COA calls out Customs for 'illegal' release of cargoes

MANILA, Philippines – It seems that lessons were not learned from past instances of large-scale shabu smuggling at the ports, based on a Commission on Audit (COA) report on the Bureau of Customs (BOC) that showed that the latter "illegally released" cargoes – over 100 of them with alert orders – in 2018.

“Cargoes were released despite the non-compliance of all requirements before a release instruction is given contrary to established rules and regulations, thus causing undue disadvantage to the government in the form of additional revenues to be collected,” the COA said in its 2018 audit report on the BOC.

At the Port of Manila, 105 containers worth P69.68 million – the subject of alert orders – “were illegally released without proper authorization,” said state auditors. This was in violation of Customs law and issuances, COA said.

Another 104 import entries of motor vehicles worth P104.621 million were processed and released at the Manila International Container Port (MICP) without certificates of authority to import and release certificates, violating an executive order.

This deprived the BOC of possible additional revenue that could be charged on the unauthorized cargoes.

“Records disclosed that there are 97 out of the 375 samples cargoes released without paying the PMS additional assessments totaling to P5.101 million, contrary to Section 3.1.4 of CMO No. 53-2010 dated December 8, 2010,” said COA.

Punish erring personnel

State auditors added that this also placed operational controls at risk.

In May 2017, Customs failed to stop P6.4 billion worth of shabu shipment at the MICP. The illegal drugs were later discovered and seized in warehouses in Valenzuela City.

In a hotly disputed case that pitted government officials against each other, another P11 billion worth of shabu was again smuggled through the MICP in May 2018.

State auditors want erring Customs officials punished.

“We recommended and Management agreed to require all concerned BOC officials to strictly adhere with the established rules and procedures before the release of cargoes are made and to institute necessary actions against erring officials, if warranted,” said COA

 Overstaying cargoes

The BOC is also grappling with the problem of overstaying cargoes, as it failed to release or auction 6,985 containers, some with rice and donations to calamity-hit communities, COA said.

“A total of 6,985 overstaying containers carrying various articles remained undisposed in various BOC Ports for a period ranging from 30 days to more than 25 years as of December 31, 2018," COA said, adding that this violated the Customs Modernization and Tarriff Act (CMTA).

The undisposed items included rice and sugar imports which were not processed because of lack of necessary permits from government agencies.

Auditors also found that 880 containers remained uninspected, and thereore could not be auctioned because of the unexamined risks of its contents.

There were also 17 cargoes containing donated goods for calamity-hit communities which were not processed, depriving victims of help. 

The inability of the Ports to conduct the necessary disposal proceedings in accordance with the CMTA and delays in the legal review of overstaying containers resulted to loss of government revenues representing proceeds of disposal or collection of assessed duties and taxes due from these cargoes,” said COA. –


Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email or tweet @lianbuan.