BOC: No fine for errors in goods declaration beyond exporter’s control

Image by Alexander Kliem from Pixabay
  • Exporters won’t be fined by the Bureau of Customs for clerical errors in goods declaration arising from circumstances beyond their control
  • The Assessment and Operations Coordinating Group said exporters must request a cancellation of export declaration first before lodging a new corrected one
  • Exporters have long complained of the P5,000 fine for every error in the goods declaration even if the error is caused by extraneous circumstances
  • These errors include foreign exchange fluctuations, buyer’s request for changes in the goods description, and changes in vessel arrival
  • In AOCG memo 534-2021, BOC said adjustments in the export declaration may be “considered” provided these are “reasonably explained” come with “appropriate documentary evidence”

Exporters will not be fined for clerical errors made in goods declaration resulting from circumstances beyond their control, the Bureau of Customs (BOC) Assessment and Operations Coordinating Group (AOCG) said in a text message to PortCalls.

AOCG made the statement after PortCalls sought further explanation of AOCG memo 534-2021. The memo, which was signed by Customs commissioner Rey Leonardo Guerrero and dated October 4, clarified the imposition of fines for clerical errors in export declaration under Customs Administrative Order 01-2021. CAO No. 01-2020 outlines BOC’s new fines and surcharges for clerical errors, misdeclaration, misclassification, and undervaluation. Under current rules, every clerical error in the lodgement of goods declaration is fined P5,000.

READ: BOC clarifies order imposing fines for clerical errors in export declaration

The clarification was cheered by exporters who have long complained of the fine levied against them for errors in goods declaration that are outside of their control, including foreign exchange fluctuations, buyer’s request for changes in the goods description, and changes in vessel arrival. They also claimed the accurate data needed for lodgment cannot, in most cases, be initially determined.

AOCG memo 534-2021 had noted that adjustments in the export declaration may be “considered” provided these are “reasonably explained (and) coupled with the appropriate documentary evidence.”

Citing memo 534-2021, AOCG in its text to PortCalls acknowledged “there are circumstances that are way beyond the control of the exporter such as when the shipping lines or airlines advised the exporters that there are certain adjustments in their registration no. or vessel/flight no. which could result (in) offloading of their shipment from the vessel or aircraft.

“As a result, the exporter entails to cancel the export declaration relative to the adjustments made, ergo, the penalty is not being imposed.”

The cancellation of export declaration, however, should be requested prior to the lodging of a new export declaration, barring such could mean the cancellation of the exporter’s accreditation.

Ma. Flordeliza Leong, Philippine Exporters Confederation, Inc. (PHILEXPORT) Vice President for Advocacy, Communications and Special Concerns, thanked Guerrero “for responding positively to our request” even if “it took a year before this clarificatory AOCG memo 534-2021 was issued since we first wrote BOC about this issue last year.”

She told PortCalls AOCG memo is “more reflective of the export situation. But I hope that by adding the ‘extraneous factors beyond the control of the exporter’, this means there will really be no penalty imposed on the errors. Also, I hope that it will not be difficult to comply with the ‘reasonable explanation’ and supporting documents since the conditions for supposedly exemption from the penalties have been clarified.”

PHILEXPORT had earlier proposed CAO 01-2020 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 COVID-19 pandemic.

As a background, AOCG memo 534-2021 noted exporters’ claims that “the preparation and submission of export declaration entail some adjustments in the entries not necessarily stemming from inadvertence but due to varying business conditions such as cargo handling and cargo measuring factors, beyond the exporters’ control.”

The memo cited the exporters’ position that the fine should not be imposed because the errors are inadvertent within the scope of CAO 01-2020.

AOCG memo 534-2021 acknowledged that “the law does not distinguish what kind of mistakes are covered by this provision. Instead, it only requires that the commission is not tainted with fraud.”

In order to address stakeholders’ concerns, the AOCG memo said distinguishing “what constitutes inadvertent and clerical errors and the instances as to when the fees may be imposed” under CAO 01-2020 from the proposed adjustments in the final export declaration is “material”.

The memo said “errors contemplated under CAO 01-2020 is committed when there is an incorrect or erroneous input of data in the goods declaration while drafting, copying or transposing a document, provided it is not attendant with fraud and not due to gross negligence, on the following:

  • Consignee’s name
  • Importing vessel or aircraft
  • Port of departure
  • Port of destination and date of arrival
  • Number and/or marks of packages
  • The quantity, the nature and the correct commodity description of the goods contained therein
  • Value as set forth in the invoice and packing list
  • Such other information as may be required by rules and regulations”

“On the other hand, minor adjustments due to extraneous factors beyond the control of the exporter may not equate to an error” under CAO 01-2020, “such as the following:

  • Changes in the net weight of the shipment due to the difference in actual volume of goods loaded vis-à-vis the declared volume prior to loading by reason of cargo handling or cargo measuring factors
  • Changes in shipping details upon the advice of the shipping lines, provided errors in encoding the shipping details are considered inadvertent unless the same are covered by such advice
  • Any other circumstance which necessitates adjustments to accurately reflect the information required for the export declaration.”

Pursuant to Section 5 of CAO 01-2020 and CAO 02-2020, which provides guidelines on dispute settlement and protest, a stakeholder may exercise or avail of the remedy of a formal customs dispute settlement arising from customs valuation, rules of origin, tariff classification, and other customs issues, the memo said. – Roumina Pablo