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Financial News

Jun 2009 Financial News

Guyana: Tariff removal a wrong move

Jun 16, 2009

Guyana yesterday admitted that it was wrong to unilaterally remove the Common External Tariff on cement originating from non-Caricom countries.

All that is left to be done now by the judges of the Caribbean Court of Justice is to find an appropriate sum to compensate Trinidad Cement Ltd which brought a case under the court's originating jurisdiction.

Lawyers representing Guyana made the admission during day one of the hearing in Port of Spain yesterday, essentially admitting that the country had breached the Caricom-upheld trade agreement, the Treaty of Chaguaramas.

This admission came during the hearing of a case in which local cement producer TCL and its subsidiary, TCL Guyana moved to have the Caribbean Court of Justice rule that Guyana has to compensate them for losses they incurred as a result of Guyana's decision to remove the 15 per cent tax from non-Caricom cement.

In January the cement company had applied for special leave to bring this case against Guyana. Leave was granted on January 15, and during yesterday's hearing of the case, defence attorney for Guyana, Prof Keith Massiah SC, said that Guyana was not contesting the fact that it was guilty of wrongdoing in deciding to remove the 15 per cent tariff for cement originating outside of Caricom without the consensus of the member states of Caricom.

CCJ Chief Justice Michael de la Bastide said the fact that the defendant was not contesting that it was in breach of the Treaty of Chaguaramas made the proceedings a little easier.

As a result of this admission, the court is not moving to determine whether there was wrongdoing but instead, the extent of damage done to TCL as a result of Guyana's unilateral decision in 2006.

Attorney Claude Denbow SC, who represented TCL and its subsidiary, said this showed "total contempt for the treaty on the part of Guyana".

TCL is claiming for compensation for loss of income suffered in its capacity as 80 per cent shareholder in TCL Guyana (TGI) in the amount of US$532,214 for the period January to December 2007 and continuing, while TGI is claiming compensation for lost profits suffered as a direct result of Guyana's failure to implement the Common External Tariff on building cement (grey) in the sum of US$2,084,540 for the period of January to December 2007 and continuing.

TCL is also claiming exemplary damages, interest at whatever rate and for whatever period the court deems fit and also wants the court to order that the costs of the proceedings be paid by the defendant (the Republic of Guyana.)

Hearing continues today.

Source: Trinidad Express
http://www.trinidadexpress.com/index.pl/article_business?id=161491361
Article by: Aretha Welch awelch@trinidadexpress.com
16-06-09