Home » Across Borders » DOF Review of Import Entries

Atty. Agaton Uvero RECENT issuances from the Department of Finance (DOF) seem to indicate an increasing interest on the part of the department to exercise its over-sight function over the Bureau of Customs (BOC).

CMO 31-2010

Last August, BOC issued CMO 31-2010 entitled “Submission of Certified Copies of Income Tax Returns and VAT Returns by Bureau of Customs Accredited Importers”. The CMO mandates all BOC-accredited importers to submit ITRs and VAT returns for the immediately preceding three years within 15 days from publication of the CMO.

Industry associations and importers have already raised issues on this additional documentation required from existing accredited importers.

Unnecessary Requirements

In a letter submitted to customs, the Port Users Confederation (PUC) raised their opposition to these requirements for the following reasons:

– The submission of ITRs and VAT returns are already covered under the Post Entry Audit regime. Under existing rules, BOC can audit companies within three years from importation and as part of the mandatory record keeping requirements, all importers are mandated to present their ITRs and VAT returns to the customs auditors upon the conduct of a compliance audit.

– In the past years, the industry has been advocating for transparency and simplification in the accreditation process and in recent years, BOC has reduced the number of documents required for accreditation. PUC’s member associations fear that the additional documents required will be a reversion to the old tedious and costly process.

– The CMO does not cover cases where companies are newly registered (with no previous ITRs and VAT returns yet) and do not expressly provide the person authorized to “certify” the documents to be submitted.

It has been almost three months since the implementation of CMO 31-2010 and the voluminous documents submitted to customs have started gathering dust at the BOC accreditation office.

DOF Order 47-2010

Last week, DOF issued Department Order No. 47-2010 requiring BOC ports to submit all import entries and related documents to the DOF prior to processing the same. In a Memorandum dated November 9, 2010, BOC implemented DOF Order 47-2010 by providing as follows:

(1) Prior submission and/or processing by the Marine Division (or any other proper office in the BOC), a clear and legible copy of the Import Entry Declaration (inclusive of the Final Invoice, Bill of Lading, Packing List and other documents appended to the IED) shall be submitted to the Revenue Operations and Legal Affairs Group (DOF-ROG) of this Department.

(2) The copy of the IED shall be scanned and sent by email to DOF-ROG at rolag@dof.g0v.ph. Confirmation of DOF-ROG receipt of the scanned copies of the documents shall also be sent by the DOF-ROG by e-mail, a printed copy of which shall be evidence of receipt sufficient for the Marine Division (or any other proper office in the BOC) to accept the IED for processing.

(3) The Marine Division (or any other proper office of the BOC) shall not receive and/or process any IED without evidence that a copy of the same has been submitted to DOF-ROG.

Another Layer of Bureaucracy

The submission of import documents prior to customs processing will provide DOF access and control over all import transactions at the BOC. Given the volume of import transactions, the scanning and submission of the import documents, including the review and approval of such submissions, will be a logistics nightmare for both BOC and DOF-ROG. This additional process will certainly result in delays in the processing of the import entries at the BOC.

BOC has long been automating its import process and this new development seems to be proceeding toward the opposite direction. If DOF wanted access and control of the import transactions at the BOC, it should have simply asked BOC for access to the current E2M system.

Hit or Miss

While we do not question the intention of both BOC and DOF to improve the current systems, the private sector should expect further misses from the new administration. Unfortunately, all these misses (including the past ones) will result in delays and losses on the part of the importers.

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 Graduate School and BayanTrade Academy on International Supply Chain Management. Please contact agatonuvero@yahoo.com for your comments.

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