Government officials plan to roll out the new harmonised customs tariff system on 1 July, with a handful of major importers test-piloting the system beginning today, 1 June.
However, several company representatives said Wednesday they were still waiting for government to provide all the information necessary to comply with the new Customs Tariff Law, which was passed 5 April on the third attempt over five years.
The new system aligns the Cayman Islands’ codes for identifying imported and exported products with codes used across the globe.
“There are not many of us who do not have to import some types of goods; therefore those changes will affect us all,” Chamber of Commerce Vice President Johann Moxam said during the Chamber’s Be Informed session Wednesday. “These changes, however, must be seen as positive, as we seek to update our systems to match those of 172 other countries around the world, systems that were established by the World Customs Organisation and standardised by the World Trade Organisation.”
At the same time as the implementation of the new codes, local customs officials are rolling out a new computer system that will allow Cayman importers to complete and file their customs documents online, obviating the need for physical trips to the customs office, and freeing up customs officers for other duties.
Assistant Collector of Customs Langlie Powery said the new system will change the function of customs officers from that of “gatekeeper” to “more of an audit role”. He said the point of the new system is not to raise duty collection, but to increase efficiencies.
“They’re hoping to cut staff with this new system. Initially, just like you all in your companies, it will take some initial manpower in order to get all your documents and data inputted. But once the data is there, then we won’t fire them, but we’ll send them to do something else. We’ll probably be able to do post-audits, using those officers not behind their desks, so look out for us,” he said.
Only registered importers will be able to use the online system to complete declarations and pay duty. Typical residents who receive imported items only occasionally will still have to go down to customs in person to complete the necessary paperwork. Even with the new system, importers and residents will still have to go to the port to take possession of their items.
Mr. Powery said his department is planning for a six-month transition period where officials are prepared to help guide people through the new system.
He said there will be training sessions to acquaint people with the new system as well.
He said the final list of codes and tariffs is in legal drafting, and will be posted on the customs website before 1 July.
More detailed data
At the moment, Cayman uses its own four-digit codes to identify products for duty purposes in 221 categories. The harmonised system has six-digit codes that specify 5,000 different categories of products, standard across the 172 jurisdictions.
Cayman’s new harmonised system will actually use eight-digit codes, with the first six digits being standard, and the final two digits being reserved in case government wants to differentiate further.
For example, Mr. Powery said a Ford Mustang would have a six-digit code, and if for some reason government wanted to specify by colour, then the final two digits would differentiate between red and yellow Ford Mustangs.
As a more practical example, Mr. Powery said the full eight digits would be used to identify the specific medical-related items to be imported for Dr. Devi Shetty’s proposed medical tourism hospital.
The switch to more specific codes will allow for the collection and analysis of more detailed trade statistics, for the purposes of both government and business, who can request data from the Economics and Statistics Office for free (except for printing costs).
“I’m not one to just change for change’s sake. But we need to change when it’s necessary or when it’s beneficial to us. And this was one of those times,” Mr. Powery said.
The harmonised system will allow for accurate comparisons of trade statistics across jurisdictions, and enable government to better target incentives in the form of duty waivers, he said.
Additionally, the standardised and detailed codes will introduce greater transparency and consistency to Cayman officials’ duty assessments.
“Every now and again you hear that you come to customs today and you do something, and then when you come back next week the rules are changed,” Mr. Powery said, eliciting chuckles from the 70-odd listeners. “What are you guys laughing about? You experience that? Those of you who have experienced that, raise your hand.”
Almost everyone in the room raised their hand. “I’ll have to report back,” Mr. Powery said.