Exporters back expansion of PSI coverage in BOC

The Philippine Exporters Confederation Inc. (Philexport) is opposing a proposal to extend the coverage of the pre-shipment inspection (PSI) to include containerized cargo in the Bureau of Customs (BOC), saying corruption and not the lack of PSI is the real culprit for the rampant smuggling in the country.

In a position paper addressed to Sen. Franklin Drilon, Philexport chairman Paterno Dizon expressed the group’s apprehensions over the lawmaker’s proposal to amend Administrative Order 243 and 243-A, allowing containerized cargoes to be included in the current PSI system.

While the group shares Drilon’s concern over smuggling, Dizon said Philexport does not agree with Drilon’s observation that the recent case of massive shipment of illegal drugs would have been detected with PSI done at the port of loading.

“Corruption is the ultimate reason why this has happened and not the lack of PSI system,” Dizon said.

Dizon said implementing the PSI system would be a violation to the latest World Trade Organization (WTO) trade facilitation agreement which provides that WTO member countries “shall end preshipment requirements and encourage not to introduce such inspection requirements in relation to tariff classification and customs valuation.”

He said implementation challenges also surround PSI, ranging from the need for a dispute settlement mechanism to handle conflicts and disagreements on the inspection report to potential bottlenecks affecting surveyors pertaining to cost, availability and place of inspection.

“Implementing PSI will add another layer of bureaucracy, serve as possible source of corruption and add significantly to the costs of all importers. And again, there is no guarantee that illegal shipments would not enter the country. All these should not hamper the inspection and create unnecessary costs to the supplier/exporter,” Dizon said.

According to the export group, the BOC should implement instead relevant provisions in the Customs Modernization and Tariff Act supporting trade facilitation, among which are the adoption of international standards and best practices in customs administrations laid down by international agreement or convention as well as employing modern practices in customs administration and using information and communications technology (ICT) to implement customs functions.

“Having an ICT-based system will reduce delays at border/entry points and expedite release of goods,” Dizon said.

Philexport also recommends strengthening the BOC’s risk management program, fast-tracking institutional reforms and establishing and strengthening the Authorized Economic Operator program to institute the advance clearance process, periodic lodgment, and expedited customs clearance of exports.

BOC is also urged to invoke its statutory and administrative power for import control such as continuing alerts, hold orders, border inspection, post-entry audit, and seizure.

“These measures only need proper and strict enforcement,” Dizon said.