9 Most Important Shipping Documents in Nigeria’s Import Trade Logistics
As it applies globally, the importation of all legitimate cargoes into Nigeria requires both general and product-specific documents for seamless clearance and release to the importer or shipper. While this is a demonstration of compliance with trade regulations, inaccurate or incorrect documentation, such as wrong valuation, classification, inaccurate invoicing, misinformation, or disinformation in shipping documents or failure to obtain the appropriate import licenses or permits can attract very costly sanctions. Document accuracy promotes compliance with extant trade laws and regulations, logistics efficiency, transparency, compliance, trust between shippers and their agents.
Having established the importance of documentation in shipping, the following nine major documents constitute the most important requirements for importation into Nigeria because they contain similar information on the cargo to be imported, suppliers, country of origin, carriers, shippers, or importer, which are then verified for consistency, accuracy by Customs, other relevant clearing authorities before cargo is released to the shipper/importer or consignee.
Form-M: This is a mandatory document, generated electronically, approved by the Central Bank of Nigeria and the Nigerian Customs Service, as the principal requirement for the importation of goods into Nigeria, to ensure that the appropriate import duties are paid for imported items. Form M is valid for a period of 180 days and renewable for another 180 days. It is processed by authorized dealer banks with the following documents:
- Certificate of Incorporation
- Importer’s Tax Identification Number (TIN)
- Proforma Invoice
- Insurance Certificate
- Product Certificate (for Standard Organization of Nigeria (SON) regulated items)
Pre-Arrival Assessment Report PAAR: This document is one of the key requirements of the Nigerian Customs Services for clearing imported goods into Nigeria. As is the case with Form M, PAAR is usually processed by authorized commercial banks. It is a tool for accurate duty assessment and the following documents are required to process it:
- Bill of Lading (for Sea freight) or airwaybill (for airfreight)
- Certificate of Origin
- Final/Commercial Invoice
- Packing List
- Manufacturers’ Certificate of origin (if applicable)
- Certificate of Analysis (depending on the item imported)
Packing List: A packing list is an important import document that provides detailed information about the goods imported to the clearing agents, the Nigerian Customs Service, and the importer/consignee. The list includes the net, gross weight, and dimension of imported items. Forwarders can also use the information on the packing list to create the bills of ladings for the imported item(s). In some cases, releasing agencies like Customs can use the packing list to locate certain specially packed items they may want to unwrap and examine rather than searching every box or pallet.
Proforma Invoice: A typical end-to-end import process starts with an inquiry, leading up to a request for a quotation for the item to be imported. In such a transaction, the quotation will be provided as a proforma invoice that will help the importer to arrange for a Letter of Credit (if needed) and other necessary import licenses. Typically, proforma invoices are like final/commercial invoices. The difference is that a proforma invoice provides an estimate for the final amount of an order. A commercial invoice shows the final amount that should be paid. Details in a proforma invoice include:
- The buyer (importer) and the seller (the supplier) in the transaction
- A comprehensive description of the shipment
- The Harmonized System classification of goods (HS Code)
- Price of the item(s) to be imported
- International Commercial Terms (INCOTERM) of payment
- Mode of transportation, place, and cost of delivery
- Currency used for quotation
- Validity period
Commercial Invoice: As stated earlier, a commercial invoice the full payment detail for each transaction, upon approval of the proforma invoice or quotation, including the order or purchase order number, importer’s reference number, description of goods, the price per unit at a particular location, total quantity, total value, packing specifications, INCOTERMS of sale, the total number of packages, name and number of flight or vessel conveying items, bill of lading number, place and country of origin, terms of payment, invoice validity period and approved, etc.
Bill of Lading/Airwaybill: While a Bill of Lading (BL or BOL) is a shipping contract document issued by an ocean carrier to a shipper/importer, with detail of the goods being carried, an airwaybill is a contract of carriage between the air carrier and the shipper/importer with detail of the goods to be carried, as in the Bill of Lading.
Typically, a Bill of Lading includes the name of the carrier, the name of the consignee, a detailed list of goods being transported, number of packages and kind of packaging, weight and/or volume of the cargo, each package’s freight class, terms of payment and special handling instructions.
While Bills of Lading can either be direct or negotiable, Airwaybills are not negotiable. You may be wondering how a Bill of Lading is negotiable. Yes, it is!
A Negotiable Bill of Lading is common when a Letter of Credit is involved. Here, the Bill of Lading is consigned according to the order of the shipper, signed by the shipper, and sent to an authorized bank in the buyers’ country. The bank holds the original Bill of Lading until the shipper meets the terms in the Letter of Credit.
A Direct Bill of Lading is not consigned to a particular consignee (who may either be the shipper or its authorized agent), who takes possession of the consignment(s) or shipment(s), once a signed original Bill of Lading is tendered.
Certificate of Origin: Certificate of Origin is a document that certifies that an imported item is truly obtained, manufactured, or produced in a particular country of origin, as presented to Customs during an examination.
SONCAP Certificate: SONCAP simply means Standard Organisation of Nigeria Conformity Assessment Program. SONCAP certificates are usually processed at origin and the aim is to ensure that manufactured goods imported into Nigeria meet the minimum safety standard. In other words, such goods must be certified by the SONCAP issuing bodies from the origin, just to make sure that the final consumer is not exposed to the safety implications of sub-standard products.
National Agency for Food and Drug Administration and Control (NAFDAC)Permit/Certificate: Importers of NAFDAC regulated goods such as Food, drugs, cosmetics, medical devices, packaged water, chemicals, and detergents, are expected to obtain a NAFDAC permit before such goods can be imported. Following a recent directive by the Central Bank of Nigeria, the permit can only be obtained electronically on the CBN trade portal and this also means that:
- Only digital forms issued by NAFDAC will be valid for the importation of NAFDAC regulated goods, as stated above.
- Applicants must now input the approval reference code stated on the NAFDAC e-licenses for Form-M, Pre-Arrival Assessment Report (PAAR) processing, Customs Clearance, and other trade-related transactions.
The foregoing documents constitute the most prominent requirements for the importation of diverse cargo into the Nigeria Customs territory. While most of these documents are universal, some (Like Form M, PAAR, SONCAP, and NAFDAC permit) are peculiar requirements for importation into Nigeria. All prospective importers must pay attention to these major documents and other minor ones not mentioned here. This is to ensure that the appropriate import documentation and the right permits are obtained to avoid costly sanctions.
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