Redundant, inconsistent
provisions dot proposed anti-smuggling bill
THE proposed Senate anti-smuggling bill
contains provisions redundant with current practices within
the Bureau of Customs (BOC) or other laws of the land. This
is the opinion of international trade and customs expert Atty.
Agaton Teodoro O. Uvero, who was commissioned by private sector
groups to conduct a study on the proposed bill.
Uvero, who also writes a column for PortCalls called Across
Borders, said he also found provisions inconsistent with the
Asean Harmonized Tariff Nomenclature and the country’s
plan to accede to the Revised Kyoto Convention. In addition,
other provisions need further study based on existing and
accepted commercial practices.
For example, Uvero said, the bill’s Section 2 which
amends Section 201 of the Tariff and Customs Code of the Philippines
(TCCP) “should be deleted as this provides a notional
and arbitrary basis for rejecting the transaction value of
imported articles. The proposed revision also seems to attempt
to address instances of dumping (e.g. “abnormal discount
or reduction from the ordinary competitive price”) which
is already provided under the existing law on dumping (Section
301, TCCP as amended by RA 8752).”
The provision on the Valuation and Classification Review Committee
(VCRC) that seeks to determine valuation issues is also redundant
as it is an existing customs practice; the VCRC is only an
ad-hoc body of the BOC, making it impractical to legislate
such a body, he noted.
Uvero saw no need for the creation of the office of a deputy
commissioner for Audit and Transparency under Section 3 (amending
Section 601, TCCP - Chief Officials of the Bureau of Customs)
as current laws allow the President to reorganize and restructure
the BOC.
The existing Post Entry Audit Group at the BOC, he noted,
is trained to conduct such audits, which requires in-depth
knowledge of import/export processes, trade rules, customs
valuation, tariff classification, cargo handling, freight
forwarding and many other subjects.
Further study is also needed on the “practicality and
legality of assigning a constitutional body (Commission on
Audit) to perform audit on the private sector as well as allow
private auditing firms to conduct the audit and perform a
government function due to possible ‘conflict-of-interest’
issues,” Uvero said.
On the proposed bill’s Section 9 (Creating a new Section
1001-A, TCCP or the Transmission of Electronic Copy of Manifest/Stowage
Plan Prior to Arrival), Uvero explained there are already
existing efforts to automate the transmission of such to the
BOC and the process may just be implemented through simple
inter-agency arrangements.
“In addition, the proposal needs to delineate between
the requirements for maritime transport as against that of
air transport, the latter having different procedures and
transport documents,” he noted.
Section 13 of the proposal amending Section 1008 of the TCCP,
on the other hand, must be “rewritten in express language
to ensure the requirement for a ‘certificate of discharge’
applies only to transshipped articles that are subject to
excise taxes.
Uvero said among provisions that should be deleted (aside
from Section 2) are Section 23 that seeks to amend Section
1409, TCCP or Employment and Compensation of Persons to Assist
in Appraisal or Classification of Articles; and Section 57
that seeks to amend Section 3601, TCCP or the provision on
Unlawful Importation.
Provisions that require further study, he said, include Section
27 amending Section 1901, TCCP or the Establishment and Supervision
of Warehouses; Section 28 amending Section 1902, TCCP or Responsibility
of Operators; Section 30 or creating a new Section 1930-A
or the Regular Audit of Bonded Warehouses; Section 31 amending
Section 1904, TCCP or Irrevocable Domestic Letter of Credit
or Bank Guarantee or Warehousing Bond; Section 36 that intend
to create a new Section 1910, TCCP or Acts Deemed as Smuggling
Punishable under Sections 3601 and 3602 of the TCCP; as well
as Section 46 (amending Section 2503, TCCP or Undervaluation,
Misclassification and Misdeclaration in Entry; and Section
65 (creating a new Section 3613, TCCP or the Summary Procedure
for Seizure and Forfeiture.
The provisions that should belong or empower other government
agency include Section 19 which seeks to create a new Section
1212, TCCP or Import Permit/Import Authority for Agricultural
Products.
According to Uvero, regulated products or importations requiring
import permits from government agencies by their very nature
are not prohibited per se and thus, not subject to seizure.
Government agencies, in their discretion, should be allowed
to issue import permits even after the arrival of the shipment
(particularly for air freight shipments) but prior to release
from customs custody.
He added that should an import permit be necessary for imported
agricultural products prior to arrival, there is a need to
define the meaning of “agricultural product” to
prevent undue harassment on legitimate traders. In addition,
there must be a government agency tasked to provide such definition
and to certify exclusions from such definition.
Also Uvero explained a stringent legislation on regulated
imports may result in a restraint to trade and a non-tariff
barrier, inconsistent to the WTO General Principle providing
“protection only through tariffs”.
Meanwhile, proposed conditions that contradict existing commercial
practices include Section 15 that seeks to amend Section 1025,
TCCP or the Export Product to Conform to Standard Grades;
Section 20 that seeks to amend Section 1401, TCCP or the Conditions
for Examination which is inconsistent with the AHTN; Section
25 amending Section 1801, TCCP or the Abandonment, Kinds and
Effects of is against commercial practices and the provisions
of the RKC; Section 34 amending Section 1907, TCCP or Withdrawal
of Article from Bonded Warehouse; and Section 38 amending
Section 2001, TCCP or the Establishment of Bonded Manufacturing
Warehouses.
Pending at both Houses of Congress since 2005, the anti-smuggling
bill seeks to impose stricter penalties against smuggling,
which has been bleeding government coffers of about P200 billion
each year.
Mindanao Container Terminal operator
likely known today
THE Phividec Industrial Authority (PIA) is scheduled
to award today the 25-year cargo-handling contract for Mindanao
Container Terminal.
The bidders include International Container Terminal Services,
Inc. (ICTSI), Asian Terminals, Inc, and Harbour Centre Port
Terminals, Inc.
Barring any major development, sources said ICTSI has the
inside track over the two other bidders.
PIA is privatizing the management and operation of MCT to
attract more direct callers and increase cargo traffic in
the port.
MCT has four regular callers — Maersk, National Marine
Corp, Lorenzo Shipping Corp, and MCC Transport, the joint
venture between Maersk and the Aboitiz Group’s shipping
unit.
Based on the bidding terms of reference, bidders should have
a minimum paid-up capital of P2 million. The minimum fixed
concession fee for the management and operation of MCT is
P2.145 billion.
Located along the Macalajar Bay in Tagoloan, Misamis Oriental,
MCT is seen as a catalyst to economic and industrial development
of Metro Cagayan De Oro and Northern Mindanao.
MCT is forecasting a 10% increase in shipments passing through
the port this year mostly from agricultural products as well
as fruit product plantations and other investing firms in
the area.
In its first year of full commercial operations, MCT posted
a 100% jump in cargo volume last year posting more than 80,000
TEUs from only about 38,000-40,000 TEUs in 2006.
MCT was barred from accepting local and international cargoes
in the last five years after Oro Port, the cargo-handling
operator of nearby government port Cagayan de Oro, convinced
the court on the exclusivity of its contract to handle cargoes
in and out of Cagayan de Oro.
The court, however, lifted its temporary restraining order
in late 2006, paving the way for the commercial operations
of MCT.
Apr 3 seminar tackles EU cargo security
requirements
THE Department of Industry (DTI) and the
Philippine Exporters Confederation (Philexport) have tapped
the European Union (EU) to educate Philippine supply chain
stakeholders of new cargo security requirements coming into
play in EU-member nations.
The seminar dubbed “Doing Business with the EU –
Security and Facilitation in the International Supply Chain:
The New EU Supply Chain Security Requirement” will be
held on April 3, 2008, from 8:00 am-12 pm, at the audiovisual
room, DTI International Building, 375 Sen. Gil Puyat Ave.,
Makati City.
Speakers include Pierre Faucherand, European Commission regional
customs representative, and Susanne Aigner, Head of Section
of Supply Chain Security of the European Commission.
Recently, the EU adopted Regulation 1875/2006 aimed at increased
security for shipments entering or leaving the EU. The measures
should produce faster and better targeted customs controls
that facilitate legitimate trade but tighten minimum security
and safety requirements.
Starting January 2008, an Authorised Economic Operator (AEO)
system has also been introduced. This means reliable traders
that meet specified criteria may obtain facilitation from
security measures and also ask for simplification as provided
for under customs rules.
In addition, from July 2009 it will become mandatory for traders
to provide customs authorities with advance information on
goods brought into, or out of the customs territory of the
EU.
Seminar registration fee is P300 for Philexport members and
P400 for non-members. For more details, contact Ann Hazel
P. Javier, Senior Officer of the Project Development and Management
Department of Philexport, at telephone no. 833-2531 local
109 or e-mail to projdev@philexport.ph. You may also contact
Karen Abenes and Olive Marasigan of the DTI-Bureau of Import
Services at telephone nos. 896-4430/ 976-5730 local 3408 or
e-mail to bis_isd@yahoo.com.
THE Bureau of Customs (BOC) will come out with
streamlined warehousing rules as early as next month to monitor,
control and expedite the liquidation of warehousing entries
and the cancellation of bonds.
The move is also seen as preventing the accumulation of unliquidated
entries at the BOC.
Customs deputy commissioner Atty. Reynaldo Nicolas, in a recent
interview after public consultation on the new rules, said
the streamlined regulations will ensure that shipments under
bond are re-exported within the allowable storage period,
thereby discouraging late re-exportation and late submission
of liquidation documents.
“The new procedure will definitely reduce the work load
of both the BOC and the importer and is very beneficial on
the part of the shipper as it will eliminate partial liquidation
after every export shipment and will be replaced by a one-time
liquidation,” Nicolas said.
“It will cover any and all shipments for which bonds
have been issued as guarantee for the performance by the importer
of certain obligations due the BOC,” Nicolas said.
Under the proposal, upon performance of obligation by way
of exportation within the prescribed storage period of up
to nine months—three months longer than the existing
procedure—the importer should within the non-extendible
period of 30 calendar days from the date of complete and full
exportation submit the complete documents required for the
liquidation of the entry.
If complete importation is made before the prescribed period
expires, the importer is given 60 calendar days to submit
the complete documents required for the liquidation of the
entry.
However, if full exportation is made towards the end of the
prescribed period, the importer is given only 30 calendar
days to submit documents for the required liquidation.
“If after the prescribed period, the importer fails
to submit the required documents, the importer will be slapped
with a penalty in the form of the full 100% duties and taxes
for the imported materials barring any justifiable reasons
for failure to export such materials in the prescribed period,”
Nicolas said.
“In cases that a percentage of the importation is left
and could not be shipped out within the prescribed period,
importers are advised to immediately file for the payment
of duties and taxes for the remaining imported materials to
do away with the penalty. Failure to do so will mean payment
of duties and taxes intended for the corresponding entry,”
Nicolas noted.
Aside from the payment of duties and taxes for the corresponding
entry, the BOC will slap a P5,000 penalty plus 2% per month
fee whichever is higher of the collectible duties and taxes
for every late payment of duties and taxes counted from the
date of the chargeable bond or bonds up to the date of actual
payment of duties and taxes. This represents an increase of
about 400% compared to the P1,000 penalty plus 2% provided
in Customs Administrative Order 5-1991.
Mindanao shippers push local-level decision
making
MINDANAO shippers want carriers to empower
their local offices to decide on issues related to freight
rates instead of referring the same to main offices.
“Ship owners and operators should empower their respective
local offices to avoid delays in decision making particularly
(on) issues concerning the upward adjustments of freight rates,”
the Mindanao Federation of Shippers Association (Minfesa)
said in a position paper provided to PortCalls, adding that
the existing situation can be cumbersome.
“Maritime Industry Authority (Marina) should also issue
a circular organizing dialogues between ship owners and shippers’
associations at the local level,” the group also stressed.
There is currently no mechanism for dialogue, consultation
between shippers’ associations and local chambers of
commerce and ship owners and operators to discuss concerns
except in Northern Mindanao.
In that region, the Northern Mindanao Shippers Association
created a body called ‘Shippers and Shipping Providers
Consultative Council (Shipco) that provides a discussion forum
for its members and their respective carriers.
According to Minfesa, plans are in the drawing board to replicate
such an initiative for the rest of the base ports in Mindanao.
Still no resolution in sight for Dumaguete
Port labor problems
OPERATIONS at Dumaguete port remain closed after
talks between the government and picketing workers bogged
down last week.
As a result, there is cargo pile-up at the port. Losses incurred
by shipping lines estimated to be almost P6 million per week
are also expected to continue increasing.
“Negotiations are at a standstill,” Philippine
Ports Authority (PPA) assistant general manager and concurrent
Port District of Visayas manager Raul Santos told PortCalls.
“Picketing workers are pushing for their all-or-nothing
demand from the new cargo-handling operator,” Santos
said.
“Such demand, however, is really not tenable. Some of
them would be absorbed by the new cargo-handling operator
but some will really have to go,” Santos added.
“Just the same, we will continue to negotiate with them
and look for a win-win solution but if they continue to push
for their demands, we will look for other measures to stop
the strike and restart full commercial port operations immediately,”
Santos said, calling the strike illegal.
As of presstime Friday, port workers continue to defy the
return-to-work order issued by the Department of Transportation
and Communications. The strike began March 13.
The PPA has advised shipping lines to temporarily divert calls
to other ports or not to accept cargoes bound for Dumaguete
until the situation is resolved.
As a result of the strike, Sulpicio is supposedly losing per
week P2 million and the Aboitiz-owned SuperFerry, P1.6 million.
George and Peter Lines, Cokaliong and Alesson Shipping Lines
are losing P800,000, P700,000, and P300,000 a week, respectively.
PPA is also foregoing P420,000 a week from port charges such
as usage and wharfage fees on top of the 10% share from the
proceeds of cargo handling operations.
Since October last year, workers affiliated with the Associated
Labor Union-Trade Union Congress of the Philippines has been
picketing on-and-off against the new operator Prudential Customs
and Brokerage Services, Inc. (PCBSI), which they claim will
lay off a significant number or workers.
In December 2006, PCBSI won the cargo-handling contract for
the port.
The PPA has allocated P395.7 million for the Dumaguete Port
project which involves the privatization of cargo-handling
services for domestic and international operations.
PCBSI has not absorbed 175 union members, which led to the
mass action. The company has also not acknowledged the collective
bargaining agreement between the workers and their former
employer, Cipres Stevedoring and Arrastre Inc, claiming the
employment of porters is a management prerogative.
Cargo volume in Dumaguete port has been progressively declining,
from 570,102 metric tons in 2003 to 567,144 metric tons in
2004, then to 531,447 metric tons in 2005. The port handles
about 1 million passengers a year.
THE Department of Justice (DOJ) saw no inconsistencies
in Republic Act 9483 or the Oil Pollution Management Act with
existing international regulations. The Department of Transportation
and Communications (DOTC) earlier asked the DOJ to determine
if the law overlaps with the Civil Liability Convention (CLC)
of 1992 and the International Oil Pollution Convention (IOPC).
RA 9483 collects a P0.10 levy for every liter transported
by tankers. Like the CLC and the IOPC, RA 9483 will finance
programs to manage anti oil pollution-related activities.
With the DOJ ruling, the DOTC will now concentrate on better
implementing guidelines, Transport undersecretary Maria Elena
Bautista told PortCalls. Workshops will be conducted to address
gray areas such as the timetable of the levy collection and
the fund’s seed money, she said.
