Import Fraud: Why Compliance With Trade Laws Is Low, By LCCI Boss

If there are stiff import restrictions in the face of weak domestic production capacity as presently obtains in Nigeria, compliance to trade laws, guidelines and regulations suffers a major risk. Similarly, when tariffs are too high and domestic production is weak in a high demand environment, compliance and enforcement become very hard.

Mr. Muda Yusuf, Director-General of the Lagos Chamber of Commerce and Industry (LCCI) stated this in Lagos Wednesday at a one-day seminar organized by the Nigerian Shippers’ Council (NSC) on the theme Need For Compliance To Trade Laws, Guidelines And Regulations.

Delivering a paper entitled International/Domestic Laws: Benefits Of Compliance By The Trading Community, Yusuf examined the role of policy in the compliance process and regretted that the issue of the much-publicized 41 items placed on the prohibition list by the Central Bank of Nigeria (CBN), for instance,  threw up some compliance problems the government and the trading community have not succeeded in resolving till date.

The automotive policy and high tariff on vehicles including palletization policy and the cost implications on importers are some policy decisions, he said, were hurriedly put in place without due consideration for the possibility of the policy environment (which includes stakeholders’ disposition)  working against the workability.

Still using the federal government’s auto policy as a reference point, he questioned the wisdom in imposing very high tariffs on imported cars ostensibly to encourage local production in an environment where there are no iron and steel industries to produce the car body, a very important component of a car, battery- manufacturing companies, epileptic power supply, etc. The so called “Semi Knocked Down” (SKD) parts are imported and coupled all in the name of car manufacturing.” This is a misnomer, he said, any nation serious for industrialization cannot allow.

Yusuf noted that export policy proceeds which compelled the use of official exchange rates created major compliance difficulties especially when there was a huge differential in rates.

On recommendations to the federal government on how to encourage compliance to trade laws among importers, freight forwarders and customs licensed agents, he sued for moderate cost of tariff, better use of technology in the trade management process and sustainable friendly trade policies.

He also called for good reward and incentives for compliance and scaling up capacity of relevant institutions. Government should also reduce the discretionary powers of enforcement officials in the trade management process even as enhanced welfare packages must be provided to discourage them from giving in to pressure from hardline stakeholders who are bent on subverting compliance procedures.

LCCI DG advocated that government should also simplify procedures and documentation processes as well as improve the business environment to make domestic production competitive in price and quality. There should also be better funding of regulatory/enforcement institutions while the general public must, as a standing policy, be continually sensitized prior to the implementation of policies that will impact on them.

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