Customs prodded to make public import prices of smuggled goods

MANILA, Philippines - Stepping up their fight against smuggling, local business groups are urging the Bureau of Customs to make public declared import prices of the most commonly smuggled goods to enhance transparency and protect legitimate businesses from illicit trade.

Some of the most frequently smuggled products include rice, corn, palm oil, tobacco, steel, cement, and ceramic tiles.

About 33 domestic industries comprising the Federation of Philippine Industries launched the Fight Illicit Trade Movement (Fight IT) in a bid to curb smuggling which has been deemed by both the government and the business community as one of the major constraints that affect the competitiveness of corporations.

Fight IT lead convenor and FPI chairman Jesus Arranza said the government has lost billions in tax revenues due to illicit financial flows.

Arranza said smuggling or the illicit introduction of goods into a country to evade the payment of duties and taxes cost the Philippines about $25.8 billion in 2011 alone.  This was based on the study made by Global Financial Integrity, a Washington D.C. based research and advisory organization.

According to GFI, a fourth of all goods imported into the Philippines were not reported to the BOC.  It noted that $410.5 billion flowed through the Philippines as “illicit funds” from 1960 to 2011.

Of the $410.5 billion, $277.6 billion resulted from underreporting goods.

While the BOC has undertaken reforms to address the problem of smuggling, the Fight IT Movement believes there are still a lot of things that need to be done to stamp out smuggling and corruption.

 “One way of highlighting the menace of smuggling is for the customs bureau to publish the declared import prices of frequently smuggled goods. This is consistent with the BOC’s mandate under the Tariff and Customs Code to prevent and suppress smuggling and other customs fraud,” Arranza said.

Arranza said posting the declared import prices on the Custom bureau’s website adheres to the principles under the Revised Kyoto Convention that necessary information regarding customs shall be provided to interested parties.

He said concerned citizens can also readily alert authorities if they come across suspected smuggled products.

Misclassification has been the most commonly used form of technical smuggling aside from the channeling of shipments to remote ports to avoid detection of the substandard imports.

The Fight IT Movement has laid out measures to curb smuggling and shore up state revenues.  These include commissioning a research on smuggling in key sectors to be published regularly, providing  recommendations to bills pending in Congress with key priority on the passage of the Customs Modernization and Tariff Act, and the holding of a reinvigorated and more focused anti-smuggling summit later this year with an emphasis on consumer protection.

The Fight IT Movement also calls for strengthened collaboration with government agencies and other business organizations,  training of law-enforcement agencies on how to spot fake products, setting up of an informer’s reward program,  and providing regular updates to the BOC and the Bureau of Internal Revenue on key smuggling issues.