A senior lawmaker on Sunday welcomed the recommendation of Swiss company Société Générale de Surveillance SA (SGS) to conduct pre-shipping inspections to stop the smuggling of agricultural goods in the country.
Cavite Rep. Elpidio F. Barzaga Jr. said through a statement the SGS proposal was an effective practice that was first adopted under the administration of President Ferdinand E. Marcos Sr., the father of the current president.
The proposal by SGS was pushed during a meeting last week between President Ferdinand R. Marcos Jr. and SGS Vice President George Bottomley and SGS Philippines Managing Director Cresenciano Maramot. Marcos and the SGS executives also discussed the proposal to expand the services of the Swiss multinational company to include agricultural products since the SGS is only inspecting fuel imports.
Marcos has vowed to study the proposal and do a cost analysis just to be sure that no burden would be passed on to consumers once the government accepts SGS’ services.
Barzaga, who chairs the House committee on natural resources, lauded the President’s move to consider seeking SGS’ services, saying it shows the government’s seriousness in fighting smuggling, especially of agricultural imports.
“That’s a good move. It makes a lot of sense because there will practically be no interference from the Bureau of Customs (BOC) anymore. If, for example, the shipment is from China, SGS inspects it in China before it is shipped, then clearance is given so, when it arrives in the Philippines, you will only release it,” said the lawmaker who is also a CPA-lawyer.
The Department of Finance and the World Bank awarded a 5-year contract to SGS in the last days of the first Marcos administration for the comprehensive import supervision scheme (CISS) at the BOC.
The SGS was then authorized to conduct pre-shipment cargo inspections at the ports of origin since the company was in charge of the valuation, classification and the release of clearance for all imports.
The practice continued during the first Aquino administration and the Ramos presidency but the contract was eventually canceled by the Estrada administration because of allegations of corruption that hounded the Economic Intelligence and Investigation Bureau (EIIB), which was tasked then to monitor SGS.
It was reported that from 1987 to 1998, the CISS was able to increase annual customs collection at an average rate of 30.1 percent.
The Presidential Communications Office (PCO) earlier cited the UN Commodity Trade data for the Philippines that showed a 20.48-percent discrepancy in the reported values of agricultural imports from 2010 to 2021, resulting in revenue losses for the government.
For vegetables, roots and tubers, the discrepancy was 34.74 percent while for swine meat (fresh, chilled, or frozen), the discrepancy was 1.89 percent.
The PCO said conducting PSI and conformity assessment procedures would ensure that the quantity and other specifications of the goods conform with sanitary and phytosanitary import permits and test the presence of diseases, among others.
The SGS claims it would address smuggling and contain the spread of diseases such as African Swine Fever and Avian Flu, clarifying also that inspection and testing fees would be paid for by the exporter.
Under the arrangement, the SGS will create a digital invoice in a standardized format prescribed by the authorities on an online government platform for registered or authenticated agricultural exporters, sellers and suppliers.
The invoices would be available in real-time to the BOC, the Department of Agriculture and the Bureau of Internal Revenue. According to the SGS, this mechanism would deter importers from manipulating or falsifying invoices and, instead, increase tax compliance and enable cross-agency trade data reconciliation.