Philippine Bureau of Customs Proposes Escrow Deposit Rule for Sea Cargo Deconsolidators
Key Takeaways
- •A draft Customs Administrative Order dated Nov. 6 would require Philippine-accredited sea cargo deconsolidators to register and post escrow deposits to protect balikbayan box shipments sent by overseas Filipinos.
- •Deconsolidators would place P2 million into an escrow account, with an added P500,000 required for each overseas consolidator they work with in each country of operation.
- •Escrow funds would be drawn on to cover duties, taxes, storage charges and delivery expenses when a deconsolidator fails to clear or deliver shipments, and defaulting firms would face a penalty of 25% of the assigned deconsolidator's expenses or at least P300,000.
- •Operating without registration would carry a P300,000 fine for a first offense and blacklisting for a second, while registered firms pay a P10,000 fee for certificates valid for three years.
- •Shipping lines would need to confirm a Philippine deconsolidator's valid registration and shipment acknowledgment before releasing empty containers, and stakeholders may submit position papers until the Nov. 13 online public consultation.
THE Philippine Bureau of Customs (BoC) has proposed requiring sea cargo deconsolidators handling balikbayan boxes to maintain an escrow deposit, in a bid to safeguard shipments sent home by Filipinos working abroad.
In a draft Customs Administrative Order (CAO) dated Nov. 6, the BoC outlined new registration requirements for Philippine-accredited sea cargo deconsolidators — the companies that break down consolidated container shipments into individual consignments for customs clearance and final delivery. Balikbayan boxes, care packages long sent by overseas Filipinos to their relatives in the Philippines, typically reach their recipients through this consolidator-to-deconsolidator chain.
Under the proposal, deconsolidators would be required to place P2 million (Philippine pesos) into an escrow account, plus an additional P500,000 for each overseas consolidator they work with in each country of operation — an amount that rises with the size of each deconsolidator's overseas network. The funds would be drawn on to cover duties, taxes, storage charges and delivery expenses if a deconsolidator fails to clear or deliver shipments to their recipients.
Deconsolidators would also have to pay a P10,000 registration fee, with certificates valid for three years.
The draft CAO would allow the BoC to assign another deconsolidator to clear and deliver shipments that remain undeclared, unpaid or unclaimed, with the expenses charged against the defaulting company's escrow account. Defaulting companies would face a penalty of 25% of the expenses incurred by the assigned deconsolidator, or at least P300,000.
Companies operating without the required registration could face a P300,000 fine for a first offense and blacklisting for a second offense.
Shipping lines would likewise be required to confirm that Philippine-based deconsolidators hold valid registration and have acknowledged the shipments before releasing empty containers to overseas consolidators, effectively making container release contingent on the Philippine deconsolidator's registration and shipment acknowledgment.
The BoC is accepting position papers until Nov. 13, with an online public consultation scheduled for the same day — the next checkpoint for the draft, and the channel through which companies in the balikbayan box shipping chain and other interested parties can weigh in on the proposed rules.
— Justine Irish D. Tabile, BusinessWorld
Source: BusinessWorld
