With the teething problems over, importers and their customs agents are now celebrating the success of the new cargo clearing model known as Pre-Arrival Assessment Report introduced by the Nigeria Customs Service (NCS), writes Francis Ugwoke
Between December last year and January this year, the ports industry was in a state of confusion. Apart from the Apapa gridlock which has over the years made life miserable for all, shippers and their freight forwarders were having issues processing the delivery of their goods that had arrived the Lagos ports. Incidentally, the problem was not limited to the Lagos ports.
It was a general problem. Importers and customs agents were therefore full of lamentation about the situation. The Nigeria Customs Service (NCS) had just taken over as the sole administrator of Destination Inspection regime.
Before then, the scheme was under private service providers who had run the system for close to 8 years. The service providers had in 2006 taken over Destination Inspection following the abolition of Pre-shipment Inspection under the Comprehensive Import Supervision Scheme (CISS). The agreement was that after seven years, they should handover to the Customs.
The service provides were therefore expected to handover to the Customs as at January 2013. But this was not to be as their contract was extended by six months. At the expiration, the service providers were lucky again to get another extension till November 30.
As the end of the contract neared, there was speculation that the service providers were again going to be lucky to get another extension. But this was not to be. The customs service was finally asked to take over from the service providers.
The customs service finally took over DI in December 1, 2013 with inherited backlog of 99,000 risk assessment reports (RARs) filed by importers and their freight forwarders to clear their cargos at the ports.
These were documents that ought to have been processed by the former service providers. What this meant was that the customs had also to process these documents before settling down to attend to new applications from importers wishing to clear their consignments. While trying to clear the backlog, the number of importers wishing to take their goods under a new documentation regime known as Pre-Arrival Assessment Report (PAAR) grew in what led to complaints from importers and customs agents.
This was later described as the teething problem for the new regime of Destination Inspection under customs and for anybody entering into a new venture. However, about nine months after the customs service took over from the service providers, stakeholders, mainly importers and their freight forwarders have been full of commendation for the Comptroller-General of Customs, Alhaji Inde Dikko Abdullahi and his management team for the success story of the scheme.
Importers and freight forwarders revealed that after the initial teething problems traced to the time it took the customs to clear the backlog of RARs left by the former service providers, it has been a smooth sail for processing and issuance of PAAR, the new model introduced by the customs to replace RAR.
Benefits of PAAR
The clearing regime in the ports is such that every cargo must be accompanied by a report which gives information about the importer and the cargo, among other things. Under the pre-shipment regime that gave way for Destination Inspection, what was popular in the system was Import Duty Report (IDR).
Upon introduction of DI, service providers introduced Risk Assessment Report (RAR) and it was in use till the customs took over fully. RAR captures names of the importers, countries that the goods are coming from, value and other relevant information. Similarly, the customs service on taking over DI decided to make a change by introducing Pre-Arrival Assessment Report (PAAR).
This became an embodiment of all sorts in what importers and freight forwarders have come to appreciate in the take-over of Destination Inspection by the customs.
On the first day of the issuance of PAAR, Comptroller General of Customs, Dikko Inde Abdulah said this could be completed under 60 minutes, and it was so with document number CN20130017589\001 in Lagos. Dikko explained that unlike RAR of the former service providers, importers would be in a position to clear their consignments within six hours as against five days of RAR.
But there are other benefits of PAAR that importers have come to like since the Customs took over DI. Under PAAR regime, the Customs is in a position to conduct documentary examination before the arrival of goods. Investigations also showed that under the system, the importer will be notified whether there will be “documentary, examinations, scanning or physical inspections are required or not before the arrival of goods."
According to the Customs “PAAR facilitates the release of goods for those not requiring examination/ inspections upon arrival. The PAAR system is an integrated Risk Management platform shared by the Regulatory Agencies including NCS, NAFDAC, NESREA, SON, among others. It is a dynamic environment where the outcomes of transactions Reports are continuously fed back into the PAAR system for efficient profiling of emerging risks”.
The customs under PAAR “provides a standard format for classifying goods. The Common External Tariff concordance has been linked to the NCS PAAR for easy navigation and accurate classification. The user can be guided by the system on how to classify his product as well as other relevant information like whether the item is prohibited”.
A top customs official who did not want to be quoted said that in order to perform the service effectively and efficiently, the PAAR was designed and developed by the Customs Service in accordance with the Nigerian import business requirement and International best practices. He said that in the history of the establishment of the Nigeria Customs Service in 1891, it was the first time that an indigenous software was developed, manned and sustained by its personnel.
This breakthrough, he said, apart from being a “thing of national pride, confers on the NCS, the sole preserve of National Trade Statistics”. He added, “the PAAR regime provides documentary review, Customs valuation; Tariff classification and Risk Assessment will be conducted before the arrival of cargoes. Traders will be notified whether documentary verification, scanning or physical inspections are required or not before the arrival of cargoes. PAAR facilitates the release of goods for those not requiring physical examinations/inspections or further intervention upon arrival
“It is a system that targets the high risk consignment before arrival. This is to check for the likelihood of hazardous importations that could threaten environmental life and National security. The benefits of the PAAR regime go beyond the shores of the country and have acquired international acclaim”.
The success of PAAR has so far dwarfed the teething problems earlier experienced during the early months that the Customs took over Destination Inspection from the service providers. A frontline freight forwarder, Chief Isaac Ogunlana who spoke to THISDAY was full of commendation for the Comptroller-General of the Customs. Ogunlana said that so far, the Dikko-led Customs has been able to reposition the Service with PAAR regime under DI, adding that this has led to efficient duty collection , among other statutory obligations that are in line with government’s economic agenda.
Revenue swells for customs
There has been success story since PAAR gained its ground beginning from April when the Service fully overcame the teething problems initially suffered. That was after the Service cleared the backlog of RARs from service providers and had equally made efforts to improve on the technology platform in use.
After the initial problem in which Apapa port suffered revenue fall as a result of the Provisional Release arrangement, THISDAY gathered that there has been steady revenue rise. In Tin Can Island Command however, the success of PAAR and to a large extent in Destination has been very clear.
Customs Controller, Tin Can Island Port, Alhaji Jibrin Zakare, who was approached to comment on the success of PAAR since Customs took over DI was full of enthusiasm when he spoke. He said it has never been so good for the Command in terms of revenue rise, attributing this as part of the gains of Customs’ taking over Destination Inspection.
THISDAY checks showed that the Command recorded N21.5bn in January this year as against N16.3bn, N14.5bn and N13.6billiong for the same period in 2013, 2012 and 211 respectively. In the month of February, the sum of N21.6bn was realised as against N16.2bn, N19.2bn and N12bn in 2013, 2012 and 2011.
The figure for the month of March was however low with N16.6bn compared to the months January and February. This was indeed the result of the teething problem suffered early in the year and also the effect of the backlog of 99,000 RARs left by the service providers.
The Customs Command in the months of April, May and June, recorded N26.3bn, N26.5bn and N26.1bn respectively in what Zakare said was also part of the stability being enjoyed by the Command.
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