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US$135m rice smuggling payoff in the Philippines unveiled

Publication Date : 26-12-2013

 

Sources named a 'David Tan' who allegedly monopolised smuggling operations

 

A Goliath in rice smuggling has cornered the trade in this grain by plying Philippine Bureau of Customs (BOC) officials and rank-and-file employees with cash gifts that have amounted to 6 billion pesos (US$135 billion) over the last two years.

A former BOC official, who spoke on condition of anonymity, said one of the main challenges facing the new management at the bureau was whether it would dismantle the network built by a certain “David Tan” who was designated as point man when rice-smuggling transactions were centralised two years ago.

“David Tan operates behind various brokerage firms. If you want to bring in rice without paying the right taxes, you have to go through him because the BOC officials deal only with him. The BOC officials do not entertain any other rice smuggler except Tan,” said the source, who described the rice smuggler as “young and with deep connections in rice exporting countries in Asia, especially Vietnam.”

“They called these special operations or palusot because the rice shipments had no documents or import permit. After David Tan informs his connections where his shipments are arriving, the smuggling network goes into motion, from those who sign the papers to those who open the exit gates in the ports,” the former official said.

It was not clear whether “David Tan” was the same as “Mr. T” who, according to a new BOC official who talked to the Inquirer last week, was one of three big traders whose under-the-table deals with corrupt examiners, appraisers and other frontline personnel at the bureau were the cause of the agency’s failure to meet its revenue collection goals.

The new bureau official referred to the other two big traders as “Big Mama” and “Ma’am T.”

Old-timers in the BOC told the Inquirer on Monday that there was no reason to go after “Big Mama,” “Ma’am T” and “Mr. T” because the papers of the three traders “appeared to be in order.”

The case is presumably the same with “David Tan.”

The former BOC official said the scheme involved at least two top bureau officials (who get 10,000 pesos to 20,000 pesos each per container), at least one major port official (5,000 pesos to 10,000 pesos per container) and more than a dozen desk employees whose signatures (1,000 pesos per container) were needed in the release papers of the smuggled rice.

He estimated that Tan brought in an average of 1,000 TEU or 6-meter equivalent unit containers a week (a container can load 510 cavans of rice) or a weekly take of 37 million to 62 million pesos.

Kickbacks

In the last two years since Tan monopolised rice smuggling in the country, the former official said kickbacks had reached between 3.85 billion and 6.45 billion pesos.

The former official said roughly one-third of the kickbacks went to just one official who was believed to be representing an “influential” group.

“Tan would pay low taxes by claiming that the TEUs contained goods of lesser value than rice. Often, his group declares the rice shipments as various construction materials that are also heavy but carry lower duties,” the former official said.

Smuggled rice is usually brought in through the two ports in Manila and the ports in Cebu, Cagayan de Oro and Davao, the former official said.

He said rice and oil were the two most smuggled goods in the country because of the huge profits involved in bringing these commodities in on the sly.

Who is Tan?

In October, Samahang Industriya ng Agrikultura (Sinag) president and former Abono Representative Rosendo So urged the government to look into reports that a certain “David Tan” was the head of the country’s biggest rice smuggling syndicate and called on BOC officials to identify him so he could be arrested.

“We want to know who is David Tan and why the authorities have allowed him to allegedly manipulate rice imports for his own and his group’s profit,” So said.

Nothing happened, as in President Aquino’s trying to shame BOC officials and employees into leaving by singling the bureau out for corruption in his State of the Nation Address in July.

Former Representative Ruffy Biazon whom the president had appointed to head the bureau, reorganised the agency to put an end to corruption there, but those who were shuffled challenged their reassignment in the Court of Appeals, frustrating reforms and keeping their lucrative posts.

Biazon beat them in leaving the bureau by quitting in early December after being implicated in the 10-billion pesos pork barrel scam.

*US$1 = 44.32 pesos

 

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