Overtime Cargo: Buy-back Scheme as Option for Failed e-Auction
By Francis UgwokeCriminality in international trade is a common phenomenon. But perpetrators usually face the wrath of the law. In the nation’s maritime industry, it is a tradition, a recurring practice for importers to abuse the provisions of the trade law with the belief that this can be settled with cash. This is not always the case. While many have succeeded, others have also lost fortunes of
Investments as a result of engaging in fraudulent practices. What is common in the ports industry is that some importers while fully aware that certain goods are under import prohibitions still go ahead to try their luck. Sometimes they succeed after oiling some palms. Other times they lose. There are some goods which for one reason or the other the importers are not able to clear out of the ports. Some of them fall into overtime cargo thereafter which allows the Customs Service the right to seize them. The law provides that any imported item which stays at the ports for more than 90 days can be seized. A visit to the ports, border stations and customs warehouses, particularly customs Federal Operations Units (FOU) scattered throughout the country show billions of Naira worth of goods that have been seized by the Customs. Some of the items have spent years and are in complete ruins with nobody caring. With the increasing activities of Boko Haram which have led to the creation of Internally Displaced Persons (IDPs) camps, the federal government had at sometimes approved that some perishable food items be given to these homes. But other items have been abandoned to waste. The law provides that such items should be auctioned to the general public but government is not observing this discreetly, a development that has become a big problem in the ports with mounting congestion in the system.
Failure of Auction
Over the years, goods which owners have lost in the ports are usually sold as auction to the general public. There are licensed auctioneers for this in some cases in the past. But over the past few years, the process has failed under the present customs leadership. About two years after assuming office as Comptroller-General of Customs, Rtd Col Hammed Ali had introduced e-auction as a more transparent way of handling the exercise. This process is seen as corrupt free as against the process adopted in the past in which allocations are simply given to those in government and cronies. However, Ali’s e-auction process was again hit with irregularities soon on arrival. Since then, nothing has happened even though seized goods are piling up and causing congestion in the ports, border stations and customs warehouses. The General Manager of Ports and Terminal Multservices Limited (PTML), Lagos, Mr Tunde Keshinro, had early this year raised alarm over the number of overtime containers that are domiciled in the ports over the years. Keshinro had lamented that such overtime goods were occupying 30 percent of its space in the terminal as the Nigeria Customs Service (NCS) failed to take them away as required by the provisions of the law. Incidentally, he made this disclosure when a team of the International Monetary Fund (IMF) visited the ports.
He said, “Since 2016, we have been struggling with 30 percent of our space that was locked up under abandoned cargo because Customs has not been auctioning and that has become a serious concern for us.
“Terminal operators sell spaces. How quick and fast we were able to turnaround space determines the profitability of the business. So, when certain portion of the space is locked up, that already will limit productivity.” The implication of his statement is that the current congestion in the ports is also caused by the spaces being occupied by overtime goods”. PTML is not the only terminal where there are such overtime cargoes. It is the same issue in other terminals in Lagos as well as the Eastern ports.
Ali had in 2017 made efforts to begin electronic auction, about two years after assuming . To many this was too long a time to have allowed overtime goods to remain unattended to. But even this effort did not last as a result of the irregularities. However, at the middle of last year, the Customs gave indication of resuming sales of overtime goods. The Public Relations Officer of the Customs, Mr Joseph Attah, was reported to have said that the Committee on overtime cargo had completed its assignment of carrying out an audit on overtime goods due for auction. This is close to a year now without any concrete action. Incidentally, these goods continue to litter and form part of the congestion in the ports, border stations and all over the FOUs.
Buy-back as Option
In what appears a quick fix for the problem, some industry operators are of the view that such overtime goods should be sold back to the original importers under very strong terms and conditions. The argument is that this will be faster with the ports and warehouses where these goods are will easily be congested . The argument is that such arrangement will even mean more revenue for the government as what will be realized will certainly be higher than what the usual auction protocol will generate. Among those who are of the view that such goods should be sold to the owners is the founder of National Association of Government Approved Freight Forwarders, (NAGAFF), Dr. Boniface Aniebonam, a very good friend of the Customs leadership hierarchy. In a passionate appeal to the customs boss, Aniebonam opined that this was in the best interest of the industry and the country. He said, “On behalf of all our importers, excise traders and public interest, we are graciously appealing to the Nigeria Customs to draw the attention of Mr President over several containers of trade goods lying at the ports which were seized by the customs and or as an overtime cargo. Mr President should invite the owners to pay appropriate customs duty and penalty thereto as a punishment for the contravention of customs laws. Government just have to take every reasonable step to generate internal revenue at this point in time because the post effect of COVID -19 pandemic may not be friendly to Nigerian economy.” A maritime lawyer, Mr Emmanuel Ofomata also supports the buy-back scheme for owners of such goods, saying it was the best option and faster to decongest the ports. Ofomata said, “ it is not a bad idea. It saves time, it will even fetch government more revenue as the Customs will have to impose certain penalty on the overtime cargo. It has been done by past regimes and it is not out of place to do it now given the circumstances of the congestion in the ports”.
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