The Government has reached a deal with the Surinamese beverage company, RUDISA Inter-national NV, to pay a sum lower than the present US$7.72m which accumulated following an award by the Caribbean Court of Justice (CCJ) against Guyana last year over an environmental tax.
A release yesterday from the Ministry of the Presidency said that RUDISA’s owner, Rudi Sardjoe met with President David Granger and Minister of State, Joseph Harmon, at the Ministry of the Presidency yesterday morning to iron out a settlement.
Harmon said, according to the press release, that RUDISA has agreed to a smaller sum and Govern-ment welcomes this. The release did not identify what the final payment will be. Harmon said that it is important that there is good cooperation between investors and the Government of Guyana.
“When the Guyana has to fork out money to pay for anything, it is the people of the country that actually have to do without and so Mr. Sardjoe’s generosity is something we really … appreciate. He has actually given us a package which gives us some breathing room,” the Minister of State said.
RUDISA’s owner, Sardjoe said in the release, “It is not about the money… We are a company working in Guyana a lot and we want to maintain the close relations that we have with the people of Guyana.”
Guyana had been ordered in May 2014 by the CCJ to pay Rudisa some US$6, 047,244.47 ($1.2B) which had been collected in an environmental tax that contravenes the Revised Treaty of Chaguaramas (RTC).
Guyana was also ordered to take the necessary legal or other measures to prevent the collection of the environmental tax on goods of Caricom origin. According to the ruling, the country was also obliged to file a report with the Court within six months on its compliance with the orders made by the Court. There was no compliance with the orders.
Rudisa and CIDI Distributor, which distributes the beverages in Guyana, had filed an application with the CCJ alleging that the imposition of the environmental tax by Guyana was a breach of the RTC.
They argued that the tax was inconsistent with Caricom trade policy set out in Articles 78, 79, 87 and 90 of the RTC which provide for the free movement of goods and prohibitions on the imposition of import duties on Caricom goods.
The two sought a declaration that the Guyana Customs Act violates either Article 87 or 90 of the RTC; an order compelling the State to amend or repeal the legislation to eliminate its discriminatory effect; an order restraining the imposition and collection of the tax and damages.
The companies had noted that the imposed tax on their goods raised the cost price on each imported container by $10. No similar tax is imposed on local producers of non -returnable beverage containers and, by the definition of “Import Duties” laid down in the RTC, the levy must be regarded as an import duty, they argued.
According to the ruling, Guyana in response to the submission admitted that the tax is inconsistent with its obligations under the RTC but noted that the Government had proposed legislation to rectify the discriminatory effect of the environmental tax but the proposed amendment was rejected by the National Assembly. The Government Guyana also submitted that the aim of the legislation is environmental protection which is a fundamental right under the Constitution of Guyana.
However, the Court observed that the explanation provided by the State, namely its inability to pass the necessary legislative amendment to the Customs Act, did not absolve it from liability for the breach.
