VIN-Valuation And The Burden Of Trade Facilitation

VIN-Valuation And The Burden Of Trade Facilitation

 The issue of Vehicle Identity Number (VIN) automotive valuation system continued to be on the front burner following the outcry of stakeholders in the business. Since it was re-launched two months ago the scheme has never been without controversy particularly from stakeholders who shared the view that the operationalization was hurriedly done without adequate transition process.

When the new VIN platform was unveiled at the Apapa Command of Nigeria Customs Service (NSC), Comptroller Yusuf Malanta reeled out the benefits of the automotive system as promoting ease of doing business and facilitating legitimate trade. Customs claimed that the system has been made simple and flexible and that agents could sit down in their bedroom and process the clearance of their goods.

Comptroller Festus Okun, PTML was quoted as saying, “We should work together to make sure that the system works in a manner that will promote trade”. While his counterpart at Tin-Can Command Comptroller Adekunle Oloyede said that “The system will enable us to tackle security challenges we have in this country, ease business and facilitate legitimate trade”.

However, a recent finding has revealed contrary results on the true state of things concerning VIN-Valuation.  In a round table discussion organized by the Maritime Journalists Association of Nigeria (MAJAN) in Lagos, outburst by stakeholders revealed an opposing experience to the assertions of Customs on the workings of VIN-Valuation. The participants comprising of members of the National Association of Government Approved Freight Forwarders (NAGAFF), Association of Nigerian Licensed Customs Agents (ANLCA), African Association of Professional Freight Forwarders and Logistics in Nigeria (APFFLON) and National Council for Managing Directors of Licensed Customs Agent (NCMDLCA) outlined numerous challenges militating against trade facilitation.

They accused Customs of neglecting the statutory 90 days notice normally accorded to stakeholders before introducing new policies into the system. While narrating some of the challenges, Mrs. Jewel Igwe of NCDMLCA, said that when VIN-Valuation became operational the age limit of imported vehicles which was initially pegged at 15 years was automatically increased to 9 years without prior notice or consultation with anyone by Customs and this has skyrocketed duty fee. “A 2002 or 2003 vehicle is paying what 2013 will pay, which is too much and outrageous” she said.

 She also revealed that further discussions by the association with Customs shows their disapproval of the scheme as it affects their revenue generation and vehicles are now left at the port with no date for clearance and suggested to them to write to the supervising Ministry to review the scheme.

Corroborating this issue, Clinton Okoro PRO of APFFLON PTML gave an example of his 2003 Mercedes Benz MC with a total duty valued at N2.8 million which he has abandoned due to the shocking duty.  He said while Customs were trying to increase their revenue, it introduced and enforced a scheme which was initially agreed to be test run at just one port before implementation. He argued that Customs may have shot itself at foot considering the rising number of vehicles now abandoned at the ports.

Mr Iyke Umelo, Secretary of APFFLON said that this problem could be linked to the non capturing of certain vehicles which are regarded as a Non-Standard Value against the already captured ones known as Standard Value. As a result of this, the duties of the Non-Standard Values like BMW, Mercedes Benz and certain Corollas are higher than the Standard Values.

The clearing agents in their arguments believed that the VIN-Valuation especially as regards the Standard and Non-Standard VINs are affecting seriously trade facilitation and that in no distance time the number of vehicles that would be abandoned at the port shall be enormous. They also believed that the agency may have carried the VIN-Valuation in a hurry without giving adequate time and creating a platform for stakeholders to acclimatize themselves with the new technology.

When MMS Plus Reporter spoke with the National Public Relations Officer of Customs DC Timi Bormadi to ascertain what the agency was doing in curbing these challenges and ensured the ease of business as promised when the scheme was launched, he first questioned those behind the claims. He argued that on the contrary the VIN-Valuation facilitate trades only when the right processing code are followed. He said that most of the challenges raised by stakeholders are deliberate actions of certain individuals trying to sabotage the efforts. “There are too many people instead of using the right procedure code, instead of capturing the right VIN number; they deliberately make errors so that they will go to Non-Standard VINs.  The DC stated that they wanted the continuation of manual but that Customs had warned from the inception that it won’t be possible because there are two different procedures code. He also talked about those who were yet to come to realities that Vin-Valuation has come to stay, rather than do the needful would be seeking ways to apply the previous method that has been dropped. He also confirmed that about 90 per cent of stakeholders has agreed that the Vin-Valuation was working so it would be considered unfair to say that the scheme does not facilitate trade.

However, this investigation has revealed that those vehicles with Non-Standard VINs constitute a huge problem for clearing agents and indeed hinders trade facilitation as confirmed by DC Timi himself. “The problem is with Non-Standard VINs, if you have a vehicle with Standard VIN you clear it easily” said the DC. He also alleged that some people are just messing around with the system. Rather than taking advantage of the automated process they still want to cut corners by going through manual process because of what they would benefit. He also debunked the 9 years for imported vehicles as 10 years while larger Van’s are for 15 years.

One thing was clear, there are hiccups surrounding the Vin-Valuation and Customs need to revisit the scheme and ensure that all stakeholders are truly carried along to be able to establish the confidence that the Vin-Valuation promised stakeholders.

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