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Rulings sow greater confusion in customs brokerage profession
CUSTOMS commissioner Napoleon Morales has
reportedly agreed to allow licensed customs brokers and customs
representatives (who are employees of freight forwarding firms
and customs brokerage houses) to process import entries with
the Bureau of Customs. The import entries will still be signed,
however, by the individual customs broker, sources privy to
the discussions on amendments to Customs Administrative Order
(CAO) No 3-2006 told PortCalls. This arrangement will allegedly
be included in the revised CAO to be issued anytime soon.
The CAO, whose implementation has already been twice postponed,
should take effect on August 21 unless another extension is
granted by the Customs commissioner - a situation which many
in the industry believe would be unlikely at this point.
"In effect, corporate practice is allowed after all,"
another source sitting on the technical working group (TWG)
working on the CAO revision claimed. The BOC legal division,
headed by Atty. Reynaldo Umali, as of presstime last Friday
was still finalizing the amended CAO for submission to Finance
Secretary Margarito Teves later that day. The amended CAO
was expected to be published in a daily newspaper on August
22. It will take full effect 15 days after publication date.
It is interesting to note though that the revised CAO is at
odds with an issuance of another government agency, specifically
the Professional Regulation Commission through the Professional
Regulatory Board for Customs Brokers (PRBCB). The PRBCB last
week issued a circular which allows the engagement, but not
employment, of customs brokers by corporations. The Board
said employment would make the broker partial to his company,
thus losing his independence altogether. "If that happens,
one of the agencies (BOC or PRBCB) will be violating the law
and hence, the violating agency and its officials may be at
risk of being hailed to court for gross ignorance of the law,"
yet another source privy to the discussions told PortCalls.
In its circular, the PRBCB said a custom broker is "not
prohibited from being employed by a forwarding firm as a consultant,
manager or in any administrative position." However,
he "cannot act as customs broker for and in behalf of
the firm which employed him or use the latter's representatives
to perform the services of customs broker under Subsection
(d) of Sec. 6 or the IRR (imple-menting rules and regulations)
of RA 9280 as the nature of his profession calls for his independence,"
the ruling stressed. The Board also explained such would run
contrary to the provision of Sec. 29 of RA 9280, which states
that "No firm, company, or association may be registered
or licensed as such for the practice of customs broker profession.
"To allow the employee customs broker of the forwarding
company to transact customs business in behalf of his employer
forwarderÉ is an indirect violation of the law prohibiting
corporate practice of customs broker," it added.
An eye on violators
Meanwhile, one of the pro-RA 9280 groups will reportedly monitor
violators of the PRC circular. "Once evidence is available
as to the violation, an administrative case may be filed with
the PRC against the licensed customs broker. Another option
is to file a criminal case against the licensed customs broker
and other third parties before the regular courts," a
legal expert told PortCalls. PortCalls was also made to understand
that failure to comply with the PRBCB circular may result
in the cancellation of the customs broker license. This will
mean the cancellation of accreditation of the customs broker
with the BOC.
SHIPPERS waiting for a reprieve from skyrocketing fuel prices
will have to feel the full brunt of the increases after the
Philippine Ports Authority (PPA) scrapped talks with shipping
lines on possible discounts for shippers. PPA said it decided
to stop negotiations after parties failed to reach a win-win
resolution a year after discussions commenced. "No one
wants to give in," Raul Santos, PPA assistant general
manager for corporate affairs and special projects, told PortCalls,
adding everyone wanted their efforts reciprocated first before
giving in to a cut in shipping rates. Since last year, the
PPA and the transport department have been asking shipping
lines and oil players in the country to apply a 30% discount
on shipping costs particularly on products from Mindanao going
to Luzon. To date only 2GO, the logistics arm of Aboitiz Transport
System, is giving a 15% discount on agricultural product shipments
from Mindanao. Regular 2GO RRTS rates for Manila-Visayas are
P2,780 per lane meter; Manila-North Mindanao, P3,107 per lane
meter; Manila South-Mindanao, P4,306 per lane meter; Visayas-Visayas
P1,744; Visayas-North Mindanao, P2,017; Visayas-South Mindanao,
P3,434, North Mindanao-North Mindanao, P1,090; and South Mindanao-South
Mindanao, P2,344. Other operators are hesitant to give discounts
pending the outcome of a reciprocity program they are asking
from the government. Shipping lines want a 10-15% cut on oil
prices to recover losses resulting from the discounts. Oil
prices have increased almost P3 in the last two months due
to the continuous rise in prices in the world market. Diesel,
the fuel commonly used by shipping lines, rose P2 in the last
two months from P35.50 per liter to about P37.50 to date.
The Department of Energy said prices could still go up by
about P0.50 per liter weekly if current trend continues.
CCBI:
Delays in CAO implementation to wreak havoc on brokerage profession,
BOC
THE Chamber of Customs Brokers, Inc. (CCBI) does not want
any further delays in the implementation of Customs Administrative
Order (CAO) 3-2006. CAO 3-2006 operationalizes Republic Act
(RA) 9280 or the Customs Brokers Act of 2004 at the Bureau
of Customs (BOC). In a general membership meeting held last
week, CCBI said another extension will wreak havoc not only
on the customs brokerage profession but also the BOC's revenue
generation and trade facilitation functions. "CCBI is
ready for the full implementation of RA 9280 and CAO 3-2006.
The 30-day extension order should not be extended anymore,"
the CCBI said during its meeting. CCBI president Atty. Jose
Leabres, in an earlier letter to Customs commissioner Napoleon
Morales, said "The customs brokers and customs representatives,
duly-accredited by the CCBI, are ready and able to operate
as your partner for trade facilitation and revenue collection."
CCBI, the only accredited professional organization recognized
under the CAO, has already accredited 1,291 customs brokers;
a total of 4,239 customs representatives or personeros have
also attended CCBI-conducted trainings as of July. "With
this number, your function for trade facilitation and revenue
collection will not be jeopardized with the full implementation
of the law," Leabres said. He stressed the almost three
years since RA 9280 was signed by President Arroyo and the
almost six months since the CAO 3-2006 was approved by Finance
chief Margarito Teves are more than enough time for affected
companies to change business practices. CAO 3-2006 was scheduled
to originally take effect May 22. However, Morales issued
a 60-day suspension (until July 21) to avoid what he said
was the impending dislocation or termination of employment
of personnel of customs brokerage firms, and other logistical
issues that may result from the strict implementation of the
CAO. The extension was also issued to review provisions of
the CAO in relation to trade facilitation. On July 19, Morales
again issued an additional 30-day extension or until August
21, to give time to the technical working group working on
the amendment to CAO 3-2006 to complete its work.
LUZON shippers will have to shell out more money if the ongoing
squabble at Poro Point in San Fernando, La Union is not settled
immediately. The House special committee on bases conversion
earlier said they will look into a report that private operator
Bulk Handlers Inc. (BHI), located within the Poro Point Special
Economic and Freeport Zone, violated environmental laws, prompting
the Department of Environment and Natural Resources to issue
a cease and desist order (CDO) against the firm last August
9. Rep. Edwin C. Uy (2nd District, Isabela), committee chair,
said BHI will be investigated. A principal whose vessels were
trapped in Poro Point due to the row said more and more international
ships are sailing towards South Harbor, Subic Bay Freeport
and Harbour Centre to avoid incurring demurrage fees. He added
at least five of his ships have been diverted to the said
ports in the past week except for one that was at Poro port
when the cease and desist order (CDO) was issued by the port
and was levied a $12,000 demurrage fee daily. "Thousands
of pesos will have to be shouldered by the charterer or shipper
the longer the vessel stays at Poro Point or the farther the
docking," the source said. He added that authorities
should immediately settle the tiff so that Poro Point can
get back to business.
NEW lease agreements worth $5.3 million were signed recently
between the Subic Bay Metropolitan Authority (SBMA) and ten
new investors. Out of the $5.3 million total committed investments,
98% or $5.18 million were foreign direct investments (FDIs).
Currently, the SBMA has approved a total of $1.34 billion
in pledged FDIs. Most of the ten new SBMA business partners
are either complementing or supplying the construction of
Hanjin, one of the world's largest shipbuilding facilities.
The new SBMA business partners include steel pipe manufacturer
Mayer Steel Pipe Corporation with $3.1 million, estate developer
Amires Corporation with $755,000, Taiwanese export trader
Taiming International Trading Inc. with $560,000, Japanese
industrial machinery manufacturer Mechatro Inc. with $231,000,
and Norwegian manufacturer of aluminum scaffoldings Delta
Production Phils. Corp. with $155,675. English language training
center for Koreans, Sky English Fluency, Inc. has committed
$140,000; Taiwanese differential probe assembler Sapphire
Instruments Subic Bay, Inc. $120,000; Taiwanese manufacturer
of granite and marble Topwin Stone Subic, Inc. $100,000; and
Taiwanese garden tools and hardware trader Wise Center (Phils.)
Precision Appliances, $20,000. The lone Filipino investor
is multi-dimensional and holistic retirement village developer
Tropical Paradise Retire-ment Village, Inc., which counts
as an expansion project, with $115,384.
FIRST-HALF exports in ecozones grew 11% to $16.72 billion
from $15.65 billion in the same period in 2005, a Philippine
Economic Zone Authority (PEZA) report showed. Exports of PEZA
locators accounted for 73.5% of the country's total exports
for the first semester. The 42 private ecozones shipped $12.5
billion worth of products during the period, higher by 8%
from the previous year's $11.57 billion. The locators in these
zones accounted for 77% of total PEZA shipments. Exports of
locators in public ecozones grew at a faster rate of 14.7%
to $3.83 billion from $3.34 billion last year although this
accounted for only 23% of total exports. Companies operating
in the 28 information technology parks and buildings sustained
strong growth as exports of services rose 148% to $397.8 million
from $180.27 million a year ago. Gateway Business Park in
Cavite, home to American chip manufacturer Intel Corp., shipped
the highest value of goods at $2.89 billion, up 6% from $2.72
billion last year. Ayala-owned Laguna Technopark registered
the second highest amount at $2.74 billion, a drop of 1.72%
from $2.79 billion in 2005. Among its major export-locators
are Panasonic Communication Philippines Corp. and Toshiba
Information Equipment Philippines. Government-run Baguio City
ecozone, whose biggest locator is Texas Instruments, came
in third with shipments totaling $1.74 billion, an increase
of 32% from a year ago's $1.32 billion. Among the IT buildings/ecozones,
Eastwood City registered the highest value of exports at $89.59
million, up 70% from $52.63 million last year. Since PEZA
locators are mostly in electronics, the performance of this
sector is normally the measure for the entire merchandise
exports. Merchandise goods exports in the first half totaled
$22.74 billion, up 16.5% from $19.47 billion in 2005. Semiconductors,
the biggest chunk of electronic products with 43.4% of total
exports, grew 9.1% to $1.756 billion. For the first half,
exports of semiconductors increased 17.2% with revenues reaching
almost $11 billion.
