Customs told to keep an eye on sugar smuggling red flags

CEBU, Philippines —  Finance Secretary Carlos Dominguez III has instructed the Bureau of Customs (BOC) to be on the lookout for possible smuggling of sugar, following reports that certain traders have been exporting the commodity and replacing them with import volumes much bigger than what they had been shipping overseas.

“The sugar price domestically is much higher than the world market price. So there is going to be an incentive for people to smuggle in sugar,” Dominguez said during a recent Department of Finance (DOF) executive committee (Execom) meeting.

Dominguez also told Customs Commissioner Rey Leonardo Guerrero during the Execom meeting that he has received reports from officials of the Bureau of Internal Revenue (BIR) in Cebu about a company authorized to export sugar, but which has been shrewdly replacing its overseas shipments with volumes that are way higher than what it had exported.

“Please keep an eye on those gaps,” Dominguez told Guerrero.

As for the BIR, Deputy Commissioner Arnel Guballa said he has long been coordinating with the Sugar Regulatory Administration (SRA) to ensure that traders secure prior clearance from the Bureau to be able to import sugar, in compliance with Dominguez’s earlier directive.

Under the export replenishment program of the Sugar Regulatory Administration (SRA), exporters of “A” sugar/quedans, which is for sale to the United States (US) at a preferential rate, may import the commodity in raw or refined form to replace the volume they sold overseas.

This replenishment scheme ensures that the supply of sugar remains stable in the domestic market.

The importation is allowed provided that the volume of sugar that an exporter may import shall not exceed the volume of “A” sugar/quedans it exported.

The SRA classifies sugar into “A” for sugar for export to the US, “B” for domestic consumption, “C” for reserves, “D” for export to countries other than the US and “E” for food local processors.

The Philippines is one of the select countries given an annual allocation of sugar exports to the US market.

During the meeting, the BOC also reported that from January 1 to June 14 this year, it has so far seized P7.22 billion-worth of suspected smuggled goods, of which the bulk are mostly counterfeit items valued at P4.33 billion; cigarettes and other tobacco products estimated to cost P1.13 billion; general merchandise, P863.23 million; and illegal drugs, P373.16 million.

The other seized goods were agricultural products, vehicles and accessories, used clothing, electronics, firearms, alcoholic beverages, wildlife, medical supplies, jewelry, chemicals, currency and fuel.

Guerrero also reported that the BOC Action Team Against Smugglers (BATAS) filed a total of 42 criminal cases against 154 suspected smugglers before the Department of Justice (DOF), and 32 administrative cases against brokers before the Professional Regulation Commission (PRC) over the January 1-June 11 period. (dof.gov.ph)