Customs chief Nicanor Faeldon said he will continue to conduct consultations with various stakeholders before implementing a widely criticized draft order that seeks to establish temporary storages for overstaying and abandoned cargoes at Port of Manila and Manila International Container Port.
But a disgruntled representative of a cargo company which attended the June 8 forum said it would be cheaper for businesses to pay fines to the Philippine Ports Authority and the Bureau of Customs for their overstaying containers.
He warned that the draft Customs Administrative Order, which will implement Section 307 of the Customs Modernization and Tariff Act enacted two years ago, will trigger a price increase for consumer goods.
But Faeldon said he would take into consideration the position of the key stakeholders who have raised concerns over the proposed CAO.
“The Commissioner is still in the consultation stage with various customs stakeholders and the next public consultation on the Customs Facilities Warehouses has been scheduled for June 22,” a Customs official said.
Among those who attended the June 8 forum were representatives from Cargohaus Inc., DHL Express, ICTSI, Paircargo, UPS, Authority of the Freeport Area of Bataan, Association of Petrochemical Manufacturers of the Philippines, Asian Terminals Inc., Association of International Shipping Lines, PricewaterhouseCoopers Philippines, and Philippine Skylanders International Inc.
The stakeholders questioned the provisions of the proposed CAO, in particular the designation of Customs Facilities and Warehouses which shall bear the brunt of establishing and maintaining the temporary storage facilities.
“The provisions contained in the draft CAO are asking for too much and what should be the BoC’s responsibility is unreasonably being transferred to the business sector,” said one of the representatives who attended the forum.
“We are all alarmed at the misguided steps being taken in the guise of modernization.”
The draft CAO, he said, erodes the foundation of the Philippine Ports Authority, which has supervision over port terminals that may be designated as CFWs.
“The PPA still exists and the designated CFWs are PPA premises. No law has been enacted to change that. Cargo handlers also pay a fixed fee for each square meter of the port terminal, and that does not cover the proposed ‘temporary storage facility.’ They have to change all existing contracts, or abolish PPA instead,” he said.
Section 4.2 of the proposed CAO states that all separate temporary storage facilities shall be part of the premises of the BoC and shall be under its control and supervision.
The draft CAO also requires CFW operators to provide all necessary cargo moving trucks and equipment as well as to physically transfer and secure the goods.
BoC shall also dictate the fees and rates to be charged in approved temporary storage facilities.
“If the BoC imposes its own fees and charges, importers will be charged double, which will be passed on to consumers. The order does not only discourage foreign investors, it also threatens to jack up prices of commodities. Cargo handling services are not free, and all relevant fees should be shouldered by the BoC. Fees and other charges are all governed by existing PPA rules,” the source added.
Under the order, the goods stored temporarily must be placed under a customs procedure, auctioned, condemned or re-exported within 90 days after due notice from the issuance of an order of abandonment.
In case of loss, damage and deterioration of the goods stored due to the negligence of willful misconduct of the cargo handlers, the draft CAO also holds these operators liable for the payment of duties and taxes.
Another source privy to the forum, however, insisted that goods in most container yards and warehouses are insured.
“Therefore any loss will entitle the importer to claim on the insurance. The owner of the goods should then be able to pay the BoC for the duties. Moreover, the facility operator does not have control over the deterioration of certain goods, such as those that are perishable or those that require refrigeration,” he said.
Instead of a temporary storage area within the ports, the source said the BoC should acquire a large plot of land outside Metro Manila where all containers can be transferred upon the issuance of an order of abandonment which is common in other developed countries.