Jamaican soap manufacturer Blue Power Group is insisting it did nothing wrong, as it has filed a strong preliminary defense to the lawsuit that has been brought against the company and Government of Jamaica by its Dominican rival, Dominica Coconut Products Successors (DCPS).
The issues is now in court after the Council for Trade and Economic Development (COTED) — the organ of Caricom that promotes trade and economic development and oversees the operations of the Single Market and Economy — ruled in favour of DCPS last November.
In its preliminary defense, Blue Power advised the Supreme Court of Jamaica that it did nothing wrong but followed the rules laid down by Jamaica’s trade and customs regulations in applying for certificates of origin in respect of soap produced from soap pellets/noodles imported from outside of Caricom, which is used in its soap manufacturing process.
Blue Power argues that, “the matters being raised by the lawsuit are issues of policy under the purview of the Government of Jamaica.” However, the Jamaica Stock Exchange-listed company has emphasised that “the importance of clarifying the matter of the tariff classification, which Blue Power is required to use and for this reason, it is useful to be a part of the defense.”
Blue Power’s legal defence is being handled by attorney-at-law Symone Mayhew, QC, who has already filed the company’s preliminary defense and will liaise with the Attorney General’s Department, which is representing the four government agencies.
The lawsuit is seeking to restrain the Trade Administrator and the Trade Board from issuing the company certificates of origin in respect of soap produced from soap pellets/noodles imported from outside of Caricom. The lawsuit also seeks to restrain the classification of soap noodles imported by Blue Power under the Tariff code 38.23 and for declarations that the soap noodles/pellets were wrongfully exempted from the 40 per cent Common External Tariff.
In addition, the lawsuit seeks to direct the commissioner of customs and excise and the Jamaican Customs Agency to apply the Common External Tariff of 40 per cent on all soap noodles/soap pellets imported by Blue Power and other soap manufacturers from outside of Caricom and to obtain a referral to the Caribbean Court of Justice for an advisory opinion on the issues of whether: (a) The certificates of origin issued to Blue Power were validly issued; (b) The Common External Tariff of 40 per cent is to be imposed on imports of soap noodles by Blue Power.
Blue Power has already been notified that the use of imported noodles will disqualify its exports to Caricom for duty-free access. The consequence of this decision is the application of a 40 per cent tariff on soap products sold into Caricom and this in turn has resulted in a significant immediate reduction in Blue Power’s export business and export earnings from the Caricom markets.
DCPS has complained of unfair competition, arguing that the soap pellets raw material imported from Indonesia by Jamaican producers were simply reshaped as soap without going through a process of manufacturing transformation. The Dominican firm contends that it is not necessary for the finished goods to be classified as being of Caricom origin, thus benefitting from the 40 per cent tariff.
The matter was brought to COTED, which issued an adverse ruling against Blue Power and the Government of Jamaica earlier this year, but DCPS took the dispute further, filing a lawsuit in the Supreme Court of Jamaica against four Government agencies and Blue Power Group.