Following the spontaneous deactivation of the Customs e-portal, which is thought to be a violation of the Customs and Excise Management Act, thousands of fast-tracked items and reefer cargoes are detained at the Five Star Logistics Terminal (CEMA).
Economic analysts have criticized Customs’ approach as the punitive action on the seaport terminal that has hampered the operations of other service users at the port facility out of concern for the fiscal and supply chain difficulties from this development.
Recall that the seaport terminal had last week been deleted from the Nigeria Customs Service (NCS) portal due to an overdue debt of around N97.3 million.
Dr. Ikenna Nwosu, a member of the Nigerian Economic Summit Group (NESG), criticized Customs’ actions as being unreasonable and in breach of the WTO’s trade facilitation pact.
The economic expert claims that considering that the facility enables Customs to generate over N150 million each day, the cost implications of closing the terminal’s access to the Customs portal, which amount to over N97 million, are not prudent.
“This development raises concerns about Customs’ effectiveness. Technically, it is improper to close the terminal and halt business since port users were not given a heads-up to stop delivering cargo to the facility. Customs cannot impose taxes while preventing access to cargo, he added.
Nwosu emphasized that the consignees in charge of the vehicle imports should be made to pay the customs, and he also forewarned that consignees with Fast Track products and reefer cargoes would challenge Customs over the unplanned terminal deactivation.
Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), recommended Customs to develop more creative ways to recover their losses without interfering with trade and the supply chain.
In his argument, Yusuf—also a former director general of the Lagos Chamber of Commerce and Industry (LCCI)—said that if a service provider violates the law or has compliance problems, the situation should be handled properly so as not to affect unwitting businesspeople.
There ought to be a mechanism to penalize a service provider without permitting it to interfere with what its customers are doing. Importers of fast track and reefer containers are innocent in this situation and shouldn’t be required to pay for Five Star Logistics’ alleged malfeasance or noncompliance. Allowing importers to pay and endure the repercussions of crimes they did not commit will be unfair. We’re not saying that Customs shouldn’t penalize Five Star, but they can do it in a way that spares the innocent clients from the consequences, the official said.
Olamide James, a freight agent employed at the terminal, claimed that some of the vehicles associated with the N97 million in unpaid assessment demanded by Customs are thought to have entered the country through land borders.
He expressed displeasure that other port customers were being inconvenienced, particularly those who had Fast Track containers and reefer goods detained at the terminal.
James observed that even if the terminal chooses to forgo storage fees following the muddle, Nigerian shippers will still incur additional demurrage costs.
However, he said that only a small number of shipping businesses often arrive at the terminal with hundreds of new and used vehicles, noting that these shipping companies don’t send individual manifests, which is apparently what caused Customs to demand payment for the unpaid assessment.
Based on these findings, he suggested Customs conduct a forensic inquiry utilizing the Vehicle Identification Number (VIN) and emphasized that CEMA mandates declarants, who are freight forwarders, should be held accountable rather than the terminal operator.
Owners of Fast Track containers at the terminal have expressed concern about the delay in delivery of their containers, and owners of time-bound reefer containers have also begun to voice concern about their shipments being held at the terminal, he continued.
According to a person close to Mr. Wolfgang Schneider, the former general manager of Five Star Logistics Terminal, the former general manager complained last year that Customs wrote the company about the investigation but did not provide full vehicle details to allow the terminal to conduct its investigation.
The insider also noted that the VIN might be used by Customs to locate the defaulting freight agents, and he questioned what function the Enforcement Unit of Customs would have if the vehicles had actually departed the terminal without paying taxes.
He claims that NCS’s behavior has demonstrated that the Service is more focused on getting the N97 million from the terminal than it is about ensuring that the guilty are brought to justice and that the anomaly won’t happen again.
However, industry watchers have seen that NCS has a history of shutting down terminals due to such unpaid assessments.