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More business-to-gov't consultation needed - Wignal

Published:Tuesday | March 30, 2010 | 12:00 AM
Andrine Higgins, managing director of APL Freight and Company Limited, engages Donovan Wignal, president of the Customs Brokers and Freight Forwarders Association of Jamaica after the APL-sponsored, Shipping Association of Jamaica Lunch and Learn Seminar on March 18.

Donovan Wignal, president of the Customs Brokers and Freight Forwarders Association of Jamaica (CBFFAJ) has said with new trends emerging in the logistics and supply chain, there needs to be more business-to-government consultation in order to make the best use of the changing environment.

According to Wignal, a careful analysis of the strengths and weaknesses of local logistics and supply-chain capabilities in the areas of capital structure, financing, profitability, registration and licensing system, import/export procedures, customs, and information and communication technology, must be carried out.

"While there have been considerable improvements done at each node of the maritime-service chain in Jamaica - shipping agents, wharf companies, Customs, the whole end-to-end import-and-export process is unwieldy and inefficient, as reflected in Jamaica's low ranking in Trading Across Borders indicators," Wignal said.

He was speaking at the APL Freight Limited-sponsored Shipping Association of Jamaica (SAJ) Lunch and Learn Seminar held on March 18. The SAJ hosts the seminars monthly to update members on changes in the local and international shipping industry.

Wignal pointed out that several areas, directly linked to trade, needed to be examined. One such area he fingered was exporter registration. "The functions for export registration and trade facilitation cause a dichotomy," Wignal pointed out. "It promotes trade and yet is responsible for trade regulations ... you can't police yourself."

He pointed out that in the case of Singapore, the roles of trade regulator and trade promoter are split into two agencies - the Singapore Customs handles trade registration, whereas the International Enterprise Singapore serves to promote external trade. Jamaica, he said, could benefit from such a system similar to that of Singapore.

Review TCC

The CBFFAJ head further pointed out that trade could be better facilitated if the Tax Compliance Certificate (TCC) and its link to trade is reviewed. "The six-month renewal period of TCC is too short, is tedious and time-consuming," Wignal opined.

Drawing a comparison with Singapore again, he noted that in that country, to foster the export-oriented culture, the tax authority does not link tax compliance with trade activities. "Tax compliance is enforced by the tax authorities via non trade-related controls. Importers and exporters are free to trade as long as they comply with the trade regulations and pay the relevant import or export duties," Wignal stressed. "Trader registration is one-time and is simple and easy," he added.

Another sore point for Wignal was the lack of a clearing facility to provide message translation, authentication, route and disseminate between government agencies and the trade community.

"The UN/CEFACT Recommendation Number 33 advises governments and traders to establish a 'single window' to enhance the efficient exchange of information between traders and government," he said. "This is an important building block in the area of trade facilitation." He noted that the planned Port Community System (also referred to as a Cargo Community System) will address some of these issues.

Wignal further noted that there was a lack of value-added network (VAN) to receive and/or send electronic messages in different formats through different communication protocols. "Some agencies, for example the Port of Montego Bay, are not able to exchange electronic messages with other stakeholders," Wignal noted.

"In Thailand, a Joint Venture EDI Gateway between government and non-government bodies, enables submission of customs declarations, import certifications, export/import licences, etc in EDI format," he added.

Wignal also noted that Jamaica stands to benefit from several recommendations, as outlined by Singaporean e-government solutions provider, Crimson Logic, as such, the Jamaican Government should:

Separate the trade regulatory and promotion functions of the industry

Review the need for users of the system to cross-check trade with tax compliance

Establish a formal government-business trade facilitation consultative and action process to address inefficiencies in the trade-facilitation processes

Set a framework for the uniform application and dissemination of the harmonised system code and tariff rates tables.

Ensure that the Customs Department adapts the World Customs Organisation Time Release Study model and methodology.

Set up a formalised advance pricing agreement which would help to resolve actual or potential transfer pricing disputes in a principled, cooperative manner as an alternative to the traditional adversarial process.

Establish a nationwide electronic-trade-documentation system/single electronic window

Enhance government agencies and trading-community capability to exchange electronic messages through a national trusted information broker

APL Freight Limited was established in 2003 and is a non-vessel operating common carrier with principals in the United States. It handles less-than-container-load, full-container load and air freight to Jamaica. It offers a weekly service from the United States as well as Canada. APL Freight also operates a DHL counter at its Newport West offices.