HAITIAN-DR BORDER CALM: BUT NO COMMERCIAL TRAFFIC

UNCLAS SECTION 01 OF 02 PORT AU PRINCE 001609 SIPDIS SENSITIVE SIPDIS STATE FOR WHA/CAR EB/IFD S/CRS SOUTHCOM ALSO FOR POLAD STATE PASS TO USAID FOR LAC/CAR INR/IAA (BEN-YEHUDA) COMMERCE FOR SCOTT SMITH TREASURY FOR JEFFERY LEVINE WHA/EX PLEASE PASS USOAS E.O. 12958: N/A TAGS: ECON EAID PGOV PINS HA SUBJECT: HAITIAN-DR BORDER CALM: BUT NO COMMERCIAL TRAFFIC YET REF: A. PAP 1552 ¶B. PAP1417 PORT AU PR 00001609 001.2 OF 002 ¶1. (U) This message is sensitive but unclassified: please protect accordingly. ¶2. (SBU) Summary and comment: Jeantal Clervil, head of customs for Malpasse at the Haitian-DR border (on August 24) told emboffs visiting the border town that the situation had calmed considerably since the Haitian National Police (HNP) sent in reinforcements August 22. Clervil said that situation would stay calm as long as the HNP remained in the area because the protesters, a small number of transport workers called "Transporters in Action," were unorganized and powerless in the face of a strong police presence. The Police Commissioner for Malpasse Jacques Noel Orival echoed Clervil's assessment and added that Clervil was enforcing the law and not charging an "unacceptable sur-tax" as the protesters claimed in calling for Clervil's resignation. This was the first step in what will presumably be a series of enforcement activities around Haiti in order to raise government revenues. Malpasse was a wise start; if one of the largest, and previously lawless, points of entry proved manageable with an increase in police presence, perhaps the others, including regional ports, will too. End summary and comment. ¶3. (U) Malpasse is located on the Haitain-DR border, 50 kilometers east of Port-au-Prince on a main route. On the way to Malpasse, emboffs passed through the town of Fond Parisien (located two kilometers from the border),where the strikers set up barricades to prohibit commercial traffic from crossing into Haiti from the Dominican Republic (reftels). Everything appeared calm: the town seemed quiet and the road was empty. Both Jeantal and Orival said that although the border was never officially closed, there had been no commercial traffic since late July, because of the barricades which forced commercial traffic to turn around. (Note: There are two border crossings located north of Malpasse at Belladere and Ouanaminthe, where customs' controls are non-existent. Haitian officials suspect that the goods are crossing into Haiti from these towns despite the difficult trek on badly-maintained roads to Port-au-Prince. End note.) ¶4. (SBU) According to Clervil, transport workers "in most countries" have no problems with customs, since they are paid only to transport goods and are not responsible for the import fees. However, because the Port-au-Prince importers rely on the transport workers to negotiate border transactions (fees and bribes) the transport workers are "posing as importers" in protesting the import fees. Since Clervil's appointment in December 2005 until the onset of the strike, he had raised government revenue at the Malpasse border to US $1550 from around US $300 per month (ref A). Clervil estimated that the government has lost around US $2500 in import fees since the strike started on July 10. He stressed that this is a small cost compared to the loss by the Dominicans which sell their goods to Haiti. Emboffs visited the border market, which is usually bustling with Dominican goods, and found it quiet and calm, with only a few goods for sale, some trinkets and bottles of alcohol. ¶5. (SBU) Comment: Newly-elected President Rene Preval tasked the ministry of finance with raising government revenues. Customs fees, which include a value-added tax, are traditionally and by far the greatest source of income for the government. It follows that the ministry targeted the bustling point of entry at the border as the first real push to raise revenues. Though commercial traffic coming through Malpasse has stopped for the time being -- and government revenues which had drastically increased are now at zero -- the government's strong stance demonstrates its serious posture regarding customs enforcement. Should the GOH move PORT AU PR 00001609 002.2 OF 002 to enforce customs fees at other points of entry, they will likely face local contention to government intervention, particularly at regional ports located in lawless areas like Gonaives and St. Marc. However, local resistance in Malpasse, one of the largest points of entry and also traditionally lawless, proved manageable, though the GOH took its time to generate an appropriate response. TIGHE