Customs Agents Rejects VIN, Says Policy Contravene Customs and Excise Management Act

Gilbert Ekugbe
Customs agents in the country have kicked against the introduction of Vehicle Identification Number (VIN) by the Nigeria Customs Service (NCS) stressing that the policy contravenes with the Customs and Excise Management Act’ 20 of 2003 based on transaction value method.

The agents in a petition to president Muhammadu Buhari said over 12,000 cars have been trapped at various ports across the country since the introduction of VIN.

President of National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), the umbrella body of customs agents in Nigeria, Lucky Amiwero in the petition described policy as a stumbling block to doing business in the country while also calling for an outright suspension of the policy.

Amiwero who was a Member Presidential Task Force for the Reform of Nigerian Custom Service said the introduction of VIN is at the disadvantage of many Nigerians who do not have the buying power to purchase new vehicles based on the harsh economic situation of the country.

He added that most of the Nigerian population depends hugely on imported second hand vehicles.
Amiwero explained that as the Chairman sub-committee of the Reconstituted Presidential Task Force on the Reform of Nigeria Customs service, on the treatment of valuation of vehicles, it was observed by the committee that the present ex -factory price is a component of Brussels Definition of Value(BDV), which is not in agreement with the provision of customs and excise management (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.

He said the present ex-factory price has no negotiated component as purchase price, which is the transaction value by importer and 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 noted that the 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 can not be used aading, “this is clearly illegal and not acceptable as transaction value.”

He stated that the adoption of the agreement on the implementation of Articles VII of the introduction of General Agreement on Tariff and Trade (GATT) establishes a positive system of customs valuation, based on price actually paid or payable for imported goods, the valuation method provides for fair, neutral system of valuation, conforming to commercial realities and outlaws the used of arbitrary or fictitious value method system of valuation, the BDV.

He pointed out that the WTO Customs Valuation Agreement (CVA) is based on a positive principle, which is opposed to a “normative” principle, stressing that the positive “principle” Transaction Value is based on the actual price/value of the goods, rather than the “normative” principle (BDV).

He added: “The GATT Article VII, Agreement on implementation of Articles VII of the general agreement of Tariff and Trade was domesticated by an Act passed by the National assembly in line with section 12 of Nigerian Constitution, as Customs and Excise Management (amendment) Act 20 of 2003, the act is the only legal instruments for the treatment, procedure and the application of Value for imported goods in Nigeria.”

He said the application of GATT Articles VII must be treated and implemented without penalty, stressing that the Act clearly states that, “the legislation of each party shall provide to determine customs’ value for right of appeal, without penalty, to importer or any person liable for payment of duty while also adding that initial right of appeal without penalty may be to an authority independent body.”

He highlighted that the present trend on uplifting and imposing value by Nigeria Customs on pre-Arrival Assessment Report (PAAR) and other valuation treatment that contravenes the Customs and Excise Management (amendment) Act 20 of 2003, clearly lays down legal procedures to be followed, which conferred right to the importer and shift the burden of proof of the importer/licensed Customs Agents and not the service.