The Bureau of Customs (BOC) has moved to address the delay in the cancellation of export declarations that contain clerical errors after exporters complained the process took so long their products started to rot and their expenses increased.
To ease the delay, Customs Commissioner Rey Leonardo Guerrero has allowed the Export Division (ED) to process the cancellation of export declarations that have clerical errors without the need to get approval from the Assessment and Operations Coordinating Group (AOCG).
Guerrero, through Office of the Commissioner (OCOM) Memo No. 212-2020, said this new directive aims to “permanently avoid delay in the cancellation of export declarations by reason of clerical errors.”
Earlier, BOC in AOCG Memo No. 164-2020 dated September 14, 2020 said processed cancellation forms must be forwarded by the district collector to the AOCG for approval, pursuant to Customs Administrative Order (CAO) No. 01-2020. After approval, the cancellation request would be returned to the district collector.
But Guerrero in the OCOM memo dated November 16, 2020 said this setup with AOCG processing the final approval “often causes delay especially in the Ports of Davao and Cagayan de Oro where combined exportation of perishable products has averaged a minimum of 600 containers a week.”
He added that “exporters are already complaining [about] the longer process of cancellation,” which has placed their products on “the brink of decomposition, and not to mention, the unnecessary expenses for said delay.”
“Hence, in order to address the foregoing dilemma and to permanently avoid delay in the cancellation of export declarations by reason of clerical errors, the Export Division can now process the cancellation of export declaration without the necessary approval by the AOCG,” said Guerrero.
CAO 01-2020, approved last January, prescribes fines and surcharges for clerical errors in all goods declaration for exportation or importation, whether for consumption, warehousing or admission.
A financial burden
Earlier this year, the Philippine Exporters Confederation (PHILEXPORT) called for the review and suspension of the CAO, noting that paying penalties for “inadvertent” clerical errors was a “huge financial burden” for exporters.
PHILEXPORT president Sergio Ortiz-Luis, Jr. in a letter to Guerrero had 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.
He also suggested moving the processing of cancellation of export declarations to the district level as centralized processing led to delays, which in turn added to exporters’ costs like demurrage and caused port congestion.
Ortiz-Luis gave a number of reasons for the review of CAO 01-2020.
For one, exporters have to make changes in the export declaration for reasons beyond their control, including foreign exchange fluctuations and the buyer’s request for changes in the goods description.
Export declarations would 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 the volume or weight of fresh and processed fruits, for example, in relation to natural moisture content, reaction to processing, treatments, and weather conditions.
PHILEXPORT likewise requested BOC to 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 and allow for a 10% tolerable margin on the weight.
Ortiz-Luis Jr. also pressed for a review in terms of the policies of other agencies such as the Bureau of Plant Industry concerning 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 these were often “a result of the rush to comply with deadlines or just pure honest mistakes.”
The PHILEXPORT letter consolidated the concerns raised by its members in Metro Manila, Cagayan de Oro, Davao and Zamboanga.