The Tribune

The Government has been urged to "amend right away this Monday" the new and increased Customs sanctions on air cargo operators, a Bahamian courier company branding them "ridiculous".

Alan Burrows, proprietor of Tropix Express and Tropix Air, told Tribune Business that the fines introduced with the 2016-2017 Budget showed the Government had little to no understanding of the air cargo and logistics industries.

He added that last-minute changes to cargo manifests via the Customs C10 form had been made virtually impossible by the 25 per cent “processing fee” that will now be levied on the value of the relevant cargo.

Suggesting that such a fine would deter "emergency" shipments to the Bahamas, Mr Burrows also hit out at the Government's failure to properly consult the industry on the changes.

He revealed to Tribune Business that while Customs did call a meeting to discuss the new and increased fines, it was unaware of their magnitude at that stage.

And Mr Burrows that the C71 forms for couriers to fill out to obtain a licence from Customs "don't exist yet", and have not been signed off by Prime Minister Perry Christie.

"I think it's going to affect the docks more than anywhere else," the Tropix proprietor told Tribune Business of the changes.

"No one is going to put in a C10 for 25 per cent of the value. That needs to be amended right away. It needs to be done by Monday next week [today]. They should sit down and have a proper meeting, and understand the effect of them [charges.].

"You can't put in charges without understanding the impact on persons," Mr Burrows added. "These amendments need to be done right away. Somebody must have the common sense to sit down and say this is not going to work.

"This should not have been passed by somebody sitting behind a desk, making a decision without understanding the shipping industry."

Both the courier companies and cargo airlines are especially concerned about the changes to regulation 147 in the Customs Management (Amendment) Regulations.

This requires all cargo planes to submit their C7 general declaration forms to Customs, detailing all freight items they are bringing in, one hour before touching down in the Bahamas.

While this will incur a $75 processing fee, any C7s submitted less than an hour before arriving in the Bahamas will be subjected to a $2,500 charge.

Air cargo operators will be subjected to a $5,000 per item fine for every “prohibited or restricted good” found on board. A fine equivalent to 25 per cent of the value will also be incurred for every item not declared prior to landing in Nassau.

Tribune Business revealed last week how some cargo operators, chartered by companies in Nassau to bring in goods and services for their clients, were threatening to boycott the Bahamas because of the new fines and sanctions.

The amendments introduced by the Christie administration effectively hold the air cargo firms liable for the goods they are shipping, but the firms argue that they have "no control" over what clients want to import into the Bahamas.

The Government believes that placing the compliance burden on air freight companies will better deter tax evasion, fraud and the smuggling of contraband goods, especially firearms, into the Bahamas.

Customs also believes that the early filing of manifests will better prepare them to assess cargo, and ensure all due revenue is collected, while helping them to conduct better 'risk analysis' on all parties - couriers, cargo firms and importers - involved in the supply chain.

The air cargo operators, though, are arguing that the amendments are forcing them to do Customs' job for it, making them 'freight inspectors' before even touching down in Nassau.

They last week warned Bahamians, via Tribune Business, that import costs could rise "tremendously" as a result of all this, indicating that any fines/sanctions would be passed on to the ultimate owner of the goods involved.

Mr Burrows agreed, telling this newspaper: "With all the charges passed on to the customer, that can't afford to ship with all the foolishness they are doing.

"They've just put into law something that they don't understand what it is. They don't know what they were putting into law. They should have come and sat down and talked with the industry."

Mr Burrows said Tropix typically brought in 40-foot shipping containers by sea in its own name, and used the C10 form to make the necessary alterations showing Customs the goods belonging to each client.

Describing this as "a very common thing going on for years", Mr Burrows said the business model would now be forced to change by the 25 per cent 'penalty' - based on the good's value - for each manifest change.

He pointed out that on a $200,000 container, such a fine would be equivalent to $50,000.

"It's a bill that no one can afford to pay," Mr Burrows said. "We barely make $5,000-$6,000 per container in the first place. Where are we going to get the extra 25 per cent to pay Customs?

"There's no way a C10 cannot be used, but for 25 per cent of the cost, that's impossible. No way can we pay that. How can you shut down an entire operation?"

Mr Burrows said he would also refuse to pay the $2,500 charge for failing to file the C7 form one hour before the plane arrived in the Bahamas, describing this as "ridiculous" in cases of last-minute "emergency" shipments.

Correspondence is circulating among south Florida-based air cargo/freight companies, urging them to “be prepared to withhold your services” if it becomes necessary to force the Government to repeal changes that accompany the 2016-2017 Budget.

The letter, addressed to “all carriers to the Bahamas”, and copied to the many local couriers and import brokers they serve, warns that the potential liabilities from the new Customs penalties “are more than any reward our airlines can make”.

It was unclear whether a widespread boycott had been initiated on Friday, although one business told Tribune Business they had been informed an expected order would not materialise because "no one's flying".

Mr Burrows said Tropix would be unaffected by any boycott, as it has its own fleet of planes. Together with Zip-X, they are the only two Bahamas-based courier companies operating their own aircraft.

The Tropix proprietor indicated he sympathised with the 'boycott' call, adding: "I can understand the guys not wanting to do the flights. They're held liable for what's put in on the manifest."

He added that fees, fines and taxes imposed on the aviation industry by the Bahamas Government has risen tremendously within the last several years.

Apart from the $150 'inbound and outbound' passenger manifests, Mr Burrows said cargo planes also incurred a $100 Customs inspection fee. For inspections after 5pm, a $180 additional fee is levied.

Criticising the absence of proper consultation on the latest fines and fees, Mr Burrows said: "They [Customs] called a meeting but didn't know what the charges were.

"They also said couriers will have to be licensed by Customs. I got my police record, but the form they put in place, C71, doesn't exist yet. And it's not been signed-off by the Prime Minister.

"What they actually need is to let Customs do its job and keep the shipping going. We need shipping. Putting a handicap to it is definitely a problem.'

Customs wants to license courier companies to ensure they are on a 'level playing field' with import brokers, and that they are also legitimate businesses.