Economic processing zones being used for smuggling

That our economic processing zones are being used for smuggling is nothing new, but the smugglers have become bolder. Last Nov. 29, Customs Commissioner Rufino Biazon personally supervised the seizure of seven 20-foot container vans of white Thailand sugar worth at least P7 million that were consigned to two locators at the Mactan Economic Processing Zone (Mepza) in Lapu-Lapu City in Cebu. The shipments in a total of 10 containers arrived at the Cebu International Port (CIP) on Nov. 2.

Biazon said the contraband was brought in without the necessary permit from the Sugar Regulatory Board. Four of the seven containers were addressed to Muramoto Audio Visuals (Philippines) Inc., and the other three to Mobilia Products Inc., reportedly a major exporter of high-quality furniture.

The shipment for Muramoto was declared as “plastic parts for eyeglasses” and those for Mobilia as “marble and granite products.” Port and Mepza insiders think that the names of the locators, both Japanese companies, may just have been used by the importer.

Three containers in the shipment were taken out of the customs zone without undergoing X-ray scanning. Two of these were later tracked down by Customs personnel to a warehouse guarded by personnel of the Enforcement and Security Services (ESS). At a meeting between customs and police authorities, Customs officials demanded that the two containers be turned over to them, but the ESS district commander, Maj. Camilo Cascolan, used some legal technicalities to keep the containers in the warehouse. According to an insider, Port of Cebu District Collector Ronnie Silvestre did not use his discretionary authority to resolve the impasse and bring the containers to the customs area.

Cascolan said the containers could not be brought out without a warrant of seizure and detention (WSD) against the warehouse. But the Bureau of Customs, through the district collector, is authorized to issue a WSD against the chattel, not a real estate property. Such warrants are issued on imported immovable goods which are already in the possession of the BOC. Real estate cannot be imported and therefore cannot be forfeited by the BOC.

As of last week, one container remains unaccounted for while the two are now at the CIP and scheduled to go through X-ray inspection.

The foiled smuggling is a variation of the classic “swing” modus operandi of smugglers. “The ‘swing’ is the worst form of smuggling because goods are spirited out of the Customs zones under the guise of tax-free importation,” said lawyer Lourdes Mangaoang, head of the BOC’s X-ray inspection project which discovered the smuggling attempt. “Other forms of smuggling where goods are misdeclared or misclassified in order to reduce taxes leave something for the government. ‘Swingers’ leave nothing to the government,” she added.

This latest smuggling attempt using Mepza locators comes on the heels of a bigger rice smuggling attempt that involved locators in Subic and validates Biazon’s concern about the continuing abuse and misuse of the tax-free privileges of ecozone investors. He has ordered the filing of charges against the two companies in the Cebu incident, their brokers, and BOC officials and employees involved in the smuggling attempt.

Biazon should also weed out the vermin in the BOC who are known to have influential backers in government, and are thus attractive to smugglers who need conspirators in the bureau. He should also kick out the fixers in the BOC disguised as media people. In Cebu, for instance, a customs official who comes from the same prestigious law school as a high official in Malacañang and also a local political big shot, is known to be a golf mate of a businessman suspected of dabbling in smuggling.

This is the second big-bucks smuggling attempt in Cebu. The first happened exactly two years ago involving 31 container vans of rice and sugar that were imported also by using Mepza locators.

These incidents have forced Biazon to declare that all tax-free imports of Epza investors will henceforth be subjected to mandatory X-ray scanning. About time, too, considering the role that the machines have played in detecting items that could have slipped through customs zones without payment of appropriate duties.

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