Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
FIRST REGULAR SESSION

HOUSE BILL No. 6209 _

Introduced by REPRESENTATIVE CONRADO M. ESTRELLA III

EXPLANATORY NOTE

In order to achieve food security and agricultural sustainability, effective
policies must be put in place in order to protect those considered and/or
classified as “Agricultural Political Commodities’. “Agricultural Political
Commodities” are those agricultural commodities which meet the following
criteria:

1. They are agricultural produce and/or commodities;

2. Such agricultural produce and/or commodities are food staples for
Filipinos; and
3. Production of such agricultural produce and/or commodities are

significant industry in Philippine economy and source of income of
Filipino farmers.

According to the latest report on the Labor and Employment Status of Filipinos
conducted by the Philippine Statistics Authority covering the year 2014,
agricultural sector remains to be the biggest employer of Filipino workers,
employing about 30% of the entire Philippine workforce or an estimated
11,193,00 Filipinos.

‘There are several laws that ensure Filipino farmers are given the means and
are encouraged to produce agricultural commodities to safeguard food security
and inclusive growth in the countryside. Among the most significant laws are
the Comprehensive Agrarian Reform Law (Republic Act No. 6657, as amended)
and its precursor laws, the Agri-Agra Law (Republic Act No. 10000) and
Agriculture and Fisheries Modernization Act (Republic Act No. 8435).

Government expenditure on land reform alone amounted to a total of Php
289,000,000,000.00 (P289 Billion in 2007 Prices) from 1972-2008. The Food


and Agriculture Organization (FAQ) of the United Nations has reported that
land redistribution has resulted in increased per capita income, reduced
poverty incidence, higher investments in physical capital, and greater
household welfare and productivity, aside from social justice and peace
attained in the countryside.

‘Add to these government expenditures are the farm-to-market roads that get
significant allocation in the national budget on a yearly basis. For fiscal year
2015, P14,500,000,000.00 (Php 14.5 Billion) was allocated for building and
rehabilitating farm-to-market roads.

The government has spent substantial resources in ensuring the production
and delivery to the market of agricultural commodities. This measure is
significant step in ensuring that the market for the said agricultural
commodities remains to be competitive. Among the reasons that greatly affect
the production of agricultural political commodities are:

1. It unnaturally affects market prices and supply and demand. The illegal
presence of smuggled goods saturates the market, thereby artificially
affecting prices. At some point, it will unjustly lower the market price,
making it almost impossible for locally produced goods to compete. This
will result in lesser employment generation and greater poverty,
particularly in the agricultural sector.

2. It puts at risk food safety, particularly on agricultural products.
Smuggling of agricultural products, among others, allows the entry of
pests and diseases that greatly endanger the health and safety of the
populace. Without going through standard and proper safety procedures
and quarantine of concerned government authorities, there is
significantly greater risk that smuggled goods may be the point of entry
for dangerous and harmful pests and diseases.

3. It ultimately robs the government of much-needed revenues necessary to
provide for basic services to its citizens. According to data from the
Bureau of Animal Industry (BAI), 199 Million kilos of pork were imported
in 2013. However, according to a United Nations Commodity Trade
Division (UN ComTrade) Report, countries exported 237 Million kilos of
pork meat into the Philippines. There is a difference of 38 million kilos
that are presumed to be smuggled into the country. If we multiply the 38
million kilos that are unaccounted for with the correct duties for prime
cuts that were usually misdeclared as pork fats or offal, the result is a
staggering P3.85-billion in lost revenues for the government. Such lost

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revenues could have otherwise been used to fund the much needed
government basic services to our people.

While some illegal acts of smuggling are already punishable under the existing
criminal laws and Tariffs and Customs Code (TCC), the more vicious illegal acts
of smuggling, such as those of agricultural economic commodities, are not
sufficiently addressed by prevailing laws.

Illegal acts of smuggling are being carried out in many forms, which include
but not limited to nondeclaration, misdeclaration, _undervaluation,
misclassification, and the used of falsified documents and used of fictitious
names and addresses of consignee.

According to the Southeast Asia Regional Center for Graduate Study and
Research in Agriculture (SEARCA), from 1986 to 2008, in terms of volume in
metric tons, the top five agricultural commodities smuggled into the country
are milled rice, refined sugar, beef meat, dry onion, and pork. In terms of value
the order of agricultural commodities technically smuggled from 1986 to 2009
are milled rice, beef meat, sugar, pork, and chicken meat.

According to a study conducted by Habito and Briones (2005) for the World
Bank, the top five agricultural commodities produced in the Philippines are
rice, corn, coconut, sugarcane, and banana. There is a clear similarity in the
list of goods most smuggled into the Philippines and the list of goods most
produced in the Philippines.

‘There is also an increase in the sophistication by which present smugglers
operate their illegal activities. Instead of simply unlawfully smuggling large
amounts or volume of rice, they illegally smuggled smaller amounts or volumes
by using several fictitious consignees in order to avoid having large shipments
get caught and confiscated by the government authorities. This is also done
clearly to circumvent and avoid application of current anti-smuggling laws that
reserves its strictest penalty to those engaged in smuggling in high volumes.

The current situation of the rampant smuggling into the country, particularly
the agricultural products, greatly affects the agriculture sector which
constrained this representation to propose this timely and relevant measure to
stop the unlawful act of smuggling in the country, particularly, the smuggling
of Agricultural Political Commodities. There must be safeguards against a
more sophisticated forms of smuggling while also indirectly increasing income
opportunities of local producers as well as alleviate poverty among the farmers
and the rest of the agricultural industry. Lastly, this proposed measure is a

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significant step towards achieving food security and agricultural sustainability
of our country.

In order to achieve such lofty aspirations, this proposed measure must include
stricter sanctions for the illegal act of smuggling of agricultural political
commodities that are most integral to the country’s drive for food security and
agricultural sustainability. These goods must be given protected status and
defined as Agricultural Political Commodities. Further, the smuggling of
anything of whatever value of goods, which is hereby classified and/or
considered as Agricultural Political Commodities must be strictly punished as a
criminal act involving economic sabotage.

It is in this view that the immediate passage of this bill is earnestly

sought.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS,
FIRST REGULAR SESSION

6209

HOUSE BILL No.

Introduced by REPRESENTATIVE CONRADO M. ESTRELLA III

AN ACT DECLARING SMUGGLING AS A CRIME INVOLVING ECONOMIC
SABOTAGE, PRESCRIBING PENALTIES THEREFOR AND FOR OTHER
PURPOSES

Be it enacted by the Senate and House of Representatives of the
Philippines in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the “Smuggling of
Agricultural Political Commodities as a Crime Involving Economic Sabotage Act of

2018”.

SEC. 2. Declaration of Policy. - It is the policy of the State to ensure growth
and stability of the agriculture sector and farmers from unscrupulous traders
and importers, who by their illegal importation of agricultural political
commodities negatively affect the production, availability of supply and stability

of prices, put safety at risk and thereby threatens the food security of the state.


The State shall impose higher sanctions for large-scale smuggling of
agricultural political commodities, to ensure the growth and stability of the

agriculture sector, which is the largest employer of Filipino workers.

High incidents of smuggling of agricultural political commodities
unnaturally affect market prices and supply and demand, discouraging food
producers to continue their production, due to lack of satisfactory return on
investment. Such situation, will eventually lead to the demise of our local

industries thereby constituting economic sabotage.

SEC. 3. Agricultural Political Commodities. - These shall be limited to the
following agricultural and marine agricultural commodities: livestock and
poultry, rice, sugar, corn, pork, poultry, garlic, onion, carrots, dried fish,
cruciferous vegetables, in their original state. Agricultural Political
Commodities shall be considered in their original state even if they have
undergone the simple processes of preparation or preservation for the market,
such as freezing, drying, salting, broiling, roasting, smoking or stripping.
Polished and/or husked rice, corn grits, raw cane sugar and molasses, and

ordinary salt shall be considered in their original state.

Sec. 4. Large-Scale Agricultural Smuggling of Agricultural Political
Commodities as Economic Sabotage. - The crime of large-scale agricultural
smuggling as economic sabotage, involving Agricultural Political Commodities

with a minimum amount of One Million Pesos (P1,000,000.00), or rice, with a
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minimum amount of Ten Million Pesos (P10,000,000.00), as valued by the

Bureau of Customs (BOC), is committed through any of the following acts:

(a) Importing or bringing into the Philippines without the required
import permit from the regulatory agencies;

(b) Using import permits of persons, natural, juridical or entities without
juridical personality other than those specifically named in the permit;

(c) Using fake, fictitious or fraudulent import permits, shipping
documents, names of natural or juridical persons or entities without juridical
personality, and addresses of consignee;

(d) Selling, lending, leasing, assigning, consenting or allowing the use of
import permits of corporations, nongovernment organizations, associations,
cooperatives, or single proprietorships by other persons;

() Misclassification, undervaluation or misdeclaration upon the filing of
import entry and revenue declaration with the BOC in order to evade the
payment of rightful taxes and duties due to the government;

() Organizing or using dummy corporations, nongovernment
organizations, associations, cooperatives, or single proprietorships for the
purpose of acquiring import permits;

(g) Transporting or storing the agricultural product subject to economic
sabotage regardless of quantity; or

(h) Acting as broker of the violating importer.

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Sec. 5. Penalties. — (a) The penalty of life imprisonment and a fine of twice the
fair value of the smuggled agricultural product and the aggregate amount of
the taxes, duties and other charges avoided shall be imposed on any person

who commits any of the acts enumerated under Section 4 of this Act.

(b) The penalty of imprisonment of not less than seventeen (17) years
but not more than twenty (20) years, and a fine of twice the fair value of the
smuggled agricultural product and the aggregate amount of the taxes, duties
and other charges avoided shall be imposed on the officers of dummy
corporations, non-government organizations, associations, cooperatives, or
single proprietorships who knowingly sell, lend, lease, assign, consent or allow

the unauthorized use of their import permits for purposes of smuggling.

(c) The penalty of imprisonment of not less than fourteen (14) years but
not more than seventeen (17) years and a fine equal to the fair value of the
smuggled agricultural product and the aggregate amount of the taxes, duties

and other charges avoided shall be imposed on the following:

(1) The registered owner and its lessee or charterer, in case of lease, of a
chartered boat, motorized commercial vessel of more than three gross tonnage,
who knowingly transports the agricultural product subject to economic

sabotage, regardless of quantity;


(2) The registered owner and its lessee, in case of lease, of six (6) or more
wheeler trucks, vans and other means of transportation, who knowingly
transports the agricultural product subject to economic sabotage, regardless of

quantity;

(3) The registered owner and lessee of a warehouse, or any property, who
knowingly stores the smuggled agricultural product subject to economic

sabotage; or

(4) The registered owner, lessee, president or chief executive officer of
the private port, fish port, fish landing sites, resorts, airports who knowingly

allows the agricultural product to be smuggled into the country.

(4) The penalty of imprisonment of not less than twelve (12) years but
not more than fourteen (14) years and a fine equal to the fair value of the
smuggled agricultural product subject to economic sabotage and the aggregate
amount of the taxes, duties and other charges avoided shall be imposed on the

following:

(1) The registered owner and its lessee or charterer, in case of lease, of a
chartered boat, motorized commercial vessel of three gross tonnage or less,
who knowingly transports the agricultural product subject to economic

sabotage, regardless of quantity; or


(2) The registered owner and its lessee, in case of lease, of less than six-
wheel trucks, vans and other means of transportation, who knowingly
transports the agricultural product subject to economic sabotage, regardless of

quantity.

In all cases, the smuggled agricultural political commodities shall be
confiscated and the property used in agricultural smuggling, consistent with
Section 2530 of the Tariff and Customs Code and without prejudice to Section

2531 of the same Code, shall be forfeited in favor of the government.

When the offender is a juridical person, criminal liability shall attach to
its president, chief operating officer or manager who consents to or knowingly

tolerates the commission of the prohibited crime.

Any person, natural or juridical, found guilty under this Act shall also
suffer the penalty of perpetual absolute disqualification to engage in any

business involving importation.

In applying the abovementioned penalties, if the offender is an alien and
the prescribed penalty is not life imprisonment, he/she shall be deported after

serving the sentence without further proceedings for deportation.

If the offender is a government official or employee, the penalty shall be

the maximum as hereinabove prescribed and the offender shall suffer an


additional penalty of perpetual disqualification from public office, to vote and to

participate in any public election.

SEC. 6. Presumption of Smuggling of Agricultural Political Commodities.
~ Mere possession of rice or any agricultural political commodities under this
Act, which has been the subject of smuggling, entered into the Philippines,
either in the Bureau of Customs controlled ports or not, or without the

necessary permits, shall be prima facie evidence of smuggling.

Sec. 7. Implementing Rules and Regulations. - The BOC, in consultation
with concerned government agencies, shall promulgate the implementing rules

and regulations of this Act within thirty (30) days upon its effectivity.

Sec. 8. Prescription of Crimes. - The crime punishable under this Act shall

prescribe in twenty (20) years, regardless of penalties.

Sec. 9. Separability Clause. - If any portion of this Act is declared
unconstitutional or invalid, the portions or provisions which are not affected

shall continue to be in full force and effect.

SEc. 10. Repealing Clause. - All laws, decrees, executive issuances, rules and
regulations inconsistent with this Act are hereby repealed and/or modified

accordingly.


Sec. 11. Effectivity Clause. - This Act shall take effect after fifteen (15) days
following its publication in the Official Gazette or in two (2) newspapers of

general circulation.

Approved,