IN the past weeks, several associations within the port community have been protesting against the alleged ‘harassment’ by agents of the Presidential Anti-Smuggling Group (PASG) against importations released from customs custody. To date, there had been many reported incidents of legitimate importations being apprehended by the group. Even importations by exporters, particularly those located in PEZA zones, have not been spared from these ‘harassments’. In one instance, PASG agents accordingly demanded proof of payment of duties and taxes on a shipment bound for the PEZA zone.
Last month, the Congressional Oversight Committee on Physical Examination of Imported Articles (COCPEIA), headed by Congressman Exequiel Javier, wrote the Bureau of Customs (BOC) to follow up on their ‘request for connectivity for real time access to the Automated Customs Operating System (ACOS)’. In addition, the oversight committee requested BOC to provide them with office space within the bureau.
PASG Memorandum dated August 4, 2009
In a memorandum issued last week, Undersecretary Antonio Villar instructed all PASG operating units ‘to desist from apprehending container vans allegedly containing smuggled or prohibited goods/articles while the same are in transit’ and that ‘apprehension thereof must be conducted at the point of destination and/or warehouse’.
Apparently, the memorandum was issued as a response to increasing protests by the port community against the activities of PASG. Various organizations have in fact made formal written protests against the group and have addressed the same to President Gloria Macapagal-Arroyo (PGMA) and other cabinet officials.
Intervention with Customs Functions
Since 1999 and after the abolition of the Economic Intelligence and Investigation Bureau (EIIB), the Executive Department has intervened with customs functions through the creation of various ad hoc bodies.
It will be remembered that the late President Corazon Aquino created EIIB in 1987 with the mandate to receive, gather and evaluate illegal activities affecting the national economy. In 1999, due to alleged failure to perform its mandate and reported abuses committed by its personnel, President Joseph Estrada abolished the bureau resulting in the termination of the employment of about 1,500 employees.
In 2004, through EO 297, PGMA created the National Anti-Smuggling Task Force (NASTF), under the helm of Department of Interior and local Government (DILG) Secretary Angelo Reyes. Tasked to provide advice and recommendations to the President on violations of tax laws and to address the unabated smuggling of goods into the country, NASTF worked for 6 months but was abolished by PGMA immediately after the elections.
PASG and COCPEIA
In 2008, PGMA created PASG with similar functions as that provided for the defunct NASTF. In June 2009, Congressman Javier wrote a letter to BOC, informing the latter of the powers and duties of COCPEIA such as the following:
- Review and monitor implementation of procedures for physical examination;
- Identify high risk commodities and recommend for inclusion Red-Selectivity;
- Coordinate with BOC for advance copies of Inward Foreign Manifests (IFM);
- Coordinate with BOC for linkage with ACOS; and
- Coordinate with customs enforcement units.
In addition, COCPEIA representatives have been empowered to conduct spot checking of shipments in coordination with customs personnel and that the continuous processing of spot checked shipments ‘shall not be allowed without the accompanying report form’ of COCPEIA.
Observations
Against all these developments, we have identified some of the policy issues and concerns below:
- Smuggling remains unabated and customs has failed miserably in preventing these illegal activities.
- The creation of ad hoc bodies, while well-meaning, is bound to fail. These bodies lack the technical skills to perform customs functions and due to its temporary nature, these bodies are generally co-opted by the corrupt system.
- The creation of COCPEIA is obviously an intrusion into what is clearly a function of the Executive Department. It is patently illegal and unconstitutional. Many quarters are now raising issues as to the real purpose of its creation in the light of the fact that elections are forthcoming.
- Historically, collections by revenue agencies dip in the months preceding a national election. This may be coincidental but we actually see this phenomenon as a major reason for the maladies afflicting the customs bureau.
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