Mindanao exporters seek exemption from BOC policy on clerical errors

A group of exporters and two big companies in Northern Mindanao are asking the Bureau of Customs (BOC) for some leeway-even possible exemption-from fines for clerical errors made in export declarations.

Philippine Exporters Confederation, Inc. (PHILEXPORT) Region 10A acting managing director Valerie Ramos-Lasmarias, in making the group’s appeal, said the group is asking for “some leeway or consideration to our exporters, especially during this time of the pandemic where labor is reduced and production is slow.”

Lasmarias in a September 18 letter of appeal to BOC-Cagayan de Oro district collector John Simon, pointed out it is difficult to comply with BOC’s Customs Administrative Order (CAO) No. 01-2020 due to the nature of production and the actual export conditions exporters work under.

She said the group understands that implementing CAO No. 01-2020, the new policy on clerical errors, “has been proven to prevent fraudulent import/export transactions,” while also contributing to the bureau’s “documentation efficiency.”

But “some exporters of certain products are experiencing its impracticality when applied in actual export conditions,” said Lasmarias.

“Our exporters are even lucky they still have Purchase Orders. This is of great help to our economy,” she added.

CAO 01-2020, issued last March, outlines BOC’s new fines and surcharges for clerical errors, misdeclaration, misclassification, and undervaluation.

Since it was implemented together with Customs Memorandum Order (CMO) 49-2019, stakeholders have been requesting for the policy’s temporary suspension over reports that importers and customs brokers are being penalized with the P5,000 fine for every violation.

CMO 49-2019, issued last year, orders the mandatory filling in of Box No. 41 (Supplemental Units) in the lodgment of goods declaration in BOC’s Electronic-to-Mobile System.

The P5,000 fee is deemed excessive by stakeholders, citing Section 108 of the Customs Modernization and Tariff Act (CMTA). The section states that BOC should not impose substantial penalties for errors committed inadvertently and without fraudulent intent or gross negligence, provided that to discourage repetition of such errors, “a penalty may be imposed but shall not be excessive.”

In a BOC webinar on October 10, BOC Prosecution and Litigation Division acting chief Atty. Julito Doria acknowledged the provision of Section 108, but also noted that “what is excessive is relative.”

He added “these fines pertain to the imposition of penalties as decided by the management to ensure that the customs clearance processes are being taken seriously by the importers.”

Exporters of certain goods said it is hard to comply with CAO 01-2020 due to the nature of production and actual export procedures; such conditions necessitate making changes in export declarations, except that these changes are considered by BOC as clerical error.

For lumber exports, Lasmarias said the actual cargo weight per container can only be determined upon gate-in at the port or origin.

“While this is happening, the documentation specialists will simultaneously make an educated estimate of the cargo’s weight. While the estimated cargo weights usually coincide with the actual weights, chances of variances in the final declaration [do] occur, even for kiln dried lumber,” she explained.

Similarly, bamboo slats would sometimes fail quality standards (e.g., slats succumb to mold infection while in storage and prior to loading) and must be removed. This affects total weight, which means the final option in the declaration is the registered weight upon gate-in at the port of origin. And since these export products still require stuffing inspection and x-ray, Lasmarias said documents have to be submitted prior to weigh-in at the port of origin.

She noted final weight issues are also common among charcoal and activate carbon exports.

In the case iron ore exports, the production of the quantity is not final or exact, and has a tolerance of +/- 10%.

Banks are another concern because while exporters auto-debit their PAS5 accounts, some banks still do manual debit instead of auto debit, which further delays the export declaration approval process. PAS5 (Project Abstract Secure 5) is a system that enables 24/7 host-to-host interface with banks and BOC’s Online Release System.

(For the full article, please visit https://www.portcalls.com/mindanao-exporters-seek-exemption-from-boc-policy-on-clerical-errors/)

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