The National Association of Government Approved Freight Forwarders (NAGAFF) has called on President Muhammadu Buhari to ascertain why the Nigeria Customs Service allegedly works at cross-purposes with the Central Bank of Nigeria in relations to monetary policy on trade.
This was contained in a letter addressed to the President by the National Secretary of the association; Dr. Arthur Igwilo dated August 9, 2016 and made available to Primetime Reporters.
NAGAFF in the letter copied to the Minister of Finance, Mrs. Kemi Adeosun, the Governor of the CBN, Mr. Godwin Emefiele and two others stated that the stakeholders (freight forwarders and shippers, etc.) were worried over the state of affairs in the administration of exchange rate for the purposes of Customs duty payment.
According to the association,” Mr. President Sir, may we draw your attention to a forwarding letter from CBN to all authorized dealers and general public with reference no. TED/FEM/FPC/GEN/01|012 of April 30 2014, detailing import guidelines, procedures and documentation under the Destination Inspection Scheme in Nigeria, (these import guidelines as far as we know have not been changed).
“Mr. President Sir, kindly take a critical look at item number (H) of the guideline (copy attached) with the heading import duty payment: The document is very clear as to what exchange rate should be applicable for the purposes of Customs duty collection. Item 1 and 2 of import duty payment guidelines, state as follows; (1) Importer shall continue to pay an administrative charge of 1% for value of all import based on the exchange rate on the approved e-form M. (2) All imports shall continue to be assessed for duty at the CIF value of the goods using the rate of exchange on the approved e-form M”.
In drawing the attention of the President to Section 37 of the Customs and Excise Management Act (CEMA) Cap 45 LFN 2004, which it said the Customs was referring to in their operations at the moment and which says that, “Except as permitted by or under the Customs laws, no imported goods shall be delivered or removed on importation until the importer has paid to the proper officer any duty chargeable thereon, and that duty shall, in the case of goods of which entry is made, be paid on delivery of the entry to the proper officer”, NAGAFF however noted that for the purposes of its letter it shall be patriotic on its own part to inform the President that the actions and inactions of officers of the Nigeria Customs Service may be in breach of guidelines and due processes in the nation’s international trade procedures and may constitute an abuse of his delegated powers under Section 5 of the Constitution.
“It is alleged that the various breaches of due processes and rules of engagement on the part of Nigeria Customs Service in the administration of exchange rate for Customs duty payment may be traced to their desire to meet up revenue targets. Others include their deliberate effort to meet up with their schedules for infrastructure, training, administrative and operational cost including welfare of officers and men of the Service. It is in the public domain that 7% commission on collectable revenue due for Customs for the proper management and administration of Customs laws in general may not be adequate. The implication is that if Customs does not meet up or even surpass revenue target, the problem of paying salaries of the officers may constitute a revenue risk and lead to disloyalty on the part of the officers. This may be the remote cause of the misunderstanding between CEMA and CBN monetary policy guideline.
“Mr. President Sir, and for the avoidance of doubt whereas the CBN has issued a monetary trade policy on exchange rate, the Nigeria Customs may have gone behind and straight to the former President Dr. Goodluck Ebele Jonathan (GCFR) to obtain an approval of the implementation of Section 37 of CEMA Cap C45 LFN 2004 as amended in breach of the CBN guidelines as the authorized Government agency in that regard”, it stated.
Calling the attention of the President to a circular issued on behalf of the Comptroller-General of Customs by a Deputy Comptroller-General of Customs, Adewuyi A. A on exchange rate for customs duty payment in 2015, it stated “Please see circular No. 015/2015 designated – Application of Exchange Rate at the time of making entry with reference No. NCS/T&T/I&E/077/S.3/Vol. XIV of 28th May 2015.It states inter alia:-
“In consonance with the provisions of Customs and Excise Management Act (CEMA) on evaluation and clearing of imported goods into the country, His Excellency, Mr. President, has in letter Reference No. PRES/87/MF/-2/666 of 19th May, 2015 approved the use of exchange rate at the time of making entry as provided in the CEMA, Customs & Excise Notice No. 13 on the valueof imported goods, Section11-c (as stated below) which supersedes the CBN Act of 2007 being relied upon by some importers/Agents.
“Where the value of an imported goods is shown in foreign currency, such value is to be converted to equivalent Nigerian currency as at the rate at the time of making entry.The current rates of exchange are published at the Customs House”.
“Accordingly, the Comptroller-General of Customs has directed that henceforth all declarations in respect of imported goods whose values are shown in foreign currency must comply with the above provision.
“Ensure strict and immediate compliance, please”.
While calling on the President to find out why exchange rate for Customs duty payment was unduly fluctuating without due consideration for inflationary consequences, NAGAFF further advised him to find out whether there was an element of internal sabotage to his administration in that regard saying that the present administration at the moment, was fast loosing followership and becoming unpopular before the trading community due to inconsistent trade policies of the government.
It described a situation wherein the Standards Organisation of Nigerian (SON) and National Agency for Food and Drug Administration and Control (NAFDAC) other than being regulatory had turned to become a revenue collecting agency in breach of the laws establishing them as most unfortunate and regrettable.
It said,”As we write you Mr. President the Enforcement Unit of SON is unlawfully and illegally arresting containers along the Federal Highways in breach of the law establishing it. They are to operate at the owners’ warehouse of factory of manufacturer in accordance with the law. It is our wish that you call the attention of the Hon. Minister Trade and Investment with a view to addressing the parastatal under his watch to order”.
NAGAFF therefore recommended as follows,” The 7% commission due to Customs should be reviewed to read 7% of FOB value instead of collectable revenue. This will help Nigeria Customs Service to resolve aforementioned related responsibilities for proper management and administration of Customs laws. The Hon. Minister of Finance, Central Bank of Nigeria, Nigeria Customs Service and Nigerian Shippers’ Council should meet immediately to review and reconcile their positions and differences in favour of trade with regard to exchange rate for Customs duty payment.
“Nigeria Customs should not be allowed further to be a judge in their own case. The relevance of PAAR or otherwise under destination inspection has to be reviewed and concenssioned to a private operator because of the inherent abuse therein in its administration and risk management. The earlier a summit is convened by Mr. President over maritime transport and trades in Nigeria the better for the good of the Nigerian economy. This is because there is uncontrollable systemic corruption in the shipping industry, ports and border entry points. That Mr. President may wish to direct forthwith the Hon. Minister of Transport and Finance to harmonize the operations, management and administration of CRFFN and CEMA for the purposes of enhanced revenue collection, compliance and professionalism in the business of freight forwarding and logistics in Nigeria.
“Anything Mr. President may wish to do to encourage trade to arrest the current level of destruction which is doing a great damage to the economy”.
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