Fraudulent Imports: Customs Plans Mass Seizure

With the suspension of duty benchmark introduced by the Nigeria Customs Service (NCS) in February this year, the Service will now enforce the provisions of the law on importers who are found to have under-declared or concealed their imports.

The duty benchmark was a uniform duty rate imposed on some categories of goods, to check all types of fraud, ranging from under-declaration, concealment and undervaluation by importers in their bid to evade payment of appropriate duties.

Following outcry from freight forwarders, importers and intervention by the National Assembly, the Customs Service was directed by the Presidency to suspend the policy recently.

But sources close to the Customs told THISDAY that the next line of action for the Customs would be to now hit hard on importers who fail to make genuine declarations.

A top official of the Customs told THISDAY that the Commands and border stations have been directed to enforce Chapters 46 and 47 of Customs and Excise Management Act (CEMA) which state that an importer found to have concealed or under-declared his goods will have the items seized.

The source said that the Service will now have no alternative than to seize goods whose importers have contravened international trade regulations, particularly on the issue of under-valuation, as directed by the Presidency.

Many had interpreted the duty benchmark as deliberate by the Customs to ensure that it meets its N1trillion revenue for the year.

Industry stakeholders had lamented that the management of Customs was planning to milk importers dry through high duty collection as a result of the N1trillion target, adding that one of such measures was the policy of duty benchmark.

The policy, according to freight forwarders, was illegal and failed to consider that value of imports depends on the countries where these items come from.

However, the Customs insisted that the policy was the only way to check decades of fraudulent importers who chose at all times to under-declare their goods.

Deputy Comptroller-General of Customs, Trade and Tariff, Mr Julius Nwagwu had told THISDAY few weeks ago that the policy was aimed at stopping unscrupulous importers from shortchanging the federal government.

Nwagwu said that the Customs Service was worried that some importers have continued to carry on with under-declaration of their imports, a development which he said has led to losses of revenue.

“What we see is a situation where an importer brings in 1,000 cartons of LCDs and declares 100 cartons. Should we close our eyes and allow this to continue?. Since they don’t want to do actual declaration, we have come out with the guide”, he had told THISDAY.

He had maintained that importers who make genuine declaration will have no problems with the Customs, adding that the Service was determined to collect all revenue accruing from imports.

Titled ‘Identified Commodities and Average Transaction Values and Duty Payable’, and described as a guide, an importer of 1x40ft container of airconditioner (fully built) is given a CIF value of N8m with a total duty of N3.6m.

Similarly, 1x40 container of airconditioner (CKD) has a CIF of N6m and total duty payable of N726,825.00; 1x40ft container of TV (LCD, LED, PLASMA) has N8,750,000.00 CIF and duty payable of N2,536,712.50; 1x40ft container of fully built refrigerator with CIF of N5,000,000 and duty of N2,290,150.00.

Other goods include 1,40ft container of aluminium coils (coloured) – CIF value ofN8m with N2.3m total duty payable; 1x40ft container - CIF value N10m with N1.2m duty payable.

Freight forwarders complained that the policy imposed an additional duty of over 80 per cent, lamenting that many importers were yet to come to clear these goods because of the new duty.

THISDAY checks revealed that an importer of a 1x40ft container of fully built air conditioner who paid between N2.m and N2.1m as duty before the guide was issued was made to pay N3.6m duty with the benchmark.

Similarly, the importer of 1x40ft container of LCD TV who used to pay about N1.2million before the benchmark paid N2.5m duty.