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Arawak Port Generates $100m Customs Boost

By NATARIO MCKENZIE

Business Reporter

and NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas Customs has enjoyed a $100 million revenue increase over the past 12 months through enhanced controls at the Nassau Container Port, Tribune Business can reveal.

Michael Maura, the Arawak Port Development Company's (APD) president and chief executive, said significant investments in technology and other inspection facilities were resulting in a 'win-win' for all parties - including legitimate Bahamas-based businesses.

The Nassau Container Port's operator explained that the crackdown on smuggling and tax evasion was preventing rivals from gaining an unfair competitive advantage, as well as boosting revenues for a Public Treasury that needs every cent it could earn. Mr Maura said the sophistication of Customs/APD's controls had developed to the point where the former was able to "flag" suspicious containers and other cargo for inspection at Arawak Cay before it arrived, whereas companies with a solid history of "playing by the rules" were able to access and move their consignments much more quickly - reducing costs and delays (time).

The APD chief also revealed to Tribune Business that the BISX-listed port operator hoped to break ground on construction of a new Customs inspection facility in the 2018 first quarter, after the Prime Minister informed him he had approved the extra 15 acres required by the port.

Mr Maura said the proposed facility would be equivalent to those enjoyed by US Customs at Miami's port and airport, with scanners enabling Customs to conduct scans of containers and other cargo to detect guns, drugs and smuggled goods.

"The intended result of these investments and effort is that those businesses engaged in legitimate trade and commerce will experience less interruptions from regulatory agencies, and their respective businesses will directly benefit as a result of operating in a transparent and ethical manner," Mr Maura told Tribune Business.

"As an example of the effectiveness of these border enhancements, the Comptroller of Customs has advised that the additional controls in place at the Nassau Container Port have directly contributed to an increase in import tax collections of approximately $100 million during the past twelve months.

"This spike is the result of Customs having both greater control at the port, and also utilising Port facilities and ICT systems to identify fraud and illegal activity. The result of this, while benefiting the Public Treasury, more importantly serves to bring a level playing field to the business environment."

Mr Maura said the consolidation of shipping companies from five sites on Bay Street to one location at Arawak Cay was generating huge dividends for the Bahamian economy and Public Treasury.

"Customs has more focus because there's only one way in and one way out," the APD chief explained. "As well as partnering with APD, we have been able to provide Customs with very modern facilities and IT systems.

"There's a Customs Inspection Unit that operates out of the Nassau Container Port that didn't exist a few years ago. They carefully review a vessel, its manifest, and are in communication with international agencies, working together to stamp out smuggling of illegal contraband and stamping out tax evasion with people falsifying declarations and so forth."

Mr Maura said the Customs Department's K-9 unit used dogs to examine imported shipments, and the agency has "the ability to put cargo on hold on Port property and facilitate inspections of cargo while on Port property".

He added: "What I have been advised by the Comptrollers of Customs; the previous one, Charles Turner, and his successor, Ms Moss, is that as a result of the additional controls Nassau Container Port has put in, and the controls Customs has put in, they have seen an increase in collections of $100 million over the last 12 months."

A $16.5 million Inter-American Development Bank (IDB) loan has financed the creation of Customs' Electronic Single Window (ESW) system, which includes the "development and enhancement of a very capable risk protocol".

"Before the cargo arrives in the Bahamas at the Nassau Container Port, Bahamas Customs through their technology investment will have looked at who the supplier is, who the importer is, and whether the weight of the cargo aligns with the cargo declaration," Mr Maura explained.

"It might supposedly weigh 6,000 pounds at the port of origin, but if the description of the bill of lading was, say, tuna fish, that wouldn't make sense as tuna fish is very heavy, weighing 50,000 pounds. It's through that kind of investigation before the cargo arrives in Nassau that Customs can flag such a container for inspection upon arrival.

"Through the implementation of that discipline and controls, Customs feels very confident in their ability to apprehend smuggling."

Mr Maura said this was where legitimate Bahamian businesses would feel the benefits, and explained: "That's good for legitimate businesses as they will not have to go through stiff inspections, and will be able to move cargo out quickly through the port. They become a trusted trader.

"Legitimate businesses will benefit as they will encounter less disruption from the Port and Bahamas Customs, whereas those companies that have a history of not playing by the rules will find interruptions far more severe and comprehensive. It's about all parties to a transaction; do all parties pass the test?"

Mr Maura said this meant that suppliers, brokers and truckers, as well as the actual company/person goods were destined for, are subject to scrutiny.

Confirming that the results had passed APD and Customs' expectations, he told Tribune Business: "It's only caused us to get more excited about opportunities ahead in terms of investing in these new facilities.

"We have applied for an additional 15 acres of property from the Government, and what's planned for that property is construction of a very modern Customs facility modelled after the facilities US Customs operates from in Miami port and airport.

"So even better and more modern inspections of cargo will take place. It will include modern technology in terms of cargo and container scanners," Mr Maura continued.

"The Prime Minister has advised me he has given his approval for it, so it's now working through Lands and Surveys and the Attorney General's Office. My expectation is that we would literally break ground on the facility in the first quarter of next year."

Mr Maura identified Lynden Pindling International Airport (LPIA) was another entry port challenged by smuggling and tax evasion. "Too often as we travel we see persons with several bags of what ends up being commercial goods, and they do not declare it as such," he said.

"The air courier industry is also a vehicle for potential fraud. While many couriers operate legitimately, others rely on a business model that requires some form of illegal or illicit activity to make it work.

"Bahamas Customs is very familiar with the courier challenge and has been working hard to combat the illegal activities of some operators. The more effective Customs is in its interdiction effort, the better for the Bahamas' courier sector and the retail industry. A transparent and level playing field makes for a healthier, more efficient and competitive business environment."

Comments

John 2 years ago

While it is good that the enhanced controls at the port has generated such profitable results, when is Customs going to extend their revenue enhancing and protection efforts to more lucrative and possible more tax evading ports? Many of the 'private' ports of entry in this country have little or no examinations and they are suspected of entry for high value tax items that the tax is evaded on, as well as the export of fisheries and other such items. One seafood restaurant in New York claims it sells 2,000 pounds of fish that is imported from the Bahamas.

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sealice 2 years ago

sadly over the past year all you here on the shop counters is i ga get it from the states ..... this hasn't changed SO.... how come the air carriers are still the main smugglers of goods in? When are they going to stop individuals from smuggling their personal items in? As long as a fella thinks he can go the states get what he needs, make sure he goes through the "friendly" line and he straight ..... in fact i know of some people who fly their crap to the out islands were it's real friendly and then bring em to Nassau

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