By NEIL HARTNELL
Tribune Business Editor
The Ministry of Finance's top official is "very confident" that next month's roll-out of Customs' new system on New Providence will be "manageable" despite concerns voiced elsewhere.
Marlon Johnson, acting financial secretary, told Tribune Business that initial difficulties surrounding the Electronic Single Window's (ESW) implementation were not unexpected given that it represents "a massive sea change in the way business is done".
Responding to complaints from Abaco that the new digital system had increased the workload associated with clearing goods at the border by 400-500 percent, Mr Johnson said Customs was already working with the island's brokers and importers to address their concerns.
He indicated that the ESW's "seaside" roll-out on New Providence would likely be smoother given the collaboration between Customs and BISX-listed Arawak Cay Port Development Company (APD), which operates the commercial shipping port that handles around 90 percent of the island's cargo imports.
Mr Johnson said major shippers and importers had also been involved to the extent that the shipping companies' own electronic management systems had been "integrated" with the ESW.
Hailing the latest element in the government-wide digitisation initiative, the acting financial secretary added that the ESW's built-in Artificial Intelligence would enable it to detect "anomalies" in import trends and prices to expose potential fraud and tax evasion.
The identity of all shipment owners, and ties to their particular cargo, will also be tracked "to protect the integrity of the system". Mr Johnson said this would help prevent cases where persons smuggling contraband into The Bahamas had used someone else's name as the shipment's owner in a bid to hide their involvement.
"We're very, very confident," Mr Johnson told Tribune Business. "When it comes into New Providence, again there will be some adjustment period, but we feel pretty confident the New Providence process will be manageable.
"Early September is what we're aiming for, and we're very much on schedule for that. This is a massive sea change in the way business is done. It is not unexpected that we will have some measure of discomfort as we roll it out."
Customs' ESW system was not without its growing pains during its "airside" launch on New Providence earlier this year, meaning at Lynden Pindling International Airport (LPIA), where air freight importers such as courier companies were impacted.
And it is also unlikely that Abaco's private sector and shipping/import community share Mr Johnson's optimism either. Tribune Business revealed last week how Abaco's business community was "extremely upset" over "delays and added expenses" created by the transition to the new digital process.
Ken Hutton, the Abaco Chamber of Commerce's president, warned that unless rectified these issues would increase the cost of clearing goods and, ultimately, the cost of living as any price rises will be passed on to consumers.
"There are still significant delays clearing goods, and there are issues still yet to be dealt with properly. The biggest issue is that the actual workload in clearing goods has increased between 400-500 per cent," he said.
"It's definitely affecting the clearance of goods out of the port and, based upon how much extra time and work it's taking to do these entries on the ESW system, I can foresee that the cost of clearing goods is definitely going to increase and that's going to increase the cost of living in Abaco. An entry that would normally take three hours is now taking a day-and-a-half. An entry that used to cover one page on a C13 now covers 15 pages or more."
Lance Pinder, operations manager at Abaco Big Bird, told Tribune Business: "Brokers are working until midnight. We do our own brokerage at the farm so we know. It's really time consuming and unclear. It was put into effect with almost no warning.
"I have talked with other business people and we expect it will raise prices around 5 per cent. People are having to hire more staff. People in Green Turtle Cay are having issues because their stuff can't be cleared in time to catch the weekly mailboat, so it's stuck in Marsh Harbour for a week. It's really putting a mental and physical strain on people here in Abaco."
In response, Mr Johnson said similar concerns had been raised in New Providence, Cat Island and Eleuthera when the ESW was launched on those islands. Pointing out that the system is "brand new", he urged users and importers to give it time.
"When you start anything it pretty much takes time to become routine," Mr Johnson added, "but we want to assure users we are taking feedback so if there are improvements to be made in how the processes are run we are open to changes to make it easier. We're taking on all the feedback from Abaco."
Besides meeting with the Chamber of Commerce in both Abaco and New Providence, he said Customs officers are also now "embedded" with the major shipping companies in Marsh Harbour on a full-time basis to help ease the transition. Some companies had also brought in assistance from the capital to help them "get up to speed".
Mr Johnson said the adjustment in New Providence should be easier given the collaboration between Customs, APD and the island's major shipping companies and importers. And he added: "We've been able to integrate the shipping companies' management systems with the electronic window," he said. "We have a team working with APD, an IT team, to ensure the system is integrated and tested."
The ESW will require all importers, even those bringing in one-off shipments, to be registered with it. "We've seen incidents of people bringing in contraband and assigning it to another person," the Ministry of Finance official told Tribune Business.
"It could be very serious depending on the nature of what's imported. We don't want people to be exposed that way, and want to tie people to their shipments at the border. It's important to know who's shipping what, and for what purpose, and to protect persons so people can't use my name or yours for something we don't know anything about."
Mr Johnson said the ESW's Artificial Intelligence will enable it to identify "anomalies" such as two companies importing the same product, but at radically different prices and paying different duty/VAT sums, thereby suggesting one may be cheating.
"It will allow us to do a lot more intelligence and analytical work," he added of the ESW. "The Artificial Intelligence built into it will allow the system to look for things that seem out of line compared to trends.
"We will have a system that works better for the importer and the Government, and tidy up some of the things that slipped through the cracks under the old system. Compliance, revenues and the information we get will enable us to lock down areas that are vulnerable.
"We will also be able to track the progress of a shipment from beginning to end. It will allow us to see if there are bottlenecks and speed the system through."