the avoidance of doubt however, a distinction needs to be drawn between the words ‘Training’ and ‘Seminar’ in order to draw a safe boundary between the statutory powers of the Council and the Nigeria Customs Service in the area of training, capacity building and information exchange.
3.1.8 While training has been defined as the activity of imparting and acquiring skills, the word “seminar” has been defined as a meeting held for the exchange of useful information by members of a common business community.
3.1.9 However, we must be quick to concede that both the CRFFN and the Nigeria Customs Service have each been vested with training powers of a sort by their enabling statutes. Nevertheless the powers of the Nigeria Customs Service in the area of training has since the enactment of the
CRFFN Act No. 16 of 2007, been thinned down to the training of its staffers only, while the professional training of any genre of freight forwarders inclusive of Customs brokers has by virtue of the provisions of
Sections 15 – 17 of the CRFFN Act been vested exclusively in the Council.
3.1.10 However, the Nigeria Customs Service may be able if ` nothing in the provision of Sections 15 – 17 of the CRFFN Act that should be construed as suggesting that the Nigeria Customs Service is completely precluded from organizing any form of training for any category of freight forwarders, provided that such a training facility, including the course contents, whether existing before the organize seminars and talk shops for the purpose sensitizing freight forwarders on any of their policies such as new tariff regimes.
Remarks
- A careful comparative analysis of the provisions of the Council for the Regulation of Freight Forwarding in Nigeria Act, 2007 and the Customs and Excise Management Act 1958 has disclosed no remarkable conflict in the two critical areas of Customs licensing regulations and professional training
of Freight Forwarders as the provisions of the two enactments are quite clear, distinct and unambiguous in two critical areas under review.2. However, we have observed that the Nigeria Customs Service which may not be disposed to embracing the positive change introduced by the Council for the Regulation of Freight Forwarding in Nigeria Act with the noble aim of cleaning the Augean stable that the clearing and forwarding practice
used to represent and replacing it with a more decent and internationally acceptable Freight Forwarding Profession.3. This attitude may have manifested itself in various dimensions, particularly in the area of the Nigeria Customs Service refusing to concede or share responsibilities in the appropriate statutorily designated areas apparently for fear of losing relevance in a profession where it had held sway as a colossus since 1958.
4. We have equally observed a disturbing tardiness on the part of the CRFFN who is shy to take up the mantle of responsibility even in the face of a brazen usurpation of its core statutory functions by the Nigeria Customs Service.
5. Wittingly or unwittingly, this situation has given an impetus to the emergence of Customs brokerage as an imperium in imperium (an empire within an empire) with the effect that Customs brokerage (which is personified by “Customs Licensed Agents”) and freight forwarding now seem to exist as two distinct professions with one controlled by the Nigeria Customs Service and the other by the Council for the Regulation of Freight Forwarding in Nigeria. With both of them operating as if they are
mutually exclusive of each other.Recommendations
The position of the Council for the Regulation of Freight Forwarding in Nigeria as the ombudsman and a clearing house of all freight forwarding activities, inclusive of Customs brokerages, is sacrosanct in so far as its powers in this regard have been statutorily entrenched.What is needed at this point in time is for the CRFFN to jump into the driver’s seat to move the freight forwarding profession to its glory. To actualize this, it is imperative for the Council to undertake the
following bold measures which can be categorized as both administrative and legalistic.Administrative Measures
1.) To precipitate inter-Ministerial Collaborations between the Ministry of Transport and Ministry of Finance which are the supervisory Ministries to the CRFFN and the Nigeria Customs Service respectively to ensure effective collaboration wherever the statutory functions of the two organizations may overlap.
2.) In addition, the CRFFN should articulate its core statutory functions and publish same from time to time with a view to sensitizing the freight forwarding community on its roles and in particular, to notify them that the process of becoming a freight forwarder of any kind starts with the CRFFN.
3.) Since the provisions of the CRFFN Act and indeed any other piece of legislation constitutes a notice to the whole world, with the result that ignorance of such law is not an excuse, the CRFFN should write an advisory and warning letter to the Nigeria Customs Service with a view to precluding them from further usurpation of any of her statutory functions particularly in the area of Customs License administration and training.
4.) The CRFFN should advise all the accredited associations to encourage their members who are registered with the Council to apply and obtain personal Customs Clearing License in their individual names from the Nigeria Customs Service in line with Regulation 4 and 6 of the Customs and Excise Agents (Licensing) Regulations of 1968.
This will effectively facilitate the meeting of the seeming hardcore Customs brokerage in the global practice of freight forwarding and enhance industrial peace and harmony in the entire maritime industry and cargo logistics chain administration.
5.) The Council should also send a memo to the Corporate Affairs Commission with adequate explanation of its core statutory functions, to request for the imposition of CRFFN Membership Registration Certificate as a mandatory proficiency qualification to be possessed by directors who
intend to incorporate companies whose objects is to carryout freight forwarding business. This area is one of the essences of cabotage law in Nigeria which seek to empower indigenous practitioners in the maritime transport and logistics
Legal Measures
1. In consideration of the fact that the rights and powers vested in the Council by the CRFFN Act are justiciable rights and powers the Council is entitled to initiate legal proceedings against any organization whether private or governmental, who violates any of the provisions of the CRFFN Act in any material particular provided that violation notice and where applicable, pre-action notice has earlier been served on such an erring person or organization.
2. The Council is also entitled to seek injunctive reliefs in the appropriate Court of law to forestall an intended breach of any of the provisions of the CRFFN Act against any person and Government organization to breach of its statute.
4.0 Conclusion
4.1 The Council for the Regulation of Freight Forwarding in Nigeria is a child of circumstance born to perfect the inadequacies inherent in the cargo Logistics Chain Management and Customs formalities.
4.2 The capacity of the Council to actualize this noble policy objective is emboweled in its copious provisions which are designed to expand, unite and professionalize the various gamut of Logistic management services which had existed in incoherent states prior to the enactment of the CRFFN
Act.
4.3 In furtherance of its policy objectives, the Council has since inception been able to inherit and foster all the trade practices in the logistics management chain all of which it has been able to link to its
control mechanism by means of registration of individual and corporate practitioners as well as accreditation of existing freight forwarding associations.
4.4 One of such associations which have submitted to the regulatory jurisdiction of the CRFFN is the Association of Nigerian Licensed Customs Agents (ANLCA) whose membership the Nigeria Customs Service may have lashed unto in order to claim absolute and uncensored control of Customs brokerage as a segment of the logistics management and Customs formalities.
4.5 It is therefore preposterous for the Nigeria Customs Service to continue to cling unto claim of absolute or uncensored control of the Customs License administration when the holders of such licenses at individual, corporate and associations have irreversibly submitted to the overriding regulatory jurisdiction of the Council.
4.6 It is also absurd that the Nigeria Customs Service as a law enforcement agency and a statutory member of the Governing Council of the CRFFN may have deployed its machinery which is sustained with tax payers money, to undermine the effectiveness of another law enforcement agency in
her effort at implementing the policies of a common master (Federal Government) in a higher capacity.
4.7 Instead of continuing to play doubtable role, the Nigeria Customs Service and indeed other stakeholders should close ranks with the CRFFN towards the designing of an operational framework that can permanently cure all the ills of the profession. This is high practicable in sense that the Council’s regulatory framework is sufficiently contained with all the control apparatuses such as a judicial tribunal which is equivalent of a high court and constituted to enforce professional ethics. This judicial facility is not available under the Customs License regime.
4.8 There is no gainsaying that the Nigeria Customs Service and indeed the Nigeria economy would be the better for it in terms of higher revenue returns, enhancement of efficiently and elimination of abuses and the Nigeria Customs Service and indeed the Nigerian economy will ultimately be the better for it if only the Nigeria Customs Service and other jealous detractors could lose their choking grip on the Council.
4.9 The concept and belief within the high command of the Nigeria Customs Service management that CEMA does not recognize associations is baseless because CRFFN duly recognized and accredited freight/licensed customs agents as a new legislative instrument aside from the constitutional
provisions of the Nigerian Constitution.
5.0 We will crave the indulgence of the Government especially the National Assembly to use the opportunity of the pending amendment of the Customs and Excise Management Act that is presently with it to have a dispassionate and critical look at our recommendation. To us the main bone of contention that is trying to throw a spanner in the wheel of progress in the logistic chain management is the issue of the licensing regime of the Nigeria Customs Service. The authors of regulation 65 which
are pursuant to CEMA as amended especially Section 4 and 6 did not contemplate that only corporate bodies which in any case cannot acquire skills and knowledge should be the only ones licensed. Individuals should be licensed once they have complied with Section 19 of the CRFFN Act. In
the U.S.A and other developed maritime economic it has become anachronistic to license corporate Customs brokers. In the U.S.A there are over 30,000 individual Customs Brokers. This is the way the world is moving to enhance international best practices.
5.1 A classical example can be drawn from the legal profession. A legal practitioner having been licensed/accredited to practice by the Council of Legal Education after acquiring the necessary skills and knowledge goes to court as an individual professional to ply his profession as a professional. It is not the law office or chambers that does this. It we believe that the CRFFN Act was meant to professionalize the freight forwarding industry, it is the individual freight forwarder that should be allowed to go to the ports and border stations to interface with the necessary agencies like terminal operators, Customs and shipping companies once his/her name is in the register of freight forwarders with CRFFN.
This we believe will be a giant step towards professionalism in freight forwarding. This alone will guarantee well over 50,000 Nigerians a legitimate trade and profession in a country where unemployment is a major problem at the moment.
Long Live the Freight Forwarding Profession
Long Live CRFFN
Long Live NAGAFF
Long Live Nigeria
Long Live Nigeria Customs Service
Barr. Okwudili Alagbu
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