Govt. still to pay US$6M fine to Surinamese beverage supplier

Sep 12, 2014 News

Guyana is still to pay a US$6M judgment against it and payable to Surinamese Rudisa Beverages, and according to Attorney General, Anil Nandlall, it is a matter of sourcing the money to pay the award which was made by the Caribbean Court of Justice (CCJ).
The CCJ had found that an Environmental Tax charged by Guyana in relation to the importation of bottled beverages was discriminatory.
Nandlall provided this publication with an update this past week and reminded that he is required to report to the CCJ by November on whether the judgment has been paid and whether the tax is still being imposed.
According to the Attorney General, “I am currently in the process of preparing that report.”
While the payment to the Surinamese company is yet to be made, the Attorney General said that he does not see a situation where the country can avoid making the payment.
Asked about the delay in making the payment, Nandlall stressed that US$6M is a significant amount and as such the Finance Minister will have to advise on where the money will come from.
“Obviously it cannot come from the Budget; we didn’t budget for that, so we may have to go back to Parliament and take money from the Contingency Fund …we have to identify the source from where the money will come.”
Guyana passed the Act in 1995 permitting the Guyana Revenue Authority (GRA) to charge a tax of $10 on each bottle of the drink imported into Guyana.
When the law was introduced, it was not deemed discriminatory, but this changed when the Caribbean Community (CARICOM) revised the Treaty of Chaguaramas.
The CCJ ruled in Rudisa’s favour, citing that it had to honour its treaty obligations and ordered that the claimants are entitled to repayment.
Rudisa argued at the CCJ that the legislation violated the trade policy contained in the Revised Treaty of Chaguaramas, in particular the free movement of goods and the prohibition on import duties on goods that are of CARICOM origin.
Both Guyana and Suriname are members of CARICOM. Rudisa, through CIDI, has been in Guyana since 2007.
According to the CCJ, in its judgment, Rudisa’s application was based on the provisions of the Customs Act of Guyana which imposes an environmental tax on all imported non-returnable beverage containers. The legislation does not contain any exemption in relation to CARICOM goods.
The Surinamese company claimed that no similar tax is imposed on local producers of non-returnable beverage containers and, by the definition of “Import Duties” laid down in the Revised Treaty of Chaguaramas; the levy must be regarded as an import duty.
The issue of the environmental tax was first raised with the Council on Economic Trade and Development (COTED), the trade arm of CARICOM, by the Government of Suriname in a series of meetings spanning the period 2001-2012.
COTED concluded that in so far as it applied to CARICOM goods, the levy was in breach of the Treaty which governs how the member countries would operate in a trade environment.
Guyana, in turn, committed itself to take the necessary action to eliminate the discriminatory effect of the environmental tax.
The Government of Guyana brought legislation to the National Assembly in 2013 to amend the Customs Act, but the proposal was rejected. It was again rejected earlier this year when Government attempted to amend the laws, this time reducing the tax on imports to $5 per bottle as well as charging $5 on each bottle produced locally.
The political opposition has called for a complete abolition of the law and to not impose any new taxes on local manufacturers.

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Govt. still to pay US$6M fine to Surinamese beverage supplier

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