The Customs division of the Ghana Revenue Authority has emphasised that from the 1st of November 2020 it will commence enforcement of the law that bans importation of salvaged vehicles into Ghana, barring any unanticipated circumstances and if all provisions stipulated in the law are fulfilled.
Speaking on Eye on Port, the state agency mandated to supervise imports stipulated that for vehicles over ten years of age it will however require the Finance Minister, in consultation with the minister responsible for Trade, through a legislative instrument to specify when a motor vehicle of such nature will be allowed into Ghana after meeting some conditions stipulated in the Customs Amendment Act, Section 154 (2).
“The prohibition against the importation of salvaged motor vehicles into the country under paragraph (b) of subsection (1) of section 58 shall come into force six (6) months after the date of the coming into force of this Act.” The Assistant Commissioner of Customs in charge of Policy and Programmes at the Customs Division of the Ghana Revenue Authority, Mr. Aweya Julius Kantum disclosed.
He said since the Act was assented to on 30th of April 2020, its commencement should be from the 30th of October 2020 and enforcement should begin a day after the law takes effect.
The Customs Division of the Ghana Revenue Authority explained that for every used vehicle that is brought into the country from the day after the Law takes effect – in this case, 31st October 2020 – shippers or importers will be required to provide a clean title as well as ensure that the cars have not been wrecked, destroyed or physically damaged by collision, fire, water or any other occurrence.
Mr. Aweya Julius Kantum added: “The other one that talks about specification of the date, chapter 87 of the first schedule of the Customs tariff – i.e. heading 87.03 and 87.04 whereby the duty rate is expected to go up to 35% – has to be on the basis of a legislative instrument”.
Mr. Justice Njornan Magah Yadjayime, Supervisor in charge of Vehicle Valuation Unit of the Customs Technical Services Bureau (CTSB), also explained that – contrary to popular opinion there is ambiguity with the definition of ‘salvaged’ by the law – the Act has not left room for human discretionary authority beyond what the law stipulates. “The law is looking at the number of ways vehicles get damaged; so you are looking at flooding, collisions etc., so all have been covered so that you don’t leave it to anybody’s judgement to say that this one can go and this one will not go, no,” he opined.
The Customs Officials further explained what importers of vehicles are expected to provide before clearing used cars in order to prove that they are not salvaged, from 1st November.
“In our case now, wherein we are going to have an Automotive Industry, the Ghana Standards Authority is playing a key role whereby they are going to be looking at other aspects of it – the certificate of conformance for used cars, and homologation certificates for brand-new cars – before importers can clear their cars.”
They emphasised importers should from now begin to weigh the calibre of vehicles they import into the country.
“Usually, importers employ the services of shipping agents who are able to help them go through the documentation; so, agents are the main source of information for the importers. So, once a shipper gets to know that these are the requirements before one can ship a vehicle into Ghana, they must comply to meet the requirements before shipping a car into Ghana.”
The Assistant Commissioner of Customs in charge of Policy and Programmes at the Customs Division of the Ghana Revenue Authority, Mr. Aweya Julius Kantum, also revealed that the Authority will start enforcing the law from first November, and therefore the law will apply to any vehicle brought in by a vessel that docks on first of November 2020 and beyond.
“The time of importation in Customs is the time that the ship docks and reports to Customs that it has docked. If the ship comes from 1st November, it means it is time-bound and it means that the law will catch it.”
The Customs top-hierarchy also explained why some specific vehicles – including those designed for the transport of persons other than those under the heading 87.02, including station wagons, racing cars and motor vehicles not exceeding 5 tonnes for the transport of goods – will attract 35% import duty.
“The local manufacturers are doing their business and government is looking at a number of parameters to assist them; so if everyone is allowed to bring in vehicles that the local manufacturers are already manufacturing here in Ghana at a cheaper rate, it will not help the local manufacturing companies government is trying to prop up. That is why some of these conditions have been put in place; so that if you still want to import the same cars that are manufactured in Ghana, then you pay the 35%. Otherwise, there are alternatives here for people to buy,” Mr. Justice Yadjayime explained.
Mr. Aweya Julius Kantum further clarified that the law was made to protect the local automotive industry. “If the import duty remains very law, how can local manufacturers or assemblers be able to compete with the imported foreign ones? Of course, you have to encourage them with incentives so that they can also invest and have returns on their investments.”
They explained that this will not contravene the ECOWAS regional protocols which peg Customs External Tariffs for vehicles at 20% of import duty.
They explained that about 70% of imported vehicles are already used, and about 90% of imported used cars are salvaged.
They said there are options to place some responsibilities on shipping lines to ensure they don’t carry vehicles which do not have clean titles or are salvaged.
“Carriers also have some responsibilities. Shipping agents have responsibilities to their clients. Now shipping agents ought to know the laws that pertain in Ghana, and when s/he knows, s/he will then advise his client that from 1st November Ghana is not accepting salvaged vehicles and the carrier will be seized with that information: then it will be incumbent on them not to bring the cargo – but ones that bring the cargo, they will be liable.”
They said though the Ministry of Trade has done some analysis on impacts of the Policy on Customs Revenue among others, they believe the overall effect on the national economy far outweighs the sacrifice.
According to the Officers, government is firm on implementing this particular ban on salvaged vehicles, and therefore hope that the public will be able to start observing the need to avoid such vehicles.
“Now anybody who intends to import should be reminded that if the cargo arrives before the first of November, then he or she is within time; if it’s after that, then it means they are time-bound. Now, don’t assume that the law is going to be changed; work on the basis that the law is going to start, and then you will not fall foul on the law.”