DUE TO DRUG SMUGGLING
CNMI Customs Director Jose C. Mafnas disclosed that rampant drug smuggling has prompted the division to ratchet up security efforts at all CNMI ports.
He declined to give further details about this, telling House of Representatives lawmakers during a session last week that he is not at liberty to disclose confidential information.
“I want to reiterate that Customs continues to face a lot of challenges with drug smuggling, undervaluation of goods, undeclared high tax-rate commodities, and other contrabands like fake products, and banned hazardous chemicals,” he said in his testimony endorsing House Bill 21-104.
Authored by floor leader Rep. John Paul Sablan (Rep.-Saipan), H.B. 21-104 seeks to eliminate the 30-day grace period within which to pay the excise tax on goods that require Customs inspection and clearance. The House passed the bill on a 12-5 vote during last Wednesday’s session.
Mafnas assured lawmakers that this bill will lessen Customs’ challenges.
Mafnas pointed out that importers have a lot of time to prepare their payment for their imported goods before they arrive. He said the shipping time for the U.S. or Asia takes anywhere from 10 to 20 days.
“If the ‘pay-upon-clearance’ works with the other bigger Customs operations, I believe it can work here too,” said Mafnas. He reiterated his earlier statement that CNMI Customs is the only member of the Oceana Customs Organization that offers a grace period for import tax.
Twenty-three countries are members of the OCO.
To address businesses’ concerns about the legislation, Mafnas assured that Customs “is not in the business of closing a business.” He said when an importer has a hard time paying its tax dues, Customs has a mechanism in place to work with them. Even without a grace period in place, Customs can work with an importer to release their cargo pending payment, he added. This courtesy, he said, is offered to low-risk importers who are compliant with customs laws.
Mafnas said they give incentives to importers/businesses that have a clean importing history—incentives like “facilitating their goods without inspection at their site, installment payment arrangement when having a difficulty meeting their tax payment, and Customs will release goods to the low-risk importers pending their payment.”
Sablan said in an earlier interview that many representatives of the business community gave a lot of input on the bill, which is why they put further amendments to address the concerns the businesses have. That includes giving
By taking into consideration the concerns of the business community, they put in a provision that they give the Customs director or his or her designee discretion to work with businesses on when to pay their import tax, especially in these very trying times.
He said when the businesses need more time to pay their taxes, they should appeal to the Customs director and explain the hardships.
“And that goes to any businesses,” Sablan said.