Press Release
August 31, 2017

Smuggling, or technical kotong?


Is it really smuggling? Or is it more like technical kotong?

Sen. Panfilo M. Lacson posed this question to ex-Customs Commissioner Nicanor Faeldon amid his repeated accusations of "smuggling" of cement against his son.

"Is there such a thing as smuggling of cement between ASEAN countries? None, because there is zero tariff for cement under the Association of Southeast Asian Nations Free Trade Area (AFTA), and even the ASEAN-China Free Trade Area (ACFTA)," Lacson said.

Faeldon made the accusations a day after Lacson delivered a privilege speech detailing corruption at the BOC, such as payoffs made to Customs officials including Faeldon.

But an online tool of the Tariff Commission indicated Portland cement has zero tariff in the ACFTA, a free trade area between China and the 10 ASEAN member states including the Philippines.

[The Tariff Finder tool can be accessed here.]

"What will you undervalue if there is zero tariff?" Lacson asked.

"When Faeldon claimed there was undervaluation in tariff, he was clearly lying as he has no basis, or, he was completely ignorant of the Tariff and Customs Code of the Philippines (TCCP)," he added.

Lacson also debunked Faeldon's claim on freight costs, which he said is not for the Bureau of Customs to decide, lest it will be guilty of abuse of discretion since it is between the supplier and the importer to agree on.

"Again, it shows his ignorance of existing Customs laws," Lacson said.

On the other hand, Lacson said holding shipments and demanding tariff payments for items with zero tariffs could smack of "kotong" or extortion.

"He's diverting from the issue. The issue is, is there corruption in the BOC? That question should be answered," he said, adding Faeldon has so far kept quiet on how P6.4 billion worth of shabu slipped past the BOC under his watch.

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