THE State declared its policy in the 2016 Customs Modernization and Tariff Act (CMTA) or Republic Act 10863 “to protect and enhance government revenue, institute fair and transparent customs and tariff management that will efficiently
facilitate international trade, prevent and curtail any form of customs fraud and illegal acts.”
Curiously, this new law instead provided more elbow room for abetting smuggling, or providing safe havens for antisocial goods coming into the country’s customs territory and, in the end, compromised national security.
One specific example is Section 403 of the new customs law, which was wrongly applied to accommodate illegal importation of wood products worth million of pesos since 2018.
Lawyer Reyzandro Unay, president of the Freedom of Information League, a citizens’ group demanding transparency and accountability in government transactions, wrote President Duterte through Project 8888, bringing to his attention the illegal importation of plywood by a company that is not even registered either as importer or dealer of wood materials, a sine qua non before one is allowed to import plywood under the Department of Environment and Natural Resources (DENR) Administrative Order (AO) 99-46 promulgated on November 10, 1999.
Under this AO, only holders of “Timber License Agreement [TLA], Industrial Forest Management Agreement [Ifma], Wood Processing Plant Permit [WPP] or Certificate of Registration as wood furniture manufacturer, agent, contractor or dealer of logs/poles and piles/lumber issued by the DENR, may import wood materials.”
Further, the said AO requires that “before availing of the privilege to import, the holder of the TLA, Ifma, and/or WPP shall first have his current local log, commercial poles and piles and/or Lumber Dealer’s Permit recorded or registered with the PWPA and then stamped by the Office of the Regional Executive Director concerned to have a valid Authority to Import wood materials;” while “existing wood furniture manufacturer, agent, contractor or dealer who is not a holder of a TLA, Ifma or WPP shall first secure the registration requirements” specified in Section 8 of the said AO.
“In 2018, Globalwood Construction Supply [GCS] was never a DENR-registered importer/dealer of wood materials [plywood]. Yet, it filed and cleared some 36 Import Entries in the Port of Manila [POM],” Unay said in his report to Malacañang.
“This year—2019 [before its after-thought
registration was effected in May 20, 2019], GCS had already filed 16 import
entries covering 104 TEUs [51×40 + 2×20]
involving the same commodity—the latest of
which were in April 2019, hence, unpermitted importation—or, Smuggled,
in plain language.”
Unfortunately, Unay lamented that “these were all released at the behest of BOC POM,” when the District Collector applied Section 403 of the new customs law as justification for processing these importations of an Unregistered importer.
In his letter to the President, Unay indicated the following 2019 data of wood importation made by GCS, including dates of entries, volumes and quality of wood product shipments.
Under normal circumstances, these regulated goods should have been seized or forfeited and disposed of in accordance with the customs rules and regulations.
It is surprising that despite filing and clearing 36 entries in 2018, and 16 entries in April 2019, with the importer yet to secure its prerequisite Certificate of Registration from the DENR, the customs authorities in the Port of Manila simply allowed these unpermitted imports to go unmolested, then cleared and discharged from customs custody.
Here’s the controversial Section 403 of the CMTA: “Provisional Goods Declaration.—Where the declarant does not have all the information or supporting documents required to complete the goods declaration, the lodging of a provisional goods declaration may be allowed; Provided, that it substantially contains the necessary information required by the Bureau and the declarant undertakes to complete the information or submit the supporting documents within 45 days from the filing of the provisional goods declaration which period may be extended by the Bureau for another 45 days for valid reasons.
“If the Bureau accepts a provisional goods declaration, the duty treatment of the goods shall not be different from that of the goods with complete declaration.
“Goods under a provisional goods declaration may be released upon posting of any required security equivalent to the amount ascertained to be the applicable duties and taxes.”
From the clear language of the law, this provision is unavailing. “It cannot be [mis]used as a shield by anyone for her/his smuggling of wood materials [plywood]. The CMTA was not designed to facilitate smuggling,” Unay stressed.
Port & Freeports Trade Security analyst, former Customs Director Ramon Cuyco, said that the invocation of Section 403 is misplaced. “CMTA cannot be used as a refuge for illegal importation,” he said.
“You filed and cleared 36 entries in 2018 without the benefit of DENR registration; and the ensuing year, you filed some 16 entries covering more than a hundred TEUs of the same regulated commodity sans import authorization from the regulatory agency concerned, and you still deserve leniency? If that is not misplaced tolerance, then vigilance must have lost its meaning,” Cuyco said.
“The controversial Section 403 is a new provision. It’s not found in the old Tariff and Customs Code of the Philippines. But I’m pretty sure that provision was in response to our international commitments, the Revised Kyoto Convention specifically, that requires member-economies to adopt local legislations that seek to facilitate trade. And 403 is just one of those provisions that our congressional leaders saw fit to adopt. But Section 403 cannot be stretched unreasonably to the extent of even loosening border controls,” Cuyco stressed.
To reach the writer, e-mail cecilio.arillo@gmail.com.