Minister of Finance, Webb Fontaine must apologise to Nigerians-Nweke

Chief Eugene Nweke is the National President, National Association of Government Approved Freight Forwarders (NAGAFF). In this interview with our correspondent, he bared his mind on the six months lifespan of the Pre-Arrival Assessment Report (PAAR) of the Nigeria Customs Service, the activities of the ousted Service Providers and the performance of the Nigeria Customs Service so far. Excerpts:
Having operated the Pre-Arrival Assessment Report (PAAR) regime for an upwards of six months now, how do you assess the performance of PAAR?
Well, first and foremost, PAAR is a laudable concept because PAAR is a homegrown portal and platform that has the capacity to actually achieve the government intention of actualizing 48 hours cargo clearance for the port.
Hence, it is the Pre-Arrival Assessment of importation so that means that it creates room while once you open form M for making trade inquiries while the goods are being shipped on baord the vessel, then you would have started your clearance process from that point between you, the designated banks and the ruling centre. So it becomes the best concept that will suit our peculiarity as an international trading environment.
Having said that, PAAR like any other regime is a transition, the transition from the Service Providers’ Destination Inspection Scheme migrating to the Nigeria Customs Service Destination Inspection Scheme cannot go without teething problems.
We as the freight forwarders and agents anticipated these problems just that we were much concerned about the time it will be soughted out so that we have a leeway to seeing the end of the tunnel which if you ask me today, i think we can see the end of the tunnel that it is brighter.
Now, what are the challenges the system encountered? First, the activities of the Service Provider called Webb Fontaine from the first three months of PAAR whereby they were not forthcoming in terms of bringing data that will generate electronic Form m to captured and integrated into the new platform.
So, such resistance and delays caused a major setback because, if they had done that earlier before the take off, then the officers that are administering the PAAR ruling centre at Abuja would have within 24 hours or thereabout acquaint and integrated themselves with the historical data and information.
Recall that the same Service Provider was unable to address the optic fibre problem in the internet whereby we have consistent server breakdown emanating from their masts. So these became the problem.
Then at that point, other Service Providers like the Cotecna, and what have you, within the point that they had to handover, 99,000 form M of traded goods that have not come into the country were trapped. So, that became a whole lot of confusion.
Also coupled with the fact that we expected between the customs and the Ministry of Finance, there should have been a systematic and milestone transition plan whereby we expected that between some period prior to the handover proper, we carry out a pilot transition, experimenting the PAAR application at a particular port, maybe we start from Apapa then to Tincan and gradually to all other ports in the Western zone and then to other zones and customs commands so that we ensure that within that period of transition, we would have gotten it right. But all these were not done till that dying minutes, everything was hurriedly handed over.
S, it takes the discretionary management like that of the Nigeria Customs Service to have immediately deployed an alternative, that was when they came up with what they called the Provisional release. It was to remedy the problems created by some of these people that were not willing to go, because there was battle, “extend the contract for us”, the customs officers were saying, “no, we need to take over “, that was all. The Minister didn’t say where she was but at the end of the day, the Federal government was on the side of the customs and said that they should take over. There was no milestone handover Process, that was one of the greatest undoing.
But suffice it to say that in the past twenty-one days now, I won’t say a month, those teething problems had been nipped in the bud. So you can now apply for PAAR and get your PAAR within twenty-four hours and the output and the system is higher as against what it were.
Then there was this other problem that ensued. Nigerians not being compliant to the international trade laws, if you look at PAAR regime, it is predicated on honest declaration or honest transaction but whereby we have illegitimate transaction by way of dishonesty, the system needs to query so many PAARs and they cannot be issued. So, we also found out that most of the PAAR that were withheld were those ones that had question and early resolution of these things could not just be decided overnight because, the information there as supplied were just far from the reality and also the designated banks involved were not actually in a better position to represent the interest of the importers because the man that has the real data and information regarding his import is the importer. So what he gives the bank is what the bank will be gambling with. So, these often times cause delays.
But like I said before, today, there is a tremendous improvement and that is why we are encouraging every other person to declare correctly and you will not have problem with your goods.
The Nigeria Customs Service late last month came up with an alternative clearing channel to help clear the backlog of imports still trapped in the ports especially at the Apapa command. How well has this measure helped in facilitating trade?
It is not only in Apapa, it is in all the customs formation. Each command should form a rescue committee. What happened was that it came to point as a result of dishonest declaration becoming rampant, the system for whatever reason started over valuing the importation and importers now when they receive it, they started crying, importers were not coming forth to clear their cargo, some of them also hid their issued PAAR and were trying to use the window called provisional release which the Nigeria Customs has withdrawn. That now caused a backlog within the system.
So, the management again went back to the drawing board and said okay, since there was truly an established fact that most of the goods were over valued and people who are holding their PAAR would actually come forth to do the right thing, so they gave a directive, let a committee be created, this committee, any importer or agent who presents his PAAR, that he was over assessed, that this committee should look into it and go and conduct a physical examination and value the cargo accordingly and so that becomes a window and the whole thing is working.
That is those who know that their imports are genuine, those who know that they are not carrying contraband goods in their importation, if you are bringing in what you called homogenous goods, why not? Even if there is an error, the physical examination will prove it there and then, the whole thing will be assessed and you will be happy to take your cargo and leave the port because sincerely speaking, it is just that we see it as part of our own sacrifice or trying to make the system work, if not, from my point of view as an activist and as an association leader, I still hold it against the Minister of Finance and Webb Fontaine, we are still waiting for the Minister and Webb Fontaine to come and apologize to Nigerians. Nigerian Shippers lost as much as over two billion naira to the terminal operators and the shipping companies as a result of the unnecessary, unwarranted delays which was just an act of sabotage.
We want a situation when all these things settle down, where they come out to apologize to the Nigerians shippers, the freight forwarders and Nigerians in general for causing us the money and subjecting us to untold hardship.
While you were speaking sir, you hinted that the PAAR is predicated on honest declarations. Now some people are calling for the re-introduction of benchmark system in the clearing procedure. What is the relationship between the PAAR and the benchmark system in the current dispensation?
A benchmark is an indicator or call it a signpost. Benchmark is trying to say that in any trading environment, the stakeholders which is the shipper otherwise known as the importer and the customs should after several years of trading and importing certain goods into the country, there should be what should be considerate and reasonable benchmark for a particular item, so to say, that if a twenty footer of stationary comes into the country, the system shall profile it and the importer should have actually interacted and agreed that truly, the value for this stationary, that is twenty footer with a certain quantity is this amount. It should be an established fact.
So benchmark is talking about an established value that should form a minimal value of transaction so that an importer who has a good consolidator that will actually maximize the space in a container in order to stock his cargo because what he is paying for is a unit freight charge.But whatever you have packaged inside the container, if you have a good consolidator that will consolidate your goods properly and you take more instead of taking five hundred, you are taking seven hundred, it is for your own credit.
So we are saying, if the same cargo comes into the country, what should have form a minimal benchmark so that this man will not unnecessarily stress himself, so that you as an importer, you are going to import your cargo and you are bringing this item, you know that as an importer, this is what you are going to pay in order to enable your planning in terms of the money that you are going to get from the bank. Then it will also enable the customs man on ground to know that there is no point wasting this man’s time because he has paid within the mark, let him go and then if there is any other excess import, then, that one can be taken care of. But there should be a minimal benchmark value which is understandable and which is a reality for value presentation.
The PAAR is to issue value, the determinant of PAAR application is based on the inbuilt value in the system that it has already created as a result of subsequent trading. Myself being a technical person in the system will always know that there are some goods by different importers that would have come in as a result of capital flight, some might have come in by way of people trying to push in money like the over invoiced importations. So, if the system comes to profile the same item and on different value that does not actually represent the reality because, somebody wanted to use that to bring over invoicing and capital flight to an extent, then we wouldn’t use that system to say that this is what a value should be, no. Because, if you use that to value the man who has gone to import genuinely without cutting corners because you needed to get more in foreign exchange for the transaction or for whatever criminal intention, do we use that to generalize it?
So, a benchmark is to form a determining factor as to what should be reasonable value. You know PAAR has four pillars, quality assessment, valuation, issuance and registration. Now, what do they do? It is based on information presented in the commercial invoice, the bill of laden, the parking list. They didn’t say that cargo, mind you that is what they use to assess PAAR. So, oftentimes, if there are mistakes in filing some of these import documents, the system will also dub it and at the end of the day, you talk about amendment. That is why you always see a system say, in line with your opinion, this FOB value has increased by this, the CIF value has also increased by this. These are just remarks and then the insurance should not be like this, it should be like this,.
But we are saying that if we are able to agree on some information overtime, we know the value even when we go to the market, you know that this is the real reasonable value for this things. If we can get this done, then it will go a long way. When such PAAR is being issued, nobody will query it.
But why is it that when PAAR is issued, the officers at the operational base are not comfortable with it? They go for physical examination, what they have is not the same and they now go back delaying the cargo.
That bring me to another question. Warrant the customs querying its own document as against the words of the Comptroller General of Customs that with the PAAR, customs will no longer query duly released cargo from the ports?
It is because there is high level of dishonesty in declaration. Customs cannot be loosing money because they want to ensure that PAAR becomes the final document. People who are supposed to declare genuinely are now hiding information that will make the system work.
Mind you, when these cargoes come, they either go through the physical examination or through scanning and if scan has reported one or two issues, what do you do? That means that the importer abinitio has defaulted.
Some importers whose goods have been cleared and exited from the ports were recently asked to come back and pay for additional value on their exited goods by the Nigeria Customs Service or risk sanctions. Why was it so?
Illegality begets illegality. If because you are a conglomerate or you are a big importing firm, then you were given a window to take some of your goods on credit, later you come and pay, they will come and take the goods on credit and they will not come back to pay, what do you expect?
Then if for instance, you have gone ahead to undervalue your invoice, did all you did and you took delivery out of the port, the law says, in customs, there is what you call post clearance audit and the law also says, every import document that have left the port, have seven years lifespan. It is after seven years that the customs cannot come back to ask you for anything.
So, when you have taken your delivery, assuming you have paid duty claims and you go, then, if tomorrow the eagle eyes of the service through post clearance audit now go back again to revisit these transaction, that is why the unit is there and what they do everyday is to go back and revisit everything that has gone in and see those ones that has erred looking at the presentation, information on the documents will come back and say, come, my friend, you have questions to answer because they compare notes.
Looking at the clearing process in the last quarter, especially as it has to do with the scanner breakdown almost on a regular basis, how would you assess the performance of the Nigeria Customs Service?
The performance indicator that is available to us indicated that over eighty percent of cargoes cleared out of the ports were through physical examination which is absurd. We expect to see more cargo going through scanning operation.
But what it means is that mobile scanner, like the audit report we sighted sometime last year that this mobile scanner actually were not in their right working condition, that is why often times, it breaks down.
So, I will prefer that the CG or the management of the Nigeria Customs Service will come out with that report that if the government is not acting, we act in our own way because by and by, the essence of delay is being passed on to some other persons and that is not acceptable within the parlance.
If somebody has constituted a delay, he should be made to be responsible for that because it is a supply chain. Against the backdrop of these things that so much money has been spent on to be instal in the customs formations yet, they are failing us just four months of the service providers having handed over to the Nigeria Customs Service, then somebody have not executed his contract or his brief efficiently to the satisfaction of Nigerians and questions should be asked.
I don’t see the reason why agents should be opting for physical examination as against the scanning because the delay in physical examination is higher. Again, some other people deliberately avoid scanning because the physical examination can give room for compromise while the scanning may note the issue and send you back to square one.
But before now, going by the statistical data available to us, prior to the handover of the service providers to the Nigeria Customs Service, the COTECNA in Apapa with the arrangement on ground, they were able to scan two hundred and twenty containers per day. How come when the customs took over,it hardly scan up to one hundred? Something is wrong and it cannot be about manpower, it is system breakdown.
Your Final word to the Nigeria Customs Service, the importing public and the freight forwarders in the industry?
Well, everybody, be it a customs officer, a freight forwarder, any key stakeholder that is involved in international trade environment should join hands let us uphold PAAR because it has to work. Why is it that we are not complaining about the one percent CISS that we are paying? Because the money is not being shipped abroad. When we are paying it, we are paying it because we are Nigerians and the money should equally be used for other developmental purposes unlike before now where if we pay it, it was being withdrawn by some people.
So, we must support PAAR. PAAR is a laudable project and it has come to stay. The government must believe in the Nigeria Customs to deliver. It may take us time but we must get there. That is just the truth.