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Govt sets up bonded warehouse program
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Posted on May 02 2005
The government has set up a bonded warehouse program, believed to pave the way for economic diversity and creation of local jobs.
Press secretary Peter A. Callaghan said the administration, through the Department of Finance, has established the program “to find ways to jump start the local economy.”
“The program makes it more affordable to invest in the Commonwealth,” he said, noting that bonded warehousing is designed to assist businesses and industries “by deferring tax payments until merchandize is actually on store shelves.”
Patterned after federally managed programs, he said that the CNMI bonded warehouses would enable businesses to defer payment of excise tax on goods prior to their formal entry.
This method is also seen to be a more efficient way as it results in less paperwork and allows businesses to pay tax “only when goods are needed.”
Under the program, importers can bring in goods, store them in the warehouse, and claim them only when they are needed.
Callaghan said that the bonded warehouse program also gives the CNMI the potential to become a major regional distribution center in Micronesia.
Based on the regulations, there would be four categories of bonds in the CNMI: Class A is a private bonded warehouse for the storage of goods exclusively consigned to proprietors; Class B is used exclusively for inspection and storage of goods from different importers, or for inspection of incompletely cleared or suspicious merchandize; Class C is an in-bond manufacturing warehouse solely for production of articles made in whole or in part of imported materials; and Class D for the cleaning, sorting, repacking, or changing the condition but not the manufacturing of imported goods.
Callaghan said the Division of Customs, headed by director Jay Santos, is currently reviewing inquiries from several potential investors who have expressed interest in the program.
Santos earlier said that all bonded warehouses should be licensed by the Department of Finance.
License fees range from $1,000 to $5,000.
