The Beleaguered Auction

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The decision of the Nigeria Association of Auctioneers to drag the Nigeria Customs Service to court over the latter’s planned e-auction of seized and contraband goods may have put the exercise on hold, writes Eromosele Abiodun

Although the uproar that trailed the order that owners of all vehicles whose customs duties were not paid should do so, is gradually dying down, there is an indication that the Comptroller General of Customs, Col. Hameed Ibrahim Ali (Rtd.) may still face yet another battle.

This time, the battle is between the Customs boss and the Nigeria Association of Auctioneers (NAA), who has made good its threat to file a legal action to stop the plan by the NCS to auction seized and contrabands goods by e-auction.
The NCS had last week announced that it would begin auction of seized and condemned goods to qualified persons on July 1, 2017.

According to the Service, the decision to reopen the suspended auction scheme after about 18 months was taken following successful test running of the new electronic auction portal.
The new date for the auction was contained in a statement obtained from the NCS website, which listed ownership of Tax Identification Number (TIN), among others, as the criteria to buy any of the goods that would be put up for sale under the scheme.

Ali, had suspended the auction of seized and condemned goods to allow for a more transparent and electronic method that would allow for equal opportunities for all participants.

‘’After repeated tests of the e-auction platform, Nigeria Customs is now set to deploy the e-auction portal on July 1, 2017,” the statement said

It added that the portal has been fully networked to designated banks to ensure that money accruing from the auction gets to the Central Bank of Nigeria (CBN) Treasury Single Account for transparency and accountability.

Although Ali has suspended his planned duty collection drive on motor vehicles suspected to have been smuggled into the country without duty payment, the NCS boss’ much reported fall-out with the national assembly over his refusal to put on uniform of the customs service as it’s Comptroller-General is still very fresh.

Stakeholders believe the leadership of the NCS is heading towards the wrong direction because of its desperation to drive the mandate given to it by President Muhammadu Buhari.

On appointment, Ali was given three basic tasks: go to customs, reform customs, restructure customs and increase the revenue generation. “I don’t think that is ambiguous; I don’t think that is cumbersome, ”Ali had declared at a media briefing shortly after he assumed office.

This, analysts believe, might have forced the NCS leadership to employ measure it thinks will help meet the set targets. The drive to meet target has set the NCS leadership against major stakeholders in the maritime industry.
It is not just the NAA that are battling the NCS leadership, recently, the Association of Nigeria Licensed Customs Agents (ANLCA) and National Association of Government Approved Freight Forwarders (NAGAFF), shut-down the ports, citing unfriendly policies by the NCS and the federal government.

In a bid to suspend the strike action, Ali and top management of the Nigerian Ports Authority (NPA) and the Nigerian Shippers Council (NSC) paid an unscheduled visit to the secretariat of both associations to plead for understanding and cooperation.

New Directive
Few days after the peace deal was reached with ANLCA and NAGAFF, the NCS announced its decision to commence the auction on July 1, 2017.

In a swift reaction, the NAA warned the NCS not to embark on the proposed e-auction of seized and condemned goods from July 1, until the court rules over the matter.

The auctioneers said such a decision was against the law of the country and cannot stand since the court has not ruled on the suit brought by way of originating summons by the association against the NCS.

The association had dragged the NCS and Ali before a Federal High Court sitting in Abuja over the plan by the NCS to conduct online auction sales of seized vehicles and other seized items.

In an originating summons, the auctioneers are praying the court to declare that by virtue of its incorporation, registration and accreditation pursuant to the relevant laws of the federation, an auction sale cannot be conducted by a committee appointed by the NCS.

The legal adviser to the association, Wale Yusuf said since the matter was still in court, all the parties involved must not do anything that will threaten the decision of the court.
According to him, the Customs lawyer filed a motion of adjournment at the last court sitting and the matter had been adjourned to September.

“Technically, the rule says every party in the dispute must hang up. Nobody must do anything that will jeopardize the decision of the court; they will not force on the court a situation of helplessness by doing anything contrary to the determination of the suit. For now, the injunction is still hanging in the court till September; Ali cannot carry out that e-auction until the court decides.

“He will not even try it or we will file for contempt. I think he has been trying to monitor the matter and thought the case will finish by June but I think he will also have to adjourn the commencement of the proposed exercise,” he said.

Similarly, the Secretary of the caretaker committee of the association, Goke Adedokun, said: “We are registered auctioneers and we have been paying our taxes; we have all the necessary documents, we are registered with the Customs. Recently, 120 members of the association renewed their licences as auctioneers. If the NCS have jobs like this, we are supposed to be called upon to do it because we don’t have any other job.”

“If Customs goes ahead with the e-auction, it will deny our members of jobs. We want to generate revenue for the country in a transparent manner. If we are allowed to do the job, it will be a physical exercise.

“The United States of America’s system of e-auction that the NCS is trying to copy allows open bidding and allows auctioneers to carry out the bid; the Procurement Act of 2007 gives us the right to carry out such exercises,” he stated.

How it all Started
The NCS had in announcing the planned auction of seizure across its commands, disclosed that the e-auction portal was expected to reduce congestion in the various government warehouses and increase revenue from the sales.
Ali, THISDAY learnt, introduced the process as a way of enhancing transparency, reduce human contacts and ensure that only the highest bidders for any auctioned item takes it.

Aside TIN by prospective bidders, other terms and conditions included: exclusion of customs officers and their families from participating in the bidding process either directly or by proxy.

The guidelines also indicate that auctioned items cannot be replaced or funds paid refunded to bidders.
Successful bidders, THISDAY findings revealed, are expected to make payments within five working days as auctioned items whose winners fail to pay within the period forfeit the auctioned item to the second highest bidder.

Successful bidders will be given a period 14 days from the date of payment to remove the item, for which a bid had been submitted for or forfeit it on expiration of the period.

Any auctioned item not removed from the warehouse within 14 days from the date of payment shall revert to its pre-bidding status which makes such item open for sale again.

Winners in the auction process are also expected to pay 25 per cent of the auction amount to the Terminal Operator with another 25 per cent of the auction amount to the shipping line operator. Owners of seized items are excluded from bidding for them but may however participate in the bidding of other items while owners of overtime items with evidence of payment of duty and other charges has priority over a successful bidder of the item provided the item has not been exited out of the Customs control.

Aside being transparent, the new method will also increase the amount of revenue government makes from auctions as bidding will be competitive and devoid of bias or favouritism.

Hitherto, the Service had done auctions through issuance of documents to beneficiaries with which such beneficiaries approached the warehouses before making payments to designated banks.

This method was viewed as not being transparent as beneficiaries of the auctions were believed to have been selected through a non-competitive process.

This new auction policy is coming 19 months after customs auctions were suspended following the voluntary retirement of the former Controller General of Customs, Dikko Inde Abdullahi.

There have been media reports that seized goods amounting to billions of naira that have been condemned through court processes are lying in the warehouses.

Confirming the development, spokesman for NCS, Joseph Attah said the Comptroller General took time to entrench the new method that requires deploying of ICT, avoiding human contact and influences.

He said apart from increase of revenue for government, the online platform would ensure integrity of the process.
Attah added that the new system is undergoing a test run for applicant acceptability before it is open to the public for access and transactions.

Billions of naira is expected to be generated from the sales and items listed for sale include cars, trucks, tankers, leather and other items seized from smugglers who ostensibly wanted to evade duty payment.