Home » 3PL/4PL, Customs & Trade, Ports/Terminals » 32 firms undergoing BOC’s reactivated post-clearance audit

More than 30 companies comprise the first set of those going through the Bureau of Customs’ (BOC) post-clearance audit, according to assistant commissioner Atty. Vincent Philip Maronilla.

In a press conference on January 24 Maronilla, who also heads BOC’s Post-Clearance Audit Group (PCAG), said the customs commissioner has already issued Audit Notification Letters (ANLs) to 32 companies profiled by the customs bureau. ANLs inform companies they will be subjected to post-clearance audit and contain information on the audit procedure.

The ANLs were issued after the recent release of Customs Administrative Order (CAO) No. 01-2019, which implements the post-clearance audit function and Prior Disclosure Program (PDP) of BOC, pursuant to the Customs Modernization and Tariff Act (CMTA).

Under CAO 01-2019, the BOC may conduct an audit examination, inspection, verification, and investigation of records pertaining to any goods declaration within three years from the date of final payment of duties and taxes or customs clearance. These records shall include statements, declarations, documents, and electronically generated or machine-readable data.

Such audit is intended to ascertain correctness of the goods valuation and determine the liability of the importer for duties, taxes, and other charges, including any fine or penalty.

CAO 01-2019 takes effect 30 days after January 16, 2019.

Maronilla said some of the 32 companies were issued ANLs due to industry complaints, like those coming from the automotive sector, asking to check the companies’ compliance level. BOC also issued ANLs to some Super Green Lane (SGL) companies, which Maronilla noted are dependent on the post-clearance process.

The SGL is a special facility established to comply with the Revised Kyoto Convention, which the Philippines is a signatory to, and to provide special procedures for authorized persons who have passed certain criteria specified by customs. SGL companies enjoy the privilege of advance processing and clearance of shipments, with BOC checking their compliance post-clearance.

Maronilla said that in identifying companies to audit, BOC has a profiling system that takes into account the agency’s own risk management process “para hindi naman naka-base lang sa discretion ng isang [so that profiling is not just based on the discretion of a] particular office or particular person.”

He added that CAO 01-2019 also lays down parameters for identifying which companies to audit, but explained that some of these parameters are confidential “because that will change from time to time” and are subject to the approval of the Customs commissioner.

Voluntary disclosure urged

Aside from firms issued with ANLs under CAO 01-2019, there are other companies that availed of the Voluntary Disclosure Program (VDP)—now called PDP. Maronilla said BOC in fact has already collected about P73 million in a span of 1.5 months last year from auditing companies that availed VDPs.

VDP, under Customs Memorandum Order No. 18-2007, allows importers to voluntarily correct—under certain conditions and without fine or penalty—erroneous, inaccurate, or insufficient information declared to BOC arising from sheer mistake, inadvertence, or negligence.

This year, Maronilla said PCAG is looking for more VDPs and PDPs, especially from companies that usually have adjustments in terms of royalties and other proceeds.

“I encourage companies that [have] existing ANLs to avail of our VDP/PDP. However, ANLs issued before the new CAO will not be affected by the provisions thereof, (so) old rules shall apply to (the companies) because they vested and acquired rights under those rules,” Maronilla told PortCalls in a text message.

He also encourages companies that have not been issued with ANLs to avail of the VDP before CAO 01-2019 takes effect on February 15 “to avoid imposition of penalties and/or legal interest under the CMTA.”

Under CAO 01-2019, if the importer is found to be deficient in the duties and taxes paid for imported goods and fails to pay the correct dues based on the audit, then the importer will be penalized according to two degrees of culpability: negligence or fraud.

Negligence shall be penalized with a fine equivalent to 125% of the revenue loss, while fraud shall be penalized with a fine six times the revenue loss, and/or imprisonment of not less than two years but not more than eight years.

But Maronilla assured stakeholders that “if they do their internal audit regularly and are compliant with our rules, they have nothing to worry about.”

“However, if they are not sure about their level of compliance, they should establish their internal audit system to be aware of possible non-compliance in order for them to rectify these mistakes before they are subjected to post-clearance audit,” the PCAG chief said.

Asked if BOC intends to provide importers and other covered stakeholders with pointers for ensuring compliance, Maronilla said they would, but pointed out that the companies’ import or logistics managers should know this matter as well.

Who should do record keeping?

Among entities required to maintain and keep their records are importers, including beneficial and true owners of goods; customs brokers and other parties engaged in customs clearance; and locators as defined by the CMTA.

Importers and beneficial or true owners of goods must keep all records pertaining to the ordinary course of business and to any activity or information contained in the records required by CAO 01-2019 and by the CMTA at their principal place of business for three years from date of final payment of duties and taxes or customs clearance, whichever is later.

All parties engaged in customs clearance and processing, as well as locators or persons authorized to bring imported goods into Free Zones, are also required to keep records related to such customs clearance and processing at their principal place of business for three years from date of filing of goods declaration.

For customs brokers and the importer’s other duly authorized agents, audit may be conducted to validate information provided by their importer client and fill information gaps revealed during the audit.

If needed, the customs commissioner may also authorize a compliance audit of importers, locators, or specific groups of importers or other parties engaged in the customs clearance process. – Roumina Pablo

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