Customs’ VIN valuation policy contravenes CEMA, says Amiwero

President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA) Lucky Amiwero, has faulted the Vehicle Identification Number (VIN) valuation policy recently introduced by the Nigeria Customs Service (NCS) to determine duty payable on imported vehicles, saying it contravenes the Customs and Excise Management Act (CEMA) 20 of 2003 based on transaction value method.

Clearing agents had last week protested and grounded activities at the Lagos port following the introduction of the VIN policy, which they described as outrageous and lacking in transparency.

In a letter addressed to President Muhammed Buhari, dated February 25th, 2022 Amiwero noted that as the Chairman sub-committee of the Reconstituted Presidential Task Force on the Reform of Nigeria Customs Service and 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.

This, according to him, 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 letter reads in part, “We hereby bring to the attention of the Federal Government the recent introduction of Vehicle Identification Number (VIN) valuation by Nigeria Customs Service (NSC) which contravenes the Customs and Excise Management Act 20 of 2003 based on transaction value Method.

“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 Transaction Value, and cannot 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 than the actual person involved in the import transaction, which is currently imposed by the Nigeria 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 an agreement contains rules for valuation of sales.”

Amiwero also criticised the present trend on uplifting and imposing value by Customs on pre-Arrival Assessment Report (PAAR) and other valuation treatment which he said also contravenes the CEMA that clearly lay down legal procedures to be followed.

“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,” he said

Amiwero appealed to the Government to compel the NCS to comply with the valuation Act of all laid down criteria and procedures, process and treatment based on the law