The Intelligence Enforcement Group of the Philippinbe Bureau of Customs has recommended rejection of the valuation method used by Japanese firm Southern Cross Cement Corp. on shipments made last year that allegedly led to P24 million in forgone revenue, documents show.

The Philippine Chamber of Commerce and Industry’s Industry Commodity Expert (PCCI-ICE) had complained that Southern Cross under-declared cargo and freight values on what authorities estimated at 46,000t of cement shipped from February 2005.

Bonifacio de Castro Juson, representing the office of the PCCI-ICE, filed the complaint in July 2005. He said Southern Cross, a subsidiary of Taiheyo Cement Corp., declared that the freight rate on the shipments was US$1.60 a ton, which was "too low" and "unrealistic."

Juson said data from major shipping companies showed that during the period the freight rate for vessels coming in from Japan ranged from US$14 to US$18 per ton. He said Southern Cross’ freight records from December 2001 to June 2004 placed rates at between US$14.20 and US$14.50 a ton.

In a memorandum dated July 14, 2006, Acting Customs Commissioner Napoleon Morales said the shipments should be reevaluated, using a different valuation method. Deputy Commissioner Celso Templo also said the recommendation for revaluation "did not state that there is convincing evidence or proof indicating clear and willful intent to commit offense or defraud the government."

Southern Cross may have to pay P18 million in value-added tax plus P6 million in customs taxes, which it avoided by declaring a lower freight cost value.