FEBRUARY 22, 2013PEZA , LAGUNA TECHNOPARK, INC.

BOC Implementation ofThe Enhanced Customs Transit System

(Global Positioning System)

Presentationon the

Enhanced Customs Transit System or GPS as a Tool in

International Trade Security

Enhanced Customs Transit System or GPS as a Tool in International Trade

Security

To increase end-to-end international chain supply security by introducing a balanced approach to safeguard shipments entering or leaving the country from manipulation or interference by criminals, illegal traders, and terrorists.

To develop an effective system of detection and presentation of fraud and criminality through cooperation at policy and operational levels between different law enforcement agencies (both local and international).

Enhanced Customs Transit System or GPS as a Tool in International Trade

Security

To pursue close partnership between Customs and the compliant trading community through transparent, efficient, effective and protected cargo clearance procedures.

Enhanced Customs Transit System or GPS as a Tool in International Trade

Security

To be compliant to the international agreements on trade facilitation and security.

a. World Trade Organization Agreementb. World Customs Organization - International Agreement on the Simplification and

Harmonization of Customs Procedures otherwise known as the

Revised Kyoto Convention - SAFE Framework of Standard - Customs Convention on Containers (Container Security

Devices)

Enhanced Customs Transit System or GPS as a Tool in International Trade

Security

A powerful tool to: Enhance cargo security (prevents attempts of

hijacking and diversion of cargoes. Plug revenue leakage. Ensure that import entries have been eventually filed

in transit shipments for consumption in the Philippines through the centralized database that ECTS will generate.

Ensure proper accounting for all transit cargo and would also allow the monitoring of action taken on the cargo after it reaches the port of destination.

Enhanced Customs Transit System or GPS as a Tool in International Trade

Security

By facilitating the customs processing of transit cargo via the use of affordable and reliable technology and other best practices

FEATURES (1) Automatically Generates Transit Delivery Permit based on the electronically filed and approved Transit

Permit Form. Eliminate manual preparation and printing of Boatnote

ECTS Contribution to Transit System Efficiency

FEATURES (2) Secures Containers Using Seal (equip with GPS)

No need for PEZA/Customs guard to escort container from Customs Port of Discharge to PEZA zone and vice versa

(ECTS ensures the availability of sealing equipment 24/7/365)

ECTS puts in place the infrastructure and controls that would enable Customs to do away with the posting of the required security bonds.

ECTS Contribution to Transit System Efficiency

Historical Timeline of ECTS Implementation

2005 – Philippine accession to the WCO Framework of Standards on the

Security and Facilitation of Trade

2006 – Start of the accession process on the International Agreement on the Simplification of Customs Procedures otherwise known as the Revised Kyoto Convention

Historical Timeline of ECTS Implementation

2008 – European Commission and the Republic of the Philippines entered into a 4-year cooperation initiative dubbed as “Trade-related Technical Assistance or TRTA Project”. Under Component 3 of the TRTA is the “Enhanced Customs Transit System in all ports of the Philippines by the

end of 2010”.

Historical Timeline of ECTS Implementation

2009 – Consultation Workshop held at the Hyatt Hotel between DOF, DTI and

Leaders of the Industry on the implementing guidelines of the ECTS Project

2010 – Issuance of Regulations and the implementation of ECTS through

- Customs Administrative Order 4-2010 signed by the Secretary of Finance- Customs Memorandum Order 24-2010 signed by the Commissioner of Customs

Historical Timeline of ECTS Implementation

2010 – Presentation of the Joint Memorandum Orders between BOC and the free port authorities of Subic, Clark, Bataan and PEZA – The Philippine government became a contracting party to the WCO International Convention on the Simplification and Harmonization on Customs Procedures (RKC)

Historical Timeline of ECTS Implementation

2010 – Issuance of CMO 48-2010 which establishes the

guidelines on the accreditation of private barrier seal

providers

2011 – Start of accreditation process of barrier seal providers

Historical Timeline of ECTS Implementation

2011 – 3 Companies were issued ToR (Jan-Apr) - SGS International

- Cotecna Inspection Philippines, Inc.

- Technology Information Management

Corporation

April 2011 – Visit of 12 EU Ambassadors in the BOC to be oriented on the EU-TRTA Projects

Historical Timeline of ECTS Implementation

April 2011 – Consultation with the Clark Development Corporation (CDC), Subic Bay Metropolitan Authority (SBMA), Authority of the Free Port of

Bataan (AFAB), Subic-Clark Alliance for Development Council

June 2011 – Orientation Seminar with the Private Sector led by Port Users

Confederation

Historical Timeline of ECTS Implementation

July 2011 – The PUC recommended the fees which became the basis of the proposed

CAO on fees submitted to DOF:- Delivery to warehouse within one (1) kilometer radius - P 750.00 or lower- Delivery to Metro Manila and nearby towns (Ex. in Cavite and in Bulacan) P 1,500.00- Delivery to Outports (Subic, Clark, etc.) P 2,250.00

Historical Timeline of ECTS Implementation

July 2011 – The PUC further proposed remedial steps to lessen their cost:- All containers tagged for GPS must already be provided by a duly processed and accomplished Boat-note. (This will eradicate the petty graft and delay.)- The mandated carrier’s Bond should now be scrapped, in lieu of the use of GPS.- The current use of the telegram (with cost of Php 90.00) shall likewise be scrapped, in lieu of the use of GPS.- The current under-guarding fee (per CMO 2- 2004) shall likewise be discontinued, in lieu of the use of GPS.

Historical Timeline of ECTS Implementation

COMPARATIVE MATRIX ON THE CURRENT and PROPOSED COST OF TRANSSHIPMENT

Historical Timeline of ECTS Implementation

PARTICULARSC O S T

1-DAY 2-DAY 3-DAY (Davao) GPS

1. BC Form 199 (Transshipment Permit) 40.00 40.00 40.00 40.00

2. Import Processing Fee

a. Warehousing 250.00 250.00 250.00 250.00

3. Documentary Stamps

a. Warehousing Entry 265.00 265.00 265.00 265.00

b. Local Transshipment 115.00 115.00 115.00 115.00

c. Transit Cargo Manifest 115.00 115.00 115.00 115.00

d. Carriers Bond 115.00 115.00 115.00 115.00

e. Boatnote 115.00 115.00 115.00 115.00

4. Underguarding Fee (per 2-2004) 1,941.33 3,882.66 5,824.00 -

5. Telegram 90.00 90.00 90.00 -

6. Container Security Fee ( $5 per TEU or Php225 at 45/$1) 225.00 225.00 225.00 225.00

7. Monitoring & Sealing Fee by SGS 00.00 00.00 00.00 00.00

T O T A L 3,271.33 5,212.66 7,154.00 3,490.00DIFFERENCE (218.67) 1,722.66 3,664.00 -

Aug 2011 – Signing of MOA with the PNP – Commissioner Angelito Alvarez discovered 2000 Containers in Transit missing – Congressional and Senate hearings on the issue

Sept 2011 – Endorsement of SLA and proposed CAO on Fees submitted to DOF – Change of leadership in Customs

2012 – SLA re-endorsed to DOF by Commissioner Ruffy Biazon

Historical Timeline of ECTS Implementation

The Next Step:PILOT TESTING OF

ACCREDITED SERVICE PROVIDERS

Closing

Thank you.