Chevron sues Jamaica

(Jamaica Observer) Multinational oil giant Chevron is challenging the validity of Jamaica’s Customs user fee, calling it a tax and contending, in a J$600-million lawsuit, that it is unconstitutional and therefore not binding.

The suit could have far-reaching implications where the Government’s coffers are concerned.

If Chevron, which operates out of Jamaica as Chevron Caribbean SRL, is successful in its suit before the Supreme Court, the outcome could be that the Government would have to make restitution in the billions of dollars to those who have, over the years, paid the fees.

The State makes over J$6 billion annually from Customs user fees.

The suit, which names the attorney general as defendant, is scheduled for trial on January 16, 2013 and is expected to last for two days.

Chevron is contending that the user fee is unconstitutional, as it is in fact a tax imposed by the minister of finance who does not have the power to do so.

“The imposition of the Customs user fee was and is ultra vires the minister of finance, because the Customs user fee is not a ‘fee’, ‘rent’ or ‘charge’ within the meaning of Section 257 of the Customs Act, but rather a tax or duty and the minister does not have the power to impose such a tax or duty,” reads a section of the suit.

“The Jamaican Constitution requires that all taxes and duties are imposed by Acts of Parliament, either directly or through clearly delegated statutory powers, and the Customs user fee was not so authorised and is therefore unconstitutional,” claims Chevron.

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