“Several Govt. players involved in multi-billion-dollar fuel racket”- Jagdeo

Jan 15, 2019 News

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Opposition Leader, Bharrat Jagdeo strongly believes that quite a few “top ones” in the government know of, and, are quite involve in the fuel “racket.”
Jagdeo, a former President, told Kaieteur News this during a brief interview last evening.
The most recent expose of racketeering in the fuel importation business surfaced when Atlantic Fuel Inc, of which Dr. Richard Van West Charles is a director, was accused of under-invoicing.
While initial reports reaching this newspaper suggested that Guyana is losing hundreds of millions of dollars as a result of fuel smuggling, Jagdeo said that it is more of a “multi-billion-dollar racket.”
He told Kaieteur News, “This fuel smuggling racket did not start recently.”
Jagdeo said that the PPP has long been urging a comprehensive investigation. Further, Jagdeo said that on several occasions, he called on President David Granger to launch a “Commission of Inquiry (COI) into the multi-billion-dollar racket involving several senior members of his administration but he has refused to do so.”
Jagdeo said that he has other information which he will volunteer at his next press conference.
Last year June, Jagdeo told the media that the APNU+AFC Government is neck-deep in corruption.

“They are basically grabbing because they know they are a one-term government. All of the ministries are grabbing…Most of the ministers – maybe 90 percent of these ministers are grabbing, Jagdeo alleged.
The politician made a call specifically to Minister of State, Joseph Harmon, asking him to stop the “runnings” that purportedly exists within government-controlled entities.
Jagdeo said, “What about the one with the fuel smuggling? Dig deeper and you will get all the connections. Then you will see how high it goes up into the government.”
The Opposition Leader said, too, that the fuel smuggling racket is the reason why the government refuses to change the prices at the pump station.
Kaieteur News had reported that along with the growing evidence of under-invoicing, there are indications that fuel importers have been colluding with Customs brokers and officers to record lower volumes.
In so doing, the Guyana Revenue Authority (GRA) was denied collecting additional millions of dollars in taxes.
Atlantic Fuel Inc. got its import, storage and wholesale licence approved in late 2015, around the same time that Van West Charles was hired as the new chief of GWI.
There has been intense scrutiny about the procedures.
Atlantic Fuels received its licence in just over a month after application, a rapid approval compared to the months that others have applied and had to wait.
According to officials, it is not unknown for the Guyana Energy Agency to grant licences and then these are rented out to importers by the holders of those licences.
According to insiders, GRA has been discovering incidents where fuel shipments, which came in gallons were recorded in the tax system as liters.
This plus the under-invoicing aspect has been helping to dent GRA’s collections.
GRA, in order to collect its outstanding taxes from the under-invoicing, which are evidenced from Customs records, is likely to examine past shipments of Atlantic Fuel, going back to 2015 or 2016, to determine whether there were other instances of under-invoicing.
Dr. Richard Van West Charles in whose name the import licence for Atlantic Fuels was issued, was summoned to a meeting with GRA’s Commissioner-General Godfrey Statia last week after reports of a number of questionable transactions by Atlantic Fuels.
With regards to Atlantic Fuels, two transactions specifically brought it back into the limelight recently.

One of them was a shipment purchased in the free trade border area at Morawhanna, North West District, Region One.
Morawhanna is the gateway to Region One, with persons coming from Venezuela by water, expected to check in at the immigration operations there. Also there is a team of Guyana Revenue Authority officers.
For a number of years, fuel has been brought to that area and local operators would make purchases, taking it to mining locations in the hinterlands and to the coastlands. The operators would pay taxes there.
It appears that Atlantic Fuels, like a number of other operators, has been capitalizing on the fuel through Morawhanna and Curacao, which on average cost just US$0.50 per liter, a tad cheaper than Trinidad and other places.
However, according to Customs documents, Atlantic Fuel presented GRA with a Commercial Invoice dated September 25, 2018, which used a CIF (Cost, Insurance and Freight) price of US$0.25, half of the normal price.
The amount of fuel was about 270,000 liters (71,326 US gallons).
Atlantic Fuel declared that the cost was US$67,500, which caused GRA to collect only $14M in taxes.
On the Customs documents, the address was listed in Meadowbrook, the same address as Van West Charles.
The other shipment was in September/October last year by the same company, which was brought on a fuel ship, named “Century”.
The shipment of 639,000 liters (170,000 US gallons) was supposed to cost US$379,100.
However, Atlantic Fuel’s Director, Lear Goring, filed documents, which pegged it at US$159,750.
The state reported losses of $32M in taxes because of that.
In Customs terms, the deliberate declaration of prices below what was actually the value or what was paid is known as under-invoicing.
Outspoken accountant and lawyer, Christopher Ram, was harsh about the issue.
“These are extremely serious and disturbing allegations and I would refrain from offering any comment other than to say that it requires an urgent and impartial investigation. The importation of fuel is the single largest Balance of Payment item with implication for tax revenues.”
According to Ram, it is never a healthy sign when a high party official with a full time job gets involved in a business activity which has for years been associated with corruption, tax evasion and other illegalities.
“It is for this reason that a multi-agency investigation should commence immediately.

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