Complaint against Ministry of Revenue “not sustained”
The Ombudsman, Maiava Iulai Toma, has not upheld a complaint by a businessman who accused the Ministry of Revenue of wrongdoing in relation to import duty compliance.
Manu Meredith, the Owner of Le Well Company Ltd., had been questioning the Ministry of Revenue since 2015 about what he claimed as unfair practices involving liquor taxes and prices.
Earlier this year, Mr. Meredith asked the Ombudsman’s Office for an investigation after numerous attempts for an explanation went unanswered.
In a copy of his investigation report sent to the Samoa Observer, the Ombudsman said the complaint cannot be sustained.
The Ombudsman’s Office points out that the calculation for trading purposes of the landed cost for “the wine” in the shipments investigated accord with widely used practice.
“The figures and values used in the calculations accord with Customs documents relating to the shipments of the merchandise,” the report reads.
“Presumption of misconduct from “low prices” charged for “the wine” in Apia is not sustained.
“The Ombudsman cannot say with any degree of confidence that quantities of wine imported correspond to quantities submitted in invoices during the period investigated due to the lack of spot checks.
“The Ombudsman notes with satisfaction that the Ministry has instituted appropriate surveillance measures since June 2016 to enhance compliance with Customs requirements and appropriate standards.”
The Ombudsman noted that his office would maintain a continuing investigative interest on the issue of ‘submitted Invoices and their correspondence to merchandise actually landed.’
“To this end he requests the C.E.O of Ministry of Revenue to facilitate random Office of Ombudsman observation of the spot checks that are occasionally carried out by Border Operations teams,” the report reads.
According to the Ombudsman’s Office, Le Well, which imports wine, was alarmed when they noticed that certain wine retailers were under-selling wines for which Le Well were local Agents.
“As they were importing at their N Z supplier’s lowest prices and assuming these other traders to be supplied by middlemen, Le Well requested Customs in December 2015 to investigate if their competitors were paying correct duties,” the report reads.
“In March 2016, Le Well re-emphasized its request to Customs with focus on a certain competitor who was selling a particular red wine (the wine) at a price clearly lower than what Le Well considered reflected realistic landed cost.
“Le Well’s concern was for uniform compliance and fair competition in the market place. The Company continued to follow up the matter with reminders over the ensuing months. There were sporadic exchanges of e-mails and letters.
“Information conveyed from time to time by Customs officials failed to satisfy the complainant who grew more and more convinced, of improper activity and, of his concerns not being properly investigated.
“He recorded sighting a bottle of the red wine selling for $19.90 which he claimed to be below landed cost for that wine. The complainant expressed doubts about the competence and ethics of the officials concerned in a letter dated 3 May 2016.”
The letter prompted a Customs investigation of the situation and the insinuations inherent in it.
The Investigation reviewed three importations of the red wine by Le Well’s competitor on 31 March, 6 October and 31 December 2015.
This represented twelve months supply of the wine in question for the importer.
Following this investigation the Ministry of Revenue advised Le Well on 27 June 2016 that the processing of entries for the wine in question had been regular and resulted in the correct amount of duty, excise tax and VAGST being levied and paid.
“It turns out however, that the original processing of the Customs entries had overlooked duty for ten cases of “free of charge” (FOC) wine that had been included in two of the three shipments under consideration,” the report reads.
“A Customs Officer had picked this up in April 2016 as a direct result of the complainant’s pestering. An adjustment for the oversight was made and additional duty paid. The complainant was advised and thanked by letter dated 19 April 2016 for his part in the discovery.
“The June 2016 special investigation by Customs picked up neither the original omission nor the adjustment made in April 2016. This failure detracts from the thoroughness and comprehensiveness of the June 2016 investigation.
“At any rate, the Ministry determined from that investigation that neither Le Well‟s competitor nor Customs officials had committed any offence under Customs legislation. The Ministry was satisfied that the invoices submitted were “cleared Customs certified invoices” but it could not at the late juncture verify quantities actually landed because wine from the shipments had been sold.
“The Ministry intended to carry out a physical examination of the next shipment by Le Well’s competitor to ascertain whether quantities of the wine in the container correspond with invoices that are submitted.”
But Le Well Co Ltd was not satisfied with explanations given to them following the Customs‟ investigation.
“On 13 February 2017 Le Well requested the Ombudsman to make an Inquiry into the Ministry of Revenue practices regarding import and duty compliance. It alleged less than diligent Customs surveillance of imported quantities resulting in the payment of less than the required duties.
“Customs were slow to respond to the Ombudsman’s call for information. They were unhappy to be investigated at the behest of a Company, not for something Customs supposedly had done or had not done to that Company, but on that Company’s dark suspicions of misconduct beneficial to a competitor.
“Moreover Customs had investigated the situation that had been pointed out as manifestation of misconduct and were satisfied Le Well were misguided in their suspicions.
“The role of the Ombudsman is to uncover truths relating to allegations of misconduct and bad decision making by public bodies and make determinations and recommendations where appropriate.
“This is not only beneficial to complainants and the wider public in providing a final avenue for redress but also for any public authority whose actions can be independently verified as reasonable and correct by the Ombudsman when faced with complaints to the contrary.
“Delays in provision of documentation to the Ombudsman are unfortunate and delay the overall findings whether that be in supporting the actions of the authority or finding areas for improvement.
“Eventually on 25 July 2017 documentation and explanations enabling a proper examination of Le Well’s complaint to begin were in the hands of the Ombudsman.”