Palm oil importer slapped with P2.2 billion smuggling suit

Image via WikipediaA March 17, 2011 fact sheet by the Bureau of Customs

1) The Bureau of Customs (BOC) filed before the Department of Justice today smuggling charges against a major importer of palm oil which declared a per kilo value of as low as P6.60 for the refined, bleached and deodorized (RBD) palm oil it imported from Malaysia between January 2010 and February this year.
2) Customs Commissioner Angelito Alvarez said it was as if a kilo of palm oil suddenly became cheaper than a liter of bottled mineral water.
3) Sued by the BOC for gross undervaluation and various fraudulent practices against customs revenue were the following officer and brokers of TRANS-ASIA PHILIPPINES MANUFACTURING INDUSTRY: Jason Uy Sio, import manager and customs brokers Benjamin P. Valic, Elinda V. Dumalaog and Joey M. Laurente. Also listed as John and Jane Doe/s were customs employees and other individuals who participated, directly or indirectly, in the release of the fraudulent palm oil shipments.
4) Trans-Asia’s business address is #5 Golden Road, Caloocan Industrial Subdivision, General Luis St., Caloocan City

5) Records of the case would show that in a span of 14 months, between January 2010 and February this year, Trans-Asia imported a total of 38,694,261 kilograms of RBD palm oil with a declared per kilo value ranging from US$.15 (P6.60) and US$.50 (P22.00).
6) RBD oil is usually made from COPRA (dried coconut kernel). It is used for home cooking & commercial food processing. It is also an important raw material in the manufacture of soap, washing powder and other hygiene & personal care products.
7) Broken in 17 import entries which were unloaded at the Port of Manila, Trans-Asia’s palm oil shipments were assessed a value added tax (VAT) totaling a measly P64,824,462 since the company falsely declared a total dutiable value of only P532,852,511.
“However, disclosed Alvarez, “investigations conducted by the  Run-After-The-Smugglers (RATS)Group of the Bureau of Customs revealed that other importers declared a per kilo value of US$1.18 for the same RBD palm oil bought from the same source within the same period of importation.”
9) If recomputed based on the correct value of US$1.18 a kilo, Trans-Asia’s total importation value would increase to P2,193,065,454 for which the company should have paid VAT totaling P264,553,516.
10) Customs Deputy Commissioner Gregorio Chavez, concurrently the executive director of the RATS Group, said the scale of undervaluation committed by Trans-Asia which was well in excess of 75 percent had very few precedents in the history of the Bureau of Customs.
11) Chavez accused Trans-Asia of submitting falsified and spurious invoices to justify the gross undervaluation.
12) For committing various fraudulent practices in violation of the country’s Customs and Tariff Code, Chavez said it was not enough to require Trans-Asia to pay an additional P199 million in VAT plus penalties and surcharges.
13) “The proper restitution should be equivalent to the sum of the dutiable values of the entire 17 import entries totaling P2,193,065,454,” he added.
14) Alvarez said that for trying to save P199 million, Trans-Asia now stood to lose the equivalent of more than P2 billion they spent on their palm oil importations.
15) Alvarez instructed Chavez to subject to post-entry audit all previous importations made by Trans-Asia prior to last year. He said the company’s liability could increase by several billion pesos more if it could be established that it had used the same modus operandi in the past.
16) The customs chief also instructed Chavez to file as soon as possible an amended charge sheet that would include the names of customs employees who aided and abetted the fraudulent importations of Trans-Asia.