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The Bureau of Customs refuted results of a Commission on Audit (COA) report that claimed 553 regulated commodities worth P1.441 billion were released without the proper permits
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BOC said the entries cited in the COA report do not require clearances from its Imports Assessment Service prior to release
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The shipments are covered by an order that exempts the shipments from the need to secure certain clearances
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The COA report also found BOC failed to suspend or revoke the accreditation of 974 erring importers, allowing them to file 77,049 consumption entries with assessed duties and taxes amounting to P28.954 billion
The Bureau of Customs (BOC) refuted a Commission on Audit (COA) report that claimed 553 regulated commodities worth P1.441 billion were released by the bureau without the proper permits.
In a statement, BOC said the shipments did not require clearances from its Imports Assessment Service (IAS).
The agency said the goods in question are “excluded from the coverage of CMC 70-2014, (with shipment owners) being members of the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and Association of Vehicle Importers and Distributors Inc. (AVID).
CMC 70-2014, dated May 30, 2014, excluded automobile shipments of CAMPI and AVID from seeking IAS clearance prior to release. While a Commissioner’s memo had later withdrawn the exclusion of CAMPI and AVID from the IAS clearance requirement, the COA-cited shipments remained free from the need to secure such clearance since they were assessed before the exclusion was withdrawn on January 31, 2019.
BOC said it had already sent explanations to COA on April 27, 2021, March 14, 2022, and May 16, 2022, in response to the audit agency’s recent Audit Observation Memorandum.
In its 2021 annual audit report of BOC, COA said the 553 regulated commodities were released despite the lack of import permits and other supporting documents required by the Customs Modernization and Tariff Act (CMTA) and other relevant laws.
While the non-submission of required documents did not significantly affect the assessment of duties and taxes, COA said the “processing and release of the port officials without the necessary documentation defeats the purpose” for which cited regulations were established.
COA reviewed sample declarations provided by the Port of Manila (POM) and Manila International Container Port (MICP) for the audit report.
Its report showed 321 entries filed with MICP were regulated commodities with assessed duties and taxes amounting to P757.263 million were released without the License to Operate, Certificate of Product Registration and electronic Authority to Release Imported Goods, required under the CMTA and other regulations.
For POM, 232 entries were filed with assessed duties and taxes amounting to P684.029 million for imported luxury vehicles that were released without the necessary permits and clearances.
COA recommended that BOC require the ports to strictly enforce Section 117 of the CMTA and other relevant rules and regulations to ensure all required permits, certificates, clearances, and supporting documents are complete and submitted prior to assessments and release of shipments.
Section 117 states that “goods which are subject to regulation shall be imported or exported only after securing the necessary goods declaration or export declaration, clearances, licenses, and any other requirements, prior to importation or exportation.”
Accreditation issues
COA also found that BOC failed to suspend or revoke the accreditation of 974 erring importers, allowing them to file 77,049 consumption entries with assessed duties and taxes amounting to P28.954 billion.
COA said this was due to the “lack of effective/strict monitoring and coordination in the process of accreditation of importers…”
According to the report, a total of 644 importers were allowed to file 71,995 consumption entries with assessed duties and taxes of P27.589 billion despite having violations such as seizure and abandonment, and unsettled/unpaid duties and taxes.
Additionally, 330 importers were considered “habitual violators” for declaring importations in a general/generic manner and were allowed to file 5,054 entries with assessed duties and taxes amounting to P1.365 billion without being penalized.
Moreover, 762 of the erring importers “remain in active status and continuously transact with BOC.” Also, 45 importers have expired accreditation but were still not suspended or revoked while the accreditation of 167 other erring importers were not found in the list of active importers.
In response, BOC said the acting chief of the Accounts Management Office (AMO), which handles accreditation, has issued a memorandum dated May 13, 2022, directing all collection districts to furnish AMO with Warrants of Seizure and Detention/Abandonment Cases or any other notices involving the violation of CMTA and other customs laws, rules, and regulations at the ports.
The AMO has also coordinated with the Management Information and Technology Group (MISTG) and the Risk Management Office (RMO) so it can be given access to the Offense Management System (OMS) to monitor all violations of importers and customs brokers and take actions as warranted.
The OMS, implemented last March, tracks and monitors the status of seized and forfeited goods to enhance its risk assessment and profiling.
READ: BOC introduces system for tracking of seized, forfeited goods
COA in its report has recommended, among others, that AMO be provided access to the OMS to aid in its monitoring of activities and compliance of importers and customs brokers. It also suggested stronger coordination between concerned BOC offices to ensure activities of importers and customs brokers are strictly monitored.
