Customs chief, 5 others face oil smuggling raps

MANILA, Philippines - The Presidential Anti-Smuggling Group (PASG) recommended to the Office of the Ombudsman the filing of criminal charges against Bureau of Customs (BOC) Commissioner Napoleon Morales and some of his men for allegedly allowing a private firm to smuggle oil into the country and defrauding the government of hundreds of millions of pesos in taxes.

PASG said in a statement that aside from Morales, others who face charges are Mindanao Container Terminal Port collector Rudy Amistad and Jetti Supply Distribution Inc. (JSDI) owners-stockholders Ramon Tanchangco and Joel Aguilar, corporate manager Joselito Magalona and in-house broker Darwin Suico.

They face charges for allegedly violating the anti-graft law, the code of conduct for government officials and employees, and fraud under Article 214 of the country’s revised penal code.

PASG chief Undersecretary Antonio Villar Jr. said the charges stemmed from the findings of a PASG-National Bureau of Investigation (NBI) two-month investigation that Morales, Amistad and officials of JSDI “conspired in a smoke-screened oil smuggling activities and non-payment of taxes and customs duties from 2006 to the present.”

JSDI is an importer of oil products and a locator at the Philippine Veterans Investment Development Corp.’s economic zone in Tagoloan, Misamis Oriental.

The PASG-NBI investigation showed that JSDI has “a privilege to import oil under warehousing without payment of customs duties and taxes provided that it will transact business and cater to other registered locators within the economic zone, or supply fuel through bunkering of any foreign vessel,” Villar said.

He alleged that JSDI, “in an unholy alliance with Customs officials, diverted its imported oil for local consumption without the proper payment of customs duties and taxes.”

Villar said Amistad’s explanation letter attests to the “unholy alliance in the bureau.”

Amistad admitted that he allowed the release of JSDI oil importations without payment of customs duties.

“The surety bond posted by JSDI for every importation equivalent to (one and a half) times the computed duties and other charges will not only prevent unauthorized withdrawals but also serve to reinforce our collection strategy of programming the infusion of available revenue resources to avoid collection shortfall in any given month of the year,” Villar said, quoting Amistad’s letter.

“You will find out that some of the entries in the list are not paid yet. This unpaid amount (duties and taxes of JSDI) will serve as buffer in an event of revenue shortage during lean months,” the letter read.

Villar said the issuer of JSDI’s surety bond, South Seas Insurance Co. Inc., has a standing cease and desist order from the Insurance Commission beginning Dec. 5, 2006. South Seas has no license and is no longer authorized to issue new bonds and other insurance policies.

Despite the standing cease and desist order, JSDI used the services of South Seas in 2007 and 2008, Villar said.

Villar revealed that in 2007 and 2008 alone, JSDI failed to pay some P288 million in duties and taxes.

Raps don’t scare Morales

News that the PASG filed smuggling cases against him before the Office of the Ombudsman does not scare him, Morales said.

 “I am not worried that PASG filed a case because I am the one who sends (crooks) to jail. I know my job and I know that the Customs employees know their jobs, and they know that they should be accountable,” he said.

Morales said he was not even aware that the PASG and the NBI conducted an investigation. “I was not consulted,” he said, adding that he has not been remiss in his responsibilities.

The alleged oil smuggling case was only raised during a series of congressional hearings headed by Pampanga Rep. Juan Miguel Arroyo early this year, according to Morales.

“I have instructed our legal department to conduct an investigation on the criminal aspect and the Post Entry Audit (PEA) to conduct an audit. This is not an easy task, we need to audit three years – 2006, 2007 and 2008,” Morales said.

He said a lot needs to be done, particularly in establishing the dates of the shipment, the volume and the value of the shipment and how much was lost to the government.

He also said that if the investigation would show there are justifiable grounds to file criminal charges against JSDI and BOC employees, then he would file appropriate cases against them before the Department of Justice.

“I am not trying to save face of the Customs personnel. If they committed an infraction we will file appropriate charges against them, even if it would lead to their dismissal,” Morales said. 

– With Evelyn Macairan