In Cameroon, a licensed Customs broker (LCB) plays a very important role in the national supply chain. The national directory of LCBs lists almost 200 brokers, with the number changing as licences are withdrawn or brokers cease their activities.

Under the current regulations it is compulsory to use an LCB. However, diplomatic missions, international bodies, owners of imported second-hand vehicles, public authorities, and oil companies (where their crude oil exports are concerned) are permitted to lodge their own Customs declarations.

The profession is governed by the Community Customs Code (Art.112 to 119) of the Central African Economic and Monetary Community (CEMAC), of which Cameroon is a member. The Code defines a Customs broker as “any natural or legal person who is professionally engaged in completing Customs formalities in relation to the declaration of goods on behalf of other persons, either as his/her main profession or as a normal complement to his/her core business.”

Underlying the status of Customs broker are certain requirements related to professionalism and compliance with ethical standards. The legal framework for the licensing of Customs brokers, and for engaging in the profession, as well as provisions aimed at combatting illegal Customs brokering, are specified in this article.

There are two types of indefinite licences for LCBs in Cameroon: a national licence; and a CEMAC Community licence.

National licences are issued by the Director General of Customs, after the views of the National LCB Advisory Committee have been sought. In Cameroon this Committee, established under the CEMAC Community Customs Code, is made up of representatives from:

• professional bodies of LCBs, stevedoring companies (responsible for loading and unloading cargo), and consignees;
• the Chamber of Commerce, Industry, Mining and Crafts;
• government authorities – the Directorate General of Treasury, the Directorate General of Taxation, and the Directorate General of Customs (the latter being an autonomous administration which is separate from the other administrations cited).

The Committee, chaired by the Director General of Customs, processes applications for Customs broker licences, and checks that the applicant satisfies the conditions laid down by the CEMAC Customs Code. The national licence authorizes the holder to carry out certain Customs operations only, namely the submission of Customs declarations for home consumption (home use), and for the outright exportation of goods.

All Customs brokers who hold a national licence may then apply to the CEMAC Community authorities for a CEMAC Community licence, which those authorities will issue after seeking the views of the National LCB Advisory Committee of the applicant’s country of residence. The Community licence, valid throughout the CEMAC territory, entitles the holder to complete all formalities related to all types of Customs operations on behalf of other persons, regardless of the Customs procedure involved. This is a full-service brokerage scheme.

The licensing conditions involve checks on the applicant’s academic, civil, tax, and judicial profile as specified by the Customs Code, and the lodging of security in an amount of 25,000,000 CFA francs (approximately 38 000 euro) for a licence to engage in the Customs broker profession.

All LCBs which are “legal persons” must include certain documents in their licence applications, including, in particular, evidence of the professional experience and academic attainment of one of their employees, known as the “lead declarant”, who will be the recognized Customs contact person and take primary responsibility for Customs operations.

The LCB’s lead declarant must have an undergraduate (Bachelor’s) degree in a subject related to transport, logistics or international trade, coupled with at least five years’ experience in the completion of Customs formalities. The lead declarant’s tax file must show that he/she is up-to-date (all tax returns submitted, all taxes paid, etc.), and that he/she does not have a criminal record.

In addition, all Customs brokers must, within three months from the date when their licence takes effect, provide evidence that they:

• have dedicated premises in which to conduct their business;
• are registered with the Registry of Commerce, and listed on the commercial tax roll;
• are members of a Customs brokers’ trade association.

LCBs must retain on their premises, for three years:

• a record of the Customs operations that they have carried out;
• the documents relating to each clearance operation.

An LCB may act in his/her own name or as an agent for the owner of the goods. He/she draws up the declaration personally, and presents the goods for examination. Any change in an LCB’s business status (change of sponsor, lead declarant, business name, etc.) must be notified to the Customs administration within a two-month period.

Some people who offer their services to economic operators illicitly, by using a false identity, assume the role of an LCB in order to complete the formalities associated with foreign trade. Thus, they will initiate goods clearance operations, and illegally collect Customs brokerage fees from users. These practices are carried on with the active connivance of certain genuine Customs brokers who, in return for payment, will “domicile” or agree to take responsibility for the declarations initiated by these clandestine operators.

To tackle this situation, Cameroon’s Directorate General of Customs has taken the following measures:

• assigning an electronic code for the initiation of Customs declarations to licensed Customs brokers only, as a means of monitoring their activities more closely;
• giving the staff of LCB firms an access card admitting them to the Foreign Trade Operations Single Window building, where foreign trade stakeholders (banks, Customs, etc.) operate under one roof;
• systematic application of administrative and financial penalties (suspension of business or withdrawal of licence) to LCBs which have been accomplices in the illegal validation of Customs declarations.

Given the major role played by LCBs in terms of protecting the interests of the Treasury and facilitating trade, Cameroon’s legal framework provides for ongoing capacity building for LCBs. It has also established a system of administrative and judicial penalties, with the aim of improving the LCB profession and ensuring compliance with the profession’s ethical standards.

The purpose of the capacity building is to ensure that all LCBs are familiar with the features of the Customs information systems, and are aware of the regulations. Specific training is delivered on the operation of ASYCUDA, Customs procedures, the WCO Harmonized System (HS), the World Trade Organization (WTO) and its various instruments (Customs valuation, the Trade Facilitation Agreement (TFA), etc.), as well as various developments in international trade. Another aim is to ensure that Customs procedures are transparent.

These capacity building initiatives are accompanied by the development of dialogue and partnership with the profession. The National LCB Advisory Committee is a forum for exchanges with all of the LCB trade associations, permitting consultations on the improvement of the profession, and the enhancement of professionalism. Ad hoc consultations also take place frequently, outside the Advisory Committee. Testament to the success of this partnership is the fact that licence withdrawal penalties are imposed in a concerted manner within the Committee; another example is the introduction of awards for the most deserving LCBs (a professionalism award, an expeditiousness award, a tax compliance award, etc.).

Under the penalty system applicable to LCBs, there are “suspension of business” or “withdrawal of licence” measures for infringements of the tax and Customs legislation, the failure to provide sufficient financial security for engaging in the profession or serious breaches of professional and ethical standards. The penalties are applied systematically, and the problems encountered relate primarily to:

• the failure to maintain a proper record of the Customs operations carried out;
• engaging in licensed brokering based on false bank guarantees;
• the illegal validation of declarations for the benefit of clandestine operators;
• non-compliance with the fee framework;
• engaging in brokering with lead declarants whose profile is not compliant (evidence of professional experience and university degrees not furnished, etc.).

The Directorate General of Customs has introduced annual administrative checks on LCBs, focusing on compliance with the profession’s ethical framework. A team of Customs inspectors from the division responsible for legislation is responsible for implementing the checks. The team’s visits are pre-announced, and all LCBs are aware of the dates when the checks will take place.

The checks cover, among other things:

• whether the licence is in order – the aim here is to tackle clandestine Customs declarants and, in particular, the case of entities whose company name indicates that they are LCBs, but which have not in fact been properly licensed and are exploiting the ignorance of users;
• whether a bank guarantee has been lodged in respect of a licence to engage in the profession;
• how the records of Customs operations are maintained, and the archiving system;
• LCBs’ compliance with the system for invoicing fees, to avoid practices involving “dumped prices” for services and unfair competition – there is a legally-established framework of fees, to avoid abuses.
• the practice of validating declarations without following up on them, under which LCBs use their electronic code to lodge declarations on behalf of a clandestine Customs broker, without the relevant Customs operations being entered in their records, and with no account being taken of the tax effect induced by the operation – remittance of value-added tax (VAT);
• compliance with the obligations imposed by the trade association.

Any shortcomings observed may result in measures involving suspension or licence withdrawal in the case of blatant infringements, especially those relating to, for example, non-compliance with the trade association’s ethical framework, unlicensed brokering, or failure to lodge a bank guarantee in respect of the licence. Any person who declares goods on behalf of others without having LCB status is, of course, subject to financial and judicial penalties.

The pooling of information by the tax and Customs administrations is underway, as part of the development of a data interface application. This will allow for more effective checks on the operations of LCBs. In addition, users and the business community have been made aware of the “clandestine declarants” issue, but this activity is difficult to eradicate. At present, those involved in this malpractice have more than one trick up their sleeves!

More information
douanes-cam@minfi.gov.cm