Assessment and Operations Coordinating Group Memo No. 281-2020 contains rules on payment by exporters of penalties for clerical errors, misdeclaration, misclassification, and undervaluation
BOC earlier allowed its Export Division to process cancellation of export declarations that have clerical errors without the need to secure AOCG approval
The Bureau of Customs (BOC) has provided guidelines for exporters in the payment of penalties, fines, and/or surcharges for clerical errors, misdeclaration, misclassification, and undervaluation.
Assessment and Operations Coordinating Group (AOCG) Memo No. 281-2020 was issued in relation to Customs Administrative Order (CAO) No. 01-2020, which outlines BOC’s new fines and surcharges for clerical errors, misdeclaration, misclassification, and undervaluation.
AOCG Memo 281-2020 notes the guidelines are designed “to effectively facilitate trade and ensure the monitoring of proper collection of penalties, fines, and surcharges for clerical errors, misdeclaration, misclassification and undervaluation” pursuant to CAO 01-2020.
Under the new guidelines, the payment procedure is as follows:
- The exporter or its authorized representative should secure an order of payment form for additional customs duties, taxes, and other charges through the BOC portal of the port concerned where it filed its electronic single administrative document (e-SAD).
- Through the BOC portal, the exporter should coordinate with the customs officers of the port on the details needed to fill out an order of payment form.
- Once all details are provided, the customs officers will print the order of payment form, have it signed and notify the exporter through the port’s Customer Care Center (CCC), a one-stop shop established in every collection district.
- After securing an order of payment form, the exporter will proceed to the port’s Cash Division or equivalent unit for payment.
- Once payment is made, the exporter can now re-lodge the e-SAD and continue with the usual processing procedures.
Review of CAO 01-2020
Earlier this year, the Philippine Exporters Confederation, Inc. (PHILEXPORT) called for the review and suspension of CAO 01-2020, noting that paying penalties for “inadvertent” clerical errors was a “huge financial burden” for exporters.
PHILEXPORT president Sergio Ortiz-Luis, Jr. in a letter to Customs Commissioner Rey Leonardo Guerrero had proposed that the policy be suspended while under review “to prevent the further bleeding of exporters, especially the MSMEs that are still trying to recover” from the effects of the ongoing COVID-19 pandemic.
He noted that exporters have to make changes in the export declaration for reasons beyond their control, including foreign exchange fluctuations and the buyer’s request for changes in the goods description.
Export declarations would also have to be amended when vessels are delayed due to bad weather, malfunction, void sailing, and similar circumstances.
Exporters must also make changes in the volume or weight of fresh and processed fruits, for example, in relation to natural moisture content, reaction to processing, treatments, and weather conditions.
PHILEXPORT likewise requested BOC to create the criteria to determine between honest/valid errors and deliberate errors on consignee details, goods description, spelling, volume, and value.
And instead of the P5,000 penalty for every clerical error as provided in CAO 01-2020, BOC could “ladderize” the penalties into three categories and allow for a 10% tolerable margin on the weight.
Ortiz-Luis also pressed for a review of policies of other agencies such as the Bureau of Plant Industry concerning phytosanitary compliance and requirements of exporters.
He likewise sought the definition of clerical errors, requesting that errors in spellings and abbreviations not be penalized as these were often “a result of the rush to comply with deadlines or just pure honest mistakes.”
Aside from PHILEXPORT, other stakeholders groups have raised issues with the imposition of P5,000 penalty for clerical errors under CAO 01-2020.
Since CAO 01-2020 was implemented together with Customs Memorandum Order (CMO) 49-2019, stakeholders have been requesting for the policy’s temporary suspension over reports that importers and customs brokers are being penalized with the P5,000 fine for every perceived violation.
CMO 49-2019, issued in 2019, orders the mandatory filling in of Box No. 41 (Supplemental Units) in the lodgment of goods declaration in BOC’s Electronic-to-Mobile System.
Meanwhile, BOC under Office of the Commissioner (OCOM) Memo No. 212-2020 has allowed the Export Division to process the cancellation of export declarations that have clerical errors without the need to secure approval from AOCG.
OCOM Memo 212-2020 aims to “permanently avoid delay in the cancellation of export declarations by reason of clerical errors.”
AOCG Memo 164-2020 issued in September 2020 required that all SAD cancellation forms after complete staff work from the collection district be forwarded to the AOCG deputy commissioner’s office for approval.
Exporters earlier appealed that cancellations of export declarations be allowed in collection districts, instead of in the AOCG deputy commissioner’s office in Manila as it “will further burden BOC Central Office, incur longer processing time resulting to additional costs to exporters like demurrage and may cause port congestion.” – Roumina Pablo