BOC moves to plug leaks in assessment of imports

THE Bureau of Customs’ (BOC) initiative to “plug loopholes in the current import assessment system” to ensure that the government is not losing much-needed revenues from alleged undervalued rice imports was welcomed last Monday by a group of farmers.

The Federation of Free Farmers (FFF) on Monday said the BOC’S plan was the highlight of a dialogue they had last March 29 with Customs Commissioner Rey Leonardo B. Guerrero and other officials.

During the dialogue on the issue of rice import undervaluation, Guerrero “promised to implement key measures to stop the tariff leakage” from undervalued rice imports, according to the FFF. The FFF added that the BOC has earlier “adopted” several of its suggestions to curb undervaluation of shipments.

The agreements between the FFF and the BOC during the Monday meeting included involving the use of updated and standard tariff classification for rice imports and the provision of reference and/or indicative prices for each variety and grade of rice from specific countries.

“The reference prices should include not only the FOB [freight on board] prices or selling price at the port of origin but also those for freight and insurance,” the FFF explained.

The FFF said the BOC agreed to “require importers to fully divulge the variety, grade and other specifications of their shipments so that a proper comparison can be made between their declared import costs and BOC reference prices.”

Furthermore, the BOC vowed to “strictly require importers, whose declared import costs are found to be below BOC reference prices, to post bonds equivalent to the estimated tariff discrepancy before their shipments can be released,” according to the FFF.

The FFF said the BOC would also pursue the audit and collection of unpaid tariffs, surcharges and other penalties from erring importers and blacklist them from future transactions with the bureau.

FFF pointed out that Guerrero clarified to them that “all collections arising from the audit of import entries, including penalties and surcharges” will be part of the annual rice competitiveness enhancement fund.

“We are hopeful that the BOC under Commissioner Guerrero’s leadership will seriously address the problem of undervaluation not only in rice but also in many other agricultural products,” the group said.

“This will provide much-needed funds for the government in addressing the Covid pandemic and other urgent concerns. In the case of rice, the collection of proper tariffs will generate more resources to help farmers affected by the drop in prices caused by excessive imports,” the group added.

The Businessmirror has published numerous exclusive stories on the issue of undervaluation of rice imports, especially since the government deregulated the industry by enacting the rice trade liberalization law in March 2019.

Likewise, the Businessmirror exposed the aggressive use of unscrupulous traders and importers of farmers’ cooperatives and associations as their fronts in importing huge volumes of staple.

Since late last year, the government has suspended farmers’ cooperatives and associations as well as irrigators’ associations from importing rice.

The Businessmirror also broke the story that the BOC have found over 40 rice importers liable for undervaluing their rice shipments in 2019, resulting in a P1.4 billion collectible. (Related story: https://businessmirror.com.ph/2020/09/23/rice-importerscharged-p1-4-billion-on-undervaluation)