The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas Customs yesterday admitted it had been experiencing “challenges” in keeping pace with the fast-growing courier sector, and the surge in imports generated by Bahamians purchasing online.

Charles Turner, the Customs Comptroller, said the “tremendous volume increase”, caused by the shift to e-commerce and online ordering, had caused difficulties in ensuring due import duties were paid on every shipment.

He added that legislative changes accompanying the 2016-2017 Budget, which will require courier companies and freight forwarders to obtain customs broker licenses, were designed to give Customs “greater control” over this emerging sector.

Mr Turner, while unable to provide any figures, said the problem was not ‘out of control’, but acknowledged that the courier/freight forwarding industry had expanded significantly in recent years as Bahamians seek to achieve price/cost savings from the comfort of their own homes.

“We’ve been having some challenges, not only with courier companies but with goods coming in,” the Customs Comptroller told Tribune Business.

“It’s not to the extent that we don’t have it under control. Couriers are a new business, and the fastest-moving business, not only in the Bahamas but around the world.

“What is happening with courier goods is that individuals are bringing in items like shirts and shorts, after ordering them online. We have to give an account for every object and piece that comes in.”

Rather than the large, bulk shipments it has traditionally dealt with in the past, Mr Turner explained that the rapid growth of online retailing and the courier industry was forcing Customs to collect duties on much smaller packages.

He said many contained just one item, such as clothing or a pair of sneakers, thus requiring Customs to deal with a greater volume of lower value import shipments - thus making the agency’s job more complicated and ‘fiddly’.

Tribune Business contacted Mr Turner after several business owners informed this newspaper that Customs was pursuing them for import duties it claimed had not been paid on past shipments.

Speaking on condition of anonymity, the business owners said that when they checked their records, the documents indicated that funds to pay the relevant duties had been passed to courier companies.

Questioning whether the duty money had then been paid to Customs, one businessman suggested that the agency appeared to be releasing goods based “on the strength of the bond” that courier companies are supposed to lodge with it.

These ‘performance bonds’ are supposed to guarantee that importers will fulfill their obligations to Customs and the Public Treasury, as they can be used by the Government to satisfy any outstanding debts and liabilities.

However, the businessman suggested that Customs appeared not to have been following through in ensuring couriers made due payment.

“There must be an awful lot of that,” they told Tribune Business. “Customs’ system appears to be getting better, so they can determine who owes what or even if there was a clerical error, where the Customs officer did not attach payment to the right entry. But it’s obviously a problem.”

Mr Turner, meanwhile, told Tribune Business that the legislative changes accompanying the 2016-2017 Budget would require courier companies to obtain a Customs broker licence.

Besides placing that sector on a regulatory ‘level playing field’ with other importers and brokers, the Comptroller said the changes would also enable Customs to update and “keep up” with the fast-growing industry.

“We want to make sure they’re legitimate businesses,” Mr Turner said. “We want to have greater control over the courier business.

“More and more persons are ordering this stuff online as opposed to going away themselves and bringing it in. We also want to be consistent with the customs brokers. They have to be licensed, so the couriers must have a customs broker licence.

“The volumes have increased tremendously, and the fact is that every shipment coming in by courier must be documented, even if it is just a pair of shorts. We have thousands and thousands [of shipments] coming in, and people buying online.”

The courier/freight-forwarding business has enjoyed explosive growth in recent years, as Bahamian consumers - buffeted by soaring prices driven even higher by developments such as Value-Added Tax (VAT) - have sought out ‘deals’ via their computer screens.

Mr Turner said the legal changes would also require couriers to submit manifests of incoming shipments to Bahamas Customs one hour before the plane carrying them landed, in a bid to prevent any import duty revenue from being missed.

“It gives us an ability to perform risk analysis, and lets us know who is bringing it in, and what, before the plane even arrives,” he added.

Mr Turner emphasised that it was the responsibility of the importing company or individual to ensure that due import duties were paid, not the courier, freight forwarder or broker.

“It’s the duty of the importer to ensure that the revenues are paid into Customs, and that they have Customs receipts for goods received,” he said. “They should be concerned when they don’t have one.

“The owners of the goods have the responsibility. If the shipment is in their name, even if the courier company clears things for them, they have a duty to ensure they have a Customs receipt to show duty was paid.”