Tuesday, January 25, 2022
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IVSP Terms of Reference

IN August of last year, we wrote that the Bureau of Customs (BOC) was finalizing its plan to outsource certain customs functions in order to further enhance customs-business partnership and promote trade facilitation. The plan then was for customs to qualify prospective Information Validation Service Provider (IVSPs) and cargo surveyors.

Last week, BOC published its Terms of Reference (TOR) to invite third parties to apply for accreditation as an IVSP.

IVSP Terms of Reference

Under the published Terms of Reference (TOR), selected IVSPs shall provide services as follows:

  • Gather information for the CPRS such as: company profile, pictures of applicant and company premises, capital structure, shareholders, officers, and profile of representatives to customs;
  • Develop systems and procedures for validation information disclosed by stakeholders dealing with customs; and
  • Develop a risk assessment system and electronic database using the information submitted by stakeholders and other data from various sources.

Prospective applicants are required to have the following qualifications:

  • Primary purpose to engage in background investigation;
  • Operational in the Philippines for the past three years;
  • Track record in background investigation in the last three years;
  • Existing electronic database of previous background investigations;
  • Global network and databases; and
  • Capability to service all identified BOC collection districts.

Related Customs Program

In addition to the IVSP program, customs is likewise finalizing the Cargo Survey program for bulk and break bulk cargo. Under CAO 6-2008, as implemented by CMO 35-2008, cargo survey at the port of loading and port of destination shall be performed only by surveying companies duly accredited by customs. The accredited surveying company shall be required to submit survey reports to customs in electronic and manual formats based on industry standards and within 24 hours from the time and date of sailing of sailing of the carrier.

The survey report on bulk and break-bulk cargo will be used by customs determine the dutiable weight, volume, dutiable value and description of imported articles, without prejudice to physical verification under certain circumstances.

Third Party Validators

Given the ongoing customs programs, a third party service provider will mostly be involved in many aspects of customs operations relating to supply chain security, trade facilitation, customs compliance and risk management.

Specifically, the service provider may as well function under the following customs programs: (1) the Client Profile Registration System (CPRS); (2) the Cargo Survey system for Bulk and Break bulk Cargo; (3) risk profiling and assessment under the Post Entry Audit system; (4) the Authorized Economic Operator (AEO) program, and (5) selection of cargo for physical examination based on an automated risk management system.

Warning Signs

As previously written, there should be clear benefits to the trading community in terms of trade facilitation and enhanced security in the supply chain. These benefits, however, may not be fully maximized if the programs are improperly implemented and managed.

The present applicants for cargo surveyor are expected to also submit their applications for accreditation as an IVSP. It is imperative for customs to select only credible and reputable companies. Similar to the current VASP program, it is imperative for customs to accredit at least three companies for both the IVSP and cargo survey programs.

Certainly, there will be costs involved. The published TOR, with its strict qualification standards, has already disqualified many prospective applicants who may have otherwise been competent to provide the services required by customs. At the very least now, customs should accredit numerous providers to give stakeholders a free hand to select the most competent, capable and cost-effective provider.

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 agatonuvero@yahoo.com and agatonuvero@customstrade.asia 


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