Customs raps 2 firms for cheating gov't of P300M

By Ina Reformina, ABS-CBN News

Posted at Aug 05 2010 02:36 PM | Updated as of Aug 05 2010 10:36 PM

MANILA, Philippines -- The Bureau of Customs (BOC) on Thursday filed smuggling charges before the Department of Justice (DOJ) against officers of 2 Escolta-based trading companies, whose various shipments, allegedly declared as mung beans, were actually white rice.

The BOC estimated the technical smuggling activities of Plum Blossom Import-Export Food Corp. and Full Story Source Marketing at P300 million.

Customs Commissioner Angelito Alvarez identified the respondents as David Manuel S. Ubarde, Enrico L. de Castro, Rex M. Butuan and Edwin M. Benito, incorporators of Plum Blossom Import-Export Food Corp., and Manolo Antonio M. Medel, proprietor of Full Story Source Marketing, who is also listed as an incorporator of Plum Blossom.

Customs broker Allan J.V. Gahon and several John/Jane Does were also charged. These John and Jane Does' identities will be made known after the completion of an ongoing probe into the involvement of customs officials and employees.

The activities of the respondents were exposed by a confidential informant, who discovered that what broker Gahon declared as mung beans in the Import Entry and Internal Revenue Declarations, was described as "white rice" (25% broken) in the Bill of Lading and Inward Foreign Manifest submitted by the shipping company.

Importation of white rice requires government clearances such as an National Food Authority (NFA) import permit. It is also subject to 50% duty and payment of 12% Value-Added Tax (VAT).

Mung beans, on the other hand, are zero-rated for both customs duties and VAT based on the ASEAN Free Trade Agreement (AFT).

The case filed on Thursday covered only 4 import entry declarations involving 84 x 20 ft. containers. The shipment arrived last June 17 and was released the next day without paying duties or taxes.

Alvarez said the BOC should have collected over P10 million in duties and taxes for a shipment which was worth around P38 million.

The BOC has reason to believe that more incidents of smuggling were committed by Plum Blossom Import-Export Food Corp. and Full Story Source Marketing.

Records now in the hands of BOC lawyers show that between 2008 and 2009, the company cleared 102 entries involving at least 2,400 containers of supposed mung beans.

These shipments, which came from either Vietnam or Thailand passed through the Port of Manila and the Manila International Container Port.

Alvarez added Vietnam is not even a mung bean exporting country.

The BOC is also looking into Full Story's questionable capitalization of P62,000 and its claim that it is a single proprietorship business.

Full Story holds office in a 10-square meter office at the 3rd floor of Regina Bldg., Escolta, Manila. Plum Blossom occupies unit 328 while Full Story is at unit 316.

The BOC's Run After Smugglers Program is now looking into the liability of customs employees assigned in the Entry Processing Unit, Formal Entry Division and other units involved in the processing and release of the shipments in question.

In this light, Customs chief Alvarez has ordered the retrieval and review of all import entry declarations of past importations of mung beans so that these can be compared with the corresponding Bills of Lading to ascertain the existence of same pattern or modus of misdeclaration.

The BOC is also encouraging the public to report knowledge or any information on smuggling incidents and corrupt practices at the BOC.

An informant is entitled to 20% of the amount government will gain from winning a smuggling case as cited in a provision of the Customs Code of the Philippines.

This the second set of smuggling cases filed under the new Aquino administration.