Republic Act No. 10863 on the Customs Modernization and Tariff Act (CMA)

(a) Develop and implement programs for the continuous (c) Admission refers to the act of bringing imported goods enhancement of customs systems and processes that will directly or through transit into a free Zone; harmonize customs procedures; (d) Airway Bill (A W'B) refers to a transport document for

(b) Adopt clear and transparent customs rules, regulations, airfreight used by airlines and international freight forwarders policies and procedures, consistent with international standards which specify the holder or consignee of the bill who has the right and customs best practices; to claim delivery of the g oods when they arrive at the port of destination. It is a contract of carriage that includes carrier

(c) Establish a regime of transparency of and accessibility conditions, such as limits of liability and claims procedures. In to customs information, customs laws, rules, regulations, addition, it contains transport instructions to rurlines and carriers, administrative policies, procedures and practices, in order to a description of the goods, and applicable transportation charges; ensure informed and diligent compliance with customs practices and procedures by stakeholders; {e) Appeal refers to the remedy by which a person who is aggrieved or adversely affected by any action, decision, order, or

(d) Consult, coordinate and cooperate with other govermnent omission of the Burea u, seeks redress before the Bureau, the agencies and the private sector in implementing and developing Secretary of Finance, or competent court, as the case may be; customs policy; (f) Assessment refers to the process of determirring the

(e) Provide a fair and expeditious administrative and amount of duties and taxes and other charges due on imported judicial appellate remedy for customs relate d grievances and and exported goods; matters; (g) Authorized Economic Operator (AEO) refers to the

(f) Employ modern practices in customs administration importer, exporter, customs brqker, forwarder, freight forwarder, and utilize information and communications technology in the transport provider, and any other entity duly accredited by the implementa tion of customs functions; and Bureau based on the World Customs Organization (WCO) Framework of Standards to Secure and Facilitate Global Trade,

(g) Institute professionalism and meritocracy in customs the Revised Kyoto Convention (RKC), the WCO Supply Chain tax administration by attracting and retaining competent and Management Guidelines and the various national best practices capable custom s officers and personnel to enforce the provisions to promote trade facilitation and to provide a seamless movement of this Act. of goods across borders through secure international trade supply chains with the use of risk management and modern technology; SEC. 102. Definition of Terms. - As used in this Act: (b) Bill of Loo.ing (BIL) refers to a transport document t (a) Abatement refers to the reduction or diminution, in i ssued by shipping lines, carriers and international freight whole or in part, of duties and taxes where peyment has not been forwarders or non-vessel o perating commo-n.-�G?-rrier for water-borne freight. The holder or consignee of the bill has made; the right to clrum delivery of the goods at the port of destination. It is a contract of carriage that includes carrier conditions, (b) Actual or Outright Exportation refers to the customs such as limits ofliability and claims procedures. In addition, it procedure applicable to goods which, being in free circulation , contains transport instructions to shipping lines and carriers, a leave the Philippine territory and are intended to remain description of the goods, and applicable transportation charges; permanently outside it; 4 5 (:i) Bureau refers to the Bureau of Customs; authorized to perform a specific function of the Bureau as provided in this Act; (j) CarriRrrefers to the person actually transporting goods or in charge of or responsible for the ·operation of the means of (q) Customs Territory refers to areas in the Philippines transport such as airlines, shipping lines, freight forwarders, cargo where customs and tarifflaws may be enforced; �onsolidators, non-vessel operating common carriers and other international transport operators; (r) Entry refers to the act, documentation and proce ss of bringing imported goods into the customs territory, including (k:) C/,earance refers to the completion of customs and other goods coming from free zones; government formalities necessary to allow goods to enter for consumption, warehousing, transit or transshipment, or to be (s) Exportation refers to the act, documentation, and exported or placed under another customs procedure; process of bringing goods out of Philippine territory; (l.) Commission refers to the Tariff Commission; (t) Export Declaration refers to a statement made in the manner prescribed by the Bureau and other appropriate agencies, (m) Conditional Importation refers to the customs by which the persons concerned indicate the procedure to be procedure known under the RKC as temporary admission in observed for taking out or c ausing to be taken out any exported wh ich certain goods can be brought into a customs territory goods and the particulfil's of which the customs administration conditionally relieved, totally or partially, from payment of shall require; import duties and taxes; such goods must be imported for a specific purpose and must b e intended for reexportation within a (u) Flexible C/,ause refer to the power of the President upon specified period and without having undergone any substantial recommendation of the National Economic and Development change except due to nonnal depreciation; Authority (NEDA): (1) to increase, reduce or remove existing protective tariffrates ofimport duty, butinno caseshall be higher (n) Customs Broker refers to any person who is a boria than one hundred percent (100%) ad valorem; (2) to establish fide holder of a valid Certificate of Registration/Professional import quota or to ban importation of any commodity as may be Identification Card issued by the Professional Regulatory Board necessary; and (3) to impose additional duty on all import not and Professional Regulation Commission pursuant to Republic exceedi.T1g ten percent ( 10%) ad valorem, whenever necessary; Act No. 9280, as amended, otherwise known as the "Customs Brokers Act of 2004"; (v) Foreign E,porter refers to one whose name appears on documentation attesting to the export of the product to the (o) Customs Office refers to any customs administrative Philippines regardless of the manufacturer's name in the invoice; unit that is competent and authorized to perfonn all or any of the functions enumerated under customs and tarifflaws; (w) Free Zone refers to special economic zones registered with the Philippine Economic Zone Authority (PEZA) under (p) Customs Officer, as distinguished from a c lerk or Republic Act No. 7916, as amended, duly chartered or legislated employee, refers to a person whose duty, not being clerical or special economic zones and freeports such as Clark Freeport Zone; manual in nature, involves the exercise of discretion in performing Poro Point Freeport Zone; John Hay Special Economic Zone and the function of the Bureau. It may also refer to an employee Subic Bay Freeport Zone under Republic Act No. 7227, as amended by Republic Act No. 9400; the Aurora Special Economic Zone under Republic Act No. 9490, as amended; the CagayanSpecial 6 7 Economic Zone and Freeport under Republic Act No. 7922; the and over all coasts, ports, airports, harbors, bays, rivers and inland Zamboanga City Special Economic Zone under Republic Act waters whether navigable or not from the se·a; No. 7903; the Freeport Area of Bataau under Republic Act No. 9728; and such other freeports as established or may be created by law; (dd) Lodgement refers to the registration of a goods declaration with the Bureau; (x) Goods refer to articles, wares, mercha ndise and any other items which are subject of im portation or exportation; (ee) Non- Vessel Operating Common Carrier (NVOCC) refers to an entity, which may or may not own or operate a vessel that provides a point-to-po:int service which may:include severa l (y) Goods Declaration refers to a statement made :in the modes of transport and/or undertakes group age ofless container manner prescribed by the Bureau and other appropnate agencies, load (LCL) shipments and issues the corresponding transport by.which the persons coµcerned indicate the procedure to be _ document; observed :in the application for the entry or admissron of nnported goods and the particulars of which the customs administration (ff) Outright Smuggling refers to an a ct ofimporting goods shall require; into the country without complete customs prescribed importation documents, or without being cleared by cu stoms or other (z) Importation refers to the act of br:inging :in of goods regulatory government agencies, for the purpose of evading from a foreign territory :into Philippine territory, whether for payment of prescribed taxes, duties and other govermnent charges; consumption, warehousing, or admission as defined in this Act; (gg) Pe:rishable Good refers to goods liable to perish or (aa) Freight Forwarder refers to a local entity that acts goods that depreciate greatly :in value while stored or which cannot as a cargo :intermediary and facilitates transport o f goods on behalf be kept without great disproportionate expense, which m ay be of its client without assuming the role of a carrier, which can proceeded to, advertised and solq at auction upon notice if deemed also perform other forwarding services, such as booking cargo reasonable; space, negotiating freight rates, preparing documents, advancing freight payments, providing packing/crating, trucking and . (hh) Port of Entry refers to a d omestic port open to both warehousing, engaging as an agent/representative of a foreign domestic and international trade, including principal ports ofentry non-vessel operating as a common carrier/cargo consolidator and subpo rt s of entry. A principal port of entry is the chiefport named in a master bill ofladin g as consignee of a consolidated of entry of the Customs District wherein it is situated and is shipment, and other related undertakings; the permanent station of the District Collector of such port. Subports of entry are under the administrative jurisdiction of the (bb) International Freight Forwarder refers to persons District Collector of the principal port of entry of the Customs responsible for the assembly and consolidation of shipments :into District. Port ofentry as used in this Act shall include airport of single lot, and assuming, :in most cases, the full responsibility for entry; the international transport of such shipment from point of re ceipt to the point of destination; (ii) Port of Discharge, also called Port of Unloading, refers to a place where a vessel, ship, aircraft or train unloads its (cc) Jurisdictional Control refers to the power and rights shipments, from where they will be dispatched to their respective of the "Bureau in exercising supervision and police authority consignees; over all seas within the jurisdiction of the Philipp:ine territory 8 9 (jj) Reexportation means exportation of goods which have (ss) Transshipment refers to the customs procedure under been imported; which goods are t ransferred under customs control from the importing means of transport to the exporting means oftransport (kk) &lease of Goods refers to the action by the Bureau to within the area ofone customs office, which is the office of both permit goods undergomg clearance to be placed at the disposal of importation and exportation; the party concerned; (tt) Traveler refers to anyperson who temporarily enters (11) Refund refers to the return, in whole or in part, of the territory of a country in which he or she d oe s not normally duties a nd taxes paid on goods; resides (non-resident), or who leaves that territory, and any person who leaves the territory ofa country in which he or she normally (m m) Security refers to any form of guaranty, such as a resides (departing resident) or who returns to that territory surety bond, cash bond, standby lette r of credit or irrevocable (returning resident); and letter of credit, which ensures the satisfaction of an obligation to the Bureau; (uu) Third Party refers to any person who deals directly with the Bureau, for and on behalf of another person, relating t o (nn) Smuggling refers t o the fraudulent act of imp orting the importation, exportation, movement or storage of g oo ds. any goods into the Philippines, or the act ofassisting in receiving, concealmg, buying, selling, disposing or transporting such goods, SEC. 103. When Importation Begins and Deemed with full knowledge that the same has been fraudulently imported, Terminated. -Importation begins when the carrying vessel or or the fraudulent exportation of goods. Goods referred to under aircraftenters the Philippine territorywith the intention to unload this definition shall be known as smuggled goods; therein. Importation is deemed terminated when; (oo) Taxes refer to all taxes, fees and charges imposed (a) The duties, taxes and pther charges due upon the goods nnder thisAct and the National Internal Revenue Code (NIRC) of have. been paid or secured to be paid at the port of entry unless 1997, as amended, and collected by the Bureau; the good s are free from duties, taxes and other charges and legal permit for withdrawal has been granted; or (pp) Technical Smuggling refers to the act of importing goods into the country by means of fraudulent, falsified or (b) In case the g oo ds are deemed free of duties, taxes and erroneous declaration of the goods to its nature, kind, quality, other charges, the goods have legally left the jurisdiction of the quantity or weight, for the purpose ofreducing or avoiding payment Bureau.. of prescribed taxes, duties_ an d other charges; SEC. 104. When Duty and Tax are Due on Imported (qq) Tentative Release refers to a case where the Goods. - Except as otherwise provided for in this Act or in other assessment is disputed and pending review, an importer may put laws, all goods, when imported into the Philippines, shall be subject up a cash bond equivalent t o the duties and taxes due on goods to duty upon importation, including goods previolJS!y exported before the importer can obtain the release of said goods; from the Philippines. (rr) Transit refers to the customs procedure under which Unpaid duties, taxes and other charges, shall incur legal goods, i n its original form, are t r ansported under customs control interest of twenty percent (20%) per annum computed from the from one customs office to another, or to a free zOne; date of final assessment under Secti on 429 of t his Act, when 10 11 payment becomes due and demandable. The legal interest shall The goods declaration submitted to the Bureau shall be likewise a=ue on any fine or penalty imposed. processed by the declarant or by a licensed customs broker: Provided, That for importations, a transition period of two (2) Upon payment of the duties, taxes and other charges, the years from the effectivity of this Act is hereby provided during Bureau shall issue tb.e necessary receipt or document as proof of which subparagraph (d) of this section shall not be implemented such payment. by the Bureau: Provided, further, That after two (2) years from the effectivity of this Act, subparagraph (d) of this section shall take into effect consistent with international standards and SEC. 105. Effective Date of Rate of Import Duty. - customs best practices. Imported goods shall be subject to the import duty rates under the applicable tariff headi ng that are effective at the date of importati on or upo n withdr awal from the warehouse for SEC. 107. Rights and Responsibilities of the Declarant. consumption. In case of w ithdrawal from free zones for - The declarant shall be responsible for the accuracy of the goods introduction to the customs territory, the duty rate at the time of declaration and for the payment of all duties, taxes and other withdrawal shall be applicable on the goods originally admitted., charges due on the imported goods. The licensed customs broker whether w ithdrawn in its original or advanced form. shall likewise be responsible for the accuracy of the goods declaration but shall not be responsible for the payment of duties, taxes and other charges due on the imported goods. In case of goods sold at customs public auction, the duty rates at the date of the auction shall apply for purposes of implementing Section 1143(a) of this Act. The declarant shall sign the g oods declaration, even when assisted by a licensed customs broker, who shall likewise sign the goods declaration. SEC. 106. Declarant. - A declarant may be a consignee o r a person who has the right to dispose ofthe goods. The declarant shall lodge a goods declaration with the Bureau and may be: SEC. 108. Penalties for, Errors in Goods Declaration. The Bureau shall not impose substantial penalties for error s when such errors are inadvertent and there was no fraudulent intent (a) The importer, being the holder of the bill oflading; or or gross negligence in the commission thereof: Provided, That in order to dlscourage repetition of such errors, a penalty may be (b) The exporter, beingtheownerofthegoodsto be shipped imposed but shall not be excessive. out;or SEC. 109. Application of Information and (c) A customs broker acting under the authority of the Communications Technol.ogy. - In accordance with ;;,_ternational importer or from a holder of the bill; or standa rds, the Bureau shall utilize information a nd communica tions technology to enhance customs control andto (d) A person duly empowered to act as agent or support a cost-effective and efficient customs operations geared attorney-in-fact for each holder. towards a paperless customs environment. In case the consignee or the person who has the right to The Bureau shall communicate, exchange and process dispose of the goods is a juridical person, it may authorize a trade• andlogistics-relatedinformationin the national and regional responsible officer of the company to sign the goods declaration as level for the efficient and prompt clearance of goods and declarant on its behalf. commodities in a technology-neutral and secured infrastructure for business, industries, and.government. 12 13 The security of data and c ommunication shall be in a A designated third party shall )lave the same rights anct manner that is consistent with applicable local and internationally obligations as the designating party when transacting business accepted standards on information security. with the Bureau. The Bureau shall likewise include as part of its systems Subject to the provisions of existing laws, treaties, aud processes; a disaster preparedness aud recovery plan to ensure convention and international agreements, the Secretary ofFinance business continuity by maintaming its uptime goal for its electronic shall make the necessary guidelines for the defined relationship and online services. of the Bureau and third parties. For purposes of customs procedures, electronic documents, SEC. 111. Information of Genera/Application. -Alllaws, permits, licenses or certificates shall be acceptable and ·shall decisions, rulings, circulars, memoranda and orders ofthe Bureau have the legal effect, validity or enforceability as any other shall be published in accordance with law. document or legal writing: Provided, That when the prescribed requirements are duly complied with, the Bureau shall: To foster an informed compliance regime, the Bureau shall ensure that all relevant and available information of general (a) Recognize the authenticity a nd reliability of electronic application pertaining to customs operations and procedures which documents; are not confidential or intended for the Bureau's internal use only, shall be readily accessible to any interested person. (b) Transmit approval in the form of electronic data messages or electronic documents; and Any new information, amendment or changes in customs law, administrative procedures or requirements, shall, as far as (c) Require and/or accept payments and issue receipts practicable, be made readily available prior to its effective date of acknowledging such payments through systems using electronic implementation unless advanc\' notice is precluded. data messages or electronic documents. SEC.112. InformatwnofaSpecifi,cNature. - TneBureau The introduction and implementation of information and shall provide information, not otherwise confidential or for the communications technology shall be undertaken with due Bureau's internal use only, relating to a specific matter as may consultation with directly affected parties and stakeholders. be requested by an interested party for legitimate use. SEC. 110. Relationship Between the Bureau and Third The Bureau may require the payment of a reasonable fee Parties. - Parties may transact business with the Bureau eiiher in providing such information. The requested information shall directly or through a designated third party to act on their behalf. be released within reasonable time from the filing of the request and payment of the required fee. The customs transactions directly transacted by a party shall not be treated less favorably or be subject to more stringent SEC. 113. Decision and Ruling. - The B>tteau shall, requirements than those transacted through a designated third consistent with Section 1502 ofthis Act, issue binding and advance party. decisionand rulingat therequestofaninterested partyon matters pertaining to importation or exportation of goods. 14 15 Upon w ritten request of the interested party, the Bureau SEC. 117. Regulated Importation and Exportation. shall notify the party of its decision in writing within the period Goods which are subject to regulation sball be imported or exported specified in this Act or by regulation. Should the decision be only after securing the necessary goods declaration or export adverse to the requesting interested party, the reasons thereof declaration, clearances, licenses, and any other requirements, shall be indicated and the party shall be advised of the party's prior to importation or exportation. In case of importation, right of appeal. submission of requirements after arriva l ofthe goods but prior to release from customs custody shall be allowed but only in cases The ruling and decision shall be issued by the Bureau within provided for by governing l aws orr egulations. thirty (30) days from the submission of the necessary documents and information. SEC. 118. ProhibitedimportationandExportation. - The importation and exportation of the following goods are prohibited: SEC. 114. Right of Appeal, Forms and Ground. - Any party adversely affected by a decision or omission of the Bureau (a) Written or printed goods in any furm containing any pertaining to an importation, exportation, or any other legal claim matter advocating or inciting treason, rebellion, insurrection, shall have the right to appeal within fifteen (15) days from receipt sedition against the government of the Philippines, or forcible ofthe questioned decision or order. resistance to any law of the Philippin es, or written or printed goods containing any threat to take the life of, or inflict bodily An appeal in writing shall be filed within the period harm upon any person in the Philippines; prescribed in this Act or by regulation and shall specify the grounds thereof. (b) Goods, instruments, drugs and substances designed, intended or adapted for producing unlawful abortion, or any printed The Bureau may allow a reasonable time for the submission matter which advertises, describes or gives direct or indirect of supporting evidence to the appeal information w here, how or hY whom unlawful abortion is committed; CHAPTERS (c) Written or printed goods, negatives or cinematographic TYPES OF IMPORTATION films, photographs, engravings, lithographs, objects, paintings, drawings or other representation of an obscene or immoral SEC. 115. Treatment of Importation. - Imported goods character; shall be deemed"entered" in the Philippines for consumption when the goods declaration is electronically lodged, together with any (d) Any goods manufactured in whole or in part of gold, required supporting documents, with the pertinent customs office. silver or other precious metals or alloys and the stamp, brand or mark does not indicate the actual fineness of quality of the metals SEC. 116. Free Importation and Exportation. - Unless or alloys; otherwise provided by law or regulation, all goods may be freely imported into and exported from the Philippines without need for (e) Any adult erated or misbranded food or goods for human import and export permits, clearances or licenses. consumption or any adulterated or misbranded drug in violation of relevant laws and regulations; 16 17 (f) Infringing goods as defined under the Intellectual The restriction to import or export the above stated goods Property Code and related Jaws; and shall include the restriction on their transit. (g) All other goods or parts thereo:( which importation and CHAPTER4 exportation are explicitly prohibited by law or rules and regulations issued by the competent authority. RELIEF CONSIGNMENT SEC. 119. Restricted Importation and Exportation. - SEC. 120. Relief Consignment. - Goods such as food, Except when authorized by law or regulation, the import�tion medicine, equipment and materials for shelter, donated or leased and exportation of the follow ing restricted goods are p rohibited: to government institutions and accredited private entities for free distribution to or use ofvictims of calamities shall be treated and (a) Dynamite, gunpowder, ammunitions and other entered as relief consig nment. explosives, firearms and weapons of war, or parts thereof; Upon declaration of a state of calamity, clearance of relief (b) Roulette wheels, gambling outfits, loaded dice, marked consignment shall be a matter of priority and subject to a cards, machines, apparatus. or mechanical devices used in simplified customs procedure. The Bureau shall provide for: gambling or the distribution of money, cigars, cigarettes or other goods when such distribution is dependent on chance, including (a) Lodging of a simplified goods declaration or o f a jackpot and pinball machines or similar contrivances, or parts provisional or incompl ete goods declaration subject to completion thereof; of the declaration within a specified period; (c) Lottery and sweepstakes tickets, except advertisements (b) Lodging, registering and checking of the goods thereof and lists o fdrawings therein; declaration and supporting documents prior to the arrival of the goods, and their release upon arrival; (d) Marijuana, opium, poppies� co ca leaves, heroin or other narcotics or synthetic drugs which are or may hereafter be declared (c) Clearanc e beyond the designa ted hours of business or habit forming by the President of the Philippines, or any away from customs offices and waiver of any corresponding compound, manufactured salt, derivative, or preparation thereo:( charges; and except when imported by the governme nt of the Philippines or any person duly authorized by the Dangerous Drugs Board, for (d) Examinat ion and/or sampling of goods only in medicinal purposes; exceptional circumstances. (e) Opium pipes or parts thereo:( of whatever material; The Department o f Finance (DOF) and the Department of and Social Welfare and Developmen t (DSWD) shall jointly issue the rules and regulations for the implementation oft!ns'provision. (J') Any other goods whose importation and exportation are restricted. SEC. 121. Duty and Tax Treatment. - Reliefconsignment, as defined in Section 120, imported during a state of calamity and intended for aspeciiic calanrity area for the use of the calamity victims therein, shall be exempt from duties and taxes. 18 19 TITLE II (1) Promulgation of rules and regulations; BUREAU OF CUSTOMS (2) Issuance, revocation or modification of rulings; and CHAPTERl (3) Compromise or abate of customs obligations. GENERAL ADMINISTRATION (:f) Assignment or reassignment of any customs officer subject to the approval of the Secretary of Finance: Provided, SEC. 200. Chief Officials of the Bureau. - The Bureau That District Collectors and other customs officers that perform shall be headed by a Commissioner and shall be assisted by at assessment functions shall not remain in the same area of least four (4) but not more than six (6) Deputy Commissioners. assignment for more than three (3) years; and -.j The Commissioner shall be appointed by the President of (g) Perform all other duties and functions as may be the Philippines. necessary for the effective implementation of this Act and other customs related laws. The Deputy Commissioners shall also be appointed by the President and at least majority of whom shall come from the SEC. 202. Functions of the Bureau. - The Bureau shall ranks of the Bureau. exercise the following duties and functions: SEC. 201. Powers and Functions of the Commissioner. - (a) Assessment and collection of customs revenues from The Commissioner shall have the followi.ng powers and functions: imported goods and other dues, fees, charges, fines and penalties accruing under this Act; (a) Exclusive and original jurisdiction to interpret the provisions of this Act, in collaboration with other relevant (b) Simplification and harmonization of costoms procedures govermnent agencies, subject to review by the Secretary ofFinance; to facilitate movement of goods in international trade; (b) Exercise any customs power, duties and functions, (c) Border control to prevent entry of smuggled goods; l directly or indirectly; (cl) Prevention and suppression of smuggling and other (c) Review any action or decision of any customs officer customs fraud; performed pursuant to the provisions of this Act; (e) Facilitatio n and security of international trade and (d) Review and decide disputed assessments and other commerce through an informed compliance program; matters related thereto, subject to review by the Secretary of Finance and exclusive appellate jurisdiction of the Court ofTax .. ....,.._ ,.., (f) Supervision and control over the entrance and clearance Appeals (CTA); ofvessels and aircraft engaged in foreign commerce; (e) Delegate the powers vested under this Act to any (g) Supervision and control over the handling of foreign customs officer with the rank equivalent to division chief or higher, mails arriving in the Philippines for the purpose of collecting except for tbe following powers and functions: revenues and preventing the entry of contraband; 20 21

(h) Supervision and control on all import and export Upon request, the Tariff Commission shall have access to, cargoes, landed or stored in piers, airports, terminal facilities, and the righ t to be furnished with copies of liquidated goods including container yards and freight stations for the protection declaration and other documents supporting the goods declaration of government revenue and prevention of entry of contraband; as finally filedm the Co=ission onAudit (COA).

(i) Conduct a compensation study with the end vie_w: of For this purpose, the Bureau shall maintain electronic developmg and recommending to the President a competitive records o f goods declaration and other documents supporting the compensation and remuneration system to attract and re tam declaration. highly qualified personnel, while ensuring that the Bureau remains financially sound and sustainable; CHAPTER2

(j) Exercise ofexclusive original jurisdiction over forfeiture cases under this Act; and CuSTOMS DISTfilCTS AND PORTS OF ENTRY SEC. 206. Customs Districts. - For administrative

(k) Enforcement of this Act and all other laws, rules and purposes, the Philippines shall be divided into as many Customs regulations related to customs administration. Districts as necessary, the respective limits of which may be changed from time to time by the Commissioner, with SEC. 203. Annual Report of the Commissioner. - The the approval of the Secretary ofFmance. Commissioner shall submit to the President, the Congress of the Philippmes and the NEDA an aonual report on the performance Each Customs District shall be supervised by one (1) of the Bureau, on or before March 31 of the followmg year. District Collector, assisted by as many Deputy District Collectors as may be necessary_ The choice of the location of a District SEC. 204. Promulgation ofRules and Regulations. - The Office, its busmess hours and the staffing pattern thereof: shall Commissioner, subject to the approval ofthe Secretary of Finance, be based on the particular requirements of each district. shall promulgate rules and regulations for the enforcement of this Act. The Commissioner shall regularly prepare and publish SEC. 207. Ports of Entry. -All ports of entry shall be an updated Customs manu.al, and the rules, regulations and under the supervision and control of a Customs District. decisions of the Bureau. The Com.missioner shall furnish the A District Collector shall be assigned in the prmcipal ports of Congress ofthe Philippmes, the NEDA and the Tariff Commission entry while a Deputy District Collector may be assigned to with electronic copies of department orders, administrative orders, other types of ports of entry. circulars, and rules and re gulations promulgated pursuant to this Act. The principal ports of entry shall be located m Aparri, San Fernando, Manila, Manila International Container Port, Ninoy SEC. 205. Copies af Goods Declaration. - The Aqumo International Airport, Subic, Clark, Batangas, Legaspi, Commissioner.shall regularly furnish the NEDA, the Philippme Iloilo, Cebu, Tacloban, Surigao, Cagayan de Oro;Zamboanga, Statistics Authority (PSA), the Bureau oflnternalRevenue (BIB) Davao, Limay and such other ports that may be created pursuant and the Tariff Commission electronic copies of all customs goods to this Act. declaration processed and cleared by the Bureau. For the effective enforcement of the Bureau's functions and without hampering business and commercial operations of the ports, sea ports and airport authorities and private ports and 22 23 airport operators shall providesuitable areas fo� exan:rin�tion and (7) Prevent smuggling and other customs fraud; and for other customs equipment free of charge within a definite penod of time, as agreed with private port and airport operations, if (8) Perform other necessary duties that may be assigned any. by the C ommissioner for the effective implementation of this Act. SEC.208. Power of the President to Open and Close Any Subject to the supervision and control of the District Port. - Upon the recommendation of the Se cretary of Finance, Collector, the duties and functions ofthe District C ollector may ·the President may open or close any port of entry. Upon closru:e be delegated to the Deputy District Collector. The Deputy District of a port of entry, the existing personnel shall be reassigned by Collector assigned to a sub-port shall be under the supe rvision the Commissioner, subject to the approval of the Secreta ry of and oontrol of the District Collector of the corresponding principal Finance. port. SEC. 209. Assignment of Customs Officers and Employees SEC. 211. Temporary Succession of Deputy District to Other Duties. - The Commissioner, with the approval of the Collector to Position ofActing District Collector. - In the absence Secretary ofFinance, may assign any employee of the Bureau or disability of a District Collector or, in case of vacancy, the to any port, service, division or office of the Bureau within Deputy District Collector shall temporarily discharge the the Bureau's staffing pattern or organizational structure, or duties of the District Collector. Should there be no Deputy District may assign any employee either duties: Provided, That such Collector, the District Collector shall designate, in writing, assignment shall not affect the employee's tenure of office nor a senior ranking customs officer to temporarily perform the result in a change of status, demotion in rank and/or salary duties of the District Collector. In case there are two (2) or more deduction. s8nior rankin g customs officers with equal length of service, a drawing of lots shall be undertaken. The District Collector SEC. 210. Duties of the District Collector. -The District shall report the designation to the Commissioner within Collector shall have the following duties in therr assigned Customs twenty.fou r (24) hours after the designation. District: SEC. 212. Records to be Kept by Customs Officers. - District Collectors, Deputy District Collectors, and customs officers (1) Ensure entry of all imported goods at the customs office; acting in such capacities must maintain permanent records of official transactions and turn-over all records and official (2) Prevent importation and exportation ofprohibited goods; papers to the:ir respective successors or other authorized officials. The records shall be made available for inspection by other (3) Ensure legal compliance ofregulated goods and facilitate authorized officials of the Bureau. the flow oflegitimate trade; If required, the District Collector shall affix the official dry (4) Examine, classify and value imported goods; seal of the Bureau on all documents and recq.,;l� requiring authentication. (5) Assess and collect duties, taxes and other charges on imported goods; SEC. 213. R ep orts of the District Collector to the Commissioner. - The District Collector shall report to the (6) Hold and dispose imported goods in accordance with Commissioner any probable or initiated litigation withi n the this Act; 24 25 Customs District and shall submit regular monthly reports on concerned government agencies and personnel for guidance and all district transactions. compliance. CHAPTERS All seizures pursuant to this section must be effected in accordance with the provisions on the co�duct of sei zure EXERCISE OF POLICE AUTHORITY proceedings provided for in Chapters 3 and 4 of Title XI of this Act. SEC. 214. Persons Exercising Police Autlwrity. - For the effective implementation of this Act, the following persons SEC. 215. Place Where Authority May be Exercised. -All are authorized to effect search, seizure, and arrest: persons exercising police authority as described in the preceding _ sect10n shall only exercise powers within customs premises as provided for in Section 303 of this Act, and within the limits of (a) Officials of the Bureau, District Collectors, Deputy the authority granted by the Commissioner. District Collectors, police officers, agents, inspectors and guards of the Bureau; Portandairport authoritiesinallportsofentrysballprovide authorized customs officers with unhampered access to all (b) Upon authorization of the Commissioner, officers and premises within their administrative jurisdiction. members of the Armed Forces of the Philippines (AFP) · and national law enforcement agencies; and SEC. 216. Exercise of Power of Seizure. - Any person exercising police authority under this Act has the power and duty (c) Officials of the BIR on all cases falling within the regular tff seize any vessel, aircra(t, cargo, goods, animal or any other performance oftheir duties, when payment of internal revenue movable property when the same is subject to forfeiture or when taxes is involved. they are subject of a fine impos,ed under this Act. All officers authorized by the Commissioner to exercise police SEC. 217. Duty of Officer to Disclose Official Character. authority shall at all times coordinate with the Commissioner. - For the proper exercise of police authority, any authorized person shall disclose the nature of the authority upon being Goods seized by deputized officers pursuant to this section questioned at the time of exercise thereof and shall exhibit the shall be physically turned-aver immediately to the Bureau, unless corresponding written authority issued by the Commissioner. provided under existing laws, rules and regulations. ' SEC. 218. Authority to Require Assistance and For this purpose, mission orders shall clearly indicate the Information. - Any person exercising police authority may specific name carrying out the nrission and the tasks to be carried demand the assistance of and request information from the out. Philippine National Police (PNP), the AFP and other national law enforcement agencies, when necessary, to effe:_gt,apy search, Subject to the approval of the Secretary of Finance, the seizure or arrest. It shall be the duty of any police officer and Commissioner shall define the scope, areas covered, p:rocedures other national law enforcers to give such lawful assistance. · and conditions governing the exercise of such police authority including custody and responsibility for the seized goods. SEC. 219. Authority to Enter Properties. - Any person The rules and regulations to this effect shall be furnished to the exercising police authority may, at any time, enter, pass through, 26 27 and search any land, enclosure, war ehouse, store, building or person or animal suspected of holding or conveying dutiable or structure not principally used as a dwelling house. prohibited goods. When a security personnel or any other employee lives in SEC. 223. Authority to Search Persons Arriving From the warehouse, store, or any building, structure or enclosure that Foreign, Countries. - Upon reasonable cause, travelers arriving is used fur storage of goods, it shall not be considered as a dwelling from foreign countries may be subjected to search and detention house for purposes of this Act. by the customs officers. The diguity of the person under search and detention shall be respected at all times. Female inspectors SEC. 220. Authority to Search Dwelling House. - A may be employed for the ex amination and s earch of persons of dwelling house may be entered and searched only upon warrant their own sex. issued by a Judge of a competent court, the sworn application thereon showing probable cause and particularly describing the SEC. 224. Power to Inspect and Visit. - The place to be searched and the goods to be seized. Commissioner or any customs officer who is author ize d in writing by the Commissioner, may demand evidence ofpayment SEC. 221. Authority to Search Vessels or Aircrafts and of duties and taxes on impo rted goods openly for sale or kept in Persons or Goods Conveyed Therein. - Any person exercising storage. In the event that the interested party fails to produce police authority under this Act may board, inspect, search such evidence within fifteen (15) days, the goods may be seized and examine a vessel or aircraft and any container, trunk, and subjected to forfeiture proceedings: Provided, That during package, box or envelope found on board, and physically the proceedings, the interested party shall be given the opportunity search and exa mine any person thereon. In c ase of any to prove or show the source of the goods and the payment of duties probable violation of this Act, the pers on exercising pol ice and taxes thereon: Provided, further, That when the warrant of authority may seize the goods, vessel, aircraft, or any part thereof. seizure h as been issued but subsequent documents presented evidencing proper payment are found to be authentic and inorder, Such power to search includes removal of any false bottom, the District Collector shall witninfifteen (15) days from the rece:ipt partition, bulkhead, or any other obstruction for the purp ose of of the motion to quash or recall the warrant, cause the immediate uncovering any concealed duti..able or forfeitable goods. release of the goods se ized, subject to clearance by the Commissioner: Provided, finally, That the release thereof shall not be contrary to law. The proceeding herein authorized shall not give rise to any claim for damage caused to the goods, vessel or aircraft, unless there is gross negligence or abuse of authority in the exercise TITLE III thereof. CUSTOMS JURISDICTION AND CUSTOMS CONTROL SEC. 222. Authority to Search Vehicles, Other Carriers, Persons and Animals. - Upon reasonable cause, any person CHAPTER I exercising police authority m ay open and examine any box, trunk, envelope, or other container for purposes of determining CUSTOMS JURISDICTION the presence of dutiable or prohibited goods. This authority includes the search of receptacles used for the transport of human SEC. 300. Customs Jurisdiction. - For the effective remains and dead animals. Such authority likewise includes implementation of this Act, the Bureau shall exercise jurisdiction the power to stop, search, and examine any vehicle or carrier, over all seas within Philippine territory and all coasts, ports, 28 29 airports, harbors, bays, rivers and inland waters whether SEC. 303. Control Over Premises Used for Customs navigable or not from the sea and any means of conveyance. Purposes. - The Bureau shall for customs purposes, h ave exclusive control, direction and management of customs offices, ct to seizure facilities, warehouses, ports, airports, wh arves� infrastructure The Bureau shall pursue imported goods subje and other premises in the Customs Districts, in all cases without land, water and air and shall exercise during its transport by prejudice to the general p olice powers.of the local government be necessary for the effecti ve enforc emen t of · diCti" on as may ·JUTIS units (LGUs), the Philippine Coast Guard and of law enfurcement • ct to s01zur .£or • e this Act. When a vessel or aircraft becomes subJe _ agencies in the exercise of their respective functions. or aircraft which violation of this Act, a pursuit of such vessel may contmue began within the territorial waters or air space be seized lil the SEC. 304. Power of the President to Subject Premises to beyond the same, and the vessel or aircraft may Customs Jurisdiction. - When public interes t requires, the high seas or international air space. President may, by executive order, declare any public wharf, landing place, infrastructure, street or land, in any port of entry CHAPTER2 under the jurisdiction of the Bureau as may be necessary, for customs purposes and/or to authorize a port or terminal operator CUSTOMS CONTROL to transfer overstaying cargoes in an inland depot or terminal. SEC. 301. Customs Control Over Goods. - All goods, SEC. 305. Trespass or Obstruction of Customs Premises. including means of transport, entering or leaving the customs - No person shall enter or obstruct a customs office, warehouse, territory, regardless ofwhether they are liable to duties and taxes, port, airport, wharf, or other premises under the control of the _ shall ·be subject to customs control to ensure compliance W1.th Bureau without prior authority, including the streets or alleys this Act. where these facilities are located. In the application of customs control, the Bureau shall ' SEC. 306. Special Surveillance for the Protection of employ audit-based controls and risk management systems, use Customs &venue. and Prevention of Smuggling. - The Bureau automation to the fullest extent possible, and adopt a compliance shall conduct surveillance on vessels or aircrafts enterin g measurement strategy to support risk management. Philippine territory and on imported goods entering the customs office: Provided, That the function of the Philippine Coast Guard The Bureau shall seek to cooperate and conclude mutual to prevent and suppress the illegal entry of these goods, smuggling administrative as sistance agreements with other customs and other forms of customs fraud and violations of maritime law administrations to enhance customs control. The Bureau shall and its proper surveillance of vessels entering and/or leaving consult coordinate, and cooperate with other government Philippine territory as provided in Republic Act No. 9993, otherwise regulat�ry agencies, free zones authorities, and the customs known as the "Philippine Coast Guard Law of 2009", shall continue stakeholders, in general, to enhance customs control. to be in force. �-,'J SEC. 302. Enforcement of Port Regulation of the BU,reau SEC. 307. Temporary Storage of Goods. - Subject to the of Quarantine. - Customs officials and employees shall cooperate rules and regulations to be issued by the Secretary of Finance, with the quarantine authorities in the enforcement of the por t the Commissioner shall establish a system for temporary storage quarantine regulations promulgated by the Bureau of Quarantme of imports prior to goods declaration in case of ab andone d or and shall give effect to the same insofar as connected with matters overstaying goods_ of shipping and navigation. 30 31 TITLE IV All importations entered through a formal entry process shall be covered by a letter ofcredit or any verifiable commercial IMPORT CLEARANCE AND FORMALITIES document evidencing payment or in cases where there is no sale fur export, by any ccmmercial document indicating the commercial CHAPTER I value of the g oods. Goons DECLARATION SEC. 403. Provisional Goods Declaration. - Where the declarant does not have all the information or supporting SEC. 400. Goods to be Imported through Customs Office. documents required to complete the goods declaration, the lodging of a provisional goods declaration may be allowed: Provided, - All goods imported into the Philippines shall be entered through That it substantially contains the necessary information required a customs office at a port of entry, or may be admitted to or by the Bureau and the declarant un dertakes to complete removed from a free zone as defined in this Act, as the case may the information or submit the supporting documents within be. forty-five (45) days from the filing of the provisional goods declaration, which period may be extended by the Bureau for SEC. 401. Importations Subject to Goods Declaration. - another forty-five (45) days for valid reasons. Unless othermse provided for in this Act, all imported goods shall be subject to the lodgement of a goods declaration. A goods If the Bureau accepts a provisional goods decla ration, the declaration may be for consumption, for customs bonded duty treatment of the goods shall not be different from that of warehousing, for admission, for conditional importation, or for goods with complete declaration. customs transit. Goods under a provisional goods declaration may be released SEC. 402. Goods Declaration for Consumption. - All upon posting of any required �ecurity equivalent to the amount goods declaration for consumption shall be cleared through ascertained to be the applicable duties and taxes. a formal entry process except for the following goods which shall be cleared through an informal entry process: SEC. 404. Owner ofImported Goods. - All goods imported into the Philippines shall be deemed to be the property of the (a) Goods of a ccmmercialnature with Free on Board (FOB) consignee or the holder of t he bill oflading, airway bill or other or Free Carrier At (FCA) value ofless than fifty thousand pesos equivalent transport document if duly endorsed by the ccnsignee (P50,000.00). Every three (3) years after the effectivity of this therein, or, ifco nsigned to order, duly endorsed by the consignor. Act, the Secretary of Finance shall adjust this amount as provided The underwri ters of abandoned goods and the salv�rs of goods herein to its present value, using the Consumer Price Index (CPI) saved from wreck at sea, coast, or in any area of the Philippines, as published by the PSA; and may be regarded as the consi gnees. (b) Personal and household effects or goods, not in SEC. 405. Liability of Importer for Duties-a,r4d Taxes. � commercial quantity, imp orted in a passenger's baggage or mail. Unless relieved by laws or regulations, the liability for duties, taxes, fees, and other charges attached to importation ccnstitutes The Commissioner may adjust the value of goods of a personal debt due and demandable against the importer in fuvor commercial nature that shall be cleared through an informal of the government and shall be discharged only upon payment of entry process without prejudice to the periodic adjustment period duties, taxes, fees and other charges. It also constitutes a lien on in subparagraph (a) of this section. 32 33 the imported good;; which may be enforced while suc h goods are amendments, inust be received prior to final assessment or under customs' custody. examination of the goods. SEC. 406. Importations by the Government. - Except SEC. 409. Advance Lodgement and Clearance. - The those provided for in Section 800 of this Act, all importations by Bureau may provide for the lodgement and clearance of good;; the go;ernment fur its own use or that ofits subordinate branches declaration and support ing documents prior to the arrival of the or instrumentalities, or corporations, agencies or instrumentalities goods under such terms and conditions as may be provided by owned or controlled by the government, shall be subject to the r ul es and regulations to be promulgated under this Act. duties, taxes, fees and other charges under this Act. SEC. 410. Entry of Goods in Part for Consumption and SEC. 407. Goods Declaration and Period of Filing. -As in Part for Warehousing. - Goods declaration covered by one bill far as practicable, the format of the goods declaration shall conform of lading or airway bill over goods which are meant in part for with international standards. The data required in the goods cons umption and in part for warehousing may be both entered declaration shall be limited to such particulars that are simultaneously for release at the port of entry. deemed ne cessary for the assessment and collection of duties and taxes, the compilation of statistics and compliance with this SEC. 411. Contents of Goods Declaration. - Goods Act. The Bureau shall require the electronic lodgement of the declaration shall contain the names ofthe consignee, importing good;; declaration. vessel or aircraft, port of departure, port of destination and date of arrival, the number and marks ofpackages, or the quantity, if The Bureau shall only require supporting documents in bulk, the nature and correct commodity description ofthe goods necessary for customs control to ensure that all requirements of contained therein, its value as set forth in a proper invoice� and the law have been complied with. Translation of supporting such other information as may be required by rules and documents shall not be required except when necessary. regulations. Where tbe declarant does not have all the information required to make tbe goods declaration, a provisional or incomplete Goods declaration must be lodged within fifteen (15) days goods declaration shall, for certain cases and for reasons deemed from the date of discharge of the last package from the vessel or valid by the Bureau, be allowed to be lodged: Provided, That it aircraft. The period to file the goods declaration may, upon contains the particulars deemed necessary by the Bureau for the request, be extended on valid grounds for another fifte e n (15) acceptance of the entry filed and that the declarant undertakes days: Provided, That the request is made before the expiration to complete it within forty-five (45) days from the filing of the of the original period within which to file the g o ods provisional goods declaration in accordance with Section 403 of declaration: Provided, however, That the period of the lodgement this Act. of the goods declaration may be adjusted by the Commissioner. SEC. 412. Statements to be Provided in the Goods SEC. 408. Lodgement and Amendment of Goods Declaration. - No entry of imported goods shall be allowed Declaration. -· The Bureau shall permit the electronic lodgement unless th e goods declaration h as been lod_.[ed with the of the goods declaration at any designated customs office. The Bureau. The goods declaration shall, under plmalties o f Bureau shall, for valid reason and under terms and conditions falsification or perjury, contain the following statements: provided by regulation, permit the declarant to amend the good;; declaration that has already been lodged: Provided, That the (a) The invoice and goods declaration contain an accurate request to amend the goods declaration, together with the intended and faithful account of the prices paid or payable for the goods, and other adjustments to the price actually paid or payable, and 34 35 that nothing has been omitted therefrom or '.'°ncealed "'.hereby (c) The name s of the buyer, seller, and the time and pl ace the goverillllent of the Republic of the Philippmes nught be ofsale; defrauded of any part of the duties and taxes lawfully due on the goods; and (d) The port of entry; (b) To the best of the declarant's information an d belief, (e) A sufficient descriptio n to enable the accurate all the invoices and bill s oflading or airway bills relatmg to the goods are the only ones in existence r elating to the nnportation m identification of goods for tariff classification, customs valuation. and statistical purposes, indicating the correct commodity question, and that these documents are in the same state as when description, in customary term or commercial designation, the they were received by th e declarant, and the declaration thereon gr ade or quality, numbers, marks or symbols under which they are in all respects genuine and true. are sold by the seller or manufacturer, together wit h the marks and number of packages in which the goods are packed; Goods declaration shall be submitted electronically pursuant to Republic Act No. 8792, otherwise known as the "Electromc (f) The quantities in the weights or measures of the goods Commerce Act of 2000". Such declarations when pri nted .and shipped; and certified by acompetent customs officer as a !'31thfulreproduction of the electronic submission sh all be considered as actionable documen ts for purpo ses of prosecuting a declar ant if the (g) Any other fact deemed necessary for the proper declarations are found to be fraudulent. examination, customs valuation. and tariff classification of the goods as may be prescribed by rules and regulations. SEC. 413. Description of Goods. - Under such terms and conditions prescribed under the rules and regulations, the To the extent possible, the above requirements shall also _ apply to goods imported but not covered by sale, such as goods on description of the goods in the goods declaration must be sufficient and specific in detail to enable the goods to be identified f r consig nment or lease, samples, or donations, covered by a _ � consignment, proforma invoice� or other noncommercialinvoice. customs valu ation, statistical purposes, and classification ro the appropriate tariff heading and subhe :3-ding in the currency of the invoice and in such other particulars necessary for SEC. 415. Mode of Payment and Terms of Trade. - the proper a.,;essment and collection of duties and taxes. Subject to existing laws and rules on foreign currency exchange, The quantity and value of each of the several classes of goods the internationally accepted standards and practices on the mode shall be separately declared according to their respective ofpayment or remittance covering import and export transactions, headings or subheadings and the totals o f each heading or including standards developed by international trading bodies such subheading shall be duly shown . as the International Ch.amber of Commerce (ICC) on trading terms (incoterms) and on international letters of credit such as the SEC. 414. Commercial and Noncommercial Invoice - Uniform Customs and Practice for Documentary Cr edit s : (UCPDC), shall be recognized. Commercial invoice ofimported goods shall contain the follOWlilg: (a) The agreed price paid or to be paid for the goods; SEC. 416. E=mination of Samples. - Customs ·officers shall see to it that representative samples taken during examinationshall be properly receipted for and retained within a (b) The adjustments to the price paid or to be paid as defined reasonable period of time. The quantity and value of the samples in Section 701(1) ofthisAct, if not yet included m themv01ce, as taken shall be no ted in the specified box of goods declaration or may be applicable; 36 37 electronic form. Such samples shall be duly labeled as will definitely identify them with the importation for which they are Derelicts and goods salvaged from foreign vessels or aircrafts taken. recovered from sea or wreck are prima facie dutiable and may be entered for consumption or warehousing. If claimed to be of Philippine production, and consequently conditionally duty-free, SEC. 417. Forwarding of Cargo and Remains of Wrecked proof must .be submitted as in ordinary cases ofreimportation of Vessel or Aircraft. - When vessels or aircrafts are wrecked goods. Foreign goods landed from a vessel or aircraft in distress w±thin the Philippines, the original owners or consignees of the is dutiable if sold or disposed of in the Philippines. c argo, or by its underwriters, in case of abandonment, may seek approval from the Bureau to forward the goods saved from the Before any goods taken from a recent wreck are admitted wreck to the ports of destination without going through the to the customs territory, the same shall be appraised, and the customs office in the district in which the goods we re cast ashore owner or importer shall have the same right to appeal as in or unloaded. Upon approval, the goods may be forwarded with ordinary importation. particular manifests and duly certified by a customs officer in charge of the goods. No part of a Philippine vessel or aircraft or its equipment, wrecked either in Philippine or foreign waters, shall be subject to The owner of the vessel or aircraft may be permitted to duty. export the remains of the wreck upon proper examination and inspection. The remains of a wrecked vessel shall include not only its hull and rigging, but also all sea stores, goods and CHAPTER2 equipme nt, such as sails, ropes and chain anchors. EXAMINATION OF GOODS SEC. 418. Derelicts and Goods from Abandoned Wrecks. Derelicts and all goods recovered from sea or from abandoned SEC. 419. Examination of Goods.- Examination of goods, _ wrecks shall be under th e jurisdiction of the port where the goods when required by the Bureau, shall be conducted immediately arrive, and shall be retained in the custody of the Bureau. If not after the goods declaration has been lodged. Priority in the claimed by the owner, underwriter or salvor, the same shall be examination shall be given to live animals, perishable goods and deemed as property of the government. other goods requiring immediate examination. Whensuch goods are brought into port by lighters or other Whenever n�cessary, a system of coordination and joint craft, each vessel shall submit a manifest of their respective cargo. examination of goods shall be established by the Bureau and other regulatory agencies under existing laws and regulations. The customs officer nearest the scene of the wreck shall take charge of the goods saved and shall give immediate notice to As a general rule, the Bureau may examine the goods in the District Collecto r or the nearest customs office. the presence of the declarant or an authorized representative. Examination of the goods in the absence of the declarant or In order to prevent any attempt to commit fraud, the District authorized representative may be allowed'fll'•exceptional Collectorshall be represented at the salvage of the cargo by customs circumstance and for valid and justifiable g rounds, as may be officers who shall examine and receive the inventory made on the defined by regulations promulgated by the Secretary of Finance, cargo. upon recommendation of the Commissioner. The Bureau may require the declarant to be present or to be represented at the 38 39 examination of the goods or to render any assistance necessary to SEC. 421. Duties of Customs Officer Tasked to E=mine facilitate the examination. the Imported Goods. - In the examination, classification, and valuation of the goods, the eustoms officer shall: The Bureau shall take samples of the goods only when needed to establish the tariff description and value of goods (a) Determine whether the packages for examination and declared, or to ensure compliance with this Act. Samples drawn their contents are in accordance with the goods declaration, invoice shall be as minimal as possible. and other pertinent documents; SEC. 420. Conditions for Examination. - Pursuant to (b) Take samples of the imported goods for examination or internationally accepted standards, the Bureau may adopt laboratory analysis when necessary; nonintrusive :examination of goods, such as the use of x-ray machines. (c) Issue a receipt for a sample taken and retained during examination; and Physical examination ofthe goods shall be conducted when: (d) Report whether the goods have been correctly declared (a) It is directed by the Commissioner on account of a as to value, quantity, measurement, weight, tariff classification derogatory information; and not imported contrary to law. (b) The goods are subject to an _Alert Order issued by Failure on the part of the customs officer to perform the competent authority; above duties shall be penalized according to Section 1431 of Title XIV of this Act. (c) The goods are electr onically s elected for physical examination;- SEC. 422. Customs E±penses Constituting Charges on Goods. - The cost of examination shall be for the account of the (d) There are issues and controversies S1.l!rounding the importer or exporter, subject to prop er acc ounting and goods declaration and the import clearance process; or documentation. All expenses incurred by the Bureau for the handling or storage of goods and other necessary operations shall (e) The importer or declarant requests for the examination be chargeable against the goods, and shall constitute a lien of the goods. thereon. The Commissioner may exempt from physical examination CHAPTER3 the goods of authorized economic operators or of those provided for under any existing trade faci--1itation program of the Bureau. AsSESSMENT AND RELEASE �'-"! Physical examination, when required, shall be conducted SEC. 423. Determination of the De Minimis Value. - No in.an expeditious manner. duties and taxes shall be collected on goods with an FOB or FCA value often thousandpesos (PI0,000.00) or below. The Secretary of Finance shall adjust the de minimis value as provided herein, every three (3) years after the effectivity of this Act. The value herein stated shall be adjusted to its present value using the CPI, ,:Cl� rn1hli,;!hoA 1-,...,. +ho ll�A 40 41 SEC. 424. Duty of Customs Officer Tasked to Assess (3) Upon request for reappraisal and/or reclassification, in Imported Goods. - For purposes ofassessing duties and taxes the form of a timely protest addressed to the District Collector by on imported goods, the customs officer shall classify, value, and the interested party ifthe latter should be dissatisfied with the determine the duties and taxes to be paid. The customs officer appraisal or return; or shall prepare and submit an assessment report as established under this Act. (4) Upon demand by the Commissioner after the completion of compliance audit in accordance with the provisions of this Act. SEC. 425. Tentative Assessment of Goods Subject to Dispute Settlement. -Assessment shall be deemed tentative if SEC. 428. Assessment of Duty on Less Than Entered the duties and taxes initially assessed are disputed by the importer. Value. -Duty shall not be assessed in any case upon an amount The assessment shall be completed upon final readjustment based less than the entered value, unless by direction ofthe Commissioner on the tariff ruling in case of classification dispute, or the final in cases when the importer certifies at the time ofentry that the resolution of the protest case involving valuation, rules of origin, entered value is higher than the dutiable value and that the goods and other cuStoms issues. are so entered in order to meet increases made by the appraiser in similar cases then pending re-appraisement; and the lower The District Collector may allow the release of the imported assessment shall be allowed only when the importer's contention goods under tentative assessment upon the posting of sufficient is sustained by a final decision, and shall appear that such action security to cover the applicable duties and taxes equivalent to the of the importer was taken in good faith after due diligence and amount that is disputed. inquiry. SEC. 426. Tentative Assessment of Provisional Goods SEC. 429. Final Assessment. - Assessment shal l be Declaration. - Assessment of a provisional goods declaration deemed final fifteen (15) days after receipt of the notice of shall be deemed tentstive and such assessment shall be completed assessment by the importer �r consignee. upon final readjustment and submission by the declarant of the additional information or documentation required to complete the SEC. 430. Period of Limitation. - In the absence offraud declaration withh1 the period provided in Section 403 ofthis Act. and when the goods have been finally assessed and released, the assessment shall be conclusive upon all parties three (3) years SEC. 427. Readjustment of Appraisal, Classification from the date of final payment •of duties and taxes, or upon or Return. - Such appraisal, classification or return, as finally completion of the post clearance audit. passed upon and approved or modified by the District Collector, shall not be altered or modified in any manner, except: SEC. 431. Release of Goods after Payment of Duties and Taxes. - Goods declared shall be released when duties and taxes (1) Within one (1) year after payment of the duties, upon and other lawful charges have been paid or secured and all the statement of error in conformity with Section 912 of this Act, as pertinent laws, rules and regulations have been complied with. approved by the District Collector: �¼ When the Bureau requires laboratory analysis of samples, (2) Within fifteen (15) day s after such payment, upon detsiled technical documents or expert advice, it may release the request for reappraisal or reclassification a ddressed to the goods before the r<asults of such examination are known after Commissioner by the District Collector� if the appraisal or posting of sufficient security by the declarant. classification is deemed to be low; 42 43 SEC. 432. Release of Goods to the Holder of Bill of Lading CHAPTER4 or Airway Bill. - Any customs officer who releases goods to the consignee or lawful holder of the bill of lading or airway bill shall not be liable for any defect or irregularity in its negotiation unless SPECIAL PROCEDURES the customs officer has notice of the defect or irregularity. SEC. 437. Traveler and Passenger Baggage. - The SEC. 433. Release of Goods Without Production ofBill of Bureau shall provide simplified customs procedure for traveler Lading or Airway Bill. - No customs officer shall release goods and baggage processing based on international agreements and to any person without the submission of the bill oflading or customs best practices. airway bill covering the goods, except on written order of the carrier or agent of the vessel or aircraft, in which case neither Travelers shall be permitted to export goods for commercial the government nor the customs officer shall be held liable purposes, subject to compliance with the necessary export _ for any damage arising from wrongful release of the goods: formalities and payment of export duties, taxes and ch arges, if Provided, That when the release of goods is made against such any. written order, the customs Officer shall require the submission of a copy of the bill. SEC. 438. Postal Item or Mail. - Postal item or mail shall include letter-post and parcels, as described in international SEC. 434. Release of Goods Upon Order of Importer. practices and agreements, such as the Acts ofthe Universal Postal An importer may issue a written authorization for the release of Union (AUPU), currently in force. goods stored in a bonded warehouse to another person. Such authorization shall not relieve the importer from liability for. the A simplified procedure shall be used in the clearance of duties, taxes and other charges due on the goods unless the person postal item or mail, including the collection of the applicable duties to whom the release was authorized assumes such liability. and taxes on such items or goods. SEC. 435. Withholding Release Pending Satisfaction of When all the information required by the customs are Lien. - When the District Collector is duly notified through a available in the special declaration form for postal items as lawful order of a competent court of a lien for freight, lighterage pro"!-ded in the AUPU or similar international agreements, the or general average upon any imported goods, the District Collector special declaration form and supporting documents shall be shall withhold the release of the goods unless the claim has been the goods declaration. However, a separate goods declaration paid or secured. In case ofdisagreement, the District Collector shall be required for the following: may release the goods after payment of the freight and lighterage due on the quantity or weight landed as actually determined. (a) Goods whose value fall within the level that the Commissioner has determined to be taxable and thus must be SEC. 436. Fine or Surcharge on Goods. - Goods subject covered by a goods declaration; to any fine or surcharge shall be released only after the payment of the fine or surcharge. (b) Prohibited and regulated goods; (c) Goods, the exportation of which must be certified; and (d) Imported goods under a customs procedure other than for consumption. !i ,, 44 45 SEC. 439. Express Shipment. - The Bureau shall provide r elated laws and regulations. Export d eclaration may not be simplified customs procedures based.on international standards granted for goods violating the aforementioned requirements. and customs best practices for air shipments considered as time-sensitive and requiring pre-arrival clearance. Express SEC. 502. Lodgement and Processing of Export shipments of accredited air express cargo operators may be Declaration. - The Bureau shall promul gate rules and released prior to the payment of the duty, tax and other charges regulations to allow manual and electronic lodgement and upon posting o f a sufficient security. processing ofthe export declara tion. SEC. 440. Establishment of Advance Customs Clearance SEC. 503. Rules of Origin. - Pursuant to the applicable and Control Program. - The Bureau m ay establish and rules of origin, the Bureau or any other designated government implement a voluntary program on advance customs clearance agency may determine the origin of goods for export and, if and control on containerized cargoes. The details of the voluntary appropriate, issu e the cor responding certificates of origin. advance customs clearance shall be subject to the rules and However, the exporter may adopt a self-certification system: regulations to be issued by the Bureau after conducting the Provided, That it is duly accredited by the Bureau or any other necessary public hearings and consultations with the concerned authorized government agencies. sectors. TITLE VI TITLEV CUSTOMS TRANSIT AND TRANSSHIPMENT EXPORT CLEARANCE AND FORMALITIES CHAPTER I CHAPTER I CUSTOMS TRANSIT EXPORT CLEARANCE AND DECLARATION SEC. 600. Customs Transit in the Customs Territory. - SEC. 500. Export Declaration. -All goods exported from Customs transit within the customs territory shall be allowed for the Philippines, whether subject to export duty or not, shall be goods except those intended for consumption, to be transported as d eclared through a competent customs office through an export follows: declaration, duly signed electronically or otherwi..se by the party making the declaration. (a) From port of entry to another port of entry as exit point for outright exportation; The description of the goods in the export declaration must contain sufficient and speci:6.c information for statistical purposes (b) From port of entry to another port of entry or inland as well as for the proper valuation and classification of the goods. customs office; SEC. 501. Export Product to- Conform to Standard Grades. - If applicable, products shall conform to export standard (c) From inland customs office to a port of entry as exit grades established by the government. The packagin g of the said point for outright exportation; and goods shall likewise be labeled and marked in accordance with (d) From one port of entry or inland customs office to another port of entry or inland customs office. 46 47 A transit permit is required for goods transported under CHAPTER2 customs transit. However, transfer of goods ID customs transit from one means of transport to another shall be allowed: Provided, That any customs seal or fastening is not broken or CUSTOMS TRANSSHIPMENT tampered. SEC. 603. Customs Transshipment. - Goods admitted The party responsible for the compliance of the obligations for transshipment shall not be subject to the payment of duties imposed on customs transit shall ensure that the goods are and taxes: Provided, That the goods declaration for customs presented intact and in due course at the customs office of transshipment particularly indicates such nature of the goods destination. Failure to comply with the aforementioned obligations duly supported by commercial or transport documents or eviden� or likewise failure to follow a prescribed itinerary or period for as required by the Bureau. delivery of the goods may immediately subject the goods to the corresponding duties, taxes and other applicable fines, penalties, Goods for transshipment must be exported from the . . and surcharges. Philippmes within thirty (30) days from arrival thereof. The Co�s10ner may allow an extension of such period after the establishment of valid reasons. SEC. 601. Duty and Tax on Goods Intended for Transit. Transit goods admitted for storage in a customs bonded warehouse, or for outright exportation at the port of destination SEC. 604. Goods Entered for Immediate &exportation. - _ or inland customs office, and goods intended for transit covered Where an :°tent of reexportation of the goods is shown by the bill by RepublicAct No. 10668, otherwise known as "An Act Allowing oflading, mv01ce, manifest, or other satisfactory evidence, the Foreign Vessels to Transport and Co-Load Foreign Cargoes for whole or a part of a bill comprising not less than one package Domestic Transshipment and for Other Purposes", shall not be may b� e1:'-tered for lililled1ate reexportation under security_ subject to the payment of duties and taxes at the port of entry: The D1stnct Collector shall designate the vessel or aircraft in Provided, That any conditions and security required by the which the goods are loaded constructively as a warehouse to Bureau are comI?lied with. facilitate the direct transfer of the goods to the exporting vessel or aircraft. Goods for consumption and other goods intended for customs transit not covered by the immediately preceding paragraph shall Unless it shall appear in the bill oflading, airway bill, _ . . _ be subject to the payment of duties and taxes at the port of mv?1ce, manifest, or other satisfactory evidence, that goods discharge. arnvmg :'1 _ the Philippmes are destined for transshipment, no :'xportation thereof will be permitted except under entry for rmrnediate reexportation under sufficient security in an amount SEC. 602. Carrier's Security, - Carriers that transport equal to the ascertained duties, taxes and other char ges. imported goods that shall be placed under customs transit from a port of entry to other ports, shall post a general transportation Upon the reexportation of the goods, and the production of security amounti.ngto at least fifty thousand pesos (P50,000.00). proof oflanding beyond the limits of the Philippmes the security Such security shall ensure the complete and immediate delivery · ' shall be released. of goods to the customs officer at the port of destination and the payment of pertinent customs charges and expenses and other transfer costs. The amount of the security may be adjusted by the Commissione:r, upon approval of the Secretary ofFinance. 48 49 TITLE VII (i) Are imposed or required by law or by Philippine authorities; IMPORT DUTY AND TAX (ii) Limit the geographical area in which the goods may be CHAPTER I resold; or BASIS OF VALUATION (iii) Do not substantially affect the value of the goods; SEC. 700. Sequential Application of Valuation Methods. (b) The sale or price is not subject to some condition or - Imported goods shall be valued in accordance with the provisions consideration for which a value cannot be determined with respect of Section 701 of this Act whenever the conditions prescribed to the goodsbeingvalued; and therein are fulfilled. (c) The buyer and the seller are not related, or where the Vfuere the customs value cannot be determined under the buyer and the seller are related, that the transaction value is provisions of Section 701 of this Act, it is to be determined by acceptable for customs purposes under the provisions hereof. proceeding sequentially through the succeeding sections hereof to the first such section under which the customs value can be For purposes of this Act, persons shall be deemed related determined. Except as provided in Section 704 of this Act, it is only if: only when the customs value cannot be determined under the provisions of a particular section that the provisions of the next (i) They are officers or directors of one another's business; section in the sequence can be used. (ii) They are legally recognized partners in business; If the importer does not request that the order of Sections 704 and 705 of this Act be reversed, the normal order of the sequence is to be followed. If the importer so requests but it is (iii) There exists an employer-employee relationsmp between impossible to determine the customs value under Section 705 of them; this Act, the customs value shall be determined under Section 704. (iv) Any person directly or indirectly owns, controls or holds five percent (5%) or more of the outstanding voting stocks or shares When the customs value cannot be determined under of both seller and buyer; Sections 701 through 705, it may be determined under Section 706 of this Act. (v) One of them directly or indirectly controls the other; SEC. 701. Transaction Value System - Method One. - (vi) Both of them are directly or indirectly controlled by a The transaction value shall be the price actually paid or payable third person; � ,_.., for the goods when sold for export to the Philippines adjusted in accordance with the provisions of this section: Provided, That: (vii) Together they directly or indirectly control a third person; or (a) There are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which: 50 51 (viii) They are members ofthe same family, including those items used in the production of imported goods; materials related by affinity or consanguinity up to the fourth civil degree. consumed in the production ofthe imported goods; and engineering, development, artwork, design work and plans and sketches undertaken elsewhere than in the Philippines and necessary for Persons who are associated in business with one another the production of imported goods, where such goods and services in that one is the sole agent, sole distributor or sole concessionaire� are supplied directly or indirectly by the buyer free of char ge or however described, of the other shall be deemed to be related for at a reduced cost for use in connection with the production and the purposes of this Act if t hey fall within any of the eight (8) sale for export of the imported goods; and cases cited in the preceding paragraph. (e) Amount ofroyalties and license fees related to the goods In a sale between related persons, the transaction value _ bemg valued that the buyer must PaY either directly or indirectly shall be accepted as basis for customs val uation whenever the as a condition of sale of the goods to the buyer. importer demonstrates that such value closely approximates one of the following occurring at or about the same time: (2) Value of any part of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues directly (a) The transaction value in sales to unrelated buyers of or indirectly to the seller; identical or similar goods for export to the same country of importation; (3) Cost of transport ofthe imported goods from the port of exportation to the port of entry in the Philippines; (b) The customs value of identical or similar goods as determined under the provisions of Section 704 of this Act; or (4) Loading, unloading and handling charges associated with the transport of the imported goods from th e country of (c) The customs value of identical or similar goods are exportation to the port of entry in the Philippines; and determined under the provisions of Section 705 of this Act. (5) Cost of insurance. In determining the transaction value, the following shall be added to the price actually paid or payable for the imported goods: All additions to the price actually paid or p ayable shall be made only on the basis of objective and quantifiable data. (I) To the extent that they are incurred by the buyer but are not inclu ded in the price actually paid or payable for the SEC. 702. Transactwn Value ofIdentical Goods - Method imported goods: Two. - Where the dutiable value cannot be determined under method one, the dutiable value shall be the transaction value of identical goods sold for export to the Philippines and exported at (a) Commissions and brokerage fees except buying or about the same time as the goods being valueq.. For purposes commissions; of this section, "Identical goods" refer to goods wHt'c'.lrare the same in all respects, including physical characteristics, quality and (b) Cost of containers; reputation. Minor differences in appearances shall not preclu de goods otherwise conforming to the definition from being regarded (c) Cost of packing, whether for labor or materials; as identi-cal. (d) Value, apportioned as appropriate, ofthe following goods and services: rnater-i:::r h�, 1:omnrmP.nti:i nf'l-rt.� �mi .1:!lm--il.,:n-• -iti:::im.<::. 52 53 If, in applying this section, more than one transaction value (3) Where appropriate, the costs of: (i) transport of the of identical goods are found, the lowest value shall be used to imported goods from the port of exportation to the port of entry in determine the .customs value. the Philippines; (ii) loading, unloading and handling charges associated with the transport of the imported goods from the SEC. 703. Transaction Value of Similar Goods-Method country of exportation to the port of entry in the Philippines; and Three. - Where the dutiable value cannot be determined under (iii) insurance; and the preceding method, the dutiable value shall be the transaction value of similar goods sold for export to the Philippines and (4) The customs duties and other national taxes payable exported at or about the same time as the goods being valued. For in the Philippines by reason of the importation or sale of the purposes of this section, "Similar goods" refer to goods which, goods. although not alike in all respects, have like characteristics and similar component materials which enable them to perform the If neither the imported goods nor identical nor similar same functions and to be commercially interchangeable. The imported goods are sold at or about the time of importation ofthe quality of the goods, its reputation and the existence of a goods being valued in the Philippines in the conditions they were trademark shall be among the factors to be considered in imported, the customs value shall, subject t o the conditions set determining whether goods are similar. forth in the preceding paragraph, be based on the unit price at which the imported goods or identical or similar imported goods If, in applyi_ng this section, more than one transaction value sold in the Philippines in the condition they were imported and at of identical goods are found, the lowest such value shall be used the earliest date after the importation of the goods being valued, to determine the customs value. but before the expiration of ninety (90) days after such importation. SEC. 704. Deductive Value -Method Four. - Where the If neither the imported goods nor identical nor similar dutiable value cannot be determined uuder the preceding method, imported goods are sold in the Philippines in the condition as the dutiable value shall be the deductive value unless otherwise imported, then, if the importer so requests, the dutiable value requested by the importer as provided in Section 700 hereo£ The shall be based on the unit price at which the imported goods, deductive value which shall be based on the unit price at which after further processing, are sold in the greatest aggregate quantity the imported goods or identical or similar imported goods are sold to persons in the Philippines who are not related to the persons in the Philippines, in the same condition as when imported, in from whom they buy such goods, subject to allowance for the the greatest aggregate quantity, at or about the time of the value added by such processing and deductions provided under importation of the goods being valued, to persons not related to subsections (1), (2), (3) and (4)hereof. the persons from whom they buy such goods, subject to deductions for the following: SEC. 705. Computed Value - Method Five. - Where the dutiable value cannot be determined uuder the preceding method, (1) Either the commissions usually paid or agreed to be the dutiable value shall be the computed value of the sum of: paid or the additions usually made for profit and general expenses in connection with sales in such country of imported goods ofthe - �-½' (I) The cost or the value ofmaterials and fabrication or same class or kind; other processing employed in producing the imported goods; (2) The usual costs of transport and insurance and (2) The amount for profit and general expenses equal to associated costs incurred within the Philippines; that usually reflected in the sale of goods of the same class or 54 55 kind as the goods being valued which are made by producers in (3) The price of goods in the domestic market of the country of exportation; the country of exportation for export to the Philippines; (4) The cost of production, other than computed values, (3) The freight, insurance fees and other transportation that have been determined for identical or similar goods in expenses for the importation of the goods; accordance with method five hereof; (4) Any assist, nits value is not included under paragraph (5) The price of goo ds for export to a country other than (1) hereof; and the Philippines; (5) The cost of containers an d packing, ntheir values are (6) Minimum customs values; or not included under paragraph (1) hereof. (7) Arbitrary or fictitious values. The Bureau shall not require or compel any person not residing in the Philippines to produce for exemination, or to allow access to, any account or other record for the purpose of SEC. 707. Ascertainment of the Accuracy of the Declared determining a computed value. However, information supplied Value. - Nothing in this section shall be construed as restricting by the producer of the goods for the purposes of deternrining the or calling into question the right of the Bureau to ascertain the customs value may be verified in another country with the truth or accuracy of any statement, document or decl ar ation agreement of the producer and provided that said producer will presented for customs valuation purposes. When a declaration give sufficient advance notice to the government of the countr.1 in has been presented and when the Bureau has reason to doubt the question and that the latter does not object to the investigation. truth or accuracy of the particulars or o f documentsproduced in support of such declaration, it may ask the importer to provide further explanation, including documents or other evidence, that SEC. 706. Fallback Value-Method Six. - If the dutiable the de clared value represents the total amount actually paid or value cannot be determined under the preceding methods payable for the impor'".edgoods, adjusted in accordance with the described. above, it shall be determined by using other provisions of Section 701 of this Act. reasonable means and on the basis of data available in the Philippines . If the importer so requests, the importer shall be informed in writing of the dutiable value determined under method Ifin the course of determining tbe dutiable value ofimported six and the method used to determine such value. goods, it becomes necessary to del ay the final determination of such dutiable value, the importer shall neve rthcless be able to secure the release ofthe imported goods upon posting of a sufficient No dutiable value shall be determined under method six on security in a n amount equivalent to the duties and taxes in dispute the basis of: conditioned o n the payment ofadditional duties and taxes, jf any, as may be determined: Provided, That prohibited goods shall (1) The selling price in the Philippines of goods produced in not be released under any circumstance. ___.,. _, the Philippines; I±: after receiving further information, or in the absence of (2) A system that provides for the acceptance for customs a response, the Bureau still has reasonable do ubts on the truth purposes of the higher of two (2) alternative values; or accuracy of the declared value, it may deem that the customs value of the imported goods canoot be determined under method 56 57 one, without prejudice to an importe r's right to appeal pursuant to Section .1104 of this Act. Before taking a final decision, the process, the Bureau or its agents shall sell the acquired goods District Collector shall communicate to the importer, in writing pursuant to existing laws and regulations. if requested, the grounds for doubting the truth or accuracy of the particulars or documents produced and give the importer a Nothing in this section limits or affects any other powers reasonable opportunity to respond. When a final decision is made, of the Bureau with respect to the disposition of the goods or any the Bureau shall com municate its decision and the grounds liability of the importer or any othe r person with respect to an therefor in writing. offense committed in the importation of the goods. SEC. 708. Exchange Rate. - For the assessment and SEC. 710. Marking ofImported Goods and Containers. - collection of import duty upon im p orted goods and for other (A) Marking of Goods. - Except as hereinafter provided, all goods purposes, the value and prices thereof quoted in foreign currency of foreign origin importe d into the Philippines or their containers, shall be converted into the currency of the Philippi nes at the as provided in subsection (B) hereof shall be conspicuously marked current rate of exchange or value specified or published, from in any official language of the Philippines as legibly, indelibly time to time, by the Bangko Sentral ng Pilipinas (BSP). and permanently as the nature of the goods or container will permit and in such manner as to indicate to an ultimate purchaser CHAPTER2 in the Philippines the name of the country oforigin of the goods. Pursuant thereto, the Commissioner shall, with the approval of the Secretary of Finance: SPECIAL DUTIES AND TRADE REMEDY MEASURES (1) Determine the character of words and phrases or SEC. 709. Government's Right of Compulsory abbreviation thereof which shall be acceptable asindicating the Acquisition. - In order tO protect government revenues against country of origin and prescribe any reasonable method ofmarking, undervaluation of goods, the Commissioner may, motu proprio whether by printing, stenciling, stamping, branding, labeling or or upon the .recommendatio n of the District Collector, acquire by any other reasonable method; and in a conspic;:mus place on imported goods under question for a price equal to their declared the goods or container where the marking shall a ppear; customs value plus ai.J.y duties already paid on the goods, payment for which shall be made within te n (10) working days from issuance of -a warrant s ig ned by the Commissioner for the (2) Require the addition of other words or symbols which may be appropriate to prevent deception or mistake as to the acquisition of such goods. origin of t he goods or as to the origin of any other goods with which such imp orted goods is usually combined subsequent to An importer wh o is dissatisfied with a decision of the importation but before delivery to an ultimate purchaser; and Commissioner pertaining to this section may, within twenty (20) working days after the date on which notice of the decision is (3) Authorize the exception of any goods from the give n, appeal to the Secretary of Finance, and thereafter if still requirements of marking if: dissatisfied; to the CTA as provid ed for in Section 1136 of this Act. (i) Such goods are incapable of being marked; Where no appeal is made by the importer, or upon rea:ffi.nnation of the Commissioner's decision during the appeals (:ri.) Such goods cannot be marked prior t o shipment to the Philippines without injury; 58 59 (iii") Such goods can not be marked prior to shipment to the Philippines, except at an expense ec onomically prohibitive of all provisions of this section, including the same exceptions as their importation; are applicable to goods uoder paragraph (3) of subsection (A). (iv) The marking of a container of such goods will (CJ Fine for Failure to Mark. - I£ at the time ofimportation reasonably indicate the origin of such goods; any good or its container, as provided in subsection (BJ hereof, is not marked in accordance with the requirements of this section, there shall be levied, collected, and paid upon such good a marking (v) Such goods are crude substances; duty of five percent (5%) of dutiable value, which shall be deemed to have accrued at the time of importation. (vi) Such goods are imported for use by the importer and not intended for sale in their imported or any other form; (D) &lease Withheld Until Marked. -No imported goods held in customs custody for inspection, examination, or (vii) Such goods are to be processed in the Philippines by assessment shall be released until such g oods or their containers the importer or for the importer's account other than for the shall have been marked in accordance with the requirements of purpose of concealing the origin of such goods and in such manner this section and until the amount of duty estimated to be payable that any mark contemplated by this section would necessarily be under subsection (C) of this section shall have been deposited. obliterated, destroyed, or permanently concealed; (E) The failure or refusal ofthe owner or importer to mark (viii) An ultimate purchaser, by reason of the character of the goods as herein required within a period of thirty (30) days such goods or by reason of the circumstances oftheir importation, after due notice shall constitute as an act of abandonment ofsaid must necessarily know the couotry of origin of such goods even goods and their disposition shall be governed by the provisions of though they are not marked to indicate their origin; thisAct relative to abandonment of imported goods. (ix) Such goods were produced more than twenty (20) years SEC. 711. Dumping Duty. - prior to their i mportation into the Philippines; or The provisions of&publicAct No. 8752, otherwise known (x) Such goods cannot be marked after importation except as the "Anti-Dumping Act of 1999", are hereby adopted. at an expense which is economically prohibitive, and the failure to mark the goocls before importation was not due to any purpose SEC. 712. Safeguard Duty. - of the importer, producer, seller or shipper to avoid c ompliance • with this section. The pro visions ofRepublicAct No. 8800, otherwise known as the "Safeguard Measures Act", are hereby adopted. (B) Marking of Containers. -Whenever goods are exempt under paragraph (3) of subsection (A) of this section from the SEC. 713. Countervailing Duty. - requirements of marking, the immediate container, if any, of such goods ,. or such other container or conta:iners of such goods, shall be marked in such manner as to indicate to an ultimate The pro visions of Republic Act No. 8751, otherwise known purchaser in the Philippines the name of the country of origin of as "An Act Strengthenin g the Mechanisms for the Imposition of such goods in any official language of the Ph:ili.ppines, subject to Countervailing Duties on Imported Subsidized Products, Commodities or Articles of Commerce in Order to Protect Domestic Industries from Unfair Trade Competition, Amending for the 60 61 Purpose Section 302, Part 2, Title II, Book I of Presidential Decree directing that suc h product ofsaid country or such goods imported No. 1464", otherwise known as the "Tariff and Customs Code of in their vessels be excluded from importation into the Philippines. the Philippines, as Amended", are hereby adopted. (c) Any proclamation issued by the President under this SEC. 714. Discrimination by Foreign Countries. section shall, ifthe President deems it consistent with the interest Without prejudice to the Philippine commitment in any ratified of the Philippines, extend to the whole of any foreign country or international agreements or treaty, the following recourse shall may be confined to any subdivision or subdivisions thereof: be applicable in case of discrimination by foreign countries: Provided, That the President may, whenever the public interest requires, suspend, revoke, supplement or amend any such (a) When the President finds that the public interest will proclamation. be served thereby, the President shall, by proclamation, specify and declare new or additional duties in an amount not exceeding (d) All goods imported contrary to the provisions of this one hundred percent (100%) ad valorem upon goods wholly or in section s hall be forfeited to the government of the Philippines and part the growth or product of, or imported in a vessel of any shall be liable to be seized, prosecuted and condemned in like foreign country whenever the President shall find as a fact that manner and under the same regulations, restrictions, and such country: provisions as may from time to time be established for the recovery, collection, distribution, and· remission or forfeiture to the (1) Imposes, directly or indirectly, upon the disposition or government by the tariff and customs laws. Whenever the transportation in transit or through reexportation from such provision of this section shall be applicable to importations into country of any goods wholly or in part the growth or product of the Philippines of goods wholly or in part the growth or product of the Philippines, any unreasonable charge, exaction, regulation any foreign country, it shall be applicable thereto, whether such or limitation which is not equally enforced upon the like goods of goods are imported directly or indirectly. every foreign country; or (e) It shall be the duty of the Commission to ascertain and (2) Discriminates in fact against the commerce of the at all times be informed whether any of the discriminations Philippines, directly or indirectly, by law or administrative aga inst the commerce of the Philippines enumer ated in regulation or practice, by or in respect to any customs, tonnage ) subsections (a) and (b) ofthis section are practiced by any country; or port duty, fee, charge, exaction, classification, regulation, and if and when such discriminatory acts are disclosed, it shall condition, restriction or prohibition, in such manner as to place be the duty of the Commission to bring the matter to the attention the commerce of the Philippines at a disadvantage compared with of the President, and to recommend measures tq address such the commerce of any foreign country. discriminatory acts. (b) If at any time the President shall find it to be a fact (fJ The Secretary of Finance s hall make such rules and that any foreign country has not only discriminated against the regulations as are necessary for the execution of a proclamation commerce of the Philippines, as aforesaid, but has, after the that the President may issue in accordance wit� provisions of issuance of a proclamation as authorized in subsection (a) of this this section. section, maintained or increased its said discrimination against the commerce of the Philippines, the President is hereby authorized, if deemed consistent with the interests of the Philippines and of public interest, to issue a further proclamation 62 63 TITLE VIII ta xes and other charges within six (6) m onths from the date of acceptance of the goods declaration: Provided, Tbat the Bureau TAX AND DUTY DEFERMENT, PREFERENCE AND EXEMPTION may extend the time for exportat ion or payment of duties, taxes and other charges for a term not exceeding six (6) months from CHAPTER I the expiration of the original period; CONDITIONALLY TAX A.ND/OR DUTY-EXEMPT IMPORTATION (c) Cost of repairs, excluding the value of the goods used, made in foreign countries upon vessels or aircraft documented, SEC. 800. Conditionally Tax and/or Duty-Exempt registered or licensed in the Philippines, upon proof satisfactory Importation. - The following goods shall be exempt from the to the Bureau: (1) that adequate facilities for such repairs are not payment ofimport duties upon compliance with the formalities afforded in the Philippines; or (2) that such vessels or aircrafts, prescribed in the regulations which shall be promulgated by the while in the regular course of their voyage or flight, were compelled Commissioner with the approval of the Secretary of Finance: by stress of w eather or other casualty to put into a foreign port to Provided, That goods sold, bartered, hired or used for purposes make such repairs in order to secure the safety, seaworthiness, other than what they were intended for and without prior payment or airworthiness ofthe vessels or aircrafts to enable them to reach of the duty, tax or other charges which would have been due and their port of destination; payable at the time ofentry if the goods had been entered without the benefit of this section, shall be subject to forfeiture and the (cl) Goods brought into the Philippines for repair, processing importation shall constitute a fraudulent practice against customs or reconditioning to be reexported upon completion of the repair, laws: Provided, however, That a sale pursuant to a judicial order pr ocessing or recond itioning: Provided; That the Bureau shall or in liquidation of the estate of a deceased person shall not be require security equal to one hundred percent (100%) of the duties, subject to the preceding proviso, without prejudice to the payment taxes and other charges thereon, conditioned for the exportation of duties, taxes and other charges: Provided, further, That the there of or payment oft he corresponding duties, taxes an d other President may, upon the recommendation of the Secretary of charges within six (6) months from the date.ofacceptance of the Finance, suspend, disallow or completely withdraw, in whole or goods declaration; in part, any conditionally free importation under this section: (e) Medals, badges, cups, and other small goods bestowed (a) Aquatic products such as fishes, crustaceans, mollusks, as trophies or prizes, or those received or accepted as honorary marine animals, seaweeds, fish oil, roe, caught or gathered by distinction; fishing vessels of Philippine registry: Provided, That t hey are imported in such vessels or in crafts attached thereto: Provided, ' (f) Personal and household effects belonging to returning however, That they have not been landed in any foreign territory residents includiog household appliances, jewelry, precious stones, or, if so landed, that they have been landed s olely for and other goods ofluxury which were formally declared and listed transshipment without having been advanced in condition; before departure and identified under oath before the District Collector when exported from the Philippines� such returning (b) Equipment for use in the salvage of vessels or aircrafts, residents upon their departure therefrom or during their stay not available locally, upon identification and the giving of a abroad; personal and household effects including wearing apparel, security in an amomit equal to one hundred percent (I 00%) of the goods ofpersonal adornment, toilet goods, instruments related ascertained duties, taxes and other charges thereon, conditioned to one's profession and analogous personal Or household for the exportation thereof or payment of corresponding duties, effects, excluding luxury items, vehicles, watercrafts, aircrafts and animals purchased in foreign countries by residents of the 64 65 Philippines which were necessary, appropriate, and normally used In addition to the privileges granted under the immediately for their comfort and convenience during their stay abroad, preceding paragraph, returning Overseas Filipino Workers accompanying them on their return, or arriving within a (OFWs) shall have the privilege to bring in, tax and d uty-free, reasonable time which, barring unforeseen and fortrntous events, home appliances and other durables, limited to one of every kind in no case shall exceed sixty (60) days after the owner's return. once in a given calendar year accompanying them on their return, or arriving within a reasonable time which, barring unforeseen and fortuitous events, in no case shall exceed sixty (60) days after For purposes of this section, tbe phrase "returning residents" every returning OFW's return upon presentation of their original shall refer to nationals who have stayed in a foreign country for a passport at the p ort of entry: Provided, That any amount in period of at least six (6) months. Returning residents shall have excess of FCA value of one hundred fifty thousand pesos ta x and duty exemption on personal and household effects: (Pl50, 000 .00) for personal and household effects or of the number Provided, That: of duty-free appliances as provided for under this section, shall be subject to the corresponding taxes and duties: Provided, further, (1) It shall not be in com mercial quantities; That every three (3) years after the effectivity of this Act, the Secretary of Finance shall adjust the amount herein stated to its (2) It is not intended for barter, sale or for hire; and present value using the CPI as published.by the PSA; (3) Limited to the FCA or FOB value of: (g) Residents of the Philippines, OFWs or other Filipinos while residing abroad or upon their return to the Philippines (i) Three hundred fifty thousand p esos (P350,000.00) for shall be allowed to bring in or send to their families or relatives those who have stayed in a foreign country for at least ten (10) in the Philippines balikbayan boxes which shall be exempt from years and have not availed of this privilege within ten (10) years applicable duties and taxes impossd under the NIRC of 1997, as prior to returning resident's arrival; amended: Provided, That balikbayan boxes shall oontain personal and household effects only and shall neither be in commercial (ii) Two hundred fifty thousand pesos (P250,000.00) for quantities nor intended for barter. sale or for hire and that the those who have stayed in a foreign country for a period of at least FCA value of which shall not exceed one hundred fifty thousand five (5) but not more than ten (1 O) years and have not availed of pesos (Pl50,000.00): Prouided,further, That every three (3) years this privilege within five (5) years prior to returning resident's after the effectivity of this Act, the Secretary of Finance shall arrival; or adjust the amou,-,_t herein stated to its present value using the CPI as published by the PSA: Provided, finally, That residents ,if the Philippines, OFWs or othsr Filipinos can only avail ofthis (iii) One hundred fifty thousand pesos (Pl50,000.00) for privilege up to three (3) times in a calendar year. Any amount in those who have stayed in a foreign country for a period of less excess of the allowable non-dutiable value shall be subject to the than five (5) years and have not availed of this privilege within applicable duties and taxes; six (6) months prior to returning resident's arrival. (1) For purposes ofthis Act, OFWs refet't'oil.olders ofvalid Any amount in excess of the above-stated threshold shall passports duly issued by the Department ofForeignAffairs (DFA) be subject to the corresponding duties and taxes under this Act. and certified by the Department of Labor and Employment (DOLE) or the Philippine Overseas Employment Administration (POEA) Every three (3) years after the effectivity of this Act, the for overseas employment purposes. They cover all Filipinos, Secretary of Finance shall adjust the amount herein stated to its working in a foreign country under employment contracts, present value using the CPI as published by the PSA. 67 66 (i) Professional instruments and implements, tools of regardless of their professions, skills or employment status in a trade, occupation or employment, wearing appareL domestic foreign country; and (2) Calendar Year refers to the p eriod from animals, and personal and household effects belonging to persons January 1 to December 31. coming to settle in the Philippines or Filipinos or their families and descendants who are now residents or citizens of other (h) Wearing apparel, goods ofpersonal adornment, toilet countries_, such parties hereinafter referred to as overseas goods, portable tools and instruments, theatri "':1- costume� and Filipinos, in quantities and of the class suitable to the p rofession, similar effects accompanying travelers; or tourISts, or arriving rank or position of the persons importing said items, for their within a reasonable time before or after their arrival in the own use and not for barter or sale, accompanying such persons, Pbili.ppines, which are necessary and appropriate for the wear or arriving within a reasonable time: Provid.ed, That the Bureau and use of such persons according to the nature of the Journey, may, upon the production of satisfactory evidence that such their comfort and convenience: Provided, That this exemption persons are actually coming to settle in the Philippines and that shall not apply to goods intended for other persons or for barter, the goods are brought from their former place of abode, exempt sale or hire: Provided, however, That the Bureau may reqmre such goods from the payment of duties and taxes: Provided, either a written commitment or a security in an amount equal to further, That vehicles, vessels, aircrafts, machineries and other · one hundred percent (100%) of the asc ertained duties, taxes and similar goods for use in manufacture, shall not fall within this other charges thereon, conditioned for the exportation thereof or classification and shall therefore be subject to duties, taxes and payment of the corresponding duties, taxes and other charges other charges; within three (3) months from the date of acceptance of the goods declaration: Provided, further, That the Bureau may extend the G) Goods used exclusively for public entertaimnent, and time for exportation or payment of duties, taxes and other charges for display in public expositions, or for exhibition or competition for a term not exceeding three (3) months from the expiration of for prizes, and devices for projecting pictures and parts and the original period. appurtenances thereof, upon identification, ex1:unination, and appraisal and the giving of a security in an amount equal to one Personal and household effects and vehicles belonging to hundred percent (100%) of the ascertained duties, taxes and other foreign consultants and experts hired by, or rendering servi�e to, charges thereon, conditioned for exportation thereof or payment _ the government, an d thei r staff or personnel and fallllies of the corresponding duties, taxes and other charges within three accompanying them or arriving within a reasonable time before (3) months from the date of acceptance of the goods declaration: or after their arrival in the Philippines, in quantities and �f the Provided, That the Bureau may extend the time for exportation . kind necessary and suitable to the profession, rank or position of or payment of duties, taxes and other charges for a term not the person importing said items, for their own use and not �or exceeding three (3) months from the expiration of the original barter, sale or hi.re: Provided, That the Bureau may require period; and technical and scientific films when i mported by either a written commitment or a security in an amount equal to technical, cultural and scientific institutions, and not to be one hundred percent (100%) of the ascertained duties, taxes a":d exhibited for profit: Provided, further, That if any of the films is other charges thereon, upon the goods classified under this exhibited for profit, the proceeds therefrom shall be subject to subsection; conditioned for the exportation thereof or payment of confiscation, in addition to the penalty provia.,;.,under this Act; the corresponding duties, taxes and other charges withm three (3) months after the expiration of their term or contract: Provided, (k) Goods brought by foreign film producers directly and however, That the Bureau may extend the time for exportation exclusively used for making or recording motion picture films on or payment of duties, taxes and other charges for a term not location in the Philippines, upon their identification, examination _ exceeding three (3) months from the expiration of the onginal and appraisal and the giving of a security in an amount equal to period; 68 69 o ne hundred percent (100%) of the ascertained duties, taxes and containers made of paper, paperboard and textile fabrics, which other charges thereon, conditioned for exportatiori thereof or are of such character as to be readily identifiable and/or reusable payment of the corresponding duties, taxes and other charges for shipment or transportation of goods shall be delivered to the within three (3) months from the date of acceptance of the goods importer thereof upon ideritification, e,xamjnation and appraisal declaration, unless extended by the District Collector fur another and the giving of a security in an amount equal to one hun dred three (3) months; photographic and cinematographic films, percent (100%) of tbe ascertained duties, taxes and other charges underdeveloped, exposed outside the Philippines by resident thereon, within six (6) months from the date ofacceptance of the Filipino citizens or by producing companies o fPhilippine registry goods declaration; where the principal actors and artists employed for the production are Filipinos, upon affidavit by the importer and identification (o) Supplies which are necessary for the reasonable that such exposed films are the same films previously exported requirementsofthevesseloraircraftinitsvoyageorflightoutside from the Philippines. As used in thisparagraph, the terms "actors" tbe Philippines, including goods transferred from a bonded and "artists" include the persons operating the photographic warehouse in any Customs District to any vessel or aircraft camera or other photographic and sound recording apparatus by engaged in foreign trade, for use or consumption ofthe passengers which the film is made; or its crew on board such vessel or aircraft as sea or air stores; or goods purchased abroad for sale on board a vessel or aircraft as saloon stores or air store supplies: Provided, That any surplus (1) Importations for the official use offoreign embassies, or excess of such vessel or aircraft supplies arriving from foreign legations and other agencies of foreign governments: Provided, ports or airports shall be dutiable; That those foreign countries accord like privileges to corresponding agencies ofthe Philippines. Goods imported for the personal or fa mily use of members and attach8s of forei� embassies, (p) Goods and salvage from vessels r-ecovered after a period legations, consular officers and other representatives of foreign of two (2) years from the d ate of filing the marine protest or the govern ments: Provided, however, That such privilege shall be time when the vessel was wrecked or abandon�d, or parts of a accorded under special agreements between the Philippines and foreign vessel or its equipment, wrecked or aband one d in the countries which they represent: Provided, further, That the Philippine waters or elsewhere: Provided, That goods and salvage privilege may be granted only upon specific instructions of the recovered within the sai d period of two (2) years shall be dutiable; Secretary of Finance pursuant to an official request of the DFA on behalf of members or attaches of foreig n embassies, leg ations, (q) Coffins or urns containing human remains, bones o r consular officers and other representatives offoreign governments. ashes, used personal and househol d effects (not merchandise) of the deceased person, except vehicles, the FCA value of which does (m) Imported goods donated to or, for the account of the not exceed one hundred fifty thousand pesos (Pl50,000.00), upon Philippine government or any duly registered relief organization, identification as such: Provided, That every three (3) years after not operated for profit, for free distribution among the needy, the effectivity of this Act, the value herein stated shall be adjusted upon certification by the DSWD or the Department of Education to its presentvalue using the CPI as published by the PSA; (DepED), or the Department of Health (DOH), as the case may �,,,. .. I be; (r) Samples of the kind, in such quantity and of such dimension or construction as to render them unsaleable or of no (n) Containers, holders and other similar receptacles of commercial value; models not adapted for practical use; and any material including kraft paper bags for locally manufactured samples of medicines, properly marked "sample-sale punishable cement for export, includi ng corrugated boxes for bananas, by law", for the purpose ofintroducing n ew goods in the Philippine mangoes, pineapples and other fresh fruits for export, except other market and imported only once in a quantity sufficient for such 70 71 purpose by a person duly registered and identified to be Provided, further, That the certification of such record, and engaged in that trade: Provided, That importations under this pedigree of such ammaJ. duly authenticated by the proper custodian subsection shall be previously authorized by the Secretary of of such record or registry, shall be submitted to the District Finance: Provided, however, That importation of sample Collector, together with the affidavit of the owner or importer m edicines shall have bee n previ ously authorized by the that such animal is the animal described in said certificate of Secretary of Health, and that such samples are new medicines record and pedigree: Provided, finally, That the animals and not available in the Philippines: Provided, further, That samples plants are certified by the NEDA as necessary for economic not previously authorized or properly marked in accordance with development; this section shall be levied the corresponding tariff duty. (t) E c o nomic, technical, vocational, s cie ntific, Commercial samples, except those that are not readily and philosophical, historical and cultural books or publications, and easily identifiable a s in the case of precious and semi-precious religious books like Bibles, missals, prayer books, the Koran, stones, cut or uncut, andjewelry set with precious or semi-precious Ahadith and other religious books of s:imilar nature and extracts stones, the value ofany single importation ofwhich does not exceed therefrom, hymnal and hymns for religious uses: Provided, That FCA value of :fifty thousand pesos (P50,000.00) upon the giving of those which may have already been imported but are yet to be a se curity in an amount equal to the ascertained duties, tax es released by the Bureau at the effectivity of this Act may still and other charges thereon, conditioned for the exportation of said enjoy the privilege herein provided upon certification by the samples within three (3) months from the date of the acceptance DepED that such imported books and/or publications are for of the goods declaration or in.default thereof, the payment ofthe economic, technical vocational, scientific, philosophical historical corresponding duties, taxes and other charges: Provided, That or cultural purposes or that the same are educational, scientific if the FCA value of any single consigmnent of such commercial or cultural materials covered by the International Agreement on samples exceeds :fifty thousand pesos (P50,000.00), the importer Importation of Educational Scientific and Cultural Materials thereof may select any portion of the same not exceeding the (IAESCM) signed by the President of th e Philippines on FCA value of :fifty thousand pesos (P50,000.00) for entry under August 2, 1952, or other agreements binding upon the Philippines. the provision of this subsection, and the excess of the consignment Educational, scientific and cultural materials covered by may be entered in bond, or for consumption, as the importer may international agreements or commitments binding upon the elect: Provided, further, That every three (3) years after the Philippine govermnent so certified by the DepED. effectivity of this Act, the Secretary of Finance shall adjust the amount herein stated to its present value using the CPI as (u) Philippine goods previously exported from the published by the PSA. Philippines and returned without having been advanced in value . or improved in condition by any process ofmanufacturing or other (s) Animals, except race horses, and plants for scientific, means, and upon which no drawback or bounty has been allowed, experimental propagation or breeding, a nd for other botanical, including instruments and implements, tools of trade, machinery zoological and national defense purposes: Provided, That no live and equipment, used abroad by Filipino citizens in the pursuit of trees, shoots, plants, moss and bulbs, tubers and seeds for their business, occupation or profession; a:Qrd foreign goods propagation purposes may be imported under this section, except previously imported when returned after hav'rngbeen exported by order of the government or other duly authorized institutions: and loaned for use temporarily abroad solely for exhibition, testing Provided, however, That the free entry of animals for breeding and experimentation, for scientific or educational purposes; and purposes shall be restricted to animals of recognized breed, duly foreign containers previously imported which have been used in registered in the record or registry established for that breed, packing exported Philippine goods and returned empty ifimported and certified as such by the Bureau of Animal Industry (BAl): by or for the account of the person or institution who exported 72 73 them from the Philippines and not for sale, barter or hire subject airworthiness ofthe vessel or aircraft, to enable it to continue its to identification: Provided, That Philippine goods falling under voyage or flight; this subsection upon which drawback or bounty have been allowed shall, upon reimportation thereof; be subject to a duty under this subsection equal to the amount of such drawback or bounty; (y) Goods exported from the Philippines for repair, processing or reconditioning without having been substantially advanced in value, and subsequently reimported in its original (v) Aircraft, equipment and machinery, s pare parts, form and in the same state: Provided, That in case the reimported commissary and catering supplies, aviation gas, fuel and oil, goods advanced in value, whether or not in their original state, whether crude or refined except when directly or indirectly used the value added shall be subject to the applicable duty rate of the for domestic operations, and such other goods or supplies imported tariff heading of the reimported goods; and by and for the use of scheduled airline s operating under congressional franchise: Provided, That such goods or supplies are not locally available in reasonable quantity, quality and price (z) Trailer chassis when imported by shipping companies and are necessary or incidental to the proper operation of the for their exclusive use in handlin g contain erized cargo, upon scheduled airline importing the same; posting a security in an amount equal to one hundred percent (100%) of the ascertained duties, taxes and other charges due thereon, to cover a period of one (1) year from the date of acceptance (w) Machineries, equipment, tools for production, plans to of the entry, which period, for meritorious reasons, may be convert mineral ores into saleable form, spare parts, supplies, extended by the Commissioner from year to year, subject to the materials, accessories, explosives, chemicals, and transportation following conditions: and communications facilities imported by and for the use ofnew mines and old mines which resume operations, when certified to as such by the Secretary of the Department of Environment and (1) That they shall be properly identified and registered Natural Resources (DENR), upon the recommendation of the with the Land Transportation Office (LTO); • Director of Mines and Geosciences Bureau, for a period ending five (5) years from the first date of actual commercial production (2) That they shall be subject to customs supervision fee of saleable mineral products: Provided, That such goods are not to be fixed by the District Collector and subject to the approval of locally available in reasonable quantity, quality and price and the Commissioner; are n8cessary or incidental in the proper operation of the mine; and aircrafts imported by agro-industrial companies to be used (3) That they shall be deposited in the customs territory by them in their agriculture and industrial operations or activities, when n ot in use; and spare parts and accessories thereof, when certified to as such by the Secretary of the Department of Agriculture (DA) or the (4) That upon the expiration of the period prescribed above, Secretary of the Department of Tradeand Industry (DTI), as the duties and taxes shall be paid unless otherwise reexported. case· may be; (aa) Any officer or employee of the DA including any (x) Spare parts of vessels or aircraft of foreign registry attache, civil or military or member of the staff assigned to a engaged in foreign trade when brought into the Philippines Philippine diplomatic mission abroad by the Department or any exclusively as replacements or for the emergency repair thereof, similar officer or employee of other departments assigned to any upon proof satisfactory to the District Collector that such spare Philippine consular office abroad, or any A.FP military personnel parts shall be utilized to secure the safety, seaworthiness or accorded assimilated diplomatic rank or on duty abroa d who is returning from a regular assignment abroad, for reassignment 74 75 to the home office, or who dies, resigns, or is retired from the protection of the revenue, and of the goods stored therein. In the service, after the approval of this Act, shall be exempt from the exercise ofthe District Coll ect or's supervisory functions herein payment of all duties and taxes on personal and household effects, and in the Bure;rn's implementation of this chapter, existing including one (1) motor car which must have been ordered or contracts of private operators with appropriate government agency purchased prior to the receipt by the mission or consulate of the or regulator, such as, but not limited to, the Philippine Ports order of recall, and which must be registered in the name ofthe Authority (PPA), Subic Bay Metropolitan Authority (SBMA) and officer or employee: Provided, That this exemption shall apply Phividec Industrial Authority (PIA) and their respective only to the value of the motor car and to the aggregate assessed authorities and powers already granted by law pertinent to such value ofthe personal and household effects, the latter not to exceed contracts, shall not be impaired or adversely affected. thirty percent (30%) of the total amount received by the officer or employee in salary and allowances during the latest assignment abroad, but not to exceed four (4) years: Provided, however, Goods manufactured in whole or in part of imported That t his exemption shall not be availed of more than once every materials, and intended for exportation, may be made and four (4) years: Provided, further, That the officer or employee manufactured in a bonded manufacturing warehouse subject to concerned must have served abroad for not less than two (2) years. the following conditions: The provisions of general and special laws, to the contrary (1) The manufacturer shall file sufficient security for the notwithstanding, including those granting franchises, there shall faithful observance of all laws, rules and regulations applicable be no exemption whatsoever from the payment of duties except as thereto; provided for in this Act; those granted to government agencies, instrumentalities or government-owned or-controlled corporations (2) The application for the establishment of bonded (GOCCs) with existing contracts, commitments, agreements, or warehouses must be made in writing and filed with the customs obligations with foreign countries requiring such exemption; those officer, describing the premises, the location, and capacity ofthe granted to international institutions, associations or organizations same, and the purpose for which the building is to be used, entitled to exemption pursuant to agreements or special laws; pursuant to Section 804 of this Act; and those that may be granted by the President upon prior recommendation of the NEDA in the interest ofnational economic ·(3) From the receipt of the application, .the customs officer development. shall examine the premises, evaluate its location, construction, and means provided for the safekeeping of the goods; CHAPTER2 (4) The customs officer may authorize the establishment of CUSTOMS WAREHOUSES the customs bonded warehouse, and accept a bond for tts operation and maintenance if the applicant was compliant with the prescribed requirements; and SEC. 801. Establishment and Supervision of Customs Bonded Warehouses.. - When the business of the port requires 1 such facilities, the District Collector, subject to the approval of (5) The operator of the bonded warehlfflllt) shall pay an the Commissioner, shall designate and establish warehouses for annual supervision fee in an amount to be fixed by the use as public and private bonded warehouses, yards, or for other Commissioner. special purposes. All such warehouses and premises shall be subject to the supervision of the District Collector who shall SEC. 802. Types of Customs Bonded Warehouses (CBWs). impose such conditions as may be deemed necessary for the - Customs bonded warehouses may be classified as either manufacturing or nonmanufacturing. 76 77 Manufacturing customs bonded warehouse may be of the SEC. 805. Responsibility of Operators. - The operator of followmg types: (a) miscellaneous customs bonded warehouse; (b) a CBW or CFW shall comply with the customs requirements on customs common bonded warehouse; or (c) industry-specific establishment, security, suitability and man agement, including bonded warehouse. stock-keeping and accounting of the goods, of the CBW or CFW. Nonmanufacturing customs bonded warehouse include: (a) Upon lawful demand, the operator of a CBW or GFW shall public bonded warehouse; (b) private bonded warehouse; or (c) allow authorized representatives of the Bureau access to the other customs facilities. premises at a reasonable time, and to all documents, books and records of accounts pertaining to the operations of the CBW or SEC. 803. Types of Customs Facilities and Warehouses CFW. (CFWs). - Customs facilities and warehouses shall include: In case ofloss of the goods stored in a CBW or CFW due to (a) Container yard; operator's gross negli gence or willful misc onduct, the operator shall be liable for the payment of duties and taxes due thereof. (b) Container freight station; The government assumes no legal responsibility over the safekeeping of goods stored in any customs warehouse, yard or premises. (c) Seaport warehouses; and SEC. 806. Customs Control Over CBWsand CFWs. -The (d) Airport warehouses. Bureau sha._R for customs purposes, exercise control over, direct and manage CBWs and CFWs pursuant to Section 303 of this Subject to consultation with the NEDA and the DTI, and Act and likewise over the goods thereat pursuant to Section 301 based on prevailing economic circumstances, the Secretary of of this Act: Provided, That the Bureau shall not be liable for any Finance may, upon the recommendation of the Commissioner, loss or damage of the goods stored for safekeeping in any CBW, create or dissolve certain types of warehouses. CFW, yard or premises. SEC. 804. Application for Operation of a Customs SEC. 807. Discontinuance of CBW and CFW. - The use Warehouse. - Application for the establishment of CBW and of any CBW and CFW may be disco ntinued by the District CFW shall be filed with the District Collector where the CBW or Collector when conditions so warrant, or upon receipt of a written CFW is located, describing the premises, location, capacity and request from the operator thereof: Provided, That all the purpose thereof. requirements of the laws and regulations have been complied with by said operato r. Where dutiable goods are stored in Upon receipt of such application, the District Collector shall such premises, the same must be removed at the risk and examine the premises of such proposed warehouse, particularly expense of the operator: Provided, however, That the premises its location, construction and storage facilities. The District shall not be relinquished, and its use shall W,J't;,l>e cliscontinued Collector, with the approval of the Commissioner, may authorize until after a careful examination of the account of the warehouse the establishment ofcustoms warehouses, and accept the required shall have been made. Discontinuance of the use of any security for its operation and maintenance. The operator of such warehouse shall be effective upon approval thereof b y the CBW and CFW shall pay an annualsupervisionfee, as determined District Collector who shall, within ten (10) days, inform the by the Commissioner. Commissioner of such action in writin g. 78 79 Notice of discontinuance made by the operator shall not The Commissioner shall, i n consultation with the result in the discharge from any duties, taxes, fees and other Secretary of Trade and Industry, establish a reasonable sto rage charges imposed on dutiable goods in said warehouse. period limit beyond one (1) year for bonded goods for manufacturing and intended for export, the processing into fimshed products of SEC. 808. Warehousing Security on Goods Stored in which requires a longer period based on industry standard and CBWs. - For goods declared in the entry for warehousing in CBWs, practice, subject to the approval of the Secretary of Finance . the District Collector shall require the importer to post a sufficient security equivalent to the computed duties, taxes and other SEC. 812. Exemption from Duty of Goods in CBWs. -Goods charges, conditioned upon the withdrawal of the goods within th e duly entered for warehousing in CBWs shall be exempt from duty period prescribed by Section 811 of this Act or the payment of and tax within the allowed period for storage unless withdrawn duties, tax es and other charg es and complianc e with all for consumption, exportation or transit to a free zone or another importation requirements. CBW, in which case, such withdrawal will be subject to the applicable rules and regulations on the liquidation of the SEC. 809. Withdrawal of Goods from CBWs. - Imported warehousing entry. goods shall be withdrawn from the CBW s when the necessary ·withdrawal permit has been filed, together with any related SEC. 813. Records to be Kept by CBW Operators. - An document required by any provision of this Act and other account shall be kept by the Bureau of all goods delivered to a regulations. CBW, and a report shall be made by the CBW operator containing a detailed statement ofall imported goods entered and withdrawn Goods entered under sufficient security as provided in from the CBW. The Bureau shall spedfy the format of the report Section 1507 of this Act may be withdrawn at any time for and may require electronic submission. consumption, transit, or exportation. The withdrawal must be made by the CBW operator or its duly authorized representative. All documents� books, and records of accounts concerning the operation of any CBW shall, upon demand, be made available SEC. 810. Release of Goods from CFWs.-Imported goods to the District Collector or the representative of the District shall be released when the goods declaration is electronically Collector for examination or audit. For record purposes, all lodged, together with any related document required by any documents shall be kept for three (3) years. provision of this Act and other regulations. All goods entered into the CFWs shall be subject to the filing of a goods declaration CHAPTERS within the period specified under Section 407 of this Act. FREE ZONES SEC. 811. Period of Storage in CBWs. - Goods entered for warehousing may remain in a CBW for a maximum period of SEC. 814. When Goods are Admitted and Withdrawn. one (1) year from the time of its arrival thereat. For perishable Imported goods shall be admitted into a free ZOljle when the goods goods, the storage period shall be three (3) months from the date declaration, together with required documetttsi as required by ofarrival, extendible for valid reasons, and upon written request, existing laws and regulations, are electronically lodged with the to another three (3) months. Goods not withdrawn after tbe Bureau and other relevant government authorities at the time of expiration ofthe prescribed period shall be deemed as abandoned, admission. as provided under Section 1129 of this Act. 80 81 Imported goods shall be withdrawn from the free zone for (b) Goods necessary for the operation and maintenance of entry to the customs territory when the goods declaration is vessels, aircrafts, or trains including fuel and lubricants but electronically lodged, together with required documents at the excluding spare parts and equipment which are either on board time of the withdrawal from the free zone. upon arrival or are taken on board during the stay in the customs t territory of vessels, aircrafts, or trains used, or intended to be SEC. 815. Exemption from Duty and Tax of Goods in Free used, in international traffic for the transport of persons for Zones. - Unless otherwise provided by law and in accordance remuneration or for the industrial or commercial transport of with the respective laws, rules and regulations of the free zo ne goods, whether or not for remuneration. authorities, goods admitted into a free zone shall not be subject to duty and tax. SEC. 819. Stores to be Taken Away. - For purposes of this chapter, "stores to be taken away" means goods for sale to SEC. 816. Movement of Goods into and from Free Zones. the passengers and the crew of vessels, aircrafts, or trains with a - The entry of goods into a free zone, whether directly or through view to being landed, which are either on board upon arrival the customs territory, shall be covered by the necessary goods or are taken on board during the stay in the customs territory declaration for admission or transit. Withdrawal from the free of vessels, aircrafts, or trains used, or int e nded to be used, zone into the customs territory shall be covered by the necessary in international traffic for the transport of persons for goods declaration for consumption or warehousing. remuneration or for the industrial or commercial transport of goods, whether or not for remuneration. Transfer of goods from one free zone into another free zone shall likewis9 be covered by the necessa..ry transit permit. SEC. 820. Exemption from Duties and Taxes of Stores. - Customs treatment of stores should apply uniformly, regardless of the country of registration or ownership of vessels, aircraft, or The implementing rules and regulations on the transit of trains. Stores which are carried in a vessel, aircraft, or train goods admitted into, exported from, withdrawn into the customs arriving L'l the customs territory shall be exempted from import territory, and moved between free zones shall be formulated and duties and taxes provided that. they remain on board. Stores issued jointly by the Bureau and the free zone authorities. for consumption by the passengers and the crew imported as provisions on international express vessels, aircrafts, or trains SEC. 817. Coordination With Free Zone Authority. - To shall be exempted from import duties and taxes: Provided, That: ensure compliance with customs laws and regulations, the Bureau shall coordinate with the governing authority of the free zone. (a) Such goods are purchased only in the countries crossed by the international vessels and aircrafts in que'stion; and CHAPTER4 ·- (b) Any duties and taxes chargeable on such goods in the STORES country where they were purchased are paid. j SEC. 818. Stores for Consumption. - Stores for Store s necessary for the operation and maintenance consumption shall include: of vesseJs7 aircrafts, or trains which are on board these means of transport shall be exempted from import duties and taxes: (a) Goods intended for use by the passengers and the crew Provided, further, That they remain on board while these means on board vessels, aircrafts, or trains, whether or not sold; and of transport are in the customs territory. The Bureau shall allow the issue of stores for use on board during the stay of a vessel 82 83 in the customs territory in such quantities as the customs their stores for the journey to their final destination in the customs authority deems reasonable with due regard to the number of the territory, subject to the same oonditions provided in this Chapter. passengers and the crew and to the length ofthe stay ofthe vessel in the customs territory. The Bureau should allow the issue of SEC. 821. Goods Declaration for Stores. - When a stores for use on board by the crew while the vessel is undergoing declaration concerning stores on board vessels arriving in the repairs in a dock or shipyard: Provided, finally, That the duration customs territory is required by the Bureau, the information of stay in a dock or shipyard is considered to be reasonable. required shall be kept to the minimum and as may be necessary for customs control When an aircraft is to land at one or more airports in the customs territory, the Bureau should allow the issuance of stores The quantities of stores which are supplied to vessels during for consumption on board both during the stay of the aircraft at its stay in the customs t erritory should be recorded on the required such intermediate airports and during its flight between such goods declaration concerning stores. airports. The Bureau shall not require the presentation of a separate The Bureau shall require a carrier to take appropriate declaration of remaining stores on board a vessel, an a ircraft measures to prevent any unauthorized use of the stores including or a train. No separate decl aration ooncerning stores should be sealing of the stores, when necessary. It shall require the removal required upon departure of vessels from the customs territory. of stores from the vesseL aircraft, or trains for storage elsewhere When a declaration is required concerning stores taken on board during its stay in the customs territory only when the Bureau the vessels or aircrafts upon departure from the customs territory, considers it necessary. the information required shall be kept to the minimum as may be necessary for customs control. Vessels, aircrafts, or trains which depart for an ultimate foreign destination shall be entitled to take on board, exempted When a vessel, aircraft, or train arrives in the customs from duties and taxes, the following: territory, stores on board shall: (1) Stores in such quantities as the Bureau deems (a) Be cleared for consumption or placed under another reasonable with due regard to the number of the passengers and customs procedure, subject to c ompliance with the conditions and the crew, to the length of the voyage or flight, and to any quantity formalities applicable in each case; or ofsuch stores already on board; and (b) Subject to prior authorization by-the Bureau, be (2) Stores necessary for the operation and maintenance of transferred respectively to another vesseL aircraft, or train a vess61, aircraft, or train, in such quantities as are deemed assigned to an international route. reasonable for operation and maintenance during the voyage or flight, after due regard of the quantity of such stores already on board. RBplenishment of stores that are exempted from duties and taxes shall be allowed for vessels, aircrafts, or trains which have arrived in the customs territory, and which need to replenish 84 85 TITLE IX quantity, value, a nd amount of duties paid thereon, should be established satisfactorily; DUTY DRAWBACK AND REFUND (2) The dutie s refunded or credited shall not exceed one CHAPTERl hundred percent (100%) of duties paid on the imported materials used; DUTY DRAWBACK (3) There is no determination by the NEDA of the SEC. 900. Basis of Duty Drawback. - (A) On Fuel Used requirement for certification on nonavailability oflocally-produced for Propulsion of Ves sels. - On all fuel imported into the or manufactured compe titive substitutes for the imported Philippines used for propulsion of vessels engaged in trade with materials used at the ti me of importation; foreign countries, or in the coastwise trade, a refund or tax credit shall be allowed not exceeding ninety-nine percent (99%) of the (4) The exportation shall be made within one (1) year after duty imposed by law upon such fuel, which shall be paid or credited the importation ofmaterials used a n d claim of refund or tax credit under such rules and regulations as may be prescribed by the shall be filed within six (6) months from the date of exportation; Commissioner with the approval of the Secretary of Finance. and (B) On Petroleum Oils and Oils Obtained from Bituminous (5) When two or more products result from the use of the Minerals, Crude, Eventually Used for Generation of Electric same impor ted materials, an apportiomnent shall be made on Power and for the Manufacture of City Gas. - On petroleum oils its equitable basis. and oils obtained from bituminous materials, crude oil imported by nonelectric utilities, sold directly or indirectly, in the same SEC. 901. Payment of Drawbacks. - Eligible claims for form or after processing, to electric utilities for the generation of refund or tax credit shall be paid or granted by the Bureau to electric power and for the manufacture of city gas, a refund or claimants within sixty (60) days after receipt of properly tax credit shall be allowed not exceeding fifty percent (50%) of the accomplished claims: Provided, That a registered enterprise duty imposed by law upon such oils, whichshallbepaidorcredited under Republic Act No. 5186, otherwise known as the "Investment under such rules and regulations as may be prescribed by the Incentives Act", or Republic Act No. 6135, otherwise known as Commissioner with the approval of the Secretary of Finance. the "Export Incentives Act of 1970", which has previously enjoyed tax credits basedoncustornsdutiespaidonimportedrawmaterials (C) On Goods Made from Imported Materials. - Upon and supplies, shall not be entitled to a drawback ,µider this section exportation ofgoods manufactured or produced in the Philippines, with respect to the same importation subsequently processed and including the packing, covering, putting up, marking or labeling reexportecl thereof either in whole or in part of the imported materials for which duties have been paid, a refund or tax credit shall be allowed The Secretary of Finance may, upon the recommendation for the duties paid on the imported materials so used including ofthe Commissioner, promulgate rules and �ations allowing the packing, covering, putting up, marking or labeling thereof, partial payme nts of d rawbacks pursuant to this section. subject to the following conditions: SEC. 902. Prescription of Drawback Claim. - A claim (1) The actual use of the imported materials in the and application for a drawback shall prescribe if it is not filed production or manufacture of the goods exported with their within one (1) year from the date of importation in case of 87 86 Section 900, paragraphs (A) and (B) and within one (1) year from (b) When goo� are destroyed or irrecoverably lost by _ the date of exportation in the case of Section 900, paragraph (C), accident or force ma1eure, the remaining waste or scrap after subject to such rules and regulations as may be issued by the destruction, if taken into consumption, shall be subject to the Commissioner, upon approval of the Secretary of Finance. duties and taxes that.would be applicable on such waste or scrap if imported in same state; and CHAPTER2 (c) When there are shortages due to the nature oftbe goods_ REFUND AND ABATEMENT SEC. 905. Abatement for Damage Incurred During Voyage. - Except as otherwise provided, no abatement of duties shall be SEC. 903. Refund ofDuties and Taxes, - Refund shall be inade on account of damage incurred or deterioration suffered granted where it is established that duties and taxes have been during the voyage ofimportation; and duties will be assessed on overcharged as a result of an error in the assessment or goods the actual quantity imported as determined by the customs officers declaration. concerned. Where permission is given by the Bureau for goods originally SEC. 906. Abatement or Refund of Duty on Missing declared for a customs procedure with payment of duties and Package. - When any package appearing on the manifest or bill taxes to be placed under another customs procedure, a refund of lading or airway bill is missing, an abatement or refund of the shall be made of any duties and taxes charged in excess of the duty shall be made if it is certified by the importer or consignee, amount due under the new procedure, subject to such regulation under pam of penalty for falsification or perjury, and upon issued for the purpose. production of proof satisfactory to the Collector concerned, that the package in question has not been unlawfully imported into A refund shall not be granted if the amount of duties and the Philippines. taxes involved is less than five thousand pesos (P5,000.00): Provided, That the Secretary of Finance, in consultation with SEC. 907. Abatement or Refund for Deficiency in Contents the Commissioner, may adjust the minimum amount specified in this Act, taking into account the CPI as published ofPackages. - If; upon opening of any package, a deficiency in fo; the quantity of the goods is found to exist based upon the invoice bythePSA. such deficiency shall be certified, under pain of penalty falsification or perjury, by the customs officers concerned and SEC. 904. Aba_tement ofDuties and Taxes. - When goods upon the production of proof s howing that the sh ortage have not yet been released for consumption or have been placed occurred before the arrival of the goods in the Philippines. under another customs procedure, provided that no other offense Upon sufficient proof thereof, the proper abatement or refund or violation has been committed, the declarant shall neither be of the duty shall be made. required to pay the duties and taxes nor be entitled to refund thereof in any of the following cases: SEC. 908. Abatement or Refund ofDl!llies on Goods Lost or Destroyed After Arrival. -The Bureau may abate or refund (a) When, at the request of the declarant, the goods are' the amount of duties accruing or paid on any goods that have abandoned, or as determined by the Bureau, the goods are been lost due to injur y, theft, destruction through fire or through destroyed or rendered commercially valueless while under customs any other causes, upon satisfactory proof of the same, under any control Any cost herein incurred shall be borne by the declarant; of the following circumstances: 88 89 (a) While within the territory of any port of entry, prior to SEC. 910. Abatement ofDuty on Dead or Injured Animals. unloading under the Bureau's supervision; - Where it is certified, under pain of penalty for falsification or perjury, and upon production of proof satisfactory to the Bureau (b) While remaining in customs custody after unloading; that an animal subject of importation dies or suffers inju,y before arrival, or while in customs custody, the duty due thereon shall be abatedprovmedthat its carcass onboardorin customs custody (c) While in transit from the port of entry to any port in is removed in the manner required by the Bureau and at the the Philippines; and expense ofthe importer. (d) While released under sufficient security for export SEC. 911. Investigation Required in Case ofAbatements except in case ofloss by theft. and Refunqs. - The Customs Officer concerned shalL in all cases of abatement or refund of duties, submit an examination SEC. 909. Abatement and Refund of Defective Goods. report as to any fact discoveredwhich indicates any discrepancy - Under conditions to be set by the Commissioner, and with and cause the corresponding adjustment on the goods declaration. the app roval of the Secretary of Finance, an abatement and refund shall be granted on imported or exported goods which are SEC. 912. Refund Arising from Correction of Errors. found defective or otherwise not in accordance with the agreed - Mamfest clerical errors made on an invoice or entzy, errors in specifications at the time ofimportation or exportation and are return of weight, measure and gauge, when duly certified under returned either to the supplier or to another person designated by penalties of falsification or perju,y by the surveyor or examining the supplier, subject to the following conditions: officer when there are such officers at the port, and errors in the distribution of charges on invoices not involving any question (a) The goods have not been worked, repaired, or used in oflaw and certified under penalties offalsifi.cation or perjury the country ofimportation, and are reexported within a reasonable by the examining customs officer, may be corrected in the time;and computation of duties, if such errors are discoveredbefore the payments of duties, or if discovered within one (1) year after (b) The goods have not been worked, repaired, or used in release from customs custody of imported goods upon written the country to which they were exported, and are reimported request and notice of error from the importer, or upon statement within a reasonable time. of error certified by the District Collector. Use of the goods shall, however, not hinder the refund if For the purpose of c orrecting errors specified.in the next such use was indispensable to discover the defects or other preceding paragraph, the Bureau is authorized to make refunds circumstances which caused the reexportation or reimp ortation within the statutory time limit. of the goods. SEC. 913. C/,aims for Refund. - All claims andapplication As an alternative to reexportation or reimportation, the for refund of duties and tax es shall be made.�ting and filed goods may be expressly abandoned or destroyed or rJOndered with the Bureau within twelve (12) months from the date of commercially valueless under customs control as the Bureau may payment of duties and taxes. decide. In such case, the importer shall not be entitled to an abatement or a refund if it does not defray the costs of such IJ; as a result ofthe refund of duties, a corresponding refund abandonment, destruction, or rendition. of internal revenue taxes_ on the same importation becomes due, the Bureau shall cause the refund of internal revenue taxes in 90 91 favor of the importer after issuance of a certification from the (a) Relative magnitude of customs revenue to be generated Commissioner of Internal Revenue, when applicable. from the firm; The importer may file an appeal of a denial of a claim for (b) The rates of duties of the firm's imports; refund or abatement, whether it is a full or partial denial, with the Commissioner within thirty (30) days from the date of the (c) The compliance track records of the firm; and receipt of the denial. The Commissioner shall render a decision within thirty (30) days from the receipt of all the necessary (d) An assessment of the risk to revenue ofthe finn's import documents supporting the application. Within thirty (30) days activities. from receipt of the decision of the Commissioner, the case may also be appealed to the CTA. SEC. ·1002. Access to Records. - Any authorized officer of the Bureau shall be given by the importer and customs broker Notwithstanding t he pro v1s10ns in the preceding full and free access to the premises where the records are kept, paragraphs, the filing of claims for refund of national internal to conduct audit ex:amination, inspection, verification, and revenue taxes shall be governed by the provisions provided under investigation of those records relevant to such investigation or the NIRC of 1997, as amended.. inquiry. TITLEX A copy of any document certified by or on behalf of the importer is admissible in evidence in all courts as if it were the POST CLEAR.A.NCE AUDIT original copy. SEC. 1000. Audit and Examination ofRecords. - Within A customs officer is not entitled to enter the premises under three (3) years from the date offin_al payment of duties and taxes this section unless, before so doing, the officer produces to the or customs clearance, as the case may be, the Bureau may conduct person occupying or apparently in cliarge of the premises written an audit examination, inspection, verificatio� and investigation evidence ofthe fact ofbeing duly authorized. The person occupying ofrecords pertaining to any goods declaration, which shall include or apparently in charge ofthe premises entered by an officer shall statements, declarations, documents, and electronically generated provide the officer with all reasonable facilities and assistance for or machine readable data, for the purpose of ascertaining the the effective exercise of the officer's authority under this section. correctness of the goods declaration and determining the liability of the importer for duties, taxes and other ch arges, including any Unless otherwise provided herein or in other provisions of fine or penalty, to ensure compliance with this Act. law, the Bureau may, in case of disobedience, invoke the aid of the proper regional trial court within whose jurisdiction the matter SEC. 1001. Scope of the Audit. - The audit of importers falls. The court may punish contumacy or refusal as contempt. shall be conducted when firms are selected by a computer-aided In addition, the fact that the importer orc�s broker denies. risk management system, the parameters of which are to be based the authorized customs officer full and free access to importation on objective and quantifiable data, subject to the approval records during the conduct of a post clearance audit shall create of the Secretary of Finance upon recommendation of the a presumption ofinaccuracy in the transaction value declared for Commiss ioner. The criter ia for selecting firms to be audited their imported goods and constitute grounds for the Bureau to shall include: conduct a reassessment of such goods. 92 93 In addition, the imposition of ·the appropriate criminal (1) The terms and conditions of the importation are sanctions provided under this Act and other administrative controlled by the person placing the order; or sanctions may be concurrently invoked against contumacious importers, including the suspension of the delivery or release of (2) The circumstances and nature of the relationship their imported goods. between the person placing the order and the importer or supplier are such that the former may be considered as the beneficial or SEC. 1003. Requirement to Keep Records. - (a) All true o wner of the imported goods; or importers are required to keep at their principal place ofbusiness, in the manner prescribed by regulations to be issued by the (3) The person placing the order had prior knowledge that Commissioner and for a period of three (3) years from the date of they will be used in the manufacture or production of the imported final payment of duties and taxes or customs clearance, as the goods. case may be, all records pertaining to the ordinary course of business and to any activity or information containedin the records (b) All parties engaged in customs clearance and processing required by this title in connection with any such activity. are required to keep at their principal place of business, in the manner prescribed by re gulations to be issued by the For purposes of the post clearance audit and Section 1005 Commissioner and for a period of three (3) years from the date of of this Act, the term importer shall include the following: filing afthe goods declaration, copies ofthe abovement'.onedrecords cover ing the transactions handled. (1) Importer-of-record or consi.gnee, owner or declarant, or a party who: (c) Locators or persons authorized to bring imporfa,d goods into free zones, such as the special economic zones and free ports, (i) Imports goods into the Philippines or withdraws such are required to keep subject-records of all its activities, including goods into the Philippine customs territory for consumption in whole or in part, records on imported goods withdrawn from or warehousing; files a claim for refund or drawback; or said zones into the customs territory for a period ofthree (3) years transports or stores such goods carried or held under security; or from the date of filing of the goods declaration. (ii) Knowingly causes the importation or transportation or Failure to keep the records required by this Act shall storage of imported goods referred to above, or the filing of refund constitute a waiver of this right to contest the results of the audit or drawback claim. based on records kept by the Bureau. (2) An agent of any party described in paragraph (l); or SEC. 1004. Power of the. Commissioner to Obtain Information and Issue Summons. - For the effective implementation of the post clearance audit functions of the (3) A person whose activities require the filing of a goods Bureau, the Commissioner is hereby authorized to: declaration. ,.,1.,, (a) Obtain on a regular basis from any person, in addition A .person ordering imported goods from a local .importer or to the person who is the subject of a post clearance audit or supplier in a domestic transaction shall be exempted from the requirements imp osed by this section unless: investigation, or from any office or officer of the national and local goverillll.ents, government agencies and instrumentalities including the BSP and GOCCs, any information such as cos� 95 94 (a) Negligence. - When a deficiency results from an and volume of production, receipts or sales and gross income of taxpayers, and the names, addresses, and financial state":ents offender's failure, through an act or acts of omission or of corporations, regional operating headquarters of multination:'1 commission, to exercise reasonable care and competence in companies, joint accounts, associations, joint ventures or cons ortia ensuring that a statement made is correct, the offender shall be _ charged for committing negligence, and, iffonnd gnilty shall be and registered partnerships, and their members, whose busmess operations or activities are directly or indirectly mvolved m the penalized with a fine equivalent to one hundred twenty-five importation or exportation of imported go�ds or products percent (125%) of the revenue loss: Provided, That subject to manufactured from imported component materials; Section 108 of this Act, no substantial penalty shall be imposed on an inadvertent error runountingto simple negligence, as defined by rules promulgated by the Secretary of Finance, upon (b) Summon the person liable for duties and taxes or recommendation ofthe Commissioner; required to file goods declaration, or any officer or employee of such person, or any person having possession, custody� or c�� of the books of accounts and other accounting records contrumng (b) Fraud. - When the material false statement or act in entries relating to the business ofthe person liable for duties and connection with the transaction vrns committed or omitted taxes, or any other person, to appear before the Commissioner or knowinglY, voluntarily and intentionally, as established by clear the duly authorized representative at a time and place specified and convincing evidence, the offender who is charged for in the summons and to produce such books, papers, records, or committing fraud and is fonnd guilty thereof, shall be penalized other data, and to give testimony; with a fine equivalent to six (6) times of the revenue loss and/or imprisonment of not less than two (2) years, but not more than eight (8) years. (c) Take such testimony of the person concerned, under oath, as may be relevant or material to such inquiry; or The decision of the Commissioner, upon proper hearing, to impose penalties as prescribed in this section may be appealed in (d) Obtain information from banks or other financial accordance with Section 1104 of this Act. institutions on commercial documents and records pertaimng specifically t-o payments relevant to import transaction. SEC. 1006. Records to be Kept by the Bureau. - The Bureau shall keep a database of importer and broker profiles The provisions of the foregoing paragraphs notwithstanding, which shall include a record of audit results and the following nothing in thi s section shall be construed as granting the information and papers: Commissioner the authority to inquire into bank deposits of persons or entities mentioned in this Title. (a) Articles of Incorporation; SEC. 1005. Failure to Pay Correct Duties and Taxes on Imported Goods. -Any person who, after being subjected to post (b) The company structnre, which shall include, but not clearance audit and examination as provided m Section 1000 of limited to, incorporators and board of directors, key officers, and this Act, is found to have incurred deficiencies in duties and taxes organizational structure; �.,,, paid for imported goods, shall be penalized according to two (2) ·. degrees of culpability subject to any nutigating, aggravating, or (c) Keyimportatio ns; extraordinary factors that are clearly established by available evidence as described hereunder: (d) Privileges enjoyed; 97 96 When the valuation method of goods not subject of an (e) Penalties; and application for advance valuation ruling or the declared customs value is in dispute, the matter shall be resolved in accordance (f) Risk categories. with Section 1106 of this Act on "protest". The Bureau shall furnish the BIR and the DOF a copy of SEC.1102. Rulingon the Rules of Origin. - An importer the final audit results within thirty (30) days from the issuance or exporter may file a written application for a ruling on whether thereof the goods qualify as originating under the rules of origin of the applicable preferential trade agreement. The application fur an TITLEXI advance ruling on origin shall be filed with the Commissioner who shall _act on the application within thirty (30) days from recei_Pt of the application and supporting documents as may be ADMINISTRATIVE AND JUDICIAL PROCEDURES requrred by rules and regulations. CHAPTER 1 When the declared origin of the goods, not subject of a request for advance ruling on origin, is in dispute, the matter .ADVANCE RULING AND DISPUTE SETTLEMENT shall be resolved in accordance with Section 1106 ofthis Act on "protest". SEC. ll00. Classification Ruling. - An importer or exporter may file a written application for an advance ruling SEC. 1�_03. Conditions for Application and Effect of on the tarili classification of goods with the Commission. The Advance Ruling. - An application for an advance ruling shall Commission shall render a ruling within thirty (30) days from cov:er only one (1) product or item. The applica�on for advance receipt of a properly documented application. ruling shall be filed at least ninety (90) days before the importation or exportation of the product or item, as the case may be. When a declared tariff classification of goods, not subject of a pending application for advance ruling, is in dispute, the SEC. 1104. Administrative and Judicial Appeals. - An importer, exporter, or the Bureau shall submit the matter to the aggrieved p arty may, within thirty (30) days from receipt of an Commission for a ruling, without pre judice to the application of adverse ruling or decision, appeal the same to the CTA without Section 1106 ofthis Act on "protest": Provided, That such rulings prejudice to the authority of the Secretary of Finance to review of the Commission on commodity classification shall be bi.tiding decisions adverse to the govermnent in accordance with Sections upon the Bureau, unless the Secretary of Finance shall rule 1127 and 1128 of this Act, as the case may be. otherwise. SEC. 1105. Implementing Rules and Regulations. - The SEC. 1101. Valualion Ruling. - An importer or exporter Secretary of Finance, upon the recommendation of the Bureau may file a written application for an advance valuation ruling on and the Commission, shall promulgate rules �regulations to the proper application of a specific method on customs valuation implement the preceding provisions on advance ruling. of specific goods as prescribed in Title VII, Chapter 1 of this Act .. The application for a valuation ruling shall be filed with the Commissioner who shall issue a ruling within thirty ( 30) days from submission of the application form and supporting documents as may be required by rules and regulations. 99 98 to the Commissioner samples of the goods which are the subject CHAPTER2 matter of the protest. The samples of the goods shall be verified by the customs officer who made the classification against which PROTEST the protests are filed. SEC. 1106. Protest. - When a ruling or decision of the SEC. 1110. Decision in Protest. - When a protest is filed District Collector or customs officer involvmg goods with valuation, in proper form, the Commissioner shall render a decision within rules of origin, and other customs issues is made, except the fixing thirty (30) days from receipt ofthe protest. In case the protest is offines in seizure cases, the party adversely affected may appeal sustained, in whole or in part, the appropriate order shall be by way of protest against such ruling or decisionby presenting to made, and the entry reassessed, if necessary. the Commissioner at the time when payment ofthe amount claimed to be due the gove rnment is made, or within fifteen (15) days thereafter, a written protest setting forth the objection to the CHAPTERS ruling or decision in question and the reasons therefore. ALERT ORDERS Subject to the approval of the Secretary of Finance, the Commissioner shall provide such rules and regulations as to the SEC. 1111. Alert Orders. -Alertordersarewrittenorders requirement for payment or nonpayment ofthe disputed amount issued by customs officers as authorized by the Commissioner and in case ofnonpayment, the release of the importation under on the basis of derogatory information regarding possible protest upon posting of sufficient security. noncompliance with this Act. An alert order will result in the suspension of the processing of the goods declaration and the conduct of physical or nonintrusive inspection of the goods SEC. 1107. Protest Exclusive Remedy in Protestable Case. - In all cases subject to protest, the interested party who within forty-eight (48) hours from issuance oftbe order. Within desires to have the action of the District Collector reviewed, shall forty-eight (48) hours or, in the case of perishable goods, within file a protest as provided in Section 1106 of this Act, otherv;ise twenty-four (24) houcs from inspection, the alerting officer shall recommend the continuance of processing of goods in case of a the action of the District Collector shall be final and conclusive. negative finding, or issuanceof a warrant ofseizure and detention ifa discrepancy between the declaration and actual goods is found. SEC. 1108. Form and Scope of Protest. -A protest shall The Bureau's information system shall immediately reflect the be filed in accordance with the prescribed rules and regulations imposition or lifting of an alert order. promulgated under this section. It shall specify the particular decision or ruling of the District Collector for which protest is being made, and shall indicate the particular ground or grounds Derogatory information shall indicate the violations and upon which the protesting party bases the claim for relief. The other necessary specifics thereof. For this pucpose, the following scope of a protest shall be limited to the particular goods subject shall not be considered derogatory information: of a goods declaration, but.8.ny number of issues may be raised in a protest with reference to the goods declaration constituting the (a) General allegations ofundervaluati.»!;., subject matter of the protest. (b) General allegations of misclassification without SEC. 1109. Samples to be Furnished by Protesting providing the appropriate tariffheading and duty of the shipment Parties. - If the nature of the goods permit, importers filing to be alerted; protests involving questions of fact must, upo n demand, present 100 101 (c) General allegations ofover-quantity without indicating CHAPTER4 the source of information supporting the allegation; SEIZURE AND FORFEITURE (d) General allegations of misdeclaration in the entry without indicating the suspected actual contents thereof; and SEC. 1113. Property Subject to Seizure and Forfeiture. - Property that shall be subject to seizure and forfeiture include: (e) General allegations of importations contrary to law without indicating the specific law or rule to be v iolated. (a) Any vehicle, vessel or aircraft, including cargo, which shall be used unlawfully in the importation or exportation ofgoods No alert order shall be issued on account of allegations of or in conveying or transporting smuggled goods in commercial undervaluation unless said undervaluation is caused by the quantities into or from any Philippine port or place. The mere sub?lission to customs of forged or spurious invoice or other carrying or holding on board of smuggled goods in commercial commercial documents. quantities shall subject such vehicle, vessel, aircraft, or any other craft to forfeiture: Provided, That the vehicle, vessel, aircraft An alert order may be issued only afte r lodgement of the or any other craft is not used as a common carrier which has goods declaration and prior to the release of goods from customs been chartered or leased for purposes of conveying or transporting custody. Under no circumstances shall the suspension of the persons or cargo; processing of goods declaration be allowed except through &'l alert order issued by an authorized customs officer. (b) Any vessel engaging in the coastwise trade which s hall have on board good s of foreign growth, produce, or manufacture The costs of the physical inspection shall be borne by the in excess of the amount necessary for sea stores, without such Bureau: Provided, That such cost shall be reimbursed by the goods having been properly entered or legally imported; owner prior to the release of the goods if the physical inspection results in the assessment of additional duties or taxes or the (c) Any vessel or aircraft into which shall be transferred issuance of a warrant of seizure. cargo unloaded contrary to law prior to the arrival ofthe impo.."tir..g vessel or aircraft at the port ofdestination; Tbe Commissioner shall be notified ofthe recommendation by the alertin g officer within twenty-four (24) hours from the (d) Any part of the cargo, stores, or supplies of a vessel or issuance of the alert order. Alert orders shall be dated and assigned aircraft arriving from a foreig n port which is unloaded before a unique reference number in series which shall be the basis for arrival at the vessel's or aircraft's port of destination and without reporting to and moni toring by the Commissioner and the authority from the customs officer; but such cargo, ship, or aircraft Secretary of Finance. stores and supplies shall not be forfeited if such unloading was due to accident, stress of weather, or other necessity and is The Bureau shall create a central clearing house for alert subsequently approved by the District Collector; orders and shall submit r�ports quarterly on the status thereof ,...L. (e) Goods which are fraudulently concealed in or removed SEC. 1112. Alert Orders on Perishable Goods. - When contrary to law from any public or private warehouse, container the subject of the alert order are perishable goods, the Bureau yard, or container freight station under customs supervision; shall attach to the recommendation a certificate stating that the goods are perishable. 102 103 (J;) Goods, the importation or exportation of which are (1) Without going through a customs office, whethe r the effected or attempted contrary to law, or any goods of prohibited act was consummated, frustrated, or attempted; importation or exportation� and all other goods which, in the op:i.Jp_on of the District Collector, have been used, are or were (2) Found in the baggage of a person arriving from abroad entered to be used as instruments in the importation or the and undeclared by such person; exportation of the former; (3) Through a false declaration or affidavit executed by (g) Unmanifested goods found on any vessel or aircraft the owner, imp orter, exporter, or consignee concerning the if manifest therefor is required; importation of such goods; (h) Sea stores or aircraft stores adjudged by the District (4) On the strength of a false invoice or other document Collector to be excessive, when the duties and taxes assessed by executed by the owner, importer, exporter, or consignee concerning the District Collector thereon are not paid or secured forthwith the importation or exportation of such goods; or upon assessment of the same; (5) Through any other practice or device contrary to law (i) Any package of imported goods which is found upon by means of which such goods entered through a customs office examination to contain goods not specified in the invoice or goods to the prejudice of the government. declaration including all other packages purportedly containing imported goods similar to those declared in the invoice or goods declaration to be the contents of the misdeclared package; SEC. 1114. Properties not Subject to Forfeiture in the Absence of Prima Facie Evidence. - The forfeiture of the vehicle, vessel, or aircraft shall not be effected ifit is established that the 6) Boxes, cases, trunks, envelopes, and other containers owner thereof or the agent in charge of the meruls of conveyance of whatever character used as receptacle or as device to conceal used as aforesa id has no knowledge of or participation in the goods which are subject to forfeiture under this Act or which are unlawful act: Provided, That aprima facie presumption shall so designed as to conceal the character of such goods; exist against the vehicle, vessel, or aircrfu+°t under any of the following circumstances: (k) Any conveyance actually used for the transport of goods subject to forfeiture under this Act, wit.li its equipage or trappings, (a) If the gmveyance has been used for smuggling before; and any vehicle similarly used, together with its equipment and appurtenances. The mere conveyance of smuggled goods by such transport vehicle shall be sufficient cause for the outright seizure (b) If the owner is not in the business for which the and confiscation of such transport vehicle but the forfeiture shall conveyance :is generally used; and not be effected if it is established that the owner of the means of conveyance used as afores·aia.. is engaged as common carrier and (c) If the owner is not financially in a position to own such not chartered or leased, or that the agent in charge thereof at the conveyance. time, has no knowledge of the unlawful act; and SEC. 1115. Conditions Affecting Forfeiture of Goods. (1) Goods sought to be imported or exported: The furfeiture shall be effected only when and while the goods are in the custody or within the jurisdiction of customs officers, or in the possession or custody of or subject to the control of the importer, exporter, original owner, consignee, agent of another 104 105 person effecting the importation, entry or exportation in question, thereof. The owner or importer shall be given an opportunity to or in the possession or custody of or subject to the control ofpersons be heard during the forfeiture proceedings. who shall receive, conceal, buy, sell, or transport the same, or aid in any of such acts, with knowledge that the goods were imported, For the purpose of serving the warrant, the importer, or were the subject of an attempt at imp ortation or exportation consignee, or person holding the bill oflading or airway bill shall contrary to law. be deemed the "owner'' of the goods. For the same purpose, "authorized representative" shall include any agent of the owner SEC. 1116. Seizure or Release of Goods. - The District and if the owner or the agent is unknown, any person having Collector shall issue an order of release or a warrant of seizure possession ofthe goods at the time of the seizure. within five (5) days, or two (2) days in case of perishable goods, upon the recommendation of the alerting officer o r any other Service of warrant to an unknown owner shall be effected customs officer. The District Collector shall immediately make a by posting the warrant for fifteen (15) days in a public place at report of such seizure or release to the Commissioner. the concerned district, and by electronic or printed publication. SEC. 1117. Warrant of Seizure or Order ofRelease. -The SEC. 1120. Description, Classification and Valuation of District Collector shall have the authority to issue a warrant of &ized Goods. - The District Collector shall cause the preparation seizure ofthe goods upon determination ofthe existence ofprobable of a list and particular description, classification, aud valuation cause and in case of nonexistence thereo.( the issuance of order of of the goods seized and valuation ofidentical or similar goods. release. In case the District Collector issued a n order ofrelease, the District Collector shallimrnediate]y transmit all the records SEC. 1121. Proceedings in Case of Property Belonging to to the Commissioner who shall automatically review within Unknown Parties. - If, within fifteen (15) days after service of forty-eight (48) h ours, or within twenty-four (24) hours in warrant, no owner or agent can be found or apJ'8ars before the case of perishable goods. When no decision is made by the District Collector, the s eized goods shall be forfeited ipso facto in Commissioner within the prescribed period, the imported goods favor of the government to be disposed ofin accordance with this shall be deemed released. Act. The lifting of the alert order shall be issued by the District SEC. 1122. Seizure of Vessel or Aircraft for Delinquency Collector only upon the affirmation of the decision of the District of Owner or Officer. - When the owner, agent, master, pilot in Collector by the Commissioner, or after the lapse of the period of command or other responsible officer of any vessel or allcraft review by the Commissioner, whichever is earlier. becomes liable for any violation of this Act, the vessel or aircraft may be seized and be subjected to forfeiture proceedings for the SEC. 1118. Sale of Perishable Goods During Forfeiture settlement of any fine or penalty for which such person is liable. Proceedings. - Upon motion of the importer of the perishable In determining whether or not to seize a vessel or aircraft, the goods, thegoodsmaybesolciatapublicauctionduringthependency Bureau shall take into account the amount of fine or penalty in of the forfeiture proceedings. The proceeds of the auction shall be relation to the commercial impact that Jt,/(J,y be caused to held in escrow until the final resolution of the proceedings. international trade by the seizure or detention as well as the value of the vessel or aircraft. SEC. 1119. Service of Warrant of Seizure. - The District Collector shall cause the service of warrant of seizure to the SEC. 1123. Burden of Proof in Forfeiture Proceedings. - owner or importer of the goods or the authorized representative In all proceedings for the forfeiture of auy vehicle, vessel, aircraft, or goods under this Act, the burden of proof shall be borne by the Pl<;liT'l'l-::i-nt 107 106 CHAPTER5 SEC. 1124. Settlement of Pending Seizure Case by Payment of Fine or Redemption of Forfeited Goods. - Subject APPEAL IN PROTEST AND FORFEITURE CASES to t he approval of the Commissioner, the District Collector may allow the settlement by payment of fine or the redemption of SEC. 1126. Appeal to the Commissioner. - In forfeiture forfeited goods, during the course of the forfeiture proceeding. cases, the person aggrieved by the decision ofa District Collector However, the Commissioner may accept the settlement by may, within fifteen (15) days or five (5) days in case of perishable redemption of any forfeiture case on appeal. No settlement by goods, from receipt of the decision, file a written notice ofappeal, payment of fine ;;hall be allowed when there is fraud or when the together with the required appeal fee to the District Collector discrepancy in duties and taxes to be paid between what is furnishing a copy to the Commissioner. The District Collecto; determined and what is declared amounts to more than thirty shall immediately transmit all the records of the proceedings to percent (30%). the <;ommissioner, who shall review and decide on the appeal within thirty (30) days from receipt of the records, or fifteen (15) In case of settlement by payment of fine, the owner, days m the case of perishable goods: Provuled, That if within importer, exporter, or consignee or agent shall offer to pay a fine thirty (30) days, no decision is rendered, the decisinn ofthe District equivalent to thirty percent (30%) of the landed cost of the seized Collector under appeal shall be deemed affirmed. An appeal filed goods. In case of settlement byredemptiori, the owner, importer, beyond the period herein prescribed shall be dismissed. exporter, or consignee or agent shall offer to pay the redeemed value equivalent to one hundred percent (100%) of the landed Appeals to protest cases shall be governed by Section 114 of cast. this Act. Upon payment ofthe fine or payment of the redeemed value, the goods shall be released and all liabilities which may attach to The decision of the Commissioner may be served through the recognized modes of service under existing law. the goods shall be discharged without prejudice to the filing of • administrative o r criminal case. SEC. 1127. Automatic Review in Forfeiture Cases. - The Settlement of any seizure case by payment of the fine or Commissioner shall automatically review any decision by the r edemption of forfeited goods shall not be allowed when there is District Collector adverse to the govermnent. The entire records fraud, or where the importation is prohibited or the release of the of the case shall be elevated within five (5) days from the goods is contrary to law. promulgation of the decision . The Commissioner shall decide on the automatic review within thirty (30) days, or within ten (10) days in the case of perishable goods, from receipt of the records. SEC. 1125. Decision in Forfeiture Cases. - In forfeitur e When no decision is rendered within the prescribed period or when cases, the District Collector shall issue an order for hearfr1g within a decision adverse to the government is rendered by the fifteen (15) days, or five (5) days in case of perishable goods, from Commissioner involving goods with FOB or FCA value of · issuance of the warrant. The District Collector shall render a ten million pesos (Pl0,000,000.00) or more,4he records of the decision within thirty (30) days upon termination of the hearing, decision of the Commissioner, or of the District Collector under or within ten (10) days in case of perishable goods. The decision review, as the case may be, shall be automatically elevated within shall include a declaration of forfeiture, the imposition ofa fine or five (5) days for review by the Secretary ofFinance. The decision such other action as may be proper. issued by the Secretary of Finance, whether or not a decision was rendered by the Commissioner within thirty (30) days, or within ten (10) days in the case of perishable go ods, from receipt of the records, shall be final upon the Bureau. 109 108 (c) Having filed snch goods declaration the owner SEC. 1128. Automatic Review by the Secretary of Finance importer, consignee or interested party after due �otice, fails � in Other Cases. - In cases not involving protest or forfeiture, the pay the assessed duti�s, taxes and other charges thereon, or, if Commissioner shall automatically review any decision by the the regulated goods failed to comply with Section 117 of this Act District Collector that is adverse to the government. The records within fifteen (15) days from the date of final assessment'. of the case shall be elevated to the Commissioner within five (5) Provided, That if such regulated goods are subject of an a lert days from the promulgation of the decision. The Commissioner order and the assessed duties, taxes and other charges thereof shall decide on the automatic review within thirty (30) days are not paid within fifteen (15) days from notification by the from receipt of the records, or within ten (10) days in the case of Bureau of the resolution of the alert order, the same shall also be perishable goods. When no decisi on is rendered within the deemed abandoned; or p.rescribed period or when any decision rendered by the Commissioner is adverse to the government, the records of the case under review shall be automatically elevated within five (5) (d) Having paid the assessed duties, taxes and other days for the review ofthe Secretary ofFinance. The decision issued charges, the owner, importer or consignee or interested party by the Secretary of Finance, whether or not a decision was rendered after due notice, fails to claim the goods within thirty (30) days by the Commissioner within thirty (30) days from receipt of the from payment. For this purpose, the arrastre or warehouse records, or within ten (10) days in the case of perishable goods, operator shall report the unclaimed goods to the District Collector shall be final upon the Bureau. for disposition pursuant to the provisions of this Act; or CHAPTER6 (e) When the owner or importer fails to claim goods in customs bonded warehouses within the prescribed period. ABANDONMENT The due notice requirement under this section may be _ proVIded by the Bureau thr ough electronic notice or personal SEC.1129. Abandonment, Kinds and Effects of. service: Provided, That for non-regular importers, notification Imported goods are deemed abandoned under any of the following shall be by registered mail or personal service. For this purpose, circumstances: the accreditation ofimporters, exporters, and other third parties shall inclnde provision for mandatory receipt of electronic notices. (a) When the owner, importer, or consignee of the imported goods expressly signifies in writing to the District Collector the SEC. 1130. Treatment and Disposition of Abandoned intention to abandon the same; or Goods. - Expressly abandoned goods under paragraph (a) of Section 1129• of this Ac t shall ipso facto be deemed the (b) When the owner, importer, consignee, or interested property of the government and shall be disp ose d of in party after due notice, fails to file t he goods declaration within accordance with the provisions of this Act. the prescribed period in Section 407 of this Act: Provided, That the term goods dec laration shall include provisional or incomplete If the Bureau has not disposed of the �oned goods, the goods declaration deemed valid by the Bureau as provided in owner or importer of goods impliedly abandoned may, at any time Section 403 of this Act. For this purpose, it is the duty of the within thirty (30) days after the lapse of the prescribed period to District Collector to post a list of all packages discharged and file the declaration, reclaim the goods provided that all legal their consignees, whether electronically or physically in the req:'1-"'ments have been complied with and the corresponding District Office, or send a notice to the consignee within five (5) duties, taxes and other charges, without prejudice to charges and days from the date of discharge; or fees due to the port or terminal operator, as well as expenses 111 110 and rights to personal pr operty, and by levy upon real property incurred have been paid before the release ofthe goods from customs and interest in rights to real prope rty; and custody. (b) Civil or criminal action. When the Bureau sells goods which have been impliedly abandoned, although no offense has been discovered, the proceeds Either or both of these remedies may be pursued at of the sale, after deduction of any duty and tax and all other the discretion of the Bureau: Provided, That the remedies of charges and e:xpenses incurred as provided in Section 1143 of this distraint and levy shall not be allowed when the amount of Act. shall be turned over to );hose persons entitled to receive them duties and taxes involved is not more than ten thousand or, ;_,hen this is not possible, held at their disposal for a specified pesos (Pl0,000.00). period. After the lapse of the specified period, the balance shall be transferred to the forfeiture fund as provided m Section 1151 of The Bureau shall advance the amounts needed to defray this Act. costs of collection by means of civil or crimirull action, including the preservation or transportation ofpersonal property distrained CHAPTER7 and the advertisement and sale thereoi; as wall as of real property and improvements thereon. OTHER ADMINISTRATIVE PROCEEDINGS SEC. 1133. Constructive Distraint of the Property. - To SEC. 1131. Authority of the Commissioner to Make safeguard the interest of the government, the Commissioner may Compromise. - Subject to the approval ofthe Secretary of Finance, place under constructive distraint the property of a delinquent the Commissioner may compromise any administrative case importer who, in the opinion of the Commissioner, is retiring arising under this Act involving the imposition of fines and from any business subject to duty and tax, or is intending to surcharges, including those arising from the conduct of a post leave the Philippines, or to remove the property therefrom, or to clearance au dit, unless otherwise specified by law. hide or conceal the property, or to perform any act tending to obstruct the proceedings for collecting the duty and tax due, er Cases in.-volvi...ng forfeiture proceedings shall however not which may be due. be subject to any compromise. The constructive distraint of personal property shall be CHAPTERS effected by requiring the importer or any person in possession or co ntrol of such property to sign a receipt covering the CrvIL REMEDIES FOR THE COILECTION OF DUTIES AND TAXES property, to obligate to preserve the distrained property on the state and condition at the time of the government's seizure of the same, and not to dispose of the sam e in any manner SEC. 1132. Remedies for the Collection of Duties, Taxes, whatsoever, witho ut the ex press authority of the Fines, Surcharges, Interests, and Other Charges. - The civil Commissioner. � remedie s for the collection of import duties, taxes, fees, or charges resulting from the conduct of a post clearance audit shall be obtained by: In <:ase the importer or the person in possession a nd control of the property sought to be placed under constructive distraint refuses or fails to sign the receipt herein referred. to, the custo ms (a) Distraint of goods, chattels, or effects, and other officer effecting the constructive distraint shall proceed to prepare personal property of whatever character, including stocks a nd other securities., debts, credits, bank accounts, and mterest Ill 113 112 treasurer, or other responsible o:fficer of the bank. Upon the receipt a list of such property and, in the presence of two (2) witnesses, of the warrant ofgarnishment, the bank shall turn over to the leave a copy thereofin the premises where the property distramed Commissioner so much of the bank accounts as may be sufficient is located, after which the said property shall be deemed to have to satisfy the claim ofthe government. been placed under constructive distraint. A report on the distraint shall, within ten (10) days from SEC. 1134. Summary Remedies. - (A) Distraint of receipt of the warrant, be submitted by the Commissioner Personal Property. - Upon failure of the person owing any to the Secretary of Finance: Provided, That the Commissioner delinquent duty, tax and other charges to pay at the time required, shall have the power to lift such order of distraint subject to the the Commissioner shall seize and distraint the goods, chattels or rules and regulations promulgated pursuant to this Act. effects, and the personal property, including stocks and other securities, debts, credits, bank accounts, and interests in and rights to personal property of such persons, in sufficient quantity (B) LevyonRealProperty. -Aftertheexpirationofthe to satisfy the duty, tax or other charge and the expenses of the period within which to pay the duty, tax and other charges distraint and the cost of the subseque nt sale. as prescribed in this section, real property may be levied upon, before, simultaneously, or after the distraint of personal property belonging to the importer. To this e nd, the Commissioner or the The officer serving the warrant of distraint shall make or duly authorized representative shall prepare a duly authenticated cause to be made an account of the goods, chattels, effects, or certificate showing the name of the importer and the amounts of other personal property distrained, a copy ofwhich, signed by the the duty and tax and penalty due. The certificate shall operate said officer, shall be left either with the owner or person from with the force of a legal execution throughout the Philippines. whose possession such goods, chattels, or effects or other personal property were taken, or at the dwelling or other place ofbusmess of such person and with someone of suitable age and discretion, The levy shall be effected by writing upon the certificate a to which list shall be added a statement of the sum demanded description ofthe property on which levy is made. At the same and note ofthe time and place of sale. time, written notice of the levy shall be mailed to or served upon the register ofdeeds of the province or city where the property is located and upon the importer, or if the latter is not in the Stocks and other securities shall be distrained by serving a Philippines, upon the agent or the manager of the business from copy of the warrant of distraint upon the importer and up on the which the liability arose, or if there be none, to the occupant of president, manager, treasurer, or other responsible officer of the the property in question. corporation, company or association, which1ssued the said stocks or securities. In case the warrant oflevy on real property is not issued before or simultaneously with the warrant ofdistraint on pereonal Debts and credits shall be distrained by leaving with the property, and the personal property ofthe importer is not sufficient person owing the debts �r having in his/her possession or under to satisfy the duty and tax due, the Commissioner or a duly his/her control such credits, or with his/her agent, a copy of the authorized representative shall, within t�30) days after warrant of distraint. The warrant of distraint shall be sufficient execution of the distraint, proceed with the levy on the real authority to the person owing the debts or having in his possession or under his control any credits belonging to the importer to pay property ofthe importer. to the Commissioner the amount of such debts of credits. Within ten (10) days after receipt of the warrant, a report Bank accounts shall be garnished by serving a warrant of on any levy shall be submitted by the levying officer to the garnishment upon the importer and upon the president, manager, Commissioner: Provided, That the Commissioner maylift such 114 115 warrants of levy issued, subject to the rules and regulations Except for the CTA, no court may issue any order or decision promulgated pursuant to this Act. until all the remedies for administrative appeal have been exhausted. CHAPTER9 SEC. 1138. Fraud Investigation and Prosecution. - No JUDICIAL PROCEEDINGS criminal case for violation of this title shall be instituted without the approval of the Commissioner pursuant to the provisions of SEC. 1135. Supervision and Control over Criminal and this Act. Civil Proceedings. - Civil and criminal actions and proceedings instituted on behalf of the Government under the authority of The Bureau shall have the power to investigate and institute this Act or other laws enforced by the Bureau shall be brought in smuggl:ing ·cases committed within its jurisdiction: Provided, the name of the government of the Phi lippines and shall be That in case of inquest, the same may be instituted by the prosecuted and handled by the Bureau with the assistance apprehending customs officer. of the Department of Justice (DOJ): Provided, That the determination of the existence of pr obable cause and the CHAPTERIO subsequent filing of any criminal or civil c ase with the proper court against violators of this Act shall exclusively belong to th e DISPOSITION OF PROPERTY IN CUSTOMS CUSTODY DOJ: Provided, however, That no civil or criminal action for the recovery of duties or the enforceme nt of any fine, penalty or SEC. 1139. Goods Subject to Disposition. - Goods in forfeiture under this Act shall be filed in court without the customs custody that are in the following COnditions and status approval of the Commis sioner. shall be subject to disposition: SEC. 1136. Review by the CTA - Unless otherw ise (a) Abandoned goods; provided in this Act or by any other law, the party aggrieved by the ruling or decisions of the Commissioner may appeal to the CTA, :in the manner and within the period prescribed by law and (b) Goods entered under warehousing entry but not regulations. Decisions of the Secretary of Finance when required withdrawn, or those whose duties and taxes have not been paid by this Act, may likewise be appealed to the CTA within the period prescribed under Section 811 of this Act; Unles s an appeal is made to the CTA in the manner and (c) Forfeited goods, other than prohibited, restricted and within the period prescribed by law and regulations, the ruling regulated goods; after liability have been established by the proper or decision of the Commissioner or the Secretary of Finance shall administr ative or judicial proceedings in conformity with th e be final and executory. provisions of this Act; and SEC.1137. Exclusive Jurisdiction of the Bureau. - (d) Goods subject to a valid lien for cu�s duties, taxes Jurisdiction over imported goods and goods for exportation shall and other charges collectible by the Bureau, after the expiration be exclusive to the Bureau, or the Secretary of Finance, when of the period allowed for payment thereof under review by the latter, subject to the proceedings described in this title. SEC.1140. PlaceofDispositionofGoods. -Upon the order of the District Coll ector, goods may be sold orotherwise disposed 116 117 of at theport where the goods are locate d, unless the Co mmis i The Commissione ris authoriz e dto determine the maximum o ner charges to be recovered by private e n es o e e shall direct its transfer to another por ( ti ti c n c r nd unde r t. s us c o n s e) an d of this e o b e ti ( J) s cti n. SEC. 1141. Mode of Disposition. - The g o d s s ubjec t to o disposition may be donated to another gov ern me n t agen SEC. 1144. Dispositionof Per ishable Goods. - Perishable cy or declared for official use of the Bureau, aft r ap al of th goo ds as defined under th is Act when certified as such by the o e e Bureau, may be sold at apub c v Secretary of Financ e, or sold at a public auc ti a ution wi tbin fi e ( 5) days ' after p r v within thir ty hre e (3 -da notice lic a t ) on (30) days after aten(l )-da y notice posted a t a public pla at th O y . e port where the goods are locatedand publishe d ele ct o nic ally r ce r o in a newsp aper of general circ';llation . For this purpose, perishable goods shall includegoods liable to P_e nsh or be was ted, or hose that depreciate greatly in value t For purposesofdonating thegoods asabo v ede scrib ed od while stored, or which cannot be kept without grea , go s t suitable for shelteror consistingoffoodstuff , clo thing m te ri l d isproportionate expense. The Bureau shall proceed to advertise s a a s and s ell the s ame a auctio nupon no ce as s e eme ormedicinesma y be donatedto theDSWD. t ti h allb de d to be s n . rea o ab le SEC 1142. Dis qualification to Particip a te in . tw Sa k . A � No customs officer or em ployee, their sp ouse an d rel t ives S EC. 1145. Disp osition of Goods Injurious to Public n uc within the fourth de gree of consanguinit y or affini ty sh al b Health . - Goods in the custody of the Bureau which, in the s a e op rmon ofthe District Collector are injurious to public health allowed to bid directly or indirectly, inan yc ust m s uc tio n. o a shall be seized. The District Collector shall, ifthe matter is no t djsposable under the provisions relating to food and drugs, appoint SEC. 1143. Dis position o f Proc eeds . - The followi ng three (3) members to constitute a Board to examine the goods. expenses and obligations shall be paid fro m thep o c e ds o f th r e e TheBoard shallbe composed ofone (1) representative from either sale in the orderprovided: the DOH or other appropriate governm ent agency or the local government unit (LGU) concerned, and two (2) representatives (a Customs duties, exceptin the case offorf ite d goo ds ) e fromt he Bureau. Ifthe goods are found to be injurious to public ; health, the Board shall report this to the District Collector who (b Taxes and other charges due the g o ve nm shall order its destruction inan appr opriate manne r or order ) r en t; i ts e o a c or a re xporta tin c d n ce wi th this Act . in (c) Govenrment storage charges ; The Dist ri ct Collector shall inrmedi ately coordinate with (d) Expenses for the appraisal, adve r tise the health and quarantine officers at the port of e n t ry for th e men t, an ds al o dis in f e iti n o f o o ds urious to pub cli heal th auctioned goods; p os o g j . (e) Arrastre and private storage charg e de ur SEC.1146. DispositionofProhibitedG�. - Prohibited s an m e d r ag charges; and goods, as providedin Section 118 of this Act, snall be desJ;r oyed, except paragraph (d) thereof whi c h shall be turned over to the (f) Freight, lighterag e or general ye ag e,o th oyag BSP . �go ods suitable for shelter, fuodstuffs, clothingmaterials a r n e v e or medicmes m dis os ed c c o o of imp ortation, of which due notice shall hav bee n g iv n to th e e a ybe p in a cordance witb Se ti n 11 1 4 f e District Collector. t his Act. 118 119 SEC. 1147. Disposition of Restricted Goods. - Restricted commerc ial value and capable of!egitimate use, these shall be goods as described in Section 119 of this Act shall be disposed as disposed of in accordance with Section 1141 of this Act. follows: SEC. 1149. Disposition of Un,sold Goods for Want of (a) Dynamite, gunpowder, ammunitions and other Bidders. - Goods subject to sale at public auction by the Bureau explosives, fire arms and weapons of war, and parts thereof shall shall be sold at a price not less than the landed cost of the goods be turned over to the AFP; adjusted for normal depreciation. (b) Roulette wheels, gambling outfits, loaded dice, marked Goods which remain nnsold after at least two (2) public cards, machines, apparatus or mechanical devices used in biddings either due to the lack of bidders or for the lack of an gambling or the distribution of money, cigars, cigarettes, or other acceptable bid, may be donated to another government goods when such distribution is dependent on chance, including agency or declared for official use of the Bureau. Ifthe goods are jackpot and pinball machines or simila r contrivances, or parts not suitable either for official use or donation, these may be subject thereof shall be turned over to the appropriate government body to reexport as government property or sold through a negotiated or agency; sale. In case of negotiated sale, the same shall be subject to the approval of the Secretary ofFinance and executed:in the presence (c) Lottery and sweepstakes tickets; except advertisements of a representative of the COA For purposes of donating the thereof, and lists of drawings therein shall be turned over to the goods as above described, goods suitable for shelter or consisting appropriate government body or agency; of foodstuffs, clothing materials or medicines may be donated to theDSWD. (d) Marijuana, opium, poppies, coca leaves, heroin, or other narcotics or synthetic drugs which are or may hereafter be declared SEC. 1150. Disposition of Smuggled Goods. - Smuggled habit forming by the President of the Philippines, or any goods, when forfeited, shall be disposed of as provided in Section compound, manu:fuctured salt, derivative, or preparation thereof, 1148 of this Act. shall be turned over to the Dangerous Drugs Board; SEC. 1151. Forfeiture Fund. - All proceeds from public (e) Opium pipes and parts thereof, of whatever material, auction sales after deduction of the charges as provided :in shall be turned over to the Dangerous Drugs Board; and Section 1143 of this Act and subject to the claim of the owner or importer ofan impliedly abandoned goods as provided in Sectio n (J) All other restricted goods which are highly dangerous 1130 of this Act, shall be deposited in an acconnt to be known as to be kept or handled shall be destroye d in a manner as the District Fo:rfuiture Fund. Collector deems appropriate. Otherwise, the restricted goods shall be turned over to the proper government agency for appropriate The Fnnd shall be in the name of and shall be managed by handling. the Bureau which is hereby authorized, subject to the usual government acconnting rules and regulations, �e it for the SEC. 1148. Disposition of Regulated Goods. - Regulated following purposes: goods shall be disposed of in a manner to be determined by the approp:riate regulatory agency. In the event that the regulatory (a) To outsource, subject to the rules on governme nt agency allows the disposition of the regulated goods with procurement established by law, the mana gement of the inventory, safekeepin g, maintenance and sale of goods 120 121 enumerated in Section 1139 of this Act to private service CHAPTER2 providers: Provided, That theBureau shallretainjurisdictional control and supervision over these goods as well as the operations CARRIERS, VESSEIS, AND AlRCRAFrS of the service provider so contracted; SEC. 1201. Ports Open to Vessels andAircrafts Engaged (b) To facilitate customs seizure, abandonment and in Foreign Trade. - Vessels and aircrafts engaged in foreign forfeiture proceedings and the disposition of goods under trade shall visit designated ports of entry only except as Section 1139 of this Act, particularly those to be disposed of other otherwise especially allowed by law: Provided, That no existing than through public sale; and valid government contract covering the handling o f import and export cargo shall be diminished or impaired. Every (c) To enhance customs intelligence and enforcement vessel or aircraft arriving within a Customs District of the capability to prevent smuggling; and Philippines from a foreign port shall dock at the designated port of entry and shall be subject to the authority of the (d To support the modernization program and other District Collector of the port while within its jurisdiction. ope rational efficiency and trade facilitation initiatives of the Bureau. SEC. 1202. Control of Customs Officer Over Boarding or Leaving ofIncoming Vessel and Over Other Vessel Approaching The DOF and the Department ofBudget and Management the Former. - Upon the arrival in port of any vessel engaged (DBM) shall, upon the recommendation of the Bureau, issue a in foreign trade, it shall be unlawful for any person, except the joint regulation to implement the provisions of this section. pilot, consul, quaranti... --ieofficers, customs officers, or other duly authorized persons, to board or leave the vessel with out permission of the customs officer concerned. It shall likewise be TITLE XII unlawful for any tugboat, rowboat, or other craft to go alongside such vessel and for any person so authorized to board THIRD PARTIES to the vessel take any unauthorized person to board the same, or allow loitering near or alongside such vessel. Unauthorized CHAPTERl tugboats and other vessels shall keep away from such vessel engaged in foreign trade at a distance of not less than fifty CUSTOMS SERVICE PROVIDERS (50) meters. SEC. 1200. Customs Brokers and Other Service SEC. 1203. Documents to be Produced by the Master Upon Providers. - Upon the recommendation of the Commissioner, Entry of Vessel. - Upon entry o f a vessel engaged in foreign the Secretary of Finance shall issue the necessary rules and trade, the master thereof shall present the following certified regulations for the registration of customs broke rs and the documents to the customs boarding officers: accreditation of other customs service providers to ensure compliance with this Act and the rules and regulations that shall (a) The vessel's general declaration; be promulgated to implement it. (b) The original manifest of all cargoes destined for the port, to be returned with the endorsement ofthe boarding officers; 122 123 (c) Three (3) copies of the original manifest, one of which, the destination and all particulars required by immigration laws. upon certification by the boardi ng officer as to the correctness of Every vessel shall present to the proper customs officers upon the copy, shall be returned to the master; arrival in ports of the Philipp:ines a complete list of all sea stores then on board. If the vessel does not carry cargo or passengers, the manifest must show that no cargo or passenger is carried (d) A copy of the cargo stowage plan; from the port of departure to the port of destination in the Philippines. (e) Two (2) copies of the store list; A true and complete copy of the cargo manifest shall be (f;) 0 ne (1) copy ofthe passengers list; electronically sent in advance by the shipping company, NVOCC, freight forwarder, cargo consolidator, or their agents within the (g) One (1) copy of the crew list; cut-off period as may be determined by the Bureau before the arrival of the carrying vessel at the port of entry. Upon arrival of (h) The original copy of all through cargo manifest, for the carrying vessel, the shipp:ing company, NVOCC, freight deposit with the customs officer who has jurisdiction over the forwarder, cargo consolidator, or their agents shall provide two vessel while in port; (2) hard copies of the cargo manifest to the Bureau in case the port of entry is either the Port of Manila (PoM) or the Manila (i) The passengers manifest containing the names of all International Conta:iner Port (MICP), and one (1) copy only in the foreigners, in conformity with the requirements of the case of the other ports of entry. immigration laws :in force in the Philippines; A cargo manifest shall in no case be changed or altered (i) One (1) copy of the original duplicate of fully after entry of vessel, except by means of an amendment, under accomplished bill oflading; oath, by the master, consignee or agent thereof; which shall be attached to the original manifest: Provided, That after the invoice (k) The s!,.ipping goods and register of the vessel of and/or goods declaration coyering an importation have been Philippine registry; and received and recorded:in the office of the appraiser, no amendment of the manifest shall be allowed, except when it is obvious that a clerical error or any other discrepancy has been committed in the (]) Such other related documents. preparation of the manifest, without any fraudulent intent, the discovery of which would not have been made until after SEC. 1204. Manifest Required of Vessel from Foreign examination of the importation has been completed_ Port. - Every vessel from a foreign port must have on board a complete manifest of all its cargoes. SEC. 1205. Translation of Manifest. - The cargo mrurifest and each copy thereof shall be accompanied by a translation in All cargoes intended to be landed at a port :in the Philippines English, if originally written in another�- must be described in separate manifests for each port of call. Each manifest shall include the port of departure and the SEC. 1206. Manifests for the Commission on Audit and port of delivery with the marks, numbers, quantity, and District Collector. -Upon arrival of a ve ssel from a foreign port, description ofthe packages and the names ofthe consignees. Every the Bureau shall provide electronic copies ofthe manifest to the vessel from a foreign port must have on board complete manifests Chairperson of the COA. The master shall immediately present of passengers and baggage, in the prescribed form, setting forth to the District Collector the original copy of the cargo manifest 124 125 properly endorsed by the boarding officer, and for inspection, the SEC. 1212. Entrance of Vessel through Necessity. -When ship's register, or other documents in lieu thereof; together with a vessel from a foreign port is compelled, by stress of weather or the clearance and other papers granted to the vessel at the port of other necessity to put into any other port than that of its departure for the Philippines. destination, the master within twenty-four (24) hours after its arrival, shall make a protest under oath setting forth the causes SEC. 1207. Production ofPhilippine Crew. - The master or circumstances of such necessity. This protest, if not made of a Philippine vessel returning from abroad shall produce the before the District Collector, must be produced and lodged with entire crew listed in the vessel's shipping crew manifest. If any the District Collector. member is missing, the master shall produce proofsatisfactory to the District Collector that the member has died, or absconded, Within the same time, the master shall make a report to has been forcibly impressed into another service, or has been the District \Jollector if any part of the cargo was unloaded from discharged. In case of discharge in a foreign country, the necessity or lost by casualty before arrival, and produce sufficient master shall produce a certificate from the consul, vice consul, or proof to the District Collector of such necessity or casualty before consular agent of the Philippines there residing, showing that the latter who shall give the approval thereto and the unloading such discharge was effected with the consent of the aforesaid shall be deemed to have been lawfully effected. representative of the Philippines. SEC.1213. UnloadingofVesselinPortfromNecessity. - SEC. 1208. Record of Arrival and Entry of Vessels and If a situation arises where the u_nloading of the vessel is required Aircraft. - A record shall be made and kept open to public pending sojourn in port, the District Collector shall, upon sufficient inspection in every Customs District of the date of arrival and proof of the necessity, grant a permit therefore, and the goods entry of all vessels and aircraft. shall be unloaded and stored under the supervision of customs officers. SEC. 1209. Arrest of Vessel or Aircraft Departing Before Entry Made. ..:. When a vessel or aircraft arriving within the At the request of the master of the vessel or the owner limits of a Customs District from a foreign port departs o r thereof; the District Collector may grant permission to enter the attempts t o depart before entr y shall have been made, not port and pay duties, taxes and other charges on, and dispose of, being thereunto compelled by stress of weather, duress of such part of the cargo as may be perishable in nature or as may enemies, or other necessity, the District Collector of the port be necessary to defray the expenses attending the vessel. may cause the arrest and bring back such vessel or aircraft to the most convenient port with the assistance of other Upon departure, the cargo, or a part thereof; may be concerned agencies. reloaded on board the vesseL and the vessel may proceed with the same to its destination, subject only to the charge for storing and SEC. 1210. lAscharge of Ballast. - When not brought to . safekeeping of the goods and the fees for entrance and clearance. port as goods, ballast of no commercial value may be discharged No port charges shall be collected on vessels entering through upon permit granted bythe District Collector for the purpose. stress of weather, dlll'ess or other urgent neces�s. SEC. 1211. Time of Unloading Cargo. - Unloading of SEC. 1214. Entry and Clearance of Vessels of a Foreign cargo from a vessel or aircraft from a foreign port during official Goveniment. - The entry and clearance of transport or supply nonworking hours shall be allowed subject to payment of service ship of a foreign government shall be in accordance with the fees by,ihipping lines. airlines, or other interested parties at rates agreement by and between the Philippines and the foreign prescribed by the Commissioner. government. 126 127 SEC. 1215. Clearance of Vessel for Foreign Port. - Before when the number ofmen shipped on board or other circumstances a clearance shall be granted to any vessel bound to a foreign port, render it probable that such vessel is intended to be employed the master or the agent thereof shall present to the District by the owner or owners to cruise or commit hostilities upon the Collector the following properly authenticated documents: subjects, citizens, or property of any foreign principality or state, or of any colony, district, or people with whom the Philippines is at peace, until the decision of the President of the Philippines (a) A bill of health from the quarantine officer or officer of is rendered thereon, or until the owner or owners shall give a the public health service in the port: security, in double the value of the vessel and cargo, that it will not be so employed, ifin the discretion of the District Collector (b) Three (3) copies of the manifest of export cargo, one of such security will prevent the violation of the provisions of this which, upon certification by the customs officer as to the section. correctness ofthe copy, shall be returned to the master: SEC. 1217. Oath of Master of Departing Vessel. - The (c) Two (2) copies of the passengers list, showing foreigners master of a departing vessel shall state under o.ath that: and other passengers; (a) All cargoes conveyed on the vessel, destined for the (d) The register and shipping goods, if the vessel is of Philippines, have been duly discharged or accounted for; Philippine registry; (b) A true copy of the outgoing cargo manifest has been (e) Clearance issued by the last port of entry; and furnished to the Bureau; (f) A certificate from the Philippine Postal Corporation to (c) No letters or packets, not enclosed in properly stamped the effect that it received timely notice ofthe sailing of the vessel: envelope sufficient to cover postage, have been received or will be Provided, That the District Collector shall not permit any vessel conveyed, except those relating to the vessel; and that all mails to sail for a foreign port if the master or agent thereof refuses t-o placed on board the vessel before its last clearance from the receive bags of mail delivered to the same by the Philippine Philippines have been delivered at the proper foreign port; and Postal Corporation for transport upon reasonable compensat ion. In case the Postmaster General and the master or agent do not (d) Ifclearing without passenger, the vessel will not carry come to an agreement concerning the amount of the compensation· upon the instant voyage, from the Philippine port; any passenger to be paid for the carriage of the mail, the matter shall be of any class, or other person not entered upon the ship's submitted for decision to a Board of Referees to be composed of declaration_ three (3) members appointed, respectively, by the Philippine Postal Corporation, the agency of the company to which the vessel concerned belongs, and the Bureau, who shall fix a reasonable SEC. 1218. Extension of Time for Clearance. - At the rate of compensation. time of clearance, the master of a departiIMssel shall be required to indicate the.time of intended departure, and if the SEC. 1216. Detention of Warlike Vessel Containing Arms vessel should remain in port forty-eight (48) hours after the time and Munition,;. - District Collectors shall report to the proper indicated, the master shall report to the District Collector for an authorities or detain any vessel of commercial registry manifestly extension of time of departure, and without such extension the builtforwarlikepurposes and about to depart from the Philippines original clearance shall be nullified. with a cargo consisting principally of arms and munitions of war, 128 129 SEC. 1219. Advance Notice of Aircraft Arrival. - (A) of safety, communication with customs officers, or preservation NonscheduledArrivals. - Before an· aircraft comes into any area of life, health, or p,roperty. As soon as practicable, the pilot-in­ in the Philippines from any place outside thereoJ; a timely notice command, or a member ofthe crew-in-charge, or the owner of the of the intended flight shall be furnished to the District Collector aircraft, shall conununicate with the customs officer at the or other customs officer-in-charge at or nearest the intended intended place of first landing or at the nearest international place of first landing, and to the quarantine and immigration airport or other customs port of entry in the area and make a full officers-in-charge at or nearest such place oflanding. Ifdependable report of the circumstances of the flight and of the emergency or facilities for giving notice are not available before departure, the forced landing. use ofany radio equipment shall be appropriate as long as it will result in the giving ofadequate and timely notice of the aircraft's SEC. 1221. Report of Arrival and Entry of Aircraft. - approach, otherwise landing shall be made at a place equipped The pilo t-in,conunand of any aircraft arriving from a foreign port with navigational facilities. If, upon landing in any area, the or place shall immediately report its arrival to the District government officers have not arrived, the pilot-in-conunand shall Collector at the airport of entry or to the customs officer detailed hold the aircraft and any baggage and goods thereon intact and to meet the aircraft at the place of first landing. Upon arrival, keep the passengers and crew members in a segregated place such aircraft shall be boarded by a quarantine officer, and after until the inspecting officers arrive. pratique or health clearance is granted, shall be boarded by a customs officer; suhsequentlyno person shall be permitted to board (B) Scheduled Arrivals. - Such advance notice will not be or leave the aircraft without the permission of the customs officer. required in the case of an airline arriving in accordance with The pilot-in-command or any other authorized agent ofthe owner the regular schedule filed with the District Collector for the or operator of the aircraft shall make the necessary entry. No Customs District in which the place of first landing area such aircraft shall, without previous permission from the District is situated, and also with the qu arantine and immigration Collector, depart from the place of first landing or discharge goods, officers-in-charge of such place. passengers, or baggage. SEC. 1220. Landing at International Airport of Entry. - SEC. 1222. Documents Required in Making Entry for Except in case of emerge ncy or forced landings, aircraft arriving Aircraft. - (a) For the purpose of making e ntry, there shall be in the Philippines from any foreign po rt or place shall make the presented to the boarding customs officer four (4) copies ofa general first landing at an international airport ofentry, unless permission declaration which shall contain the following data, unless any of to land elsewhere other than at an international airport of entry such data is otherwise presented on a separate official form: is first obtained from the Commissioner. In such cases, the owner, operator, or person in charge of the aircraft shall pay the expenses (1) Name of owner or operator of aircr aft, registration incurredininspectingthe aircraft, goods, passengers, and baggage marks and n ationality of air craft, and flight number of .carried thereon, and such aircraft shall be subject to the authority identifo:ation; of the District Collector at the airport while within its jurisdiction. (2) Points ofclearance and entry, and d�f arrival; Should an emergency or forced landing be made by an aircraft coming into the Philippines at a place outside the (3) Health and customs clearance at the last airport of jurisdiction of the latter, the pilot-in-command shall not allow departure; goods, baggage, passenger, or crew member to be removed or to dBpart from the landing place without permission of a customs officer, unless such removal or departure is necessary for purposes 130 131 (4) Itinerary of aircraft, including information as to airport SEC. 1223. Manifests for the Commissiol), on Audit (COA) of origin and departure dates; and District Collector. - Upon arrival of an aircraft from a foreign port, the Bureau shall provide electronic copies of the manifest to the Chairperson of the COA. The master shall (5) Names and nationality of crew members; immediately present to the District Collector the original copy of the cargo manifest properly endorsed by the boarding officer, and (6) Passengers manifest showing places ofembarkation and for inspection, the aircraft's register or other documents in lieu destination; thereof, together with the clearance and other papers granted to the aircraft at the port of departure for the Philippines. (7) Cargo manifest showing information as to airway bill number, the number of packages related to each airway bill SEC. 1"224. Clearance of Aircraft for Foreign Port. - (a) number, nature of goods, destination, and gross weight, together Any aircraft bound to a foreign port shall, before departure, be with a copy of each airway bill securely attached thereto; granted clearance by the Commissioner at an airport of entry where such aircraft has been authorized to make its landing; and (8) Store list; and (b) Before clearance shall be granted to an aircraft bound (9) Such other documents as may be required by the to a foreign port, there shall be presented to the District Collector BurealL or to the customs officer detailed at the place of depa_rturefour (4) copies of a general declaration signed by the pilot-in-command or (b) The general declaration shall be written in English and authorized agent of an aircraft which shall contain the following duly signed by the pilot-in-command or operator of the aircraft, data: or the authorized agent. The section on health, and customs clearances, however, shall be signed only by the pilot-in-command (1) Name of owner or operator of aircraft, registration or when necessary, by a crew m ember when the general marks and n atio nality of aircraft, and flight number of declaration itself has been signed by a non-crew member. If the identification; aircraft does not carry cargoes or passengers, such facts must be shown in the manifest. (2) Port of clearance, data thereof and destination; (c) A cargo manifest shall in no case be changed or altered (3) Health and customs clearance; after entry of the aircraft, except by means of an amendment by the pilot-in-command or authorized agent thereof, under oath, (4) Itinerary of aircraft, includinginformation as to airport and attached to the original manifest: Provided, That after the ofdestination and departure date; invoice and/or goods declaration covering an importation have been received and recorded in the office of the appraiser, no amendment shall be allowed except when it is obvious that a (5) Names and nationality of crew members; clerical error or any other discrepancy has been committed without � any fraudulent intent in the pr eparation of the manifest, the (6) Passengers manifest showing places of destination; discovery of which could not have been made until after complete examination of the importation. (7) Export cargo manifest showing information as to airway bill number, the number of packages related to each airway bill 133 132 II the Bureau in relation to the importation, exportation, movement, number, nature of goods, destination, and gross weight, together storage and clearance ofgoods for and on behalf ofanother person. with a copy of each airway bill securely attached thereto; and The rules and regulations shall provide for specific conditions when third parties may or may not directly transact with the (8) Store list showing stores loaded. Bureau and shall provide a written notice in case such third parties are, for valid reasons, barred from transacting with the Bu reau. SEC. 1225. Oath of Person-in-Charge of Departing Third party is defined under Section 102(uu) of this Act. For I Aircraft. - The pilot-in-command or authorized agent of such purposes of this section, third parties may also refer to logistics departing aircraft shall also state under oath to the effect that: providers, importers, exporters, carriers , airlines, shipping lines, I I shipping agents, forwarders, consolidators, port and terminal (a) All cargoes conveyed on the aircraft destined to the operators, and warehouse operators, if such persons or entities Pbilippines have been duly discharged a nd accounted for; and transacted with the BurealL (b) The aircraft has not received nor will convey any letter CHAPTER4 or packet not enclosed in properjy stamped envelope sufficient to I cover postage, except those relating to the cargo of the aircraft, AUTHORIZED ECONOMIC OPERATORS (AEOs) and that there was delivery to the proper foreign port of all mails placed on board said aircraft before clearance from the Philippines. SEC. 1227. Treatment ofAuthorized Economic Operators (AEOs). - The Bureau shall promulgate the necessary If an aircraft is cleared to depart without passengers, the procedures and requirements for the compliance of Authorized aircraft shall not carry any passenger thereon. Economic Operators (AEOs). For AEOs who have displayed diligence in complying with the rules and the submission of A record shall be made and kept open to public inspection official customs requirements, and have satisfactorily managed in every cu;toms office at an airport of entry of the dates of arrival their commercial records, the Bureau shall extend the following and entry of all aircraft. incentives: CHAPTER3 (a) Release of the goods upon provision of the minimum information necessary to identify the goods and permit the OTHER THIRD PARTIES subsequent completion of the final goods declaration; SEC. 1226. Supervision and Regulation of Third Parties. (b) Grant of clearance of the goods at the declarant's - Third parties transacting with the Bureau on behalf ofimporters premises or another place authorized by the Bureau; and and consignees shall be treated equally as true importers or consignees. (c) Other special procedures such as: � Third parties transacting with the Bureau shall be liable (i) Allowing a single goods declaration for all imports or for acts committed in violation of this Act and related laws. exports in a given period where goods are imported or exported frequently by the same person; Upon the recommendation of the Commissioner, the Secretary of Finance shall issue rules and regulations to govern and regulate the conduct of all third parties dealing directly with 134 135 (ii) Use of commercial records to self-assess their duty and in customs territory and/or in airports and seaports. The Bureau tax liability and, where appropriate, to ensure complia nce with shall likewise ensure that any subsequent rules, regulations, other customs requirements; and orders or memoranda issuedinrelation to AEOs shall be consistent with the appropriate government agency's or regulator's prevailing (iii) Allowing the lodgement of goods declaration by means operating procedures and international best practices. of an entry in the records by the authorized person to be supported subsequently by a supplementary goods declaration_ Existing contracts of private operators with appropriate government agency or regulator, such as, butnotlimited to, the SEC. 1228. Trade Facility for AEO. - The Secretary of PPA, SBMAand PIA and their respective authorities and powers Finance shall, upon the recommendation of the Commissioner, already granted by law pertinent to such contract, shall not be issue the necessary rules: impaired or adversely affected with the Bureau's implementing c1:i rules and regulations on AEOs. (a) To supervise and regulate the conduct and operations of the AEOs, consistent with international best practices, the TITLE XIII World Customs Organization (WCO) framework of standards to secure and faci litate global trade, and other international CUSTOMS FEES A.ND CHARGES conventions ar1.d agreements; SEC.1300. Customs Dues, Fees and Charges. - For (b) To develop a trade facilitation program for AEOs and services rendered and documents issued by the Bureau, dues, other authorized. persons consistent with international best fees and charges shall be collected as may be provided under practices and international conventions ·and agreemE)nts; and existing regulations issued by the Secretary ofFinance, upon the recommendation of the Commissioner. (c) To recognize existing facilities where the authority or right to operateAEOs has been granted by the relevant government SEC. 1301. General Provision on the Authority tobicrease agency or regulator through a contract, where the Bureau shall: or Decrease Dues, Fees and Charges. - The Secreta:ryofFinance may, upon the recommendation of the Commissioner, increase (i) Only require an endorsement by the relevant agency or decrease the dues, fees and charges collectible by the Bureau or regulator; to protect the interest of the government. (ii) Issue a certificate of authority as a matter of course; TITLE XIV and 0FFENSES AND PENALTIES (iii) Ensure that the term of the certificate of authority shall be coterminous with the applicable government contract or CHAPTER I any extension thereof. CRIMES AND OTHER 0FFENSES The Bureau shall implement the provisions of this chapter without interfering, or impeding AEO operations as well as SEC. 1400. Misdeclaration, Misclassification, existing operations of wharves, container yards, container freight Undervaluation in Goods Declaration. - Misdeclaration as to stations, warehouses, examination areas and other facilities located quantity, quality, descriptio n, weight, or measurement of the 136 137 goods, or misclassification through insufficient or wrong fines or penalties provided under Section 1401 of this Act against description of the goods or use ofwrong tariff heading resulting to the importer and other person or persons who willfullyparticipated a discrepancy in duty and tax to be paid between what is legally in the fraudulent act. determined upon assessment and what is declared, shall be subject to a surcharge equivalent to two hundred fifty percent (250%) of SEC. 1401. Unlawfullmportation or Expo rtation. -Any the duty and tax due. No surcharge shall be imposed when the person who shall fraudulently import or export or bring into or discrepancy in duty is less than ten percent (10%), or when the outside of the Philippines any goods, or assist in so doing, contrary declared tariff heading is rejected in a formal customs dispute to _law, or shall receive, conceal, buy, sell, or in any manner settlement process involving difficult or highly technical question facilita te the transportation, concealment, or sale of such goods of tariff classification, or when the tariff classification declaration after importation, or shall conunit technical smuggling as defined relied on an official government ruling. in this Act s):,_all be penalized by: There is undervaluation when: (a) the declared value fails (a) Imprisonment of not less than thirty (30) days and to disclose in full the price actually paidor payable or any dutisble one (1) day but not more than six (6) months, or a fine of not less adjustment to the price actually paid or payable; or (b) when an than twenty-five thousand pesos (P25,000.00) but not more than incorrect valuation method is used or the valuation rules are not seventy-five thousand pesos (P75,000.00), or both, if the appraised properly observed, resulting in a discrepancy in duty and tax to value of the goods unlawfully imported, to be determined in the be paid between what is legally determined as the correct value manner prescribed under this Act, including duties and taxes, of against the declared value. When the undervaluation is the goods unlawfully imported does not exceed two hundred fifty established without the need to go through the formal dispute thousand pesos (P250,000.00); settlement process provided for in this Act, a surcharge shall be imposed equivalent to two hundred fifty percent (250%) of the (b) Imprisonment of not less than six (6) months and one duty and tax due. No surcharge shall be imposed when the (1) day but not more than one (1) year, or a fine of not less than discrepancy in duty is less than ten percent (10%), or the declared seventy-five thousand pesos (P75,000.00) but not more than value is rejected as a result of an official ruling or decision under one hundred fifty thousand pesos (P 150,000.00), or both, if the the customs dispute settlementprocess involving difficult or highly appraised value of the goods unlawfully imported, t o be technical question relating to the application ofcustoms valuation determined in the manner prescribed under this Act, including rules. duties and taxes, exceeds two hundred fifty thousand pesos (P250, 000.00) but not more than five hundred thousand pesos A discrepancy in duty and tax to be paid between what is (P500,000.00); legally determined and what is declared amounting to more than thirty percent (30%) shall constitute aprima facie evidence of (c) Imprisonment of not less than one (1) year and one (1) fraud. day but not more than three (3) years, or a fine of not less than one hundred fifty thousand pesos (Pl50,000.00) but not more than When the misdeclaratiOn, misclassification or: three hundred thousand pesos (P300,000.00)�both, if the undervaluation is intentional orfraudulent, such as when a false appraised value ofthe goods unlawfully imported, to be determined or altered document is submitted or when false statements or in the manner prescribed under this Act, including duties and information are knowingly made, a surchar ge shall be imposed taxes, exceed s five hundred thousand pesos (P500,000.00) but not equivalent to five hundred percent (500%) of the duty and tax due more than one million pesos (P 1,000,000.00); and that the goods shall be subject to seizure regardless of the amount of the discrepancy without prejudice to the application of 139 138 crime of homicide shall have been committed by reason or on the (d) Imprisonment of not less than three (3) years and one occasion of the unlawful importation. (1) day but not more than six (6) years, or a fine of not less than three hundred thousand pesos (P300,000.00) but not more than one million five hundred thousand pesos (Pl,500,000.00), or both, In applying the above scale ofpenalties, an offender who is if the appraised value of the goods unlawfully imported, to be a foreigner shall be deported without further proceedings after determined in the manner prescribed under this Act, including serving the senten "'.'. If the offender is a public officer or employee, duties and taxes, exceeds one million pesos (Pl,000,000.00) but the penalty which IS the next higher in degree shall be imposed not more than five million pesos (P5,000,000.00); in addition to the penalty of perpetual disqualification from public office, and disqualification to vote and to participate in any public e lection. If the offender fails to pay the fine, subsidiary (e) Imprisonment ofnotless than six (6) years and one (1) imprisonment shall be served. day but not more than twelve (12) years, or a fine of not less than one million five hundred thousand pesos (Pl,500,000.00) but not more than fifteen million pesos (P 15,000,000.00), or both, if the When, upon trial for violation of this section, the defendant appraised value of the goods unlawfully imported, to be determined is shown to have had possession of the goods in question, possession in the manner prescribed under this Act, including duties and shallbe deemed sufficient evidence to authorize conviction unless taxes, exceeds five million pesos (P5,000,000.00) but not more the defendant shall explain the possession to the satisfaction of than fifty million pesos (P50,000,000.00); the court: Provided, That each act of unlawful importation or exportation shall be deemed as a separate offense: Provided, however, That payment of the tax due after apprehension shall (f) Imprisonment of not less than twelve (12) years and not constitute a valid defense in any prosecution under this section: one (1) day but not more than twenty (20) years, or a fine of not Provided, further, That outright smuggling shall also bi, less than fifteen million pesos (Pl5,000,000.00) but not more than punishable under this section: Provided, finally, That the rights fifty million pesos (P50,000,000.00), or both, if the appraised value and privileges provided in tbis Act for the importers, consignees, ofthe goods unlawfully imported, to be determined in the manner exporters, service providers, third parties and other third parties prescribed under this Act, including duties and taxes, exceeds who committed this offense shall be revoked. fifty million pesos (P50,000,000.00) but not more than two hundred million pesos (P200,000,000.00); .I. SEC. 1402. Failure or Refusal of Party to Give Evidence or Submit Documents for Assessment. - When the owner, (g) If the appraised value of the goods unlawfully imported importer or consignee of any imported goods, or the agent of either, to be determined in the manner prescribed under this Act, fails or refuses, upon lawful demand in writing by any customs including duties and taxes, exceeds two hundred million pesos ... officer to appear, lawfully depose, or submit to examination or to (P200,000,000.00) or if the aggregate amount of the appraised !; value of the goods which are the subject of unlawful importation . answer any material question or refuses to produce records, ..·..·..•.I·.. � ,_,__ accounts or invoices in possession pertaining to the value committed in more than one instance, including duties and taxes, ..• ,.;.,·.·.··· classification or disposition of the goods in question and deemed exceeds two hundred million pesos (P200,000,000.00), the same material in assessing the same, the District Colle,ctor shall assess shall be deemed as a heinous crime and shall be pu nishable with . a surcharge of twenty percent (20%) on the duffil'!i1e value of the a penalty of reclusion perpetua and a fine ·of not less than fifty . goods which is the subject of the importation . million pesos (P50,000,000.00); and . (b) The penalty ofprision mayor shall be imposed when .. ,,., SEC. 1403. Other Fraudulent Practices Against Customs B.evenue. - Any person who makes or attempts to make any the crime of serious physical injuries shall have been committed, entry of imported or exported goods by means of any false or and the penalty of reclusion perpetua shall be imposed when the --2 " - ,. 140 141 fraudulent statement, document or practice or knowingly and not less than one hundred thousand pesos (Pl00,000.00) but not willfully files any false or fraudulent claim for payment of more than three hundred thousand pesos (P300,000.00). drawback or refund of duties shall, for each act, be punished i n accordance with the penalties prescribed i n Section 1401 o f this SEC. 1408. Unloading of Cargo Before Arrival at Port of Act. Entry. - If, upon the arrival within the limits of any Customs District of the Philippines of any vessel or aircraft engaged in SEC.1404. Failure to Declare Baggage. - Whenever foreign trade, the master or pilot-in-command thereof permits dutiable goods are not declared by any personarriving within the any part of the cargo to be unloaded before arrival at the port of Philippines, such goods shall be seized and the person may obtain entry, and without authority from a proper customs officer, the release of such goods, if not imported contrary to any law, upon owner, operator, or agent of such vessel or aircraft shall be liable payment of a surcharge equivalent to thirty percent (30%) of the for a fine o£not less five hundred thousand pesos (P500,000.00) landed cost of such goods, in addition to all duties, taxes and but not more than two million pesos (P2,000,000.00): Provided, other charges due. Nothing in this section shall preclude the That no fine shall accrue upon satisfactory proof to the proper filing of criminal action against the offender. District Collector that the unloading was rendered necessary by stress of weather, accident or other necessity: Provided, however, SEC. 1405. Vessel, Seacraft, or Aircraft Departing Before That the fine imposed herein shall be without prejudice to the Undergoing Customs Formalities. - Any vessel, seacraft, or application of fines or penalties provided under Section 1401 of aircraft arriving within the limits of a Customs District from a this Act. fureign port which departs before undergoing customs formalities, without being compelled to do so by stress of weather, pursuit or SEC. 1409. Unloading of Cargo at Im.proper Time or Place duress of enemies, or other necessity, shall be liable for a fine of After Arrival. - The owner or operator of any vessel or aircraft not less than one hundred thousand pesos (Pl00,000.00) but not from which cargo is discharged upon arrival in the Philippines at more than three hundred thousand pesos (P300,000.00). a time or place other than that designated by the District Collector, shall be fined not less one hundred thousand pesos (Pl00,000.00) SEC. 1406. Obstruction to Boarding Officer. - If the but not more than three hundred thousand pesos (P300,000.00): master or pilot-in-command or any member of the complement of Provided, That no fine shall a=ue upon satisfactory proof to the any vessel or aircraft arriving at the Philippine port obstructs or proper District Collector that the unloading was rendered hinders any officer from lawfully going on board such vessel or necessary by stress of weather, accident or other necessity. aircraft for the purpose of enforcing this Act, or intentionally causes any officer to be so obstructed or hindered, the vessel or SEC. 1410. Failure to Exhibit or Deposit Documents. - aircraft shall be liable to a fine of not less than one hundred When the master of a vessel or pilot-in-command of an aircraft thousand pesos (Pl00,000.00) but not more than three hundred engaged in foreign trade fails to submit t o the District Collector thousand pesos (P300,000.00). at the time of entry of the vessel or aircraft the register or other documents in lieu thereof, together with the clearance and other SEC. 1407. Unlawful Boarding or Leaving of Vessel or documents granted by the customs officers to tl:!.� vessel or aircraft Aircraft. - If, upon arrival at the Philippine port, any master of at the last foreign port of departure, or falrs''to exhibit any a vessel or pilot-in-co=and of an aircraft engaged in a foreign certificate or other documents required to be then exhibited, the trade permits any person to board or leave the vessel or aircraft owner or operator of such vessel or aircraft shall be liable for a without the permission ofthe customs officer-in-charge, the owner fine of not less than one hundred thousand pesos (P 100,000.00) or operator of such vessel or aircraft shall be liable for a fine of but not more than three hundred thousand pesos (P300,000.00). 142 143 SEC.1411. Bringing of Unmanifested Arms, Expwsives goods listed in the manifest does not tally materially in character or War Equipment. - The owner, operator 1 or agent of a vessel or otherwise with the description thereof in the manifest. or aircraft arriving at a port in the Philippines bearing cargo consisting-0ffirearms, gunpowder, cartridges, dynamite or any SEC.1414. Discrepancy Between Actual and Declared other explosives, munitions or equipment of war not contained in Weight of Manifested Goods. - If the gross weight of goods or the manifest of the vessel or aircraft, or which are concealed on package described in the manifest or bill oflading exceeds the board, shall be liable for a fine of not less than five hundred declared weight by mor e than ten percent (10%), and such thousand pesos (P500 ,000 .00) but not more than one million pesos discrepancy w a s due to the negligence of the master or pilot-in­ (Pl,000,000.00). comroand, the owner, employee, operator or agent ofthe importiog vessel or aircraft shall be liable for a fine ofnot more than twenty SEC. 1412. Failure to Supply Advance and Requisite percent (20%) of the value of the package or goods in respect to Manifests. - Failure to transmit the electronic manifest within wh ich the deficiency exists. the required time as may be prescribed by the Bureau, prior to arrival of the carrying vessel or aircraft at the port of SEC. 1415. Discrepancy With the Master's or Pilot's-in­ entry shall make the owner, operator, or agent of the vessel or Command Report. - When a vessel or aircraft arriving from a aircraft liable fo r a fine of not less than one hundred foreign port is compelled by necessity to unload in another port thousand pesos (Pl00,000.00) but n ot more than three other than the port of entry and permission is granted by the hundredthousand pesos (P300, 000 .00). District Coll ector for the unloading of the vessel or aircraft or the delivery of any part ofthe cargo and it s hall be found that there is If the transit time from port of origin to port of entry is at discrepancy between the cargo un_!oaded and the report of the least seventy-two (72) hours, the shipping or forwarding agent master or the pilot-in-command and.such discrepancy is not of the carrier or the vessel who fails to submit the manifest satisfactorily explained, the owner, operator or agent of the vessel at least twenty-four (24) hours before entry shall likewise be or aircraft shall be liable for a fine of not less than one hundred liable for a fine of not less than one hundred thousand thousand pesos (Pl00,000.00) but not more than three pesos (Pl00,000.00) but not more than three hundred thousand hundred thousand pesos (PS00,000.00). pesos (P300,000.00). SEC. 1416. Failure to Report Fraud. - A master, pilot­ SEC. 1413. Disappearance of Manifested Goods. - When in-command or other officer, owner or agent of any vessel or aircraft any package or goods mentioned in the manifest meant to be trading with or within the Philippines who has knowledge of the unloaded at the port of destination is not unloadedupon the arrival commission of fra ud that shall result in the loss or diminution of of the vessel or aircraft, its agent shall be liable for a fine of not customs revenue but fails to report all information relative thereto less than one hundred thousand pesos (Pl00,000.00) but not more to the District Collector shall be penalized with imprisomnent of than three hundred thousand pesos (P300,000.00) unless not less than six (6) months and one (I) day but not more than the disappearance ofthe package or the goods io question was not one (1) year and shall be liable for a fine of not less than one due to the negligence of the m a s te r of the vessel or hundred thousand pesos (PIOO, 000.00) but not.., than three pilot-in-command of an aircraft, and is explained to the satisfaction hundred thousand pesos (P300,000.00). If th� offender is a of the District Collector. foreigner, the offender shall be deported after serving the s entence. If the offender is a public officer or employee, the offender shall The owner, operator, or agent of a vessel or aircraft shall suffer additional penalty ofperpetual disqualification to hold public be liable for the payment of the same fine when a package or office, to vote and to participate in any election. All the benefits 144 145 due from service in the government, including the separation SEC. 1420. Breaking of Lock or Fastening Placed by and retirement benefits, shall be forfeited. Customs Officers. - lf any lock or other fastening device placed by a customs officer upon any hatch door, or other means of communication in the hold of a vessel or aircraft, or other part SEC. 1417. False Statement of Vessel's or Aircraft's thereof for the security of the same during the night time, is Destination. - When the master or pilot-in-command of a vessel unlawfully opened, broken or removed, or if any of the goods or aircraft loaded with goods shall make a false statemen t as to contained in the hold or in the other compartments so secured is the next destination of such vessel or aircraft when that clandestinely abstracted and landed, the owner, operator, or agent information is required by a customs officer, the owner or operator of the vessel or aircraft shall be liable for a fine of not less th an of such vessel or aircraft shall be liable for a fine of not less than one hundred thousand pesos (Pl00,000.00) but not more than one hundred thousand pesos (Pl00,000.00) but not more than three hundred thousand pesos (P300,000.00). three hundred thousand pesos (P300,000.00). The arrival of a vessel or aircraft at a different port other than the one it had been orig:inally authorized and cleared for without having been impelled SEC. 1421. Removal, Breakage, and Alteration of Marks. to do so by necessity, shall be prima facie proof that the original - Any person who, without authority, willfuJly removes, breaks, statement of the actual destination of the vessel or aircraft was injures, defaces or alters any customs seal or other fastening false. or mark placed upon any vessel, vehicle, on land, sea or air, warehouse or package containing merchandise or baggage iu bond or in customs custody, shall be punished with the penalty SEC. 1418. Affixing Seals. - Any person who, without prescribed in Section 1420 hereof. authority, affixes or attaches a customs seal, fastening, or any mark, or fastening purporting to be a customs seal, to any vessel, aircrai4;, vehicle, warehouse, or package, shall be penalized with SEC. 1422. Unauthorized Withdrawal of Imported Goods imprisonment of not less than six (6) months and one (1) day but from Bonded Warehouse. - Any person who causes the not more than one (1) year, and shall be liable for a fine ofnot less unauthorized withdrawal of imported goods stored from a CBW than one hundred thousand pesos (Pl00,000.00) but not more shall be liable for payment of a surcharge of fifty percent (50%) of than three hundred thousand pesos (P300,000.00). lfthe offender duties, taxes, customs fees, and charges, found to be due and is a foreigner, the offender shall be deported after serving the unpaid. The amount of surcharge shall be added to the duties sentence. If the offender is a public officer or employee, the offender taxes and charges due on the goods withdrawn. lfthe delinquen.,; shall suffer an additional penalty ofperpetual disqualification to lasts for more than one (1) year, the surcharge shall be increased hold public office and disqualification from exercising the right to by twenty-five percent (25%) of the unpaid duties and taxes vote and to participate in any election. annually: Provu!ed, That where the withdrawal is attended with fraud, such as when a fake or altered withdrawal permit is submitted, the warehouse operator shall be held liable under the SEC. 1419. Breaking of Seal Placed by Customs Officers. pertinent provisions ofthis Act, without prejudice to the suspension If any seal placed by a customs officer upon any vessel or �. or revocation ofthe warehousing privileges granted by the Bureau aircraft or comp artment thereof; or upon any box, trunk or other pursuant to this Act. package of goods on board is broken, the owner, operator, or agent of the vessel or aircraft shall be liable for a fine of not less than one hundred thousand pesos (P 100,000.00) but not more SEC.1423. Removing or Repacking Goods in Warehouse. than three hundred thousand pesos (P300,000.00) for each broke n - Any person w ho fraudulently conceals, removes, or repacks or destroyed seal. merchandise in any warehouse or fraudulently alters defaces or obliterates any mark or numbers placed upon packag;s deposited 146 147 in such warehouse, or shall aid or abet any such acts, shall be ofnot less than three (3) years and one (1) day but not more than punished with the penalties prescribed in Section 1418 hereof. six (6) years and/or a fine ofone million pesos (Pl,000,000.00). This penalty shall likewise be imposed against importers and Merchandise so concealed, removed, or repacked, or brokers who deny an authorized customs officer full and free access packages upon which marks, numbers or the values thereofhave to such records, books of accounts, business and computer been so altered, defaced, or obliterated shall be forfeited infavor systems, and all customs commerci al data including payment ofthe government. records, without prejudice to the imposition of the administrative sanctions by the Bureau against contumacious importers, SEC. 1424. Removing Goods from Customs Custody. including the authority to hold delivery or release oftheir imported Any person who enters any warehouse, or any vehicle loaded with goods. or c ontaining merchandise with intent to unlawfully remove therefrom any merchandise or baggage in such vessel, vehicle or SEC. 1428. Concealment or Destruction of Evidence of warehouse or otherwise in cust oms custody or control, or any Fraud. - Any person who willfully conceals o r destroys any person who receives or transports any merchandise or baggage invoice, book, or document relating to any goods liable to dutv unlawfully removed from any such vessel, vehicle or warehouse, after an inspection thereof has been demanded by the Distri;t or shall aid or abet such removal, shall suffer the penalties Collector or at any time conceals or destroys any such invoice, provided in Section 1401 hereof. book, or document for the purpose ofsuppressing any evidence of fraud therein contained, shall be penalized with imprisonment of SEC. 1425. Failure to Pay Duties, Taxes and Other not less than three (3) years and one (1) day but not more than Charges. -For failure to pay the duties, truces and other charges six (6) years and shall be liable for a fine of not less than three of an assessment within fifteen (15) days from the date of final hundred thousand pesos (P300,000.00) but not more than one assessment, a surcharge of ten percent (10%) of the total assessed million pesos (Pl,000,000.00). amount or balance thereon shall be added and collected, which surcharge shall be increased to twenty-five percen t (25%) if the SEC. 1429. Other Offenses. -The owner or operator of a delinquency lasts for more than one (1) year. vessel, aircraft or train shall be liable for a fine for the following acts: SEC. 1426. Breach of Security. -Upon breach ofsecurity required to be filed under this Act, the District Collector, subject (a) For anchoring at any dock, pier, wharf, quay, or to the approval of the Commissioner, may accept in satisfaction bulkhead other than a port of entry, a fine of not less than five thereof a smaller sum than that mentioned in the penalty clause hundred thousand pesos (P500,000.00) but not more than one of the security, but in no case less than the amount necessary to million pesos (PI,000,000.00) for overseas vessels; indemnify the government for the damage occasioned by such· breach. (b) For dumping of garbage or slops over the sides of the vessel within three (3) miles from the nearest coastline, a fine of SEC. 1427. Failure to Keep Importation Records and Full notlessthanonemillionpesos(Pl,000,000.00)�otmorethan Access to Customs Officers. - Any person who fails to keep all ten million pesos (PI0,000,000.00); the records of importations or books of accounts, business and computer systems and all customs commercial data in the manner (c) For dumping or causing to spread crude oil, kerosene, prescribed under this Act, shall be punished with imprisonment or gasoline in the bay or at the piers within three (3) miles from the nearest coastline, a fine of not less than one million p esos 148 149 (Pl,000,000.00) but not more than ten million pesos CHAPTER2 (Pl0,000,000.00) for each offense; PENALTIES IMPOSED UPON BUREAU EMPWYEES (d) For loading gasoline or any other petroleum products at a place other than that designated by the regulations, a fine of SEC. 1431. Statutory Offenses of Officers and Employees. notless than five hundred thousand pesos (P500,000.00) but not Every officer, agent, or employee of the Bureau or of any more than one million pesos (Pl,000,000.00) for eachoffense; other agency of the government char ged with the enforcement of the provisions of this "'.'-et, who shall be found guilty of any _ (e) For causing the emission and spread of harmful gas, delinquency as described below shall be penalized with fumes and chemicals, a fine of not less than one million pesos imprisonment of not less than six (6) years and one (1) day but (Pl,000,000.0 0) but not more than ten million pesos not more than twelve (12) years, and perpetual disqualification to (PI0,000,000.00) for each offense; and h old public office, from exercising the right to vote and to participate in any public election and a fine ofnot less than five (f) For transporting hazardous waste, radioactive waste hundred thousand pesos (P500,000.00), but not more than one and other toxic substances as provided under the Basel Convention million pesos (PI,000,000.00): and Republic Act No. 6969, otherwise known as the "Toxic Substances and Hazardous and Nuclear Wastes Control Act of (a) Extortion or willful oppression under color oflaw·, 1990", the penaltyshall be forfeiture of the vessel in favor of the govemment. O:') Knowingly demanding other or greater sums that are authonzed by law or receive any fee, compensation, or reward The fines imposed herein shall be without prejudice to the except as by law prescribed, for the performance of any duty; application of fines or penalties provided under special laws and regulations. (c) Willfully neg lecting to give recejpts, as required by law, for ':"Y sum co ?ected in the performance of duty, or who willfolly SEC. 1430. Violations of this Aci and Rules and negiect t o pertorm any of the duties enjoined by l aw; Regulations in General. - Any person who violates any other provision of this Act or the rules and regulations issued pursuant (d) Conspiring or colluding with another or others to thereto, shall be penalized with imprisonment of not less than defraud the customs revenue or otherwise violate the law; thirty (30) days a nd one (1) day but not more than one (1) year, or be liable for a fine of not less than one hundred thousand pesos (e) Providing an opportunity for any person to defraud the (Pl00,000.00) but not more than three hundred thousand pesos government of customs revenue or failing to do any act with the (P300,000.00), or both. If the offender is a foreigner, the offender mtent to enable any person to defraud the government ofcustoms shall be deported after serving the sentence. If the offender is a revenue; public officer or employee, ·the offender shall be disqualified from holding public office, from exercising the right to vote and to (f) Negligently or designedly permitting �"' participate in any public election for ten (10) years. the violation of the law by any other person; (g) Making or signing for any false entry or entries in any hook, making or Sigmng any false certificate or return in any 150 151 case where the law requires the making by them of such entry the application of fines or penalties provided under Chapter I of certificate or return; this title and special laws and regulations. (h) Failing to report knowledge or information to their TITLEXV superior officer about an act or act s of fraud committed in revenue collection as requrred by law; MISCELLANEOUS PROVISIONS (i) . Demanding or accepting or attempting, without SEC. 1500. Information, Decisions, and Rulings. _ The authority, to collect directly or indirectly as payment or otherwise, Bureau shall ensure that all information of general application any sum of money or other thing of value for the compromise, pertaining to customs, mcluding revisions or amendments thereto adjustment, or settlement of any charge or complaint for any shall be available to the general public. violation or alleged violation oflaw; SEC. 1501. Period to Issue Ruling. - Unless otherwise (D Unlawfully disclosing confidential information gained provided in this Act, the issuing authority shall act on the d uring any investigation or audit, or using s uch information for applica�on for ruling within thirty (30) days from receipt of the personal gain or to the detriment of the government, the Bureau, application and supporting d o cuments as may be required by or third parties. regulation. Within three �3) days from issuance of a ruling, the issumg authonty shall notify the requesting party of such ruling. All the benefits due from s ervice in the government, including separation and retirement benefits, ofan officer, agent, SEC. 1502. Publication and Confidentiality of Certain or employee of the Bureau or of any other agency ofthe government Information in Ruling. -The Bureau and the Commission shall charged with the enforcement of the provisions of this Act found regul ":'ly publish its rulings in a man ner accessible to the public. guilty of the foregoing violations shall be forfeited. Fo� this purpose, each application for ruling shall be assigned a title and umque ruling number for easy reference. The SEC. 1432. Failure to Report Fraud. -Any employee of publication shall contain information on the goods involved, the the Bureau who has knowledge of any fraud committed against body or summary of the ruling, particularly the grou nds relied the government pertaining to customs revenue, and who fails to upon to support the ru ling, but shall exclude the name of report all information relative thereto to the District Collector, the requestmg party and other information whicli by their very shall be penalized with imprisonment of not less than six (6) na� are confidential, mcluding those which the requesting party years and one (1) day but not more than twelve (12) years and a mdicated m its app lication as c onfidential in nature. Except _ _ fine of not less than five hundred thousand pesos (P500,000.00) m the co ntext of Judicial proceedings, any dis closu re of but not more than one million pesos (Pl,000,000.00). The offender confidential information under thi s section shall not be made shall suffer the additional penalty ofperpetual disqualification to except upon the written consent of the benefici ary of the advance hold public office, to vote and to participatein any election. All ruling. the benefits of the offender due from service in the government, � including separation and retirement benefits, shall be forfeited. SEC. 1503. Duty of District Collector to· Report Ruli to the Commiss_ioner. - When any new or unset ngs tled question SEC. 1433. Liability for Other Offenses. - The fines and shall be determmed by a District Colle ctor, and if the matter is not otherwise appealed for review in penalties imposed in this chapter shall be without prejudice to the ordinary co urse, the 152 153 District Collector shall notify the Commissioner of the decision Tbe required amount of security shall be the lowest possible and submit an adequate statement of the facts involved. and shall not exceed the amount of imposable duties, taxes and other charges. SEC. 1504. Application ofEstablished Ruling or Decision. - A ruling or decision of the Commissioner which determines the When the obligation underwhich the security was required Construction or application of any provision of law imposing has been satisfied, the security shall be discharged immediately. customs duties and taxes, and which changes any existing established valuation, classification, rules of origin and other SEC. 1508. Customs Service Fees. - Customs personnel customs rules, interpretation or practice shall not take effect until may be assigned by a District Collector to render overtime work thirty (30) days after public notice shall have been gi ven in the and other customs services and shall be paid for such services by form of a published decision. When the ruling or decision favors the Bureau)lccording to service fees fixed by the Commissioner the taxpayers, it shall become effective immediately. and approved by the Secretary of Finance. Tbe Bureau may charge additional customs service fees when applicable, subject SEC. 1505. Authority of Official to Administer Oaths and to the rates prescribed under existing rules and regulations. Take Testimony. - The Commissioner, District Collectors and their deputies, and other customs officers especially deputized by SEC. 1509. Testimony in Writing. - When testimony is the District Collector shall have authority to administer oaths taken in any proceeding or matter under the authority of the and take testimony in c onnection with any matter within the Bureau, either party may require that the testimony shall be jurisdiction of the Bureau and, in connection therewith, may made in writing, and when so taken, the written testimony shall require the production of relevant papers, documents, books and be filed with the Office of the District Collector and to be preserved records in accordance with law. for use or reference until the final decision has been reached. SEC. 1506. General Security. - In cases where securities SEC. 1510. District Collector Not Liable in Resp ect to are required to be given under the provisions of this Act and Ruling in Customs Cases.- Every District Collector or other related customs laws, the District Collector, instead ofrequiring officials ofthe Bureau shall not bein anyweypersonally liable on separate special security where transactions of a particular party account of any official ruling or decision as to which the person are numerous, may accept general security extending over su:h claimmg to be aggrieved has the right to obtain either an periods of time and covering such transactions of the party m a�trative or judicial review. Except for misdelivery of goods, question as may be satisfactory to the District Collector. a D�stnct Collector may not, in the absence of abuse of authority, be liable to any person for any loss occasi oned either by the official SEC.1507. Security. - The Bureau shall prescribe the act or the acts of the subordinates. forms and amount of security required to guarantee the payment of duties and taxes and other obligations provided for in this Act. SEC. 1511. Interest Prohibited to be Held by Customs Employees. -:- Any person employed under th hority of the Any party required to provide security shall have the option �: government m the assessment of duties, tax , es and other to choose from any form of security prescribed by the Bureau. �arg�s in connection with imports or exports, shall not own, Tbe Bureau may not require security if satisfied that an obligation either m whole or in part, any vessel or aircraft or act as attorney, to the Bureau will be ful:fi1led, but shall require and accept a agent or CoilSlgnee for the owner of any vessel or aircraft or of any general security from declarants who regularly declare goods at cargo !oaded on board the vessel or aircraft; and shall not import different offices in customs territory under such terms and or be mvolved, directly or indirectly, i n the importation of any conditions as may be determined by the Commissioner. goods for sale into the Philippines. 154 155 SEC. 1512. Reward to Persons Instrumental in the experience and academic training possess the necessary Actual Collection of Additional Revenues Arising from the qualifications requisite for developing expert knowledge of tariff Discovery of Violations of this Act. - A cash reward equivalent and trade related matt ers. During their terms of office the to twenty percent (20%) of the actual proceeds from the sale of ChairPerson and the Commissioners shall not engage � the smuggled goods and confiscated goods or actual collection of practice of any profession, or intervene directly or indirectly in additional revenues shall be given to the customs and non-customs the management or control of any private enterprise which may, informers or wbistleblowers who are instrumental in the collection Ill anyway, be affected by the functions of their office. They shall ofadditional revenues arising from the discovery of violations of not be, directly or indirectly, financially interested in any contract this Act in accordance with the rules and regulations to be issued with the government, or any subdivision or in strumentality by the SecretarJ of Finance. thereof SEC. 1513. Outsourcing of Non-Sovereign Customs SEC. 1601. Appointment and Compensation of Officials Functions to Private Entities. - Subject to the approval of the and Employees. - All employees of the Commission shall be Secretary of Finance, the Bureau may outsource _any of its non­ appointed by the Chairperson in accordance with the Civil Service sovereign and ancillary function to a qualified and competent Law except as the private secretaries to the offices of the private entity in accordance with government rules on service Chairperson, Commissioners and Executive Director. procurement. SEC. 1602. Official Seal. - The Commission is authorized SEC. 1514. International Standards and Best Practices. to adopt an official seal - The Bureau may adopt international standards and best practices in custoIDB administration laid down by international SEC. 1603. Functions of the Commission. - The agreement or convention pertaining to trade facilitation, supply Commission shall have the following functions: chain security, and related matters, whether or not the Philippines is a signatory to such international agreement or (a) Adjudicate cases on the application of trade remedies convention. against imports pursuant to Sections 711, 712 and 713 of this Act; TITLE X-vl (b) Study the impact of tariff policies and programs on . TARIFF ADMJNISTRATION AND POLICY national competitiveness and consumer welfare in line with the economic objectives of the government; CHAPTER I (c) Administer the Philippine tariff schedules and tariff TARIFF COMMISSION nomenclatures; , ,#.;+ SEC. 1600. Chief Officials of the Tariff Commission and (d) Issue advance rulings on tariff classifi�tion ofimported Qualifications. - The officials of the Tariff Commission shall goods and render rulings on disputes over tariff classifi cation of consist of a Chairperson and two (2) Commissioners to be appointed goods pursuant to Section 1100 ofthis Act, except in cases involving by the President of the Philippines. The Chairperson and the goo_ds on which the Commission has provided advan ce ruling on Commissioners shall be natural-born citizens of the Philippines, tariff classification; of good moral character and proven integrity, and who, by 156 157 (e) Provide the President and Congress with independent possession of any person, firm,. copartnership, corporation, or analysis, information and technical support on matters related association engaged in the production, importation, or distribution to tariff and nontariff measures affecting Philippine industries of goods under investigation, and shall have power to summon and exports for policy guidance; witnesses, take testimony, administer oaths, and to issue subpoena duces tecum requiring the production of books (c() Analyze the nature and composition, and the papers, or �oc�ents relating to the matter under investigation'. classification of goods according to tariff commodity classification The Com1:111ss1on may also request the views, recommendations, and heading number for customs and other related purposes, and assis tance of any govern ment office, agency, or which info rmation shall be furnished the NEDA, DTI, DA, DOF, instrumentality who shall be expected to cooperate fully with the DENR, and ESP; Commission. (g) Review the trade agreements for negotiation and trade SEC. 1606. Sworn and Verified Statements. - The agreements entered into by the Philippines and make Com mission may order the taking of sworn statements at any recommendations, if necessary, on the consistency of the terms stage of any proceeding or inves tigation before it. The sworn of the agreements with the national policy objectives; statements must be made before a person ·duly authorized to administer oaths. (h) Conduct public consultations and public he arings pursuant to its functions; and The Commission is authorized to require any importer, grower, producer, manufacturer or seller to file with the (i) Deputize or delegate, to appropriate government agency Commission a statement, under oath, giving the selling prices in its function of rendering rulings on disputes over tariff the Philippines of goods imported, grown, produced, fabricated or classification of goods, until the plantilla positions necessary for manufactured by such person. undertaking such function have been approved and filled-up: Provided, T"nat such delegation offunction shall not extend beyond SEC. 1607. Implementing Rules and Regulations. - The three (3) years from the effectivity of this Act. Commission shall promulgate and adopt such rules and re�ations as may be necessary to carry out the provisions of SEC. 1604. Reports of the Commission. -The Commission this Act. shall place at the disposal of the President and any Member of the Congress of the Philippines all information at its command. CHAPTER2 It shall conduct such investigation and submit reports as may be required by the President and the Congress ofthe Philippines. It FLEXIBLE TARIFF shall likewise r eport to the Preside nt and Congress on the first Monday of December of each year and hereafter, a statement of SEC. 1608. Flexible Cbuse. - (a) In the interest of the methods adopted and a summary of all reports made during the e eral welfare and national security, and, subject to the � ": year. limitations prescribed under this Act, the PrM'd.ent, upon the recommendation of the NEDA, is hereby empowered to: SEC.1605. Access to Documents and Assistance to the Commission. - The Commission or its duly authorized (1) � ncrease, reduce, or remove existing rates of import representative shall have access to any document, paper or record . duty mcluding any necessary change in classification. The existing pertinent to the subject matter under investigation, in th e rates may be increased or decreased to any level, in one or several 158 159 stages, but in no case shall the increased rate of import duty be (e) The power delegated to the President as provided for in higher than a maximum of one hundred percent (100%) ad this section shall be exerciBed only when Congress is not in session. valorem; (f) The power herein delegated may be withdrawn or (2) Establish import quotas or ban imports of any term inated by Congress through a joint resolution. commodity, a s may be necessary; and Th e NEDA shall promulgate rules and regulations (3) Impose an additional duty on all imports not exce�ding necessary to carry out the provisions of this section. ten perce nt (10%) ad valorem whenever necess ary: Provided, . That upon periodic investigations by the Commiss10n and SEC. 1609. Promotion of Foreign Trade. - (a) For th e recommendation of the NEDA, the President may cause a gradual purpose of expanding foreign markets for Philippine products as reduction of rates of import duty granted in Section 1611 of this ameans of assisting in the economic development of the country, Act, includiug those subsequently granted pursuant to this section. in overcoming domestic unemployment, in increasing the purchasing power of the Philippine peso, and in establishing and (b) Before any re commendation is submitted to the maintainingbetter relations between the Philippines and other President by the NEDA pursuant to the provisions of this section, countries, the President, shall, from time to time: except in the imposition of an additional duty no t exceeding ten percent (10%) ad ualorem, the Commission shall conduct an (1) Enter into trade agreements with foreign governments investigation and shall hold public hearings wherein interested or instrumentalities thereof; and parties shall be afforded reasonable opportunity to be present, to produce evidence and to be heard. The Commission shall also (2) Modify import duties, including any necessary change hear the views and recommendations of any government office, in classification and other import restrictions as are required or agency, or instrumentality. The Commission shall submit its appropriate to carry out and prom ote foreign trade with other findings and recommendations to the NEDA within thirty (30) countries: Provided, That in modifying import duties or fixing days a,_-fter the termination of the public heafl.1,gs. import quota, the require ments prescribed in subsection (a) of Section 1608 of this Act shall be observed: Provided, however, (c) The power of the President to increase or decrease rates That any modification in import duties and the fixing ofimport of import duty within the limits fixed in subsection (a) hereof quotas pursuant to the various trade agreements the Philippines shall include the authority to modify the form of duty. In has entered into, shall not be subject to the limitations ofaforesaid modifying the form of duty, the corresponding ad val.orem or subsection (a) of Section 1608. specific equivalents of the duty with respect to imports from the principal compe ting foreign country for the most recent (b) The duties and other import restrictions as modified in representative period shall be used as basis. subsection (a) oftbis section, shall apply to goods which are the !;!Owth, produce, or manufacture of the specifi.�1jlltry, whether (d) Any order issued by the President pursuant to the llllported directly or indirectly, with which the Philippines has provisions of this section shall take effect thirty (30) days after entered into a trade agreement: Provided, That the President promulgation, except in the imposition of additional duty not may suspend the application of any concession to goods which are exceeding ten percent (10%) ad val.orem which shall take effect the growth, produce, or manufactu red product of the specific at the discretion of the President. country because of acts or policies which tend to defeat the purposes 160 161 set in this section, including the operations ofinternational cartels; the condition that the wholesale prices of the domestic products and the duties and other import restrictions as negotiated shall shall be reduc.ed to, or maintained at, the level recommended by be in force and effect from and '1fter such time as specified in the the NEDA unless, for good cause shown, an increase thereof, as order, without prejudice to the Philippine commitments in any recommended by the NEDA, is authorized by the President. ratified mternational agreement or treaty_ Should incre ases be made without such authority, the NEDA sh all immedi atejy notify the President who shall allow the (c) Nothing in this section shall be construed to give any importation of competing products i n such quantities as to protect authority to cancel or reduce in any manner the indebtedness of the public from the unauthorized increase in wholesale prices_ any foreign country to the Philippines or any claim of the Philippines against any foreign country_ (f) This section shall not prevent the effectivity of any executive agreement or any future preferential trade agreement (d) Before any trade agreement is concluded with any with any foreign country_ foreign government or instrumentality thereof; reasonable public notice of the intention to negotiate an agreement with such (g) The NEDA and the Commission shall promulgate such government or in strume ntality shall be given in order that reasonable procedures, rules and regulations as they may deem interested persons may have an opportunity to present their necessary to execute their respective functions under this section_ views to the Commission_ The Commi&sion shall seek information and advice from the DTI, DA, DOF, DENR, DFA andBSP, and CHAPTERS from such other sources as it may deem appropriate_ TARIFF NOMENCLATURE AND RATE OF DUTY (e) In advising the President, on a trade agreemen t entered into by the Philippines, the following shall be observed: SEC_ 1610. General Rules for the Interpretation (GRI)_ -The classification of goods and its tariffnomenclature as provided (1) The Commission shall determine whether or not the pursuant to this Act shall be governed by the following principles: domestic industry has suffered or is being tbreatened with injury and whe ther or not the whole sale prices at which the domestic (1) The titles of sections, chapters a nd subchapters are p roducts are sold are reasonable, taking mto account the cost of provided for easy reference only_ For legal purposes, classifica tion raw materials, labor, overhead, a fair return on investment) and shall be determined according to the terms of the headings and the overall efficiency of the industry_ any relative s ection or chapter notes and, provided such headings or notes do not otherwise require, according to the following (2) The NEDA shall evaluate the report of the Commission provisions: and submit reco=endations to the President_ (2)(a) Any reference in a heading to the ,11:Jds shall be (3) Upon receipt of the re por t of the findings and taken to include a reference to the same in their rncomple te or recommendations of the NEDA, the President may prescribe unfinished form or state: Provided, That the incomplete or adjustments in the rates of import duties, withdraw, modify o r unfinished goods have the essential character, as presented, of suspend, in whole or in part, any concession under any trade the complete or finished goods_ It shall also be taken to include a agreement, establish import quota, or institute such other import reference to the same, in their complete or finished form or state restrictions, as the NEDA recom mends to be necessary in order (or falling to be classified as complete or finished by virtue ofthis to fully protect domestic industry and the consumers, subject to Rule), presented unassembled or disassembled_ 163 162 (b) Any reference in a heading to a material or substance (a) Camera cases, musical instrument cases, gun cases, shall be taken to include a reference to !lllXtures or combinations drawi ng instrument cases, necklace cases and similar containers of that material or substance with other materials or substances. specially shaped or fitted to contain specific goods or set of goods'. Any reference to goods of a given material or substance shall be suitable for long-term use and presented with the guods for which taken to include a reference to goods consisting wholly or partly they are intended, shall be classified with such goods when of a of such material or substance. The classification of goods kind normally sold therewith. The Rule does not, however, apply consisting of more than one material or substance shall be to containers which give the whole its essential character; and according to the principles of Rule 3. (b) Subject to the provisions ofRule 5(a), packing materials (3) When by application of Rule 2(b) or for any other and packing containers presented with the goods therein shall be reason, goods are, prima facie, classifiable under two (2) or classified with the goods if they are of a kind normally used for more headings, classification shall be effected as follows: packing such goods. However, this provision does not apply when such packing materials or packing containers are clearly suitable for repetitive use. (a) The heading which provides the mo st specific description shall be preferred to headings providing a more general description. However, when two (2) or more headings (6) For legal purposes, the classification of goods in the each refer to part only of the materials or substances contained subheadings of a heading shall be determined according to the in mixed or composite goods or to part only of the items in a set terms of those subheadings and any related subheading notes put up for retail sale, those headings are to be regarded as equally and, mutatis mutimdis, to the above Rules, on the understanding specific in relation to those goo ds, even if one of them give s a that only subheadings at the same level are comparable. For the more complete or precise description of the goods. purposes of the Rule, the relative section and Chapter Notes also apply, unless the context otherwise requires. (b) J\1:i.xtures, composite goods consisting of different materials or made up of different components, and goods put up SEC. 1611. TariffNomenclature and Rates ofImport Duty. in sets for retail sale, which cannot be classified by reference to - The provisions of Section 104 on Rates of Import Duty of 3(a), shall be classified as if they consisted of their essential Presidential Decree No. 1464, otherwise known as the Tariff and character, insofar as this criterion is applicable. Customs Code of the Philippines ofl978, as amended, specifically providing for the tariff sections, chapters, headings and subheadings and the rates of import duty, shall still apply and (c) When goods cannot be classified by reference to 3(a) or shall supplement this Act. There shall be levied, collected and 3(b), they shall be classified under the heading which occurs last paid upon all imported goods the rates of duty indicated i n numerical or der among thos e which equally merit thereon except as otherwise specifically provided for in this Act: coDfilderation; Provided, That the maxinmm rate shall not exceed one hundred percent (100%) ad valorem. (4) Goods whicli cannot be classified in accordance with the above Rules shall be classified under the heading appropriate A1 The rates of duty provided or subsequently fixed pursuant to the goods to which they are most akin. to Sections 1608 and 1609 of this Act shall be subject to periodic investigation by the Tariff Commission and may be revised by (fiJ In addition to the foregoing provisions, the following the President, upon the recommendation of the NEDA Rules shall apply with respect to the goods referred to therein: 165 164 (1) Industry audits; It shall also apply to all products, whether imported directly or indirectly, of all foreign countries, which do not discriminate against Philippine export products. An additional one hundred (2) Collection performance data; and percent (100%) across-the-board duty shsll be levied on the products of any foreign country which discriminates against (3) Status report on administrative, civil and criminal Philippine export products. actions initiated against persons. SEC. 1612. TariftNomenclatureandR.atesofExportDuty. TITLEXVIIl -The provisions of Section 514 on Export Products Subject to Duty and Rates of Presidential Decree No.1464, otherwise known FINAL PROVISIONS as the Tariff and Customs Code ofl978, as amended, specifically providing for the export products subject to duty and rates, sh all SEC. 1800. Implementing Rules and Regulations. - The still apply and shall supplement this Act. Secretary of Finance shsll, upon the recommendation of the Commissioner, promulgate the necessary rules and regulations TITLEXVII for the effective implementation ofthis Act. CONGRESSIONAL OVERSIGHT COMMITTEE SEC. 1801. Transitory Provisions. - All suits, proceedings, or pr0secutions whether civil or criminaL for causes arising or SEC. 1700. Congressional Oversight Committee. - The acts done or committed prior to the effectivity of this Act, shall be Cong ressional Customs and Tariff Oversight Committee, herein commenced and prosecuted within the same time in the same referred to as the Committee, is h<areby constituted in accordance manner and with the same effect as if this Act had not been with the provisions of this Act. The Committee shsll be composed enacted and all rights acquired, offenses committed, and penalties of the Ch airpersons of the Committee on Ways andMeans ofthe or forfeitures or liabilities waived prior to the said effectivity shall Senate and House of Representatives and four (4) additional not be affected thereby. members from each House� to be designated by the Senate Pres ident and the Speaker of the House of Representatives, SEC. 1802. Saving Clause. - All other laws, acts, executive respectively. The Committee shsll, among others, in aid of orders, an d Customs Administrative Orders (CAOs), Customs legislation: Memorandum Orders (CMOs), orders, memoranda, circulars, rules and regulations issued by the Bureau, under the provisions (a) Monitor and ensure the proper implementation of this of Presidential Decree No. 1464, otherwise known as the Tariff Act; and Customs Code of the Philippines of 1978, as amended, not inconsistent with the provisions of this Act, shall remain valid (b) Review the collection performance of the Bureau; and unless the same will be repealed or amended accordingly, pursuant to the provisions of this Act. (c) Review the implementation of the programs of the Bureau. SEC.1803. Repealing Clause. Presidential Decree No. 1464, otherwise known as the Tariff and Customs Code of In furtherance of the hereinabove cited objectives, the the Philippines of 1978, as amended, a nd Presidential Committee shall require the Bureau to submit all pertinent Decree No. 1853 which require any applicant for letter of credit information which includes: covering imports to deposit the full amount of duties due on the .�.-c-wrmer ,r ····1wr:11·:·t1mmm , v;; m n _··1!,IM!i. 11•1i.f./ 'V 166 importation, are hereby expressly repealed. All other laws, acts, presidential decrees, executive orders, rules and regulations or parts thereof inconsistent with the provisions ofthis Act are hereby expressly repealed, amended or modified accordingly. :l SEC. 1804. Separability Clause. - If any provision of this Act is declared invalid or unconstitutional, the remaining provisions or parts shall remain in full force and effect. SEC. 1805. Effectiuity. - This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation. Approved, ' M.�110N ��N�' f Speaker o the House ofRepresentatives This Act which is a consolidation .of House Bill No. 5525 and Senate Bill No. 2968 was finally passed by the House of Representatives and the Senate on February 2, 2016. � Secretary ' ofthe Senate �!� Secretary General House a/Representatives