Bill To Eliminate Customs Duties Clears Rules Committee, Heads To Full Body

ST. THOMAS — Senator Nereida Rivera-O’Reilly’s bill seeking to eliminate customs duties was voted favorably out of the Committee on Rules and Judiciary, and forwarded to full Senate on Thursday at the Earl B. Ottley Legislative Hall here.

Roughly $12 million is collected annually from customs duties in the territory. Originally, most of the funds — except a small portion that Customs and Border Protection (C.B.P.) kept for operations — went to the Government of the Virgin Islands. But following the creation of the Department of Homeland Security in 2003, C.B.P. started keeping all of the funds for its local operations.

During the bill’s hearing in the Committee on Finance, senators agreed that C.B.P. was in violation of an agreement signed during the Governor John P. de Jongh administration — which saw the parties agreeing to C.B.P. funding air passenger pre-departure clearance with federal funds, among other clauses. The agreement was to afford the Virgin Islands the ability to request new or enhanced C.B.P. services on a reimbursable basis, and set in place a reporting system that would allow the V.I. Government to track C.B.P.’s costs in the territory in order to ensure it is not overcharged for C.B.P.’s costs of collecting V.I. customs duties. But the agreement was never enforced.

Department of Finance Commissioner Valdamier Collens, who had introduced a proposal similar to that of Mrs. Rivera-O’Reilly’s in 2015, testified last month in favor of the measure, and asked that the bill be amended to give the federal government 180 days to adjust. Mr. Collens was asked by Senator Novelle Francis, whether the local government had considered the ramifications that could follow such a move. Mr. Collens said agencies like C.P.B., Coast Guard and other Homeland Security arms that serve in the territory are already federally funded. And he said that federal employees that are currently dedicated to collecting customs duties, would be free “to do more for the territory; they don’t have to collect duties anymore.”

Senators amended the bill to eliminate customs duties on all goods if the federal government does not allow the local government to either collect all the funds, or limit C.B.P.’s collection from the $12 million to no more than 20 percent. The new rules would take effect following the expiration of the 2014 memorandum of understanding signed between C.P.B. and former Governor John P. de Jongh.

Voting to forward the measure to the full Senate were Senators Justin Harrigan, Sr., Jean Forde, Novelle Francis, Kenneth Gittens and Neville James. Mrs. Rivera-O’Reilly was absent, and Janette Millin Young voted no.