Attorney Christopher Ram says that Guyana must comply with a ruling by the Caribbean Court of Justice (CCJ) to pay Suriname company Rudisa Bev-erages some US$6, 047,244.47 ($1.2B) which had been collected in an environmental tax that contravenes the Revised Treaty of Chaguaramas (RTC).
“In my view Guyana has no option but to comply with the orders of the CCJ. Section 4 of the CCJ Act provides with narrow exceptions for decisions of the Court to be final. If we were to flout the declaration and orders handed down by the Court, we would be exacerbating an already bad situation and potentially invite retaliatory measures from our CARICOM partners,” Ram, also a chartered accountant, wrote on his blog.
In the ruling, issued earlier this month, the court also ordered Guyana to take the necessary legal or other measures to prevent the collection of the environmental tax on goods of Caricom origin. According to the ruling, the country is also obliged to file a report with the Court within six months on its compliance with the orders made by the Court.
The judgment, issued in the court’s original jurisdiction, could lead to similar claims against the government from Caricom companies on which the longstanding tax was levied. It was also made clear in the judgment that the political gridlock here will not absolve Guyana of liability in actions of this type. Guyana had explained before the court that it had attempted to rectify the tax but that the measure failed in Parliament.
Surinamese manufacturing company Rudisa Beverages & Juices N.V. and its Guyana subsidiary Caribbean International Distributors Inc had filed an application with the CCJ alleging that the imposition of the environmental tax by Guyana was a breach of the RTC. They argued that the tax was inconsistent with Caricom trade policy set out in Articles 78, 79, 87 and 90 of the RTC which provide for the free movement of goods and prohibitions on the imposition of import duties on Caricom goods. The two sought a declaration that the Guyana Customs Act violates either Article 87 or 90 of the RTC; an order compelling the State to amend or repeal the legislation to eliminate its discriminatory effect; an order restraining the imposition and collection of the tax and damages.
The companies had noted that the imposed tax on their goods raised the cost price on each imported container by $10. No similar tax is imposed on local producers of non -returnable beverage containers and, by the definition of “Import Duties” laid down in the RTC, the levy must be regarded as an import duty, they argued.
Ram was critical of Guyana’s legal representation. While the two Surinamese companies were represented by legal counsel with expertise in trade matters Guyana was represented by its Attorney General Anil Nandlall and a junior attorney to defend what under any circumstances would have been a very difficult case for the country, he said. “Reading the decision it was obvious that the court was not at all impressed by the submission and performance of Mr. Nandlall … Mr. Nandlall should have advised his clients of the complete hopelessness of the case, rather than appear before the regional court and look completely lost,” Ram said.
He recalled that Guyana had admitted as long ago as May 2001 at a meeting of COTED – the regional trade organ of CARICOM – that the tax was a violation of the RTC. “By unforgivable sloth and recklessness Guyana spent another twelve years during which it failed to provide COTED with requested information or act to remove the unlawful tax,” he said.
“Against a background of serial failures of compliance, it would have required something of a miracle to overcome the formidable case presented by the Surinamese companies. Unfortunately, our case was so weakly represented that the Court had no difficulty in demolishing every one of Mr. Nandlall’s arguments and efforts. We argued for example that it was the political opposition that prevented the necessary legislative amendment to the Customs Act, ignoring the fact that the State is indivisible for the purposes of liability and had an overarching responsibility to honour treaty obligations, and ignoring too that Guyana had ten years to comply with the law but did not,” Ram said.
“We argued too… about the nobility of the tax, leading the court to believe that the tax was used for environmental purposes when all Guyana knows that the monies collected were put into the Consolidated Fund. While the Court politely took notice of the need to strike a balance between environmental protection and economic development, it noted that such a need could not create an exception to the trade policy spelt out in Chapter Five of the RTC which prohibits the imposition of import duties on regionally sourced products,” the attorney asserted.
He also noted that Guyana sought to argue that the companies were not entitled to any reimbursement because they must have already passed on the tax to the citizens of Guyana, and that to refund them would be a case of unjust enrichment. “This was more than ironic since Mr. Nandlall must have realised that it was Guyana that was unjustly enriched from levying for more than a decade a tax that was patently unlawful,” Ram said.
He further said that it is remarkable that not a single member or representative of the Private Sector Commission has made a single comment on the implications of this case for the country. “Guyana could easily find itself having to refund several billion dollars to the Surinamese companies and to exporters from Trinidad whose government requested and was granted locus in a matter,” he said.
“Two of Guyana’s major companies – Banks DIH Limited and DDL have been the principal beneficiaries of this discriminatory tax which effectively amounted to a subsidy for those businesses. Did they pass the subsidy to their employees and customers or did they pay it to their shareholders?”, he asked.
Ram said that he has heard a leading representative of one of these companies suggest that Guyana should ignore the judgment. “I think that is dangerous nonsense. That person and his ilk need to read Part IV Article XXVI, of the Agreement Establish-ing the Caribbean Court of Justice. The Article is entitled “Enforcement of Orders of the Court” which reads:
“(a) all authorities of a Contracting Party shall act in aid of the Court and that any judgement, decree, order or any sentence of the Court given in the exercise of its jurisdiction shall be enforced by all courts and authorities in any territory of the Contracting Party as if it were a judgment, decree order or sentence of superior court of that Contracting Party;
(b) the Court has the power to make any order for the purpose of securing the attendance of any person, the discovery or production of any document, or the investigation of punishment of any contempt of court that any superior court of a Contracting Party has power to make as respects the area within its jurisdiction,” Ram noted.
“Guyana has incorporated the CCJ into our domestic municipal law (Caribbean Court of Justice Act Cap. 3:07) which means that at both Public international Law and Private International Law the judgment is enforceable,” he added.