BOC holds rice imports until permits question settled

Customs Commissioner Ruffy Biazon: ‘Committing an error on the side of right’. RYAN LEAGOGO/INQUIRER.net

MANILA, Philippines—The Bureau of Customs (BOC) will continue to hold rice shipments not covered by import permits as it awaits a government policy on rice importation from countries whose quantitative restrictions (QR) had expired.

To date, over 400 container vans of rice are on hold, according to Customs Commissioner Ruffy Biazon.

“Our default position is that we’d rather commit an error on the side of right, which means we will block shipments with no import permits,” said Biazon in an interview.

“But this standoff cannot last long, a policy decision has to be made,” he added.

Biazon said the bureau was being threatened with lawsuits by importers, who claimed the agency had no basis for holding their shipments since the QR under the World Trade Organization–General Agreement on Tariffs and Trade (WTO-GATT) expired in June last year.

“I think the government should make a decision now on what the actual policy is because it’s customs that is caught in the middle,” he said.

The Vietnam Food Association, an organization of rice traders in Vietnam, earlier sought Biazon’s help over its expired QR that was making it difficult for its members to export rice to the Philippines.

The group said that with the expiration of the QR, import permits were no longer needed for rice to enter the country provided the applicable tariff rate of 50 percent “is paid by the importing entity after compliance with customs procedures.”

Seek two opinions

Biazon said he would seek the opinion of the Department of Justice and the Department of Agriculture on the matter.

On Oct. 22, the VFA, Vietnam’s equivalent of the NFA, wrote the Bureau of Customs asking if it was proper for the entry of imported rice into the Philippines to still be covered by import permits when quantitative restrictions (QRs) on rice importations had been lifted under the WTO-GATT.

The letter was a follow-up to the VFA’s Oct. 10 letter to the customs bureau saying that with the expiration of QRs, import permits were no longer needed for rice to be traded between one country and another.

“We are of the position that the WTO QR on rice entering the Philippines had expired on June 30, 2012, and as a member country of the WTO we are aware that the QR in favor of the Philippines had not been extended,” wrote VFA representative, Pham Van Bay.

All WTO members had agreed to improve market access and reduce trade distorting subsidies and restrictions to agriculture in their respective countries.

The organization, however, granted the Philippines “special treatment” for rice and allowed the country to impose quantitative restrictions on its importations from 1995 to 2005.

While given an extension in 2004, after the “special treatment” first expired, this expired in June 2012. Representatives from the Department of Agriculture (DA) had been asked to obtain extensions of the privilege but were twice denied by the WTO.

Seizure of shipments

The NFA ordered the seizure of rice shipments by private importers at the Davao City port even though the importers had officially coordinated the importation with the NFA in letters to Administrator Orlan Calayag dated Aug. 20 and Sept. 10.

“Unless the Philippines is ready and willing to admit publicly that it has no intention of complying with its commitments under the WTO, it has no choice but to allow the importation of rice without a QR,” wrote lawyer Benito Salazar for his clients, Silent Royalty Marketing and Stracraft International, among several importers hurt by the NFA decision on the rice cargo here.

“If your good office insists to the contrary, then the country should be properly informed and advised to prepare for dispute cases to be initiated by WTO members and the possible sanction that will be imposed,” said Salazar in a statement.—With a report from Germelina Lacorte, Inquirer Mindanao