JK NWACHUKWU EXAM REVISION NOTES 2024 EDITIONS PDF

© 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 1 Appointment and Confirmation of BA Adeniyi, establishment of a customs laboratory is a significant MFR as Comptroller-General of Customs milestone, enabling precise identification, verification, and...

© 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 1 Appointment and Confirmation of BA Adeniyi, establishment of a customs laboratory is a significant MFR as Comptroller-General of Customs milestone, enabling precise identification, verification, and classification of goods. Bashir Adewale Adeniyi, MFR was appointed in an acting capacity on June 19, 2023 by His Excellency President Bola Ahmed Tinubu, GCFR. He took over from former CG, Hameed Ali. President Tinubu approved the confirmation of his appointment as the substantive Comptroller-General of the Nigeria Customs Service on October 19, 2023 His confirmation was communicated in an official statement from the office of the Secretary-General of the Federation, signed by Willie Bassey, the Director of Information. CGC’s leadership revolves around consolidation, collaboration, and innovation, driving positive change within the Nigeria Customs Service. Consolidation This involves building on previous gains, streamlining and harmonizing Customs procedures for a sustainable workflow that will enhance the professionalism and integrity of the NCS. The annual CGC Conference, which the CGC revived, serves as a platform for positive discussions and value addition to Customs operations Collaboration This involves partnerships with international partners, local law enforcement agencies, government bodies, media, and other countries’ customs administrations. By fostering dialogue and partnerships, the Nigeria Customs Service (NCS) aims to resolve disputes, enhance revenue generation, and streamline processes. Innovation This involves harnessing the transformative power of data analytics within the NCS. By utilizing data effectively, informed decisions can be made, legal trade facilitated, and service activities streamlined across borders. The proposed © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 2 NIGERIA CUSTOMS SERVICE ACT, 2023 The Act includes provisions that will enable the Nigeria Customs Service (NCS or “the Service”) to meet its key objectives such as generation and collection of revenue, prevention and suppression of smuggling, collaboration with other relevant agencies, facilitation of international trade and economic development. It was obvious that the provisions of the erstwhile CEMA had become inadequate to address pertinent issues in the excise and customs space. The Act, therefore, provides robust legislative amendments that will address these issues, including reforming the administration and management structure of customs and excise operations in the country, and positioning the Service to be dynamic and financially stable to carry-out its functions and mandate under the Act. The recently ratified Nigeria Customs Service Act, 2023, which repealed the Customs and Excise Act of 2023 (CEMA) has promoted innovation and strengthened the modernization of NCS operations, compliance and enforcement. The Act also aligns the Service’s procedures with international best practices as stipulated in the World Trade Organization, World Bank, United Nations, and the World Customs Organization Risk Management Compendium, and is expected improve the effectiveness and efficiency of the Service. The NCS Act has given rise to the recent transition from: The Fast Track 2.0 to the Authorized Economic Operators (AEO) program, where participants benefit from expedited Customs clearance processes; The Advance Ruling System, which aligns NCS operations with global best practices; The introduction of Time Release Study (TRS) to identify bottlenecks in the clearance process and ensure that adequate measures are taken. © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 3 NEW INNOVATIONS IN THE NEW NCS ACT, 2023 9 Board Section 3 The provision is Proceedings more explicit than in CEMA SECTION SIDENOTE REMARK 10 Functions and Section 4 More elaborate 1,2 & 3 Establishment, Scope The Service is now a legal Powers of the in the New Act and Application of NCS entity Board 4 Functions of the Service 11 Delegation of Section 4 (2) Section 7 of the 5 Powers of the Service The powers previously Board’s Powers repealed NCS delegated to the Board in the Board Act also old Act are now to the Service refers to same. subject to Board approval 12 Board subject to Section 5 8 Establishment of control of Departments Minister 13 Limitation of action This was provided for in 30-45 Customs Control Sections 12, 14, against the Board Section 6 of the repealed NCS 15 and 20 Board Act. 46-66 Importation, Sections 12-23 There has been 14 Appointment of CGC Exportation and introduction of and DCGs Transit of Goods stiffer 15 Other Staff of the punishments Service and fines for 16 Appointment of Board offences Secretariat 67 Determination Sections 27-30 17 Pension and Gratuity of Classification, 18 Funds of the Service Valuation and Origin of 19 Expenditure of the Imported and Service Exported Goods 20 Annual Estimates, by the Declarant Accounts and Audits 68 Determination Sections 37 and 21 Annual Reports of Classification, 69 22 Provision of Valuation and Information to the Origin of Service Imported and 23-29 Provision of Premised on furthering the Exported Goods Information by the tenets of the Freedom of by the Declarant Service Information Act. 69-74 Transaction First Schedule 77 Rights of the Service to Value (s) Investigate Value 75 Delay in the First Schedule Claims Determination 78 Origin of Goods of Customs 79 Rules of Origin Value 80 Preferential Rules of 76 Valuation First Schedule Origin Methodology for 81 Non-Preferential Rules the of Origin Determination 82 Evidence of Origin of Goods for 83-94 Customs Debt and Export Payment 103-112 Customs Sections 144-159 Empowers the 95-102 Customs Guarantees Representatives Service to make and Security and AEOs Regulations for 134-141 Special Economic Zone the licensing of Procedure Customs 162-167 Travelers and Duty- Agents as Free Shops opposed to the Minister in 168 Protection of Furthers the implementation of Intellectual Property the Copyrights Act CEMA Rights 113-117 Status of Goods Sections 161-165 The new Act and Customs introduces 193-197 Manufacture of Carbonated Drinks Procedures electronic declaration 118 Release for Free Section 31 COMPARATIVE TABLE OF SECTIONS FROM Circulation REPEALED CEMA AND NCS ACT, 2023 procedure 119 Sale, Disposal or Sections 46, 47 Destruction of and 167 SECTION SIDENOTE EQUIVALENT REMARKS Goods IN NCS IN CEMA 120 Abandonment of Sections 167-169 ACT 2023 Goods 6 Power of Police Section 8 121-133 Warehouse Sections 81-98 officer 142-144 Temporary Section 52 7 Establishment Sections 3 and 4 There is Admission and Membership reduction in the Procedure of the Board membership of 145-147 Drawbacks Sections 137-143 the Board 148-156 Export Sections 12-36 Procedure and © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 4  Coastwise PART XXI Travelers and Duty Free Shops Carriage of PART XXII Protection of Intellectual Property Rights Goods PART XXIII Excise Customs Duties 157-161 Cross-Border Sections 73, 74 Express PART XXIV Manufacture of Spirits eCommerce, and 79 Shipments PART XXV Manufacture of Beer Coastal and provisions are PART XXVI Manufacture of Tobacco and its Substitutes Express new PART XXVII Manufacture of Carbonated Drinks Shipments innovations to PART XXVIII Manufacture of Goods subject to Excise Tax this provision in PART XXIX General Provisions relating to Excise Licenses the new Act PART XXX General Operational Powers and Customs Offences 169-173 Customs Excise Sections 118-135 PART XXXI Seizures, Forfeitures and Condemnation Duties PART XXXII Legal Proceedings relating to Customs Offences 174-182 Manufacture of Sections 99-109 Introduces PART XXXIII Miscellaneous Provisions Spirits stiffer penalties and fines for offences contravening STATUTORY FUNCTIONS this provision 183-187 Manufacture of Same as above 188-192 Spirits Manufacture of Sections 115-117 Same as above The functions of the Nigeria Customs Service include, but Tobacco and its not limited to the following: Substitutes 198-201 Manufacture of Sections 118-120 Same as above Collection of Revenue (Import /Excise Duties & Other Goods other Taxes /Levies) and accounting for same subject to Excise Anti-Smuggling activities Tax Security functions 202-219 General Sections 144-166 Same as above Provisions Generating statistics for planning and Budgetary relating to purposes Excise Licenses Monitoring Foreign Exchange utilisation etc. 220-244 General Sections 144-166 Same as above Operational Engaging in Research, Planning and Enforcement Powers and of Fiscal Policies of Government Customs Manifest processing Offences Licensing and registration of Customs Agents 245-254 Seizures, Sections 167-169 Same as above Forfeitures and Registration and designation of collecting banks Condemnation Working in collaboration with other government 255-273 Legal Sections 173-190 Same as above agencies in all approved ports and border station Proceedings relating to Customs MANDATE OF NCS Offences 274-280 Miscelleous Sections 191-195 Intercept contraband such as illegal drugs and Provisions weapons 281 Interpretation Sections 282 Citation Section 1 Check travellers and their baggage, cargo and mail; assess and collect Customs duties and other taxes on Goods and Services SUMMARY LIST OF NCS ACT 2023 PARTS Protect businesses against illegal trade malpractices PART I Establishment of the NCS, Scope and Application Enforce import and export restriction and PART II Functions and Powers of the NCS prohibitions PART III Governing Board, Membership, Functions and Powers PART IV Establishment of the Management, Staff of the Service, Collect accurate import and export data for Functions and Powers of Management economic statistical usage and planning PART V Financing of Customs Service Operations As the Nigeria gatekeepers, we use intelligence and PART VI Provision of Information for Customs Formalities and Controls risk assessment to target our physical checks on PART VII Customs Service Controls containers, vessels or travellers. PART VIII Importation, Exportation and Transit of Goods Conduct investigations and audits, and prosecute PART IX Determination of Duties and Customs Duties offenders PART X Customs Debt and Payment PART XI Customs Guaranties and Security Work closely with other Government agencies in PART XII Customs Representatives and AEOs accomplishing the collective aim of developing PART XIII Status of Goods and Customs Procedures Nigeria PART XIV Release of Goods PART XV Warehouses PART XVI Special Economic Zone Procedure PART XVII Temporary Admission Procedure PART XVIII Drawbacks PART XIX Export Procedure and Coastwise Carriage of Goods PART XX Cross Border eCommerce, Postal and Express Shipments © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 5 MISSION THE RE-INTRODUCED NATIONAL ANTHEM Nigeria Customs Service is a reference and model Information Details administration with excellence in providing effective and efficient service to accomplish all 📅 Release Date 29 May 2024 dimensions of its mission. ✍️ Composer Lillian Jean Williams That the Service is a modern, compact and dynamic Service that influences policy and contributes to 📜 History Used 1960-1978 Nigeria development. 🔄 Change “and” to “are” That the Service is recognized as being in the vanguard of Customs best practices and No. of Stanzas Three (3) international standards. VISION No. of Lines Eighteen (18) To excel in the efficient and timely collection of and 🎤 Official Line “Nigerians all, are proud to serve” accounting for revenue. 📍 Announcement Abuja, Nigeria Implementation of and advise on Governmental trade and fiscal policies. Bola Ahmed Tinubu, GCFR 🏛️ President Promotion of trade facilitation Protection of Nigerian society, generation of accurate and precise statistical data by developing a professional, transparent administration that implements international best practices and obligations. NCS MANAGEMENT TEAM AS AT 6 JUL 24 BA ADENIYI, MFR CGC DCG FATS DCG SRP DCG HRD DCG T&T FO OKUN JP AJOKU GA ITOTOH CK NIAGWAN DCG EI&I DCG EX.FTZ DCG ACG HQ TRADOC BM JIBO BU NWAFOR SA BOMAI OA ALAJOGUN ZN COORD A ZN COORD ZN COORD ZN COORD B C D SK A SA YUSUF DANGALADIMA CO OBIH ABDULAZEEZ COMDT ACG BOARD ACG F&A ACG TS (NCCSC) AB KC EGWU B IMAM Y SALIHU MOHAMMED ACG SRP ACG ICT-MOD ACG EX. ACG T&T FTZ S CHIROMA KI ADEOLA IQ OGBUDU AAS OLOYEDE (F) (F) ACG T&C ACG HRD ACG EI&I NP UMOH © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 6 THE 2023 CGC CONFERENCE MEASURES OUTLINED BY NCS UNDER OPERATION WHIRLWIND The opening ceremony of the 2023 Comptroller-General of Sharing critical data among agencies Customs (CGG’s) Conference was held on Thursday, 14 Monitoring PMS lifting and delivery December 2023 at the Grand Ballroom, Continental Hotel, Advising independent marketers to automate fleet Lagos. The event was initially scheduled between 13 to 15 management systems December, 2023. Managing the proliferation of fuel stations near border areas. The theme of the 2023 CGC Conference is "Leveraging Data Analytics for Secure and Efficient Trade THE CUSTOMS RETIREE VERIFICATION Facilitation in Customs Operations" SYSTEM (RVS) The Conference focused on harnessing the transformative power of data analytics for the NCS, representing a The Retiree Verification System ( RVS ) is an initiative of significant leap in executing its core mandates. By CGC BA Adeniyi that seeks to significantly replace the strategically integrating data analytics, the NCS aims to traditional analogue methods of verification for retirees. The bolster key functions, from revenue collection to trade RVS is designed to electronically verify retirees, streamline facilitation and enforcement operations. and enhance the efficiency of benefits processing, and ensure that retired officers receive the support and The event showcased instances where data analytics has recognition they deserve for their years of dedicated service. driven process improvements, resulting in more accurate valuations, efficient trade operations, and enhanced risk The sensitization for the enrollment of the automated retiree identification. verification system was done Monday 22 April 2024 at the NCS Conference Room, Headquarters. OBJECTIVES OF THE CGC CONFERENCE  Assessing Service Performance during the year and 2024 EXECUTIVE ORDERS IN NIGERIA strategise for the years ahead.  Strengthening partnership with Stakeholders on the On Wednesday 28 February 2024, his Excellency, operations of the Service. President Bola Ahmed Tinubu, GCFR, signed three  Fostering better collaboration with all Stakeholders Executive Orders on Oil and Gas Reforms as part of the Federal Government of Nigeria’s commitment to improve in the cargo clearance process using modern ICT techniques for trade facilitation and optimum the investment climate and position Nigeria as the preferred revenue drive. investment destination for the Petroleum Sector in Africa.  Assessing the progress of various IT Projects to The Executive Orders (hereinafter referred to as the Orders), enhance qualitative Service delivery. which became effective 28 February 2024, are as follows: 1. Oil and Gas Companies (Tax Incentives, Exemption, LAUNCH AND GOALS OF OPERATION Remission, etc.) Order, 2024 WHIRLWIND 2. Presidential Directive on Local Content Compliance Requirements, 2024 The NCS in collaboration with the Office of the National 3. Presidential Directive on Reduction of Petroleum Sector Security Adviser (ONSA), launched a tactical team code Contracting Costs and Timelines, 2024 named " Operation Whirlwind " aimed at These Executive Orders introduce notable policy directives combating the smuggling of Petroleum Products to the (the Directives) that aim to reform and revitalise the neighbouring countries. Nigerian oil and gas industry by broadly enhancing local content compliance, reducing contracting costs and The CGC on Thursday 22 May 2024, inaugurated a timelines, and providing tax incentives to promote workshop for the newly formed tactical team and kicked off investment in the industry. the operation on Monday 10 June 2024 in Yola, Adamawa with a seizure of 150,950 litres of Premium Motor Spirit (PMS) valued at N105,965,391. On Friday, 28 June 2023, President Tinubu signed a new Executive Order eliminating Tariffs, Excise Duties, and VAT AIMS OF OPERATION WHIRLWIND on imported pharmaceutical inputs. 1. Combat PMS smuggling Specified items contained in the new Executive Order include 2. Increase surveillance and enforcement Active Pharmaceutical Ingredients (API), excipients, other 3. Regulate PMS trafficking across borders essential raw materials required for manufacturing of crucial health products like drugs, syringes and needles, Long-lasting Insecticidal Nets and Rapid Diagnostic Kits, among others. © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 7 NATIONAL SINGLE WINDOW INITIATIVE 3. It enables accessibility to resources and services for Nigerian and international trade actors from different Nigerian agencies in one place. President Bola Ahmed Tinubu, GCFR, on Tuesday April 16, 2024 launched the National Single Window Initiative to 4. It aims to propel the nation’s economy to new heights by enhance revenue generation and streamline import/export facilitating trade and creating a more transparent, secure, and trade process for ease of business. business-friendly environment. NOTE: A Single Window is deemed as the highest standard of excellence in the area of public service delivery. As such 5. Revenue leakage will be prevented and by bringing the a Single Window is a paradigm of governance in which informal e-commerce sector into the fold, the project will traditional government regulatory functions are re- increase the tax base, contributing to government revenue. engineered into transparent, efficient and predictable services to meet the needs and expectations of citizens and 6. An ambitious $2.7bn is expected annually as economic businesses. benefits from the implementation of the project The Nigeria’s NSW initiative is projected to link 7. Small enterprises have the chance to expand their opportunities and can potentially reach global markets more Nigerian ports, government agencies, and key stakeholders, easily while contributing to economic development. creating a seamless and efficient system that will facilitate trade like never before. The NSW is not just about Nigeria, 8. The National Single Window promises to create a more by linking our system with those of other African nations, transparent and secure trade environment, which could Nigeria will expedite cargo movement and optimize intra- enhance trust and confidence among trade actors and Africa trade. investors. A crucial component of the NSW initiative is data FISCAL INCENTIVES FOR THE PRESIDENTIAL harmonization, which involves enabling efficient GAS GROWTH INITIATIVE capture, definition, analysis, and reconciliation of regulatory trade documents within one unified technological mechanism. It is believed that the NSW will reduce barriers The Honourable Minister of Finance and the Coordinating to efficient timing, improve economic metrics, increase Minister of the Economy (“the Minister”) on 7th December transparency, reduce trade costs, and boost revenue. 2023, issued a Circular (F.1781/T/39) titled “Fiscal Incentives for the Presidential Gas for Growth Initiative” to several heads of parastatals, associations and councils. The directives in the Circular seek to boost gas utilisation in Nigeria’s local market and enhance its investment landscape as several eligible gas-related equipment or items are now exempt from Import Duty and Value Added Tax (VAT). The overarching goal of the initiative is to create a conducive environment for increased investment in the gas sector and increased supply and utilization of gas, thereby contributing to the nation’s economic development. This is in line with the Federal Government’s stated commitment to improving the investment climate in Nigeria. KEY HIGHLIGHTS OF THE NATIONAL SINGLE WINDOW INITIATIVE NOTE: Fiscal incentives are measures used by governments to stimulate economic activity and investment. They can 1. It is a single portal (website) for trade-related services take various forms, including: which streamlines processes and reduces bureaucratic  Financial incentives, such as grants and loans. hurdles, saving time and resources for businesses.  Tax incentives, such as tax holidays and reduced tax 2. The Secretariat is domiciled at the Federal Inland Revenue rates. Service (FIRS) and the funding would be drawn from the  Other incentives, such as subsidized infrastructure Nigerian Sovereign Wealth Funds (SWFs). and regulatory concessions. These incentives aim to support economic growth and development © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 8  41 ELIGIBLE ITEMS FOR EXEMPTION FROM IMPORT DUTY AND VALUE ADDED TAX (VAT) UNDER THE PRESIDENTIAL GAS FOR GROWTH INITIATIVE S/NO COMMODITY DESCRIPTION HS CODE 1 CNG/LPG Dual Fuel Vehicles 8703.90.00.00 2 Dedicated LPG Vehicles and Dedicated CNG 8703.90.00.00 Vehicles 3 Parts, and semi-knocked down units (for 87.02 assembly) of CNG and LPG Buses 4 Parts, and semi-knocked down units (for 8703.80.11.00 assembly) of Electric Vehicles 5 Electric Vehicles 8703.80.19.00 6 LPG/CNG Conversion Kits 8419.90.00.00 7 CNG and LPG Cylinders. 7311.00.00.00 8 CNG and LPG Cascades 7311.00.00.00 9 CNG and LPG Dispensers 8413.81.00.00 10 Gas Generators 8502.39.20.00 BREAK DOWN OF THE 5 KEY FISCAL INCENTIVES 11 LPG and CNG Trucks (Bobtails and 87.16 Bridgers; fixed axle and semi-trailers) ARE AS FOLLOWS: 12 Steel Pipe 7304.11.00.00 13 Steel Valves & Fittings 84.81 1. Import Duty Waiver: All items of equipment imported 14 SS Tubes & Fittings 7304.11.00.00 relating to Compressed Natural Gas (CNG) and Liquefied 15 Storage Tanks (all sizes) 73.09 16 Regulators 84.81 Petroleum Gas (LPG) will now be at zero percent duty rate. 17 CNG and LPG Pumps and Compressors (all 8414.80 types) 2. Zero Percent VAT: The following items are subject to 18 Steel 72.04 zero-rated VAT: 19 Pressure Relief Valves 8481.10.00.00 20 Hydraulic press/R0lling machine 8430 21 Heat Treatment Equipment 8417.10.00.00  Feed Gas for all processed gas. 22 Liquid Level Guage 90.26  Compressed Natural Gas. 23 Pumping Housing and Motors 8413.91.90.00  Imported Liquified Petroleum Gas. 24 Regulator Body 84.81 25 Pressure Guage 90.26  Compressed Natural Gas (CNG) equipment 26 Truck Chassis 87.06 components, conversion, and installation services. 27 Metering and Measuring Equipment 90.26  Liquefied Petroleum Gas (LPG) equipment (including weighbridges, filling scales) components, conversion, and installation services. 28 Dispensing equipment (dispensing scales, 8413.11 nozzles, gas filling systems)  vi. All equipment and infrastructure related to the 29 Safety Features (emergency shutoff valves, 84.81 expansion of CNG, LPG, and the Presidential CNG pressure relief valves, excess flow valves, Initiative, including conversion kits breakaway couplings, quick release couplings) 30 Gas water heaters 8419.11.00.00 3. Letter of Support: Importers of Compressed Natural Gas 31 Gas burners for industry 8417.80.00.00 equipment seeking exemption from import and customs duty 32 Gas boilers 8403.10.00.00 are required to obtain a letter of support from the Office of 33 Gas washing machines and dryers 84.50 & 84.51 (launderettes) the Special Adviser to the President on Energy. 34 CNG and LPG hoses 39.17&40.09 35 CNG and LPG truck heads 87.01 4. Import Duty and VAT Exemption for LPG: 36 Gas Leak Detectors 9031.49.00.00 Importation of LPG under HS Codes 2711.12.00.00, 37 Gas air conditioners 84.15 38 Cylinder refurbishment equipment 2711.13.00.00, and 2711.19.00.00 are exempt from both 39 Blending skid/unit. 84.79 Import Duty and Value-Added Tax. 40 Odourizing unit 84.79 41 Chromatography unit (GC) 84.79 5. Withdrawal of Debit Notes: Debit Notes issued to Petroleum Marketers, who imported LPG using codes ADVANCE RULING 2711.1.2.00.00 and 2711.13.00.00 from August 26, 2019, to the present date, should be withdrawn by the Nigeria Legal Framework: Section 24 sub-sections 1-9 of the new Customs Service in line with the previous approval. NCS Act 2023 No 35, and Article 3 of the World Trade Organisation (WTO) Trade Facilitation Agreement (TFA). NOTE: A total of 41 equipment categories were captured in the Circular’s appendix showing ‘Extended Exemption List’ of items exempted from import duty and VAT, along An Advance Ruling (AR) is a decision with their Common External Tariff (CET) Codes. provided by the customs authority in advance of a trade transaction. It offers clarity on the classification, valuation, © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 9 and origin of goods, providing businesses with predictability decision will be applied at the moment of the importation or in customs processes. exportation. It can also be defined as a concept wherein the Customs The most common area for binding rulings is tariff Administration provides a written decision upon request classification, however, origin and valuation rulings are also from the importer concerning valuation, tariff classification, common. With regard to tariff classification, for example, or origin of goods before they are imported. this system helps operators obtain the correct tariff classification for the goods they plan to import or export. The Nigeria Customs Service (NCS) on Friday 25 August, 2023 established a Standard Operating Procedure (SOP) for the implementation of Advance Ruling. The decision was This is clearly an important factor, given that the tariff reached during the 6th Management Meeting of the NCS heading of the goods determines the rate of the Customs held on August 23, 2023. duties as well as the application of the different legal provisions (import/export licenses, rules of origin, anti- The AR Project was launched in conjunction with the dumping duties, security standards, etc.). The use of such a Nigerian Energy Support Programme (NESP) on Thursday, ruling will also help importers and exporters in facilitating 2nd May 2024, at Envoy Avenue in Abuja. the clearance formalities for their goods and will consequently expedite the goods’ release. Advance Ruling has been proven to be a valuable tool for trade facilitation, benefiting both Customs administration and traders.  It enhances predictability and certainty in Customs treatment for goods.  The procedure also promotes cooperation and confidence between Customs and traders, following the guidelines set out by the World Customs Organisation Safe Framework of Standards. THE WCO BASIC ELEMENTS OF AR PROCEDURE The NCS SOP on Advance Ruling aligns with the CAN BE SUMMARIZED AS FOLLOWS: principles outlined in the Revised Kyoto Convention of 2006 and the WTO Trade Facilitation Agreement of 2017. 1. The request must supply the administration with all the information required (detailed description of the goods, information enabling the determination of the origin or the customs value of the goods, possible inclusion of samples, plans, various documents, etc.). Should the request contain inaccurate or incomplete information, the ruling based on such information could be revoked. 2. The ruling must be issued by the competent authority in writing within a specified period; 3. The ruling is binding on the administration following its issue and is valid for a specified period. However, in some cases (issuing of a new regulation, amendment of the interpretation of the nomenclature at international level, etc.), this decision ceases to be valid. The ruling may also be made binding on the applicant; 4. Only the holder of the binding ruling can call upon its application, provided that he/she demonstrates that the goods presented and the goods described in the decision The expression “binding ruling” (or “advance ruling”) correspond in every respect; generally designates the option for Customs to issue a decision, at the request of an economic operator planning a 5. These decisions are generally made public (except from foreign trade operation, relating to the regulations in force. confidential information) to ensure transparency and The main benefit for the holder is the legal guarantee that the equality of treatment of operators as well as the uniform application of the regulations. © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 10 AUTHORIZED ECONOMIC OPERATOR (AEO) prescreened, the assumption is that it’s more likely to be a safe import, versus one where more/all of the parties are not The Authorized Economic Operator (AEO) was introduced prescreened. Ultimately, it allows items deemed safe to enter into the country of import quicker. by the World Customs Organization (WCO) in 2007 under the WCO’s Flagship Customs Business Partnership Agreement, which is used by Customs administrations to secure and facilitate global trade and supply chain security. AEO is a trade facilitation scheme for ease of doing business in light of international development. It is a designation which may be granted by customs authorities to economic operators established in the customs territory. AEOs are part of the international supply chain, involved in customs-related operations and who have met certain standards of security and compliance. AEO participants involved in global trade, including importers, exporters, shipping agents, customs brokers and warehouse operators, benefit from preferential treatment from customs authorities. Benefits include expedited clearance times, fewer examinations, improved security and communication between supply chain partners, and more. The AEO program is a keystone in NCS efforts to balance streamlined trade with rigorous security protocols. This program aims to streamline clearance of goods and eliminate illegal activities. AEO CERTIFICATION As defined by the WCO , “the Authorized Economic This is a status granted by national customs administrations Operator (AEO) is a party involved in the international to companies involved in the international movement of movement of goods in whatever function that has been goods that comply with certain security standards. approved by or on behalf of a national customs administration as complying with WCO or equivalent supply TYPES OF AEO CERTIFICATIONS chain security standards.” Those standards relate to the following areas: There are two (2) types of AEO Certification  Demonstrated compliance with customs requirements 1. AEO Simplified  Satisfactory system for management of commercial 2. AEO Security records  Financial viability AEO SIMPLIFIED  Consultation, cooperation and communication  Education, training and awareness AEO Simplified authorisation is issued to an economic  Information exchange, access and confidentiality operator who fulfils the criteria of customs compliance (with  Cargo security a compliance score of > 5, but < 10 on the NCS trader  Conveyance security segmentation rating), appropriate record keeping standards,  Premises security financial solvency and practical standards of competence /  Personnel security professional qualifications.  Trading partner security  Crisis management and incident recovery BENEFITS OF AEO SIMPLIFIED  Measurement, analysis and improvement  NICIS clearance on the blue lane  Customs control after clearance at their premises This partnership allows all the parties in a supply chain to  Renewal of AEO certificates after 3 years be vetted and approved by the import country's customs  Access to dedicated Customs personnel authority. If an exporter has supply chain partners (carriers,  Expedited PAAR registration (Average 36 hours, forwarders, or anyone touching their freight) that have been AEO + 3 hours at most) © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 11   Priority use of non-intrusive inspection if cargo is WCO TIME RELEASE STUDY (TRS) selected for random check  AEO branding to improve competitive advantage  Dedicated exit lanes from port premises The first TRS was conducted in February 1991 under  Prioritized acknowledgement of gate pass or exit Japan-US Structural Impediment Initiative (SII). pass (Not allowed to queue)  Use of barge & rail operations to expedite cargo Time Release Study ( TRS ) is a strategic and release through specified routes internationally recognized tool developed by the WCO for  Dedicated parking spaces in Customs premises the clearance of goods from arrival until the physical release  Dedicated FOU escorts of cargo.  Cargo tracking AEO – SECURITY An AEO Security authorization is issued to an economic operator who fulfils the criteria of customs compliance (with a compliance score of < 5 on the NCS trader segmentation rating), appropriate record keeping standards, financial solvency and maintains appropriate security and safety standards. The holder of an AEO Security is recognised as an economic operator who has taken appropriate measures to secure their business and is thus a reliable actor in the international supply chain both from the customs perspective and from the perspective of their business partners. BENEFITS OF AEO SECURITY The WCO defined TRS as “a strategic and internationally recognized tool to measure the actual time  Renewal of AEO certificate after 5 years required for the release and/or clearance of goods, from the  AEO branding time of arrival until the physical release of cargo, with a  NICIS clearance on the green lane view to finding bottlenecks in the trade flow  Prioritized acknowledgement of gate pass or exit process and taking necessary measures to improve the pass (Not allowed to queue) effectiveness and efficiency of border procedures”.  Priority use of non-intrusive inspection if cargo is selected for random check In general context, the TRS is a unique tool that countries  Access to dedicated Customs personnel are recommended to utilize in order to: measure the actual  Priority processing during periods of elevated time required from the arrival of goods to their physical threats release; assess the efficiency and effectiveness of each actor  Dedicated exit lanes from port premises in the flow process of cargo; identify bottlenecks affecting  Dedicated parking space in Customs premises the release of goods; obtain empirical evidence for re-  Use of barge & rail operations to expedite cargo engineering existing procedures; identify opportunities for release through specified routes border management improvement; establish a baseline for  No FOU escorts border management performance measurement; and to  Cargo tracking improve border process efficiency in a periodic manner. NOTE: The WCO TRS is specifically referenced in Article The 6th World Customs Organization Global Authorized 7.6 of the WTO Trade Facilitation Agreement (TFA) Economic Operators Conference took place in Shenzhen, as a tool for Members to measure and publish the average China. The CGC on Wednesday 8 May 2024, during a panel release time of goods. The TRS is being increasingly used discussion gave an insight into the recently launched Pilot Authorized Economic Operator (AEO) program in Nigeria. by Members with respect to strategic planning and the proper sequencing of TFA measures in accordance with their National Committees on Trade Facilitation (NCTF). © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 12  6. Measuring the arithmetic mean and/or median time Nigeria launched the TRS at the Tin Can Island between the arrival of the goods and their release into the Port in Lagos on 8 February 2024 as the first TRS of economy; several TRS across multiple border posts and involving key 7. Estimating with precision, based on a standardized stakeholders beyond Customs. system, the time required for each intervening event between arrival and release of the goods, i.e. unloading, storage, submission of the declaration, inspection, interventions by other government agencies and release of goods; 8. Comparing the results obtained from previous Studies, especially following the introduction of policies or changes relating to Customs or border procedures (such as modernization, reform or trade facilitation programmes), to observe their progressive impact; 9. Collaborating on the TRS with neighbouring countries sharing borders, as well as others within a Customs/Economic Union or otherwise, in order to identify bottlenecks at common border crossings or in a supply chain from export to import (including transit), and to take necessary coordinated corrective measures and implement solutions; The TRS measures the total time needed to complete all 10. Promoting the image of Customs administrations and formalities. In other words, it can determine with precision other trade stakeholders with regard to commitment to trade the time for each separate procedure, such as the average facilitation; time needed to prepare documents and to complete the formalities for each stakeholder responsible, and other 11. Exploring opportunities to introduce WCO modern average times in the movement of cargo between two or standards and instruments related to Customs and other more countries along the international supply chain. border regulatory processes; 12. Monitoring and evaluating the implementation of the OBJECTIVES AND IMPORTANT FEATURES OF WTO TFA; TRS 13. Promoting coordinated border management; 14. Implementing the Single Window environment; Although countries conducting a TRS may have several objectives, the overriding or principal objective is to identify 15. Introducing realistic policies related to service standard and address bottlenecks in procedures related to the levels or client charters in Customs and other government international movement of cargo. This objective remains agencies crucial, both for the current international trade environment, and for how that environment might change in future. TRS INVOLVES THE NCS AND THE FOLLOWING OGAs 1. Measuring the overall performance of Customs and other stakeholders’ business processes; i. Federal Ministry of Industry, Trade and Investment (FMITI) 2. Identifying bottlenecks in the international supply chain ii. National Agency for Food and Drugs Administration and/or constraints affecting the release of goods, including Control (NAFDAC) with regard to the flow of information, documents and iii. National Trade Facilitation Committee (NTFC) finance; iv. National Drug Law Enforcement Agency (NDLEA) 3. Assessing newly introduced and modified policies, v. Standard Organisation of Nigeria (SON) procedures, techniques, technologies and infrastructure, or vi. Nigeria Agricultural Quarantine Service (NAQS) administrative changes; vii. Nigeria Ports Authority (NPA) 4. Establishing a baseline for trade facilitation performance PRIVATE SECTORS INVOLVED ARE measurement; i. Chambers of Commerce 5. Identifying opportunities for trade facilitation ii. Clearing Agents improvements; iii. Freight Forwarders iv. Express Couriers v. Transporters © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 13 WCO SAFE FRAMEWORK OF STANDARDS recognition of Authorized Economic Operators (AEOs), and mutual administrative assistance. 6. Strengthen co-operation between Customs In 2005, the World Customs Organization (WCO) created administrations and other Government agencies involved in the SAFE Framework of Standards to Secure and Facilitate international trade and security such as through Single Global Trade, which includes the Authorized Economic Window. Operator Program (AEO). 7. Strengthen Customs/Business co-operation. The SAFE Framework sets forth the principles and the 8. Promote the seamless movement of goods through standards and presents them for adoption as a minimal secure international trade supply chains. threshold of what should be done by WCO Members. Pillar 1 – Customs-to-Customs Standard 1 – Integrated Supply Chain Management The Framework has since been regularly updated to Standard 2 – Cargo Inspection Authority effectively address new and emerging developments in the Standard 3 – Modern Technology in Inspection Equipment international supply chain. Notable additions were Standard 4 – Risk-Management Systems provisions on Authorized Economic Operators (AEO), Standard 5 - Selectivity, profiling and targeting Coordinated Border Management and Trade Continuity and Standard 6 – Advance Electronic Information Resumption, Pillar 3 (Customs-to-Other Government and Standard 7 – Targeting and Communication Inter-Government Agencies), and Pre-loading Advance Standard 8 – Performance Measures Cargo Information (ACI) for air cargo. Standard 9 – Security Assessments Standard 10 – Employee Integrity OBJECTIVES AND PRINCIPLES OF THE SAFE Standard 11 – Outbound Security Inspections FRAMEWORK Pillar 2 – Customs-to-Business The SAFE Framework aims to: Standard 1 – Partnership Standard 2 – Security 1. Establish standards that provide supply chain security Standard 3 – Authorization and facilitation at a global level to promote certainty and Standard 4 – Technology predictability. Standard 5 – Communication 2. Enable integrated and harmonized supply chain Standard 6 – Facilitation management for all modes of transport. 3. Enhance the role, functions and capabilities of Customs Pillar 3 - Customs to Other Government and Inter- to meet the challenges and opportunities of the 21st Government Agencies Century. Standard 1 - Mutual Cooperation 4. Strengthen co-operation between Customs Standard 2 - Cooperative Arrangements/Procedures administrations to improve their capability to detect high- Standard 3 - Alignment of security programmes risk consignments. Standard 4 - Harmonization of national control measures 5. Strengthen co-operation between Customs Standard 5 - Development of continuity and resumptions administrations, for example through exchange of measures information, mutual recognition of controls, mutual Standard 6 – Harmonization of data filing requirements Standard 7 - Mutual Cooperation © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 14 Standard 8 - Development of Cooperative Arrangements or ICD THEMES 2009 – 2024 Protocols Standard 9 - Harmonization of security programmes 2024 Theme - Customs Engaging Traditional and New Standard 10 - Harmonization of cross-border control Partners with Purpose measures Standard 11 - Establishment of Mutual Cooperation 2023 Theme - Nurturing the Next Generation: Promoting a Standard 12 - Development of cooperative arrangements or Culture of Knowledge-sharing and Professional Pride in protocols Customs FIVE CORE ELEMENTS OF THE SAFE FRAMEWORK 2022 Theme - Scaling up Customs Digital Transformation by Embracing a Data Culture and Building a Data Ecosystem 2021 Theme - Customs bolstering Recovery, Renewal and Resilience for a sustainable supply chain 2020 Theme - Customs fostering Sustainability for People, Prosperity and the Planet 2019 Theme - SMART borders for seamless Trade, Travel and Transport 2018 Theme - A secure business environment for economic development 2017 Theme - Data Analysis for Effective Border 1. Advanced Information - It harmonizes the advance Management electronic cargo information requirements on inbound, outbound and transit shipments. 2016 Theme - Digital Customs: Progressive Engagement 2. Risk Management - Each country that joins the SAFE 2015 Theme - Coordinated Border Management: an Framework commits to employing a consistent risk inclusive approach for connecting stakeholders management approach to address security threats. 2014 Theme - Communication: sharing information for 3. Non-Intrusive Inspection - Third, it requires that at the better cooperation reasonable request of the receiving nation, based upon a comparable risk targeting methodology, the sending nation's 2013 Theme - Innovation for Customs progress Customs administration will perform an outbound inspection of high-risk cargo and/or transport conveyances, 2012 Theme - Borders divide, Customs connects preferably using non-intrusive detection equipment such as large-scale X-ray machines and radiation detectors. 2011 Theme - Knowledge, a catalyst for Customs 4. Benefits to Businesses - The SAFE Framework suggests excellence benefits that Customs will provide to businesses that meet minimal supply chain security standards and best practices 2010 Theme - Customs and Business: improving (AEO). performance through partnerships 5. Strategic Alliance - It promotes close cooperation with 2009 Theme - Customs and the environment: protecting our other governmental agencies representing different natural heritage regulatory areas, in order to keep societies safe and secure while facilitating the movement of goods. © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 15 REVENUE COLLECTION KEY CHANGES IN CUSTOMS VARIATION ORDER 2023 The Nigeria Customs Service is empowered by Section 4 Suspension of the application of the green tax surcharge of the NCS ACT 2023 to collect and account for revenue – Import Adjustment Tax (IAT) levy on Motor Vehicles from Import duties, Excise duties, and other taxes and levies. as contained in the 1st Schedule of the Customs Order. The table below shows the taxes payable and their respective Suspension of the application of the revised excise tax tax bases: rates on alcoholic beverages, tobacco, SCOPE & telecommunication services and Single Use Plastics tax TYPE OF TAX BASE REMARK as contained in the 5th Schedule of the Customs Order. TAX Import CIF % of Cost value, Insurance and Freight, Duty determined by the HS Tariff 2024 AMENDMENTS TO THE HARMONIZED 7% Import Duty 7% of the Import Duty as Port charges SYSTEM EXPLANATORY NOTES – Surcharge HS COMMITTEE 73RD SESSION 0.5% CIF Tax imposed on goods imported from ETLS non-ECOWAS member countries into 1% CISS FOB ECOWAS member country Applies to transactions covered by Click toSEE LIST that contains the decisions taken PAAR by the Harmonized System Committee (73rd Session – VAT CIF + all the (CIF+Duty+CISS+ETLS+Levies) X other charges 7.5% March 2024) concerning amendments to the Levies CIF These are supplemental taxes imposed on Harmonized System Explanatory Notes, applicable as of selected imports such as Automobiles 1 June 2024. etc. Excise Duty applicable on beer and stout, wines, Duty spirits, cigarettes, carbonated drinks and COMMON EXTERNAL TARIFF (2022-2026) homogenized tobacco manufactured in or imported into Nigeria 2024 – 2026 FISCAL ITEMS (REVENUE HEADS) Federation Federation Non-Federation Account Account Levies Account Import Duty CET Levy 7% Surcharge Excise Duty Wheat Flour 5% Sugar Levy Fees/Penalties Wheat Grain 1% CISS Tile Levy 0.5% ETLS Wood Levy 10% Iron /Steel Levy Ceramic Levy Ceramic Levy Brown Rice 1% NESS Polished Rice Levy 35% Automotive Levy 30% Sanitary wares 100% Rice Levy SCHEDULES IN THE CET 30% Wine Levy Schedule 1 – Import Duty. 30% Textile Levy 100% Cigarette Levy Schedule 2 – Exemption from Import Duty. Schedule 3 – Import Prohibition (Trade) KEY CHANGES IN FINANCE ACT ORDER 2023 Schedule 4 – Absolute Prohibition (other than Trade) Schedule 5 – Excise Duty. The effective date is September 1, 2023 Schedule 6 – Export Prohibition. Schedule 7 – Goods Exempted from Excise. => Imposition of 0.5 per cent levy on goods imported into Schedule 8 – Value of Goods. Nigeria from outside Africa => Companies appointed to withhold Value Added Tax BREAKDOWN OF THE CET SCHEDULES (VAT) at source are to remit such VAT to the Federal Inland Revenue Service (FIRS) on or before the 14th day of the Schedule 1 - Import Duty: Covers the parts of the tariff that following month among others. are used to determine the proper tax rates for items that are imported, including sections, chapters, headings, and subheadings. Customs, Excise Tariff (Variation) (Amendment) Order 2023 Schedule 2 - Exemption from Import Duty: Lists the items, such as personal, diplomatic, and presidential goods, that are The commencement date is August 1, 2023. exempted from import duties. © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 16 Schedule 3 - Import Prohibition (Trade): Lists the items that are prohibited from being imported in commercial quantities, such as Used Motor Vehicles above twelve (12) years from the year of manufacture, frozen chicken, etc. Schedule 4 - Absolute Prohibition: Outlines the items whose importation is prohibited in any quantity, such as Second-hand clothing, Pistols disguised in any form, blank invoices etc. Schedule 5 - Excise Duty: Focuses on products like tobacco, cigarettes, and fizzy drinks whose manufacturing in Nigeria necessitates the payment of excise duty. Schedule 6 - Export Prohibition: Lists all the items whose exportation is not allowed, such as scrap metal, maize, and hides and skins. Schedule 7 - Goods Exempted from Excise Duty: Covers HIGHLIGHTS OF NIGERIA’S 2022 & 2023 FISCAL commodities made in Nigeria that are not subject to excise POLICY MEASURES (FPM) taxes, such as products that are considered necessities or are used in other industrial processes. The 2023 Approved SPM has 3 Annexes Schedule 8 - Value of Goods: Focuses on how products should Annex I: Import Adjustment Tax (IAT) list with be valued in order to determine excise duty. additional taxes (Levy) on 189 tariff lines of the extant ECOWAS CET. Aids to Classification Annex II: Import Prohibition list (Trade), applicable only to certain goods originating from non-ECOWAS Alphabetical Index Member States. Explanatory Notes Annex III: National list consisting of items with Compendium of Opinion Index to Six Digit Guide reduced import duty rates to promote and stimulate HS (The Tariff) growth in critical sectors of the economy. Chemical Analysis REVIEWED EXCISE DUTY RATES (EFFECTIVE 1ST JUNE, 2023) Some Changes to CET S/N PRODUCT AD-VALOREM SPECIFIC RATE NCS migrated from the old version of CET 2017-2021 RATE to the new version 2022-2026 on Friday 1 April, 2022. 1. Beer & Stout ₦45/ltr NCS retained duty rate of 20% for Used Vehicles with 2. Wines 20% ₦60/ltr (Alcoholic) NAC Levy of 15% 3. Spirits and other 20% ₦65/ltr New Vehicles pay same 20% with NAC Levy of 20%. Alcoholic NCS has also activated the use of Chapters 98 and 99 beverages of the CET. 4. Tobacco 30% ₦4.70k/stick (Cigarettes) => In Chapter 98 of the current ECOWAS CET : 5. Other Smoking ₦1,500/kg Tobacco ₦3,500/ltr Bonafide Assemblers (in Nigeria) importing CKD enjoys concession of 0% Duty while those importing SKD enjoys concession of 10% Duty rate SPM 2022 Within ECOWAS those importing CKD enjoys 5% while for SKD is concession of 10% Duty rate. The Fiscal Policy is made up of Supplementary Protection Measures (SPM) for the implementation of => Chapters 98 and 99 in Nigeria’s case promotes: ECOWAS CET 2002-2026 and Excise duties on Non- Alcoholic beverages, Alcoholic beverages, Cigarettes Industrialization through sectoral and sub sectoral and Tobacco products as well as Telecommunication incentives for members targeted at economic growth Services. Enhancement of security The New Excise Duty Rate on FPM 2022 took effect Minimized consumption of unwholesome goods from 1 June, 2022 Effective date for 2022 FPM is 1 April 2022 © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 17 THE APPROVED SPM HAS 5 ANNEXES GENERAL RULES FOR THE INTERPRETATION OF THE HARMONIZED SYSTEM Annex I: Import Adjustment Tax (IAT) list with additional taxes (Levy) on 172 tariff lines of the extant The General Rules for the Interpretation of the Harmonized ECOWAS CET System ( GIR) provide guidelines for classifying goods Annex II: Import Prohibition list (Trade) applicable in the Harmonized Commodity Description and Coding only to certain goods originating from non-ECOWAS States System ( HS). These rules ensure consistent legal Annex III: National list consisting of items with interpretation for proper classification. There are six of these reduced import duty rates to promote and stimulate rules, known as the General Interpretative Rules (GIRs), and growth in critical sectors of the economy. they must be applied sequentially Annex IV: Proposed Review of Excise Duty on KEY POINTS TO NOTE: Selected Items in 2022. => Rules 1 to 4 are related and must be applied in Sequential Annex V: Proposed Revised List of Medical Supplies Exempted from Import Duty and VAT for COVID-19 Order under 2022 FPM. => Rule 1 is to be taken into consideration first. Chapter 99 in ECOWAS CET has been activated in Nigeria => Rules 1 to 5 are used to determine the 4 digits of the to provide for National list consisting of items with Import Duty Reduction. commodity code (heading). => Rule 6 - to determine the digits 5 and 6 (subheading). The Concessionary Import Duty under Chapter 99 is accessible to ONLY Verifiable Investors/Manufacturers => Rules 5 to 6 stand on their own to be applied as needed. who require them as inputs for production. “All goods imported” from the Export Prohibition List (Schedule 6) of CET has been removed by Mr President. Goods from outside the ECOWAS Customs Union can now be imported into Nigeria and re-exported to other countries subject to payment of a 2.5% export surcharge on the present value of the goods. Exporters also need to obtain approval from FMFBNP for this to stand. Exemption of these items from ID and VAT is subject to importers obtaining Letter of Support from FMH and IDEC from FMFBNP through the IDEC Portal. Containers of “Iron and Steel for Compressed or Liquified Gas” have been removed from the Revised Import Prohibition List. => Goods must first be classified in the 4-digit HS heading whose terms most specifically describe the goods (unless otherwise required or directed by the GIRs) and Only 4-digit headings are comparable: Do not compare a heading description with a subheading description. © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 18 PROCESS OF CLASSIFICATION GIR 2 (b) provides that each heading which relates to a particular material or substance shall also apply to the Once again, in every case, the goods must first be classified mixtures and combinations consisting of it. in the appropriate 4-digit HS heading, followed by the appropriate 1-dash subheading, and the appropriate 2-dash Examples => Milk to which vitamins or minerals have been added. subheading and so on. You should not proceed directly to the => A pack of cornflakes which also contains a small lower-level subheadings without first determining the amount of nuts and raisins. appropriate heading. RULE 3, POINTS (A), (B) & (C) Rule 3 applies when the goods are classifiable under two or more headings. Points (a), (b) and (c) of the Rule 3 shall be applied sequentially. RULE 1 Most goods are classifiable under the GIR 1. It provides GIR 3 (a) states that the heading which provides the most specific description shall be preferred. that the classification is determined principally by the terms of the headings and the relative section or chapter notes. Example: Mint tea is not stated specifically, as a product, in the Tariff. Although the product descriptions available Example of Terms of the Headings, Section/Chapter are mint and tea, the importer must classify mint tea under Notes the appropriate tea Heading because it provides the most specific product description and mint is only the flavour of the tea. GIR 3 (b) applies to the classification of mixtures or sets in respect of the material or component which gives them their essential character. Example: An importer bringing in "liquor gift sets" (that include the bottle of liquor and glasses) must classify the goods under the appropriate liquor Heading. The essential character of the item is the liquor itself and not the glasses contained within the set. GIR3 (c) is used when the goods cannot be classified Example of GIR 1 by reference to 3 (a) or (b). Such goods shall be classified under the heading which occurs last in numerical order If a provision specifically and completely describes a among those which equally merit consideration. product, then the product would be classified in that provision (e.g., fresh grapes are classified under heading Example: A gift set which includes socks (Heading number 0806 which provides for “grapes, fresh or dried”). In this 6115) and ties (Heading number 6117) cannot be classified situation, the product is classified by the terms of a heading. by the previous rule since neither item gives the gift set its essential character. The gift set must be classified under the * Live poultry (heading 01.05) Heading number for ties which is the Heading that occurs last in numerical order. RULE 2 POINTS (A) & (B) RULE 4 GIR 2 (a) applies to the classification of goods which Goods which cannot be classified in accordance with the are incomplete or unfinished but have the essential character above Rules shall be classified under the heading appropriate of the complete or finished article. to the goods to which they are most akin. Examples: Explanation: This is a "last resort" rule, most often used => A car without wheels, is considered as a complete car. with new products. => A complete set of wooden panels meant for assembly into a cupboard, is considered as a finished cupboard. © 2024 CSC JK Nwachukwu, FCAI | www.jkn.ng 19 Example: Exhaust Air Jack (heading 84.25) Credit: eBay.com GIR5 (b) Subject to the provisions of Rule 5 (a) above, packing materials and packing containers presented with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision does not apply when such packing materials or packing containers are clearly suitable for repetitive use. Credit: eBay.com Explanation: Rule 5 (b) deals with other types of containers and packing materials. These should be classified with the RULE 5 goods they contain if they are of a kind normally used for packing such goods and are not suitable for repetitive use. GIR5 (a) Camera cases, musical instrument cases, Example: Men’s shirts individually sealed in a polybag then gun cases, drawing instrument cases, necklace cases and packed in cardboard boxes similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and presented with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This Rule does not, however, apply to containers which give the whole its essential character; Explanation: Rule 5 specifies how to classify containers. Rule 5 (a) deals with containers which: => are shaped or fitted for the article they will contain, Credit: Customs Legal Office => are suitable for long-term use, RULE 6 => protect the article when not in use, => are of a kind normally sold with such articles, For legal purposes, the classification of goods in the => are presented with the articles they are designed to subheadings of a heading shall be determined according to contain. the terms of those subheadings and any related Subheading Notes and mutatis mutandis, to the above Rules, on the Containers which have these characteristics can be classified understanding that only subheadings at the same level are with the products which they contain. However, in cases comparable. For the purpose of this Rule the relative Section where the container gives the product its essential character, and Chapter Notes also apply, unless the context otherwise it would be the container which would have to be classified. requires. Example: Rule 5 (a) would apply to flute cases because Simply Put: Classification of goods in the subheadings of a flutes are normally sold with their cases (due to their specific heading shall be determined according to the terms of those shape) and are intended f