By LISA S. KING

FN Asst. Editor

lisa@nasguard.com

A study conducted by the Grand Bahama Chamber of Commerce (GBCC) on over the counter sales of bonded goods reveal that there currently exists no standardized form or procedure to regulate what has become a normal practice among local businesses.

The study came about after the GBCC, Ministry of Finance and Customs had a series of meetings to observe the amount of people involved in this method of sales, to examine the importation of goods – what could be imported and what could not – and to determine what a consumable was.

While addressing the matter during a recent GBCC luncheon meeting, First Vice-president Greg Langstaff said after interviewing a number of vendors who purchased bonded goods, he discovered that no measure was in place to control how sale of such goods was to be conducted.

"There was no standardization that I know of in Customs report, some businesses do not even submit a form to Customs when they make sales," Langstaff said. "I believe that puts them in a real position of liability and there is nothing in the Hawksbill Creek Agreement (HCA) to require that.

"So there are different methods of purchasing and throughout the whole process, what we were trying to do was find something within the HCA that would not subrogate the rights of the licensees and also provide Customs the authority to investigate fraud, not audit."

Langstaff noted that the GBCC understands that the Bahamian Government must collect a revenue to support Government and its initiatives, but it has to be legitimate revenue.

"It can't be cohersive so what we would like to do is give them the ability to investigate fraud, but eliminate the request that some businesses report how they purchase goods from other businesses because of the potential liability that would put them in," he said.

"What we are trying to do with the Ministry of Finance is to equalize the playing field so that everyone is playing with the same set of rules and if that happens then business will become better."

Langstaff is convinced that while there are no terms for the practice in the HCA, Justice Isaacs in his 2002 Supreme Court ruling determined that the licensees of the Port Authority have reasonable and legitimate exp-ectation for continuance of over the counter sale of bonded goods.

Following an injunction by Justice Moore in 2002, preventing Customs from performing auditing of licensees, Langstaff said Customs authorities had voiced some concerns with respect to the practice, as they viewed it as a possible source of revenue loss.

"Both licensees and Customs are frustrated because there is no set standard with which the practice is being managed and Customs has made some arbitrary decisions with respect to the goods," he said.

"A standardized mechanism must be established when dealing with over the counter sale of bonded goods that does not subrogate the rights of the GBPA licensees while still protecting the rights of the government revenue collection of The Bahamas. This mechanism must be the same for all and must be derived at through the laws of The Bahamas and terms of the HCA."

Another issue Langstaff said the study covered was consumable stores. The declaration of bonded goods, dutiable and duty-free consumable, he said, have been the source of a number of controversies for the licensees of GBPA and Customs.

"We want to come up with a list of them and there was a consistent thing that the licensee may import, which includes any supplies necessary to carry out their business including supplies to provide housing for their employees," he said.

"These include retail goods sitting on the shelf like in Bellevue which can be either purchased wholesale for the benefit of a licensee's business or personal consumption by retail customers. Same with automotive parts that can be used to fix a licensee's vehicle or sold to the public to fix cars as well."

Langstaff said that each year, licensees are requested to obtain an over the counter sale of goods letter from Customs to get duty free on purchased goods for at least one year.

However, he said some vendors would get a copy of the letter keep it for years after it has expired and still try to use it to purchase goods.

"For purchase orders, there was no consistency whatso- ever," he said. "Some businesses require it, with some its an absolute requirement and some say 'well the purchase order is really for your accounting purposes, we really don't want one.'"

Despite this, Langstaff said there are advantages to the practice of over the counter sale of bonded goods which is having all businesses use other local businesses as their supplier of consumables supplies for their business.

"Some businesses need to go and purchase small items from off the shelves when they aren't importing the large trailers and this procedure gives small businesses the convenience of buying goods in small quantities at home instead of importing it from overseas that will cost them more."

Langstaff said the GBCC hopes to publish the final resolution to the bond issue in the near future.

"This is very necessary because I believe that work that we have done towards it is very positive and that we have accomplished something with it," he said.