IN the past months, the Bureau of Customs (BOC) has been accelerating its automation programs for the purpose of further facilitating trade and simplifying customs procedures. In this column, we will highlight some of the recent problems resulting from these programs.
Customs authorities have been promoting their “electronic-to-mobile” (e2m) program for more than two years now. While the program mainly provides for automation of current manual processes, customs has been harping on the future mobile capabilities of the program, to much confusion. Unfortunately and as shown in recent weeks, the more basic automation stage (manual to electronic) has been a mismanaged activity as far as the shipping and forwarding industries are concerned.
e2m Failure at MICP
These past weeks, customs forwarders and brokers have been experiencing great difficulties (and failures) in clearing goods at customs resulting in substantial losses on their part and on the importers. While there were a few successful automated submissions of manifests by shipping lines, most shipping lines and forwarders encountered serious problems and system failures in the recent implementation of the e2m Customs IAS Electronic Manifest at MICP, as provided in the recently issued CMO 37-2009 (implementing CAO 1-2007).
So far, the general observation is that the program has been improperly planned and implemented. As one forwarder said, the customs MISTG group has “placed the cart before the horse” by designing the program without first looking closely at actual operations. There was no parallel run and no back-up system. It should have been a case of defining in detail the process requirements first and designing the program to suit such specific requirements.
We have outlined below some of the reported problems of the forwarding industry:
- e2m Customs not allowing registration of shipping line main manifests and co-load manifests if submitted less than 12 hours before vessel arrival resulting in the following:
- “manual registration” of the main manifest submitted by shipping lines (unfortunately, MISTG staff are totally unprepared for such manual process);
- delay in the submission of the consolidation manifests of forwarders; and
- failure of customs brokers to lodge import entries through the VASP.
- strict implementation of the 12-hour rule before vessel arrival resulting in the following:
- sequential submission of manifest information as follows: 1st — main manifest, 2nd —“register” main manifest within VASP, 3rd — submit co-load manifests, 4th — validate consolidation manifest;
- forwarders to await registration of main manifest which may be submitted beyond the 12-hour deadline; and
- import entries not processed if consolidation B/Ls are not yet validated.
- e2m failure to register consolidation manifest submitted by forwarders even if shipping line manifest is already registered because the customs program requires matching of the packaging code used in consolidation House B/L to the packaging code used in shipping line Master B/L
- forwarders and customs brokers are unable to process transshipment entries for their PEZA clients due to discrepancy between shipping line info as against consolidation manifest and the failure of customs staff to view manifest data for transshipment cargo
- technical errors in the customs program resulting in failures and delays in the registration of manifests submitted by shipping lines (as reportedly experienced by Wanhai, APL, RCL, Feeders, K-Line, and many others)
Penalties and Losses
The recently issued CMO 37–2009 provides that e-IFM (master bills of lading of shipments consigned to ultimate and nominal consignees) and e-CCM (house bills of lading of shipments consigned to the ultimate consignees de-grouped/ split from the master bills of lading of shipments whose consignees are just nominal such as banks, forwarders and consolidators) shall be submitted 12 hours before arrival of the carrying vessel. Failure to submit such information within the prescribed period shall result in administrative penalties.
Obviously, there will be no penalties to be imposed as a result of the system failure of e2m. In the meantime, will customs MISTG reimburse importers for substantial losses incurred from delayed releases (additional arrastre and wharfage fees, container storage and demurrage fees, trucking demurrage, delayed production, overtime costs, etc.)?
The author is the legal director of AFPI, PISFA and PUC. He is a lecturer on logistics, indirect tax and customs, and a trainor of Ateneo and BayanTrade on International Supply Chain Management. Please contact email@example.com for your comments.