The Tribune

• Pledges not to violate Hawksbill Creek, court order

• GB Chamber chief hails outcome as ‘on right track’

• Click2Clear launch date left up to private sector

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Grand Bahama’s Chamber of Commerce president hailed yesterday’s meeting with Customs as “a win-win for everyone” after it pledged not to violate Freeport’s founding treaty or existing court orders.

Gregory Laroda told Tribune Business he believed all sides were now “on the right track” over Bahamas Customs’ planned implementation of its Click2Clear import clearance system in Grand Bahama, after the agency addressed numerous private sector concerns.

With Customs providing “reassurance” to ease fears that Freeport’s existing bonded goods regime would be overwhelmed by increased “red tape” and costs, Mr Laroda said the only outstanding matter to be resolved is the date when Click2Clear - known formally as the Electronic Single Window (ESW) - will go live.

Implementation has presently been pushed back to September 1 due to private sector concerns, with Customs having originally targeted a July 1, 2021, launch. However, with the agency’s existing Electronic Customs Automated System (eCAS) network now “inoperable” and “beyond repair”, Grand Bahama’s private sector is now fretting over having to clear imported goods manually for the next six-seven weeks.

Mr Laroda said Customs yesterday handed the issue over to the private sector, telling the Chamber of Commerce and others to go away and consult with the wider private sector on whether to bring the launch date forward. He added that the agency said it would adjust the timeline in accordance with business community wishes.

“The concerns that our members would have at least raised about Click2Clear, like the reporting that was being required and the possible infringement of the Hawksbill Creek Agreement, all of that came out in the meeting as not happening,” the Chamber chief told this newspaper.

“Customs assured us they are not doing anything that goes against the Hawksbill Creek Agreement or any court order that was put in place. That was good to hear.” In particular, Mr Laroda disclosed that Customs had informed attendees it will not require mandatory monthly reports on bonded goods sales - something that is prohibited by a court Order and injunction obtained by Kelly’s (Freeport).

Instead, the agency said such reports from Grand Bahama Port Authority (GBPA) licencees will be voluntary. “There were concerns from a couple of businesses about monthly reports of bonded goods sales,” Mr Laroda added.

“The majority of businesses are reporting that along with duty-paid sales. Customs is saying it makes things easier if they report it, but if you don’t want to report it, you don’t have to. If you don’t want to report bonded sales monthly, they’re not going to force you. That goes against the court order if they try to create some sort of hardship or induce you to do that, but they’re not planning to do anything like that.”

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 there were fears that was exactly what Customs was seeking with the implementation of its Click2Clear platform in Grand Bahama even though this is barred by Supreme Court injunction.

Mr Laroda, meanwhile, said Customs had also eased concerns that GBPA licencees who acquired “over-the-counter” bonded goods would be subject to extra reporting requirements under Click2Clear, thus “costing them more money and making it more difficult to operate”.

“That goes away because Customs said it’s not going to happen,” the GB Chamber president added. “They did have in mind, very early in the game, that there would be additional reporting. When they started training on Click2Clear, and people raised concerns, they decided not to go with that reporting.

“It seemed that was going to be very challenging to the point where persons were saying they would opt not to buy bonded any more as it was too much of a headache. That would have impacted consumer prices, and the fact it has been cleared up and is going to operate like it did in the past, that definitely is a win.

“There were also concerns expressed to us about requirements for businesses to upload all their their inventory into Customs Click2Clear. Most businesses were saying that they have so many items that was going to be a challenge. Customs replied that uploading all inventory into their system was a suggestion and not mandatory. If you don’t want to do it, you don’t have to.

“If inventory was uploaded it would update automatically and make it easier.... But we were hearing businesses did not have the software to do it to do it automatically, and that it would be a tedious process. Customs is now saying you don’t have to do it if you don’t want to do it; it was just to make it easier for you.”

Mr Laroda said other concerns revolved around the possibility that GBPA licencees would be “locked out” of Click2Clear if they owed taxes elsewhere, such as VAT or National Insurance Board (NIB) contributions, and unable to clear goods. However, the GB Chamber chief added that Customs again indicated this would not happen apart from when Certificates of Good Standing were needed by other agencies.

While some private sector sources voiced concern that Customs has yet to commit any of these pledges and reassurances on how Click2Clear will work to writing, Mr Laroda told Tribune Business: “The meeting went very well. They’re not forcing any additional steps on anyone. I think it’s going to end up being a win-win for everyone.”

“Disclosing that Customs and the private sector are “a lot closer than we were prior to the meeting” to resolving their concerns and differences, he added: “If everyone can get working on issues that need to be resolved sooner rather than later, we can have a smoother transition. We’re on the right track.”

The only matter now outstanding is the timing of Click2Clear’s implementation. With July 1 unattainable, Customs said it had opted to miss August because it was traditionally a busy month when many of its officers and private sector executives were away, while import volumes were also significant.

“They didn’t see it as being in anybody’s best interest to do it in August,” Mr Laroda said. However, the enforced manual clearance of goods for the next six to seven weeks before Click2Clear is introduced is causing a private sector rethink in a bid to either avoid or minimise this situation.

As a result, Customs urged attendees at yesterday’s meeting to find out what the majority of the private sector wants - to stick with September 1 or bring the launch forward - and it will oblige that wish.

Mr Laroda yesterday voiced optimism that Click2Clear’s introduction will lead to a “smoother, faster operation” in clearing Grand Bahama’s cross-border commerce while also presenting Customs with “a better record of what is going on”.