Home » Breaking News, Customs & Trade, Exclusives » Improved version of NVVS for adoption this year

Customs commissioner Rey Leonardo Guerrero (3rd from left) and Import Assessment Service director Yasser Ismail Abbas (4th from left) during the June 2019 launch of computer projects, including the NVVS

The Bureau of Customs (BOC) will continue to implement the National Value Verification System (NVVS) this year, even as it is working to enhance the system by improving the data collected by the agency’s electronic-to-mobile (e2m) system.

The customs bureau will continue implementing the NVVS as part of this year’s measures to facilitate trade, said BOC assistant commissioner Atty. Vincent Philip Maronilla in a recent presentation to stakeholders.

The NVVS is the agency’s internal system that customs assessment officers may access to verify whether the value declared by the importer is the price actually paid or payable for the goods when sold for export to the Philippines.

However, after the system was implemented in the second half of last year, it received complaints and concerns from stakeholders, including from the Chamber of Customs Brokers, Inc. (CCBI) and Bureau of Customs Employees Association (BOCEA). The Lower House Committee on Ways and Means even suggested suspending the system over these issues.

Import Assessment Service (IAS) director Yasser Ismail Abbas, in an interview with PortCalls on the sidelines of the event, said implementation of the NVVS is “status quo,” with no directive from the Customs commissioner to suspend it.

But Abbas said BOC plans to improve the system this year by allowing other units of measurement besides kilograms (kg) to be used in establishing the volume of different types of commodities and shipments in the E2M—its other system where stakeholders lodge and declare their shipments. By doing this, he said, the reference values in the NVVS can be improved.

Abbas explained that the NVVS is “actually entirely dependent on the E2M system” and its data.

Value verification in the NVVS is based on the previous importation, on similar and identical goods at the same period of importation, and on other methods of valuation available under Republic Act No. 10863, otherwise known as the Customs Modernization and Tariff Act (CMTA).

Abbas said that if data in the E2M are improved and have proper and specific descriptions, “then we will be able to value the commodities better and in turn it will be reflected in NVVS.”

For starters, BOC already issued in November last year Customs Memorandum Order (CMO) No. 49-2019, which requires declarants to accomplish completely and properly the supplemental units under Box No. 41 of the goods declaration in the E2M system.

For tariff headings under Annex A of CMO 49-2019, the E2M “will automatically reflect the unit of measurement as pieces…”

Under CMO 49-2019, pieces, as well as units, refer to a unit of measurement for number equivalent to an individual object or item regarded as a unit of a kind or class. Previously, the E2M only had kg as a unit of measurement, making it hard for customs brokers to justify to importers why BOC’s valuation was based in kg, even when this unit of measurement was inappropriate for the shipment and resulted in higher valuation.

CMO 49-2019 is designed to “properly assess and collect duties and taxes on imported articles,” said Abbas.

He noted, however, that compliance with CMO 49-2019 is still low, but once compliance goes up and data are sufficient, correct duties can be “reflected” to the NVVS.

Abbas said CMO 49-2019 is just the first phase as BOC also intends to incorporate other units of measurement in the E2M and eventually in the NVVS.

“We just started with units but once the compliance is already very high, then we can continue to the other phases and of course whatever unit of measurement that we change in the E2M system, it will be reflected in the NVVS,” Abbas said.

He added that IAS has been “going around collection districts” to talk about the NVVS, while trainings of appraisers on how to do proper description continue.

He also again clarified that the transaction value system has not been discarded when the NVVS was implemented, and that customs appraisers should still implement the methods of valuation under the CMTA.

Abbas said the NVVS is an “enforcement risk management tool to tell the assessment personnel that there might be a problem in the customs declaration.”

He noted, however, that some appraisers, in their previous “zealousness” to collect their targets, “dinis-regard na nila ‘yung (they disregard) documents presented by importers, then automatically upgrade [value]”, which he noted shouldn’t be the case.

Abbas said the rule is to apply method one (transaction value) first and if the importer is not able to “substantiate” their declared value, then other valuation methods should be followed.

CCBI, in a letter to Customs Commissioner Rey Leonardo Guerrero dated November 12, 2019, cited instances of “non-acceptance of the proof of payment as evidence for shipments with higher NVVS compared to the declared value.”

“There are many instances wherein shipments have been upgraded to match the NVVS value despite the submission of complete documents with proof of payments,” CCBI claimed.

BOCEA, in a statement, said they “strongly reject” the implementation of NVVS, claiming it is anti-trade facilitation as it “forces” customs officers to “adopt a valuation that is based on a database of previously utilized values with a per-kilogram unit value.” – Roumina Pablo

Photo from BOC

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