The Philippine Exporters Confederation, Inc. (PHILEXPORT) is calling for the review and possible suspension of the Bureau of Customs’ (BOC) policy on penalties for clerical errors in the goods declaration for export, adding the policy is a “huge financial burden” on exporters.
PHILEXPORT president Sergio Ortiz-Luis, Jr. in a recent letter to Customs Commissioner Rey Leonardo Guerrero, said the group understands the policy aims to discourage malicious or fraudulent errors in the export declaration (ED). However, it is “causing exporters huge financial burden on inadvertent errors.”
Customs Administrative Order (CAO) No. 01-2020, approved last January, prescribes fines and surcharges for clerical errors, misdeclaration, misclassification and undervaluation in the ED.
Assessment and Operations Coordinating Group (AOCG) Memo 164-2020 dated September 14, 2020, meanwhile, is the implementing guidelines for the CAO.
Ortiz-Luis Jr. said a review of both CAO 01-2020 and AOCG Memo 164-2020 is needed to address exporters’ issues with clerical errors. “We believe that there is still room for reforms/amendments” because exporters have valid reasons for making these errors/changesâ€ , he said.
He also proposed that the policy be suspended while under review “to prevent the further bleeding of exporters, especially the MSMEs that are still trying to recover” from the effects of the pandemic.
Ortiz-Luis, Jr. said exporters have to make changes in the ED for reasons beyond their control, including foreign exchange fluctuations, where the applicable value can only be determined upon the vessel’s departure.
Another reason is the buyer’s request for changes in the goods description upon advice from the importing country.
Export declarations will also have to be amended when vessels are delayed due to bad weather, malfunction, void sailing, and similar circumstances.
Exporters must also make changes in relation to the product’s volume or weight.
In the case of fresh and processed fruits, for instance, the natural moisture content, reaction to processing, treatments like vapor heat treatment, weather conditions, testing and sampling have impact and necessitate changes in the ED, said PHILEXPORT.
The letter likewise requested BOC to look into the group’s recommendations on amending certain provisions of the policy.
For one, BOC should create the criteria to determine between honest/valid errors and deliberate errors on consignee details, goods description, spelling, volume, and value.
And instead of the P5,000 penalty for every clerical error as provided in CAO 01-2020, BOC could “ladderize” the penalties into three categories. The first modification will be allowed with no penalty, the second modification to have a P1,000 penalty, and the third, a P2,000 penalty. Moreover, the penalties should allow for a 10% tolerable margin on the weight.
Another suggestion: instead of pre-lodgement of the ED, a draft may be prepared but not lodged yet. This is to comply with the Manila International Container Terminal’s requirement to file the authority to load six hours before the vessel arrives and also to serve as basis for the payment of port charges.
Ortiz-Luis Jr. also pressed for a review of the policy in relation to the policies of other agencies such as the Bureau of Plant Industry in terms of the phytosanitary compliance and requirements of exporters.
He also sought the definition of clerical errors, requesting that errors in spellings and abbreviations not be penalized as such errors are often “a result of the rush to comply with deadlines or just pure honest mistakes.”
Further, the processing of cancellations of EDs should be moved to the district level as centralized processing leads to delays, which in turn adds to exporters’ costs like demurrage and causes port congestion.
The PHILEXPORT letter consolidated the concerns raised by its members, specifically those in Metro Manila, Cagayan de Oro, Davao and Zamboanga.
The issues have also been raised to the Export Development Council Committee on Trade Procedures and Procedures Simplification where BOC Deputy Commissioner Edward James Dy Buco serves as Vice Chairman. He committed to look into the issues and address the complaints urgently.