Wisdom Deji-Folutile
In April this year, FTN received a tip that certain officers of the Nigeria Customs Service were forcing importers to pay bribes to receive their Pre-Arrival Assessment Report (PAAR), an advisory document used in the valuation and classification of commodities before importation.
Our source was one such importer, who was allegedly forced to pay N130,0000 per container, to get the PAAR, which is supposed to be received automatically at no cost to importers once required documents are provided and the application is made via an online portal.
Not receiving your PAAR means you cannot pay your duties, which means your container remains at the port and cannot be cleared.
Accusing Customs for particularly targeting by-the-book individuals who were not interested in circumventing payment of normal duties, our source said he had been told on record by an officer to pay N150k per container to be issued PAAR. Eventually, payment was pegged at N130k per container.
Not paying the bribe would have caused the importer to risk paying a huge demurrage. This is because the goods cannot be released without the PAAR.
“This thing just started, and it must be exposed. They want foreign investors,” the begrudged importer said, revealing that this particular scenario occurred at the Grimaldi Terminal in Tin Can Island, Lagos.
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Reaching out to clearing and forwarding agents, our source’s information was corroborated.
— It happens, says clearing and forwarding agent —
One source, name withheld, works with a ports and cargo handling service in Lagos State. He explained to our correspondent that the entire process of getting the PAAR should be without cost. However, that is not always the case.
“Before you ship a container at all, you’re to do your processing through a letter of credit.”
A Letter of Credit is issued by a bank to another bank (especially one in a different country) to serve as a guarantee for payments made to a specified person under specified conditions. For example, if you’re a Nigerian trying to import something from, say the United States, your bank issues a letter of credit to the receiving bank of the exporting party as a guarantee for payment.
“If you’re (importing) from Nigeria and you’re buying something from the US, it has to be a bank-to-bank transaction,” he explained.
Paying for an import requires the issuance of Form ‘M’. Form ‘M’ is a declaration of intention to import physical goods into Nigeria. Being a mandatory document, it must be completed by anyone intending to import physical goods into the country irrespective of the value and whether payment is involved or not.
“So your bank here will open a Form ‘M’ for you, and they will be the ones to pay your customer in the US. So that’s the letter of credit—they send a memo to your customer bank in the US. So when that’s done, that same bank in Nigeria will process a PAAR for you through customs. There is no cost attached to it, it’s on the portal,” the agent explained to our correspondent.
PAAR is required by importers for capturing and then processing or paying duty.
“Customs will have documented all your information and everything into that PAAR, so the moment you log it into the portal, it will bring out what you’re going to pay as a duty.”
The agent then explained that it is only importers who fail to complete this entire process before shipping that are forced to pay unofficially to conduct the process and receive PAAR.
“If you have done all this before you ship, you will not have to pay any N150,000 to anybody. If you have not done it, that’s when they’ll be charging you depending on the number of containers on the bill of laden. It’s not official, it ‘runs’. But they’ll do an official PAAR for you.” he divulged.
“If you did all that you were supposed to do before the shipping you would not have to pay. But if the shipment has come in or has left (the exporters) then you have to pay”.
Meanwhile, when our correspondent reached out to our sources, they explained that they had processed all their documents on time, before shipping but were still forced to pay the N150,000 before the issuance of the PAAR .
“We don’t apply for PAAR ourselves. The bank does it for us. We, the shippers, send the original documents by courier to the bank and everything is processed through the bank.”
The source then explained that the bank had waited for the issuance of PAAR for two weeks but nothing came up. Meanwhile, their containers arrived around that same time. “That was the time a Customs lady collected that amount per container,” our source shared.
Since the incident, however, our source has collected two shipments from the same terminal, with the PAAR application and issuance going smoothly with no problem.
“Maybe people reported them just as I did,” he said.
— Customs threatens action, disowns behaviour —
Meanwhile, the Nigeria Customs Service has condemned the report of Customs officers collecting money to issue PAAR.
National Public Relations Officer of the NCS, Abdullahi Maiwada, told our correspondent that the allegation if supported by evidence, would not be swept under the carpet.
READ ALSO: Customs generates N489bn from Apapa Port in Q1 2024
Maiwada reiterated that obtaining PAAR is free and without cost, and that issuance of PAAR cannot be done manually but only through an official portal.
“PAAR is an advisory document that is used to know the value and classification of the commodity before the importation of those items. You cannot get PAAR under the table. It is an automated process. It is not done manually,” the PRO said.
“There is not supposed to be any relationship between the person importing and the people at the PAAR ruling centre.”
Concerning what the punishment was for defaulting officers/importers, Maiwada said, “If you have any evidence, bring it to our attention and it will be addressed.
“This is a grievous allegation and if the person who is alleging it can come forward with the person who collected the money and evidence, we are not going to sweep it under the carpet.”
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