The government is thinking of rehiring the Swiss-based Societe Generale de Surveillance (SGS) in inspecting import shipments to boost revenues and plug smuggling, according to Trade secretary Peter B. Favila.

Favila said that the government reviewed its figures and saw that higher revenues were collected under the services of SGS, when it was conducting physical inspection of goods, including verification and reporting of dutiable goods valued over $500.

Until 2000, SGS was conducting preshipment inspection on goods to be exported to the country under a P2 billion to P3 billion annual contract.

In 1987, SGS started conducting these services for imports coming from Japan, Hong Kong and Taiwan but later on was given other countries to cover by 1992.

SGS inspection included physical inspection of goods in the country of supply including the verification of the quality, quantity and type of goods against the shipping documents; reporting the dutiable value of the goods as defined by the Tariff and Customs Code of the Philippines; reporting the SGS opinion of the tariff classification of the goods and issuing a clean report of findings (CRF) for customs clearance purposes.

SGS was contracted to help local customs and in eradicating corruption while protecting the interests of its trading partners.

The SGS inspection was seen both as an added layer of bureaucracy and costs as well as increased security for trading.

In 2002, the government did not renew its contract with SGS, leaving it with CHF 202.4 million, plus accrued interest in receivables.

The issue brought the government and the Swiss firm to arbitration in the International Centre for Settlement of Investment Disputes. The Centre ruled in favor of SGS in January 2004, and required the Philippines to observe the obligation to pay sums properly due and owing.

SGS has not been paid so far.