Irish companies send post through Singapore to slash bills

Irish businesses are sending post from Singapore to Ireland in order to avail of international rates that are 75 per cent cheaper than domestic postal charges, The Sunday Business Post has learned.

Post can be sent from Singapore to Ireland for the equivalent of 12 cent – a saving of 36 cent on each letter – due to a trade deal between national governments and the Universal Postal Union. Firms e-mail material to Singapore, where it is printed, packaged and posted as bulk mail to Ireland.

An Post claims the practice is illegal under the Postage Evasion Act 1934. A spokesman said that the semi-state planned to prosecute companies which sent post from another jurisdiction. An Post is already prosecuting several companies, including First Active bank, for sending post from Britain by Royal Mail.

The prosecutions are taking place under the terms of the 1934 Act, which is largely untested by the courts.

It is understood that some Irish companies are printing mail in London, but franking letters with a Singapore stamp, under an arrangement between an Extra Territorial Office of Exchange and the Universal Postal Union.

A separate deal between An Post and 17 European state postal services – known as REIMS – limits An Post’s charges for inbound European mail to 75 per cent of the price of its standard domestic price.

It is understood that Irish companies switched their attention to Singapore from Britain after a Royal Mail price rise in January.

“Least developing” countries, including Singapore and the Philippines, are charged just 25 per cent of the price of a standard stamp in developed countries for inbound international mail.

To block this legal loophole, the Irish Government and An Post would have to renegotiate a change of the deal at the Universal Postal Union’s convention next month in Bucharest.

An Post, which is forecasting losses of 30 million this year, has accepted that it is not getting a good deal on its international prices.

The company claimed the situation was worsened by not securing any increase in postal charges between 1990 and 2002.

It is seeking a 14.5 per cent increase in stamp prices to 55 cent from 48 cent, as revealed by this newspaper last week.

The latest application comes on top of a 7 cent increase granted by the communications regulator, ComReg, last August.

An Post was rapped by the communications regulator in March over its failure to renegotiate more favourable price deals in inbound international mail.

“It is quite clear that it is costing An Post money to deliver international inbound mail, which means An Post is subsidising other European operators and their customers,” according to a ComReg statement released in March of this year.

“This situation cannot be allowed to continue.” Alex Pigot, the chief executive of one of the country’s largest bulk mail companies, Tico, said that domestic customers and private postal operators were subsidising An Post’s international losses.

Pigot calculated that if An Post had renegotiated the REIMS agreement instead of setting aside funding for its restructuring, it would have been in profit over the last three years.