Picard, Michael, Paul Holtom and Fiona Mangan. 2019 ‘Diversions of Small Arms at Import in the Philippines.’ Trade Update 2019: Transfers, Transparency, and South-east Asia Spotlight (Box 8), p. 63. Geneva: Small Arms Survey, the Graduate Institute of International and Development Studies, Geneva. 12 December

Relevant contents

Data and testimonies that International Alert collected on the illicit economies linked to conflict in Mindanao have illuminated how legal firearms are illicitly diverted at import in the Philippines. Weapons smugglers often exploit loopholes in the importation process to divert firearms out of the nominally strict firearms management regime that the PNP FEO enforces. International Alert found that, based on UN Comtrade data, at least USD 54 million worth of small arms—about 27,000 individual firearms—were under-declared at ports of entry between 2000 and 2010, which is possibly an indicator of diversion. This was based on discrepancies between what exporters declared and what imports the Philippines declared. On average, this discrepancy was about 2,500 firearms per year (Quitoriano, 2016, pp. 92–93).

Importing agents in the Philippines are frequently private firearms traders and retailers. These actors use a number of techniques to facilitate the diversion of imported firearms. Specifically, small arms importers exploit a specific loophole to avoid import quotas and limitations that the PNP FEO imposes. The PNP FEO does not directly coordinate its activities with customs authorities. When an importer receives PNP authorization to import a certain number of small arms, the importer will present this authorization to the exporting partner, but will demand a small additional number of weapons as a contingency on the grounds that some will be damaged and rendered inoperable while in transit. Upon import, customs agents who verify the import permit generally will not control the precise quantity of the shipment (Quitoriano, 2016, p. 92). The officially authorized number of firearms will then be sent on to a PNP FEO facility, while the firearms constituting the unauthorized contingency weapons can then be sold on the black market.

Other techniques include 'technical smuggling' or 'masking'. This involves a process by which small arms or their components are falsely declared to customs agents as an unrestricted consignment (for example, industrial machine parts). Alternatively, small arms may be concealed in a larger consignment with other items (Quitoriano, 2016, p. 92).

Coercion also appears to be a technique used to divert small arms imports. In 2014 an armed communist group active in the Philippines—the New People's Army—reportedly forced a businessman to order a shipment of more than 1,000 Kalashnikov rifles through legal channels. On paper, these rifles were destined for mining and private security companies that the businessman owned, but ended up in the hands of the militants (Cupin, 2014).

References:
- Cupin, Bea. 2014. 'PNP Eyes Cases vs Generals over Missing AK-47s.' Rappler. 5 June.
- Quitoriano, Eddie L. 2016. 'Shadow Economy or Shadow State? The Illicit Gun Trade in Conflict-affected Mindanao.'
In Francisco J. Lara and Steven Schoofs, eds. Out of the Shadows: Violent Conflict and the Real Economy of Mindanao, 2nd edn. Quezon City: Ateneo de Manila University.

Last accessed at:
http://www.smallarmssurvey.org/fileadmin/docs/S-Trade-Update/SAS-Trade-Update-2019.pdf