Compliance in cross border pharmaceutical trade
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Transcript of Compliance in cross border pharmaceutical trade
The role of compliance in pharmaceutical cross-border trade
Phamaceutical Society of NigeriaGlobal Trade Compliance SummitSheraton Hotel, Lagos (May 22,2014)Presented by Remi ADESEUN, FPSN.
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
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.
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
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
Global Trade
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.
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/
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
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
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.
Industry’s Goals Improve Efficiency
Harmonisation of Regulatory Requirements
Speedier Port Clearance Reduce Cost Mitigate Risk Issues concerning
conducting cross-border business
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.
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
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
Drug Laws
Poisons and Pharmacy Act (PPA) Cap 535 LFN 1990
Dangerous Drugs Act (DDA) Cap 91 LFN 1990
NDLEA Act of 1989
Remi ADESEUN
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.
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
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
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
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
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
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
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
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
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
Customs Clearing LanesNAFDAC
Customs Auto release
Output 1Fast Track
Facility
Output 2Documentary
Check
Output 3ScanningOutput 4
Physical Inspection
Output 5
NAFDAC finished Pharmaceutical products fall under the deep red lane which is for physical inspection
X X X X
ROUTES FOR DRUGS CLEARANCENAFDAC.
Drugs, Food,
Cosmetics Medical Devices,
Agrochemicals,Raw Materials
Lagos PortsDrugs,
Food, Cosmetics
Medical Devices,
Agrochemicals,Raw Materials
AirportsFood,
Cosmetics, Agrochemicals
Land BordersFood, Cosmetics
Medical Devices,
Agrochemicals,Raw Materials
Other Sea Ports
Note: Drug products are not allowed through any port except for Lagos Ports and Airports
XDrugs
NAFDAC: Procedures for Drugs Clearance
28 04/07/2023
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
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 M04/07/2023 29
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)04/07/2023 30
04/07/2023 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
2Pre 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
3Clean Report of
Inspection & Analysis (CRIA)
NAFDAC: Operations
04/07/2023 32
Documents originating from NAFDAC and used for the clearance of NAFDAC regulated products
S/NO DESCRIPTION
1NARCOTICS AND CONTROLLED
SUBSTANCES DIRECTORATE (NCS)Permit to import Narcotics substances
Permit to import Psychotropic and Other controlled Substances
2CHEMICAL EVALUATION AND RESEARCH
DIRECTORATE (CER)Permit to import Controlled Chemicals and
Solvents
3REGISTRATION AND REGULATORY AFFAIRS
DIRECTORATE (R&R)Certificate of Registration/Notification of
Registration Preferably 2013 - 2014
NAFDAC: Operations
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 operationsApplicable at: Borders, sea and airports – checks contrabands, hazardous goods, national security interest.
Physical interception, examination of goods and documents.
33
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
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
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
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
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
PAAR Application provides timely multi-dimensional risk analysis at every stage of Customs processes.
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.
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.
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.
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.
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.
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
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.
Getting it Right: Facilitation, not Encumbrance!
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
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
Thank You!
Contact Information:Remi ADESEUN
Chairman
Programs Committee
Pharmaceutical Society of Nigeria
08057713769/07065156473