Custom fines for difference between quantities reported and the final stevedores’ figure have been a potential issue for bulk vessels trading in West African countries, especially in countries such as Benin, Togo and the Ivory Coast which have a high demand for imported bagged commodities like sugar or rice.
Skuld P&I Club, provides information on fines that can be imposed on vessels calling at Lomé, Cotonou or Abidjan and best practices to avoid delays upon completion of discharge.
Bulk vessels discharging bagged cargo in Lomé, Cotonou or Abidjan will often receive a message from their agent stating that when a vessel is calling one of these ports the agent has to provide a copy of the cargo manifest within 24 hours after the vessel’s arrival and that, in case of difference between the quantity reported and the final stevedore tally’s figure, a custom fine will be imposed.
As the vessel’s agent is responsible for the payment of the fine on behalf of the vessel it is common, before completion of discharge, to receive a request for the issuance of a letter of undertaking (LOU) to cover the amount of the potential fine. The LOU request will be based on the estimation of the potential fine plus a usual uplift.
For example, in Togo, the fine is calculated based on the local market value estimated by local customs plus the difference accounting for the duties that should have been paid plus a fine.
The Togolese customs state that a fine amounting two to three times the amount of duties and taxes evaded will be imposed in case of discrepancy between the quantity manifested and discharged.
A similar article in the Benin custom code states that within 24 hours of the vessel’s arrival, a summary declaration of the cargo manifest shall be presented to customs by the vessel’s Master or his agent.
In Ivory Coast, the Master is liable for any error in cargo manifest declaration and Art. 285 states that a fine will be imposed in case of discrepancy between the quantity manifested and discharged.
Skuld Club noted that the situation has improved in Togo and Benin since 2014, however it would be good safe to apply the following:
- Ask the vessel agent to confirm in writing in advance all latest customs requirements before calling West African ports to discharge bagged cargo.
- Appoint a protecting agent to double-check the stevedore’s tally.
- Ensure that the Master contacts the vessel’s P&I or the local correspondent immediately when there is a risk of fine.
- liaise with local correspondent to get updates from the vessel’s agent and the customs authority as to when the final amount has been negotiated, and to request a receipt a release after the fine has been settled.
- In addition, Owners and Charterers can negotiate the issuance of LOUs for customs fines related to manifest discrepancies in back-to-back charterparties.
Finally, the vessel agent will first request a LOU from the vessel’s Owners P&I club, and will usually also agree for the LOU to be issued by a well-established local correspondent instead. The agent can alternatively agree to get a LOU from the Owner or the Charterers.