Prosecutor’s Discretion Prevails: Bureau of Customs Cannot Override Public Prosecutor in Smuggling Cases

In smuggling and customs fraud cases in the Philippines, many businesses and individuals mistakenly believe that the Bureau of Customs (BOC) has the final say. However, this case definitively clarifies that the power to prosecute crimes rests firmly with public prosecutors. When the prosecutor decides to withdraw a case, even if initiated by the BOC, the courts will generally uphold that decision, emphasizing the executive branch’s control over prosecution. This principle ensures fairness and prevents potential overreach by individual government agencies.

G.R. No. 190487, April 13, 2011

INTRODUCTION

Imagine your business is caught in a legal battle with the Bureau of Customs over import duties. You believe you’ve complied with all regulations, but suddenly face criminal charges for smuggling. Who ultimately decides whether your case proceeds to trial? This crucial question was at the heart of Bureau of Customs v. Peter Sherman. The case arose when the BOC, under its Run After The Smugglers (RATS) program, filed a criminal complaint against officers of Mark Sensing Philippines, Inc. (MSPI) for allegedly smuggling bet slips and thermal papers by failing to pay proper duties and taxes. MSPI had imported these goods into the Clark Special Economic Zone (CSEZ) and then transported them to the Philippine Charity Sweepstakes Office (PCSO). The central legal issue became whether the Bureau of Customs could compel the prosecution of this case even after the public prosecutor, the officer primarily responsible for criminal prosecution, had decided to withdraw the charges.

LEGAL CONTEXT

In the Philippine legal system, the power to prosecute crimes is vested in the executive branch, specifically through the Department of Justice (DOJ) and its prosecutors. This authority stems from the principle that the faithful execution of laws is an executive function. Rule 110, Section 5 of the Rules of Court explicitly states, “All criminal actions commenced by complaint or information shall be prosecuted under the direction and control of the prosecutor.” This principle of prosecutorial discretion is crucial; it recognizes that prosecutors, as officers of the court and the executive branch, are in the best position to determine whether sufficient evidence and public interest warrant pursuing a criminal case.

The Supreme Court in Webb v. De Leon (G.R. No. 121234, August 23, 1995) affirmed this, stating, “…prosecution of crimes pertains to the executive department of the government whose principal power and responsibility is to insure that laws are faithfully executed. Corollary to this power is the right to prosecute violators.” Furthermore, the Revised Administrative Code of 1987 mandates that the Office of the Solicitor General (OSG) represents the government, its agencies, and instrumentalities in legal proceedings. This representation rule is significant because it channels government litigation through a central legal body, ensuring consistency and expertise.

Section 3601 of the Tariff and Customs Code, the law allegedly violated in this case, defines unlawful importation or smuggling. It states in part: “Any person who shall fraudulently import or bring into the Philippines, or assist in so doing, any article, contrary to law…shall be guilty of smuggling…” This section, in conjunction with sections regarding forfeiture (Section 2530) and prohibited importations (Section 101), forms the backbone of customs regulations and enforcement. However, the interpretation and application of these laws in specific cases are ultimately subject to prosecutorial and judicial review.

CASE BREAKDOWN

The story of this case unfolds with Mark Sensing Philippines, Inc. (MSPI) importing bet slips and thermal papers. Believing duties were not paid, the Bureau of Customs initiated its RATS program, targeting MSPI executives Peter Sherman, Michael Whelan, Teodoro Lingan, and Atty. Ofelia Cajigal, along with customs brokers. A criminal complaint was filed with the Department of Justice (DOJ).

• Initially, State Prosecutor Rohaira Lao-Tamano found probable cause and recommended filing charges in March 2008.
• The BOC filed an Information (the formal charge) in the Court of Tax Appeals (CTA) in April 2009. The Information accused MSPI of unlawful importation from June 2005 to December 2007, valuing the goods at over US$1.2 million, with alleged unpaid duties exceeding Php15.9 million.
• However, the respondents petitioned the Secretary of Justice for review.
• In a significant turn, the Secretary of Justice reversed the State Prosecutor’s resolution in March 2009, directing the withdrawal of the Information.
• The BOC moved for reconsideration, but this was denied in April 2009.
• Undeterred, the BOC elevated the case to the Court of Appeals via certiorari.
• Meanwhile, back in the CTA, Prosecutor Lao-Tamano, now following the Justice Secretary’s directive, moved to withdraw the Information. The BOC opposed this withdrawal.
• The CTA, in its September 3, 2009 Resolution, granted the withdrawal and dismissed the case.
• The BOC’s motion for reconsideration was “Noted Without Action” by the CTA, citing that an Entry of Judgment had already been issued because the State Prosecutor did not file a motion for reconsideration on time.

The Supreme Court upheld the CTA’s decision, emphasizing the prosecutor’s control. The Court stated, “It is well-settled that prosecution of crimes pertains to the executive department of the government whose principal power and responsibility is to insure that laws are faithfully executed. Corollary to this power is the right to prosecute violators.” The Court further highlighted that the BOC’s motion for reconsideration in the CTA was correctly disregarded because it lacked the endorsement of the public prosecutor. Crucially, the Supreme Court pointed out the BOC’s procedural misstep in filing the petition without representation from the Office of the Solicitor General, reinforcing the established protocol for government agencies in litigation. The Court noted, “Parenthetically, petitioner is not represented by the Office of the Solicitor General (OSG) in instituting the present petition, which contravenes established doctrine that ‘the OSG shall represent the Government of the Philippines, its agencies and instrumentalities and its officials and agents in any litigation…’”.

PRACTICAL IMPLICATIONS

This case has significant practical implications, particularly for businesses involved in importation and for government agencies involved in law enforcement. For businesses, it underscores that while agencies like the Bureau of Customs play a vital role in initiating investigations and filing complaints, the ultimate decision to prosecute a criminal case rests with the public prosecutor. This separation of powers provides a check and balance, preventing agencies from unilaterally pursuing cases without proper legal vetting.

For the Bureau of Customs and similar agencies, this ruling reinforces the importance of working collaboratively with public prosecutors. While agencies can and should diligently investigate and gather evidence, they must recognize the prosecutor’s authority in deciding whether to proceed with charges. Disagreements between an agency and the prosecutor regarding a case’s merits should be resolved within the executive branch, with the DOJ having the final say.

Key Lessons:

• Prosecutorial Control: Public prosecutors have ultimate control over criminal prosecutions in the Philippines. Agencies initiating complaints cannot dictate prosecution.
• Agency’s Role: Agencies like BOC act as complainants and gather evidence, but the prosecutor directs the legal strategy and decision to prosecute.
• OSG Representation: Government agencies must be represented by the Office of the Solicitor General in court proceedings.
• Limited Private Complainant Role: Private complainants (including government agencies in criminal cases) have a limited role, primarily as witnesses, once a case is under prosecutorial control.
• Importance of DOJ Review: The Department of Justice plays a critical role in reviewing and potentially reversing prosecutorial decisions, ensuring a layer of oversight.

FREQUENTLY ASKED QUESTIONS

Q: Who has the final say in deciding whether to prosecute a smuggling case in the Philippines?

A: Public prosecutors, under the Department of Justice, have the final say. While agencies like the Bureau of Customs can initiate complaints, the prosecutor decides whether to file charges and pursue the case in court.

Q: Can the Bureau of Customs appeal a prosecutor’s decision to withdraw a smuggling case?

A: As this case shows, it is difficult for the Bureau of Customs to successfully appeal if the public prosecutor decides to withdraw an Information. The courts generally defer to prosecutorial discretion.

Q: What is the role of the Office of the Solicitor General (OSG) in cases involving government agencies?

A: The OSG is mandated to represent the Philippine government, its agencies, and officials in legal proceedings. Agencies like the Bureau of Customs must be represented by the OSG in court.

Q: What should businesses do if they are facing smuggling charges from the Bureau of Customs?

A: Businesses should immediately seek legal counsel. Understanding the principle of prosecutorial discretion is crucial. Engaging with both the Bureau of Customs and the public prosecutor, with proper legal representation, is essential to navigate these complex cases.

Q: What happens if there is a disagreement between the Bureau of Customs and the public prosecutor about a smuggling case?

A: The decision of the public prosecutor, and ultimately the Department of Justice, will generally prevail. Agencies should aim for collaboration and present compelling evidence to the prosecutor to support their cases.

ASG Law specializes in Customs and Tariff Law and Criminal Litigation. Contact us or email hello@asglawpartners.com to schedule a consultation.