By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas Customs yesterday sought to reassure the shipping industry that it will use its newly-acquired “teeth” wisely, and not levy “unreasonable fines” that could drive a further increase in freight rates.

Michael Maura, Arawak Port Development Company’s (APD) chief executive, told Tribune Business that Customs’ new enforcement powers “need to be watched carefully” to ensure they do not adversely impact the shipping industry and wider Bahamian economy.

He explained that the sector had legitimate concerns regarding the penalties that could be incurred as a result of using the C-10 declaration form, and if prohibited or restricted goods were discovered, as such situations were not necessarily its fault.

Mr Maura was speaking after he, and the cargo shipping companies, met with senior Customs executives to discuss the enhanced fines and penalties the Government is seeking to introduce with the 2016-2017 Budget.

These reforms, which the Christie administration wants to take effect from July 1, will see shippers/importers who fail to provide the cargo manifest and loading list “at least 12 hours” before the ship or plane lands in the Bahamas hit with a $2,500 fee. That represents a major increase from the current across-the-board $75 fee.

A fee equivalent to 25 per cent of the imported good’s value will be levied on the parcel list used by cargo ships, while a $5,000 per good charge will be levied on shippers “if prohibited or restricted goods are found on board their vessels”.

Mr Maura told Tribune Business that the “prohibited/restricted goods” reforms, and last-minute changes made to cargo manifests via the C-10 form, were among the shipping industry’s greatest concerns.

However, Customs informed the sector yesterday that it planned to be “reasonable” in the enforcement of its proposed new powers, and would not be imposing sweeping sanctions for infractions that were not the shipper’s fault.

“What Customs really impressed on everybody in the room today is that Customs is going to be reasonable,” Mr Maura said.

“Customs does now have some teeth to address some of the issues that do exist with trade in and out of the Bahamas but, at the same time, are introducing a process to give persons who think it was not their fault the opportunity to have that penalty removed.”

Mr Maura said that in the case of prohibited/restricted goods, which are covered by Customs regulation 147, the $5,000 penalty was not ‘set in stone’.

Prohibited/restricted goods include items and substances such as weapons, animals, money, narcotics and foods, and the Budget reforms could theoretically allow Customs to levy a $5,000 fine for situations such as a supplier mistakenly placing three cases of chicken in a frozen container.

Mr Maura said Customs yesterday pledged that a group of senior executives would “review every situation and determine if it was accidental, or whether it was intentional.

“The carrier, if it feels it should not have been fined, can appeal to an Appeals Committee which is outside Customs and independent.... They’ll review it and see whether Customs appropriately applied the law.”

Mr Maura said the three-member Appeals Committee’s membership would include a retired judge and an accountant.

A “reasonable” approach by Customs, and a properly-functioning appeals process, will be vital in ensuring that the shipping industry is not over-burdened by the new regulation. And that, in turn, it does not over-react by increasing freight rates, something that would further weigh down Bahamian consumers, businesses and an already-struggling economy.

Mr Maura said the issue was “a major concern” for the shipping industry, given that around 80 per cent of the containers (TEUs) they ship to the Bahamas have already been sealed off-site by their clients before they receive them.

This means that it is impossible for the shipping companies themselves to inspect, and corroborate, the cargo before it arrives in the Bahamas - thus exposing them to penalties for mistakes and infractions they have no responsibility for.

“If Customs assesses the $5,000 in cases where the carriers had no reasonable means of detecting the contraband, the carriers will very likely react by increasing their freight charges in an effort to offset these unreasonable fines,” Mr Maura told Tribune Business.

“Eighty per cent-plus of the cargo transported by the carriers is delivered to the carrier in a sealed container. The Carrier has no means of inspecting this cargo.”

The APD chief executive added that the use of C-10 Customs forms to make last-minute changes to cargo manifests was another “huge concern” for the Bahamian shipping industry.

Mr Maura said there were “a lot of reasons” for C-10s to be employed, given that shipping companies were dealing with clients and suppliers where English was not the first language, and which often described physical freight differently.

He added that suppliers were often shipping product to different locations in the Bahamas, and sometimes confused manifests for one destination with those for another, requiring last-minute changes.

“There are a lot of situations that take place on a regular basis that require C-10s,” Mr Maura said.

“This is something that needs watching carefully, but Customs indicated it would be fair and transparent with the process, and will not be levying fines and penalties in a manner that causes more uncertainty.”

Elsewhere, Mr Maura said Customs now wanted a shipping company’s parcel list to be submitted with its cargo manifest, and no less than 12 hours before arrival in the Bahamas.

Failing to do so will subject the shipper to a fee equivalent to 25 per cent of the imported good’s value, which would be equivalent to a $12,500 penalty on a $50,000 consignment.

Still, Mr Maura said Customs emphasised that the new sanctions were only targeted at law breakers, not legitimate companies.

“Customs added that they will be on the look out for those importers and exporters who deliberately choose to engage in illegitimate trade and impede Customs’ risk assessment efforts. Customs will bring the full weight of the law on these persons,” Mr Maura said.

“Customs added that there is a C-10 review committee which will review each C-10 and determine if it warrants a fine. Again, they are not focused on assessing fines on the entity engaged in legitimate trade and makes an innocent mistake.”