By Janina C. Lim, Reporter

DA cancels all import permits to curb smuggling

Posted on November 23, 2016

THE Department of Agriculture (DA) has ordered the revocation of all import permits for agricultural products issued by the agency as an anti-smuggling measure.

“The only way to check this is a total recall of permits issued and we can only recall this by canceling all permits previously issued.... I will sign that order effective today (Tuesday). Tomorrow (Wednesday) the legitimate importers will come to the office and I will personally make sure that I will check every import permit that will be issued again,” Agriculture Secretary Emmanuel F. Piñol said at a briefing in Quezon City.

The department will create a technical working group which will be composed of representatives from its various agencies to review all permits.

Rice and corn import permits will not be affected by the order as the National Food Authority, the regulatory agency overseeing these grains, was removed from Agriculture department control and transferred to the Office of Presidential Assistant for Food Security and Agricultural Modernization.

All importers found to be “legitimate” upon review will be re-issued import permits within 24 hours, Mr. Piñol assured, while those found using import permits illegally will be blacklisted from trading.

To date, the department has issued some 1,700 import permits.

Mr. Piñol said the cancellation follows “persistent” reports of recycling of import permits and technical smuggling.

“We have to do this to make sure that all permits are no longer being recycled. This usually happens every time the Christmas season comes because of the great demand for meat and chicken,” he added.

Mr. Piñol particularly cited meat processors as abusing the permits, alleging that they falsely declare imported goods as other commodities with lower import duties such as offal.

Sought for comment, Philippine Association of Meat Processors, Inc. Executive Director Francisco J. Buencamino said that the order will inconvenience legitimate importers, with delays adding to importers’ storage costs and demurrage.

“We legitimate importers will be the ones inconvenienced. We have been through this in the past. The new people of the DA will eventually find out how useless this is,” Mr. Buencamino said in a text message on Tuesday.

Mr. Buencamino noted that smuggling “is the product of unreasonable regulation and wide price variance” between foreign and local goods, and asked that the department resolve such issues “more logically.”

PAMPI groups 35 meat processing firms which generate an average of P300 billion in annual sales.

“Christmas items will be affected,” Mr. Buencamino added.

Asked about the possible economic impact of the cancellations, Mr. Piñol said: “There is no stoppage of importation... What we just want is to clean up the issuance of permits. As long as they are legitimate importations, we will not stop them.”

Meanwhile, Samahang Industriya ng Agrikultura, Inc. (SINAG), an organization composed of 33 agriculture federations and organizations, welcomed “with caution” the DA’s order to cancel all import permits.

“We are just hoping that the re-issuance of new import permits would not be a new source of corruption for some people,” Rosendo O. So, SINAG chairman, said in a statement the group e-mailed to reporters on Tuesday.

SINAG added that smuggling continues to flourish due to the government’s failure to penalize violators despite the enactment of the new law, Republic Act 10845, “An Act Defining Large-Scale Agricultural Smuggling as Economic Sabotage, Prescribing Penalties Therefor and for Other Purposes.”

Signed on May 23 this year, RA 10845 classifies economic sabotage as “any act or activity which undermines, weakens or renders into disrepute the economic system or viability of the country or tends to bring out such effects and shall include, among others, price manipulation to the prejudice of the public especially in the sale of basic necessities and prime commodities.”

Violators face a sentence of life imprisonment and a fine of twice the fair value of the smuggled agricultural product and the aggregate amount of taxes, duties and other charges avoided.

SINAG also proposed that only those with “legitimate” financial standing based on Bureau of Internal Revenue records should be accredited as importers.

The group also wants the DA to publicly list all accredited importers and their annual financial reports for the past three years “so we can weed out spurious importers.”

SINAG noted that its independent research shows that nearly P200 billion worth of agricultural goods were smuggled into the country in the past five years which the group said translates to P60-P80 billion in lost revenue for the government.