The Role Clearing and Forwarding Agent Plays in Facilitating Ease of Imports Business in Nigeria

By Kayode Farinto

Clearing and forwarding professionals play pivotal and significant roles in facilitating Ease of import business in Nigeria and this can be divided into three stages: Pre– Import Role, Role Play When Goods Arrive and Clearing Process and Forwarding Goods to the Consignee.

Pre–Import Role: Many people tend to underrate this stage before importation and it determines whether the commodity when imported, can be cleared quickly or otherwise from the ports. It is the responsibility of the clearing agents to insist that, his consignee should consult with him because many importations that have difficulties during clearing process arise due to the importers neglecting this stage before embarking on importation. We can only achieve ease of import business when we do the needful. We should remember that, there are extant laws that must be obeyed, there are commodities place on imports prohibition list and also many commodities that attract levies, the only person that can avail an importer of this information is the clearing and forwarding professional hence, it can be described as a determining factor to the success of Ease of imports.

Clearing and forwarding agents also advice the importers on the best and the less cost – effective methods of shipment of the cargoes, ie the shipping liner that are not expensive. This stage is even more important now that some shipping company like CMA –CGM recently slammed an illegal charges called PORTS ADDITIONAL DESTINATION charges of about 38,00 naira per TEU on all their imports. One will quickly advice his/her clients against using such shipping line.

Opening of E –Form ‘M’ is a stage preceding the importation, because it is part of documentation needed to clear such consignment out of the ports. A clearing agent that knows his onion must first classify the commodity to be imported and the relevant and appropriate HS CODE which must conform with what is to be imported. Using the International convention of harmonised commodity and coding system (HS) and GATT interpretation, which has the general rules of six sequential application. if an agent does not classify the commodity to be imported properly, then such clearing will be delayed and may not enjoy the Ease of Doing Business, if not we as clearing and forwarding professional will be failing our importers in our duty to guide them properly.

The last stage of pre-clearing is to approach Nigeria Customs Service portals, through the importer’s bank, with relevant documents such as, approved E- M Form, final invoice, parking list, bill of lading and SONCAP where necessary for Pre-Arrival Assessment Reports, which determines duties and other charges to be paid. I need to stress and advise our professional colleagues that are in the habit of opening Form M in their names or company’s names for their clients to be watchful, this could be dangerous.

B) Role Play When the Goods Arrive
Since proper documentations have been done before importation, clearing of such goods will be easier and faster, except there are other things. This is because the documents submitted to customs portals will tally with one another without any discrepancy and such job, when declaration is eventually made with single goods declaration (SGD) to generate assessment may go smoothly.

The modernization of Nigeria Customs Service (NCS) has assisted in fast Tracking the functions/role played by clearing and forwarding agent. This is because once a manifest is registered with NCS, then such agent is free to make his declaration with the Pre-Arrival Assessment Report (PAAR) obtained from NCS and proceeds to pay duties and other charges on behalf of his/her consignee. This is called Traders Zone. The professional can then wait for the arrival of the vessel and, once the consignment has been stalked in the terminal, one can go for selectivity/routing of the declaration.

Customs Zone: Here, many importers have been profiled about their integrity, such selectivity may be green, which means the clearing agent can go ahead and pick his goods, or red which means such consignment should be subjected to physical examination by customs officers in the terminal.

Incompetence: Most of the challenges facing the clearing and forwarding professionals in the maritime industry have been blamed on ignorance of clearance procedure/operations. Most of the suspects arrested for under declarations and concealment often claimed that they are not aware. This is largely because, most of them, have not been part of the pre-clearing documentation, abnitio, they just jumped on an importer that is desperate and because of their gullibility, may run into problems.

Many at times during physical examination of imports, lots of discoveries which are in variance to what is declared are made. It varies from wrong classification of imports, to query on value, to under declaration and at times capital flight. And all these mentioned above are Customs and Excise Management Act (CEMA) related offences, which are punishable under the law. That is why I am of the opinion that, for us to achieve ease of imports, then clearing and forwarding professionals have preponderance roles to play.

For Example, during a physical examination of a container laden with new electronics, duties have been paid and customs officials are satisfied with the duty paid and contents of the container but the Standards Organisation of Nigeria officials insisted that the container should not be released by customs because it was discovered improper labeling with the country of origin not mentioned and the agent began to make trouble. This scenario, as interesting as it is, will take us to what is called RULE OF ORIGIN.

What is Rule of Origin?
Rule of Origin is the criteria needed to determine the national source of a product. Rule of origin is used to determine the country of origin of a product for purposes of international trade. – World Trade Organization.

Rule of origin is divided into two categories namely, preferential and non – preferential rules of origin. A clearing and forwarding professional should know that this import has contravene an international convention, which Nigeria is a signatory to and has been domesticated. Irrespective of whether such import has a SONCAP or not, such import has flouted the SON ACT. Even though, the World Trade Organization does not support confiscation of such imports but there is a penalty to be paid by the consignee.

The clearing and forwarding professionals should constantly go for training to be on the same page with their colleagues abroad. The World Customs Organization (WCO) introduced a new thing into clearing and forwarding worldwide, called Authorized Economic Operator (AEO) and this new lexicon will soon be incorporated into our system. It has been discovered that 58 member countries of WCO have introduced AEO –WCO Study Report, June 2016.

It is however unfortunate that the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) that needs to train the clearing and forwarding professionals has been politicized and docile.
After cargoes are duly released by Nigeria customs service, the agent is expected to meet with the representatives of shipping company and obtain a Delivery Order (DO), after which he can take delivery of such imports and forward to the consignee’s premise, which is the last stage of clearing and forwarding process.

Finally, for us to be seen to facilitate import business in Nigeria, we must do the needful, stop buck passing and allow the world to see the agency of government that may wish to constitute an impediment to trade.

L-r: Managing Director, Nigerian Ports Authority, Hadiza Bala Usman, Dr. Kayode Farinto, and a top official of NPA at a recent function on port development in Lagos

Being a paper presented by Dr. Kayode Farinto at a recent workshop on Ease of Doing Business in Nigerian ports by Standards Organisation of Nigeria in Lagos. Farinto is the Publicity Secretary of Association of Nigeria Licensed Customs Agents (ANLCA).


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