Capacity Building Program in the Nigeria Customs Service and Trade

FACILITATION MEASURES BY THE WORLD TRADE ORGANIZATION

1. Introduction

The capacity building program in the Nigeria Customs Service [NCS] is aimed at transforming the Service into a modern organization that is capable of service delivery based on international standards. The international standards include trade facilitation measures currently under negotiations at the World Trade Organization [WTO] Secretariat, Geneva, Switzerland. 

2. Membership and Obligation to Implement the WTO Agreements

Nigeria as a Member of the WTO [ratified the WTO Agreements in December 1994] is participating in the ongoing WTO negotiations on trade facilitation and under an obligation to implement the Agreement when it is finalized and signed by Members, including Nigeria. The implementation commitment by Nigeria is the link between the capacity building agenda in the NCS and the WTO measures.

3. Capacity to Implement Agreement

Because the WTO trade facilitation measures under negotiations are mostly customs- related, the NCS will implement the Agreement in Nigeria. It is therefore reasonable to establish whether the NCS is capable of the task ahead? In other words, the question arises, whether the capacity building program in the NCS is relevant to the WTO trade facilitation measures? A review below of the trade facilitation measures under implementation by the NCS reflects that the Service is capable of implementing most of the WTO measures on trade facilitation while effort is ongoing to build further capacity.

4. WTO Trade Facilitation Measures under Negotiations at the WTO

The most recent document guiding discussions of the WTO Negotiating Group on Trade Facilitation [NGTF], which Nigeria is a member and participates through representations by the Nigerian Trade Office in Geneva and NCS Headquarters, Abuja, is the Draft Consolidated Negotiating Text reference number TN/TF/W/165/Rev.11 dated October 2011. Article 7 of this document is titled “Release and Clearance of Goods”. This article provides for basic instruments for release and clearance of goods with specific proposals that are based on international standards.  The proposals under Article 7 are directly linked to the trade facilitation measures that have been adopted by the NCS. These proposals are;

i. Pre-arrival Processing: Negotiating proposal requires Members to introduce procedures allowing traders to submit import documentation and other required information to Customs and other relevant border agencies prior to the arrival of the goods, where appropriate. NCS allows pre-arrival processing through submission of advanced manifest by shipping companies, electronic declaration and e-payment and by the trader.

ii. Separation of Release from Final Determination and Payment of Customs Duties, Taxes and Fees: Proposal requires that where regulatory requirements have been complied with and inspection or examination of the goods is not considered necessary, the goods shall be released immediately upon payment of customs duties and taxes. NCS adopts procedures that allow release of goods considered not necessary for inspection or examination immediately after payment of customs duties and taxes. Based on documentary examination, goods that comply with regulatory requirements are directed to appropriate exit channel and released without examination.

iii. Risk Assessment/Analysis: Proposal requires Members to conduct examination based on risk management in connection with importation, exportation and transit for facilitating the movement of low risk goods. The simplified clearance procedure with advanced electronic requirements enables the NCS to undertake risk assessment on all cargo at an early stage of clearance to identify high-risk cargo for isolation from low-risk cargo. This enhances trade facilitation through fast tracking and selection of appropriate clearance channel as follows;

• Green – consignment is released automatically.

• Blue – consignment is released. May conduct documentary post clearance audit check in future.

• Yellow – documentary check at Customs Processing Centre (CPC) and if the officer is satisfied the cargo is released, otherwise routed for physical examination.

• Red – scanning or physical examination and if the examining officer is satisfied the cargo is released, otherwise reassessed.

The feature of the simplified self-assessment procedure facilitates clearance for compliant traders whose declarations pass the test of the risk management system.

iv. Post Clearance Audit [PCA]: Proposal requires that Members adopt post-clearance audit to expedite the release of goods at borders. NCS applies PCA in its operations to expedite clearance at the borders.

v.  Establishment and Publication of Average Release Times: Proposal requires Members to publish their average release time of goods periodically and in a consistent manner using tools such as the WCO Time Release Study. NCS supports this measure and has completed capacity building program in time release study including bilateral technical assistance with the United States Agency for International Development [USAID]. While challenges are noted in conducting time release study, the Service is consolidating on current experience.

vi. Authorized Operators: Proposal requires each Member to provide additional trade facilitation measures related to import, export and transit formalities and procedures to operators [called authorized operators] who meet specific criteria related to customs compliance requirements. Such criteria for obtaining authorized operator status may include the following; an appropriate record of compliance with customs and other related laws and regulations, a system of managing records to allow for necessary internal controls, and financial solvency. NCS maintains a fast track facility that rewards traders with consistent record of compliance with the NCS regulations.

vii. Expedited Shipment: Proposal requires each Member to adopt procedures allowing for expedited release of at least those goods entered through air cargo facilities to persons that apply for such treatment, while maintaining customs control. To promote expedited shipment, NCS requires submission in advance of the arrival of an expedited shipment the information necessary for release.  

5. CHALLENGES

While consolidating on enhanced performance based on ongoing capacity building programs, NCS is faced with the challenges of coordinating the activities of other agencies in border procedures and also securing enhanced compliance by traders. To overcome these barriers, it may require a collaborative capacity building program that supports interagency cooperation and promotes compliance. NCS and relevant stakeholders can agree on the scope of the collaborative program.

6. CONCLUSION

Based on the review in paragraph 4 above, NCS is good on proposals in Article 7 of the WTO “Draft Consolidated Negotiating Text” on trade facilitation. We should have the opportunity to review other articles in the negotiating text in relation to the capacity building program in the NCS in future edition of this magazine.