Press Release

CUSTOMS APPEAL MECHANISM

LAGOS CHAMBER OF COMMERCE AND INDUSTRY

URGENT NEED FOR AN INDEPENDENT DISPUTE RESOLUTION FRAMEWORK BETWEEN THE CUSTOMS SERVICE AND THE BUSINESS COMMUNITY

Managing disputes with the Nigeria Customs Service on matters of product valuation and harmonized system of product classification is one of the most distressing encounters experienced by investors in the Nigerian economy.  A major shortcoming in our international trade process is the absence of an independent, credible, and prompt appeal mechanism.  It is a situation that is hurting investment and weakening investors’ confidence.  Importers are left entirely at the mercy of the customs in the absence of a credible, independent window for dispute settlement between the customs and the private sector. Under the present arrangement, the Customs Service is the accuser and the judge.  

This mechanism is unfair to investors and not consistent with the principles of natural justice.  Many companies have been compelled to pay outrageous additional charges on imports thus distorting their investment plans and projections.  Discretionary interpretations on product classification and valuation poses enormous corruption risks in customs processes.  Indeed, the biggest corruption risks in the interface between the customs and the business community are around these two issues.  This situation is hurting investors across all sectors – manufacturing, agro-allied, ICT, construction, Services etc.  It is a disincentive to domestic and foreign investment; it creates uncertainty and aggravates investment risk,  it undermines economic diversification prospects, depresses capacity utilization, and limits the scope for job creation.  It is also not consistent with the vision to make Nigeria a top investment destination.

The LCCI calls on the President to intervene by setting up an Independent Appeal Mechanism to deal with issues of valuation and HS classification between the Nigeria Customs Service and the Business community.  This could be done within the framework of an Executive Order.  This is necessary to restore the confidence of investors in the international trade process.

The reality is that the Nigeria Customs Service has a weak Trade Facilitation culture and an absence of customer service orientation. This disposition is hurting investment, frustrating trade, and creating a negative investment sentiment.  A presidential intervention has become inevitable, especially with the onset of the African Continental Free Trade Area [AfCFTA]

There is need to ensure a balance between regulatory controls, revenue generation and trade facilitation functions of the Nigerian customs service.

DR MUDA YUSUF

DIRECTOR GENERAL

LAGOS CHAMBER OF COMMERCE AND INDUSTRY

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