Customs issues

This is a follow-up letter to the series of columns of Mr. Jarius Bondoc published in your paper, the latest of which was entitled “More Customs issues for Dellosa to explain” (Gotcha, 02 April 2014). Before I proceed, I wish to express my sincerest gratitude for the publication in full of my first rejoinder in yesterday’s issue of the Philippine STAR.

My first letter to the Philippine STAR conveyed an invitation for Mr. Bondoc to visit our office to afford us an opportunity to provide him data and information to hopefully enable him to develop a balanced report. However, it would seem that your columnist is confident on the reliability of sources that provided him documents, allegedly from my own office. Reiterating my view that media plays a key role in accurately informing the public of the Bureau of Customs reform effort, may I provide this rejoinder to set the records straight. Offhand, I apologize if this letter appears to lecture on Customs laws and procedures. However; the assertions of your columnist indicate the need for some refresher.

To re-emphasize, an alert order is not a seizure order, but is simply a means to subject a shipment to more thorough examination based on derogatory information. In his March 24, 2014 column, Mr. Bondoc cited five specific cases of importers paying additional duties and taxes as a result of the alert orders issued, imputing that their non-seizure translated to revenue losses for the government. To clarify, the duties and taxes adjustments are made by Customs Examiners, not by Intelligence Group (IG) agents, after the conduct of a 100 percent examination of the alerted shipment. A Warrant for Seizure and Detention (WSD) is recommended to the District Collector when the discrepancy exceeds 30 percent.

To expect that every Alert Order will result to the seizure of the alerted shipment is unreasonable. And if I may add, alerts against undervalued declarations during the early part of my assumption were meant to effect a change in the importers’ and brokers’ declaration behavior to rectify a tolerated practice termed as ‘benchmarking’. The aggregate additional duties and taxes gained after thorough examinations that were made possible by Alert Order issuances constitute the P24.5M additional revenues for the government.

That said, this Office has observed that Mr. Bondoc’s sources have been selective in the alert cases they provided to your columnist. Attached to this letter, therefore, is a partial list of seizures of shipments of some consignees referred to in the Gotcha columns. (Tab A)

On the specific cases cited in the March 26, 2014 column entitled “Customs freeing contraband despite obvious smuggling”, I regret to inform your columnist that his sources have provided him with incorrect computations, or maybe even polluted data. Our verification has resulted to the following findings:

a) Allegation: In his 3rd Endorsement dated Feb 13,2014, Gen. Dellosa reversed his own Alert Order No A1IG/20140130-102 despite a clear discrepancy from the original value of $5,315 as against the adjusted value of $7,281. The $1,966.00 difference was 37 percent from the original declaration, and this should have led to the confiscation of the goods.

Fact: The reported 37 percent discrepancy for the shipment consigned to Sagrav Trading is incorrect. Based on the Discrepancy Report Form duly attested by the Customs Examiner, the actual percentage discrepancy assessed was only 25 percent, and the consignee was imposed an additional payment of P54,469. (Tab B) (Note: A computation review using the formula prescribed in CMO 01-2014 will increase the discrepancy to 27 percent that is still below the 30 percent threshold.)

b) Allegation: In his 2nd Endorsement dated Jan 27, 2014, Gen. Dellosa lifted his own Alert Order No. A1IG/20131206-105 despite the clear discrepancy from the declared value of $5,794.97 as against the adjusted value of $7,700. The $1,905 difference was 32 percent from the original declaration, and this should have led to the seizure and auction of the shipment under Section 2305.

Fact: Again, the alleged 32 percent discrepancy for the shipment consigned to Northwings Enterprise is incorrect. Based on the Discrepancy Report Form of the concerned Customs Examiner, the actual percentage discrepancy assessed was only 26 percent. Under the law, the shipment was not subject to seizure but was only imposed additional duties and taxes plus surcharge amounting to P53,493. (Tab C)

c) Allegation: In his 2nd Endorsement dated Feb 14, 2014, Gen. Dellosa overturned his own Alert Order No. AIIG/20140122-1D2 despite the discrepancy from the declared value of $9,365 as against the adjusted value of $12,900. The $3,535 was 37 percent from the original declaration, and this should have resulted to the confiscation of the shipment, and yet it was released to the erring importer.

Fact: The alleged 37 percent discrepancy of the shipment consigned to Era Pottery is incorrect. Based on the report of the concerned Customs Examiner, additional duties and taxes in the amount of P24,894 was imposed after determining a percentage discrepancy of 27.4 percent. (Tab D) (Note: Per analysis, the erroneous percentage discrepancies cited in Gotcha columns stem from Mr. Bondoc’s use of a formula based on CAO 10-93 and CMO 64-93. Attached herewith for reference is Customs Administrative Order No. 01-2014 that repealed/replaced previous CAO/CMO pertaining to guidelines on the imposition of surcharges.)

d) Allegation: Gen. Dellosa violated his own Alert Order No. NIG/20131018-115 when he allowed the unexamined release of cargo consigned to Copperfield Marketing. Said shipment is linked to Manny Santos, an admitted partner of Davidson Bangayan.

Fact: The shipment that Mr. Bondoc wrote as having been released unexamined is inside the Manila International Container Port (MICP). Seizure 10 No. 12-2014 was issued against the shipment on 21 January 2014 after this Office recommended for the issuance of a Warrant of Seizure and Detention (WSD) to the District Collector MICP. (Tab E) We would appreciate Mr. Bondoc’s assistance for information pertaining to Manny Santos’ link with the shipment of Copperfield Marketing.

e) Allegation: Gen. Dellosa “invented segregation” when he ordered the confiscation of one portion of the shipment, and allowed the release of other portions. Whether deliberate or the result of ignorance of the Customs Code, the invented “segregation” is unlawful, and both the declared and concealed goods are subject to confiscation and auction. Segregation was applied in the case of Alert Order No. NIG/20131104-101 and Alert Order No. NIG/20131104-102 pertaining to shipments consigned to Flavie Enterprises.

The final action of the Commissioner to review our recommendations, the earlier cases cited with respect to the assessment recommendations of Customs Examiners and the legal recommendations of the Chiefs of the Law Division are testaments that check and balance mechanisms, and the principle of transparency are very much in-place in the Bureau. Mr. Bondoc could have been spared the embarrassment of making inaccurate accusations if only he validated with our office the information provided to him by his sources.

This Office was compelled to write this supplemental rejoinder as the timing of Mr. Bondoc’s malicious columns suspiciously coincide with the contrived Ombudsman complaint filed against IG personnel that was widely circulated to media outlets. The complainant later recanted after the deception was exposed with the denial of his supposed employer-consignee. It is with a deep sense of duty, therefore, that I must correct the disinformation to protect the reputation of your respected paper, and to thwart designs to discredit our Office and the on-going reform campaign in the Bureau of Customs. It is my hope that with the facts presented herein, the editors of the Philippine STAR will convey our points to Mr. Bondoc, even as my invitation for him to visit our office remains. We will provide him access to our documents to validate the reports provided to him by his sources.

On this note, the Office of the Deputy Commissioner Intelligence Group once again reiterates our steadfast commitment to this reform effort, and we look forward to a more robust exchange with your paper to provide the public with updates to generate greater awareness and public support for the programs of the Bureau. Thank you for your fairness and kind attention. — GEN. JESSIE D. DELLOSA (Ret.), Deputy Commissioner, BOC