Constituent policy

Port Operators: How We Lost N500 Billion to Vehicle Valuation Policy

• Customs meet with stakeholders; commit to reviewing the policy

• Freight forwarders require a 90-day grace period before

implementation • Congestion builds up

There appears to be light at the end of the dark tunnel after around 15 days of protest by freight forwarders and customs brokers operating in ports across the country against the introduction of the new vehicle valuation policy; otherwise known as the Vehicle Identification Number (VIN) assessment policy, PAUL OGBUOKIRI reports that operators have lost over half a trillion naira due to the protest. This was even as the Nigeria Customs Service (NCS) gave in to operators’ demands to go back to the drawing board and rework the policy

More than two weeks of protests paralyze port activities

For more than two weeks, the ports of Lagos have been grounded by protesting freight forwarders and customs brokers, who claimed that the VIN valuation policy would cripple their businesses and send them to their villages if they were authorized to operate as introduced by the Nigeria Customs Service.

Protesters claimed that customs clearance fees had increased by more than 400%. For example, a vehicle which hitherto attracted a duty of N400,000 will now pay over N1.7 million as duty. They called on the NCS to return to the status quo.

Stakeholders demanded that the new policy be put on hold and the system revert to transaction valuation until they believe the new policy adjusts to the Customs and Excise Management Act (CEMA) with regard to second-hand vehicles and “damaged vehicles”; which stakeholders believe should be incorporated into the VIN assessment database.

While stakeholders criticized Customs for allegedly failing to take into account the main recommendation of international bodies such as WTO and WCO as a register of values, they urged management to adapt the eAssessment against “market reality” and also take into account some previous agreements between Customs and stakeholders to make eAssessment a workable policy document.

Earlier in the week, the Marine Surveyor and Chairman of the Board of Directors General of Licensed Customs Brokers, Mr. Lucky Amiwero, in a letter to President Muhammadu Buhari, described the implementation of the Customs Valuation Policy. VIN as a breach of the CEMA (Amendment) Act 20 of 2003 NCS based on transaction value.

Amiwero, who is the Chairman of the Sub-Committee of the Reconstituted Presidential Task Force on the Reform of the Nigerian Customs Service, revealed that on the processing of vehicle valuation, the committee observed that the current ex-factory price is a component of the Brussels definition. of Value (BDV), which is not in accordance with the provision of the CEMA (Amendment) Act 20 of 2003, which is supposed to be based on the purchase price (price negotiated with a buyer and a seller of vehicles engine to have a transaction element.

“The current ex-factory price does not have a component negotiated as the purchase price, which is the transaction value by the importer. It lacks legal procedure in the criteria contained in the treatment of motor vehicles in paragraphs 1 to 6 of the Customs and Excise Management (Amendment) Act 20 of 2003 and cannot be used but examined to contain the characteristics of the elements of transaction/purchase pricing on motor vehicles,” he pointed out. .

Amiwero said the internet that NCS allegedly relied on to get data for the controversial VIN value is not acceptable, saying “the price on the internet is not a negotiated price and is not admissible as transaction price or purchase price, which has no bargaining power, as there is no buyer and seller to attract the transaction item, which negates the doctrine of value of transaction, and cannot be used, which is clearly illegal and unacceptable as a transaction value.

He further revealed that the Customs Valuation Agreement (CVA) of the WTO is based on a “positive principle, as opposed to a ‘normative’ principle, “the positive ‘principle’ of value transaction value is based on the actual price/value of the goods, rather than the “normative” principle (BDV), the valuation basis of the agreement is the transaction value “which is the price actually paid or payable by the buyer for the imported goods, if the sales were freely negotiated, and the agreement contains sales valuation rules,” Amiwero said.

WINE as a job tooI

Meanwhile, Comptroller General of Nigeria Customs Service Col. Ibrahim Ali (rtd) sent a high level delegation to Lagos on Tuesday, led by Area A Area Coordinator, ACG Modupe Aremu (Ms) to find an amicable solution to the crisis. with the protesting freight forwarders. She revealed that VIN is a business tool and not a punitive government policy. “We all know that the valuation of vehicle imports is not a matter of convenience or feelings.

It is part of international trade. What is happening is that NCS has embraced the modernization of customs trade tools”

Although customs officials assured stakeholders that they had a legitimate right to protest what they considered wrong in government policies, they argued that the electronic valuation database that served as the basis for the Officers’ week-long protest took into account all the dynamics involved in import valuation, and insisted that the new policy has come to stay and will maintain the uniform valuation which is the acceptable trend in trade international.

They stated unequivocally that rather than putting customs brokers out of business, the VIN business tool is intended to maximize brokers’ profits, allow them to retain staff and even employ more workers.

She explained that the process leading to the adoption of the VIN has been thoroughly reviewed, evaluated and found to be in line with global best practices and in line with the principles of the World Customs Organization (WCO), as highlighted by d other global trade bodies prior to its implementation.

Speaking, ACG Trade and Tariff, ACG Hamza Gumi, said the new policy is about trade modernization and facilitation, which will not be allowed to run on sentiment but clear economic dynamics, compatible with trade international. He said: “Through the deployment of this VIN, the negotiated value has disappeared. We can no longer negotiate. This is a political decision and it does not depend on you. This policy is based on a universal valuation and is not dictated by anyone”.

Back to the drawing board

The Nigeria Customs Service management team, which met with stakeholders on Tuesday in Lagos, assured that the freight forwarders’ complaint will be investigated.

Although it is uncertain whether the policy will be revised, the NCS Area Coordinator in Area A, Mrs. Modupe Aremu, who represented the Comptroller General of Customs at the meeting, assured the people that the leadership of Customs will meet on Wednesday to consider the complaints. Ms. Aremu, who described customs and its licensed agents as one big family, also revealed that a solution to the problem will be found soon.

Speaking to the media after the meeting, ACG Aremu explained that Customs will amend the complaints of clearing agents on VIN valuation policy. She said: “We have also discussed and thought about a solution to this ongoing strike at the ports. “The agents were actually trained upstream of the implementation of the VIN valuation

That’s why we didn’t expect this kind of response from them when we started the implementation.

“Due to the complaints the agents made today, we are going back to the drawing board to amend all the issues they raised. Hopefully very soon we will get back to them on the outcome of the amendment. VIN has come to stay, he cannot be suspended.Speaking, a former Board Secretary of the Association of Licensed Nigerian Customs Officers (ANLCA), Chief Taiye Oyeniyi, denounced the high cost of the customs clearance of vehicles, using VIN assessment.

Oyeniyi advised the NCS to reconsider its former Customs Consultative Forum as a way to bridge the communication gap between the NCS and officers. He also urged the strikers to allow members of the customs management team present at the Lagos meeting to take their complaints to Abuja for consideration.

Babatunde Keshinro, managing director of Ports Terminal Multi-services Limited (PTML), said the protest by clearance officers has caused a huge backlog of vehicles waiting to be evacuated. He said the strike caused congestion, which prevented more RoRo ships calling at the port from unloading.

According to him, as of February 24, some ships that bring cars to Lagos went to wait in Cotonou, waiting for information on the space to unload their vehicle cargoes. For more than two weeks, customs officers and licensed freight forwarders have been on strike over the alleged increase in duty payments on imported used vehicles under the new VIN valuation regime.

The regime addresses the variations in rights and the non-uniformity that existed before. It also uses artificial intelligence relying on data provided by the merchant and other third parties to assess and decide duty payment without human interference.

Go forward

Although there was no concrete agreement on the way forward at the meeting, a decision by customs management on VIN deadlocks will likely determine what happens in the coming days.


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