The locally-owned cement producer – Rock Hard Cement Limited – has won its final court battle in the long and complex tariff war against its Barbados and Trinidad competitors.
Today, the Caribbean Court of Justice (CCJ) ruled that the products of the Mark Maloney company are to be classified as ‘Other hydraulic cement’ on which the applicable rate of duty under the Common External Tariff (CET) is 0-5 per cent.
This marks another significant victory for Rock Hard Cement in its battle with Trinidad Cement Limited and local subsidiary Arawak Cement Company Limited, proceedings described by the CCJ as the finale of complex litigation that resulted in five separate judgments and numerous orders.
Sitting in its original jurisdiction, the court upheld the classification decision of the CARICOM Council for Trade and Economic Development (‘COTED’) on cement, known as Rock Hard Cement, imported and/or distributed within CARICOM by Rock Hard Distribution Limited, Mootilal Ramhit and Sons Contracting Limited in Trinidad and Rock Hard Cement Limited.
“Today’s judgment settled the dispute as to whether Rock Hard Cement ought to be classified as ‘Building cement (grey)’ and be charged a CARICOM tax of 15 per cent when imported into the region, or as ‘Other hydraulic cement’ in which case a levy of 0-5 per cent would be payable,” the CCJ stated.
Earlier this year, COTED decided that Rock Hard Cement was to be classified as ‘Other hydraulic cement’ in line with the advice received from the World Customs Organisation’s (‘WCO’) Harmonized System (‘HS’) Committee.
Trinidad and Tobago, Trinidad Cement Limited (‘TCL’) and Arawak Cement Company Limited argued that COTED’s decision-making process was procedurally flawed and that COTED’s reliance on the WCO’s advice went against the economic objectives of the CARICOM tax.
On this basis, they contended that Rock Hard Cement should be classified as ‘Building cement (grey)’ and be subjected to the 15 per cent tax, as Rock Hard Cement was in direct competition with TCL’s regionally-produced ‘building cement (grey)’.
In its judgment, the CCJ upheld the COTED classification decision as being binding on all Member States in keeping with Article 29(1) of the Revised Treaty of Chaguaramas (RTC).
The court found that COTED was fully entitled to place heavy reliance upon the WCO advice, given the role of the WCO in harmonizing rules on international trade within the context of the World Trade Organisation (WTO).
While it upheld the COTED classification decision, the court also said that recent developments in the cement industry made it appropriate for a study to be done by COTED to assess whether the tariff rate for imported ‘Other hydraulic cement’ ought to be increased to give additional protection to regional cement manufacturers so that these manufacturers might obtain an appropriate level of protection.
The CCJ stated that the conduct of such a study would be entirely in keeping with the CARICOM Treaty’s obligation on COTED to keep the tariff under review according to Article 83 (5) of the RTC.
The CCJ also recommended greater collaboration between regional cement producers in undertaking global trade commitments.
For example, the regional court suggested the establishment of a project aimed at harmonizing the classification of goods based on WCO standards in a move to increase CARICOM trade.
In his response to today’s CCJ decision, Executive Chairman of Rock Hard Cement Mark Maloney was overjoyed.
Not only does he see it as another major triumph for his company, but also one for all of those in the construction sector who “have benefited from an almost 40 per cent drop in the price of cement since Rock Hard Cement Limited started operations in November 2015. “
“Rock Hard Cement would now be able to continue to offer consumers a superior product at a competitive price. In recent months, Rock Hard Cement has absorbed the 60 per cent rate of duty that we were forced to pay as a result of the injunction that Trinidad Cement Limited was awarded but which has now been lifted,” he told Barbados TODAY.
Maloney also confirmed that Rock Hard Cares, the foundation established to assist communities and which to date has helped numerous families will be expanding the initiative across the region.
He said this will start with their annual back-to-school programme.