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The Bureau of Customs has revived the proposed policy to regulate charges imposed by foreign shipping lines operating in the Philippines
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The proposed joint administrative order is now being studied by a technical working group led by the Department of Finance
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The JAO will require the approval of DOF, Department of Trade and Industry, and Department of Transportation
The Bureau of Customs (BOC) has revived the proposed joint administrative order (JAO) that aims to regulate charges imposed by foreign shipping lines operating in the Philippines.
The proposed JAO is now being studied by a technical working group led by the Department of Finance (DOF), BOC Assessment and Operations Coordinating Group deputy commissioner Atty. Agaton Teodoro Uvero told PortCalls in a chance interview at the sidelines of the recent Kapihan forum by the Philippine Interisland Shipping Association.
The order will require the signature and approval of DOF, BOC’s mother agency, the Department of Trade and Industry (DTI), and Department of Transportation (DOTr).
The revival comes as BOC continues its discussions with stakeholders regarding congestion issues at ports, and the long-standing issue of alleged exorbitant fees being charged by foreign shipping lines.
In February 2019, DTI, together with DOF and DOTr, released a draft JAO intended to regulate origin and destination charges imposed by foreign carriers, and to lessen or eliminate port congestion.
The JAO was part of DTI’s commitment to stakeholders to find measures to address the high cost of international shipping, a frequent complaint among stakeholders.
The JAO was already signed by then Trade secretary Ramon Lopez and Transport secretary Arthur Tugade, and was awaiting signature of then Finance secretary Carlos Dominguez III.
But by July 2019, DTI announced that instead of a JAO, it would push for an executive order (EO) instead to give “more teeth” to the proposed policy.
Then in November 2019, Lopez said the “way to go is legislation” and that “we need a new law because it might not be enough to have an EO.”
Pending bills
Several bills have already been filed in Congress that seek to strengthen government agencies’ oversight functions over the shipping charges imposed by international shipping lines operating in the Philippines. One of these bills, House Bill (HB) No. 10575, was approved on third and final reading in January 2022 during the 18th Congress, but failed to be tackled in the Senate.
More similar bills have been filed in the 19th and the current (20th) Congress, but all are still pending at the committee level.
Various stakeholder and business groups have supported such bills, saying the high shipping charges “are caused by a lack of regulatory oversight as there is no agency assigned to oversee local charges imposed by international shipping lines.”
Stakeholders have for years raised the issue of alleged exorbitant fees—particularly destination charges—imposed by foreign shipping lines, but it has never been clear which government agency exercised jurisdiction over the lines or if ever there was any agency that had jurisdiction over them to begin with. This, until BOC officials in 2018 pointed out Republic Act No. 10863, or the Customs Modernization and Tariff Act (CMTA), provides the bureau authority to register and regulate shipping lines as third parties.
BOC under the CMTA has the authority to govern and regulate the conduct of third parties—including shipping lines, shipping agents, and warehouse operators—that deal with the customs bureau in relation to the import, export, movement, storage and clearance of goods for and on behalf of another person.
The CMTA is also the basis for BOC’s proposed customs administrative order (CAO) containing rules to determine cost of transport, loading, unloading, and handling charges levied by foreign carriers. BOC in 2024 released the draft CAO for the matter to gather position papers from stakeholders.
READ: BOC drafts rules on foreign shipping line charges
The Association of International Shipping Lines, Inc. (AISL), in a position paper, however, reiterated that the BOC has no regulatory authority in the formulation of policies regarding charges that may be imposed by international shipping lines.
READ: AISL, depots offer counter-arguments to proposed BOC order on carrier charges
AISL – a group of international carriers calling Philippine ports – said Section 1226 (Supervision and Regulation of Third Parties) of the CMTA does not grant BOC the legal authority to regulate charges imposed by international carriers. AISL noted that BOC’s supervision and regulation of international shipping lines, if at all, are actually provided for under Sections 1201-1218 of Chapter 2 (Carriers, Vessels, and Aircrafts) of the CMTA, which the group noted “are all operational issues.”
AISL had earlier pointed out that while BOC may register and regulate foreign shipping lines, the agency cannot involve itself in commercial matters such as carriers’ rates and charges.— Roumina Pablo
