FEATURE: CTN, an unnecessary cost to already burdened traders

Since news of the cargo tracking note (CTN) came to the fore, opinions have been sharply divided over the relevance of a third-party platform in the trading business.

As is to be expected, proponents of the system have insisted that it is necessary to assure, among other things security, value and weight.

They often point to under invoicing and over invoicing as the two devils the system will help solve and, in the process, plug revenue leakages to soar up collections.

What they have refused to avert their minds to is that CTN is an unnecessary cost to the already burdened trader.

Instead, it is an avenue for free cash to its proponents but adds no value to the government. Thus, the government’s ardent support for it leaves much to be desired.

Notice of postponement

Before I proceed to discuss why Ghana does not need CTN, let me address the official communique about CTN being Notice of Postponement of Implementation.

The notice said “the postponement of the implementation date is to allow for:

A) “More consultation and sensitisation of all stakeholders with the view to build and deepen understanding and consensus.”

Shouldn’t this have been done first before the attempt at implementation?

Why must we always rush to implement policies (fumigation levy and tax stamp in mind) before doing broader stakeholder consultation and sensitisation?

But this is not in the least surprising, considering the unfortunate utterances of some kingpins in the Ghana Revenue Authority (GRA) and the Ministry of Trade in the aftermath of July 1 in defense of CTN.

b) “To address all concerns raised by the trading community before the new date of the implementation of the CTN”

This should be done properly and without discrimination to any stakeholder, irrespective of whether ‘they are just intermediaries’ in international trade. Otherwise, the glory of the later action shall be far greater than the former.

Even more saddening are those hasty pronouncements by GRA in the notice of the CTN postponement.

“The Commissioner-General also announced the following:

a). There will be no fees or charges applicable to importers or shippers in Ghana or elsewhere associated with the implementation of the CTN now or in the future.”

Does it mean CTN was inherently free and GRA decided to charge shippers CTN fees? Or does it mean that CTN is not free but government is absorbing all the cost of CTN both ‘now’ and ‘in the future’ so that vicariously, CTN is free to ‘importer or shippers’?

If so, why would government want to expend about $500,000 annually on something that existing systems can deliver better even for free?

b). “Any fees charged to any importer so far in association with the implementation of CTN will be reimbursed by the GRA.

GRA must come clear on ‘any fees charged’ because the July 1 CTN implementation came with three cost elements: direct fees – CTN fees (minimum of $100), ancillary fees – freight forwarders service charge for CTN documentation (between $150 to $250) and ancillary fess – shipping lines service charge for CTN (minimum of $150).

But ‘any fees’ can certainly not refer to direct CTN fees because until this postponement notice, GRA and the Deputy Minister of Trade, Carlos Ahenkorah, particularly kept saying that CTN was cost-free. He argued that the government was absorbing CTN fees, at least for the first six months of implementation.

Therefore, ‘any fees charged……’ in the context can only refer to ancillary fees or service charges paid by the shipper to freight forwarders or shipping lines incidental to the July1 date.

The government, through GRA, will be reimbursing in dollars and euros paid by every shipper to foreign freight forwarders and shipping lines since the July 1 to August 31, 2018. This is a typical case of capital flight. If this were to be another jurisdiction, heads would by now be rolling.

Scrap CTN

CTN fails a purported risk management tool because it has no agents or means abroad to validate information fed into it.

CTN cannot present a level-playing field to importers or solve the purported under-invoicing and over-invoicing because its information is not validated and, therefore, not sacrosanct.

Customs have said they are not obliged to accept values declared by CTN. CTN, therefore fails at valuation too.

Thus, why will CTN be suspended instead of being scrapped completely from the vocabulary of the Ghanaian freight forwarding industry?

Free cash

CTN appears to take inspiration from pre-shipment inspection. However, Ghana practices destination inspection.

The 15 countries in Africa that use CTN known as Bordereau de Suivi Cargaison (BSC) or loading certificate) do so either because of security reasons or are pre-shipment inspection-oriented.

A cursory look at most of the countries, including Burundi, Senegal, Angola, Mali, Nigera, Togo and Cote d’Ivoire, show that they have had a form of instability or battling terrorism.

Pre-shipment inspection is when the importing goods are verified at source (exporting country) against the documents submitted.

To do this, the agency representing the importing country at the export country are present to verify the authenticity of the goods against the information fed into it.

However, Ghana’s attempt to implement CTN without recourse to the tenets of proper pre-shipment inspection, which is that CTN must have agents in various ports around the world, has no value for the Ghana importer whose attempts have been made to charge CTN fees and other ancillary fees.

Ghana, by the Customs Act 891 (2016) practices destination inspection and not pre-shipment inspection by which CTN would have been relevant.

Therefore, introduction of a mere policy like the CTN cannot undo the destination inspection practice unless the law is amended to make Ghana a pre-shipment inspection country.

Otherwise, CTN has no locus, for which reason person(s), including shippers, shipping lines and freight forwarders, who contravene it will not be liable to prosecutions.

The current practice of destination inspection means that importing goods arrive in the country before they are verified against their accompanying transport and trade documents (bill of lading, commercial invoice, packing list, certificated of origin, etc.).

Even then, there are at least two systems currently in place that give information about importing goods before the arrival of the means of conveyance.

These are the e-manifest and the pre-arrival assessment reporting system (PAARS) managed by Westblue Consulting.

C2C

The e-manifest, which is totally free of charge, is designed to accommodate far more detailed cargo information than CTN, which has both direct cost to government (CTN fees) and indirect cost to shippers (service fees charged by shipping lines and freight forwarders).

Hence, Ghana Customs and port authorities have prior information of every importing cargo before the arrival of the means of conveyance.

Ghana, as a member of the World Customs Organisation (WCO) has the opportunity to international best practice of Customs-to-Customs (C2C) cooperation.

This allows our Customs to communicate and seek clarification or information about any imported cargo from their counterparts around the world. Again, at no cost to either government or the importer.

Ghana Customs or Ministry of Trade and Industry are currently able to efficiently collate trade data and analyse same reports without CTN.

The Import Declaration Form (IDF) and the Bill of Entry (customs declaration) submitted by importers to MoTI and Customs Division respectively through GCNet and GICCS are means by all relevant data is compiled.

Therefore, CTN implementation cannot add a new information as far as the compilation of trade data for statistics is concerned.

In its current form, it only adds an additional process with potential to cause delays in the supply chain in the of a CTN system downtime.

As a champion of efficiency at the ports, it will be interesting to see how Vice President Dr Mahummudu Bawumia will react to this irrelevant addition.

The writer is a student of the Ghana Institute of Freight Forwarders (GIFF)

Email: didomisch@gmail.com