26 | Saturday, February 15, 2014
THE GUARDIAN www.ngrguardiannews.com
YOURMONEY
PAAR As A Veritable Tool For Customs Clearance Procedure By John Ofobike E live in an extremely fast-moving world where global trade is fundamental to economic growth and social development. A stable environment enables economies to reap plenty benefits which can impact positively on the general public or society and the only way people live. Customs organizations worldwide play an important role in ensuring that world trade meets regulatory requirements and conforms to national laws. Changes in the strategic landscape of customs’ operating environment and long-term growth in trade and travel volumes have no doubt affected the way customs administrations are managed and approach their tasks. New priorities of government, alongside emerging challenges at the border, have led many customs administrations to seek a more structured and systematic way to manage risk. Today, many of these administrations are required to address risk wherever it is found and increasingly as early in the supply chain as possible. The Nigeria Customs Service in response to finding answers to the numerous challenges confronting the importation and cargo clearance system, last year came up with an indigenous cargo clearance data base known as the Nigeria Integrated Customs Information System (NICIS) which is the platform for generating Pre-Arrival Assessment Report (PAAR), which came into effect on December 1, 2013, following the non-extension of the service providers’ contract by the Federal Government. PAAR as a risk management tool replaced the Risk Assessment Report (RAR) and is borne out of the service new order of innovation, change, trade facilitation, building better business relationship, transformation and free trade flow that is today the global trend. The dawning of a new regime is supposed to be about hope, but fear remains the dominant emotion among stakeholders at the ushering in of PAAR. This fear has however been allayed by the service performance in the first month of its been implemented. These initial fears by both stakeholders and even officers and other agencies of government have however turned into commendation. Finance Minister and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, recently, expressed satisfaction with the implementation of PAAR, adding that the takeover of the destination inspection by the Customs had been “the dream” of Nigerians. “So far the takeover seems to be relatively smooth,” she said. Similarly, President Manufacturers Association of Nigerian (MAN), Dr. Kola Jamodu commended the Customs for the level so far attained in the implementation of the PAAR scheme. He confirmed that the new policy allowed importers to carry out self-assessment and commended the Service for being proactive. “Since we are the users of destination inspection, I want to confirm that we were surprised at the level of competence of the Customs in handling of PAAR so far”. “The only area that requires a few fine-tuning, is the area of transition from Risk Assessment Report (RAR) to PAAR and the explanation we got from the Customs is quite satisfactory. “The delay at the ports in clearing goods had been taken care of and importers are now allowed to do a self-assessment in clearing their goods subject to post-audit,” he said. For the Seaport Terminal Operators Association of Nigeria (STOAN), the NCS effort is a commendable move. The body expressed confidence in the ability of the service to ensure success of the PAAR scheme and operations of the scanning machines at the seaports. “The takeover of the DI and introduction of PAAR by the Comptroller General of Customs, Alhaji Dikko Inde Abdullahi is a commendable
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move. As patriotic Nigerians, we support nessed a huge improvement in its revenue in government’s decision on the importation the month of December 2013 with the raking regime, and we will give the Nigeria of N85, 455,977,095 (N85.46 billion). Not only Customs Service unflinching support in that the revenue accrued to the Federal ensuring that it succeeds in this onerous Government was up, the government also task on it”. saved N4, 653,374,259 (N4.65billion) the one The Association of Nigerian Licensed per cent Comprehensive Import Supervision Customs Agents (ANLCA) through its Scheme (CISS) which hitherto would have National President, Prince Olayiwola Shittu been paid to the service providers. declared the PAAR scheme as still the best The new cargo clearance regime is also option to facilitate trade through the receiving international acceptance and kudos nation’s ports. as sister West African countries are sending Shittu, while joining other industry stake- delegations to understudy it. holders in commending the NCS in respect With the first PAAR issued in just 58 minutes, of its 2013 performance, indicated the com- stakeholders have continued to express hope mitment of ANLCA towards ensuring the and optimism that the Nigeria Customs PAAR, the Service pet initiative, becomes a Service are up in the air, as the era of speedy, huge success. efficient and effective cargo clearance is here His words: “In spite of the hitches being with us. experienced in its implementation, which Risk Management has been one of the key were envisaged, but not to this magnitude, vehicles for customs administrations to better it is still the best option to facilitate trade meet the demands of the 21st century operatthrough our Nigerian ports. With the joint ing environment, which is seeing customs instrumentality of the Customs trade hub, administrations endeavouring to address risk the CET and explanatory notes, proper classi- wherever they are found. fication of imported items can be accurately The development and implementation of an established. intelligence-enabled risk management frame“And arising from such confirmation, no work like PAAR along with embedding a risk officer will claim superiority of knowledge, management culture within a customs organsince the result was generated from the ization, has enabled more effective decisionCustoms website. The only likely problem is making at all levels of the administration and establishing actual values of goods, which in relation to all areas of risk. the NCS is presently working at now, Suffice to say that with the Federal because of the corruption of the data base Government’s wise decision that aborted the handed over by the former destination service providers dominance of our import inspection service providers”. inspection regime, Nigeria was one of the 17 “PAAR is a game changer for Customs. countries of the 179 members of the World Aside simplifying the clearing processing by Customs Organization that were under the ensuring things are done professionally, it shackles and chains of the Destination has enhanced our revenue. We can see the Inspection agents. difference between what we generated dur- Again, these nations were all in the West and ing RAR regime and what we generated just Central Sub-Saharan Africa. within one month of PAAR. The Customs International trade as we all know is an high Command did a good job in PAAR. essential driver for economic prosperity, “Though there were initial hiccups in the securing the global trading system, demands take off of PAAR, the Comptroller-General the cooperation and collaboration between also acted promptly by sending six ACGs different parties that works best in the spirit (Assistant Comptroller-Generals) to the of partnership. Apapa and Tin Can Commands. One of such best examples of this partner“These ACGs helped with their presence as ship can be found between the Nigeria they again held several parleys with licensed Customs Service and the trading community. customs agents, terminal operators, key The CGC and his management team in this stakeholders that include bankers and also regard has continued to maintain cordial and officers and by the grace of God, the situarobust organizational best practice and busition was far better to the extent that we are ness environment that will enhance balance hitting N1billion plus in a day unlike previ- between trade facilitation, revenue generaous days, where we were having N400 mil- tion and security to the good of the nation lion to N500 million”, declared the Apapa and the trading community. Area Command Controller. This partnership, which is under the WCO In general, the Nigeria Customs Service wit- Authorised Economic Operator (AEO) pro-
gramme, that is being successfully implemented worldwide, enhances the security and facilitation of international supply chain and as well as promotes certainty and predictability in an increasing competitive global trading environment. The Service should aim for a reasonable and equitable balance between ensuring compliance, and minimizing disruption and cost to legitimate trade and the public. Through adoption of a holistic risk-based compliance management approach, optimal levels of both facilitation and control can be achieved. A key feature of this approach is to actively “steer” the client population towards voluntary compliance (low risk) leaving more scarce control resources to be deployed towards the high-risk end of the risk continuum. The future success of PAAR lies with the compliance level of officers, government agencies and the trading community. Increased automation and submission of honest, comprehensive information earlier in the supply chain, is the enabler the customs needs to improve risk assessment and deployment of targeted customs control concentration on the high-risk end of the risk continuum. Corresponding effective and efficient controls in turn give the service the opportunity to facilitate low-risk movements and promote government’s goals relating to the facilitation of trade. It also has shown that government is expected to receive more revenue from the non-oil sector as honest declaration and better compliance will yield more income to the government’s coffers. Okonjo-Iweala emphasised when she declared that the new policy of government is to enhance revenue generation and that the Customs is one of such agencies of government for revenue generation for the government. Finally, it is a known fact that in any policy implementation, there are always some teething problems, PAAR is no exception. Presently, the server infrastructure being provided by Webb Fontain to support cargo releases has been a source of serious concern to importers, agents and terminal operators as well as the trading community. This indeed is part of the expected challenges as it were with the early days of terminal operators, and even the telecommunication GSM providers. All that is needed at this early stage is patience. John Ofobike is former Chairman, ANCLA, Apapa Chapter.