Guidelines and Practical Implementation issues

1
CHALLENGES OF
IMPLEMENTATION OF
DESTINATION INSPECTION IN NIGERIA
by S.O.Ogundeji Deputy Comptroller General
(Tariff Trade) Nigeria Customs
Service Presented At MAN Workshop on the
Implementation Status of Destination Inspection
Scheme on 9th August, 2006
2
AREAS TO BE COVERED

• Primary role of customs
• Pre-shipment Inspection (PSI) regime
• Introduction of Destination Inspection (DI)
• Objectives of DI
• Component of DI

3
AREAS TO BE COVERED

• Customs Clearance Procedures
• List of Exemptions
• Challenges
• Future Outlook

4
PRIMARY ROLE OF CUSTOMS

• Revenue collection
• Suppression of smuggling
• Implementation of Government fiscal policy
  measures
• Agency functions
• Generation of Statistical data for planning
  purposes
• Trade facilitation

5
PRE-SHIPMENT INSPECTION REGIME

• The scheme was introduced to address the
  following
• Over or Under invoicing of goods imported
• Check on quantity and quality of imported goods
• Determination of duty payable
• Prevention of importation of prohibited,
  dangerous, hazardous goods

6
PRE-SHIPMENT INSPECTION REGIME

• Rather than solving the problems for which it was
  introduced, the scheme created new ones
• Inaccuracies and discrepancies in classification
  and assessment of duties
• Delays in inspection of goods and issuance of the
  CRIs leading to accumulation of demurrage
• Concealment and false declarations
• Diversion of goods to neighbouring countries
• ? This led to loss of revenue, importation of
  prohibited goods and elongated clearance processs

7
Destination Inspection Components
Risk Management
Integration
ASYCUDA
Training
Scanning Machines
IT Hardware
Telecom Hw Sw
Import Clearance Procedure
Servers, PCs, Printers, UPS etc
8
DESTINATION INSPECTION SCHEME IN NIGERIA

• COMPONENTS OF DI
• RISK MANAGEMENT OF DI
• All Scanning Companies issue a risk Assessment
  Report (RAR) for all shipment imported to
  Nigeria.
• The RAR will contain
• The level of risk
• An opinion on the value and classification

9
DESTINATION INSPECTION SCHEME IN NIGERIA
COMPONENTS OF DI SCANNING COMPONENT OF DI Good
selected by the Risk Management Component will be
scanned. This should reduce the time
traditionally taken by physical examination.
10
DESTINATION INSPECTION SCHEME IN NIGERIA

• COMPONENTS OF DI
• MIGRATING FROM ASYCUDA version 2 to ASYCUDA
• The migration started in Apapa on 1 February
  2006, as a pilot site
• High imports
• Likely to present all the problems the project
  may encounter

11
DESTINATION INSPECTION SCHEME IN NIGERIA

• The destination Inspection Scheme is geared
  toward achieving the following
• Elimination of the long wait for the CRI
• Reduction of the cost of clearance of goods
• Speedy clearance of goods arising from simplified
  procedures
• Increase of revenue
• Saving government, the colossal amount of foreign
  currency being spent in payment of inadequate
  service of the PSI

12
IMPORT GUIDELINES
After receiving complaints from the Trading
Community and from Foreign Chambers of Commerce,
the Import Guidelines have been modified. The
requirement of Attesting/Certifying final
documents through Chambers of Commerce or Notary
Publics have been withdrawn.
13
CUSTOMS CLEARANCE PROCEDURES
At the CPC
Declarants
Customs
Complete the SGD, attach all the necessary
supporting documents, and present to the
designated face vet officers.
Check basic details of SGD, and that the required
documents are attached. Then, the documents are
referred to the TS.
Input manifest and SGDs details into ASYCUDA
respective modules, register and print the
ASYCUDA declaration.
If the modification is accepted, then the
declaration is signed and stamped by the
declarant. Otherwise, the dispute settlement
mechanism is followed.
Check details against RAR messages, trigger
selectivity, mark the declaration with selected
lane and inspector name, and modify declarations
(in case of discrepancy).
In case of discrepancy, the modified declaration
is returned to the declarant.
Declarants can make the payments at the
designated banks based on the total amount of
duties and taxes shown in the Assessment notices.
Declarants receive their copies of the
declarations through the Paging/ Importer Copy
Seat.. The following processing steps are carried
out at the terminals
Sort the eight copies of the SGD. Record the
numbers of SGDs that are to be dispatched.
14
Banks
Declarants
Customs
Assessment Notices are printed at the
Verification Query Seat, and handed to
declarants. Other Assessment notices of any
additional taxes, fees and charges to be paid
will be printed at the terminals and the scanning
site.
Declarants make the payments at the designated
banks based on the amount of duties and taxes
shown on the Assessment Notices
Payment receipts and schedules of payments are
received by the Accounts Seat and input into
PRIMS.
After the assessment of declarations, the
Accounts Seat officers/ CPC (or at the scanning
site for yellow-lane declarations) can input the
payments details into the respective ASYCUDA
module after verifying that payments were made.
For yellow-lane declarations, if the physical
examination results in a discrepancy, then the
container will have to be returned back to the
terminal. Consequently, red-lane procedures will
apply to these cases afterwards, i.e. a message
will have to be sent by the Accounts Seat at CPC
to the terminal to start release procedures.
Upon completion of the payment procedures for
red-lane declarations, a message is sent by the
Accounts officers/ CPC to the terminals to start
release procedures.
15
CUSTOMS CLEARANCE PROCEDURES
At the Terminals
16
LIST OF EXEMPTIONS

• Explosives and pyrotechnic products
• Arms
• Ammunitions
• Weapons and implements of war
• Personal effects
• Supplies of Diplomatic consulate missions and
  International organisations for their own needs
• And such other goods as may be prescribed by the
  Federal Government of Nigeria from time to time

17
THE CHALLENGES

• Public Awareness
• Sustainability of the scheme
• Cooperation of all stakeholders
• Resistance to change
• Compliance
• Capacity Building
• Reform must be total
• Availability of equipment and machines at the
  ports

18
THE SERVICE PROVIDERS

• X-RAY Scanners and Risk Management
• COTECNA Inspection Limited LOT I
• (Apapa TinCan seaport, Kano Abuja Airports,
  Jibiya and Banki Border Posts)
• SGS LOT II
• (Onne Port-Harcourt seaports, Port-Harcourt
  airport, Idiroko Border Post)
• Global Scan LOT III
• (Warri Calabar seaports, Ikeja airport and
  Seme border post)
• ASYCUDA
• UNCTAD (UNCTAD Component of ASYCUDA)
• WEBB FONTAINE
• (non-UNCTAD Component of ASYCUDA)

19
Practical Implementation Issues

• OPERATIONS AT APAPA PORT
• APAPA /TINCAN CPCs ASYCUDA Zonal Office and the
  Training College at Ikeja has been renovated and
  fully equipped
• Telecommunication installed
• Operational staff have been trained (ASYCUDA
  and Scanning machines)
• Training is on-going
• Awareness and Training is being delivered to
  Custom Agents
• Scanning Operations are being undertaken

20
Practical Implementation Issues
OPERATIONS AT APAPA PORT CONCERNS The
reorganisation of the port through the Port
Reform will considerably modify the way NCS works
at the port. (NCS terminals will be reduced
) Port Congestion
21
Practical Implementation Issues
OPERATIONS AT APAPA PORT Piloting Direct Trader
Input (DTI) Training for DENCA (Private Clearing
Agent) and other operators has been
completed. Piloting Electronic-Manifest We have
started receiving manifest electronically
Awareness and Training of Custom Agents On
going.
22
Practical Implementation Issues
BUILDING A NATIONAL DATABASE A central server has
been set up in order to Centralize all NCS data
transactions. All SGDs coming from the ASYCUDA
version 2 and version automated offices are in
a unique database. This is a basis to provide in
a near future timely and accurate statistics.
23
Practical Implementation Issues
The final import guidelines has been approved
and released by the Honourable minister of
Finance Stakeholders/Media awareness and
training
24
Practical Implementation Issues
Implementation of Direct Trader Input
(DTI) Implementation of Electronic-Manifest/Dire
ct Carrier Input (DCI) The continuation of
Training activities (refurbishment and equipment
of NCS Training College in Kano)
25
ASYCUDA
and DESTINATION INSPECTION
Thank you