The Caribbean Court of Justice (CCJ) this afternoon reserved judgement on whether to back the previous rulings of regional and global watchdogs that Rock Hard Cement, imported from outside CARICOM is exempt from higher taxes applied to third country goods.
After lawyers wrapped up oral arguments, CCJ President Justice Adrian Saunders declared that the matter was not a simple one and that the lawyers should therefore not expect a judgment “tomorrow or next week”.
Justice Saunders promised that all parties involved in the four cases which were heard simultaneously, would be informed when the court was ready to rule.
Both the CARICOM Council for Trade and Economic Development (COTED) and the World Customs Organization (WCO) ruled that the Rock Hard Cement product imported from Turkey and Portugal is correctly classified as “other hydraulic cement” and therefore attracts a much lower tax rate than what is produced in the region by competitors Arawak Cement Limited and Trinidad Cement Limited (TCL).
Lawyers are representing Barbados, Rock Hard, Trinidad and Tobago, TCL, Moonilal Rahmit and Sons Contractors and the Caribbean Community Secretariat.
In her submission, the attorney for Barbados, Deputy Solicitor General Donna Brathwaite, urged the court to accept the opinion of the WCO which has been affirmed by COTED in its classification of cement imported by Rock Hard Cement.
“The World Customs Organization (WCO) which represents customs administrations across the globe that collectively process about 98 per cent of world trade is considered the global competent authority on customs matters, was asked by COTED to provide a ruling on the classification of Rock Hard Cement.”
She added that the justices should not only consider the WCO report as a persuasive argument.
Brathwaite also noted that while the CCJ was not precluded from accepting the WCO’s decision, it could also come to its own independent conclusion on the classification issue.
She said that while the Harmonised System Committee’s (HSC) classification opinion was not binding on the court, it can properly be relied upon as an important aid to the interpretation of the scope of the various tariff headings of the Common External Tariff (CET).
Counsel for Rock Hard Cement, Anthony Wood, QC argued that the exercise of determining competing goods is not relevant to classification as being contended by Trinidad and Tobago.
He said the CET has adopted six expressed rules of classification under the Harmonized System (HS).
Wood declared: “And actually, being the six rules of the HS. And there is a seventh rule that is not termed rule seven, but which is simply stated as the additional rule of interpretation of the Common External Tariff which says the classification of goods in a CET tariffied item, is determined according to the terms of the general rules for interpretation for the Harmonized System
He echoed the position of Barbados that Rock Hard was correctly classified.
But lawyers for Trinidad and Tobago and TCL dismissed those arguments, insisting that the classification of the WCO and COTED were unsafe, unreliable and incorrect.
The TCL attorney suggested that Rock Hard Cement ought properly to be classified as “building cement grey”
He was adamant that the CET is a rate-based tariff regime and continues to be one that was designed to ensure the protection of regionally produced goods and commodities from external imports through the implementation of a higher import tariff rate or duty.
And to press home his point, he contended that Rock Hard’s products must therefore be treated as an external good and ought to attract the higher duty of 15 per cent rather than zero to five per cent.
The counsel for Trinidad also suggested to the court that the lower rate of tax which Rock Hard was enjoying was unfairly competing with the regionally produced cement of Arawak Cement and TCL.
She told the court that the Community policies must drive classification explaining that no member state had any input in the decision of the WCO.
The attorney went further to describe the WCO’s ruling as arbitrary and cautioned the CCJ that it would be acting irresponsibly if it upheld the opinion of the Harmonized System Committee.
She alleged that the Harmonized System Committee and WCO did not apply the appropriate rules and argued that there was overwhelming evidence for the CCJ to depart from the WCO’s decision.
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