Third Party Clearance: Taming the monster in cargo clearing process

Early this month, precisely January 4th, 2019, Hameed Ali, the retired Colonel in charge of the Nigeria Customs Service ordered immediate suspension of clearance of cargoes with discrepancies in their clearance documents.

Specifically, the order, contained in a circular signed by Deputy Comptroller General of Customs in charge of Tariff and Trade, Mrs Talatu, said the service has noted with concerns the increasing cases of discrepancies on consignee’s name on the Pre-Arrival Assessment Report (PAAR), Single Goods Declaration (SGD), Bill of Lading and Manifest, the vital clearance documents.

While seeking harmony in the information contained in these documents, the CGC directed that cargoes in this category should not be processed for clearance forthwith.

The order was immediate and instantaneous.

Within the first week of the declaration, over 5,000 containers caught in the unwholesome practice were stranded at the Lagos ports alone.

These are outside those affected in other ports, bonded terminals and border posts across the country.

It was a tsunami of sort which hit the perpetrators of this unwholesome practice like a bolt from the blues.

The nigeriamaritime360.com welcomes the development and commends the CGC for taking a bold step to nip this practice in the bud.

We regard this practice as retrogressive, fraudulent and anti-trade capable of circumventing the fight against prohibited goods.

Among the clan of its perpetrators, who are licensed customs agents, the practice is called third party clearance which has been thriving for a very long time.

As a matter of fact, customs said three previous attempts to stop it had been rebuffed by the perpetrators who revel in its practice.

To the uninitiated, this is how it works.

The Customs broker, rather than the importer as the normal practice, opens Form ‘ M’ in his names. He submits it with the Bill of Lading which carries the importer’s names to his bank (dealers bank) which transmits it to the Customs’ PAAR centre where the PAAR is issued in the names on Form M which is erroneously believed to be the importer’s .

In the declaration of goods made to the Customs, the names on the PAAR, which is the agent’s who opens Form M but erroneously thought to be importer’s, will be used for the declaration of the imports.

However, the NICIS II, a Customs automation process, captures the names on the manifest submitted for that purpose which carries the importer’s names for the purpose of duty payment.

In effect, there are different names on Form M, PAAR, Manifest and Bill of Lading which muddles up the clearance procedures.

With this unwholesome practice, the identity of the real importer is not known to the Customs automation process.

So any infraction committed by the owner of the goods could only be traced to the agent who will naturally claim he doesn’t own the goods while the real importer, who most of the time uses fake names and addresses, could not be traced.

The practice is weaved in a complicated web of deceit and conspiracy between the importer and his agent with, of course, an active connivance of the dealer banks and some Customs officers.

Before you can open Form M, you must give adequate information on the goods you intend to bring in such as the type of goods, the quantity, the names and address of the suppliers.

It is meant for genuine importers.

However, for customs agents to obtain this vital document from the dealer banks which they claimed they do routinely in anticipation of using it for third party clearance smacks of collusion with officials of such banks.

Also, the Customs authority cannot feign ignorance of the fact that the practice, as unwholesome as it is, has been going on for quite some time.

Why allow it to thrive knowing fully well that the practice defeats all known norms in normal and fair clearance process.

This deduction gives us strong reason to believe that the unwholesome practice, while it lasted, was subtly encouraged, aided and abetted by some unscrupulous elements in the Customs service for pecuniary gains.

This is why we support wholeheartedly the decision of the Customs High Command to put a final stop to this inordinate act.

Oftentimes, the Customs Authority has come to cul de sac, a dead end in its search for the owners of banned Tramadol, codeine as well as other contraband goods such as arms and ammunition whenever they are seized.

However, this sad development has thrown up some issues which may hobble the process of quick cargo clearance.

The trapped containers caught in the web of this deceit, as deservingly as they are, could cause a major chaos in the whole process.

The 5000 containers said to be affected that are trapped in Lagos ports alone, which is the hub of customs operations, are capable of causing congestion as there is no way they could go if not released by Customs on concessionary ground.

It would be almost impossible for customs to pronounce them as seizures, especially when they haven’t fallen foul of any importation guidelines, such as contraband, under declaration, undervaluation, concealment or duty evasion.

In other to avoid this unpleasant scenario and create more space at the terminals, we want to advocate that Customs should release these containers with minimal penalty.

Our stand does not suggest that we encourage this unwholesome practice nor justify the action of the perpetrators but rather, we want the Customs authority to avoid creating unnecessary tension in the process.

Already, some stakeholders claimed that the development has slowed down the process of goods clearance as majority of imports fall into the category of this unwholesome practice.

Our appeal is that Customs should bend backward by allowing these containers to go but sanction the owners to act as a deterrent against future occurrence.

We also want to advocate for stringent measures to be put in place to discourage any Customs officer who in future, may be tempted to circumvent the order in connivance with any unscrupulous Customs broker for pecuniary gains.