For well over two weeks, the ports in Lagos have been grounded by protesting Freight Forwarders and Customs Brokers, who claimed that the VIN Valuation policy will cripple their businesses and send them to their villages if allowed to run as introduced by the Nigeria Customs Service.
Point News247 reports that the protestors claimed that clearing charges have gone up by over 400 per cent. For instance, a vehicle that hitherto attracts a N400, 000 duty now will pay over N1.7 million as duty. They called on NCS to return to the status quo.
The stakeholders demanded that the new policy be put in abeyance and the system revert to transaction valuation until according to them, the new policy adapts to the Customs and Excise Management Act (CEMA) in relation to used and ‘accident vehicles’; which stakeholders said must be incorporated into the VIN Valuation database.
While the stakeholders criticised Customs for purportedly failing to take into account primary recommendation of international bodies like WTO and WCO on as value log book, they urged management to tailor the e-valuation in relation to ‘market reality’, and to also factor in certain agreements previously reached between Customs and stakeholders in making the e-valuation a workable policy document.
Earlier in the week, maritime expert and President of Council of Managing Directors of Licensed Customs Agents, Mr. Lucky Amiwero, had in a letter to President Muhammadu Buhari, described the implementation of the VIN Valuation policy as a violation of the NCS convention of the CEMA (Amendment) Act 20 of 2003 based on transaction value.
Amiwero, who is the Chairman, sub-committee of the Reconstituted Presidential Task Force on the Reform of Nigeria Customs Service, disclosed that on the treatment of valuation of vehicles, the committee observed that the present ex-factory price is a component of Brussels Definition of Value(BDV), which is not in agreement with the provision of CEMA (amendment) Act 20 of 2003, that is supposed to be based on Purchase price(negotiated price with a buyer and seller of motor vehicles to have transaction element.
“The present ex-factory price has no negotiated component as purchase price, which is the transaction value by importer. It lacks legal process in the criteria as contained in the treatment of motor vehicle of Paragraph 1-6 of the Customs and excise Management (amendment) Act 20 of 2003 and cannot be used but reviewed to contain features of the elements of transaction/purchase pricing on motor vehicles,” he stressed.
Amiwero stated that the internet upon which NCS purportedly relied on to source data for the controversial VIN value is not acceptable, saying “internet price is not a negotiated price and not admissible as transaction price or purchase price, which has no negotiating capability, as there is no buyer and seller to attract the element of transaction, which negates the doctrine of Transaction Value, and cannot be use, which is clearly illegal and not acceptable as transaction value.”
He further disclosed that the WTO Customs Valuation Agreement (CVA) is based on a “positive principle, which is opposed to a “normative” principle, “the positive “principle” Transaction Value is based on the actual price/value of the goods, rather than the “normative” principle (BDV), the Agreement’s basis of valuation is Transaction value” which is the price actually paid or payable by the buyer for the imported goods, if the sales was freely negotiated, and agreement contains rules for valuation of sales,” Amiwero stressed.
VIN as a trade tool
Meanwhile, the Comptroller General of the Nigeria Customs Service, Col Ibrahim Ali (rtd) on Tuesday sent a high powered delegation to Lagos, led by the Zonal Coordinator of Zone A, ACG Modupe Aremu (Mrs.) to find amicable resolution to the crisis with the protesting Freight Forwarders. She disclosed that VIN is a trade tool not a punitive policy of the government. “We all know that import valuation of vehicles is not a question of convenience or sentiments.
It is part of the international trade. What is happening is that NCS has embraced the modernization of customs trade tools”
Although Customs officials assured the stakeholders that they have a legitimate right to protest against what they feel is wrong in government policies, they maintained that the e-valuation database which was the basis for agents week-long protest took into account all the dynamics involved in valuation of importations, and insisted that the new policy has come to stay and will maintain uniform valuation which is the acceptable trend in international trade.
They stated unequivocally that rather than run the Customs Brokers out of business, the VIN trade tool is intended to maximize profit for the agents, enable them retain their staff and even employ more workers.
She explained that the process leading to the adoption of the VIN was thoroughly looked into, evaluated and seen as compliant with global best practices and in tune with the World Customs Organisation (WCO) principles just as outlined by other global trade bodies prior to implementation.
Speaking, the ACG Trade and Tariff, ACG Hamza Gumi, said the new policy is about trade modernization and trade facilitation, which will not be allowed to run on sentiments but clear economic dynamics, consistent with international trade. He said: “By the deployment of this VIN, negotiated value is gone. We can no longer negotiate. This is a policy decision and it’s not up to you. This policy is based on universal valuation and not dictated by anyone”.
Back to the drawing board
The management team of the Nigeria Customs Service, which met with stakeholders on Tuesday in Lagos assured that the complaint of Freight Forwarders will be looked into.
Though, it is not certain if the policy will be reviewed, the Zonal Coordinator of NCS in Zone A, Mrs. Modupe Aremu, who represented the Comptroller General of Customs at the meeting, assured the people that the Customs management will meet Wednesday to review the complaints. Mrs. Aremu, who described Customs and its licensed agents as members of one large family, also disclosed that a solution to the issue will be arrived at soon.
Addressing the media after the meeting, ACG Aremu explained that the Customs is going to modify the complaints of the Clearing Agents on the VIN valuation policy. She said:“We also talked and rubbed minds on a solution to this ongoing strike at the ports. “The agents were actually trained ahead of the implementation of the VIN valuation.
That was why we were not expecting this kind of response from them when we began the implementation.
“Due to the complaints the agents gave today, we are going back to the drawing board to modify all the issues that they raised. Hopefully, very soon, we will get back to them on the outcome of the modification. VIN has come to stay, it cannot be suspended.” Speaking, a former secretary of the board of the Association of Nigeria Licensed Customs Agents (ANLCA), Chief Taiye Oyeniyi, decried the high cost of vehicle clearance, using VIN valuation.
Oyeniyi advised NCS to reconsider its defunct Customs Consultative Forum as a way to bridge communication gap between the NCS and agents. He also urged the striking agents to allow members of the Customs management team present at the Lagos meeting to take their complaints to Abuja for consideration.
Babatunde Keshinro, General Manager of Ports Terminal Multi-services Limited (PTML), said that the Clearing Agents protest has caused a huge backlog of vehicles waiting to be evacuated. He said that strike has caused congestion leading to inability of more RoRo vessels calling at the port to discharge.
According to him, as at February 24, some ships that are bringing cars to Lagos have gone to wait in Cotonou, awaiting information about space to discharge their vehicular cargoes. For over two weeks, licensed customs agents and freight forwarders have embarked on a strike action over alleged increase in duty payment on imported used vehicles under the new VIN Valuation regime.
The regime addresses the duty variations and the non- uniformity to have existed before now. It also uses artificial intelligence relying on supplied data by the trader and other third parties to evaluate and decide on duty payments without human interference.
Way forward
While there was no concrete agreement on the way forward at the meeting, a decision reached by Customs management on the VIN impasses is likely to determine what happens in the next few days.
