Customs freeing contraband despite obvious smuggling

The Tariff and Customs Code simplifies proving of smuggling. One basis is the discrepancy between: (1) the declared value of goods by the importer, and (2) the assessed value by the Customs examiner. If the difference is 30 percent or more, then the contraband automatically must be seized for auction, and the importer indicted. So states Section 2305 of the Code.

Reformers grumble that Customs deputy Jessie Dellosa defies such proviso. If deliberate or out of ignorance is unclear. But records from his Office of Intelligence show the following:

• Dellosa reversed his own Alert Order No. A/IG/20140130-102, in his Third Endorsement dated Feb. 13, 2014. This was in spite of clear discrepancy in the adjusted value of US$7,281 and the original declared value of US$5,315. The $1,966 difference was 37 percent, subjecting the goods to confiscation.

• There’s worse. Since the report contained photographs, the price of the items, polypropylene films, was verifiable. The lowest price for the films of the imported size was around British £100 per coil. The quantity, 178 coils, thus was worth £17,800. At the exchange rate of $1.66 : £1, the imposed value of $7,281 was still too low. The government failed to collect more than half of the required duties.

• Dellosa lifted his own Alert Order No. A/IG/20131206-105, on Second Endorsement dated Jan. 27, 2014. This again was despite the clear discrepancy from the declared value of $5,794.97 that was adjusted to $7,700. The difference, $1,905, was 32 percent of the original, thus again subject to seizure and auction under Section 2305.

• Similarly, Dellosa overturned his own Alert Order No. A/IG/20140122-102, on Second Endorsement dated Feb. 14, 2014. There was discrepancy of 37 percent, or $3,535 between the declared value of $9,365 and the adjusted value of $12,900. The goods summarily should have been confiscated, yet were released to the erring importer.

All these are in addition to Dellosa’s other alleged breaches of the Tariffs and Customs Code. That is, reversing his own alerts-seizures of contraband, based on mere “similar value,” instead of “transaction value” (see Gotcha, 24 Mar. 2014).

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As Deputy for Intelligence, Dellosa’s mission is to detect smugglers and colluding Customs insiders. Assessing duties is someone else’s work. Yet Dellosa allegedly usurps such authority.

Worse, Dellosa supposedly has invented “segregation.” That is, he orders the confiscation of one portion, at the same time clearing the release of others, in a shipment. Again unclear is if deliberate or stems from ignorance of smugglers’ modus operandi.

It is usual for smugglers to conceal contraband with legitimately declared and valued goods. In such cases, the Customs Code deems the entire shipment unlawful. Both the declared and concealed goods are subject to confiscation and auction.

Not for Dellosa, though. Examples, again from records of his Office of Intelligence:

• Alert Order No. A/IG/20131104-102; consignee: Flavie Enterprises - Dellosa recommended: (a) Seizure of 43 packages of “bags,” nine packages of “pouch bags,” eight packages of “Hello Kitty stationery,” and 60 packages of “lotion.” At the same time he ordered: (b) Continue processing the rest of the shipment, considering the payment of additional duties.

• Alert Order No. A/IG/20131104-101; consignee: Flavie Enterprises - Dellosa recommended: (a) Seizure of 65 cartons of Beauty Products, and 187 cartons of blank CDs. In the same breath, he ordered: (b) Continue processing the rest of the shipment.

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Two more oddities make Customs reformers wonder what Dellosa is up to:

• One of the first Alert Orders he issued was No. A/IG/20131018-115, on Oct. 18, 2013. Then two weeks on the Deputy Commissioner’s job, he was supposed to have his men immediately seize the subject cargo inside the Manila International Container Port. Yet three nights later, at 9:52 p.m. of Oct. 21, the cargo was transported out unexamined. This was gleaned from entries of the International Container Terminal Services Inc., the MICP operator.

The cargo consignee was Copperfield Marketing. There was no lifting of the Alert Order, or clearance for cargo release. Yet, not only was Copperfield allowed to transport, its subsequent import volumes also increased. Copperfield allegedly is linked to one Manny Santos. This is the same person who, in a Senate inquiry, admitted to being a partner of Davidson Bangayan alias David Tan, the “Goliath of rice smuggling.”

• Dellosa also overturned his own Alert Order No. A/IG/20131113-103. A discrepancy report showed an increase from the declared value of $34,446 to the assessed value of $96,259. As well, the VAT rose from P35,316 to P59,936. There was more than 30-percent difference in both valuation and tax due. Still, Dellosa cleared the release of the contraband, in breach of the Customs Code’s 30-percent ceiling.

There was a happy ending, though. Customs chief John Sevilla overruled Dellosa, and re-confiscated the contraband.

Then came the sequel. Intelligence reports started pouring in, alleging Sevilla and other deputies to have received multimillion-peso bribes from this and that consignee.

And so it goes at the Customs....

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