BOC orders giving North Harbor authority to handle foreign cargo questioned

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PowerPoint PresentationMore questions are being asked about the propriety of Bureau of Customs (BOC) orders granting Manila North Harbor, a domestic port, the authority to engage in international trade.

On June 2, Customs commissioner Alberto Lina signed Customs Memorandum Order (CMO) No. 11-2016 and CMO 12-2016, effectively allowing North Harbor operator Manila North Harbour Port, Inc. (MNHPI) to handle foreign cargoes. The twin CMOs were preceded by a December 2015 BOC order that awarded MNHPI a certificate of authority to operate as an authorized customs facility (ACF). As ACF, MNHPI can handle and store imported goods that are immediately discharged from an arriving airplane, vessel and other means of international transport.

READ: BOC lays out North Port rules for handling foreign cargo

The BOC orders are now being questioned by a PortCalls source from the Philippine Ports Authority (PPA) who said that “MNHPI needs PPA approval to handle foreign cargoes as well as approval for the (cargo-handling) tariff (that will be levied at the port).”

MNHPI’s 25-year contract for the development, management, operation and maintenance of North Harbor was granted by PPA in 2010.

The source, who did not want to be named, stressed that MNHPI’s permit is only for domestic operations.

Before MNHPI took over the operation and management of North Harbor, the port had handled bulk and breakbulk foreign cargoes and had its own complement of customs offices since it is a sub-port of Manila International Container Port. Some of the offices were, however, transferred when MNHPI took over since by then the port no longer processed foreign cargoes, except for transhipments.

The PPA source insisted that North Harbor “is owned by PPA and MNHPI is only the cargo-handling operator. Any operation not stipulated in the 25-year contract is a direct violation which will merit cancellation of (the MNHPI) contract with PPA even if they are armed with a BOC permit.”

Asked for comment, MNHPI told PortCalls it will respond at a later date.

Under its mandate, PPA has the authority to allow foreign and domestic vessels to dock at a port, the source said.

He added port operators have to seek PPA approval for a cargo-handling tariff schedule at the port to which they were given a contract. This, he said, applies to MNHPI as well.

The BOC orders allowing MNHPI to engage in international trade have been questioned even by a BOC official who called the grant a “sweetheart deal.” In local news reports, an unnamed BOC official said the bureau may not exercise jurisdiction over another government agency, in this case the PPA which gave MNHPI the North Harbor contract.

The source also claimed Lina in an “internal memo issued on June 2” invoked the recently signed Republic Act (RA) 10863 (Customs Modernization and Tariff Act) in its decision to allow MNHPI to engage in international trade. The official claimed the June 10 public hearing on RA 10863’s implementing rules and regulations has yet to be called at the time the Customs orders granting concessions to MNHPI were issued.

It must be noted though that nowhere in the June 2 customs orders issued by Lina was RA 10863 ever invoked.

CMO 11-2016 cited as legal basis Section 608 of the Tariff and Customs Code of the Philippines (TCCP), as amended, and RA No. 10668 or the Foreign Ships Co-loading Act, their implementing rules and regulations, and related laws, orders and issuances in the issuance of the authority to handle foreign cargo.

Section 608 of the TCCP states that the Customs Commissioner shall, subject to the approval of the department head, make all rules and regulations necessary to enforce provisions of TCCP.

Sections 4 and 5 of RA 10668 grants the Customs Commissioner the power to authorize any foreign vessel to take or convey import or export cargoes at any Philippine port authorized by a government contract to handle domestic, import, or export cargo.

A twin measure to CMO 11-2016 is CMO 12-2016, which provides guidelines on how MNHPI should operate the terminal now that it has been authorized to handle and store import, export and transshipment cargoes.

CMO 12-2016 also invoked the TCCP and RA 10668 as basis for BOC to grant MNHPI the authority to engage in international trade. – Roumina Pablo