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Air freight operators in Bahamas boycott threat

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Florida-based air cargo companies are threatening to boycott the Bahamas over the new Customs fees and fines set to be introduced tomorrow, with this newspaper told: “It’s D-Day time.”

Tribune Business has obtained correspondence which warns air cargo/freight companies 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”.

Arguing that these sanctions could be imposed for infractions over which air cargo companies “have no control”, the letter says the sector “cannot be held hostage by Bahamas Customs”.

Then, suggesting a potential boycott of this nation as a last-ditch response if all else fails, it adds: “The Bahamas needs us as much as we need them.”

The documents seen by Tribune Business illustrate how the shipping/cargo/logistics industry has been thrown into turmoil by the Budget amendments, which again have appear to have been introduced without any warning or consultation with Bahamian or international businesses.

Commerce in this nation is heavily reliant on international transportation to facilitate the smooth movement of goods and services, and any withdrawal or reduction in air cargo services is yet another threat to the Bahamas’ ease of doing business and a functioning economy.

In common with the ocean shipping industry, the 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, to Customs 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 also 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 understands that some of the Florida-based air cargo operators were meeting with the Customs Department yesterday in a last-ditch bid to have the new fines and fees amended or delayed.

However, the document sent to all air cargo carriers warned simply: “We are being assessed fees for stuff we have no control over.”

It said the increased fines meant it was impossible for operators to submit their C7 form to Bahamas Customs until they had their final cargo manifest - something that depended on “when your client or customer gets his invoices together”.

The letter added that despite cargo manifests being filled out by clients, it was the air cargo operators that would pay the fines for incorrect listings or the inclusion of ‘prohibited/restricted’ goods.

“The manifest is filled out by your client, but you pay for his actions,” the letter seen by Tribune Business said. “You do not say what is put on your aircraft; your client does.

“If he chooses to move something on the restricted list, then we will pay the $5,000 per item fee prior to getting our [outbound] general declaration.

“We don’t control what goes on our aircraft; our client does, but the fees are assigned to the carrier, you and I.”

The letter also confirmed that the new regulations threatened to undermine the business model for air cargo operators, especially those hired for specific charters, who relied on quick turnaround times after landing in the Bahamas.

“A side effect, which is just as crippling as the financial, is that the general declaration will not be stamped until the cargo has been inspected,” the letter said.

“This is deadly, as there are times Customs takes three to four hours to clear our flight. My aircraft are scheduled with a 30 minute turn time to meet the requirements of our other clients.”

The letter continued: “We, the carriers, cannot be held hostage by the Bahamian Customs to pay fees we have no control over.

“As 135 airlines, we cannot make it in south Florida without serving the Bahamas, but these liabilities are more than any reward our airlines can make.

“It takes only one client to put a box (content one gross) of restricted items on your flight, and you are out of business ($5,000 per item (times) 144 = $720,000).”

Calling on the industry to stand together, it urged air cargo operators to “advise your clients we will not accept this liability to carry their cargo, and for them to advise the Comptroller of Customs of the seriousness of the loss of their trade.

“Contact every person you know who is providing a carrier service to the Bahamas, and advise them of these liabilities. Contact the Customs inspectors you know and tell them you cannot operate under these regulations.”

Finally, it warned: “Be prepared to withhold our services if required to repeal this amendment.

“The Bahamas needs us as much as we need them.”

Executives in the Bahamian courier/import industry, speaking on condition of anonymity, told Tribune Business that the Customs fines threatened to undermine the “same day shipping” model many of them employed. Not to mention their finances, if the cargo companies they chartered passed the fines on to them.

“They really are doing some crazy stuff, and putting it basically on small people bringing stuff in,” one said. “The Act really says that the fine goes to them [the cargo companies], not the client.”

The executive confirmed they were aware that air cargo companies were “threatening” to boycott the Bahamas, and added: “Being an urgent shipper, we fly at certain times. Now, it’s going to be impossible for people to do same day shipping.

“Anyone dropping stuff off, we’ll have to make the closing the night before, except for perishables. I hope they’re not going to roll this out on July 1. It’s affecting everybody.”

Another courier, speaking on condition of anonymity, told Tribune Business: “Those Customs amendments are a serious concern, a pretty serious concern for us. There is no doubt about that, and I know that the shipping companies are concerned as well.

“We haven’t gotten together as yet on this, but there is some stuff floating around that we know comes into effect July 1. Once they say it, that’s it. You can’t fight it; you just have to find ways to work round it.”

Comments

banker 6 years, 5 months ago

Another brick comes out from under the foundation. With an air freight boycott to an island that imports EVERYTHING, well it won't be long before shortages and ... anarchy !

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observer2 6 years, 5 months ago

This is only one of numerous aggressive tax moves by the PLP. There are two others changes moving under the radar which will cripple the financial industry. (1) a 1.5% stamp tax on all incoming and out going wires buried in Section 4(38) of the Stamp (Amendment) Act, 2016. This does not only apply to FX transactions or Bahamians but every last wire in and out of the Bahamas by a Bahamian bank (or trust company) regardless of if it is for non residents or residents and (2) extension of VAT on inward informational services to financial entities. In cases where the management, administration, custodianship is outside the Bahamas it will push mutual funds only registered in the Bahamas to the BVI or Cayman.

Well done PLP! Keep it up! Looks like the web boys are the only ones making a decent profit. But at what a cost to our working class who are struggling to put food on the table. Forget the light and water and education, these are already off for most people over the hill.

People are now desperate and most votes are now for on sale at a very low price.

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sealice 6 years, 5 months ago

Please Please go on strike - this country needs a general strike and a new gov't not PLP, FNM or DNA something else better

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butlers 6 years, 5 months ago

So what idiot is advising Customs. When was the meeting with all the freight carriers? PLP communism .

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The_Oracle 6 years, 5 months ago

Any bureaucracy that becomes incompetent or cannot administer the existing laws and rules derived thereon will create more rules and regulations under which they will penalize, victimize and boost revenues. This road is well worn globally and historically, and never ever ends well. Unfortunately the general population suffers and will pay the price while the despots political families and "inner circle glitterati" walk away with the stolen revenues and national assets.

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ohdrap4 6 years, 5 months ago

i heading to the beach to make my own salt.

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truetruebahamian 6 years, 5 months ago

Retarded - ridiculously retarded. Overthrow this government, pay them NO taxes, bring in mercenaries and run them out of the country.

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killemwitdakno 6 years, 5 months ago

No imports should be headline news.

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killemwitdakno 6 years, 5 months ago

"Air cargo operators will also 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."

This equivalent to requiring a webhost provider to manage all violating uploads to their clients sites. Like SOPA. You're expecting the courier to open everyones package. Why not fine the fool that ordered serious contraband? Just require the courier provide the list of what's illegal on their site where the customer checks the box that's they've read the terms and conditions on checkout.

If such is an issue , that should be more jobs creation within the country at customs duh, as opposed to reducing the market or causing the big players to hire mail checkers outside the country.

With rules like this thrown out, we're obviously not ready to host a regional fulfillment center with product inspection for the likes of Amazon.

People already mainly use their family members that are coming over. And the next article says we're aiming for spot 50 in ease of doing business..

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killemwitdakno 6 years, 5 months ago

One solution would be to offer the option a product inspection fee from courtier companies based on their annual traffic instead of violations, and use that money for gov to hire more inspectors.

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ohdrap4 6 years, 5 months ago

which is another ridiculous solution.

so they reduce the duty with one hand and take money back with another.

this would also affect your price at the food store and at retailers, so it does nothing to protect buying at home.

it is no improvement over the existing law.

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killemwitdakno 6 years, 5 months ago

More customers due to less duty would make up for it. A customs officer salary is less than the near $1M for 100+ prohibited items.

Any deal is always just putting the cost elsewhere.

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killemwitdakno 6 years, 5 months ago

With islands still heavily importing for repairs from Joaquin and hurricane and back to school season coming , this could be bad. Summer is already a slow time for biz.

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BMW 6 years, 5 months ago

Majority rule. While the world progress's we regress.

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killemwitdakno 6 years, 5 months ago

Could also charge a competition fee if the foreign ones undercut the Bahamaian providers.

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killemwitdakno 6 years, 5 months ago

A inspectors fee plus competition fee with a no duty on food and supplies for businesses would be a trade off that increases their clientele.

$12,000 for gov to hire a customs officer is better that $720,00.

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killemwitdakno 6 years, 5 months ago

Use warnings for minor violations. Repeated serious contraband found with a courier would be loss of license instead of fines.

https://www.gov.uk/guidance/customs-s...">https://www.gov.uk/guidance/customs-s...

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killemwitdakno 6 years, 5 months ago

If the list of items is complied as the customer buys forwarding, I don't see how requesting sending the list an hour in advance is so inconvenient that it changes the ship within 24 hr service to the next day. Amazon gives you a cut of time to purchase if you want to receive your order the next day. 24hrs vs same day before sundown isn't a big difference except for medical items but understandably it hindered a feature of their service so they claim.

Who's this company that does rounds every half hr? Wasn't aware we had same day shipping.

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killemwitdakno 6 years, 5 months ago

Expensive couriers should get on the consumers side and push for duty reductions.

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ThisIsOurs 6 years, 5 months ago

Seems weird to put the charge on the carrier and not the person who packed the container. It's almost as if customer wants to transfer their inspection duties onto the carrier

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ohdrap4 6 years, 5 months ago

looks like the person who ordered the stuff might not be held responsible either.

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ThisIsOurs 6 years, 5 months ago

I wondered if that's why they did it, i.e. to protect their crooked friends in high places. They know these guns are being brought in by "respectable" people. If it was the "usual suspect", they would have been in jail long time. That's why I simply don't believe John Bostwick.

Drugs, guns and human smuggling are being sponsored by rich, well established, "respected" (money=respect in this crazy town) businessmen. Some whose industry was recently regulated too, they've now gone on a massive marketing campaign to clean up their dutty image.

I'm certain after marijuana is legalized, or I should say they force the legalization, they'll be the first to pop in front of the camera to show us the sophistication of their operation. Then the minister of agriculture will tell us how professionally they've been operating illegally for years. Then they'll tell us how wonderful this will be for the economy and all the drug programmes they'll sponsor. In real life, the only concrete thing the country will get is more addicts,and lots of shiny media appearances.

Others have sham money laundering (or anything laundering) business fronts. There's one particular store in Palmdale that has been open for decades, I have never seen more than 5 people in that store, yet somehow they've managed to weather roadworks and tough economic times while other businesses around them crumble. And they always have a big container to unload, meanwhile the stuff in the store look likes it's been on display from 1920.

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