The lawsuit which the DGA presented in October 2004, at the beginning of the administration of Customs by the late Miguel Cocco Guerrero, is in the judgment stage and it is expected that the court assigns a judge from the Superior Administrative Tribunal, according to what Diario Libre has learned.
Recently Customs once again reiterated its refusal to put into place the contract signed in 2002 between the Dominican state and the ICSSI, S.A. company because they feel it is burdensome and not very transparent.
The agreement approved by the National Congress on 18 July, 2002, under the signatures of Jose Miguel Soto Jimenez, representing the Dominican government, and for ICSSI, S.A., Ms. Belinda Galvan the widow of the former Secretary of the Armed Forces, Juan Rene Beauchamp Javier, gave the latter the right to check freight arriving in the seaports using the x-ray system for 10 years (with an automatic renewal for 10 more years).
The DGA questions the fact that the document was signed by the then-Secretary of the Armed Forces, when that organism lacks the authority to intervene in the security of the ports.
In fact, Soto Jimenez himself recognizes the lack of authority of the Armed Forces to sign this type of an agreement, but he said that he did it in order to comply with an order that he received from then President Hipolito Mejia.
Soto Jimenez said that the project, of which he no longer remembers the details, was sent to the Armed Forces in order that they might give their technical opinion regarding the feasibility of installing this equipment, to which the ministry, after a meeting of the General Staff, decided to give a favorable vote.
"The Armed Forces, in no case can deliberate and we cannot make a decision of this type, if an order does not come down from the President of the Republic, and the President has his Legal Council," said the former officer.
He insists that "it was an order that came down from the President, then, if there was a mistake, it was not us, but rather the Legal Council, what we did was go through our procedures."
According to the contract, ICSSI, S.A. would provide inspection and investigation of all the containers, trucks, cars and vans, all of the freight exports or in transit and make random checks of merchandise that was being imported. For each load of freight that was inspected, the State would pay the company an amount that went from US$25.00 to US$90.00, depending on the size of the container and that ICSSI, S.A. would collect direct from the shippers.
In the document, the company is also authorized to charge the shippers an additional 5% of the established rate, an amount that would be delivered to the State, after collecting any compensation that it generated. The company, moreover, was given the right to increase the rates in proportion to any compensation that it had to give the State, as well as the yearly readjustment of the rates themselves. The collection of the service would be done by the Dominican Port Authority by way of another agreement signed by them and the ICSSI in May 2003.
The company was also exempt from "any and all taxes, tariffs, rates or any other charges legally established" that would affect their operations, "Including, but not limited to" the customs duties for importing all the equipment and supplies for the installation of the system.
In exchange, the company had to acquire and install the equipment, which was estimated to require a US$14,0 million investment, in addition to the more than 200 jobs it would create, according to what was said in the report of the commission of deputies that studied the contract.
The contract also had two addendums. The first, on 15 January 2003, added two articles to the original project, by which the State was obliged to reimburse the company, in case that they should decide to break the contract, with the total cost of each inspection not carried out during the remaining time on the contract.
Moreover they should pay the ICSSI during the life of the contract, the amount equal to the amount that they would receive from 90% of the containers, independent of whether they were checked by the x-ray system or not.
The second addendum of 14 August 2003 modified article 5 of the contract, in reference to the rates, lowering the charge for checking empty containers to RD$14.00 and increasing the rate for inspecting loaded containers to US$95.00.
It also established that the ICSSI would make payments to the State for the collection services, equal to 1.5% of the amount collected each month. It also provided for the inclusion of business groups and exporters in the yearly discussions regarding the review of the rates.
For these agreements, the parties were backed by Decrees 898-02 and 336-03 and 675-03 which were signed by President Mejia.
The ownership of the company
One of the reasons that have made the current Customs Director mistrust the contract for the installation of the x-ray equipment is the fact that the company has changed ownership.
The incomplete memories of Soto Jimenez mention problems among the partners and this is a lawsuit between the Beauchamps family and the International Container Security System (ICSS) which was represented by the late Salomon Sanz and that was being heard in a court in the United States for alleged fraud.
In May 2003, a national newspaper reported that a letter had been written by the director of the Specialized Corps of Port Security (SESEP) to Sanz regarding the authorization for the installation of the x-ray services for ICSS, since he was the president and representative in the country. But the company (or a different one with the initials ICSSI, S.A.) changed ownership to the widow Beauchamps and her son Jean Beauchamps, who are the persons who finally signed the contract.
From the beginning the contract for the installation of the x-ray equipment was rejected, which brought about difficulties between the shareholders of ICSSI, S.A. This rejection came from the businessmen, and even went so far as a lawsuit to annul the contract which is still in the courts. According to Customs the agreement had among other things, a contractual imbalance due to the "laughable compensations for the State, on juxtaposition to the burdensome obligations of every sort." They (Customs) also felt that the contract violated international agreements.
The company, in a letter published in March 2010, reminded the parties of the force of law of the contract since it had been approved by both chambers of Congress and they justified the signature of the Armed Forces because they felt that the inspection of the containers was not only a Customs issue but also one of national security in reference to terrorism and drug trafficking.
The letter alleged that Customs had approved the installation (in spite of the fact that the officials at present deny this) and that the contract did not require a tender, because the law that requires tenders did not exist at that time. They also make reference to the world leadership in the manufacture and handling of x-ray systems of the Cotecna Company, an associate of ICSSI, S.A., although in the contract there is no mention of this company. Diario Libre tried to communicate with the executives of the company, but it was not possible. In fact, the telephone numbers that used to belong to the company are now a corner market and the building where the offices were located is now occupied by another company.