Eromosele Abiodun writes that the plan to review the Nigeria Customs and Excise Management Act can only materialise if the NCS heeds stakeholders’ advice that the Minister of Finance remains the agency’s board chairman
Last week, the Nigeria Customs Service (NCS) presented its draft bill for amendment of the Customs and Excise Management Act (CEMA) to maritime industry stakeholders for observation and input before submission to the National Assembly for consideration and passage. The CEMA is the principal law guiding the administration of Customs and Excise in Nigeria.
It is divided into 13 parts, spanning 195 Sections and 3 Schedules. Section 37 – 5 deals specifically with duty on imported goods, relief from duty of goods entered for transit or transshipment; Relief from duty of goods temporarily imported, exempt from goods and goods delivered free of duty; valuation of imported goods for purpose of ad valorem duties among others. This is not the first time effort has been made to review CEMA. In 2010, the federal government forwarded a bill to the National Assembly requesting that the lawmakers repeal and re-enact the CEMA 2004 as well as repeal the existing Destination Inspection Act 2003 to allow NCS take over all obligations of the Federal Ministry of Finance and the CBN under the Act.
At that time, there were indication that the National Assembly tinkered with the Customs CEMA in order to make it more proactive to meet the challenges of a modern day customs service. This, the lawmakers said, became necessary after it was discovered that some of the conditions adopted by the CEMA to deter crimes especially via fines were no longer relevant or stringent enough to deter such crimes.
THISDAY gathered that the CEMA, enacted in the 1950, does not reflect the sovereignty of an independent Nigeria.
“The CEMA does not reflect the realities of modern day international trade and it is also silent on Destination Inspection of the present day NCS.
Trade practices procedures and sanctions that existed in the 1950 are no longer relevant, fines and penalties prescribed by CEMA are ludicrous and generally incapable of deterring economic criminals even if fully enforce,” said a player in the maritime industry.
He stated that the National Assembly in the course of its statutory over sight functions had discovered that if the service was to incorporate Customs practice, traditions and obligation, then various recommendations and instrument on Customs and trade standard practice must be in consonance with the World Customs Organisation (WCO), the United Nation Trade and Development (UNICTAD) and the World Trade Organisation (WTO).
“For Nigeria to fully exploit the benefits of its strategic placement and its ambition to be the maritime hub of the sub-region, our trade laws, especially as they relate to NCS operations must be made very simple and harmonised, with that of other Customs organisations of the sub region,” he said.
Speaking on the issue of overtime cargo, he highlighted that the national assembly has a duty of transforming over time cargo task into a transparent Public Auction System (PAS); separate the board chairman from the supervising minister as is the case with other parastals under the Ministry of Finance (MOF) as well as make NCS operations to become more proactive.
He frowned on what he described as undue emphasis on revenue generation by the Customs service and advised that it was trade liberalisation that should be prioritised.
“Emphasis all over the world is on trade facilitation, liberalisation, economic integration and globalisation of markets rather than revenue generation which the CEMA stoutly promotes, “he added.
He charged the board of customs to carry out a holistic review and update of all customs notices, tariff, codes and books of instructions on imports and exports and harmonise them in line with global best practices.
CEMA Dead on Arrival
Meanwhile, the draft bill seeking to amend the CEMA may die a premature death on arrival at the floor of the national assembly as key stakeholders in the maritime industry unanimously kicked against Section 5 of the draft bill which suggests that the Comptroller General of Customs be made Chairman of the Board of Customs.
This, they argued, is against the previous provision which gives the position to the Minister of Finance.
Those who kicked against Customs Controller General chairing the board at a stakeholders meeting in Lagos included: the Manufacturers Association of Nigeria (MAN) led by its president, Mr. Frank Jacobs Udemba, the Nigerian Maritime Administration and Safety Agency (NIMASA) represented by Mr. Momoh Alhassan; the Lagos Chamber of Commerce and Industry (LCCI) represented by Mrs. Julie Ogboru and Association of Nigerian Licensed Customs Agents (ANLCA) led by Mr. Olayiwola Shittu.
Others are: the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN), Association of Maritime Truck Owners (AMARTO) as well as many private organisations and individuals.
CGC Seeks Stakeholders’ Support
Speaking at the stakeholders meeting in Lagos, Comptroller-General of customs, Col. Hameed Ali (rtd.), urged stakeholders to consider national interest in their inputs to the review of the CEMA.
The CGC said that the review was necessary and overdue to enable the NCS to meet up with modern Customs administration under a template provided by the world customs organisation.
Ali said that consulting stakeholders were strong pillars for any modern Customs administration, adding that, “Customs legal framework defines who Customs is, what it does and how or who the laws relate with. Over the years, both Customs and stakeholders have clamoured for a review of our enabling law which was first enacted in 1958.”
He added: “CEMA did not undergo any major review for over half a century. This attempt represents a collective resolve to update our laws and realign its provisions with modern realities. Most importantly, we need to take a second look at the provisions for sanctions that are neither punitive nor deterrent enough to promote compliance.”
He explained that the review of the CEMA was originally initiated by the last administration of Customs, adding that they could not get Presidential assent after undergoing the legislative processes.
Ali said that review process by the last administration therefore lapsed, adding that, “the present administration is back at the starting blocks again to review the CEMA law.”
The comptroller-general urged government agencies and stakeholders to always access customs trade hub for any information relating to any consignment coming into the country, without visiting any Customs office.
The Legal Adviser to the NCS, Mr. Paul Ikhenoba, who is also the Chairman of the Review Committee, said that the review was fundamental to Customs modernisation efforts, which was a sound legal structure in line with international norms and best practices.
“The CEMA law was enacted in 1958 and the initial gap analysis of the Act was conducted in 2009 which discovered that the law was lacking, with the respect to the WCO Revised Kyoto Convention (RKC). The law does not contain provisions to support the use of modern information technology (IT), such as use of electronic documents, signatures and payments as well as application of risk management, post clearance audit and special, simplified procedures for qualified readers.
“The penalty structure of CEMA is also severely outdated to the point where it may be more affordable for less ethical traders to break the law, “ Ikhenoba stated.
He added that the NCS operated within a consolidated legal framework and supporting laws as well as legal notices.
According to him, these are meant to complement the existing laws by reflecting current realities.
Ikhenoba noted that the replacement of CEMA with modern Customs legislation procedures and a revised enforcement regime would substantially increase collection of revenue by the service.
On his part, the Chief Shipping Development Officer, Nigerian Maritime Administration and Safety Agency (NIMASA), Mr. Momoh Alhassan, pleaded with the customs to grant the agency access to electronic manifest of importers before arrival of the goods.
Alhassan said that most government agencies could not operate without the manifest, adding that if the manifest was available, it would enable other agencies meet their targets.
He also urged NCS to standardise information and statistics for oil rigs that come into Nigerian waters to enable NIMASA to obtain statistics for revenue collections.
“Customs should also fast track the manifest for exports because exports’ manifest can be delayed for 30 days before importers can have access to it, which could also frustrate the efforts of the exporters,’’ Alhassan said.
MAN, LCCI Kicks
The President, Manufacturers Association of Nigeria (MAN), Dr. Jacobs Udemba, said that the association recommended that the Minister of Finance should be the Chairman of the Board of Customs and not the Customs boss.
Jacobs said that there is the N1.5million fine proposed to be paid by any person who infringed on imports, exports, transit laws or two years imprisonment.
He said that such a fine should be increased to enable importers desist from such acts of infringement.
In the same vein, a member of the LCCI, Ogboru, suggested that the Finance Minister should be the Chairman of the Board, while the Comptroller-General of Customs should be the Deputy Chairman of the Board.
Ogboru said that the inputs of all the stakeholders should be included in the review to enable them have a say in the implementation.
ANLCA, NAGAFF, CRFFN Position
In his contribution, the President of the Association of Nigerian Licensed Customs Agents (ANLCA), Mr. Olayiwola Shittu, said that all administrations set up for checks and balances should be abrogated.
Shittu said that Section 58 (1) of CEMA Law says “examination of goods should be at the examination bay.”
He said that there was no reason for officers to continue taking samples when there was no dispute on a particular consignment.
The Chairman, Murtala Airport Chapter of the National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Segun Musa, said that there was need to review all fees imposed by all government agencies on importation, exportation as well as transit goods.
He said that there should be fact of value of any particular consignment, adding that Customs officers should stop using their discretion to value consignments.
A representative of CRFFN, Mr. Okudili Alagbi, said that the CEMA law should allow the Council to be issuing licenses to all freight forwarding practitioners to fulfill the Council’s Act.
Alagbi said that the CRFFN Act 2007 stated the council’s obligations to all freight forwarding practitioners.
In his concluding remarks, the Customs comptroller-general said that all the inputs of the stakeholders and other agencies would be looked into.
Ali said that the senior officers of Customs and the Review Committee would be having a three-day to review all contributions.
He said that about five chapters of the laws related to the stakeholders were the critical aspects of the law.
The comptroller-general said that all the suggestions would go through scrutiny, adding that only those suggestions that would add value to operations would be considered.
Ali said that every suggestion that would be added must be in conformity with the existing laws.