Customs fraud in the export of wamara logs

Dear Editor,

 

The price range for exported wamara logs was reported as being between US$200 and 220 per cubic metre during January to March 2015 (FPDMC Market Export Report, April 2015, page 10). However the CIF import price for wamara logs into China was US$760 per cubic metre, as reported in the latest edition (19 (11) 1-15 June 2015) of the Tropical Timber Market Report of the International Tropical Timber Organization (ITTO). This difference of US$500 per cubic metre provides an indication of the scale of Customs fraud, which was estimated for Guyana at US$84 million in 2003 rising almost continuously to US$440 million in 2012. Around half of the illicit flows (US$1,464 million for 2003-2012) were attributed to export under-invoicing (Global Financial Integrity 2014). The transfer pricing in wamara log exports is a very good example of why forensic audits in the natural resources sector are urgently needed.

Incidentally Guyana is also exporting fire ants to China, according to the same ITTO report: “Fire ants found at Fujian port – Recently fire ants were found in Pau rosa [wamara] logs from Guyana for the first time by the Fujian Entry-exit Inspection and Quarantine Bureau. The batch of Pau rosa logs was sealed after fumigation treatment to prevent ant infestation.

The fire ants are found in tropical and subtropical areas of South America. They can be a serious problem for livestock. It has also been found that fire ants can damage power supply systems by biting cables.”

The Ministry of Agriculture provides a phytosanitary inspection and fumigation service, and exporters should be showing the phytosanitary certificate when they apply to the Guyana Forestry Commission for an export certificate. So how would it be possible for log exporter Bai Shan Lin to be exporting infested logs?

Surely it could not be because they have bypassed the phytosanitary service and the GFC and the GRA inspections prior to the sealing of the shipping container? Did not Minister Robert Persaud promise 100 per cent verification of all exports? (‘Forestry transfer pricing probe on – Commissioner Singh – Barama, Jialing to come under closer scrutiny’, Stabroek News December 9, 2006).

 

Yours faithfully,
Janette Bulkan

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