By Eugene Nweke
Presently, it is a common knowledge to see the stakeholders operating in the maritime/international trade supply chain (cut across the international frontiers) make or pass one remarks or the other, either in the positive or the negative all in a bid to expressing their feelings or of what they heard concerning the Pre-Arrival Assessment Report (PAAR) regime, even without making further probe or inquiries as to what went wrong.
This development becomes obvious, following the noticeable teething problems that confronted the PAAR regime at inception, especially, the associated delays noticed during the processing, issuance of PAAR and the clearance process at the operational base.
It has become necessary to articulate the true position of the Customs cargo clearance activities under the PAAR regime, for the attention of the necessary authorities and for the record.
THE FORCES AGAINST PAAR
Truth, though bitter, must be said. There is no gain overstating the fact that, PAAR application/regime took off amidst several challenges, ranging from:
1). Divided mission/ interest between the supervisory Ministry and the Customs management (Ministry canvassed for the contract extension in favour of the service providers and the Customs insisted on its readiness to take over).
2). The factor above led to unstructured and lack-luster transition (hand over) plan, from the service providers’ Destination Inspection scheme to the Nigeria Customs Destination Inspection scheme.
3). The service providers’ were not willing to end the juicy contract and hand over the scheme to the Nigeria Customs, so they resorted to political permutation by way of lobbying and sponsoring propaganda merchants in a bid to stay on after the 6 month-grace ( extension) granted them by the government.
4). Following the non-actualization of the above targets by the service providers, hand over pitfalls and ambush were hatched against the PAAR, with the untidy and shabby hand over, in the process over 99,000 uploaded Form Ms were trapped in transmission.
5). The Web Fontaine in a seemingly manner of vendetta for the Service opted for abandoning its Asycuda3.0 site and the inconclusive packaging of NICIS and not being engaged by the service to develop Nigeria Single Window, Nigeria Trade Hub and PAAR application, incidences of server break-down became unprecedented under PAAR regime, to the extent that from the report in a time release study, the total delay time caused by incessant server break-down is over 20 days from the time a Form M is uploaded to the bank, to the time the cargo is exited out of the Customs gate control.
6). The trapped uploaded Form M created an administrative emergency thereby compelling the Customs Service to alternatively introduce a remedy for imports clearance guide-line, referred to as “Provisional Release”. This temporary application eventually diverted the attention of the management, following the associated confusion and the service quest to deploy its eagle eyes against dishonest declarations and revenue saboteurs. Moreso, that with the slow and delays in the issuance of PAAR, this temporary measure became a window exploited by the Customs Agents/Importers. PAAR application was adversely affected as a result.
7). Though officers trained for the PAAR administration had to grapple with trade volume via application in a much more practical experiment and the official engagement of PAAR application with the aim of correcting false declarations, wrong classifications, etc amidst demand and rush.
8). PAAR application ideally is structured to deal with and promote honest compliant trade transactions, but from inception to date PAAR ruling centre recorded more non-compliant/dishonest transactions than envisaged. This by design became a distortion of concept.
9). The inadequate support from the supervisory Ministry, against the back-drop of a persistent server break-down from the Web Fontaine services, the supervisory Ministry has not proactively intervened on this matter being the Ministry that engaged the services of the Web Fontaine.
Rather, the Ministry is undaunted with sponsored petition from the anti-PAAR campaigners, giving embarrassing information on a mere teething problem and dishing out falsehood all in a bid to discredit the service and PAAR in particular.
10). The seemingly act of betrayal exhibited by notable unit officers, whereby it appears that the proponent of anti-PAAR application seems to have penetrated and bribed some unit officers to work and frustrate the PAAR regime, to the extent that some of them will openly ask you “what is PAAR” and goes ahead to raise unnecessary queries and frivolous Demand Notices all in the name of extorting money from the Agents.
This set of officers with their status quo ante mentality, persistently institutes haggling in the cargo clearance process with impunity, thus contributing to noticeable delays in the Customs ports clearance process.
11). The ineffective use of the intrusive scanners to facilitate trade at the scan site. The persistent break-down of the server also showed effects on the operations of the intrusive scanners.
Before the PAAR regime, Apapa fixed and mobile scanners ( though under an existed MOU) designated and scanned about 220 Boxes per day, but with the advent of PAAR regime, the same now scan less than 90 Boxes per day.
12). The ordering and stoppage of the Customs Intelligent Unit- CIU from undue incursion in the fluidity of cargo clearance by the CGC, made the unit to resort to ambushing the cargo, by sending false signals and reports to the Federal Operations Unit- FOU and at times to the headquarters in Abuja, all targeted at heating up the system and causing confusion.
The panic created by this practice slowed cargo clearance, as 85% of released cargos are subjected to the CIU watch list, causing further delays
THE ENVISAGED ADVANTAGES OF PAAR
Pursuance to creating a compliant, accessible, predictable, competitive, sustainable, enabling trade environment in the Nigerian international trade parlance, the Nigeria Customs Service needed to go back to the drawing board to bring to bare its over fifty years of experience as a revenue collector and preventive agency of Government.
Against this backdrop, PAAR emerged as the output of this brainstorming/cross fertilization of ideas session that lasted for months.
From the conceptualization point of view, the driving spirit behind the PAAR application (as an ICT seamless Automation soft ware) anchored on the principles of creation of a one-stop shop portal for the integration of stakeholder to attending to trade documentation, trade facilitation, reduction of human contact to cargo, uniformity of duty assessments, reduction of human barrier elements (malpractices), prompt revenue generation, improve the turnaround time in all strata and facet of production and services related to ports operation, etc.
PAAR applications functions alongside the Nigeria Trade Hub as its complementing tool, provides that since all relevant stakeholders within the supply chain are already duly integrated in the system, it will , from a central point (Ruling Centre), process all international trade transactions and documentations in a much seamless and clear operations and final decision taken on every import coming into the country prior to closing of the vessel hatch at the port of origin, throughout its sailing / voyage duration.
Expectedly, final decision on the import should have been concluded two weeks before the vessel arrives at our ports (final destination port). Upon arrival of the imports, cargos are expected to leave the port within 24 hours of its discharge from the point of port-stacking area.
The expectations of the trading public was high, as they looked forward to a regime that will promote equality in trade treatment, thereby removing the old arrangement where “some animals are more equal than the others” and as such enjoy certain level of compromises and preferential treatments in relation to clearance time, payable duty, clearance cost, etc.
In addition, the trading public was convinced that with PAAR being a final document in relation to import value assessment and not an advisory document as it was with the Risk Assessment Reports (RAR) of the service providers, the PAAR they believe has the capacity to collapse, reduce or possibly eliminate the incidences of rampant / uncoordinated programming of alerts, cross functions of operations within the units, unnecessary registration /dispatch points, frivolous Demand Notices, haggling and other subtle delays that come in form of undue queries and malpractices.
THE REALITIES ON GROUND
With the teething problems enunciated above, PAAR application is characterized by the following practices and operations now snowballing into PAAR albatross:
1). Following the longer days (20) and the associated delays it takes to upload from the bank , process and issue PAAR at the ruling centre, it is natural for the importer /agents to sought a way to avoid paying undue demurrage and storage charges.
In this regard, it was observed that most recent imports uploaded to the PAAR ruling centre through the banks and so many others that are not formally uploaded into the banks, which were not officially trapped (among the said 99,000 Form Ms), were smuggled into the provisional release arrangement, thereby, over stretching the system.
This practice led to “overcrowding” of the Customs Processing Centre (CPC) and the cargo releasing point. It also promoted compromises and unstable operations ranging from:
a). Trade clearance inconsistency in relation to duty assessment.
b). 90% of imports leaving the ports via the red lane (physical examination), rendering the intrusive scanners almost in operational.
c). Heightened issuance of frivolous Demand Notices, leading to haggling and compromises by way of bribery and corruption, also constitutes distortion to a reasonable import value bench mark.
d). Server break-down became the order of the day, whereby increasing the already mounted pressure on the operational officers and the over-stretching of the computers in view of inadequate work spacing schedule on the system.
e). With the incessant server break-down on ground, coupled with the rush and more cargo been designated for physical examination, the terminal operators handling gears were as well over stretched, of which booking for physical examination takes an average of 7working days, indirectly wetting ground to incurring a progressive demurrage and storage charges which the terminal operators and shipping line Agents collect with impunity.
f). As this situation and practices persist, helpless Agents reverted to exploring all available means to secure and release their cargo out of Customs’ control, resultant import clearance scheming, manipulations, uneven competition took centre stage, all in a bid to reduce and save clearance cost.
g). Giving the above scenario, the Resident Officers, the valuation unit and the CIU subjected the issued PAAR from the Ruling Centre to further probe. In this regard physical examinations were carried out to compare and as well determine the true imports quantity and value declared by the importer.
The result of this action shows that out of the total PAAR earlier issued, 35% of it were overvalued while 65% were said to have been undervalued from the ruling centre.
This action was taken in order to whittle down the coercion of and the assumption that PAAR is a final document as far as import value decision is concerned.
Therefore, it was established that non compliant trade thrived and most importers have not come to terms with the need to effect genuine declaration of their imports.
h). From investigation, undertaken by Maritime Advocacy & Action Group (MAAG), it was discovered that as obtained in the days of the service providers, the documentation experts ( especially those “fast lane cartels”) that existed in the system with their collaborators or their allies being the insider banks/Customs staff have eventually infiltrated the ruling centre.
This development paved way for unequal treatment, as those on this fast lane pay N40,000 as fee and gets their PAAR issued within 48 hours and at a very low import value, while the majority waits for more 3 weeks for their PAAR to be transmitted to their designated bank.
i). The resultant effect of this development seems to have compelled the service to direct the Ruling Centre to against all valuing norms raise upwards the imports value bar on almost 90% of the Imports into the country. The month of March, 2014 recorded increase in the final PAAR Imports value assessment increasing by 300% to 400% Cost Insurance and Freight.
j). With this development, some genuine importers / Agents are protesting their assessed value from the Ruling Centre, while others are busy pushing for the reintroduction of the suspended provisional release, even as some others resigned themselves to fate and abandoned their import believing that once the port is congested the service and government will consider alternatives.
Only few people are helplessly paying the new assessed value. Figures taking from APMT and TCIT on the number of Containers Positioned for examination showed that less than 30 containers were examined per terminal on Monday 24th March 2014 through Wednesday 26th March 2014. This drop in physical examination activities in the largest terminals within the West Africa region is to speak the less unhealthy developments.
Firstly, without prejudice, the management must stake its bar against corrupt officers as noted above. This is because from every point of system studied and reviewed, compliant trade environment without compliant officers can never be achieved. This position makes the management’s quest for a compliant regime to appear like a mere shadow chase.
Our trading public, because of the harsh economic trading environment, will always have reason to cut corners in order to maximize profits. Therefore, neither the burden of proof on declared transaction value by the importer nor the shift in burden of proof with integrity on the Customs Officer is feasible for now.
It has no place nor make sense in the present Import Clearance environment as the Importer, Agents and officers are on the same band wagon of dishonesty and compromises, due to corrupt tendencies. I think at this juncture, officers should be made to resign their contract on a more committed structured agreement with service.
It is my candid view to submit here, by saying that, the only option left, is for the management to carry out wider consultation with the government, legislature (secure an official gazette) and stakeholders to experiment an acceptable, reasonable import value benchmark regime for at least six months or one year period. Thereafter, the experience garnered thereafter, will go a long way at structuring and arriving at a smooth import value methodology.
In the interim, the valuation unit should be directed to revalue all suspected over-valued imports, so as to mitigate against port congestion thereby facilitating trade.