Mandatory inspection of containerized cargoes to curb smuggling

MANILA, Philippines - With the reorganization of the Bureau of Customs in full swing, the local business community and some foreign embassies are hopeful that the much-needed regulatory reforms will finally be implemented.

Among these reforms are the pre-shipment inspection of all containerized cargoes to curb smuggling, which has deprived the government of P200 billion in lost revenues a year.

Several business organizations said smuggling continues to be rampant and is posing a threat to legitimate businesses as well as to government’s efforts to create more jobs.

Business groups led by the Federation of Philippine Industries (FPI), Makati Business Club, and Government Watch as well as some foreign embassies have revived calls for the immediate inspection of all containerized cargo shipments, which comprise 35 percent of dutiable goods entering the country.

The proposal, they said, has been on the table for two years without any feedback from the Department of Finance (DOF).

They said there was a pending administrative order laying down the guidelines to implement the advanced customs clearance and control for containerized cargoes, that has been approved in principle and which the Bureau of Customs endorsed to the Finance department last July 26, 2013. 

The BOC, in its letter to the DOF, was hopeful the program could be enforced before the fourth quarter of last year.

At present, ship inspection is limited only to bulk and break bulk cargo which account for 65 percent of dutiable goods that are shipped into the country.

The proposed customs administrative order is aimed at including the remaining 35 percent to effectively cover 100 percent of dutiable volume of cargo imports.

“We believe that it has become imperative that containerized inspection be included at the first opportunity since 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,” a port stakeholder said.

The business groups noted the marked increase in technical smuggling of traditional bulk or break bulk cargoes like sugar, rice and steel. 

In particular, they cited recent alleged rice smuggling case in Subic where more than 1,000 containers of rice were brought into the country without the proper documentation.

“In view of the recent arrests and concerns regarding the entry into the Philippines of major drug cartels, Customs reform programs such as the pre-shipment inspection of containerized cargoes could greatly curb not only the smuggling problem but even the entry of drugs and arms into Philippine territory. Against this backdrop, the smuggling problem is not only a fiscal concern, but a serious consumer protection and national security concern,” the same source said.

“Secretary (Cesar) Purisima has been consistent with his pronouncements about continuing efforts to improve Government revenue collection efficiency and therefore we are quite certain that he would welcome the benefits of this reform program,” the source added.