(Barataria) – The Bureau of Illicit Trade of the Manufacturers Association of Trinidad and Tobago (TTMA) calls for greater accountability in free zones to prevent illicit trade and money laundering.
Roger Montero, managing director of Bastion Market Intelligence Limited, said that some companies use free zones to repackage consumer goods and export to another free zone or another country which, at times, can create an environment conducive to illicit trade: “Many people use free zones to bring in items to reduce administration time and speed up the movement of goods in transit to another free zone or country. When the goods are exported, they are in different containers and it is difficult to track the goods from their point of origin as they pass through the free zones. When goods are exported from free zones, they are legally; however, when these goods are not declared before entering a destination country, they are illegal (smuggling / smuggling). These products are then sold at a reduced price and the profit is high. Illicit trade deprives the government of taxes, is unfair to businesses that legally import goods, in some cases supplies substandard or dangerous goods, and contributes to organized crime and terrorism.
Two of the most illegally traded items are tobacco and alcohol, and although there are COVID-19 restrictions on manufacturing worldwide, these products are in demand. According to Mr. Montero, there is a huge movement of illicit goods in the Caribbean and Latin America, and it is steadily increasing: “Recently we had to destroy four sets of illicit shoes which were seized by customs and excise. because there is an increase in people bringing items under the veil of “entrepreneurship”, and they want to buy products and sell at a profit, but they are not doing it the right way. “
However, the responsibility for monitoring free zones should not rest entirely with the Customs and Excise Division, he said: “The main objective of Customs and Excise is to collect revenue and they do not have the necessary resources. resources to continuously audit all these warehouses. I would recommend the free trade area owner and business to be held more accountable and to provide Customs and Excise with regular and frequent updates. It is important to note that, in most cases, unless the goods leave free zones, customs and police do not have access or jurisdiction over those goods.
Mr. Montero considers Suriname to be the most effective country in combating illicit trade in his FZ due to its coding and bonding system. He said: “Suriname has even discouraged bulk cigarettes from going through their obligations – which means it is difficult to ship cigarettes by main cases, container shipping is strongly encouraged. They did so to avoid adding to the 26 billion sticks annually the illicit trade figures in Brazil.
To curb illicit trade in Trinidad, Montero calls for an enforcement arm and the introduction of licensing requirements for all businesses operating in free zones: “For businesses to retain this license, there should be tracking and traceability of certain functionalities with the products they transport through free zones. I think it will discourage illicit trade, it will not stop it, but will discourage it from happening. “
Fanta Punch, lawyer and partner at Hamel-Smith and Co noted international reports which cite the illicit trade industry is expected to grow to around US $ 991 billion by 2022,[i]. Illicit trade operates in the belly of the global economy and counterfeiting is an integral part of its contribution to criminal activity.
In his view, it is now no longer possible to stem the flow of counterfeit goods through our ports of entry thanks to the recently proclaimed Trade-marks Act, 8 of 2015. Customs and Excise can now play a greater role in the application and have the power to initiate actions ex officio, seize and detain counterfeit goods, including goods intended for export and in transit, suspected of being counterfeit.
Although the Trinidad and Tobago Free Zones Act does not specifically define similar powers for the transshipment of counterfeit goods through free zones, there may be other means through which Customs and Excise could exercise their influence and control. presence, for example retaining goods when duties remain unpaid inconsistent with import restrictions.
She said free zones require stricter rules and regulations as they act as havens for uncontrolled crime. One of the main reasons countries establish free zones is to encourage foreign investment, economic growth and employment. This focus sometimes takes precedence over putting in place better controls and regulations, so that government agencies turn a blind eye.
Ms Punch believes there should be specialized training for judicial officers on some of the complex issues involving free zones and illicit trade in order to better adjudicate criminal and civil actions. Equally important are the empowerment of customs and excise and police within their authority and the benefits of using a multi-faceted approach to tackling the flow of counterfeit goods.
Ms Punch noted that successful reduction of illegal activities in free zones requires not only cooperation between enforcement agencies and regulatory bodies such as the Trinidad and Tobago Free Zone Company, but also engagement with them. regional and international organizations to help fight illegal activities. in free zones.