To Broker or Not To Broker

Recently, a friend of mine had to take trips to the customs office at the Tribhuvan International Airport, one of the 31 main customs offices across the country, for receiving a boxful of miscellany from the land of the eagle. She describes with ill-disguised unease the sheer number of brokers, almost all men, swarming towards her in hoards to ‘help her’ get through the further nightmare of going through the customs office. They willingly offered their services for a fee; the nominal of which was Rs.500. She fought her way into the customs office through the crowd and asked to see an official who would help her get her package.

Turns out, very. What was unprecedented was that the customs official would send her back into the crowd of brokers outside. She recounts him telling her, ‘Tapaile broker ko sahayata liani parcha baini’ (Read: “No way are you getting through this without a broker”). The procedure apparently warranted the need. The Customs Act 2064 (2007) does not mandate the need of a broker. The Trade Facilitation Agreement of the World Trade Organization as of 2013, also termed the ‘Bali Package’, is the most recent of its documents that states explicitly under sub-heading 6 of Article 10: Formalities Connected With Importation and Exportation and Transit, that ‘Without prejudice to the important policy concerns of some Members that currently maintain a special role for customs brokers, from the entry into force of this agreement, Members shall not introduce the mandatory use of customs brokers.’ Nepal has been a member of the WTO since April 23, 2004.

The Doing Business Report 2015 by World Bank Group ranks Nepal at 171 among 189 economies under ‘Trading across Borders’, a further drop from the 2014 rank of 169. A comparison between Singapore, which is ranked at the top stop, and Nepal reveals a frustrating gap and evident bureaucracy when it comes to trade. Looking at imports only, document preparation, customs clearance and inspection, ports and terminal handling and inland transportation and handling take a mere total of 4 days with a total cost of 440$ in Singapore, whereas the same procedures take a total of 39 days in Nepal with a reported cost of 2650$.

The Customs Reforms and Modernization Strategies and Action Plan Nepal, 2013, outlines wanting to come up with a ‘Broker Management System’, the details of which are few and sketchy. It is ironic that the document begins with the Department of Customs’ supposed mission statement which states, ‘We strive for customs services to respect clients’ time and value for money’.

Read more of Samriddhi’s Labisha Uprety’s work here!