The harmonised product codes are out, but technical difficulties with the Cayman Islands Customs’ new information technology system has pushed back implementation of the Customs Tariff Law 2012 to a date that is yet to be determined.
Published Friday, 22 June, the new law aligns Cayman’s codes for identifying imported and exported products with codes used in 172 jurisdictions across the globe. Concurrent with the new law, local customs officials are rolling out a new computer system that will allow Cayman importers to complete and file their customs documents online.
The new customs system was supposed to go into effect Sunday, but it’s being delayed until government resolves computer-related glitches.
Under the new law, the number of categories of products blooms from 221 to about 5,000. Officials say the more specific categories will make the process of levying duty more transparent and consistent, and allow government to collect more accurate data.
“It should make the whole process of classification transparent for both Customs and traders. It also harmonises the coding to the international standard,” Assistant Collector of Customs Langlie Powery said.
Because the codes are universal, Mr. Powery said suppliers should be able to provide traders with the proper customs codes on receipts for orders, eliminating guesswork by traders or officials.
He said, “The main benefit to Cayman is that we can have better statistics for government. The statistics unit has access to our system, where they will be able to print off whatever report they need as to what items have been imported, exported, etc.”
The harmonised codes are six digits in length, but Cayman is also using two additional digits to further differentiate between specific products; for example, to assign different tariff rates or for purely statistical purposes.
The new law uses the two additional digits to differentiate between turtles and other reptiles, cats and dogs, perfumes and toilet waters, fresh and dried fruit, mineral waters and aerated waters, champagne and sparkling wine, oxygen and oxygen for medical use, human organs and other human body parts, office supplies and school supplies, automobiles of various values, and small and large boats.
Officials say the new law is not intended to raise additional revenue from duty. Overall, it appears the vast majority of tariff rates will remain the same.
However, the new law does change some tariff rates from the old law – including breaks for hybrid and electric vehicles.
Duties for conventional motor vehicles are determined according to the value of the vehicle, and range from 29.5 per cent for vehicles valued at $20,000 or less, to 42 per cent for vehicles greater than $30,000.
The new law prescribes a reduced 15 per cent duty rate for hybrid vehicles and a 10 per cent rate for electric-powered vehicles.
On the other hand, some items are losing their duty-free statuses. The tariffs on leather clothing, wool clothing, potters’ clay, ceramic colouring, and cotton gloves with lace embroidery increase from 0 to 22 per cent under the new law. Additionally, the duty on lace piece goods (lace sold from the bolt at retail in lengths specified by the customer) increases from 0 to 12 per cent.
As a protective measure, the new law sets a tariff of 50 per cent on “worked turtle shell”. Live turtles and most turtle products, including “unworked turtle shell”, remain duty-free.
Some of the differences between the old law and the new law (which is 230 pages long) are unintentional. Clerical errors that officials discover, or that are brought to their attention, will be submitted to Cabinet for correction via amendment to the law.
For example, the new law inadvertently strips table salt of its duty-free status, imposing a tariff of 22 per cent.
Meanwhile, the duty on crustaceans – including shellfish, lobsters, shrimps, prawns, crawfish and crabs – increases from 12 to 17 per cent under the new law. Mr. Powery attributed that to an error in current law, which he said should specify a duty rate of 17 per cent on crustaceans, the same as most fish and meat products.