Labianca Web: The Facts

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The controversy over the report of the Office of the Special Prosecutor (OSP) into Labianca operations and allegations of corruption on the part of Customs prompted us to do some researches whose findings include the following:

Traders, importers, the business community, freight forwarders and clearing agents supported and played very significant roles in the victory of the New Patriotic Party (NPP) and its Presidential candidate, Nana Addo Dankwa Akufo-Addo in the general elections of 2016. There was so much euphoria and commitment on the part of the private sector to ensure the success of the NPP Administration and improvement in the living conditions of the average Ghanaian.

Consequently, to demonstrate their good faith, the traders and their associations, especially the Ghana Union of Traders Association (GUTA) called on their members to reduce prices of goods and maintain same for a reasonable time during the early part of 2017. For instance, spare parts dealers, dealers in used clothing and sellers of chemicals for agricultural purposes announced to the general public that they had reduced or stabilized the prices of their goods.

This gesture of GUTA and traders of all types and wares was heartily welcomed by the NPP Administration thus creating a very harmonious relationship with the NPP Administration and a congenial atmosphere between the government, the general public and the business/trading community across the breadth and length of Ghana.

Getting to the end of 2017, the traders started having serious engagements with the government on the need to address the issue of valuation of goods and import duties and taxes. As a result, various stakeholder engagements were held between the business community and government and some public institutions such as the Customs Division of the Ghana Revenue Authority (GRA). One of such efforts culminated in the graduation of reduction in import values for frozen goods before the application of duties and taxes. Thus, on the 6th of February, 2018, a common understanding was reached between Ghana Revenue Authority (Customs Division in particular) and the importers of frozen foods.

The Commissioner of Customs Division at that time, Mr. Isaac Crentsil, sent a memorandum to the incumbent Commissioner General, Mr. Emmanuel Kofi Nti, requesting for approval to apply graduated values for frozen goods for purposes of import duties and taxes. Mr. Isaac Crentsil indicated that if his proposals were approved, the applicable value per kilogram of frozen foods would be as follows:

Srl           Manifested Consignment                            Percentage Reduction in

                                                                                                                Value (BMV)

  1. Up to 20 containers x 20’                                     5% reduction in Benchmark Value

per kg

  1. Above 20 container x 20’

Up to 40 containers x 20’                                              8% reduction in BMV per kg

 

  1. Above 40 containers x 20’                                    12% reduction in BMV per kg

 

Mr. Isaac Crentsil indicated that “the above consideration shall be applicable to any revised or reviewed Benchmark Values until you decide otherwise.”

The Commissioner General, Mr. Kofi Nti, approved the memorandum from Mr. Isaac Crentsil on the same day, 6th February, 2018.

Mr. Crentsil then wrote to the Assistant Commissioner (Head of the Customs Technical Services Bureau (CTSB) where classification and valuation of goods are done for all declarations and Bills of Entry (BoE) of importers or declarants. In a memorandum to the Assistant Commissioner CTSB, Mr. Crentsil wrote: “The Commissioner General has approved a graduated valuation vis-à-vis the Benchmark Values for Frozen Foods in terms of the quantum of consignment per shipment of an importer/declarant.”

Mr. Crentsil indicated: “The applicable values per kilogram of frozen foods with effect from 13th February, 2018”.

The Commissioner of Customs further indicated in the memorandum that: “the above consideration shall be applicable to any revised or reviewed Benchmark values until further notice.”

Mr. Crentsil concluded his memorandum to the Assistant Commissioner (CTSB) as follows: “Please ensure that all officers at the Customs Technical Services Bureau (CTSB) are conversant with the above to avoid unnecessary appeals from importers as this information would be brought to the notice of importers and their agents.”

Subsequently as indicated in his memorandum to the Assistant Commissioner, CTSB, Mr. Isaac Crentsil wrote to all importers of Frozen Foods and Frozen Foods Importers Association on the same day, 6th February, 2018 as follows:

“Please be informed that with effect from Tuesday, 13th February, 2018, the following graduated valuation shall apply to frozen foods imported into the country relating to the quantum of the consignment per shipment and the value per kilogram vis-à-vis the Benchmark value.”

Mr. Crentsil then produced the table as indicated earlier giving reduction in values for frozen goods for quantities up to 20 containers x 20’, above 20 containers x 20’ up to 40 containers x 20’ and above 40 containers x 20’ as 5%, 8% and 12% reduction in Benchmark value per kilogram respectively.

Mr. Isaac Crentsil, the Commissioner Customs Division at that time, concluded his letter to all Frozen Foods Importers and Frozen Foods Importers Association ACCRA/TEMA/TAKORADI, as follows: “These percentages SHALL BE applicable to any revised or reviewed Benchmark value until further notice. Please be guided, Yours faithfully,”

Copies of all these two important correspondences were sent to the Commissioner General, All Deputy Commissioners, Customs Division and all Sector Commanders, Custom Division. The approval by the Commissioner General became the Commissioner General’s order to the Frozen Foods Importers and Frozen Foods Importers Association and all Customs Officers including the Commissioner of Customs. The order had 13th February, 2018 as the effective date of implementation and expiry date as “until further notice”.

The Commissioner General had the power and authority to give the reduction in values of imports under both Sections 12 and 67 of the Customs Act, 2015 (Act 891). Values are determined before import duties and taxes are applied. Thus, the Commissioner General does not arrogate to himself the power of taxation, which lies appropriately with the legislature (Parliament), when he approves of reductions in values.

It needs to be clarified that taxation is different and distinct from valuation. Parliament approves taxes (import duties inclusive) but Parliament does not set values for goods. Values for goods are determined by sellers and Customs Administrations based on express and implied provisions of laws (Statutes, Statutory Instruments, Regulations, Orders, Rules, Treaties, Protocols, Conventions) and best practices.

The Commissioner General and Commissioner Customs of GRA have never varied or changed the rates of taxes and duties (which are the prerogative of Parliament) in the implementation of the Customs Act, 2015 (Act 891), Customs Regulations, 2016 (LI 2248) and the Revenue Administration Act, 2016 (Act 915).

The Commissioner General’s order was to all frozen foods importers in a very fair, equitable and progressive manner. As a result, every importer benefitted from or potentially could benefit from the dispensation as the importer of one container of twenty (20) feet was catered for at a reduction of five percent (5%) while those of higher volumes beyond, for instance, forty (40) containers of twenty feet (20’) were offered a reduction of twelve percent (12%).

The relevant question in this situation would be: “Was Labianca the only company given the offer or which took advantage of the offer of reduction in import values?” The answer is categorically NO.

On 20th February, 2018, Mr. Isaac Crentsil granted concessions in his capacity as a Proper Officer [Section 151 of Customs Act, 2015 (Act 891) refers] on behalf of the Commissioner General as follows:

  1. Poultrade Ltd., Tema – 12% discount on BMV for ninety (90) days;
  2. White Capital Foods Ltd., Takoradi – 12% discount on BMV for ninety (90) days
  3. Perez Frozen Foods Ltd., Tema – 12% discount on BMV for ninety (90) days
  4. Francopat Company Ltd, Accra North – 12% discount on BMV for ninety (90) days.

On 27th February, 2018, Mr. Isaac Crentsil granted a five percent (5%) discount on BMV to the following companies for ninety (90) days:

  1. Amuwoe Company Ltd. Tema
  2. Herald Trading Enterprise, Dansoman, Accra.

On 21st March, 2018, Isaac Crentsil reaffirmed BMV discounts granted to White Stone Frozen Foods Ltd. of Accra and Labianca Company Ltd. of Tema in November 2017 for some eighteen (18) products for additional ninety (90) days.

On 28th March, 2018, Mr. Isaac Crentsil again reviewed the value of two (2) products (chicken back and hen leg quarter) to $315/ton and 8615/ton respectively. According to the letter, the new values replaced those of the Valuation Assurance Letter issued on 21st March, 2018 in which two (2) products had been reduced to $375/ton and $650/ton respectively.

On 6th April, 2018, Mr. Richard Yawutse, Deputy Commissioner, Policy and Programmes (also a Proper Officer) granted a five percent (5%) reduction on the BMV to Trust Link Ventures of Adabraka for ninety (9) days up to 14th August, 2018.

Furthermore, on 17th July, 2018, Mr. Isaac Crentsil granted a six percent (6%) reduction in the BMV for further ninety (90) days to PEREZ Frozen Foods Ltd., Tema, White Capital Foods Ltd., Takoradi and Francopat Co. Ltd., Accra North to expire on 14th October, 2018. On the same 17th July, 2018, Mr. Isaac Crentsil granted a four percent (4%) reduction in the BMV to Herald Trading Enterprise, Dansoman, Accra for ninety (90) days to expire on 14th October, 2018.

Labianca Company made two (2) requests for considerable customs import values in April and October 2021 in letters dated 6th April, 2021 and 21st October, 2021 taking advantage of the existing Commissioner General’s Order of 6th February, 2018 already stated above. The request from Labianca for preferential customs values were denied by the Deputy Commissioner Operations, Mr. Joseph Adu-Kyei as analysis on them showed that percentage deviations from prevailing benchmark values were unacceptably high between about 50% and 80%.

Instead, owing to the high volumes of imports of the Labianca Company (about 275 x 40’ containers per month), a reduction of between 5% and 10% BMV was granted by Mr. Joseph Adu-Kyei, the Deputy Commissioner Operations (a Proper Officer) on 20th April, 2021 valued to 20th October, 2021.

Labianca Company put in another application for reduction in values of their imports on 21st October, 2021 just a day after the offer in April 2021 given by Customs had expired.

The Deputy Commissioner Operations, conveyed the disapproval of the Commissioner of Customs of the request made by Labianca but indicated that in line with Section 12 of the Customs Act, 2015 (Act 891) and by inference the then existing Commissioner General’s Order of 6th February, 2018, a reduction of import values by ten percent (10%) could be granted to Labianca depending on the quantity imported.

The letter from the Deputy Commissioner Operations found its way into the public domain through a publication in the Daily Post newspaper. Subsequently, a Ghanaian citizen, Mr. Asare, petitioned the Office of the Special Prosecutor (OSP) alleging wrongdoing on the part of Labianca and the Customs Division of GRA.

The OSP then commenced investigations into these allegations of “offences of corruption and/or corruption related offences.”

Our research revealed further that the Deputy Commissioner Operations, Mr. Adu Kyei, and the Commissioner of Customs Colonel Kwadwo Damoah (Rtd) were invited to meet with the Special Prosecutor and the officials of the Office of the Special Prosecutor.

Our research revealed that the Top two officials of the Customs Division of GRA made all the relevant documents connected with or related to the granting of the reduction in values of imports by importers of frozen foods since 2017 available to the Office of the Special Prosecutor. Mr. Joseph Adu-Kyei was the first to be invited and later, the Commissioner of Customs, Colonel Kwadwo Damoah (Rtd) was also invited.

Our investigations showed that Colonel Damoah was originally billed to appear before the OSP on Thursday, 10th February, 2022 but could not honour the invitation on that day.

Colonel Damoah could not do so because he was on an official assignment in the Volta Region where he led a Ghanaian delegation to meet with their Togolese counterparts on the operationalization of the Akanu-Neope Joint Border Post. Colonel Damoah had requested for a postponement to another day to enable him to discharge a national duty of grave importance as part of trade facilitation along the Abidjan-Lagos Corridor.

We were told that the OSP postponed the invitation of Colonel Damoah to Wednesday, 16th February, 2022. As a very disciplined military officer and Commissioner of Customs Division of GRA, with respect for the rule of law and the due process of the law reported at the Office of the Special Prosecutor on time on that fateful Wednesday, 16th February, 2022. The reporting time indicated on the letter of invitation was 11:00 a.m. By 10:30 a.m., Colonel Damoah and his lawyer had arrived at the premises of the OSP and were ushered into a waiting room. By 10:45 a.m. on Wednesday, 16th February, 2022, Colonel Damoah and his lawyer were seated ready for proceedings to commence.

Our investigations stumbled on some startling revelations which will form the basis of our subsequent publications.