“We will not hesitate to comply with orders, and we’ll not contradict other regulatory agencies. But for this one, we have to clarify with them because no memo has reached my office yet. For now, we will continue with the status quo,” he said.
Faeldon said he has already instructed all ports to process all agricultural importations under the current procedures, provided importers present all required clearances and permits.
His pronouncement came following reports that BOC is holding shipments of meat and agricultural products due to DA’s order. Some stakeholders have also raised concerns about having to pay undue demurrage and storage fees because their shipments are on hold within the ports while waiting for the DA to validate their permits.
Agriculture Secretary Emmanuel Piñol recently said he has ordered the “immediate cancellation of all import permits of all agricultural products because of persistent recycling and technical smuggling.” (The filing of SPS permits is a prerequisite to the filing of import permits. The cancellation of the former thus leads to the cancellation of the latter.)
He said recycling of import permits usually happens around the Christmas season when demand for meat, chicken, and other agricultural products starts to increase. There are also reports that importers classify imports of good meat as offal because the latter only carries a 5% tariff and the former 35%.
Agricultural product importers were ordered to bring their documents to DA’s main office for validation.
Piñol, in a Facebook post last week, said they discovered the recycling of SPS permits during a revalidation.
“What was also alarming was the discovery that there are private importers who hold as much as 180 import documents, some of which are not being used,” Piñol said.
“I was also surprised to find out that the processing of the import permits is being done by a private group,
InterCommerce.com.ph, which gets a fee of P50 per transaction that it processes online,” the DA chief added. InterCommerce Network Services, Inc. (INS), in a letter to Piñol, clarified that it is not involved in processing import permits, but provides the system for automating the import procedure for DA and some of its attached agencies. INS said it “developed the DA Trade System modules and continues to maintain them, adopting the value added service provider model at no cost to DA, while importers pay for the transaction fees to cover the cost of system development and maintenance, the IT infrastructure (hosting and network services), as well as 24/7 customer service.”
INS explained that aside from DA, it also provides VASP services to other government agencies such as BOC, Philippine Economic Zone Authority, and Board of Investments. INS president Francis Lopez asked for a meeting with Piñol to further explain company services and to “allow us to seek guidance on your office’s initiatives to eliminate smuggling, ensure compliance to import quarantine requirements, and facilitate legitimate trade.”
Fast lane for PAMPI members, institutional importers
Piñol, meanwhile, said he met on November 28 with officers of the Philippine Association of Meat Processors Inc. (PAMPI), who assured him that they will “cooperate with the DA in weeding out unscrupulous traders who bring in misdeclared meat products.”
“While they admitted that their business was adversely affected by the strict measures being implemented by the DA now, they are hopeful that the smugglers masquerading as importers would finally be weeded out,” Piñol said.
To quickly validate highly perishable and live items, Piñol said DA has established a fast lane to prioritize the processing of the documents for these goods. On December 1, Piñol said the “green lane” is applicable not only to PAMPI members but also to other institutional importers, especially those importing perishable goods who have no smuggling record.
Along with reinspecting SPS permits, DA also created a group called the Agricultural and Fisheries Trade Facilitation Unit to inspect all inbound shipments of agricultural shipments before BOC evaluates the tariffs for these shipments.
Piñol admitted, however, that inspecting agricultural shipments in ports is problematic because “there’s no cold storage facilities within the Customs compound, therefore, we cannot open each container, because it might spoil the goods inside.” This was the same problem encountered by the previous administrations of DA and BOC, which could not inspect refrigerated shipments due to the lack of cold storage facilities.
Piñol said DA will just conduct random checks on selected containers for inspection up to the customs bonded warehouse level only.□