‘Code Red’: 
Crisis at 
Cayman Customs

If you want to import a rail locomotive into the Cayman Islands, according to the new Customs coding system, the duty rate is 29.5 percent.

Spacecraft, with their own unique Cayman Customs code, will be assessed at 22 percent. The same for nuclear reactors — 22 percent.

In recent weeks, the Customs Department has put into place a new “harmonized system” that increases the number of codes for imported goods from 221 (under the old system) to about 5,000 (under the new), complete with eight-digit numerical designations.

Transitioning from the local system to the new international one (about 250 jurisdictions currently use it) was, in theory, supposed to eliminate the guesswork in Cayman’s customs process, introduce greater transparency, consistency and efficiency to duty assessment, and allow the government to collect more accurate data on imported products.

That’s not the way things have turned out.

Instead we have a government-induced fiasco on our hands — with businesses complaining that what once took minutes to clear Customs now takes hours, and what once took hours can now take days.
Remember, Customs clearance is central to doing business on an island since nearly everything we consume must be imported.

Air freight and cargo ships are our lifelines, and our economy requires a flawless flow of products, produce, equipment and other goods to function. Inefficiencies in the supply chain cause disruptions down the line, to distributors and retailers, with the extra costs ultimately passed on to individual consumers.

We cannot — we must not — allow Customs to be a chokepoint in the system.

We have sincere sympathy for Collector of Customs Samantha Bennett who only recently ascended to her top post. This scheme was hatched more than seven years ago, and the new law to enable the changes was passed two years ago.

Nevertheless, it is now her mess to clean up — and clean up fast. As she acknowledged in yesterday’s Compass, “The declaration process will take a while for larger importers who have several invoices to process. For those persons with small imports, the process can be just as overwhelming.”

Ms. Bennett oversees a department with at least three critical functions: anti-smuggling enforcement, tax (duty) collection and, what is extremely important, providing efficient customer-friendly service.

We are not encouraged by her characterization of the current state of affairs as mere “teething issues,” nor by her statement that “we are hoping that the online process will allow us to process applications expeditiously in the back office so we can then focus on speeding up the service in the front office at the customer service counter.”

Hope is not enough. Ms. Bennett states that “currently we are doing the best we can with the resources we have.”

We believe her and if she needs more resources to implement the new system, the government needs to do one of two things: Either staff her department adequately. Or scrap entirely the new, mismatched system. (Locomotives?)

Whatever is going on at Customs, it certainly is not a “teething issue.” At the very least, it’s a “root canal issue.”

Please pass the Excedrin. (We’re sure there’s a code for that.)

1 COMMENT

  1. Very unfortunate outcome. It would seem that Cayman continues to move away from its roots and what made us successful: ease of doing business. As this and other aspects become increasingly cumbersome one has to wonder … if Cayman continues to mirror the rest of the world why would (foreign) business and people want to do business with us? Clearly we are continuing to lose our competitive edge. I can not see how more regulation and bigger government is a positive move for the country.

  2. There IS definitely a crisis with import goods. Businesses will suffer extremely! What about food products? Island-wide we will all feel the strain when products are just sitting out there for days and days until Customs has every digital code in order. Ludicrous!!!!

    Come on – Customs can do better than that! Samantha Bennet has just too much to handle herself and more people should be recruited to help with the mess they are now in.

  3. This is a perfect example of the Peter Principle; such that employees who r competent in their existing job get promoted to positions which require knowledge, skills and abilities they do not have. This creates a bad situation for both employee and employer, resulting in poor delivery of services to the end user

  4. Ever noticed how plane ticket prices vary based on how far in advance you book?
    Airlines are offering a reward/benefit to customers in order to modify their behaviour to suit the airline.

    Major changes to systems are rarely pain free – but the general wisdom is a slow and gradual implementation allows both the staff and customers to get up to speed gradually.

    That’s where behaviour management comes in – roll out the system over say 6 months and give customers the option to use either system…

    In that situation customers will go with the old system for the full 6 months, and the proverbial hits the fan month 7.

    BUT offer say a 1/2 percent duty discount for the users of the new system month 1, and increasing it pro-rata to 3 percent on month 6, many customers will switch to the new methods voluntarily and the early changeovers will be the easier ones. By month 6 it may well be that 70-80 percent are already using the new system. There may even be an unexpected economic boost as people ramp up quantities to take advantage of the customs ‘discount’

    IF all is as expected then the ‘hard launch’ can proceed as anticipated but if the soft roll out highlights issues then it is much easier to delay until the staff and infrastructure can cope and the issues remedied.

    If the current problems look insurmountable this may be an option.

    Of course it’ll get ridiculous if someone decides to shoot the new ‘Transformers’ movie here….’ …So you’re importing a Locomotive? powered by a Nuclear Reactor? and it transforms into a Spacecraft? Umm, I think you need to talk to my supervisor!’

  5. Killing the Goose that laid the Golden Egg! We have more educated people in power than ever before and they running every joe out of town and making it hard for businesses to conduct business. Then again, they give the rich the concessions so they don’t have to join any lines.

  6. Firstly I would like to say, a revenue collection portal should never be slow. Secondly, Those front line customs agents are doing a great job given the requirements.

    The back office administrative task of qualifying the commodity codes seem to be an after thought and not a contingency plan in the event of unacceptable delays.

    FOI seem to be the driver of this data collection, I may be wrong, but I expect no manager wants to be in the position to not know how many locomotives was brought in when asked.

  7. I am not intelligent enough to ever understand why Cayman feels we cannot survive unless we adopt the red tape hassle and waste of time that other so called modernized countries have made; those in charge of running our country believe that is what we must have if we want to survive.

    The customs department had made some recent strides at the clearing headquarters that had very much improved the turn around time to clear goods imported into our Island. Only, to now make those positive improvements be washed under the bridge with the new unnecessary coding system. I implore to the Custom department and the business community as a whole to come together urgently and review this cumbersome frustrating system. We deserve better from our legislators than just promises from the platform while on the campaigning trail.

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