Anti-smuggling campaign: Gov’t takes 1 step forward, 2 steps back

(Conclusion)

When he assumed office last September, Rozzano Rufino Biazon was overwhelmed by the problems plaguing the Bureau of Customs (BoC).

It did not take long for the former legislator to understand what other people had meant when they said that “the job of cleaning the BoC is extremely difficult.”

“Malala at malalim ang problema ng Customs (The problems in the Bureau of Customs are serious and deeply rooted),” Biazon admitted in an interview with the Inquirer.

He said that fulfilling the President’s directive—to “squarely address corruption in the BoC”—would require not merely firing a few people but reforming the entire system.

“Actually, the most effective way to clean up the BoC is to abolish it and create a new [agency],” Biazon said.

Trade facilitation

But since doing so may not be legally feasible at the moment, other measures must be put in place, and it would take strong political will to implement them, he explained.

For the business community, the current system in the BoC does not only facilitate smuggling but paves the way for extortion by Customs personnel—something legitimate businessmen are confronted with from time to time, according to an industry leader.

The fact that the government considers the BoC a major source of revenue makes the reform objective difficult to achieve, says Sergio Ortiz-Luis, Philippine Exporters Confederation president and Philippine Chamber of Commerce and Industry chairman.

Originally, the customs bureau need only facilitate importation and exportation, and ensure fair trade through the tariff system. But a developing country like the Philippines, suffering from a scarcity of funds, has to rely on the bureau to raise its financing requirements.

The BoC accounts for nearly 20 percent of state revenue. It is given annual collection targets to help raise the necessary funds for the government’s projects and operational expenses.

But some customs personnel do not care about those targets and resort to extortion, Ortiz Luis said.

One way to reform the BoC, therefore, is to redefine its mandate, he said.

“Ideally, the BoC must be for trade facilitation only. It must not be given revenue targets. The accuracy of its revenue collection must be evaluated based solely on actual volume of trading and economic activities,” Ortiz-Luis said.

New anti-smuggling team

For the customs chief, solving the BoC’s problem will entail running after smugglers and implementing vital administrative reforms.

Biazon admitted that the dismissal in January of some members of the BoC’s RATS [Run After The Smugglers] team had set back the Aquino administration’s campaign to collect unpaid taxes and put the smugglers behind bars.

The dismissed customs men are witnesses to 44 smuggling cases pending in court. Now, the bureau has to painstakingly rebuild those cases and put up a new anti-smuggling team, Biazon said.

“Yes, we may have to go back to square one,” he added.

“What happened to the former members of the RATS team and the case involving Sanyo Seiki should serve as a lesson for the (anti-smuggling personnel of the BoC). They have to make sure they don’t do any shortcuts in the conduct of their job.”

He says putting up a new team and strengthening it are among his top priorities at the bureau.

‘Automation is key’

Also, on his priority list is the automation of key functions at the BoC.

Enforcement, or the arrest of smugglers, “while important, is not enough. It must be accompanied by measures that will change the system within the BoC,” he said.

Automation, he explained, means reducing face-to-face transactions between importers and customs personnel.

Without personal interaction between two parties, he said, the chances for wrongdoing are substantially reduced.

One of the first projects that Biazon hopes to implement is the installation of an electronic system for the examination of import applications, where applicable taxes and duties are determined.

The automation project requires the abolition of the BoC’s entry processing unit (EPU) which, according to Biazon, is prone to corruption. The implementation of the project will mean the reassignment of affected employees to other departments.

Biazon believes this to be an important step in effectively cleaning up one of the most corrupt units of the BoC.

Another setback

Unfortunately, on March 30 this year, a Manila trial court, acting on petitions filed by affected BoC employees, issued a temporary restraining order on Biazon’s automation project.

“I was already about to implement it, but the day before we were supposed to start implementing it, the court issued a TRO,” Biazon said.

He is obviously frustrated over the setback in the implementation of Customs memorandum order 5-2012, which would have paved the way for the automation project.

But instead of brooding over it, Biazon is determined to do his job and follow the President’s directive with whatever resources he has at his disposal.

Biazon said the BoC would defend CMO 5-2012 in court, hoping the TRO would eventually be lifted.

Also, the BoC will implement other reform programs, including the automation of the importers accreditation system, which at present is done manually by customs personnel, he said.

A recent audit ordered by Biazon revealed that many importers accredited by the BoC in the past had fictitious names and addresses. Smugglers are the ones who use fake identities, he said.

Biazon believes the system breeds corruption.

Also, he plans to implement the National Single Window (NSW) and the Asean Single Window (ASW) programs.

Under the NSW, the BoC will electronically connect its database with those of other government agencies. This will ensure that documents—such as business permits, income statements and tax declarations—submitted by importers to the BoC are authentic, thus reducing chances for unscrupulous groups to smuggle goods.

Under the ASW, the BoC will electronically connect to the databases of customs bureaus of neighboring countries. This will enable the BoC to check the accuracy of import documents presented by importers by comparing those with the export documents submitted to the customs bureaus of other countries.

“We intend to implement these initiatives within this year,” Biazon says, adding that he is hoping the BoC will hurdle whatever opposition these measures may encounter.

“The job of cleaning up the BoC is truly difficult,” he said. “But we just have to continue working.”

(First part of the report)

(Second part of the report)