By Marcelle Thomas
On the heels of allegations that Ramps Logistics Guyana (RLG) again made a false declaration to the Guyana Revenue Authority (GRA) by inflating billions, the tax agency last year flagged and fined other companies for false declarations, sources say.
“Many other companies have been flagged, and fined and additional taxes paid…,” a GRA source explained to the Stabroek News while adding, “this is not only for the oil and gas industry but also for other filings made for imports.”
With a list of over 50 companies flagged, the source said GRA was engaging in best practices by utilising risk management approaches, post clearance analysis, and also valuation exercises when looking at filings.
However, companies in the oil and gas sector were put on alert as the tax agency has a keen focus on filings for this sector. One official explained, “excessive wear and tear claims and increased cost oil claims that could arise from false declarations” could put this country at a loss, given that cost oil makes up for 75% of profits currently.
The Stabroek News on Friday reported on the massive inflation of the invoice from an estimated US$4.4 million to US$12.1 billion by Ramps Logistics. The inflated invoice pertained to a quantity of oil-well equipment imported on behalf of ExxonMobil Guyana.
According to reports, the revenue authority said that an investigation it conducted uncovered that in November of last year, Ramps Logistics allegedly inflated the invoice value for a consignment of goods on behalf of ExxonMobil.
According to a report seen by this newspaper, on November 16th last, Ramps declared to Customs that the goods were valued at US$12,192,103,923.91. The actual cost, however, of the imported goods, the GRA said, was US$4,467,662.
Additionally, reports said that Ramps Logistics allegedly falsely declared itself as being the supplier of the goods imported by ExxonMobil when the suppliers were Baker Hughes and Technip FMC.
According to reports, two weeks later, Ramps responded via letter stating among other things that the false declaration was prepared based on information provided by ExxonMobil Guyana Limited through its KABAL System.
The reports said that to further support its claims Ramps presented a demonstration of how the information was extracted from Exxon’s KABAL System.
In keeping with the principles of natural justice, the GRA thereafter dispatched a letter dated March 18th 2024 to ExxonMobil requesting it to show cause why legal proceedings should not be instituted against it.
Particulars of the complaint against both Ramps and Exxon are that contrary to the Customs Act, on November 16th, 2023 they falsely declared to the GRA that the value for a quantity of oil-well equipment and supplies was US$12,192,103,923.91.
The letter from the GRA’s Law Enforcement and Investigation Division, to ExxonMobil’s Company Secretary set out the details of the false declaration, which was made and subscribed to Exxon on November 11, 2023, by Ramps acting as Custom broker and agent for ExxonMobil.
GRA said that according to Ramps, “they were contracted by your company to provide brokerage and freight forward service; and the information used to prepare and submit Customs declaration GY 410 2023 C2612 to the Revenue Authority for ExxonMobil Guyana Limited was obtained from Exxon KABAL system.
“Further, you may recall that on December 11, 2023, representatives from your company visited the Revenue Authority to assist with the investigation; therein, enquiries were made regarding your company’s conduct. In response, your company submitted a letter dated December 13, 2023, and claimed inter alia, that – 1. You learned that Ramps Logistic Inc incorrectly inputted “USD” as the currency of the commercial invoice on the referenced Customs declaration, in place of “GYD”; and 2. The error resulted in an overstatement of the value of the items listed on the commercial invoice and consequently on the Customs declaration submitted by your broker.”
The GRA told ExxonMobil that its claims and explanations provided “cannot be deemed as accepted in law, particularly since a statutory duty is imposed on ExxonMobil Guyana Limited to verify and ensure that all information declared to the Revenue Authority by its broker/agent is true and correct.”
In addition, GRA stated that “evidence was obtained to prove that the untrue declaration was caused to be made by your company. As such, be guided accordingly that this act constitutes a breach of Section 217 (1) (a) of the Customs Act, Chapter 82:01.”
ExxonMobil subsequently distanced itself from Ramps’ actions saying it played no part nor was it responsible for the actions of that company.
In a brief statement following the Stabroek News’ story, the company said: “ExxonMobil Guyana (EMGL) became aware of a clerical error in a Customs declaration filed by our former broker in 2023 from an investigation initiated by the Guyana Revenue Authority. EMGL did not compose the erroneous declaration, nor were we aware of this clerical error when the declaration was filed. EMGL is cooperating fully with the GRA in its investigation of this matter”.
ExxonMobil also wrote to the GRA to put itself in the clear. Its controller William A Thompson wrote to Deputy Commissioner Jason Moore on April 16 stating that EMGL was not the declarant and had not made any false declaration.
In the correspondence seen by this newspaper, Thompson said the declaration was made by RLGI “as borne out by the information in column 14 of the prescribed customs declaration form” provided by the GRA.
He added that EMGL has not made or caused any false declaration to be made.
“Any error made by RLGI was a typographical error which did not inure to the detriment of or cause any loss,” to the GRA, Exxon added.
Addressing Ramps’ contention about the KABAL system, Thompson said, “To the best of EMGL’s knowledge, all information that was available to RLGI from the KABAL platform was accurate and any error was not caused by EMGL”.
Under its contract with EMGL, Thompson said that RLGI had an obligation to review and verify all inbound shipping documentation such as bills of lading and packing lists etc and ensure that all such documentation was accurate and correct and met the country’s customs requirements.
“In these circumstances, there are no apparent circumstances why proceedings ought to be instituted against EMGL as a matter of fact or law. EMGL is ready to engage with the Guyana Revenue Authority in the spirit of (dialogue) and cooperation to address any remaining concerns that the authority may have on this matter,” he added.
The inflation of the invoice, whether by mistake or other, underlines the importance of assessing the expenses that ExxonMobil and its partners are claiming for cost oil. If a US$12 billion transaction compared to US$4 million was passed, it would reduce profits due to Guyana and its partners by the difference between the two figures.
To date, neither of the two major audits of expenses by ExxonMobil and partners has been brought to a conclusion and in relation to the first by UK firm IHS Market, the Guyana Government and ExxonMobil may be headed to arbitration.
