IN the past months, the Bureau of Customs (BOC) has been filing criminal complaints on a weekly basis against alleged erring importers. Previously, BOC also sent demand letters against importers for deficiency of taxes and duties without the benefit of due process or without going through the post-entry audit system.
We have outlined below the instances that allow BOC to legally collect additional duties and taxes against importations that have long been cleared from customs custody.
For the past two years, importers and forwarders have been receiving demand letters from various customs offices (bonds division, liquidation and billing division, collection service, etc.) on supposedly un-liquidated bonds posted for importations that have been re-exported many years back, some of them more than 10 years.
Accordingly, failure to settle the amount demanded will result in the withdrawal of the accreditation of the importer or forwarder from the customs automated system, thereby preventing these entities from transacting with customs.
The problem arises from the fact that: (1) many importers and customs brokers/forwarders failed to liquidate their bonds on imports that were subject to re-exportation; and (2) BOC has tedious processes even if proof of exportation has already submitted.
While some of these demand letters are legitimate, many cover bonds that have been posted more than 3 years ago. In many of these cases, the demand letter will merely attach as proof details of the bond posted, without any document showing that the bond did actually exist or that the same were actually posted.
Unfortunately, many importers and forwarders have settled the demand letters, with some of them settling by way of un-receipted fees. With the present convoluted procedure for liquidating customs bonds, the practice of sending demand letters for un-liquidated bonds remains a veritable gold mine for some customs offices.
Under current laws and procedures, customs may assess additional duties and taxes against imports that have already been cleared from customs custody under the following circumstances:
(1) Within 15 days from release of the goods, upon request for re-appraisal and/or re-classification by the Collector addressed to the Commissioner, if the appraisal is deemed too low;
(2) Upon re-liquidation within one year after payment of duties arising from manifest errors in invoice or entry in return of weight or distribution of charges on invoices not involving any question of law;
(3) When payment under protest is made by an aggrieved importer; and
(4) Within 3 years from date of importation, in case of a post-entry audit.
As provided above, importations that have been cleared from customs custody can no longer be assessed with additional duties and taxes except under the instances already mentioned. Any additional assessment outside of the circumstances provided can be deemed irregular and illegal and tantamount to illegal exaction.
In the past years, however, BOC has been sending out demand letters amounting to millions or even billions of pesos without going through any of procedures required under existing law or regulation. The demand letter is issued with the threat of suspension of the importer’s accreditation, holding of delivery of future shipments and/or filing of appropriate criminal charges for alleged violation of applicable customs laws.
Some importers, particularly those perceived as ‘players’, have been forced to settle the demand letters, whether through legitimate payments or un-receipted settlements. Other importers have opted to take the case before the proper courts. Some of these cases have become acrimonious, with criminal cases being filed against importers and customs officials.
For the gateway community dealing with the previous customs administration, these practices clearly show utter disregard for the rule of law and total disrespect for constitutional and procedural rights by erring customs officials.
There are many customs processes and practices that remain improperly documented or not covered by implementing rules and guidelines which leave importers at the mercy of unscrupulous officials. The challenge for the current customs administration is to identify these practices that have long victimized importers and, going forward, provide for measures to address them either by way of documenting and simplifying the process or by way of automation. Failing that, this administration will not be any different from past administrations as far as the transacting public is concerned.
The author is an international trade, indirect tax (customs) and supply chain expert. He is the Editorial Board Chairman of Asia Customs & Trade, an online portal on customs and trade developments affecting global trade and customs compliance in Asia. He was also Bureau of Customs Deputy Commissioner for Assessment and Operations Coordinating Group (2013-2016). For questions, please email at email@example.com and firstname.lastname@example.org