DOF reviews proposal to abolish CBWs

The Department of Finance (DOF) will look into the legal implications of the proposal to abolish customs bonded warehouses (CBWs) that are being used by smugglers as havens for their illegal activities.

Finance Secretary Margarito Teves said the move is part of government efforts to curb smuggling, which has resulted in a huge dent on state coffers to the tune of roughly P100 billion in revenue losses a year.

Teves has issued Department Personnel Order 269-08 establishing a task force composed of personnel from the Finance department and the Bureau of Customs. The task force would conduct a thorough study of the legal effects of the proposed abolition of the customs bonded warehouse system accredited by customs, the Board of Investments, and other government agencies.

The Finance chief said the task force would come up with recommendations to address the issue of revenue leakages under the customs bonded warehouse system.

Teves wants a review of existing laws and other related rules and regulations governing the operations of customs bonded warehouse and the accreditation of members of common bonded warehouses to see how the government can improve the system.

The ultimate goal, he said, is to prevent smugglers from using the warehouses as conduits for their smuggling activities.

The Federation of Philippine Industries, an umbrella organization of local industries, is keeping a close watch on the activities of customs bonded warehouses all over the country.

The group has noted that some of the operators of customs bonded warehouses have diverted their finished products into the domestic market instead of re-exporting their goods.

At present, FPI coordinates with customs in monitoring the importation of various tax-and-duty-free goods such as ceramic tiles, textile and garments, steel products, resins through customs bonded warehouses.

Teves said the government task force may file charges and impose penalties or fines for violations of the law and regulations of the customs bonded warehouse operations.

Finance Undersecretary Estela Sales would chair the task force with Finance Assistant Secretary Roberto Geotina and Customs Deputy Commissioner Reynaldo Nicolas as vice chairmen.