Customs catches alleged pet food smuggling scheme

The Bureau of Customs (BOC) slapped smuggling charges against a pet food company for grossly undervaluing its P474.5 million importations after the BOC’s Run-After-The-Smugglers (RATS) group sniffed out the operation which had been going on for the past 15 months. The BOC’s Prosecution and Legal Division has charged Leoby Castillo Leonidas, proprietress of Honey Drops Marketing, and customs broker Isabelita C. Galera, for undervaluing pet food shipments by more than 80 percent. “An 80 percent undervaluation smacks of arrogance that offends in a special way because of implied assumption of impunity and untouchability which we will never allow," Customs chief Angelito Alvarez said. BOC RATS investigators were able to establish that the real dutiable value of Honey Drops’ various importations from March 2010 to June 2011 totaled P474.5 million, for which the company should have paid P23.5 million in duties and P59 million in value added taxes. But the BOC said that the company’s books were supposedly cooked to make it appear that the 139 import entries it had filed had a combined dutiable value of only P92.6 million. Hence, the company only paid a nominal amount of P4.6 million in duties and P12.2 million in value added taxes. The company claimed that its pet food’s per kilogram value was only $0.23 (P10.12), much lower than the $1.11 (P48.84) to $1.21 (P53.24) per kilogram value declared by other importers of exactly the same products. P83-M duties, taxes due The company must now not only pay the corresponding duties and taxes on the subject importations totaling P83.1 million, but all of its pet food shipments with a combined value of P474.5 million will be subject to forfeiture in favor of the government. Deputy Customs Commissioner and RATS executive director Gregorio Chavez, says the BOC is now looking into the involvement of customs personnel who aided and abetted the smuggling activities and participated in the act of defrauding the government of much-needed revenues. Moreover, Alvarez instructed Chavez to undertake a post-entry audit of all previous importations made by Honey Drops prior to last year. The Customs commissioner said the company’s liability could increase if it is proved that Honey Drops had also used the same modus operandi in the past. — MRT/VS, GMA News