AFTER being tagged as the “mother of all smuggling,” the Department of Agriculture (DA) on Thursday appealed to Congress to give the agency police powers to apprehend smugglers of agricultural products.
Undersecretary for Policy, Planning and Research Fermin D. Adriano made the appeal during a press conference after House Committee on Ways and Means Chairman Joey Sarte Salceda tagged the DA as the “mother of all smuggling.”
During a House hearing, Salceda raised the issue of palm oil smuggling, claiming that P45 billion in government revenue was lost as a result of the misdeclaration of palm oil as animal feeds worth P300 billion, supposed to be slapped with a 15-percent duty.
According to Adriano, palm oil as animal feeds is imposed zero tariff and is not classified as a product to be imposed a 12 percent e-VAT.
Adriano assured him that the DA is already investigating the alleged smuggling of palm oil as animal feeds but is processed as cooking oil for human consumption as early as last year.
“We regret this description [of Salceda]. The Department of Agriculture, however, fully support the intent of the congressional hearing and is cooperating with the efforts of the House Committee to get to the bottom of the issue, with the end-view of addressing any loophole in our Sanitary and phytosanitary (SPS) systems,” he said.
“The DA has no power to prosecute and apprehend smugglers, I am appealing to legislators, give us the power it’s just a matter of changing the implementing rules and regulations; then I think we will be in business of really [apprehending] smugglers properly,” said Adriano.
But Salceda maintained that agricultural importations start with a DA import permit, “so there, the maternity of agriculture smuggling.”
Added the Albay congressman: “Make no mistake: the victim of agricultural smuggling is the ordinary Filipino farmer, who tends to be among the poorest workers in the country. Agricultural smuggling is not only economic sabotage. In view of whom it harms, it is a grave moral and societal evil.”
Salceda has said “80 percent of our problem [in smuggling of agricultural products] is the DA and only 20 percent is Bureau of Customs.”
“I stand by the work of the Committee on Ways and Means in improving legislation on agricultural smuggling, particularly its work on the following legislation and rules (1) the Customs Modernization and Tariff Act and its rules; (2) the Anti-Agricultural Smuggling Act which makes large-scale agricultural smuggling economic sabotage; and (3) joint guidelines to prevent the smuggling of agricultural products. We are also studying our special safeguard, anti-dumping, and countervailing duties laws to see how we can fight the deleterious effects of smuggling using amendments to these laws,” he said.
“At the same time, creating public and political pressure to fight smuggling is also part of our job. In this job, I am very likely to offend the feelings of some public officials, but it is a job I am intent on doing well, regardless. Smuggling is a concern that rightfully elicits public outrage. It is also our responsibility to represent and convey that public outrage, so that those who are entrusted with public office can respond to public concerns. Hence, I stand by my strong words against smugglers and those who protect them in government,” he added.
On the shortcomings and possible abuses in other agencies, including those named by the DA, Salceda said the lower chamber will exert the same amount of pressure it exerts on the DA to improve the fight against illegal trade in agricultural products.
Earlier, Salceda vowed to look into the issues of jurisdiction with the prosecution of cases of agricultural smuggling.
“The implementing agency of the law is unfortunately the Bureau of Customs, so there appears to be an issue of clarity about who should take the lead in pursuing these cases,” Salceda said, in response to a query from the committee’s Vice Chairperson Sharon Garin about the jurisdiction of the DOJ over cases of agricultural smuggling as economic sabotage.
Salceda noted that the mandate of the Criminal Investigation and Detention Group (CIDG), under the Philippine National Police, also includes “monitoring, investigation and prosecution of all crimes involving economic sabotage.”
“I think we need to clear that up. It appears that RA 10845 [the Anti-Agricultural Smuggling Act] will fall under the jurisdiction of this committee as well,” Salceda added.
Report
On February 7, 2022, Adriano said the Anti-Red Tape Authority (ARTA), which conducted an investigation in January 2022, submitted its report to Agriculture Secretary William Dar.
“The highlights of the report show that the Bureau of Internal Revenue’s Revenue Memorandum Circular (BIR-RMC) tasked the Food and Drug Administration (FDA) to certify that the imported palm oil is unfit for human consumption, as part of the requirements for VAT exemption. This authority was recently transferred to the Bureau of Animal Industry (BAI) only last September 6, 2021 through RMC 100-2021 of the BIR,” he said.
Adriano also said the agency noted a huge discrepancy in the volume certified by BAI versus those allowed to enter by the Bureau of Customs (BOC), saying BAI’s data on volume certified is much higher that those in the accounts of BOC.
“The entry of palm oil has been ongoing since 2016, as per the data traced by ARTA. In 2016, imports registered at 1.181 million kgs. as per BOC data. In contrast, BAI data recorded an import volume of 2.421 million kgs. [kilograms] Imports peaked at 55.488 million kgs in 2020 per BOC data. In contrast, BAI data revealed imports reaching to 40.632 million kgs,” he said.
“[With this volume] there’s something wrong with the market even you have not proven who the culprits are,” Adriano added.
From 2016 to 2021, the DA official said BOC data showed a VAT due sum of P2.328 billion.
“ARTA’s major recommendation is for “the Department of Agriculture to conduct its own investigation on the discrepancy reported from the data from BOC and BAI in relation to the record on importations with VAT exemption vis a vis BOC’s actual arrival of goods. Pending such investigation, the responsible officer be placed under preventive suspension to preserve the integrity of the evidence,” he said.
Adriano said Dar has already formed an investigation committee to look into the matter.
Meanwhile, Adriano said the DA is seeking the assistance of other government agencies to rid the country of smuggling of agricultural products, which requires inter-agency efforts to succeed.
Also, he said the DA will continue the efforts to fight smuggling of agricultural products by tightening of its protocols, requirements and monitoring of Sanitary and Phytosanitary Import Clearance (SPSIC) issuance.
He said the department is working with other agencies in going after smugglers (Sub-Task Group on Economic Intelligence (STG-EI) to complement DA’s limitation in terms of legal mandate and police power to go after smugglers.
Adriano also said the DA will continue to implement measures to improve the productivity and competitiveness of farmers through investing in infrastructure, postharvest and processing facilities, and improving the yield and quality of farmers’ produce.