SSIC begins prob over merchandise released from customs without full duty payment

Pago Pago, AMERICAN SAMOA — The Senate Select Investigative Committee (SSIC) began its hearing last Friday regarding customs practices related to border control and excise taxes on imported goods. This hearing follows concerns about the release of vehicles, a plane, and merchandise without full payment of the required excise taxes.

The Chief of Customs, Juliano Falaniko, testified before the SSIC Friday morning on these topics. The hearing was convened after discrepancies were identified.

Senator Togiola Tulafono, Chairman of the SSIC, requested an explanation of the necessary paperwork required for a cargo plane upon its arrival in the territory. Falaniko clarified that when a cargo plane lands, it is provided with a manifest that must match the documentation submitted by the customer when they collect their cargo or package.

He emphasized that all details must be consistent, from the recipient's name to the contents of the cargo. Any discrepancies will result in Customs seizing the shipment and holding it at their office until the proper paperwork is submitted.

This procedure applies to freight cargo and shipping containers. However, for USPS shipments, the process differs. Customs escorts the cargo to the post office and leaves it there until customers pick up their packages. At that time, Customs inspects the packages before being released from the post office.

According to Falaniko, a company has been contracted by USPS to transport mail from the airport to the post office. Regarding shipping containers, companies are prohibited from opening them without the presence of a customs agent. He noted that if any issues arise, such as the discovery of illegal contraband, the shipment will be closed, and Customs will conduct a full investigation.

Falaniko stated that two cargo planes operate directly from the mainland, but there are no direct flights from any Asian regions. He mentioned that goods imported from China typically route through New Zealand, Fiji, and Australia before reaching their final destination. Additionally, Hawaiian Airlines transports cargo and express shipments, while Pacific Air Cargo handles regular mail. Local shipping companies also bring cargo via Apia.

Falaniko explained that excise taxes vary for different items, including cigarettes, beer, specific merchandise, and vehicles. After completing the declaration form, the amount of excise tax due will be provided. He stated that, under the law, cargo cannot be released unless the excise taxes are paid in full. However, the Treasurer, and only the Treasurer, has the authority to grant a grace period for businesses and members of the public, allowing them to collect their cargo and settle their payments.

Senator Togiola also inquired about the drugs being smuggled into the territory via the post office. 

Falaniko explained that when illegal contraband is discovered, a protocol is in place for conducting an investigation, and after completing their investigation, they notify the police. Once the police have been contacted and the investigation is concluded, all evidence, including the drugs, is handed over to the Department of Public Safety, as is the chain of command procedure.

The Customs Chief further stated that when they receive a bulk shipment labeled as for personal use, they must investigate it, as they cannot release items that have not been declared. 

Senator Magalei Logovi’i Magalei inquired whether the containers are taken to the Customs warehouse or sent directly to the business compound. According to Falaniko, the majority of the containers are transported to their warehouse in Tafuna. 

He mentioned that for companies that have received more than one violation for undeclared items, the business is required to pay 50 percent of the excise taxes on that merchandise. 

Additionally, he noted that some businesses have issued bad checks. In such cases, the company is required to pay a penalty and is not allowed to pay with checks; they must only use money orders, cashier's checks, or cash.

Senator Utu Sila Poasa expressed concerns about the Customs' capability to trace or verify the authenticity of the last port of entry declaration forms for imported vehicles. He asked if Customs could confirm the legitimacy of these documents to prevent fraudulent activities. In response, Falaniko stated that Customs currently lacks the means to conduct such verifications.

Senator Utu highlighted that his concerns arise from the recent influx of vehicles shipped from China, some of which have been apprehended by Customs due to irregularities in their documentation. He emphasized the importance of ensuring that all imported vehicles adhere to legal standards to maintain the integrity of the importation process and protect consumers. 

Falaniko explained during the hearing that businesses pay for cargo scanning, as per the existing process. For containers, the Customs Agent must manually inspect the container and use smaller scanners.

He was responding to queries by Senator Levu Sa Iosia Jr. The Senator also commented on the influx of drugs in the territory, hence the need for border control to be stringent in their process. 

In addition, the Chief of Customs clarified that the appropriate documentation must accompany firearms permitted in the territory. In such cases, customs will impose a fee in accordance with the relevant laws and regulations governing the importation of weapons. Conversely, if a firearm is deemed illegal or prohibited within the territory, Customs will temporarily hold the item for a period of five days. After this holding period, the matter will be escalated to the police for further investigation and potential legal action. This process ensures that all firearms are adequately regulated and that illegal weapons are handled in accordance with the law.

Falaniko, who was appointed Chief in May of this year, has nearly 30 years of experience working in Customs. He has served as Deputy Chief since 2019.