Import documents are the heart and beginning of all imports. Exporters, importers, and even Clearing and Forwarding companies themselves are left with the choice of choosing to sublet their shipping documentation unit. Otherwise, companies will keep training and retraining staff with more cost implication. The reason is due to the evolving nature of the industry. Most companies surveyed would prefer to sublet the burden of organizing import documents to a expert documentation company.
Thus, documentation expert bears the pain of working with partner agencies and governmental organisations like Nigerian Custom Services (NCS), NAFDAC, and FIRS to generate needed reports for successful cargo shipping and clearance.
IMPORT DOCUMENTS: USE A SPECIALIST
The benefit of allowing a specialist documentation company do your import documents are as follow:
- Firstly, it eliminates mistakes in import documents that would have arisen otherwise.
- Secondly, someone is held responsible should there be any mistake in documents.
- Lastly, this impacts on the overall cargo clearance speed and even cost.
This article will itemize commonest errors in documents, and show how to prevent them from happening.
IMPORT DOCUMENTS: COMMONEST ERRORS IN DOCUMENTS
Wrong Description of Goods or Item in the Import:
The description of the imported items does matter a lot. Description could make the difference between the item being classified as restricted/prohibited or allowed item. Therefore, with the description, you can tell the type of importation documents required to importing the item. Hence, make sure goods are well classified and described to fit the Nigerian market. Possibly, use clear, unambiguous expressions to describe commodities. You may research how the goods are described in the people’s language.
Using a Wrong HS Code in import documents:
This is where you need be extremely careful. The reason is clear, wrong HS Codes means you could be told to attach NAFDAC, MANCAP, DPR or other regulatory agency certificate befor obtaining Form M. The duty rate payable is also a direct function of HS Codes. Hence, the use of a documentation specialist who knows the goods destination country is recommended here.
Failure to State ‘Letters of Credit’ As Payment Mode on the Pro Forma Invoice:
When preparing Form M there is usually a space to indicate the payment mode. The options listed for selection are letters of credit, bills for collection, advance payment, and not valid for FOREX. If the agreement with the seller is letters of credit (LC), it is extremely important to indicate so on the Pro forma invoice (PFI). This is important because it is from the Pro forma invoice that information are got to fill in the e-Form M.
Failure to say LC when this is the case, would mean repeating the entire process. The backward review begins from amending the pro forma invoice and cancelling the issued Form M document. Consequently, regenerating a fresh Form M, since Form M are no longer amendable by regulation once issued. This amendment of erroneous Form M certainly will delay shipment. However, if cargo was already shipped before errors are seen, it could create confusion that may lead to direct assessment of cargo with higher cost implication.
Read Also: FORM M NIGERIA: HOW TO PROCESS AND OBTAIN IT
Failure to Include Ancillary Charges in the FOB Value on the PFI and Form M:
In the e-Form M, once the ancillary charges are typed, the system sums it to the FOB value. Also, the the Total Cost i affected. Therefore, ensure you add all costs depending on shipment type and terms. This problem becomes pronounced in an LC shipment. I am afraid the Form M may be cancelled and regenerated if not properly done.
Not Including Form M Numbers on Final Import Documents:
All or at least some original import documents like the Packing List, the Commercial Invoice, the Combined Certificate of Value and Origin, the Bill of Lading and the SONCAP should contain Form M numbers – MFxxxxxxxxxx/BAxxxxxxxxxxxxxx.
Different Gross Weights in Different Documents:
Total weights of commercial invoices (for import with many invoices) must be reflected in Packing list and Bill of Lading or Air Waybill. Discrepancy in weights raises suspicion, and cannot be allowed for PAAR if significant.
Failure to Add Container Numbers and Sizes on the BL:
This could result in editing of original document to add it up, before the BL can fly for PAAR. So always state if 1x20ft or any other container number and size.
Using the Wrong Exchange Rate:
Exchange Rate should not be less than 10% or more than 10% of CBN rate. This also applies to the marine cargo insurance value. Otherwise, using wrong exchange rate will render the marine insurance document unacceptable for Form M.
Failure to Include all Items in the Invoice on the SON PC/SONCAP:
This can be a source of frustration, and could mean that you have to pay again for a fresh SONCAP. So, make sure of all things, double check the draft documents.
This article has highlighted commonest mistakes in import documents that could impact on the overall cargo clearance speed. Documentation is everything in importation. Therefore, we recommend subletting this critical part to a specialist like Vagmon. Contact us today.