Customs seize P22-M worth of 'ukay-ukay' in Baguio

Posted at 09/03/14 10:59 AM

Around 2,800 bales of used clothing were found in 9 different warehouses in Baguio City. Courtesy of Bureau of Customs

MANILA, Philippines - The Bureau of Customs has seized P22-million worth of used clothing from nine warehouse units in Baguio City on Tuesday.

In a statement, the BOC said there were almost 2,800 bales of used clothing, comforters and other garments, mostly from the United States and Canada, found in the warehouses.

These second-hand items were believed to have entered via locators as the Subic and Clark Freeport zones and Cavite Export Processing Zone in Rosario, Cavite, declared as "scrap fabric" intended for manufacture and subsequent export as rags.

The BOC's Intelligence Group discovered some locators used the privilege to import raw materials tax-free, to smuggle used clothing declared as "scraps." They then sell these used clothing to dealers who supply "ukay-ukay" business owners.

Export manufacturing enterprises registered with the Philippine Economic Zone Authority (PEZA) and located at PEZA Zones are allowed tax-free and duty-free importation of raw materials, capital equipment, machineries and spare parts. They are also exempted from paying wharfage dues and export tax, impost or fees.

However, Republic Act Number 4653, which has been in effect since 1966, bans the commercial importation of used clothing.

"While times may have changed, it is the duty of the Bureau of Customs like any other law enforcement agency of the government to implement RA 4653, not bend it even for practicalities’ sake. Moreover, we need to ensure that legitimate stakeholders in the local garments industry are protected from unscrupulous and illegal importations of clothing. What makes this situation worse is that we have found evidence that certain locators granted fiscal privileges by our government have abused these perks," said Bonifacio De Castro, District Collectors of the Bureau of Customs in San Fernando, La Union.

The second-hand clothing will be subjected to forfeiture proceedings in favor of the government.

The BOC said it will conduct follow-up operations to identify and file cases against the erring importers and traders.

"Ukay-ukay" stores have sprouted up around the country in recent years, affecting the local garments and clothing industry.