Groups bat for shipment inspection on container cargo

MANILA, Philippines - Port users and stakeholders are lobbying for the immediate issuance by Malacañang of an administrative order subjecting containerized cargoes to shipment inspection to curb the worsening smuggling problem in the country.

Global inspection survey firm Intertek said the expansion of the inspection coverage to include containerized shipment would result to 100 percent inspection of all dutiable goods that enter the country which should translate to less smuggling and increased revenues for the government.

The proposed AO, which has been “approved in principle” by Malacañang and endorsed by the Bureau of Customs (BOC) as early as September 2012, is just an amendment to the existing AO 243-A limiting ship inspection to only bulk and break bulk cargoes.

The current A0 243-A only covers the inspection of 65 percent of cargoes entering the country which are considered bulk or cargoes that are not packaged, bundled or packed and break bulk cargoes that are stored in boxes, bales, and pallets.

Intertek general manager Tomas Drilon noted that 35 percent of dutiable goods that are shipped using container vans are not subject to pre-shipment inspection.

He said this was the reason why in recent years, there was a marked increase in technical smuggling of traditional bulk or break bulk cargoes like sugar, rice and steel that are loaded in containers to escape detection.

“We have observed that traditionally bulk/break bulk cargo such as wheat, rice, steel, chemicals etc. are now being brought into the country in containers perhaps in an effort to avoid detection with the current bulk/break bulk inspection program,” Drilon said.

Drilon cited the P500 million worth of imported rice seized at the Subic Bay Freeport Zone that was investigated by the Senate and which were contained in more than 1,000 containers as one glaring example of how the limited AO’s coverage is being abused.

The AO’s limited coverage is also seen as a hindrance to BoC’s effort to meet revenue targets.

Last year, the BoC, the second largest revenue generating agency of the government, collected a total of P282.3 billion, P57.21 billion short of its programmed target.

The BoC is tasked to collect a total of P340 billion this year. In January, the BOC managed to collect P24.5 billion but still short of its goal of P25 billion.

According to studies, the country remains a smuggling haven for shipped goods, including counterfeit articles, resulting in P127.08 billion in foregone revenues every year, including the uncollected VAT and a five percent average duty.

The International Monetary Fund (IMF) has monitored $284.7 billion worth of goods shipped to the country from 2002 to 2007 but only $195.01 billion worth of cargoes was processed and taxed by the BOC during said period or a discrepancy of $89.69 billion.