Freight forwarders say the stampede in documentation and delays in the import clearance process which they witness daily in the ports since the introduction of a benchmark on all imported cargo by the Nigeria Customs Service are overwhelming. The freight forwarders say they now borrow loans at two digits from lending banks to meet the benchmark.
A seasoned freight forwarder, Dr Eugene Nweke raised this concern in an open letter he wrote to the Comptroller-General of Nigeria Customs Service, Hameed Ali. The letter was dated 18th December 2021.
Dr. Eugene Nweke said that the benchmark ranges from N2 million payable surface duty benchmark for a 20feet Container to N3 million as payable surface duty benchmark, excluding other taxes as listed in an internal directive issued by Nigeria Customs Service in September 2021.
Regrettably, Nweke noted that the benchmark application has been linked with the PAAR ruling centre as one of the documents for cargo clearance which has caused confusion for importers and their freight forwarders.
Nweke said in the letter thus: Comptroller-General of Customs, Sir, you may recall that following the internal directive issued sometime in September 2021, to benchmark goods imported into the country by the management to the PAAR ruling centre (trade treatment and application hub), Abuja, ranging as follows: N2 million payable surface duty benchmark for a 20feet Container and N3 million as payable surface duty benchmark, excluding other taxes.
Regrettably, this benchmark application is plaintively linked with the PAAR Ruling Centre Administration.
In practice, therefore, the memo implies an internal directive in lieu of initial imports documentation prerequisite before the issuance of the PAAR certificate. I am concerned that this act now causes documentation stampede in addition to the associated delays in the smooth flow of the import clearance process.
This is because the PAAR Certificate issuance is the critical document that drives the clearance processes, as such any policy or directives that distorts this methodology creates avoidable distortion and confusion in the cargo clearance processes and procedures, hence, the import of this open appeal to your good office.
By this internal directive, the spirit of trade flexibility/fluidity has been altered by trade highhandedness, subjectivity, rigidity as the importers and their imports are being stampeded in the Customs ports – terminals, especially so in Lagos ports.
It may interest you to know that by this coercive directive, the importers now helplessly source for credit lines from their banks amidst double-digit interest rates. Through pains, they accept the obnoxious value application in other to salvage their imports in the face of the exorbitant demurrage and storage charges by both shipping lines and the terminal operators.
Whereas some other importers who cannot access credit facilities had helplessly abandoned their cargo, some other importers now depend on the financial solidity of their agents, as your directive has inflicted unbearable customs trade pains; eliciting official high-handedness and hopelessness.
By visiting the ports to compare notes, I can say categorically, that this uncommon and arbitrary internal directive by all standards of import value applications defiles known universal Customs Valuation application.
Sir, issuing a value benchmark at PAAR Ruling Centre from the onset of the imports clearance process, is subjective in nature because the system does not grant nor permit the importers to defend themselves on value matters, thereby, this constitutes a breach to rule the of engagement.
Nweke said the National Public Relation Officer of the Service had alluded that the Customs HS Code classification tool has no provisions for used items except for new items. Therefore, in justifying this internal directive, he insisted that the used item must be accompanied with SONCAP Certificate for PAAR Processing.
Nweke said that the Customs Public Relations Officer said the Standards Organization of Nigeria (SON) had imputed and integrated its SOP into the NICIS-2 PORTAL to the effect that all imports into the country must be accompanied with the SONCAP.
“Unfortunately, the Service image-maker failed to point out to the reading public, especially the trading public, that the SON in its Product Regulatory List, clearly did capture on page 9, item 2 under General Application, equivocally noted that Used item imports are not regulated (meaning that used item imports do not require SONCAP),” said Nweke.
To save freight forwarders from the quagmire which the benchmark has caused, Nweke called on the Comptroller-General of Customs to relax the internal directive (benchmark) for the sake of the integrity of the Service and trade facilitation, to curtail inflations and save the ailing economy, to savage helpless importers of used items whose imports are presently trapped in various Lagos ports, to forestall capital wastages and to help reenact and sustain the culture of flexibility, transparency, reliability and predictability in the customs imports administration and clearance.