Home » 3PL/4PL, Breaking News, Customs & Trade, Maritime, Ports/Terminals » PH exporters ask for freeze on BOC stuffing policy

ID-100262586Philippine exporters are asking the Bureau of Customs (BOC) to hold off on implementing a 2010 directive that requires a customs official to be present during the stuffing of export shipments.

Philippine Exporters Confederation, Inc. (Philexport) president Sergio Ortiz-Luis, in a letter to Customs Commissioner John Phillip Sevilla, recommended keeping to the status quo for the time being. He said they see a number of problems with the January 15 implementation of the stuffing policy “for both implementers and private sector stakeholders, especially MSMEs (micro, small, and medium-sized enterprises) who will again be the victims.”

Philexport said it has received reports and complaints from its members regarding the BOC stuffing policy as contained in Section 16 of Customs Memorandum Order No. 22-2010, or the Revised Customs Operations Manual.

“While the BOC is merely reviving an existing policy that has not been implemented, we have serious misgivings about it, as it presents another opportunity for graft and corruption,” Ortiz-Luis said.

Philexport said that while inspections may be random, it will still require signatories, which pose situations for “table certification” due to the administrative and technical costs and difficulties of implementing this policy.

The confederation said inspection and monitoring of stuffing of containers requires tremendous resources if BOC “is to do this well and corruption-free.” However, the Customs Container Control Division, which handles this task, only has about 15 staff on the plantilla and reportedly another 15 on call.

Philexport said this will be no match against the thousands of containers (around 4,000 twenty-footers per BOC estimate) that are shipped daily. It added that imposing the policy, even as the BOC has admitted to insufficient manpower and communications facilities for this undertaking, “can only mean imposing another non-tariff barrier that will hurt our job- and dollar-generating capacity.”

BOC said another purpose of the policy is to ascertain the legitimacy of the exporter and his goods. However, Philexport noted that other existing BOC measures already deliver the same result. These include strict implementation of commodity clearances and the Client Profile Registration System under which an annual plant inspection is conducted.

Philexport pointed out that they know of no other country especially in the Association of Southeast Asian Nations (ASEAN) that implements the stuffing policy “simply because they see no benefit from such.” It added that bills of lading (B/L) specify that the loads are “based on Shipper’s Load and Count,” adding this has been sufficient for shipments anywhere in the world thus far.

It added that many seasoned exporters have already been certified by accredited third parties for the U.S. C-TPAT (Customs-Trade Partnership Against Terrorism) with strict procedures on access to containers and controls, which include security, stuffing, and sealing details.

Conducting such inspections, Philexport added, will likewise contribute further to the shipment delays and rising costs that exporters are already dealing with because of congestion. “Consider further that containers are piling up already and the queue to be served first is already a governance nightmare, aside from the logistics issues involved,” it said.

Moreover, Philexport said the policy is a non-revenue activity that will only drain the BOC of resources that otherwise could help achieve revenue targets. Even in the short term, this will cost the economy and will not be commensurate to BOC’s intentions for this policy, considering the safeguards that are already in place.


Gray areas

Furthermore, the exporters’ association pointed out there are other gray areas in the stuffing rule that have to be addressed to ensure transparency and trade facilitation.

One is that BOC district officers are unaware of the policy, based on reports from exporters in the regions.

Another is the availability of inspectors at nighttime, on holidays, and on weekends when stuffing takes place. Relevant to this, Philexport is asking if a system has been set up to facilitate deployment of BOC personnel especially in the regions, how long it will be administered, and how long the waiting time is before a BOC personnel gets to the factory.

Philexport noted that many of its members are small and medium-sized companies with very little or no margin in the costing and with limited factory or warehouse space to store merchandise or detain containers and chassis (the latter being very costly), as companies await the arrival of BOC personnel. Lately, containers are sealed round the clock to better cope with the massive increase in trucking charges and the frequent revisions in truck bans and container terminal acceptance timings at the ports, according to Philexport.

Moreover, for some shipments, the container cannot be sealed after cargoes are loaded because it needs to be fumigated and aerated after 24 hours. Philexport is asking if the BOC personnel will stay on for this, or if the exporter will need to file for another appointment.

It also asks what an exporter’s recourse for compensation is if a shipment deadline is missed should the BOC fail to do its part. Philexport explained that many shipments carry daily or weekly penalties in the contracts, as high as 10% on the first day of unauthorized delay, that will put exporters, especially those producing low-cost products, in the red.

This may result in business closures, loss of jobs and livelihood, Philexport pointed out.

It also noted that most sales contracts for exports are negotiated months ahead of shipment (six to nine months) and the quotations would not have included this new procedure or risk of delay.

“We have repeatedly heard Customs/the Commissioner promoting trade facilitation which could be a competitive advantage for us especially as the ASEAN integration is completed this year. The E2M (electronic-to-mobile system) is in fact a move towards this direction,” Philexport said.

However, it added that “this policy is a step back to the campaign to improve cross-border procedures to move as much trade as possible.”

The Philippine Chamber of Commerce and Industry, for its part, asked for the policy to be studied further since it will be “an impediment to trade facilitation and could further increase the cost of doing business for exporters.”

BOC Public Information and Assistance Division chief Charo Logarta-Lagamon said the agency will meet with stakeholders on January 20 regarding this matter. Earlier, BOC-Manila International Container Port officials met with the Export Development Council that questioned the move but the agency still decided to pursue implementing the policy. – Roumina Pablo

Image courtesy of Iamnee at FreeDigitalPhotos.net

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