By Okey Ogoke

An agent undertakes to clear the goods from the port on behalf of the importer, who is the principal for a fee. In Nigeria, he must be licensed by the Nigeria Customs Service as a customs brokerage agent.

He indemnifies the Customs and takes responsibility for any loss of revenue resulting from the

clearing transaction.

The main source of customs revenue is Customs duty.

To generate Custom’s duty on any consignment the importer should have to opened a Form ‘M’

with his bank through his bank account.

The Form M serves as a means of payment for the goods to be imported, which is why it is usually handled by the foreign or international department of each bank but routed through the Central Bank of Nigeria CBN. Attached to the Form M are the proforma invoice and the insurance certificate.

For regulated products, the certificate of the relevant agency such as the Standards Organisation of Nigeria SON, National Agency for Food, Drug Administration and Control NAFDAC or The National Environmental Standards and Regulations Enforcement Agency NESREA as the case may be is attached.

To generate the Customs duty on each consignment, the shipper (importer) would have to send the shipping /final documents to the consignee’s bank international department, who in turn forward’s to Customs’ Pre-Arrival Assessment Report PAAR office that eventually issues the PAAR that would determine the duty that will be paid.

It has to be emphasised that the duty must be paid through the importer’s bank since the Form M

was opened there, as no other bank should collect the duty for another bank.

However, for consignments that do not have Form M such as used vehicles and personal effects, the agents are expected to apply to Valuation Unit of the Custom Area Command to issue value/duty to be paid on them.

Even in this case, duty is also paid through a given bank. Therefore, if the consignee requires to pay duty through his bank, he will only have to ask the agent to route the assessment to his bank.

Whatever the mode of valuation and payment that may apply; the consignee remains the principal while the agent remains a mere representative of the principal implying that the principal is responsible for any loss of revenue/short payment as may have been done by the agent.

There was a case where a consignment was supposed to be a 20 per cent rate of duty but was declared as five per cent and consequently five per cent duty was paid.

This is a major case of loss of revenue ,75per cent of the consignment was delivered to the principal but in the course of delivering the balance of 25per cent, something happened and the consignment was impounded.

Customs also visited the warehouse to seal up what was left of the already delivered goods.

There was also a case in Cotonou Ports involving two persons married to two sisters

The other shipped supposed chemicals in a 20-foot container to Cotonou Ports in his company name and gave his wife’s younger sister’s husband the document for the clearing, who in turn gave out the documents to his Cotonou agent. Upon examination, it appeared there was alert on the container from the Brazilian Drug Agency because the container was diligently examined, which led to the discovery of illicit drugs in five of the drums in the container.

The Cotonou agent was arrested promptly who in turn invited the Nigerian who oblivious of the illicit drugs was also arrested. However, the principal upon knowing the bubble has burst, boarded the next available flight out of the country while his brother in- law was tried and convicted and sentenced to a six- year jail term.

The above scenario when viewed within the context of section 136 of Customs and Excise Management Act CEMA, 1958, which states inter alia: “Any person who acts as an agent of an importer, exporter or proprietor of goods shall be personally liable for the payment of any duties payable in respect of those goods and for the performance of all acts under the Customs and Excise laws in relation to those goods as though were exporter or proprietor of those goods as the case may be.”

However, sub section two goes on to state that nothing shall relieve the principal from any liability in case of revenue loss or any malfeasance for that matter”

The sub section one of section 136 captures the Cotonou matter succinctly when it states that ….any person who acts as agent of an importer shall be personally liable for

…duties payable in respect of goods and for the performance of all acts under the

Customs laws in relation to those goods as though were exporter, proprietor or

importer of those goods as the case may be.

The sub section two requires that as an agent, you should be conversant with all customs instructions to enhance good performance.

Agents need to be conversant with the rules and regulations on the importation of goods, tariffs, fiscal policy and current prohibition list etc.

He must also update his knowledge in other human areas such as economics, computer literacy, current rate of duty on goods and contemporary trends in Customs administration.

The brokerage agents are expected to be honest in their declarations, the exact quantities, nature of the goods imported and specific description of the goods must be stated

Therefore, the agent suffered as though he is the importer in this case.

The first case provides a much different issue which had to do with defining who truly the consignee is.

Nonetheless, the case of wrong declaration which led to revenue loss was established since there was no documented relationship between the actual owner the importer except for the fact that the goods was delivered at his warehouse. In the eyes of the law, the consignee is the agent, however, when the actual owner came to terms with the fact that he was about to lose his consignment, he claimed ownership but he disowned the declaration of the agent by disassociating himself with whatever the agent may had done. Therefore, sub section 2 of section 136 of CEMA had to apply which states that the principal is responsible for loss of revenue and all acts or omission of his agent as he is the main beneficiary of the acts of the agent.

*Okey Ogoke, our guest writer and a supply chain expert writes from Lagos