COA flags Customs for allowing importers with violations

Adrian Ayalin, ABS-CBN News

Posted at Aug 11 2022 06:30 PM

MANILA — The Bureau of Customs (BOC) has allowed 974 importers to continue transactions despite violating laws and rules, the Commission on Audit (COA) said in its report. 

COA said the importers should have been suspended instead of being allowed to import 77,049 consumption entries with assessed duties and taxes amounting to P28.954 billion.

State auditors noted that 644 of the 974 importers have records of violations, seizure, abandonment and smuggling, while 330 were habitual violators of importation with generic description.

“When left uncorrected, this may cause the breakdown of risk controls, which will significantly affect the efficient implementation of accreditation and defeats the purpose of accreditation,” the audit team said.

The audit report also noted that the BOC management agreed to the recommendations of the audit team, including ensuring that the account management office is furnished with all the warrants of seizure and detention as well as abandonment cases.

The report further mentioned the importation of 553 regulated commodities costing P1.44 billion in duties and taxes which were processed and released despite lack of import permits and other documents.

Included in the P1.44 billion duties and taxes are P684.028 million from the importation of luxury vehicles which were assessed and released without necessary permits and other documents.

The BOC management, however, assured the audit team that they will strictly enforce compliance with the Customs Modernization and Tarriff Act and other laws to ensure that all documents are complete before the assessment and release of goods.

The audit team also flagged the inconsistent and inappropriate tagging of the BOC within their system for a total of 100,944 consumption entries with assessed duties and taxes of P122.146 billion.

The BOC uses a color-coded system in its system using colors such as green to signify release without further inspection, red for x-ray scanning and physical examination, among others.

The audit team noted that 5,989 entires amounting to P1.733 billion which should have been tagged as red were released without conducting 100 percent physical inspection.

The audit report noted that the BOC management agreed to review the inconsistencies noted.

There was also an understatement of P105.108 million on duties and taxes for the importation of 765 commodities due to deficient computation of insurance.

“The non-compliance by the BOC with the prescribed computations could affect the collection of total duties and taxes accruing from the importations, thus, a possible loss of revenue,” the audit team said.

The BOC management again agreed to the recommendation of the audit team to issue demand letters to the concerned importers on the deficient accounts with appropriate legal interests and surcharges.

A copy of the audit report was received by the office of former BOC commissioner Rey Leonardo Guerrero on July 15, 2022.


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