FREEPORT, Grand Bahama – A leading Freeport-based lawyer on Tuesday suggested that as The Bahamas debates participation in Free Trade Area of the Americas agreement, more attention should be paid to the Freeport model under the Hawksbill Creek Agreement in considering what “sensible approach” the country should take “in weaving itself into the fabric of the economy of the Americas.”
Commenting on the recent landmark decision issued by judge Stanley Moore in support of two licensees of the Grand Bahama Port Authority (GBPA), Frederick Smith, managing partner of the firm of Callenders & Co. Freeport, said the whole concept of the Hawksbill Creek Agreement “was to create a simple legal structure to conduct business with the least amount of Government red tape so as to attract businesses, not only internationally, but also from within The Bahamas.”
Mr. Smith was the lead lawyer for UNEXSO and the Dolphin Experience Limited, licensees of the GBPA, that challenged audits conducted by Bahamas Customs related to certain duty-free items allowed for their businesses under the Hawksbill Creek Agreement.
In issuing an injunction restraining Customs from conducting “any such audits in the future,” Judge Moore, among other things, ruled that the audits were unconstitutional and “cannot be said to be reasonably justifiable in a democratic society.”
Obviously elated by the Court’s decision, Mr. Smith said the Hawksbill Creek Agreement created “a booming economy in the early years, but as Government, inch by inch, began to reassert its control over the last few decades, Freeport’s economy has been slowly expiring, making it very fragile and brittle.”
“Freeport’s collapse first began with the unlawful interference by the Cabinet with the Grand Bahama Port Authority granting or refusing business licenses to both Bahamian and foreign investors,” Mr. smith said. “With harsh imposition of abusive immigration measures, this economy was further shattered.”
In the years that followed, Mr. Smith added, the real estate industry “disintegrated with the arbitrary Exchange Control and Immovable Property Act.”
“In addition, throughout this slow death, the Customs Department began to restrict more and more what goods could be imported for businesses of licensees duty exempt,” Mr. Smith said, adding that by the late 1980s and early 1990s, Freeport was “but a burnt shell of its former self.”
The attorney noted that Judge Moore’s ruling is the fifth judgment by the Supreme Court in which, over the years, it has ?rolled back unlawful Government interference.
Citing the “Shangrila case” as the first example, Mr. Smith noted that in that case Justice B.O. Adams declared the practice of the Port Authority submitting license applications to the Government as unlawful.
“Although the Port Authority now approves license applications by Bahamians without reference to Cabinet, the practice continues of submitting foreign applications for prior Cabinet approval,” Mr. Smith said.
In the case of Commonwealth Brewery vs the Port Authority and Hammerhead Brewery in Freeport, Mr. Smith said Chief Justice Joan Sawyer declared that the licensing and tax provisions of The Beer and Spirits Manufacturing Act did not apply to Freeport and refused to uphold the exclusivity for the entire Bahamas given to Heineken Brewery by Cabinet.
Another example cited was the case of Callenders vs Customs, in which Justice Lyons declared that Customs could not prevent licensees from importing vehicles for the use of their businesses.
Very soon thereafter, Mr. Smith said, Justice Ganpatsingh, now a member of the Court of Appeal, in the Sandra Hepburn case declared that Customs could not require homeowners or licensees developing buildings in Freeport to pay Customs duty on their resale. The Court held that once constructed, all buildings were duty exempt.
“These judgments have reaffirmed the value of the Hawksbill Creek Agreement financially for licensees,” Mr. Smith declared.
