Customs: trade unions look askance at proposed Act

by Manjula Fernando

Attempts by the government to replace the 1869 Customs Ordinance with a new Act are being met with stiff resistance by Customs Trade Unions. The trade unions refused to cooperate with the Finance Ministry, claiming that the process was taking place in an 'arbitrary and ah-hoc manner'. They said, the unions have not been consulted in the drafting of the proposal at any point. However, they said, they were not opposing 'the change,' but are of the view that the ongoing process to bring in a new Act, supposedly to ensure trade facilitation, is a perfect pretext to open the door to fraudsters.

Pic: Gayan Pushpika

The unions have launched an all out battle against this move, questioning the need for a brand new Act, and that too allegedly to facilitate unscrupulous business tycoons to bypass tariff barriers, when the existing Customs Ordinance has been updated through 52 Amendments, the last being effected as late as 2013.

A top official of the Customs Department who wished to remain anonymous also agreed, that some of the issues the Customs trade unions have raised were valid and need to be addressed promptly, before they get out of hand.

The Customs Trade Union Alliance (CTUA) comprising Customs Officers' Union, Customs Staff Officers' Union and Customs Superintendents' Union together with the SLFP and JVP backed trade unions within the Department have joined in the fight.

"First, we have concerns about the members of the Cabinet appointed committee in charge of drafting the proposed Act. One member of the committee is a former Customs DG, the other a former Customs Director and the last member is a defence counsel who had appeared in a customs case," Customs Officers' Union Vice President and Spokesperson Lal Weerakoon said.

Weerakoon said, many of the proposed amendments in the draft, for instance, certain provisions covering trans-shipments, are already found in the current amended Ordinance.

"There was no broad based consultative process and the document has been put out in April in a haphazard manner. There was no civil society involvement or consultation of expert views. After the trade union action, the Finance Ministry says, the Act (which was to be forced down the throat), is a discussion paper."

The Trade Union representatives met the Malwathu and Asgiri Chief Prelates and Archbishop Malcolm Cardinal Ranjith, recently, in a bid to keep them informed of the trade union action and get their support to present these concerns to the top leadership of the government.

The Finance Ministry Secretary R.H.S.Samaratunga met the Trade Union representatives last Friday. This first ever discussion on the proposed Act with the Customs officers unfortunately ended up a stalemate.

The Finance Ministry Secretary had conveyed that the document presented by the Committee was not a draft Act, but a discussion paper. He had invited the unions to submit their proposals. The representatives have refused to assist in formulating a new Act to replace the existing Ordinance, emphasizing that they wanted to retain this comprehensive law after making necessary amendments.

The Customs officers have threatened to resort to harsh trade union action if the government continued to ignore their 'reasonable demands'.

Weerakoon said, they were aware that the present Customs Ordinance required certain 'adjustments', but a complete overhaul in this manner is the last thing they would cooperate with.

"We are concerned about the lack of guarantee for customs officers in the new law," he said adding that reduced penalties for wrongdoers was another concern. The proposed provisions also have many loopholes for racketeers to give the officials the slip.

For instance, the new provisions allow the importer to convince the officials that the offence is not deliberate, in which case a reduced penalty is charged. Further, if the importer fails to make an honest declaration initially, he will be allowed to make a second declaration before an inspection is made, and seek a reduced penalty or get away with paying only the tax component. Even the 'death penalty' imposed on drug smuggling (for possession of more than 2 grams of heroin) under the 'Poisons, Opium and Dangerous Drugs Ordinance', will be reduced to Rs. 5 million fine and/or six years imprisonment.

They have pointed out that with such lax provisions, the new Act would fail to extract even 50 % of the present annual tax collection, while the racketeers and drug smugglers will have a smooth sailing.

The Customs Ordinance is linked to the other Ordinances and Acts so as to provide broader protection to people, the society and the environment.

The trade unions say the proposed Act clashes with the other laws, in turn, causing the system to shirk this primary responsibility.

Following the protests, the Finance Ministry has appointed two committees, a Steering Committee comprising the Customs DG and Finance Ministry officials and a Technical Committee comprising three customs officers and Finance Ministry officials on the subject of amending the Ordinance. The Ministry has called for more proposals for the new Act.

Some sections in the Act, which unions have raised objections on:

Section 105. Power to examine persons
Section 105 (2) A person to whom an order under this section has been given shall-

b) during such examination, be bound to answer all questions relating to the case put to him and shall be legally bound to state the truth, whether or not such answer is made wholly or partly in answer to questions but he may refuse to answer any question the answer to which would have a tendency to expose him to a criminal charge or penalty or confiscation.

Section 175 (2)

If a person is guilty of an offence under section 181 of the Act for any specified goods such as prohibited drugs as defined in any Acts relating to trafficking in dangerous narcotic drugs or psychotropic substances as defined in the Dangerous Drugs Act and arms and ammunition such as military weapons, revolvers and pistols, air or gas guns, bombs, grenades, mines, missiles, cartridges including shot and cartridge wads, swords, bayonets, lances and similar arms, shall be liable to a fine not exceeding five million rupees and to a mandatory jail term not exceeding six years.

Section 175. A person is not liable to the imposition of a penalty, if that person has voluntarily disclosed the error or omission to the Customs before Customs has notified the person.

Under the provisions of Section 47 of current Customs Ordinance, the importer should properly declare to the Customs the details of his import. If not the person is committing an offence under the existing law.

Section 175 of the new Act, facilitate the smugglers and they will be liable only to a payment of fiscal levies (not a penalty) on the undeclared goods, which is contradictory to a well established opinion given by the Attorney General

“A person who commits an offence must be charged with a penalty, the offence cannot be mitigated by making him pay duties and other fiscal levies.”