In Defence of The Customs Department
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?