Smuggling 101

The Philippine Center for Investigative Journalism (PCIJ) estimates the revenue loss from smuggling from P89 to P130 billion a year. The IMF estimated it at about P120 billion.

If the initial moves of Customs Commissioner Angelito Alvarez, the golf cheat, are any indication, it will be “business as usual” in the Customs zone. Several importers told us that if one pays P20,000 per container today, your shipment can be released without inspection.

The first major move of Commissioner Alvarez was to abolish the accreditation unit because of the 9,000 importers given accreditation, he said that 2,000 are fake importers. But Customs oldtimers say that at least 6,000 are fake. So how did Commissioner Alvarez identify the 2,000 fake ones? The going rate at BOC is P35,000 to get accreditation without questions asked.  Accredited importers get their shipments released thru a “super green lane” without strict inspection.

Commissioner Alvarez and his boys have made 4 apprehensions of steel, Lamborghini and Chinese dry goods, but so far, no report on the big time smugglers of oil and derivatives, resins, computers, cellphones, garments including ukay-ukay, sugar and agricultural products.

It is estimated that smuggling of oil and derivatives, chemicals and resins, steel, computers and cellphones account for 60 percent of the PCIJ’s estimated revenue loss. Revenue loss from oil smuggling alone is estimated to be P50 billion.

Smuggling is a crime that involves customs personnel, customs brokers, shipping lines and freight forwarders, middle men usually called players and financiers. Customs administrations all over the world, even the World Customs Organization, realize that anti-smuggling measures need to be creative and responsive because smugglers are usually three steps ahead of customs.

Customs officers are able to extort money from importers because of the indiscriminate issuance of “alert” orders which means a shipment is to be subjected to opening and detailed examination which could be as much as 100% inspection for suspicion of misdeclaration and undervaluation. The Customs officers take their time in conducting the examination resulting in huge expenses for warehousing and demurrage by the importer and ultimately lost profits.

In a recent case, the shipment of electric fans from Black and Decker in China was held for 27 days under alert order A/OC/200100728-106 issued on July 29, 2010 when the importer refused to pay the P20,000 per container demanded. This resulted in P800,000 expenses incurred by the importer for inspection fees, warehousing and demurrage.

In spite of strict rules under CMO 104-92, the inspection was done in 3 weeks of slow inspection. No misdeclaration or undervaluation was found and the goods were found to be genuine and not fake.  

The demand of the Customs officer assigned at the Commissioner’s office for a P20,000 per container bribe was reported to Commissioner Alvarez but he did not do anything to discipline his staff member who disobeyed his order to release the shipment.

Two other legitimate importers of pre-painted galvanized iron sheets and ceramics reported the same experience resulting in millions of pesos incurred for warehousing, demurrage and lost profits. One multinational has complained about an alert order on its shipments.

The problem is aggravated by the fact that several officers are authorized to issue alert/hold orders when it should only be the Commissioner himself. In the Black and Decker case, Alvarez even denied he issued an alert order on the shipment. It turned out his signature was faked by an employee in his office, who even held on to the entry documents for several days after release of the shipment was ordered by Alvarez in a last ditch attempt to force the importer to come across with the P20,000 per container demand. The Collector in charge had to reconstruct the documents.  In the case of fake consignees, a simple check of the addresses and officers declared in the entry documents will reveal they are fake or dummies. Also faked are the required Bureau of Product Standards and Bureau of Food and Drugs (BFAD) clearances in the case of food products which are waived if the P20,000 grease money is paid. Why have no charges been filed against the 2,000 fake importers?

The big “players” are known to Commissioner Alvarez but they are doing business as usual. Their names are Lucio, Manny the Saint, King David, Big Mama C, Larry, William and Jimmy, Jeffrey, Sammy, Teves and Simon. There’s a “payroll” system going on for years now where a least P20 million is distributed in cash every Friday to those on the payroll which includes Customs personnel from top to bottom.   

With 2,000 containers passing thru the ports everyday, if P20,000 is collected from at least 1,500 containers, that amounts to P30 million a day or a potential “take” of P900 million a month or P10.8 billion a year. No wonder all anti-smuggling task forces from Task Force Aduana to PASG has failed to curb smuggling. Recall that Secretary Angelo Reyes was at one time the anti smuggling czar. (To be continued in next column)  

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Gutsy move. President Aquino’s act to take responsibility for the hostage fiasco is a good move that shows the President can be decisive if he puts his mind to it. But why in heaven’s name did Secretary Herminio Coloma have to mess up things again by issuing a statement that “The President will not resign”, That “he will finish his six year term.”

As far as I have heard or read, there has been as yet no calls for President Aquino to resign.

The problem with having 3 “Press” Secretaries is it has given rise to a competition among them issuing statements for the President to show that they are the dominant or superior one.

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Tidbits. . . Executive Secretary Jojo Ochoa’s law office has decided to drop Globe Asiatique and Delfin Lee as a client. Mayor Fred Lim testified before the De Lima Committee that he left the PCP Command post to eat at Emerald Restaurant because he had not eaten his lunch. But the Manila Hotel is right next door to the command post. Why didn’t he go there instead? And are the aides of Mayor Lim and General Rodolfo Magtibay so incompetent that they did not have food delivered to the PCP for their bosses to eat? Is it right to allow PNP Chief to retire while the De Lima Committee has not finished its investigation? Supposing he is found guilty of nonfeasance, shouldn’t he be charged and his retirement benefits held?