In De­fence of The Cus­toms Depart­ment

The Star (St. Lucia) - - LOCAL - By

Ihave de­cided to add my voice to the on­go­ing dis­cus­sion about Cus­toms, if only to bal­ance the equa­tion by pre­sent­ing an­other per­spec­tive to the dis­course. The view ex­pressed by Mr Vic­tor Gi­rard in his let­ter of April 1, 2015 is note­wor­thy and per­haps de­serves a lot more anal­y­sis than so far given by the me­dia. Mr Gi­rard’s main con­cern was about Cus­toms’ ac­tions re­lated to “ar­bi­trar­ily in­creas­ing the in­voice value of goods” and ac­tions on the part of of­fi­cers to “de­tain goods as li­able to for­fei­ture” with­out hav­ing es­tab­lished that there has been a breach of the Cus­toms Law. Th­ese are fun­da­men­tal is­sues which lie at the core of the cur­rent dis­tur­bances and which so far have re­ceived a dis­torted and per­haps onesided view mainly from per­sons who pre­sented them­selves as vic­tims of a dra­co­nian Cus­toms regime. Sim­i­lar to Mr Gi­rard, I would not sup­port any ac­tion by Cus­toms of­fi­cers which is il­le­gal. How­ever, the fail­ure of Cus­toms to speak in its own de­fence should not be per­ceived as an ad­mis­sion of guilt. The truth is that there are some un­scrupu­lous and dis­hon­est im­porters in Saint Lu­cia who sub­mit false doc­u­ments and at­tempt to evade cus­toms du­ties. When they are caught they cry foul and make all sorts of ac­cu­sa­tions to dis­tract from the real is­sue.

Cus­toms value is de­fined as “… the trans­ac­tion value, that is, the price ac­tu­ally paid or payable for the goods when sold for ex­port to Saint Lu­cia.” The Val­u­a­tions of Goods is in the Cus­toms (Con­trol and Man­age­ment) Act which is based on the WTO Val­u­a­tion Agree­ment. Trans­ac­tion value should re­flect com­mer­cial re­al­ity and is ap­plied in the ma­jor­ity of im­port trans­ac­tions. How­ever, there are in­stances when, due to that ab­sence of proper and suf­fi­cient in­for­ma­tion, it is not pos­si­ble to de­ter­mine trans­ac­tion value based on the doc­u­men­tary ev­i­dence. In such cases the rules per­mit the cus­toms value to be determined based on a sys­tem of rules which con­sid­ers iden­ti­cal or sim­i­lar goods, a de­duc­tive or com­puted method, and a fall back method – in de­scend­ing or­der. The rules per­mit ad­just­ments to be made to sell­ing price to re­flect cost of trans­porta­tion and other charges in­curred in the course of mov­ing the items from the ori­gin to the des­ti­na­tion. The cus­toms value is usu­ally termed as the CIF value which in­cor­po­rates Cost, In­sur­ance and Freight; but which, in con­tract­ing terms, means that the li­a­bil­ity of the ship­per ends when the goods ar­rive at the des­ti­na­tion – usu­ally a named port (CIF St. Lu­cia).

The na­ture of a trans­ac­tion, in­clud­ing the terms of the sale and con­di­tion of goods, is an im­por­tant con­sid­er­a­tion in de­ter­min­ing the cus­toms value of goods. Used ar­ti­cles such as house­hold ef­fects, equip­ment, ma­chin­ery, mo­tor ve­hi­cles, usu­ally present se­ri­ous chal­lenges for Cus­toms of­fi­cials to de­ter­mine proper val­ues in the ab­sence of full dis­clo­sure of in­for­ma­tion by im­porters. The fact is cus­toms du­ties on some goods, such as mo­tor ve­hi­cles, are ex­ceed­ingly high and as such there is a prac­tice (some may say in­cen­tive) for many im­porters to present in­voices on which they would pay as lit­tle as pos­si­ble. In essence they at­tempt to de­fraud the du­ties and taxes due by pre­sent­ing de­flated or fraud­u­lent val­ues. It is the job of the Cus­toms of­fi­cer to deal with this level of de­cep­tion and take ap­pro­pri­ate mea­sures. I ac­cept that it should not be ar­bi­trary or dra­co­nian; how­ever, the law re­quires that in such in­stances the goods may be re­leased on pro­vi­sion of ad­di­tional se­cu­rity in the form of a de­posit or bond by the im­porter. This is where the con­tention nor­mally be­gins and some­times fiery ex­changes and un­war­ranted state­ments may be made when emo­tions take over and de­scend into un­pleas­ant di­a­tribe.

Part of the prob­lem is that there is no func­tion­ing mech­a­nism for deal­ing swiftly with such dis­putes. The Cus­toms Ap­peals Com­mis­sion ap­pointed un­der the Cus­toms Act has never func­tioned due to the ab­sence of the ad­min­is­tra­tive struc­ture and sup­port. It has no of­fice or phys­i­cal lo­ca­tion, postal ad­dress or any of the re­quire­ments to make it func­tion. It ex­ists in law but not in re­al­ity. As a re­sult the courts are over-bur­dened with Cus­toms dis­putes and there are nu­mer­ous un­re­solved is­sues, many of them for ju­di­cial re­view fol­low­ing ad­min­is­tra­tive pro­cess­ing.

The detention or seizure of the goods is an­other mat­ter en­tirely. Of­ten it is not a detention per se, but re­fusal on the part of the im­porter to meet the re­quire­ments for re­lease. Some­times when im­porters claim their goods are kept by Cus­toms, it is be­cause they have not or can­not pay the ad­di­tional monies de­manded by way of se­cu­rity for re­lease. In­deed, one of the con­di­tions for seek­ing re­dress from the Cus­toms Ap­peals Com­mis­sion or the courts is pay­ment of any amounts in dis­pute be­fore the case can be heard.

A seizure by Cus­toms, on the other hand, must fol­low a process in law. If there is a breach or an in­frac­tion of the law which war­rants a seizure of goods, then the of­fi­cer must ad­vise the im­porter or his rep­re­sen­ta­tive of the breach and the ap­pro­pri­ate sec­tion of the Act that has been breached. A no­tice of seizure must be given to the im­porter as soon as pos­si­ble, and the im­porter or his agent has 30 days in which to con­test the seizure. Usu­ally that in­volves meet­ing with the Comptroller of Cus­toms or other se­nior of­fi­cial. The im­porter may ac­cept that a breach was com­mit­ted and re­quest that the mat­ter be dealt with ad­min­is­tra­tively. The Cus­toms Comptroller usu­ally ac­cedes to this re­quest and set­tles the mat­ter ad­min­is­tra­tively with the pay­ment of the ad­di­tional du­ties and a penalty, if deemed ap­pro­pri­ate in the cir­cum­stances. Al­ter­na­tively the im­porter may elect to ap­peal the mat­ter to the Cus­toms Ap­peals Com­mis­sion but must first pay the amount dis­puted or take the mat­ter to court. Many per­sons have cho­sen to go di­rectly to court, mainly to avoid hav­ing to pay any ad­di­tional amount re­quired by Cus­toms. Un­til re­cently Cus­toms did not have in-house legal sup­port and was there­fore re­luc­tant to opt for pros­e­cu­tion of of­fend­ers, largely be­cause of the limited re­sources of the At­tor­ney Gen­eral’s Cham­bers and the DDP’s Of­fice. With­out the op­tion of ad­min­is­tra­tive pro­cess­ing there would be an even greater num­ber of un­re­solved Cus­toms dis­putes be­fore the court.

The moi­ety or re­ward sys­tem has also re­ceived some at­ten­tion in the me­dia. As noted by Mr Gi­rard, this is an in­te­gral part of Cus­toms op­er­a­tions and is used in many coun­tries for re­ward­ing per­sons for ex­cep­tional ac­tions. Un­der the Cus­toms Act the Comptroller may re­ward any per­son, in­clud­ing an of­fi­cer, for any ser­vice in re­la­tion to an as­signed mat­ter in­clud­ing any in­for­ma­tion re­lat­ing to any of­fence against the Cus­toms en­act­ment or for as­sist­ing in the re­cov­ery of any fine or penalty, which ap­pears to him or her to merit re­ward. As far as I know there is a very trans­par­ent process used to de­ter­mine the pay­ment of such re­wards and, as such, the sys­tem should not be con­tro­ver­sial. It is not meant to re­ward any Cus­toms of­fi­cer for rou­tine work, but rather for ex­cep­tional per­for­mance, and may be viewed in the con­text as nec­es­sary to pre­vent of­fi­cers from look­ing the other way, ac­cept­ing bribes or col­lud­ing with an of­fender. It is not meant to be a cor­rupt prac­tice as is be­ing sug­gested by per­sons who do not fully un­der­stand how the sys­tem works. Per­haps the process can be made even more trans­par­ent by pub­lish­ing the re­wards paid to the of­fi­cers and the jus­ti­fi­ca­tion for do­ing so.

At the time of writ­ing, the mat­ter was fur­ther ven­ti­lated within the Par­lia­ment of St. Lu­cia dur­ing the 2015/16 bud­get de­bate. The rep­re­sen­ta­tive for

There is no doubt in my mind that St. Lu­cia Cus­toms is in need of ur­gent at­ten­tion notwith­stand­ing the re­cent signs of im­prove­ment in the area of fa­cil­i­tat­ing trade. The re­forms un­der­taken in the late 1990s and early 2000s have been over­taken by rapid im­prove­ments in tech­nol­ogy and the de­mand for im­proved ser­vice de­liv­ery. The laws are still based on con­di­tions from the 1970s and 80s and must be amended and con­stantly up­dated. Other coun­tries like Ja­maica, Trinidad and the Do­mini­can Repub­lic have made sig­nif­i­cant strides while we have re­mained stag­nant. The mind-set of some se­nior of­fi­cials, which re­mains skewed and biased to­wards en­force­ment, is not well placed at the de­ci­sion-mak­ing level of re­spon­si­bil­ity.

The in­ten­tion of the Gov­ern­ment to amend the Cus­toms Act is there­fore timely and wel­comed but that is only part of the so­lu­tion. There is also a need for pro­fes­sion­al­is­ing Cus­toms through tar­geted ca­pac­ity-build­ing ini­tia­tives and long-term in­vest­ment in hu­man re­source devel­op­ment. There is tal­ent within the ranks of the Cus­toms Depart­ment but it must be har­nessed and al­lowed to de­velop within a more sup­port­ive en­vi­ron­ment, free of po­lit­i­cal in­ter­fer­ence and un­war­ranted per­sonal at­tacks. The few bad ba­nanas should be ex­cised and not be al­lowed to con­tam­i­nate the whole Cus­toms bunch.

Claude Paul is a for­mer Comptroller of Cus­toms

Is the Cus­toms and Ex­cise Depart­ment, and its of­fi­cers, be­ing un­fairly scru­ti­nized and crit­i­cized?

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