Bulletin 214 - 10/01
Technical Smuggling - Fines - Philippines
Technical Smuggling
We warn Members to be on their guard against getting caught in cases of “technical smuggling” in the Philippines. The local term “technical smuggling” involves - cargo documentation not being in order and containing conflicting information. The cargoes which are most likely to give rise to the problems detailed below appear to be bagged rice, bagged sugar, timber and cement. The problem arises when the manifested quantity of cargo does not match either the B/L quantity or the destination.
Example 1
A vessel arrives at a Philippine Economic Free Zone port and the charterer alters the B/L to show that only part of the cargo will be discharged in the Philippines and that the remaining balance is for discharge and transshipment to a foreign port. When entering a port in the Philippines the ship must submit a cargo manifest to Customs detailing the quantities destined for the Philippines and the quantity destined for transshipment. Based on this manifest the appropriate duty will be calculated. However, what has been happening is that the full cargo is being discharged by charterers for domestic use only and none transhipped. The savings made in respect of customs duties are considerable.
The Bureau of Customs are detaining and imposing heavy penalties on ships found to be caught up in this practice.
Example 2
When the whole cargo is destined for specific ports in the Philippines, the inward cargo manifest becomes the basis for the tax due. Occasionally, charterers change the B/L quantities and destination because the cargo has been sold for a higher value and they wish to sail the ship to a new port within the Philippines. Only part of the intended cargo is discharged at the original port, the intention being to discharge the balance at the revised port. If the ship is sailed from the original port without the manifest being revised, the ship will be detained and severe penalties imposed.
Problems of this kind are, it is thought, created by organised smuggling rings, as some of these “technical smuggling” operations requires the complex co-operation of personnel ashore.
Additionally, the alteration of discharge port may leave Members exposed without Club cover and only an indemnity from the charterers to rely on. Owners of ships chartered to deliver cargo in the Philippines should be aware of these problems and insist that strict documentation controls are followed.
Source of information:
Pandiman Philippines Inc.
Manila
Tel +63 2 527 7831
Fax +63 2 527 2167
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