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