Forwarders, customs houses seek step-by-step guide at BOC
CUSTOMS brokerage houses and freight forwarders want the Bureau of Customs (BOC) to issue a directive outlining step-by-step transacting procedures with the BOC owing to the implementation of Customs Administrative Order No 3-2006-A.
The new CAO, which operationalizes Republic Act 9280 or the Customs Brokers Act of 2004 at the BOC, authorizes customs brokerage corporations and freight forwarding firms' authority to lodge customs entries and/or use their employee-customs representatives to transact business at the BOC.
Atty. Romeo Sto. Tomas, executive director of the Philippine International Seafreight Forwarders Association and spokesperson of the Port Users Confederation, told PortCalls the BOC should issue such directive to ensure that forwarders and corporations may continue to transact with the agency even after the BOC implements ASYCUDAWorld later in the year.
Under ASYCUDAWorld, the BOC will require biometric signatures for uniform electronic messages based on a global, harmonized standard data, otherwise known as the World Customs Organization Customs Data Model. The shift to ASYCUDAWorld is in line with the ongoing P500-million customs modernization program which will enhance current day-to-day operations of the BOC involving import entry lodgment, the Valuation Reference Information System, selectivity, bank payment transactions, electronic manifest system assessment process, and online releasing.
Sto. Tomas said the directive is needed to prevent confusion once the BOC starts using ASYCUDAWorld this year. The system will only recognize individual biometrics, electronic signatures and tax identification numbers.
For now, corporations and freight forwarders are still allowed to lodge customs entries using their corporate TIN. Which TIN to use in import entries appears to be the most contentious issue under the new CAO and the impending ASYCUDAWorld.
According to a PortCalls source, using the individual broker's TIN in entries will ensure compliance to the soon-to-be implemented ASYCUDAWorld and with provisions of RA 9280.
Sto. Tomas said, "The BOC should address this issue immediately to prevent any problem in the future especially since there is a provision in the new CAO that states nothing prevents freight forwarders and customs brokerage houses to customs clear."
He stressed any order that contravenes with the new CAO will prevent the smooth flow of transaction between forwarders and the BOC.
Raising issues
Earlier, PortCalls columnist and international customs and trade consultant Atty. Agaton Teodoro Uvero, in his column Across Borders, raised the question of whether the revised rules will allow corporations to still file import entries using their TIN as corporate broker in the Automated Customs Operating System, with the entries signed by their principal or alternate customs brokers.
Uvero wrote in his September 4, 2006 column: "The CAO is quite clear on this: Only licensed customs brokers duly accredited by BOC (as an individual or as partner of a general professional partnership) may sign the import and export entries. A contrary opinion is that customs brokerage corporations should still be allowed to file their import entries using their principal or alternate brokers based on the provision that 'nothing herein shall be construed as prohibiting corporations engaged in the business of customs brokerage to transact business with the bureau pertaining to shipments of their clients for as long as entries with supporting documents are duly signed by a licensed accredited customs broker'. This phrase is, however, qualified by the provision that import and export entries must be "duly signed by licensed and BOC accredited customs brokers".
"Under the revised rules, the term customs broker refers to 'any bona fide holder of a valid Certificate of Registration/Professional Identification Card issued by the Professional Regulatory Board and the Professional Regulation Commission who is accredited to practice in the Bureau of Customs'. The definition does not refer to a corporate customs broker. Stated otherwise, a BOC-accredited customs broker is an individual professional accredited under the present rules. The phrase 'to transact business' may refer to the customs processing of import and export entries, and not to the signing of such entries. Given that definition, what will happen now to corporations previously accredited under the old rules?"
Uvero also explained that before the passage of Republic Act 9280 and as provided under the old accreditation system, "corporations (with their principal and alternate customs brokers) are required to be accredited at each and every customs collection district. Once accredited by the collection district concerned, the TIN of the corporation is uploaded to the ACOS before actual filing of any import entry is allowed. The TIN is a required field of information when the electronic copy of the import entry (otherwise known as the Single Administrative Document or SAD) is filled out at the Entry Encoding Center operated by the Philippine Chamber of Commerce and Industry. Without this TIN, corporations are unable to file import entries under their corporate name using their principal or alternate customs brokers.
"Under the rules provided in CAO 3-2006-A, only individuals may be accredited and as such, only the TIN of these accredited individual customs brokers or general professional partnerships may be uploaded in the ACOS. Considering that corporations are not allowed to be accredited under the new rules, the customs accreditations previously issued to these corporations are deemed to have lapsed or expired and as such, the corporate TIN uploaded in the ACOS will have to be removed. To date, however, the TIN of corporations remains in the ACOS."
Uvero added that "the revised CAO has specific provisions as to who can be customs brokers in the import and export entries. And these specific rules refer to individuals and not to corporations. Unfortunately, while the rules seem to be clear on who is allowed to sign the import and export entry as a customs broker, present customs operations still allow corporations to file their import entries although some ports have reportedly disallowed the filing of import entries under the TIN of corporations. Going forward, will customs then remove the TIN from the ACOS and, if yes, when? Or will customs still allow corporations to file the import entries, notwithstanding the contrary provisions in the revised rules?
"The CAO provides that existing customs brokerage corporations may continue to transact "business" with customs, however, the rules provide that only BOC-accredited customs brokers may sign the import and export entries. If customs will allow corporations to continue filing their entries, what will be the basis for their accreditation? Customs will have to clarify these seemingly conflicting provisions. In addition, customs should also issue guidelines as to the apparent disconnect between the revised rules as against actual practices."
THE Professional Regulatory Board for Customs Brokers (PRBCB) is determined to enforce the full provisions of Republic Act 9280 or the Customs Brokers Act of 2004 even if the Bureau of Customs (BOC) insists on implementing Customs Administrative Order (CAO) 3-2006-A.
PRBCB chairman Constantino Calica told PortCalls the board will not be affected by BOC moves to enforce the law. "The brokers will choose whether to follow the BOC or the PRBCB. If they chose to follow the new CAO, they will be facing the full penal provision of RA 9280 as the new CAO contravenes the law," Calica said.
For starters, the Board will send out subpoenas this week to "erring" brokers and customs brokerage houses.
Calica stressed the subpoenas will also serve as a strong warning to brokers. "We are reiterating our earlier warning that brokers found violating the law will be subject to the full extent of the law including cancellation of license, fines and imprisonment," Calica stressed, adding the Board already has a list of brokers and corporations which it considers in violation of RA 9280.
Under the law, violators face fines of up to P500,000, imprisonment of up to 12 years, and cancellation of license to practice the profession.
Calica reiterated brokers should maintain their independence particularly in lodging and signing of import shipments. He said employment in a corporation or freight forwarding firm will only influence the broker's impartiality.
PRBCB recently ruled that freight forwarding firms may engage, but not employ, the professional services of a customs broker in the customs clearance of their imported/exported goods.
The broker, it added, is not prohibited from being employed by a forwarding firm as a consultant, manager or in any administrative position.
The resolution also ruled the customs broker cannot act in behalf of the firm which employed him or use the latter's representatives to perform the services of a customs broker under Subsection (d) Section 6 of the IRR (implementing rules and regulations) of RA 9280 as the nature of the profession calls for independence and this would run contrary to the provisions of Section 29 of RA 9280. That section states, "No firm, company, or association may be registered or licensed as such for the practice of customs broker profession."
Infrastructure should take up 5% of GDP
, industry leader stresses
INFRASTRUCTURE spending should be pegged at 5% of the country's gross domestic product (GDP) to ensure the country is at par with world standards and to make the Philippines more competitive in the world market.
Federation of Philippine Industries (FPI) president Meneleo Carlos, in a speech at the recent Distribution Management Association of the Philippines, said the current allotment for infrastructure projects is just not enough to bolster the competitiveness of the country in the international market.
"The country should not be handicapped or crippled by the infrastructure problem of the country. About 5% of our GDP should be allotted or spent in infrastructure projects to make the Philippines compete with other countries," Carlos said.
The country only allots 0.5% of the country's GDP for infrastructure projects. According to Carlos, the low allotment causes delays to major projects such as ports and road segments vital in the movement of goods.
Records also show that the country is ranked 89th in the world in terms of infrastructure.
Carlos also urged government to exercise its power of eminent domain so that such projects as the Northrail and port projects such as the Batangas Port are accelerated and not hampered by the right-of-way (ROW) problems.
"Almost every major infrastructure project in the country is bugged by the ROW issue rendering undue delay and undue costs," Carlos noted.
The Northrail project is still unfinished since it started two years ago due to the ROW issue. The government has had to seek a grant from the Chinese government to pay informal settlers dislocated by the project.
The ROW issue also held back the Batangas port project. It took the Philippine Ports Authority and the Department of Public Works and Highways almost five years to settle the ROW issue with informal settlers just to have the access road to the port put in place which, according to Carlos, is too much of a delay and too much unnecessary spending.
"Unless the Government exerts his will to put vital infrastructure projects in place the soonest time possible and spend the right amount, the Philippines will continue to be a handicapped and a crippled player," Carlos stressed.
LOCAL cargo carrier Lorenzo Shipping Corp. (LSC) recorded a 6.1% increase in net revenue for the first six months of the year to P660.96 million from P622.79 million posted for the same period last year. This, despite a 9% decline in TEU volume.
LSC attributed the decline in TEU volume to lower domestic cargo volume contribution from various customer segments. "Agricultural products such as sugar and corn have also declined during the first half of the year," the company said in a report.
The increase in net revenue, on the other hand, may be attributed to the full implementation of a 6.99% automatic fuel rate adjustment in June 2005, the bunker surcharge increase which took effect last October 2005, and a series of freight increases in foreign shipping lines' cargoes.
Operating expenses increased P58.8 million or 10.8% substantially due to fuel price increases, amortization of drydocking charges, manpower and repairs and maintenance costs.
Interest and financial charges decreased 28.7% despite the accrual of interest expense representing dividends on preferred shares and discounting (interest factor) on redeemable preferred shares. Otherwise the exact decrease would be P15.6M or 40% as a result of repayment of loans.
Miscellaneous income also registered a P1.5 million or 8% increase due to higher door-to-door shipments.
To date, the company's current ratio (current assets divided by current liabilities) increased from 0.66 to 1.04 for the same period due to increase in net revenue.
Acid-Test Ratio (cash plus receivable divided by current liabilities) also increased from 0.50 to 0.91.
Operating profit margin (earnings before income tax divided by net revenue) decreased from 13% to 9% due to higher operating expenses.
Domestic Trade
Volume down but value up in Q4 2005
THE volume of commodities traded in the Philippines
declined in the fourth quarter of 2005 compared with the same
period a year earlier even as the value of traded goods grew
by as much as a fifth.
Total domestic trade transactions in the fourth quarter of
2005 decreased 7.4% to 4.19 million tons from 4.53 million
tons in the fourth quarter of 2004, according to a report
from the National Statistics Office (NSO).
The value of traded goods in the country during the period
rose 19.5% to P92.91 billion from P77.73 billion, two years
after President Macapagal-Arroyo launched the Strong Republic
Nautical Highway (SRNH) project.
According to the NSO report, the bulk or 99.6% of the traded
goods for the period in review was shipped over water from
99.1% in 2004.
The NSO also reported that food and live animals contributed
the largest value - P28.43 billion or 30.6% of the total traded
throughout the country in the fourth quarter of 2005.
Mineral fuels, lubricants and related materials followed with
P15.88 billion or 17.1% and machinery and transport equipment
with P13.51 billion or 14.5%.
The National Capital Region accounted for most of the traded
goods amounting to P20.80 billion or 22.4%. On the other hand,
Cagayan Valley contributed the least share in domestic trade
with P45,000.
In 2003, the government launched the SRNH in an effort to
improve transport cost and efficiency. The SRNH involves the
use of roll on-roll off vessels as virtual moving bridges
to connect far-flung areas to spur economic growth. Since
the, the SRNH has brought down the percentage of goods spoilage
as it slashed travel time from 36 to 24 hours from Luzon to
Mindanao and cut cost by almost 50%.
Current linkages of the SRNH include the Western Nautical
Highway or the western seaboard route from Manila to Dipolog
City or the Northwestern tip of Mindanao, which connects to
the central route at Cebu City in Central Visayas. The Central
Nautical Highway is the central route connecting Pilar, Sorsogon
to Balingoan, Misamis Oriental, passing through Central Visayas
and connecting to the East-West routes at Cataingan, Masbate
and San Carlos City in Negros Occidental. The Eastern Nautical
highway is the eastern sea link that binds Biliran, Leyte
to Surigao City or the Northwestern tip of Mindanao and connects
to the central route of Cataingan, Masbate.
