Customs slammed in report on released containers
Marks denies irregularities
By Patrick Denny
Stabroek News
October 16, 2002
Customs and Trade Administration head, Lambert Marks is disputing the conclusion of an investigation into his verbal authorisation of the release of 17 containers consigned to a businessman before any documents had been processed.
The investigation was conducted earlier this year by Marks’ own deputy, Jameel Baksh, at the request of then Commissioner-General of the Guyana Revenue Authority, Edgar Heyligar. Copies of the report were submitted to the Ministry of Finance and to the Office of the President. The report raises a number of serious allegations against several senior customs officers and recommends that “disciplinary action should be taken ...against the officers concerned.”
Heyligar withdrew his services from the GRA a few weeks ago reportedly because the Office of the President refused to act on the recommendations in the report.
Baksh characterised the release of the seventeen containers back in March as “unwarranted, fraught with irregularities, regulatory deficiencies and... a recipe for corrupt practices.”
The containers were for businessman S. Ahmad who had been granted permission to operate a warehouse at Albert and Charlotte Streets in January after lodging $23 million as surety. He regularly imports various electrical appliances including refrigerators, televisions and washing machines.
A bonded warehouse allows an importer to pay duties as he releases the items from the bond.
Seventeen containers were released to go to the private warehouse and one for immediate payment of duty prior to the processing of the documents. This was authorised by Marks according to the statements of senior officers one of whom threatened to “minute” (discipline) a junior officer if he did not follow the order right away.
The report characterised Marks’ use of his authority to order the release of the containers as a “whimsical” exercise of his own discretion and that Marks should be asked why he considered it expedient to grant such permission since the items were neither perishable nor needed for an emergency.
Baksh said in his report that “the first shipment of seven containers was lying on the wharf for nineteen days and no attempt was made to clear them. It must therefore be concluded that the request for the urgent removal of the goods was not genuine.”
Baksh, whose substantive post is Deputy Commissioner “Operations” also observed in the report that “the absence of any inter-departmental memorandum or even a scribbled note relating to the release may be viewed as a deliberate omission intended to avoid the presence of a paper trail leading to the initiating of this reckless exercise.”
But Marks told Stabroek News yesterday that he had breached no regulations and that in exercising his discretion to authorise the prior processing procedure under Sections 125 and 270 of Customs Act (Chap 82:01) the government incurred no loss of revenue.
Baksh cited Section 125 but not 270 which reads: “The Commissioner may permit the entry, unloading, removal and loading of goods, and in the report and clearance of aircraft and ships in such form and manner as he may direct to meet the exigencies of any case in which customs laws may not be conveniently applicable.”
Marks also contended that there was no breach of the regulations to process the documents related to a consignment since this would allow for a quicker release of the consignments when it arrives here. He explained that businessmen complain ad nauseam about delays in clearing their goods. Marks said the “prior processing” procedure is in use all over the world and was used by Customs even before he assumed the leadership of the department.
Commenting on the procedures followed in the release of the seventeen containers, Marks said four customs officials including the “Warehousing Officer” escorted the containers to Ahmad’s bonded warehouse.
Baksh noted in commenting on the part played by the warehousing officer that Ahmad was “unlawfully” granted sole access to the warehouse and that this “created opportunities for revenue leakages.”
Section 99 of the Customs Act provides for the Commissioner to grant this facility on the provision “of one or more sureties, conditioned on due payment of all duties and the due of observance of the Customs law”.
Section 100, which Marks says was amended by Administrative Order #2 of 1967 provides for the prior permission of the Customs for removal of goods from the warehouse.
Marks said the containers were unloaded and inspected in the presence of the officers and Ahmad, and that this allowed for a 100% inspection, which would not have been possible if they were inspected at the wharf.
Moreover, Marks said there was no report of any discrepancies between the stated amounts and items listed on the invoices and the containers. Further, he said, Customs had to authorise the removal of any goods from the warehouse by Ahmad and the duty paid on the goods removed.
He said the procedures require that the goods are stacked, labelled and a certificate issued and that the contents are entered in three ledgers held by different sections of the department. These registers, he explained, are adjusted as permission is granted for the removal of goods on the payment of the required duty.
But Baksh says “there is no evidence that the release of the goods was made conditional to any restrictions as contemplated by the Act”.
Marks also noted Baksh’s observations that there was no permanent Customs presence at Ahmad’s warehouse as required by Section 100 of the Customs Act Chap 82:01. He said that Baksh seems unaware that administrative Order #2 of 1967, which provides only for a permanent Customs presence at the private warehouses operated by Banks DIH and Demerara Distillers Limited, had amended this section. The Order, according to Marks, also provides for Customs to check the warehouses at anytime to ensure that their contents are the same as documented in the records of his department.
With regards to Baksh’s observations that his oral instructions were intended to ensure the lack of a paper trail, Marks said that such a trail was fully in place based on the record-keeping required and was there for the scrutiny of the Auditor General.
The Baksh report notes that the requested fast tracking of Ahmad’s invoices through the valuation unit caused the officers not to research the declared values and that the prices quoted by Ahmad were accepted because he was considered “a reputable importer for the comparison of similar goods imported.”
Marks maintained yesterday that he believes Ahmad is a reputable importer. He said because Ahmad makes large bulk purchases he is in a better bargaining position than the other importers. Moreover, that in support of the quoted prices, Ahmad submitted newspaper clippings with advertisements showing the very items at prices lower than those given on the invoices.
The report noted that the items were sourced to AON International a company established in Miami whose President is S. Ahmad. Baksh said “a sale could not take place between AON and S.Ahmad” and even though the two parties were related no attempt was made to find the prices of similar goods imported as part of non-related transactions.
But Marks said there is nothing wrong with the two companies transacting business once the relationship between them is declared to the department, which it was. He pointed out that the reference base for the articles used by the Customs department for the articles imported by Ahmad is actually lower than the prices he quoted.
As to Baksh’s comments on the valuation method used to check the declared prices on the invoices, Marks said that the GATT (General Agreement on Trade and Tariffs) prohibits the use of the selling price of an article to compute its price for duty, as it appears Baksh had done.
The report says the invoices were vague not giving sizes of refrigerators for example and there was no way to determine if freight or insurance had been included.