Local traders who import goods on commercial airline flights will be faced with increased expenses due to the closure of the Customs Clearance Longroom at the LF Wade International Airport (LFWIA) on June 1, 2015.
Letters were sent out informing importers of the decision, which will require traders to submit their Bermuda Customs Declarations (BCDs) and the relevant “data input of BCDs” to pay duty to secure release forms in Hamilton instead of the Air Cargo Terminal.
The change in operational procedures has triggered a slew of criticism and complaints by importers who will also be required to upgrade computer software to submit data electronically. The associated software costs will impact small businesses in particular. Software costs range from $5,000 to $15,000.
In a letter dated April 8, 2015, Collector of Customs Lucinda Pearman said: “The LFWIA Longroom will cease all operations at 5pm on Friday, May 29, 2015, and after such time will no longer be accepting any BCDs, any payments, or any query responses.
“While Customs is aware that this decision will impact importers who deal exclusively with the LFWIA Longroom, it has been reached after careful review,” said Ms Pearman.
“The Customs Department is endeavouring to be as efficient as possible and a review of operations shows declining use of the LFWIA Longroom. The volume of BCDs processed through the LFWIA Longroom is significantly less than what is submitted through the Hamilton Longroom. The lesser volumes of BCDs processed through the LFWIA Longroom also results in higher associated staffing costs per BCD when factored against the revenues generated. The staff at the LFWIA Longroom will be redeployed in Hamilton.”
As a result, Ms Pearman noted that “Customs will be organizing meetings in both Hamilton and at LFWIA with those importers and declarants that account for the majority of BCDs currently being submitted through the LFWIA Longroom”. Those meetings started on Monday, April 13th and run through to Thursday, April 16, 2015.
Speaking on the condition of anonymity, most of the importers who spoke with Bermuda Real were upset that they had no input before the decision was made to change procedures. And most plan to attend the meetings to thrash out a number of issues.
Apart from the extra travel time required to clear Customs in Hamilton then travel back to the airport to collect their goods, there is also the issue of “handling of perishable and time sensitive shipments outside normal working hours”.
Importers will also be briefed by the Customs Department on the “electronic submission of BCDs, Simplified Prior Declaration, and Local Inland Clearance facilities”.
One importer told Bermuda Real: “Freight forwarders know this will have a financial impact on the cost of customs clearance for our customers as it will increase as they now have to travel from the airport to Hamilton to process the paperwork.
“Additionally Customs wants us to submit data electronically but the software required runs anywhere from $5,000 to $15,000 which most of the smaller services cannot afford,” she said.
Another importer was more concerned about perishable goods that land outside of normal working hours. “There’s a possibility that you may not get the associated airway bill until the plane lands in Bermuda.”
“The airway bill has the importer’s name, the supplier and what’s in the package. Goods like fish and flowers can’t sit down at the freight shed for hours and it can go off or go bad. Plus you’ve got the summer months coming up as well so there’s the heat factor, so I want to know how they plan to do the turnover.
“You need the airway to fill out the Customs Form and then you’ll have to go into Hamilton from the airport to pay duty and then wait for the release form which could take hours before you go back to the airport,” she added.
“Let’s say a dog comes in on a British Airways flight that lands in the evening, but you have to pay duty in Hamilton before you get the dog. In other words, you’re going to have to do up the form, process and pay after hours. What happens with keeping the dog overnight? And I still want to know whose monitoring whether or not imported goods are perishable.
“Either way without the release form you still can’t take your goods,” she said. “It makes no sense to me because people bring in goods by air to get them quicker than shipping by sea. And there are Customs Officers stationed at the airport to sort out any problems with entries at the airport. Now we’re being told those officers will work out of the main office in Hamilton.”
“When you think about it, you need to have hands-on people there to deal with issues. The freight shed is at the airport and you can go right in with Customs to sort it out right away.”
She also questioned how long it will take to stand on line at the main office and for how long, particularly leading up to the 5pm closing time – not to mention the increase in gas to cover travelling back and forth to the airport.
“I plan to go in on Monday with my boss to hear how they plan to handle all of this. We’re very concerned about the impact on our business and we’re not pleased that this decision was made without consultation with us first,” she said. “We all know that changes were coming somewhere down the line but there was no consultation with importers first.”
Another importer who imports perishable goods weekly said her biggest concern is the “time it will take for processing”. “It’s going to be a real hassell going back and forth, plus the extra cost for parking in Hamilton,” she said.
“I see people getting really ticked off having to stand on long lines at Customs, especially late in the day while waiting for release forms before they make it back to the airport to pick up perishable goods. And they did not talk to the importers and brokers who will be impacted most before they made the decision – you can’t just put it out there like that,” she said.
“For our customers it’s going to be a nightmare. We heard it through the grapevine that it was coming but we still believe that Customs should have gotten our input first.”
The LFWIA Longroom currently operates out of the LFWIA Air Cargo Terminal and “provides facilities for BCDs, the data input of BCDs,the review and release of BCDs, the receiving and processing of funds for BCDs, the receiving and processing of query responses for BCDs, as well as providing general guidance on Customs matters”.
The letter clearly states that “as of Monday, June 1, 2015, the Customs Department will be operating one Longroom only and that will be from our main Hamilton offices at 40 Front Street” and “all BCDs, together with any associated query responses or payments, will be required to be submitted to the Hamilton Longroom commencing on June 1, 2015.
Principal Customs Officer for Commercial Operations, Dean Lema, who sent out the email to local importers said: “As this is a change in the operational process there are bound to be many questions.”
As a result he said: “There will be a series of 30 minute meetings scheduled in order to provide information and gather any questions.”
Meetings were held at LFWIA Customs offices above the Arrivals Hall in the traning room and at the Customs Department. The notice will also be placed on the Customs website for the general public to view.
Let us know what you think about the proposed changes due to go in effect at the end of May by sending an email to editor@BermudaReal.com or by posting on our Bermuda Real Facebook Page.
in the Training Room at LFWIA Cus
By Ceola Wilson