Finance Secretary Carlos Dominguez III has approved the donation of 6,357.8 liters of unmarked fuel to the Philippine Coast Guard (PCG) by the Bureau of Customs (BOC), which was seized in September 2021 and forfeited in the government’s favor.
In a statement on Friday, the Department of Finance (DOF) said the BOC and PCG have signed a memorandum of agreement on the turnover of the seized diesel fuel to the Coast Guard for its anti-smuggling operations.
It said that the Port of Clark ordered the confiscation of the diesel fuel, which was found at a retail gas station in Arayat, Pampanga after a composite team of the BOC and the Bureau of Internal Revenue (BIR) had conducted field tests and detected the absence of the fuel marker supposed to be injected into tax-paid oil products.
Upon the recommendation of Finance Undersecretary Antonette Tionko, the seized fuel is set to be donated by the BOC to the PCG, it added.
The DOF said the Customs district collector in Clark port issued a decision on September 22, 2021, forfeiting the confiscated fuel in favor of the government after conducting legal proceedings that were concluded when the management of the gas station, the Luzon Petromobil Integrated Service Stations Inc. (LPISSI), filed an affidavit abandoning its claim on the seized products.
The decision became final on October 11, 2021 as no other petition was filed by LPISSI after the lapse of the 15-day period for filing an appeal, it said.
Under Section 7 of the DOF-BOC-BIR Joint Circular (JC) No. 001.2021, petroleum products that are unmarked, with diluted markers or have counterfeit fuel markers shall be subject to duties and taxes, inclusive of the appropriate fines and penalties.
This is without prejudice to the confiscation and forfeiture of such products and the filing of the appropriate criminal cases against those liable for violations of the law.
Section 1141 of the Customs Modernization and Tariff Act (CMTA) permits goods that are subject of forfeiture proceedings to be donated to another agency, upon the approval of the Secretary of Finance.
Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law authorized the fuel marking program in a bid to curb smuggling after the law raised the excise tax rate on fuel products.
As of December 9, 2021, the government has collected P330.29 billion in taxes from 33.54 billion liters of marked petroleum products under the fuel marking program since it was implemented in September 2019, according to the DOF.
