Smuggling Charges to be Filed Against Official and Broker of a Petroleum Company

Posted: April 25, 2013


In a Resolution dated 24 April 2013 ("April 24 Resolution"), the  Department of Justice found probable cause to charge the President/Chief Executive Officer ("CEO") and the Customs Broker of Phoenix Petroleum  Philippines ("Phoenix") for violations of the Tariff and Customs Code of the Philippines ("TCCP"), in connection with allegations of unlawful and fraudulent importations of gasoil, unleaded gasoline and petroleum products at the Port of Davao and Sub-Port of Bauan, Batangas during the periods June to November 2010, January to March 2011, and June 2010 to April 2011. 

The case, which is one of the major and high-profile cases involving oil smuggling, arose from a complaint filed by the Bureau of Customs ("BOC"). It alleged that the unlawful and fraudulent importations by Phoenix, through its corporate official and Customs Broker, deprived the Government of lawful duties and taxes due on said importations.

Respondents President/CEO DENNIS ANG UY and Customs Broker JORLAN CAPIN CABANES are being charged for having personal knowledge and direct participation in the operations of Phoenix, including the processing and release of shipments that were already abandoned in favor of the Government for failure to file import entries within thirty  (30) days from discharge of the goods. BOC further claimed that Respondents could not have perpetrated the acts without the participation of yet unidentified customs personnel, referred to in the complaint as "John Does" and "Jane Does".

The April 24  Resolution resolved the Motion for Reconsideration filed by the BOC, and reversed the earlier Resolution dated 16 November  2012  ("November 16 Resolution"), which, in turn, affirmed on automatic review the Resolution dated 14 January 2012 dismissing the complaint.

The November 16 Resolution, in affirming the dismissal of thecomplaint, stated that the documents submitted by the respondents "belied and negated complainant's allegations," thus sustaining their claim that all the duties, taxes and fees due thereon have been fully paid to complainant BOC. 

However, on reconsideration, Secretary of Justice LEILA M. DE LIMA held that the dismissal of the complaint could not be sustained on the basis of the documents Respondents themselves proffered, as they were found to contain "discrepancies, inconsistencies, and variance ... vis-à-vis the documents submitted by complainant relative to the shipments in question."

For instance, the Import Entry Internal Revenue Declaration ("IEIRD") submitted by Respondents pertain to different consignees and shipments; Bills of Ladings reflect suppliers different from those reflected in the IERDs supposedly covering the shipments; and Discharge Port Survey Reports appear to be of doubtful validity as they contain inconsistent data and do not correspond to the shipment in questions. On the other hand, the Statement of Settlement of Duties and Taxes ("SSDTs") adduced by the Respondents appear to indicate that payments were made as late as 36 to 65 days, thus failing to disprove the BOC's complaint that the shipments involved were already deemed abandoned by operation of law and, thus, had already become the property of the government for failure to file import entries within thirty (30) days from discharge of the goods.

In the face of said factual documents, the April 24 Resolution stated that the dismissal of the complaint could not be sustained, as there appears "reason to believe that Unlawful Importation and Fraudulent Practices Against Customs Revenue under Sections 3601 and 3602, respectively, of the [TCCP] have been committed."

Further finding that the acts complained of "could not have been perpetrated without the connivance and conspiracy of officials and employees of the [BOC]," it was also stated that said individuals, "as soon as their identities shall have been known, should similarly be charged for the same offense and for violation of Section 3604 of the [TCCP]."

The Prosecutor General was, thus, directed to cause the filing of the appropriate information in court and to report action taken thereon within ten (10) days from receipt of the April 24 Resolution.



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