Australian Navy ship HMAS Tobruk loads relief goods as the vessel docks at the Cebu International Port in December 2013. There were no hitches in delivery to hard-hit areas in north Cebu but foreign donations from Belgium are still stuck in the port. (CDN PHOTO/TONEE DESPOJO)
Twelve container vans of private donations from Belgium for typhoon victims in Leyte remain stuck in the Cebu International Port, where they arrived in January 2014.
The Belgian donors want the cargo released as a tax-free importation, but met with familiar obstacles – compliance with Customs law and the logistics costs of moving goods to storm-damaged Leyte.
“I withdrew as consignee in March,” said Cebu businessman Philip Tan, district secretary of Rotary International District 3860. His name and that of the civic organization were placed in the shipping manifest as the recipient of the foreign cargo.
Tan said he had the consignment transferred to Paul Lamy, a Belgian citizen based in Manila, to work out the requirements.
Either the donors find a consignee that is accredited with the Department of Social Welfare and Development (DSWD) in order for the relief goods to enter duty-free or the shipper has to pay full taxes, duties and the 10 percent value-added tax.
A third option is to donate the relief goods to the DSWD, but the Belgian donors didn’t want that.
DON’T BLAME CUSTOMS
Tan said there were hard “lessons” learned about receiving large-scale donations in kind from foreign partners, in this case Belgian nationals who wrote him saying they had mobilized Rotary members in their country to respond to the call for help for calamity victims left homeless by supertyphoon Yolanda, known abroad as “Haiyan”.
Tan, president of the Mandaue City Chamber of Commerce, said he did not blame the Bureau of Customs for the non-release of the vans because the Rotary International District was not accredited with the DSWD as a relief agency, a “basic regulation” that the foreign donors knew beforehand.
“For anyone to send donations, Philippine law requires you to list a foundation that’s accredited with DSWD to receive the cargo. We at the Rotary International District 3860 advised them about that before they sent the cargo.
“But they still went ahead and listed the organization as the receiver, which is not in accordance with the law. That is why BOC cannot release it.”
COMPLAINT
The vans caught in limbo were reported abroad in the website of Flanders News last May 31 as a case of Customs’ red tape.
Johan De Pelsmacker in an interview with the Flanders newspaper complained: “Customs expects me to pay for the goods to enter the country. However, they are asking 1,000 euors per container. I don’t have the case,” he was quoted as saying.
Cebu Customs Distrcit Collector Roberto Almadin told Cebu Daily News this was not the complete story.
“All charges, fees, duties and taxes that are collected by the office for ordinary shipments are waived and exempted for donated goods for Yolanda victims from assisting foreign countries,” he said.
But the consignee, a charitble organization or relief group, must be accredited with the DSWD as required by Section 105 (1) of the Tariff and Customs Code of the Philippines.
(One purpose of accreditation is to assure that a foreign shipper doesn’t misuse charity as a vehicle to smuggle in goods.)
Almadin said the Bureau of Customs also has no control of fees charged by private business entities in other activities for the release and transport of imported donated goods.
Storage fees are charged by the Cebu Ports Authority, stevedore fees are collected by the Oriental Port and Allied Services Corp., and shipping lines charge fees for demurrage, he explained.
Tan, in a separate interview, said he advised the Belgian donors to donate the shipment directly to the DSWD in order to do away with tax payments and other handling fees altogether.
However, the donors “did not want to deal with the agency.”
Tan said the local Rotary International 3860 in Cebu headed by president Ed Chiongbian had many other donors helping in typhoon Yolanda relief operations from Canada, USA, the United Kingdom and Australia, which had no problem sending their relief goods.
“We gave them suggestions on which foundation to send it to like IPI Foundation and for the Rotary to handle distribution. That worked before without a problem. I have talked to the Cusotms Collector and he said he has no problem releasing the vans as long as there is a DSWD accredited foundation to receive it. The problem is not with BOC.”
“This has reached the Embassy of Belgium and they too agreed that the problem is not with the BOC.The donor will just have to comply with our laws,” said Tan.
“People in Customs will lose their job if they just release that.”
OTHER COSTS
Another cost to face is the transport of relief goods from Cebu to Tacloban and Ormoc city, the preferred destination.
To “strip down” and ship the goods to Leyte, domestic shipping lines would charge P40,00 per container van. Neither the donors nor the partners in Cebu are ready to shoulder that.
“I don’t even know what’s inside,” Tan said, because the vans arrived without an inventory or packing list, which prompted him to ask the Customs collector to do a 100 percent examination if the vans are opened.
Tan said one of the many “lessons” Rotary International learned from the experience is to insist that all transactions be “transparent” and well recorded, and that foreign donations “comply with the law” in all aspects for the goods to qualify for duty-free and tax-free exemptions.
Another is that donors and recipients must be clear about who will shoulder other logistics costs: domestic shipping, warehousing, stevedore services, etc.
There are volunteers willing to help, he said, but “many don’t have a lot of money”.
Tan said some Belgian donors came to Cebu to check on the cargo so he arranged a meeting with the Cebu Customs collector to discuss options.
ONE-STOP SHOP
Deputy Collector for Operations Paul Almaceren said they referred the Belgian representatives to the DSWD in the inter-agency “One-Stop-Shop” which was formed last November by the Customs bureau to hasten movement donations and relief goods from the international community.
Josephine Belotindos, head of DSWD’s Standards Unit, said the donors had three options.
First, find an NGO consignee that is registered with the DSWD.
Second, DSWD 7 can give a list of registered NGOs for them to choose to deal with. There are 159 lsisted NGOs based in Cebu.
Third, donate the shipment to the DSWD.
For foreign donations to enter duty-free the national government requires a Deed of Donation (authenticated), a notarized Deed of Acceptance, and shipment documents (bill of lading, packing list, invoice.)
Deputy director Almaceren told CDN the Cebu customs bureau will “give the donors time” to submit complete requirements.