Customs brokers and freight forwarders are appealing to be relieved of some of the liabilities imposed on them under the proposed new Customs Act, and to instead have those responsibilities focused on clients who fall in breach.
The brokers made their case last Thursday at a meeting of the joint select committee reviewing the Customs Act of 2019 that will replace the current 1941 law.
The Customs Brokers and Freight Forwarders Association of Jamaica is asking for the definition of importer and declarant — in the treatment of goods in specified circumstances — to be amended so that it excludes customs brokers, from liability under the provision.
The association urged that an amendment to the definition of declarant, importer or exporter to exclude customs brokers should also be considered in relation to the distribution of surplus on the sale of goods after all claims have been met.
President Clive Coke said the logistics professionals take “grave issue” with being made liable for payment of duties and taxes on behalf of importers and exporters, despite the fact that section 270 (10 and 11) of the Bill states that a customs broker is not responsible.
He said the exemption in the Bill which prescribes instances in which the broker becomes liable seems to shift the burden of proof of a criminal act to the accused customs broker.
“In our view these two sections ought to be omitted because the Act has already identified us as a custom broker. There is an entire section of the Customs regulations which already addresses how Customs may regulate, and under the regulations you're liable to criminal prosecution if you step out of line in the fulfilment of your duties as a customs broker,” Coke argued.
But Finance Minister and Committee Chairman Dr Nigel Clarke reasoned that the intention of the law is to ensure that as a licensed agent, brokers take every step to ensure that their customers follow all the requirements.
“If you do that, then there is no liability. We are addressing gaps that exist today. Time and time again you have aberrations at points of entry, and you can't get to anyone. The construct [of the law] is to incentivise the kinds of activity that secures Jamaica's borders and, at a minimum, allow the State to have recourse whenever those rules are broken” he said.
The brokers insisted, however, that they should not be held jointly accountable with clients who are in breach of the law, likening the relationship to that of an attorney and client.
They are also concerned about section 108 of the new Bill which makes brokers liable for duty, tax, penalty, or any other sanction, if Jamaica Customs stores the goods in a warehouse at the expense of the declarant, or the importer. There is no justifiable reason or legal basis for the name of a broker to be included in the information submitted to the commissioner of customs pertaining to the goods for disposal, as the goods aren't owned by the broker, the group further argued.
The association also believes the fine of $2 million for administrative penalties should be reduced by half, but pointed out that even reduced, this penalty still does not fit the offence and could result in detrimental effects on micro, small and medium-sized businesses.
The association, which represents over 200 customs brokers, engages in customs clearance and third-party logistics processes in the importation of goods and services.
The 236-page Bill is intended to replace the current law to modernise customs practices and procedures, but some groups such as the Shipping Association of Jamaica have contended that it is too heavily skewed towards extracting penalties.
Private operator of Norman Manley International Airport, PAC Kingston Airport Limited, has also stated strong concerns that the Bill appears to give the commissioner of customs and portfolio minister broad, almost unfettered powers, and that the proposed law does not recognise the fact that customs functions are within the broader operations of the airports.
The Government says the new law is expected to bring benefits for the trading community and Jamaica Customs Agency by improving customs clearance and revenue collection processes, simplifying procedures for businesses, and providing a more efficient service delivery to the public.