Free Trade 21: Abolish or Shrink the Bureau of Customs

Trade protectionism serves two main groups and vested interests: the protected domestic business groups or sectors, and the government. The former can raise their prices and local consumers will have no choice but buy from them since competing imported products are either not available or available but priced much higher due to government taxes (import, value added/VAT, documentary stamp/DST, etc.), related fees, and possible bribery paid to corrupt customs officials.

Yesterday and today, the local media and the web were treated to this scandal: a lowly clerk, with official monthly salary of P9 to 12,000, at the Bureau of Customs (BOC) was accused of inflicting physical injury, attempted murder, other cases. A month ago, he and his buddy beat up a student who alighted after a minor traffic altercation. When he went back to his car to get his guns, the student drove away and the Customs clerk shot his car several times.

The focus of possibly 99 percent of public discussion about it was on the arrogance of that supposedly lowly government employee, and the systemic corruption at the BOC. These are valid concerns as there was an attempted murder case. I will not pursue that angle as it is heavily discussed in the web, just google the name of the culprit, "Paulino Elevado" and one will get lots of materials about him and the incident. For instance, here are two stories about the previous complaints filed against him:

(1)   http://business.inquirer.net/24561/consumer-goods-trader-files-extortion-case-vs-customs-aide

Consumer goods trader files extortion case vs Customs aide

By: Ronnel W. Domingo
Philippine Daily Inquirer

7:05 pm | Thursday, October 13th, 2011

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MANILA, Philippines—An international trader of consumer goods filed before the Office of the Ombudsman charges against an administrative aide at the Bureau of Customs for allegedly asking for as much as P200,000 in bribe to facilitate the release of shipments.

The Department of Finance’s Revenue Integrity Protection Service said in a statement that Flor Tagle, an import and export consultant for Prima Modas Inc., sought help from the DOF’s anti-graft unit to establish the case against Paulino Elevado IV....

(2) http://www.tribuneonline.org/metro/20110223met4.html

DoF execs file graft charges vs 4 BoC officials
By Charlie V. Manalo

02/23/2011

Mid-level officials of the Department of Finance (DoF) have filed graft and administrative charges against four Bureau of Customs (BoC) officials and several others before the Office of the Ombudsman.

Charged were Port of Manila Customs collector Rogel Gatchalian, Gatchalian’s staff lawyer Marlon Agaceta, special assistant Paulino Elevado, spot checker Reffy Gorre and 12 other respondents....

The BOC is the main agency to implement trade protectionism. BOC officials and even junior and low level staff can extort money from importers and brokers. All that these government personnel will do is to delay the processing of papers and release of shipments. Here are some stories of corruption and arbitrary powers exercised by these government personnel, from pinoyexchange.com: