Economy's 'Blood Supply Choked' By Customs Proof Of Exchange Control

Economy's 'Blood Supply Choked' By Customs Proof Of Exchange Control


Tribune Business Editor

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The private sector yesterday hailed the Government's decision to abolish a Customs demand that would have "choked off the blood supply" of the Bahamian economy.

Robert Myers, pictured, the Organisation for Responsible Governance's (ORG) principal, told Tribune Business that the Department's proposal for all Customs entries to be accompanied by proof of Central Bank exchange control approval would have "shut down the dock" if implemented.

He added that the Government needed to "think it through properly" before introducing changes that completely disrupted The Bahamas' "ease of doing business", and urged it to fully consult the private sector and civil society on such matters beforehand

His reaction was echoed by Michael Maura, the Bahamas Chamber of Commerce and Employers Confederation's (BCCEC) chairman, who praised Marlon Johnson, the Ministry of Finance's acting financial secretary, and other officials for deciding to reverse course over the exchange control demand.

Mr Maura, who is also chief executive of Arawak Port Development Company (APD), the operator of Nassau's commercial shipping port, added that the plan would have have totally disrupted import flows and cross-border commerce - something the Bahamas cannot afford.

Both men spoke out after Tribune Business revealed Customs' now-halted plan to require all importers to provide proof of Central Bank exchange control approval for all entries with effgect from this Monday, May 14.

A "public notice", signed by Dr Geannine Moss, the Customs comptroller, stated: "The public is hereby advised that as of the 14th of May 2018, all commercial entries submitted to Bahamas Customs must be submitted with current Business Licence."

Dr Moss said such requirements were enshrined in law by the Customs Management Act's section 208 (2), "item nine", which states that "goods imported for the purpose of any business" can only be cleared by production of a valid Business Licence and "proof that exchange control approval was obtained by the importer from the Central Bank of the Bahamas permitting the expenditure of foreign currency for the purchase of the goods".

Mr Johnson subsequently confirmed that the exchange control 'proof' had been dropped following a backlash from furious businesses who obtained a copy of the 'public notice'.

Tribune Business sources, speaking on condition of anonymity, also suggested Customs had misinterpreted its own Act. They explained that the section cited in the 'notice' applied only to 'restricted or prohibited' goods, not "all commercial entries" - something this newspaper's inspection of the Act and its schedules seemed to bear out.

As a result, the sources said Customs' demand had no basis or justification in law. As a result, they suggested the Department apologise for a "travesty" that had caused unnecessary "confusion" and turmoil within the private sector.

Mr Myers, meanwhile, said the episode again showed the Government's failure to consult and "properly think through" initiatives that threatened to erode the Bahamas' already-weak 'ease of doing business'. He likened it to the ongoing fly fishing controversy, where that sector's new licensing system had not been accompanied by the necessary payment and issuance systems.

"What are you going to do when someone pays by credit card? There's no exchange control approval and the goods are already here," Mr Myers said of one likely dilemma that Customs' approach would have caused.

"We just don't think things through. Use the business community to bounce these ideas off before you effect policy that affects businesses, and take the blood supply out of your economy. Don't sit there and think you have all the answers. Use all the assets in your tool box, speak to the private sector and civil society, then implement the policy and law.

"Don't put the policy in place that disrupts the lifeline of the economy and cause everyone a headache. There are lots of situations where you're not going to have a [bank] draft. Why are we making it more difficult for the formal economy?"

Mr Myers added that the effect of Customs' proposal would have been to "shut the dock down", impeding the timely clearance of imported goods and causing a trailer back-up, with commerce ultimately grinding to a halt.

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