Dominica’s DCP Files Lawsuit against Jamaican Entities over Soap Exports
The Dominica Coconut Products (DCP) Successors Ltd has filed a lawsuit against some corporate entities in Jamaica at the country’s apex court. Through the law firm Hylton Powell, DCP filed lawsuit claims against soap exporters and manufacturers as well as some Jamaican state agencies for flouting the Revised Treaty of Chaguaramas.
The lawsuit filed on June 8 at the Supreme Court of Jamaica stipulates that Jamaican soap exporters and manufacturers must pay duty on the soaps marketed in CARICOM states; purchase soap chips or raw materials from DCP; or invest in saponification equipment to enable them manufacture their own soaps.
The lawsuit also includes the Jamaica Customs Agency, commissioner of customs, trade board, trade administrator, and a Jamaican soap company, Blue Power Group Ltd.
In the lawsuit, DCP contends that it is unfair for government agencies in Jamaica to issue certificates of origin to soap exporters given that the soaps are not manufactured in the country. The certificates of origin are issued to companies producing items that are of “community origin” and which enables them to enjoy a duty-free export on such products distributed in CARICOM markets.
According to DCP, it is unfair for such certificates to be issued to Jamaican soap companies since they do not manufacture the soaps as stipulated under applicable laws to enable them enjoy duty-free exports in CARICOM regions. Following the lawsuit, Jamaica suspended the issuance of the certificates of origin to Jamaican soap exporters.
This trade conflict between DCP and Jamaican companies and agencies did not just start recently; it has been on for some years. In 2020, the certificates were ordered to be suspended after a meeting of CARICOM Council for Trade and Economic Development (COTED) conference. But DCP was compelled to proceed to the Supreme Court on June 8 when the Jamaican government failed to comply with last year’s suspension order.
After COTED ordered the Jamaican government to suspend issuing the certificates without success in 2020, DCP’s director Yvor Nassief clarified that Jamaican soap exporters and “manufacturers” do not engage in saponification – and hence do not engage in actual soap manufacturing. Saponification is the process of soap-making which involves the chemical reaction of combining oils or fatty acids with caustic soda.
Nassief said Jamaican companies skip the saponification process by importing soap chips – and still enjoy duty-free relief due to the certificates of origin issued to them – while the soap manufacturing process did not actually originate in Jamaica as prescribed by regulations.
While logic has prevailed on the certificate of origin issue, the companies continue to import chips duty-free for local production. DCP Successors Ltd contends that this is illegal and is in the process of legally challenging the continued importation of soap chips duty-free from outside the region. Again, all DCP Successors Ltd is asking for is a level playing field. The only fair and just remedy is that they pay duty on the extra-regional chips. To avoid this, they can buy chips from DCPS, or better yet, invest in saponification equipment.
Yvor Nassief, Director of Dominica Coconut Products (DCP) Successors Ltd
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