MANILA — The Commission on Audit (COA) noted red flags at the Bureau of Customs (BOC) in releasing shipments with assessed duties and taxes of P3.558 billion which should have been subjected to 100 percent physical inspection.

In the 2022 annual audit report on the BOC, state auditors said that 2,416 consumption entries tagged as “green, yellow or orange” were released without conducting a mandatory 100 percent physical inspection, inconsistent with the prescribed and fixed criteria of the bureau.

The audit report did not mention the specific items.

“The release of shipments which should have been tagged as 'Red' without 100 percent physical inspection poses the risks that misdeclaration/undervaluation of goods and importations of prohibited goods may not be detected thereby affecting the revenue generation and border protection functions of the Bureau to the disadvantage of the government,” the audit team said.

“Green” items are released without further inspection, “yellow” needs validation of documentary requirements and “orange” have to be subjected to physical inspection if the image is found to be suspicious upon x-ray scanning.

The audit report noted that the BOC management agreed to the recommendation of the audit team to have the P3.558 billion entries reviewed and explain the non-compliance with the fixed criteria of the bureau.

The audit team also noted the inappropriate tagging of 45,677 consumption entries with assessed duties and taxes of P38.510 billion.

The BOC management also agreed to the recommendation of the audit team to review the consumption entries and explain the non-compliance with the fixed criteria.

The audit report also noted the delayed disposal of forfeited goods and articles totaling P567.265 million by 3 days to 265 months, exposing the goods and articles to further spoilage or deterioration risks.

Among the ports with the highest appraised value of forfeited goods and articles that were delayed in disposal were the Ports of Manila, Zamboanga, and Limay.

“The absence of timelines on disposition and the inability of the Ports to conduct the necessary disposal proceedings resulted in the loss of government revenues representing proceeds of disposal or collection of assessed duties and taxes due from these cargoes, possible loss through theft and deterioration, additional storage fees, foregone government revenues and further contributes to port congestion due to overstaying containers and cargoes,” the audit team said.

The BOC management also agreed to the recommendation of the audit team to require the ports to immediately dispose of the goods and articles to prevent further deterioration and decline of value.

A copy of the report was received by the office of BOC Commissioner Bienvenido Rubio on June 22, 2023.

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