Customs in bid to outwit cunning clearing agents

29 June 2020 | Ministries

OGONE TLHAGE

WINDHOEK



The directorate of customs in the finance ministry is making attempts to outwit clearing agents who avoid paying import duties by using product codes meant for untaxable items.

“They use similar commodity codes that do not attract charges. These cases are very common; we have penalised a lot of traders who were trying to avoid paying duties by using different commodity codes,” a source at the ministry said.

“In some cases, they also import prohibited products such as medicines and then claim the products were wrongly sent to Namibia. When this is discovered by Customs, traders always claim that these were not the instructions they gave to the clearing agents. This enforcement will help the ministry to know the exact instruction given to the agents.”



Past losses

Between 2010 and 2016, Namibia allegedly lost N$3.5 billion in unpaid customs duties, resulting in the 2017 arrest of Walvis Bay businessman Julius Laurentius, Chinese businessman Jack Huang and his countrymen Zhihua Gua, Hongying Jia, Shuhua Cao, Dadi Li and Ying Zhang.

According to police and forensic accounting evidence presented during their bail hearing, the ministry suffered the loss because of under-declaration of the value of imported goods on which customs duties were supposed to be paid.

The Bank of Namibia had noticed that there had been a massive outflow of foreign currency from Namibia. During the investigation, it was discovered that N$3.5 billion had been shipped out of the country through Julius Laurentius' business, Xtreme Customs Clearing Services, among others. Investigators discovered that imports were under-declared at Customs and over-declared at the bank, resulting in losses of billions of dollars.



Closing loopholes

This type of customs fraud has prompted the ministry to enforce Section 41 (1) c of the Customs and Excise Act.

“As from 1 July, all declarants must deliver to a Customs and Excise officer the importer/exporter's written clearing instructions and supporting documents relating to the goods. Clearing agents may not process any transaction without written clearing instructions and supporting documentation,” a ministerial notice stated.

“Clearing instructions include information pertaining to shipment details, customs entry instructions, delivery instructions, authorisation given by importer/exporter and acceptance of instructions by [the] clearing agent.”

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