The Mark Maloney-owned Rock Hard Cement has won the final round of a trade dispute with the St Lucy-based Arawak Cement Company.
The Caribbean Court of Justice (CCJ) today settled the longstanding import tax dispute on cement in favour of Rock Hard and the Government of Barbados.
The CCJ’s judgment, in its Original Jurisdiction, ruled that the regional tax payable on ‘other hydraulic cement’ imported by Maloney’s company from Portugal and Turkey should be five per cent.
Trinidad Cement Limited, the parent company of Arawak Cement in Barbados, brought an action to the CCJ in 2018 against Trinidad and Tobago alleging that that country was mis-classifying Rock Hard Cement as ‘Other Hydraulic Cement’, as opposed to Portland Cement-Building Cement Grey.
As a result of this classification, the competing cement manufacturer claimed that Rock Hard Cement was attracting a lower rate of duty than it should.
In this regard detailed evidence was obtained from leading international experts on both the composition of cement and its classification, and the interpretation of the Harmonised Commodity Description and Coding System on which the Common External Tariff is based.
Subsequent to Rock Hard’s counsel presenting this evidence to the CCJ, both Trinidad Cement Limited and the CARICOM Secretariat argued that the matter of classification falls within the remit of the Council for Trade and Economic Development (“COTED”) and should be decided by COTED. The World Customs Organisation (WCO) which represents 183 customs administrations across the globe that collectively process about 98 per cent of world trade and is the only international organisation with competence in customs matters, was asked by COTED to provide a ruling on the classification of Rock Hard Cement.
Both the WCO and COTED subsequently considered the classification of Rock Hard Cement and ruled that Rock Hard Cement is correctly classified as ‘Other Hydraulic Cement’ which attracts 0-5 per cent duty under the Common External Tariff. Rock Hard Cement later said it fully expected the CCJ to uphold the ruling of COTED in the matter of the classification of its product.
In its ruling today the CCJ decided that where COTED allowed a member-state to charge taxes higher than the regional tariff on the importation of goods from outside the region, there was no need for the member-state to obtain approval from COTED to revert to the CET. In 2001, COTED had granted Barbados an exemption in respect of the CET of 0 – 5 per cent, so that this country could apply taxes of 60 per cent to categories of cement described as ‘Other Hydraulic Cement.’
The regional tariff is intended to offer goods produced and distributed in the region an advantage over extra regional imports. Barbados decided to return to the CET and apply a five per cent on the ‘Other Hydraulic Cement’ imported by Hard Rock Cement Limited.
However, the CCJ said that while there was no need for Barbados to obtain approval from COTED to return to the tax, in these circumstances, it should give reasonable notice of its intention to revert to the regional tariff.
The CCJ also found that the regional manufacturers of cement who had brought the action against Barbados, had notice for several years and therefore could not succeed in their action.
In response, Executive Chairman of Rock Hard Cement Mark Maloney told Barbados TODAY that while his company took the decision not to pass on to consumers the extra cost imposed as a result of the action taken by Arawak Cement, today’s CCJ decision means that this position can now be maintained over the long-term for the benefit of all Barbadians.
Since October 2018 Trinidad Cement Company Limited which operates under the name Arawak Cement Limited in Barbados has been steadily increasing its prices. Rock Hard Cement confirmed today its commitment to providing Barbadian consumers with the highest quality cement at an affordable price and is delighted with the decision of the CCJ and the end of the state-owned protectionism for foreign owned monopolies such as Arawak Cement Limited.
General Manager of the Arawak Cement Company Yago Castro could not be reached for comment.