Technical smuggling of rice worsens, says FFF

Technical smuggling of rice, through undervaluation and misdeclaration of shipments, remained unabated and even worsened this year even with the assurance from the Bureau of Customs (BOC) that it has been acting on such reports, according to farmer group Federation of Free Farmers (FFF).

A recent FFF study indicated that the discrepancy between rice prices at the shipments’ points of origin as declared by importers and the BOC’s reference values averaged P945 a ton last year. From January to May this year, however, the gap more than doubled to P2,416 a ton. Revenue losses during the period was estimated to have reached P1.6 billion.

Also, the group said that in a meeting, BOC officials had disclosed that some importers had been conniving with the shippers to label invoice freight and insurance charges as “other charges” so as not to be included in tariff computations, which resulted in additional uncollected duties of about P1.1 billion.

About P134 million in duties were also said to be lost after the BOC found that some imports from India and Pakistan were declared to have come from the Asean and were slapped with a lower tariff of 35 percent. Under the Rice Tariffication Law, a 35-percent tariff is slapped on rice imports from Asean countries while a tariff of 50 percent is imposed on those coming from countries outside the region.

Despite the enactment of the rice tariff law, the BOC has not yet changed its tariff code classification system, which allowed room for several inconsistencies.

FFF also called on the BOC to fast-track its assessment on the 40 importers who were found to have undervalued their rice shipments between March and June last year, and to tighten its supervision of rice importation.

According to the BOC, it had assessed that these importers owed the government P1.4 billion in additional import duties and penalties which could have been used to increase the rice tariff fund for the sake of palay farmers.

FFF national chair Raul Montemayor said the findings were “probably just the tip of the iceberg.”

“We hope the BOC will resolve all these cases quickly and finally end the practice of undervaluation. We also ask the BOC to be transparent and reveal how many import shipments are under investigation … and what monetary and other penalties have been imposed on erring importers. We are interested not only in who were caught but also on those who might have gotten away,” Montemayor said.

The group further expressed concern over the continued use of farmer cooperatives and groups as dummies of rice importers, adding that while these co-ops might be charged, the importers who financed the shipments might be able to go scot-free.

Between January and August this year, the Bureau of Plant Industry issued import certificates to 77 farmer associations for 1.17 million metric tons of rice. Of the 1.66 million MT of imports that arrived during the period, 34 percent were brought in under the name of 69 farmer organizations.