Firm charged for undervalued P1.1-B buffalo meat imports

MANILA, Philippines—The Bureau of Customs Thursday filed smuggling charges against a meat processing firm for undervaluing P1.1 billion worth of buffalo meat imports from India by more than 32 percent.

Named in the charge sheet filed at the Department of Justice for preliminary investigation were Rolando Juan Cruz, assistant vice president for finance of CDO Foodsphere Inc., and customs broker Romeo Lerit.

Also included were several John Does and Jane Does who participated directly or indirectly in the release of anomalous meat shipments.

CDO Foodsphere, which is based in Valenzuela City, produces the popular canned meat brands, such as CDO Karne Norte corned beef and Bibbo hotdogs.

Customs Commissioner Angelito Alvarez said Foodsphere valued the 8,964,000 kg of buffalo meat it imported between October and March 2009 at $1.50 (about P65) a kilo for paying import duties.

Alvarez said the valuation attracted the agency’s investigators who noted that it was only slightly higher than the price of a half a kilo of galunggong (mackerel scad). Other importers, he added, declared a per-kilo value of $2.58 (about P112) for the meat they bought from the same supplier of Foodsphere within the same period.

P41-M tax deficiency

Deputy Commissioner Gregorio Chavez, also executive director of the agency’s Run After The Smugglers (RATS) Group, said in his report that Foodsphere declared a combined dutiable value of only P675,740,705 for all its 207 buffalo meat import entries when the correct dutiable value was P1,094,124,221.

As a result, he said, Foodsphere paid only a nominal amount of P67,574,071 in duties when it should have been P109,412,422. Thus, the company still owed the government P41,838,351.

According to the bureau, the company and the broker used falsified invoices to support the gross undervaluation of their imports.

Alvarez instructed the agency’s post-entry audit group to check all importations made by Foodsphere before October 2009 to ascertain if there were similar anomalies in its previous transactions.

He also instructed Chavez to file as soon as possible an amended charge sheet that would include the names of brokers and customs employees who were involved in the questionable importations.

Frivolous, baseless

In a statement, Foodsphere spokesperson Raymond Fortun described as “frivolous and baseless” the charges against the company.

He said the bureau on March 18 asked the firm to submit importation documents covering 2010-11 and that its authorized customs broker had been providing the requested papers.

Fortun said the company was “greatly surprised” by the filing of the case, pointing out that the validation of information had not been concluded and that the charges were premature.

He said Foodsphere had been in the food business for more than 35 years and had never been accused of any unlawful activities.