Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
Third Regular Session

HOUSE BILL NO. 6306

Introduced by Honorable MARK A, VILLAR

AN ACT
DECLARING CERTAIN ACTS OF AGRICULTURAL SMUGGLING AS ECONOMIC
SABOTAGE, PRESCRIBING PENALTIES THEREFOR AND FOR OTHER PURPOSES

EXPLANATORY NOTE

The 1987 Constitution, provides that "The goals of the national economy are a more
equitable distribution of opportunities, income, and wealth; a sustained increase in the
amount of goods and services produced by the nation for the benefit of the people; and an
expanding productivity as the key to raising the quality of life for all, especially the
underprivileged.

The State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, through industries that make full and
efficient use of human and natural resources, and which are competitive in both domestic
and foreign markets. However, the State shall protect Filipino enterprises against unfair
competition and trade practices.

In pursuit of these goals, all sectors of the economy and all regions of the country
shall be given optimum opportunity to develop. Private enterprises, including corporations,
cooperatives, and similar collective organizations, shall be encouraged to broaden the
base of ownership (Article XII, Section 1)

Our Constitution also states that “The prime duty of the Government is to serve and
protect the people, The Government may calll upon the people to defend the State and, in
the fulfilment thereof, all citizens may be required, under conditions provided by law, to
render personal military, or civil service”. (Article II, Section 4)

Lastly, it also enunciates that “The maintenance of peace and order, the protection
of life, liberty, and property, and the promotion of the general welfare are essential for the
enjoyment by all the people of the blessings of democracy”. (Article II, Section 5)


The government is currently developing agricultural sustainability and security. To
bolster and safeguard the agricultural industries, policies should also be put in order. It
must be ensured that our small scale and subsistence farmers can compete in the market
without unnecessary bafflement and vexation from smuggled goods that affect and
manipulate market prices

It is true that some acts of smuggling are already punishable under the Tariff and
Customs Code, however, some acts are too unsparing and pitiless by its very scope
making it tantamount to economic sabotage. Smuggling which includes agricultural
products of at least Five Million Pesos (Php 5,000,000.00) worth, more so that of
agricultural political commodity which is rice, of at least Ten Million Pesos (Php
10,000,000.00) worth, effectively put our local industries and food producers in an
endangered and exposed position.

The illegal presence of smuggled agricultural products in bulk saturate the market,
and in effect, manipulate the prices. The situation can lower the market price, making it
highly difficult for locally produced goods to compete. The said situation fiercely
discourages small scale farmers to produce because of the fear of not being able to
recover investments.

It is the constitutional mandate that the State protect the local agricultural industry
and farmers from unscrupulous traders and importers.

The ASEAN Integration has commenced. We must enable trade filters in order to
‘save our agricultural sector from becoming a casualty of trade liberalization

Agricultural smuggling, which involves misdeclaration, undervaluation,
misclassification, and use of falsified documents, has robbed the government of much-
needed revenues. It has promoted unfair competition and the entry of pests and diseases,
endangering the health of our local consumers.

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 products smuggled into the country are milled rice, refined sugar, beef meat,
dry onion, and pork, in that order. In terms of value the order of selected agricultural
commodities technically smuggled from 1986 to 2009 are milled rice, beef eat, sugar, pork,
and chicken meat.

Over that 22-year period, according to the said report, the amount of smuggled rice
reached $1,96 billion. Apart from rice, other farm products that were smuggled and the
amounts involved are as follows: Refined sugar, $448.2 million; Beef, $428.8 million;
Onion $259.55 million; Pork, $117.45 million; Chicken, $27.8 million; Ginger, $7.8 million;
and Carrots and turnips, $6.5 million

SEARCA said farm products smuggling in the mid-1980s was valued at $6 billion a
year, increasing every year to reach at least $10 billion in 2008.

In December 2014, the Bureau of Customs (BoC) intercepted P200 million worth of
smuggled Vietnamese rice, misdeclared as tiles and stonewares, at the Mindanao
Container Terminal. Apart from glutinous rice, some container vans were filled with
imported sugar.


The Philippine government lost close to P4 billion in revenues in 2013 and almost a
million Filipinos dependent on hog raising lost their livelihood in the last four years due to
outright and technical smuggling of pork meat, according to the Samahang Industriya ng
Agrikultura (SINAG).

Data from the Bureau of Animal Industry (BAI) indicate that 199 million kilos of pork
were imported in 2013. However, a United Nations Commodity Trade Division (UN
ComTrade) report of countries that exported pork meat to the Philippines showed pork
importation at 237 million kilos - a difference of 38 million kilos that are presumed
smuggled to the country. If we multiplying the 38 million kilos unaccounted for with the
correct duties for prime cuts which was misdeclared as pork fats or offal, the result is a
staggering P3.85-billion in lost revenues for government.

Now is the apropos time to craft legislation that is germane to the massive and
widespread problem of agricultural smuggling. There is a need for a statute that shall
serve as an aegis against the above mentioned despicable illicit acts. There is a need for a
statute that shall indirectly increase income opportunities for local producers, and at the
same time, help alleviate poverty especially among farmers and agricultural households.
Such statute is gravely sought

Finally, more stringent punishments for certain acts of agricultural smuggling that
amount to economic sabotage must be established. This measure shall syncopate such
unlawful acts.

In view of the foregoing, the passage of this bill is earnestly sought

et


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
Third Regular Session

HOUSE BILLNo._ 6306

Introduced by Honorable MARK A. VILLAR

AN ACT
DECLARING CERTAIN ACTS OF AGRICULTURAL SMUGGLING AS ECONOMIC
SABOTAGE, PRESCRIBING PENALTIES THEREFOR AND FOR OTHER PURPOSES.

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

SECTION 1. Short Title. - This Act shall be known as the "Anti-Agricultural
‘Smuggling Act of 2015”.

SEC. 2. Declaration of Policy - It is the policy of the State to protect and promote
the productivity of the agriculture sector and farmers from unscrupulous traders and
importers, who by the sheer volume of their illegal importation of agricultural products
significantly affect the production, availability of supply and stability of prices

Graver penalties for large-scale smuggling of rice shall be imposed. Rice, as
political commodity determines the level of our country's food security. It is in rice
production too, that farmers are highly dependent for their income.

It is also the policy of the State to accord subsistence farmers’ protection, being the
frontliners of food production. Large-scale presence of smuggled products effectively
manipulates the prices by lowering it down, therefore 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.

The State, therefore, shall impose higher sanctions for large-scale smuggling,
tantamount to economic sabotage of agricultural products in order to protect the livelihood
of our farmers.


SEC. 3. Definition of Terms. - As used in this Act, the following terms shall mean:

(1)"Economic Sabotage” - any act or activity which undermines, weakens or
renders into disrepute the economic system or viability of the country or tends to bring
out such effects and shall include, among others, price manipulation to the prejudice of
the public especially in the sale of basic necessities and prime commodities.

(2) "Agricultural Products" - any agricultural commodity or product, whether plant
based, animal based, raw or processed, including any commodity or product derived from
livestock that is available for human or livestock consumption. This definition includes fish,
forestry, seeds, poultry and dairy products that have undergone various degrees of
processing:

(3) “Agricultural Political Commodity” - for purposes of this Act, rice shall be
classified as agricultural political commodity.

(4) "Smuggling" - also known as direct or outright smuggling, refers to the act of
importing or bringing into or assisting in importing or bringing into the Philippines, any
article, good or product without the corresponding documents, permits or licenses when
these are reqUired by existing laws, order, rules and regulations, including the receipt,
concealment, purchase or sale or in any manner, facilitating the transportation, after
importation, knowing the same to have been imported contrary to law;

(5) "Technical Smuggling” pertains to misdeclaration, misclassification or
undervaluation of imported goods or products in violation of the Tariff and Customs Code
of the Philippines and other related laws

SEC. 4. Definition of Crime of Agricultural Smuggling. - Any person who shall import
or bring into the Philippines agricultural products without the required import permit from
the implementing agency, or any person who shall import agricultural products by means
of fraud or by illegally obtaining the required import permit shall be guilty of the crime of
smuggling, including those acts which are within the purview of technical smuggling.

SEC. 5. Agricultural Smuggling as Act of Economic Sabotage. - The acts of
agricultural smuggling, including technical smuggling thereof, are acts inimical to the
national interest, economic growth and development

Any person regardless of nationality or citizenship found guilty of engaging in
agricultural smuggling, or technical smuggling thereof, of a minimum aggregate amount of
One Million Pesos (Php 1,000,000.00) worth of agricultural products or has been found
guilty of engaging in agricultural smuggling of rice, or technical smuggling thereof, with a
minimum aggregate amount of Fifteen Million Pesos (Php 15,000,000.00), as valued by
the Bureau of Customs, utilizing methods of value verification such as, but not limited to,
Revision Orders and/or by appropriate agencies and entities identified, accredited or
certified by the Bureau of Customs, shall be guilty of economic sabotage.

SEC. 6. Penalties. - (1) Any person, natural or juridical, regardless of nationality or
citizenship, found guilty of engaging in smuggling or technical smuggling of a minimum
aggregate amount of One Million Pesos (Php 1,000,000.00) worth of agricultural products
and Fifteen Million Pesos (Php 15,000,000.00) of rice, shall suffer the following penalties:

a. Fine equal to twice the fair value of the smuggled articles;


b. Fine equal to the aggregate amount of the taxes, duties and other charges
avoided;

c. Imprisonment of a minimum of six (6) years and one (1) day up to twelve
(12) years imprisonment;

d. Confiscation of the smuggled articles;

e. Cancellation and revocation of business license, import permits and other
pertinent documents for importation; and

f. Perpetual disqualification to import agricultural products.

When the offender is a juridical person, criminal liability shall attach to its president,
chief operating officer or manager. In addition, the business permit or licenses of the
business entity shall be revoked or cancelled

(2) The following shall be considered as principals to the crime of economic
sabotage:

a. Traders who prey on cooperatives and by using their permits for purposes of
smuggling;

b. The officers of the cooperatives who knowingly sell, lend, lease, assign, allow
the unauthorized usage of their import permits for purposes of smuggling;

c. Traders who deliberately use dummy corporations, non-government
organizations, associations for purposes of smuggling;

d. The officers of dummy corporations, non-government organizations,
associations, who knowingly sell, lend, lease, assign, allow the unauthorized usage of
their import permits for purposes of smuggling; and

e. The brokers of violating importers.

When the offender is a government official or employee acting in connivance with
private individuals or entities or other government officials or employee, he/she shall be
charged as principal without prejudice to administrative, civil and criminal cases which may
be filed against him/her.

SEC. 7. Implementing Rules and Regulations. - The Bureau of Customs in
coordination of appropriate agencies shall promulgate the implementing rules and
regulations of this Act within thirty (30) days after its effectivity.

SEC. 8. Prescription of Crimes. - The crime punishable under this Act shall
prescribe in twenty (20) years.

SEC. 9. Separability Clause. - The provisions of this Act are hereby declared to be
separable from, and independent of, one another and that should one or more of such
provisions be declared unconstitutional, the validity of the remaining provisions shall not be
affected thereby.


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 immediately upon its
approval

Approved,