Our attention has been drawn to various publications in the media on the operations of Destination Inspection Companies vis-avis the activities of Customs.
The thrust of most of the publications being that Customs is in a position to take over the operations of Destination Inspection Companies and should be allowed to do so.
The Ministry of Trade has not taken a position on this matter as yet and will not do so on its own. Given the importance of the Trade Sector to the economy of Ghana and the involvement of other Ministries, Departments and Agencies in the process of Trade Facilitation any decision on the management of Destination Inspection Services will be referred by the Minister to Cabinet for the Government of his Excellency Professor John Evans Atta Mills to collectively take a decision on the best way forward.
However , prior to any decisions being taken by the new administration, we consider it worthwhile to bring to the attention of the Public the state of Destination Inspection operations in the Country as at the time the new administration took office, and the steps that have taken so far by the Ministry of Trade & Industry.
Prior to the introduction of Destination Inspection in the country in April 2000 Ghana operated a pre-shipment inspection regime. The objective of introducing Destination Inspection was to achieve the objectives of trade facilitation, efficient verification of imports, revenue protection and security. The Destination Inspection scheme introduced Computerised Risk Management Systems, X-Ray Scanning and the development of Transaction Price Databases.
The first Destination Inspection Company to start business in Ghana was the Gateway Service Ltd. The Contract with the Company was signed on the e12th of November 1999 but was to take effect from the date the pre-shipment inspection services came to an end and that was in the year 2000. The agreement was to take effect for a period of ten years in the first instance with an option to renew for further periods of two years at a time.
Some unsuccessful attempts were made by the previous administration to terminate the contract with Gateway Services limited. Though their contract was not terminated three new operators were introduced into the scheme. These were BIVAC International (Bureau Veritas) BV of Holland, Inspection and Control Services (ICS) and Ghana Link Network Services. These agreements were signed by the then Minister of Trade & Industry- Dr. K.K. Apraku. All three agreements were signed on the 14th of November 2002 and were for the provision of Destination Inspection Services for a period of 5 years from the date of commencement which was the 1st of January 2003 with an option to renew for a further term of five years upon evaluation by the Government.
Effectively four Destination Companies were given the mandate to carry out the business of Destination Inspection within the Country and were assigned to carry inspection activities at different entry locations and each company’s operations covered specific geographical areas.
Prior to the expiry of the Contracts of BIVAC, Ghana Link and ICS with the Government of Ghana at the end of 2007, the then Minister of Trade and Industry, Private Sector Development and Presidential Special Initiatives – Hon Joe Baidoe-Ansah wrote to each of the three company’s on the 29th of October 2007 extending their contracts for a period of one year each, which would expire on the 31st of December 2008.
During this period of extension the then Ministry of Trade, Industry, Private Sector Development and Presidential Special Initiatives represented by the Minister Hon Joe Baidoe-Ansah, the Customs Excise and Preventive Service represented by the Commissioner of CEPS and Ghana Link Network Systems entered into an agreement on the 22nd of may 2008 for the creation of a new joint venture company called the Ghana Customs Inspection Company Ltd. To manage and perform Destination Inspection scheme services. This joint venture was to operate as per the terms of the agreement for a period of 8 years.
The just before the previous administration left office on the 31st of December 2008 the then Minster of Trade, Industry, Private Sector Development and Presidential Special Initiatives-Papa Owusu –Ankomah wrote to BIVAC International Ghana Ltd. And ICS Ltd. Extending their contracts for a further period of one year each to end on the 31st of December2009.
The Ministry of Trade & Industry would also like to draw attention to the fact that one of the companies that had their contracts extended for a further year have commenced legal action against the Government challenging the duration of the extension period granted to them on the basis that per their interpretation of the agreement any further extension of the agreement should be for another term of five years.
Actions Taken by the Ministry of Trade & Industry
On the 27th April 2009 the Ministry of Trade & Industry held a Stakeholders Forum on the Destination Inspection Scheme.
Representatives from the Association of Ghana Industries, Ghana Union of Traders Associations, Ghana Institute of Freight Forwarders, Ship Owners Association of Ghana, the Customs Brokers Association of Ghana, the Freight Forwarders Association of Ghana, all the Destination Inspection Companies, Ghana Community Network Ltd. (GCNET), some Members of the Parliamentary Select Committee on Trade, Industry and Tourism and other interested persons attended the program. All the Stakeholders were given the opportunity to express their opinions on the operations of the Destination Inspection Scheme as it currently operates. The inputs provided at the Stakeholders forum are among the resource materials for consideration of Cabinet.
Further, given the current status in respect of the four destination companies the Minister of Trade & Industry has asked for a legal opinion pm the obligations of the Government in respect of the legal agreements and correspondence between the previous administration and the Destination Inspection Companies in order to ensure that Cabinet will have clarity on the issues at Stake and will have the opportunity to make an informed decision on the future of Destination Inspection Activities in the Country.
Any decision taken in this matter will address the issues of expediting the process of verification and clearing of imports, proper management of exemptions and other trade facilitation issues, and also the plugging of revenue leakages by limiting the opportunities for fraud and fiscal evasion. The Ministry of Trade and Industry will inform the various Stakeholders in the Sector and the People of Ghana as a whole of the final decisions taken by the Government in this matter, when discussions have been concluded.
Minister of Trade &Industry
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