Take it easy, Customs urges industry players
The Jamaica Customs Agency (JCA) is urging stakeholders to hold strain, while changes are being made to the legislation governing its processes. But the players are worried over what they feel are amendments that will lead to nothing but more of the same challenges they have been grappling with for years.
They say that what the Government is coming with are more penalties, underpinned by other onerous provisions, which assume that everyone is out to beat the system.
“Based on the draft presented to us so far, the revision clearly would heighten the revenue collection processes and fees, and the fines that customs collect,” Chief Financial Officer at Lannaman and Morris Group, William Brown believes.
Brown said that shipping agents have made “numerous overtures” to both JCA and the Port Authority of Jamaica over the past three to four years, about their concerns that the legislation is skewed too much in the direction of “catching” people, and extracting as much as possible from importers. He feels that despite several meetings, and information to back up make their case, the suggestions and concerns of the agents have not been reflected in the various drafts of the Customs Bill.
President of the Shipping Association of Jamaica, Trevor Riley shared the sentiment. He argued that the current proposed legislative changes were “backwards” and “do not in any way support the ostensible direction that we have charted”.
He further submitted: “They are ammendents that will increase the fines, and increase the power of Customs to generate revenue rather than facilitate the movement of cargo. Also, the proposed changes to the Port Authority Act are not changes meant to modernise shipping, or even to encourage private sector participation. It is (also) for example, giving the Authority more power to compete against entities that it regulates”.
The SAJ head said that customs seemed to be of the official view that it needed to go after the majority in order to catch those who are circumventing the system.
One frustrated exporter sited a number of occasions on which he feels he had been unfairly dealt with by the customs agency. For him, the agency is hell bent on going after the tax dollars up front, instead of over the long term, and far too inflexible. “In every other country, you have flexibility, you can bring in your goods, take it wherever you want, once its put into a bonded wharehouse or a free zone, its fine. But not Jamaica. It’s so difficult to get anything done. Even if there is a gray area, they (customs) will always side with ‘no’.
“The only conclusion I can draw from this is that the Government or Customs feel everybody is a thief, and they operate in that way”.
Chief Executive Officer of Seaboard Jamaica Limited, Corah-Ann Robertson-Sylvester, herself also clearly frustrated with the system, reasoned that the challenge with customs is that due to its executive agency, status, it had no choice but to make revenue generation its primary focus.
But Riley contended that this should not be a barrier to facilitation. “The fact that you have to also earn your revenue is not a barrier or excuse”. Still, he acknowledged that the executive agency factor was certainly part of the problem, pointing out that even while customs is mandated to help fill up government’s coffers, the agency is also going after the ‘almighty dollar’ in order to sustain itself.
He described this arrangement as “a little irregular,” which presents as a conflict of interest, noting that, customs agencies around the world, are managed from central coffers. “But at the same time, the facilitation of trade would mean that customs would be able to help the economy to grow,” he remarked.
Riley said that it is not that the players are unaware or insensitive to the financial bind that the country is in. However, he asserted that the Government has not proven that the measures now being taken to update and modernise the legislation would make the procedures and operations of customs any less cumbersome and anti-business.
In fact Riley debated that: “What they are telegraphing down the road, in terms of the legislation, suggests a counter-productive future. They have not said to us, these are the challenges that we are having now, but look at how we are making projections for the future, by changing the laws. What we are seeing is a concentration of this effort where you’re actually stifling business rather than expanding it”.
Countering these perceptions, Chief Executive Officer and Commissioner of the JCA, Major Richard Reese insisted that all stakeholders, “including Riley and company,” are well aware of the roadmap to modernising the legislation, and the agency as a result. He said that stakeholders have been given ample opportunity to ventilate their concerns, and make suggestions towards the legislative adjustments.
According to the customs boss, the agency has since November of last year actively engaged the stakeholders at a number of fora, some of which have even been conducted on weekends. He noted that the first phase of these discussions began in 2013.
“At those meetings the first set of amendments dealt with amendments to support the implementation of an electronic system — ASYCUDA (Automated System for Customs Data) — and that would speak to all the changes necessary to bring that into being,” he told the Jamaica Observer.
He said that from the outset, customs clearly stated that the process would be three-phased, to include the implementation of ASYCUDA in the first instance, followed by harmonisation of the Customs Act, to bring it in line with similar pieces of legislation in the Caribbean region.
Reese admitted that the law is not among the most easily interpreted. But some exporters have said that in too many instances it is not just a matter of interpretation, but excessive interpretation on the side of non-facilitation
“The act is difficult to understand. So we have addressed the penalties — if something was written in 1941, the penalties may not be relevant in this day and age. Any penalties that are imposed, there has to be some consistency across the various laws,” Reese said.
There are still another set of changes to come, including those related to the Special Economic zone Act, which investment minister, Anthony Hylton has indicated should come on stream later this year.
Furthermore, the commissioner said that the Ministry of Finance had established an incentives working group, which was co-chaired by Government and private sector groups, to examine a raft of measures that were to be implemented, relative to critical pieces of legislation such as Charities Act, and the Omnibus Act, which were passed in 2013.
“What that does is that if there is a decision or position by Government, which impacts a sector, they have a forum on which to voice their concerns, and discuss alternatives. In addition ongoing dialogue took place regarding the customs administration fees with manufacturers and adjustments have been made over time, so Government has been responsive,” he outlined. Reese said that it was from this broader dialogue that it was decided to maintain permanency, through the setting up of a fiscal linkages committee.
He emphasisesdthat it is not true that the powers that be are not listening to the players, or have not taken their concerns and input seriously.
“When the bill is drafted, when it goes to the legislative committee (of Parliament), all those issues are put on the table, so that they are fully aware of what the various stakeholders positions are. Decisions are made, the document goes back to Cabinet, and then it goes to parliament,” he explained.
The CEO pointsedout that after the bill is referred to a sub-committee of Parliament, there is yet another opportunity for advocacy. He notedthat in the past, no such multiple opportunities existed for consultation and stakeholder involvement.
“If you look at the legislative agenda of successive administrations, these (amendments) are being done in very short order, because we recognise the urgency of the situation, relative to trade facilitation, and reducing bureaucracy. When legislation was being amended (in the past), it was crafted, it would go to Parliament, and that’s when the show starts. But the Government has taken an approach of inclusiveness and consultation, all the way through the process. The idea is that when it gets to Parliament, there should be fewer issues on the table, and no surprises,” the commissioner told the Sunday Observer.
He noted that in one instance, a major stakeholder had written a 29-point list of views and concerns regarding the amendments, to which a response was provided within two weeks. “So it’s a very open dialogue,” he said.
The Customs Act was enacted in 1941, followed by a series of ammendments from 1960 to 2014, the most major of which were done in 2004. The 2014 ammendment included the new provision for ASYCUDA. Also, other subsidiary legislation has been passed, in addition to a number of orders which relate to the Act.