Home » Customs & Trade » BOC recommends 80% cut in container security fee

CUSTOMS Commissioner Napoleon Morales has recommended an 80% reduction in the container security fee (CSF) as proposed by the technical working group (TWG) which restudied the fee.

In a letter to Finance Secretary Margarito Teves, Morales said the TWG recommendation to reduce the fee to $5 from $25 per 20-footer and to $10 from $50 per 40-footer is tenable and a win-win solution that would benefit both consignees and the bureau.

He said the variables used in calculating the present fees have changed in the last two years so that the nomenclature can now stand revision.

The BOC is also recommending that the number of scanners for installation be cut by a third from 30 to only 10.

Based on the assumption that only 10 scanners will be installed and the CSF reduced by 80%, the machines would have been fully paid for by 2026, according to an earlier estimate by the Port Users Confederation (PUC), a member of the TWG. The BOC will also have a total net flow of P748,850,023, it said.

PUC said the 10 x-ray machines are sufficient and that if the government insists on purchasing 30 machines and charges the present fees of $25 and $50, it shall have fully paid for the scanners by 2027 and attained a total net cash flow of P25, 872,972,206 at the expense of port users.

This scenario, PUC said, would have made the scanning project a revenue-generation measure rather than one designed to promote security and trade facilitation, as was originally intended.

The 10 machines should go to container ports or two each at the Port of Manila, Davao and the Manila International Container Terminal, and one each at the ports of Batangas, Cebu, Cagayan de Oro and Subic, PUC said.

As of presstime Friday, BOC and PUC officials were still in a closed-door meeting with Secretary Teves.

Once approved by the finance chief, the recommendation will be implemented right away as it no longer has to go through the Office of the President, according to the BOC.

Port congestion

As news of the recommendation for a CSF decrease spread, consignees began holding the release of their cargo leading to port congestion. Asian Terminals, Inc. and International Container Terminal Services, Inc said they expect further bottlenecks this week if a decision is not handed down soon.

Last week, the Philippine Chamber of Commerce and Industry (PCCI) joined the call to reduce the CSF.

PCCI chairman Ambassador Donald Dee said the government should not insist on charging the high fees but instead look at drastically reducing smuggling.

“The scanners are for curbing smuggling and other security measures. And that could pay for itself since there will be revenues involved. If the BOC insists on collecting the prescribed fee then do not implement anything at all,”Dee stressed.

“We believe that only 10 x-ray machines should be purchased and these can be utilized by highly containerized ports,”Dee added.

He explained that installing 30 scanners is too much, saying even developed economies such as the United States and Australia use a maximum of five per main port of entry.

The government, through Executive Order 592, has ordered the installation of the non-intrusive scanning devices in all major ports to ensure that all cargoes, particularly those US-bound, are free from materials used for weapons of mass destruction.

The BOC has already installed 10 scanners in major ocean gateways including at the South Harbor, the Manila International Container Port, Cebu, Subic, Batangas, Zamboanga, Davao, Cagayan de Oro and Clark.

The BOC is looking at installing loose cargo scanners in major airports such as at the Ninoy Aquino International Airport, Clark, Subic, Cebu, Zamboanga and Davao.

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