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Anti-Smuggling in the Philippines

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Senators and business sectors are once again pushing for the revival of the anti-smuggling task force after its abolition. But PGMA has now turned over the tasks back to the Bureau of Customs giving it 60 days to solve smuggling activities and boost up its collections, or else she would revive the anti-smuggling task force. Will the newly appointed BOC Commissioner and officials be able to put together the Bureau in better shape in two-months time?

Through Executive Order No. 297 issued on March 10,2004 for the purpose of providing advice and recommendations to the President on violations of tax laws and to address the unabated smuggling of goods into the country, the anti-smuggling agency or the National Anti-Smuggling Task Force (NASTF) came to light. Department of Interior and local Government (DILG) Secretary Angelo Reyes immediately assumed the position as its task force chief. Thereafter, with the government s unwavering campaign against smuggling, Reyes and the NASTF agents thrived the waterfronts for six months, exercised the powers of search and seizure under the provisions of law (R.A. 1937) and consolidated effort to pre-empt, prevent and suppress smuggling activities including apprehension of smugglers and their accessories, as mandated by the Executive Order.

But immediately after the national elections, the NASTF was abolished. PGMA shifted the reigns of power and control over smuggling activities to the Bureau, under its new Commissioner George Jereos.

NASTF advocates Senators Mar Roxas and Juan Ponce Enrile are questioning the Palace for shelving the task force when it was supposedly winning the battle against smuggling.

Testimonies from business sectors intoned that NASTF is responsible for the reduction in smuggling, as statistics have shown in the recent months.

But PGMA has given the authority back to BOC and to ensure that BOC meets its two-month target, the President has even extended the Commissioner s jurisdiction by granting him the mandate to exercise the powers of the defunct Economic Intelligence and Investigations Bureau (EIIB).

The new officials should be given the chance to exercise their mandate, Sec. Reyes explained during an interview. However, failure on the Commissioner s part to accomplish the President s directive would mean revival of NASTF.

Amidst all these pressures are Customs employees and port workers who are pressed against these two skirmishing walls. An advocacy group called PWERSA or Port Workers, Employees and Representatives Solid Alliance a union of different associations representing various stakeholders transacting at BOC shares a different view.

Backtracking the days when military agents still rummaged around the ports, PWERSA has already made known to the government its determination to stamp out the anti-smuggling agency through unswerving protests and complaints claiming that the presence of such task force has only caused delay in trade facilitation, created disturbance and commotion among the customs employees and instilled fear in the people transacting business with BOC. Their meddling may only result to extortions from importers.

With senators and business sectors banding together for NASTF revival and with the president s 60-day ultimatum to BOC, it seems that PWERSA is once again on the lookout, ready to rise up in arms.

First and foremost, if they wanted to revive the functions of EIIB, bring back those that were laid-off, said PUWERSA chair Rommie Pagulayan. Customs has its own functions. The integration of EIIB with BOC is plain absurdity. How can the Commissioner derive powers from something that has been already deactivated?

EIIB was created during Corazon Aquino s term through EO 127 but was deactivated by Joseph Estrada after failing to perform its mandate to receive, gather, and evaluate illegal activities affecting the national economy resulting to a lateral attrition of 1,500 workers.

Now the burden of proof is with BOC, Pagulayan expressed, given that the country has been heavily relying on revenues generated from Customs and the Bureau of Internal Revenue. The anti-smuggling campaign is anchored by the country s acute fiscal deficit and its ballooning foreign debt. The government has been claiming that smuggling is the main reason for the decrease in its collections.

But Pagulayan averred that one of the culprits in the drastic drop of collections, particularly by the Bureau of Customs, is the country s accession to the common effective preferential tariff (CEPT) scheme of the Asean Free Trade Agreement, which is contrary to the Pure Transaction Value of WTO-GATT Agreement. Under the CEPT, the margin of preference offers a discount below GATT bound tariffs for ASEAN imported articles. As a consequence, goods can enter the country from an average of 30% rate of duty (based on WTO Transaction Value) to a very low 7% tariff (based on CEPT). Likewise, the government finds it difficult to determine whether the imported goods originated from the ASEAN country or were merely passed through the ASEAN to take advantage of the CEPT discounts.

Similarly, he explained that under the 11 Reform Program of the IMF-WB, a structural reform to combat smuggling, to increase the revenue and to protect the health and safety of the Filipino people was instituted. The two government agencies (BOC and BIR) subsequently embarked on a highly sophisticated computerization program and went into hiring the services of the Societe Generale de Sorvelance (SGS) a multinational Swiss-based firm with hopes to hit the collection targets. Implemented for 10 years, the government paid SGS an annual fee of P3B.

Yet BOC s collection remained negative. The government had to lower down its target so that BOC can hit it. And it did, for at least a couple of years, he explained.

To put it straight forward, even if an anti-smuggling task force is re-constituted, it can never be a factor in combating smuggling activities nor increasing the country s revenue collections stated Pagulayan. NASTF only duplicates the Customs job but it lacks technical knowledge of the whole Customs operation. What it has is merely the police power.

When ask about NASTF s abolishment, the PWERSA chair could only say It has outlived its usefulness.

As an alternative to the revival of NASTF, the government should support and strengthen the structure of BOC instead; increase the salaries (P3000 across the board); bring back employees benefits such as hazard and amelioration pays; put government counterpart to our existing provident funds; professionalize Customs personnel by insulating them from political patronage; improve our port facilities; and band shipping and forwarding companies from transacting business with Customs, Pagulayan implored.

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