Customs License Fee: SEREC Recommends Tiered Fee Structure

BY GBOGBOWA GBOWA

Industry advocacy group, the Sea Empowerment and Research Center (SEREC) has lent its voice to the ongoing protest and debate about an acceptable customs license fee and urged for a tiered structured licensing formula that meets every need.

A statement signed and made available by SEREC Head of Research, Fwdr Eugene Nweke Rff titled ‘SEREC’S POSITION ON THE PROPOSED INCREMENT ON AGENTS LICENSES FEES BY THE NCS’ is here published verbatim, for your reading enjoyment. Excerpt:

“The Sea Empowerment and Research Center (SEREC) is pleased to offer this position paper for the consideration of relevant stakeholders, especially to the Nigeria Customs Service (NCS) Management Team, providing our analysis and recommendations on the proposed 2000% increase in customs license fees.

After careful consideration and analysis, we strongly believe that such an astronomical increase would be detrimental to the customs brokerage industry and the economy as a whole.

*Key Recommendations:*

1. *Balanced Licensing Fees* : We recommend that licensing fees be set at a level that balances the need for regulatory oversight with the need to promote competition and efficiency in the customs clearance process. A tiered fee structure based on the type of service or level of license would be more suitable.
2. *Tiered Licensing System:* SEREC support the implementation of a tiered licensing system, with different levels of licenses based on factors such as experience and specialization. This would promote professionalism and efficiency in the customs clearance process.
3. *Competency -Based Licensing:* SEREC agree that licensing requirements should focus on demonstrating competence in customs procedures, tariff classification, valuation, and origin determination.
4. *Ongoing Training and Professional Development:* SEREC support the requirement for license holders to undergo ongoing training and professional development to maintain their licenses.

*Concerns about the Proposed 2000% Increase:*

1. *Impact on Small and Medium-Sized Enterprises:* We are concerned that the proposed increase would disproportionately affect small and medium-sized enterprises, which may struggle to absorb the increased costs.
2. *Potential Impact on Trade Facilitation:* We believe that the proposed increase could lead to increased costs for traders, which could negatively impact trade facilitation and economic growth.

*Suggested Solution:*

We recommend that the NCS consider a more balanced and nuanced approach to licensing reform, taking into account the needs of small and medium-sized enterprises and the industry as a whole. We propose the following elements:

1. *Tiered Licensing System:* Implement a tiered licensing system with different levels of licenses based on experience and specialization.
2. *Competency- Based Licensing:* Focus on demonstrating competence in customs procedures and regulations.
3. *Ongoing Training and Professional Development* : Require license holders to undergo ongoing training and professional development.
4. *Balanced Fee Structure:* Implement a fee structure that is balanced and takes into account the needs of small and medium-sized enterprises.

*Proposing a potential Fee Structure:*

In the context of idealism, with regards to global comparisons and at universal *exchange rate of 1USD/₦400* , we propose the following potential fee structure for the different license categories, taking into account the Consumer Price Index (CPI) and the needs of small and medium-sized enterprises, believing that, it will serve as a general guide for a further responsive license agents regulatory reforms in the industry for the common good of all parties:

1. *Standard License:* For general customs clearance services

– New License Fee: N50,000 – N100,000 (approximately $125-$250 USD)

– Renewal Fee: N20,000 – N50,000 (approximately $50-$125 USD) every 2 years

– Insurance Bond Fee: N500,000 – N1,000,000 (approximately $1,250-$2,500 USD)

2. *Advanced License:* For complex customs clearances, such as those involving specialized commodities or high-value goods

– New License Fee: N100,000 – N200,000 (approximately $250-$500 USD)

– Renewal Fee: N50,000 – N100,000 (approximately $125-$250 USD) every 2 years

– Insurance Bond Fee: N1,000,000 – N2,000,000 (approximately $2,500-$5,000 USD)

3. *Specialized License:* For agents handling specific types of commodities, such as hazardous materials or controlled substances

– New License Fee: N150,000 – N300,000 (approximately $375-$750 USD)

– Renewal Fee: N75,000 – N150,000 (approximately $187-$375 USD) every 2 years

– Insurance Bond Fee: N1,500,000 – N3,000,000 (approximately $3,750-$7,500 USD)

4. *Brokerage License*: For agents providing customs brokerage services, including tariff classification and valuation

– New License Fee: N80,000 – N150,000 (approximately $200-$375 USD)

– Renewal Fee: N40,000 – N80,000 (approximately $100-$200 USD) every 2 years

– Insurance Bond Fee: N800,000 – N1,500,000 (approximately $2,000-$3,750 USD)

5. *Chandler’s License:* For agents providing services related to ship chandlery

– New License Fee: N30,000 – N60,000 (approximately $75-$150 USD)

– Renewal Fee: N15,000 – N30,000 (approximately $37-$75 USD) every 2 years

– Insurance Bond Fee: N300,000 – N600,000 (approximately $750-$1,500 USD)

6. *Bonded Warehouse Operator’s License*: For operators of bonded warehouses

– New License Fee: N200,000 – N500,000 (approximately $500-$1,250 USD)

– Renewal Fee: N100,000 – N200,000 (approximately $250-$500 USD) every 2 years

– Insurance Bond Fee: N2,000,000 – N5,000,000 (approximately $5,000-$12,500 USD)

*Rationale:*

The fee structure is designed to be balanced and take into account the needs of small and medium-sized enterprises. The fees are also intended to reflect the level of complexity and risk associated with each license category.

The new license fees are higher than the renewal fees to reflect the costs associated with processing new applications and conducting initial inspections.

The insurance bond fees are designed to provide a level of protection for the government and traders in case of non-compliance or other issues.

*CPI Adjustment:*

The fees can be adjusted annually based on the Consumer Price Index (CPI) to ensure that they remain relevant and effective.

We believe that this fee structure provides a reasonable and acceptable framework for the different license categories, and we look forward to working with the Customs Consultative Committee, the Freight Forwarding/Agents Associations, and the NCS to finalize the fee structure, possibly navigating through the inflationary matrix, thus, accommodating all strata of interests.

Sincerely,

Fwdr Eugene Nweke Rff.

Sea Empowerment and Research Center (SEREC)”