Customs bureau phases out public bonded warehouses

The Bureau of Customs (BOC) is phasing out public bonded warehouses as part of a crackdown on smuggling.

Customs Commissioner Antonio Bernardo made this announcement over the weekend, saying the commission is also tightening up on the membership accreditation for common bonded warehouses.

"Bonded warehouses have become difficult to monitor because there are so many of them," Bernardo said. "So the first order of business is to reduce the number of the warehouses down to a level we can easily manage and then tighten up on the ones that we will allow to continue operating," Bernardo said

Under the law, export-oriented companies are allowed to import raw materials under preferential tariffs and duties provided these imports are used in the manufacture of goods for exports.

Companies are also allowed to import finished goods if they are likewise used as input, like buttons for garments.

Public bonded warehouses, Bernardo explained, are facilities normally used for imported finished goods and general merchandise. Common bonded warehouses, on the other hand, are operated by members accredited by the BOC.

Bernardo said public bonded warehouses are most commonly abused by importers who bring in finished goods that are sold in the local market instead of being used in the manufacture of exportable goods.

"For those who know warehousing, this is a significant move because finished goods go through public bonded warehouses," Bernardo said.

Bernardo said it would be up to the BOC to determine which public bonded warehouses would be allowed to continue operation. "We are giving them three months to phase out or convert into industry-specific warehouses," Bernardo said.

Common bonded warehouses, on the other hand, would be covered by tighter accreditation rules to make it easier for the BOC to monitor the membership of each bonded warehouse.

"Some of these common bonded warehouses have more than a hundred members and that makes it very difficult for us to monitor them," Bernardo said. "So we will limit the membership and we will tighten up the accreditation."

This week, Bernardo said the BOC is also going to shut down 100 more customs bonded warehouses, cutting down the number of customs warehouses to 1,792 after it shut down 820 warehouses.

"By the time I am finished streamlining and cleaning up the bonded warehouse system, we would have scaled the number down to about 25 percent of the original number," Bernardo said. – Des Ferriols