IMPORT DUTY FRAUD: Senate Panels Says Leakages Still Abound In Duty Collection

PIX: Nigerian Senate

 Nigerian Senate

 

The Senate Committee on Customs, Excise and Tariff has alleged that leakages still abound in the import chain despite the application of the Comprehensive Import Supervision Scheme (CISS).

It accused the Nigerian Ports Authority (NPA) of failing to provide records of over 280 vessels that berthed at its terminals across the country between 2010 and 2016.

The committee made this known at a public hearing it organised on smuggling of goods into the country.

Chairman of the Committee, Senator Hope Uzodinma, in his opening remarks, alleged that NPA failed to properly account for the vessels and their contents over the period.

“We want the Nigerian Ports Authority to come and explain what happened to 282 vessels that disappeared from terminals. We have names of the releasing officers. This shows that there is no security at the terminal,” he said.

Uzodinma criticised the NPA for not attending the hearing, even though the exercise was focused on the activities of the authority.

“Permit me in this respect to drop the hint that primary information at our disposal will suggest that in spite of the CISS, leakages still abound in the import-export chain.

“A major area of concern here has to do with mis-invoicing by international traders, abuse of free trade zone policies and temporary import permit.

“Mis-invoicing is a form of trade-based money laundering that includes the over- and understatement of import and export values on official forms and records. A few examples will suffice for illustration.

“Specifically, such practice will include taking advantage of unutilised Form M to perpetrate fraud in collaboration with operating banks.

Uzodinma said the committee has evidence that unutilised Form M is used by operators for capital flight and money laundering, all of which facilitate smuggling.

“There are also questions to be answered on the criteria used in the determination, abandonment, cancellation of PAARs and SGDs and unutilised PAARs. The SGD is crucial in the import export chain, as it is the document that indicates payments to be made of shipment", the committee chairman said.

The Pre-Arrival Assessment Report (PAAR) system is an online application designed and used by the Nigeria Customs Service (NCS) to increase the speed of delivery of imported goods while the Single Goods Declaration (SGD) form refers to the document evolved by the Customs for processing the payment of duties.

“As it stands, it does appear that the documentation process has been compromised and the authorised dealer banks may be culpable.

“Indeed there are accusing fingers in many directions, including unpaid and cancelled SGDs, cancelled PAARs, bills of lading with multiple PAAR, etc.

“All these appear to be channels through which official instruments of international trade have been abused to aid smuggling.

“Even in the area of remittances, the operating banks might not have come out very clean of legitimate revenue.”

Uzodinma recalled that the Senate mandated the Committee on Customs, Excise and Tariff to carry out a holistic investigation into the operations of the Comprehensive Import Supervision Scheme, with a view to identifying the factors behind the escalating rate of smuggling of imported goods into the country and those behind it.

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