• Warn goods clearance costs to rise in New Year
• Still seeking clarity over Click2Clear ‘integration’
• Customs: No ‘mandate’ to use certain providers
By NEIL HARTNELL
and YOURI KEMP
Tribune Business Reporters
Brokers yesterday warned the cost of clearing goods into The Bahamas will likely increase in the New Year as Customs revealed its revenue collections year-to-date have increased by $15m compared to pre-COVID levels.
Ralph Munroe, Customs’ acting deputy comptroller, said the revenue and border protection agency has been beating its targets by collecting an average of $100m per month since the 2022-2023 fiscal year began on July 1.
“We’ve been running at $100m a month since July of this year for the fiscal year. Revenues are recovering. I think it’s safe to say that revenue is beyond expectation and we are doing remarkably well,” he said. “I believe that the message is getting through that Customs is no longer tolerating that level of dishonesty and, of course, persons have been fined. We’re imposing penalties.
Mr Munroe’s comments came as Customs brokers continue to voice concerns over what they argue is a lack of clarity and certainty surrounding the agency’s requirement for them to be fully “integrated” with its electronic goods clearance platform, Click2Clear, by January 2, 2023.
A flyer on the initiative, seen by Tribune Business, warns brokers, in-house brokers, retailers and wholesalers that all major importers “must submit Customs declarations via integration to Click2Clear. Bahamas Customs will not accept manual declarations nor documents. Only integration submissions will be accepted.
The flyer names two suitable suppliers of the necessary software “integration”, Information Systems Ltd and its SWIM product, and GAAC. However, rather than mandate that brokers and major importers use the services of either of these two entities, the Customs flyer advertising an October 6, 2022, meeting on the initiative said firms can “seek the services of an independent program developer”.
Customs brokers spoken to by Tribune Business yesterday said confusion still surrounded the initiative, with little progress or clarity forthcoming since the last meeting with government on the matter. Several raised questions as to whether the Government could force them to buy a product from a private vendor, with others suggesting that the relevant Customs laws might need to be changed to facilitate the plan.
David Humes, owner/operator of Integral Logistics, told Tribune Business that the flyer’s assertions about ending manual submissions was “not an accurate statement” as such filings were already eliminated when the Electronic Single Window and Click2Clear first came into being.
“We don’t know what is going on. We haven’t been informed since the last meeting,” he said. “One of the persons [software providers] mentioned, the costs are really astronomical. One of the persons mentioned has a really high cost of doing business.” Mr Humes added that brokers adopting this solution would have to pay $2,000 to acquire and install the software, a further $400 for training and $600 per month for its continued use.
“Any small business person couldn’t possibly absorb that cost. We don’t make that kind of money,” he told this newspaper. “Costs will go up considerably in order for persons like myself to survive. I can tell you persons like myself are apprehensive and don’t know what to do. It’s really confusing at this point.”
Mr Humes said the other software provider named in the flyer had informed him he had no idea he was included on it. He added that brokers had also been advised to “do it ourselves or find someone to do it for us, which he branded “practically impossible” given the length of time required to develop software that was compatible and could integrate with Click2Clear.
Kenneth Gibson, chief executive of Five Star Brokers, told Tribune Business that among the brokerage industry’s first questions when the initiative was announced was “who’s going to bear the cost?” He added: “I’m ultimately preparing myself for the transition. They’ve not said anything further, and I still need to operate.
“If they tell you that you don’t have access to Click2Clear then all my clients are going to suffer. That’s the path I’ve taken because I’ve not had the opportunity to get any further understanding from the Government. It will be to my disadvantage if they enforce this thing and I’m not ready.”
Acknowledging that there will be “a learning curve” over the Click2Clear integration, Mr Gibson added: “For us it’s going to increase our costs because the software is duty entry specific. We’re going to have to increase our prices as it’s going to take a little more effort to enter items in the system. We’ll have to have a slight increase to accommodate the cost of doing business.
“There are costs as brokers that we have to absorb, and costs we pass on to the customer. A lot of my clients are not fully aware of what is about to happen.” Both Mr Gibson and Mr Humes said the “integration” initiative appeared to be driven by the Ministry of Finance, rather than Customs, with the former complaining that there were “a lot of inaccurate classifications” and wanting to obtain better data from the system.
“The rationale was that the present system is unable to provide the supporting data that the Ministry of Finance needs, and the third-party providers have the software that will allow them to extract the critical data they require,” Mr Gibson said. “They also mentioned there were a lot of issues with regard to tariff headings. They wanted to improve compliance with the Click2Clear system.”
Mr Munroe yesterday said there was no mandate from the Government or Customs that brokers had to use one of the two software providers named. He said: “That’s not true. Let’s look at what the facts are. As a government department our whole job is trade facilitation, and trade facilitation, the very word itself suggests that we are here to assist and to make things easy.
“We’re in the electronic age and what we’re doing in some cases, you may say we’re troubleshooting. But if we were to come up with a proposal or programme and it doesn’t work, we will adjust it until it does. But we are not in any way, shape, or form, forcing anything on anybody.
“We want to work along with our partners, because that’s why we’re here. We’re not here for ourselves; we’re here to facilitate persons and trade, and so whatever we believe is the best that is what we will advance.”
James Albury, senior Customs officer with responsibility for IT, said: “What we’re doing is that, as a mandate from the financial secretary, Simon Wilson, we have a process what we called integration where we have a program that submits declarations through an electronic XML format.
“What happens is that we have two major companies that are doing the programming in the Bahamas, one is ISL Bahamas and the GATS Bahamas. So what is happening is that those are the two persons that are available in The Bahamas.
“We are asking them [brokers] to reach out to those two companies, or an independent programming company, so that they can be ready for January 2 with our integration where they will have to submit declarations electronically into the Customs system.”