BOC questioned over release of P1.4 billion goods

MANILA, Philippines — The Commission on Audit (COA) has called out the Bureau of Customs (BOC) for allowing the release of imported goods worth P1.441 billion despite the lack of import permits and other supporting documents.

“Importations of 553 regulated commodities costing P1.441 billion were processed and released despite the lack of import permits and other supporting documents required under Section 117 of the Customs Modernization and Tariff Act (CMTA) and other relevant laws, rules and regulations implementing the CMTA, thus, defeating the purpose for which these rules and regulations were established,” the COA said in its 2021 annual audit report on the BOC.

The COA said its audit team’s adverse finding was based on the review of the sample goods declarations submitted by the Manila International Container Port (MICP) and the Port of Manila (POM).

Its breakdown showed that the MICP was responsible for the release of 321 entries of regulated commodities with P757.263 million in assessed duties and taxes despite lack of License to Operate, Certificate of Product Registration and electronic Authority to Release Imported Goods, required under the CMTA and other customs rules.

The POM, meanwhile, was found responsible for the release of 232 entries of imported luxury vehicles with assessed duties and taxes amounting to P684.029 million.

“Importation of luxury vehicles assessed and released without the necessary permits/clearances/certifications and other required supporting documents,” the COA said.

The audit body stressed that under Section 117, Chapter 3 of Republic Act 10863 or the CMTA, “goods which are subject to regulation shall be imported or exported only after securing the necessary goods declaration or export declaration, clearances, licenses, and any other requirements, prior to importation or exportation.”

The same law also states that “in case of importation, submission of requirements after arrival of the goods but prior to release from customs custody shall be allowed but only in cases provided for by governing laws or regulations.”

“While the non-submission of the required documents for the 553 regulated importations by the importers has not significantly affected the assessment of the duties and taxes, the processing and release by the port officials without the necessary documentation defeats the purpose for which the above regulations were established,” the COA said.

The COA, nonetheless, noted that the BOC has already agreed to the audit recommendation to require all ports to strictly enforce compliance with all the rules under the CMTA before allowing the assessment and release of imported goods.

974 erring importers

In the same audit report, the COA admonished the BOC over its failure to suspend or revoke the accreditation of 974 importers with outstanding smuggling cases or other violations of customs laws, allowing them to continue to import goods with assessed duties and taxes amounting to P28.954 billion.

“Lack of effective/strict monitoring and coordination in the process of accreditation of importers, which signifies lack of internal control, resulted in 974 importers who were not suspended/revoked appropriately by the BOC and were allowed to import 77,049 consumption entries with assessed duties and taxes amounting to P28.954 billion despite violations of laws, rules, and regulations,” the COA said.

The COA’s record showed that 644 of the importers have records of “violations, seizure/ abandonment and smuggling cases” while 330 importers were considered “habitual violators” in terms of proper declaration of their imports.

Still, 762 of the erring importers “remain in active status and continuously transact with BOC” while 45 importers have expired accreditations but the same were still not suspended or revoked by the BOC, the COA noted.

Also the COA said that accreditation of 167 other erring importers “were not found in the list” provided by the BOC.

“When left uncorrected, this may cause the breakdown of risk controls, which will significantly affect the efficient implementation of accreditation and defeat the purpose of accreditation,” it said.

The COA said that the BOC management agreed to “maintain an organized and effective monitoring system of all violations of importers and ensure that proper actions are taken, as warranted,” among other audit recommendations.