Surinamese beverage company RUDISA International NV has agreed to accept US$6.22M from the award made to it by the Caribbean Court of Justice (CCJ) over an environmental tax that was imposed by Guyana.
Attorney General and Minister of Legal Affairs Basil Williams made the disclosure to reporters yesterday after communicating the agreement to the CCJ in Trinidad and Tobago via video conferencing at the Court of Appeal, along with the attorney for RUDISA in Suriname.
Originally, Guyana owed US$7.72M that accumulated following the award by the court but the beverage company agreed to accept US$1.5M less after its principals met with President David Granger and State Minister Joseph Harmon on Wednesday.
The AG said that the two sides will formalise the new agreement by next Friday, when the matter will be heard again by the CCJ.
A release on Wednesday from the Ministry of the Presidency said that RUDISA’s owner, Rudi Sardjoe met with Granger and Harmon at the Ministry to iron out a settlement.
According to the press release, Harmon said that RUDISA had agreed to a smaller sum and government had welcomed the development, though the sum was not disclosed at that point.
“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,” Sardjoe was quoted as saying in the release.
In May, 2014, the CCJ had ordered Guyana to pay RUDISA some US$6,047,244 ($1.2B) which had been collected in an environmental tax that it found to be in contravention of 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 violated 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.
