The Philippines newly appointed Customs commissioner says his office has made a proposal that would require all importers to open letters of credit (L/Cs).

Bert Lina says the Bureau of Customs (BOC) is considering the measure as part of plans to tighten the rules in the payment of import duties and stem huge revenue losses due to non-declaration of imports and the consequent non-payment of duties.

Anti-smuggling measures

Lina says that in his efforts to curb smuggling he has written to the Philippines Central Bank asking its opinion of his plans.

These would require importers to open L/Cs with their chosen banks, to where the payment for the incoming shipment and the corresponding duties would be remitted. Banks would then have to inform the BOC of imports.

Opposition

The commissioner's plans may not be nodded through by the central bank. Some of Lina's critics say his plans run contrary to the World Trade Organisation's principle of trade facilitation.

Lina disagrees. Requiring importers to declare their imports ahead of shipment would not be restraining trade he argues.

L/Cs soon

If the central bank does approve his plans, Lina says the BOC would issue a directive requiring importers to open L/Cs with banks and for pay duties to be paid via the bank immediately.

If the proposal is adopted the BOC says it would have much tighter control over imports and a better profile of importers. The Customs authority also says the tougher regulations would help them chase importers of questionable shipments who routinely use false identities to evade detection.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.