Chaos at Customs - Auditor general says values and duties being arbitrarily applied to imported items at the nation's ports

Published: Monday | December 30, 2013 Comments 0

Livern Barrett, Gleaner Writer

The Auditor General's Department has confirmed a fear held by many Jamaicans that Customs officers are arbitrarily applying values and duties to imported items.

The confirmation is contained in the latest report to Parliament by the government oversight agency.

The report, tabled in Parliament last week, paints a picture of a free- for-all at the Jamaica Customs Agency (JCA).

It points to the absence of valid price-reference data for most imported products and a uniform research methodology for the valuations done by Customs officers.

"The values imposed on the (imported) commodities were based on pricing-reference information maintained by individual officers," charged the auditor general (AG).

"In the absence of centralised data on commodity prices, each Customs officer compiled their own file with copies of supplier invoices, catalogues, and prices from Internet sources, which they use to value imports," reported the AG.

Further, the AG said auditors found that price-reference files maintained by Customs officers contained invoices that were outdated by up to 360 days, an occurrence that is in contravention of the Customs Act.

The oversight agency pointed out that Section 19 of the act requires that price-reference data be in place 90 days prior to or subsequent to importation because "the use of dated invoices creates inconsistencies and inaccuracies in the valuation of imported goods".

Yesterday, Commissioner of Customs Richard Reese declined to comment on the findings, saying the agency had already responded to the AG and would need to respond to the Public Accounts Committee of Parliament before speaking to the media.

The AG's Department pointed out that the audit had been conducted with a view to assessing the efficiency and the effectiveness of the system that governs the levying of import duties and was focused, primarily, on the research conducted for price verification, the operation of the JCA's Valuation Verification Unit, and the appeals process available to members of the public.

No formal guidelines

The result, according to the AG, was dismissal as the Customs department "did not establish formal guidelines to ensure that research activities are conducted in a structured and transparent manner".

"We found that the JCA does not have centralised data storage of information to facilitate research for valuation. Further, the valuation process was manual, cumbersome, and inefficient, and there was no common methodology to aid research for Customs' valuations," the AG reported.

"The audit highlighted operational weaknesses at the JCA, which impair its ability to consistently determine appropriate and objective valuation of imports."

The report noted that price verification was conducted to confirm the accuracy of the price declared by an importer in the absence of an invoice.

As a result, the Valuation Research Unit at Customs is expected to gather, sort, and maintain accurate pricing information on imported commodities for use by the Valuation Verification Unit.

However, the AG's Department said it found that the Valuation Research Unit did not maintain data on current commodity prices that would allow the verification of the declared value of some products.



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