PortCalls

Law on practice of customs brokers sows confusion

REPUBLIC ACT NO. 9280 or "An Act Regulating the Practice of Customs Brokers Profession in the Philippines" has received mixed reactions - mostly confusion - from transport industry players, particularly the logistics sector.

Officially enacted last March 30, 2004, the law effectively regulates the practice of the customs brokers profession and prohibits corporate practice of customs brokerage.

Section 29 of RA 9280 specifically provides that the customs broker practice is a professional service and as such, "no firm, company, or association may be registered or licensed as such for the practice of customs broker profession".

In addition, Section 28 provides that no person shall practice or offer to practice the profession, or use the title unless one is a registered licensed customs broker.

Atty. Romeo Sto. Tomas, a legal expert on the freight forwarding industry, said many forwarding firms offering customs brokerage services were alarmed when the law came out.

"Most forwarding firms have the same question: How will they continue their operations? Should they subcontract the service? And who will finance the payment of duties and taxes?" he said.

Sto. Tomas, the training director of the Philippine International Seafreight Forwarders Association and legal director of the Aircargo Forwarders of the Phils., Inc., said there have been no discussions yet among involved parties to clarify the implications of the new law. "There is no regulatory body and no implementing rules and regulations (IRR) yet," he noted.

Most companies reached by PortCalls apparently lacked information on the new legislation, with some admitting being completely unaware of it. But for those in the know the legislation, they said, provides much relief.

Licensed customs broker Adriano A. Rimando who is also AE Eagle Philippines, Inc. vice president for Business Development and Customer Service, said the law clearly defines the place of practicing customs broker, employees and employers in the industry and schools offering the course. "Business is separate from profession. With the new ruling, customs brokerage will no longer be allowed to be part of the services of a logistics company.

The practice is exclusively for individuals registered as licensed brokers under the Professional Regulation Commission (PRC)," he opined. At present, there are more than 4,200 licensed customs brokers all over the country.

Another positive provision of RA 9280, Rimando said, is the prohibition on financing activities. Under the law, brokers are now prohibited from advancing and financing in behalf of their client-importers the payment of duties and taxes, arrastre charges, wharfage dues, storage fees and other port charges.

Atty. Agaton Teodoro Uvero, in a recent PortCalls column, explained this provision: "In other words, importers can no longer ask their customs brokers to advance their duties, taxes and related costs. Many importers normally require a minimum credit line prior to accrediting customs brokers.

With this practice now prohibited, the financial standing of a customs broker will become less of a consideration when companies bid out their customs brokerage requirements." Rimando said brokers at present cannot compete with multinational companies offering brokerage services because the latter can easily provide financial support for big shipment volumes while a broker cannot.

Diosdado Santiago, president of the Chamber of Customs Brokers, Inc. (CCBI), admitted the provisions of the law are complicated. "We have to consider the corporate law and all the specific conditions that might affect practicing companies.

Presently, we are bombarded with questions as to what will happen to existing brokerage corporations under this law," he said. The CCBI is already working on its recommended IRR, he added.

The final IRR, including the Code of Ethics for the profession, will be issued by the yet-to-be created Professional Regulatory Board. Santiago said the IRR may be out by July or August.

Honorato O. Colico, chairman of the Professional Customs Broker Association of the Phils., Inc. (PCBAPI), said the legislation will help eliminate technical smuggling and improve Bureau of Customs collections. Colico said most logistics firms are alarmed by the law due to the wrong impression that it will put them out of business.

"Logistics services will still be there. The main objective here is to put the practice of the profession in proper perspective," he said.

An official from a top forwarding firm who requested anonymity agreed: "I do not see the law affecting our operations or our services because our in-house broker is professionally licensed and when it comes to signing documents, he does it himself.

The company does not interfere with the service."

Domestic lines asked to provide x-ray machines

THE Philippine Ports Authority (PPA) recently required all domestic shipping firms with their own terminal buildings to install walk-through x-ray machines for passengers similar to those found at the airports.

A PPA source disclosed the agency came out with a recent memorandum imposing the order as part of minimum requirements under the International Ship and Port Facility Security (ISPS) Code. "When the PPA drafted its security plan, the absence of high-tech security equipment became one of our concerns.

So we decided to ask for the domestic shipping operators' help regarding this," he said. Although there is no specific deadline on the installation of walk-through x-ray machines, metal detectors and other security gadgets, the source said PPA is looking at the July 1 deadline in keeping with the implementation of the ISPS Code

Sulpicio Lines Passenger Service vice president Salvacion Buaron noted that the requirement would mean big costs for shipping lines. "There is no quantity specified. But we were thinking that one x-ray machine, which costs about P3 million, would not be enough.

We will have to install about two to three if we want to expedite the passenger inspection process," she said. Buaron said shipping lines are willing to comply with the requirement but that they are still negotiating with the PPA on the terms of acquisition.

"We will have to lease/rent the machine or ask the PPA to advance it for us, or pass on the costs we will incur to our customers," she said.

The government recently injected an additional P200 million to PPA to finance preparations for the ISPS Code implementation, including hiring of additional security officers to man the ports and the acquisition of passenger x-ray machines which will be positioned at PPA-operated terminals.

Ben Line Agencies welcomes China-based SITC Container Lines

SITC CONTAINER LINES CO., LTD has appointed Ben Line Agencies as its Philippine agent.

The China-based carrier operates 20 full container vessels on the China/Japan, China/Korea, mainland China/Hong Kong, China Mainland/Taiwan, Japan/Taiwan, Korea/Taiwan, Taiwan/Hong Kong routes, and is developing multimodal logistics services. SITC Container Lines is a member of the SITC Maritime (Group) Co., Ltd.

Although known as one of the younger carriers in the industry, it has undergone rapid advancement through strategic investments in service route expansion, and acquisition of larger vessels and state-of-the-art facilities.

SITC Container Lines has been named one of the top ten carriers' in the China Freight Industry Awards since 1999.

Ship history record required on international vessels

THE Maritime Industry Authority (MARINA) recently ordered all international passenger and cargo vessels of 500 gross tonnage (GT) and above to have a Continuous Synopsis Record (CSR) on board by July 1, 2004.

Issued by MARINA, the CSR is a record of ship history, including changes in ownership. The policy aims to strengthen maritime security measures and is in conformity with Regulation XI-1/5 of the International Convention for the Safety of Life at Sea (SOLAS) and the amended International Maritime Organization (IMO) Assembly Resolution A.959(23).

The maritime agency said domestic ships allowed to temporarily engage in overseas trade are also covered by the procedure. MARINA deputy administrator Lamberto Pia, during a public hearing with shipping operators last week, said the requirement is also in line with the nearing implementation of the International Ship and Port Facility Security (ISPS) Code.

In its draft memorandum circular, MARINA noted the CSR must be complete and updated at all times. "Any previous entries in the CSR shall not be modified, deleted, or in any way, erased or defaced," it noted.

Shipping operators are required to file an application containing details such as name of ship, IMO number, official number, date of registration of ship, owner's name, bareboat charterer's name and classification society of the ship. Amendments to the CSR would also require the submission of an amendment form.

MARINA will issue the revised and updated version of the CSR document three months from the date of the amendment. In case of loss or damage to a ship's CSR, the company must inform the maritime agency.

MARINA will then provide a certified true copy of the document signed by authorized officials. Processing fee is P1,200 per application.

Failure to acquire a CSR by July 1 or failure to report any change in the document and unauthorized change of entries in the CSR will result in a fine of P5,000 for the first violation; P10,000 for the second; and P20,000 for the third and succeeding violations.

NENACO rehabilitation program gets nod of two big creditors

Debt-saddled Negros Navigation Company's (NENACO) rehabilitation plan has received positive response from two of its creditor banks.

Court-appointed receiver Sulficio O. Tagud, Jr. told reporters at the sidelines of NENACO's stockholders meeting at the Manila Polo Club last week, that the Development Bank of the Philippines (DBP) and the Export Industry Bank (EIB) have expressed support for the company's restructuring program. The loans from these banks represent roughly 40% of the total P1 billion bank loans of NENACO.

The company owes DBP - its largest creditor - a total of P350.543 million and EIB, P29.013 million. Other creditor banks include Bank of Commerce, which NENACO owes P127.653 million; Equitable-PCI Bank, P51.56 million; Prudential Bank and Trust Co., P37.768 million; Dutch Firm Debis Financial, P108.225 million; and Pioneer Insurance, P63.345 million.

With about P2.4 billion total unpaid debts, the shipping firm is stretching the repayment period to 10 years. "The creditor's concern is to get paid at the shortest possible time," Tagud noted, adding the company has enough assets to cover its debts.

"They have about P1.59 for every peso of liability," he said. Tagud noted few of the banks are positive about converting outstanding debts to equity.

NENACO also owes a total of P324.89 million to leasing companies TransAmerica Leasing Co., Danlite Indutries Corp., Continental Sales, First Malayan Leasing Co., Waterfront Leasing Co., Burough Financing Co., and GE Seaco. It also needs to pay about P914.8 million in critical expenses, including employees' salary and balances from trade suppliers such as arrastre and stevedoring companies, suppliers of heavy equipment and spare parts, security agencies, trucking companies and drydocking firms.

Jose Maria Lim, president of Metro Pacific Corp., parent company of NENACO, said Metro Pacific is confident its beleaguered shipping subsidiary will get court approval for its rehabilitation program considering its tight cash flow.

ICTSI appoints IT managers

INTERNATIONAL CONTAINER TERMINAL SERVICES, INC. (ICTSI) recently announced the promotion of Catherine P. Orellano as the new Management Information Systems (MIS) Manager of ICTSI's flagship operation, the Manila International Container Terminal (MICT), and the appointment of Pablo L. Peñalba as Business Development Manager of ICTSI's software developer company for marine ports and terminals, Container Terminal Systems Solutions, Inc. (CTSSI).

Orellano joined MICT as MIS Assistant Manager in August 2003. She was formerly with Subic Bay Metropolitan Authority as division chief of the MIS Department.

She also worked for Tridel Technologies, Inc. in 1998 as Technical Coordinator, Webscape Philippines, Inc. in 1996 as Technical Support and Sales Engineer, and Integrated Computer Systems, Inc. in 1990 as Senior Quality Computer Technician.

Orellano earned her Bachelor of Science major in Industrial Technology degree and Masters in Business Administration from Rizal Technological University (RTU).

She also took technical courses at the Meralco Foundation Institute. Currently, she is working on her doctor of Philosophy in Public Administration also at RTU.

Peñalba brings to CTSSI his nine-year work experience in ICTSI's various departments and subsidiaries. He started working as Safety Supervisor at Chemphil Manufacturing Corp. in 1979.

In 1986, he worked as Accident Prevention Superintendent at the Jeddah Islamic Port. He joined ICTSI in 1989 as Safety Officer of the MICT.

He rose from the ranks and was promoted to Assistant Operations Manager. In 1991, he was assigned as Assistant Terminal Manager.

In 1995, he was promoted to Operations Manager. In 1998, he was assigned to ICTSI's former Saudi Arabia unit, International Ports Services, in Dammam for its start-up operations.

In 2001, he was recalled to ICTSI Manila and was appointed as MICT Special Projects Manager.

He has been involved in various MICT projects such as the empty container depot, and was at one time the officer-in-charge of the MIS Department.

Peñalba took up Bachelor of Science in Industrial Technology at the Sorsogon College of Arts and Trade.

AsiaLink gets ISO certification

AsiaLink Shipping Lines was recently awarded an ISO 9001:2000 certification from SGS.

The company said the certification ensures its business practices are consistenly of high quality and at par with quality standards.

The team is headed by assistant general manager Bob Maravillas (left).

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