Making trade easier

Customs Commissioner John Phillip (“Sunny”) Sevilla is a man with a mission. He wants to make it much easier for importers and their brokers to comply with the various import requirements provided by law—ideally without the need to face a customs officer. We all know what that would imply. Eliminate face-to-face contact, and you minimize, if not eliminate, opportunities for bribery, graft and corruption. There are estimates that such corruption at the Bureau of Customs (BOC) has deprived government of sums far greater than the money lost in the now nearly-forgotten PDAF (Priority Development Assistance Fund) scandal.

For BOC to collect what’s really due it, we must start with making it easier for traders to transact their business legitimately. The easiest way to drive importers to bribe customs officials, thereby diverting their payments from public coffers to private pockets, is to make it cumbersome and difficult for them to do things right. And the way our government works, it often feels like things were designed precisely to make it difficult to do things the proper, legitimate way—sometimes (or usually?) deliberately, sometimes not. This led Commissioner Sevilla to embark on the not-so-straightforward exercise of taking stock of all regulations, clearances and permits that other government agencies require for the importation of various products, ranging from garlic to color photocopying machines. It is his men and women at Customs, after all, who are tasked to ensure that these regulations are observed, and that the proper clearances and permits are obtained.

Not long after he assumed his post, Sevilla discovered that his people had never really been fully aware of the nature of these import requirements from other government entities (let’s call them trade regulatory government agencies or TRGAs). If the front line enforcers of these rules at Customs don’t fully understand what they’re supposed to enforce, how can one expect the trading public to know any better? Hence, certain critical regulations (such as safety standards or controls against plant or animal diseases or toxic substances) may not be properly enforced, to the peril of the consuming public. Some less-than-honest customs officers could also exploit the situation to throw unnecessary hurdles in the way of importers, naturally luring them to become willing accomplices to diverting payments away from the public fund.

What Sevilla did was to invite the various TRGAs to a series of roundtables with his front-line officers. The aim was to get fuller understanding of what regulations, clearances and permits they require, what laws require them, and what actions are to be taken by customs personnel when these requirements are not met. It emerged that the usual action of front-line customs officers when requisite clearances and permits are absent is to seize the questioned items—even when, as it turned out, the concerned agency does not necessarily expect them to. In one amusing instance, it was a revelation for the front-line customs officers to find out that after years of seizing a certain item regulated by a particular agency, they were not actually expected by that agency to seize it, but merely obtain a formal declaration. In another case, customs personnel were still enforcing a restriction that the concerned agency had already lifted. In others, it was the opposite: Customs was not aware of a certain regulation they were expected to enforce. The lesson: Coordination, or even simple communication, is too easily overlooked by government agencies, leading to such instances where the proverbial left hand doesn’t know what the right hand is doing. And the result hurts all of us.

It also emerged from the exercise that many products require clearances from multiple agencies. Sugar-based products such as powdered juice, for example, require clearances from both the Food and Drug Administration and the Sugar Regulatory Administration. Food products are commonly subject to such overlapping clearances, one imposed for food safety reasons and another to watch out for biological pests and diseases. Sevilla’s plea: Why can’t they coordinate and just require one unified clearance? He laments that if TRGAs don’t get their act together and insist on their separate clearances, and then expect BOC personnel to enforce these, it is Customs that will face a “revolt” from the importing public, even as certain customs people could take advantage and make money on the side.

With technical assistance from the USAID-TRADE Project, the BOC has completed a master list of TRGAs’ regulations, permits and clearances—reportedly the first time such an inventory has been done. Sevilla will shortly make this available online, a major step toward making it truly easier for importers to do things right, the first step of which is knowing what it takes to do so. Much further work is needed down the line. Apart from having information on all TRGAs’ requirements readily accessible online, it should be possible to comply with all these online as well, with a minimum of legwork, and without having to face an officer from Customs or a regulatory agency. Overlapping and duplicating clearances need to be unified, and those that are not necessary or have outlived their usefulness eliminated. Sevilla knows he cannot be the one to make this happen; the push has to come from higher-up.

In the end, much can be achieved toward making our economy more vigorous and beneficial to more Filipinos simply by making trade easier—and the scope for doing so remains wide indeed.

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