SMUGGLING
Smuggling has a long and controversial history, probably dating back to the first time at which duties were imposed in any form, or any attempt was made to prohibit a form of traffic. Smuggling is often associated with efforts by authorities to prevent the importation of certain contraband items or non-taxed goods; however, there has also been smuggling based on illegally exporting goods like drugs and firearms and legal like apparel, alcohol, tobacco, canned good, and the like. (Picture source: https://media.philstar.com/photos/2019/03/03/gen4-smuggled-goods_2019-03-03_22-45-44.jpg)
Smuggling is the illegal transportation of objects, substances, information, or people, such as out of a house or building, into a prison, or across an international border, in violation of applicable laws or other regulations.
There are various motivations to smuggle. These include the participation in illegal trade, such as the drug trade, illegal weapons trade, prostitution, human trafficking, kidnapping, exotic wildlife trade, art theft, heists, chop shops, illegal immigration, tax evasion, import/export restrictions, providing contraband to a prison inmate, or the theft of the items being smuggled.
In the Philippines, the first law to codify the custom and tariffs was Republic Act 455 and enacted in 1950. It was an amendment of the portion of the Philippine Civil Code. The full text of the law is presented below:
REPUBLIC ACT NO. 455
AN ACT TO AMEND SECTION TWO THOUSAND SEVEN HUNDRED AND TWO, AND TWO THOUSAND AND SEVEN HUNDRED AND THREE OF THE REVISED ADMINISTRATIVE CODE
Section 1. Section two thousand seven hundred and two of the Revised Administrative Code is hereby amended to read as follows:
“Sec. 2702. Unlawful importation of merchandise. — Any person who shall fraudulently or knowingly import or bring into the Philippines, or assist in so doing, any merchandise, contrary to law, or shall receive, conceal, buy, sell, or in any manner facilitate the transportation, concealment, or sale of such merchandise after importation, knowing the same to have been imported contrary to law, shall be punished by a fine of not less than six hundred pesos but not more than five thousand pesos and by imprisonment for not less than three months nor more than two years and, if the offender is an alien, he may be subject to deportation.
“When, upon trial for a violation of this section, the defendant is shown to have or to have had possession of the merchandise in question, such possession shall be deemed sufficient evidence to authorize conviction unless the defendant shall explain the possession to the satisfaction of the court.”
Sec. 2. Section two thousand seven hundred and three of the Revised Administrative Code is hereby amended to read as follows:
“Sec. 2703. Various fraudulent practices against customs revenues. — Any person who makes or attempts to make any entry of imported or dutiable exported merchandise by means of any false or fraudulent invoice, declaration, affidavit, letter, paper, or by means of any false statement, written or verbal, or by means of any false or fraudulent practice whatsoever, or shall be guilty of any willful act or omission by means whereof the Government of the Republic of the Philippines might be deprived of the lawful duties, or any portion thereof, accruing from the merchandise or any portion thereof, embraced or referred to in such invoice, declaration, affidavit, letter, paper, or statement, or affected by such act or omission, shall, for each offense, be punished by a fine of not less than six hundred pesos but not more than five thousand pesos and by imprisonment for not less than six months nor more than two years and, if the offender is an alien, he may be subject to deportation.”
Sec. 3. This Act shall take effect upon its approval.
Approved: June 8, 1950
This antiquated law was amended by Republic Act 4712 in 1966 to make the penalty stiffer and to give rewards to those officers and men of the Bureau of Customs and any informers to curtail smuggling problems in the country. In 2007, Executive Order No. 624 was signed by the President creating the Presidential Anti Smuggling Group (PASG) and a Special Team of Prosecutors to speed-up prosecution of cases involving violations of custom and tariff law.
Almost every year, the police community hauled a hundred million IF NOT BILLION (in the case of luxury cars) worth of illegally-transacted items courtesy of the Bureau of Customs (BoC). Rice, being the basic commodity, was the most pronounced trafficked stuff. Still, Vietnam prevailed to be the greatest source of the tons of rice unlawfully entering our territory. The increase in the trafficking of rice, vegetable, cars, and goods poses a threat to our local suppliers and to the Philippine economy as well.
The reactivation of a task force to suppress the ascending importation of vegetables from China, Taiwan, and Singapore in order to protect the small traders, particularly those coming from the Cordillera Region was done.
Response from the administration included the creation of the Petrochemical Industry Task Force (PITF) and One-CP, One Unit Scheme that has already taken place. Other forms of smuggling revealed included the illegal transport of oil, plywood, and ceramic tiles which all contributed to the government’s losing a huge amount of money. The local industry currently suffered from a great loss of profit due to the unabated proliferation of imported goods and basic commodities whose prices are within the reach of the meager income group which is the majority of the society. There is a present-day Task-Force Smuggling attached to the NBI and the PNP working out for this kind of problem.
Smuggling problems in the Philippines are dealt with by some specific laws such as oils smuggling, tobacco smuggling, luxury car smuggling, smuggling of pirated products, used clothing, and the like. Some are incorporated into the violations of payments on correct tax dues by the Bureau of Internal Revenue, when it passes on to the Bureau of Customs (if entered legally); when illegally declared product (see an example of the picture above) the Bureau of Customs or the Anti-Smuggling Task Group will handle the case.
In May 2016, Republic Act 10845 or the Anti-Agricultural Smuggling Act was signed into law declaring large-scale agricultural smuggling as economic sabotage. It aims to boost the productivity of the agricultural sector and protect Filipino farmers and agricultural enterprises from illegal traders and importers.
Up to this time, NO CLEAR PROGRAMS AND POLICIES to get rid of the smuggling problem in the country because of corruption, making it a favorite SCHEME OF ORGANIZED CRIME. The economy of the country is always at stake if this kind of problem cannot be suppressed. Smuggling can be either outright or technical. In an example of outright smuggling in the Philippines petroleum industry, fuel is smuggled from tankers in international waters to local supply vessels to bypass import duties; or fuel is smuggled out of Special Economic Zones, where locator firms are permitted to import fuel duty-free as long as it is used within the zone or re-exported. Technical smuggling may involve declaring a lower value of the fuel shipment for tax purposes, declaring a lower volume, or misdeclaration, e.g. declaring a gasoline shipment as diesel to qualify for the lower tax rate. AND ALL THESE THINGS MAY HAPPEN TO ANY IMPORTED PRODUCT!
What is your key takeaway from this lesson?
You learn about the different laws on Tariffs and Customs the RA 455, RA 4712, the Executive Order 624 creating the Presidential Anti-Smuggling Group, and lastly the RA 10845. We learn here that the penalty depends on the declared market value of the product, except for illegal commodities where stiffer penalties may be imposed and may be subjected to confiscation in favor of the government or subjected to destruction. Violation of tax laws and customs laws are the primary violations in this particular problem.
Despite the laws, why smuggling is still prevalent? The answer is because “CORRUPTION” is the forte of an organized crime group and officers and employees of both tax and custom bureaus are all susceptible to being corrupted. Remember the corruptor and the corrupted as important ingredients of “organized crime”.
Click PREVIOUS if you want to review the last lesson.
Click NEXT to proceed to the last part of the module (PIRACY)