FEATURE: TCL makes last stand against Caricom

Trinidad & Tobago's Trinidad Cement Limited (TCL) has suffered a major setback in its legal offensive against the Caribbean Community (Caricom) to recover lost revenue. Last year, Caricom decided to suspend the 15% common external tariff (CET) charged on cement imports from non-Caricom manufacturers from September 2008 to September 2009, following a formal request from Jamaica. On March 31 this year, TCL went to the Caribbean Court of Justice (CCJ) to challenge Caricom's decision. The lawsuit also sought to annul the decision of the Council for Trade and Economic Development (COTED) to suspend the CET on cement imported to Antigua and Barbuda, Dominica, Grenada, St Lucia, St Kitts and Nevis, St Vincent and the Grenadines, and Suriname. These countries requested the suspension of the CET, citing difficulties in obtaining the necessary supplies from the TCL Group. TLC lost the battle on August 10, when CCJ threw out the company's case in Jamaica and supported COTED's decision arguing the entity is authorized to suspend a tax when demand is not met either regionally or in an individual country. UNMET DEMAND Jamaica asked Caricom to waive the tax to facilitate the importation of 240,000t of cement, in the midst of complaints from importers that TCL-owned local manufacturer Carib Cement Company Limited (CCCL) was failing to meet demand. Importers said they were able to satisfy demand when a previous suspension of the CET was authorized in 2006 in an effort to increase supplies after thousands of tons of faulty CCCL cement had to be recalled. The waiver of the CET last year was granted after Trinidad & Tobago's competent authority issued Caricom a "no objections" response to Jamaica's request. However, TCL complained it was not consulted. In addition to throwing out TCL's claim in Jamaica, CCJ dismissed all the other claims for compensation made by the company. CCJ also said TCL was right to take the case to court and stressed the importance of many CET-related issues for the region's private sector. LAST STAND The decision could be a preview of things to come in the ongoing lawsuit TLC filed before CCJ against Guyana for removing the tax on imported cement, although this case is being treated separately from the proceedings in Jamaica. On June 16, attorneys representing the company and Guyana presented closing arguments before CCJ in their ongoing dispute over the suspension of the CET in the country. The court could order Guyana to pay TCL as much as US$2.5mn in compensation for lost revenue. The company claims Guyana unilaterally waived the CET in 2006, despite the fact that the Treaty of Chaguaramas stipulates that the decision must be made by Caricom and not by any one country. Initially Guyana admitted it was wrong to waive the 15% tax unilaterally instead of going to COTED and did not move to defend its decision. However, an official with the Guyana trade, industry and commerce ministry testified that businesses had been complaining that subsidiary TCL Guyana was failing to provide enough cement. TCL is demanding compensation for lost income suffered in its capacity as 80% shareholder in TCL Guyana "for the period from January to December 2007 and continuing," according to local reports. When contacted by BNamericas, CCJ was not able to estimate a date for the ruling, or clarify if the Jamaica ruling sets any kind of precedent in the Guyana case. Given that the country unilaterally suspended the CET, TLC still has a shot at vindication in this particular case. Either way, the company will not give in without a fight for the US$2.5mn at stake.