A Case for auctioning process; re-arrests of containers by Customs

Before now, most stakeholders especially those that witness the clearing of consignments at ports had quarrelled with the long process of clearing which they believe was carefully designed by the Nigerian Customs Service(NCS) to rip off importers. There was this complaint that the number of Custom desks you visit before your cargo is cleared increased daily and most of these desks were mere duplication of functions.

For instance one discovers that CIU, resident officers and valuation units including the taskforce then set up by the immediate past Comptroller General of Customs, AdullahiDikkoInde were all working on values which was unnecessary duplication. Besides, to get clearance from a particular desk to another takes betweentwo to three days.

There was a particular case of a Nigerian living abroad that had some consignments to clear. He didn’t know what it really entailed. When he started moving from desk to desk with his clearing agent and the officials were bidding facilitation money with them, as if he had a product to sell, he couldn’t believe what he saw.
Then also, to get the cargo cleared from the port he had to contend with the multiplicity of government agencies beside the customs. “When will this country get to point where people will just do their job without looking for gratification,” he wondered aloud as each agency representative filed in to inspect the container and wait for their palm to be greased before going to write their report. The agencies were later reduced drastically by the federal government of Goodluck Jonathan.
What he found out was that if all things remained equal, a cargo does not need to stay beyond a week at the port. His consignment lasted four weeks and with a lot of fight. In one of the encounters, he thought of inviting the police to arrest a custom official that demanded a bribe of N250, 000 from him before signing a document for release of the cargo. He decided to stay action when his clearing agent advised him to forget it and negotiate with the officer because inviting the police was a foolish attempt.
But he thought that was all but it was not. When the container left the wharf after four weeks with demurrage running into hundreds of thousands of Naira, the container was intercepted by the Federal Operations Unit (FOU) of the Customs at Berger Cement on ApapaOshodi Expressway.  The FOU men demanded for service fee of N350, 000 or the consignment would be taken to their Ikeja office for examination. The agent protested but the protest did not change anything. He had to cough out the money which was the profit he made from the business. At the end it was like he ended up working for the Customs.
The importer representative only added little money for him but not without complaint. When the man from abroad was telling the story later, he said he realised it was better for the agent to have paid that money than allow his client’s consignment get to the Ikeja office of the FOU. According to him, within a little time he had discovered that no consignment that ever gets there comes out the same way. “It is either the consignment is auctioned on some trumped up charges or the owner is made to pay unnecessary demurrage after the cargo has been delayed without reason. To worsen matters he said the importer is made to pay for scanning of containers beside other charges.
For most importers and freight forwarders, it was cry of woes. It created new wave of tension over the auctioning of containers by Customs FOU. Some groups among the freight forwarders and importers out rightly called for the sack of the then Comptroller General of Customs for what they described as inhuman activities. They argued that the manner some of theimpounded cargoes were auctioned even when they were not contraband was the height of oppression.
Some of the groups that rose up then against this were the National Conscience Group and Save Nigeria Freight Forwarders Importers and Exporters Coalition (SNFFIEC).
National Coordinator of the Group, OsitaChukwu condemnedout rightly the activities of FOU around the ports. He also called for the for the president to intervene in the so called auctioning of containers by the Customs as it was purely fraudulent and designed to enrich some few powerful individuals in the country at the expense of importers and freight forwarders.
“What we are fighting against is corruption at the ports because we want the ports to be free of corruption. If the Comptroller General of Customs feel that the Custom officials that have been assigned to work at the ports are not doing well, and thinks that the ones on the road- that is the FOU should do it better-he should do massive overhauling to transfer those ones down to the ports and transfer the other ones down to FOU or he should bring the FOU to be part of what they are doing in the ports.
The group continued “We are highly disturbed that after going through the hurdle of clearing goods at the ports, some FOU officials will go on the road and hijack containers, molest the importer, cease the goods, put them in cell while the people that released the goods are left untouched.
“Somebody should be asking this question; we have what they call joint examination form; this  form is normally filled after each cargo clearance by a representative of Customs who is the district controller, and representatives of all other security agencies at the ports showing that they have seen those containers; that they are free for release. What happens at the end of the day? The same container that has been certified as free is rearrested just outside the gate by FOU. You wonder, are these people normal? You should expect that any reasonable organization should say since our officer has certified this cargo as free, let it go. But it is not so.
“It shows that the Customs house is not in order and that is why we call for overhaul of customs so the government can bring in a seasoned administrator to reorganize the body that has been badly infested by corruption. The whole Nigeria Customs Service (NCS) should undergo complete overhauling beginning from the CG so that people could do business at the port without molestation. That is the basis of our protest.”
The Group also said that “Customs should give interpretation of what it meant by container exited by them and container caught by them. Does it mean that the FOU is a different Custom’s command? Under normal circumstances the FOU are not supposed to be within the port premises, they are supposed to be 40 miles away from the seaport and their duty there is to intercept any smuggled goods from the border. But what do you see; they hijack the same consignment they released. What does it show; they don’t trust their men at the port.
“Take for instance, bulk cargoes are released by CG only; which means he does not trust the Custom Area Controllers who are supposed to do so. What we are saying is if you don’t trust your men, then sack all of them and bring new people and if they believe that the FOU will do the work better he should then bring them to the ports to do the work and let the Custom officials at the ports be removed and replaced. What we advocate for is that that once you finish clearing at the port, the container should not be intercepted again. What they do is that when they intercept your container on the road they ask you to pay bribe and once you don’t pay, they take your consignment to their office and serve you examination paper and only God will save that container.
The group also said that “the bribe varies; sometimes they collect N200, 000 per 20litre container, and N300, 000 for 40litre;at times they collect N30 0000 and 500,000 respectively depending on the case.

So what form did this auctioning really take before?A stakeholder who preferred anonymity said “the custom officers told us that once a container is auctioned, the owner of the goods should come forward with the documents as a proof that he is the owner and they will give it to him, but the reverse is the case? What is obtainable here is that they auction these containers and give it out to fictitious names like AdamuRabiu or Isa Mohammed, and if you go to the addresses given you cannot find them. What it means is that the customs seize these containers and buy it using different names. So automatically the people that are buying these containers are paying certain percentage to the Custom high command and it is something that they have to agree before they write the something in your name.”
He said that if auctioning is removed from the hand of Customs the body would no longer be interested in seizing any consignment, adding “rather if they see that you did not pay the correct duty, they will appraise it for you to go and pay. If they are sure that they are doing the work for government, they have to know that the revenue they work on should be based on what is lawful.”
Recently the Nigerian Association of Auctioneers (NAA) said Nigeria lost about N200 billion in four years to fraudulent disposal of seized goods by the Nigeria Customs Service (NCS).

In a statement the NAA General Secretary, Isibor Benjamin Abhulimen, the auctioneers alleged that the huge loss was recorded because the previous administration was not transparent in the disposal of seized cargoes.

Abhulimen said customs officials set ridiculously low prices for the items to be auctioned and sell them at that same prices to their cronies without conducting competitive bidding.

“It is our prerogative to bring this glaring anomaly to the attention of Nigerians and President MuhammaduBuhari administration, especially now that the revenues to the federal government coffers have dwindled.

“The customs should allow the professional auctioneer to do their jobs. Nigerians will witness a sharp rise in the amount of revenue generated from the sector if professional auctioneers are invited to conduct public auctioning of items impounded by customs,” he said.

He added: “There has been no effort in the past years to generate additional revenue for the government, instead they make the government lose so much revenue and this is simply because the method adopted by the customs, which is direct allocation, does not give room for the goods to be sold publicly by auctioneers who ultimately drive the prices higher through competitive bidding.”

According to him, this process of direct allocation dents the reputation of government and also makes the public lose confidence in government’s style of disposal of these items.

Abhulimen said it was a fact that the sales of seized goods is a punitive measure to stop importers from fraudulent practices, but stressed that government must make the process transparent.The association however charged the new Comptroller General of the Nigeria Custom Service (NCS) to bring about transparency in the exercise.

They also faulted the current system whereby customs officials see seized goods as their private property, noting that these goods belong to Nigeria, hence there should be transparency in the process of selling them, as against this present method, where by a few custom officials use their privileged positions to acquire such goods.

“This is the practice globally, if you tune your television to discovery channel on Dstv, you might just stumble on professional auctioneers carrying out live public auction of seized goods in the ports around the world, we have watched the show several times. Nigeria should borrow a leaf from this and allow professional auctioneers do their jobs.” the auctioneers stated.

As if in answer to the protests and allegations about the auctioning process adopted by the past regime,the Nigeria Customs Service early this year approved a new procedure for the disposal of seized and overtime goods in its bid to address some of the perceived irregularities relating to the system, including fake online auctions. The NCS set up four committees to handle the disposal of these categories of goods. The committees are those on assessment, disposal, seizure and overtime.

According to the new guidelines signed by the Comptroller-General of Customs, Hammed Ali, perishable items with or without defendants are to be properly disposed of by the relevant committee.For general goods, the guidelines state that these are to be disposed of after condemnation by a competent court of law, adding, “Condemnation shall be done after 30 days of seizure, so far as there is no notice of claim or litigation.”

The guidelines also stipulate that all overtime cargos are to be published in the Federal Government’s gazette when they fall due after 30 days.Under the new dispensation, the NCS will advertise information on seized and overtime goods for disposal with their reserve prices in the media and on its official website.

The NCS boss enjoined interested buyers to apply online, specifying items of interest to the committee on disposal, adding that applications must be accompanied with approved means of identification such as a national identity card, passport or driving licence, in addition to a recent passport photograph scanned onto the dedicated portal on the website.

The guidelines further explained that successful applicants would be required to make payment within 14 days of notification through designated banks at the area commands where the goods were domiciled.According to the guidelines, any returns on disposals will need to be rendered to the comptroller-general not later than 21 days after completion of each exercise.

The Service, however, pointed out that the disposal committee, subject to the approval of the comptroller-general, might use its discretion in handling peculiar cases.The assessment committee shall consist of not less than five officers of high integrity, including valuation officers at all area commands supervised by the zonal coordinator, who shall undertake inspection, collation and fixing of prices of all goods on monthly basis, and is to forward its report to the auction committee.

The NCS also announced plans to designate the Ikorodu Cargo Terminal as a dedicated export gateway. Currently, the terminal serves as a storage facility for loaded imported containers, also known as overtime containers, which have stayed beyond the 28 days allowed by the NCS at the ports.

Speaking about the auctioning process, Legal Adviser, National Association of Government Approved Freight Forwarders (NAGAFF) Barrister Fred Akokhia said the disposal of overtime consignments should be handled by approved auctioneers who are independent noting that Customs should not be seen as a judge in its own case. He called for the exclusion of customs officers in the auction process saying that is the only way to make the procedure more transparent.
“We want a situation where as it is in the CEMA statutorily that after this consignment have been gazetted for auction, customs should be become ‘functos officio’ that is they have taking their hands off it and give to government auctioneers, that way it will be more transparent.
“Customs cannot be a judge in its own case. They can seize, detain but once the items have been gazetted for auction, they should transfer that function to an independent body because there is no point in telling customs to seize and at the same time sell, it does not make sense.
“In the CEMA review, we have advised Customs that they cannot be a judge in their own case. If customs seize, it cannot auction. By the time they have gone through the due process of seizing, they should give it to an independent body. We have approved auctioneers in Nigeria. Those are the ones that should auction not customs, he said.
President, Association of Nigerian Licensed Customs Agent (ANLCA), Prince OlayiwolaShittu however kicked against the idea of excluding customs in the auction process.
According to him, those that are calling for the exclusion of customs are not licensed by customs; hence they should not be the one to determine whether or not Customs should be in the committee.
He appealed that a representative of licensed customs agents should also be included in the Customs board as well as in the auction committee because according to him, “we are the ones that account for the cargo”.
“Why are people anti customs when they are not even licensed by Customs? Why are freight forwarders who have no business with customs (because they are not licensed), be the one to determine what should happen to Customs? Customs must head any auction committee they have set up and licensed customs agents should be included in the committee including being a member on the board of customs.
“That is what is happening in India today. Customs brokers there are part of all those decision making in economic activities there including revenue matters through the Comptroller General of Customs.
“It is the inability of Customs to put us in our proper place that is making all the distortion in the port being created by people who called themselves freight forwarders without any particular schedule of work,” he said.

 

Copyright 2016 Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.

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