Rice importer chides NFA for ignorance of trade laws

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The legal counsel of rice importers whose shipments have been questioned by the National Food Authority (NFA) on Monday chided the state-run agency under the Department of Agriculture (DA) for unlawfully holding rice shipments brought in by his clients, Silent Royalty Marketing and Starcraft International, and accusing them of allegedly being involved in rice-smuggling operations in Davao.

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Lawyer Benito Salazar, lawyer for Silent Royalty Marketing and Starcraft International, advised officials of the NFA, particularly NFA Administrator Orlan Calayag, “to become better acquainted with the laws regarding rice importation” as the agency’s communications to his client “betrays an ignorance of international trade agreements that reflects poorly on the competency and capability of those tasked to manage such a critical agency.”

Salazar was reacting to statements made by Calayag that his clients, Starcraft International and Silent Royalty Marketing, among other consignees, were allegedly involved in rice smuggling in Davao.

Calayag said he has asked the Bureau of Customs (BOC) to file necessary charges against the alleged rice smugglers, as well as the concerned BOC allegedly involved.

“We take exception to the statements of the NFA and emphasize that all rice shipments of Starcraft International and Silent Royalty Marketing have been fully declared as rice; there has been no misdeclaration of the said shipments, no attempts to hide anything,” Salazar said.

“How can the NFA accuse us of smuggling rice into the country,” Salazar explained, “when my clients openly declared that they were importing rice into the country without an import permit, a fact they made known to NFA officials in letters sent to them on August 20 and September 10. The NFA was further advised of the expiration of the quantitative restrictions under the World Trade Organization (WTO)-General Agreement on Tariffs and Trade (GATT) the consequence of which is that rice importation would no longer require import permits.

The NFA had written Silent Royalty Marketing on August 5 requiring the company to submit within five days from receipt an explanation regarding its shipments.

The letter, signed by Calayag, further warned that its failure to “submit an explanation as required” would be deemed as a waiver of the company’s “right to be heard on the matter.” Calayag also threatened to submit the case to authorities “for appropriate action.”

Salazar’s firm, however, fired back and informed Calayag that the NFA interpretation of the laws governing the rice imported by Silent Royalty Marketing and was “incorrect and without basis.”

In its August 20 letter to Calayag, Salazar stressed that “the present regime of granting rice import quotas and the corresponding permit to import is really based on the extension of the Philippines’ right to impose quantitative restrictions on rice.

That extension of the right to impose quantitative restrictions, however, expired in June 2012,” Salazar explained.

“As such,” Salazar emphasized, “the country in essence has no more legal right to impose quantitative restriction [QR] on rice.”

With no QR, no import permit may be required for rice importation.

As the government has no legal basis to do so, Salazar said in his letter, “the government therefore cannot legally hold any shipment of rice but rather should only impose proper tariff.”

Quantitative restrictions allow member-countries of the WTO to restrict the importation of sensitive agricultural products. From its entry in the WTO in 1995 to 2005, the country has been allowed to exempt rice from full import liberalization and has instead been granted permission to impose quantitative restrictions on rice. In January 2004, the country requested an extension of the privilege, and was allowed to continue imposing quantitative restrictions until June 2012. The Philippines has twice appealed to the WTO to gain another extension, in December 2012 and March 2013. In both instances the WTO did not grant the said extension.

“The DA continues to hold negotiations to extend quantitative restrictions because it knows our right to impose them has expired.

“That the NFA continues to use this as an excuse for holding my clients’ legitimately imported rice makes us wonder if its officials have other motivations for holding the shipment,” said Salazar.

DA and NFA officials are currently the subject of ongoing inquiries in the Senate and the House of Representatives over the alleged overpricing of over 200,000 metric tons of rice imported in April under a government-to-government transaction. Several groups have accused agriculture officials of pocketing as much as P412 million from the said transaction.

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