The role of compliance in pharmaceutical cross-border trade is discussed. Compliance involves ensuring goods entering a country conform to all laws and regulations, and is a focus for regulators like NAFDAC in Nigeria and customs services. NAFDAC's role includes inspecting and certifying imported and exported pharmaceuticals to control quality and prevent non-compliant trade. Harmonization of regulatory standards across countries can help increase legitimate cross-border pharmaceutical trade in Africa by improving efficiency and reducing costs.

1. The role of
compliance in
pharmaceutical
cross-border trade

2. Introduction
 Key Concepts: Globalisation, Global Trade/Cross-Border
(Pharmaceutical)Trade
 Focus on Africa
 Compliance
 Trade (General)
 Pharmaceutical
 Regulators
 NAFDAC
 Nigeria Customs Service
 Industry (Consumer) Angle
 Best Practice
 Summary
Remi ADESEUN

3. What is Globalisation?
 From the Business Perspective:
 Globalisation is the worldwide movement
toward Economic, financial, Trade, and
communications integration.
 4 Basic Aspects according to IMF:
 trade and transactions,
 capital and investment movements,
 migration and movement of people
 the dissemination of knowledge.[7]
 Ref:International Monetary Fund . (2000). "Globalization:
Threats or Opportunity." 12th April 2000: IMF Publications.

4. Globalisation: Context & Focus
 Focus of this Paper:
 Global Economic
Integration or
Economic
Globalization
 process by which an
increasing share of
the economic activity
in the world is taking
place between
people from
different countries

5. What is Global Trade?
 The worldwide business that
involves:
 making and collecting payments
 for transactions in goods and
services,
 and transporting them to
interested markets.

Remi ADESEUN

6. Global Trade

7. What is Cross-Border Trade?
 The buying and selling of goods and
services
 between businesses in
neighboring countries,
 with the seller being in one country and
the buyer in the other country, for
example, a company in the United
States selling to a company in Canada.
Or a company in Nigeria selling to a
company in Ghana.

8. Cross-Border Trade in Africa
 “One of the biggest obstacles to
industrialization in Africa is
that African countries trade very little
between themselves,
 only 10-12 percent of total trade,
whereas regional trade accounts for
63% in EU, 40% in the US and 30%
in Asean countries.”
 Ref: http://kariobangi.com/2012/02/13/are-african-economies-too-
similar/

9. Cross-Border Trade Environment
For Pharmaceuticals
 Key Requirements for Understanding
 Extensive knowledge of Trade & Customs
Practices around the world
 Deep understanding of
 import and export laws and regulations,
 The Global Supply Chain
 Trade Processes and Controls
 Extensive knowledge of Pharmaceutical
Laws and Regulations
 Forward-thinking attitude/Global Mindset
 Harmonisation of Regulatory Requirements

10. Cross-Border Pharmaceutical
Trade in Africa
 Harmonisation of Regulatory
Requirements is a key driver for
increased intra-regional trade
 East Africa has made significant
progress in this regard by making
Product Registration in one Country
acceptable for trade in another country
 Leading to improved Compliance and
enhanced Cross-Border Pharmaceutical
Trade

11. Key Considerations for Successful
Regional Harmonisation in Africa
 A need to adopt a step-wise approach to harmonisation (e.g Start
with Generics)
 A need to invest in regulatory and industry capacity building,
 Acknowledgment that NMRAs must follow through on their mandate
to promote and protect public health
 Sustainability, transparency and trust building
 Use of existing structures and broader REC strategies to advocate
for AMRH
 National sovereignty must be respected,
 Existing forums should be used to provide regulators with practical
advocacy (African Medicines Regulators Conference (AFDRAC),
International Conference for Drug Regulatory Authorities (ICDRA),
International Conference on Harmonisation Global Cooperation Group (ICH-
GCG)
 Need for the Consortium to keep all stakeholders informed and
involved
 Need to capitalise on strategic niche roles of key players
including:WHO, NEPAD, DFID, etc.

12. Industry’s Goals
 Improve Efficiency
 Harmonisation of Regulatory
Requirements
 Speedier Port Clearance
 Reduce Cost
 Mitigate Risk Issues concerning
conducting cross-border business

13. What is Trade Compliance
 Trade compliance is the process by
which goods enter into a Country in
conformance with all laws and
regulations of that Country.
 It should be the goal of the Customs
Service to maximize trade compliance
while facilitating the importation of
legitimate cargo.

14. Drivers of Increased Compliance
Focus in Cross-Border
Pharmaceutical Trade
 tremendous increase in international
trade and transport,
 the growing awareness of trans-
national organized crime and, more
recently,
 the threat of terrorism.
 increased awareness in Customs
administrations that national and and
international co-operation is essential

15. Pharmaceutical Regulatory Aspects
of Compliance in Cross-Border
Pharmaceutical Trade
 Pharmacy & Drug Laws
 NAFDAC Act, Cap N1 LFN 2004 (formerly Decree 15 of 1993 as
amended) + 14 Subsidiary Regulations
 Drugs and Related Products (Registration, etc) Act Cap F33 LFN 2004
(Formerly Decree 19 of 1993 (as amended)
 Pharmacists Council of Nigeria (PCN) Act 91 of 1992
 Food and Drugs Act Cap 150 LFN (as amended)
 National Drug Formulary and Essential Drugs List Act Cap 252 LFN
1990
 Counterfeit and Fake Drugs and Unwholesome Processed Foods
(Miscellaneous Provisions) Cap 34 LFN 2004 (formerly Decree 25 of
1999)
 Poisons and Pharmacy Act (PPA) Cap 535 LFN 1990
 Dangerous Drugs Act (DDA) Cap 91 LFN 1990
 NDLEA Act of 1989

Remi ADESEUN

16. NAFDAC
MANDATE
 NAFDAC was established by Decree No. 15 of 1993 (now
NAFDAC Act CAP N1 LFN, 2004) to Regulate and Control the
Importation, Exportation, manufacture, distribution, advertisement,
sale and use of Foods, Drugs, Cosmetics, Medical Devices,
Chemicals, Detergents and packaged water.
 This mandate places on Ports Inspection Directorate (PID) the
responsibility of carrying out the following functions and exercising
powers as described in sections 5d,5e and 5g of the NAFDAC Act.

17. NAFDAC Act CAP N1 LFN, 2004
5d) undertake inspection of imported food, drugs, cosmetics, medical devices,
bottled water and chemicals and establish relevant quality assurance
systems, including certification of the production sites and of the
regulated products;
5e) compile standard specifications and guidelines for the production,
importation, exportation, sale and distribution of food, drugs, cosmetics,
medical devices, bottled water and chemicals;
5g) control the exportation and issue quality certification of food, drugs,
cosmetics, medical devices, bottled water and chemicals intended for
export.
NAFDAC

18.  NAFDAC controls the importation and exportation of
all the products covered by this Act at the Sea Ports,
Airports and Land borders.
 No NAFDAC regulated product shall be imported into
and exported out of Nigeria unless it has been duly
registered and/or issued a permit or certificate in
accordance with the provisions of Act Cap F33 LFN 2004
and the accompanying guidelines.
NAFDAC

19.  To control and inspect imported food, drugs, cosmetics, medical
devices, and chemicals at ports of entry.
 To control the export of food, drugs, cosmetics, medical devices, and
chemicals and issue quality certification of the above products for
export.
 Duties also include compilation of guidelines & regulation for
importation/exportation of regulated products.
 Collaborate with other relevant Agencies, Organizations and the
Private Sector at the Ports and Land Borders.
 Sampling of relevant products for lab analysis before final release
 Implementation of Government fiscal policy on the prohibition of
imports of regulated products through the ports and land borders.
NAFDAC: Functions

20.  Imposition of sanctions and administrative penalties for violations
including outright seizures for violative products and apprehension
of culprits.
 Operation of 24-hour surveillance at designated airports.
 Organizing seminars, workshops and meetings to sensitize, update
and create awareness on NAFDAC regulations as it concerns imports
and exports.
 Holding Consultative meetings with sectoral groups and
stakeholders to encourage regulatory compliance.
NAFDAC: Functions

21. A.) IMPORTS:
The divisions in PID ensure proper documentation and
endorsement of customs documents during importation.
The Ports (sea and Air) and Land border offices conduct
physical inspection of goods, Hold assignments, fast track
activities and final release of goods at the various ports and
land borders.
Import Activities occur as:
 Pre-clearance Activities
 Clearance Activities
 Post Clearance Activities
NAFDAC: Operations

22. B.) EXPORTS:
NAFDAC mandate covers the certification of finished pharmaceutical
products that are meant for export.
The following Certificates are issued on satisfying the requirements for
export:
 Combined Certificate of manufacture and free sale (for registered
products)
 Certificate of Pharmaceutical Products (COPP).
 Free sale Certificates for products not manufactured in Nigeria but
sold in Nigeria.
 Export Certificate for goods transported through Land Borders for
ECOWAS Market.
NAFDAC: Operations

23.  Pre-Clearance Processes involves
 Pre-arrival notification.
 Clearance Processes involves
 E-Clearance Assessment
 Payment of NAFDAC Charges
 Documentation and First Endorsement
 Physical Inspection
 Second Endorsement
 Release of Goods to importers’ ware
house
NAFDAC: Operations

24. The Federal Government in her wisdom made laws which
empowers several Government Agencies including NAFDAC to
regulate activities at the Ports.
In the light of this, the Federal Government in 2005 adopted the
Destination Inspection (DI) Scheme.
The objectives of the Destination Inspection Scheme include:
1. To improve clearance of goods by using latest technology tools for
documentary checks risk assessment and on the job training.
2. Facilitate trade through Risk Management and the use of non-
intrusive inspection (x-ray scanners) of imports thereby minimizing
the need for physical examination.
3. To enhance Government import revenue collection and the
detection of illegal and false declaration of imports.
Ports Inspection Directorate
NAFDAC: Operations

25.  All consignments imported into Nigeria are subjected
to some form of documentary checking and Risk
Assessment. These functions are performed by Nigeria
Customs Service and Webbfontaine Nigeria Limited.
 NAFDAC is connected with Nigeria Customs Service on the
Nigeria Trade Hub at www.nigeriatradehub.gov.ng and
http://trade.gov.ng for ports operations.
 To facilitate legitimate trade, NCS in collaboration with
regulatory agencies have listed all regulated products into
HS Codes, clearing lanes as follows on the next slide:
NAFDAC: Operations

26. Customs Clearing Lanes
NAFDAC
Customs
Auto release
Output 1
Fast Track
Facility
Output 2
Documentary
Check
Output 3
Scanning
Output 4
Physical
Inspection
Output 5
NAFDAC finished Pharmaceutical products fall under the deep red lane
which is for physical inspection
X

27. ROUTES FOR DRUGS CLEARANCE
NAFDAC.
Drugs,
Food,
Cosmetics
Medical
Devices,
Agrochemicals,
Raw Materials
Lagos Ports
Drugs,
Food,
Cosmetics
Medical
Devices,
Agrochemicals,
Raw Materials
Airports
Food,
Cosmetics,
Agrochemicals
Land Borders
Food, Cosmetics
Medical
Devices,
Agrochemicals,
Raw Materials
Other Sea Ports
Note: Drug products are not allowed through any port except for Lagos Ports and Airports

28. NAFDAC: Procedures for Drugs
Clearance
28 5/29/2014
1. Declaration of
importation on
ASYCUDA at
Customs DTI (Direct
Trader Input) Cafe
2. Costing for NAFDAC
Charges NAFDAC
eClearance Unit
3. First Endorsement
of relevant
documents
4. Physical Inspection of
Products at ports and
importer‘s warehouse
5. Submission of relevant
documents for second
endorsement and release
6. Final
Release

29. NAFDAC: Documents Required for 1st
Stamp for Finished Pharmaceutical
Products
 Letter of undertaking &
Introduction (Original Copy)
 Certificate of Analysis (Original
Copy)
 NAFDAC Certificate of
Registration or Notification
preferably 2013 – 2014
 Electronic SGD
 CRIA (Original) e.g
 *India – QCS, Silis Labs, ACS
 *China – NHU, Hanlin Shangai,
Quangzhou Test Tech.
 *Egypt - ITG
 Photocopy of Payment Advice
 Form C-30
 Annual License to practice as a
Pharmacist
 Retention of Premises
 NAFDAC receipt of payment
 Permit to Import & Permit to Clear
Controlled Substances
 Packing list
 Bill of lading/Airway bill
 Invoice
 Pre-Shipment Information for
Finished Pharmaceutical Products
 Form M
5/29/2014 29

30. NAFDAC: Documents Required for 2nd
Stamp for Finished Pharmaceutical Products
& Controlled Substances
 Certificate of Analysis/CRIA
 Invoice
 Electronic SGD
 Bill of Lading/Airway Bill
 Form M
 Packing List
 PAAR (Pre-Arrival Assessment Report)
 Physical Examination Sheet
 NAFDAC Reg. Certificate
 Permit to Import & Permit to Clear (Original where
applicable)
5/29/2014 30

31. 5/29/2014 31
Documents not originating from NAFDAC and
used by Nigeria Customs Service for the
clearance of NAFDAC regulated products
S/NO DESCRIPTION
1 Single Goods Declaration
2 Pre Arrival Assessment Report
3 Form M
4 Bill of Lading/Airway Bill
5 Packing List
6 Invoice
Documents not originating from
NAFDAC and used exclusively by
NAFDAC for the clearance of NAFDAC
regulated products
S/NO DESCRIPTION
1
Certificate of Analysis of the
product
2
Pharmacist License and
Premises Licence
3
Clean Report of Inspection &
Analysis (CRIA)
NAFDAC: Operations

32. 5/29/2014 32
Documents originating from NAFDAC and used for the clearance of
NAFDAC regulated products
S/NO DESCRIPTION
1
NARCOTICS AND CONTROLLED SUBSTANCES
DIRECTORATE (NCS)
Permit to import Narcotics substances
Permit to import Psychotropic and Other controlled
Substances
2
CHEMICAL EVALUATION AND RESEARCH DIRECTORATE
(CER)
Permit to import Controlled Chemicals and Solvents
3
REGISTRATION AND REGULATORY AFFAIRS
DIRECTORATE (R&R)
Certificate of Registration/Notification of Registration
Preferably 2013 - 2014
NAFDAC: Operations

33. Functions of Nigeria Customs
Service in the Nigerian Economy:
i. Revenue Collection
 Customs & Excise Management Act, Cap 84 Laws of the
Federation [CEMA, Section 4], LFN.1990 – power to
control and manage administration of the Customs &
Excise Laws. Collects and account for revenue.
 [ii] Anti – smuggling operations
Applicable at: Borders, sea and airports – checks
contrabands, hazardous goods, national security
interest.
 Physical interception, examination of goods and
documents.
 33

34. Functions of Nigeria Customs
Service in the Nigerian Economy:
 Agency Function (Inter-Agency)
 NCS performs inter-agency functions on behalf of other
government agencies, namely;
 Nigeria Police Force – seizure of arms and ammunitions.
 National Agency for Food and Drug Administration and Control
[NAFDAC] – prevents illegal importation of foods, drugs and
chemicals.
 National Drug Law Enforcement Agency [NDLEA] – prevents
importation and exportation of hard drugs.
34

35. Nigeria Customs Service (NCS):Trade
Facilitation Objectives
 Generation of Trade Statistics
 Trade Facilitation
 Trade facilitation at the core of Customs operations
due to the following
 Developments in the WTO with emphasis on trade
liberalization and facilitation.
 Development of Free Trade Areas across the regions
of the world – removing tariff and non-tariff barriers
to speed up economic development .
 NCS strategic positions at the entry and exit points of
Nigerian borders; lead agency role
35

36. Nigeria Customs Service (NCS):
Trade Facilitation Objectives
 To improve the trade environment and
reduce transactions cost between
business and government.
 To attract Foreign Direct Investment
(FDI).
 To make Nigeria’s borders competitive
by un-impeded flow of goods, services
and investment funds through the
borders.
36

37. I. Implementation of global best practices as a core objective
of NCS modernization agenda.
II. Revised Kyoto Convention (RKC) on the simplification
and harmonization of Customs procedures- Pre-
lodgement and Pre-registration.
III. WCO guidelines on immediate release of consignment -
PreArrival processing.
IV. Facilitation of trade through provision of adequate &
accurate information in the Nigeria Trade Hub Portal (NTH).
NCS New PAAR Policy

38. What is PAAR?
•P- Pre
•A- Arrival
•A- Assessment
•R- Report
•Pre-Arrival Assessment Regime allows importer/Agents to
submit import Documents for assessment and issuance of
PAAR (for Clearance) before the arrival of the cargo

39. PAAR Application provides timely multi-dimensional risk analysis at every
stage of Customs processes.

40. Risk Management Approach in
Customs Controls
 Risk: The potential for non-compliance
with Customs (& NAFDAC) laws.
 Risk analysis: Systematic use of
available information to determine how
often defined risks may occur and the
magnitude of their likely consequences.
 Risk areas: Those Customs procedures
and categories of international traffic
which present a risk.

41. Risk Management Approach in
Customs Controls...2
 Risk assessment: The systematic
determination of risk management priorities
by evaluating and comparing the level of
risk against predetermined standards,
target risk levels or other criteria.
 Risk indicators: Specific criteria which,
when taken together, serve as a practical
tool to select and target movements for
their potential for non-compliance with
Customs law.

42. Risk Management Approach in
Customs Controls...3
 Risk management: Logical and
systematic method of identifying,
analyzing and managing risks. Risk
management can be associated with
any activity, function or process
within the organization and will
enable the organization to take
advantage of opportunities and
minimize potential losses.

43. Risk Management Approach in
Customs Controls...4
 Risk profile: A predetermined,
comprehensive and relevant
combination of characteristics or risk
indicators, based on information
which has been gathered, analyzed
and categorized.

44. Risk Management Approach in
Customs Controls...5
 Risk profiling: The means by which Customs
put risk management into practice. It replaces
random examination of documents and goods
with planned and targeted working methods
that use profiles as a basis.
 Standardized Risk Assessments
(SRAs): These Assessments produce risk
indicator products for use by Customs officials
for the purpose of targeting goods and
conveyances in their daily work.

45. Consumer Protection
 Service Failure
 Arising from Agencies and Service
Providers
 Remedy
 Waive Penalties for Infractions that are
beyond the control of Companies
 Dispute Resolution Mechanism
 No Agency must be allowed to be
Prosecutor, Judge and Jury

46. Best Practice:
Customs Trade Compliance
 Focused Assessments (FA)
 a detailed review of the company's internal controls for
Customs transactions coupled with an audit of selected import
transactions.
 Goal: determine the company's current level of compliance,
and whether or not there are sufficient systems in place to
ensure a high level of compliance with Customs laws and
regulations for future transactions.
 Outcome: Compliant or Non-Compliant.
 If Non-Compliant, the company will be required to formulate
a compliance improvement plan (CIP), and tender any
revenue found to be owing.

47. Getting it Right: Facilitation,
not Encumbrance!

48. Summary
 Globalisation:
 Has led to greatly increased volume of Global and Cross-Border
Trade
 Increased fortunes for developed nations and increased
opportunities for smart developing nations
 Developing nations need to take advantage of Globalisation for
prosperity while avoiding inequalities of wealth distribution
 All need to be aware of the risks that have come with Globalisation
and mitigate against them
 Cross-Border Trade:
 Essentialy between Neighbours
 Regional Cooperation is enlightened self-interest and should be
encouraged
 Inventory the relevant National laws/regulations and harmonise
across the region
 Keep all stakeholders actively informed and involved

49. Summary
 Trade Compliance:
 Conventionally driven by Customs
 Customs should regularly compile and communicate Compliance
Issues/Breaches to Industry with a view to aiding improvement
 Goal should be facilitation of Trade not encumbrance
 Policy implementation must be customer-centric and culture must
be to protect consumer rights while pursuing National Interest
 Dispute Resolution Systems and Structure must be established
 Cross-Border Pharmaceutical Trade (CBPT):
 Deference should be given to the difference between Professionally
Regulated Pharmaceutical Trade and Trade in General Goods
 There should be greater inter-agency collaboration especially
between Customs and NAFDAC given the key role the latter plays
in regulating CBPT
 Companies need to establish Compliance Management Desks and
give it appropriate Executive Oversight

50. Thank You!
Contact Information:
Remi ADESEUN
Chairman
Programs Committee
Pharmaceutical Society of Nigeria
08057713769/07065156473
radeseun@gmail.com
r.adeseun@rodot.org