THIS is the last of our two-part series on how to institute reforms at the Bureau of Customs (BOC). We mentioned in our previous article that efforts to create a modern customs administration should focus on the following functional areas:
– Trade Facilitation (Promotion of transparent, harmonized and simplified rules and procedures)
– Revenue Collection (Ensuring the collection of correct duties and taxes)
– Revenue Protection (Preventing smuggling and other activities)
– Border Protection (Protecting international borders from terror and other illicit activities)
Our previous articles covered some discussions on Trade Facilitation and Revenue Collection, and partly, on Revenue Protection. Below are additional thoughts on the areas of Revenue Protection and Border Protection.
Revenue Protection
There is a saying in customs that ‘shipments apprehended are those not under the protection racket of customs enforcement officials’. Meaning, smuggling remains unabated but actually promoted and protected not only by customs officials but even those officials in higher offices, including some in congress and the senate.
The strict implementation of customs controls is more a question of ‘political will’ rather than a lack of manpower and resources. The challenge for the next customs commissioner is how to insulate the bureau from political pressures not only from public officials but also from the financial backers of these public officials.
These political pressures may involve the raising of election funds or promoting and placing customs personnel in ‘juicy’ positions.
From an administrative perspective, we will need to do the following:
– Delineate and define the various police functions into the following operational areas: intelligence, fraud investigation, enforcement and border control; and
– Provide an intelligent risk management system that will link all available information coming from various customs units (accreditation, assessment, liquidation and post entry audit).
For the customs police functions, we propose the following defined functions:
- Intelligence (gathering of information and data on internal threats, e.g. smuggling modus operandi, and external threats, e.g. terrorists and international syndicates)
- Fraud Investigation (investigation and prosecution of large taxpayers engaged in fraud activities, including fraud investigations arising from post entry audits)
- Enforcement (enforcing criminal laws within areas subject of customs jurisdiction, including PEZA and free trade zones)
- Border Control (physical control and protection of the customs offices, port and air ports)
Border Protection
The protection of our international borders will involve protection not only from terror activities but also from illicit activities involving hijacking, illegal drugs, gun running and counterfeits.
Customs administrations worldwide have been implementing various security measures in the following areas:
– Port and airport security
– Airline Crew and Passenger Security
– Vessel and Container Security
– Transport Security (inland and while in transit)
– Cargo Inspection (X-ray and Scanning)
– Advance Submissions of Manifest Information
– Private Sector Supply Chain Security
Recent reports indicate that the global illicit trade is growing out of control. The World Customs Organi-zation has estimated that about 7% of international merchandise trade, or US$517 billion in 2004, involves counterfeit and pirated products.
The Philippines has also been reported to be a growing transshipment point for illegal drugs and guns.
Against all these developments, customs will need to enhance its security measures and border protection work as part of its police functions.
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