Online shopping during the COVID-19 lockdown led to an increase in imports to Cayman, and Customs and Border Control officials say they expect those trends to continue as international travel restrictions remain.
CBC Deputy Director Kevin Walton told the Cayman Compass this week that a rise in imports had been projected by his team, but the volume of single imports coming through local ports was more than they had planned for.
“We had this in our continuity plan to manage the amount of imports. However, it did go above what we were expecting. To manage it, we have deployed [an] extra… 15 officers and support staff to [deal with] the increase,” Walton said.
He said the travel restrictions led residents, who would normally import their goods themselves as passengers on flights, to spend shopping online instead.
“I think that [lack of travel] has the most impact. However, because persons can’t travel and buy their stuff overseas, they’re also purchasing locally. So, the [local] businesses are also having to restock and bring in more stuff. It has a dual effect… from both ways, but obviously imports [of] the individual shipments have increased because of the travel restrictions,” Walton said.
The higher number of imports is putting additional strain on resources, the deputy director said, adding that the main struggle CBC is facing is the fact that most of the imports are by people who are not regular users of the CBC system and therefore are unfamiliar with it.
“That poses a challenge for us because those individuals haven’t been registered in our system before. They haven’t used courier services or consolidated companies before, so they haven’t even been appointing agents and they have very little understanding of [what] importing of goods through our system requires,” he said.
For smooth clearing of imports, Walton said, importers must complete and submit an Appointment of Agent Authorisation form when using courier or broker services.
This is the importers’ responsibility, he said.
However, he said, CBC staff are spending extra time helping first-time importers go through the system, including some who were unable to access a computer to complete the process.
This, he said, has added to the challenges of wading through the imports to clear goods, as has the fact that many imports are arriving at the same time.
He added that it seems the freezing of payments on home mortgages and the early release of pension funds meant that many residents had more disposable income to spend “and that has caused a lot of online shopping to go, what we would consider, … wild.”
Record imports bring revenue
Cayman’s monthly imports for the first seven months of this year have reached record highs. In June, more than 18,000 items were imported, surpassing the highest number for a single month in 2019.
The highest number of imports in a single month last year was recorded in October, when more than 17,000 items were imported. Walton explained that traditionally the last three months of the year are the peak period for imports.
As of 20 July, Cayman’s imports were just shy of 12,000, and climbing.
From January through June this year, with the exception of April, imports reached at least 13,000 per month. During the first six months of last year, import numbers were typically between 8,000 and 9,000 per month.
The total value of imports from March to June stood at an estimated $281.6 million, inclusive of insurance, shipping and freight costs.
The import duty revenue from these goods is expected to be more than $74 million. Of that sum, so far this year, CBC has collected $56 million in duty, as some importers have lines of credit and their tariff payments will be forthcoming.
The current import system allows for the real-time tracking of data.
Walton said CBC is feeling the heat from importers who want their goods released as soon as possible, but “approximately 40% of imports [to] the Cayman Islands arrive with incorrect invoices”.
This, he said, creates a backlog when it comes to dealing with releasing imports, especially when each import has to be filed individually, even if it is delivered in the same container.Also, he said, some people were not cooperating with their couriers, and were refusing to even submit the form to them for the release of the goods.
“In addition to that, when they did submit, some of their identifications were not readable,” he said. He said CBC requires a driver’s licence or passport when submitting the appointing agent form which is required by law to protect the importer, as well as the agent, and for CBC to link the importer with the agent.
Walton asked the public for patience, saying some new suppliers sending single-import invoices were listing imports incorrectly, which could lead to customers overpaying or underpaying duties.
“Our objective is to have the general public compliant and understanding the process that is needed when importing goods, because it’s not just to check for revenue or check your tariffs. But also, to ensure that our borders are protected from any prohibited or restricted goods that may cross [them], may it be drugs, firearms, plants, animals, etc.,” he said.
He said protecting Cayman’s borders is increasingly important during the COVID-19 pandemic as the airports are closed and the sea port is the only point of entry into the islands.Walton said work is ongoing to facilitate online payments, and the CBC is building out its system to increase efficiency.
This approach entails upgrading the operating system behind the scenes while it is running on the front end, and testing its upgrades simultaneously before releasing the new function onto the computerised portal.
He said a number of phased upgrades are planned for the customs portal.