Jamaica Customs Agency (JCA) has refuted the majority of the main findings of a special audit on its operations between 2016 and 2021 carried out by the Auditor General’s Department (AuGD).

The report, tabled in the House of Representatives this week, detailed accountability and operational weakness in JCA’s internal systems, which the AuGD said created opportunities for corrupt practices and irregularities.

This included control breaches of Customs laws resulting in an estimated $2.1 billion in financial exposure, and another $664.24 million in revenue remaining uncollected from three bonded warehouse operators. The Government auditors said the arrears were more than the bonds related to the warehouse operations as at September 30, 2021.

According to Auditor General Pamela Monroe Ellis, between June 2018 and February 2020, importer BFO1 failed to declare, in a timely manner, a total of 50.08 million litres of imported fuel in five shipments with estimated duties of $2.1 billion.

However, the JCA said yesterday that its records show that the duties, taxes, and fees in relation to the shipments in question were paid to the agency.

“This evidence was provided to the AuGD. Therefore, the JCA does not agree with the AuGD’s usage of the term ‘financial exposure’ since there was no revenue loss.”

The probe also found that the JCA had failed to validate — for the same entity — the authenticity of 765 declaration entries for 296.34 million litres of fuel, valuing approximately $12 billion, that were paid late and recorded as exports.

The agency argued that although there were some instances where import declarations were submitted late, the agency was still aware of shipments through the uploading of the manifest process and submission of other cargo documents.

The JCA has also disputed the amounts owed by the three private bonded warehouses, arguing that it “does not agree with the quantum of the arrears stated by the AuGD”, pointing out that legal proceedings are ongoing against one of the importers and the attorney general has been instructed to start proceedings in the Supreme Court against another. An injunction was obtained freezing the assets of one importer, according to the agency.

The JCA pointed out that the arrears arose several years ago, prior to the implementation of the electronic warehouse monitoring system which has significantly enhanced Customs’ monitoring capabilities. It said some payments have been made on the arrears, and the private bonded warehouse privileges of the three importers were rescinded. A judgement was obtained in the court against one importer, and other legal proceedings are ongoing against this importer.

“It must be noted that it was during the JCA’s internal monitoring activities in 2015 that the anomalies relating to two of the operators were identified. The liabilities relating to the other operator were identified in 2012. In all three instances the JCA took reasonable steps to recover the outstanding amounts. These included bonds drawdown, the auctioning of goods, payment plans and court action,” the JCA said.

But Monroe Ellis had noted that 138 entries with duties of $308.36 million were brought before the courts in 2020 — following queries by her office during the period of the audit, and another in May and August 2020, relating to 80 entries totalling $142.3 million, for goods imported between 2011 and 2012 — outside the seven-year time limit for Customs to bring such proceedings.

Meanwhile, Opposition spokesman on finance Julian Robinson has called for the Major Organised Crime Anti-Corruption Agency to launch an immediate probe into the auditor general’s findings. He said it was critically important to determine whether the loss to the Government is as a result of negligence or deliberate criminal conduct.

— Alphea Sumner