BOC files smuggling charges against food processing firm

Manila, Philippines - The Bureau of Customs, the government’s second largest revenue agency, filed yesterday with the Department of Justice (DOJ) a smuggling case against a meat-processing firm which is behind popular food brands CDO Karne Norte and Samba Corned Beef.

In a press conference at the DOJ, Customs Commissioner Angelito Alvarez said food processing firm Foodsphere, Inc. undervalued its buffalo meat imports from India by more than 32 percent.

This was vehemently denied by the company which issued a statement describing the charge as “frivolous and baseless” and expressing confidence that this will be dismissed after due process of law.

In a statement signed by company spokesman Raymond Fortun, Foodsphere explained that is was invited by the BOC on March 18, 2011 to submit importation documents covering the period 2010-2011. Fortun said the company’s authorized customs broker has been providing the necessary documents as requested. 

“The company is greatly surprised with the filing of the case as well as the press releases of the Bureau of Customs, because the validation of information has not been concluded yet and, as it were, the charges are premature at best,” Fortun said. “Foodsphere, Inc. is confident that these frivolous and baseless charges will be dismissed after due process of law,” he added.

According to Fortun, Foodsphere has been in the food business for more than 35 years now and has never been accused of any unlawful activities. 

“It has always been a good corporate citizen and has abided by all the laws and regulations of the government in all of its transactions, and will continue to do so,” Fortun said.

Named as respondent in the file sheet that was submitted by the BOC is Rolando Juan Cruz, assistant vice-president for finance of CDO Foodsphere.

The BOC also filed charges against Romeo Lerit, a Manila-based customs broker for allegedly helping the company misdeclare the value of the goods.

Also included in the charge sheet were several individuals whom the BOC deemed responsible for the release of the shipments.

The charge sheet stated that Foodsphere, which holds office in Valenzuela City, declared a per kilo value of processed meat at $1.50 or P66 for shipments that came in from October 2009 to March 2011.

The low valuation attracted the attention of Customs investigators because it was only slightly higher than the price of a half a kilo of galunggong.

Customs investigators said they noted that other meat importers declared a per kilo value of $2.58 or P113.52 for similar imported products sourced from the same supplier during the same period.

Customs Deputy Commissioner Gregorio Chavez said that overall, the dutiable value of Foodshere’s shipments, based on the value declared by other importers amount to P1.094 billion.

According to Chavez, Foodsphere declared a combined dutiable value of only

P675 million for all its buffalo meat import entries. As a result, the company paid only P67 million for customs duty when it should have been assessed the amount of P109 million, Chavez said.

Foodsphere used falsified invoices to support the gross undervaluation of their various importations, Chavez said.

The agency will also investigate if such practice was employed by the company in previous importations, Chavez added.

The BOC is tasked to collect P320 billion this year. Last year, the bureau had a target of P280 billion but it was able to collect only P258 billion.