The Department of Trade and Industry (DTI) will file criminal and civil charges against the importer of a shipment of 20,000 metric tons (MT) of steel bars that arrived at Subic Port from China for violating trade regulations and the Philippine Consumer Act.
The decision stemmed from importer Mannage Resources Trade Corporation’s (MRTC) lack of cooperation with a request to re-inspect  the shipment, and from reports that several truckloads of the steel bars were taken out of the port without clearance.
DTI said the inspection report by DTI Region 3 (Central Luzon) dated November 23, 2016, as attested by the importer’s own representative and evidenced by photographs, indicated that more than 50% of the steel bundles of the shipment that arrived on November 2 last year had missing tags, making it difficult to identify the declared manufacturer of the steel bars in China and to trace their specific production lot/batch.
DTI also withdrew the import clearance certificate (ICC) for the shipment, which was the largest ever shipped to the country, to ensure public safety while it established the quality of the shipment.
Shortly after issuing the letter of ICC withdrawal, DTI requested a joint re-inspection with the importer, MRTC. The inspection team was tasked to determine if the shipment remained intact and if no steel bars were distributed in the market, and to conduct a technical assessment of the issue of the missing tags and the traceability of the shipment to the manufacturer in China and to the mill’s production batches.
However, MRTC disallowed the team from entering its premises to conduct the joint re-inspection, a clear violation of Section 5 of Department Administrative Order No. 05, Series 2008, on the authority of the DTI to ensure that the shipment is intact pending the approval/denial of the ICC, said DTI.
With the importer’s non-cooperation and reports of several truckloads of the steel bars being taken out of the Subic storage area without an ICC, DTI will be filing administrative charges against the importer for violation of DTI rules and regulations. The agency will likewise file criminal and civil charges against the company for violation of Republic Act No. 4109, or Standards Law, and R. A. No. 7394, or the Consumer Act of the Philippines.
More importantly, DTI is tracking these steel bars and coordinating with consumer groups in order to raise awareness that the products may have been leaked to the market.
The Bureau of Customs and the Subic Bay Metropolitan Authority, which has jurisdiction over Subic port, have also alerted their personnel to prevent the release of any imported steel bars without DTI’s clearance.
DTI said its officials are committed to ensure that only steel products that comply with Philippine National Standards, Product Certification Scheme, and provisions of the Standards Law and the Consumer Act of the Philippines are sold in the market. Any importer that does not comply with these provisions will be held fully liable under the law, it added.
The Philippine Iron and Steel Institute (PISI) last year called the attention of BOC to the fact that MRTC had apparently undervalued its shipment, declaring total freight and insurance costs of P1.9 million, or less than US$2 per metric ton.
PISI said prevailing freight and insurance rates were $9 per metric ton from China to Hong Kong; $15 per MT from China to Singapore; and $18 to $25 per MT to the Philippines.
Freight and insurance costs form part of the basis for determining the duties an import shipment should pay.
BOC said it has recovered an estimated P1.7 million worth of duties and taxes from MRTC after a careful review of the documents submitted confirmed that the steel importation was undervalued; hence, an adjustment of $16.50 per metric ton was made to the freight charges.
Pursuant to Section 1400 of the Customs Modernization and Tariff Act, BOC cannot compel MRTC to pay surcharges since “no surcharge shall be imposed when the discrepancy in duty is less than ten percent (10%).” But MRTC has already voluntarily corrected the undervaluation and paid the additional duties and taxes.
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