Procedures in investigating suspected gemstone smuggling reviewed

The Philippine government has ordered the Presidential Anti-Smuggling Group (PASG) to review their procedures in investigating jewelry makers suspected of smuggling gemstones.

The order was issued after a dialogue which the Export development Council facilitated recently and in response to complaints aired by leaders of the country’s jewelry industry of “harassments” resulting from PASG mission orders to their members demanding for import documents.

The jewelers, led by Philexport trustee Luis Sicat, for the fine jewelry and fashion accessories sector, and heads of jewelry exporters’ groups presented to Ermita mission orders which threatened to confiscate jewelry items and detain the owners should the local jewelers fail to show the appropriate papers.

In the meeting, Atty. Roberto Bauzon of the legal department of the Bureau of Customs (BOC) confirmed the series of PASG operations that targeted jewelry stores in Greenhills, Binondo and Shangrila-Edsa.

The owners had sought for a warrant from the customs legal office for the confiscation of suspected smuggled jewelries in the shelves of at least 13 companies, one of them an official of a jewelers group.

Bauzon clarified that the request for warrant was deferred until the standard legal procedure is followed and proofs of smuggling are found.

The exporters told Executive Sec. Eduardo ErmitaEduardo Ermita that to comply with the documentary requirements required by the PASG operatives, they submitted their documents to the NBI but the PASG people were nowhere to be found.

In their testimonies to Ermita, the jewelers explained that gemstones and other jewelry raw materials are tax-free under the Jewelry Industry Development Act of 1998.

They admitted that another related problem is the difficulty in securing BOC accreditation for this purpose. Getting their accreditation for tax exemption turned from bad to worse in 2006 when the processing was transferred from the office of Customs Deputy Commissioner Jairus Paguntalan to another office.

Also during the dialogue, one of the jewelry manufacturers found out that his company is also in the list that is subject to seizure warrants.

Speaking for the group, Sicat said that the country started going global almost at the same time as Thailand coaxing their jewelry sectors to the mainstream of business.

Sicat revealed that Thailand already exports $5.7 billion worth of jewelry a year while the Philippines only exported $40 million last year.

Mia Faustmann, head of the Guild of Philippine Jewellers, Inc., seconded that it took them 12 years to lobby for the passage of a law to give the local industry some incentives so that it can grow faster, but 10 years later, that same law has not worked to their benefit.