The Philippines has been the target of rampant smuggling, fraud and price and quantity mis-declaration in commodity imports. To address these issues, the Philippine Bureau of Customs (BOC) recently announced new regulations, effective June 1, 2014, requiring inspection and certification of all bulk and container imports at the port of loading, to be performed by one of a limited number of BOC-approved inspection companies. Importers are expected to absorb the costs of inspection, which are estimated to be $5-15 per metric ton, depending on the surveyor and the volume.

Most of this smuggling and fraudulent activity originates in South and Southeast Asian countries. There have been no smuggling incidents originating in the United States. Unfortunately, however, the BOC elected to impose a blanket inspection requirement on cargos from all countries of origin. This one-size-fits-all approach effectively deems the United States as a potential origin of smuggled goods, despite the clean U.S. record and the long-established, comprehensive and transparent U.S. Federal Grain Inspection Service (FGIS). The added costs could significantly affect a number of containerized exports of U.S. products, including distiller’s dried grains with solubles and corn gluten meal.

A straightforward solution would be for the Philippines to either exempt U.S. cargoes from these new inspection requirements, given the effectiveness and transparency of the U.S. export inspection system, or to add FGIS to the approved list of accredited inspection agencies. The U.S. Grains Council and the U.S. Soybean Export Council are urging the Philippines to adopt this approach. The Council is also engaging with BOC to increase its understanding of the FGIS system. The United States has long had an effective, high quality inspection system in place, and the Council believes that the proposed new inspection system would be both costly and redundant for U.S. cargoes.