The Tribune

By NEIL HARTNELL Tribune Business Editor The Government's decision to establish a committee to revise the Customs Guide to Freeport was yesterday hailed as "a first step to breathe modern life back into the Hawksbill Creek Agreement", a leading QC telling Tribune Business that this body's remit should be expanded to assess other agencies that have "stultified" the city's growth. Fred Smith QC, attorney and partner at Callender's & Co, said Prime Minister Hubert Ingraham's address to Free National Movement (FNM) supporters at Sunday night's rally indicated the current administration had "recognised" the importance of Freeport's 'bonded goods' trade, which generated between $70-$120 million in economic activity annually. Backing the Government's move, which also includes a review of the requirement that Grand Bahama Port Authority (GBPA) licensees submit to Customs their C14A declarations of all 2011 bonded goods purchases, including in order to receive their 'over-the-counter' bonded letters for 2012, Mr Smith urged the committee's mandate to review the actions of other public sector agencies that have also proven to be "flies in the ointment". "As a licensee of the Port Authority, I am elated that the Prime Minister is creating a forum comprising of the Port Authority, Ministry of Finance and licensees to perhaps develop a working model for respect of the rights of licensees under the Hawksbill Creek Agreement," Mr Smith told Tribune Business. "While, at the same time, ensuring the regulatory responsibilities of Customs are managed, both in a way that encourages and enhances the spirit and intent of Freeport as an international and domestic free trade zone. "I am pleased that my FNM government is recognising that it should do whatever it can to promote and encourage ease of commerce in Freeport, rather than support administrative constipation created by Customs." Mr Smith said the Prime Minister's approach, as outlined to the FNM rally on Sunday night, was "consistent with the new Customs Management Act, which embraces best management practices internationally for the promotion of commerce, as opposed to simply focusing on extracting every pound of dollar flesh from merchants". With Freeport's economy needing "every encouragement that can be given", the well-known QC said that visible co-operation between the Government's regulatory agencies and the Bahamian private sector "will go a long way to making investors, both local and foreign, feel good and confident about investing in - and staying in - Freeport's economy". GBPA licensees are allowed to purchase, from other licensees, goods that are bonded (duty exempt) provided they are only for use in their own business. To do so, they require an annual 'bonded letter' from Customs. Without one, the whole process clogs up, as licensees are required to seek Customs' approval for every bonded purchase they make. In his address to the FNM rally, Mr Ingraham acknowledged that Freeport's bonded sales economy had "increased substantially" over the past 20 years, with the majority of participants now Bahamian-owned. The Customs Guide to the Hawksbill Creek Agreement, he said, was intended to provide "reasonable certainty" to GBPA licensees as to the Customs procedures to be followed. Customs, for its part, merely wanted to "ensure that it collects revenue due and payable to the public purse", but the Prime Minister conceded that the Guide had "led to various challenges over the years". Customs, as a result, was having to find new ways to collect revenues due to the Government, the requirement for GBPA licensees to produce details of all 2011 bonded goods purchases, in return for receiving their 'bonded letter' for 2012, the latest example of this. Mr Smith, meanwhile, urged the Government to widen the proposed committee's remit beyond Customs to focus on actions by other government agencies that hindered Freeport's economic growth. "Freeport's economy has been plagued with attempts by Customs, Immigration, exchange control, the Investments Board to stultify its fluidity, and the ethos of a free-trade zone," the QC told Tribune Business. "This is a first step taken by the Government to breathe modern life back into the Hawksbill Creek Agreement. I encourage the Government not only to do this in relation to Customs, but to do it in relation to all government agencies that impact on commerce in Freeport, particularly Immigration and exchange control, which have also been flies in the ointment and stultified Freeport's growth in the past." Over the past 20 years, Mr Smith said the likes of Kelly's (Freeport), Dolly Madison and Bellevue had invested heavily in creating 'bonded goods' inventories worth millions of dollars. And he added: "It is certainly encouraging to see the Government is recognising the duty exempt bonded economy, and will have agencies co-operating with the merchants, rather than working against them."