CUSTOMS Commissioner Alberto Lina on Friday vowed to implement the edict originally issued by his close buddy, former Commissioner Angelito Alvarez, which tightened the rules on transshipments.
The move was a measure to prevent a repeat of an incident that happened more than four years ago wherein around 2,000 container vans of highly taxable goods worth at least P3.6 billion went missing without a trace while being transported to the Port of Batangas.
Ironically, the incident about the missing containers happened under the watch of Alvarez, which eventually forced his resignation after only 14 months on the job.
Lina issued Customs Memorandum Order No. 28-2015, directing that all sea shipments, intended for use or consumption in the country, will be covered by the necessary import entry for immediate consumption, whether formal or informal, at the assessment office at the port of first discharge upon importation into the Philippine territory even if the final destination is another port.
Transshipment, which is allowed by the Tariff and Customs Code of the Philippines (TCCP), refers to the movement under customs guard of imported cargoes from their original port of discharge to their final port of destination.
Previously, it has been a practice in the ports that the assessment of imported goods for transshipment was done at the port of final destination rather than at the port of original entry.
“This now requires the immediate filing of import entries and the payment of duties and taxes of goods at the port of first discharge instead of the practice of allowing the filing of entry and payment of duties in the port of final destination. To illustrate, the old practice allows cargo discharged in a Manila port to be transshipped to Cebu (as port of final destination) where the import entry will then be filed, and the duties and taxes will be assessed and paid,” Customs Deputy Commissioner for Assessment and Operations Agaton Uvero explained.
“Transshipments will no longer be allowed and the filing of the entry at the final destination shall be strictly prohibited. That way, we prevent containers from missing during transshipment,” he said.
Uvero also pointed out that importers would now have to immediately file an import entry and pay duties and taxes in Manila before the same could be transported to its port of destination.
The order excludes shipments imported by accredited locators of the Philippine Economic Zone Authority (PEZA) and free ports; articles intended for use by accredited Customs Bonded Warehouses (CBWs); and those imported for immediate exportation.
Alvarez was the first Customs commissioner under the Aquino administration. He assumed BOC’s top post on July 7, 2010, replacing Napoleon Morales who served as commissioner for six years under the Arroyo administration.
Prior to his appointment, Alvarez ran a number of firms under the Lina Group of Companies. Among them as president and chief operating officer of Airfreight 21000 and president of PBA team Air21, all owned by Lina.
Alvarez was forced to resign on September 16, 2011 after President Benigno S. Aquino 3rd publicly announced that he was no longer satisfied with the former’s performance.
The BOC’s Management Information System and Technology Group confirmed that a total of 1,910 containers vans disappeared without a trace and without a single cent paid to the government.
During a congressional investigation, Laoag Rep. Rodolfo Farinas said that the government lost P3.6 billion in revenues out of the incident.
Alvarez has since changed the rules on transshipment as an offshoot of the missing container vans because of the practice’s alleged susceptibility to abuse and misuse.
The directive was no different from Lina’s. Under Alvarez’s ruling, it stated, “payments of duties and taxes would be made at the port of discharge, not anymore on the port of final destination.”
“There’s no reason why importers would pay at the port destination and not on the port of discharge as the amount to be paid remains the same. Transshipment has become a marketing tool for customs collection districts who are forced by circumstances to attract the patronage of as many customers as they could bet because of their district’s need to meet high collection targets,” Alvarez said.
“That way, we ensure the payment of duties and taxes due the government and there would be no more undergoing while the goods are being transshipped. So whatever happened to the containers vans and its contents while on transit, payments has already been paid,” he explained.