Largest haul of smuggled cigarettes

Customs agents seized yesterday over 2,000 cartons of smuggled cigarettes mostly hidden beneath potato chips or crackers in boxes shipped from the Philippines and were consigned to a wholesaler on Saipan, the largest cigarette haul in recent CNMI history.

Customs officer John Paul Sablan said the volume could further increase as customs agents were still inspecting the contents of the 20-foot container at the seaport at almost 4:30pm yesterday.

Most of the undeclared cigarettes were Philippine-made Philip Morris and Marlboro.

If these illegal contrabands were not intercepted, they could have been at least $40,000 in lost income tax for the CNMI government.

Customs said each carton of cigarettes is taxed at least $20.

Each carton has 10 packs, and each pack has 20 sticks of cigarettes.

The shipment from the Philippines arrived on Saipan at around 5am on Sunday. Sablan said the 20-foot container was brought to the customs inspection area at the seaport around 3:40pm on Monday, and the inspection was scheduled for yesterday at around 8:30am.

Sablan said the only items declared in the invoice were potato chips (or crackers), body soap, toothpaste, condiments such as soy sauce, and women’s sanitary napkins.

“There was no declaration of cigarettes,” he told Saipan Tribune in an interview at the seaport’s customs area.

Sablan said customs officers started noticing that the boxes did not match the actual products in them and when they dug deeper into the first few boxes, they started seeing cigarettes beneath mostly Marty’s Cracklin chips.

“That raised the flag so we had to make a 100 percent inspection,” said Sablan, who has been with the CNMI Divisions of Customs Services for 13 years. “This is the largest number of illegal cigarettes we came across in the years I’ve been here and I haven’t heard anything more than that.”

In 2008, Customs seized over 350 cartons of illegal cigarettes from China.

At around 11am yesterday, customs agents counted over 500 cartons of smuggled cigarettes. A few hours later, the number went up to over 900 cartons.

By 4pm, the number went up to over 2,000 and still counting.

Sablan said the number dramatically went up because some of the boxes in the deeper end of the 20-foot container were full of undeclared cigarettes, and were no longer mixed with food items such as potato chips.

Legal actions

Customs Director Jesus Muna, in a separate interview, said the division is now consulting with the Office of the Attorney General on the best action to take against the owner of the smuggled cigarettes which include Philippine-made Philip Morris and Marlboro.

Samples of Philip Morris and Marlboro are labeled “not for export” and “for domestic use only,” meaning they’re supposed to be sold only in the Philippines.

The Customs director, moreover, said there was really intent to conceal the cigarettes and not pay taxes to the CNMI government.

Muna said the contents of the container were consigned or addressed to Pacific Jun Corp., a wholesaler on Saipan.

Sablan said Customs could impose up to $20,000 fine against the company, or if the matter goes to court and the case is won by the government, it could mean prison time of up to five years, or both.

Right now, the smuggled cigarettes would be kept as evidence should the matter goes to court. After that, they will be incinerated, said Sablan.

The smuggled cigarettes, if they weren’t intercepted, could also harm businesses in the CNMI that are following the law, Sablan added.

For example, a business that does not pay taxes for cigarettes could sell a pack for $2.50 or $3, which is almost the tax paid by legitimate businesses for every pack of cigarettes. If customers buy these illegal products, then the legitimate businesses could lose revenue because they sell their products at a higher price taking into consideration the taxes they pay.

‘Restore 80 hours’

Rep. Ray Basa (R-Saipan) and Rep. Ray Yumul (R-Saipan) separately lauded the Customs Services Division for being able to intercept the illegal cigarettes, despite work hour cuts.

Customs is now included in the 64-hour workweek, from the normal 80 hours because of the government’s financial conditions.

But Basa, chairman of the House Ways and Means Committee, and Yumul said the critical function of Customs should be reason enough for the administration to consider restoring 80 hours for customs inspectors.

Yumul said importers could now be testing the CNMI’s vulnerability, and they may be trying to sneak into the islands illegal products knowing that Customs has limited work hours and is understaffed.

“This is serious. Bringing in illegal items to the CNMI is an attack on our economy, our border. It will be best if our Customs Division is restored to 80 work hours,” Yumul added.

Broken x-ray van

Besides limited work hours and understaffing, Customs’ x-ray van is also currently broken.

Sablan said it could cost $30,000 to $50,000 to repair the broken x-ray van.

Without this x-ray van, customs officers slave to manually inspect cargo at the seaport, which is time consuming and requires more inspectors.