Business slams 500% Customs burden rise


Ken Hutton


Tribune Business Reporter

The government yesterday promised that Customs’ new system will “smooth out” after furious Abaco businesses blasted a “400-500 percent” increase in the goods clearance workload.

Ken Hutton, the Abaco Chamber of Commerce’s president, estimated this was the increase in delays and bureaucracy associated with clearing imports through the Customs Department’s Electronic Single Window (ESW) system that was installed on the island within the last couple of weeks.

Abaco’s business community was described as “extremely upset” over “delays and added expenses” created by the transition to the new digital process. Mr Hutton warned that, unless rectified, these issues will increase the cost of clearing goods and, ultimately, the cost of living as any price rises will be passed on to consumers.

“We reached out to the government about a week-and-a-half ago,” he told Tribune Business. “We have been in regular communication with Customs and the Ministry of Finance. They are working to help us work through all the issues, but there are a tremendous amount of issues still being worked on.

“We are very concerned about this. We received feedback from the customs brokers, other importers and many of our Chamber members on Abaco and the Cays. The feedback has been fairly robust.”

K Peter Turnquest, deputy prime minister, in a statement issued to Tribune Business last night said all parties - Customs, brokers and the private sector - had “to raise their standard” in moving away from an “antiquated” Customs system responsible for major revenue losses and leakages.

While acknowledging that the ESW’s arrival had created “a learning curve” for all involved with the importation of goods into The Bahamas, Mr Turnquest said the experience on less populated Family Islands showed the transition would “smooth out” once everyone became familiar with the new system.

“With the transition to the new system, there is no denying that everyone has to raise their standard of operations, and that means the Department of Customs and our business stakeholders,” said Mr Turnquest.

“We are transitioning from an antiquated system that had ineffective controls to a new system that follows international best practices and requires a higher level of compliance. It requires more detailed information from businesses so we can have more accurate records and properly account for Government revenue. With every new system there is a learning curve, and the new Customs portal is no different.”

Describing the ESW as one element in a “major modernisation effort” designed to bring Customs on to an online platform, the deputy prime minister added: “The weaknesses in the old system, quite frankly, are responsible for much of the leakage we see in Government revenue, so we are committed to working with our stakeholders to make this work.

“Our experience in the Family Islands, as in Nassau with air cargo operators, has shown that once businesses become familiar with the new system and accustomed to the online process, operations smooth out.”

Mr Turnquest continued: “That being said, I am pleased to see Customs has been proactive in responding to the feedback provided by businesses and is engaging business stakeholders directly.

“I know they met with The Bahamas Chamber of Commerce on Wednesday and have been in regular contact with the Abaco Chamber of Commerce ever since their specific concerns were brought to the forefront. This is a partnership and we will work closely with businesses to address their individual and collective needs when it comes to transitioning to the new system.”

Mr Hutton, meanwhile, said the major concern was the extra workload associated with clearing imported goods through the ESW. “It’s the added workload that is causing the delays and added expense,” he explained.

“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.”

The Chamber president continued: “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: “The business community is very upset. 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.”

Mr Pinder added: “We are in an extra mess here at the farm because duty free permits take four to six weeks or longer to process through agriculture, so we are left in a position of not being compliant with Customs rules and timelines for clearing our items or pay duties on farm supplies.”

One broker told Tribune Business: “It’s an extremely cumbersome process. It’s not an issue of people being resistant to change. We understand what the ESW is all about. I just don’t think it was rolled out properly. It’s a major headache right now.”

The ESW platform is intended to reform and modernise the Customs Department’s operations, facilitating one point of access for brokers and businesses within The Bahamas through its connection to various government agencies.

However, fears are already being raised about how the transition on New Providence will go once the roll-out begins on the most-populated island. One posting to The Tribune’s website yesterday said: “Y’all think it’s bad now? Wait till the new Customs single window hits Arawak Cay in Nassau in September like it did Abaco two weeks ago. People working night, day, weekends and holidays just to get freight off the dock.”