Appraising PAAR implementation one year after

By Shulammite ‘Foyeku

 

“Today is a historic day in Nigeria because the Federal Government in its own wisdom has directed NCS to fully takeover the Destination Inspection process from the service providers. The implication of this is that NCS will now fully take over imports and exports procedures of our dear country,” an excited Comptroller General of the Nigeria Customs Service (NCS), Dikko Inde Abdullahi, had announced in Abuja on Friday, 29th of November 2013.

 

The Pre-Arrival Assessment Report (PAAR) was formerly introduced in December 2013, exactly one year today to replace the Risk Assessment Report (RAR) issued by the erstwhile service providers, following the expiration of its contract as an import document required for clearing of goods at the ports.

 

The PAAR software which manages and maintains national data on trade and security is designed to efficiently handle import on the basis of pre-arrival of cargo thereby facilitating trade, ensuring security of the nation and improving revenue collection.

 

With PAAR, importers do not have to wait for their goods to arrive the port before processing their import document. PAAR provides that the importer goes ahead to pay his duties even before the examination of his consignments but he is subjected to scrutiny as to the authenticity of his claims on the duty paid when the consignment is examined.

Coming along the introduction of PAAR was a web-based application known as the Nigeria trade hub portal. It was developed with a view to encouraging trade process compliance and to simplify the entire trade process by providing information and guidance for international trade business processors in the areas of import, export and transit trade.

With this application, importers need not feign ignorance about prohibited or contraband goods as excuse for importing them as the portal, a non-restrictive online medium, is an intuitive and interactive platform for classifying goods. Through this portal, trade processors are enabled to find exact harmonised system codes (HS Codes) required for related tariffs and duties.

The latest technology is intended to enhance compliance by traders and avail them the required information on tariff in areas like the prohibited items and taxes/levies due for payment upon importation.

All these efforts were made by the NCS with an objective to make for ease of doing business in the at the nation’s seaport, airport and land borders.

 

 

While PAAR has been regarded as one of the best innovations of the present Customs management led by Dikko to transform and modernize the process of importation and clearing of goods at the ports, it did not come without its challenges as with every new transition.

At the launch of the PAAR at the Lagos International Trade Fair, the Customs boss had announced that the first PAAR was issued in less than 6 hours; however few weeks after, there were several complaints of delays with importers complaining that it took months in some cases to process their documents before obtaining PAAR.

The delay, the Customs management acknowledged was as a result of a teething problem which it said was occasioned by the backlog of over 99,000 RAR’s left behind by the service providers and must be cleared before the various commands could start processing their own PAAR.

Other challenges the stakeholders had identified in the last one year of Customs implementation of the new clearance procedure, apart from the delay in the processing of the document was the incessant querying of cargoes based on low value as well as inflation of values payable on consignments.

Others are the issue of PAAR not being a final document and indiscriminate placements of alert on consignments, among others.

While the customs boss has continued to appeal to the stakeholders to exercise patience with the Service in tackling the identified challenges, he had however in several fora challenged agents on their integrity, noting that PAAR will only work effectively when agents are honest in their declaration.

The Customs boss maintained that PAAR can be queried because the officers issuing document at the Customs headquarters only work with documents submitted by the importer or his agent.

He said, “How can an officer not query PAAR? We are dealing with documents and we give you PAAR based on your documentation but when we open the container and find out that what you have there is different from what you declared, can’t we query it? We are not querying PAAR but the importer’s integrity and the level of his compliance. So when we notice that what you give us is false, we have to amend it.

“Tell them to do the right thing. If they do the right thing, officers will not be difficult but when you say you bring in paper and when we open we see a different thing; who is now wrong and who is right?” he queried.

However, despite the barrage of complaints from agents and importers, the Comptroller General of Customs, has continued to innovate measures aimed at ensuring the stability of the PAAR regime.

The Service recently upgraded its system to a new application which led to an increase in the number of PAARs generated from the Customs ‘ruling center’ in Abuja. This is in addition to introducing three shifts for officers to work at the PAAR ruling center.

After 12 months of ripples between stakeholders particularly clearing agents and the Service, normalcy has since returned to the ports environment after the Service overcame the major teething problems encountered at the beginning of the implementation of the scheme.

 

To prove that there had been an improvement in the issuance of PAAR, stakeholders have commended the Service over the successes recorded so far in the clearance of goods especially with the PAAR introduction.

ANLCA President, Prince Olayiwola Shittu at a forum in Lagos recently said PAAR has fared well although it had some teething challenges at the onset.

He said the successes PAAR recorded so far had made it to be understudied by countries around the world.

 

“PAAR is regarded as the best system by the World Customs Organisation, World Bank and other countries are coming to Nigeria to learn. Our association has never lost confidence and faith in the efficacy of PAAR and we are happy that we are partners in the success of PAAR of today.”

 

He said part of the problems bedeviling the regime was Nigerians’ reluctance to change.

 

“Nigerian don’t like change. We like saying we should continue managing even if things are not working and that is the teething problem of PAAR. Also those former operators of RAR also tried as much as possible to ensure that PAAR does not work and that is why I admire the resilience of Customs that we can start from nowhere and they fashioned out a home grown system. PAAR is working unless for those who want to short change the system,” Shittu declared.

 

Corroborating the ANLCA president, National President of the National Approved Freight Forwarders (NAGAFF), Chief Eugene Nweke said “the provision of at least two weeks to conclude all documentation process before vessel arrive is unbeatable if diligent efforts and honesty is applied in all facets of international transaction and clearance procedures within the Customs port.”

 

Importers and agents who were once critics of PAAR scheme have admitted that the scheme is now working effectively, noting that whatever inadequacies detected in the system was as a result of teething problems which have been surmounted.

Coordinator, Western Zone and Chairman, Technical Committee on PAAR, Association of Nigerian Licensed Customs Agents (ANLCA) John Ofobike, described PAAR as a welcome development in the Nigerian clearing process, adding that the new development has given the Service the sole responsibility of implementing Destination Inspection.

“The greatest thing that has happened to freight forwarders and the license customs agents is PAAR. When the PAAR came up, there was little delay, like a child who has to crawl before walking after several attempts that is how the whole system is. But now the PAAR has taken off in a high speed, it has become effective. As the Chairman, Technical Committee on PAAR [of ANLCA], I came to realize that most of the complaints from some agents are manmade. Customs management has put in measures to train officers and men of the Service abroad to be well equipped to do this job. Presently, they are doing three shifts every day, working round the clock. They have achieved this; there is no doubt about it.

“Most of the delays is being caused by the importer by not giving accurate documents to his agents. Most times, they submit these documents through their agents who will not explain these things to the bank and the bank will now send it to Customs and when there is amendment, Customs will send it back to the bank and before they now get the agent, it becomes a problem and constitutes delay. But if you have all your correct documents submitted, within two to three days, your PAAR will come out,” he said.

Delivery Operations Manager, Thasious International Company Limited, Egwin Anthony said: “As far as I am concerned, PAAR is better than before. Some months ago, it was really difficult, and in fact all the jobs were stranded. But to God be the glory; with various complaints and frequent reporting of the issues to the Area Controller who in turn relays the message to the headquarters recently, things have improved massively. So for now, I won’t say we are having much problem on PAAR. I’m sure it is gradually stabilizing. Not that we have gotten there, but I’m sure hopefully, Customs will work harder to get there.”

It is worthy of note that the NCS as a result of the successes recorded in the implementation of PAAR and its ability to address the initial challenges has not only gained the federal government’s confidence to effectively handle the scheme but World Customs Organization’s recognition thus according it a model organization status among Customs administrations.

In spite of the encomiums poured on the PAAR, however, there are grey areas that need to be addressed as soon as possible to strengthen the scheme. For instance, most of the scanning machines installed at the ports by the erstwhile destination inspection service providers are no longer working, while the rate of physical examination of goods remain alarmingly high thereby slowing down the process of cargo clearance. Some unscrupulous Customs officers are also cashing in on some loopholes in the PAAR implementation. Such officers issue frivolous demand notices to importers and agents only to turn around to negotiate for the downward review of same at a fee which goes into their own pockets rather government coffers.

The Nigeria Customs Service management no doubt has very good intentions and intends to facilitate trade in the country. Its efforts, however, will be strengthened by addressing observed lapses and blocking other loopholes in the system.

  

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