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Chevron gets $611.5 million in two years

Published:Thursday | February 26, 2015 | 2:00 AM
Dr Omar Davies

Nearly $290 million has been set aside in the 2015/2016 Estimates of Expenditure to meet the Government's obligation's to Chevron Limited, further to a court award.

Next fiscal year, some $287.6 million is to be paid over to Chevron by the Government, making it $611.5 million in two years.

Jamaica has been forced to repay Chevron monies it collected as customs user fees (CUF) between 2003 and 2013 after Puisne Judge David Batts ruled in 2013 that the imposition of the fee was unconstitutional.

Chevron sought restitution of the aggregate sum of $548.8 million, which it paid in CUF from May 7, 2011.

In 2003, then Minister of Finance Dr Omar Davies, purporting to act under section 257 of the Customs Act, amended the Customs Regulations to introduce a CUF of two per cent of the value of goods. The fee was imposed on all goods imported to Jamaica, including petroleum imported by Chevron.

Then, in April 2009, then Minister of Finance Audley Shaw increased the CUF on imported finished petroleum products, but excluding that imported under the Petro Caribe Agreement, to five per cent. The Customs Regulations were amended accordingly.

Justice Batt held that the CUF was not lawfully imposed by the minister.

"Its imposition was ultra vires Section 257. It did not have the sanction of Parliament and was not, therefore, a lawfully imposed tax rate or due," the judge said.