‘5-20’ scheme at Customs costing gov’t millions

MANILA, Philippines–The government continues to lose millions of pesos in much-needed revenue to the cinco huli, lusot veinte or 5-20 ukay-ukay scheme at the Bureau of Customs (BOC).

That is, for every 25 shipments of imported ukay-ukay (used clothing), five are seized by the Department of Finance-attached agency while the rest are released to their consignees upon payment of “tara” (grease money) to corrupt customs personnel, according to BOC insiders.

At least eight big-time BOC players—mostly based in Metro Manila—are reportedly behind the illegal ukay-ukay importation.

The traders, including the “Teves” group, have been misdeclaring ukay-ukay imports as general merchandise, among other items, due to the ban on the importation of used clothes under Republic Act No. 4653.

Aside from RA 4653, ukay-ukay importation is also prohibited under the Tariff and Customs Code of the Philippines.

Two of the importers have allegedly been dropping the names of a top DOF official and of two customs officials in their illegal operations, said a BOC official. The finance department and bureau executives are said to be fraternity brothers.

Proof of failure

Inquirer sources at Customs cited the “continued proliferation of ukay-ukay stores not just in Baguio City but in many other places nationwide” as proof of the government’s failure to stop ukay-ukay smuggling.

Last week, the Bureau of Customs seized over P21 million worth of illegally imported used clothes at the Manila International Container Port.

In a news release, the bureau’s Public Information and Assistance Division (PIAD) said five container vans of ukay-ukay were consigned to a Greenhills, Mandaluyong City-based firm called PJK Express Door-to-Door Corp.

However, BOC investigation disclosed that the company was not holding office at its declared address.

“The smuggling attempt was foiled on the basis of alert orders issued by the BOC’s Enforcement Group after receiving derogatory information about the shipment. The BOC promptly issued a warrant of seizure and detention of the shipment for violation of Section 2503 of the Tariff and Customs Code of the Philippines, as well as RA 4653,” noted the PIAD.

From 2002 to 2011 alone, the government lost more than P1.33 trillion in revenue to smuggling through the country’s ports, according to the Federation of Philippine Industries (FPI), which groups together about 800 firms nationwide.

In a study, the FPI said lost revenue from 2002 to 2008 totaled P889.5 billion, with further losses of P119.65 billion in 2009 and P326.75 billion in 2010 and 2011.

President Aquino earlier said the government had been losing at least P200 billion in revenue each year due to smuggling at the ports.

Customs officials have repeatedly said they were doing something about it.