Freeport businesses licensed under the Grand Bahama Port Authority are now permitted to bring in motorcycles, vessel engines, and dolphin feed duty-exempt as the practice of conducting audits by Customs was ruled unconstitutional by the Supreme Court Monday.
Additionally, according to a press release from Frederick Smith, Customs was ordered to refund all duties, but no damages were awarded against them.
Earlier in the year, Underwater Explorers Society (UNEXSO) and The Dolphin Experience Limited (Dolphin Experience) commenced cases in the Supreme Court against the Comptroller of Customs and the Honourable Justice Stanley Moore in a 95-page judgment that reviewed the Hawksbill Creek Agreement (HCA), the Customs Management Act, the Constitution, and the entitlement of licensees to import goods for their businesses in Freeport. The HCA formed the foundation for the development of Freeport and business enterprises.
Smith, who was one of the attorneys that represented both companies, said his clients were pleased with the judgment and that it meant that their licence from the GBPA had some financial substance.
He said: “The judgment breathes life back into the HCA. It gives much needed relief to licensees from arbitrary taxation from the government.”
The actions filed by the two companies resulted from a refusal by Customs to allow the plaintiffs to import a motorcycle, two diesel yacht engines, frozen fish for dolphin food, a new engine for a vessel and scuba tanks. Secondly the action also arose out of a decision by Customs to audit and inspect the accounts of the mentioned businesses.
As UNEXSO claimed that the decision by Customs to audit was malicious, Justice Stanley Moore stated: “I am unable to find… that the audit weapon was deployed maliciously for the purpose of cowing Unexso into discontinuing its challenge… the audit letter far from intimidating that applicant, seems to have had the opposite effect; for within 11 working days of it UNEXSO was to commence Action No. FP/99/2002. Not an act of the brow-beaten or faint-hearted.”
Additionally, the court stressed: “The Comptroller may not enter except by due process of law… The Customs Management Act provides an amplitude and sufficiency of powers to enable the Comptroller to enter premises for good and sufficiently lawful reason provided the stipulated preconditions were met.”
The court found that had Customs gone forward with the intended audit, and if carried out it would have been unlawful and unconstitutional as a breach of Article 21 of the Constitution.
Moreover the court rejected arguments by the Attorney General’s office that UNEXSO was a bonded warehouse. “It reviewed the meaning of ‘consumable stores’ in the Hawksbill Creek Agreement and stated that because the items imported by UNEXSO were not for ‘personal use,’ but for ‘commercial business’ undertaking, they were not subject to duties or tax.” Additionally despite the items being used by the two companies in canals and waters of Freeport, business remained within the meaning of the HCA.
Smith, along with Sean Callender, Hadassah Swain and George Missick represented both companies and Customs was represented by the Attorney General’s chambers and Jennifer Mangra.
