How We Have Repeatedly Helped Organizations to Resolve the Commonest Import Challenges in Nigeria
Volatile cost of shipping, unexpected delivery delays, and mistakes in import documentation are among the most critical challenges that importers continue to encounter in Nigeria. Nevertheless, importers ought to consult or engage import agents with the right expertise and pedigree of effectively resolving their commonest challenges. The following case study gives us a clearer picture of how these challenges could be resolved in a single transaction.
For instance, company XYZ is a pharmaceutical distribution company based in Nigeria. They intend to import a container load of conventional antibiotics from China into Nigeria. How can they achieve this objective without being trapped by the costly challenges associated with the import processes? Or being exposed to unanticipated costs during and even after such transactions?
The answer is simple. Finding a competent freight forwarding company/agent is the first step towards achieving this goal based on the following benefits:
Pre-Shipment Advice: A competent agent has excellent knowledge and understanding of the International Commercial Terms (INCOTERMS) applicable to the importation of a container load of conventional antibiotics and advises the importer well ahead of time. This eliminates potential conflicts and clearly defines who bears the risks involved and shared responsibilities of both the importer and the agent in the transaction. Also, a comprehensive understanding of end-to-end documentation, the required modes of transportation, and how to process them is key. Importantly, a good Knowledge of cost requirements and ability to make well-informed decision on end-to-end transaction cost with very thin or no margin for error is one the most important pre-shipment advice an importer should obtain prior to the importation of the said items. This helps importers to stay compliant and rarely exposed to costly penalties or incurring unanticipated cost.
Accurate Documentation: A competent agent understands that the importation of a container load or container loads without incurring unanticipated costs or costly post cargo clearance audit penalties require perfect documentation. The question then is, what documents does one need to process or have in the entire process of shipping a container load of conventional antibiotics to avoid costly sanctions? The following documents are not only required but are expected to agree with the information captured in every other document connected to the specific import process:
- Bill of Lading: 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 cargo being carried, including name of the carrier, name of consignee, detailed list of goods being transported, number of packages and the kind of packaging, weight and/or volume of the cargo, freight class, terms of payment and special handling instructions. Information captured in the Bill of Lading must match with those captured in the Form M, PAAR, Commercial Invoice, and the Packing list because even the minutest discrepancy will attract a penalty.
- NAFDAC e-Permit: National Agency for Food & Drug Administration and Control (NAFDAC) permits, and registration certificate can be obtained electronically by importers of conventional antibiotics, like other medically related products. Only digital forms issued by NAFDAC are valid. The approval reference code stated on the NAFDAC permit is then inputted for the processing of Form-M, Pre-Arrival Assessment Report (PAAR).
- 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. The goal is to ensure that the appropriate import duty is paid for imported items, based on the correct invoice value. Though a Form M is valid for 180 days, it must be processed before the shipment sails. In other words, the date on the Form M should precede the date that vessel sails.
- 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 to ensure that the right duty is determined or that the appropriate levies are paid.
- Commercial Invoice: This contains the full payment detail of the item being imported, including importer’s reference number, description of goods, price per unit at a particular location, total quantity, total value, packing specifications, INCOTERMS of sale, name, and number of vessels conveying items, bill of lading number, place and country of origin, terms of payment, invoice validity period, VAT, approval signature etc.
- 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 gross weight of imported items. Forwarders can also use the information on the packing list to create the bills of ladings for the items being imported.
The key consideration for the foregoing documents is that the general information on the imported item(s) must be consistent without any disparity and they must also be in synch with the classification on the HS Code so that the right duty or levies can be determined.
HS Code: Harmonization Systems (HS) Codes contain numbers or codes that provide accurate description and classification of the item(s) being imported. This is to ensure that the appropriate duty can be paid, based on the designated percentage associated with such cargo. However, the importation of drugs into Nigeria attracts 0% duty but antibiotics or drugs that contain antibiotics attract up 20% levy. Importers ought to be aware of these technicalities or at least consult experts for proper guidance to avoid costly sanctions.
In view of the foregoing, the benefits of hiring a competent freight forwarding agent like Fortune Global are many but specifically saves importers of potentially high cost of shipping, unexpected delays, and technical mistakes in documentation. We are experts at providing pre-shipment advisory – including documentation, timely interface with regulatory authorities, and in helping clients determine the required tariffs, duties, and levies associated with diverse shipments.