JAMAICA CIVAIR: QUERYING THE GOJ ABOUT FEES

UNCLAS KINGSTON 001529 SIPDIS STATE FOR WHA/CAR (WBENT),EB/TRA (MATTINGLEY) E.O. 12958: NA TAGS: EAIR JM SUBJECT: JAMAICA CIVAIR: QUERYING THE GOJ ABOUT FEES ATTACHED TO FUEL PURCHASES - JUNE 2005 UPDATE REF: A) 04 STATE 160714 B) 04 KINGSTON 3134 C) KINGSTON 1035 ¶1. (SBU) On June 8, Econoff contacted the Ministry of Finance and Planning and was directed to Sheila Gordon, Director of the Taxation Division, who was aware of USG interest in the issue of the customs user fee being charged on jet fuel sold to international air carriers (ref A),in apparent contravention of the Open Skies agreement. Gordon apologized for the lengthy delay (Post first raised the issue with the GOJ in August 2004), saying that the Ministry's legal department was still looking into the issue and would hopefully return an opinion soon. She added, however, that they were months behind in their work. ¶2. (SBU) When asked whether Air Jamaica was still exempt from the customs user fee on international jet fuel, Gordon stated that Jamaican customs officers had been charging the fee to Air Jamaica on a case-by-case basis, taking the airline's troubled financial situation into account. (Note: Air Jamaica, the national airline, was reacquired by the GOJ in late 2004. During a decade of privatized operation, it had amassed staggering amounts of debt, and was often unable to pay its bills. End note.) When informed of the GOJ rationale for not charging the customs user fee on a regular basis, a representative of American Airlines (AA) wryly asked Emboff what circumstances would allow AA to qualify for exemption from the fee. ¶3. (U) We will continue to press the GOJ for a satisfactory resolution of this issue. ¶4. (SBU) Comment: Given the slow pace of GOJ response and Gordon's admission of discriminatory exemption of Air Jamaica from tax payments, Post suggests Department and other appropriate USG entities consider imposing a tax on Air Jamaica fueling at U.S. airports. End Comment. TIGHE