The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Ministry of Finance's top official last night "publicly apologised" for delays impacting cross-border commerce as a result of Customs' failure to promptly release tariff code changes.

Marlon Johnson, the acting financial secretary, told Tribune Business that the revised tariff codes were now available in hard copy from government publications following 48 hours of "nuisance issues" where brokers and importers struggled to clear goods correctly.

He has also issued "instructions" for the codes to be published online, although he argued there was "no indication of any material impact" on the cross-border trade that the Bahamian economy relies upon so heavily.

Mr Johnson spoke out after Tribune Business sources, speaking on condition of anonymity, disclosed that the latest bout of bureaucracy and red tape impacting the clearance of goods at The Bahamas' borders stemmed from changes mandated by the World Customs Organisation (WCO).

While Bahamas Customs has upgraded its systems to align with the new WCO tariff code headings from July 1, these contacts revealed that the changes were never passed on to Bahamian brokers and importers.

They explained that, as a result, brokers have been unable to submit correct entries for the clearance of imported goods since the working week began on Monday, as their systems no longer "match" the tariff codes and descriptions now employed by Customs.

"The World Customs Organisation changed a lot of the tariff code headings and descriptions," one source told Tribune Business. "That created a lot of confusion with people submitting entries to bring goods into the country because Customs has updated their systems but not released the new tariff code schedule to the public.

"I don't think a broker can submit a correct entry because all the tariff headings have changed. The WCO has changed it all, and while Customs has upgraded their system they've not made it available to the public... Nobody's system matches Customs' system so everyone's entries are being rejected. Brokers are working on last month's tariff code and headings."

The source said Customs was not only being asked to cope with the VAT rate hike, and Budget-related adjustments in terms of tariff eliminations/reductions and the 'zero rating' of breadbasket foods and medicines, but simultaneously cope with the WCO mandate.

They described this workload as "insanity", but Mr Johnson last night rejected their suggestion that Customs had not planned to publish the revised tariff code headings until August so it could also incorporate the Budget-related changes.

The acting financial secretary, though, conceded that while the WCO-mandated changes had caused problems for the Bahamas' cross-border commerce, it had not brought trade to a complete standstill.

"We do have a bit of an issue there," Mr Johnson admitted. "What seems to have happened there is that to be in compliance with WCO standards some of the tariff headings were changed, so that's creating a bit of delay.

"I'm advised by Customs that they are assisting brokers in making the corrections, and that there is also a 'Help Desk' where they can go. We did have a delay in the publication of the revised tariff headings; they should have been published earlier than that. I've now instructed they be published online. We did have a situation there."

While the new tariff code headings are now available from government publications, the top Ministry of Finance official conceded: "I certainly do apologise publicly for the delay in getting that situation sorted out. Now we're aware of it my office is trying to rectify it. It [the tariff headings] was scheduled to be published; there was just a delay in that happening."

Mr Johnson acknowledged the need to avoid any disruption to normal business processes, but added that the tariff coding confusion had not brought commerce to a grinding halt.

"Obviously we don't want a scenario where folks have hiccups in transacting business," he told Tribune Business. "I do want to reiterate that Customs officers are helping brokers to make the corrections, and that we have a Customs Help Desk available.

"It does create some nuisance issues, but there is no indication of a material impact other than a slow down in getting items cleared. It's slower than necessary, but I don't have any indication that we have material issues with commerce."

Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation's (BCCEC) chief executive, said his understanding of the problem was the same as the explanation provided by Tribune Business's contacts.

He added that the Chamber had "raised the issue" with both Mr Johnson and Customs as soon as the business community made it aware of what was happening, and urged that the problems be resolved "within hours rather than days".

"They've acknowledged it and are addressing it," Mr Sumner said. "How soon they make the correction, I don't know. We're hoping it happens within hours and not days so we can bring resolution to this issue."

He added that the response received from the Government said the issue related to "the new chart of accounts that became effective" on July 1, with Customs "hoping to have it rectified very shortly".

Mr Sumner said the tariff coding issue highlighted the Chamber's previous concerns over whether the Government's systems would be able to handle all the Budget-related changes from the get-go.

"We're hoping to have the coding updates available and accessible, and that they line up with the tariff schedule Customs is working on," he added.