Last year was a very busy and problematic year for the private industries transacting with the Bureau of Customs (BOC). Other than the ever increasing transaction costs when dealing with customs, importers, forwarders, shipping lines and importers had to deal with difficulties brought about by the customs automation projects. By and large, the past year has resulted in increasing problems and corruption concerns for the trading community. We have summarized below some of the major developments that we expect from the customs and trade fronts in the coming months.
AFTA and ASEAN-Australia/New Zealand Agreements
The Office of the President recently issued Executive Order Nos. 850 and 851, which reflects the new duty rates for goods coming from ASEAN countries, Australia and New Zealand. BOC has now issued CMO 1-2010 to implement the said EOs. EO 850 is important because it now provides zero rates to almost 99% of goods coming from ASEAN countries. Importers, forwarders and customs brokers will have to familiarize themselves with the rules of origin for availing the preferential tariffs provided under those EOs.
Outstanding Issues on e2m
In general, e2m operations at the Port of Manila and MICP have stabilized, with some exceptions brought about by server down time and glitches in the bank clearing house system. Continuing issues, however, remain with regards to the imposition of penalties against forwarders and shipping lines.
Some freight forwarders have raised additional issues such as: unreasonable imposition of penalties for late submission of manifest and for amendment of manifest information, most of which are un-receipted; backlog of requests for amendment of manifest submissions and late submissions at the Office of the Deputy Collector at Port of Manila and MICP; additional clearance requirements from the Office of the Commissioner for such amendments, resulting in additional delays and un-receipted costs; and the lack of technical support given the fact manifests are submitted almost on a 24/7 basis.
e2m implementation at NAIA
Recently, BOC announced that e2m will be implemented at the NAIA before the end of March 2010. To date, trainings are accordingly being conducted on customs personnel. Manifest information on air shipments are different and much more complicated than sea freight shipments. In addition, most air shipments, particularly those imported by the semi-conductors and electronics industries, must be released and delivered within 6 hours from arrival of the aircraft.
Importers, brokers and forwarders will need to work very closely with BOC on the implementation of the e2m at NAIA. Failing that, we foresee delays in the processing and releasing of shipments resulting in additional storage costs, production delays and plant shutdowns. Additional concerns have been raised by the courier industry (UPS, FedEx, TNT and DHL) with regards to the unique requirements for processing and releasing express cargo.
Bulk and Break Bulk Cargo Survey
BOC recently declared that they will be issuing a new CMO to implement the cargo survey program. The previous announcement from Secretary Jun Santiago, as Chair of the Accreditation Committee, that the program will be implemented by January 2010 has caused confusion on the part of the trading community. Many importers delayed their importations on the mistaken belief that cargo survey will have to be conducted at the port of loading.
BOC has clarified that the requirement of conducting a cargo survey at the load port will be on hold pending the issuance of implementing guidelines. In a formal letter sent to BOC, the Port Users Confederation (PUC) has raised concerns of its members with regard to the lack of implementing rules (or revised rules) and the lack of stakeholders’ consultation on the planned implementation of Cargo Survey Program.
Amendment to the Customs Brokers Act
Last December 15, 2009, the President signed and approved the passage of Republic Act No. 9853, entitled: “An Act Amending RA 9280 otherwise known as the Customs Broker Act of 2004, and for other purposes”. RA 9853 was accordingly published in major newspapers last January 16, 2010.
Section 2 of RA 9853 effectively allows corporations to engage in the customs brokerage business by providing as follows: “The practice of customs brokers is a professional practice, admission to which shall be determined upon the basis of individual and personal qualifications. However, nothing in this Act shall prevent a corporation from being registered for the purpose of engaging in the business of customs brokerage as long as the corporation shall engage or hire the services of at least one (1) customs broker.”
BOC is reportedly drafting the implementing rules to allow corporations to register with the Bureau of Customs for purposes of engaging in the customs brokerage business. The draft rules will also allow general professional partnerships of customs brokers to register for purposes of engaging in their profession.
The author is an international trade, indirect tax (customs) and supply chain expert. He is the Editorial Board Chairman of Asia Customs & Trade, an online portal on customs and trade developments affecting global trade and customs compliance in Asia. He was also Bureau of Customs Deputy Commissioner for Assessment and Operations Coordinating Group (2013-2016). For questions, please email at agatonuvero@yahoo.com and agatonuvero@customstrade.asia
