VIN Implementation Contravenes CEMA Act, Amiwero Writes Buhari, N’Assembly, Others
CUSTOMS AGENTS PROTEST
*Internet price of car not negotiated price, customs agents tell customs
By Francis Ugwoke
The National President, National Council of Managing Directors of Customs Agents (NCMDCA), Mr Lucky Amiwero, has drawn the attention of President Muhammadu Buhari and members of the National Assembly to the implementation of the newly introduced Vehicle Identification Number (VIN) valuation policy by the Nigeria Customs Service (NCS).
The implementation of VIN valuation in calculating duties on vehicles has led to protests by freight forwarders since last week.
In a letter to the President, Amiwero said the policy “contravenes the Customs and Excise Management Act 20 of 2003 based on transaction value Method”.
Amiwero argued that the use of ex-factory price in calculating duties as against the purchase price was wrong.
Part of the letter reads, “As the Chairman sub-committee of the Reconstituted Presidential Task Force on the Reform of Nigeria Customs service, on the treatment of valuation of vehicles, it was observed by the committee that the present ex -factory price is a component of Brussels Definition of Value(BDV), which is not in agreement with the provision of Customs and Excise management (amendment) Act 20 of 2003, that is supposed to be based on Purchase price(negotiated price with a Buyer and seller of Motor vehicles to have transaction element.
“The present ex-factory price has no negotiated component as purchase price, which is the transaction Value by importer, it lacks legal process in the criteria as contained in the treatment of Motor vehicle of Paragraph 1-6 of the Customs and excise Management (amendment) act 20 of 2003 and cannot be used but reviewed to contain features of the elements of Transaction/purchase pricing on Motor vehicles
“The internet price is not a negotiated price and not admissible as transaction price or purchase price, which has no negotiating capability, as there is no buyer and seller to attract the element of transaction, which negates the doctrine of TransactionValue, and can not be use, which is clearly illegal and not acceptable as transaction value
“The adoption of the Agreement on the implementation of Articles VII of GATT, establishes a positive system of Customs Valuation, based on price actually paid or payable for imported goods, the valuation method provides for fair, neutral system of Valuation, conforming to commercial realities and outlaws the used of arbitrary or fictitious value method system of valuation, the Brussels Definition of Value(BDV) which is “NOTIONAL” concept that is imaginary persons or Ghost rather then the actual person involved in the import transaction, which is currently imposed by the Nigerian Custom Service(NCS) on all imported goods.
The WTO Customs Valuation Agreement(CVA) is based on a “positive principle, which is opposed to a “normative” principle, the positive “principle” Transaction Value is based on the actual price/value of the goods, rather than the “normative” principle(BDV), the Agreement’s basis of valuation is Transaction value” which is the price actually paid or payable by the buyer for the imported goods, if the sales was freely negotiated and agreement contains rules for valuation of sales.
” The GATT Article VII, Agreement on implementation of Articles VII of the general agreement of Tariff and Trade was domesticated by an Act passed by the National assembly in line with section 12 of Nigerian Constitution, as Customs and Excise Management (amendment) Act 20 of 2003, the act is the only legal instruments for the treatment, procedure and the application of Value for imported goods in Nigeria
VALUATION OF IMPORTED GOODS
The valuation of goods in Nigeria is prescribed under the Customs and Excise Management (amendment) Act 20 of 2003, which authorizes the power of treatment, process, procedures and determination of valuation of good under the Act, based on Transaction value method, with six sequential application , which states as follows:
Transaction value of good general(paragraph)-1
Transaction value of Identical goods(paragraph)-2
Transaction Value of Similar Goods (paragraph )-3
Deductive/sales value of goods( paragraph)-4
Computed value of goods (paragraph)-5
Reasonable means/fall back method of value (paragraph)-6
“The determination of valuation of imported goods, is as continued in the hierarchical order of application, on the treatment of valuation of Imported goods, the law provides the primary basis for determination of the valuation of goods as Transaction value , which is defined as, the price actually paid or payable , is the total payment made or to be made by the buyer to the benefit of the seller for the imported goods, which includes all payment made as condition of sales of the imported goods by the buyer to the seller or the buyer to a third party to satisfy the obligation of the seller.
“STEP TO BE FOLLOWED FOR CASES WHERE CUSTOMS ADMINISTRATION HAVE REASON TO DOUBT THE TRUTH AND THE DECLARED VALUE
The burden of proof is shifted to the importer, which is aimed at verifying that the element of valuation declared presented to Customs is complete and correct, which is followed by the following principle
(a) Declaration to Customs
(b) Incase of doubt of the declaration by Customs
(c) Customs request for further information
(d) Importer provides additional information
(e) Importer have right to switch by using deductive value method or Computed value method, which is the sole right of the importer not customs
(f) Customs still have reasonable Doubts
(g) Customs communicate the reasonable doubt the truth and accuracy
(h) Importer response
(i) Customs communicates and ground thereof in writing
(j) Importer may appeal if not satisfied
“By the provision of paragraph 12, shift the onus of proof is on the importer to provide information, evidence, explanation and can switch paragraph 4 and 5 of deductive method or computed methods of valuation and not the right of Nigeria Customs service(NS) but that of the importer by the provision of the Act, the Nigeria Custom Service has no right to uplift or impose value after establishthe TEST value, which has been accepted in line with paragraph 1,2,3,4, 5 and 6 of the Act
THE TEST VALUE AND COMMERCIAL LEVEL CRITERIA ON VALUATION OF IMPORTED GOODS
“The Test value set forth in Paragraph 2(b) are to be used at the initiative of the importer and only for comparison purpose, Substitute value may not be established under the provision of paragraph 2(b) the test value represents already accepted value, paragraph 2 and 3 and commercial level is the step at which the goods are changing hand, manufactures, wholesalers, brokers, and retailer must be adjusted on commercial level
“THE TREATMENT OF VALUATION OF IMPORTED OF GOODS CAN NOT BE IMPOSED WITH PENALTY
The application of GATT Articles VII must be treated and implemented without penalty, the Act clearly states, The legislation of each party shall provide to determine of Customs Value for right of appeal, without penalty, to importer or any person liable for payment of duty and initial right of appeal without penalty may be to an authority independent body, but the legislation of each party shall provide without penalty to judicial authority
Copy of paragraph 14 and Tokyo Valuation code is attached and marked appendix 8a&b
“THE PRESENT PROCEDURE OF OUTLAWED BRUSSELS DEFINITION OF VALUE (BDV) ADOPTED BY THE SERVICE ON PRE-ARRIVAL ASSESSMENT REPORT(PAAR) AND TREATMENT ON VALUATION PROCEDURES CONTRAVENES ACT 20 OF 2003
“The present trend on uplifting and imposing value by Nigeria Customs on pre-Arrival Assessment Report (PAAR) and other valuation treatment contravenes the Customs and Excise Management (amendment) Act 20 of 2003 that clearly lay down legal procedures to be followed, which conferred right to the importer and shift the burden of proof of the importer/Licensed Customs Agents and not the service.
Uplifting and imposition of value on (PAAR) is the principle based on the outlawed brussels Definition of Value(BDV) that is based on Customs opinion and open market pricing(OMP) which adjudged by world Customs Organization (WCO) and World trade Organization (WTO) as arbitrary or fictitious values and its presently not applicable in the world, due to its negative effect to SMEs and the world economy
We hereby appeal to the Federal Government to compel Nigeria Customs Service(NCS) to Comply with the valuation Act , of all lad down criteria and procedures process and treatment based on the law”
By Francis Ugwoke
The National President, National Council of Managing Directors of Customs Agents (NCMDCA), Mr Lucky Amiwero, has drawn the attention of President Muhammadu Buhari and members of the National Assembly to the implementation of the newly introduced Vehicle Identification Number (VIN) valuation policy by the Nigeria Customs Service (NCS).
The implementation of VIN valuation in calculating duties on vehicles has led to protests by freight forwarders since last week.
In a letter to the President, Amiwero said the policy “contravenes the Customs and Excise Management Act 20 of 2003 based on transaction value Method”.
Amiwero argued that the use of ex-factory price in calculating duties as against the purchase price was wrong.
Part of the letter reads, “As the Chairman sub-committee of the Reconstituted Presidential Task Force on the Reform of Nigeria Customs service, on the treatment of valuation of vehicles, it was observed by the committee that the present ex -factory price is a component of Brussels Definition of Value(BDV), which is not in agreement with the provision of Customs and Excise management (amendment) Act 20 of 2003, that is supposed to be based on Purchase price(negotiated price with a Buyer and seller of Motor vehicles to have transaction element.
“The present ex-factory price has no negotiated component as purchase price, which is the transaction Value by importer, it lacks legal process in the criteria as contained in the treatment of Motor vehicle of Paragraph 1-6 of the Customs and excise Management (amendment) act 20 of 2003 and cannot be used but reviewed to contain features of the elements of Transaction/purchase pricing on Motor vehicles
“The internet price is not a negotiated price and not admissible as transaction price or purchase price, which has no negotiating capability, as there is no buyer and seller to attract the element of transaction, which negates the doctrine of TransactionValue, and can not be use, which is clearly illegal and not acceptable as transaction value
“The adoption of the Agreement on the implementation of Articles VII of GATT, establishes a positive system of Customs Valuation, based on price actually paid or payable for imported goods, the valuation method provides for fair, neutral system of Valuation, conforming to commercial realities and outlaws the used of arbitrary or fictitious value method system of valuation, the Brussels Definition of Value(BDV) which is “NOTIONAL” concept that is imaginary persons or Ghost rather then the actual person involved in the import transaction, which is currently imposed by the Nigerian Custom Service(NCS) on all imported goods.
The WTO Customs Valuation Agreement(CVA) is based on a “positive principle, which is opposed to a “normative” principle, the positive “principle” Transaction Value is based on the actual price/value of the goods, rather than the “normative” principle(BDV), the Agreement’s basis of valuation is Transaction value” which is the price actually paid or payable by the buyer for the imported goods, if the sales was freely negotiated and agreement contains rules for valuation of sales.
” The GATT Article VII, Agreement on implementation of Articles VII of the general agreement of Tariff and Trade was domesticated by an Act passed by the National assembly in line with section 12 of Nigerian Constitution, as Customs and Excise Management (amendment) Act 20 of 2003, the act is the only legal instruments for the treatment, procedure and the application of Value for imported goods in Nigeria
VALUATION OF IMPORTED GOODS
The valuation of goods in Nigeria is prescribed under the Customs and Excise Management (amendment) Act 20 of 2003, which authorizes the power of treatment, process, procedures and determination of valuation of good under the Act, based on Transaction value method, with six sequential application , which states as follows:
Transaction value of good general(paragraph)-1
Transaction value of Identical goods(paragraph)-2
Transaction Value of Similar Goods (paragraph )-3
Deductive/sales value of goods( paragraph)-4
Computed value of goods (paragraph)-5
Reasonable means/fall back method of value (paragraph)-6
“The determination of valuation of imported goods, is as continued in the hierarchical order of application, on the treatment of valuation of Imported goods, the law provides the primary basis for determination of the valuation of goods as Transaction value , which is defined as, the price actually paid or payable , is the total payment made or to be made by the buyer to the benefit of the seller for the imported goods, which includes all payment made as condition of sales of the imported goods by the buyer to the seller or the buyer to a third party to satisfy the obligation of the seller.
“STEP TO BE FOLLOWED FOR CASES WHERE CUSTOMS ADMINISTRATION HAVE REASON TO DOUBT THE TRUTH AND THE DECLARED VALUE
The burden of proof is shifted to the importer, which is aimed at verifying that the element of valuation declared presented to Customs is complete and correct, which is followed by the following principle
(a) Declaration to Customs
(b) Incase of doubt of the declaration by Customs
(c) Customs request for further information
(d) Importer provides additional information
(e) Importer have right to switch by using deductive value method or Computed value method, which is the sole right of the importer not customs
(f) Customs still have reasonable Doubts
(g) Customs communicate the reasonable doubt the truth and accuracy
(h) Importer response
(i) Customs communicates and ground thereof in writing
(j) Importer may appeal if not satisfied
“By the provision of paragraph 12, shift the onus of proof is on the importer to provide information, evidence, explanation and can switch paragraph 4 and 5 of deductive method or computed methods of valuation and not the right of Nigeria Customs service(NS) but that of the importer by the provision of the Act, the Nigeria Custom Service has no right to uplift or impose value after establishthe TEST value, which has been accepted in line with paragraph 1,2,3,4, 5 and 6 of the Act
THE TEST VALUE AND COMMERCIAL LEVEL CRITERIA ON VALUATION OF IMPORTED GOODS
“The Test value set forth in Paragraph 2(b) are to be used at the initiative of the importer and only for comparison purpose, Substitute value may not be established under the provision of paragraph 2(b) the test value represents already accepted value, paragraph 2 and 3 and commercial level is the step at which the goods are changing hand, manufactures, wholesalers, brokers, and retailer must be adjusted on commercial level
“THE TREATMENT OF VALUATION OF IMPORTED OF GOODS CAN NOT BE IMPOSED WITH PENALTY
The application of GATT Articles VII must be treated and implemented without penalty, the Act clearly states, The legislation of each party shall provide to determine of Customs Value for right of appeal, without penalty, to importer or any person liable for payment of duty and initial right of appeal without penalty may be to an authority independent body, but the legislation of each party shall provide without penalty to judicial authority
Copy of paragraph 14 and Tokyo Valuation code is attached and marked appendix 8a&b
“THE PRESENT PROCEDURE OF OUTLAWED BRUSSELS DEFINITION OF VALUE (BDV) ADOPTED BY THE SERVICE ON PRE-ARRIVAL ASSESSMENT REPORT(PAAR) AND TREATMENT ON VALUATION PROCEDURES CONTRAVENES ACT 20 OF 2003
“The present trend on uplifting and imposing value by Nigeria Customs on pre-Arrival Assessment Report (PAAR) and other valuation treatment contravenes the Customs and Excise Management (amendment) Act 20 of 2003 that clearly lay down legal procedures to be followed, which conferred right to the importer and shift the burden of proof of the importer/Licensed Customs Agents and not the service.
Uplifting and imposition of value on (PAAR) is the principle based on the outlawed brussels Definition of Value(BDV) that is based on Customs opinion and open market pricing(OMP) which adjudged by world Customs Organization (WCO) and World trade Organization (WTO) as arbitrary or fictitious values and its presently not applicable in the world, due to its negative effect to SMEs and the world economy
We hereby appeal to the Federal Government to compel Nigeria Customs Service(NCS) to Comply with the valuation Act , of all lad down criteria and procedures process and treatment based on the law”
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