Home' Trinidad and Tobago Guardian : June 22nd 2017 Contents JUNE 22 • 2017 guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG21
Is T&T open for
ADecember 2016 In-
ment Bank (IDB) report
stated that of a sample of
38 mostly Western Hem-
isphere countries, T & T's
Customs is among the three worst. The other
two countries were Haiti -- the poorest coun-
try in the hemisphere, and Bolivia.
This indictment was unsurprising to in-
termediaries in the Maritime Sector, who for
years have been feeling the impact of a Cus-
toms administration rife with ad-hoc and
contradictory procedures, absent standard
operating procedures (SOPs), questionable
regulations, transaction fees which appear
to have no basis in law, and obsolete practic-
es which have their basis in colonial times,
when the policy prescription was different,
and in the total absence of automation, and
the continuance of which serve only to gen-
erate windfall revenues for Customs. This,
of course, comes at a cost to business, both
in terms of forgone income, significant loss
of business efficiency and productivity, and
loss of credibility and reputation in the in-
ternational business of shipping.
Fundamentals of Customs
The World Customs Organisation (WCO)
opined that Customs is often the first win-
dow through which the rest of the world
views a country, and as such it does much
to shape the perceptions of the key individ-
uals and organisations involved in making
important trade and foreign investment
decisions. There is clearly no recognition
of this by our Customs.
Fully stated, the responsibilities of a Cus-
toms administration are revenue collection;
national security; community protection;
trade facilitation; and collection of trade sta-
tistics. The WCO asserts that an efficient
and effective national Customs adminis-
tration is fundamental to the fulfillment
of Government policy objectives in these
More often than not, these responsibilities
are consolidated into an all-encompassing
dual role of border protection and trade
Effective and high performing Customs
Administrations give equal focus to both
roles. For the purpose of this article, we will
focus on the peculiarities of Customs' reve-
nue collection and trade facilitation in T&T.
From our perspective, an important dis-
tinction needs to be made between reve-
nue collection and revenue generation. The
that the services extended and transactions
thereto are defined, transparent, predictable,
consistent and such like.
On the other hand, revenue generation is
pre-occupied with maximising all and any
opportunities to extract the most amount
of revenue possible. In this scenario, the
rules are unclear and/or undefined, and
operating procedures are non-standard
Further, there is either no framework or
weak framework for escalation and medi-
ation, and governance and/or oversight is
weak or deliberately lacking. Our Customs
administration remains unduly fixated on
revenue generation, at the expense of or
with little concern for trade facilitation.
Customs continues to capitalise on absent
checks and balances to strong-arm legiti-
mate businesses into paying unjustified and
often falsified fees.
Perhaps the greatest bug-bear in the
quagmire of Customs administration is the
application of overtime. Intermediaries pre-
senting transactions for authorisations at
any time during regular hours of 8 to 4, are
more often than not required to complete an
. If this is not com-
plied with, chances are that the transaction
will not be facilitated. Notwithstanding the
time presented, the intermediary will surely
receive an overtime billing.
Not only is a Customs officer on duty paid
for the hours worked, but that officer's man-
hours of overtime is applied to every transac-
tion which is presented during the overtime
hours that the Customs officer works. Which
other business in the private or public sector
will be allowed to impose such a practice on
the customers they serve?
It is little known that a significant per-
centage of Customs' overtime fees are paid
into a consolidated fund which is then dis-
tributed to Customs officers. As a result, they
are deeply motivated to channel transactions
which can be processed during regular hours
into overtime hours.
In an environment where there are no per-
formance standards, nor are there checks
and balances to suppress this practice, it has
become deeply entrenched.
Add to this the apparent ease with which
theses officers can arbitrarily interpret and/
or increase fees, and we have a recipe for
the corrupt practices which only seem to
be escalating as the gravy train is reduced
by reduced vessel calls, and the decline in
other shipping related business.
Customs officers appear to believe that
the above practices are a victimless crime,
in that it's the international carriers to which
charges are passed on. However, as is the case
for most businesses, these costs are simply
passed on in some form. In the case of ship-
ping, it's the freight rates, and so ultimately
it's the local consuming public that pays.
The IDB, WCO, and the WTO are among
the international agencies which hold that
trade facilitation is an important engine of
economic growth. The IDB, particularly, em-
phasises that moving goods across borders
quickly and cheaply is essential for firms to
be competitive and for countries to boost
trade and participate more fully in the global
How does T&T's Customs rank in this
context? An international benchmark report
provides some insight. The World Economic
Forum's Enabling Trade Report 2016 ranks
T&T 106th out of 136 countries measured.
This report features 7 pillars. When disag-
gregated, Pillar 3: Efficiency and Trans-
parency of Border Administration (that is,
Customs) was ranked 112th.
When this pillar is further broken down, a
component titled Customs Services Index,
was ranked 117th. It is important to note that
a related Pillar: Operating Environment,
ranks T&T 119th.
Within this Pillar: Efficiency and Ac-
countability of Public Institutions was
ranked 124th, and this was one of the areas
which significantly contributed to the overall
low rating in this pillar.
This report captures the challenges to
which stakeholders in the maritime sector
are subject as they seek to conduct trade.
It is worthwhile to further illustrate with a
few case studies.
CASE STUDY 1:
Customs delay at Pointe-a-Pierre,
In January 2017 a tanker arrived at the local re-
finery to load fuel; an export cargo. A very irate
Customs officer later telephoned the owner/oper-
ator of the tanker, to complain that there was con-
flicting documentation concerning the destination
of the cargo and, as a result, the vessel would not
be allowed to load.
After some discussion, it was determined that the
local intermediary had indeed given to its agent the
correct information but the local refinery had made
an incorrect assumption. The Customs officer in
charge called the local intermediary and demanded
a prompt letter including all the relevant details
or the vessel would not be allowed to load cargo.
The company complied and the ship was eventu-
ally released---over 24 hours after arrival. This for a
transaction which should have taken approximately
eight hours, all things being equal.
The local intermediary missed an important
deadline as a result of the significant delay, which
deprived them of revenue and damaged their repu-
tation, as well as that of the country. This incident
cost the company in excess of US $130,000.
The irony of it all is that there may even be a
charge from Customs for receiving the requested
CASE STUDY 2:
Issues at Chaguaramas Customs,
Also in January of 2017, the agent of a vessel doing
business in Chaguaramas arrived one evening at
Customs in Chaguaramas to facilitate a proposed
The Customs officer on duty informed the agent
that effective immediately all such business at
Chaguaramas must now be approved by the As-
sistant Comptroller of Ports, located at Customs
House Port-of-Spain, something that had never
been required before.
The officer also insisted that the Maritime Ser-
vices Division approval was required for the trans-
action, and it was only after he was forced to check
his books to confirm that this also has never been
required before, did he back down. The transac-
tion, however, would have to be delayed until the
following morning when Customs House was open
On the following day, the agent reported to the
Assistant Comptroller who advised that the local
intermediary would be required to make an advance
payment to Customs before the transaction at the
port would be allowed to proceed; a fee of approx.
$250 covering the cost for each one of two separate
transactions. The transactions were eventually al-
lowed with Customs willing to accept payment at
a later time, which is actually the norm.
Finally, the relevant approvals were granted by
the officer in charge, but the local intermediary
was faced with a delay of over 16 hours, and with a
cost of more than US $16,000.This cost could have
been even greater if a penalty had been added as a
result of missed deadlines.
It is pertinent to highlight that both these trans-
actions relate to export cargo; US$ generating export
cargo, a commodity in very short supply in T&T.
These two incidents only represent the tip of the
iceberg and exemplify the manner of facilitation
that some businesses face; licensed business gen-
erating hundreds of thousands of dollars in foreign
Today's best performing Customs administra-
tions are run on the basis of integrity, transparency,
accountability, and predictability, maximum use of
ICT, and partnership with the trade.
So what short-, medium-, and long-term
interventions are needed bring about the
desperately needed reform of T&T's Customs
Part 11 of this article will elucidate. Our
prescription will be heavily anchored in the
WCO's Revised Kyoto Convention, to which,
not surprisingly, T&T is not a party.
The Customs effect
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