This article talks about the crime of smuggling and unlawful importation in the Philippines.
Smuggling is among the biggest threats facing the Philippine economy. The high profits derived from smuggling are the driving force why crooked individuals and traders resorted to this illicit activity. They smuggle goods into or outside the Philippines to circumvent import and export restrictions and to evade the payment of customs duties, thereby unduly depriving the government of significant revenue.
Republic Act No. 10863 otherwise known as the Customs Modernization and Tariff Act (“CMTA”) defines smuggling as the fraudulent act of importing any goods into the Philippines, or the act of assisting in receiving, concealing, buying, selling, disposing or transporting such goods, with full knowledge that the same has been fraudulently imported, or the fraudulent exportation of goods.
Prior to the enactment of the CMTA, smuggling is commonly understood to refer to the act of importing or bringing into the Philippines any article without proper documentation. In fact, the repealed Section 3601 of the Tariff and Customs Code of Philippines (“TCC”) speaks only of “unlawful importation”.
Under the CMTA, the crime of smuggling pertains not only to unlawful importation but also to unlawful exportation.
Smuggling under Section 1401 of the CMTA
Section 1401 of the CMTA, in part, provides:
“Section 1401. Unlawful Importation or Exportation. – Any person who shall fraudulently import or export or bring into or outside of the Philippines any goods, or assist in so doing, contrary to law, or shall receive, conceal, buy, sell, or in any manner facilitate the transportation, concealment, or sale of such goods after importation, or shall commit technical smuggling as defined in this Act shall be penalized by:
xx xx xx
In applying the above scale of penalties, an offender who is a foreigner shall be deported without further proceedings after serving the sentence. If the offender is a public officer or employee, the penalty which is the next higher in degree shall be imposed in addition to the penalty of perpetual disqualification from public office, and disqualification to vote and to participate in any public election. If the offender fails to pay the fine, subsidiary imprisonment shall be served.
When, upon trial for violation of this section, the defendant is shown to have had possession of the goods in question, possession shall be deemed sufficient evidence to authorize conviction unless the defendant shall explain the possession to the satisfaction of the court: Provided, That each act of unlawful importation or exportation shall be deemed as a separate offense: Provided, however, That payment of the tax due after apprehension shall not constitute a valid defense in any prosecution, under this section: Provided, further, That outright smuggling shall also be punishable under this section: Provided, finally, That the rights and privileges provided in this Act for the importers, consignees, exporters, service providers, third parties and other third parties who committed this offense shall be revoked.”
Pursuant to the above provision of Section 1401 of the CMTA, there are two ways by which smuggling in the Philippines can be committed. The first is the unlawful importation or bringing of goods into the Philippines, and the second involves the unlawful exportation or bringing of goods out of Philippines.
The crime of Unlawful Importation
In the case of Jardeleza vs. People, G.R. No. 165265, 06 February 2006, the Supreme Court in the context of the repealed Section 3601 of the TCC stated that the crime of unlawful importation is committed by any person who: (1) fraudulently imports or brings into the Philippines any article contrary to law; (2) assists in so doing any article contrary to law; or (3) receives, conceals, buys, sells or in any manner facilitate the transportation, concealment or sale of such goods after importation, knowing the same to have been imported contrary to law.
According to the Supreme Court, the phrase “contrary to law” in Section 3601 qualifies the phrases “imports or brings into the Philippines” and “assists in so doing,” and not the word “article.” The law penalizes the importation of any merchandise in any manner contrary to law.
The Supreme Court further stated in Jardeleza that “the crime of unlawful importation is complete, in the absence of a bona fide intent to make entry and pay duties when the prohibited article enters Philippine territory”. Accordingly, the term “entry” in Customs law has a triple meaning. It means (1) the documents filed at the Customs house; (2) the submission and acceptance of the documents; and (3) the procedure of passing goods through the Customs house.
Jardeleza exemplifies the first form of unlawful importation, i.e., fraudulently imports or brings into the Philippines any article contrary to law. In that case, the petitioner, a flight stewardess of Philippine Airlines, was found to have imported assorted gold jewelry into the Philippines by hiding said jewelry inside a hanger bag. Moreover, she did not declare the jewelry in the Customs Declaration form. The trial court found the petitioner guilty of the crime of smuggling. This is what the Supreme Court had stated when it affirmed the conviction of the Petitioner:
“The bare fact that, under the second paragraph of the Information, petitioner is alleged to have imported the jewelry into the country by, inter alia, not declaring it in the customs declaration form, it cannot thereby be concluded that she was being charged of a crime under Section 2505 of the TCC. The acts alleged therein are descriptive of the fraudulent manner petitioner imported her jewelries into the country. Petitioner was mandated to indicate in the Customs Declaration Form that she had jewelry in her possession to be imported into the country valued at more than US$350.00. Worse, when asked by Nario if she had goods or articles to declare, she spontaneously answered “No.” Petitioner’s intentional concealment or nondisclosure that she had such jewelry items in the leatherette bags constituted fraud under Sections 3601 and 3602 of the TCC, aimed at depriving the government of customs revenue.”
Thus, the crime unlawful importation is committed when the importation of foreign goods and articles was made without going through the legal processes or procedures set forth in the TCC and the implementing rules and regulations of the Bureau of Customs, such as the declaration of the dutiable articles in the Customs entry forms.
As regards unlawful importation in its second form, assisting in the illegal importation of goods, for one to be held criminally liable for this act, he must have helped or facilitated the importation of any foreign goods despite knowing that the same were imported into the Philippines contrary to law.
A customs officer who assisted or facilitated in the illegal importation of goods is a perfect example of how the second mode of unlawful importation can be carried out. This is what happened in the case of Francisco vs. People, G.R. No. 177430, 14 July 2009, where several customs employees, including the petitioner, facilitated the release of smuggled goods from the Bureau of Customs:
“There is no doubt that smuggling was committed in this case. The collective evidence on record shows that the Francisco, Ojeda and Lintag assisted in the unlawful importation of dutiable articles by facilitating their release from the Bureau of Customs without payment of proper duties and taxes. Having the power to order the physical examination of the subject importation, they intentionally did not do so despite the glaring irregularities found on the face of the documents (Formal Entry and Internal Revenue Declaration No. 118302, Invoice No. LPI/99-500 and Bill of Lading). They helped conceal the true nature of the cargo. Thereafter, the cargo, which had the appearance of having been legally imported through their help, was removed from customs premises and was being transported to an undisclosed location. Unfortunately for all the accused, said cargo, which was being guarded and escorted by PO3 Nadora, was intercepted by Presidential Anti-Smuggling Task Force (PASTF) Aduana.”
With respect to the third mode of committing the crime of unlawful importation, i.e., receives, conceals, buys, sells or in any manner facilitate the transportation, concealment or sale of such goods after importation, knowing the same to have been imported contrary to law, this is illustrated in the case of Salvador vs. People, G.R. No. 146706, 15 July 2005. In that case, the petitioner, then an aircraft mechanic of the Philippine Air Lines and assigned at the Ninoy Aquino International Airport and Manila Domestic Airport, together with two (2) other aircraft mechanic, were caught in possession of assorted smuggled watches and jewelries. The trial court found them guilty of violation of Section 3601 of the TCC. The Supreme Court affirmed their conviction stating that:
“In the instant case, the prosecution established by positive, strong, and convincing evidence that petitioner and his co-accused were caught red-handed by a team from the PAF Special Operations Squadron, while in the possession of highly dutiable articles inside the premises of the airport. The contraband items were taken by petitioner and his co-accused from a PAL plane which arrived from Hong Kong on the night of June 3, 1994. Petitioner and his colleagues then attempted to bring out these items in the cover of darkness by concealing them inside their uniforms. When confronted by the PAF team, they were unable to satisfactorily explain why the questioned articles were in their possession. They could not present any document to prove lawful importation. Thus, their conviction must necessarily be upheld. Clearly, the Court of Appeals committed no reversible error in affirming the trial court’s Decision convicting petitioner and his co-accused.”
Furthermore, in unlawful importation, also known as outright smuggling, goods and articles of commerce are brought into the Philippines without the required importation documents or are disposed of in the local market without having been cleared by the Bureau of Custom or other authorized government agencies, to evade the payment of correct taxes, duties and other charges. Such goods and articles do not undergo the processing and clearing procedures at the Bureau of Custom, and are not declared through submission of import documents, such as the import entry and internal revenue declaration (Bureau of Customs vs. Devanadera, G.R. No. 08 September 2015).
The crime of Unlawful Exportation
The crime of unlawful exportation is essentially a new crime. Prior to the enactment of the CMTA, there was no such crime as unlawful exportation under the TCC or the Revised Penal Code. There is nothing in the TCC which says that any person who exports or brings goods outside of the Philippines in violation of law, rules or regulation shall incur criminal liability.
As now punished, the crime of unlawful exportation may be committed in any of the following manner: 1) exportation or bringing outside the Philippines any article contrary to law; or (2) assisting in the exportation of any article contrary to law.
Smuggling under Section 1403 of the CMTA
Section 1403 of the CMTA provides:
Section 1403. Other Fraudulent Practices Against Customs Revenue. – Any person who makes or attempts to make any entry of imported or exported goods by means of any false or fraudulent statement, document or practice or knowingly and willfully files any false or fraudulent claim for payment of drawback or refund of duties shall, for each act, be punished in accordance with the penalties prescribed in Section 1401 of this Act.
In various fraudulent practices against customs revenue, also known as technical smuggling, the goods and articles are brought into the country through fraudulent, falsified or erroneous declarations, to substantially reduce, if not totally avoid, the payment of correct taxes, duties and other charges. Such goods and articles pass through the Bureau of Custom, but the processing and clearing procedures are attended by fraudulent acts in order to evade the payment of correct taxes, duties, and other charges. Often committed by means of misclassification of the nature, quality or value of goods and articles, undervaluation in terms of their price, quality or weight, and misdeclaration of their kind, such form of smuggling is made possible through the involvement of the importers, the brokers and even some customs officials and personnel (Bureau of Customs vs. Devanadera, G.R. No. 08 September 2015).
In the case of Mercado vs. People, G.R. No. 167510, 08 July 2015, the Supreme Court enumerated the various fraudulent practices against customs revenue, as follows:
- Making or attempting to make any entry of imported or exported article by means of any false or fraudulent invoice, declaration, affidavit, letter, or paper;
- Making or attempting to make any entry of imported or exported article by means of any false statement, written or verbal;
- Making or attempting to make any entry of imported or exported article by means of any false or fraudulent practice whatsoever;
- Knowingly effects any entry of goods, wares or merchandise, at less than true weight or measures thereof;
- Knowingly effects any entry of goods, wares or merchandise upon a false classification as to quality or value;
- Knowingly effects any entry of goods, wares or merchandise by the payment of less than the amount legally due;
- Knowingly and willfully files any false or fraudulent entry or claim for the payment of drawback or refund of duties upon the exportation of merchandise;
- Knowingly and willfully makes or files any affidavit abstract, record, certificate or other document, with a view to securing the payment to himself or others of any drawback, allowance, or refund of duties on the exportation of merchandise, greater than that legally due thereon.
The very essence, therefore, of technical smuggling is the importation of foreign goods or articles through fraudulent practices against customs rules and regulations which can be done in various ways such as the undervaluation of the price, load or weight, misclassification of the goods imported, misdeclaration of the quantity or quality, payment of less than the amount legally due.
Technical smuggling cannot happen if no collusion took place between the importer and customs officer, considering that the processing of documents for the importation of foreign goods or articles into the Philippine has to pass through the custom officials and personnel. Parenthetically, any customs officials who allowed or participated in the commission of various fraudulent practices against customs revenue as laid down in Section 1403 of the CMTA may be held criminally liable for technical smuggling under the “conspiracy theory”.
About Nicolas and De Vega Law Offices
If you have any questions or concerns regarding criminal law, we can help you. Nicolas and De Vega Law Offices is a full-service law firm in the Philippines. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website https://ndvlaw.com/.
