SMUGGLING OF ILLICIT DRUGS AIDED BY CUSTOMS PLAYERS
Marie Catherine R. Nolasco＊

I. INTRODUCTION
The entry into the Philippines of large volumes of imported illicit drugs was initially believed to bethrough the various islands of the Philippines, taking into consideration the archipelagic nature of the country.
However, there have been reservations on this because of the proliferation of smuggling activities being
perpetrated by the “players”1 or “fixers” at the Bureau of Customs.
In an investigation conducted by the National Bureau of Investigation in September 2013, whereby 62kilograms of methamphetamine hydrochloride̶commonly known as shabu̶were seized by virtue of theservice of a search warrant2 issued against the occupants of a condominium unit in Manila used as a “dryingstation” of shabu, large empty tea packs were found inside the premises. Examination conducted on the tea
packs revealed the presence of shabu residue.
It was assumed that tea packs containing shabu were smuggled into the country through boats entering
through the various islands of the Philippines. There was no opportunity to confirm or disprove it. Theinvestigation reached a dead-end since no documents were found within the premises that could lead theinvestigation beyond the three (3) Chinese nationals arrested during the operation, since, as with otherinvestigations, the arrested Chinese nationals were mum when questioned.
Another investigation in December 2016 conducted by the Task Force on Anti-Illegal Drugs (TFAID) ofthe NBI in the City of San Juan yielded a total of almost 800 kilograms of shabu in a series of interrelated
operations.3 Likewise, no documents were found in the premises subject to the search warrant that would
provide leads as to the source of the illicit drugs. Similarly, no additional information was revealed by theChinese nationals arrested in the operation. As in the other case, there were indications that the same werealso smuggled into the country.
A breakthrough came about in 2017, when the Bureau of Customs sought the assistance of the NBI in theinvestigation of the contents of five (5) metal cylinders from China containing a total of over 600 kg of shabu.

II. INVESTIGATION OF THE SHABU CONTAINED IN METAL CYLINDERS
A. Initial Discovery of the Shabu by the Bureau of Customs4
On 26 May 2017, the Bureau of Customsʼ (BOC) Criminal Intelligence and Investigation Service (CIIS)
sought the assistance of the National Bureau of Investigationʼs (NBI) Anti-Organized and Transnational
Crime Division (NBI) and the Philippine Drug Enforcement Agency (PDEA) to assist them in theinvestigation and processing of the methamphetamine hydrochloride, or shabu, they discovered in awarehouse in Valenzuela City.
Executive Officer for Operations, Anti-Organized and Transnational Crime Division, National Bureau of Investigation,Philippines.
1“Players”, or “fixers”, are the terms used to refer to those who facilitate/process the importation of goods in the Bureau ofCustoms.
2Search Warrant No. SW 13-147-MN issued by the Regional Trial Court of Malabon City on 06 September 2013.
3
By virtue of Search Warrant No. 16-031 issued by the Regional Trial Court of Makati City, Branch 65 and a series of relatedoperations, such as interdiction.
4
Joint Affidavit, dated 14 August 2017, executed by the operatives of the AOTCD in filing charged against the importers of theshabu. (NPS Docket No. XVI-INV-17H-00206)＊59RESOURCE MATERIAL SERIES No. 106

A total of 605 bags of shabu were found inside five (5) metal cylinders placed in wooden crates. After
deliberations among the BOC, NBI and PDEA, it was decided that a controlled delivery would be conducted
as to one of the cylinders containing shabu. The controlled delivery was led by the PDEA. Delivery was madeto the ultimate consignee as indicated in the documents. The consignee was arrested by the PDEA for
violation of R.A. 9165 (Comprehensive Dangerous Drugs Act of 2002). A total of 100 bags of shabu were seizedat the address indicated, with a net weight of 100,181.0 grams (100.181 kg).
Meanwhile, the rest of the transparent bags containing a white crystalline substance and the fourcylinders containing the same were left in the custody of the NBI-AOTCD for field testing, seizure,
qualitative and quantitative examination and further investigation. Personnel from the NBI Forensic
Chemistry Division (FCD) were, thus, called-in for the field testing.
B. Investigation Conducted by the AOTCD5After the illicit drugs were seized, the NBI-AOTCD conducted a thorough investigation on how the shabuwas able to pass through the BOC without being detected. Various modes of investigation were utilized,
among which are: (1) interviews of witnesses, officials and employees of the different departments of theBOC, experts in the field of importation, among others; (2) backtracking of the import documents,accreditation papers, as well as the various customs orders and issuances; (3) verification with several
government agencies; and (4) issuance of subpoenas to those who participated in the importation.
Based on the investigation, the warehouse where the metal cylinders containing the shabu were found isowned by a company engaged in international sea and air freight forwarding. The company receives several
items for shipment from its various warehouses in China and assembles and consolidates the same into asingle lot. Once a container is filled up, it contacts its broker in China to arrange for the shipment of thecontainers to the Philippines. Since the company is no longer a registered forwarder of the Bureau ofCustoms, to continue its operation as an international freight forwarder, it hires consultants handling therelease of goods from the Bureau of Customs. These consultants in turn use the players for the importations.
The players charge an all-in package of one hundred ninety thousand pesos (Php190,000)6. It means that forthe said amount, the player will provide a “consignee-for-hire”7, pay the taxes and duties, and deliver thecontainer to the importer.
Further, the player guides the importer through the consultants in the preparation of the import
documents. The player revises the packing list with the corresponding harmonized system (HS) codes to beused by the importer to ensure that the shipment would be categorized as “general merchandise.”In the importation of the shipment which includes the five (5) metal cylinders containing the shabu, thesame procedure was adopted. The actual packing list of the importer was revised by the player. As preparedby the player, the packing list forming part of the import documents to be submitted to the BOC indicated thecontents as cutting boards, footwear, kitchenware and molds, contrary to the actual contents of the original
packing list as transmitted by the importerʼs warehouse in China.
In the course of the preparation of the documents, the shipment was brought to the Port of Shihu where it
was loaded into a vessel. It arrived at the Manila International Container Port (MICP) on 15 May 2017.
On 17 May 2017, the customs broker hired by the player lodged the details of the shipment in the Bureauof Customs Electronic to Mobile (E2M) System. As part of the all-in package, the playerʼs customs broker
entered a trading company or the consignee-for-hire as the importer/consignee for the shipment.
The player and the consignee-for-hire verbally agreed that the player would use the business name of her
trading company in exchange for a royalty/retainer of one thousand five hundred pesos (PhP 1,500.00) percontainer. The shipment was assigned a “Green Lane” tag by the Selectivity System of the Bureau ofCustoms. Because the shipment was tagged “GREEN”, no physical inspection and further documentary
Transmittal of the NBI to the Department of Justice, dated 14 August 2017 (NPS Docket No. XVI-INV-17H-00206).
Equivalent to around US$3,800.
7A “consignee for hire” is a consignee whose business name is used as consignee of the various importation of the playerʼsclients.
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examination was required. All that was needed was the payment of customs fees and taxes.
On 23 May 2017, the shipment was released from the MICP. It was loaded onto a truck owned by theplayer and delivered to the importerʼs warehouse on 24 May 2017. Upon arrival of the container, thewarehouse personnel listed its contents, and checked the same to see if it matched the actual packing list emailed from China. They then called up the individual consignees of the shipments to inform them of thearrival of their goods.
At around 5 or 6 oʼclock in the evening of 25 May 2017, the warehouse manager, who is also theimporter/consolidator (hereinafter referred to as importer), received a call from a Xiamen Customs PoliceOfficer, asking if the shipment of five (5) insulator machines had arrived. The warehouse manager answeredthat it arrived on 24 May 2017. The Xiamen Customs Police Officer then told the importer that the shipment
contained voluminous drugs; and that the shippers thereof were arrested in China.
Fearing that the shipment would be discovered in his warehouse by the Philippine authorities, theimporter then coordinated with the Chinese Embassy in the Philippines. He also called up a Philippinecustoms official, who has contacts with the Customs of China to assist him. After proper verification by thePhilippine Customs official with the Xiamen Customs Police Officer, the package as described was indeed
part of the shipment. The information was relayed by the Philippine Customs official to his superior, the BOCCIIS head. Consequently, the assistance of the NBI and the PDEA were sought.
C. Result of the Investigation
As a result of the investigation conducted by the NBI-AOTCD, charges for Importation of DangerousDrugs, under Section 4 of the Comprehensive Dangerous Drugs Act of 2002 (R.A. 9165) were filed against theactual consigneeʼs importer, players, consultants, broker and the consignee-for-hire.8 The case is now pending
before the Regional Trial Court of Manila and arrest warrants have been issued against them.9
In addition, criminal cases for Unauthorized Practice of Customs Broker Profession, under Section 28 ofthe Customs Brokers Act of 2004 were filed against the player and the consultants. Criminal cases forviolation of the Anti-Graft and Corrupt Practices Act (Republic Act 3019, as amended) were also filed against
employees of the Bureau of Customs: the Chief of the Risk Management Office (RMO) and two employees ofthe Formal Entry Division (FED).10

III. BEATING THE SYSTEM OF THE BOC
A. Selectivity System of the BOC
The players at the Bureau of Customs have wittingly or unwittingly paved the way for the drugtraffickers to smuggle illicit drugs into the country passing through the Bureau of Customs itself.
The customs player in his testimony before the Senate Blue Ribbon Committee on Accountability of Public
Officers and Investigations (Blue Ribbon) hearings in the Inquiry, in Aid of Legislation, Into the Php6. 4Billion Worth of Shabu Shipment From China, on the Possible Malfeasance, and Nonfeasance of Bureau ofCustoms (BOC) Officials and Employees and the corresponding parallel investigations before the House
Committees on Dangerous Drugs and Good Government and Public Accountability admitted the employmentof the “tara system”, whereby he pays off customs officials to ensure the release of the importations heprocesses.
According to the player, he was provided with the HS Codes and other methods to give his shipments abetter chance of being tagged “green” in the BOCʼs Selectivity System. Under the said system, when given agreen tag, goods are released without further inspection. All that has would have to be done is the payment of
the assessed duties and taxes, and the shipment will be released from the Bureau of Customs withoutIbid.
Criminal Case No. R-MNL-18-00347-CR.
10
The cases were docketed as NPS Docket No. XVI-INV-17I-00251 and NPS Docket No. XVI-INV-17I-00252. The case against
the Chief of the RMO was dismissed while the cases against the employees of the FED are awaiting Resolution of theProsecutor of the Department of Justice.
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inspection.
True enough, in the investigation conducted by the NBI-AOTCD, for the period of 31 March 2017 to 29
May 2017, or for almost two (2) months, out of the six hundred sixty-four (664) shipments processed by theplayer through his broker and consignee-for-hire, five hundred thirty-two (532) were tagged green, onehundred twenty-three (123) were tagged yellow and only nine (9) were tagged red.11 (With a yellow tag, only adocumentary check is made on the shipment while with a red tag, documentary check and physicalexamination is conducted.) This is despite the fact that the consignee-for-hire utilized by the player is a “newimporter” and a “sole proprietorship”, which are considered as high risk by the Selectivity System.
B. Insufficient X-ray Machines
Since the shipment was assigned a green lane, it did not have to go through the x-ray machines. Under thecurrent set-up of the BOC, only a small number of containers pass through the x-ray machines due to thelimited machines available. Had the container containing the metal cylinders been examined through the xray machines, the magnitude of the size of the metal cylinders would have alerted the inspector. The
discrepancy between the actual contents of the container and the packing list submitted with the import
documents could have been detected.

IV. CONCLUSION
Entry of illicit drugs in large volumes through the Philippine ports has become an easier and perhaps acheaper mode for drug traffickers. Corruption coupled with the lack of sufficient technology has allowed
entry under the noses of customs officials. If not for the timely information coming from the Chinese
authorities, over 600 kilograms of shabu would have been distributed in the Philippines; thus, taking a big step
backward on the current administrationʼs war on drugs.

V. RECOMMENDATIONS
It is recommended that the Philippine government invests in sufficient x-ray machines to enable the BOC
to have an efficient 100% inspection of all importations and not just a small percentage. This will deter theproliferation of smuggling not only of drugs but other contraband as well. Further, law enforcement agencies
should develop partnerships with other nations to enable sharing of intelligence.

11

Transmittal filed by the NBI before the DOJ under NPS Docket No. NPXVI-INV-17I-00251, dated 18 September 2017.

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