Wednesday, December 4, 2019
By NEIL HARTNELL
Tribune Business Editor
The Ministry of Finance's top official yesterday voiced optimism that the problems with Customs' new electronic system will be largely resolved "in a matter of weeks" and "fade quickly into the past".
Marlon Johnson, its acting financial secretary, admitted to Tribune Business that some importers had seen "a bit of a slowdown for sure" in the time taken to clear their shipments but pledged that Customs and the Electronic Single Window's programmers, Singapore-based Crimsonlogic, were committed to working with the private sector to address all issues.
He added that the private sector's lack of "familiarity" with the switch to automation was also a significant factor behind the problems being experienced, and said importers who had invested in new equipment and digitising their own systems were "navigating" the system - branded Click2Clear - much more smoothly.
Arguing that the Electronic Single Window was "working as intended", Mr Johnson said the difficulties stemmed from how Customs and private sector stakeholders were engaging with and using its processes.
Calling on businesses to provide specifics on the issues they were having, the acting financial secretary said that upon investigation it was discovered that some of the problems were "not as pronounced" as reported or resulted from human as opposed to system/process error.
Mr Johnson, confirming that Customs and Ministry of Finance officials met with brokers, major importers and the Chamber of Commerce two weeks' ago to address any grievances, said: "We are aware there are some issues with the system from a transactional standpoint that could be tightened up.
"We are working with the users and programmers to address some of the reporting issues as well as other elements we know of. Quite a few of the importers that invested in upgrading their equipment and automated their processes as we suggested have been able to navigate it very smoothly."
Suggesting that the transition from a manual, paper-based system was never going to be problem free, Mr Johnson continued: "The thing we've discovered is unfamiliarity with a new system. It's brand new, totally different from the manual processes, people are getting used to a new way of doing business, and it's slowing things down somewhat."
The increase in enhanced investigations and post-clearance audits that the Electronic Single Window allows Customs to perform, he added, had also contributed to some of the delays.
"For some customers there has been a bit of a slowdown for sure," Mr Johnson said. "Part of it is to do with us doing system enhancements, and part of it is to do with unfamiliarity with the system,.
"There are a number of issues and things we're hoping to mitigate, but we feel confident that as these issues get resolved and people get comfortable, this will fade into the past fairly quickly.
"We're on top of it, understand the critical nature of these transactions and are ensuring people get through as quickly as possible," he continued. "We're talking a matter of weeks.
"Once we get through this period and into the New Year, any system changes, process changes will have worked their way through. There aren't any issues that the system is failing. It's really certain processes that have to be streamlined and made faster.
"The system itself is working as intended. The way we engage the system from a Customs standpoint and stakeholder standpoint is where the work has to be done, refining the system to make it more user friendly for them and get more functions for them."
Mr Johnson said another meeting was scheduled for next week between Customs and the private sector so that both sides could continue to work through the issues and provide feedback. He added that Customs officers will also go to importers and brokers to work through any problems alongside them in their offices.
The electronic single window was billed as an initiative that would bring Customs and The Bahamas' cross-border trade into the 21st century via the embrace of technology, but many brokers and importers have argued that it has proven to be something less than that to-date.
Several have described the platform, which was rolled out two months' ago on October 1 for all seaborne freight coming into New Providence, as a "real rough" adjustment and a "giant step back from the old system".
Among the major complaints are that, prior to the system's implementation, the private sector was informed that import shipments would be immediately released once due taxes (VAT and duties/excise tax) was paid on the declaration.
This was intended to speed up the clearance of goods at the border, benefiting Bahamian merchants, wholesalers and other importers through reduced supply chain delays and a reduction in associated logistical costs. However, in practice, this is not happening as Customs is still insisting on checking consignments prior to their clearance even if taxes have been paid.
Other issues include "significant delays" to the replenishment of companies' performance bonds with Customs even after due taxes are paid, and problems processing shipments where VAT waivers are required. The latter is understood to have added an extra business day to processing/clearance times alone.
The electronic single window is also a key component of the Government's efforts to modernise and digitise critical public services. Besides improving border revenue collection, and helping to crack down on tax evasion, fraud and related crime by identifying high-risk shipments and importers, the system was also hailed as a means to improve the speed and efficiency of cross-border commerce.
Apart from aiding the proposed World Trade Organisation (WTO) accession, its electronic platform was designed to play a key role for an economy that is almost totally reliant on imports for everything it consumes. However, the delays and confusion in the immediate aftermath of implementation threaten to bottleneck retail/wholesale supply chains at the worst possible time just before Christmas, when import volumes tend to peak amid merchants' rushing to stock up.