The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Ministry of Finance’s top official has pledged that Customs will make whatever adjustments are necessary to ensure its Click2Clear system “operates within the law” in Freeport and wider Grand Bahama.

Marlon Johnson, its acting financial secretary, seeking to ease concerns that Click2Clear’s so-called “free trade zone” module will violate both the Hawksbill Creek Agreement and previous Supreme Court judgments, told Tribune Business he was confident the matter will be “resolved to the satisfaction of all stakeholders” when Customs meets with Freeport’s private sector this week.

Speaking after Grand Bahama’s cross-border commerce was forced back to manual clearance processes for the next month-and-a-half prior to Click2Clear’s planned September 1 implementation, he added that the existing Electronic Customs Automated System (eCAS) would incur too much “cost and effort” to be restored after it was deemed “inoperable and beyond repair” last week. “Grand Bahama is the final island to transition over to Click2Clear because it has the complexities of the Port area and the bonded area and the like,” Mr Johnson said. “We have been trying valiantly to keep the eCAS system up.

“The Click2Clear launch was pushed back with the hope and expectation that eCAS would hold up for a few more months, but it crashed. Customs had tried bringing it back up, but the cost and effort to do so.... when they brought it back up it was not stable.”

Mr Johnson said Customs was working to make the manual clearance of goods on Grand Bahama “as seamless as possible” until the new system can be introduced. “It will not make everyone happy, but at least everyone knows what the game plan is,” he added.

Click2Clear’s Grand Bahama implementation had already been pushed back from July 1, 2021, to September this year. This was in response to private sector fears that its introduction as-is would violate both the Hawksbill Creek Agreement, Freeport’s founding treaty, as well as previous Supreme Court rulings and injunctions. 

Some observers will now likely view the declaration that eCAS is “inoperable” as affirming Customs’ desire to ram Click2Clear down Freeport’s throat while also overcoming all opposition to its implementation, given that the city will otherwise be stuck with manual processing.

Mr Johnson, though, said there had already been discussions between Customs and the private sector over the latter’s fears that Click2Clear will both breach the law and undermine Freeport’s bonded goods regime.

“That will certainly be part of the discussions when the comptroller meets with them this week,” he added, “and it will be resolved to the satisfaction of all stakeholders. We’ll operate within the parameters of the law, and any adjustments that need to be made to function within the law we’ll do so. Between now and September 1, we’ll work it out and I’m very confident that will happen.

“The good thing about a system like this is you can make adjustments so it lines up with the law and good practice, and helps taxpayers as well as it is aligned for the benefit of all stakeholders.”

Freeport’s ‘over-the-counter’ bonded goods regime has been a key feature of the city’s business environment for almost three decades, and is now an established practice under the Hawksbill Creek Agreement.

It allows GBPA licensees to sell goods duty-free (bonded) to fellow companies within the Port area for use in the latter’s own business. But any sales to a consumer or household do attract duty, and these taxes have to be submitted in a report - together with the full tax owed - to Customs by the 15th of the following month.

While post-paid duty sales have to be reported, there have never been similar requirements for so-called ‘bonded’ sales reports, but the latter is exactly what Customs is seeking with the implementation of its Electronic Single Window (ESW) or Click2Clear platform in Grand Bahama even though this has been barred by a Supreme Court injunction.