Commonwealth _ The Caribbean Court of Justice (CCJ), situated in Trinidad and Tobago, determined that Jamaica violated Article 82 of the Revised Treaty of Chaguaramas (RTC) by failing to impose the 40% common external tariff (CET) on soap noodles imported from outside the area.
The Claimant, DCPS, is a Dominican firm that produces soap noodles and soap goods. The soap noodles may be formed into a variety of soap products, including but not limited to laundry bar soap. “Because DCPS’ soap noodles and other soap products are made within CARICOM, they are qualified for and get preferential treatment over identical items imported from non-CARICOM states. Regional importers of DCPS goods do not pay the CARICOM-established 40% CET on soap products. It went on to say that, while Jamaica the claim’s Defendant has soap-producing enterprises, such companies do not manufacture soap noodles and instead import them from Malaysia and Indonesia. The court observed that in Jamaica, these soap companies add scents, oil extracts, moisturizers, and color to imported noodles, bend them into various shapes, repackage them, and then sell the finished product.
Furthermore, Jamaica did not impose the CET on soap noodles imported from outside the area, which was initially due to a misclassification of the tariff category under which the soap noodles belonged. After the DCPS protested about the categorization, Jamaica sought and obtained assistance from the World Customs Organisation, which affirmed the mistake. According to the CCJ, Jamaica continues to exclude imported soap noodles from the relevant 40% CET. The exemption was first based on the contention that Jamaican soap products were community goods eligible for preferential treatment, and later on a domestic exemption regime: the Productive Inputs Programme, established by Jamaican legislation and applied to Jamaican soap producers.
DCPS sought to contact soap makers in Jamaica to supply them with soap noodles. However, Jamaican soap makers complained about the quality of DCPS’ soap noodles. After hearing from the parties, the CCJ concluded in its ruling that it was not admissible to give tax exemptions on soap noodles imported from outside the area where the same or comparable items are manufactured in sufficient numbers in CARICOM. Tariff protection for such commodities is compatible with the RTC’s aims, particularly Schedule III, which establishes a specific regime for oils and fats, including soap and soap noodles. When soaps and soap noodles are in short supply in CARICOM, the Council of Trade and Economic Development (COTED) may suspend the 40% CET. The CCJ determined that the wording of Jamaica’s exemption system was compatible with the concept that before providing exemptions, Member States should first look within CARICOM.
However, the CCJ determined that Jamaica failed to evaluate or analyze whether soap noodles were in sufficient supply from regional manufacturers before granting the CET exemption to Jamaican soap makers under its exemption system. The Court ruled that the evidence presented demonstrated that DCPS could supply the whole CARICOM Single Market with soap noodles, and that the soap noodles produced by it were not rancid or otherwise unsuitable for
The CCJ concluded that Jamaica violated Article 82 and paragraph 18 of Schedule III of the RTC by failing to apply the 40% CET on soap noodles imported from outside the area. Regarding Jamaica’s claimed violation of Article 84 of the RTC, the CCJ accepted counsel’s admission that the Jamaican soap products could not be classified as commodities of Community origin. Jamaica used good faith as a defence for this noncompliance, but the CCJ ruled that good faith, even if present, did not relieve culpability for the breach. The CCJ granted fees to DCPS and will convene a case management conference to assess how the issue will continue in order to determine whether
