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10 of the Most Common Export Inspection Risks in Nigeria

10 of the Most Common Export Inspection Risks in Nigeria

In the inspection process, a manufacturer chooses whether to inspect goods before or after export. Both inspection options have their pros and cons, but exporting entities must choose one of them. Inspecting goods before export is more cost-effective in the long run because it reduces the risk of rejection at the port of exit. However, pre-export inspection is more complex, time-consuming and expensive than post-export inspection. Inspection processes must be standardised so that documents such Inspection Certificate, Packing List Checklist, etc., are the same for every shipment and meet all necessary requirements. To reduce costs while maintaining quality control, an exporter can use a third party inspection operator as an intermediary between the manufacturing entity and customs authorities. This article identifies 10 risks commonly found during export inspections in Nigeria.

Inventory Discrepancy

Before an inspection, the inspector calculates the quantity of manufactured goods based on the quantity of raw materials entered into the system, the quantity of finished goods sold and the quantity retained. If the inventory discrepancy is equal to or less than 5%, the inspector issues the Certificate of Inspection without any additional requirements. If an export inspector detects a discrepancy greater than 5%, he or she initiates a questionnaire about the cause of the discrepancy. During the questionnaire, the exporter must provide evidence, such as purchase and sales documents or a copy of the ERP/MRP system, to prove the origin of the discrepancy. The inspector may ask the exporter to provide a detailed breakdown of the quantities of raw materials, intermediate products and finished goods. Any discrepancies in the breakdown may lead to a rejection of the shipment.

 

Shifting Quality Standards

After the inspector completes the visual inspection and finds no discrepancies, he or she issues the Certificate of Inspection. However, before the inspector issues the COI, he or she references the quality standards in the inspection plan and the general standards for the product. An inspector may reject the shipment based on a shift in the inspector’s quality standards or an inconsistency between the quality standards and the general standards or the client’s requirements. If a manufacturer or supplier has not received a shift in the quality standards, he or she can request an explanation from the inspector, who must provide an explanation for any shift in the standards and how the shift affects the manufactured goods. If the client’s quality standards have shifted, the inspector must have the client confirm the shift in writing to support any rejection caused by the shift in standards.

 

Incorrect Commodity Description & Traceability

After the inspector issues the Certificate of Inspection, the exporter issues a Packing List Checklist. The exporter must use the same commodity description as the one in the COI. If the inspector finds any discrepancy between the COI and the Packing List, he or she initiates a questionnaire that may lead to a rejection of the shipment. In the questionnaire, the inspector may ask the exporter to provide evidence, such as purchase and sales documents or a copy of the ERP/MRP system, to prove the source of the discrepancy. The inspector may also ask the exporter to provide proof of the chain of custody for the goods. If the exporter does not provide evidence or proof, the inspector may reject the shipment. In addition, the inspector may reject the shipment if the description does not meet the general standards for the product, or if the description is incorrect even though the COI and Packing List match.

 

Incorrect Packing List

Before issuing the COI, the inspector references the packing list in the inspection plan. If the inspector finds a discrepancy between the packing list and the goods, he or she initiates a questionnaire. To reduce the risk of a rejection based on a discrepancy between the packing list and the goods, the exporter must use the same terms as those on the packing list. If the inspector finds a discrepancy between the packing list and the goods, he or she initiates a questionnaire that may lead to a rejection of the shipment. In the questionnaire, the inspector may ask the exporter to provide evidence, such as purchase and sales documents or a copy of the ERP/MRP system, to prove the origin of the discrepancy. The inspector may also ask the exporter to provide proof of the chain of custody for the goods. If the exporter does not provide evidence or proof, the inspector may reject the shipment.

 

Incorrect Certification(s) & Declaration of Origin (DOA)

The exporter must provide the COI issued by the inspection company to the importer. The inspector must stamp the COI and provide the importer with an endorsed copy as proof that the goods have passed inspection. The COI must include the following information: The inspector may reject the shipment if the COI does not include all of the above information. If the inspector finds a discrepancy between the COI and the goods, he or she initiates a questionnaire that may lead to a rejection of the shipment.

 

Lack of Consistency Between Exports from Single Factory and Shipment(s) from Multiple Factories or Warehouses

If an inspector detects differences between exports from a single factory and shipments from multiple factories or warehouses, he or she initiates a questionnaire and may reject the shipment. The inspector may also reject the shipment if the inspector finds a discrepancy between exports and shipments from the same factory or warehouse. For example, if the inspector finds that the exported goods have a dye-lot number, but the goods in the shipment do not have a dye-lot number, the inspector may revoke the COI for all shipments from that factory because of a lack of consistency between exports from a single factory and shipments from multiple factories or warehouses.

 

Inferior Materials/Poor Quality Merchandise

Before issuing the COI, the inspector examines the goods to ensure that they meet the general quality standards for the product. However, if the inspector does not examine the goods before issuing the COI, he or she may reject the shipment because of poor quality. Inspectors often find low-quality materials and products in Nigeria. Therefore, manufacturers and suppliers must meet the general quality standards for the product. If a manufacturer uses inferior materials or products, the inspector may reject the shipment.

 

Tracking Discrepancy

If the goods have an incorrect lot number and tracking discrepancy, the inspector may reject the shipment. A tracking discrepancy occurs when the goods do not match their tracking information. For example, if the goods have a COI with a tracking number of “ABCDEFG”, but the tracking information for those goods has a tracking number of “123456”, the goods have a tracking discrepancy. If a discrepancy occurs after an inspector issues the COI, the inspector initiates a questionnaire and may reject the shipment.

 

Lack of Documentation Confirming Accuracy of Exported Commodities

After the inspector issues the COI, the exporter must provide the importer with a Packing List Checklist. This document confirms that the goods listed on the COI match the goods in the shipment. The Packing List Checklist must include the following information: The inspector may reject the shipment if the goods do not match the COI or the Packing List Checklist.

 

Summary

In this article, we have identified 10 risks commonly found during export inspections in Nigeria. These risks include inventory discrepancy, shifting quality standards, incorrect commodity description, incorrect packing list, incorrect certification(s) & declaration of origin (DOA), lack of consistency between exports from a single factory and shipments from multiple factories or warehouses, inferior materials/poor quality merchandise, tracking discrepancy, lack of documentation confirming accuracy of exported commodities and summary.

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