DOJ Opinion No. 056, s. 2000

DOJ OPINION NO. 056 , s. 2000 July 11, 2000 Secretary Edgardo J. Angara Department of Agriculture Elliptical Road, Diliman Quezon City Sir : This refers to your request for a new opinion on the following issue: "Can seized smuggled goods be re-exported by the government?" The query is raised in connection with this Department's Opinion (No. 6, current series) wherein, resolving certain issues raised by your Office, this Department ruled that "the power to dispose of or sell the confiscated smuggled sugar does not vest under (the) law in the Department of Agriculture" but "pertains to the Bureau of Customs and [the disposition] shall be governed by the provisions of the Tariff and Customs Code". In making the instant request, you clarify that the Department of Agriculture (DA) is not seeking authority to dispose of the confiscated smuggled sugar on its own; rather, it is "seeking legal ways for the appropriate government agency be it the Department of Finance, Department of Trade and Industry, or in the proper case, the Department of Agriculture to re-export confiscated smuggled sugar" at the soonest possible time. In Opinion No. 6, current series, we stated that the disposition of confiscated smuggled goods, as provided for in the Tariff and Customs Code, shall be governed by the provisions of Section 2810 thereof which provides: "SECTION 2610. Disposition of Unsold Articles for Want of Bidders . Articles subject to sale at public auction by Customs authorities shall be sold at a price not less than the wholesale value or price in the domestic market of these or similar articles in the usual wholesale quantities and in the ordinary course of trade as determined in accordance with section twenty-three hundred and five of this Code. When any article remains unsold in at least two public biddings for want of bidders or for lack of an acceptable bid, and the article is perishable and/or suitable for official use, then the Collector shall report the matter immediately to the Commissioner of Customs who may, subject to the approval of the Secretary of Finance, authorize the official use of that article by the Bureau of Customs to promote the intensive collection of taxes and/or to help prevent or suppress smuggling and other frauds upon the Customs, and if the article is not suitable for such use, then it may be channeled to the official use of other offices of the National Government. If the article is suitable for shelter or consists of foodstuff, clothing material or medicines, then that article shall be given to government charitable institutions through the Department of Social Services and Development . If the article offered for sale is not suitable either for official use or charity, then the same may be re-exported as government property through the Department of Trade or any other government entity through barter or sale . If the article cannot be disposed of as provided above, the Collector shall report the matter immediately to the Commissioner who may, subject to the approval of the Secretary of Finance, dispose of the article to the best advantage of the government in a negotiated private sale which shall be consummated in the presence of a representative of the Commission on Audit, in the manner provided for by this Code." (Emphasis ours) You state that a cursory reading of Section 2610 reveals that re-exporting is allowed in case of two failed public biddings and under either of two situations, viz : 1. when the article is channeled for official use of the National Government, in which case "official use" may include re-exportation of the same; or 2. if the article is not suitable for official use or chart, it may be re-exported as government property through the Department of Trade or any other government entity through barter or sale. (emphasis yours). Section 2610 prescribes the procedure in disposing of confiscated smuggled articles in rather clear terms. cdlex The provision requires that the article must be sold by customs authorities at public auction. If the article remains unsold after two public biddings for want of bidders or for lack of an acceptable bid, it call be disposed of in the following manner: 1. If the article is perishable and/or suitable for official use the following rules of disposition shall govern: a) The article may be channeled for the official use of the Bureau of Customs "to promote the intensive collection of taxes and/or help prevent or suppress smuggling and other frauds upon the Customs"; b) If the article is not suitable for the use of the Bureau of Customs as specified above, it may be channeled to the of official use of other national government offices; c) If the article is suitable for shelter or consists of foodstuffs, clothing materials or medicines then that article shall be given to government charitable institutions through the Department of Social Services and Development . (Emphasis ours) 2. If the article is not suitable for official use or for charity, it shall be disposed of as follows: a) The article may be re-exported as government property through the Department of Trade or any other government entity; (emphasis ours) b) In case of failure to dispose as prescribed above, then the Commissioner of Customs, subject to the approval of the Secretary of Finance, may dispose of the article to the best advantage of the government in a negotiated private sale. It may be noted that re-exportation, as a mode of disposition of confiscated smuggled articles is authorized only under the last paragraph of Section 2610 under the condition that the article is not suitable for official use or for charity . In the case of the confiscated smuggled sugar subject of your query, considering that it is suitable for official use and it is foodstuff, it would strongly appear that the mode of disposition applicable to it is for charity as provided for the last sentence of the penultimate paragraph of Section 2610. Please be guided accordingly. Very truly yours, (SGD.) ARTEMIO G. TUQUERO Acting Secretary