1 1BUREAU OF CUSTOMS 2CODE OF REGULATIONS OF 2012 3 4BOOK I BUREAU OF CUSTOMS, ORGANIZATION AND FUNCTIONS 5 6TITLE ONE ORGANIZATION AND

ND FUNCTIONS 7 8CHAPTER 1 ORGANIZATION 9 10Section 1 Chief Officials.The Bureau of Customs shall be headed by and 11shall be under the control and supervision of a Commissioner, appointed by 12the President, upon the recommendation by the Secretary of Finance. He 13shall be assisted by six (6) Deputy Commissioners and an Assistant 14Commissioner, namely: 15 16(a) Deputy Commissioner for the Revenue Collection and Monitoring Group; 17 18(b) Deputy Commissioner for the Assessment and Operations Coordinating 19Group; 20 21(c) Deputy Commissioner for the Intelligence Group; 22 23(d) Deputy Commissioner for the Enforcement Group; 24 25(e) Deputy Commissioner for the Internal Administration Group; 26 27(f) Deputy Commissioner for the Management Information Systems 28Technology Group; and 29 30(g) Assistant Commissioner for the Post Entry Audit Group. 31 32The aforementioned Deputy and Assistant Commissioners shall be appointed 33by the President upon the recommendation of the Commissioner of Customs. 34 35Section 2 Structural Organization 36 372.1. Composition. The Bureau of Customs shall be composed of the 38following: 39 40(a) Customs Revenue Collection Monitoring Group, headed and supervised 41by a Deputy Commissioner and composed of the following services, each of 42which shall be headed by a Service Chief: 43 44 (1) Legal Service, composed of the following: 45 46 (i) Ruling and Research Division; 47 (ii) Prosecution and Litigation Division; 48 (iii) Appellate Division; and 49 (iv) Tax Exempt Division. 50 2 3
1

1 1 (2) Collection Service, composed of the following: 2 3 (i) Collection Performance/Evaluation Division; 4 (ii) Liquidation and Assessment Audit Division; 5 (iii) Bonds Audit Division. 6 7 (3) Financial Service, composed of the following: 8 9 (i) Revenue Accounting Division; and 10 (ii) Statistical Analysis Division. 11 12(b) Customs Assessment and Operations Coordinating Group, headed and 13supervised by a Deputy Commissioner and composed of the following 14services, each of which shall be headed by a Service Chief: 15 16 (1) Imports and Assessment Service, composed of the following: 17 18 (i) Valuation and Classification Division; 19 (ii) Assessment Coordination and Monitoring Division; and 20 (iii) Warehouse Coordination Division. 21 22 (2) Ports Operations Service composed of the following: 23 24 (i) Auction and Cargo Disposal Division; 25 (ii) Export Coordination Division; 26 (iii) Port Operations Division. 27 28(c) Intelligence Group, headed and supervised by a Deputy Commissioner 29and composed of the following service, which shall be headed by a Service 30Chief: 31 32 (1) Intelligence and Investigation Service, composed of the following: 33 34 (i) Intelligence Division; 35 (ii) Investigation and Prosecution Division; 36 (iii) Internal Inquiry and Prosecution Division; 37 (iv) Intellectual Property Rights Division; and 38 (v) Warehousing Audit Monitoring Unit. 39 40(d) EnforcementGroup, headed and supervised by a Deputy Commissioner 41and composed of the following service, which shall be headed by a Service 42Chief: 43 44 (1) Enforcement and Security Service, composed of the following: 45 46 (i) Customs Police Division; 47 (ii) Water Patrol Division; 48 (iii) Radio Communication Division. 49

2 3

1 1(e) Internal Administration Group, headed and supervised by Deputy 2Commissioner and composed of the following: 3 4 (1) Financial Management Office, composed of the following; 5 6 (i) Budget Division; 7 (ii) Planning & Policy Research Division; and 8 (iii) Accounting Division. 9 10 (2) Administration Office, composed of the following: 11 12 (i) Human Resources Management Division; 13 (ii) Public Information and Assistance Division; 14 (iii) General Services Division; 15 (iv) Central Records Management Division; 16 (v) Medical and Dental Division; and 17 (vi) Internal Control/Management Division. 18 19(f) Management Information System & Technology Group, headed and 20supervised by a Deputy Commissioner and composed of the following 21services, each of which shall be headed by a Service Chief: 22 23 (1) Planning and System Development Service, composed of the 24 following: 25 26 (i) Planning, Management and Information Division; and 27 (ii) System Development Division. 28 29 (2) Technology Management Service, composed of the following: 30 31 (i) System Management Division; and 32 (ii) Technical Support Division. 33 34(g) Post Entry Audit Group, headed and supervised by an Assistant 35Commissioner and composed of the following services, each of which shall be 36headed by a Service Chief: 37 38 (1) Trade Information & Risk Analysis Office, composed of the following: 39 40 (i) Trade Information Analysis Division I; and 41 (ii) Trade Information Analysis Division II. 42 43 (2) Compliance Assessment Unit, composed of the following: 44 45 (i) Audit Division I; 46 (ii) Audit Division II; 47 (iii) Audit Division III; 48 (iv) Audit Division IV; and 49 (v) Audit Division V. 50 2 3
3

1 1(h) Collection Districts and Subports.The Bureau shall have seventeen (17) 2Collection Districts each of which shall be headed by a Collector of Customs 3of appropriate level referred to as District Collector of Customs. Each 4Collection District shall have as many sub-ports as necessary to maximize 5revenue collection and to prevent smuggling and fraud against customs. The 6following are the seventeen (17) Collection Districts and thirty eight (38) 7subports under the direct control and supervision by the Commissioner, 8namely: 9 10 (1) Collection District I Port of San Fernando, with three (3) subports 11namely (1) EPZA Baguio, (2) Sual, and (3) Salumague; 12 13 (2) Collection District IIA Port of Manila, with six (6) subport namely 14(1) Harbor Center, (2) Masinloc, (3) FTI, (4) Postal Office, (5) EPZA Cavite 15and (6) PEZA Laguna; 16 17 (3) Collection District IIB Manila International Container Port, with 18North Harbor as its subport; 19 20 (4) Collection District III Ninoy Aquino International Airport, with two 21(2) subports namely (1) Manila Domestic Airport, (2) Central Mail Exchange 22Center; 23 24 (5) Collection District IV Port of Batangas, with two (2) subports, 25namely (1) Siain, and (2) Puerto Princesa; 26 27 (6) Collection District V Port of Legaspi, with two (2) subports, namely 28 (1) Tabacco, and (2) Jose Panganiban; 29 30 (7) Collection District VI Port of Iloilo, with Pulupandan as its subport; 31 32 (8) Collection District VII Port of Cebu, with two (2) subports namely 33(1) Mactan, and (2) Dumaguete; 34 35 (9) Collection District VIII Port of Tacloban, with three (3) subports 36namely (1) Isabel, (2) Catbalogan, and (3) San Jose; 37 38 (10) Collection District IX Port of Surigao, with two (2) subports, 39namely (1) Bislig, and (2) Nasipit; 40 41 (11) Collection District X Port of Cagayan De Oro, with two (2) 42subports namely (1) Ozamis, and (2) Iligan; 43 44 (12) Collection District XI Port of Zamboanga, with four (4) subports 45namely (1) Zamboanga International Airport, (2) Jolo, (3) Tawi-Tawi, and (4) 46Basilan; 47 48 (13) Collection District XII Port of Davao with three (3) subports 49namely (1) Dadiangas, (2) Mati, and (3) Parang; 50 2 3
4

1 1 (14) Collection District XIII Port of Subic; 2 3 (15) Collection District XIV Port of Clark International Airport (EO 55); 4 5 (16) Collection District XV Port of Aparri with four (4) subports namely 6 (1) Laoag International Airport, (2) Currimao, (3) Tuguegarao Airport; and 7(4) Port Irene (EO 707); and 8 9 (17) Collection District XVI Port of Limay and Mariveles, with 10Mariveles as its subport (EO 727). 11 12 13CHAPTER 2 FUNCTIONS 14 15Section 1 Functions of the Bureau of Customs.The Bureau of Customs shall 16have the following functions: 17 18(a) Collect customs duties, taxes and the corresponding fees, charges and 19penalties; 20 21(b) Account for all customs revenues collected; 22 23(c) Exercise police authority for the enforcement of tariff and customs laws; 24 25(d) Prevent and suppress smuggling, pilferage and all other economic frauds 26within all ports of entry; 27 28(e) Supervise and control exports, imports, foreign mails, and the clearance 29of vessels and aircrafts in all ports of entry; 30 31(f) Administer all legal requirements that are appropriate; 32 33(g) Prevent and prosecute smuggling and other illegal activities in all ports 34under its jurisdiction; 35 36(h) Exercise supervision and control over its constituent units; and 37 38(i) Perform such other functions as may be provided by law. 39 40 41Section 2 Functions of Groups, Services, and Divisions. 42 432.1. Customs Revenue Collection Monitoring Group. The Customs Revenue 44Collection Monitoring Group, headed by a Deputy Commissioner who shall 45have direct control and supervision over the Legal Service, the Collection 46Service, and the Financial Service including the offices therein,shall have the 47following functions: 48 49(a) Maintain an updated accounting for all Customs revenues collected; 50 2 3
5

1 1(b) Administer legal requirements of the Bureau of Customs to include 2litigation and prosecution of cases; 3 4(c) Provide the Commissioner of Customs with accurate and timely 5information and analysis of collection statistics; 6 7(d) Conduct continuing audit of liquidated entries and outstanding bonds; and 8 9(e) Perform such other appropriate functions consistent with the assigned 10tasks of the group and others which may be given by the Commissioner. 11 122.1.1 Legal Service.The Legal Service shall be headed by a Customs Service 13Chief and shall have direct control and supervision over the Appellate 14Division, the Ruling and Research Division, the Prosecution and Litigation 15Division, and the Tax Exempt Division. 16 172.1.1.1 Ruling and Research Division. The Ruling and Research Division 18shall have the following functions: 19 20(a) Recommend to the Commissioner opinions, rulings and memoranda on 21matters relating to Customs laws, rules and regulations; 22 23(b) Review claims for abatements, refunds and rewards and prepares the 24corresponding action for the consideration of the Commissioner; 25 26(c) Render legal service to the Commissioner and other official/employees of 27the Bureau; 28 29(d) Submit periodic reports and other data as may be required; and 30 31(e) Perform other functions consistent with the assigned tasks. 32 332.1.1.2 Appellate Division. The Appellate Division shall have the following 34functions: 35 36(a) Review decisions of the District Collector of Customs in seizure, protest 37and administrative cases elevated to the Commissioner on appeal or review 38and prepares the corresponding decisions; 39 40(b) Collaborate with the Office of the Solicitor General in the prosecution of 41cases of appeal to the Court of Tax Appeals or the Supreme Court; 42 43(c) Submit periodic reports and other data as may be required; and 44 45(d) Perform other functions consistent with the assigned tasks. 46 472.1.1.3 Prosecution and Litigation Division. The Prosecution and Litigation 48Division shall have the following functions: 49

2 3

1 1(a) Hear administrative cases against customs personnel for violations of 2laws, rules and regulations; 3 4(b) Collaborate with the Prosecutors Office on the proper prosecution of 5criminal cases filed for violation of customs laws and other related laws; 6 7(c) Submit periodic reports and other data as may be required; and 8 9(d) Perform other appropriate functions consistent with the assigned tasks. 10 112.1.1.4 Tax Exempt Division. The Tax Exempt Division shall have the 12following functions: 13 14(a) Indorse and transmit to the District Collector of the Customs, Tax Exempt 15and Certificates of Authority issued by concerned government agencies; 16 17(b) Evaluate and conduct studies on exemptions under Section 105 of the 18Tariff and Customs Code (TCCP) and recommend action to the Department 19of Finance through the Commissioner of Customs; 20 21(c) Submit periodic reports and other data as may be required; and 22 23(d) Perform other functions consistent with the assigned tasks. 24 25 262.1.2 Collection Service - The Collection Service shall be headed by a 27Customs Service Chief and shall have direct control and supervision over the 28Collection Performance Evaluation Division, the Liquidation and Assessment 29Audit Division, and the Bonds Audit Division. 30 312.1.2.1 Collection Performance Evaluation Division. The Collection 32Performance Evaluation Division shall have the following functions: 33 34(a) Gather and evaluate collection performance reports of the different 35collection districts; 36 37(b) Provide the Commissioner with the accounts and timely information of 38collection performance; 39 40(c) Submit periodic reports and other data that may be required; and 41 42(d) Perform other functions consistent with the assigned tasks. 43 442.1.2.2 Liquidation Audit and Assessment Division. The Liquidation Audit 45and Assessment Division shall have the following functions: 46 47(a) Conduct a continuing and systematic accounting and audit liquidated 48entries; 49 50(b) Formulate policies and guidelines affecting audit of liquidated entries; 2 3
7

1 1 2(c) Submit periodic reports and other data that may be required; and 3 4(d) Perform other functions consistent with the assigned tasks. 5 62.1.2.3 Bonds Audit Division. The Bonds Audit Division shall have the 7following functions: 8 9(a) Maintain a systematic and updated reports on bonds; 10 11(b) Formulate policies and guidelines on Bonds Audit; 12 13(c) Conduct a continuing and systematic accounting and audit of outstanding 14bonds; 15 16(d) Submit the necessary periodic reports and other data that may be 17required; and 18 19(e) Perform such other appropriate functions consistent with the assigned 20tasks. 21 222.1.3 Financial Service - The Financial Service shall be headed by a 23Customs Service Chief and shall have direct control and supervision over the 24Revenue Accounting Division and the Statistical Analysis Division. 25 262.1.3.1 Revenue Accounting Division. The Revenue Accounting Division 27shall have the following functions: 28 29(a) Receive and analyzes report of collection from all collection districts; 30 31(b) Receive and reconcile the Abstract of Remittance submitted by Authorized 32Agents Banks (AAB) against the debt advice submitted by the Central Bank; 33 34(c) Prepare Reports of Collection on direct payments and payments through 35banks; 36 37(d) Submit periodic reports; and 38 39(e) Perform other functions consistent with the assigned tasks. 40 412.1.3.2 Statistical Analysis Division. The Statistical Analysis Division shall 42have the following functions: 43 44(a) Gather, analyze, and generate reports on revenue collection of imports 45and exports; 46 47(b) Set-up annual targets of collection districts based on the previous years 48collection and other relevant statistical sources and economic trends; 49 50(c) Submit periodic reports and other data that may be required; and 2 3
8

1 1 2(d) Perform other functions consistent with the assigned tasks. 3 4 52.2. Customs Assessment and Operations Coordinating Group. The 6Customs Assessment and Operations Coordinating Group, headed by a 7Deputy Commissioner who shall have direct control and supervision over the 8Imports and Assessment Service and thePorts Operations Service including 9the offices therein, shall have the following functions: 10 11(a) Regularly gather and upon approval of the Commissioner, publish values 12of commodities imported into the Philippines, such values being the bases for 13the computation of customs duties and other revenues; 14 15(b) Monitor for decision making purposes the implementation of rules and 16regulations governing assessment, warehousing and support operations; 17 18(c) Monitor auction and disposal activities together with port/airport operations 19related activities for decision-making purposes; and 20 21(d) Perform other appropriate functions consistent with the assigned tasks of 22the Group which may be given by the Commissioner. 23 24 252.2.1 Import Assessment Service. This office shall be headed by a Customs 26Service chief and shall have direct supervision and control over the Valuation 27and Classification Division, Assessment Coordination and Monitoring Division 28and the Warehouse Coordination Division. 29 302.2.1.1 Valuation and Classification Division. This office shall perform the 31following functions: 32 33(a) provide technical advice on the correct classification and valuation of 34imported articles and commodities; 35 36(b) gather, collect, verify, publish and disseminate current valued in the form 37of valuation and classification circulars and revision orders, check the 38valuation and classification of the articles as declared on the advance copies 39of import entries from all ports; 40 41(c) provide liaison and coordination with the agencies that have dealing on 42matters pertaining to valuation and classification; 43 44(d) submit periodic reports and other data that may be required; and 45 46(e) perform other functions consistent with assigned tasks. 47 48 492.2.1.2 Assessment Coordination and Monitoring Division. This office shall 50perform the following functions: 2 3
9

1 1 2(a) coordinate and monitor all activities relating to implementation of rules and 3regulations governing assessment of customs duties, taxes and other 4charges; 5 6(b) coordinate and provide liaison with other government agencies and 7instrumentalities as well as private entities that have dealings on matters 8pertaining to imports, assessment services and related activities; 9 10(c) submit periodic reports and other data that may be required; and 11 12(d) perform other functions consistent with the assigned tasks. 13 14 152.2.1.3 Warehouse Coordination Division. This office shall perform the 16following functions: 17 18(a) coordinate and monitor policies and guidelines for the effective 19implementation of laws, rules and regulations on bonded warehousing; 20 21(b) coordinate and evaluate warehousing activities, including the liquidation of 22materials, formulate effective internal control system to prevent possible 23violations of customs laws, rules and regulations; 24 25(c) submit periodic reports and other data that may be required; and 26 27(d) perform other functions consistent with the assigned tasks. 28 29 302.2.2 Port Operations Service. This office shall be headed by a Customs 31Service Chief and shall have direct supervision and control over the Auction 32and Cargo Disposal Division, Export Coordination Division and the Port 33Operations Division. 34 35 362.2.2.1 Auction and Cargo Disposal Division. This office shall perform the 37following functions: 38 39(a) coordinate and monitor storage, inventory, auction and disposal activities 40to ensure effective implementation of customs laws, rules and regulations; 41 42(b) maintain an up-to-date record of abandoned and/or auctioned 43merchandise; 44 45(c) formulate and monitor policies/guidelines or modes of cargo disposal; 46 47(d) submit periodic reports and other data that may be required; and 48 49(e) perform such other functions consistent with the assigned tasks. 50 2 3
10

1 12.2.2.2 Export Coordination Division. This office shall perform the following 2functions: 3 4(a) coordinate and monitor export activities in all collection districts; 5 6(b) provide technical advice and act in consultation on export matters; 7 8(c) provide liaison and coordination with agencies that have dealings on 9matters pertaining to export; 10 11(d) submit necessary periodic reports and other data that may be required; 12and 13 14(e) perform other functions consistent with the assigned tasks. 15 16 172.2.2.3 Port Operations Division. This office shall perform the following 18functions: 19 20(a) coordinate and monitor all ports operation activities of the collection 21district; 22 23(b) ascertain that established policies, regulations and standard procedures 24and programs on port operations are complied with; 25 26(c) provide liaison and coordination with agencies that have dealings on 27matters pertaining to report operations; 28 29(d) submit the necessary periodic reports and other data that may be required; 30and 31 32(e) perform other function consistent with the assigned tasks. 33 34 352.3. Customs Intelligence Group. The Customs Intelligence Group, headed by 36a Deputy Commissioner who shall have direct control and supervision over 37the Intelligence and Investigation Service including the offices therein, shall 38have the following functions: 39 40(a) Regularly and consistently gather intelligence information related to 41customs and economic activities for proper dissemination to the Customs 42offices concerned; 43 44(b) Conduct internal inquiry and investigation which may serve as the basis for 45prosecution; and 46 47(c) Perform such other appropriate functions consistent with the assigned 48tasks of the Group and others which may be given by the Commissioner. 49

2 3

11

1 12.3.1 CustomsIntelligence and Investigation Service. The Customs 2Intelligence and Investigation Service shall be headed by a Customs Service 3Chief and shall have direct supervision and control over the Intelligence 4Division, the Investigation and Prosecution Division, the Internal Inquiry and 5Prosecuted Division, the Intellectual Property Rights Division, and the 6Warehousing Audit Monitoring Unit. 7 82.3.1.1 Intelligence Division. The Intelligence Division shall have the 9following functions: 10 11(a) Provide accurate and complete intelligence information for the effective 12administration and operation of the Bureau in accordance with existing tariff 13and customs laws; 14 15(b) collect, collate and evaluate data and information on acts in violation of 16the Tariff and Customs Laws, rules and regulations and translate the same 17into usable intelligence information for dissemination to end-users; 18 19(c) coordinate with other offices/ agencies in all the necessary periodic 20reports and other data that may be required; and 21 22(d) perform other functions consistent with the assigned tasks. 23 242.3.1.2 Investigation and Prosecution Division. The Investigation and 25Prosecution Division shall have the following functions: 26 27(a) Conduct investigation on cases involving violations of the tariff and 28Customs Laws, rules and regulations; 29 30(b) examine records of importations and determine the authenticity of 31suspected documents; recommend the filing of administrative and/or criminal 32charge(s) arising from violations of the tariff and Customs Code, its rules and 33regulations and prosecute cases filed in courts and/ or administrative bodies; 34 35(c) maintain a centralized record of cases investigated/ prosecuted and 36establish liaison with other government agencies; 37 38(d) submit periodic reports and other data that may be required; 39 40(e) and perform other functions consistent with assigned tasks. 41 42 432.3.1.3 Internal Inquiry and Prosecution Division. The Internal Inquiry and 44Prosecution Division shall have the following functions: 45 46(a) conduct background investigation on applicants and employees of the 47Bureau; 48 49(b) initiate investigation and prosecute, if warranted, administrative cases 50against customs employees; 2 3
12

1 1(c) investigate and take appropriate action against security violations; 2 3(d) perform liaison and coordination activities with other government 4agency/officials; 5 6(e) submit periodic reports and other data that may be required; and 7 8(f) perform other functions consistent with the assigned tasks. 9 10 112.3.1.4 Intellectual Property Rights Division. The Intellectual Property Rights 12Division shall perform the following functions: 13 14(a) Handle all application for recordation of IPRs and products covered 15therein; 16 17(b) Issue Alert/Hold Orders against shipments suspected of containing 18infringing goods; 19 20(c) Investigate cases involving IPR violations and to make recommendations 21for prosecution of violations of the TCCP in relation to the IP Code; 22 23(d) Gather and manage data relative to IP Enforcement; 24 25(e) Coordinate all BOC enforcement activities relating to IPR matters; 26 27(f) Draw up appropriate training programs on IPR border control enforcement; 28 29(g) Liaise with other office/agencies and coordinate with the National 30Committee on Intellectual Property Rights (NCIPR); 31 32(h) Represent the government exclusively in all seizure and forfeiture 33proceedings relating to IPR matters. 34 352.3.1.5 Warehousing Audit Monitoring Unit. The Warehousing Audit 36Monitoring Unit shall have the following functions. 37 38(a) Lead in the investigation of all cases relating to illegal withdrawal, 39diversion, unliquidated entries, and violations of the Tariff and Customs Code 40of the Philippines, as amended, pertaining to warehousing operations; 41 42(b) Conduct an inventory audit of warehouses suspected or found to have 43committed any infraction of the warehousing law, rules and regulations; 44 45(c) Submit periodic reports and other data that may be required; and 46 47(d) Perform other functions consistent with the assigned tasks. 48 492.4. Customs Enforcement Group. The Customs Enforcement Group,headed 50by a Deputy Commissioner who shall have direct control and supervision over 2 3
13

1 1the Enforcement and Security Service including the offices therein, shall have 2the following functions: 3 4(a) Exercise police authority conferred by the Tariff and Customs Code or 5other laws which include the enforcement of seizures and forfeitures and the 6imposition of penalties and fines; and 7 8(b) Perform such other appropriate functions consistent with the assigned 9tasks of the Group and others which may be given by the Commissioner. 10 112.4.1 Enforcement and Security Service. TheEnforcement and Security 12Service shall be headed by a Customs Service Chief and shall have direct 13supervision and control over the Customs Police Division, Water Patrol 14Division, and Radio Communication Division 15 162.4.1.1 Customs Police Division. The Customs Police Division shall have the 17following functions: 18 19(a) Maintain peace and order, security and protection of all cargoes and 20properties within the customs installations, buildings and properties and 21render police assistance to all needing the same while within the customs 22jurisdiction; 23 24(b) prevent and suppress smuggling pilferage theft and all cases of frauds and 25various evasions of customs laws and other regulations enforced by the 26Bureau; 27 28(c) conduct searches seizures and arrests on board vessels, aircrafts, 29vehicles, warehouses, piers wharves and other customs premises consistent 30with the existing rules and regulations relative thereto; 31 32(d) establish and enforce personnel and vehicles identification, movement 33and traffic control; 34 35(e) submit periodic reports and data that may be required; and 36 37(f) perform other functions consistent with the assigned tasks. 38 39 402.4.1.2 Water Patrol Division. The Water Patrol Division shall have the 41following functions: 42 43(a) Maintain peace and order and enforce customs laws, rules and regulation 44and pertinent provisions of the Revised Philippine Merchant Marine 45Regulations (RPMR) within the waters, rivers streams, harbors and 46anchorages under the jurisdiction of the Bureau and such other bodies of 47water whether navigable from the sea or not; 48 49(b) prevent and suppress smuggling, pilferage and theft (piracy) committed on 50board vessels and within the jurisdiction of the Bureau; 2 3
14

1 1(c) conduct searches, seizures and arrest on board vessels for violations of 2Customs Laws, rules and regulations; 3 4(d) maintain and repair all patrol-crafts and equipment to ensure operational 5efficiency; 6 7(e) undertake searches of vessels applying for conversion from foreign to 8coastwise trade and vice versa; 9 10(f) submit periodic reports and other data that may be required; and 11 12(g) perform other function consistent with the assigned tasks. 13 14 152.4.1.3 Radio Communication Division. The Radio and Communication 16Division shall have the following functions: 17 18(a) plan, design, install and maintain radio stations, antennae towers, and 19other communication system; 20 21(b) act as the liaison between the National Telecommunication Commission 22and the Bureau; 23 24(c) disseminate local transshipments telegraphic permits to all ports and 25assimilate the necessary feedback on the same; 26 27(d) provide training for radio operators and technicians in accordance with the 28latest trend in telecommunication techniques; coordinate the operation of all 29customs radio stations throughout the country; 30 31(e) submit periodic reports and other data that may be required; and 32 33(f) perform other functions consistent with the assigned tasks. 34 35 362.5. Customs Internal Administration Group. The Customs Internal 37Administration Group,headed by a Deputy Commissioner who shall have 38direct control and supervision over the Financial Management Office and the 39Administration Office including the offices therein, shall have the following 40functions: 41 42(a) assist the Commissioner of Customs in the formulation of policies and in 43the setting up of objectives relative to financial, administrative, personnel, 44planning and management improvement services of the Bureau; 45 46(b) approve and/or sign travel orders of central office personnel and/or 47personnel in the outports who have official transactions at the Central Office 48upon the recommendation of the District Collectors concerned; 49

2 3

15

1 1(c) approve applications of central office personnel for vacation, sick and 2maternity leaves with or without pay for a period in excess of 60 days but not 3beyond one year as required by existing rules and regulations; 4 5(d) represent the Commissioner in meetings and conference which have 6relevance to his scope of jurisdiction; 7 8(e) sign Memorandum Circulars and other publications for general circulation; 9 10(f) sign applications of central office personnel for business outside office 11hours; 12 13(g) review official communications and documents relevant to internal 14administration for the signature of the Commissioner; and 15 16(h) Perform such other appropriate functions consistent with the assigned 17tasks of the Group and others which may be given by the Commissioner. 18 192.5.1 Financial Management Office. The office shall be headed by a Customs 20Operation Chief and shall have direct supervision and control over the Budget 21Division, Accounting Division, Planning and Policy Research Division, and 22Management Information and Data Systems Division. 23 242.5.1.1 Budget Division. This office shall perform the following functions: 25 26(a) provide policy guidance and control on financial matters for all offices 27nationwide of the Bureau; 28(b) provide assistance on budget techniques and procedures and the 29preparation of budget jurisdiction of all offices; 30(c) render periodic report and other data as required; and 31(d) perform other functions consistent with the assigned tasks. 32 332.5.1.2 Accounting Division. This office shall perform the following functions: 34 35(a) certify to the availability of funds for expenditures; 36 37(b) process, check and verify disbursement from all ports of entry; 38 39(c) record and maintain books of original entry with corresponding subsidiary 40ledgers for disbursement; 41 42(d) prepare trial balance with related schedules; 43 44(e) render periodic reports and other data as may be required; and 45 46(f) perform other functions consistent with the assigned tasks. 2 3
16

1 12.5.1.3 Planning and Policy Research Division. This office shall perform the 2following functions: 3 4(a) formulate projection in management improvement activities; 5 6(b) conduct and supervise policy research and development studies; 7 8(c) study and recommend improvement on structural organization and 9operating procedures; 10 11(d) develop and maintain management and operational manual; 12 13(e) render periodic report and other data as required; and 14(f) perform other functions consistent with the assigned tasks. 15 162.5.1.4 Management Information and Data Systems Division. This office shall 17perform the following functions: 18 19(a) create and develop information systems for planning, implementation and 20control of customs operation; 21(b) provide management with systematic approaches to applied procedures; 22(c) apply Electronic Data Processing Techniques; 23(d) submit periodic reports and other data as may be required; and 24(e) perform other functions consistent with the assigned tasks. 25 262.5.2 Administrative Office. The office shall be headed by a Customs 27Operation Chief II and shall have direct supervision and control over the 28Human Resource Management Division, General Services Division, Central 29Records Management Division, Public Information and Assistance Division 30and Medical & Dental Division. 312.5.2.1 Human Resources Management Division. This office shall perform 32the following functions: 33 34(a) develop and recommend personnel management policies; 35(b) develop and administer program on recruitments, selection, 36(c) appointment and placement, career and employee development, 37employee relations, welfare services and incentive systems; 38(d) provide assistance on matters concerning attendance, leave of absence, 39appointments, promotions, transfers and other personnel actions; 40(e) research, develop and conduct training programs; 41(f) maintain personnel records and statistics; 2 3
17

1 1(g) submit periodic reports and other data as required; and 2(h) perform other functions consistent with the assigned tasks. 3 42.5.2.2 General Services Division. This office shall perform the following 5functions: 6 7(a) provide assistance and services pertaining to administrative management 8improvement; 9(b) provide policy guidance on the care, maintenance and repair of 10equipment, building and public utilities; 11(c) providemessengerial, custodial and other utility services; 12(d) process requisition for materials and equipment, receive, store and 13conduct inventories on them; 14(e) receive, collect and deposit cash and prepare payrolls for payment of the 15Bureaus obligations; 16(f) receive, maintain and control of the pool of motor vehicles acquired through 17seizure/donations and other modes of acquisition; 18(g) submit periodic reports and other data as required; and 19(h) perform other functions consistent with the assigned tasks. 20 212.5.2.3 Central Records Management Division. This office shall perform the 22following functions: 23 24(a) establish and maintain sound records management programs; 25(b) receive, record and transmit/deliver documents and correspondence to all 26Bureau offices; 27(c) provide classification and filing system for all documents and 28correspondence that needs to be maintained; 29(d) reproduce, disseminate, maintain an updated compilation of all customs 30orders and circular issued and signed by the Commissioner and make the 31same available to interested parties; 32(e) submit periodic reports and other as may be required; and 33(f) perform other functions consistent with the assigned tasks. 34 352.5.2.4 Public Information and Assistance Division. This office shall perform 36the following functions: 37

2 3

18

1 1(a) provide direction and guidance in the dissemination of information on 2Bureau wide programs, operations and activities; 3(b) provide frameworks for rendering assistance to the general public; 4(c) receive complaints and grievances from the public and prepare referrals to 5the concerned offices and monitor actions taken; 6(d) submit periodic reports and other data as required; and 7(e) perform other functions consistent with the assigned tasks. 8 92.5.2.5 Medical and Dental Division. This office shall perform the following 10functions: 11 12(a) Perform physical examination of applicant for entrance to service, 13employees for reinstatement, promotions and for evaluation of physical 14disability; 15 16(b) Attends to first aid treatment of accidents occurring in the Bureau; 17 18(c) Inspect office buildings, piers, harbors and canteens operating within the 19limits of the Bureau, renders a weekly report to the Chief on the health and 20sanitary conditions of the surroundings; 21 22(d) Attend to the removal of spoiled goods or malodorous damaged cargoes 23from the premises; 24 25(e) Perform minor operations, treatment of accident cases, etc.; 26 27(f) Attend to all custom employee coming to the Clinic for consultation and 28treatment; 29 30(g) Prescribe and dispense medicine; 31 32(h) Prepare requisitions of medical equipment, medicine and supplies needed 33by the Section; 34 35(i) Keep record of clinical cases, medical supplies, medicine, drugs, 36instruments and equipment; 37 38(j) Perform dental examinations, extractions and treatment; 39 40(k) Conduct oral prophylaxis, gives advice on dental care and corrects dental 41defects; 42 43(l) Treat mouth diseases such as alveolar abscesses, pyorrhea alveolaris, 44etc.; 45 46(m) Do minor oral surgery when indicated; 2 3
19

1 1(n) Prepare requisition of dental equipment, medicine and supplies needed by 2the Section; 3 4(o) Keeps records of dental cases; and 5 6(p) Perform other functions consistent with the assigned tasks 7 82.5.2.6 Internal Control/Management Division. This office shall perform the 9following functions: 10 11(a) Ensure that all rules and regulations and procedures governing the 12operations of the Bureau of Customs are strictly followed and are being 13uniformly applied; 14 15(b) Ensure that all programs, projects contracts, agreements and others are 16properly implemented and complied with; 17 18(c) Help in the safeguarding of assets and resources of the Bureau of 19Customs; 20 21(d) Assist the management in identifying obsolete and or modifying /ineffective 22Rules, Regulations and Orders; 23 24(e) Identify areas of improvements and developments concerning day to day 25activities of the Bureau of Customs; 26 27(f) Identify weakness and leakages that hamper and derail in carrying out the 28mandates and vision of the Bureau of Customs; 29 30(g) Ensure that the Bureau is observing Customs International best practices; 31Help improve the quality of service of the Bureau; 32 33(h) Help improve the quality of service of the Bureau; 34 35(i) Conduct strategic review and evaluation of the operations and 36performances of the Bureau; 37 38(i) Assist the Change Management Team in drafting the 39Staffing/Organizational structure of the Internal Control Office in line with the 40Rationalization of the Bureau pursuant to EO 366; and 41 42(k) Perform other related activities as may be mandated by the Commissioner 43of Customs. 44 452.6. Customs Management Information System & Technology Group. The 46Customs Management Information System & Technology Group,headed by a 47Deputy Commissioner who shall have direct control and supervision over the 48Planning and System Development Service and the Technology Management 49Service including the offices therein, shall have the following functions: 50 2 3
20

1 1(a) Upgrade and maintain the present information technology group where it 2will have a more strategic position within the Bureau of Customs organization 3setup and provide a functional structure which will encompass the functions 4which are seen as vital in the attainment of the vision of a modernized trade 5facilitating and globally competitive Bureau of Customs; and 6 7(b) Perform such other appropriate functions consistent with the assigned 8tasks of the Group and others which may be given by the Commissioner. 9 10 112.6.1 Planning and System Development Service. The Planning and 12Systems Development Service shall be headed by a Customs Service Chief 13who shall have direct control and supervision over Planning, Management 14and Information Division and the System Development Division. This office 15shall perform the following functions: 16 17(a) Develop information systems and technology plans; 18 19(b) Design and recommend systems architecture; 20 21(c) Develop information systems; 22 23(d) Standardize operating procedures; 24 25(e) Generate information on the various operations of the Bureau; and 26 27(f) Perform such other functions consistent with the assigned tasks. 28 29 302.6.1.1 Planning, Management and Information Division. This office shall 31have the following functions: 32 33(a) Facilitate the development of information system and technology plan; 34 35(b) Conduct continuous researches on IT and advise management on 36appropriate adaptation of new technology; 37 38(c) Guide or assist management on acquisition of automation equipment and 39software; 40 41(d) Access, analyze and report management information for client servicing; 42 43(e) Prescribe guidelines and standards in implementing the functions of 44MISTG units; 45 46(f) Ensure compliance to quality assurance standards in performance of 47functions; and 48 49(g) Perform such other functions consistent with the assigned tasks. 50 2 3
21

1 12.6.1.2 System Development Division. This office shall perform the following 2tasks: 3 4(a) Determine the appropriate information system architecture for the Bureau 5based on operational needs and characteristics; 6 7(b) Set up or establish policies, procedures and standards for the 8development of information system; 9 10(c) Develop standard operating procedures for the Bureaus various 11operations; 12 13(d) Undertake and manage systems analysis, development, testing and 14documentation; 15 16(e) Provide user-support services on developed programs; 17 18(f) Guide and assist management in the acquisition of software packages; 19 20(g) Update database and reference tables according to government and BOC 21regulations; 22 23(h) Ensure compliance to quality assurance standards in performance of 24functions; 25 26(i) Conduct quality assurance testing of application programs; and 27 28(j) Perform such other functions consistent with the assigned tasks. 29 30 312.6.2 Technology Management Service. The Technology Management 32Service shall be headed by a Customs Service Chief who shall have direct 33control and supervision over the System Management Division and Technical 34Support Division. This office shall provide support services to all IT related 35projects of the Bureau in terms of: (1) management and administration of HW 36and System Software; (2) IT facilities management; and (3) provision of 37support sites in terms of network, system and equipment requirement. This 38office shall cover: 39 40(a) Server Administration; 41 42(b) Database Administration; 43 44(c) Network Administration; 45 46(d) System Implementation; 47 48(e) Training (application and office automation); 49 50(f) Email and Internet; 2 3
22

1 1(g) Site Support; 2 3(h) ICT Facilities Management; 4 5(i) Security and Account Management; and 6 7(j) Inventory and IT Supplies Management 8 9 102.6.2.1 System Management Division. This office shall perform the following 11functions: 12 13(a) System Implementation; 14 15(b) Change Management Training; 16 17(c) Helpdesk; 18 19(d) Procurement of IT equipment and Supplies; and 20 21(e) Application Support. 22 23 242.6.2.2 Technical Support Division. This office shall perform the following 25functions: 26 27(a) ICT Server room management; 28(b) Server Administration; 29(c) Network Administration; 30(d) Database Administration; 31(e) Site Monitoring; 32(f) System Administration; 33(g) Email Management; 34(h) Internet and Website Administration; 35(i) ICT Security Administration; 36(j) User Management; and 37(k) ICT Facilities Management. 38 392.7. Customs Post Entry Audit Group. The Customs Post Entry Audit 40Group,headed by an Assistant Commissioner who shall have direct control 41and supervision over the Trade Information & Risk Analysis Office and the

2 3

23

1 1Compliance Assessment Unit including the offices therein, shall have the 2following functions: 3 4(a)Set the framework and benchmarks for compliance measurements of 5industry groups; 6 7(b) In coordination with Management Information System and Technology 8Group (MISTG), direct the development of a computer aided risk 9management system using the data warehousing technology and other 10statistical tools; 11 12(c) Implement the computer-aided risk management system to develop and 13establish audit selection parameters based on objective and quantifiable data; 14 15(d) Establish and recommend audit targets to the Commissioner of Customs. 16 17(e) Set policies, guidelines, manuals and standard operating procedures 18relating to the audit and continuously assess how audit performance can be 19improved by better and more fine-tuned policies and guidelines; 20 21(f) Formulate audit work plan for approved audit targets; 22 23(g) Conduct audit examination, inspection, verification or investigation in 24accordance with the set policies, guidelines, manuals and standard operating 25procedures; 26 27(h) Prepare and submit audit reports; 28 29(i) Develop and implement a customs compliance program; and 30 31(j) Perform such other appropriate functions consistent with the assigned 32tasks of the Group and others which may be given by the Commissioner. 33 342.7.1 Trade Information & Risk Analysis Office. This office shall be headed by 35a Service Director and shall have direct control and supervision over the (1) 36Trade Information Analysis Division I, and the (2) Trade Information Analysis 37Division II. This office shall perform the following functions: 38 39(a) Set the framework and benchmarks for compliance of measurements of 40industry group; 41 42(b) Direct the development of computer aided risk management system, in 43coordination with Management Information System & Technology Group 44(MISTG) using the data warehousing technology and other statistical tools. 45 46(c) Implement the computer aided risk management system to develop and 47establish audit selection parameters based on objective and quantifiable data. 48 49(d) Establishes and recommend audit targets to the commissioner of 50 Customs. 2 3
24

1 1(e) Set policies, guidelines, manual and standard operating procedure relating 2 to the audit and continuously assess how the audit performance can be 3 improved by better and more fine-tuned policies and guidelines. 4 52.7.2 Compliance Assessment Unit. This office shall be headed by a Service 6Director and shall have direct control and supervision over (1) Audit Division I, 7(2) Audit Division II, (3) Audit Division III , (4) Audit Division IV, and (5) Audit 8Division V. This office shall perform the following functions: 9 10(a) Formulate audit work plan for approved audit targets; 11 12(b) Conduct audit examination, inspection, verification or investigation in 13accordance with the set policies, guidelines, manuals and standard operating 14procedures; 15 16(c) Prepare and submit audit reports; and 17 18(d) Develop and implement a customs compliance program. 19 20Section 3 Functions of District Collectors and Port Collectors: Port of Manila, 21MICP, Port of Cebu, and NAIA. 22 233.1District Collectors and Port Collectors.Each Collection District shall be 24headed and supervised by a District Collector while each subport will be 25headed by a Port Collector. The Collectors shall have the following functions: 26 27(a) Collect duties, taxes, fees, charges, penalties and fines accruing to the 28Government under the Tariff and Customs Code and related laws; 29 30(b) Exercise police powers conferred to him/her by the Tariff and Customs 31Code or other laws which include the enforcement of penalties and fines; 32 33(c) Examine goods, assess duties, fees, charges, penalties and fines accruing 34to the Government under the Tariff and Customs Code and other related laws; 35 36(d) Supervise the entrance and clearance of vessels and aircraft engaged in 37foreign commerce; 38 39(e) Supervise and control handling of foreign mails arriving in the Philippines; 40 41(f) Supervise all import and export cargoes landed and/or stored in piers, 42airports, terminal facilities, yards and freight stations; 43 44(g) Perform such other appropriate functions consistent with the assigned task 45of the District/Port Collectors and those which may be given by the 46Commissioner (lifted from EO 127) 47

2 3

25

1 13.1.1 Power of the Commissioner to Reassign Collectors. The Commissioner 2of Customs may, in the exigency of the service reassign the District Collectors 3within the appropriate levels of Collectors of Customs VI or V as the case may 4be. The Collector of Customs V as District Collector, may be assigned as 5Deputy Collectors at the Ports of Manila, NAIA, MICP and Cebu while those 6designated as deputies of these aforementioned districts may be assigned as 7District Collectors of the collection district by the Collector of Customs V. 8 9 103.2 District Collector, Collection District II-A: Port of Manila 11 123.2.1 Office of the District Collector of Customs, Functions. The Collection 13District II-A shall be headed and supervised by a Collector of Customs VI and 14herein referred to as the District Collector. The District Collector shall have the 15following functions: 16 17(a) collect duties, taxes, fees, charges, penalties and fines accruing to the 18Government under the Tariff and Customs Code and related Laws; 19 20(b) exercise police powers conferred to him/her by the Tariff and Customs 21Code or other Laws which include the enforcement of penalties and fines 22accruing to the Government under the Tariff and Customs Code or other Laws 23which include the enforcement of penalties and fines accruing to the 24Government under the Tariff and Customs Code and other related Laws; 25 26(c) supervise the entrance and clearance of vessels engaged in foreign 27commerce; 28 29(d) supervising and controlling handling of foreign malls arriving in the 30Philippines; 31 32(e) supervising all imports and export cargoes and freight stations; and 33 34(f) perform such appropriate functions consistent with the assigned tasks of 35the District Collector and those which may be given by the Commissioner of 36Customs. 37 383.2.2 Office of the Deputy Collector for Administration. This office shall be 39headed by a Collector of Customs V and shall have direct supervision and 40control over the Administrative Division, Law Division and Sub-ports under 41Collection District II- A. 42 433.2.2.1 Administrative Division. This office shall have the following functions: 44(a) provide assistance and services to the Collection District on matters 45pertaining to budget, finance and personal; 46 47(b) provide the Collection District with efficient equipment, records, supplies, 48disbursement, messengerial, janitorial and other administrative/ general utility 49services; 50 2 3
26

1 1(c) submit periodic reports and other data as may be required; and 2 3(d) perform other functions consistent with the assigned tasks. 4 53.2.2.2 Law Division. This office shall have the following functions: 6 7(a) assist the District Collector in the legal aspect of the administrative 8responsibilities and provide legal advice and services to the Collection District; 9 10(b) render opinions and rulings on customs matters involving interpretations 11and application of laws and implementing regulations; 12 13(c) represent the District Collector in court whenever summoned by subpoena 14or made a party litigant therein and collaborate with the Office of the Solicitor 15General in prosecuting cases against importers / surety companies liable 16under their forfeited bonds and when the District Collector is a party defendant 17or respondent in any other cases; 18 19(d) conduct investigations and hearings on seizures, protest and other cases, 20and submit findings and proposed decision for signature of the District 21Collector of Customs; 22 23(e) process and submit recommendation on all application for Customs 24Brokers license and other permits to operate in the Customs Zone, and keep 25and maintain up-to-date roster of duly licensed Customs Brokers and 26Brokerage firms and other pertinent records thereto; 27 28(f) institute abandonment proceedings on overstaying cargoes and detention 29upon application of persons of agencies exercising police authority; 30 31(g) receive and process drawback claims; 32 33(h) act on Special Powers of Attorney and authorization relating to business 34transactions with the Bureau including issuance of clearances; 35 36(i) submit periodic reports and other data that may be required; and 37 38(j) perform other functions consistent with the assigned tasks. 39 403.2.2.3 Sub-ports. The Collection District II-A shall have the following sub41ports of entry namely; (1) Harbor Center, (2) Masinloc, (3) FTI, (4) Postal 42Office, (5) EPZA Cavite and (6) PEZA Laguna. Each sub-port shall be 43headed by a Collector of Customs who shall be referred to as Port Collector, 44and shall perform similar functions attributed to the District Collector within the 45area of his/her jurisdiction in order to maximize revenue collection and prevent 46smuggling and frauds against customs. 47 483.2.3 Office of the Deputy Collector for Assessment. Headed by a District 49Collector V, this office shall have direct supervision and control over the Entry 50Processing Division, Formal Entry Division, Informal Entry Division, Bonds 2 3
27

1 1Division, Collection Division, Liquidation and Billing Division, Customs Postal 2Division and Warehousing Assessment Division. 3 43.2.3.1 Entry Processing Division. This office shall have the following 5functions: 6 7(a)receive, check and verify entry declarations and documents of importation, 8ascertain that the required documents are attached to the entry and examine 9said documents for correctness and authenticity; 10 11(b) prepare and issue Order of Payment (OP); 12 13(c) match statements and declarations on the entry against the data indicated 14on the inward cargo manifest; 15 16(d) designate the specific number of cases, crates or packages for 17examination according to prescribed rules and regulations and transmit 18original entry declaration to designated Examiners and Appraisers Section 19concerned; 20 21(e) accept and process special permits for shipside discharge, transfer, 22transshipment, as well as the loading of provisions for the ships use; 23 24(f) submit periodic reports and other data that may be required; and 25 26(g) perform other functions consistent with the assigned tasks. 27 283.2.3.2 Formal Entry Division. This office shall have the following functions: 29 30(a) examine, classify and appraise imported articles covered by formal entry 31and assess customs duties and taxes and other charges, subject to existing 32customs laws and regulations in so far as release of the shipment is 33concerned; 34 35(b) examine passengers and crew members baggage for the purpose of 36preventing entry of banned prohibited articles; 37 38(c) recommend the institution of seizure and forfeiture proceedings against 39cargoes found to be misdeclared or undervalued and banned and regulated 40or prohibited merchandise in accordance with existing laws, rules and 41regulations; 42 43(d) submit the necessary periodic reports and data as may be required of the 44division; and 45 46(e) perform other functions consistent with the assigned tasks. 47 483.2.3.3 Bonds Division. This office shall have the following functions: 49

2 3

28

1 1(a) control and supervise the processing, approval and/or cancellation of 2customs bond; 3 4(b) process all entries covered by bonds before any delivery or withdrawal of 5shipment could be affected; 6 7(c) device standardized surety forms in conformity with the requirements of 8the Tariff and Customs Code and Insurance Code; 9 10(d) keep in custody all bonds and other pertinent public documents; 11 12(e) collect bonded obligations through appropriate judicial and/or 13administrative measures in coordination with the Law Division whenever 14necessary; 15 16(f) submit the necessary periodic reports and data as may be required of the 17division; and 18 19(g) perform such other appropriate functions consistent with the assigned 20tasks. 21 223.2.3.4 Collection Division. This office shall have the following functions: 23 24(a) receive payments of customs duties, taxes and other charges; 25 26(b) authorize the delivery of goods after full payment of Government charges 27and compliance with Central Bank (CB) rules and regulations and all other 28requirements; 29 30(c) remit daily collection to the National Treasury; 31 32(d) issue bills for deferred/ suspended payments; 33 34(e) submit the necessary periodic reports and data as may be required; and 35 36(f) perform other functions consistent with the assigned tasks. 37 383.2.3.5 Liquidation and Billing Division. This office shall have the following 39functions: 40 41(a) verify, check and review computations of formal, informal and withdrawal 42entries based on the applicable foreign exchange rates, the correct dutiable 43and taxable values, taking into account the returns made by the examiner and 44appraiser as to the description of the commodities, tariff paragraph and rate of 45duties and taxes; 46 47(b) maintain daily record of all liquidated entries and post in the public 48corridors list of entries found with discrepancies and indicate therein the name 49of importers and serial numbers of entries; 50 2 3
29

1 1(c) compute fines and other charges; 2 3(d) prepare and transmit letters of demand to importers, brokers, government 4agencies and send bill/statement of accounts for all receivables including 5short duties, taxes, fines and other charges due to the Bureau of Customs; 6 7(e) prepare statement of refunds and tax credits and notify importers 8concerned accordingly; compute, record, control and coordinate collection of 9amounts remaining unpaid and unsettled; 10 11(f) forward to the Law Division all dockets of cases uncollected accounts for 12possible court action after the prescribed period for compliance has lapsed 13and payment has not been made; 14 15(g) maintain an effective system of accounting for all entries received and 16ensure security and control over all unliquidated entries kept in the division; 17 18(h) submit the necessary periodic reports and data as may be required of the 19division; and 20 21(i) perform other functions consistent with assigned tasks. 22 233.2.3.6 Customs Postal Division. This office shall have the following 24functions: 25 26(a) coordinate with the Foreign Surface Mail Distribution Center of the Bureau 27of Post in monitoring the movement and transfer of foreign parcels/mailbags 28form the Piers to the Bureau of Posts; 29 30(b) examine classify and appraise imported merchandise received through the 31mails; 32 33(c) authorize the release of imported parcels upon compliance with existing 34Customs/Postal laws, rules and regulations; 35 36(d) examine and appraise exportable items exported through the mails by 37verifying and checking the correctness of documents submitted whether it is in 38accordance with the existing Customs/Postal laws, rules and regulations and 39other related laws; 40 41(e) recommend the institution of seizure and/or forfeiture proceedings against 42cargoes found to be misdeclared or undervalued and banned, prohibited, 43abandoned/unclaimed imported merchandise in accordance with customs 44and/or postal laws, rules and regulations; 45 46(f) provide a system of monitoring and reporting of parcels received and 47transferred to customs postal stations; 48 49(g) submit the necessary periodic reports and data that may be requires of the 50division; and 2 3
30

1 1(h) perform other functions consistent with the assigned tasks. 2 33.2.3.7 Warehousing Assessment Division. This office shall have the 4following functions: 5 6(a) examine, classify and appraise imported raw materials/goods destined for 7bonded warehouses; 8 9(b) check and verify the correctness of all returns on warehousing entries with 10regards to tariff paragraphs, rate of duty and description of imported goods; 11 12(c)compute and determine the correct dutiable and taxable values of the 13imported goods; 14 15(d) recommend the institution of seizure and/or forfeiture proceedings against 16cargoes found to be misdeclared or undervalued and banned, prohibited, 17abandoned/unclaimed imported merchandise in accordance with existing 18laws, rules and regulations; 19 20(e) submit the necessary periodic reports and data as may be required of the 21division; and 22 23(f) perform other functions consistent with the assigned tasks. 24 253.2.4 Office of the Deputy Collector for Operations. This office shall be 26headed by a Collector of Customs V and shall have direct supervision and 27control over the Public/ Private Bonded Warehouse Division, Miscellaneous 28Manufacturing Bonded Warehouse Division, Garment and Textile 29Manufacturing Bonded Warehouse Division, Warehousing Inspection Division, 30Warehousing Documentation and Records Division, Piers and Inspection 31Division, Auction and Cargo Disposal Division, Export Division and Customs 32Container Control Division. 33 343.2.4.1 Public/Private Bonded Warehouse Division. This office shall have the 35following functions: 36 37(a) supervise and oversee the operations of the public/private bonded 38warehouse; 39 40(b) receive, store and release cargoes by authority of the Deputy Collector for 41Operations, authorized to be warehoused in the public/private warehouses; 42(c) Issue warehousing permits; 43 44(d) maintain systematic records of all customs transactions of individual 45public/private bonded warehouses; 46 47(e) submit the necessary periodic reports and data that may be required of the 48division; and 49 50(f) perform other functions consistent with the assigned tasks. 2 3
31

1 13.2.4.2 Miscellaneous Manufacturing Bonded Warehouse Division. This office 2shall have the following functions: 3 4(a) supervise and oversee the operations of the miscellaneous manufacturing 5bonded warehouses; 6 7(b) receive, store and release cargoes authorized by the Deputy Collector for 8Operations to be warehoused in the miscellaneous manufacturing bonded 9warehouses; 10 11(c) issue warehousing permits; 12 13(d) oversee the packing, stuffing and transfer of goods to loading points for re14exportation; 15 16(e) determine imported material usage against accepted formula of 17manufacture and review export documents to establish fact of exportation of 18finished goods for the purpose of recommending cancellation of bonds and 19liquidation of entries; 20 21(f) Maintain systematic records of all customs transactions of individual 22miscellaneous manufacturing bonded warehouses; 23 24(g) submit the necessary periodic reports and data as may be required of the 25division; and 26 27(h) perform other functions consistent with the assigned tasks. 28 293.2.4.3 Garments and Textile Manufacturing Bonded Warehouse Division. 30This office shall have the following functions: 31 32(a) supervise and oversee the operations of the garments and textile 33manufacturing bonded warehouses; 34 35(b) receive, store and release cargoes authorized by the Deputy Collector for 36Operations to be warehoused in the garment and textile bonded warehouses; 37 38(c) issue warehousing permits; 39 40(d) oversee the packing, stuffing and transfer to loading points of goods for re41exportation; 42 43(e) determine imported material usage against accepted formula of 44manufacture and review export documents to establish fact of exportation of 45finished goods for the purpose of recommending cancellation of bonds and 46liquidation of entries; 47 48(f) maintain systematic records of all customs transactions of individual 49garment and textile manufacturing bonded warehouses; 50 2 3
32

1 1(g) submit the necessary periodic reports and data as may be required of the 2division; and 3 4(h) perform other functions consistent with the assigned tasks. 5 63.2.4.4 Warehousing Inspection Division. This office shall have the following 7functions: 8 9(a) inspect premises and facilities and applicants for the establishment of 10bonded warehouses and subcontractors, as well as of all registered and 11operating customs bonded warehouse; 12 13(b) conduct physical and records inventories of imported raw materials, 14finished goods, wastages and by-products; 15 16(c) submit the necessary periodic reports and data as may be required of the 17division; and 18 19(d) perform other functions consistent with the assigned tasks. 20 21 223.2.4.5 Warehousing Documentation and Records Division. This office shall 23have the following functions: 24 25(a) keep and maintain a centralized recording system of all transactions of the 26three (3) operating divisions involved in customs bonded warehousing; 27 28(b) provide a system of monitoring, recording and filing of statistical reports 29necessary to ensure compliance with customs laws, rules and regulations; 30 31(c) submit the necessary periodic reports and data as may be required of the 32division; and 33 34(d) perform other functions consistent with the assigned tasks. 35 363.2.4.6 Piers and Inspection Division. This office shall have the following 37functions: 38 39(a) conduct customs boarding formalities and place the vessel and cargoes 40under continuous under guarding in accordance with existing laws, rules and 41regulations; 42 43(b) supervise the discharge and loading of cargoes; 44 45(c) receive and distribute Inward Cargo Manifest to offices concerned; 46 47(d) supervise the issuance of entrance and departure clearance of vessels in 48coordination with the concerned agencies; 49

2 3

33

1 1(e) keep and update record of vessels data such as group and net tonnage as 2well as volume of imports, exports and transshipment cargoes; 3 4(f) coordinate with the Philippine Port Authority (PPA) and arrastre contractor 5for location of cargoes; 6 7(g) coordinate with Entry Processing Division and the arrastre contractor in 8reporting to the District Collector unentered and/or overstaying cargoes; 9 10(h) supervise the release or transfer of cargoes from the piers; 11 12(i) submit the necessary periodic reports and data as may be required of the 13division; and 14 15(j) perform other functions consistent with the assigned tasks. 16 173.2.4.7 Auction and Cargo Disposal Division. This office shall have the 18following functions: 19 20(a) keep custody of seized, forfeited, unclaimed and abandoned merchandise 21and maintain an up-to-date record and inventory thereof; 22 23(b) dispose at public auction all merchandise subject to sale and employ such 24other modes of disposition thereof, in accordance with laws, rules and 25regulations; 26 27(c) coordinate with the offices concerned for the purpose of instituting 28abandonment proceedings; 29 30(d) submit the necessary periodic reports and data as may be required of the 31division; and 32 33(e) perform other functions consistent with the assigned tasks. 34 353.2.4.8 Custom Container Control Division. This office shall have the 36following functions: 37 38(a) monitor all incoming and outgoing containers and trailer chassis; 39 40(b) supervise the stripping/stuffing of all containers inside or outside customs 41zone as the case maybe; 42 43(c) Supervise the operations of Container Yard/Container Freeport Station 44(CY/CFS) outside customs zone; Submit the necessary periodic reports and 45data as may be required of the division; and 46 47(d) perform other functions consistent with the assigned tasks. 48 493.2.4.9 Export Division. This office shall have the following functions: 50 2 3
34

1 1(a) receive, check and verify export entry declarations and supporting 2documents; 3 4(b) examine export cargoes to determine compliance with existing laws, rules 5and regulations; 6 7(c) assess and collect export duties and other charges; 8 9(d) prepare and issue Orders of Payment, authority or permit to load cargoes 10for export and/or for re-exportation and Certificates of Origin, identification, re11exportation or non-shipment; 12 13(e) submit the necessary periodic reports and data as may be required of the 14division; and 15 16(f) perform other functions consistent with the assigned tasks. 17 18 193.3 District Collector, Collection District II-B: Manila International Container 20Port 21 223.3.1 Office of the District Collector of Customs, Functions. The Collection 23District II-B shall be headed and supervised by a Collector of Customs VI and 24herein referred to as the District Collector. The District Collector shall have the 25following functions: 26 27(a) collect duties, taxes, fees, charges, penalties and fines accruing to the 28Government under the Tariff and Customs Code and related Laws; 29 30(b) exercise police powers conferred to him/her by the Tariff and Customs 31Code or other Laws which include the enforcement of penalties and fines 32accruing to the Government under the Tariff and Customs Code or other Laws 33which include the enforcement of penalties and fines accruing to the 34Government under the Tariff and Customs Code and other related Laws; 35 36(c) supervise the entrance and clearance of vessels engaged in foreign 37commerce; 38 39(d) supervise and control handling of foreign malls arriving in the Philippines; 40 41(e) supervise all imports and export cargoes and freight stations; and 42 43(f) perform such appropriate functions consistent with the assigned tasks of 44the District Collector and those which may be given by the Commissioner of 45Customs. 46 473.3.2 Office of the Deputy Collector for Administration. This office shall be 48headed by a Collector of Customs V and shall have direct supervision and 49control overthe Administrative Division, Law Division, and the Sub-port of 50North Harbor. 2 3
35

1 13.3.2.1 Administrative Division. This office shall have the following functions: 2 3(a) provide assistance and services to the Collection District on matters 4pertaining to budget, finance and personal; 5 6(b) provide the Collection District with efficient equipment, records, supplies, 7disbursement, messengerial, janitorial and other administrative/ general utility 8services; 9 10(c) submit periodic reports and other data as may be required; and 11 12(d) perform other functions consistent with the assigned tasks. 13 143.3.2.2 Law Division. This office shall have the following functions: 15 16(a) assist the District Collector in the legal aspect of the administrative 17responsibilities and provide legal advice and services to the Collection District; 18 19(b) render opinions and rulings on customs matters involving interpretations 20and application of laws and implementing regulations; 21 22(c) represent the District Collector in court whenever summoned by subpoena 23or made a party litigant therein and collaborate with the Office of the Solicitor 24General in prosecuting cases against importers / surety companies liable 25under their forfeited bonds and when the District Collector is a party defendant 26or respondent in any other cases; 27 28(d) conduct investigations and hearings on seizures, protest and other cases, 29and submit findings and proposed decision for signature of the District 30Collector of Customs; 31 32(e) process and submit recommendation on all application for Customs 33Brokers license and other permits to operate in the Customs Zone, and keep 34and maintain up-to-date roster of duly licensed Customs Brokers and 35Brokerage firms and other pertinent records thereto; 36 37(f) institute abandonment proceedings on overstaying cargoes and detention 38upon application of persons of agencies exercising police authority; 39 40(g) receive and process drawback claims; 41 42(h) act on Special Powers of Attorney and authorization relating to business 43transactions with the Bureau including issuance of clearances; 44 45(i) submit periodic reports and other data that may be required; and 46 47(j) perform other functions consistent with the assigned tasks. 48 493.3.2.3 Sub-port of North Harbor. The sub-port shall be headed and 50supervised by a Collector of Customs IV or III andherein referred to as the 2 3
36

1 1Port Collector. He shall perform similar functions attributedto the District 2Collector within hi specific area of jurisdiction. 3 43.3.3 Office of the Deputy Collector for Assessment. Headed by a District 5Collector V, this office shall have direct supervision and control over the Entry 6Processing Division, Formal Entry Division, Informal Entry Division, Bonds 7Division, Collection Division, Liquidation and Billing Division, Customs Postal 8Division and Warehousing Assessment Division. 9 103.3.3.1 Entry Processing Division. This office shall have the following 11functions: 12 13(a)receive, check and verify entry declarations and documents of importation, 14ascertain that the required documents are attached to the entry and examine 15said documents for correctness and authenticity; 16 17(b) prepare and issue Order of Payment (OP); 18 19(c) match statements and declarations on the entry against the data indicated 20on the inward cargo manifest; 21 22(d) designate the specific number of cases, crates or packages for 23examination according to prescribed rules and regulations and transmit 24original entry declaration to designated Examiners and Appraisers Section 25concerned; 26 27(e) accept and process special permits for shipside discharge, transfer, 28transshipment, as well as the loading of provisions for the ships use; 29 30(f) submit periodic reports and other data that may be required; and 31 32(g) perform other functions consistent with the assigned tasks. 33 34 353.3.3.2 Formal Entry Division. This office shall have the following functions: 36 37(a) examine, classify and appraise imported articles covered by formal entry 38and assess customs duties and taxes and other charges, subject to existing 39customs laws and regulations in so far as release of the shipment is 40concerned; 41 42(b) examine passengers and crew members baggage for the purpose of 43preventing entry of banned prohibited articles; 44 45(c) recommend the institution of seizure and forfeiture proceedings against 46cargoes found to be misdeclared or undervalued and banned and regulated 47or prohibited merchandise in accordance with existing laws, rules and 48regulations; 49

2 3

37

1 1(d) submit the necessary periodic reports and data as may be required of the 2division; and 3 4(e) perform other functions consistent with the assigned tasks. 5 63.3.3.3 Bonds Division. This office shall have the following functions: 7 8(a) control and supervise the processing, approval and/or cancellation of 9customs bond; 10 11(b) process all entries covered by bonds before any delivery or withdrawal of 12shipment could be affected; 13 14(c) device standardized surety forms in conformity with the requirements of 15the Tariff and Customs Code and Insurance Code; 16 17(d) keep in custody all bonds and other pertinent public documents; 18 19(e) collect bonded obligations through appropriate judicial and/or 20administrative measures in coordination with the Law Division whenever 21necessary; 22 23(f) submit the necessary periodic reports and data as may be required of the 24division; and 25 26(g) perform such other appropriate functions consistent with the assigned 27tasks. 28 293.3.3.4 Collection Division. This office shall have the following functions: 30 31(a) receive payments of customs duties, taxes and other charges; 32 33(b) authorize the delivery of goods after full payment of Government charges 34and compliance with Central Bank (CB) rules and regulations and all other 35requirements; 36 37(c) remit daily collection to the National Treasury; 38 39(d) issue bills for deferred/ suspended payments; 40 41(e) submit the necessary periodic reports and data as may be required; and 42 43(f) perform other functions consistent with the assigned tasks. 44 453.3.3.5 Liquidation and Billing Division. This office shall have the following 46functions: 47 48(a) verify, check and review computations of formal, informal and withdrawal 49entries based on the applicable foreign exchange rates, the correct dutiable 50and taxable values, taking into account the returns made by the examiner and 2 3
38

1 1appraiser as to the description of the commodities, tariff paragraph and rate of 2duties and taxes; 3 4(b) maintain daily record of all liquidated entries and post in the public 5corridors list of entries found with discrepancies and indicate therein the name 6of importers and serial numbers of entries; 7 8(c) compute fines and other charges; 9 10(d) prepare and transmit letters of demand to importers, brokers, government 11agencies and send bill/statement of accounts for all receivables including 12short duties, taxes, fines and other charges due to the Bureau of Customs; 13 14(e) prepare statement of refunds and tax credits and notify importers 15concerned accordingly; compute, record, control and coordinate collection of 16amounts remaining unpaid and unsettled; 17 18(f) forward to the Law Division all dockets of cases uncollected accounts for 19possible court action after the prescribed period for compliance has lapsed 20and payment has not been made; 21 22(g) maintain an effective system of accounting for all entries received and 23ensure security and control over all unliquidated entries kept in the division; 24 25(h) submit the necessary periodic reports and data as may be required of the 26division; and 27 28(i) perform other functions consistent with assigned tasks. 29 30 313.3.4 Office of the Deputy Collector for Operations. This Office shall be 32headed by a Collector of Customs V and shall have direct supervision and 33control over the Bonded Warehouse Division, Auction and Cargo Disposal 34Division, Export Division and Customs Container Control Division. 35 363.3.4.1 Bonded Warehouse Division. This office shall have the following 37functions: 38 39(a) supervise and oversee the operations of the public/private bonded 40warehouse; 41 42(b) receive, store and release cargoes by authority of the Deputy Collector for 43Operations, authorized to be warehoused in the public/private warehouses; 44(c) Issue warehousing permits; 45 46(d) maintain systematic records of all customs transactions of individual 47public/private bonded warehouses; 48 49(e) submit the necessary periodic reports and data that may be required of the 50division; and 2 3
39

1 1(f) perform other functions consistent with the assigned tasks. 2 33.3.4.2 Piers and Inspection Division. This office shall have the following 4functions: 5 6(a) conduct customs boarding formalities and place the vessel and cargoes 7under continuous under guarding in accordance with existing laws, rules and 8regulations; 9 10(b) supervise the discharge and loading of cargoes; 11 12(c) receive and distribute Inward Cargo Manifest to offices concerned; 13 14(d) supervise the issuance of entrance and departure clearance of vessels in 15coordination with the concerned agencies; 16 17(e) keep and update record of vessels data such as group and net tonnage as 18well as volume of imports, exports and transshipment cargoes; 19 20(f) coordinate with the Philippine Port Authority (PPA) and arrastre contractor 21for location of cargoes; 22 23(g) coordinate with Entry Processing Division and the arrastre contractor in 24reporting to the District Collector unentered and/or overstaying cargoes; 25 26(h) supervise the release or transfer of cargoes from the piers; 27 28(i) submit the necessary periodic reports and data as may be required of the 29division; and 30 31(j) perform other functions consistent with the assigned tasks. 32 333.3.4.3Auction and Cargo Disposal Division. This office shall have the 34following functions: 35 36(a) keep custody of seized, forfeited, unclaimed and abandoned merchandise 37and maintain an up-to-date record and inventory thereof; 38 39(b) dispose at public auction all merchandise subject to sale and employ such 40other modes of disposition thereof, in accordance with laws, rules and 41regulations; 42 43(c) coordinate with the offices concerned for the purpose of instituting 44abandonment proceedings; 45 46(d) submit the necessary periodic reports and data as may be required of the 47division; and 48 49(e) perform other functions consistent with the assigned tasks. 50 2 3
40

1 13.3.4.4Custom Container Control Division. This office shall have the following 2functions: 3 4(a) monitor all incoming and outgoing containers and trailer chassis; 5 6(b) supervise the stripping/stuffing of all containers inside or outside customs 7zone as the case maybe; 8 9(c) Supervise the operations of Container Yard/Container Freeport Station 10(CY/CFS) outside customs zone; Submit the necessary periodic reports and 11data as may be required of the division; and 12 13(d) perform other functions consistent with the assigned tasks. 14 153.3.4.5Export Division. This office shall have the following functions: 16 17(a) receive, check and verify export entry declarations and supporting 18documents; 19 20(b) examine export cargoes to determine compliance with existing laws, rules 21and regulations; 22 23(c) assess and collect export duties and other charges; 24 25(d) prepare and issue Orders of Payment, authority or permit to load cargoes 26for export and/or for re-exportation and Certificates of Origin, identification, re27exportation or non-shipment; 28 29(e) submit the necessary periodic reports and data as may be required of the 30division; and 31 32(f) perform other functions consistent with the assigned tasks. 33 34 353.4 District Collector, Collection District VII: Port of Cebu 36 373.4.1 Office of the District Collector of Customs, Functions. The Collection 38District VII shall be headed and supervised by a Collector of Customs VI and 39herein referred to as the District Collector. The District Collector shall have the 40following functions: 41 42(a) collect duties, taxes, fees, charges, penalties and fines accruing to the 43Government under the Tariff and Customs Code and related Laws; 44 45(b) exercise police powers conferred to him/her by the Tariff and Customs 46Code or other Laws which include the enforcement of penalties and fines 47accruing to the Government under the Tariff and Customs Code or other Laws 48which include the enforcement of penalties and fines accruing to the 49Government under the Tariff and Customs Code and other related Laws; 50 2 3
41

1 1(c) supervise the entrance and clearance of vessels engaged in foreign 2commerce; 3 4(d) supervising and controlling handling of foreign malls arriving in the 5Philippines; 6 7(e) supervising all imports and export cargoes and freight stations; and 8 9(f) perform such appropriate functions consistent with the assigned tasks of 10the District Collector and those which may be given by the Commissioner of 11Customs. 12 133.4.2 Office of the Deputy Collector for Administration. This Office shall be 14headed by a Collector of Customs V and shall have direct supervision and 15control over the Administrative Division, Law Division and Sub-Ports of 16Mactan, and Dumaguete. 17 183.4.2.1 Administrative Division. This office shall have the following functions: 19(a) provide assistance and services to the Collection District on matters 20pertaining to budget, finance and personal; 21 22(b) provide the Collection District with efficient equipment, records, supplies, 23disbursement, messengerial, janitorial and other administrative/ general utility 24services; 25 26(c) submit periodic reports and other data as may be required; and 27 28(d) perform other functions consistent with the assigned tasks. 29 303.4.2.2 Law Division. This office shall have the following functions: 31 32(a) assist the District Collector in the legal aspect of the administrative 33responsibilities and provide legal advice and services to the Collection District; 34 35(b) render opinions and rulings on customs matters involving interpretations 36and application of laws and implementing regulations; 37 38(c) represent the District Collector in court whenever summoned by subpoena 39or made a party litigant therein and collaborate with the Office of the Solicitor 40General in prosecuting cases against importers / surety companies liable 41under their forfeited bonds and when the District Collector is a party defendant 42or respondent in any other cases; 43 44(d) conduct investigations and hearings on seizures, protest and other cases, 45and submit findings and proposed decision for signature of the District 46Collector of Customs; 47 48(e) process and submit recommendation on all application for Customs 49Brokers license and other permits to operate in the Customs Zone, and keep

2 3

42

1 1and maintain up-to-date roster of duly licensed Customs Brokers and 2Brokerage firms and other pertinent records thereto; 3 4(f) institute abandonment proceedings on overstaying cargoes and detention 5upon application of persons of agencies exercising police authority; 6 7(g) receive and process drawback claims; 8 9(h) act on Special Powers of Attorney and authorization relating to business 10transactions with the Bureau including issuance of clearances; 11 12(i) submit periodic reports and other data that may be required; and 13 14(j) perform other functions consistent with the assigned tasks. 15 163.4.2.3 Sub-ports. The Collection District shall have the following sub-ports 17of entry, namely: I. Mactan shall be headed by a Customs Collector III or IV; 18II. Dumaguete by a Customs Collector II or III.The said Collector of Customs 19shall be referred to as Port collector and shall perform similar functions 20attributed to the District Collector within his/her area of jurisdiction in order to 21maximize revenue collection and prevent smuggling and fraud against 22customs. 23 243.4.3 Office of the Deputy Collector for Assessment. Headed by a District 25Collector V, this office shall have direct supervision and control over the Entry 26Processing Division, Formal Entry Division, Informal Entry Division, Bonds 27Division, Collection Division, Liquidation and Billing Division, Customs Postal 28Division and Warehousing Assessment Division. 29 303.4.3.1 Entry Processing Division. This office shall have the following 31functions: 32 33(a)receive, check and verify entry declarations and documents of importation, 34ascertain that the required documents are attached to the entry and examine 35said documents for correctness and authenticity; 36 37(b) prepare and issue Order of Payment (OP); 38 39(c) match statements and declarations on the entry against the data indicated 40on the inward cargo manifest; 41 42(d) designate the specific number of cases, crates or packages for 43examination according to prescribed rules and regulations and transmit 44original entry declaration to designated Examiners and Appraisers Section 45concerned; 46 47(e) accept and process special permits for shipside discharge, transfer, 48transshipment, as well as the loading of provisions for the ships use; 49 50(f) submit periodic reports and other data that may be required; and 2 3
43

1 1(g) perform other functions consistent with the assigned tasks. 2 33.4.3.2 Assessment Division. This office shall have the following functions: 4 5(a) examine, classify and appraise imported articles covered by formal entry 6and assess customs duties and taxes and other charges, subject to existing 7customs laws and regulations in so far as release of the shipment is 8concerned; 9 10(b) examine passengers and crew members baggage for the purpose of 11preventing entry of banned prohibited articles; 12 13(c) recommend the institution of seizure and forfeiture proceedings against 14cargoes found to be misdeclared or undervalued and banned and regulated 15or prohibited merchandise in accordance with existing laws, rules and 16regulations; 17 18(d) submit the necessary periodic reports and data as may be required of the 19division; and 20 21(e) perform other functions consistent with the assigned tasks. 22 233.4.3.3 Bonds Division. This office shall have the following functions: 24 25(a) control and supervise the processing, approval and/or cancellation of 26customs bond; 27 28(b) process all entries covered by bonds before any delivery or withdrawal of 29shipment could be affected; 30 31(c) device standardized surety forms in conformity with the requirements of 32the Tariff and Customs Code and Insurance Code; 33 34(d) keep in custody all bonds and other pertinent public documents; 35 36(e) collect bonded obligations through appropriate judicial and/or 37administrative measures in coordination with the Law Division whenever 38necessary; 39 40(f) submit the necessary periodic reports and data as may be required of the 41division; and 42 43(g) perform such other appropriate functions consistent with the assigned 44tasks. 45 463.4.3.4 Collection Division. This office shall have the following functions: 47 48(a) receive payments of customs duties, taxes and other charges; 49

2 3

44

1 1(b) authorize the delivery of goods after full payment of Government charges 2and compliance with Central Bank (CB) rules and regulations and all other 3requirements; 4 5(c) remit daily collection to the National Treasury; 6 7(d) issue bills for deferred/ suspended payments; 8 9(e) submit the necessary periodic reports and data as may be required; and 10 11(f) perform other functions consistent with the assigned tasks. 12 133.4.3.5 Liquidation and Billing Division. This office shall have the following 14functions: 15 16(a) verify, check and review computations of formal, informal and withdrawal 17entries based on the applicable foreign exchange rates, the correct dutiable 18and taxable values, taking into account the returns made by the examiner and 19appraiser as to the description of the commodities, tariff paragraph and rate of 20duties and taxes; 21 22(b) maintain daily record of all liquidated entries and post in the public 23corridors list of entries found with discrepancies and indicate therein the name 24of importers and serial numbers of entries; 25 26(c) compute fines and other charges; 27 28(d) prepare and transmit letters of demand to importers, brokers, government 29agencies and send bill/statement of accounts for all receivables including 30short duties, taxes, fines and other charges due to the Bureau of Customs; 31 32(e) prepare statement of refunds and tax credits and notify importers 33concerned accordingly; compute, record, control and coordinate collection of 34amounts remaining unpaid and unsettled; 35 36(f) forward to the Law Division all dockets of cases uncollected accounts for 37possible court action after the prescribed period for compliance has lapsed 38and payment has not been made; 39 40(g) maintain an effective system of accounting for all entries received and 41ensure security and control over all unliquidated entries kept in the division; 42 43(h) submit the necessary periodic reports and data as may be required of the 44division; and 45 46(i) perform other functions consistent with assigned tasks. 47 483.4.4 Office of the Deputy Collector for Operations. This office shall be 49headed by a Collector of Customs V or VI and shall have direct supervision

2 3

45

1 1and control over the Bonded Warehouse Division, Piers and Inspection 2Division and the Export Division. 3 43.4.4.1 Public/Private Bonded Warehouse Division. This office shall have the 5following functions: 6 7(a) supervise and oversee the operations of the public/private bonded 8warehouse; 9 10(b) receive, store and release cargoes by authority of the Deputy Collector for 11Operations, authorized to be warehoused in the public/private warehouses; 12(c) Issue warehousing permits; 13 14(d) maintain systematic records of all customs transactions of individual 15public/private bonded warehouses; 16 17(e) submit the necessary periodic reports and data that may be required of the 18division; and 19 20(f) perform other functions consistent with the assigned tasks. 21 22 233.4.4.2 Piers and Inspection Division. This office shall have the following 24functions: 25 26(a) conduct customs boarding formalities and place the vessel and cargoes 27under continuous under guarding in accordance with existing laws, rules and 28regulations; 29 30(b) supervise the discharge and loading of cargoes; 31 32(c) receive and distribute Inward Cargo Manifest to offices concerned; 33 34(d) supervise the issuance of entrance and departure clearance of vessels in 35coordination with the concerned agencies; 36 37(e) keep and update record of vessels data such as group and net tonnage as 38well as volume of imports, exports and transshipment cargoes; 39 40(f) coordinate with the Philippine Port Authority (PPA) and arrastre contractor 41for location of cargoes; 42 43(g) coordinate with Entry Processing Division and the arrastre contractor in 44reporting to the District Collector unentered and/or overstaying cargoes; 45 46(h) supervise the release or transfer of cargoes from the piers; 47 48(i) submit the necessary periodic reports and data as may be required of the 49division; and 50 2 3
46

1 1(j) perform other functions consistent with the assigned tasks. 2 33.4.4.3Export Division. This office shall have the following functions: 4 5(a) receive, check and verify export entry declarations and supporting 6documents; 7 8(b) examine export cargoes to determine compliance with existing laws, rules 9and regulations; 10 11(c) assess and collect export duties and other charges; 12 13(d) prepare and issue Orders of Payment, authority or permit to load cargoes 14for export and/or for re-exportation and Certificates of Origin, identification, re15exportation or non-shipment; 16 17(e) submit the necessary periodic reports and data as may be required of the 18division; and 19 20(f) perform other functions consistent with the assigned tasks. 21 22 233.5 District Collector, Collection District III: Ninoy Aquino International Airport 24 253.5.1 Office of the District Collector of Customs, Functions. The Collection 26District III shall be headed and supervised by a Collector of Customs VI and 27herein referred to as the District Collector. The District Collector shall have the 28following functions: 29 30(a) collect duties, taxes, fees, charges, penalties and fines accruing to the 31Government under the Tariff and Customs Code and related Laws; 32 33(b) exercise police powers conferred to him/her by the Tariff and Customs 34Code or other Laws which include the enforcement of penalties and fines 35accruing to the Government under the Tariff and Customs Code or other Laws 36which include the enforcement of penalties and fines accruing to the 37Government under the Tariff and Customs Code and other related Laws; 38 39(c) supervise the entrance and clearance of vessels engaged in foreign 40commerce; 41 42(d) supervising and controlling handling of foreign malls arriving in the 43Philippines; 44 45(e) supervising all imports and export cargoes and freight stations; and 46 47(f) perform such appropriate functions consistent with the assigned tasks of 48the District Collector and those which may be given by the Commissioner of 49Customs. 50 2 3
47

1 13.5.2 Office of the Deputy Collector for Administration. This office shall be 2headed by a Collector of Customs V and shall have direct supervision and 3control over the Administrative Division, Law Division, Customs Data 4Monitoring Division, Central Mail Exchange Center (sub-port) and Manila 5Domestic Airport (sub-port). 6 73.5.2.1 Administrative Division. This office shall have the following functions: 8(a) provide assistance and services to the Collection District on matters 9pertaining to budget, finance and personal; 10 11(b) provide the Collection District with efficient equipment, records, supplies, 12disbursement, messengerial, janitorial and other administrative/ general utility 13services; 14 15(c) submit periodic reports and other data as may be required; and 16 17(d) perform other functions consistent with the assigned tasks. 18 193.5.2.2 Law Division. This office shall have the following functions: 20 21(a) assist the District Collector in the legal aspect of the administrative 22responsibilities and provide legal advice and services to the Collection District; 23 24(b) render opinions and rulings on customs matters involving interpretations 25and application of laws and implementing regulations; 26 27(c) represent the District Collector in court whenever summoned by subpoena 28or made a party litigant therein and collaborate with the Office of the Solicitor 29General in prosecuting cases against importers / surety companies liable 30under their forfeited bonds and when the District Collector is a party defendant 31or respondent in any other cases; 32 33(d) conduct investigations and hearings on seizures, protest and other cases, 34and submit findings and proposed decision for signature of the District 35Collector of Customs; 36 37(e) process and submit recommendation on all application for Customs 38Brokers license and other permits to operate in the Customs Zone, and keep 39and maintain up-to-date roster of duly licensed Customs Brokers and 40Brokerage firms and other pertinent records thereto; 41 42(f) institute abandonment proceedings on overstaying cargoes and detention 43upon application of persons of agencies exercising police authority; 44 45(g) receive and process drawback claims; 46 47(h) act on Special Powers of Attorney and authorization relating to business 48transactions with the Bureau including issuance of clearances; 49 50(i) submit periodic reports and other data that may be required; and 2 3
48

1 1(j) perform other functions consistent with the assigned tasks. 2 33.5.2.3 Customs Data Monitoring Division. This office shall have the following 4functions: 5 6(a) Set up procedures and guidelines for the grouping, screening, analyzing, 7encoding, transcribing and controlling of accomplished permit to deliver 8imported goods (PDIG), Currency declarations, re-export commitments, 9certificate of identification, certificates of origin and other documents; 10 11(b) transcribe data into computer acceptable media for electronic data 12processing; 13 14(c) submit periodic reports as may be required; and 15 16(d) perform other functions consistent with the assigned tasks. 17 183.5.2.4 Airmail Distribution Center (sub-port). This sub-port shall be headed 19by a Collector of Customs III or IV and shall perform the following functions: 20 21(a)examine, classify and appraise imported merchandise coming through the 22airmail; 23 24(b) assess and collect duties, taxes and other customs charges due thereon 25and/or authorize release/transfer thereof after complying with the 26requirements of existing laws, rules and regulations; 27 28(c) recommend the institution of seizure and/or forfeiture proceedings against 29cargoes found to be misdeclared and undervalued, and banned, prohibited, 30abandoned/unclaimed merchandise in accordance with customs and/or postal 31laws, rules and regulations; 32 33(d) provide a system of monitoring and reporting of parcels transferred to 34Postal Stations; 35 36(e) submit periodic reports and data as may be required; and 37 38(f) perform other functions consistent with the assigned tasks. 39 403.5.2.5 Manila Domestic Airport (sub-port). This sub-port shall be headed by 41a Collector of Customs I and shall perform the following functions: 42 43(a) control and supervise local transshipments to other domestic airport; 44 45(b) receive and supervise the transfer of exports from other domestic ports to 46the MIA; 47 48(c) control the entry of barter trade goods and other imported articles through 49the Domestic Airport in accordance with the provisions of the Barter Trade

2 3

49

1 1Law as well as the Tariff and Customs Code and examine, appraise and 2collect customs duties and taxes, if any. 3 43.5.3 Office of the Deputy Collector for Assessment. Headed by a District 5Collector V, this office shall have direct supervision and control over the Entry 6Processing Division, Formal Entry Division, Informal Entry Division, Bonds 7Division, Collection Division, Liquidation and Billing Division, Customs Postal 8Division and Warehousing Assessment Division. 9 103.5.3.1 Entry Processing Division. This office shall have the following 11functions: 12 13(a)receive, check and verify entry declarations and documents of importation, 14ascertain that the required documents are attached to the entry and examine 15said documents for correctness and authenticity; 16 17(b) prepare and issue Order of Payment (OP); 18 19(c) match statements and declarations on the entry against the data indicated 20on the inward cargo manifest; 21 22(d) designate the specific number of cases, crates or packages for 23examination according to prescribed rules and regulations and transmit 24original entry declaration to designated Examiners and Appraisers Section 25concerned; 26 27(e) accept and process special permits for shipside discharge, transfer, 28transshipment, as well as the loading of provisions for the ships use; 29 30(f) submit periodic reports and other data that may be required; and 31 32(g) perform other functions consistent with the assigned tasks. 33 343.5.3.2 Formal Entry Division. This office shall have the following functions: 35 36(a) examine, classify and appraise imported articles covered by formal entry 37and assess customs duties and taxes and other charges, subject to existing 38customs laws and regulations in so far as release of the shipment is 39concerned; 40 41(b) examine passengers and crew members baggage for the purpose of 42preventing entry of banned prohibited articles; 43 44(c) recommend the institution of seizure and forfeiture proceedings against 45cargoes found to be misdeclared or undervalued and banned and regulated 46or prohibited merchandise in accordance with existing laws, rules and 47regulations; 48 49(d) submit the necessary periodic reports and data as may be required of the 50division; and 2 3
50

1 1(e) perform other functions consistent with the assigned tasks. 2 33.5.3.3Informal Entry Division. This office shall have the following functions: 4 5(a) examine, classify and appraise imported articles covered by informal entry 6and assess customs duties and taxes and other charges, subject to existing 7customs laws and regulations in so far as release of the shipment is 8concerned; 9 10(b) examine passengers and crew members baggage for the purpose of 11preventing entry of banned prohibited articles; 12 13(c) recommend the institution of seizure and forfeiture proceedings against 14cargoes found to be misdeclared or undervalued and banned and regulated 15or prohibited merchandise in accordance with existing laws, rules and 16regulations; 17 18(d) submit the necessary periodic reports and data as may be required of the 19division; and 20 21(e) perform other functions consistent with the assigned tasks. 22 23 243.5.3.4Bonds Division. This office shall have the following functions: 25 26(a) control and supervise the processing, approval and/or cancellation of 27customs bond; 28 29(b) process all entries covered by bonds before any delivery or withdrawal of 30shipment could be affected; 31 32(c) device standardized surety forms in conformity with the requirements of 33the Tariff and Customs Code and Insurance Code; 34 35(d) keep in custody all bonds and other pertinent public documents; 36 37(e) collect bonded obligations through appropriate judicial and/or 38administrative measures in coordination with the Law Division whenever 39necessary; 40 41(f) submit the necessary periodic reports and data as may be required of the 42division; and 43 44(g) perform such other appropriate functions consistent with the assigned 45tasks. 46 473.5.3.5 Collection Division. This office shall have the following functions: 48 49(a) receive payments of customs duties, taxes and other charges; 50 2 3
51

1 1(b) authorize the delivery of goods after full payment of Government charges 2and compliance with Central Bank (CB) rules and regulations and all other 3requirements; 4 5(c) remit daily collection to the National Treasury; 6 7(d) issue bills for deferred/ suspended payments; 8 9(e) submit the necessary periodic reports and data as may be required; and 10 11(f) perform other functions consistent with the assigned tasks. 12 133.5.3.6Liquidation and Billing Division. This office shall have the following 14functions: 15 16(a) verify, check and review computations of formal, informal and withdrawal 17entries based on the applicable foreign exchange rates, the correct dutiable 18and taxable values, taking into account the returns made by the examiner and 19appraiser as to the description of the commodities, tariff paragraph and rate of 20duties and taxes; 21 22(b) maintain daily record of all liquidated entries and post in the public 23corridors list of entries found with discrepancies and indicate therein the name 24of importers and serial numbers of entries; 25 26(c) compute fines and other charges; 27 28(d) prepare and transmit letters of demand to importers, brokers, government 29agencies and send bill/statement of accounts for all receivables including 30short duties, taxes, fines and other charges due to the Bureau of Customs; 31 32(e) prepare statement of refunds and tax credits and notify importers 33concerned accordingly; compute, record, control and coordinate collection of 34amounts remaining unpaid and unsettled; 35 36(f) forward to the Law Division all dockets of cases uncollected accounts for 37possible court action after the prescribed period for compliance has lapsed 38and payment has not been made; 39 40(g) maintain an effective system of accounting for all entries received and 41ensure security and control over all unliquidated entries kept in the division; 42 43(h) submit the necessary periodic reports and data as may be required of the 44division; and 45 46(i) perform other functions consistent with assigned tasks. 47 48 493.5.4 Office of the Deputy Collector for Passenger Services. The office shall 50be headed by a Collector of Customs V and shall have direct supervision and 2 3
52

1 1control over the Arrival Operations Divisions, Departure Operations Divisions, 2and the Baggage Assistance Divisions. 3 43.5.4.1 Arrival Operations. This office shall have the following functions: 5 6(a) Examine, classify and appraise accompanied personal effects of incoming 7passengers, crew, members and transit passengers in compliance with all 8laws, rules and regulations applicable thereon; 9 10(b) assess duties and taxes and other charges due thereon, recommend 11seizure and/or forfeiture proceedings against banned and/or prohibited 12articles in accordance with laws rules and regulations; 13 14(c)implement rules and regulations of the Central Bank and other government 15agencies concerned; submit periodic reports and data as may be required; 16and 17 18(d) perform other functions consistent to the assigned tasks. 19 203.5.4.2 Baggage Assistance Division. This office shall have the following 21functions: 22 23(a) receive and store articles, luggages held in bond; 24 25(b) supervise the storage of transit and unaccompanied luggages; 26 27(c) conduct inventory examinations and appraisal of in bond interline 28baggages, and collect duties and taxes, if any; 29 30(d) submit reports and data s may be required; and 31 32(e) perform other functions consistent with the assigned tasks. 33 34 353.5.5 Office of the Deputy Collector for Operations. This office shall be 36headed by a Collector of Customs V and shall have direct supervision and 37control over the Aircraft Operations division, Bonded Warehouse Division, 38export Division, Auction and Cargo Disposal Division and Customs Duty free 39Shops Division. 40 413.5.5.1 Aircraft Operations Division. This office shall have the following 42functions: 43 44(a) conduct the entrance and clearance of aircraft and the boarding formalities 45attendant thereto; 46 47(b) supervise, control and coordinate the handling/conduction/underguarding 48of import/export transit/cargoes from and to the aircraft or from the public 49customs bonded warehouse to designated destinations whenever duties and 50taxes are still due and collectible; 2 3
53

1 1(c) keep and update records of volume of imports, exports and transit 2cargoes; 3 4(d) coordinate with the Entry Processing Division in reporting to the District 5Collector unentered and/or overstaying cargoes; 6 7(e) receive and distribute Inward Cargo Manifest and Airway Bills to offices 8concerned; 9 10(f) submit periodic reports and other data as may be required; and 11 12(g) perform other functions consistent with the assigned tasks. 13 143.5.5.2 Bonded Warehouse Division. This office shall have the following 15functions: 16 17(a) supervise and oversee the operations of the public/private bonded 18warehouse; 19 20(b) receive, store and release cargoes by authority of the Deputy Collector for 21Operations, authorized to be warehoused in the public/private warehouses; 22 23(c) Issue warehousing permits; 24 25(d) maintain systematic records of all customs transactions of individual 26public/private bonded warehouses; 27 28(e) submit the necessary periodic reports and data that may be required of the 29division; and 30 31(f) perform other functions consistent with the assigned tasks. 32 333.5.5.3Export Division. This office shall have the following functions: 34 35(a) receive, check and verify export entry declarations and supporting 36documents; 37 38(b) examine export cargoes to determine compliance with existing laws, rules 39and regulations; 40 41(c) assess and collect export duties and other charges; 42 43(d) prepare and issue Orders of Payment, authority or permit to load cargoes 44for export and/or for re-exportation and Certificates of Origin, identification, re45exportation or non-shipment; 46 47(e) submit the necessary periodic reports and data as may be required of the 48division; and 49 50(f) perform other functions consistent with the assigned tasks. 2 3
54

1 13.5.5.4Auction and Cargo Disposal Division. This office shall have the 2following functions: 3 4(a) keep custody of seized, forfeited, unclaimed and abandoned merchandise 5and maintain an up-to-date record and inventory thereof; 6 7(b) dispose at public auction all merchandise subject to sale and employ such 8other modes of disposition thereof, in accordance with laws, rules and 9regulations; 10 11(c) coordinate with the offices concerned for the purpose of instituting 12abandonment proceedings; 13 14(d) submit the necessary periodic reports and data as may be required of the 15division; and 16 17(e) perform other functions consistent with the assigned tasks. 18 19 203.5.5.5 Customs Duty-Free Shops Division. This Office shall have the 21following functions: 22 23(a) Supervise and control the movement and transfer of imported cargoes 24discharged from NAIA and other ports of entry to the warehouse of the Duty25Free Shops operator and release them to all sales outlets/stores in 26accordance with existing customs rules and regulations; 27 28(b) monitor the sale of all imported duty-free items; 29 30(c)maintain update and systematic records and devise effective control 31system for all goods transferred to, stored in, sold, release by or withdrawn 32firm Duty-Free Shops warehouse/sales outlets; 33 34(d) assist in the collection if fees and other charges from the Duty-Free shop 35Operators; 36 37(e) submit periodic reports and data as may be required; and 38 39(f) perform other functions consistent with the assigned tasks. 40 41 BOOK II ASSESSMENT AND OPERATIONS 42 43 TITLE 1 ASSESSMENT 44 45SECTION 1 PRINCIPLES AND STANDARDS IN THE DETERMINATION 46 OF DUTIABLE VALUE 47 481.1 Principles 49 501.1.1 It is imperative that the rules for the application of the provisions of the 2 3
55

1 1 WVA be elaborated in order to provide greater uniformity and certainty 2 in its implementation; 3 41.1.2 There is a need for a fair, uniform and neutral system for the valuation 5 of goods for customs purposes that precludes the use of arbitrary or 6 fictitious dutiable values; 7 81.1.3 The basis for valuation of goods for customs purposes should, to the 9 greatest extent possible, be the transaction value of the goods being 10 valued; 11 121.1.4 The dutiable value should be based on simple and equitable criteria 13 consistent with commercial practices and that valuation procedures 14 should be of general application without distinction between sources of 15 supply; and 16 171.1.5 Valuation procedures should not be used to combat dumping. 18 191.2 Standards 20 211.2.1 Sequential Application of Valuation Methods 22 231.2.1.1 The methods of valuation are set out in a sequential order of 24 application. The primary method for customs valuation is the 25 Transaction Value and imported goods are to be valued in 26 accordance with the provisions of this method whenever the 27 conditions prescribed for its use are fulfilled. 28 291.2.1.2 Where the dutiable value cannot be determined under the 30 Transaction Value method, it is to be determined by proceeding 31 sequentially through the succeeding methods to the first such method 32 under which the dutiable value can be determined. Except as 33 provided under Section 1.2.3.1, paragraph 3 of this Order, it is only 34 when the dutiable value cannot be determined under the provisions 35 of a particular method that the provisions of the next method in the 36 sequence can be used. 37 381.2.2 Use of Generally Accepted Accounting Principles (GAAP) 39 401.2.2.1 "Generally accepted accounting principles" refers to the recognized 41 consensus or substantial authoritative support within a country at a 42 particular time as to which economic resources and obligations 43 should be recorded as assets and liabilities, which changes in assets 44 and liabilities should be recorded, how the assets and liabilities and 45 changes in them should be measured, what information should be 46 disclosed and how it should be disclosed, and which financial 47 statements should be prepared. These standards may be broad 48 guidelines of general application as well as detailed practices and 49 procedures. 50 2 3
56

1 11.2.2.2 For purposes of this Order, the Bureau of Customs (BOC) shall utilize 2 information prepared in a manner consistent with the generally 3 accepted accounting principles in the country which is appropriate for 4 the Valuation Method in question. For example, the determination of 5 usual profit and general expenses under the provisions of Method 6 Four would be carried out utilizing information prepared in a manner 7 consistent with the generally accepted accounting principles of the 8 country of importation which is the Philippines. On the other hand, the 9 determination of usual profit and general expenses under the 10 provisions of Method Five would be carried out utilizing information 11 prepared in a manner consistent with the generally accepted 12 accounting principles of the country of production. As a further 13 example, the determination of the value of assist in the form of tools, 14 dies, moulds, and similar items used in the production of the imported 15 goods undertaken in the Philippines would be carried out utilizing 16 information in a manner consistent with the generally accepted 17 accounting principles of the Philippines. 18 191.2.3 Rules on Customs Valuation 20 211.2.3.1 General Provisions 22 23 The primary method in determining the dutiable value of imported 24 goods shall be Method One: The Transaction Value, whenever the 25 conditions prescribed for its use are fulfilled. 26 27 However, if the dutiable value cannot be determined with the use of 28 Method One, the following valuation methods shall be applied in 29 sequential order: 30 31 Method Two: The Transaction Value of Identical Goods 32 33 Method Three: The Transaction Value of Similar Goods 34 35 Method Four: Deductive Value 36 37 Method Five: Computed Value 38 39 Method Six: Fallback Value 40 41 However, at the request of the importer, the order of application of 42 Methods Four and Five may be reversed; provided, that the 43 Commissioner of Customs agrees to such request taking into 44 consideration that the reversal of the sequential order will not give 45 rise to real difficulties for the BOC in determining the dutiable value 46 under Method Five. 47 48 If the importer does not request that the order of Method Four and 49 Method Five be reversed, the normal order of the sequence shall be 50 followed. If the importer does so request but it then proves impossible 2 3
57

1 1 to determine the dutiable value under the provisions of Method Five, 2 the dutiable value shall be determined under the provisions of 3 Method Four, if it can be so determined. 4 5 Where the dutiable value cannot be determined under the provisions 6 of Methods One to Five, it shall be determined under the provisions 7 of Method Six. 8 9SECTION 2 METHOD ONE: THE TRANSACTION VALUE 10 112.1 Price Actually Paid or Payable 12 132.1.1 The dutiable value of imported goods shall be the transaction value, 14 that is, the price actually paid or payable for the goods when sold for 15 export to the Philippines adjusted in accordance with the provisions of 16 Section 2.8 of this Order and subject to the conditions specified in 17 Section 2.3 herein. 18 192.1.2 The price actually paid or payable is the total payment made or to be 20 made by the buyer to or for the benefit of the seller for the imported 21 goods. The payment need not necessarily take the form of a transfer of 22 money. Payment may be made by way of letters of credit or negotiable 23 instruments. Payment may be made directly or indirectly. An example 24 of an indirect payment would be the settlement by the buyer, whether 25 in whole or in part, of a debt owed by the seller. 26 27 The price actually paid or payable refers to the price for the imported 28 goods. Thus, the flow of dividends or other payments from the buyer to 29 the seller that do not relate to the imported goods are not part of the 30 dutiable value. 31 322.2 Concept of Sale and Sale for Export 33 342.2.1 Sale 35 36 The transaction value of the imported goods is based on the price 37 actually paid or payable for those goods when sold; therefore, 38 there must be a sale for export to the Philippines as one of the 39 conditions for the application of Method One. 40 41 The WVA itself provides no definition of a sale. It merely states that 42 there must be a specific commercial operation that meets certain 43 requirements and conditions. WCO Advisory Opinion 1.1 provides 44 guidance in this matter by elaborating on the concept of "sale" as it 45 appears in the WVA. It states that a sale may be described as follows: 46 472.2.1.1 A commercial operation which involves a buyer and a seller; 48 492.2.1.2 The buyer agrees to obtain certain goods; 50 2 3
58

1 12.2.1.3 An agreement to exchange the ownership of the goods at a time and 2 for a price or other consideration; 3 42.2.1.4 A compensation occurs as the transfer for that ownership and 5 acquisition for those goods; and 6 72.2.1.5 Both parties acknowledge that the transaction 8 constitutes a commercial operation. 9 102.2.2 No Sale 11 12 Since one of the underlying principles of the WVA is to use the 13 transaction value of the imported goods to the greatest extent possible, 14 then the term "sale" should be taken in its widest sense. 15 16 Goods that might be considered not to be subject to a sale would 17 include, among others, the following: 18 192.2.2.1 Free consignments, like, gifts, samples and promotional items; 20 212.2.2.2 Goods imported on consignments; 22 232.2.2.3 Goods imported by intermediaries, who do not purchase the goods 24 and who sell them after importation; 25 262.2.2.4 Goods imported by branch offices which are not separate legal 27 entities; 28 292.2.2.5 Goods imported under a hire or leasing contract; and 30 312.2.2.6 Goods supplied on loan, which remain the property of the sender. 32 332.2.3 Sale for Export 34 35 Only transactions involving an actual international transfer of goods 36 may be used in valuing merchandise under the transaction value 37 method. 38 392.2.4 Sold for Export in a Series of Sales 40 41 In a series of sales situation, the price actually paid or payable for the 42 imported goods when sold for export to the Philippines is the price paid 43 in the last sale occurring prior to the introduction of the goods into the 44 Philippines, instead of the first (or earlier) sale. 45 462.3 Conditions Under Method One 47 48 Method One shall be used if the following conditions are fulfilled: 49 502.3.1 There must be no restrictions as to the disposition or use of the 2 3
59

1 1 goods by the buyer, other than restrictions which: 2 32.3.1.1 Are imposed or required by law or by Philippine authorities; 4 52.3.1.2 Limit the geographical area in which the goods may be resold; and 6 72.3.1.3 Do not substantially affect the value of the goods. 8 9 An example would be the case where a seller requires a buyer of 10 automobiles not to sell or exhibit them prior to a fixed date which 11 represents the beginning of a model year. 12 132.3.2 The sale or price must not be subject to some conditions or 14 considerations for which a value cannot be determined with respect to 15 the goods being valued. 16 17 If the sale or price is subject to some conditions or considerations for 18 which a value cannot be determined with respect to the goods being 19 valued, the transaction value shall not be acceptable for customs 20 purposes. Some examples of this include: 21 222.3.2.1 The seller establishes the price of the imported goods on condition 23 that the buyer will also buy other goods in specified quantities. 24 252.3.2.2 The price of the imported goods is dependent upon the price or 26 prices at which the buyer of the imported goods sells other goods to 27 the seller of the imported goods. 28 292.3.2.3 The price is established on the basis of a form of payment 30 extraneous to the imported goods, such as where the imported goods 31 are semi-finished goods which have been provided by the seller on 32 condition that the seller will receive a specified quantity of the finished 33 goods. 34 35 Conditions or considerations relating to the production or marketing 36 of the imported goods shall not result in rejection of the transaction 37 value. Examples: 38 392.3.2.4 Buyer furnishes the seller with engineering and plans undertaken in 40 the Philippines shall not result in rejection of the transaction value for 41 the purposes of Method One. 42 432.3.2.5 Buyer undertakes on his own account, even though by agreement 44 with the seller, activities relating to the marketing of the imported 45 goods, and the value of those activities is not part of the dutiable 46 value nor shall such activities result in rejection of the transaction 47 value. 48 492.3.3 No part of the proceeds of any subsequent resale, disposal or use of 50 the goods by the buyer will accrue directly or indirectly to the seller, 2 3
60

1 1 unless an appropriate adjustment can be made in accordance with the 2 provisions of Section 2.8. 3 42.3.4 The buyer and the seller are not related, or where they are related, 5 such relationship did not influence the price of the goods. The buyer 6 and the seller shall be deemed to be related only if: 7 82.3.4.1 They are officers or directors of one another's businesses; 9 102.3.4.2 They are legally recognized partners in business; 11 122.3.4.3 They are employer and employee; 13 142.3.4.4 Any person directly or indirectly owns, controls or holds five (5) per 15 cent or more of the outstanding voting stock or shares of both of 16 them; 17 182.3.4.5 One of them directly or indirectly controls the other; 19 202.3.4.6 Both of them are directly or indirectly controlled by a third person; 21 222.3.4.7 Together they directly or indirectly control a third person; or 23 242.3.4.8 They are related by affinity or consanguinity up to the fourth civil 25 degree. 26 27 For the purpose of Section 2.3.4, one person shall be deemed to 28 control another when the former is legally or operationally in a 29 position to exercise restraint or direction over the latter. 30 31 Persons who are associated in business with one another, in that, one 32 is the sole agent, sole distributor or sole concessionaire, however 33 described, of the other shall be deemed to be related if they fall within 34 the criteria of Section 2.3.4. 35 362.4 Acceptance of Method One in Related Sale 37 38 If the buyer and seller are related, the use of the transaction value 39 method is acceptable if either of the two following circumstances is 40 present: 41 422.4.1 The circumstances surrounding the transaction demonstrate that the 43 relationship did not influence the price actually paid or payable. It is not 44 intended that there should be an examination of the circumstances in 45 all cases where the buyer and the seller are related. Such examination 46 will only be required where there are doubts about the acceptability of 47 the price. Where the Collector of Customs has no doubts on the 48 acceptability of the price, it should be accepted without requesting 49 further information from the importer. 50 2 3
61

1 1 For example, the Collector of Customs may have previously examined 2 the relationship, or he may already have detailed information 3 concerning the buyer and the seller, and may already be satisfied from 4 such examination or information that the relationship did not influence 5 the price. 6 7 Where the Collector of Customs is unable to accept the transaction 8 value without further inquiry, he should give the importer an opportunity 9 to supply such further detailed information as may be necessary to 10 enable him to examine the circumstances surrounding the sale. In this 11 context, the Collector of Customs should be prepared to examine 12 relevant aspects of the transaction, including the way in which the 13 buyer and seller organize their commercial relations and the way in 14 which the price in question was arrived at, in order to determine 15 whether the relationship influenced the price. Where it can be shown 16 that the buyer and seller, although related under the provisions of 17 Section 2.3.4 buy from and sell to each other as if they were not 18 related, this would demonstrate that the price had not been influenced 19 by the relationship. 20 21 As an example of this, if the price had been settled in a manner 22 consistent with the normal pricing practices of the industry in question 23 or with the way the seller settles prices for sales to buyers who are not 24 related to the seller, this would demonstrate that the price had not been 25 influenced by the relationship. 26 27 As a further example, where it is shown that the price is adequate to 28 ensure recovery of all costs plus a profit which is representative of the 29 firm's overall profit realized over a representative period of time (e.g. on 30 an annual basis) in sales of goods of the same class or kind, this would 31 demonstrate that the price had not been influenced. 32 332.4.2 The transaction value closely approximates to one of the following test 34 values occurring at or about the same time: 35 362.4.2.1 The transaction value in sales to unrelated buyers of identical or 37 similar goods for export to the Philippines; or 38 392.4.2.2 The deductive value of identical or similar goods determined in 40 accordance with Method Four; or 41 422.4.2.3 The computed value of identical or similar goods determined in 43 accordance with Method Five. 44 45 In applying the foregoing tests, due account shall be taken of 46 demonstrated differences in commercial levels, quantity levels, 47 adjustments and costs incurred by the seller in sales in which the 48 seller and the buyer are not related that are not incurred by the seller 49 in sales in which the seller and the buyer are related. 50 2 3
62

1 1 2 3 4 5 62.5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 212.6 22 23 24 25 26 27 28 29 30 31 32 33 34 35 362.7 37 38 39 40 41 42 43 44 45 46 47 48 49 2 3 The tests set forth in Section 2.4.2 are to be used at the initiative of the importer and only for comparison purposes. Substitute values may not be established under the provisions of Section 2.4.2 of this Order. Collector of Customs Action when there is Ground that Relationship has Influenced the Price If, in the light of information provided by the importer or otherwise, the Collector of Customs has grounds for considering that the relationship influenced the price, he shall communicate the ground/s to the importer and the importer shall be given a reasonable opportunity to respond. If the importer so requests, the communication of the ground/s shall be in writing. If the importer contests the issue that the relationship influenced the price, the matter shall be raised and resolved through the existing dispute settlement mechanism, like, the Valuation and Classification Review Committee (VCRC). Significance of Test Values Test values provide an opportunity for the importer to demonstrate that the transaction value closely approximates to a "test" value previously accepted by the Collector of Customs and is therefore acceptable under the provisions of Method One. Where a test under Section 2.4.2 is met, it is not necessary to examine the question of influence under Section 2.4.1. If the Collector of Customs has already sufficient information to be satisfied, without further detailed inquiries, that one of the tests provided in Section 2.4.2 has been met, there is no reason for him to require the importer to demonstrate that the test can be met. In Section 2.4.2.1 the term "unrelated buyers" means buyers who are not related to the setter in any particular case. Close Approximation of Values A number of factors must be taken into consideration in determining whether one value "closely approximates" to another value. These factors include the nature of the imported goods, the nature of the industry itself, the season in which the goods are imported, and, whether the difference in values is commercially significant. Since these factors may vary from case to case, it would be impossible to apply a uniform standard such as a fixed percentage, in each case. For example, a small difference in value in a case involving one type of goods could be unacceptable while a large difference in a case involving another type of goods might be acceptable in determining whether the transaction value closely approximates to the test" values set forth in Section 2.4.2 of Method One.

63

1 12.8 Adjustments 2 3 In determining the dutiable value under the provisions of Method One, 4 the following adjustments shall be added to the price actually paid or 5 payable for the imported goods being valued to the extent that they are 6 incurred by the buyer, provided there is objective and quantifiable data to 7 form the basis of the adjustment, and if such value has not been 8 included in the price actually paid or payable: 9 102.8.1 Commissions and brokerage fees (except buying commissions); 11 12 Commissions and brokerage fees include selling commissions which 13 are paid by the seller to his agent in the promotion and sale of his 14 products. Selling commission may take the form of an indentors 15 commission, selling agent's commission, or manufacturer's 16 representative commission. 17 18 The term brokerage fees refer to a commission paid to a broker who 19 arranges the transaction between a seller and a buyer. Such may be 20 paid by the seller or the buyer or by both the seller and the buyer. This 21 normally applies to the commodities market. It does not refer to the 22 customs broker's professional fees in customs clearance paid by the 23 importer which is considered a post importation expense. 24 25 Buying commissions are fees paid by an importer to the importer's 26 agent for the service of representing the importer abroad in the 27 purchase of the goods being valued. 28 292.8.2 Cost of containers which are treated as being one for Customs 30 purposes with the goods in question; 31 322.8.3 Cost of packing whether for labor or materials; 33 342.8.4 Assists; 35 36 "Assist" is defined as the value, apportioned as appropriate, of certain 37 goods and services supplied directly or indirectly by the buyer free of 38 charge or at a reduced cost for use in connection with the production 39 and sale for export of the imported goods, to the extent that such value 40 has not been incorporated in the price actually paid or payable. The 41 goods and services are: 42 432.8.4.1 Materials, components, parts and similar items 44 incorporated in the imported goods; 45 462.8.4.2 Tools, dies, moulds and similar items used in the production of the 47 imported goods; 48 492.8.4.3 Materials consumed in the production of the imported goods; and 50 2 3
64

1 12.8.4.4 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 2 3 Engineering, development, artwork, design work, and plans and sketches undertaken elsewhere than in the Philippines and necessary for the production of the imported goods. There are two factors involved in the apportionment of the elements, namely, the value of the element itself and the way in which that value is to be apportioned to the imported goods. The apportionment of these elements should be made in a reasonable manner appropriate to the circumstances and in accordance with GAAP. Concerning the value of the element, if the importer acquires, the element from a seller not related to the importer at a given cost, the value of the element is that cost. If the element was produced by the importer or by a person related to the importer, its value would be the cost of producing it. If the element had been previously used by the importer, regardless of whether it had been acquired or produced by such importer, the original cost of acquisition or production would have to be adjusted downward to reflect its use in order to arrive at the value of the element. Finally, once a value has been determined for the element, it is necessary to apportion that value to the imported goods. Various possibilities exist. For example, the value might be apportioned to the first shipment if the importer wishes to pay duty on the entire value at one time. As another example, the importer may request that the value be apportioned over the number of units produced up to the time of the first shipment. As a further example, the importer may request that the value be apportioned over the entire anticipated production where contracts or firm commitments exist for that production. The method of apportionment used will depend upon the documentation provided by the importer. As an illustration of the above, an importer provides the producer with a mould to be used in the production of the imported goods and contracts with the producer to buy 10,000 units. By the time of arrival of the first shipment of 1,000 units, the producer has already produced 4,000 units. The importer may request the Collector of Customs to apportion the value of the mould over 1,000 units, 4,000 units or 10,000 units. In order to minimize the burden for both the importer and Collector of Customs in determining the values to be added, data readily available in the buyer's commercial record system should be used in so far as possible. For those elements supplied by the buyer which were purchased or leased by the buyer, the addition would be the cost of the purchase or the lease. No addition shall be made for those elements available in the public domain, other than the cost of obtaining copies of them.

65

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 282.8.5 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 442.8.6 45 46 47 48 49 50 2 3 Further, the manner in with which it may be possible to calculate the values to be added will depend on a particular firm's structure and management practice, as well as its accounting methods. Example: It is possible that a firm which imports a variety of products from several countries maintains the records of its design centre outside the Philippines in such a way as to show accurately the costs attributable, to a given product. In such cases, a direct adjustment may appropriately be made under the provisions of Section 2.8. Another example is that - a firm may carry the cost of the design centre outside the Philippines as a general overhead expense without allocation to specific products. In this instance, an appropriate adjustment could be made under the provisions of Section 2.8 with respect to the imported goods by apportioning total design centre costs over total production benefiting from the design centre and adding such apportioned cost on a unit basis to imports. Variations in the above circumstances will, of course, require different factors to be considered in determining the proper method of allocation. In cases where the production of the element in question involves a number of countries and over a period of time, the adjustment should be limited to the value actually added to that element outside the Philippines. Royalties and license fees related to the goods being valued that the buyer must pay, either directly or indirectly, as a condition of sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable; The royalties and license fees may include, among other things, payments in respect to patents, trademarks and copyrights. However, the charges for the right to reproduce the imported goods in the Philippines shall not be added to the price actually paid or payable for the imported goods in determining the dutiable value. Payments made by the buyer for the right to distribute or resell the imported goods shall not be added to the price actually paid or payable for the imported goods if such payments are not a condition of the sale for export to the Philippines. The value of any part of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues directly or indirectly to the seller; An example of this element is that when the contract of sale between buyer and seller states that a certain percentage of the sales proceeds of an imported article is remitted to the seller.
66

1 1 22.8.7 The cost of transport of the imported goods to the port of entry in the 3 Philippines; loading, unloading and handling charges associated with 4 the transport of the imported goods to the port of entry in the 5 Philippines; and 6 7 The cost of transportation would include those costs for physically 8 moving the goods to the port of entry in the Philippines. This cost could 9 include such charges as trucking (inland freight, rail freight, ocean 10 freight, air freight and barge or lighterage and postal costs). 11 122..8.7.1 The freight charge to be applied shall be based on the amount 13 indicated in the Air Waybill or Bill of Lading. 14 152.8.7.2 Freight charges whether prepaid or collect shall be required to be 16 clearly indicated in the Bill of Lading (air or ocean) for approval or 17 statistical purposes. [CMO 2-90] 18 192..8.7.3 In case of bulk shipments, the certified copy of Charter Party 20 document or Freight Contract, and Stowage Plan shall be 21 presented to show the actual freight charge, all of which shall be 22 attached to the working copy of the Entry. [CMO 22-2007 Section 23 3.2 (3.2.1 to 3.2.5 c)] 24 25 a. For bulk/general cargo shipments made by the National 26 Food Authority (NFA), the freight charge if not lower than 10% of 27 the CFR value of the commodity may be accepted. 28 29 In case of refrigerated shipment, a certification from shipping 30 lines as to the freight paid must be presented for Customs 31 verification. 32 33 b. In the absence of a certification from the shipping lines, 34 the following freight charges may be used as reference: 35 36 b.1 Shipments coming from China should not be lower than: 37 38 $1,700.00/40 ft Reefer Container (Guangshou, China) 39 $1,300.00/20 ft Reefer Container (Guangshou, China) 40 $1,500.00/20 ft Reefer Container (Xiamen, China) 41 $1,800.00/40 ft Reefer Container (Xiamen, China) 42 $1,800.00/20 ft Reefer Container (Shanghai, China) 43 $3,200.00/40 ft Reefer Container (Shanghai, China) 44 $3,200.00/40 ft Reefer Container (Shanghai, China) 45 $1,350.00/20 ft Reefer Container (Dalian, China) 46 $1,680.00/40 ft Reefer Container (Dalian, China) 47 48 b.2 Shipments coming from Hongkong $1,600.00/40 ft 49 container reefer van. 50 2 3
67

1 1 b.3 Shipments coming from Singapore: 2 3 $900.00/20 ft container reefer 4 $1,850.00/40 ft container reefer 5 Plus: BAF ($70/20' & 140/40') 6 7 b. 4 Shipments coming from Los Angeles, USA: 8 9 $3,050.00/20 ft Reefer Container 10 $6,100.00/40 ft Reefer Container 11 12 c. If it is a 20 ft. container reefer van, then the freight should be 13 50% of the freight charge of a 40 ft. In case lower, the same 14 shall be subject to further verification by the BOC 15 16 To illustrate further, there may be cases where the imported 17 goods are transported by the importer's own vessel/aircraft. 18 Although the cost of transportation has not been paid to a third 19 party, to arrive at the dutiable value, the importer must, 20 nevertheless, calculate the "actual cost" for that transportation of 21 the goods to the country of importation. The example of such 22 calculation would be a depreciation of the costs of the fuel, 23 lubricants, parts, the vessel or aircraft itself and other related 24 charges relating to the voyage/flight plus the salaries of the 25 crew. This calculation should be based on the generally 26 accepted accounting principles (GAAP). 27 28 Charges for loading, unloading and handling could be attributed 29 to a number of different activities. Loading and unloading would 30 include, in part, the movement of goods onto or from any 31 conveyance. Handling would include any number of activities 32 surrounding the physical movement of the goods such as 33 preparation of manifests, B/L or AWB, obtaining any export 34 license, and any other shipping arrangement. All these charges 35 must be associated with the transportation of the goods before 36 the vessel reaches the port of importation. 37 382.8.8 The cost of insurance. 39 402.8.8.1 If the terms of sale are CIF/CIP, the amount of the actual insurance 41 premium shall be used in the assessment, provided that if such 42 amount is lower than 2% of the FOB value for general cargo and 4% 43 of the FOB value for dangerous/inflammable goods, chemicals and 44 other high risk cargoes, the same shall be subject to further 45 verification by the BOC. 46 472.8.8.2 If a shipment is covered by a local or domestic insurance, the amount 48 of insurance premium actually paid may be accepted. However, if the 49 premium is lower than 2% of the FOB value for general cargo and 4% 50 of the FOB value for dangerous/inflammable goods, chemicals and 2 3
68

1 1 other high risk cargoes, then a Certification from the insurance 2 company as to the actual premium paid shall be presented to the 3 BOC together with the Original Official Receipt. A copy of that Official 4 Receipt shall be certified as a true copy by the assigned Customs 5 Appraiser/Examiner which shall be attached to the original Working 6 Entry. 7 82.8.8.3 For shipments not covered by a local insurance, then the amount of 9 insurance declared on the Entry may be accepted, provided that if 10 such amount is lower than 2% of the FOB value for general cargo 11 and 4% of the FOB value for dangerous/inflammable goods, 12 chemicals and other high risk cargoes, the same shall be subject to 13 further verification by the BOC. 14 152.8.8.4 For direct importations by the government, the original copy of the 16 Marine Open Policy issued by the Government Service Insurance 17 System (GSIS) together with a true copy shall be presented to BOC 18 (Attn: Import Assessment Service) certified by the latter. The Bureau 19 shall apply the actual GSIS insurance premium rate. 20 21 a. If insured by a Surety company other than GSIS, apply 22 Section 2.8.8.2. 23 24 b. If not covered by a local insurance, apply Section 2.8.8.3. 25 262.8.8.5 The amount of insurance shall be declared in the IEIRD Box no. 90 27 and the equivalent appropriate box in the SAD for the electronic 28 lodgment. [CMO 22-2007 Section 3.1 (3.1.1 3.1.5)] 29 30 The word insurance under this Section means those charges for 31 insurance for the goods during transportation, loading, unloading and 32 handling. WCO Advisory Opinion 13.1 states that the word 33 "insurance" should be interpreted as referring solely to insurance 34 costs incurred for the goods during the transport of the imported 35 goods to the port or place of importation. 36 372.9 Post Importation Charges/Costs 38 39 The dutiable value must not include the following charges or costs, if 40 they are distinguished from the price actually paid or payable for the 41 goods: 42 432.9.1 Charges for construction, erection, assembly, maintenance or technical 44 assistance, undertaken after importation on imported goods such as 45 industrial plant, machinery or equipment; 46 472.9.2 Cost of transport after importation; and 48 492.9.3 Duties, taxes and other charges paid for the imported goods. 50 2 3
69

1 12.10 All additions to the price actually paid or payable shall be made only on 2 the basis of objective and quantifiable data. 3 4 Where objective and quantifiable data do not exist with regard to the 5 additions required to be made under the provisions of Section 2.8, the 6 transaction value cannot be determined under the provisions of Method 7 One. As an illustration of this, a royalty is paid on the basis of the price 8 in a sale in the importing country of a litre of a particular product that 9 was imported by the kilogram and made up into a solution after 10 importation. if the royalty is based partially on the imported goods and 11 partially on other factors which have nothing to do with the imported 12 goods (such as when the imported goods are mixed with domestic 13 ingredients and are no longer separately identifiable, or when the 14 royalty cannot be distinguished from special financial arrangements 15 between the buyer and the seller), it would be inappropriate to attempt 16 to make an addition for the royalty. However, if the amount of this 17 royalty is based only on the imported goods and can be readily 18 quantified, an addition to the price actually paid or payable can be 19 made. 20 212.11 No Additions shall be made in the price actually paid or payable in 22 determining the dutiable value except as provided for in Section 2.8. 23 24SECTION 3 METHOD TWO: THE TRANSACTION VALUE OF 25IDENTICAL GOODS 26 273.1 If the dutiable value of imported goods cannot be determined with the 28 use of Method One, the dutiable value shall be determined under 29 Method Two or the Transaction Value of Identical Goods sold for export 30 to the Philippines and exported at or about the same time as the goods 31 being valued. 32 33 In applying this Method, the transaction value of identical goods in a sale 34 at the same commercial level and in substantially the same quantity as 35 the goods being valued shall be used to determine the dutiable value. 36 Where no such sale is found, the transaction value of identical goods 37 sold at a different commercial level and/or in different quantities, 38 adjusted to take account of differences attributable to commercial level 39 and/or to quantity, shall be used, provided that such adjustments can be 40 made on the basis of demonstrated evidence which clearly establishes 41 the reasonableness and accuracy of the adjustment, whether the 42 adjustment leads to an increase or a decrease in the value. 43 443.2 "Exported at or about the same time" is generally to be interpreted as 45 exportation of the identical goods forty five (45) days before or after the 46 date of bill of lading or airway bill of lading of the goods being valued, 47 This external time standard must allow for practical application of the 48 Method in question. Hence, the words "or about" should be regarded as 49 intended simply to make the terms "at the same time" somewhat less 50 rigid. In addition, it should be noted that according to Section 1.1.4, the 2 3
70

1 1 dutiable value should be based on simple and equitable criteria 2 consistent with commercial practice. Starting from these principles "at or 3 about the same time should be taken to cover a period of time, as close 4 to the date of exportation as possible, within which commercial practices 5 and market conditions which affect price remain the same. In the final 6 analysis, the question must be decided on a case by case basis within 7 the overall context of the application of Method Two. 8 93.3 Identical imported goods are defined as goods, which are: 10 113.3.1 the same in all respects including physical characteristics, quality and 12 reputation; 13 143.3.2 produced by the producer of the goods being valued; and 15 163.3.3 produced in the same country as the goods being valued. 17 18 The definition of identical goods excludes imported goods for which 19 engineering, development, artwork, design work, and plans and 20 sketches is undertaken in the Philippines and is provided by the buyer 21 to the producer of the goods free of charge or at a reduced cost. 22 23 Where there are no identical goods produced by the same person in 24 the country of production of the goods being valued, identical goods 25 produced by a different person in the same country may be taken into 26 account. 27 28 Minor differences in appearance would not preclude goods which 29 otherwise conform to the definition from being regarded as identical. 30 313.4 If no sale of identical goods at the same commercial level and in 32 substantially the same quantity as the goods being valued is found, the 33 transaction value of identical goods sold at a different commercial level 34 and/or in different quantity may be utilized. Such transaction value of 35 identical goods shall be adjusted upwards or downwards to account for 36 demonstrated differences between the goods being valued and the 37 identical goods, to take account of: 38 393.4.1 Commercial level differences; 40 413.4.2 Quantity differences; and 42 433.4.3 Significant differences for transportation costs due to variances in the 44 mode and/or distance of transport. 45 463.5 In applying Method Two, the Collector of Customs shall, wherever 47 possible, use a sale of identical goods at the same commercial level and 48 in substantially the same quantities as the goods being valued. Where 49 no such sale is found, a sale of identical goods that takes place under 50 any one of the following three conditions may be used: 2 3
71

1 1 23.5.1 A sale at the same commercial level but in different quantities; 3 43.5.2 A sale at a different commercial level but in substantially the same 5 quantities; or 6 73.5.3 A sale at a different commercial level and in different quantities. 8 9 Having found a sale under any one of these three conditions 10 adjustments will then be made, as the case may be, for: 11 123.5.3.1 Quantity factors only; 13 143.5.3.2 Commercial level factors only; or 15 163.5.3.3 Both commercial level and quantity factors. 17 18 The expression "and/or allows the flexibility to use the sales and make 19 the necessary adjustments in any one of the three conditions described 20 above. 21 22 A condition for adjustment because of different commercial levels or 23 different quantities is that such adjustment, whether it leads to an 24 increase or a decrease in the value, be made only on the basis of 25 demonstrated evidence that clearly establishes the reasonableness 26 and accuracy of the adjustments, e.g. valid price lists containing prices 27 referring to different levels or different quantities. As an example of this, 28 if the imported goods being valued consist of a shipment of 10 units 29 and the only identical imported goods for which a transaction value 30 exists involved a sale of 500 units, and it is recognized that the seller 31 grants quantity discounts, the required adjustment may be 32 accomplished by resorting to the seller's price list and using that price 33 applicable to a sale of 10 units. This does not require that a sale had to 34 have been made in quantities of 10 as long as the price list has been 35 established as being bona fide through sales at other quantities. In the 36 absence of such an objective measure, however, the determination of 37 a dutiable value under the provisions of Method Two is not appropriate. 38 393.6 If in applying Method Two, more than one transaction value of identical 40 goods is found, the lowest of such value shall be used to determine the 41 dutiable value of the imported goods. 42 43SECTION 4 METHOD THREE: THE TRANSACTION VALUE OF SIMILAR 44 GOODS 45 464.1 If the dutiable value of imported goods cannot be determined under the 47 preceding methods, the dutiable value shall be the transaction value of 48 similar goods sold for export to the Philippines and exported at or about 49 the same time as the goods being valued. 50 2 3
72

1 1 In applying this Method, the transaction value of similar goods in a sale 2 at the same commercial level and in substantially the same quantity as 3 the goods being valued shall be used to determine the dutiable value. 4 Where no such sale is found, the transaction value of similar goods sold 5 at a different commercial level and/or in different quantities, adjusted to 6 take account of differences attributable to commercial level and/or to 7 quantity, shall be used, provided that such adjustments can be made on 8 the basis of demonstrated evidence which clearly establishes the 9 reasonableness and accuracy of the adjustment, whether the adjustment 10 leads to an increase or a decrease in the value. 11 124.2 "Exported at or about the same time" is generally to be interpreted as 13 exportation of the similar goods forty five (45) days before or after the 14 date of bill of lading or airway bill of lading of the goods being valued. 15 This external time standard must allow for practical application of the 16 Method in question. Hence, the words "or about" should be regarded as 17 intended simply to make the terms "at the same time" somewhat less 18 rigid. In addition, it should be noted that according to Section 1.1.4, the 19 dutiable value should be based on simple and equitable criteria 20 consistent with commercial practice. Starting from these principles "at or 21 about the same time" should be taken to cover a period of time, as close 22 to the date of exportation as possible, within which commercial practices 23 and market conditions which affect price remain the same. In the final 24 analysis, the question must be decided on a case by case basis within 25 the overall context of the application of Method Three. 26 274.3 Similar goods are defined as goods which, although not alike in all 28 respects 29 304.3.1 Have like characteristics and like component materials; 31 324.3.2 Are capable of performing the same functions as the goods being 33 valued; 34 354.3.3 Are commercially interchangeable with the goods being valued; 36 374.3.4 Are produced in the same country of the goods being valued; and 38 394.3.5 Are produced by the producer of the goods being valued. 40 41 The definition of similar goods excludes imported goods for which 42 engineering, development, artwork, design work, and plans and 43 sketches is undertaken in the Philippines and is provided by the buyer 44 to the producer of the goods free of charge or at a reduced cost. 45 46 Where there are no similar goods produced by the same person in the 47 country of production of the goods being valued, similar goods 48 produced by a different person in the same country may be taken into 49 account. 50 2 3
73

1 14.4 Where no sale of similar goods at the same commercial level and 2 substantially the same quantity as the goods being valued is found, 3 similar goods at different commercial level and/or in different quantity 4 may be utilized. Such transaction value of similar goods shall be 5 adjusted upwards or downwards to account for demonstrated differences 6 between the goods being valued and the similar goods, to take account 7 of: 8 94.4.1 Commercial level differences; 10 114.4.2 Quantity differences; and 12 134.4.3 Significant differences for transportation costs due to variances in the 14 mode and/or distance of transport. 15 164.5 In applying Method Three, the Collector of Customs shall, wherever 17 possible, use a sale of similar goods at the same commercial level and in 18 substantially the same quantities as the goods being valued. Where no 19 such sale is found, a sale of similar goods that takes place under any 20 one of the following three conditions may be used: 21 224.5.1 A sale at the same commercial level but in different quantities; 23 244.5.2 A sale at a different commercial level but in substantially the same 25 quantities; or 26 274.5.3 A sale at a different commercial level and in different quantities. 28 29 Having found a sale under any one of these three conditions 30 adjustments will then be made, as the case may be, for: 31 324.5.4 Quantity factors only; 33 344.5.5 Commercial level factors only; or 35 364.5.6 Both commercial level and quantity factors. 37 38 The expression "and/or" allows the flexibility to use the sales and make 39 the necessary adjustments in any one of the three conditions described 40 above. 41 42 A condition for adjustment because of different commercial levels or 43 different quantities is that such adjustment, whether it leads to an 44 increase or a decrease in the value, be made only on the basis of 45 demonstrated evidence that clearly establishes the reasonableness 46 and accuracy of the adjustments, e.g. valid price lists containing prices 47 referring to different levels or different quantities. As an example of this, 48 if the imported goods being valued consist of a shipment of 10 units 49 and the only similar imported goods for which a transaction value exists 50 involved a sale of 500 units, and it is recognized that the seller grants 2 3
74

1 1 quantity discounts, the required adjustment may be accomplished by 2 resorting to the seller's price list and using that price applicable to a 3 sale of 10 units. This does not require that a sale had to have been 4 made in quantities of 10 as long as the price list has been established 5 as being bona fide through sales at other quantities. In the absence of 6 such an objective measure, however, the determination of a dutiable 7 value under the provisions of Method Three is not appropriate. 8 94.6 If in applying Method Three, more than one transaction value of similar 10 goods is found, the lowest of such value shall be used to determine the 11 dutiable value of the imported goods. 12 13SECTION 5 METHOD FOUR: THE DEDUCTIVE VALUE 14 155.1 By this method, the dutiable value is determined on the basis of sales in 16 the Philippines of the goods being valued or of identical or similar 17 imported goods, less certain specified expenses resulting from the 18 importation and sale of the goods. 19 205.2 The sales in the Philippines must meet the following conditions: 21 225.2.1 The imported goods or identical or similar imported goods have been 23 sold in the Philippines in the same condition as imported; 24 255.2.2 Sales of the imported goods being valued or of identical or similar 26 imported goods have taken place at or about the time of importation of 27 the goods being valued. The expression "at or about the time of 28 importation of the goods being valued" shall mean a period extending 29 45 days prior to and 45 days following the importation of the goods 30 being valued; 31 325.2.3 The purchaser must not be related to the importer from whom he buys 33 such goods; and 34 355.2.4 The purchaser in the Philippines must not have supplied assists, either 36 directly or indirectly. 37 385.3 A deductive value is determined by making a deduction from the 39 established price per unit for the aggregate of the following elements: 40 415.3.1 Commissions generally earned on a unit basis in connection with sales 42 in the Philippines for goods of the same class or kind, or 43 445.3.2 Additions usually made for in connection with sales profit and general 45 expenses in the Philippines for goods of the same class or kind; 46 475.3.3 The usual transport, insurance and associated costs incurred within the 48 Philippines; and 49 2 3
75

1 15.3.4 Customs duties and other national taxes payable in the Philippines by 2 reason of the importation or sale of the goods. 3 45.4 The term "unit price" means the price at which the greatest number of 5 units is sold in sales to persons who are not related to the persons from 6 whom they buy such goods at the first commercial level after importation 7 at which such sales take place. 8 9 As an example of this, goods are sold from a price list which grants 10 favorable unit prices for purchases made in larger quantities. 11 Total Quantity Sale Unit sold at each quantity price Number of sales price 1-10 units 100 10 sales of 5 units 5 sales of 3 units 5 sales of 11 units 1 sale of 30 units 1 sale of 50 units 65

11-25 units over 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

95

55 80

25 90 units

The greatest number of units sold at a price is 80; therefore, the unit price in the greatest aggregate quantity is 90. As another example of this, two sales occur. In the first sale, 500 units are sold at a price of 95 currency units each. In the second sale, 400 units are sold at a price of 90 currency units each. In this example, the greatest number of units sold at a particular price is 500; therefore, the unit price in the greatest aggregate quantity is 95. A third example would be the following situation where various quantities are sold at various prices. (a) Sales Sale quantity 40 units 30 units 15 units 50 units 25 units 35 units 5 units Unit price 100 90 100 95 105 90 100

27 28 2 3

(b) Totals
76

1 1 Total quantity sold 65 50 60 25 2 3 4 5 65.5 7 8 9 10 11 12 135.6 14 15 16 17 18 19 20 21 22 235.7 24 25 265.8 27 28 29 305.9 31 32 33 34 35 36 37 38 39 40 415.10 42 43 44 2 3 Unit price 90 95 100 105

In this example, the greatest number of units sold at a particular price is 65; therefore, the unit price in the greatest aggregate quantity is 90. Any sale in the Philippines, as described in Section 5.4 above, to a person who supplies directly or indirectly free of charge or at reduced cost for use in connection with the production and sale for export of the imported goods any of the elements specified Section 2.8.4 should not be taken into account in establishing the unit price for the purposes of this Method. It should be noted that "profit and general expenses" referred to in Section 5.3 should be taken as a whole. The figure for the purposes of this deduction should be determined on the basis of information supplied by or on behalf of the importer unless the importer's figures are inconsistent with those obtained in sales in the country of importation of imported goods of the same class or kind. Where the importer's figures are inconsistent with such figures, the amount for profit and general expenses may be based upon relevant information other than that supplied by or on behalf of the importer. The "general expenses" include the direct and indirect costs of marketing the goods in question. Local taxes payable by reason of the sale of the goods for which a deduction is not made under the provisions of Section 5.3.4 shall be deducted under the provisions of Section 5.3.2 as general expenses. In determining either the commissions or the usual profits and general expenses under the provisions Section 5.3 hereof, the question whether certain goods are "of the same class or kind" as other goods must be determined on a case-to-case basis by reference to the circumstances involved. Sales in the Philippines of the narrowest group or range of imported goods of the same class or kind, which includes the goods being valued, for which the necessary information can be provided, should be examined. For purposes of this Method, "goods of the same class or kind" includes goods imported from the same country as the goods being valued as well as goods imported from other countries. If no sales of the imported goods or of identical or similar imported goods took place at or about the time of importation of the goods being valued, it is permitted to use sales of the imported goods or identical or similar imported goods, sold in the Philippines in the same condition as
77

1 1 imported, at the earliest date after importation of the goods being valued 2 but before the expiration of 90 days after such importation. For the 3 purpose of this Section, the "earliest date" shall be the date by which 4 sales of the imported goods or of identical or similar imported goods are 5 made in sufficient quantity to establish the unit price. 6 75.11 If there are no sales of identical or similar imported goods in the 8 condition as imported that meet all the above requirements, the importer 9 may choose to use sales of the imported goods being valued after 10 further processing. 11 125.11.1 Where the method in Section 5.11 is used, deductions made for the 13 value added by further processing shall be based on objective and 14 quantifiable data relating to the cost of such work. Accepted industry 15 formulas, recipes, methods of construction, and other industry 16 practices would form the basis of the calculations. 175.11.2 It is recognized that the method of valuation provided for in Section 18 5.11 would normally not be applicable when, as a result of the further 19 processing, the imported goods lose their identity. However, there 20 can be instances where, although the identity of the imported goods 21 is lost, the value added by the processing can be determined 22 accurately without unreasonable difficulty. On the other hand, there 23 can also be instances where the imported goods maintain their 24 identity but form such a minor element in the goods sold in the 25 Philippines that the use of this valuation method would be unjustified. 26 In view of the above, each situation of this type must be considered 27 on a case-to-case basis. 28 29SECTION 6 METHOD FIVE: THE COMPUTED VALUE 30 316.1 Under this method, the dutiable value is determined on the basis of the 32 cost of production of the goods being valued, plus an amount for profit 33 and general expenses usually reflected in sales from the country of 34 exportation to the Philippines of goods of the same class or kind. 35 366.2 The dutiable value may be calculated as follows: 37 386.2.1 Determine the aggregate of the relevant costs, charges and expenses 39 or the value of: 40 416.2.1.1 Materials employed in producing the imported goods; 42 436.2.1.2 Fabrication, production or other processing costs for the imported 44 goods (direct and indirect labor, factory overheads); 45 46The following are to be added if not included in Sections 6.2.1.1 and 6.2.1.2 47 above: 48 496.2.1.3 Cost of containers which are treated as being one for Customs 50 purposes with the goods in question; 2 3
78

1 16.2.1.4 Cost of packing whether for labor or materials; 2 36.2.1.5 Assists (apportioned in a reasonable manner in accordance with 4 generally accepted accounting principles); and 5 66.2.1.6 Engineering, development, artwork, design, work, and plans and 7 sketches undertaken in the Philippines and charged to the producer. 8 96.2.2 Add amount for profit and general expenses equal to that usually 10 reflected in sales of goods of the same class or kind as the goods 11 being valued which are made by producers in the country of 12 exportation for export to the Philippines. 13 146.2.3 Add the cost of transport, loading, unloading and handling charges, 15 insurance and related charges to the port or place of entry in the 16 Philippines as referred to in Sections 2.8.7 and 2.8.8. 17 186.3 As a general rule, dutiable value is determined under this Method on the 19 basis of information readily available in the country of importation. In 20 order to determine a computed value, however, it may be necessary to 21 examine the costs of producing the goods being valued and other 22 information which has to be obtained from outside the Philippines. 23 Furthermore, in most cases the producer of the goods will be outside the 24 jurisdiction of the authorities of the Philippines. The use of the computed 25 value method will generally be limited to those cases where the buyer 26 and seller are related, and the producer is prepared to supply to the 27 authorities of the Philippines the necessary costing and to provide 28 facilities for any subsequent verification which may be necessary. 29 306.4 The "cost or value" referred to Section 6.2.1 is to be determined on the 31 basis of information relating to the production of the goods being valued 32 supplied by or on behalf of the producer. It is to be based upon the 33 commercial accounts of the producer, provided that such accounts are 34 consistent with the generally accepted accounting principles applied in 35 the country where the goods are produced. 36 376.5 The "cost or value" shall include the cost of elements specified in 38 Sections 2.8.2 and 2.8.3. It shall also include the value, apportioned as 39 appropriate under the provisions of Section 2.8, of any element specified 40 in Section 2.8.4 which has been supplied directly or indirectly by the 41 buyer for use in connection with the production of the imported goods. 42 The value of the elements specified in Section 2.8.4.4 which are 43 undertaken in the Philippines shall be included only to the extent that 44 such elements are charged to the producer. It is to be understood that no 45 cost or value of the elements referred to in this paragraph shall be 46 counted twice in determining the computed value. 47 486.6 The "amount for profit and general expenses" referred to in Section 6.2.2 49 is to be determined on the basis of information supplied by or on behalf 50 of the producer unless the producer's figures are inconsistent with those 2 3
79

1 1 usually reflected in sales of goods of the same class or kind as the 2 goods being valued which are made by producers in the country of 3 exportation for export to the Philippines. 4 5 It should be noted in this context that the "amount for profit and general 6 expenses" has to be taken as a whole. It follows that if, in any particular 7 case, the producer's profit figure is low and the producers general 8 expenses are high, the producer's profit and general expenses taken 9 together may nevertheless be consistent with that usually reflected in 10 sales of goods of the same class or kind. 11 126.6.1 Such a situation might occur, for example, if a product is being 13 launched in the Philippines and the producer accepted a nil or low 14 profit to offset high general expenses associated with the launch. 15 Where the producer can demonstrate a low profit on sales of the 16 imported goods because of particular commercial circumstances, the 17 producer's actual profit figures should be taken into account provided 18 that the producer has valid commercial reasons to justify them and the 19 producer's pricing policy reflects usual pricing policies in the branch of 20 industry concerned. 21 226.6.2 Such a situation might occur, for example, where producers have been 23 forced to lower prices temporarily because of an unforeseeable drop in 24 demand, or where they sell goods to complement a range of goods 25 being produced in the Philippines and accept a low profit to maintain 26 competitiveness. Where the producer's own figures for profit and 27 general expenses are not consistent with those usually reflected in 28 sales of goods of the same class or kind as the goods being valued 29 which are made by producers in the country of exportation for export to 30 the Philippines, the amount for profit and general expenses may be 31 based upon relevant information other than that supplied by or on 32 behalf of the producer of the goods. 33 346.7 Where information other than that supplied by or on behalf of the 35 producer is used for purposes of determining the computed value, the 36 Collector of Customs shall inform the importer, if the latter so requests, 37 of the source of such information, the data used and the calculations 38 based upon such data, subject to the provisions of Sec. VI-D of CAO No. 39 4-2004 (Confidentiality Clause). 40 416.8 The "general expenses" referred to in Section 6.2.2 covers the total 42 costs (direct and indirect) of producing and selling the goods for export 43 which are not included under Section 6.2.1. 44 456.9 Whether certain goods are "of the same class or kind" as other goods, 46 must be determined on a case-to-case basis with reference to the 47 circumstances involved. In determining the usual profits and general 48 expenses under the provisions of Method Five sales for export to the 49 Philippines of the narrowest group or range of goods, which includes the 50 goods being valued, for which the necessary information can be 2 3
80

1 1 provided, should be examined. For purposes of Method Five, "goods of 2 the same class or kind" must be from the same country as the goods 3 being valued. 4 56.10 The Collector of Customs shall not require or compel any person not 6 residing in the Philippines to produce for examination, or to allow access 7 to, any account or other record for the purposes of determining a 8 computed value However, information supplied by the producer of the 9 goods for the purpose of determining the dutiable value may be verified 10 in another country with the agreement of the producer and provided they 11 will give sufficient advance notice to the government of the country in 12 question and the latter does not object to the investigation. 13 14SECTION 7 METHOD SIX: THE FALLBACK VALUE 15 167.1 When the dutiable value cannot be determined under any of the previous 17 methods of valuation, it shall be determined by using other reasonable 18 means consistent with the principles and general provisions of GATT 19 1994, the WVA, and on the basis of data available in the Philippines. 20 217.2 If the importer so requests, he shall be informed in writing of the dutiable 22 value determined under Method Six and the method used to determine 23 such value. 24 257.3 No dutiable value shall be determined under Method Six on the basis of: 26 277.3.1 The selling price in the Philippines of goods produced in the 28 Philippines; 29 307.3.2 A system that provides for the acceptance for customs purposes of the 31 higher of two alternative values; 32 337.3.3 The price of goods in the domestic market of the country of exportation; 34 357.3.4 The cost of production, other than computed values, that have been 36 determined for identical or similar goods in accordance with Method 37 Five hereof; 38 397.3.5 The price of goods for export to a country other than the Philippines; 40 417.3.6 Minimum dutiable values; or 42 437.3.7 Arbitrary or fictitious values. 44 457.4 Dutiable values determined under the provisions of Method Six should, 46 to the greatest extent possible, be based on previously determined 47 dutiable values. 48 497.5 The methods of valuation to be employed under Method Six should be 50 those laid down in Method One through Method Five, but a reasonable 2 3
81

1 1 flexibility in the application of such methods would be in conformity with 2 the aims and provisions of Method Six. 3 4 Some examples of reasonable flexibility are as follows: 5 67.5.1 Identical goods - the requirement that the identical goods should be 7 exported at or about the same time as the goods being valued could be 8 flexibly interpreted; identical imported goods produced in a country 9 other than the country of exportation of the goods being valued could 10 be the basis for customs valuation; dutiable values of identical imported 11 goods already determined under the provisions Methods Four and Five 12 could be used. 13 147.5.2 Similar goods - the requirement that the similar goods should be 15 exported at or about the same time as the goods being valued could be 16 flexibly interpreted; similar imported goods produced in a country other 17 than the country of exportation of the goods being valued could be the 18 basis for customs valuation; dutiable values of similar imported goods 19 already determined under the provisions of Methods Four and Five 20 could be used. 21 227.5.3 Deductive method - the requirement that the goods shall have been 23 sold in the "condition as imported" in Section 5.2.1 could be flexibly 24 interpreted; the "90 days" requirement referred to in Section 5.10 could 25 be administered flexibly. 26 27 28 CHAPTER 2 TARIFF CLASSIFICATION 29 30SECTION 1 GENERAL RULES FOR THE INTERPRETATION OF THE 31 ASEAN HARMONIZED TARIFF NOMENCLATURE 32 331.1 Classification of goods in the nomenclature shall be governed by the 34 following principles: 35 36 RULE 1 37 38The titles of Sections, Chapters and sub Chapters are provided for ease of 39 reference only; for legal purposes, classification shall be determined 40 according to the terms of the headings and any relative Section or 41 Chapter Notes and, provided such headings or Notes do not otherwise 42 require, according to the following provisions. 43 44EXPLANATORY NOTE 45 46(I) The Nomenclature sets out in systematic form the goods handled in 47 international trade. It groups these goods in Sections, Chapters and 48 sub Chapters which have been given titles indicating as concisely as 49 possible the categories or types of goods they cover. In many cases, 50 however, the variety and number of goods classified in a Section or 2 3
82

1 1 Chapter are such that it is impossible to cover them all or to cite them 2 specifically in the titles. 3 4(II) Rule 1 begins therefore by establishing that the titles are provided for 5 ease of reference only . They accordingly have no legal bearing on 6 classification. 7 8(III) The second part of this Rule provides that classification shall be 9 determined : 10 11(a) according to the terms of the headings and any relative Section or 12 Chapter Notes, and 13 14(b) where appropriate, provided the headings or Notes do not otherwise 15 require, according to the provisions of Rules 2, 3, 4, and 5. 16 17(IV) Provision (III) (a) is self evident, and many goods are classified in the 18 Nomenclature without recourse to any further consideration of the 19 Interpretative Rules (e.g., live horses (heading 01.01), pharmaceutical 20 goods specified in Note 4 to Chapter 30 (heading 30.06)). 21 22(V) In provision (III) (b), the expression provided such headings or Notes 23 do not otherwise require is intended to make it quite clear that the 24 terms of the headings and any relative Section or Chapter Notes are 25 paramount, i.e., they are the first consideration in determining 26 classification. For example, in Chapter 31, the Notes provide that 27 certain headings relate only to particular goods. Consequently those 28 headings cannot be extended to include goods which otherwise might 29 fall there by reason of the operation of Rule 2 (b). 30 31 RULE 2 32 33(a) Any reference in a heading to an article shall be taken to include a 34 reference to that article incomplete or unfinished, provided that, as 35 presented, the incomplete or unfinished article has the essential 36 character of the complete or finished article. It shall also be taken to 37 include a reference to that article complete or finished (or falling to be 38 classified as complete or finished by virtue of this rule), presented 39 unassembled or disassembled. 40 41(b) Any reference in a heading to a material or substance shall be taken to 42 include a reference to mixtures or combinations of that material or 43 substance with other materials or substances. Any reference to goods 44 of a given material or substance shall be taken to include a reference 45 to goods consisting wholly or partly of such material or substance. The 46 classification of goods consisting of more than one material or 47 substance shall be according to the principles of Rule 3. 48 49EXPLANATORY NOTE 50 2 3
83

1 1 RULE 2 (a) 2 (Incomplete or unfinished articles) 3 4(I) The first part of Rule 2 (a) extends the scope of any heading which refers 5 to a particular article to cover not only the complete article but also that 6 article incomplete or unfinished, provided that, as presented, it has the 7 essential character of the complete or finished article. 8 9(II) The provisions of this Rule also apply to blanks unless these are 10 specified in a particular heading. The term blank means an article, 11 not ready for direct use, having the approximate shape or outline of the 12 finished article or part, and which can only be used, other than in 13 exceptional cases, for completion into the finished article or part (e.g., 14 bottle preforms of plastics being intermediate products having tubular 15 shape, with one closed end and one open end threaded to secure a 16 screw type closure, the portion below the threaded end being intended 17 to be expanded to a desired size and shape). 18 19Semi manufactures not yet having the essential shape of the finished articles 20 (such as is generally the case with bars, discs, tubes, etc.) are not 21 regarded as blanks . 22 23(III) In view of the scope of the headings of Sections I to VI, this part of the 24 Rules does not normally apply to goods of these Sections. 25 26(IV) Several cases covered by the Rule are cited in the General Explanatory 27 Notes to Sections or Chapters (e.g., Section XVI, and Chapters 61, 62, 28 86, 87 and 90). 29 30 RULE 2 (a) 31 (Articles presented unassembled or disassembled) 32 33(V) The second part of Rule 2 (a) provides that complete or finished 34 articles presented unassembled or disassembled are to be classified in 35 the same heading as the assembled article. When goods are so 36 presented, it is usually for reasons such as requirements or 37 convenience of packing, handling or transport. 38 39(VI) This Rule also applies to incomplete or unfinished articles presented 40 unassembled or disassembled provided that they are to be treated as 41 complete or finished articles by virtue of the first part of this Rule. 42 43(VII) For the purposes of this Rule, articles presented unassembled or 44 disassembled means articles the components of which are to be 45 assembled either by means of fixing devices (screws, nuts, bolts, etc.) 46 or by riveting or welding, for example, provided only assembly 47 operations are involved. 48 49 No account is to be taken in that regard of the complexity of the 50 assembly method. However, the components shall not be subjected to 2 3
84

1 1 any further working operation for completion into the finished state. 2 3 4 Unassembled components of an article which are in excess of the 5 number required for that article when complete are to be classified 6 separately. 7 8(VIII)Cases covered by this Rule are cited in the General Explanatory Notes to 9 Sections or Chapters (e.g., Section XVI, and Chapters 44, 86, 87 and 10 89). 11 12(IX) In view of the scope of the headings of Sections I to VI, this part of the 13 Rule does not normally apply to goods of these Sections. 14 15 RULE 2 (b) 16 (Mixtures and combinations of materials or substances) 17 18(X) Rule 2 (b) concerns mixtures and combinations of materials or 19 substances, and goods consisting of two or more materials or 20 substances. The headings to which it refers are headings in which 21 there is a reference to a material or substance (e.g., heading 05.07 22 ivory), and headings in which there is a reference to goods of a given 23 material or substance (e.g., heading 45.03 articles of natural cork). It 24 will be noted that the Rule applies only if the headings or the Section or 25 Chapter Notes do not otherwise require (e.g., heading 15.03 lard oil, 26 not ... mixed). 27 28 Mixtures being preparations described as such in a Section or Chapter 29 Note or in a heading text are to be classified under the provisions of 30 Rule 1. 31 32(XI) The effect of the Rule is to extend any heading referring to a material or 33 substance to include mixtures or combinations of that material or 34 substance with other materials or substances. The effect of the Rule is 35 also to extend any heading referring to goods of a given material or 36 substance to include goods consisting partly of that material or 37 substance. 38 39(XII) It does not, however, widen the heading so as to cover goods which 40 cannot be regarded, as required under Rule 1, as answering the 41 description in the heading; this occurs where the addition of another 42 material or substance deprives the goods of the character of goods of 43 the kind mentioned in the heading. 44 45(XIII)As a consequence of this Rule, mixtures and combinations of materials 46 or substances, and goods consisting of more than one material or 47 substance, if prima facie classifiable under two or more headings, must 48 therefore be classified according to the principles of Rule 3. 49 50 RULE 3 2 3
85

1 1 When by application of Rule 2 (b) or for any other reason, goods are 2 prima facie, classifiable under two or more headings, classification 3 shall be effected as follows: 4 5(a) The heading which provides the most specific description shall be 6 preferred to headings providing a more general description. However, 7 when two or more headings each refer to part only of the materials or 8 substances contained in mixed or composite goods or to part only of 9 the items in a set put up for retail sale, those headings are to be 10 regarded as equally specific in relation to those goods, even if one of 11 them gives a more complete or precise description of the goods. 12 13(b) Mixtures, composite goods consisting of different materials or made up 14 of different components, and goods put up in sets for retail sale, which 15 cannot be classified by reference to 3 (a), shall be classified as if they 16 consisted of the material or component which gives them their 17 essential character, insofar as this criterion is applicable. 18 19(c) When goods cannot be classified by reference to 3 (a) or 3 (b), they 20 shall be classified under the heading which occurs last in numerical 21 order among those which equally merit consideration. 22 23EXPLANATORY NOTE 24 25(I) This Rule provides three methods of classifying goods which, prima facie, 26 fall under two or more headings, either under the terms of Rule 2 (b) or 27 for any other reason. These methods operate in the order in which they 28 are set out in the Rule. Thus Rule 3 (b) operates only if Rule 3 (a) fails 29 in classification, and if both Rules 3 (a) and (b) fail, Rule 3 (c) will 30 apply. The order of priority is therefore (a) specific description; (b) 31 essential character; (c) heading which occurs last in numerical order. 32 33(II) The Rule can only take effect provided the terms of headings or Section or 34 Chapter Notes do not otherwise require. For instance, Note 4 (B) to 35 Chapter 97 requires that goods covered both by the description in one 36 of the headings 97.01 to 97.05 and by the description in heading 97.06 37 shall be classified in one of the former headings. Such goods are to be 38 classified according to Note 4 (B) to Chapter 97 and not according to 39 this Rule. 40 41 RULE 3 (a) 42 43(III) The first method of classification is provided in Rule 3 (a), under which the 44 heading which provides the most specific description of the goods is to 45 be preferred to a heading which provides a more general description. 46 47(IV) It is not practicable to lay down hard and fast rules by which to determine 48 whether one heading more specifically describes the goods than 49 another, but in general it may be said that : 50 2 3
86

1 1(a) A description by name is more specific than a description by class (e.g., 2 shavers and hair clippers, with self contained electric motor, are 3 classified in heading 85.10 and not in heading 84.67 as tools for 4 working in the hand with self contained electric motor or in heading 5 85.09 as electro mechanical domestic appliances with self contained 6 electric motor). 7 8(b) If the goods answer to a description which more clearly identifies them, 9 that description is more specific than one where identification is less 10 complete. 11 12 Examples of the latter category of goods are : 13 14(1) Tufted textile carpets, identifiable for use in motor cars, which are to be 15 classified not as accessories of motor cars in heading 87.08 but in 16 heading 57.03, where they are more specifically described as carpets. 17 18 19(2) Unframed safety glass consisting of toughened or laminated glass, 20 shaped and identifiable for use in aeroplanes, which is to be classified 21 not in heading 88.03 as parts of goods of heading 88.01 or 88.02 but in 22 heading 70.07, where it is more specifically described as safety glass. 23 24(V) However, when two or more headings each refer to part only of the 25 materials or substances contained in mixed or composite goods or to 26 part only of the items in a set put up for retail sale, those headings are 27 to be regarded as equally specific in relation to those goods, even if 28 one of them gives a more complete or precise description than the 29 others. In such cases, the classification of the goods shall be 30 determined by Rule 3 (b) or 3 (c). 31 32 RULE 3 (b) 33 34(VI) This second method relates only to : 35 36(i) Mixtures. 37 38(ii) Composite goods consisting of different materials. 39 40(iii) Composite goods consisting of different components. 41 42(iv) Goods put up in sets for retail sales. 43 44It applies only if Rule 3 (a) fails. 45 46(VII) In all these cases the goods are to be classified as if they consisted of 47 the material or component which gives them their essential character, 48 insofar as this criterion is applicable. 49 50(VIII) The factor which determines essential character will vary as between 2 3
87

1 1 different kinds of goods. It may, for example, be determined by the 2 nature of the material or component, its bulk, quantity, weight or value, 3 or by the role of a constituent material in relation to the use of the 4 goods. 5 6(IX) For the purposes of this Rule, composite goods made up of different 7 components shall be taken to mean not only those in which the 8 components are attached to each other to form a practically 9 inseparable whole but also those with separable components, provided 10 these components are adapted one to the other and are mutually 11 complementary and that together they form a whole which would not 12 normally be offered for sale in separate parts. 13 14 Examples of the latter category of goods are : 15 16(1) Ashtrays consisting of a stand incorporating a removable ash bowl. 17 18(2) Household spice racks consisting of a specially designed frame (usually 19 of wood) and an appropriate number of empty spice jars of suitable 20 shape and size. 21 22As a general rule, the components of these composite goods are put up in a 23 common packing. 24 25(X) For the purposes of this Rule, the term goods put up in sets for retail 26 sale shall be taken to mean goods which : 27 28(a) consist of at least two different articles which are, prima facie, 29 classifiable in different headings. Therefore, for example, six fondue 30 forks cannot be regarded as a set within the meaning of this Rule; 31 32(b) consist of products or articles put up together to meet a particular need 33 or carry out a specific activity; and 34 35(c) are put up in a manner suitable for sale directly to users without 36 repacking (e.g., in boxes or cases or on boards). 37 38The term therefore covers sets consisting, for example, of different foodstuffs 39 intended to be used together in the preparation of a ready to eat dish or 40 meal. 41 42Examples of sets which can be classified by reference to Rule 3 (b) are : 43 44(1) (a) Sets consisting of a sandwich made of beef, with or without cheese, 45 in a bun (heading 16.02), packaged with potato chips (French fries) 46 (heading 20.04) : 47 48 Classification in heading 16.02. 49 50 (b) Sets, the components of which are intended to be used 2 3
88

1 1 together in the preparation of a spaghetti meal, consisting of a packet 2 of uncooked spaghetti (heading 19.02), a sachet of grated cheese 3 (heading 04.06) and a small tin of tomato sauce (heading 21.03), put 4 up in a carton : 5 6 Classification in heading 19.02. 7 8 The Rule does not, however, cover selections of products put up 9 together and consisting, for example, of : 10 11 A can of shrimps (heading 16.05), a can of pt de foie (heading 12 16.02), a can of cheese (heading 04.06), a can of sliced bacon 13 (heading 16.02), and a can of cocktail sausages (heading 16.01); or 14 15 A bottle of spirits of heading 22.08 and a bottle of wine of heading 16 22.04. 17 18 In the case of these two examples and similar selections of products, 19 each item is to be classified separately in its own appropriate heading. 20 21(2) Hairdressing sets consisting of a pair of electric hair clippers (heading 22 85.10), a comb (heading 96.15), a pair of scissors (heading 82.13), a 23 brush (heading 96.03) and a towel of textile material (heading 63.02), 24 put up in a leather case (heading 42.02) : 25 26Classification in heading 85.10. 27 28 (3) Drawing kits comprising a ruler (heading 90.17), a disc 29 calculator (heading 90.17), a drawing compass (heading 90.17), a 30 pencil (heading 96.09) and a pencil sharpener (heading 82.14), put up 31 in a case of plastic sheeting (heading 42.02) : 32 33Classification in heading 90.17. 34 35For the sets mentioned above, the classification is made according to the 36 component, or components taken together, which can be regarded as 37 conferring on the set as a whole its essential character. 38 39(XI) This Rule does not apply to goods consisting of separately packed 40 constituents put up together, whether or not in a common packing, in 41 fixed proportions for the industrial manufacture of, for example, 42 beverages. 43 44 RULE 3 (c) 45 46(XII) When goods cannot be classified by reference to Rule 3 (a) or 3 (b), they 47 are to be classified in the heading which occurs last in numerical order 48 among those which equally merit consideration in determining their 49 classification. 50 2 3
89

1 1 RULE 4 2 3 Goods which cannot be classified in accordance with the above Rules 4 shall be classified under the heading appropriate to the goods to which 5 they are most akin. 6 7EXPLANATORY NOTE 8 9(I) This Rule relates to goods which cannot be classified in accordance 10 with Rules 1 to 3. It provides that such goods shall be classified under 11 the heading appropriate to the goods to which they are most akin. 12 13(II) In classifying in accordance with Rule 4, it is necessary to compare the 14 presented goods with similar goods in order to determine the goods to 15 which the presented goods are most akin. The presented goods are 16 classified in the same heading as the similar goods to which they are 17 most akin. 18 19(III) Kinship can, of course, depend on many factors, such as description, 20 character, purpose. 21 22 RULE 5 23 24In addition to the foregoing provisions, the following Rules shall apply in 25 respect of the goods referred to therein : 26 27(a) Camera cases, musical instrument cases, gun cases, drawing instrument 28 cases, necklace cases and similar containers, specially shaped or fitted 29 to contain a specific article or set of articles, suitable for long term use 30 and presented with the articles for which they are intended, shall be 31 classified with such articles when of a kind normally sold therewith. 32 This Rule does not, however, apply to containers which give the whole 33 its essential character; 34 35(b) Subject to the provisions of Rule 5 (a) above, packing materials and 36 packing containers presented with the goods therein shall be classified 37 with the goods if they are of a kind normally used for packing such 38 goods. However, this provision is not binding when such packing 39 materials or packing containers are clearly suitable for repetitive use. 40 41EXPLANATORY NOTE 42 43 RULE 5 (a) 44 (Cases, boxes and similar containers) 45 46(I) This Rule shall be taken to cover only those containers which : 47 48(1) are specially shaped or fitted to contain a specific article or set of 49 articles, i.e., they are designed specifically to accommodate the article 50 for which they are intended. Some containers are shaped in the form of 2 3
90

1 1 2 3(2) 4 5 6 7 8 9(3) 10 11 12 13 14(4) 15 16(5) 17 18(II) 19 20 21(1) 22 23(2) 24 25(3) 26 27(4) 28 29(5) 30 31(III) 32 33 34 35 36 37 38(IV) 39 40 41 42 43 44 45(V) 46 47 48 49 50 2 3 the article they contain; are suitable for long term use, i.e., they are designed to have a durability comparable to that of the articles for which they are intended. These containers also serve to protect the article when not in use (during transport or storage, for example). These criteria enable them to be distinguished from simple packings; are presented with the articles for which they are intended, whether or not the articles are packed separately for convenience of transport. Presented separately the containers are classified in their appropriate headings; are of a kind normally sold with such articles; and do not give the whole its essential character. Examples of containers, presented with the articles for which they are intended, which are to be classified by reference to this Rule are : Jewellery boxes and cases (heading 71.13); Electric shaver cases (heading 85.10); Binocular cases, telescope cases (heading 90.05); Musical instrument cases, boxes and bags (e.g., heading 92.02); Gun cases (e.g., heading 93.03). Examples of containers not covered by this Rule are containers such as a silver caddy containing tea, or an ornamental ceramic bowl containing sweets. RULE 5 (b) (Packing materials and packing containers) This Rule governs the classification of packing materials and packing containers of a kind normally used for packing the goods to which they relate. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use, for example, certain metal drums or containers of iron or steel for compressed or liquefied gas. This Rule is subject to Rule 5 (a) and, therefore, the classification of cases, boxes and similar containers of the kind mentioned in Rule 5 (a) shall be determined by the application of that Rule. RULE 6

91

1 1 For legal purposes, the classification of goods in the subheadings of a 2 heading shall be determined according to the terms of those 3 subheadings and any related Subheading Notes and, mutatis 4 mutandis, to the above Rules, on the understanding that only 5 subheadings at the same level are comparable. For the purposes of 6 this Rule the relative Section and Chapter Notes also apply, unless the 7 context otherwise requires. 8 9EXPLANATORY NOTE 10 11(I) Rules 1 to 5 above govern, mutatis mutandis, classification at 12 subheading levels within the same heading. 13 14(II) For the purposes of Rule 6, the following expressions have the 15 meanings hereby assigned to them : 16 17(a) subheadings at the same level : one dash subheadings (level 1) or two 18 dash subheadings (level 2). 19 20 Thus, when considering the relative merits of two or more one dash 21 subheadings within a single heading in the context of Rule 3 (a), their 22 specificity or kinship in relation to a given article is to be assessed 23 solely on the basis of the texts of the competing one dash 24 subheadings. When the one dash subheading that is most specific has 25 been chosen and when that subheading is itself subdivided, then, and 26 only then, shall the texts of the two dash subheadings be taken into 27 consideration for determining which two dash subheading should be 28 selected. 29 30(b) unless the context otherwise requires : except where Section or 31 Chapter Notes are incompatible with subheading texts or Subheading 32 Notes. 33 34 This occurs, for example, in Chapter 71 where the scope assigned to 35 the term platinum in Chapter Note 4 (B) differs from that assigned to 36 platinum in Subheading Note 2. For the purpose of interpreting 37 subheadings 7110.11 and 7110.19, therefore, Subheading Note 2 38 applies and Chapter Note 4 (B) is to be disregarded. 39 40(III) The scope of a two dash subheading shall not extend beyond that of the 41 one dash subheading to which the two dash subheading belongs; and 42 the scope of a one dash subheading shall not extend beyond that of 43 the heading to which the one dash subheading belongs. 44 45NB: 46 471. Above was adopted from Explanatory Notes for the Harmonized 48 Commodity Description and Coding System by the WCO and does not 49 produce any binding legal effect. 502. The classification of goods in the ASEAN Harmonized Tariff 2 3
92

1 1 Nomenclature (AHRN) is governed by the General Rules for the 2 Interpretation of the AHRN under Section 103 of the Tariff and 3 Customs Code, as amended. 4 5SECTION 2 ENTIRETY RULE 6 7 A whole plant in its entirety can be classified in one tariff heading 8 provided following conditions are met: 9 102.1 The source of all materials to build a whole plant is located in a single 11 place or origin and supplied by one entity only; 12 132.2 It is only by reason of logistics i.e. the whole plant cannot be 14 transported in one single consignment under one vessel or aircraft and 15 instead individual component or parts of the whole plant is transported 16 the classification of under one tariff heading may be allowed; 17 182.3 The consignee/owner should give a written request for approval to the 19 District Collector who has territorial jurisdiction over the port of 20 discharge stating therein the reasons and providing full details of the 21 break-down of items covering the whole plant; and 22 232.4 Approval of the District Collector must be secured prior to departure 24 from country of origin of any part of the whole plant. 25 26SECTION 3 ADVANCE TARIFF RULING 27 283.1 From which office a tariff ruling may be secured. 29 30Importers may secure advance tariff ruling from Tariff Commission under the 31 provisions of Section 1313(a), TCCP or at IAS, AOCG. 32 333.2 Requirements in making request for tariff ruling from IAS: 34 353.2.1 Request in writing stating therein full details of article(s) intended to be 36 imported; 373.2.2 Official Receipt evidencing payment of Advance Ruling Fee or Peso 38 1,000.00 per article; 393.2.3 Sample, when practicable; 40 413.2.4 Full specifications through relevant literature, brochure, drawings or 42 plans. 43 44VCD shall not issue a ruling for any article which is subject of a VCRC or 45 protest case. 46 47The requested ruling shall be issued within thirty (30) days from receipt of 48 request. 49 503.3 When ruling is binding with the Bureau of Customs. 2 3
93

1 13.3.1 Ruling by Tariff Commissioner 2 3A tariff classification ruling of the Tariff Commission to be valid must meet 4 following conditions: 5 6a. Copy of the ruling is directly transmitted by the Tariff Commission 7 directly to the IAS; 8 9b. Duly published through a Customs Tariff Decision Circular (CTDC); 10 11 12c. The actual shipment of article(s) covered by the ruling is the same as 13 the article(s) submitted to the Tariff Commission for ruling as evidenced 14 by physical examination of concerned customs operations officer; and 15 16d. Secretary of Finance has not overturned the ruling. 17 183.3.2 Ruling by IAS 19 20 A tariff classification ruling issued by IAS to be valid must meet 21 following conditions: 22 23a. The actual shipment of article(s), covered by the ruling is the same 24 article9s) submitted to VCD for ruling as evidenced by actual physical 25 examination of concerned customs operations officer. 26 273.4 Shipments covered by advance ruling exempt from surcharge under 28 the provisions of Section 2503, TCCP. 29 30 Shipments covered by an advance ruling is exempt surcharge under 31 the provisions of Section 2503 in cases of misclassification provided 32 the nature and character of the article(s) which is subject matter of the 33 tariff ruling is the same as the article(s) that arrive in the Philippines as 34 evidenced by physical examination of concerned customs operations 35 officer. 36 37CHAPTER 3 DISPUTE RESOLUTION OF VALUATION AND 38 CLASSIFICATION ISSUES 39 40SECTION 1 TENTATIVE RELEASE 41 421.1 Definition of Terms 43 441.1.1 Tentative Release 45 46 The process where a shipment is released to the Importer to avoid 47 delay while the Valuation and Classification Review Committee 48 (VCRC) deliberates on the valuation and/or tariff classification issues. 49 (Sec. 3.1, CMO 45-09) 50 2 3
94

1 11.1.2 Value Reference Information System (VRIS) 2 3 A data base system where the Bureau of Customs stores previously 4 accepted transaction values for risk management purposes. 5 61.2 Administrative Provisions 7 81.2.1 Reference Value as Risk Management Tool 9 10 Customs shall consolidate all previously accepted transaction values 11 through the existing Value Reference Information System (VRIS), and 12 may publish the range of said values under such criteria as established 13 for the purpose, to serve as a risk management tool. The VRIS value 14 range shall be used as basis to raise doubt as to the truthfulness or 15 accuracy of a given value declaration, which in turn may trigger a 16 valuation query on the applicability of the method of valuation used by 17 the importer. 18 19 Reference values cannot be used as substitute values for customs 20 valuation purposes. However, such value information may be used as 21 a risk management tool to establish doubt or to alert customs to do a 22 value verification check either upfront thru a system created for the 23 purpose or on a post-entry basis through the Post Entry Audit 24 infrastructure. Further, reference value may end up being the 25 applicable customs value in the event that the declared transaction 26 value under Method 1 is rejected in appropriate cases and that such 27 value qualifies under any of the alternate valuation methods found 28 applicable in their order of priority. 29 301.2.1.1 Office Tasked to Maintain VRIS 31 32 The responsibility of establishing the Value Reference Information 33 System (VRIS) as the database of information on the value and 34 classification of imported goods shall be vested on the Director, Import 35 Assessment Service (IAS). [CMO 31-2011, Section 2.1 to 2.5] 36 371.2.2 Where the Collector of Customs has Reasons to Doubt the Truth or 38 Accuracy of the Declared Value and Classification 39 40 When an import declaration has been presented and where the 41 Collector of Customs has reason to doubt the truth or accuracy of the 42 particulars or of documents produced in support of this declaration, the 43 Collector of Customs may ask the importer to provide further 44 explanation, including documents or other evidence, that the declared 45 value and/or classification represents the total amount actually paid or 46 payable for the imported goods, adjusted in accordance with the rules 47 on valuation. 48 49 If, after receiving further information, or in the absence of a response 50 from the importer, the Collector of Customs still has reasonable doubts 2 3
95

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 161.2.3 17 18 19 20 21 22 23 24 251.2.4 26 27 28 29 30 31 32 33 341.2.5 35 36 37 38 39 401.2.6 41 42 43 44 451.2.7 46 47 48 49 50 2 3 about the truth or accuracy of the declared value and/or classification, then it is deemed that the dutiable value of imported goods cannot be determined under Method One and/or classification cannot be accepted as entered. The Collector of Customs shall then proceed to determine the dutiable value under alternative methods sequentially and in the order of succession and/or p Before taking a final decision, the Collector of Customs shall communicate to the importer, in writing if requested, the ground/s for doubting the truth or accuracy of the particulars or documents produced and the importer shall be given a reasonable opportunity to respond. When a final decision is made, the Collector of Customs shall communicate to the importer in writing his decision and the ground/s in support thereof. Importers Right to Secure Release of Articles Under Sufficient Guarantee and Right to Appeal. When the Collector of Customs makes a final decision as to entered value and classification during clearance stage pursuant to preceding Section, the importer has the right to avail of the tentative release mechanism subject to posting of sufficient guarantee provided the importation in question is not prohibited by law. Form and Amount of Release Guarantee The amount of guarantee shall be the difference in the amount of duties and taxes declared against the amount of duties and taxes computed based on the recommended value and/or tariff classification. Cash bond shall be the preferred form of guarantee, but other forms may be allowed subject to the approval of the District Collector. (Sec. 3.2, CMO 45-09) When Guarantee for Tentative Release Required and Not Required Release Guarantee is required for entries hit by the Valuation Screen or in case of tariff classification issue while release guarantee in not required for Appraiser Initiated challenge of entered value. Where Cash Bond shall be Deposited All cash bonds shall be deposited with the In-House Banks under the BOC Trust Fund Account. (Sec. 3.3, CMO 45-09) VCRC Cases Subject to Payment of Docket Fees The amount of Docket Fees shall be in accordance with schedule under Title 2, Book 6 of this Code. Docket Fees shall be included in the payment instruction to the Authorized Agent Bank (AAB) under "Other Charges".
96

1 11.2.8 Post Entry Modification of Entry 2 3 The import entry declaration shall be subject to post entry modification 4 after the release of the decision of the VCRC. (Sec. 3.7, CMO 45-09) 5 61.3 Operational Provisions 7 81.3.1 Data Build-up for VRIS 9 10 To properly monitor the valuation and tariff classification of imported 11 goods and for purposes of building the database of value information 12 and classification, all District/Port Collectors are hereby directed to 13 submit to the Office of the Director, IAS, all import documents, 14 including the accompanying invoices and other commercial and 15 shipping documents, whether the goods were entered under 16 consumption or warehousing or destined to Freeports or special 17 economic zones. 18 19 All District/Port Collectors are likewise directed to furnish the Office of 20 the Director, IAS, decisions or rulings on value and classification issued 21 by their respective Valuation ad Classification Review Committee to be 22 utilized as source of information for the VRIS database and for the 23 issuance of the lists of generally described goods to be subjected to 24 100% examination pursuant to Section VI of CAO 8-2007. 25 26 The Director, IAS is directed to coordinate with the Deputy 27 Commissioner, MISTG, for technical support, including access to the 28 Customs e2m system, to attain the objectives of this Order. 29 301.3.2 Operational Provisions on Tentative Release 31 321.3.2.1 The following steps in the e2m Customs System shall be observed for 33 shipments NOT hit by Valuation Screen but with valuation issue where 34 no guarantee is required (Appraiser-initiated): 35 361.3.2.1.1 After the VCRC Form 1 has been approved by the District Collector, 37 the Customs Operations Officer (COO) III shall retrieve the Single 38 Administrative Document (SAD) subject to Tentative Release and 39 shall make the following changes: 40 41 a. Indicate the code as mentioned in Item 3.4 above for the 42 corresponding amount of Docket Fee in "Box 13" of the SAD. 43 The Docket Fee shall be automatically calculated by the E2M 44 Customs System and included in the assessed amount. 45 46 b. Select in the Inspection Act the appropriate Tentative Release 47 code indicated in Item E.1.6 above. 48 49 c. Indicate the Docket Number in the "Attached Document" page of 50 the SAD. 2 3
97

1 1 d. Update the SAD in the E2M Customs System. 2 31.3.2.1.2 After the COO III has accomplished Item 4.1.1, the COO V shall 4 assess the SAD. Tentative assessment shall be based on the value 5 and/or tariff classification declared by the importer/Customs broker. 6 71.3.2.1.3 A payment instruction shall be automatically sent to the AAB for 8 debiting against the nominated bank account. 9 101.3.2.1.4 After confirmation of the payment under PASS5 by the AAB, the 11 E2M Customs System shall automatically trigger a release 12 instruction to the port operator/arrastre/CY-CFS 13 141.3.2.2 The following steps in the E2M Customs System shall be observed for 15 shipments hit by Valuation Screen and/or with tariff classification 16 issue/s where guarantee is required: 17 181.3.2.2.1 After the VCRC Form 1 has been approved by the District Collector, 19 the COO III shall retrieve the SAD subject to Tentative Release. 20 211.3.2.2.2 Indicate the code for the corresponding amount of Docket Fee in 22 "Box 13" of the SAD. The Docket Fee shall be automatically 23 calculated by the System and included in the assessed amount. 24 251.3.2.2.3 The COO III shall make the temporary changes in the SAD to 26 reflect the recommended value and/or tariff heading. 27 281.3.2.2.4 The COO III shall "Verify" and "Remote Check" the SAD for the 29 E2M Customs System to compute the "Temporary" amount of 30 duties and taxes based on the recommended value and/or tariff 31 classification. 32 331.3.2.2.5 The COO III shall print the "Temporary" SAD and its corresponding 34 "Temporary" Assessment Notice (TAN). 35 361.3.2.2.6 The COO III shall compute the difference between the declared and 37 the recommended customs duties and taxes which shall be 38 reflected in the TAN as the amount of the guarantee. 39 401.3.2.2.7 The COO III and the COO V shall print their names and affix their 41 signatures on the TAN. 42 431.3.2.2.8 The Importer or his authorized representative shall bring the TAN 44 and the "Temporary" SAD to the In-House Bank for deposit of the 45 cash bond. 46 471.3.2.2.9 The In-House Bank shall ensure that the amount of cash bond 48 corresponds to the amount reflected in the TAN duly signed by the 49 COO III and COO V. After verification, the In-House Bank shall 50 accept the cash bond and shall deposit it under the BOC Trust 2 3
98

1 1 Fund. 2 31.3.2.2.10 The In-House Bank shall use the Cash Payment Miscellaneous 4 function in the E2M Customs System to issue an electronic 5 Customs Payment Receipt (ECR) to the Importer. The ECR 6 represents the receipt for the posted cash bond. 7 81.3.2.2.11 The Importer/Customs broker shall return to the COO III and COO 9 V concerned showing his ECR. 10 111.3.2.2.12 The COO III shall retrieve from the E2M Customs System the 12 SAD of the import declaration to be released tentatively and shall 13 do the following: 14 151.3.2.2.12.1 Indicate the code for the corresponding amount of Docket Fee in 16 "Box 13" of the SAD. 17 181.3.2.2.12.2 Select in the Inspection Act the appropriate Tentative Release 19 code indicated in Item 3.6 above and the amount of guarantee 20 posted. 21 222.2.2.12.3 Indicate the Docket Number and the Reference Number of the 23 ECR in the "Attached Document" page of the SAD. 24 251.3.2.2.12.4 "Update" the SAD in the E2M Customs System. 26 271.3.2.2.13 Thereafter, the COO V shall "Assess" the SAD corresponding to 28 the import declaration to be tentatively released. Assessment 29 shall be based on the declared value and/or tariff classification. 30 311.3.2.2.14 Upon assessment by the COO V, a payment instruction shall be 32 automatically sent by the E2M Customs System to the AAB. 33 341.3.2.2.15 Upon confirmation of payment of duties and taxes by the AAB, the 35 E2M Customs System shall trigger a release instruction to the 36 port operator/arrastre operator/CY-CFS. 37 38SECTION 2 VALUATION AND CLASSIFICATION REVIEW COMMITTEE 39 (VCRC) 40 412.1 Composition: 42 432.1.1 Except as herein otherwise provided, the VCRC, organized District 44 Port, shall be composed of the following: 45 46 a. District Collector Chairman 47 b. Deputy Collector for Assessment Vice Chairman 48 c. Chief, Formal Entry Division (FED) or Equivalent Unit Member 49 d. Other personnel under the succeeding paragraph 50 2 3
99

1 12.1.2 2 3 4 5 6 7 8 9 10 112.1.3 12 13 14 152.1.4 16 17 18 19 20 212.1.5 22 23 24 25 262.1.6 27 28 292,2 30 312.2.1 32 33 34 35 36 37 38 39 402.2.2 41 42 43 44 45 46 47 482.2.3 49 50 2 3 At the major ports of entry, particularly at the Port of Manila, Manila International Container Port and the NAIA Customhouse, other Customs officials may be designated to the VCRC as Vice-Chairman or member, upon the recommendation of the concerned District Collector and approval of the Commissioner of Customs. Provided that the ViceChairman shall have the rank not lower than a Collector of Customs IV/COC while the member, not lower than a COAC. At the ports where there are no Collector IV, COC or COAC, any officer with a rank not lower than COO III can be designated as a Vice-chairman/member. The concerned COO V and COO III of the Section in the Formal Entry Division who contested the declared valuation or classification of a given shipment shall act as resource persons to the VCRC. The VCRC Technical Support Team (VCRC-TST) shall provide administrative and technical support to the VCRC in the handling and disposition of VCRC cases. It shall be headed by the Vice-Chairman of the VCRC, unless the concerned District Collector assigns other qualified Customs official. At the NAIA Customs, a VCRC-TST shall be established in each of the Customs Clearing Warehouse and shall be headed by the respective Special Duty Collector, unless the District Collector assigns other qualified Customs official. All resolutions of the VCRC shall be signed by the District Collector as Chairman thereof. Procedure at the VCRC Technical Support Team [CMO 37-2001] Upon receipt of the pertinent documents, the VCRC-TST receiving clerk assigns a docket number to the case, enters the same in the VCRC-TST logbook and immediately within the day forwards the case documents to the Head, VCRC-TST. The Head, VCRC-TST, may, subject to the approval of the District Collector, resolve the case and authorize the release of single-item entries whose f.o.b. value as per appraiser's findings are not more than USD500 for seaports, and USD100 for airports. The Head, VCRC-TST may, subject to the approval of the District Collector, likewise resolve cases without formal VCRC deliberation such as when the importer manifests in writing to voluntarily waive the application of method 1 and allow Customs to adopt the appropriate method of valuation, or when he is willing to pay based on classification rulings by the Department of Finance, the Commissioner of Customs, BOC-SGS Appeals Committee, or the VCRC. Where the disposition requires additional payment of duties and taxes by 10% or more of the original assessment, the District Collector shall decide on whether or not to impose the appropriate surcharge pursuant
100

1 1 2 32.2.4 4 5 6 7 8 9 102.2.5 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 272.2.6. 28 29 30 31 32 33 342.2.7 35 36 37 38 39 40 41 42 43 44 45 46 472.3 48 492.3.1 50 2 3 regulation. In any of the above cases, the Head, VCRC-TST, shall fill up the New VCRC Disposition Form (VCRC Form No. 2), Annex "Q" herein and refer it with the Entry to the concerned COO V for final assessment. The import entry shall then be forwarded to the Collection Division for payment verification and/or collection of additional duties and taxes, and surcharge, if any. In all other cases where formal VCRC deliberation will be necessary, the Head, VCRC-TST shall notify importer or his customs broker or any of the personnel of either the importer or the customs broker who is in charge of the filing of the import entry to submit within ten (10) days from receipt of such notice a written explanation/justification as to the truthfulness and/or accuracy of the declared value, including any document or record in support thereof. He may also require the submission of specific documents which are relevant in the determination of the applicable method of valuation and the dutiable value based on (the method as may be found applicable. The notice shall be served by registered mail or personally, as the case may be. Attached as Annex "R" is the notification format (VCRC Form 3). Failure to submit within the regulated period the required explanation and for specific documents without justifiable cause shall be a ground for VCRC to reject the method of valuation used by the importer, and to proceed with the alternate method of valuation. The Head, VCR-TST, shall transmit all cases requiring formal VCRC deliberation to the VCRC Chairman, recording in the logbook the docket numbers of such cases, their captions, among other relevant information, indicating the time and date such cases were referred to and received by the importer, and to proceed with the alternate method of valuation. On the basis of such transmittals, the Head, VCR-TST, shall prepare a case digest using the information checklist provided for in VCRC Form 4, hereto attached as Annex "S" of this Order. This checklist shall be used to expedite the evaluation and resolution of issues presented before the VCRC. He shall also prepare the agenda to be deliberated upon by the VCRC. All cases received by the VCRC-TST shall be calendared immediately or not later than three (3) working days from receipt thereof without awaiting the written explanation/justification required of the importer as indicated in Section IV.D.5 above. Such written explanation/justification shall nonetheless be submitted to the VCRC within the reglementary period provided for in said Section IV.D.5. Procedure at the VCRC The VCRC Chairman shall convene the committee to deliberate the matters in the agenda at least once a week, or as often as necessary.
101

1 1 All cases pending or not resolved in the last meeting are automatically 2 calendared for the next meeting until the same is resolved, in addition 3 to the new matters in the agenda. To expedite the resolution of cases, 4 the Chair may create sub-groups, ad hoc bodies, and the like, aided by 5 the information checklist (VCRC Form "4"), to closely study, analyze 6 and summarize contending issue(s) and positions of the parties in a 7 given case for deliberation by the Committee as a whole. 8 92.3.2 Cases referred to the VCRC shall be resolved within twenty (20) 10 working days from date the same is calendared. 11 122.3.3 Cases resolved by the VCRC shall continue to be listed in the agenda 13 for final confirmation by the VCRC before these are finally taken out of 14 the agenda. 15 162.3.4 Those taken out of the agenda can no longer be reopened, except to 17 correct manifest clerical error, or when the text of the resolution is 18 different from what was decided upon during the deliberation as borne 19 out by the records of the deliberations, or on account of a newly 20 discovered evidence which was not available or could not be obtained 21 during the deliberation of the case. 22 232.3.5 The VCRC-TST shall record the minutes of VCRC meetings and based 24 on such records, prepare the VCRC decision for every case within 25 eight (8) working hours after the same has been finally resolved by the 26 committee. The VCRC-TST shall forward the prepared decision to the 27 VCRC Chairman for signature within the same day the said decision 28 was prepared. The VCRC Chairman shall act on the prepared decision 29 within eight (8) working hours from the time the same is received by his 30 office. 31 322.3.6 The VCRC decision shall essentially contain the following: 33 342.3.6.1 Brief Statement of Facts description of the goods, consignee, entry 35 number, country of exportation/origin/manufacture, declared value 36 and tariff heading, other information available which is relevant to the 37 case; 38 392.3.6.2 Issue importer's declaration is being challenged/why Method 1 can 40 or cannot apply/what tariff heading to use; 41 422.3.6.3. BOC basis/position vs. importer's; 43 442.3.6.4 VCRC decision indicating reason(s) for adopting Method 1 or 45 importer's declaration, or for rejecting Method 1 and decreeing the 46 use of an alternate Method of valuation or use of a different tariff 47 heading; and 48 492.3.6.5 Dutiable value based on the Method of valuation and the tariff 50 classification as decided upon. 2 3
102

1 1 22.3.6.6 The signed VCRC decision shall be immediately referred to the 3 section concerned for implementation within the same day that the 4 signed decision is received by that office. 5 62.3.6.7 The COO III concerned shall reflect in the SAD the value and/or tariff 7 classification actually used based on the VCRC-TST (without formal 8 deliberation) or VCRC (with formal deliberation) decision, as the case 9 may be. In particular, he shall amend the following boxes, as may be 10 applicable, based on said decision: 11 12 a. Customs Value (Box # 22) 13 b. Item Customs Value (Box # 42) 14 c. Freight Charges (Box # 9a) 15 d. Insurance Charges (Box # 9b) 16 e. Other Dutiable Charges (Box # 9c) 17 f. Tariff Heading (Box #33) 18 g. Valuation Method (Box # 43) 19 h. SDV (Box # 39) 20 i. Commodity Description (specific) (Box # 31) 21 j. Other boxes necessary for amendment 22 232.3.6.8 COO V shall validate the amendment made, if any, by the COO III 24 in the foregoing boxes. 25 262.3.6.9 The head, VCRC-TST, shall submit to the VCRC Chairman a 27 running weekly report of the cases referred to VCRC and the action 28 taken by it. 29 302.3.6.10 The VCRC Chairman shall in turn submit a weekly consolidated 31 report to the Commissioner, the Deputy Commissioner for 32 Assessment and Operations Group, and the Post Entry Audit Unit, 33 using the VCRC Form No, 5, attached herein as Annex "T". The 34 report shall be categorized as follows: 35 36 a. Decision by VCRC (VCRC-TST) without formal deliberation; 37 38 b. Decision by VCRC with formal deliberation. 39 402.3.7 Payment Under Protest 41 42 2.3.7.1 If the importer disputes the decision of the VCRC, he may pay 43 under formal protest pursuant to Section 2308 of the TCCP. 44 45SECTION 3 HANDLING AND RELEASE OF CASH BOND 46 47Note: Patterned after CMO 4-99 48 493.1 Administrative Provision 50 2 3
103

1 13.1.1 Cash Guarantee shall be deposited by the Collecting Officer in a 2 Special Trust Fund Account not later than the day following the date 3 when received, or the maturity date of the check. BOC Form 38-A 4 properly stamped in bold prints "CASH BOND" (PROVISIONAL) shall 5 be issued whenever the cash/check guarantee is received. 6 73.2 Operational Provisions 8 93.2.1 Cash guarantee shall be treated as follows as soon as decisions had 10 been released by the VCRC: 11 123.2.1.1 If the decision is in favor of government and if the cash given is 13 equivalent to the additional assessed duties/taxes as decided, the 14 Chief, Collection Division shall notify the Chief, Administrative 15 Division (Attn.: Chief Accountant) to prepare the Disbursement 16 Voucher , and the Disbursing Officer to issue the corresponding 17 check payable to the Bureau of Customs (for the account of the 18 importer). Upon receipt of the check at the Collection Division, the 19 Collecting Officer shall issue BOC Form No. 38-A (FINAL PAYMENT) 20 to the importer indicating therein the respective amount of the duties, 21 taxes and charges and specifying the import entry reference number 22 of the shipment concerned. 23 243.2.1.2 If the amount of the cash/check guarantee is more than what is due, 25 there are two disbursement vouchers and disbursement checks that 26 the Administrative Division shall prepare, i.e.: 27 28 a. Disbursement voucher and check in the amount equivalent as 29 decided payable to the BOC (for the account of the importer) to be 30 forwarded to the Collection Division for the issuance of BOC Form 31 38-A (Final Payment) and 32 33 b. Disbursement voucher and check for the excess of the decided 34 amount payable to the importer. 35 363.2.2 In the event that the additional duties and taxes due is more than the 37 cash guarantee, the following shall be done: 38 39 a. The Chief, Administrative Division (Attn.: Chief Accountant) shall, as 40 in Item No.3 .2.1 above, be notified to issue a Disbursement 41 Voucher to cover the check payable to the BOC (for the account of 42 the importer) in the full amount of the cash/check guarantee that 43 was earlier deposited. The corresponding BOC Form 38-A (Final 44 Payment) shall be issued by the collecting officer to the importer. 45 46 b. A demand letter shall be issued by the Chief, Collection Division for 47 the unpaid portion. 48 493.2.3 If the Committee's decision is in favor of the importer, the Chief of the 50 Collection Division shall notify the Chief, Adm. Division to issue a 2 3
104

1 1 disbursement voucher and prepare a check payable to the importer in 2 the full amount of the cash/check guarantee earlier deposited by the 3 importer. 4 53.3 The following shall be required to support the Disbursement Vouchers: 6 73.3.1 Original copy of BOC Form 38-A (Cash Bond -Provisional) equivalent to 8 the cash/check guarantee deposited to the Special Trust Fund 9 Account. 10 113.3.2 Appropriate Notice/Instruction to the Chief, Administrative Division from 12 the Chief, Collection Division. 13 143.3.3 VCRC Decision 15 163.3.4 Photocopy of the entry with final assessment of duties and taxes. 17 183.4 All final payments of additional duties and taxes shall be receipted and 19 remitted to the General Fund of the Bureau of Treasury through 20 authorized government banks following the accounting and auditing 21 rules and regulations on revenue collections. 22 233.5 The Collecting Officer shall ensure the genuiness and authenticity of the 24 check, or cash deposited, or post-dated checks with bank guarantee by 25 taking the following security measures: 26 273.5.1 The person submitting the cash/check guarantee must be properly 28 identified by requiring the presentation of his laminated company ill with 29 picture, the SSS identification card and the written authority from the 30 importer. 31 323.5.2 The complete name, address, and ID number of the person submitting 33 the cash/check guarantee shall be duly recorded. 34 353.6 A temporary/provisional pre-numbered receipt shall be issued for all cash 36 guarantee duly signed by the Chief, Collection Division or his 37 authorized collecting officer, recorded in a book bound log book and 38 released as follows: 39 403.6.1 Original copy-released to importer 41 423.6.2 Photocopy or duplicate copy duly signed by the Chief, Collection 43 Division or the authorized collecting officer to be attached to the entry. 44 45 .CHAPTER 4 PREFERENTIAL TARIFF 46 47SECTION 1 FTA OVERSIGHT COMMITTEE IS HEREBY CREATED. 48 491.1 Composition 50 2 3
105

1 1The Committee shall be composed of the following: 2 3a. Director, IAS - Chairman 4b. Deputy Collector for Assessment, POM - Vice Chairman 5c. Deputy Collector for Assessment, MICP - Member 6d. Deputy Collector for Assessment, NAIA - Member 7e. Chief of the Export Coordination Division Member/Head 8 Secretariat 9f. Chief, Export Division, POM Member/ 10 HeadTechnical 11 121.2 Functions 13 141.2.1 The Committee shall have following functions: 15 16 a. To Issue advance ruling on whether an article is originating or not 17 for purposes of availing preferential tariff. 18 19 b. To see to it that the necessary mechanics for the effective 20 implementation of the FTA Preferential Tariff Scheme are 21 immediately put in place. 22 23 c. To formulate plans and policies and submit the necessary 24 recommendations to the Commissioner of Customs on how the 25 operations of the FTA Preferential Tariff Scheme may be made 26 more effective and to devise ways preventing the possible abuse of 27 the Tariff rate privileges accorded under it. 28 29 d. To coordinate with the private sector in the selective / random 30 verification of the existence of businesses of certain suppliers for 31 purposes of determining the origin of particular articles claiming for 32 preference. 33 34 e. To computerize the implementation of the FTA Preferential Tariff 35 Scheme. 36 371.2.2 The Secretariat shall be responsible for the administrative and logistical 38 support of the Committee. 39 401.2.3 The Head Technical shall be responsible for providing legal and 41 technical assistance in the evaluation process for Advance Ruling. 42 43Section 2 Advance Ruling 44 452.1 Administrative Provisions 46 472.1.1 The Advance ruling shall be based on facts and circumstances 48 presented by the applicant and any other relevant information in 49 possession of the Committee. 50 2 3
106

1 12.1.2 The Advance ruling shall be applicable to all importation of goods 2 described in that ruling, imported within 1 year from the date of 3 issuance of such ruling. 4 52.1.3 The Bureau of Customs may modify or revoke an advance ruling upon 6 determination that it was based on an error of fact or law, the 7 information provided is false or inaccurate or if there is a change in a 8 material fact, or circumstances on which the ruling is based. 9 102.1.4 The presentation of a Certificate of Origin for the purpose of claiming 11 preferential tariff treatment shall not in any way be waived by the 12 issuance of the Bureau of Customs of an Advance ruling. 13 142.2 Operational Provisions 15 162.2.1. The would be importer or his authorized representative shall request in 17 writing for a pre arrival evaluation of a product which he will intent to 18 import and claim preferential tariff treatment under any free trade 19 agreement implemented by the Bureau of Customs. 20 212.2..2. The request shall be submitted to the pre arrival consultation 22 committee accompanied by the following information or document: 23 24 a. Name of the Importer/ Company (Complete Address and Contact 25 Number); 26 b. Name of Exporter (Complete address and contact number); 27 c. Company/ Factory Registration Details (Registration No. Validity, 28 etc); 29 d. Product Details (Description, HS Code, Quantity, FOB Value); 30 e. Country of Exportation and Transport Route; 31 f. The complete list of all materials, parts or components (both locally 32 made or imported) used in the Manufacture of the product, with 33 their respective country of origin, if imported; 34 g. Breakdown of the cost elements that make up the ex-factory cost, 35 ex-factory prices and FOB price of the finished product; 36 h. The manufacturing operations to be performed on the product; 37 i. Production Flowchart; 38 j. Photo of Production process; 39 k. Sample of the Product, if available; 40 l. Additional documents that the committee may requires such as sale 41 receipts or invoices, certificate of origin, etc; 42 m. Origin Criteria invoked for the product; 43 n. Certification of the exporter. 44 45(Note: Should the Committee charge certain fee for administrative cost of 46 processing the request for advance ruling?) 47 482.2.3. The Committee upon receipt of all the necessary 49 information/documents shall evaluate the product to determine 50 whether: 2 3
107

1 1 22.2.3.1. It complies with the origin criteria of the product under specified Free 3 Trade Agreement Rules of Origin. 4 52.2.3.2. It is included in the list of product given preferential tariff by the 6 importing Party. 7 82.2.4 The Committee shall avail the assistance of various offices and experts 9 involved in the implementation of the rules of origin to come up with a 10 ruling. 11 122.2.5. The Committee shall issue the advance ruling after fifteen days from 13 receipt all the necessary information from the applicant. 14 152.2.6 Appeal 16 17 In cases where the applicant is not amenable to the decision of the 18 committee, it may be elevated to the District Collector. 19 202.2.7 Legal Sanction 21 22 The advance ruling once issued by an authorized official of the Bureau 23 of Customs becomes a public document. Any person who furnishes or 24 causes to be furnished false information in any material particular shall 25 be liable and punishable under Revised Penal Code of the Philippines 26 and other related laws. 27 28Section 3 Preferential Tariff Availment 29 303.1 Administrative Provision 31 323.1.1 Special Unit Created in Every Collection District. 33 34 A special unit shall be created in the Formal Entry Division (FED) in the 35 Principal Port of Entry in every Collection District. This special unit shall 36 be called Preferential Rate Unit FED (PRU-FED). 37 383.1.1.1 Function 39 40 It shall evaluate applications of FTA member countries for 41 availment of tariff rate preferences on products exported by said 42 Member countries to Philippines under a particular Free Trade 43 Agreement. 44 453.1.1.2 Composition 46 47 The PRU-FED shall be composed of customs personnel who are at 48 least COO III in rank. Its Head as well as the members thereof, shall 49 be designated by the District Collector. 50 2 3
108

1 13.1.2 Mandatory Marking of Box 36 of IEIRD 2 3 For shipment availing of the preferential rate under a particular FTA, 4 Box 36 of the import entry must be marked accordingly. 5 6(Note: MISTG should get copy of this so that they can redesign the system to 7 reject lodgement with out the mandatory marking of Box 36.) 8 93.1.3 Specific Certificate of Origin (CO) Form is a Mandatory Supporting 10 Document 11 12 The specific CO Form is a mandatory supporting document in availing 13 of preferential tariff. 14 153.1.4 All Entries Availing of Preferential Tariff to be Routed to Yellow or Red 16 Lane 17 18 As a risk management protocol, all import entries availing of 19 preferential tariff under an FTA shall be routed to either Yellow lane or 20 Red lane depending on the parameters in the selectivity module. 21 22 (Note: RMO should be provided copy of this draft Order) 23 243.1.4 Rule When Philippine Rate of Duty Lower than FTA Rate 25 26 In the event that any subsequent changes are made in the basic 27 Philippine rate of duty to a rate lower than the FTA rate, such article 28 shall be automatically accorded the corresponding reduced rate of 29 duty. 30 313.1.5 Settlement of Disputes 32 33 All disputes concerning the FTA Preferential Tariff Scheme shall be 34 resolved by the Deputy Collector for Assessment within 60 days from 35 the date of approval of tentative release, subject to the approval of the 36 District Collector. 37 38 The assistance of the Tariff Commission may be sought for the ruling 39 on tariff classification issues. 40 413.1.6 Monitoring System of Managers Check or Cashiers Check Deposited 42 as Guarantee in Case of Tentative Release. 43 44 The Collection Division of each Collection District shall put up an 45 accounting and monitoring system to insure that there will be no stale 46 checks put up for the tentative release of the shipments. 47 483.2 Procedures in verifying authority of CO. 49 503.2.1 Upon receipt of the CO, the PRU-FED Officer shall match the signature 2 3
109

1 1 of the issuing official with specimen signature submitted; 2 33.2.2 The official seal / stamp on the CO shall also be matched with the 4 sample submitted; 5 63.2.3 Any discrepancy found in the signatures and seal / stamp of the CO 7 including the format, shall be subjected to verification with the issuing 8 country. 9 103.2.4 Procedure in verifying the CO with the issuing country. 11 123.2.4.1 When there is a reasonable doubt as to the authenticity of the 13 document or as to the accuracy of the information regarding the true 14 origin of the products or certain parts thereof, a check with the issuing 15 authority shall be undertaken in the following manner: 16 173.2.4.1.1 The PRU-FED officer assigned shall prepare an official written 18 request on a customs letterhead addressed to the FTA Oversight 19 Committee, specifying the reasons for the request and any additional 20 information suggesting that the particulars given on the said CO 21 maybe inaccurate. 22 233.2.4.1.2 The written request shall be signed by the PRU-FED officer duly 24 noted by the Deputy Collector for Assessment and shall be 25 accompanied by the original copy and triplicate of the CO. 26 273.2.4.1.3 The Deputy Collector for Assessment shall cause the transmittal 28 of the request of the FTA Oversight Committee, Port Area, South 29 Harbour, Manila, which in turn shall make the official verification with 30 the issuing authority. 31 323.2.5 Procedure for Tentative Grant of Preferential status pending result of 33 verification of the CO as provided for Section 3.2.4: 34 353.2.5.1 Unless there is a prima facie evidence or probable cause that the CO 36 is spurious or, the information therein is false or the shipment itself is 37 attendant with violations, the shipment maybe granted provisional 38 release: under the terms described in Sections 3.2.5.3 and 3.2.5.4 39 below. 40 413.2.5.2 The PRU-FED officer assigned shall determine the difference of the 42 duties and taxes due on the article/s based on the regular rate of duty 43 and the FTA Preferential rate. 44 453.2.5.3 The PRU-FED officer subject to the approval of the Deputy Collector 46 for Assessment shall require the importer to post a guarantee in the 47 form of either a managers or cashiers check which is equal to the 48 difference in preceding Section 3.2.5.2 before tentative release of the 49 shipment. 50 2 3
110

1 13.2.5.4 The Cash Division shall hold the check in abeyance until an order to 2 deposit or return the MC, or Cashiers Check from the Deputy 3 Collector for Assessment is received. 4 53.2.6 Procedure in evaluating whether or not to grant FTA Preferential rate: 6 7 Upon receipt of the entry from the Formal Entry, the PRU-FED shall 8 verify whether or not the shipment qualifies for the Preferential Tariff 9 treatment based on the following criteria: 10 11 a. The article/s indicated in the CO must correspond to the article/s 12 imported. The discovery of minor discrepancies or obvious clerical 13 or typographical errors in the statement made in the CO and in the 14 other documents supporting the entry shall not render the 15 application for preferential tariff invalid where it is clear that the CO 16 of the article refers to the article/s imported. 17 18 b. The imported article/s must be included in the Philippine Tariff 19 Reduction Schedule cited in specific Executive Order and 20 circularized under particular Customs Memorandum Circular 21 (CMC). 22 23 c. The imported article/s must be included in the Tariff Reduction 24 Schedule of the applying ATIGA member country. If the article is 25 included in the Tariff Reduction Schedule of the applicant ATIGA 26 member country, and the rate of duty is 20% and below, the Tariff 27 Rate Preference shall be allowed. But in case the rate of duty is 28 more than 20%, the application for the Tariff Rate Preference shall 29 not be allowed. 30 31 d. In case the imported article is in the Sensitive List of the exporting 32 party under ACFTA and AKFTA, and the rate of duty is 10% and 33 below, but said imported product is in the normal track of the 34 importing FTA party, the applicable rate shall be the preferential 35 rate of the importing party or the tariff rate of the exporting party 36 whichever is higher as provided in the reciprocity provision in the 37 cited FTA. 38 393.2.7 The PRU-FED after having determined that the criteria mentioned 40 above have been met, shall verify whether the imported article had 41 complied with the origin criteria of the rules of origin of a particular FTA, 42 before granting the preferential rate of duty under said FTA. 43 443.2.8 The Deputy collector for Assessment, upon receipt of the entry with an 45 FTA Preferential tariff application from the Chief, FED shall approve / 46 disapprove the entry for which preferential tariff treatment is applied, 47 based on the evaluation made by the PRU-FED and the 48 recommendation, whether for approval or disapproval, if in his well 49 considered opinion an error or omission of a material fact ad been 50 made in the evaluation of a shipment, which otherwise would have 2 3
111

1 1 resulted in the different recommendation. 2 3 The Deputy Collector for Assessment shall then forward the entry to 4 the Chief, Liquidation and Billing Division. 5 63.2.9 The Chief, FED shall submit a monthly report in two copies of all 7 transactions under the FTA Preferential Scheme (thru the Deputy 8 Collector for Assessment) to the Chairman, FTA Oversight Committee, 9 with the following date: Tariff Heading, Description of Articles, Country 10 of Exportation, Origin Criteria and FOB Value. 11 12 One copy shall be furnished to the Chief, ECD-POS-AOCG who will 13 then prepare a consolidated report for transmittal to the Director, 14 Bureau of International Trade Relations (BITR), Department of Trade 15 and Industry. 16 173.2.10 Procedure for Handling Protested Cases. 18 193.2.10.1 In all cases wherein the importer is not amenable to a decision, the 20 PRU-FED officer shall elevate the matter to the Deputy Collector for 21 Assessment. 22 233.2.10.2 The Deputy Collector for Assessment upon receipt of the protest 24 shall endeavor to resolve the case immediately. However, if the 25 importer is not satisfied with the decision of the Deputy Collector, 26 he/she shall make a protest in writing indicating therein the reasons 27 for the protest. 28 293.2.10.3 Upon receipt of a written protest, the case shall be heard by the 30 Deputy Collector in the presence of the importer or his/her duly 31 authorized representative and PRU-FED officer assigned who shall 32 be guided by the terms of the FTA. In case of protest over 33 classification of a particular item, the Deputy Collector may seek the 34 assistance of the Tariff Commission. 35 363.2.10.4 The decision of the Deputy Collector shall be summary in nature. 37 The case may be elevated to the District Collector under a regular 38 protest case. 39 40 CHAPTER 5 CUSTOMS CLEARING PROCEDURE 41 42SECTION 1 CONVENTION ON DESCRIPTION OF GOODS 43 44(Ref: CAO 8-07 and CMO 28-07) 45 461.1 Administrative Provisions 47 481.1.1 The convention described herein must be strictly observed in the 49 following: 50 2 3
112

1 1 a. In the proper encoding of the Single Administrative Document 2 (SAD) in ACOS, or its upgrade; 3 4 b. In the proper filing of the IEIRD; 5 6 c. In the accomplishment of the returns of the COO III and COO V; 7 8 d. In describing articles for publication; and 9 10 e. In describing articles for statistical purposes. 11 121.1.2 Any delay in the processing of the entries or SAD due to failure to fully 13 described the shipment shall be the full responsibility of the importer 14 and/or broker. 15 161.1.3 The convention described herein shall be observed to the extent 17 practicable, taking into account that some products such as raw 18 materials may not have specific brand names, but are still susceptible 19 to description in tariff terms. 20 211.1.4 It shall be the responsibility of the COO V together with the Chief, 22 Formal Entry Division, to ensure proper implementation of this Section. 23 MISTG shall ensure that the space provided for in the IEIRD or SAD 24 shall be sufficient to accommodate description as per convention. 25 261.1.5 The Commissioner of Customs through the VRIS shall issue a list of 27 products covered by this Section, together with specific per article 28 guidelines on the proper description of goods. 29 301.1.6 The Chief, Formal Entry/Assessment Division of each Port/District shall 31 compile a list indicating the entry number and other shipment details of 32 companies violating this Section and shall submit the same regularly 33 on a weekly basis the Head, Valuation Reference Information System 34 (VRIS) and the Director, Trade Information Risk Analysis Office 35 (TIRAO), Post Entry Audit Group (PEAG) for profiling purposes. 36 371.1.7 Goods declared in a general manner to avoid proper classification or 38 valuation shall undergo 100% examination and are to be considered in 39 a status of continuing alert, subject to the following: 40 411.1.8 Items enumerated under this Section as generally described and 42 subsequent updates issued by the Commissioner shall be established 43 as a separate Selectivity Parameter for Red Channel in the Selectivity 44 Module of e2m Customs System. 45 461.1.9 Entries containing containerized generally described goods may be 47 subjected to the Commissioners Special Stop. 48 491.1.10 For bulk shipments, generally described goods shall not be allowed 50 special permits to discharge until full payment of correct duties and 2 3
113

1 1 taxes are made. 2 31.1.11 Habitual violators or those violating this Section by persisting to declare 4 their importation in a general manner shall be penalized in the following 5 manner: 6 7 a. First Offense Warning 8 b. Second Offense Suspension of Accreditation for 6 months 9 c. Third Offense Cancellation of accreditation and blacklisting as 10 an importer 11 121.2 Convention on Description of Goods 13 141.2.1 Motor Vehicles 15 16 For motor vehicles, the specific description shall be in accordance with 17 the illustrative example: 18 19 Make ------------------------------ Nissan GX4 20 Series ----------------------------- Infinity 21 Body Type ------------------------ Wagon 22 Year Model ----------------------- 2006 23 Gross Weight --------------------- 3,600 Kilos 24 Net Weight ----------------------- 1,800 Kilos 25 Piston Displacement ------------- 3,500 cc 26 No. of Cylinders ------------------- 6 cylinders 27 Engine No. ------------------------ VK 45 (DE) 4494 28 Chassis No. ---------------------- JNRBS08W25X402113 29 VIN No. --------------------------- x x x x x 30 Fuel -------------------------------- Gas 31 321.2.1.1 Data on engine and chassis/VIN number shall be supported by 33 stencil prints to validate the findings of the examiner (COO III) 34 351.2.1.2 It shall be the responsibility of the official signatories of the certificate 36 of payment to ensure compliance with the above requirements. 37 381.2.1.3 For Chamber of Automotive Manufacturers of the Philippines, Inc. 39 (CAMPI) members, participants in the Motor Vehicle Development 40 Program (MVDP) and the Motorcycle Development Program, and 41 other importers who are the authorized distributors of specific car 42 brands in the Philippines, the Packing List attached to the 43 consumption entry shall indicate the respective chassis and engine 44 numbers. 45 461.2.2 Description of Articles 47 48 The description of articles must be in sufficient detail to enable the 49 article to be identified for tariff classification, valuation and other 50 statistical purposes including the following; 2 3
114

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 351.2.3 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 2 3 a. General Description Pertains to the generic name or general name of the product, e.g. pump, engine, milk, bag, etc. b. Specific Description Pertains to the specific description of 1.1., e.g. centrifugal (for pump), diesel (for engine), skimmed (for milk), shoulder (for bag), etc. c. Make/Brand Refers to the brand name product e.g. Caterpillar, Nike, Gucci, Honda etc. d. Model/Style The model number, style, reference and other reference e.g. CRV 2007 for a Honda Civic car, model Thinkpad R50e for an IBM notebook, model E90 for a Nokia cellular phone, etc. e. Capacity/Quality/Grade/Process The capacity, output, horsepower or other indication of size and performance, among others, of the product e.g. 200 h.p., 10 kw, 120 watts rms, etc.; or the description of quality grade specification or applicable standard e.g. technical grade 95%, JIS G 310 1/87 SS 41, etc.; or process by which the product is manufactured e.g. suspension, emulsion, dispersion, etc. f. Retail Packaging This pertains to the detailed packaging or measure within the unit used, e.g. 12x1L bottles, 24x300 oz cans, 150 kg bags, etc. If said details are not provided for the invoice, an accompanying inspection report with the above details must be submitted as part of the working copy of the entry. List of Manner of Describing Goods Considered as General Description Thus Subject to 100% Examination. 1 2 3 4 5 6 7 8 9 10 11 12 13 Plastic Products Packaging Furniture Raw Materials Slippers Sandals Milk Food Preparations Beverages Coffee Soups Agricultural tyres Synthetic Polymer 51 52 53 54 55 56 57 58 59 60 61 62 63 Caseinates Modified Starch Natural Polymer Aluminum Foil Aluminum Containers Metal Enclosure Surfactant Acrylic Polymer Fungicide Inorganic Compound Wax Oil Resin
115

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 2 3 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Carbon Black 64 Lubricant Accelerators 65 Alcohol Wood Pulp Petroleum Waxes 66 Phenol Wires 67 Glassware Other Chemicals 68 Household Articles Ballast 69 Dinner Set Filament Coils 70 Film Lamp 71 Animal Feed Bulb 72 Picture Tube for Colored TV (CTV) Colorant 73 Parts of Air conditioner Lamp 74 Electric Motor for Washing Machine Spare Parts 75 Valve Truck Replacement Parts 76 Bearing Egg Yolk 77 Piston Ring Vegetable 78 Automotive Spare Parts Leguminous Vegetable 79 Rice Fruit 80 Apples Fruit Peel 81 Spice Seeds Spices 82 Wheat Flour Muciiages & Thickeners 83 Oil Seeds Display 84 Seaweeds Poultry Fat 85 Pectic Substances Bovine Fat 86 Thermoplastic Vegetable Oil 87 Sheet Metal Meat Extracts 88 Shoes Pasta 89 Textile Prepared Vegetable 90 Fabric Fruit Juice 91 Machinery Parts Sauces 92 Paper Product Textured Protein Substances 93 Bingo Equipment Flavoring 94 Agricultural Machinery Materials for Flavoring 95 Equipment Unsaturated for Flavoring Monocarboxylic Acid 96 Bicycle Spare Parts Polycarboxylic Acid 97 Motorcycle Spare Parts Carboxylic Acid 98 Kitchenware Acyclic Polyamine 99 Beer Essential Oil 100 Audio Video Audio Equipment Video Equipment Used TV TV Stereo Digital Machine Digital Camera Photographic Equipment Article of Steel Wire Rods Bronze Rod
116

101 102 103 104 105 106 107 108 109 110 111

1 1 112 Steel Billets 2 113 Cold Rolled Steel 3 114 Hot Rolled Steel 4 115 Polycarbon Bottles 5 116 Float Glass 6 117 Articles of Glass 7 118 Samples 8 119 Toys 9 120 Plastic Toys 10 11 12SECTION 2 PAYMENT OF DUTIES AND TAXES UNDER e2m CUSTOMS 13 SYSTEM 14 152.1 Administrative Provisions (Ref. CAO 10-08.) 16 172.1.1 Use of Payment Application Secure System Version 5.0 (PASS5) 18 19 Under PASS5 which is a component of e2m Customs System, the 20 duties, taxes and fees payable, both advance and final, will be 21 transmitted to the AAB via a payment gateway through a secured 22 communication channel and collected by debit from designated bank 23 accounts. 24 252.1.2 Requirements of PASS5. 26 27 To be able to make payments of advance duty and final payables, the 28 importer must have in place the following: 29 302.1.2.1 Customs Client Number (CCN). 31 32 The CCN is the importer' unique identifier in the e2m Customs, 33 enabling him to obtain the services allowed by his profile. The CCN is 34 issued by the BOC following the procedures for the Client Profile 35 Registration System (CPRS). This number will also be required by 36 the AAB when the importer opens a new or designates an. existing 37 account to be referred to as a debit account for use in the system as 38 well as in the issuance of the AAB Reference Number. 39 402.1.2.2 Debit accounts with AAB. 41 42 Importers have the option of putting up one or several of these 43 accounts and with different AABs. 44 452.1.2.3 AAB Reference Number 46 47 This number is issued by the AAB following the putting up of the debit 48 account by the importer. There shall be as many MB Reference 49 numbers as there are nominated debit accounts. 50 2 3
117

1 1 AABs shall have to upload these AAB Reference Numbers to the 2 e2m Customs for the automated debit process to operate. 3 42.1.3 Modes of Payment 5 6 For Customs declarations lodged through the e2m Customs, the 7 customs duties, taxes and other charges payable can only be paid by 8 cash, and/or Tax Credit/Tax Debit Memo (TCC/TDM), and/or through 9 "Deferred Payment Scheme" in the case of government importations 10 and for broadcasting companies under existing laws and regulations. 11 122.1.3.1 Cash payments of Customs duties, taxes and other charges, 13 including Import Processing Fee, Documentary Stamps and 14 Container Security Fee, can only be paid through debit from the 15 importer's nominated accounts in an MB/s as provided for in his 16 Order." 17 182.1.3.2 TCC/TDM shall not be utilized for payment of duties, taxes and other 19 charges to the MBs. Procedures for payments through TCC/TDM 20 shall be governed by separate regulation/s to be issued by the 21 Commissioner of Customs. 22 232.1.3.3 Existing procedures governing government importations where the 24 Customs duties and taxes are settled under Joint Circular 2-91 dated 25 19 November 1991 and importations of broadcasting companies 26 where the payment of duties and taxes are provided for under PD 27 1362 dated March 27, 1978, shall remain to be followed. 28 292.1.3.4 All Import Processing Fees (IPF) must be paid through the PASS5 30 except for government importations which may be paid either through 31 the Customs Collection Office or through the PASS5. 32 332.1.4 Final Payment 34 35 The e2m Customs System shall compute the final amount payable as 36 follows: 37 382.1.4.1 Total Assessment Net of Exemption 39 Less: Advance Duty Paid 40 Less: TCCs/TDMs applied referred to in the entry declaration 41 Equals Final Amount Payable to AAB 42 432.1.4.2 Responsibility for Accuracy of Computation. It shall remain the 44 responsibility of the importer to disclose and declare all relevant and 45 applicable data and information in order to determine the proper 46 duties, taxes and other charges due and payable. 47 482.1.4.3 Discontinuing the Direct Payment to the AAB. Consistent with the 49 national roll-out schedule of the e2rn Customs, the procedure of 50 presenting the printed IEIRD or SAD to an MB for final payment and 2 3
118

1 1 machine validation of the amount collected shall be discontinued. In 2 lieu thereof, the final payment will be debited by the concerned AAB 3 from the designated debit account upon receipt of the final payment 4 instructions from Customs via the payment gateway, subject to the 5 bank's confirmation and security procedures for payment instructions. 6 72.1.4.4 Transmittal of Payment Confirmation. In all cases of payment 8 instructions received, the AABs should complete the collection and 9 thereafter transmit a payment confirmation to the electronic gateway 10 payment unless there is no sufficient balance in the debit account. 11 122.1.4.5 Abandonment. If no payment confirmation is received within fifteen 13 (15) calendar days from the date of receipt by tile MB of the final 14 payment instruction, then the importer shall be deemed to have failed 15 to claim his importation after filing the entry rendering the same liable 16 to abandonment pursuant to Sec. 1801 of the TCCP. 17 182.1.4.6 Final Payment Bank. For shipments covered by LCs, final payment 19 must be made to the same bank where the LC was opened. 20 212.1.4.7 To avoid delays declarants must ensure that the claims for duty 22 exemptions have been duly processed pursuant to existing laws and 23 regulations and have been uploaded to the corresponding databases 24 prior to the lodgment of the SAD. 25 262.2 Operational Provisions 27 282.2.1 Advance Payment of Customs Duty Through Electronic Import Entry 29 Declaration (IED) 30 312.2.1.1 The provision of Section 1, PD 1853 that no financial institution shall 32 open any Letter of Credit (LC) covering imports unless the LC 33 Applicant deposits the full amount of import duty payable on the 34 importations shall remain in force and effect. lED shall continue to be 35 used in declaring and paying the advance import duty. 36 372.2.1.2 Preparation and Lodgment of lED 38 39 Use of the paper lED has been discontinued. In lieu of the paper lED 40 required for Letter of Credit opening under PO 1853 dated January 6, 41 1983, an electronic lED must be prepared and lodged through a 42 BOC-accredited Value Added Service Provider (VASP) pursuant to 43 existing regulations. The particulars of the goods to be imported as 44 declared in the electronic lED and the LC application must be the 45 same. Any misdeclaration in the lED shall be subject to the provisions 46 of Section 2503 in relation to Section 3601 and 3602 of the TCCP, as 47 amended. 48 492.2.1.3 System Computation of Payables 50 2 3
119

1 1 The total amount payable as well as the amount payable in case to 2 the AAB taking into account exemptions obtained as well as the data 3 declared in the lED shall be computed by the e2m Customs System. 4 For the net payable in cash to the AAB, a system generated payment 5 instruction containing the AAB reference number designated by the 6 importer in the lED will be transmitted to the Bank Payment Gateway. 7 The Bank Payment Gateway shall route this payment instruction to 8 the appropriate AAB. 9 102.2.1.4 Validity Period of lED 11 12 The net duty payable must be paid within the lED validity period which 13 is seven (7) days reckoned from the date the payment instruction is 14 generated by the system. Beyond the validity period, the e2m 15 Customs will indicate the lED status as expired to serve the efficient 16 management of the database, for which reason AAB's shall not 17 accept payment without a new lED. 18 19 (Ref: CMO 27-09) 20 212.2.2 Utilization of Tax Exemption Certificate (TEC) 22 232.2.2.1 TEC to be issued on or after DOI. 24 252.2.2.1.1 Importers with shipments arriving at the implementation Port on or 26 after DCI and intending to use a TEC to effect the release of the 27 shipments shall apply for the exemption at any of the following DOF 28 Revenue Department offices: Mabuhay Lane, internal Revenue 29 Division and the Customs and Tariff Division. 30 312.2.2.1.2 The BIR, in the course of issuing an ATRIG, also prescribes 32 exemption from excise tax or Value-Added Tax (VAT). The BIR 33 shall encode the exemption details of the ATRIG Into e2m Customs 34 TEC, in addition to encoding the details of the ATRIG In the e2m 35 Customs LCS. 36 372.2.2.1.3 Aside from the currently required supporting documents (Bill of 38 Lading, Invoice, etc.), importer shall also present to the DOF or BIR, 39 as the case may be, a printout of the declaration printed out from 40 his VASP submission (but not yet submitted to e2m Customs) to 41 serve as a guide for the proper classification of the commodities 42 being applied for exemption. 43 442.2.2.1.4 After the existing approval process (including the signing by the 45 DOF designated signatory of the agency-issued TEC, details of 46 TEC shall be encoded into the e2rn Customs Tax Exemption 47 system. The electronic TEC shall be assigned a unique reference 48 number by e2m Customs System. 49 502.2.2.1.5 This e2m Customs-assigned reference number is to be entered in 2 3
120

1 1 the Terms of Payment Page of the declaration by the importer as 2 provided in 4.1 hereof. 3 42.2.2.1.6 A copy of the e2m Customs TEC (Sample printout is in Annex B), 5 and attached to the agency-issued TEC for release to the importer. 6 The agency-issued hard-copy of the TEC shall be forwarded by 7 official messenger to the Tax Exempt Division (TED) of the BOC. 8 92.2.2.1.7 The e2m Customs TEC and the agency-issued TEC are prepared 10 only for DOF and the importers reference. The electronic TEC is 11 the valid authorization for the tax exemption. 12 132.2.2.1.8 The Tax Exemption-issuing offices of the DOF may query the e2rn 14 Customs Tax Exemption System to get the status of the TECs that 15 they have issued, 16 172.2.2.2 TECs issued prior to DOI 18 192.2.2.2.1 Importers holding unused TECs issued prior to DOI shall bring their 20 TECs to the original issuing office of the DOF Revenue Group or 21 the BIR. 22 232.2.2.2.2 After verification against the agency files and completion of the 24 approval process, the unused TEC shall be encoded into the e2rn 25 Customs Tax Exemption System. The system shall assign a unique 26 number to the TEC. 27 282.2.2.2.3 A copy of the e2m Customs TEC is printed and attached to the 29 agency-issued TEC for release to the importer. There is no need for 30 DOF to forward the print-out of the electronic TEC to the BOC TED 31 as the latter office already has an electronic copy of the agency32 issued TEC. 33 342.2.2.2.4 This e2m Customs-assigned reference number is to be entered in 35 the Terms of Payment Page of the declaration by the importer. 36 372.2.2.3 The agency-issued TEC and the TEC printed from e2m Customs 38 System shall be attached to the IEIRD. 39 402.2.2.3.1 Upon submission of the declaration to e2m Customs System 41 through the VASP, the TEC and the declaration are electronically 42 matched. A TEC cited in the declaration must be existing in the e2m 43 Customs database at the time the declaration is lodged. Otherwise, 44 the declaration is rejected by e2m Customs System. The importer 45 may re-lodge the entry after making sure that the TEC has been 46 successfully submitted by the DOF Revenue Department or the BIR 47 office issuing ATRIG Tax Exemptions. 48 492.2.2.3.2 The TEC is verified by the BOC Examiner at the Assessment 50 Division using the TEC module of e2m Customs System. 2 3
121

1 1 22.2.2.3.3 The BOC Tax Exempt Division (TED) shall conduct a review and 3 evaluation of the agency-issued TEC it receives in parallel with the 4 e2m Customs clearance process that the declaration is subjected 5 to. 6 72.2.2.3.4 At any time that the TED discovers a Tax Exemption that is 8 inappropriate or fraudulent, it shall immediately inform the 9 originating office of the exemption who shall then cancel the TEC. 10 Cancellation will render the Tax Exemption invalid during the e2m 11 Customs matching of the Exemption against the importer 12 declaration. 13 142.2.3 Utilization of a Tax Credit Certificate (TCC) 15 162.2.3.1` TCC Jointly Issued by BOC and DOF One-Stop Shop Center (OSSC) 17 182.2.3.1.1 The importer shall present a copy of the VASP printout of his 19 declaration with the complete calculation of duties and taxes as 20 supporting documents to his application to the District Collector of 21 the Port for utilization of the TCC. The importers declaration is on a 22 pending status with the VASP and has not been submitted to e2m 23 Customs. 24 252.2.3.1.2 The processing of the application for utilization shall be performed 26 following existing procedures. 27 282.2.3.1.3 Upon approval of the importers application for TCC utilization, the 29 Tax Debit Memo (TDM) covering the single shipment shall be 30 generated using the e2m Customs TCC module. 31 322.2.3.1.4 The TDM shall be printed out for the importers reference of the 33 TDM Number. The electronic TDM uploaded in the e2m Customs 34 TDM System shall be considered the authentic and authoritative 35 document that is valid to be used for OSM payment. 36 372.2.3.1.5 An electronic ledger for the TCC is created in the system and this 38 ledger shall be automatically updated as the TCC is utilized as 39 payment of the duties and taxes in the clearance process of the 40 single shipment. 41 422.2.3.1.6 The importer or his representative shall cite the TDM number in the 43 Terms of Payment (TOP) page of the declaration that he wishes to 44 pay with the TDM. 45 462.2.3.1.7 When a TDM is used for the payment of duties and taxes, the 47 electronic TDM is automatically tagged USED by the System and 48 shall not be available for subsequent payment of declarations. The 49 importer may apply for a refund of the unutilized portions of the 50 TDM, with the appropriate office. 2 3
122

1 12.2.3.2 Solely-issued TCC by the DOF-OSSC (For BOI Companies) 2 32.2.3.2.1 The importer shall proceed to the implementation Port District 4 Collector, presenting a copy of the VASP printout of his declaration 5 with the complete calculation of his duties and taxes, among other 6 supporting documents required for his application for utilization of 7 the TCC. This declaration is on a pending status with the VASP and 8 has not been submitted to e2m Customs System. 9 102.2.3.2.2 The processing of the application for utilization shall be performed 11 following existing procedures. 12 132.2.3.2.3 The BOC Tax Credit Office shall evaluate and, with the proper 14 clearance from the approving authority under existing guidelines, 15 proceed to process the importers application for TCC utilization, 16 marking the application with the approved amount following existing 17 procedures. 18 192.2.3.2.4 The approved importers application and all supporting documents 20 shall be brought by the importer to the DOF-OSSC who shall issue 21 the TDM for the amount approved by the BOC. The DOF-OSSC 22 shall issue one TDM for one single shipment covered by the self23 declaration of the importer evidenced by his declaration printout. 24 252.2.3.2.5 Upon the approval of the application for a TDM, the processing 26 office at the DOF shall encode the details of the TDM data into the 27 e2m Customs TDM System. 28 292.2.3.2.6 The TDM shall be printed out for the importers reference of the 30 TDM Number. The electronic TDM uploaded in the e2m Customs 31 TDM System shall be considered the authentic and authoritative 32 document that is valid to be used for non-cash payment. 33 342.2.3.2.7 The importer or his representative shall cite the TDM number in the 35 Terms of Payment (TOP) page of the declaration that he wishes to 36 pay with the TDM. 37 382.2.3.2.8 When a TDM is used for the payment of duties and taxes, it shall be 39 marked USED automatically by the System and shall not be 40 available for subsequent payment of declarations. Unutilized 41 portions of the TDM, if any, shall be available for refund, under the 42 existing refund process. 43 442.2.3.2.9 For a period of time before the DOI in the implementation Port, the 45 OSSC shall issue new TDMs for utilization in the implementation 46 Port under the existing system but with the validity period up to the 47 day before the DOI only. 48 492.2.3.3 BOC-issued TCC 50 2 3
123

1 12.2.3.3.1 The authority to use the TCC or a portion of it shall be termed a 2 TDM in e2m Customs System to align DOF and BOC processing of 3 TCCs. 4 52.2.3.3.2 An importer shall apply for the issuance of a TDM to cover a single 6 importation in the implementation Port following the steps below: 7 82.2.3.3.2.1 If the original TCC is kept with any of the non- Manila ports, the 9 importer shall retrieve the TCC from the non-Manila port and 10 surrender the same to the Tax Credit Office in the Assessment 11 and Operations Group (AOCG). The Tax Credit Office shall enter 12 the balance of the TCC in the existing TCC System, hereinafter to 13 be called Precedent TCC. 14 152.2.3.3.2.2 Following existing procedures for the application for a TDM, the 16 importer requests for the issuance of a TDM to cover his single 17 importation at the implementation Port. 18 192.2.3.3.2.3 Upon approval of the application by the approving authority under 20 existing procedures, the Tax Credit Office shall issue the TDM 21 from the Precedent TCC, currently executed through the issuance 22 of a BOC Official Receipt (OR). 23 242.2.3.3.2.4 The TDM (BOC OR) from the Precedent TCC shall be encoded in 25 e2m Customs TCC Module as an electronic TCC immediately 26 after a new TDM (with a system-assigned number) shall be issued 27 to the importer using e2m Customs TCC module. The TDM will 28 have the same amount as the TCC rendering the TCC as 29 completely USED. There shall no longer be any need to issue 30 BOC OR to cover the TDM issued by the e2m Customs TCC 31 system. 32 332.2.3.3.2.5 The e2m Customs TDM shall be printed out for the importers 34 reference. The electronic TDM generated by the e2m Customs 35 TCC module shall be considered the authentic and authoritative 36 document that is valid to be used for non-cash payment. 37 382.2.3.2.2.6 The importer or his representative shall cite the e2m Customs 39 TDM number in the Terms of Payment Page of the declaration 40 that he wishes to pay with the TDM. 41 422.2.3.2.2.7 E2m Customs shall generate reports for both the Precedent TCC 43 and the e2m Customs TCC. The reports shall be reconciled by 44 the Tax Credit Office. 45 462.2.3.3 Recording of TCCs 47 482.2.3.3.1 After the issuance of the e2M TDM, the issuing agency [BOC Tax 49 Credit Secretariat (TCS) or the DOF-OSSC] shall record, log and 50 post the TDM amount stated in the e2m TDM printout, as well as 2 3
124

1 1 the remaining balance of the TCC at the back of the certificate itself. 2 32.2.3.3.2 The Chairman or Director of the issuing agency concerned shall 4 appoint the personnel as TDM- in-Charge, in addition to his duties 5 as member of the TCS or DOF-OSSC, who shall perform the said 6 task, covered by a bond issued by an accredited surety company of 7 the bureau or department concerned. (Ref: CMO 6-2010) 8 92.2.4 Utilization of TDM with unused balances 10 112.2.4.1 TDMs with unused balances and intended to be used for OSM 12 payment in the implementation Port starting DOI, shall be returned to 13 the issuing office (DOF OSSC or the Tax Credit Office of the BOC) 14 for their re-validation and conversion to new electronic TDMs. 15 162.2.4.2 The verification of the validity of the TDM balance shall be the 17 responsibility of the issuing office. The holder of the TDM with unused 18 balance shall be responsible for the presentation of documents 19 required by the issuing office to establish the accuracy of the TDM 20 balance. 21 222.2.4.3 For TDMs issued by the BOG, unused balances shall be 23 administratively converted to electronic TCC using the e2m Customs 24 TCC module, under COA audit procedures. New TDMs may be 25 subsequently issued from this electronic TCC. 26 272.2.4.4 Authentication of TCC and Reporting its Utilization 28 29 a. The TCC to be utilized by the importer shall be properly 30 authenticated. 31 32 b. The original TCC jointly issued by the DOF OSSC and the BOC 33 shall be conveyed to the BOC Tax Credit Office, Attn: Deputy 34 Commissioner for Assessment and Operations Group, by an 35 OSSC-designated courier. The importer is given a photocopy of the 36 TCC. 37 38 c. Before acceptance, the Tax Credit Office shall verify the authenticity 39 of the said TCC using the DOF system DIVAS. The BOC Tax Credit 40 Office shall treat the jointly-issued TCC in the same manner as a 41 BOC-issued TCC by encoding the details of the TCC in the Tax 42 Credit Module of e2m Customs. 43 44 d. The BOC Tax Credit Office shall be responsible for submitting TCC 45 utilization reports to the DOF-OSSC on periodic intervals as agreed 46 upon by the two offices. The BOC Tax Credit Office shall generate 47 the TCC utilization report from e2m Customs System. 48 492.2.5 Utilization of IEDs with remaining or unused balance 50 2 3
125

1 12.2.5.1 Importers wanting to use IEDs originally presented at the 2 implementation Port and with remaining balances shall proceed to 3 the implementation Port Cash Division section in charge of IEDs and 4 secure a Certificate of Balance. There will be no change in the 5 procedures for the issuance of the Certificate of Balance. 6 72.2.5.2 Importers wanting to use IEDs originally presented at ports other than 8 the implementation Port to pay their declarations lodged at the 9 implementation Port shall proceed to the Port holding the original IED 10 and get a Certificate of Balance. There will be no change in the 11 procedures for the issuance of the Certificate of Balance. 12 132.2.5.3 Importers with unused IEDs that they intend to use for payment of 14 duties and taxes at the implementation port shall follow the same 15 procedure for IEDs with remaining balances as provided In Item 4.9.1 16 and Item 4.9.2 above. 17 182.2.5.4 The Certificate of Balance shall be presented to the authorized officer 19 of the Cash Division of the implementation Port for use of e2m 20 Customs IED system. The authorized officer shall encode the data in 21 the Certificate of Balance into e2m Customs IED using a special 22 purpose program. The converted IED may retain the original IED 23 number or be issued a new reference number by e2m Custom 24 System. 25 262.2.5.5 Importer owning these IEDs shall have the responsibility to secure 27 from the implementation Port the e2m Customs reference numbers 28 for their converted IEDs. 29 302.2.5.6 The importer or his representative shall cite the e2m Customs IED 31 number in the Terms of Payment Page of the declaration that he 32 wishes to pay with the IED. 33 342.2.5.7 To reduce the conversion efforts, the Collector of the implementation 35 Port is hereby tasked to encourage the immediate utilization of the 36 IEDs with remaining balance for shipments arriving before the DOI. 37 382.2.6 Government importations 39 402.2.6.1 Government Agencies which are eligible for the deferred payment 41 scheme must be registered in the CPRS with their Joint Order (JO) 242 91 identification number. Their eligibility shall be verified in the course 43 of approval of their CPRS Registration. 44 452.2.6.2 The government agency shall secure a clearance from the Collection 46 Service before lodgment their declaration. 47 482.2.6.3 Declaration of these pre-registered government agencies shall avail 49 of the deferred payment scheme by entering the code DPG in Part 2 50 of Box 37 - PROCEDURE of the SAD as provided in item 4.1 above. 2 3
126

1 1 e2m Customs System checks that the government agency is eligible 2 for the deferred payment scheme by verifying its eligibility in CPRS. 3 42.2.6.4 These importations shall be selected YELLOW to allow the examiner 5 of the Assessment Division to verify the supporting documents of the 6 government agency, including the clearance issued by the Collection 7 Service. 8 9 10SECTION 3 PROCEDURES FOR FORMAL ENTRY FOR 11 IMMEDIATE CONSUMPTION 12 133.1. Documentation Requirements 14 15 The following documents shall be used in clearing importations at the 16 BOC: 17 18 a. Import Entry and Internal Revenue Declaration (IEIRD) Form BC 19 Form 236, which will include the Supplemental Declaration on 20 Valuation (SDV) form. 21 b. Bill of Lading or Air Waybill or House Bill of Lading, where applicable; 22 c. Commercial Invoice; 23 d. Packing List; and 24 e. Other additional document as may be required as for example Tax 25 Exempt Certificate (TEC), Import Permit/Clearance. 26 f. Statement of Settlement of Duties and Taxes (SSDT) 27 28 Note: See Note on Section 3.3 below) 29 303.2. The IEIRD shall be based on self-assessment. As such, the importer 31 and the customs broker shall make a complete and correct declaration 32 of the specifications and/or particulars of the importation on the IEIRD 33 and the SDV, which declaration shall be under oath and subscribed to 34 by the importer and the Customs broker before a notary public or a 35 Customs officer authorized to administer such oath under Section 3503 36 of TCCP under pain of prosecution for perjury. However, in the case of 37 SDV, the Customs broker shall sign to attest to the authenticity of the 38 signature of the importer. 39 403.3. The first step in customs clearing articles for immediate consumption is 41 the payment of duties and taxes electronically through the PASS5 42 based on self-assessment. Thus e2m Customs System shall not 43 accept an import entry lodging without any confirmation of payment of 44 duties and taxes. 45 46 In the alternative: The first step in customs clearing articles for 47 immediate consumption is the lodging of import entry and the 48 automatic debit of the importers special account for the duties and 49 taxes due on the shipment based on self-assessment. 50 2 3
127

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 2 3 Note: There must however be some adjustments to be made in the e2m Custom System for Section 1.3 to be implementable. Under the present procedures/system the first step in clearing articles for immediate consumption is electronic lodging of import entry. Payment of duties and taxes are made electronically after final assessment is made. The current procedure may be contrary to Section 205, TCCP which states that Imported articles shall be deemed entered in the Philippines for consumption when the specified entry form is properly filed and accepted, together with any related documents required by the provisions of this Code and/or regulations to be filed with such form at the time of entry, at the port or station by the customs official designated to receive such entry papers and ANY DUTIES, TAXES, FEES AND/OR OTHER LAWFUL CHARGES REQUIRED TO BE PAID AT THE TIME OF MAKING SUCH ENTRY HAVE BEEN PAID OR SECURED TO BE PAID with the customs official designated to receive such monies, provided that the article has previously arrived within the limits of the port of entry. Section 205 enumerates following elements of entry: a) Filing of entry in specified form together with required documents; b) Acceptance of entry by authorized customs official; c) Duties and taxes paid or secured to be paid to customs official designated to receive; and d) Article has previously arrived within the limits of the port of entry. Before automation of customs processes, customs clearing procedures to implement Section 205 is as follows: 1st Import entry together with supporting documents are submitted to the Marine Division (now EDP) and Order of Payment (OP). The duties and taxes as computed by the Customs Broker is indicated in the OP. Marine Division perforates the Import Entry and OP for entry number. The Broker goes to the AAB and pay duties and taxes. (Who says that self-assessment is a new concept?) 2nd Marine Division checks manifest to determine whether articles covered by entry have arrived. 3rd Submitted documents to the Marine Division are transmitted to the Formal Entry Division (FED) for assessment purposes (valuation, classification and examination)

128

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 433.4 44 45 463.4.1 47 48 49 503.4.2 2 3 4th After assessment at FED the import entry and supporting documents are transmitted to Liquidation and Billing Division (LBD) for liquidation. Any discrepancies found in the liquidation process are indicated in the import entry and findings posted in the Bulletin Board. 5th Import entry is then forwarded to the Cash Division (CD) which will compare the assessed amount versus actual payment by importer as evidenced by Central Bank Release Certificate (CBRC) and additional payments to be made per LBD. The AAB which received the payment transmits the original copy of the CBRC to CD. If everything in order DC authorizes release to the arrastre operator. Under ACOS the following system/procedures was adopted: 1st Customs Broker (CB) prepares IEIRD based on selfassessment. Duties and taxes are paid to AAB which issues OR. (CAO 2-95). 2nd After payment CB goes to Entry Encoding Center (EEC) where data in the IERD are encoded into ACOS. 3rd CB goes to EPD to FED where final assessment is made. After final assessment entry is forwarded to CD. 4th CD checks through PASS4 the amount in final assessment versus actual payment made to AAB. Under e2m payment of duties and taxes is made electronically after final assessment which may be contrary to the provisions of Section 205, TCCP that payment of duties and taxes should be made at the time of entry. The rationale of Section 205 is that the importer is bound by his own statements and self-assessments made in the IEIRD which is made under oath. Further, if there are issues arising from the declarations the government is already in the possession of duties and taxes as computed based on self-assessments. The burden of proving the correctness of the declarations made in the import entry therefore rests on the shoulder of the importer. Lodgment of Import Declarations under the e2m Customs System. (CMO 27-09) Only Customs brokers and importers registered with CPRS and manually registered with BOC accrediting office shall be allowed to submit import declarations in e2m Customs system. e2m Customs import declarations shall only be electronically lodged
129

1 1 2 33.5 4 53.5.1 6 7 8 9 10 11 12 13 14 15 163.5.2 17 18 19 20 213.5.3 22 23 24 25 26 27 283.5.4 29 30 31 32 333.4.5 34 35 36 373.4.6 38 39 40 413.4.7 42 43 443.5 45 46 473.5.1 48 49 50 2 3 through the accredited Value-Added Service Providers (VASP). Licenses, Clearances and Permits The Deputy Commissioner for Assessment and Operations Coordinating Group (AOCG) in coordination with the Deputy Commissioner for Management and Information System Technology Group (MISTG) shall identify the Asean harmonized tariff Nomenclature (AHTN) Codes that will require a license or permit, in consultation with the concerned other Government Agencies (OGAs). They shall jointly review the e2m Customs Required License reference Table (LRT) and endorse the list of additional commodity codes requiring a license or permit to be uploaded in the e2m customs system In the e2m Customs System, the Importers/Customs brokers are required to secure licenses or permits for the covered commodities before the electronic lodgment of import declarations; otherwise the system will reject the lodgment of the import declaration. In the case of ATRIG, where the commodity code for which the ATRIG is to be issued is not in the e2m Customs LRT, an appropriate communication from the concerned BIR office and duly endorsed by the Office of the Commissioner shall be sufficient for MISTG to provisionally upload the recommended AHTN code into the LRT, in consultation with the said agency. Once the National Single Window (NSW) is made fully operational, a separate Customs regulations may be issued to cover the particular procedure to be followed by the importer in acquiring the electronic license or permit in each of the e2m Customs-ready issuing agency. License and clearance issued by government agencies that are not yet connected to the NSW or not yet e2m Customs-ready shall continue to be processed under the current procedure. All licenses and clearances shall be processed in the current procedure of tagging the import declaration into the SELECTED channel to enable the verification of the license or clearance by the BOC examiner. The importer or his authorized broker and other government agencies (OGA) shall use the AHTN Code listed in the LRT. Entry Processing Unit (EPU) and Submission of Documents (CMO 2709) Yellow and Red Lane Shipments, the Importer/Customs Broker shall submit all copies of the IEIRD together with the required supporting documents to EPU on the date of electronic lodgment with e2m Customs System. If lodgment was accepted by the System on a
130

1 1 2 3 4 5 6 7 8 9 10 11 12 date/time beyond BOC regular office hours, the IEIRD and supporting documents shall be submitted before noon of the next BOC regular working day. The Importer/Customs Broker shall indicate the computergenerated Customs Reference Number on the "Entry No". field found on the upper right side portion of Box No. 4 of the IEIRD thereof. The EPU shall stamp "Received" on the original working copy of the IEIRD, indicating the date and time of receipt, and then sign the same as evidence of receipt. The EPU shall validate the Customs Reference Number indicated in the IEIRD against the e2m Customs System. EPU shall then forward the submitted IEIRD and its supporting documents to the Division/Section concerned after checking the completeness and authenticity of the document attachments. (Bold letter is a proposal)

14 153.5.2 Green Lane Shipments, the Importer/Customs broker shall submit all 16 copies of the IEIRD together with the required supporting documents to 17 EPU on the date of electronic lodgment. If lodgment was accepted by 18 the System on a date or time beyond BOC regular office hours, the 19 IEIRD and supporting documents shall be submitted before noon of the 20 next BOC regular working day. The Importer/Customs Broker shall 21 indicate the computer-generated Customs Reference Number on the 22 "Entry No." field found on the upper right side portion of Box No. 4 of 23 the IEIRD thereof. The EPU shall stamp "Received" on the original 24 working copy of the IEIRD, indicating the date and time of receipt, and 25 then sign the same as evidence of receipt. The EPU shall validate the 26 Customs Reference Number indicated in the IEIRD against the e2m 27 Customs System. EPU shall then forward the submitted IEIRD and its 28 supporting documents to the Formal Entry Sections concerned or 29 equivalent units following the prescribed procedures. 30 31 32SECTION 4 EXAMINATION 33 34Note: Main reference is CMO 17-08 with some changes. 35 364.1 Types of Customs Examination 37 384.1.1 Physical Examination of Goods 39 40 Means the physical inspection of goods by the Customs to satisfy 41 themselves that the nature, origin, condition, quantity and value of the 42 goods are in accordance with the particulars furnished in the Goods 43 declaration. (Chap. 2, General Annex, RKC) 44 454.1.1.1. Regular examination 46 47 Means that an entry is routed to the Yellow Lane and that the 48 consignment generally is not subject to 100% examination unless the 49 customs officer conducting the examination has reason to believe its 50 need. 2 3
131

1 1 24..1.1.2 100% examination 3 4 Means that a consignment is subject of derogatory information thus its 5 need. In containerized shipment the rule is that the shipping container 6 shall be completely stripped of its contents to enable the customs 7 officers conducting and witnessing the examination to determine the 8 veracity of the derogatory information received. The 100% physical 9 examination of individual packages and its contents shall depend on 10 the due discretion of the examining officer. 11 124.1.2 Document examination 13 14 Means the act of checking the completeness, accuracy, authenticity of 15 documents attached to the import entry as required by regulation. 16 174.1.3 Non-intrusive examination 18 19 Means the use of x-ray machine or any apparatus to validate whether 20 the declaration in the covering import entry declarations, transit 21 declarations or export declarations are accurate without physically 22 touching the contents of a shipping container or package. 23 244.2 Administrative Provisions 25 264.2.1 Truck Mounted Examination 27 28 The physical examination of Selected RED cargo on-board the trucks 29 (TME) is not allowed except for shipments of agricultural products 30 (meat, poultry, fruits and vegetables) that require quarantine clearance 31 prior to release. 32 334.2.2 PEZA bound and Freeport Zone Shipments Not Subject to Physical 34 Examination 35 36 PEZA bound and Freeport Zone shipments are not subject to physical 37 examination at the port of discharge unless authorized in writing by the 38 Commissioner. Such shipments may however be subject to x-ray 39 examination upon the recommendation of the Deputy Collector for 40 Operations. Physical examination may be conducted at the Customs 41 Clearance Areas (CCA) or equivalent office at destination point jointly 42 by customs and PEZA or Freeport Zone Authority. 43 444.2.3 Tagging of High risk Shipments by the Selectivity System. 45 46 High risk shipments may be tagged in the Selectivity System as either 47 subject to X-ray inspection, or Selected Red and subject to physical 48 examination. 49 504.2.4 Connectivity of x-ray Machines with e2m Customs System 2 3
132

1 1 The hard copy of the x-ray inspection image of the containers 2 subjected to x-ray inspection shall form part of the working copy of the 3 corresponding entry documents in the meantime that x-ray machines 4 are not yet connected with the e2m Customs System to enable 5 customs operations officers at FED to check on line results of x-ray 6 examinations. 7 84.2.5 Shipments Subjected to 100% Examination may Still be Subject of x9 ray Examination or Vice-Versa. 10 11 Shipments which have been subjected to 100% examination are no 12 longer subjected to x-ray examination unless there is derogatory 13 information against the shipment. 14 15 Shipments which have been subjected to x-ray examination may still 16 be subject to 100% examination upon receipt of derogatory information 17 by concerned customs office. 18 194.2.6 Expenses with Regard Physical Examination 20 21 Expenses relative regular physical examination shall be for the account 22 of the importer. In cases of special service/examinations like 100% 23 examination and stripping./stuffing required by the BOC the rule is that 24 in case of negative results the expenses shall be for the account of the 25 office that requested the special examination. Expenses incurred in 26 special examination shall be charged to the cargo. 27 284.2.7 Persons authorized to witness the conduct of physical examination: 29 30a. the customs broker who signed the entry and importer upon request; 31b. one authorized CIIS representative in cases it is the office that issued 32 the hold order or 100% examination; 33c. one authorized ESS representative in cases it is the office that issued 34 the hold order or 100%; 35d. Representative of the office which issued the hold order; 36e. Representative of the X-Ray Inspection Project for shipments tagged 37 as suspect or have image irregularities after x-ray examination. 38 39Non-organic Personnel are strictly barred from the Designated Examination 40 Areas. 41 424.2.8 Shipments Subject to 100% examination. 43 444.2.8.1 Shipments with Hold Order; 45 464.2.8.2 Shipments by once-a-year importers; 47 484.2.8.3 All shipments/importations declared in the shipping/commercial 49 invoice and entry as stocklots, side-runs, cull rolls, seconds, mill lots, 50 off-grade, B-grade, C-grade, used, second-hand, off-specs, sub2 3
133

1 1 standard, off-quality, overruns, sweepings, overflow, recycled, 2 waste-waste, reconditioned, refurbished, re-fashioned, surplus, 3 scrap metals, metal waste, cut-up, bath-roll, odd lengths, unbranded 4 and other similar descriptive terms; 5 64.2.8.4 Informal entries; 7 8 Memorandum Order titled: Supplemental Guidelines in the 9 implementation of CMO 27-2009 re: Exa- All shipments covered by 10 an informal entry and with the required Shippers Export Declaration 11 and Packing list will be subjected to 100% scanning through the use 12 of Scanning or X-ray machine. (subject of CMO 22-2011)mination of 13 Shipments Selected for Red Lane or X-Ray Inspection shall apply. 14 154.2.8.5 Shipments found to be suspect or have image irregularities of the 16 container/s after being subjected to x-ray inspection; 17 184.2.8.6 Generally described articles. 19 204.2.9 Rule on Examination of Bulk and Break-bulk Cargoes 21 224.2.9.1 Covered by Load Port Survey (LPS) 23 24 Shipments inspected by the Accredited Cargo Surveying Company 25 (ACSC) at the loading port shall prima facie be deemed to have been 26 examined for customs purposes pursuant to Section 1401 of the TCCP 27 as amended, and shall no longer be re- examined upon arrival in the 28 country but shall instead be immediately released transferred to the 29 importer/consignees warehouse or facility following the procedures per 30 regulation except in the following situation: 31 32 a. The surveyors report has been tampered or shows signs that the 33 same has been altered. 34 35 b. The shipment is covered by an alert or hold order issued pursuant 36 to existing orders. 37 38 c. Upon request of the importer if he disagrees with the findings of the 39 surveyor. 40 41 d. If the Commissioner or the Collector has derogatory information that 42 there is a substantial variance between the declared and true 43 quantity, measurement, weight and tariff classification of the 44 shipment. (Sec. 4.7, CMO 18-2010) 45 464.2.9.2 Not covered by LPS 47 48 They shall I be subjected to extensive actual physical examinations, 49 continuous under guarding until accomplishment and submission of 50 the DPS and other Applicable control, the payment of the duties and 2 3
134

1 1 taxes due the shipment including any administrative fine as may be 2 imposed by the Bureau. (Sec. 7.1, Ibid.) 3 44.2.10 Rule on the Conduct of Physical Examination other than Bulk or Break 5 Bulk Cargoes 6 74.2.10.1 Regular examination 8 9 Regular examination shall be conducted on formal entries which are 10 routed to the Red Lane under following rules: 11 124.2.10.1.1 Full Container Load (FCL) shipments. 13 14 a. For shipments consisting of several containers, the square 15 root rule shall apply. The selection of containers for 16 examination shall be automatically generated by the system. 17 (Sec. III.6.1, CMO 17-2008) 18 19 b. The COO IIIs should see to it that contents of the containers 20 are unloaded to create a passage (canal) that will enable 21 him/her to verify the innermost part of the container. (Sec. 22 III.6.2, Ibid.) 23 244.2.10.1.2 Less than Container Load (LCL) shipments. 25 26 As a general rule one of every ten (10) package minimum of one 27 (1) package or rounded off to the reason one (1) package shall 28 be examined. However, the concerned customs operations 29 officer upon due discretion may opt to examine more packages. 30 314.2.10.1.3 As a matter of course shipments subject to regular examination 32 shall also be subject to documentary examination. 33 344.2.11 Rule When Discrepancy Discovered in the Course of Physical 35 Examination 36 37 Should a discrepancy be noted after physical and/or X-ray 38 examination, recommendation by x-ray personnel, CIIS and ESS 39 personnel for seizure of the shipment or compliance to legal 40 requirements shall be officially indorsed to the District Collector of the 41 port concerned for his appropriate action within the same day that 42 examination was conducted. Verbal recommendations shall not be 43 honored. 44 45SECTION 5 ON LINE RELEASE SYSTEM (OLRS) 46 475.1 After completing e2m customs formalities and clearance procedures, 48 release of the shipment shall be as follows: 49 505.1.1 An On-Line Release Instruction is immediately generated by the e2m 2 3
135

1 1 Customs OLRS after the bank debit confirmation is received from the 2 BOC-BAP/PCHC payment gateway. 3 45.1.2 For shipments stored at the Port temporary storage facility or at other 5 transit sheds (CY-CFS, Dangerous Goods Area), e2m Customs 6 System sends the electronic release instruction to the transit shed. The 7 transit shed shall provide e2m Customs System with the electronic 8 feedback message on the release of the shipment from the temporary 9 storage facility. 10 115.1.3 Misrouted release instructions, defined as release instructions sent to a 12 transit shed that does not store the cargo referred to, shall be routed to 13 the correct transit shed as soon as the recipient transit shed informs 14 e2m Customs OLRS of the mis-routing. The SAD is updated with the 15 correct transit shed code by the designated BOC officer. 16 175.1.4 For shipments discharged at piers or discharge areas where 18 connectivity is not present, a release instruction will be printed from the 19 VASP by the importer/Customs broker, signed by the Port Collector or 20 his designated representative and physically transmitted to the pier or 21 discharge area. After the release, the paper containing the release 22 instruction will be returned to the Port's PID or POD which will update 23 the bill of lading status to signify shipment has been released to the 24 consignee. 25 265.1.5 Only the release instructions described in Item 4.11.2 shall be honored 27 by the transit shed. In cases of system breakdown which prevents the 28 transmittal of the on-line release instructions, the Commissioner of 29 Customs or his designated official, shall allow the use of the manual 30 release instructions in the prescribed format under Item 4.11.4 above. 31 325.1.6 No other authorizations or approvals are required for the shipment 33 release except for the electronic release instructions or in the case of 34 non-Internet transit facilities, the duly-signed manual release 35 instruction. 36 375.1.7 If a Hold and Alert Order has been applied to the bill of lading and this 38 has not been lifted at the time of payment, no release instruction shall 39 be generated to the transit sheds. Only upon lifting of the Hold and 40 Alert Order will the release instruction be issued by e2m Customs 41 System. 42 43 44SECTION 6 SUPER GREEN LANE (SGL) PROCESSING 45 466.1 For Super Green Lane Shipments, the Importer/Customs broker shall 47 submit a copy of the duly notarized SAD printed from the VASP system 48 (VASP-SAD) with all the required documents to the EPU on Tuesday 49 or the second working day of the succeeding week. 50 2 3
136

1 16.2 BCOR evidencing payment of SGL service fee per following schedule 2 shall likewise be attached to the SAD: (CAO 6-2003) 3 4 FOB Value Amount 5 6 Below US$5,000.00 Php 500.00 7 $5,000.00 to $100,000.00 1,000.00 8 $100,001.00 to $200,000.00 1,500.00 9 $200,001.00 to $500,000.00 2,000.00 10 Over $500,000.00 2,500.00 11 126.3 The EPU shall stamp "Received" on the copy of the VASP-SAD, 13 indicating the date and time of receipt, and then sign the same as 14 evidence of receipt. The EPU shall validate the Customs Reference 15 Number indicated in the VASP-SAD against the e2m Customs System. 16 EPU shall then forward the submitted VASP-SAD & its supporting 17 documents to the Formal Entry Sections concerned or its equivalent 18 units following the prescribed procedures. 19 20 21SECTION 7 CARGO SURVEYING PROCEDURES FOR BULK AND 22 BREAK-BULK CARGOES 23 247.1 The importer must inform his exporter of the requirements of this Order 25 and shall ensure that the cargoes are surveyed by an ACSC. It is the 26 responsibility of the importer of bulk and break bulk cargo to obtain 27 from the BOC the names and overseas addresses of ACSCs and to 28 communicate this information to the seller/exporter of the goods. 29 307.2 The exporter must contact the nearest office of the ACSC selected by 31 him to register his cargo falling under the coverage of AO 243-A and 32 this Order and provide a full description, technical specification and 33 quantity of the cargo. 34 357.3 The exporter must advise the selected ACSC of the whereabouts and 36 availability of the cargo at least three (3) working days prior to the 37 required date of survey. The exporter must present the goods in a 38 manner to allow a full survey to be conducted. They must arrange and 39 allow full access to the representative (surveyor) of the ACSC to allow 40 a full survey to be conducted and submit complete copies of the final 41 invoices to the ACSCs. The foregoing applies even to partial/split 42 shipments. 43 447.4 The ACSC must make available to all interested parties the 45 requirements of AO 243-A and this Order and the addresses of their 46 offices/representatives in each country of supply. They must arrange to 47 survey the cargo within three (3) working days of receipt of the request 48 and seal the holds where necessary prior to the vessel sailing and 49 issue the LPS prior to the arrival of the shipment in the Philippines 50 within the prescribed period. 2 3
137

1 1 27.5 3 4 5 6 77.5.1 8 9 107.5.2 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 267.6 27 28 29 30 31 32 33 347.7 35 36 37 38 39 40 41 427.7 43 44 45 46 47 48 497.8 50 2 3

Any importer obtaining the services of an ACSC pursuant to the preceding Section shall be allowed to file entries for the imported articles and pay the proper duties, taxes, and other fees therefor, prior to its arrival in the Philippine port of destination, Provided that: The entry contains a full and true statement of all the articles which are the subject of the importation; Declaration executed by the importer/consignee under oath on the following: a. The invoice and entry contain a just and faithful account of the actual cost of said articles, including and specifying the cost of insurance and freight and other necessary charges, and that nothing has been omitted there from or concealed to the detriment of the proper collection of revenue by the Government; b. The invoice and all bills of lading relating to the articles are the only ones in existence relating to the importation in question; c. The entry, invoice and bill of lading, and the declaration thereon are in all respects genuine and true, and were made by the person by whom the same purportedly has been made. As soon as the cargo arrives at the Philippine port of destination, the importer may immediately cause the discharge and withdrawal of the same from customs premises and/or custody provided that the declarations in the import entries are confirmed by the LPS Report and upon presentation of the proof of payment of duties, taxes and other fees as well as compliance with other pre-requisite for a valid importation. In the event that the shipment is covered by an alert order or that the shipment is different from the details in the entry, the Customs Inspector or the Customs Guard assigned on board the vessel shall return the delivery permit to the Formal Entry Divisions (Attn: the concerned examiner/appraiser) indicating therein the exact location of the shipment for the usual customs examination and processing of the entry. The Port Collector shall cause the utilization of the LPS Report and the SR issued by an ACSC as integral parts of the documentation required for the clearance of Bulk/Break-Bulk Cargo in the determination of dutiable weight, volume, description, value and tariff classification of imported articles, without prejudice to an actual verification as it may be deemed proper.\ Shipments requiring the LPS without undergoing the same shall be subjected to the DPS by an ACSC selected by the importer and
138

1 1 2 37.9 4 5 6 7 8 9 107.10 11 12 13 147.11 15 16 17 18 19 20 21 227.12 23 24 25 26 27 28 29 30 31 327.13 33 34 35 36 37 38 39 407.14 41 42 43 44 45 46 47 487.15 49 50 2 3 confirmed/approved by the OSS. In the event the importer/consignee wishes to contest/re-confirm the LPS conducted, he may request, at his own costs, for the conduct of a DPS in accordance with the procedures herein which shall be performed by an ACSC other than the one which conducted the LPS. In this eventuality, the BOC shall determine which results (under the LPS or DPS) to apply for its purposes. In requesting for the DPS, the importer shall inform the OSS of the need therefor at least three (3) days prior to the estimated date of arrival of the shipment. In addition to the formal request for DPS, the importer, consignee or his authorized representative shall accomplish and execute under oath the importer's referral or information sheets shown in Annex "B" hereof, the requirements therein being deemed as forming an integral part of this Order and submit the same directly to the OSS. The importer shall likewise indicate in the referral its preference of the ACSC to conduct the DPS. The OSS upon receipt of the accomplished importer's referral or information sheet shall immediately assign the chosen ACSC to conduct the surveying activities. The ACSC preferred by the importer shall be given priority in the assignment unless there are valid reasons for the assignment by the OSS of a different ACSC to conduct the DPS. In the event that no preference is indicated by the importer or that the preferred ACSC cannot conduct the DPS, and that the OSS will have to make the assignment, an impartial system which ensures nonfavoritism or non-bias for choosing the ACSC shall be employed. The choice of ACSC to perform the surveying activities at the discharge port shall depend on the commodity and the availability/capability of the ACSC's services to conduct the survey for the subject commodity. For this purpose, all ACSCs are required to provide the CASCS and the BOC an updated list of all commodities that could be subject of their services, their accredited laboratories (local) and their authorized survey personnel. Within twenty four (24) hours upon notification by the OSS, the chosen ACSC for the DPS shall endeavor to conduct the activity except when the surveying could not be conducted for reasons beyond the control of the ACSC. Additional expenses incurred by the importer in the form of storage and demurrage fees occasioned by the failure of the ACSC to conduct surveying activity within the prescribed period without any valid reason shall be borne by the ACSC. In the event the chosen ACSC cannot perform the services for whatever reason, it shall immediately inform the OSS, or the authorized customs official as the case may be, who shall immediately assign an
139

1 1 alternate ACSC to conduct the activity. The failure of the designated 2 surveyor to perform his obligation shall be immediately reported to the 3 CACSC for its appropriate action. 4 57.16 Copies of the DPS shall be submitted in both electronic and hard 6 copies within twelve (12) hours upon termination of the surveying 7 activities containing the details specified in 4.1.1 hereof. 8 97.17 Appeals 10 11 In the event that the importer/consignee disagrees with the findings 12 made under the DPS, the importer/consignee may resort to payment of 13 the duties and taxes due under protest, including the applicable 14 fine/penalty, or cause the tentative release of the shipment under such 15 conditions as the Collector may impose. The same appeal procedure 16 for protest or for cases covered by the rules for Valuation and 17 Classification Review Cases, as the case may be, shall be observed. 18 19 20SECTION 8 INFORMAL ENTRY 21 22Ref.: CMO 13-2010 23 24A.8.1 Coverage of subsection: Electronic lodging as informal entry in the 25 e2m Customs of commercial goods. 26 27A.8.1.2 e2m Customs System shall allow shipment to be declared under In 28 Informal Entry if the following criteria are met: 29 30 Total Customs Value is below US$500; 31 Total Gross Weight is less or equal to 300 kilograms; 32 Total number of packages is less or equal to 12; 33 The shipment volume is less or equal to one (1) cubic meter; and 34 The consignee is registered in CPRS as an individual entity. 35 36A.8.1.3 All informal entry declarations have to be lodged through the VASPs. 37 The printed copy of the SAD in the required number of copies and all 38 other supporting documents must be submitted to the BOC. 39 40A.8.1.4 Only Customs brokers and consigned registered with CPRS shall be 41 allowed to submit informal entry declarations in e2m Customs 42 System through the VASP. 43 44A.8.1.5 The consignee may register himself on a Once-A-Year Importer 45 46A.8.1.6 If an exemption is claimed under Section 105 of the Tariff and 47 Customs Code of the Philippines (TCCP), such exemption code 48 should be part of the allowable list. 49 50A.8.1.7 Shipments that do not qualify for Informal Entry under the above 2 3
140

1 1 criteria shall be lodged under Formal Entry. 2 3A.8.1.8 Licenses, Clearances and Permits 4 5A.8.1.8.1 The consignee/Customs broker is required to secure licenses or 6 permits for the covered commodities before the electronic lodgment 7 of import declarations; otherwise the system will reject the lodgment 8 of the import declaration. 9 10A.8.1.8.2 For license and clearance issued by government agencies that are 11 not yet connected to the NSW or not yet e2m Customs-ready, the 12 same shall be processed in the current procedure of tagging the 13 import declaration into the SELECTED channel to enable the 14 verification of the license or clearance by the BOC examiner. 15 16A.8.1.9 Selectivity Informal Entry declarations lodged under this Section 17 shall be subject to Selectivity 18 19A.8.1.10 Calculation of Duties, Taxes and Fees 20 21A.8.1.11 Duties, taxes and fees shall be calculated using the taxation rules of 22 e2m Customs, which are also applicable to Formal Entry 23 declarations. 24 25A.8.1.12 Duties are based on the tariff rates for the particular commodity 26 code. 27 28A.8.1.13 The Import Processing Fee (IPF) shall be calculated similar to the 29 formal entry IPR 30 31A.8.14 Payment of duties and taxes shall be settled using PASS5 for the 32 automatic debit of the amount from the Importer's nominated bank 33 account. 34 35A.8.1.15 The consignee shall acquire a Bank Reference Number after CPRS 36 Registration from his bank choice. The Bank Reference Number is 37 mandatory in the Informal Entry SAD. 38 39A.8.1.16 Other Modes of Settlement Tax Exemptions are allowed as 40 payment for duties and taxes. 41 42A.8.2 Operations Provisions 43 44A.8.2.1 Filling up of Informal Entry SAD 45 46 The Informal Entry SAD shall be filled up in accordance with 47 guidelines in the filling up of the SAD for the Informal Entry of 48 Commercial Goods. 49 50A.8.2.2 Informal Entry Processing 2 3
141

1 1 2 Informal Entry processing shall mainly follow the operational 3 provisions for Formal Entry Declarations with the following revisions: 4 5A.8.2.2.1 The Consignee/Customs Broker shall submit one (1) copy of the 6 SAD including the Assessment Notice, printed from the VASP 7 system, together with the required supporting documents to the 8 Entry Processing Unit (EPU) on the date of electronic lodgment with 9 e2m Customs System. If lodgment was accepted by the System on 10 a date/time beyond BOC regular office hours, the Informal Entry 11 SAD and supporting documents shall be submitted before noon of 12 the next BOC regular working day. The EPU shall stamp Received 13 on the VASP-SAD, indicating the date and time of receipt, and then 14 sign the same as evidence of receipt. The EPU shall validate the 15 Customs Reference Number indicated in the Informal Entry SAD 16 against the E2M Customs System. The EPU shall then forward the 17 submitted Informal Entry SAD and its supporting documents to the 18 Informal Entry Division/Section concerned. 19 20A.8.2.2.2 The Informal Entry Division/Section concerned shall follow the 21 existing procedures specified for Update, Re- route, Assess except 22 for informal entries selected Red. 23 24A.8.2.3 Payment 25 26A.8.2.3.1 To ensure that an E2M Customs declaration is accepted and 27 assessed successfully, all Other Settlement Mode (OSM) payments 28 claimed in the declaration should be existing in the E2M Customs 29 database before the declaration making the reference is lodged. 30 This is the responsibility of the consignee and his designated 31 broker. 32 33A.8.2.3.2 Payment for duties, taxes and other charges follows formal entry 34 processing procedures 35 36A.8.2.3.3 Utilization of a Tax Exemption Certificate shall follow formal entry 37 processing procedures. 38 39A.8.2.4 OLRS 40 41 The release process for Informal Entry Shipments shall follow the 42 procedures for formal entry and the procedures described below for 43 Red Lane channeled entries: 44 45A.8.2.4.1 When an Informal Entry declaration is Post-Entry modified after the 46 examination results in adverse findings, payment of the additional 47 duties and taxes shall not initiate a release message to the Port 48 Operator/ transit shed. 49 50A.8.2.4.2 A manual release instruction shall be printed from e2m Customs 2 3
142

1 1 System into a non-editable format (PDF) at the office of the 2 Collector. This release instruction PDF shall be e-mailed from the 3 Collector of the Port's official BOC e-mail address to a designated 4 e-mail address of the Port Operator. Manual release instructions 5 provided to the Port Operator by other means shall not be honored 6 by the Port Operator. 7 8B.8.1 Coverage of this subsection: Non-commercial Inbound Consolidated 9 Balikbayan Box Shipments from Filipinos Abroad. 10 11B.8.2 Definitions of Terms 12 13B.8.2.1 Consolidation Shipment 14 15 Two (2) or more shipments from two (2) or more individual 16 consignors/senders abroad, assembled and consolidated at one point 17 of origin/exportation and shipped together under a single Master of 18 Ocean Bill of Lading or Master Airway Bill by a Freight Forwarder 19 /Consolidator to its Consolidation Agent in the Philippines. 20 21B.8.2.2 Freight Forwarder/Consolidator 22 23 A duly licensed and registered foreign forwarding entity that procures 24 the transport of goods and issues in its name House Bills of Lading to 25 the individual consignee/senders and ships the consolidated 26 shipment to its Consolidation Agent in the Philippines as Consignee, 27 under one Master Bill of Lading or Master Airway Bill issued under its 28 name. 29 30B.8.2.3 Consolidation/Break Bulk Agent 31 32 The Philippine agent/representative of a Freight 33 Forwarder/Consolidator accredited by the Philippine shippers Bureau, 34 Department of Trade and Industry named in a Master Bill of 35 Lading/Airway Bill as Consignee of a consolidated shipment. 36 37B.8.2.4 Master Ocean Bill of Lading 38 39 An ocean bill of lading issued by common ocean carrier to a Freight 40 Forwarder/Consolidator covering a consolidated shipment. 41 42B.8.2.5 House Bill of Lading 43 44 A bill of lading covering a single, individual shipment/consignment 45 issued by the Freight Forwarder/consolidator to the 46 Consignor/Sender containing the names and address, respectively, 47 of both the Consignor/Sender and the Consignee/Receiver and the 48 detailed, specific description/s of the goods shipped. 49 50B.8.2.6 Consolidated Cargo Manifest 2 3
143

1 1 2 A true and correct manifest of all the individual 3 shipments/consignments in a consolidated shipment destined to be 4 unloaded in a port of entry in the Philippines, the same being 5 attached as a Rider to the Inward Foreign Manifest of the carrying 6 vessel. 7 8B.8.3 Administrative Provisions 9 10B.8.3.1 Accreditation/Registration 11 12 Consolidation Agent shall be allowed to transact business with the 13 Bureau of Customs provided Agent and its Freight Forwarders 14 abroad are duly accredited and registered with Bureau of Customs 15 and Philippine Shippers Bureau (PSB) and the local Consular Office. 16 17B.8.3.2 Accreditation of Consolidation/Break Bulk Agent 18 19 Consolidation/Break Bulk Agent accredited by the PSB must identify 20 and submit a list of Freight Forwarders together with a copy of their 21 contract/service agreement duly notarized by the Philippine Consular 22 Office in the country of origin to in a prescribe format to the Director, 23 Import Assessment Service, Office of the Commissioner of Customs, 24 for each Freight Forwarder/ attaching thereto the true copies of the 25 Original following documents: 26 27 a. Article of Incorporation, Partnership and Bylaws; 28 29 b. Certificate of Registration issued by the Philippine Shippers 30 Bureau; 31 32 c. Financial Statements and Income Tax Return covering the last 33 preceding year; 34 35 c. Fidelity Performance Bond. A bond in the amount of Two Million 36 (Php2,000,000.00) pesos to guarantee faithful compliance with 37 this regulation and all pertinent Customs rules and regulations as 38 well as to answer for any damage which the Government, 39 Senders and their Consignees may suffer from the misconduct or 40 negligence of subject Consolidation/Break Bulk Agent and their 41 Freight Forwarder for any financial obligation and liability in the 42 release and delivery of consolidated Balikbayan boxes; and 43 44 e. Contract/Service Agreement 45 46 Consolidation/Breakbulk Agent must enter/execute a 47 contract/service agreement with its Freight Forwarder that should 48 contain the following covenants and provisions: 49 50 e.1 The consolidated shipment shall not contain any banned 2 3
144

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45B.8.3.3 46 47 48 49 50B.8.3.4 2 3 prohibited or highly regulated items. Freight Forwarder shall advice the Sender of the Philippine Customs Rules and Regulation on Balikbayan Boxes and ensures that no prohibited, banned or highly regulated items are included in their shipment; e.2 Freight Forwarder must see to it that the Export Declaration and Packing list are properly accomplished and attached accordingly to the shipment; e.3 Freight Forwarder must assure that individual shipment shall not exceed the limits as value, quantity, kind and frequency fixed by the Bureau of Customs; and e.4 Freight Forwarder must cooperate and assist in determining who shall be held responsible in consolidated shipment that contains banned or prohibited items. For those found responsible, the Freight Forwarder shall assist in the prosecution under the governing laws of the Republic of the Philippines. f. Financial Capability Consolidation/Break Bulk Agent must demonstrate financial capability to transact and solicit business. Consolidation /Break Bulk Agent must assure that Freight Forwarder/s that it has the financial resources to cover cost of releasing and or delivery to the ultimate consignees. Freight Forwarders must be able to show proof of sufficient working capital, an adequate warehouse and office space for distribution of boxes and not in the public road or streets, and ample parking space for containers safety. Sufficient transport vehicles to service delivery, and in case of Sub-contract deliveries, to pre-qualify sub-contractors but still assume liability/responsibility of delivery; g. Certificate of Registration or Authority from source agency. Consolidation/Break Bulk Agent must secure license and permit issued by the appropriate governing agency of the Freight Forwarder/s engaged in the business and those included in the same shipment. Master Loaders and Co-loaders business licenses and permits must be registered with the local consular offices of the foreign freight forwarders, and the same must bear local consular stamps and seals. Registration/ Renewal- The registration/accreditation shall be a term of one (1) year, renewable yearly in writing fifteen days prior to the expiration date of One (1) year from the date of approval to be submitted to the Director, Import Assessment Service. Consolidation Shipment Committee.
145

1 1 2 In order to implement an efficient and centralized control and 3 recording system, a consolidation shipment committee is hereby 4 constituted as follows: 5 6 Chairman: Director, Import Assessment Service 7 Members: Chief, IED of POM, MICP and NAIA 8 Representative, Philippine Shippers Bureau 9 Representative, DDCAP 10 Representative, CCBI 11 12 The Committee may issue its internal guidelines pursuant to, and 13 consistent with this Order and its objectives, subject to the approval 14 of the Commissioner of Customs 15 16B.8.4 Operational Provisions 17 18B.8.4.1 Documentary Requirements in Releasing Shipments 19 20 a. The inward foreign manifest with the corresponding rider or 21 consolidated cargo manifest 22 23 b. The Master Ocean Bill of Lading with the corresponding individual 24 house bills of ladings 25 26 c. Individual Packing List is essential as a reference to be used in 27 case of examination of box. Sender must sign and attest that 28 content is true, correct and accurate. Packing list must be 29 individually attached to the box containing the goods. 30 31B.8.4.2 Filing of the Import Entry 32 33 One Informal entry may be filed for every Ten (10) individual 34 balikbayan boxes in a given consolidated shipment, provided that 35 each container must have a Rider/manifest of all ultimate consignees 36 plus individual packing list of each ultimate consignee attached to the 37 box. 38 39B.8.4.3 All entries covering individual consignments in a consolidated 40 shipment shall be filed and processed altogether at the same time; 41 42B.8.4.4 The examination of a consolidated shipment shall be conducted 43 follows: 44 45 a. Regular Examination- All shipments covered by an informal entry 46 and with the required Shippers Export Declaration and Packing 47 list will be subjected to 100% scanning through the use of 48 Scanning or X-ray machine. 49 50 b. All shipments covered by an informal entry without the required 2 3
146

1 1 Packing list are subject to thorough 100% examination. 2 3 c. The assigned Customs Examiner may also conduct a thorough 4 100% examination for shipments covered by alert/hold order or 5 those with derogatory information as to the true nature, quantity, 6 measurement, value etc. of the shipment. 7 8B.8.4.5 Appraisal 9 10 The appraisal of consolidated shipments shall be based on the 11 nature/character of the article under appraisement on a per item 12 basis subject to existing rules and regulations on the treatment of 13 used, off-quality, second hand items. 14 15SECTION 9 POST ENTRY MODIFICATION OF SAD AND SAD 16 CANCELLATION 17 18Ref: CMO 53-2010 19 209.1 Definition of Terms 21 229.1.1 Post Modification of SAD (PMS) 23 24 PMS is a process used when it is necessary to revise the data in the 25 SAD. For clarity, post modification of the SAD includes the post 26 assessment and post entry modification. Post assessment is the stage 27 where the shipment is already assessed but not yet released from 28 Customs (i.e. Green Lane entries). Post entry, on the other hand, is the 29 stage where the shipment has already been released from Customs 30 (i.e. Tentatively-Released Entries) 31 329.1.2 SAD Cancellation 33 34 SC is a process used when it is necessary to revise data in the 35 assessed SAD which cannot be done under PMS. 36 379.2 Administrative Provisions 38 399.2.1 Post Modification of SAD (PMS) 40 419.2.1.1 The Tax Exemption Certificate declared in the original SAD shall still 42 apply in the calculation of the allowed exemption during PMS. 43 449.2.1.2 Any additional duties and taxes calculated as a result of post 45 assessment shall be settled at the In-House Bank using Cash 46 Payment Module in the e2m Customs System. 47 489.2.1.3 The e2m Customs System shall send a release instruction to the port 49 operator/arrastre/CY-CFS only once upon payment of the assessed 50 duties and taxes due on the import declarations. 2 3
147

1 19.2.1.4 Refund or excess payment of duties and taxes as a result of PMS 2 shall be coursed through the Tax Credit Office, following existing 3 procedures. 4 59.2.1.5 Refund or cash bond posted on tentatively released shipments as a 6 result of PMS, shall be processed in accordance with regulation on 7 the matter. 8 99.2.1.6 All the data in the SAD can be modified except the following: 10 11 a. Customs Office Code (Box at the top right hand corner) 12 b. Model of Declaration/General Procedure Code (Box 1) 13 c. Importers Reference Number/TIN No. (Box 8) 14 d. Declarants Reference Number/TIN No. (Box 14) 15 e. Registry/Manifest Number (Box 18) 16 f. Bill of Lading Number (Box 40a) 17 g. Type of Package (Box 31) 18 h. Number of Packages (Box 31 & Box 6) 19 i. Gross Weight (Box 35) 20 j. Container Reference Number (Box 31) 21 k. Warehouse (Box 49) 22 l. All entries or data in the Attached Document Page 23 m. All entries or data in the Terms of Payment (TOP) Page 24 25 Necessary revision of the above-mentioned data shall require the 26 cancellation of the SAD to be covered by an appropriate request (see 27 Annex A). However, in the case of letters (i) and (j) above 28 cancellation of SAD is not necessary. The number of packages 29 and/or gross weight of the shipment can be modified in the Inspection 30 Act of the SAD. 31 329.2.1.7 The use of ASYCUDA Post-Entry Revision Form for post entry 33 modification shall be discontinued. In lieu thereof, the e2m post 34 modification of SAD form shall be used. 35 369.2.1.8 The respective documents are required for PMS under the 37 corresponding instances: 38 399.2.1.8.1 For correction of data encoded by the Customs Broker in the e2m 40 Customs 41 42 Letter Request of the Importer or Customs Broker addressed to 43 the District Collector identifying the data in the SAD that needs to 44 be corrected, stating the reasons and basis for correction. 45 469.2.1.8.2 For Tentative Release 47 48 Copy of VCRC Resolution, as the case maybe 49 Prepared Discrepancy Report (D/R) 50 2 3
148

1 19.2.1.8.3 For shipments subject to adjustment of either value and/or 2 modifiable net weight and/or classification. 3 49.2.1.8.3.1 In case of Hold Order 5 6 Lifting of Hold Order 7 Result of Magna-scale (if goods are dutiable by weight) 8 Report on the Result of Physical Examination 9 VRIS printout and/or other value info references, if necessary 10 Literature/Brochure and/or Tariff Commission Ruling, MSDS, 11 Chemical Analysis, if available 12 Prepared Discrepancy Report (D/R) 13 149.2.1.8.3.2 For Decisions rendered by Law Division 15 16 Copy of the approved Decision or Order 17 Prepared Discrepancy Report (D/R) 18 199.2.1.8.3.3 For Other Cases (initiated by the COO III / COO V, Chief FED and 20 other offices) 21 22 VRIS printout and/or other value info references, if necessary 23 Literature/Brochure and/or Tariff Commission Ruling, MSDS, 24 Chemical Analysis, if available 25 Prepared Discrepancy Report (D/R) 26 279.2.1.10 The Discrepancy Report is no longer required if the percentage 28 discrepancy is less than 10% 29 309.2.2 SAD Cancellation (SC) 31 329.2.2.1 The original Import Entry & Internal Revenue Declaration (IEIRD) 33 shall be retained as the original working copy. 34 359.2.2.2 Electronic re-lodgment of new SAD to replace the cancelled SAD is 36 necessary in order to clear the goods/shipment from Customs. 37 389.2.2.3 Cancellation of the SAD will revert back the status of the attached 39 documents like the Import Entry Declaration (IED) for customs duty 40 deposit, the license, clearance or permit, the Tax Exemption 41 Certificate (TEC) and the Tax Debit Memo (TDM). However, if the 42 SAD has already undergone final assessment by the COO V and the 43 Other Settlements Modes (OSM) has been completed; payments 44 debited from the importers account cannot be automatically 45 refunded. The Importer shall follow the regular refund process. 46 479.2.2.4 The use of ASYCUDA Post-Entry Revision Form for post entry 48 cancellation shall be discontinued. In lieu thereof, the e2m SAD 49 cancellation form shall be used. 50 2 3
149

1 19.2.2.5 Documents Required for the Cancellation of SAD under 2 corresponding instances: 3 49.2.2.5.1 For Change of Consignee 5 6 Letter Request addressed to the District Collector stating the 7 reason for the change and duly approved by the District Collector. 8 99.2.2.5.2 Change of Customs Broker 10 11 Letter Request addressed to the District Collector stating the 12 reason for the change and duly approved by the District Collector. 13 149.2.2.5.3 Other modifiable data 15 16 Letter Request addressed to the District Collector identifying the 17 date in the SAD that needs correction and stating the reason and 18 basis for correction and duly approved by the District Collector. 19 209.3.1 Operational Provisions for PMS for Correction of Data Encoded in the 21 e2m Customs System 22 239.3.1.1 Importer/Customs Brokers shall submit to the Office of the District 24 collector the original IEIRD or VASP-SAD print-out (for SGL entry) 25 and the necessary documents required depending on the applicable 26 instance listed in Section 9.2.1 above. 27 289.3.1.2 The District Collector or his designated official shall refer the letter 29 request to the Division Chief and Section Chief or the concerned 30 office for appropriate action. 31 329.3.1.3 The COO III and the COO V concerned shall review the request 33 submitted. If the request for post modification of the SAD is 34 inadequate and modifiable, the COO III and the COOV shall prepare 35 the e2m post modification form. The Section concerned shall then 36 forward the same to the Division Chief for his evaluation/action. If he 37 concurs with the recommendation of the COO III and COO V, he then 38 transmits the same documents to the District Collector for the latters 39 approval/disapproval. 40 419.3.1.4 If the request is approved by the District Collector, the COO V shall 42 access the e2m Customs System and make the necessary 43 amendments in the SAD, reflect in the Inspection Act the 44 amendments made and the reason/s therefore. He shall then print 45 the modified SAD and attach it to the original import documents. 46 479.3.1.5 If the post modification of the SAD results to no additional duties and 48 taxes, the Section concerned shall forward the entire documents to 49 the Liquidation and Billing Division (LBD). The COO III, however, 50 shall verify first if payment has been made on the subject shipment 2 3
150

1 1 before the entire documents shall be transmitted to the LBD. 2 39.3.1.6 If the PMS results to additional duties & taxes, the Importer/Customs 4 Broker shall proceed to the In-House Bank to pay the additional 5 amount indicated in the Order of Payment Form (OPF) prepared by 6 the COO III and duly signed by the COO V of Section concerned. 7 However, if the Importer/Customs Broker does not agree with the re8 assessment made, the Importer/Customs Broker may avail of 9 tentative release or the remedy provided for under Section 2308 of 10 the TCCP, as amended. 11 129.3.1.7 The In-House Bank shall accept the payment & enter the details of 13 payment in the e2m Customs System using the Cash Payment 14 Module. The In-House bank shall generate and print the e2m 15 Customs Receipt (ECR). The ECR Number must be indicated in the 16 BCOR to be issued by the In-House Bank to the Importer/broker 17 together with the ECR. 18 199.3.1.8 After payment, the Importer/Customs Broker shall return to COO III 20 and COO V to present his BCOR with the ECR attached. 21 229.3.1.9 The COO III shall verify that the appropriate payment has been made 23 using the e2m Customs Cash Payment Module in the e2m Customs 24 System. 25 269.3.1.10 If additional duties and taxes was confirmed paid the Section 27 concerned shall forward the import document with all its attachments 28 including the BCOR to the LBD. 29 309.3.2 Operational Provisions for Amendments to the Data Encoded for 31 Tentative Release and shipments subject to adjustment of either value 32 and/or modifiable net weight and/or reclassification. 33 349.3.2.1 Follow the procedures in Sections 9.3.1.5 to 9.3.1.10 above. 35 369.3.2.2 If the District Collector approves the recommendation and the 37 assessment made, he shall forward the same documents to the 38 Division Chief concerned. The Division Chief shall return the same 39 documents to the concerned COO V, who shall access the e2m 40 system, print the modified SAD and attach it to the original import 41 documents. 42 439.3.2.3 After proper amendment of the details in the SAD, procedures 44 indicated above under Sections 9.3.1.5 to 9.3.1.10 above shall be 45 followed 46 479.3.3 PMS with Unpaid Account 48 499.3.3.1 All unpaid post modified SAD/s shall be forwarded by the Section 50 concerned to the LBD for preparation of demand letter for signature 2 3
151

1 1 by the District Collector. 2 39.3.3.2 The demand letter signed by the District Collector shall be forwarded 4 to the Administrative Division, for mailing to the importer. 5 69.3.4 SAD Cancellation (SC) 7 89.3.4.1 .Follow same procedure in Sections 9.3.1.1 to 9.3.1.2 above. 9 109.3.4.2 The COO III and the COO V concerned shall review the request 11 submitted. If the modification request is for data that are not 12 modifiable, the COO III and COO V shall recommend for the SAD 13 cancellation. The Section concerned shall then forward the same 14 documents to the Division Chief for his evaluation/action. If he 15 concurs with the recommendation of the COO III and COO V, he then 16 transmits the same documents to the District Collector for the latters 17 approval/disapproval. 18 199.3.4.3 After approval by the District Collector or his designated official, the 20 same documents shall be returned to the Division Chief concerned 21 for appropriate action. 22 239.3.4.4 The Division Chief shall forward the same documents to the COO V 24 for SAD cancellation based on the approval of the District Collector. 25 269.3.4.5 After the SAD cancellation, the concerned COO V shall print the 27 cancelled SAD and attach this to the original IEIRD, or SAD-IEIRD. 28 299.3.4.6 The Section concerned shall return the same import documents with 30 all its attachments to the importer or his authorized representative for 31 electronic re-lodgment of the new SAD to replace the cancelled SAD 32 in the e2m Customs System through VASP. 33 349.3.4.7 After re-lodgment, the Importer/Customs Broker shall submit the new 35 printout generated VASP-SAD together with the original documents 36 to the Entry Processing Unit of the concerned port for clearance 37 processing. 38 39 40SECTION 10 MANUAL PROCESSING OF IMPORT ENTRIES UNDER e2m 41 CUSTOMS SYSTEM 42 43(Note: Adopted from CMO 10-05 and CAO 8-08) 44 4510.1 Administrative Provisions 46 4710.1.1 When Manual Processing Allowed 48 49 Manual processing of import entries shall be allowed in case of 50 computer systems breakdown, power failure rendering the computer 2 3
152

1 1 system non-operational and similar instances. 2 310.1.2 Official Authorized to Allow Manual Processing 4 5 Upon request by an importer/Customs Broker manual processing of 6 importations shall be authorized only by the Deputy Commissioner, 7 MISTG, or his authorized alternate as he deems necessary, as may be 8 recommended by the District Collector. 9 10 An approval even for a single request from an importer/Customs 11 Broker shall be construed as a general approval for acceptance of 12 manual processing for all import entries until the duration of the 13 situation per Section 9.1.1. 14 1510.1.3 All automated systems not affected by the breakdown or power failure 16 shall continue to be utilized. 17 1810.1.4 Procedures which are not affected by the system breakdown or by the 19 power failure shall, as much as practicable, continue to be observed. 20 2110.1.5 Manual processing shall cease upon the re-activation of the computer 22 system. 23 2410.1.6 The computer system files shall be updated with information on the 25 import entries/transshipments processed manually at the end of the 26 day or as soon as the computer system is operational. The Chief, FED, 27 Chief, Collection Division and Chief, Entry Processing Division shall be 28 responsible for the updating of the information as required in the 29 system. 30 3110.2 Manual Processing of Entry 32 3310.2.1 Importer/Customs Broker prepares IEIRD and goes to the bank with 34 branch inside Customs Zone and deposits the duties and taxes as self35 assessed. The bank shall send a letter to the Cash Division of the 36 amount of deposit made together with copy of the Official Receipt. 37 3810.2.2 The Importer shall present the IEIRD together with the required 39 attachments thereto and the Official Receipt evidencing deposit of 40 duties and taxes to the Entry Processing Division (EPD). 41 4210.2.2 The EPU Document Processor shall verify the Bill of Lading and other 43 information against the hard copies of the manifest. In the case 44 seaports, the hard copies shall be requested at the Piers and 45 Inspection Division (PID) or its equivalent unit. 46 4710.2.3 The examiner/appraiser of the FED shall conduct the examination of 48 the shipment and final assessment of the shipment shall be made on 49 the dorsal part of the IEIRD. The working copy of the IEIRD is then 50 sent to the Collection Division. 2 3
153

1 1 210.2.4 The Collection Division shall furnish the Arrastre Operator of the 3 approval for the release of the shipment with the blue copy of the entry 4 indicating the approval for release of the shipment; copy furnished the 5 Officer-in-Charge/Gatekeeper of the exit gate. 6 710.2.5 The Collection Division shall keep the original copies of the IERD and 8 supporting documents for transmittal to FED for their electronic 9 assessment, using e2m Customs System when the electronic system 10 has become available. 11 1210.2.6 The Collection Division shall submit a report to the district Collector at 13 the end of the day until the reactivation of the computer system and on 14 manually processed entries covering at least the following information: 15 16 a. Entry numbers; 17 b. Consignee; 18 c. Container number(s); 19 d. Registry and Bill of Lading numbers/Airway bill of Lading numbers; 20 e. Duties and Taxes paid, if any 21 22 CHAPTER 6 CUSTOMS BONDED WAREHOUSE 23 24I. Objective 25 26I.1 To clearly define the rules and regulations on customs bonded 27 warehousing operations. 28 29II. ADMINISTRATIVE PROVISIONS 30 31II.1. APPLICATION TO ESTABLISH AND OPERATE 32A CUSTOMS BONDED MANUFACTURING WAREHOUSE 33 34II.1.1 PLACE. The application shall be submitted to the Commissioner of 35 Customs through the District Collector of Customs of the Port/Subport 36 where the majority of the importations to be stored shall be entered. 37 38II.1.2 DOCUMENTARY REQUIREMENTS. Only applications with complete 39 documentary requirements shall be accepted. 40 41 1) Duly accomplished and notarized Application Form (refer to Annex 42 A). 43 44 2) Certified photo copies of Certificate of Registration with the SEC, 45 Articles of Incorporation, and By-Laws duly certified by the 46 Corporate Secretary; in case of partnership, photo copies of 47 Articles of Partnerships; in case of sole proprietorship, Certificate of 48 Registration with the Bureau of Domestic Trade. 49 50 3) Certified photo copies of BOI Registration including the Terms and 2 3
154

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 2 3 Conditions of registration and in case of garments, a Garments and Textile Import Development Office (GTIDO) issued license; 4) Certified photo copies of applicant's Income Tax Returns and Audited Financial Statements submitted to BIR for the last two years immediately preceding the date of application; in case of new corporation, Interim Financial Statements duly signed by the applicants controller/accountant; 5) Certified photo copy of Mayor's Business Permit; 6) Comprehensive Company Profile; 7) Certified photo copies of Instrument evidencing absolute ownership or lease contract covering the proposed warehouse (if lease, contract must have minimum period of 1 year); 8) Plant location map showing means of access to the property; 9) Plant layout plan showing and describing the size and construction of the proposed warehouse together with the intended use of each compartment. In case of a customs common bonded warehouse applicant, the facility must be sufficient in space for the inspection and subsequent storage and safekeeping of imported goods prior to the delivery of goods to its accredited members; 10)Clearances from the offices or equivalent units of the port having jurisdiction over the warehouse to be secured by the applicant together with the application. For APPLICANTS for CUSTOMS BONDED WAREHOUSE engaged in MANUFACTURING, including applicants for CUSTOMS COMMON BONDED WAREHOUSE, the following documents must be submitted in addition to the above: 11) Certified photo copies of Formula of Conversion issued by Industrial Technology Development Institute. In case of garments, the formula approved by GTIDO; 12)List of machineries and equipment and production capacity (refer to Annex __); 13)List and volume of Raw Materials to be imported (refer to Annex __). Such volume must be consistent with the submitted Formula of Conversion, Purchase Order or export performance two (2) years prior to application. 14)Certified photo copies of Patterns or sketches of the products to be
155

1 1 manufactures. In case of garments, the pattern or sketches 2 approved by GTIDO; 3 4 15)Certified photo copies of Toll Agreement in case of consigned 5 goods/materials; 6 7 16)Favorable indorsement from the appropriate recognized industry; 8 9 10 For APPLICANTS for INDUSTRY SPECIFIC CUSTOMS BONDED 11 WAREHOUSE, the following documents must be submitted in 12 addition to numbers 1 to 10: 13 14 17)List and volume of Raw Materials to be imported (refer to Annex 15 __). Such volume must be consistent with the submitted Letters of 16 Intent of its proposed End-user Clients; 17 18 18)Favorable indorsement from the appropriate recognized industry 19 20 21 For APPLICANTS for AIRLINE OR AIRLINE CATERING 22 CUSTOMS BONDED WAREHOUSE, the following documents 23 must be submitted in addition to numbers 1 to 10: 24 25 19)Certified photo copies of Service Agreements/Letters of Intent if 26 servicing other airlines. 27 28 20)Certified photo copies of approved permit/license from the Civil 29 Aeronautics Board and the Air Transportation Office. 30 31 21)For local airline applicant, certified photo copies of its 32 Congressional Franchise. 33 34 22)For airline catering applicant, a Statement containing the following: 35 36 a) Aircraft configuration; 37 b) Flight frequency per month; 38 c) Number and class of passengers and crew; 39 d) Types and number of meals to be served; 40 e) List of catering equipment to be supplied by airline client; 41 f) List and volume of aircraft spare parts and supplies, inflight 42 equipment, stores and commissary items, consistent with its own 43 or airline clients requirements (refer to Annex __);and; 44 g) Photos and description of proposed menu(s). 45 46 47II.1.3. INSPECTION, EVALUATION, APPROVAL OF APPLICATION AND 48 ISSUANCE OF LICENSE TO OPERATE A CBMW. 49 50II.1.3.1 INSPECTION. 2 3
156

1 1 2 Upon receipt of the application the District Collector shall immediately 3 direct the inspection of the warehouse. The assigned inspector shall 4 submit the photos and Inspection Report (refer to Annex "__) within 5 five (5) working days upon receipt of the directive. 6 7ll.1.3.2 EVALUATION, APPROVAL AND ISSUANCE OF LICENSE. 8 9 1) The evaluation shall be made by the District Collector of Customs 10 through the Chief, Warehouse Operating Division concerned or 11 equivalent unit of the port having jurisdiction over the applicants 12 warehouse by accomplishing the attached Evaluation Report 13 (refer to Annex __) within five (5) days from receipt of the 14 Inspection Report. 15 16 2) Upon receipt of the Indorsement of District Collector of Customs, 17 the Customs Bonded Warehouse Committee shall conduct a final 18 evaluation/deliberation and make the requisite recommendation(s) 19 for consideration of the Commissioner of Customs. 20 21 3) The Commissioner of Customs shall issue a Certificate 22 formalizing the applicants approved license. 23 24II.2 PRE-OPERATING STAGE. 25 26 The application upon receipt of the approval by the Commissioner of 27 Customs shall further comply with the following before actual 28 operations begin: 29 30 1) Payment of fifty (50) percent of warehousing fees to the District 31 Collector of Customs; 32 33 2) Filing of a Customs Performance Bond with the District Collector to 34 guarantee compliance with the provisions of laws and regulations 35 on customs bonded warehouse in the amount of P200,000.00; 36 37 3) Posting of an Import Processing Fund in accordance with CMO No. 38 23-1997; 39 40 4) Registration with the Client Profile Registration System (CPRS) and 41 Customs Accreditation and Registration (CARE) Unit; 42 43 5) Filing of a Warehousing Bond for Raw Materials in such amount to 44 guarantee the payment of duties and taxes in case the imported 45 raw materials are not manufactured and exported within the 46 prescribed period; 47 48 6) Filing of a General Warehousing Bond in such amount as may be 49 required by the District Collector for Customs Public Bonded 50 Warehouse and Airline/Airline Catering Customs Bonded 2 3
157

1 1 Warehouse; 2 3 7) Submission of a Board Resolution and a notarized Power of 4 Attorney designating the person authorized to sign or act in behalf 5 of the bonded warehouse, and the brokers authorized to transact 6 with the Bureau of Customs; 7 8 8) Submission of a notarized Oath of Undertaking by the President 9 that the CBW Operator shall at all times comply with the terms and 10 conditions of his license and pertinent Customs laws, rules and 11 regulations (refer to Annex ___); 12 13 9) Installation of the appropriate signages (i.e. assigned CBW 14 Number, Certificate of Registration issued by the Bureau of 15 Customs etc.) 16 17 10)Compliance with conditions, if any, as imposed and embodied in the 18 Inspection Report; 19 20 11)Installation of an acceptable automated materials management 21 inventory system 22 23II.3 ACCREDITATION FOR SUBCONTRACTING. 24 25II.3.1 GENERAL CONSIDERATIONS. A CBW operator who acts either as a 26 principal or subcontractor shall file for accreditation with the District 27 Collector of Customs or Subport Collector of Customs. Subcontracting 28 activities shall be governed by the following conditions: 29 30 1) Subcontracting work shall be limited only to a portion of the 31 production process. 32 33 2) Subcontracting work shall be due to insufficiency of operational 34 facilities or lack of material time to meet export commitment. 35 36 3) Accreditation by other agencies shall be without prejudice to the 37 accreditation license issued by the Bureau of Customs. 38 39 4) In case of garments, only pre-cut or cut to pattern materials shall be 40 transferred. 41 42 5) Upon completion of the processing done by the subcontractor, 43 finished materials and the resulting wastages, if any, shall be 44 returned to the principal customs bonded warehouse, PEZA 45 enterprise or Freeport Zone locator which shall be subject of 46 examination by Customs personnel to fully account for the duty free 47 raw materials used in processing. 48 49II.3.1 DOCUMENTARY REQUIREMENTS. Only applications with complete 50 documentary requirements shall be accepted. 2 3
158

1 1II.3.1.1 For Non-CBW / PEZA / Freeport Zone Registered Firms. 2 3 1) Duly accomplished and notarized Application Form (Annex __). 4 5 2) Certified photo copies of Certificate of Registration with the SEC, 6 Articles of Incorporation, and By-Laws duly certified by the 7 Corporate Secretary; in case of partnership, photo copies of 8 Articles of Partnerships; in case of sole proprietorship, Certificate 9 of Registration with the Bureau of Domestic Trade. 10 11 3) Plant Location Map showing access to the property, Plant Layout 12 Plan and Mayors Business Permit; 13 14 4) In case of garments, GTIDO approved accreditation as 15 subcontractor; 16 17 5) Formula of Conversion issued by Industrial Technology 18 Development Institute; in case of garments, the formula approved 19 by GTIDO; 20 21 6) Service/Subcontracting Contract/Agreement; 22 23 7) List and volume of materials to be subcontracted and stages of 24 production to be subcontracted. Such volume must likewise be 25 consistent with the submitted Formula of Conversion. 26 27 8) List of machineries and equipment and production capacity (refer 28 to Annex __); 29 30 9) Clearances from the offices or equivalent units of the port having 31 jurisdiction over the warehouse to be secured by the applicant 32 together with the application. 33 34 10)Waiver of Motion 1704 (d) of the Tariff and Customs Code of the 35 Philippines 36 37II.3.1.2 For CBW / PEZA / Freeport Zone Registered Firms. 38 39 1. Duly accomplished and notarized Application Form (Annex __). 40 41 2. Service/Subcontracting Contract/Agreement. 42 43 3. List and volume of materials to be subcontracted. 44 45 4. For CBW operator, certified photo copy of last renewed license 46 47 5. For PEZA registered enterprise: 48 495.1 Certified photo copy of Certificate of Registration; and, 50 2 3
159

1 15.2 Certified photo copy of Letter of Authority (LOA) approved by PEZA 2 36. For Freeport Zone locator: 4 56.1 Certified photo copy of Certificate of Registration; and, 66.2 Certified photo copy of Letter of Authority (LOA) approved by the 7 Freeport Zone Authority. 8 9II.3.2 INSPECTION, EVALUATION AND APPROVAL OF APPLICATION AND 10 ISSUANCE OF CERTIFICATE OF ACCREDITATION. 11 12II.3.2.1 For Non-CBW / PEZA / Freeport Zone Registered Firms. 13 14 1) Upon receipt of the application the District Collector shall 15 immediately direct the inspection of the warehouse. The assigned 16 inspector shall submit the photos and Inspection Report (refer to 17 Annex "__) within five (5) working days upon receipt of the 18 directive. 19 20 2) The evaluation shall be made by the District Collector of Customs 21 through the Chief, Warehouse Operating Division concerned or 22 equivalent unit of the port having jurisdiction over the applicant23 subcontractor by accomplishing the attached Evaluation Report 24 (refer to Annex __) within five (5) days from receipt of the 25 Inspection Report. 26 27 3) Upon receipt of the Indorsement of the District Collector of 28 Customs, the Customs Bonded Warehouse Committee shall 29 conduct a final evaluation/deliberation and make the requisite 30 recommendation(s) for consideration of the Commissioner of 31 Customs. 32 33 4) The Commissioner of Customs shall issue a Certificate 34 formalizing the applicants approved accreditation. 35 36II.3.2.2 For CBW / PEZA / Freeport Zone Registered Firms. 37 38 1) The evaluation shall be made by the District Collector through the 39 Chief, Warehouse Operating Division concerned or equivalent unit 40 of the port having jurisdiction over the applicant-subcontractor by 41 accomplishing the attached Evaluation Report (refer to Annex 42 __) within five (5) days from receipt of the application. 43 44 2) Upon receipt of the Indorsement of the District Collector of 45 Customs, the Customs Bonded Warehouse Committee shall 46 conduct a final evaluation/deliberation and make the requisite 47 recommendation(s) for consideration of the Commissioner of 48 Customs. 49 50 3) The Commissioner of Customs shall issue a Certificate 2 3
160

1 1 formalizing the applicants approved accreditation. 2 3II.4 ACCREDITATION FOR MEMBERSHIP TO A 4 CUSTOMS COMMON BONDED WAREHOUSE. 5 6II.4.1 GENERAL CONSIDERATIONS. 7 8 1) Any person, natural or juridical, who is an export registered firm 9 may apply for membership to a Customs Common Bonded 10 Manufacturing Warehouse. 11 12 2) A manufacturer-exporter shall be accredited with only one 13 CCBMW. 14 15 3) The accredited member shall maintain in their place of business 16 and to make available for inspection their books of accounts, 17 supporting documents and records of imported materials. 18 19 4) The CCBMW operator and the accredited member shall at all 20 times be jointly and severally liable for any accountabilities with 21 the Bureau of Customs including responsibility for the liquidation 22 of all raw materials imported by the accredited member. 23 24 5) No direct transfer from the Customs Zone to the accredited 25 member shall be effected unless first delivered to the premises of 26 the CCBMW for examination and withdrawal. 27 28 6) The accredited member shall secure the materials imported 29 through the CCBMW against pilferage and loss thru fire, flood, 30 and other such occurrences. 31 32 7) An accredited member of a CCBMW which has not effected any 33 importation/exportation within a minimum period of one year shall 34 be cause for the cancellation of his accreditation without prejudice 35 to the filing another application. 36 37 38II.4.2 DOCUMENTARY REQUIREMENTS. The application for membership 39 should be submitted to the District Collector of Customs or Subport 40 Collector of Customs. Only applications with complete documentary 41 requirements shall be accepted. 42 43 44 1) Duly accomplished and notarized Application Form (Annex __). 45 46 2) Certified photo copies of Certificate of Registration with the SEC, 47 Articles of Incorporation, and By-Laws duly certified by the 48 Corporate Secretary; in case of partnership, photo copies of 49 Articles of Partnerships; in case of sole proprietorship, Certificate of 50 Registration with the Bureau of Domestic Trade. 2 3
161

1 1 3) Plant Location Map showing access to the property, Plant Layout 2 Plan and Mayors Business Permit. 3 4 4) Certified photo copies of BOI Registration including the Terms and 5 Conditions of registration and in case of garments, a GTIDO issued 6 license. 7 8 5) Formula of Conversion issued by Industrial Technology 9 Development Institute. In case of garments, the formula approved 10 by GTIDO; 11 12 6) List and volume of Raw Materials to be imported. Such volume 13 must be consistent with the submitted Formula of Conversion, 14 Purchase Order or export performance two (2) years prior to 15 application. 16 17 7) List of machineries and equipment and production capacity (refer to 18 Annex __); 19 20 8) Toll Agreement, in case of consigned goods/materials; 21 22 9) Favorable indorsement from the appropriate recognized industry; 23 24 10)Clearances from the offices or equivalent units of the port having 25 jurisdiction over the warehouse to be secured by the applicant 26 together with the application. If under FTI also an indorsement by 27 FTI Collector. 28 29 30II.4.3 INSPECTION, EVALUATION AND APPROVAL OF APPLICATION AND 31 ISSUANCE OF CERTIFICATE OF ACCREDITATION. 32 33 34II.4.3.1 INSPECTION. Upon receipt of the application the District Collector 35 shall immediately direct the inspection of the warehouse. The 36 assigned inspector shall submit the photos and Inspection Report 37 (refer to Annex "__) within five (5) working days upon receipt of the 38 directive. 39 40 41II.4.3.2 EVALUATION AND APPROVAL OF APPLICATION AND ISSUANCE 42 OF CERTIFICATE OF ACCREDITATION. 43 44 1) The evaluation shall be made by the District Collector of Customs 45 through the Chief, Warehouse Operating Division concerned or 46 equivalent unit of the port having jurisdiction over the applicant47 subcontractor by accomplishing the attached Evaluation Report 48 (refer to Annex __) within five (5) days from receipt of the 49 Inspection Report. 50 2 3
162

1 1 2) Upon receipt of the Indorsement of the District Collector of 2 Customs, the Customs Bonded Warehouse Committee shall 3 conduct a final evaluation/deliberation and make the requisite 4 recommendation(s) for consideration of the Commissioner of 5 Customs. 6 7 3) The Commissioner of Customs shall issue a Certificate 8 formalizing the applicants approved accreditation. 9 10II.4.4 TRANSFER OF MEMBERSHIP FROM ONE CCBMW TO ANOTHER. 11 12II.4.4.1 GENERAL CONSIDERATIONS. 13 14 1) The transfer of membership from one CCBMW to another shall 15 not affect the storage period of nine (9) months extendible, for 16 sufficient reasons, for another 3 months from the date of original 17 transfer or conveyance to the CCBMW. 18 19 2) In case of garments manufacturer, the transfer must have prior 20 approval by the GTIDO. 21 22 3) A constructive warehousing entry(ies) shall be filed by the new 23 CCBMW for the account of the member which shall be used to 24 liquidate the previous import entry(ies). 25 26II.4.4.2 DOCUMENTARY REQUIREMENTS. The application for transfer of 27 membership should be submitted to the District Collector of Customs 28 or Subport Collector of Customs. Only applications with complete 29 documentary requirements shall be accepted. 30 31 1) Letter of intent to transfer membership to another CCBMW. 32 33 2) Notarized statement by the member that it has no outstanding 34 obligation with its current CCBMW. 35 36 3) Written approval or objection and reason(s) thereof by the current 37 CCBMW to the transfer within five (5) days from receipt of letter of 38 intent. 39 40 4) Acceptance Letter of the new CCBMW and its assumption of all 41 liabilities of the member. 42 43 5) Certification from the Customs Warehouseman of the proposed 44 CCBMW that its warehouse has sufficient physical capacity to 45 accommodate the volume of importations of the applicant. 46 47II.4.4.3 EVALUATION AND APPROVAL OF APPLICATION AND 48 ISSUANCE OF CERTIFICATE OF ACCREDITATION 49 50 1) The request shall be evaluated by the Chief, Warehouse 2 3
163

1 1 Operating Division concerned or FTI Customs Collector, as the 2 case may be, for preliminary evaluation and recommendation. 3 4 2) The Evaluation and Recommendation Report of the Chief, 5 Warehouse Operating division concerned or FTI Customs 6 Collector shall be submitted to the District Collector for his 7 consideration. 8 9 3) Upon receipt of the Indorsement of the District Collector of 10 Customs, the Customs Bonded Warehouse Committee shall 11 conduct a final evaluation/deliberation and make the requisite 12 recommendation(s) for consideration of the Commissioner of 13 Customs. 14 15 4) The Commissioner of Customs shall issue a Certificate 16 formalizing the applicants approved transfer of accreditation. 17 18II.5 ACCREDITATION AS END-USER CLIENT OF AN 19 INDUSTRY-SPECIFIC CUSTOMS BONDED WAREHOUSE. 20 21II.5.1 GENERAL CONSIDERATIONS. 22 23 1) Any person, natural or juridical, who is a registered manufacturer24 exporter firm may apply for accreditation as end-user client of an 25 Industry-Specific Customs Bonded Warehouse. 26 27 2) The accredited end-user client shall maintain in their place of 28 business and to make available for inspection their books of 29 accounts, supporting documents and records of imported materials. 30 31 3) No direct transfer from the Customs Zone to the accredited end32 user client shall be effected unless first delivered to the premises of 33 the ICBMW for examination and withdrawal. 34 35 4) An accredited end-user client of an ICBMW who has not effected 36 any importation/exportation within a minimum period of one year 37 shall be cause for the cancellation of his accreditation without 38 prejudice to the filing another application. 39 40II.5.2 DOCUMENTARY REQUIREMENTS. The application for accreditation 41 as end-user client of an ICBMW should be submitted to the District 42 Collector of Customs or Subport Collector of Customs. Only 43 applications with complete documentary requirements shall be 44 accepted. 45 46 1) Duly accomplished and notarized Application Form (Annex __). 47 48 2) Photo copies of Certificate of Registration with the SEC, Articles of 49 Incorporation, and By-Laws duly certified by the Corporate 50 Secretary; in case of partnership, photo copies of Articles of 2 3
164

1 1 Partnerships; in case of sole proprietorship, Certificate of 2 Registration with the Bureau of Domestic Trade. 3 4 3) In case of PEZA registered enterprise or Freeport Zone locator, 5 certified true copy of its Certificate of Registration and Product 6 Activity. 7 8 4) Plant Location Map showing access to the property and Mayors 9 Business Permit. 10 11 5) Letter of Intent stating among others the List and volume of Raw 12 Materials to be imported. 13 14 6) Favorable indorsement from the appropriate recognized industry; 15 16II.5.3 EVALUATION AND APPROVAL OF APPLICATION AND ISSUANCE 17 OF CERTIFICATE OF ACCREDITATION. 18 19II.5.3.1 EVALUATION AND APPROVAL OF APPLICATION AND ISSUANCE 20 OF CERTIFICATE OF ACCREDITATION. 21 22 23 1) The evaluation shall be made by the District Collector of Customs 24 through the Chief, Warehouse Operating Division concerned or 25 equivalent unit of the port having jurisdiction over the applicant26 subcontractor by accomplishing the attached Evaluation Report 27 (refer to Annex __) within five (5) days from receipt of the 28 Inspection Report. 29 30 2) Upon receipt of the Indorsement of the District Collector of 31 Customs, the Customs Bonded Warehouse Committee shall 32 conduct a final evaluation/deliberation and make the requisite 33 recommendation(s) for consideration of the Commissioner of 34 Customs. 35 36 2) The Commissioner of Customs shall issue a Certificate 37 formalizing the applicants approved accreditation. 38 39II.6 ASSIGNMENT OF CUSTOMS PERSONNEL. 40 41II.6.1 The District Collector shall assign customs personnel to efficiently and 42 effectively supervise the operations of the warehouse. The Customs 43 personnel to be assigned may consist of a Warehouseman, a 44 Storekeeper and a Customs Guard. Their duties and responsibilities 45 are enumerated in Annex "D". 46 47II.6.2 Customs employees assigned to work in CBWs shall strictly observe 48 regular work hours set by the Civil Service Commission. 49 50II.6.3 Upon the request of the CBW Operator or whenever necessary, the 2 3
165

1 1 Collector of Customs shall require customs personnel assigned thereat 2 to render overtime service. All work performed outside of regular office 3 hours and days shall be considered overtime, the rate of which shall be 4 prescribed in pertinent orders on overtime work. Overtime pay shall be 5 charged to the account of the CBW Operator who shall remit it to the 6 Collector of Customs for appropriate payment to the customs 7 personnel concerned. 8 9II.7 CUSTODY OF LOCKS 10 11 The door to a customs bonded warehouse must be secured with two (2) 12 padlocks; one set shall be kept by the Customs Warehouseman and the 13 other by the CBW Operator. The CBW Operator may install other forms 14 of security or locking devices subject to the approval of the Collector of 15 Customs. 16 17II.8 RESPONSIBILITIES OF A CBW OPERATOR / 18 ACCREDITED MEMBER OR SUBCONTRACTOR 19 20 The customs bonded warehouse operator shall be responsible in the 21 operation and maintenance of his warehouse. He shall governed and at 22 all times comply with pertinent customs laws, rules and regulations. He 23 shall have as additional duties those enumerated in Annex "E". 24 25II.9 APPLICATION FOR ESTABLISHMENT 26 OF AN EXTENSION WAREHOUSE 27 2811.9.1 GENERAL CONSIDERATIONS. 29 30 1) The proposed extension warehouse shall be located within the area 31 of jurisdiction of the Port over which the main warehouse is under. 32 33 2) Customs personnel shall be assigned thereat and separate books 34 of accounts shall be maintained by the CBW Operator and customs. 35 36 3) The extension warehouse shall be subject to the payment of 37 warehouse supervision fee. 38 3911.9.2 DOCUMENTARY REQUIREMENTS. The application for 40 establishment of an extension warehouse should be submitted to the 41 District Collector of Customs or Subport Collector of Customs. Only 42 applications with complete documentary requirements shall be 43 accepted. 44 45 1) Letter Request; 46 2) Certified photo copies of Instrument evidencing absolute 47 ownership or lease contract covering the proposed warehouse (if 48 lease, contract must have minimum period of 1 year); 49 50 3) Plant location map showing means of access to the property and 2 3
166

1 1 plant layout plan showing and describing the size and 2 construction of the proposed warehouse together with the 3 intended use of each compartment; and, 4 5 4) Mayors Business Permit. 6 7 5) In case of garments manufacturer, the proposed extension 8 warehouse must have prior approval from the GTIS. 9II.9.3 INSPECTION, EVALUATION, APPROVAL OF APPLICATION AND 10 ISSUANCE OF A LICENSE TO OPERATE AN EXTENSION 11 WAREHOUSE. 12 13II.9.3.1 INSPECTION. 14 15 Upon receipt of the application, the District Collector shall 16 immediately direct the inspection of the warehouse. The assigned 17 inspector shall submit the photos and Inspection Report (refer to 18 Annex "__) within five (5) working days upon receipt of the directive. 19 20ll.9.3.2 EVALUATION, APPROVAL AND ISSUANCE OF LICENSE. 21 22 1) The evaluation shall be made by the District Collector of Customs 23 through the Chief, Warehouse Operating Division concerned or 24 equivalent unit of the port having jurisdiction over the applicants 25 warehouse by accomplishing the attached Evaluation Report 26 (refer to Annex __) within five (5) days from receipt of the 27 Inspection Report. 28 29 2) Upon receipt of the Indorsement of District Collector of Customs, 30 the Customs Bonded Warehouse Committee shall conduct a final 31 evaluation/deliberation and make the requisite recommendation(s) 32 for consideration of the Commissioner of Customs. 33 34 3) The Commissioner of Customs shall issue a Certificate 35 formalizing the applicants approved license for an extension 36 warehouse. 37 38II.10 APPLICATION FOR CHANGE OF NAME 39 40II.10.1 GENERAL CONSIDERATIONS. 41 42 An application for change of name found to have been filed to evade 43 the payment of lawful duties, taxes or any other accountability with the 44 Bureau of Customs shall be a ground for the filing of the appropriate 45 administrative and or legal action against the applicant. 46 47II.10.2 DOCUMENTARY REQUIREMENTS. 48 49 1. Letter Request 50 2 3
167

1 1 2. Certified photo copy of Certificate of SEC Registration 2 3 3. Certified photo copy of Amended Articles of Incorporation 4 5 4. Certified photo copy of Amended By-Laws 6 7 5. Certified photo copy of New General Information Sheet/Business 8 Profile 9 10 6. Certified photo copy of Board Resolution adopting the change of 11 name 12 13 7. Notarized Affidavit of Undertaking 14 8. Clearances from the offices or equivalent units of the port having 15 jurisdiction over the warehouse to be secured by the applicant 16 together with the application. If under FTI also an indorsement by 17 FTI Collector. 18 19II.10.3 EVALUATION AND APPROVAL OF APPLICATION AND ISSUANCE 20 OF CERTIFICATE OF CHANGE OF NAME. 21 22 1) The evaluation shall be made by the District Collector of Customs 23 through the Chief, Warehouse Operating Division concerned or 24 equivalent unit of the port having jurisdiction over the applicants 25 warehouse within five (5) days from receipt of the application. 26 27 2) Upon receipt of the Indorsement of the District Collector of 28 Customs, the Customs Bonded Warehouse Committee shall 29 conduct a final evaluation/deliberation and note the application for 30 change of name. 31 32 3) Upon the applicants surrender of his Certificate of Registration, 33 the Commissioner of Customs shall issue a new Certificate of 34 Registration formalizing the applicants approved change of name. 35 36II.11 APPLICATION FOR RELOCATION 37 38II.11.1 GENERAL CONSIDERATIONS. 39 40 A customs bonded warehouse operator, accredited member, end-user 41 client or subcontractor shall secure the approval of the Bureau of 42 Customs prior to any relocation. 43 44II.11.2 DOCUMENTARY REQUIREMENTS. 45 46 The application for relocation shall be filed with the District Collector of 47 Customs or Subport Collector of Customs. Only applications with 48 complete documentary requirements shall be accepted. 49 50 2 3
168

1 1 1) Letter Request 2 2) Warehouse Location Map 3 3) Warehouse Layout Plan 4 4) Lease Contract for a minimum of one (1) year or Instrument 5 evidencing ownership of the premises 6 5) Mayors Business Permit 7 8II.11.3 INSPECTION, EVALUATION AND APPROVAL OF APPLICATION. 9 10II.11.3.1 INSPECTION. 11 12 Upon receipt of the application the District Collector shall immediately 13 direct the inspection of the warehouse. The assigned inspector shall 14 submit the photos and Inspection Report (refer to Annex "__) within 15 five (5) working days upon receipt of the directive. 16ll.11.3.2 EVALUATION, APPROVAL AND ISSUANCE OF AMENDED 17 LICENSE. 18 19 1) The evaluation shall be made by the District Collector of 20 Customs through the Chief, Warehouse Operating Division 21 concerned or equivalent unit of the port having jurisdiction over 22 the applicants warehouse by accomplishing the attached 23 Evaluation Report (refer to Annex __) within five (5) days from 24 receipt of the Inspection Report. 25 26 2) Upon receipt of the Indorsement of District Collector of Customs, 27 the Customs Bonded Warehouse Committee shall conduct a 28 final evaluation/deliberation and note the application for change 29 of location. 30 31 3) Upon the applicants surrender of his Certificate of Registration, 32 the Commissioner of Customs shall issue a new Certificate of 33 Registration formalizing the applicants approved change of 34 location. 35 36II.12 APPLICATION FOR RENOVATION 37 38II.12.1 GENERAL CONSIDERATIONS. 39 40 A customs bonded warehouse operator, accredited member, end-user 41 client or subcontractor shall secure the approval of the Bureau of 42 Customs prior to any renovation. 43 44 4511.12.2 DOCUMENTARY REQUIREMENTS. 46 47 The application for renovation must be submitted to the District 48 Collector of Customs or Subport Collector of Customs. Only 49 applications with complete documentary requirements shall be 50 accepted. 2 3
169

1 1 2 1) Letter Request 3 2) Warehouse Layout Plan Previous 4 3) Warehouse Layout Plan Proposed 5 6II.12.3 INSPECTION, EVALUATION AND APPROVAL OF APPLICATION. 7 8II.12.3.1 INSPECTION. 9 10 Upon receipt of the application the District Collector shall immediately 11 direct the inspection of the warehouse. The assigned inspector shall 12 submit the photos and Inspection Report (refer to Annex "__) within 13 five (5) working days upon receipt of the directive. 14 15II.12.3.2 EVALUATION AND APPROVAL OF APPLICATION FOR 16 RENOVATION. 17 18 1) The evaluation shall be made by the Chief, Warehouse 19 Operating Division concerned or equivalent unit by 20 accomplishing the attached Evaluation Report (refer to Annex 21 __) within five (5) days from receipt of the Inspection Report. 22 2) Upon receipt of the Indorsement of Chief, Warehouse Operating 23 Division, the District Collector of Customs shall conduct a final 24 evaluation/deliberation and approve the application for 25 renovation. 26 27II.13 APPLICATION FOR PROVISIONAL AUTHORITY FROM THE 28 DISTRICT COLLECTOR 29 30II.13.1 GENERAL CONSIDERATIONS. 31 32 A customs bonded warehouse operator may be granted a provisional 33 authority by the District Collector of Customs exercising jurisdiction 34 over it for the following requests: 35 36 1. Request for relocation where it can be clearly shown that the 37 security of the bonded articles is compromised; 38 39 2. Requests for increase in volume and/or inclusion of additional 40 importable materials to meet export commitments, but to exclude 41 articles as may be pre-determined by the Commissioner of 42 Customs; and, 43 44 3. Request for accreditation as subcontractor to meet export 45 commitments where the applicant is an existing CBW operator, 46 PEZA enterprise or Freeport Zone locator. 47 48II.13.1 OTHER CONSIDERATIONS AND CONDITIONS. 49 50 The grant of a provisional authority by the District Collector of Customs 2 3
170

1 1 is conditioned upon the following: 2 3 1. That the applicant has submitted all the documentary requirements 4 appurtenant thereto; 5 6 2. That the applicant shall submit a notarized Affidavit of Undertaking 7 to pay the duties and taxes on its importations entered under the 8 provisional authority if the same is denied by the Customs Bonded 9 Warehouse Committee or the Commissioner of Customs; 10 11 3. That the Chief, Warehouse Operating Division has made an in12 depth evaluation of the request and made a favorable 13 recommendation; 14 15 4. That the provisional authority shall be for a period as may be 16 determined by the District Collector and subject to his suspension 17 or revocation; 18 19 5. That the provisional authority is without prejudice to the final action 20 of the Customs Bonded Warehouse Committee or the 21 Commissioner of Customs; 22 23II.14 APPLICATION FOR RENEWAL OF LICENSE 24 25 26II.14.1 GENERAL CONSIDERATIONS. 27 28 1) The license to operate a bonded warehouse shall be valid for two 29 (2) years from date of grant of the license, renewable every two 30 (2) years thereafter. The license to operate an industry-specific 31 customs bonded warehouse shall be valid for three (3) years from 32 date of grant of the license. 33 34 2) The application for renewal shall be filed not later than six (6) 35 months before the expiration of the license to operate a CBW. 36 37 3) Full disclosure of the information required in the application form 38 is mandatory under the pain of administrative and/or criminal 39 prosecution or disapproval of the application whichever may be 40 just and appropriate. 41 42 4) No renewal of authority/license to operate a CBW shall be given 43 unless upon certification or clearance duly issued by the 44 appropriate Services/Divisions/Units concerned that the applicant 45 has no outstanding obligation or liability whatsoever, monetary or 46 otherwise, with the Bureau of Customs. 47 5) Failure to file an application for renewal six (6) months prior to 48 expiry shall automatically render the CBW subject to the 49 appropriate penalty. 50 2 3
171

1 1 6) The Chief, Warehouse Operating Division shall give proper and 2 timely notice to the CBW operator to afford the applicant sufficient 3 time to file his application. 4 5 7) An application for renewal filed after the expiry of his license shall 6 be considered as a new application. 7 8 8) In the case of a Common Customs Bonded Warehouse operator, 9 all his accredited members shall simultaneously file their renewal 10 of accreditation together with the principal CCBW. 11 1211.14.2 DOCUMENTARY REQUIREMENTS. 13 14 The application for renewal must be submitted to the District Collector 15 of Customs or Subport Collector of Customs. Only applications with 16 complete documentary requirements shall be accepted. 17 18 1) Accomplished Application for Renewal duly Notarized (Annex 19 __) 20 21 2) Annual Stock Inventory Report as of ___ (Annex __) 22 23 3) Certified photo copy of Payment of Current Warehousing Fee 24 25 4) Certified photo copy of General Warehousing and Performance 26 Bonds for the current year 27 28 5) Certified photo copy of Original/Previous Approved Permit. 29 30 6) Original Bureau of Customs Clearance 31 32 7) Import/Export Performance Report for the last two (2) years and 33 nearest quarter of the current year (Annex __) 34 35 8) Comparative Audited Financial Statements and Income Tax 36 Returns submitted to the BIR for the last two (2) years 37 38 9) SEC Certification that the company has neither been dissolved 39 nor has applied for dissolution 40 41 10)Copy of its Last Approved Consolidated Statement of Monthly 42 Material Import Requirements (Annex __) 43 44II.14.3 EVALUATION AND APPROVAL OF APPLICATION AND ISSUANCE 45 OF CERTIFICATE OF RENEWAL. 46 47 1) The evaluation shall be made by the District Collector of Customs 48 through the Chief, Warehouse Operating Division concerned or 49 equivalent unit of the port having jurisdiction over the applicants 50 warehouse within five (5) days from receipt of the application. 2 3
172

1 1 2 2) Upon receipt of the Indorsement of the District Collector of 3 Customs, the Customs Bonded Warehouse Committee, through the 4 Office of the Deputy Commissioner, Assessment and Operations 5 Group, shall conduct a final evaluation/deliberation and render a 6 decision on the application for renewal. 7 8 3) Upon the applicants surrender of his Certificate of Registration, the 9 Commissioner of Customs shall issue a new Certificate of 10 Registration formalizing the applicants approved renewed license. 11 12II.15 REVOCATION OF LICENSE OF A CUSTOMS BONDED 13 WAREHOUSE AND CANCELLATION OF ACREDITATION OF A 14 MEMBER OF A COMMON BONDED WAREHOUSE OR 15 SUBCONTRACTOR 16 17II.15.1 GENERAL CONSIDERATIONS. 18 19 1) The warehouse/place of business of the CBW operator, accredited 20 member or subcontractor shall be made accessible to all 21 authorized Customs Officials or representatives upon presentation 22 of an approved mission order issued by the District Collector or 23 Commissioner of Customs or their authorized representatives. 24 25 2) The Deputy Commissioners - Assessment and Operations 26 Coordinating Group, Intelligence and Enforcement Group or 27 Revenue Collection Monitoring Group, Chief, Warehouse 28 Monitoring and Audit Unit, the Chiefs of the Warehouse Operating 29 Divisions, Chief, Warehouse Inspection Division, Chairman, 30 Customs Bonded Warehouse Division, and such other Customs 31 personnel or any government agency (e.g. GTIS) may initiate the 32 filing of a revocation proceedings against the operator of a 33 customs bonded warehouse, and cancellation proceedings 34 against the accreditation of a member of a common customs 35 bonded warehouse or subcontractor, by filing a formal request 36 with the District Collector of Customs having jurisdiction over the 37 CBW on the following grounds: 38 39 2.1 Failure to file application for renewal; 40 41 2.2 Filing an application for renewal found to contain false 42 information; 43 44 2.3 Being inactive for at least one (1) continuous year, i.e., no 45 importation, or if there is one, no corresponding legal 46 withdrawal of imported goods or exportation of finished 47 products; and, 48 49 2.4 Violation of Customs rules and regulations and those being 50 implemented by another government agency in relation to 2 3
173

1 1 2 3 4 5 6 7 8 9 10 11II.15.2 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 2 3 the operation of a CBW 3) This is without prejudice to the authority of the Commissioner of Customs to order that revocation/cancellation proceedings be instituted against the CBW. 4) The CBW operator, accredited member or subcontractor may, upon written request, file for the revocation or cancellation of his license or accreditation.

PROCEDURES. 1) In case of a Customs initiated revocation or cancellation/complaint, the District Collector of Customs shall order the Chief, Law Division to conduct a hearing and allow the CBW operator to controvert the evidence of the prosecution. 2) The administrative proceeding should be summary in nature and should be terminated within seven (7) working days from receipt of the order. 3) The assigned Hearing Officer may, upon approval of the District Collector, continue the hearing beyond the seven (7) day period on valid grounds not intended to delay the disposition of the case, but in no case shall exceed the non-extendible period of another fifteen (15) days. 5) After termination of the hearing, an Order for Revocation of License or Order of Cancellation of Accreditation shall be issued by the District Collector (refer to Annex __). 5) In case of a Customs initiated revocation or cancellation/complaint, the Order shall specifically cite the facts and circumstances of the case and the grounds as basis for the revocation/cancellation thereof, or dismiss the complaint subject to the review of the Commissioner of Customs. 6) After the Order becomes final and executory, all importations by the CBW shall be withheld release unless duties and taxes are paid thereon. 7) The CBW operator shall settle all his accountabilties with the Bureau of Customs. 8) All finished products for export shall be allowed to be exported. 9) In case of an adverse decision by the District Collector, the CBW operator/accredited member or subcontractor may file an appeal or motion for consideration with the Commissioner of Customs within five (5) days from receipt of the Order for Revocation of
174

1 1 License/Cancellation of Accreditation. 2 3 10)Any ruling by the District Collector short of revocation/cancellation 4 shall be considered as an adverse decision and shall be subject 5 to automatic review by the Commissioner of Customs. 6 7II.15.3 POST REVOCATION/CANCELLATION PROCEDURES. 8 9 1) Upon the issuance by the District Collector of the Order for 10 Revocation of License/Cancellation Of Accreditation, the Chief, 11 Warehouse Operating Division shall immediately cause the 12 written notification to the CBW Operator/Accredited member or 13 subcontractor and the Chief, Warehousing Inspection Division or 14 appropriate Unit for the immediate closure of the CBW by sealing 15 and putting it under guard on a twenty four hour basis at the 16 operator's expense. 17 18 2) Upon receipt of the Order for Revocation of License/Cancellation 19 Of Accreditation, the CBW operator/member/subcontractor shall 20 immediately surrender to the Chief, Warehouse Operating 21 Division all the books, records, and other documents relative to 22 and required for the operation of the CBW. 23 24 3) The Chief, Warehouse Operating Division concerned shall 25 immediately cause a complete inventory of all imported articles, 26 raw materials, goods-in-process, and finished products. The 27 inventory shall indicate, among others, the corresponding entries. 28 29 3) The Chief, Warehouse Operating Division concerned shall 30 determine the extent of the accountability or liability of the CBW 31 operator/member/subcontractor. 32 33 5) All goods inventoried in the CBW shall be transferred to the 34 security warehouse of the Bureau of Customs, unless the duties, 35 taxes and other charges are paid thereon. Pending the transfer of 36 the goods to the security warehouse, the expenses for the round37 the-clock security under guard and the storage of the goods at the 38 CBW shall be for the account of the concerned operator. 39 40 6) No warehousing fee shall be collected; fees already collected 41 shall not be refunded. 42 43 7) The payment by the CBW operator/member/subcontractor of his 44 secondary accountabilities or liabilities shall be without prejudice 45 to any other liability, administrative, criminal or otherwise, which 46 shall subsist. 47 48II.16 OTHER APPLICATIONS 49 50II.16.1 NOTICE OF SEC APPROVED MERGER OF A CUSTOMS BONDED 2 3
175

1 1 WAREHOUSE 2 3II.16.1.1 DOCUMENTARY REQUIREMENTS. 4 5 The application for cognizance of a SEC approved Articles of 6 Merger for licensing purposes shall be submitted to the District 7 Collector of Customs or Subport Collector of Customs. Only 8 applications with complete documentary requirements shall be 9 accepted. 10 11 1) Letter Request 12 13 2) Certified photo copy of SEC approved Certificate of Filing of the 14 Articles and Plan of Merger 15 16 3) Certified photo copy of New General Information 17 Sheet/Business Profile 18 19 4) Certified photo copy of Board Resolution adopting the merger 20 21 5) Notarized Affidavit of Undertaking 22 23 6) Clearances from the offices or equivalent units of the port having 24 jurisdiction over the warehouse to be secured by the applicant 25 together with the application. 26 27II.16.1.2 EVALUATION AND APPROVAL OF APPLICATION AND 28 ISSUANCE OF CERTIFICATE ARISING FROM THE MERGER 29 30 1) The evaluation shall be made by the District Collector of 31 Customs through the Chief, Warehouse Operating Division 32 concerned or equivalent unit of the port having jurisdiction over 33 the applicants warehouse within five (5) days from receipt of the 34 application. 35 36 2) Upon receipt of the Indorsement of the District Collector of 37 Customs, the Customs Bonded Warehouse Committee shall 38 conduct a final evaluation/deliberation and note the application 39 for change of name. 40 41 3) Upon the applicants surrender of his Certificate of Registration, 42 the Commissioner of Customs shall issue a new Certificate of 43 Registration formalizing the applicants approved merger. 44 45II.16.2 NOTICE OF SEC APPROVED CONSOLIDATION OF A 46 CUSTOMS BONDED WAREHOUSE 47 48 A customs bonded warehouse who is a party to a consolidation shall 49 be treated as a new application. Hence, all documentary requirements, 50 evaluation and administrative procedures shall be governed by Section 2 3
176

1 1 II.1 2 3OPERATIONAL PROCEDURES FOR AIRLINE AND AIRLINE CATERING 4 CUSTOMS BONDED WAREHOUSE: 5 6A. IMPORTATION: 7 8I. DOCUMENTARY REQUIREMENTS: The operator shall file an Informal 9 Entry (BC Form 177) together and Warehousing Permit (BC Form 198) 10 together with other required documents: 11 12 1. Transshipment Permit, if any 13 2. Bill of Lading/Air Waybill 14 3. Invoice 15 4. Packing List 16 5. Bond for Transit Cargo, in case of Transshipment 17 6. Transit Cargo Manifest, in case of Transshipment 18 7. License/Permit from appropriate government agency, if any 19 20II. PROCEDURES: 21 22 1. The CBW operator or his authorized representative shall submit his 23 request to the accredited Value Service Provider for encoding, manifest 24 write-off, and collection of applicable fees. 25 26 2. Documents shall be presented to the Warehouse Assessment Unit 27 (WAU) for assessment and collection of duties, taxes and penalties if 28 any for: (1) Excess materials; (2) Materials not included in the 29 approved List of Importable Materials; and, (3) Articles not covered by 30 a favorable Indorsement from the Department of Finance. 31 32 3. Copies of the Informal Entry, Warehousing Permit and other 33 documents shall be submitted to the Bonds Division. 34 35 4. Documents cleared by the WAU shall be forwarded to the Customs 36 Bonded Warehouse Division (CBWD) for cross-checking against the 37 approved importable list, encoding and processing by the Customs 38 Account Officer and the Chief, CBWD. Copies of documents are 39 retained. 40 41 5. Boat Note shall likewise be prepared by the Customs Account Officer 42 for transmittal to the Warehouseman, Customs Public Bonded 43 Warehouse for the release of the cargo to the Customs Guard of the 44 Airline/Airline Catering CBW or Aircraft Operations Division. 45 46 6. Cargo is received at the warehouse by representative of the 47 airline/airline catering CBW and by the Customs 48 Warehouseman/Storekeeper assigned thereat by affixing their 49 signatures on the Boat Note. Copies of documents including the Boat 50 Note are retained by the CBW operator and Customs 2 3
177

1 1 2 3 4 5B. 6 7I. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23II. 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41C. 42 43 44I. 45 46 47 48 49 50 2 3 Warehouseman/Storekeeper and encoded in their respective data base. 7. Signed copy of Boat note is returned to the CBWD. WITHDRAWAL OF ARTICLES: DOCUMENTARY REQUIREMENTS: The operator shall accomplish a controlled/pre-numbered Requisition Slip which shall contain the following information: a. b. c. d. e. f. g. h. i. Date of Request Entry Number Description of Unit of Measure of Articles to be Withdrawn Volume of Articles to be Withdrawn Name of Airline(s) where articles are to be used. In case of inflight stores, the Flight Number, Destination and Date of Loading must be indicated. Other related information Name of Requesting Party Name of Approving Customs Officer Name of Receiving Party PROCEDURES: 1. The operator shall file a signed controlled/pre-numbered Requisition Slip with the Customs Warehouseman. 2. The Customs Warehouseman verifies the data in the Requisition Slip versus his data, encodes the withdrawal and proceeds to the assigned compartment for the withdrawal of articles. 3. The Customs Warehouseman affixes his signature and turns over the articles to the CBW representative. 4. The CBW representative receives the goods and affixes his signature on the Requisition Slip. 5. Copies of the Requisition Slip are each retained by the CBW operator and Customs Warehouseman. WITHDRAWAL OF ARTICLES FOR BONDED TO BONDED/PEZA/FREEPORT ZONE TRANSFER: GENERAL CONSIDERATIONS: Articles may be the subject of a bonded to bonded/PEZA/Freeport Zone transfer under the following conditions: 1. Termination of catering service agreement; 2. Repair works to be undertaken; and,
178

1 1 2 3 4 5II. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20III. 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 2 3 3. Threat of strike, lockout and other circumstances which, upon the determination of the District Collector, may be prejudicial to the security of the articles or the smooth operations of the warehouse DOCUMENTARY REQUIREMENTS: following documents: 1. 2. 3. 4. 5. 6. The operator shall submit the

Letter Request; Letter of Intent for New Catering Service Agreement; PEZA Form 8105 or Freeport Zone Bring-In Permit; List and Volume of Articles subject of request for transfer; Certification of Warehouseman that the Goods are Still Intact; Certificate of Identification duly signed by the operator and Customs Warehouseman 7. Boat Note; 8. Invoice; 9. Packing List; and, 10. Prepared Indorsement Form for Transfer PROCEDURES: 1. The operator shall file with the District Collector Attention: The Chief, Customs Bonded Warehouse Division, a request with all documentary requirements attached. 2. The Customs Account Officer shall verify all information contained in the request. If in order, he shall prepare an Indorsement for the signature of the Chief, CBWD to the WAU for the examination of goods. 3. The Customs Examiner, WAU shall proceed to examine the goods at the warehouse of the applicant, issue the corresponding findings and affix his signature on the Certificate of Identification. The Chief, WAU shall indorse the same to the Chief, CBWD. 4. The Customs Account Officer shall verify the findings of the Customs Examiner against the request. If in order, he shall affix his initial on the prescribed Indorsement for the signature of the Chief, CBWD who shall transmit the same to the Deputy Collector for Operations. 5. The Deputy Collector for Operations affixes his signature on the prescribed Indorsement to signify his concurrence and transmits it to the District Collector for his approval. 6. The District Collector approves the transfer by affixing his signature on the prescribed Indorsement and transmit the same to the Chief, CBWD for implementation. 7. The approved Indorsement with all its attachments is received by
179

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17D. 18 19I. 20 21 22 23 24 25 26 27 28 29 30II. 31 32 33 34 35 36 37 38 39 40 41 42 43III. 44 45 46 47 48 49 50 2 3 the CBW operator, copy furnished the Customs Warehouseman. 8. The procedures on withdrawal as provided in Section B are followed. Articles are delivered under continuous guard by the Customs Guard of the CBW or the Aircraft Operations Division until received by the recipient and Customs officer assigned thereat who shall affix their signatures on the Boat Note. The Boat Note shall be returned to the CBW where the goods originated. 9. The recipient of the goods shall file the requisite Constructive Import Entry, CEWE or other Customs Import Declaration. 10. In case of repair works, all articles must be returned to the CBW where the goods originated including unserviceable items provided by it. EXPORTATION OF ARTICLES: GENERAL CONSIDERATIONS: Articles may be the subject of exportation under the following conditions: 1. Expired, reject, unserviceable, unsaleable articles; 2. Repair and calibration works; 3. Articles requested by international airline for use in its other outbound stations; 4. Disposition through sale to foreign buyer; and, 5. Other circumstances which, upon the determination of the District Collector, are reasonable and meritorious. DOCUMENTARY REQUIREMENTS: documents: 1. 2. 3. 4. 5. 6. 7. 8. The operator shall submit the

Letter Request; List and Volume of Articles subject of request for transfer; Certification of Warehouseman that the Goods are Still Intact; Certificate of Identification; signed by the CBW operator and Customs Warehouseman Certification of Inspection and Loading; Boat Note; Invoice and Packing List; and, Prepared Indorsement Form for Transfer

PROCEDURES: 1. The operator shall file with the District Collector Attention: The Chief, Customs Bonded Warehouse Division, a request with all documentary requirements attached. 2. The Customs Account Officer shall verify all information contained in the request. If in order, he shall prepare an Indorsement for the
180

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34E. 35 36I. 37 38 39 40II. 41 42 43 44 45 46 47 48 49 50 2 3 signature of the Chief, CBWD to the WAU for the examination of goods. 3. The Customs Examiner, WAU shall proceed to examine the goods at the warehouse of the applicant, issue the corresponding findings and affix his signature on the Certificate of Identification. The Chief, WAU shall indorse the same to the Chief, CBWD. 4. The Customs Account Officer shall verify the findings of the Customs Examiner against the request. If in order, he shall affix his initial on the prescribed Indorsement for the signature of the Chief, CBWD who shall transmit the same to the Deputy Collector for Operations. 5. The Deputy Collector for Operations affixes his signature on the prescribed Indorsement to signify his concurrence and transmits it to the District Collector for his approval. 6. The District Collector approves the transfer by affixing his signature on the prescribed Indorsement and transmit the same to the Chief, CBWD for implementation. 7. The approved Indorsement with all its attachments is received by the CBW operator, copy furnished the Customs Warehouseman. 8. The procedures on withdrawal as provided in Section B are followed. Articles are delivered under continuous guard by the Customs Guard of the CBW or the Aircraft Operations Division until received at the Export Division of the Port of Loading. The Customs officer assigned thereat shall affix his signature on the Boat Note which shall be returned to the CBW where the goods originated. DISPOSITION OF ARTICLES THROUGH LOCAL SALE GENERAL CONSIDERATIONS: Articles imported by airlines may not be disposed of through local sale unless authorized by the Department of Finance. DOCUMENTARY REQUIREMENTS: The operator shall submit the following documents: 1. 2. 3. 4. 5. Letter Request; Favorable Indorsement from the Department of Finance; List and Volume of Articles subject of request of local sale; Certification of Warehouseman that the Goods are Still Intact; Certificate of Identification; signed by the CBW operator and Customs Warehouseman 6. Invoice and Packing List; and, 7. Prepared Indorsement Form for Local Sale
181

1 1III. PROCEDURES: 2 1. The operator shall file with the District Collector Attention: The 3 Chief, Customs Bonded Warehouse Division, a request with all 4 documentary requirements attached. 5 6 2. The Customs Account Officer shall verify all information contained 7 in the request. If in order, he shall prepare an Indorsement for the 8 signature of the Chief, CBWD to the WAU for the examination of 9 goods. 10 11 3. The Customs Examiner, WAU shall proceed to examine the goods 12 at the warehouse of the applicant, issue the corresponding findings 13 and affix his signature on the Certificate of Identification. The Chief, 14 WAU shall indorse the same to the Chief, Collection Division for 15 collection of duties and taxes. Thereafter, all documents including 16 the BOC Official Receipt, shall be forwarded to the Chief, CBWD. 17 18 4. The Customs Account Officer shall verify the findings of the 19 Customs Examiner against the request. If in order, he shall affix his 20 initial on the prescribed Indorsement for the signature of the Chief, 21 CBWD who shall transmit the same to the Deputy Collector for 22 Operations. 23 24 5. The Deputy Collector for Operations affixes his signature on the 25 prescribed Indorsement to signify his concurrence and transmits it 26 to the District Collector for his approval. 27 28 6. The District Collector approves the transfer by affixing his signature 29 on the prescribed Indorsement and transmit the same to the Chief, 30 CBWD for implementation. 31 32 7. The approved Indorsement with all its attachments is received by 33 the CBW operator, copy furnished the Customs Warehouseman. 34 35 8. The procedures on withdrawal as provided in Section B are 36 followed. 37 38F. DISPOSITION OF ARTICLES THROUGH CONDEMNATION 39 40 I. GENERAL CONSIDERATIONS: Expired, reject, unserviceable, 41 unsaleable articles may be disposed of through condemnation. 42 43 44 II. DOCUMENTARY REQUIREMENTS: The operator shall submit the 45 following documents: 46 47 1. Letter Request; 48 2. List and Volume of Articles subject of request of condemnation; 49 3. Notarized Certification from the CBW operator that the articles 50 subject of request are either expired, reject, unserviceable, or 2 3
182

1 1 2 3 4 5 6III. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 479.1 489.2 499.3 50 2 3 unsaleable. 4. Certification of Warehouseman that the Goods are Still Intact; 5. Certificate of Identification; signed by the CBW operator and Customs Warehouseman 6. Prepared Certificate of Condemnation and Destruction PROCEDURES: 1. The operator shall file with the District Collector Attention: The Chief, Customs Bonded Warehouse Division, a request with all documentary requirements attached. 2. The Customs Account Officer shall verify all information contained in the request. If in order, he shall prepare an Indorsement for the signature of the Chief, CBWD to the WAU for the examination of goods. 3. The Customs Examiner, WAU shall proceed to examine the goods at the warehouse of the applicant, issue the corresponding findings and affix his signature on the Certificate of Identification. The Chief, WAU shall indorse the same to the Chief, CBWD. 4. The Customs Account Officer shall verify the findings of the Customs Examiner against the request. If in order, he shall affix his initial on the prescribed Certificate of Condemnation and Destruction for the signature of the Chief, CBWD who shall transmit the same to the Deputy Collector for Operations. 5. The Deputy Collector for Operations affixes his signature on the prescribed Certificate of Condemnation and Destruction to signify his concurrence and transmits it to the District Collector for his approval. 6. The District Collector approves the transfer by affixing his signature on the prescribed Certificate of Condemnation and transmit the same to the Chief, CBWD for implementation. 7. The Customs Account Officer shall inform the CBW operator of the approval of his request and set the schedule of condemnation. A Letter of Notification shall be sent to the Commission on Audit. 8. The procedures on withdrawal as provided in Section B are followed. 9. The condemnation shall be witnessed and signed by the following: CBW Operator Customs Warehouseman Representative from the Commission on Audit

183

1 110. A copy of the Certificate of Condemnation and Destruction shall be kept 2 by the Customs Account Officer. 3 4G. VALIDATION OF CONSUMPTION OF MATERIAL IMPORTS BY 5 AIRLINE CATERING CUSTOMS BONDED WAREHOUSE 6 7I. GENERAL CONSIDERATIONS: Articles withdrawn by airline catering 8 customs bonded warehouse shall be validated against actual usage 9 every six (6) months. Articles withdrawn in excess of actual meal 10 requirements shall be subject to the collection of duties and taxes. 11 12II. REPORTORIAL REQUIREMENTS: The operator shall submit the 13 following reports: 14 15 1. Monthly Report on the Number of Meals Prepared and Loaded per 16 airline-client every six (6) months (Refer to Annex _); 17 18 2. Summary of Number of Meals Prepared and Loaded covering the 19 six (6) months period; 20 21 3. Monthly Report on Material Usage Requirements per airline-client 22 every six (6) months (Refer to Annex _); and, 23 24 4. Summary of Material Usage Requirements covering the six (6) 25 months period. 26 27III. PROCEDURES: 28 29 1. The operator shall submit the above reports to the Customs 30 Warehouseman assigned to the warehouse. 31 32 2. The Customs Warehouseman shall prepare and submit to the 33 Chief, CBWD through the Customs Account Officer, the reports of 34 the CBW operator and the following: 35 362.1 Monthly Report on Articles and Volume Withdrawn every six (6) 37 months (Refer to Annex _); and, 38 392.2 Comparative Report on Articles and Volume Withdrawn versus Monthly 40 Report on Material Usage Requirements every six (6) months. 41 423. The Customs Account Officer shall validate the reports submitted. A 43 Discrepancy Report for articles withdrawn and ascertained to be in 44 excess of actual meal requirements shall be prepared and submitted to 45 the Chief, CBWD together with an Indorsement to the WAU. 46 474. The Chief, WAU shall make an assessment of the duties and taxes 48 due and shall indorse the same to the Chief, Collection Division for 49 collection of duties and taxes. 50 2 3
184

1 15. Thereafter, all documents including the BOC Official Receipt, shall be 2 forwarded to the Chief, CBWD. 3 4 5 CHAPTER 7 SPECIAL ASSESSMENTS 6 7SECTION 1 PREVIOUSLY OWNED VEHICLES UNDER THE NO-DOLLAR 8 IMPORTATION SCHEME 9 101. Conditions to Import Previously Owned Vehicles (POV) Under the No11 Dollar Importation (NDI) Scheme: 12 131.1 There is no outflow of dollar or any foreign exchange from the 14 Philippines as the importer is the registered owner at the country of 15 exportation; 16 171.2 Vehicles under this regulation are only those with gross vehicle weight 18 not exceeding three (3) tons; 19 201.2.1 previously owned or registered under the name of a returning resident 21 or immigrant at least six (6) months prior to the date of application for 22 permit to import with the Bureau of Import Services (BIS); 23 241.2.1.1 Returning resident refers to a Filipino citizen who has stayed in a 25 foreign country for at least one (1) year and which residency shall be 26 accumulated within the three (3) year period immediately preceding 27 the date of filing of the application to import POV. 28 291.2.1.2 Immigrant refers to a person issued any of the following types of who 30 under the Philippine Immigration Act of 1940, as amended: 31 32 a. A Filipino citizen and a holder of 13G Visa under Section 13 Sub. 33 G(13G); or 34 35 b. A foreign national married to a Filipino and a holder of 13A Visa 36 under Section 13, Sub. A (13a); or 37 38 c. A Filipino citizen and holder of 47A issued to awardees of Special 39 Government Projects (SPG) e.g. Philippine Retirement Authority 40 and Balik-Scientist Program. (Part II, Sec. 1.a.3, Guidelines on 41 E.O. 156) 42 432. Administrative Provisions 44 452.1 Basis of Dutiable of Value of POV under NDI Scheme. 46 472.1.1 Transaction Value or Method One is not the applicable valuation 48 method for the no-dollar importations of previously owned vehicles 49 under this regulation because there is no sale for export under this kind 50 of importation. Method Two and Method Three are likewise not 2 3
185

1 1 appropriate as previously accepted Transaction Values of POV and 2 NDI are non-existent as Method One is deemed not applicable. 3 Method Four finds no application either as by the nature of previously 4 owned vehicles comparison is not appropriate. Method Five is not 5 applicable either as the qualified importer who is also the exporter is 6 not the manufacturer of the vehicle which is subject of valuation. 7 Method Six therefore is deemed the applicable valuation method. 8 92.1.2 Blue Book Value or Red Book Value, Karo or World Car Book or other 10 similar publications shall be the basis of dutiable value of POV under 11 NDI with applicable straight line depreciation method of ten per cent 12 (10%) per annum maximum of fifty per cent (50%) depreciation. 13 142.1.3 POV imported under the NDI scheme cannot be sold, transferred, 15 bartered or its use assigned by the importer within the period of three 16 (3) years from date of entry. 17 182.1.4 Duties and taxes due: 19 202.1.4.1 Customs duty shall be based on MFN but subject to preferential tariff 21 upon presentation of valid Certificate of Origin; 22 232.1.4.2 Ad valorem tax shall be based on BIR rules and regulations under 24 current regulation of which shall be based on landed cost; and 25 262.1.4.3 Value-added tax shall be based on BIR rules and regulations under 27 current regulation is 12% on landed cost inclusive of ad valorem tax. 28 292.1.5 All imported personally owned motor vehicles found to be in violation of 30 any provision of E.O. 156 shall be subject to seizure without 31 redemption by the BOC and will not be subject to registration by the 32 Land Transportation Office (LTO) unless disposed of in accordance 33 with the Tariff and Customs Code. Neither shall settlement by payment 34 of fine be availing as the importation in violation of EO 156 as the 35 release of the articles will be contrary to law. 36 372.3 Operational Provisions 38 392.3.1 Documents to be presented together with the IEIRD/SAD in customs 40 clearing process: 41 422.3.1.1 Bill of Lading; 43 442.3.1.2 Original copy of BIS Certificate of Authority to Import. When NSW 45 facilities are already operational this requirement may be deleted; 46 472.3.1.3 Original copy of BIS Release Authority. When NSW facilities are 48 already operational this requirement may be deleted; 49 502.3.1.4 Authenticated copy of document to prove that vehicle imported is 2 3
186

1 1 original left-hand drive vehicles (i.e., conversion from original right2 hand drive to left-hand drive) will only be allowed when it is covered 3 by a road safety certificate issued by appropriate government agency 4 in the country where the used motor vehicle will be imported; 5 62.3.1.5 Authenticated copy of roadworthiness and emission standards as 7 certified by authorized agency in the country of origin and duly 8 authenticated by the Philippine Embassy or Commercial Attach; 9 102.3.1.6 Authenticated copy of old and new passport, with complete pages 11 and stamped with valid 13A or 13G visa for immigrant importer; 12 132.3.1.7 Authenticated copy of car registration or title, with English translation 14 if necessary; 15 162.3.1.8 Duly notarized waiver of ownership by registered co-owner/s in case 17 the vehicle is registered in the names of two or more persons; 18 192.3.1.9 Alien Certificate of Registration (ACR) and Immigrant Certificate of 20 Residence (ICR) for immigrant importer; 21 222.3.1.10 If importer is a returning resident authenticated copy of pages in 23 passport showing stay abroad for an accumulated period of three 24 (3) years before securing BIS Certificate of Authority to Import; 25 262.3.1.11 Affidavit under oath that the vehicle imported will not be sold, 27 transferred or its use assigned within three (3) years from date of 28 covering import entry filing; and 29 302.3.1.12 Affidavit under oath describing in specific terms vehicle being 31 imported following the convention on description of vehicles. 32 332.3.2 The importer shall be treated as once-a-year importer and be 34 accredited for the purpose of lodging covering import entry in the e2m 35 Customs System. 36 372.3.3 The customs clearing process follows the regular processing of regular 38 imported article except a special procedures in the issuance of 39 Certificate of Payment (CP). 40 412.4 Reportorial Requirements 42 432.4.1 District Collectors through their respective Formal Entry Divisions 44 (FED) in coordination with MISTG shall submit report on all 45 importations of Personally Owned Vehicles to the Department of Trade 46 Industry (DTI) Attn: Director, Bureau of Import Services as provided for 47 under Section 4.1.2 of E.O. 156. Such information shall be submitted 48 every month not later than 15 days after the end of the reference 49 month. 50 2 3
187

1 1SECTION 2 IMPORTATION OF BRAND NEW AUTOMOBILES 2 CONSIGNED TO MANUFACTURERS/DEALERS AND INDIVIDUALS 3 42.1. Definition of Terms 5 62.1.1 Automobile 7 8 Shall refer to any four (4) or more-wheeled motor vehicle regardless of 9 seating capacity, which is propelled by gasoline, diesel, electricity or 10 any other motive power; provided that, for purposes of these 11 Regulations, buses, trucks, cargo van, jeeps/jeepneys/jeepney 12 substitutes, single cab chassis, and special purpose vehicles as herein 13 defined shall not be considered as automobiles. 14 15 Any motor vehicle, though referred to or otherwise denominated as 16 truck, cargo van, jeep/jeepney/jeepney substitute, bus, single cab 17 chassis, or special purpose vehicle, but not falling within the purview of 18 the definitions stated in these regulations shall be classified as 19 automobile and therefore subject to excise tax. (Chapter I, Sec. 2.b, 20 BIR RR 25-2003) 21 222.1.2 Completely Build Up (CBU) 23 24 Shall refer to vehicles imported in completely assembled form and 25 ready for use by the consumers. (Chapter I, Sec. 2.m, BIR RR 2526 2003) 27 282.1.3 Importer 29 30 Shall refer to any person bringing motor vehicles into the country from 31 a foreign country for the purpose of sale, for personal use or for use in 32 business. It shall also refer to persons/enterprises duly registered with 33 legislated freeport zones who purchase motor vehicles from 34 establishments located within the customs territory. This shall also 35 include owner/possessor/purchaser or transferee of motor vehicles 36 intended for exclusive used within the freeport zone but are introduced 37 or re-introduced into the customs territory. (Chapter I, Sec. 2.j, BIR RR 38 25-2003) 39 402.1.4 Manufacturer / Assembler 41 42 Shall refer to any person or group of persons, juridical or otherwise, 43 who produces, assembles, fabricates, or otherwise manufactures a 44 motor vehicle by combining body frame/chassis, engine, drive-train, 45 suspension and other automotive parts, or one who alters any part of a 46 motor vehicle to meet the specification of an automobile and render it 47 fit for registration with the Land Transportation Office. It shall also 48 include any person which manufactures, assembles, or fabricates 49 motor vehicles from surplus and/or used parts. (Chapter I, Sec. 2.i, 50 BIR RR 25-2003) 2 3
188

1 12.1.5 Semi-Knocked Down (SKD) 2 3 Shall refer to parts and components for assembly purposes that are 4 imported in partially assembled condition. SKDs include semi5 assembled vehicles, for purposes of ad valorem tax the same shall be 6 treated as CBU. (Chapter I, Sec. 2.l, BIR RR 25-2003) 7 82.1.6 Total Landed Value 9 10 Shall refer to the total of the (i) market value of the motor vehicles 11 imported as indicated in the motor vehicle reference books, such as the 12 Japanese and U.S. Red Book, Karo and World Car Book on 13 automobile utility vehicles and other motor vehicles, or the dutiable 14 value as defined in Sec. 201 of the Tariff and Customs Code of the 15 Philippines as amended, whichever is higher; (ii) customs duties paid 16 on the imported goods; and (iii) all other charges arising from, or 17 incident to, the importation. (Chapter I, Sec. 2.h, BIR RR 25-2003) 18 192.1.7 Brand new automobile 20 21 To be considered brand new, the automobile shall be (a) of current or 22 advance year model in the country of origin and/or manufacture, or (b) 23 of year model immediately preceding year in the country of origin 24 and/or manufacture provided that: 25 262.1.7.1 The automobile has a mileage of not more than 200 kilometers; and 27 282.1.7.2 The automobile has been acquired by the importer from the dealer as 29 first owner. 30 312.2 Administrative Provisions 32 332.2.1 Basis of Dutiable of Value of Brand New Automobiles 34 35 The primary method in determining the dutiable value of brand new 36 automobiles is the Transaction Value and the alternative methods of 37 valuation in sequential manner depending on the circumstances 38 attendant to the importation. 39 402.2.2 Ad Valorem Tax 41 42 There shall be levied, assessed and collected an ad valorem tax on 43 automobiles based on the importers selling price, net of excise and 44 value-added tax, in accordance with the following schedule: (Chapter 45 II, Sec. 4, BIR RR 25-2003) 46 47 Net Manufacturers/Importers Selling Price Tax Rate 48 49 Up to P600,000.00 2% 50 2 3
189

1 1 2 3 4 5 6 7 8 9 10 11 12 132.2.3 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 472.2.4 48 49 50 2 3 Over P 600,000.00 to P 1,100,000.00 of the value in excess of P600,000.00 Over P 1,100,000.00 to P 2,100,000.00 of the value in excess of P1,100,000.00 Over P 2,100,000.00 of the value in excess of P2,100,000.00 P 12,000.00 plus 20%

P 112,000.00 plus 40%

P 512,000.00 plus 60%

The importers selling price shall refer to the price, net of excise and value added taxes, at which locally manufactured/assembled or imported automobiles are offered for sale by importer to the dealers, or to the public directly or through their sales agents, as reflected in the importers sworn statement duly filed with the BIR, or in their sales invoices/official receipts, whichever is higher. provided, that in computing the importers selling price, it shall always include the value of car air conditioner, radio and mag wheels including the cost of installation thereof whether or not the same were actually installed in the automobile. Provided, further, that in no case shall the importers selling price be less than the amount computed as follows: 80% x (Suggested Retail Price Excise Tax Value-Added Tax). Provided, furthermore, that the importers selling price shall in no case be less than the cost of importation plus the industry profit margin of ten percent (10%) and other expenses incurred before the automobiles are sold to the market, provided, finally that the suggested retail price shall not be less than the actual selling price of the automobiles when sold to the market. The value of other factory-installed accessory or optional equipment such as wheel covers, or any other attachment installed on the unit removed or sold, or previously removed and returned for purposes of installation thereof, as well as the costs of installation of the accessory, shall likewise form part of the importers selling price. In cases where accessories are installed outside the production/ assembly plant or after the release from the customs custody but before the actual sale of the imported automobile, as the case may be, and the costs of such accessories and the cost of the installations shall form part of the expenses of the importer, all subsequent billings therefore by the manufacturer/assembler or importer to the dealer or customer shall form part of the selling price. (Chapter II, Sec. 5, BIR RR 25-2003) In case of automobiles that are imported for personal use and not for sale by the importer, the excise tax shall be computed based on the total landed value. Importation of more than one automobile unit by the same importer or the sale or transfer of an imported automobile within
190

1 1 a twelve (12)-month period shall not be considered as importation not 2 intended for sale for purposes of the preceding paragraph of this 3 section. 4 5Should there be importations of automobiles made in the name of several 6 buyers but represented by a single person/entity, such importations 7 shall be deemed an importation of automobile for resale; therefore, 8 subject to ad valorem tax based on importers selling price to be paid 9 by such person/entity representing the individual buyers. (Chapter II, 10 Sec. 7, BIR RR 25-2003) 11 122.2 Operational Provisions 13 142.2.1 Shipping documents required for customs clearance 15 162.2.1.1 Bill of Lading which shall describe the importation according to the 17 convention in the description of motor vehicles; 182.2.1.2 Commercial Invoice which shall describe the importation according to 19 the convention in the description of motor vehicles; 202.2.1.3 In case the importer is a corporation or an individual in the business 21 of importing vehicles for sale, authenticated copy of importers sworn 22 statement filed with BIR selling price of the importation for sale to a 23 dealer or to the general public and authenticated copy of actual sales 24 invoice/official receipts issued when sale was conducted. 25 262.2.1.4 In case the importer is a corporation or individual who intends to use 27 personally the vehicle being imported an affidavit under oath of 28 undertaking that he intends to use the imported vehicle for at least 29 one (1) year from date of import entry filing and that if he sells the 30 vehicle before the lapse of one (1) year period he shall pay the 31 difference in ad valorem tax between what he paid from the Bureau 32 of Customs and the actual selling price of the vehicle. 33 34 The Certificate of Payment and LTO certification shall include the 35 notation NOT TO BE SOLD WITHIN ONE (1) YEAR. IF SOLD 36 WITHIN ONE (1) YEAR FROM DATE OF IMPORT ENTRY FILING 37 THE OWNER MUST SECURE CLEARANCE FROM THE BUREAU 38 OF CUSTOMS. 39 402.3 Issuance of Certificate of Payment 41 422.3.1 Administrative Provision 43 44 The regulations and procedures in the issuance of Certificate of 45 Payment for brand new vehicles is the same as that of POV imported 46 under the NDI scheme. 47 482.3.1.1 The District Collector shall issue / transmit the CPs of motor vehicles 49 under the following categories: 50 2 3
191

1 1 a. Personally owned motor vehicles or those for personal use; 2 3 b. Importations of privileged individuals and entities (embassies, 4 multinationals, ADBs, etc.); and 5 6 c. Those subject of auction sales, settlement and/or redemption 7 which are clearly personally-owned or for personal use. (Sec. 8 3.1.1, CMO 20-2011) 9 102.3.1.2 The Deputy Collector for Assessment shall issue and transmit CPs 11 for all types of motor vehicle importations by members of the 12 Chamber of Automotive Manufacturers of the Philippines, Inc. 13 (CAMPI) and Automotive Vehicles Importers and Distributors (AVID), 14 including motorcycles, semi-knocked down units and importations by 15 members of said associations. (Sec. 3.1.2, CMO 20-2011) 16 172.3.1.3 To maintain the integrity of CPs, all blank CP forms shall be under 18 the custody and safe-keeping of the Deputy Collector for 19 Administration. (Sec. 3.2, CMO 20-2011) 20 212.3.1.4 To contain the distribution of blank CP forms for processing, the 22 same shall be issued only upon formal written request from the FED 23 Chief or any equivalent unit. The Chief FED, shall attach the working 24 copy of the entry to the letter request to ensure that CP forms are 25 issued in quantities enough for processing at any given time. (Sec. 26 3.3, CMO 20-2011) 27 282.3.1.5 The Deputy Collector for Administration shall provide the Chief FED 29 or equivalent a daily report on the number of blank CP forms issued 30 for reconciliation with the actual number of CPs processed for the day 31 to determine if any CP remains accountable or not. (Sec. 3.4, CMO 32 20-2011) 33 342.3.1.6 In order to establish and maintain a comprehensive and updated 35 database of all Brand New Vehicles processed and cleared through 36 Customs, all heads of offices / sections or units concerned are 37 hereby directed to submit to the EMVMCO a report on said 38 importations in such a format as the EMVMCO shall require. (Sec. 3, 39 Par. 1, CMO 27-2011) 40 412.3.1.7 For a centralized and coordinated approach on all kinds of queries 42 received by the Bureau pertaining to CP issuances, all requests for 43 verification of validity or authenticity of CPs shall be referred to the 44 EMVMCO which shall take the necessary action, including the 45 verification of the correctness of the duties & taxes paid on the motor 46 vehicle subject of the request / query. (Sec. 3, Par. 2, CMO 27-2011) 47 482.3.2 Operational Provisions 49 502.3.2.1 All import entries covering brand new motor vehicles before final 2 3
192

1 1 2 3 4 5 6 72.3.2.2 8 9 10 11 12 13 14 15 162.3.2.3 17 18 19 20 212.3.2.4 22 23 24 25 262.3.2.5 27 28 29 30 31 32 332.3.2.6 34 35 36 37 38 39 402.3.2.7 41 42 43 442.3.2.8 45 46 47 482.3.2.9 49 50 2 3 assessment by the Customs Examiner / Appraiser of the duties and taxes due shall be indorsed to the Enforcement and Security Service Motor Vehicles Monitoring and Clearance Office (EMVMCO) for issuance of Clearance of No Derogatory Information. (Sec. 2, CMO 27-2011) The EMVMCO upon receipt of the covering import entries shall check if the imported vehicle is the subject of any derogatory information received. The EMVMCO may also acquire the submission by the importer / consignee of an affidavit and other documents attesting to the legitimacy of the source / acquisition of the same. If none, the Chief EMVMCO shall issue a Certification or Clearance attesting that the importation is not the subject of any derogatory information. (Sec. 4.2, CSO 30-2011) Prior to release of the import documents, the assigned EMVMCO personnel shall encode in the database established and maintained for such purpose, all pertinent details regarding the subject importation. (Sec. 4.3, CSO 30-2011) Preparation of the CP shall be done by the concerned customs examiner of Section 5, FED or equivalent unit who retrieves the data submitted electronically by the importer / applicant applying for CP. (Sec. 4.1, CMO 20-2011) The assigned customs examiner validates whether the engine and chassis number and the Vehicle Identification Number (VIN) as encoded by the importer / applicant matches with the details provided in the import entry filed with the Bureau. If the same matches, he / she then prepares the hard copy of the CP for review by the principal examiner and appraiser. (Sec. 4.2, CMO 20-2011) The principal examiner and appraiser shall evaluate and review the CP prepared by the Customs Examiner against the encoded data. If in order, the accomplished CP shall be distributed and forwarded to the concerned officials, otherwise the CP shall be returned to the Customs Examiner assigned for further review / validation. (Sec. 4.3, CMO 20-2011) The Collection Division Chief shall encode the amount paid and the official receipt number in the e-CP System and tagged it paid. (Sec. 4.4, CMO 20-2011) The District Collector shall approve the CP by tagging it as approved and post-evaluates (transmits) the same electronically to the LTO. (Sec. 4.5, CMO 20-2011) In the entire process of CP preparation and its transmittal to the LTO, it is understood that the motor vehicle importation has complied with all existing rules and regulations, particularly CAO No. 8-2007 on the
193

1 1 specific description of imported articles. (Sec. 4.6, CMO 20-2011) 2 32.3.2.10 To maintain the operational efficiency of the offices / units 4 concerned and avoid delays in the electronic transmittals of CP to 5 the LTO, the District Collector is hereby directed to ensure that in 6 case absence of the primary official concerned, an alternate official 7 is designated to assume the responsibility of transmitting 8 electronically the CPs to LTO. (Sec. 4.7, CMO 20-2011) 9 102.3.2.11 Amendments of Certificate of Payment 11 122.3.2.11.1 Request for amendment/s of CPs shall be filed with the District 13 Collector of the port where the CP was originally issued through a 14 formal letter-request for amendment together with a copy of the 15 CP subject of the request. (Sec. 5.1, CMO 20-2011) 16 172.3.2.11.2 Request for amendment/s of CPs issued under the BOCs e-CP 18 System shall be filed with the Deputy Collector for Assessment or 19 Chief, Formal Entry Divisions, for action. (Sec. 5.2, CMO 20-2011) 20 212.3.2.11.3Amendment/s of CPs issued prior to the implementation of the e22 CP System shall be indorsed to the Office of the Commissioner 23 (Attn: Chief of Staff) for transmittal to the LTO. (Sec. 5.3, CMO 2024 2011) 25 26SECTION 3 TREATMENT OF IMPORTED ARTICLES DECLARED AS 27 OFF-QUALITY 28 29(Ref: CMO 21-2008) 30 313.1 Administrative Provisions 32 33 All shipments/importations declared in the shipping/commercial invoice 34 and entry as stocklots, side-runs, cull rolls, seconds, mill lots, off-grade, 35 B-grade, C-grade, second-hand, off-specs, substandard, off-quality, 36 overruns, sweepings, overflow, recycled, waste-waste, reconditioned, 37 refurbished, re-fashioned, surplus, scrap, scrap metals, metal waste, cut38 up, bath-roll, odd lengths, unbranded and other similar descriptive terms, 39 shall be: 40 413.1.1 Subject to 100% examination in the presence of PCCI/FPI technical 42 expert. Their absence shall however not deter the conduct of the 43 examination; 44 453.1.2 Subject to clearance by the District Collector who shall be the Principal 46 Accountable Officer. 47 483.1.3 Accompanied by a duly notarized Manufacturers and/or Suppliers 49 Certificate of Quality as to the actual condition/quality of the articles/s, 50 indicating therein the attributes/qualities in physical measurable terms, 2 3
194

1 1 such as but not limited to: 2 33.1.3.1 Standard for the product being imported; 43.1.3.2 Deviation from such standard which reduced its quality. 5 63.1.4 The Manufacturers and/or Suppliers Certificate shall be authenticated 7 by the Commercial Attache or Consulate at the Country of Origin as to 8 the quality of the shipment and not merely an authentication on the 9 genuineness of the signature of the document issued. Otherwise, the 10 same shall not be considered by the Bureau. 11 123.1.5 Subject to Laboratory analysis by the Philippine Customs Laboratory. 13 In case of unavailability of apparatus/equipment, PCL may indorse the 14 article/s or sample thereof to the DOST or other accredited laboratories 15 for analysis. 16 173.1.6 In the absence of the requirements prescribed under Sections 3.1.3 18 and 3.1.4, assessment shall be made using the VRIS Test Value or 19 Published Reference Value for a prime quality articles. 20 213.2 Operational Provisions 22 23 Allowable Discount a nominal discount per standard trade practice of 24 the Industry based on the Customs value of brand new or prime quality 25 article/s may be allowed for shipments/articles found by the Ports as 26 sub-standard or off-quality which shall not exceed 30% discount, if the 27 requirements under Sections 3.1.3, 3.1.4 and 3.1.5. 28 29SECTION 4 SHORT SHIPMENTS 30 31Ref.: CMO 52-2010 32 334.1 Administrative Provisions 34 354.1.1 BL of Short Shipped Cargoes should be marked Short Shipped when 36 established as such. 37 384.1.2 Request for amendment of the IFM/BL shall be conditionally approved 39 for short shipment known before lodgment subject to the results of 40 actual 100% physical examination. 41 424.1.3 No claim for short shipment shall be allowed if the goods had been 43 released without undergoing-physical examination. 44 454.1.4 Importation subject of short shipment shall be treated as one complete 46 importation. The subsequent importation shall likewise be treated as 47 one complete importation. 48 494.1.5 Upon assessment of the customs declaration, the licenses, clearances 50 or permits (LCP) including tax exempt certificates (TEC) issued for the 2 3
195

1 1 shipment shall be electronically tagged as USED. The importer shall 2 re-apply with the OGA for re-issuance of the said LCP and TEC to 3 cover the remaining balance of the subsequent importation, if any and 4 allowed by existing laws and regulations. 5 64.1.6 All other settlement modes such as the non-cash payments and the 7 Import Entry Declaration (IED) for advance duty payments shall be 8 applied on the as shipment that actually arrived. 9 104.1.7 In case there is an excess in the payment of duties and taxes, alter 11 applying the advance payment of duties and the amount endorsed and 12 paid at the bank, the importer may apply for a refund thereof. 13 144.1.8 All import declarations subject of short shipment shall be channeled to 15 Red Lane. 16 174.2 Operational Provisions 18 194.2.1 Procedure for Short shipment known before electronic lodgment of 20 entry. 21 224.2.1.1 The Importer/Customs broker shall file a request for amendment of 23 the IFM/BL with the Deputy Collector for Operations (see Annex A 24 hereof). 25 264.2.1.2 The Deputy Collector for Operations shall conditionally approve the 27 request for amendment subject to 100% physical examination. 28 294.2.1.3 The Office of the Deputy Collector for Operations shall encode the 30 necessary details to cause the amendment of the electronic manifest 31 corresponding to the subject B/L. 32 334.2.1.4 The Importer/Customs Broker, through the Value Added Service 34 Provider (VASP), shall electronically lodge an entry based on the 35 conditionally amended IFM/BL. 36 374.2.1.5 The Assessment Office shall conduct physical examination of the 38 shipment and follow the corresponding procedure, depending on the 39 results of the Physical examination conducted. 40 414.2.1.5.1 No discrepancy in volume and/or quantity. 42 43 The CDO V shall forward the working entry of the 1mport Entry and 44 Internal Revenue Declaration (IEIRD) to the District Collector for final 45 approval of the request for amendment. 46 474.2.1.5.2 Discrepancy in Volume and/or Quantity is less than the amended 48 IFM/BL. 49 50 The COO III indicate the actual findings in the IEIRD and shall, 2 3
196

1 1 upon approval by the District Collector, also make the necessary 2 amendments in the SAD as follows: 3 4 a. Adjust the value to cover the actual quantity and volume of the 5 subject shipment. 6 7 b. Reflect the actual findings in the Inspection Act, as to the actual 8 quantity and volume of the subject shipment. 9 104.2.1.5.3 Discrepancy in Volume and/or Quantity is more than amended 11 IFM/BL. 12 13 If discrepancy is 30% or less 14 154.2.1.5.3.1 Apply Customs Memorandum Order (CMO) No. 64-93 entitled 16 Guidelines in the Implementation of CAO 10-93 regarding the 17 imposition of surcharge under Section 2503 of TCCP, as 18 amended by RA 7651 19 204.2.1.5.3.2 The COO III shall indicate the actual findings and appropriate 21 penalty/fine (if applicable) in the IEIRD and shall, upon approval 22 by the District Collector, also make the necessary amendments in 23 the SAD as follows: 24 25 a. Adjust the CIF value to cover the whole quantity and volume of 26 the subject shipment. 27 28 b. Indicate the amount of penalty/fine (Box 44), if of necessary 29 based on item No. 4.1.5.3.1. 30 31 c. Reflect the actual findings in the Inspection Act, as to the actual 32 quantity and volume of the subject shipment. 33 34 If discrepancy is more than 30% there is presumption of fraud and 35 issuance of Warrant and Seizure Detention (WSD) is proper. 36 374.2.1.5.4 The COO III shall indicate the actual findings in the IEIRD and in the 38 Inspection Act of the SAD and COO V shall recommend the 39 issuance of WSD subject to the approval disapproval by the 40 District Collector. 41 424.2.2 Short shipment known after filing entry 43 444.2.2.1 Follow the procedures in Section 4.2.1.5.2. 45 46 47SECTION 5 ARTICLES ENTERING CUSTOMS TERRITORY 48 PREVIOUSLY ADMITTED INTO SPECIAL ECONOMIC ZONES AND 49 FREEPORT ZONES 50 2 3
197

1 15.1 2 35.1.1 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 435.1.2 44 45 46 47 48 49 50 2 3 Administrative Provisions Tariff Classification The classification under the AHTN of foreign articles, whether or not they have been manufactured, blended or otherwise combined with domestic articles, shall be determined according to the conditions, nature and character of the article when admitted to the SEZ or FPZ. However, the rate of duty shall be based at the time of entry to the Customs Territory. Note: The present wordings of existing customs issuances for FPZ i.e. Subic, Clark, Cagayan, Zamboanga, Bataan, Camp John Hay Freeport Zones as follows: The classification under the Tariff and Customs Code of the Philippines of foreign articles, whether or not they have been manufactured, blended or otherwise combined with domestic articles, shall be determined according to the conditions, nature and character of the entire article at the time of its transfer from (Subic, Clark, Zamboanga etc) to Customs Territory. In its present form the regulation can be interpreted to mean that when an article is processed into finished product the basis of the tariff classification is the character of the article at the time of entry to the Customs Territory which is that of a finished product. Laws creating the different Freeport zones do not have specific provisions on how foreign articles previously admitted shall be classified when such articles on its form when imported or processed enter the Customs Territory. Upon the other hand, Section 26 of RA 7916 or PEZA law provides that goods manufactured by an ECOZONE enterprise shall be made available for immediate retail sales in the domestic market, subject to payment of corresponding taxes on the raw materials and other regulations that may be adopted by the PEZA. So in practice finished products manufactured out of imported articles previously admitted to PEZA entering the Customs Territory are classified as raw materials while in the case of Freeport Zones the finished products are classified as such. Valuation of Articles The value of foreign articles or articles containing foreign article components, on which ad valorem duties (and taxes) are assessed shall be the price actually paid or payable for the entire article in the transaction that caused the article to be transferred to Customs Territory, minus the cost of any domestic article components of the entire article.
198

1 1 Note: Above wordings are from current issuances for the 2 different Freeport zones and it is suggested that it be adopted 3 also for SEZ. The interpretation of the provision is that the 4 articles for customs purposes the customs value shall be based 5 on the transaction value of the articles when admitted to the SEZ 6 or FPZ. 7 85.1.3 Value-added tax 9 10 The value-added tax on foreign articles or articles containing foreign 11 article components shall be assessed and collected based on the total 12 amount of the invoice issued by the registered locator of SEZ or FPZ to 13 the buyer in the Customs Territory. 14 155.1.4 Excise-tax (for consideration) 16 17 If the foreign articles or articles containing foreign article components 18 are subject to payment of excise-tax the buyer in the Customs Territory 19 must secure an Authority to Release Imported Goods (ATRIG) from 20 BIR before such articles may be released from the SEZ or FPZ. 21 225.2 Operational Provisions (for consideration) 23 245.2.1 The buyer from the Customs Territory for customs purposes shall be 25 considered as the importer and therefore required to lodge import entry 26 in the e2m Customs System through VASPs. As such the buyer must 27 be BOC registered and CPRS registered. 28 295.2.2 The documents required for customs clearance shall be: 30 315.2.2.1 The commercial invoice issued by the registered locator of SEZ or 32 FPZ as seller; 33 345.2.2.2 The transit declaration in the form of Single Administrative Document 35 and shipping documents used in the admission of the foreign article 36 to SEZ or FPZ; 37 385.2.2.3 Import Permit/Clearance from concerned government regulatory 39 agency in case of qualifiedly prohibited or regulated articles. 40 415.2.3 In lodging the import entry the manifest, bill of lading, insurance and 42 freight shall not be a mandatory field as there are not applicable in the 43 transaction. 44 455.2.4 The clearance process follows the same process of an ordinary 46 importation except that the articles shall be examined jointly by the 47 Bureau of Customs and authorized personnel of the SEZ or FPZ before 48 they are allowed exit from SEZ or FPZ. 49 50 2 3
199

1 1SECTION 6 AIR EXPRESS SHIPMENTS 2 3Ref: CMO 45-2010; CMO 50-2010; CMO 51-2010; CMO 46-98. 4 56.1 Scope 6 7 This regulation applies only to express consignments as herein defined 8 and carried either as freight or as baggage by accredited Operators. This 9 Order does not apply to other shipments which are traditionally 10 transported as ordinary freight (whether shipped individually under one 11 airline airway bill or as part of a consolidated shipment) which shall 12 continue to be processed and cleared under existing informal and formal 13 entry procedures. 14 15 This regulation shall, as far as practicable, also apply to other 16 international airports of entry where there are express consignments as 17 defined below. 18 196.2 Definition of Terms 20 216.2.1 Express Consignments - consolidated air shipments of articles/goods 22 which are time-sensitive in character, usually under a door-to-door 23 service arrangement with on-time delivery commitment, which are 24 shipped under a master air waybill (MAWB) consigned to Express 25 Cargo Operator (ECO) 26 276.2.2 Express Cargo Operator (ECO) - a company which provide and 28 arrange, by order and in the interests of shippers/consignors, for the 29 fast and rapid transport and delivery of express consignment (either as 30 a direct common carrier or an indirect air carrier) and as such issues its 31 own airwaybill to shippers/consignors of shipments under its 32 solicitation. 33 346.2.3 Courier Services Operator (CSO) - a company which, by itself or in 35 concert with affiliates or subcontractors, provide for the fast and rapid 36 transport (as an indirect air carrier) and delivery of express 37 consignments being brought and arriving as accompanied baggage of 38 its courier flying as passenger of commercial airlines. (The passenger 39 is commonly known and referred to as On-Board-Courier or OBC). 40 416.2.4 Package - a closed container (i.e. box/carton/envelope) or covering in 42 which the contents of a consignment is packed ready for shipment or 43 transport subject to weight and size limits imposed in section 5.0 44 hereof. 45 466.2.5 Consignment/Shipment (the terms are used interchangeably) -one or 47 more packages received from one shipper/consignor at one address 48 and addressed to one consignee at one final destination, receipted for 49 in one lot and shipped under one air waybill (AWD). (Consignments 50 consisting of two or more packages are referred to as "Multiple 2 3
200

1 1 Package Shipments"). 2 36.2.6 Master air waybill (MAWB) - an air waybill showing, among other data 4 elements, the consignee (nominal) at destination of a consolidated 5 shipment, the total number of packages and total weight of the 6 consolidation. 7 86.2.7 House air waybill (HAWB) - an air waybill showing all essential data 9 elements of an individual consignment and its ultimate consignee at 10 destination. 11 126.2.8 Customs - refers to the Bureau of Customs, an agency of the 13 Government of the Republic of the Philippines, and its duly authorized 14 officials and employees. 15 166.3 Administrative Provisions 17 186.3.1 Express Consignments Clearance Office (ECCO) 19 206.3.1.1 For uniformity and consistency in the application and enforcement of 21 customs laws and regulations, the composite units presently 22 established in Customs Bonded Warehouses (CBWs) of Express 23 Cargo Operators (ECOs) shall hereafter be named and referred to as 24 Express Consignments Clearance Office (ECCO). 25 26 These ECCOs shall be under the operational supervision and control 27 of the Deputy Collector for Assessment and shall separately be 28 headed by a Special Deputy Collector. The OBC Clearance Center 29 shall remain to be under the operational control and supervision of 30 the Deputy Collector for Passenger Services. 31 326.3.1.2 The ECCO shall receive all shipping documentations transmitted 33 electronically or manually covering express consignments in their 34 area of responsibility and the processing and clearance/release of 35 the consignments. It shall keep and maintain records of all express 36 consignments. A methodology which will provide an effective audit 37 trail of each and every consignment cleared/released by the ECCO 38 shall be formulated and prescribed by the Deputy Collector for 39 Assessment. 40 416.3.1.3 Each ECCO shall gather, collate and maintain an electronic database 42 of values from invoices of consignments, in close liaison and 43 coordination with the other ECCOs, which database shall be 44 updated from time to time as the need arises and interlinked with 45 the Valuation Section central database. Values established shall be 46 uniformly applied in the appraisement and valuation of subsequent 47 importations of the same, like, or similar articles goods from the 48 same country of origin until officially revised. This provision on the 49 application of established values, however, shall be amended 50 accordingly upon the implementation of the transaction value, 2 3
201

1 1 consistent with the WTO commitments. 2 36.3.2 Categories Of Express Consignments And Restrictions 4 56.3.2.1 Consignment Categories - Express consignments shall be 6 categorized as follows: 7 86.3.2.1.1 Documents (DOCS) - those generally considered as business, inter9 office, or personal (BIP) in character which have no commercial 10 value. Included under this category are diplomatic bags/pouches 11 with official seal and international letter-mail (excluding parcels) for 12 entry into the Philippine postal system. Representative examples of 13 these consignments are listed in Appendix " A " hereof. 14 156.3.2.1.2 Non Documents (NON-DOCS) - Consignments which do not fall 16 under the DOCS category, further sub-categorized as follows: 17 18 a. Low value non-dutiable consignments - Consignments whose 19 aggregate amount of duties, taxes and other charges collectible 20 is less than the amount authorized by law. 21 22 b. Low value dutiable consignments - Consignments above the 23 duty, tax and charges limit whose value is not more than the 24 established low value threshold FCA. 25 26 c. High value consignments - Consignments whose value is above 27 the established low value threshold FCA. 28 296.3.2.2 Restrictions - No express consignments shall include any of the 30 following: 31 32 a. Prohibited/Regulated imports under the Philippine laws; 33 b. Laws Dangerous Goods/Hazardous substances such as 34 explosives and other hazardous chemicals under RA 6969; 35 c. Valuable cargo such as jewelry, works of art and the like; 36 d. Animal, fish and fowls (live or frozen); 37 e. Foodstuff and highly perishable articles; 38 f. Human remains/cadavers; 39 g. Money (coins, cash, paper money and negotiable instruments 40 equivalent to cash); and 41 h. Personal effects of Balikbayans, OFWs and other travelers. 42 436.3.3 Standards and Documentation 44 456.3.3.1 Package Weight and Size Limits - Unless compliance is not feasible 46 due to the nature, size, or dimensions of the articles/goods to be 47 transported, each express consignment package shall weight not 48 more than thirty (30) kilograms and shall not exceed 1.50 meters for 49 anyone dimension or 3 meters for the sum of the length and the 50 greatest circumference measured in a direction other than that of the 2 3
202

1 1 length. However, Customs may also consider clearly established and 2 universally accepted international standards on the size and weight of 3 express consignment package. 4 56.3.3.2 Description and Limit on Commodities 6 76.3.3.2.1 Articles/goods shall be described on commercial/pro-forma invoices 8 in their normal trade description expressed in sufficiently precise 9 terms to enable immediate and unambiguous identification and tariff 10 classification of the commodity, preferably with correct H.S. Code 11 for each commodity. 12 136.3.3.2.2 Low-value consignments (dutiable or non-dutiable) shall not contain 14 more than five (5) commodities with different tariff classification or 15 H.S. Codes per HAWB. 16 176.3.3.3 Method of Transport 18 196.3.3.3.1 DOCS and NON-DOCS consignments shall not be commingled in 20 one bag/sack but placed in separate bags/sacks or other 21 containers. 22 236.3.3.3.2 DOCS consignments shall be placed in Green-colored bags/sacks 24 and NON-DOCS in bags/sacks ofa different color. Any bag/sack not 25 of Green color shall be presumed to contain NON-DOCS 26 consignments and shall be treated accordingly. 27 286.3.3.4 Manifest Requirements 29 306.3.3.4.1 A consolidated manifest copy shall be prepared and submitted for 31 all DOCS and both low-value dutiable and non-dutiable NON-DOCS 32 consignments. High value NON-DOCS consignments require 33 submission of a separate Manifest. 34 356.3.3.4.2 Consol (consolidation) manifest shall contain, among others, the 36 following data elements: 37 38 a. HAWB numbers of the consignments, with corresponding 39 40 Number of packages 41 42 Brief description of commodities; 43 44 Weight of the consignment (in kgs.); 45 46 Value of the consignment; 47 48 Name of shipper/consignor; and 49 50 Name and address of consignee. 2 3
203

1 16.3.3.4.3 OBC consol manifest shall contain, among others, the following 2 data elements: 3 4 a. Flight number/identification of carrying aircraft; 5 6 b. Name and passport number of the courier; 7 8 c. Airport of origin; 9 10 a. Original airport of origin of a consignment (if a consignment/s 11 originates from another airport); 12 13 d. Total number of bags/sacks; 14 15 e. Gross weight of all bags/sacks brought in; and 16 17 f. Baggage claim tag number of each bag/sack. 18 196.3.3.5 Each consignment shall be accompanied by the covering HAWB and 20 commercial pro-forma invoice placed inside a transparent self21 adhesive plastic document pouch which shall be securely affixed to 22 the consignment with the face of the HAWB readable from the 23 outside for easy identification of the consignment. For multiple 24 package consignments, the document pouch shall be affixed to the 25 #1 package, the rest of the packages to be properly identified or 26 marked. 27 286.4 Expedited Operational Procedures 29 306.4.1 Post-Arrival Routines 31 326.4.1.1 For consignments carried as freight: 33 346.4.1.1.1 Upon arrival, the consignment shall be immediately transferred 35 underguard to the CBW of the Operator concerned. In cases where 36 short-shipment is noted, a Cargo Irregularity Report (CIR) shall be 37 prepared by the representative of the airline. The CIR shall be 38 noted by the assigned Customs Guard who shall secure a copy for 39 record purposes. 40 416.4.1.1.2 Receiving Customs Warehouseman and Operator shall check the 42 completeness of the consignments transferred before they are 43 received and in-bonded, after which the Green-colored bags/sacks 44 shall be segregated from the rest of the consignments. 45 466.4.1.2 For consignments carried as OBC baggage: 47 486.4.1.2.1 Assigned Customs Guard, guided by the pre-alert copy of the 49 OBC consol manifest electronically or manually transmitted, shall 50 upon arrival of the carrying aircraft segregate at the cargo break2 3
204

1 1 down area the baggage of an arriving OBC in the presence of a 2 CSO representative who shall make proper accounting of the 3 consignments unladen. In cases where bag/sack is short-landed 4 or cannot be accounted for, a Property Irregularity Report (PIR) 5 shall be prepared by the CSO representative. The PIR shall be 6 noted by the assigned Customs Guard who shall secure a copy 7 for record purposes. 8 96.4.1.2.2 Receiving Customs Warehouseman and OBC-ECCO shall verify 10 the bags/sacks transferred and check the baggage claim tag 11 numbers against the pre-alert OBC consol manifest and transfer 12 Boatnote. For consignments with discrepancy, the OBC-ECCO 13 shall secure a copy of the PIR from the CSO representative. 14 156.4.2 Expedited Clearance/Release Procedures. 16 176.4.2.1 For DOCS and low-value non-dutiable NON-DOCS consignments: 18 196.4.2.1.1 These categories of consignments shall be processed and 20 cleared/released using the consol manifest as the entry document 21 with the covering MAWB as supporting document provided, that 22 they are placed and transported in properly identified bags/sacks. 23 The consignments shall be cleared/released only after each 24 bag/sack has undergone an x-ray scan. Customs retains the right to 25 physically examine packages as required, prior to release, or check 26 the HA WB covering a particular consignment for verification 27 purposes. 28 296.4.2.1.2 Any consignment found to contain dutiable articles/goods shall be 30 segregated and cleared/released only after payment of duties and 31 taxes provided, that the articles/goods found were not misdeclared 32 or undeclared on the consol manifest or HAWB, otherwise 33 appropriate enforcement action shall be taken including seizure. F 34 or purposes of clearance/release of any dutiable consignment, the 35 form STATEMENT AND RECEIPTS OF DUTIES COLLECTED ON 36 INFORMAL ENTRY (BC Form 116) shall be used. 37 386.4.2.2 For low value dutiable NON-DOCS consignments (as amended by 39 CMO 51-2010) 40 416.4.2.2.1 Low-value dutiable non-docs consignments shall be processed and 42 cleared/released under consolidated informal entry or individually in 43 cases where certain documentary requirements from other 44 government agencies are still being secured or for some valid 45 reason. 46 476.4.2.2.2 An Informal Import Declaration and Entry Form (BC Form 177) shall 48 be filed together with the copy of the House Airways Bills (HAWBS) 49 and corresponding commercial pro-form invoice as supporting 50 documents, provided that one (1) consolidated informal entry shall 2 3
205

1 1 cover not more than ten (10) individual HAWBs with different 2 consignees. 3 46.4.2.2.3 A consolidated informal entry covering ten (10) individual HAWBS 5 with different consignees shall not have an aggregate FOB value of 6 not more than US$200.00, provided that an individual HAWB shall 7 not have an FOB value of more than US$20.00, provided further 8 that each HAWB shall not exceed 5 kg by weight. 9 106.4.2.2.4 The consolidated informal entry must specify each and every HAWB 11 it covers, the number p of packages for every HAWB, Description, 12 Weight and Value. 13 146.4.2.2.5 Payment of the required fees shall be for every HAWB under the 15 filed consolidated entry. For example, for a consolidated entry 16 covering 10 HAWBs, payment of the prescribed fees shall be 17 computed as follows: 18 19 Informal Entry Form (inc. CDS and IPF) = Php 555.00 20 21 Php 265 (CDS) x 9 HAWBS = Php 2,385.00 22 23 Php 250 (IPF) x 9 HAWB = Php 2,250.00 24 25 Total fees for 10 HAWBS = Php 5,190.00 26 276.4.2.2.6. Consignments under this category shall still be cleared/released 28 based on selective documentary examination but shall undergo 29 regular x-ray scan prior to release if found in order, without 30 prejudice however to the Bureaus conducting a physical 31 examination of the content of any suspected package or at random 32 prior to release. 33 346.4.2.2.7. Any consignment forming part of consolidated informal entry found 35 with discrepancy shall be segregated and cleared/released alter the 36 appropriate action has been undertaken by Customs. 37 386.4.2.3 For high value NON-DOCS consignments: 39 406.4.2.3.1 This category of consignments shall be individually processed and 41 cleared/released under existing formal entry procedures and shall 42 pass the selectivity process based on e2m Customs System. No 43 physical examination shall be made of consignments in the Green44 Lane category unless based on derogatory information or Alert 45 Notice received. Customs may conduct document examination of 46 consignment channeled to the Yellow-Lane category but shall in all 47 cases conduct physical examination of consignments in the Red48 Lane category. 49 506.4.2.3.2 Consignments with a value of USD$500.00 FCA shall be cleared 2 3
206

1 1 through formal entry. 2 36.4.2.4 Advance Processing of Entries. 4 56.4.2.4.1 Advance processing of entries covering express consignments may 6 be allowed; provided a pre-alert copy of the consol manifest has 7 been electronically transmitted in advance under existing 8 regulations. However, numbering of entries shall be made only 9 after arrival of the consignments, and clearance/release authorized 10 only upon submission of hard copies of the consol manifest 11 submitted to the Customs Boarding Officer upon arrival of the 12 carrying aircraft as well as other supporting documents. Customs, 13 however, reserves the right to randomly conduct examination. 14 156.4.2.4.2 To avail of the privilege of advance processing, prior arrangement 16 shall be made by the ECO concerned with the District Collector or 17 his authorized representative at least one working day prior to the 18 arrival of the carrying aircraft. 19 206.4.2.4.3 In the case of consignments arriving as baggage, their 21 clearance/release shall be authorized only upon receipt by the 22 OBC-ECCO of hard copies of the required supporting documents. 23 No bag/sack shall be cleared/released unless the corresponding 24 baggage claim tag has been surrendered to the OBC-ECCO for 25 verification and record purposes. 26 276.4.2.4.4 At the sound discretion of the District Collector, release of low value 28 dutiable (except a HAWB) NON-DOCS consignments without 29 certain supporting documents may be authorized as a matter of 30 privilege; provided, the Operator concerned presents a written 31 undertaking under oath that the lacking documentary requirement 32 shall be submitted within twenty-four (24) working hours after the 33 clearance/release. In such cases, final liquidation of the entries 34 shall be made only after submission of the required documents. 35 Failure on the part of an Operator to faithfully comply with this 36 undertaking shall be sufficient ground for cancellation of the 37 privilege. 38 396.4.2.4.5 Advance processing of entry shall not be allowed for the following 40 consignments: 41 42 a. Those subject of a Hold Order; 43 44 b. Those requiring import clearance/permit from the concerned 45 government agency, unless submitted together with the entry; 46 47 c. Conditionally-free importations falling under sub-sections "d" "i" 48 "J" " q" "t" and "x" of Section 105 of the Tariff and Customs Code 49 of the Philippines, as amended; and 50 2 3
207

1 1 d. Those for transshipment to another local or foreign port. 2 36.4.3 General Provisions 4 56.4.3.1 Determination of Freight for Shipment Arriving as Baggage. For the 6 Express consignments arriving as baggage, the freight component 7 shall be based on the IATA Area from whence the consignment came 8 from, to wit: 9 10 IATA Area 1 USD$ 5.00/kg or fraction thereof 11 12 IATA Area 2 USD$ 4.00/kg or fraction thereof 13 14 IATA Area 3 USD$ 2.00/kg or fraction thereof 15 16 The freight component shall be revised upon publication of new IATA 17 rates. 18 196.4.3.2 Treatment of Split Consignments. 20 21Two or more low value NON-DOCS consignment which appears on the 22 consol manifest to have the same shipper/consignor and the same 23 consignee, whose aggregate value is USD$ 500.00 FCA or more or 24 its equivalent in other foreign currency, shall be treated as a single 25 consignment for customs purposes and cleared/released under one 26 formal entry. 27 286.4.3.3 Alerting/Holding of consignments. 29 306.4.3.3.1 Customs law enforcement officers/agents shall not hold and stop 31 delivery of express consignments after their release has been 32 authorized, unless based on positive information that its 33 clearance/release was attended with irregularity or its documentation is 34 not in order or fraudulent. All held or alerted consignments shall be 35 transferred to the Collector's Corral or similar facility in the CBW of the 36 operator pending final resolution of the matter. 37 386.4.3.3.2 In the case of DOCS and low value non-dutiable NON-DOCS 39 consignments, the corresponding HAWB number of a particular 40 consignment whose delivery is held shall be highlighted with a 41 colored text liner with proper notation of the ground for holding its 42 delivery .After said action, the rest of the consignments shall be 43 cleared/released if found in order. 44 456.4.3.4 Supplemental and Amendments to Consol Manifests. 46 476.4.3.4.1 Supplemental consol manifest for consignments not listed on the 48 consol manifest originally submitted upon arrival of the carrying 49 aircraft: Provided, however, that the supplemental consol manifest 50 is submitted by the Operator concerned within six (6) hours from the 2 3
208

1 1 time of arrival of the carrying aircraft or OBC. Supplemental consol 2 manifest shall contain a notation of the time and date it was 3 submitted and shall first be approved by the Special Deputy 4 Collector or authorized representative before it will be given due 5 course. 6 76.4.3.4.2 Consol manifests shall be amended or in accordance with existing 8 regulation. Amendment to consol manifest shall, before it shall be 9 given due course, be approved by the District Collector or his 10 authorized representative. 11 126.4.3.5 Overtime Services of the Customs Personnel. 13 146.4.3.5.1 Customs personnel at the ECCOs shall be assigned, on rotation 15 basis, to render overtime service after regular office hours and 16 during Saturdays, Sundays and other non-working Holidays. Such 17 services shall be requested by the Operator in advance and in 18 writing, specifying the number of personnel required and other 19 relevant information. 20 216.4.3.5.2 The Operator for whom such services has been rendered shall pay 22 such services, including transportation and meal allowances based 23 on rates prescribed under existing regulations. 24 256.4.3.6 Clearance of Express Consignments Through Customs 26 276.4.3.6.1 Customs clearance of DOCS and low value NON-DOCS 28 consignments shall be handled by the ECO concerned through 29 contracted licensed customs brokers, being part of their integrated 30 customer service. For consignments arriving as baggage, customs 31 clearance of consignments may handled by the CSO concerned at 32 the OBC-ECCO. 33 346.4.3.6.2 For high value NON-DOCS consignments, customs clearance may 35 be handled by the ECO/CSO concerned except in cases where the 36 shipper/consignor indicates the name of the customs broker to 37 handle clearance of the consignment appearing on the broker 38 select option box of the HA WB or when the consignee authorizes a 39 particular customs broker to handle customs clearance of his 40 consignment. 41 426.4.4 Payment Deposit for Duties and Taxes and Guaranty. 43 44 Payment of duties and taxes shall be through PASS5. 45 46 The air cargo express operator shall deposit and maintain at all times 47 in a duly accredited commercial bank the amount of not less than two 48 million pesos (P2,000,000.00) specifically to guaranty immediate 49 payment by the bank upon demand by the Bureau of Customs, in case 50 of default on the part of the operator, of all assessed customs duties, 2 3
209

1 1 taxes and other charges on importations the release of which have 2 been secured under the provisions of regulation. 3 46.4.5 Delivered Duty Paid (DDP) or Bill to Shipper (BTS) Shipments (CMO 5 45-2010; CMO 50-2010) 6 7 ECO may be allowed to be the financial party for a particular shipment 8 where the term of payment between the shipper and consignee is 9 Delivered Duty Paid (DDP) and/or Delivered Duty Unpaid (DDU) where 10 the consignee is a regular known customs of the ECO and have 11 extended the credit to terms to ensure the delivery of shipment on a 12 specified date and time. This should be applicable to both informal and 13 formal entries where the Bureau of Customs is guaranteed to 14 immediately collect the customs duty and tax due on shipments. 15 16 Note: The privilege of extending the special procedures for 17 DDP/BTS to Delivered Duty Unpaid (DDU) or Bill to Consignee 18 (BTC) may not be appropriate. (Please note that under 19 INCOTERMS 2010 DDU has been replaced with DAP) As the 20 advances to be made by EOs in behalf of their clients partakes of 21 private financial arrangement it may not be proper for government 22 (BOC) to extend its resources to EOs by reason of their financial 23 arrangements with their clients. BOC has to make adjustments to 24 its present system to accommodate the request of extending the 25 DDP/BTS special procedures to DDU/BTC. 26 27 Financial institutions extending credits to importers for the 28 payment of duties and taxes may be asking for same arrangement 29 to ensure that the loans extended to importers are used for the 30 purposes. The same may be true for freight forwarders which 31 may have similar financial arrangements with their client 32 importers. 33 346.4.5.1 Definition of Terms 35 366.4.5.1.1 Delivered Duty Paid - a commercial arrangement where the seller 37 pays for all transportation costs, bears all risks until the goods has 38 been delivered, and pays the duty (the term duty refers to customs 39 duty, taxes, and other charges). The dutiable value of imported 40 articles on DDP terms shall be based on the full DDP amount 41 unless the post importation charges are distinguished from the price 42 actually paid or payable. 43 446.4.5.1.2 Financial Party - the company who shall be responsible for the 45 payment of duties and taxes in behalf of the supplier under the 46 DDP/BTS commercial arrangement. 47 486.4.5.2 Administrative Provisions 49 506.4.5.2.1 The EO shall be recognized as the Financial Party in the DDP/BTS 2 3
210

1 1 shipments 2 36.4.5.2.2 The special arrangement for DDP/BTS is extended to named 4 consignees/importers by the EO or its authorized representative. 5 The special arrangement shall be tagged in the CPRS profile of the 6 consignee / importer as DDP-enabled. 7 86.4.5.2.2.1 Expiration, cancellation or suspension of the importers CPRS 9 profile shall automatically invalidate the importers DDP tag. 10 However, successful renewal of the CPRS client profile shall 11 reinstate the CPRS DDP tag of the importer. 12 136.4.5.2.2.2 Renewal of the CPRS registration, however, shall automatically 14 enable the special procedure without the need of re-assignment. 15 166.4.5.2.2.3 The CPRS DDP - enabled tag may be invalidated at any time at 17 the instance of the EO or its authorized representative when 18 shipper has changed or stopped the terms of the DDP shipment 19 or at the instance of the Customs Authorities based on adverse 20 findings from audits and investigations that may be conducted. 21 226.4.5.2.2.4 Once tagged as DDP- enabled, the special arrangement shall be 23 applicable to any EO not just the endorsing party. 24 256.4.5.2.3 The special procedure for DDP/BTS shipments shall cover both 26 Formal and Informal Entries (Phase 3) in NAIA and other airports 27 nationwide. (Subsequent CMOs written for Informal Entry 28 implementation shall not diminish any of the rights and 29 privileges accorded to DDP/BTS shipments through this 30 Order.) Note: Deleted because it is legally untenable. What is 31 granted by the CMO is a privilege and not a right granted by 32 law) 33 346.4.5.2.4 EOs other than PCAEO members desiring to use the special 35 procedure for their BTS/DDP shipments provided in this Order must 36 apply for accreditation with the Deputy Commissioner for RCMG or 37 the Deputy Commissioner in charge of BOC accreditation 38 processes and demonstrate the following capabilities and actual 39 practice: 40 41 a. Capability to send inward foreign manifest to BOC at least 2 42 hour prior to aircraft arrival. 43 44 b. Profile their Customers as to financial credibility and track record 45 of compliance so that only shipments with shippers and 46 consignees that are low risk should be declared following this 47 procedure. 48 496.4.5.2.5 Yearly Evaluation 50 2 3
211

1 1 There shall be yearly evaluation to be done before the end of 2 January of each year to determine the faithful compliance of 3 EOs with regulation. 4 5 The Customs Team of Evaluators shall be composed of: 6 7 Director, IAS as the Chairman 8 Members: 9 Head, Risk Management Office (RMO) 10 Deputy Collector for Assessment, NAIA 11 Chief, Formal Entry Division, NAIA 12 136.4.5.2.6 Monthly Reporting by EOs Availing of the DDP/BTS Special 14 Procedures 15 16 DDP is a purchase arrangement where the shipper includes in the 17 quotation to the consignee/buyer the estimated customs duty 18 and tax at the port of destination. As such EOs should be 19 paying the amount of duty and tax as quoted by the shipper. 20 Therefore, to check the accuracy of actual payments made to 21 the government by the EOs in relation to the quotation by the 22 shipper a monthly report shall be submitted by the EOs to BOC 23 Attention: Director, IAS. 24 25 The report which shall be submitted every 5th of the month 26 should contain the summary of all shipments cleared through 27 the special procedures for DDP/BTS supported by following 28 documents: 29 30 a. Import entries; 31 b. HAWB; 32 c. Commercial Invoices; 33 d. Packing Lists, if any; 34 e. Quotation of shippers to consignees. 35 366.4.5.3 Control by the Office of the Deputy Commissioner, RCMG (CMO 5037 2010) 38 396.4.5.3.1 The designed user in the Office of the Deputy Commissioner, 40 RCMG shall tag the CPRS record of every consignee importer in 41 the certified list submitted by the EO using the Special Arrangement 42 Tab of CPRS. 43 446.4.5.3.2 Upon the instance of the EO or AOCG itself the designated user 45 shall disable the DDP special arrangement of a consignee/importer. 46 The special arrangement shall cease to be active for all EOs. 47 486.4.5.4 Express Operations (EO) 49 506.4.5.4.1 The EO shall register itself in CPRS with Nature of Business of "Air 2 3
212

1 1 Express Operator. As an importer, the EO can enroll its debit 2 accounts with AABs to get Bank Reference Numbers. The EO shall 3 advice the bank that the debit account is to be used under the DDP 4 arrangement, in which case the EO is named in the declaration as 5 the Financial Party. 6 76.4.5.4.2 The EO shall submit an initial list of importer- clients, using the 8 format, arrangement to the Office of the Deputy Commissioner, 9 RCMG. The latter shall review and approve the list which shall be 10 the basis for tagging the importers client profile in CPRS as "DDP 11 enabled". 12 136.4.5.4.3 Subsequent addition to the list shall be applied by email from the 14 EO to the designated RCMG official who will immediately include 15 the entity and tag the same based on the certification of the EO that 16 the due diligence verification has been performed and to be subject 17 to post audit by Customs. 18 196.4.5.4.4 The Deputy Commissioner, RCMG should provide at least two (2) 20 e-mail addresses exclusively dedicated to receive requests for 21 additions to the list of clients initially submitted by the EOs. (or 22 other consolidators with DDP/BTS arrangements.) Note: Deleted as 23 the regulation should be exclusive to air express operators and not 24 to regular consolidators. To add: The EO requesting for additions 25 to the list of clients by e-mail should confirm the e-mail in writing 26 latest the following day e-mail was sent. 27 286.4.5.4.5 The EO may invalidate a consignee/importers DDP special 29 arrangement at any time by official communication to the Deputy 30 Commissioner, RCMG, stating the grounds therefore. 31 326.4.5.5 Declarant 33 346.4.5.5.1 The declarant shall indicate the model of declaration "4FD"or "4ID" 35 for formal entry or informal entry, respectively, in Box 1 of the Single 36 Administrative (SAD). 37 386.4.5.5.2 The declarant shall indicate the TIN of the EO in Box 9 of the SAD, 39 labeled Financial Party. 40 416.4.5.5.3 The declarant shall indicate the Bank Reference Number of the EO 42 in Box 28, Bank Ref. No. 43 446.4.5.5.4 The exporter (shipper/seller), the consignee (importer) and the 45 declarant (customs broker) shall be declared in their appropriate 46 boxes in the SAD following the existing rules for declaration. 47 486.4.5.6 Payment 49 50 6.4.5.6.1 The payment instruction message sent by e2m Customs to the 2 3
213

1 1 PCHC-BAP payment gateway shall contain the BRN of the EO. The 2 consignee in the payment instruction message shall be the EO. 3 46.4.5.6.2 The Bank shall follow its existing procedure to confirm debit of the 5 account with the owner, in this case, the EO. 6 76.4.6 X-ray and Field Test Kits (For narcotics and dangerous drugs) 8 9 Each ECCO shall provide the Customs with X-ray and field test kits (for 10 narcotics and dangerous drugs) in order to prevent the entry of illegal 11 and anti-social goods. 12 136.4.7 Sanction Against Violations. 14 156.4.7.1 Express consignments arriving as baggage without an accompanying 16 OBC shall be seized as unmanifested cargo pursuant to a ruling of 17 the Supreme Court. If the bags/sacks containing such consignments 18 are inadvertently brought to the Customs Arrival Area at the 19 Passenger Terminal Building, it shall be immediately transferred 20 underguard with Boatnote to the OBC-ECCO for appropriate action. 21 No airline shall accept express consignments as check-in baggage 22 unless verified to be accompanied by a duly authorized 23 courier/passenger; otherwise, it may be held liable for carrying 24 unmanifested cargo and subject to administrative sanctions. 25 266.4.7.2 Expedited clearance/release procedures may be discontinued if an 27 Operator is found to repeatedly violate or fail to comply with any 28 provision of this Order unless it demonstrates to show willingness to 29 address them in a manner that will substantially preclude such 30 violations or non-compliance, without prejudice to whatever 31 administrative or criminal action which Customs may take for 32 violations of the Customs laws and regulations if warranted. 33 34Attachments: Appendix "A" 35 36BIP DOCUMENTS FALLING UNDER THE DOCS CATEGORY INCLUDES 37 BUT NOT LIMITED TO THE FOLLOWING: 38 39a. Business and Inter-Office Documents 40 41Accounting documents Invoices, completed 42 43Bank statements Legal documents 44 45Bid quotations Licenses/Permits 46 47Blueprints Memoranda 48 49Booklets/brochures Office records 50 2 3
214

1 1(non-advertising) 2 3Budget statements/reports Operating agreements 4 5Business cards Reports: Analysis 6 annual/sales/ 7 8Business correspondences 9 Inventory/financial/conference 10 11Cash letters Photocopies of BIP 12 documents 13 14Computer printouts Price lists 15 16Contracts Proposals 17 18Court transcripts Purchase orders 19Crew lists Quotations 20 21Customs documents Sales agreements 22 23General business documents Statistical data 24 25Insurance documents Technical drawing (non26 comm'l) 27 28Inter-Office Memos Trade confirmations Travel 29 agendas/itineraries 30 31b. Personal Documents 32 33Bio-data/resumes Marriage 34 certificates/licenses 35 36Birth certificates Medical records 37 38Employment papers Passports 39 40Death certificates Photographs, personal 41 42Income statements Tax papers 43 44Immigration papers Visa applications 45 46Letters and cards, personal X-ray films, exposed, 47 personal Manuscripts 48 49 50(NOTE: These articles must have no commercial value or taxable 2 3
215

1 1 importance.) 2 3*Must not exceed ten (10) pieces; otherwise, they must be manifested as 4 "NON-DOCS" and accompanied with a commercial invoice. 5 6SECTION 7 CUSTOMS CARGO CLEARANCE PROCEDURES FOR MCC 7 FUNDED GOODS UNDER THE MILLENIUM CHALLENGE 8 CORPORATION (MCC) CONTRACT 9 10Ref: CMO 44-2010 11 127.1 Definition of Terms 13 147.1.1Beneficiary means any of the following: (1) MCA-Philippines ; and (2) 15 any Vendor. 16 177.1.2 Compact means the Millenium Challenge Compact between the 18 Republic of the Philippines and the United States of America. 19 207.1.3 DPWH means the Department of Public Works and Highways. 21 227.1.4 DSWD means the Department of Social Welfare and Development. 23 247.1.5 MMC means the Millenium Challenge Corporation, a United States 25 government corporation established pursuant to the U.S Millenium 26 Challenge Act of 2003, as amended. 27 287.1.6 MCC Funded Contract means a contract of the vendor with MCA29 Philippines. 30 317.1.7 MCC Funded Goods means goods and other property, works, 32 technology and other assets, whether acquired, used or performed at 33 any level or stage, under or in connection with the Compact, the 34 Program or any Project. 35 367.1.8 Program means the program being implemented by the Republic of 37 the Philippines to achieve the goals and objectives described in the 38 compact. 39 407.1.9 Project means any of the following: (1) the KALAHI-CIDSS Project of 41 DPWH; (2) the Secondary National Roads Development Project of the 42 DPWH; and (3) the Revenue Administration Reform Project of BIR; 43 and 44 457.1.10 Vendor means any person, natural or juridical that provides MCC 46 Funded Good 47 487.2 Administrative Provisions 49 507.2.1 All beneficiaries of MCC-funded importations/goods shall apply for 2 3
216

1 1 2 3 4 57.2.2 6 7 8 9 10 11 127.2.3 13 14 15 16 17 18 19 20 21 22 23 24 257.2.4 26 27 28 297.2.5 30 31 32 33 347.3 35 367.3.1 37 38 39 40 41 42 43 44 45 46 47 48 49 50 2 3 accreditation with the Bureau as an accredited importer by filing the required application form and submission of the documents listed in Annex A hereof, as applicable BOC Accredited Importers/beneficiaries of MCC-funded Importations/goods shall likewise register with the Client Profile Registration System (CPRS) under the Bureaus E2M System pursuant to CMO 39-2008 with their JO 2-91 identification number which eligibility will be verified in the course of the approval of their CPRS Registration To facilitate their customs cargo clearance process, MCA-Philippines shall on a regular basis, provide the BOC through its Collection Service (CS) the following documents for reference purposes: (i) List of vendors who will import MCC Funded Goods (ii) Certified true copies of the MCC Funded Contracts (iii) Certified true copy of the Certificate of Entitlement to Subsidy (CES) for the year issued by the Fiscal Incentives Review Board (FIRB) (iv) Certified true copy of the Special Allotment Release Order (SARO) for the year issued by the Department of Budget and Management The CES and the SARO shall answer for the payment of the duties and taxes due on all incoming MCC-funded shipments consigned to the beneficiaries as defined in Section 1 hereof. All beneficiaries and/or buyer must secure Tax Exemption Certificates from the Department of Finance prior to implementation so as to facilitate the processing at the Bureau of Customs of importations to be considered as conditionally-free Operational Provisions Prior to arrival of the MCC-Funded Importations, the intended Beneficiary shall secure the required clearance from the BOCs Collection Service (BOC-CS) prior to lodgment of the Import Declaration through the VASP by submitting two sets (one original copy, one photocopy) of the following documents: a. Photocopies of the CES and SARO; b. Certification of Official Importation issued by MCA-Philippines following the prescribed form; c. Photocopy of the relevant MCC Funded Contract; d. Commercial and Shipping documents for the MCC Funded Goods to be imported (e.g. Commercial Invoices, Packing Lists, Bill of Lading, Air Waybill); e. Duly accomplished Import Entry, signed by the authorized representative of MCA Philippines;
217

1 1 f. Tentative Statement of Account following the prescribed format, 2 endorsed by MCA Philippines; and 3 g. Other documents as may later be deemed necessary. 4 57.3.2 Upon filing of the above documents with BOC-CS, BOC-CS shall 6 inform the Beneficiary whether the documents are complete. The BOC7 CS Director shall issue the corresponding clearance/indorsement to the 8 District Collector within five (5) days of submission of the complete 9 documents. 10 117.3.3 Lodgment and processing of the import entry shall follow the 12 procedures prescribed under CMO 27-2009 on the Import Assessment 13 System (IAS) under E2M Customs System 14 157.3.4 Within fifteen (15) days from the release of the MCC Funded Goods by 16 BOC, the District Collector shall submit to BOC-CS the Statement of 17 Account stating the amount of customs duties and internal revenue 18 taxes actually assessed on the imported MCC Funded Goods 19 207.3.5 The BOC-CS shall credit the amount of customs duties and taxes 21 stated on the Statement of Account against the amount of available tax 22 subsidy under the CES and SARO 23 247.3.6 For importations to be entered conditionally-free for later re25 exportation, the required Tax Exemption Certificate must be secured 26 from the Department of Finance before lodgment and submission of 27 the covering Import Declaration through the Value-Added Service 28 Provider (VASP) 29 30SECTION 8 BOOK IMPORTATION 31 328.1 Regulation on book importation is governed by Department of Finance 33 Department Order no. 57-2011 which was published in the 25th 34 December 2011 issue of the Philippine Star is quoted as follows: 35 36Pursuant to Section 38 (1), Chapter 7, Book IV of Executive Order No. 292 or 37 the Administrative Code of 1987, in relation to the Tariff and Customs 38 Code of the Philippines (TCCP), as amended, the National Internal 39 Revenue Code of 1997, other existing laws and international 40 agreements, the following guidelines are hereby being issued to govern 41 the clearance procedures for book importations. 42 431. `Rationale 44 45These guidelines are being issued to emphasize the duty-free and VAT46 exempt status of imported books, subject only to the exceptions 47 provided under the Florence Agreement, and to clarify the procedure 48 for their clearance and release from the Bureau of Customs. 49 502. Definition of Terms 2 3
218

1 1 2a. 3 4 5 6 7 8 9b. 10 11 12 13 14c. 15 16 17 18 19 20 21 22 23 243. 25 26 27 28 29 30 31 32 333.1 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 2 3

Florence Agreement refers to the Agreement on the Importation of Educational, Scientific and Cultural Materials signed by the President of the Philippines on August 2, 1952, whereby the contracting States undertake not to apply customs duties or other charges on, or in connection with, the importation of books and materials listed in Annexes A to E thereof. Commercial quantity means quantity for a given kind or class of articles which are in excess of what is compatible and commensurate with a persons normal requirements for personal use, as defined under Customs Memorandum Order No. 67-77. Personal effects/personal use As explained by Customs Administrative Order No. 7-72 or the implementing rules and regulations of Section 105 of the TCCP, as amended, this term refers to those embracing all articles of personality not considered as merchandise, including books. For purposes of this Order, books considered as personal effects or for personal use shall mean those, the quantities of which do not exceed twelve (12) copies of any one work when imported by an institution; or six (6) copies of any one work when imported by an individual. Guidelines All imported books, whether for commercial or personal use with the exception of those published by or for a private commercial enterprise essentially for advertising purposes as stated in Annex A of the Florence Agreement, are exempt from customs duties. Importation of books is likewise exempt from value-added tax (VAT) pursuant to Section 109 (R) of the National Internal Revenue Code. For Books Imported in Commercial Quantities Prior to the release by the Bureau of Customs (BOC) of books imported in commercial quantities, the importers must first present an endorsement from the Revenue Office of the Department of Finance for the duty- and VAT-free importation of books/materials covered by the Florence Agreement which shall be issued after submission of the following documents 1. Bill of Lading/AirwayBill/Postal Registry Notice with BOC Tentative Assessment Sheet; 2. Commercial Invoice; 3. Packing List with title of books; 4. Authority of Representative (in lieu of consignee);

219

1 1 5. Affidavit to the effect that the shipment consists of books; 2 3 6. In case of donated books Deed of Donation duly authenticated by 4 the Philippine Consulate abroad, and Deed of Acceptance; 5 6 7. Certification from the UNESCO Office in the Philippines attesting 7 that the importation/s is/are covered by the Florence Agreement; 8 and 9 10 8. Certificate of Registration with the National Book Development 11 Board as book importer or publisher. 12 133.2 For Books Imported as Personal Effects or for Personal Use 14 15 The endorsement prescribed under Section 3.1 hereof shall not be 16 required for books imported as personal effects or for personal use as 17 defined under Section 2(b) of this Order, whether transported as 18 accompanied baggage, through couriers or the post offices. Said 19 importations however, should be cleared and released through the 20 required declaration of goods as provided under existing rules and 21 regulations. 22 234. Repealing Clause 24 25 All other DOF Department Orders, Circulars, Bureau of Customs 26 issuances or provisions thereof, which are inconsistent with this Order, 27 are hereby revoked, repealed or modified accordingly. 28 295. Effectivity 30 31 This Department Order shall take effect immediately upon publication 32 in a newspaper of general circulation. 33 34 CHAPTER 8 SPECIAL DUTIES 35 36Note: Codal Provisions 37 38SECTION 1 SAFEGUARD DUTY 39 40Section 1. Definitions 41 421.1. Agricultural product" refers to a specific commodity under Chapter 1 to 4324of the Harmonized System (HS) of the Commodity Classification as used in 44the Tariff and Customs Code of the Philippines 451.2. Consumers" shall refer to the Tariff Commission; 461.3. Consumers " shall refer to natural person or organized consumer 47groups who are purchaser, lessees, recipient, or prospective purchasers, 48lessees, recipients of consumer products, services or credit; 491.4. Critical circumstances" shall mean circumstances where there is prima 50facie evidence that increased imports, where there absolute or relative to 2 3
220

1 1domestic production , are a substantial cause of serious injury or threat 2thereof to the domestic industry and that delay in taking action under this Act 3would cause damage to the industry that would be difficult to repair; 41.5. Directly competitive products" shall mean domestically-produced 5substitutable products: 61.6. Domestic industry" shall refer to the domestic producer, as a whole , 7of like or directly competitive products manufactured or produced in the 8Philippines or those whose collective output of like or directly competitive 9products constitutes a major proportion of products; 101.7. Interested parties" shall include domestic producers consumers, 11importers and exporters of the products under consideration 121.8. Like product" shall mean a domestic product which it identical, i.e., 13alike in all respects to the imported product under consideration, or in the 14absence of such a product, another domestic product which, although not 15alike in all respects, has characteristic: closely resembling those of the 16imported product under consideration 171.9. Market access opportunity" shall mean the percentage of the total 18annual volume of imports of an agricultural product to the corresponding total 19volume of domestic consumption of the said product in the country in the 20three (3) immediately preceding years for which data are available; 211.10. Minimum Access Volume (mV)"is the amount of imports of an 22agricultural product allowed to be imported into the country at a customs duty 23lower than out-quota customs duty: 241.11. Positive adjustment to import competition " shall refer to the ability of 25the domestic industry to compete successfully with imports after measure, or 26to the orderly transfer of resources to other productive pursuits; and to the 27orderly transition of dislocated workers in the industry to other productive 28pursuits; 291.12. Price difference" is the amount obtained after subtracting the c.i.f. 30import price from the trigger price; 311.13. " Product" shall refer to either to article, commodities or goods 321.14. " Secretary injury" shall refer to either the Sectary of the department of 33Trade and Industry in the case of non-agricultural products or the Secretary of 34the Department of Agriculture in the case of agricultural products; 351.15. " Serious injury" shall mean a significant impairment in the position of a 36domestic industry after evaluation by competent authorities of all relevant 37factor of an objective and quantifiable nature having a bearing on the situation 38of the industry concerned, in particular ,the rate and amount of the increase in 39imports of the products concerned in absolute and relative terms the share of 40the domestic market take by increased imports, change in level of sales, 41production, productivity, capacity utilization, profit and losses, and 42employment; 431.16. " Substantial cause" means a cause which is important but not less 44than any other cause; 451.17. " Threat of serious injury " shall be understood to mean serious injury 46that is imminent; 471.18. " Trigger volume " is the price benchmark for applying the special 48safeguard measure; and 491.19. " Trigger price" is the volume benchmark for applying the special safe 50guard measure. 2 3
221

1 1 2GENERAL SAFEGUARD MEASURE 3 4Section 5. Condition the Application of General Safeguard Measure.- The 5Secretary shall apply a general safeguard measure upon a positive final 6determination of the Commission that a product is being imported in to the 7country in increased quantities, whether absolute or relative to the domestic 8production, as to be a substantial cause of serious injury or threat thereof to 9the domestic industry; however in the case of on- agricultural products; the 10Secretary shall first establish that the application of such safeguard measure 11will be in the public interest. 12 13Section 6. Initiation of Action Involving General Safeguard Measure. Any 14person, whether natural or juridical, belonging to or representing a domestic 15industry may file with the secretary a verified petition requesting that action be 16taken to remedy the serious injury or prevent the threat thereof to the 17domestic industry caused by increased imports of the product under 18consideration. 19The petition shall include documentary evidence supporting the facts that are 20essential to establish: 211. An increase in import of like or directly competitive products; 222. The existence of serious injury or threat thereof to the domestic 23industry ; and 243. The causal link between the increased imports of the product under 25consideration and the serious injury or threat thereof. 26The sectary shall review the accuracy and adequacy of the evidence adduced 27in the petition to determine the existence of a prima facie case that will justify 28the initiation of a preliminary investigation within five (5) day from receipt of 29the petition 30The Sectary may also initiate action upon the request of the President; or 31resolution of the House or Sale Committee On Agriculture, or house Or 32Senate Committee on Trade and Commerce. 33In the absence of such a petition, the Secretary may, motu proprio, initiate a 34preliminary safeguard investigation if there is evidence that increased imports 35of the product under consideration are a substantial cause of the threatening 36to substantially cause, serious injury to the domestic industry. 37The Secretary may extend legal, technical and other assistance to the 38concerned domestic producer and their organization at all stages of the 39safeguard action 40 41Section 7. Preliminary Determination- Not later than thirty (30) days from 42receipt of the petition or a motu proprio initiation of the preliminary safeguard 43investigation. The Secretary shall on the basic of the evidence and 44submission of the interested parties, make a preliminary determination that 45increased imports of the product under consideration are a substantial cause 46of or threaten to substantially cause, serious injury to the domestic industry In 47the process of conducting a preliminary determination the Secretary shall 48notify the interested parties and shall require them to submit their answer 49within five (5) working days from receipt of such notice .The notice shall be 50deemed received five (5) working days from the date of transmittal to the 2 3
222

1 1respondent or appropriate diplomatic representative of the country of 2exportation or origin of the imported product under consideration. 3When information is not applied within the above time limit set by the 4Secretary or if the investigation is significantly impeded, decision will be based 5on the facts derived from the evidence at hand. 6Upon a positive preliminary determination that increased importation of the 7product under consideration is a substantial cause of, or threatens to 8substantially cause serious injury to the domestic industry the secretary shall 9without delay transmit its records to the Commission for immediate formal 10investigation. 11 12Section 8. Provisional Messages.- In critical circumstances, which would be 13difficult to repair, and pursuant to a preliminary determination that increased 14import are a substantial cause of, or threaten to substantially cause, serious 15injury to the domestic industry, the Secretary shall immediately issue, through 16the Secretary of finance, a written instruction the Commissioner of Customs 17authorizing the imposition of a provisional general safeguard measure. 18Such measure shall take the from of a tariff increase, either ad valorem or 19specific, or both, to be paid through a cash bond set at a level sufficient to 20redress or present injury to the domestic injury provided, however, that in the 21case of agricultural products where the tariff increase may not be sufficient to 22redress or to prevent serious injury to the domestic producers or producers, a 23quantitative restriction may be set. The cash bond shall be deposited with a 24government depository bank and posted the bond. The duration of the 25provisional measure shall not exceed two hundred (200) days from the date of 26imposition during which period the requirements of the subsequent section of 27this Act on the initiation of a formal investigation notification and consultation 28shall have been met provided, That the duration any provisional measure 29shall be counted as part of the initial period and any extension, of the 30definitive final safeguard measure. 31When the provisional safeguard measure is in the from of a tariff increase, 32such increase shall not be subject or limited to the maximum level of the tariff 33as set forth in Section 401 (a) of the Tariff and Customs Code of the 34Philippines. 35 36Section 9. Formal Investigation- within five (5) working days from receipt of 37the of the request from the Secretary, the Commission shall publish the notice 38of the commencement of the investigation, and public hearing which shall 39afford interested parties and consumers and opportunity to be present or to 40present evidence, to respond to the presentation of other parties and 41consumers, and otherwise be heard. The Commission shall submit evidence 42and position with respect to the importation of the subject article to the 43Commission within fifteen (15) days after the initiation of the investigation. 44The Commission shall complete its investigation and submit its report to the 45Secretary within one hundred twenty (120) calendars days from receipt of the 46referral by the Secretary, except when the Secretary certifies that then same 47is urgent, in which case the Commission shall complete the investigation and 48submit the report to the Secretary within sixty (60) days. 49 50Section 10. Inspection of Evidence- The Commission shall make available for 2 3
223

1 1inspection by interested parties, copies of evidence submitted on or before the 2relevant due: Provided, however, that any information which is by nature 3confidential or which is provided on a confidential basis, shall upon cause 4being shown, not be disclosed without permission of the party submitting it. 5Parties providing confidential information may be requested to furnish non6confidential summaries thereof or if such parties indicate that such information 7cannot be summarized, the reasons 8Why a summary cannot be provided: provided, further, that if the Commission 9finds that a request for confidentiality is not warranted and if that party 10concerned is either unwilling to make the information public or to authorize its 11disclosure in generalized or summary from the Commissions may disregard 12such information unless it can be demonstrated to its satisfaction from 13appropriate sources that the information is correct. 14 15Section 11. Adjustment plan.- In the course of its investigation, the 16Commission shall issue a appropriate notice to representatives of the 17concerned domestic industry or other parties to submit an adjustment plan to 18import competition, within forty-five (45) days upon receipt of the notice, 19except when the Secretary certifies of that the same is urgent, in which case 20the adjustment plan must be submitted within thirty (30) days. 21If the Commission make an affirmative determination of injury or threat thereof 22individual comments regarding actions such persons and entities intend to 23take to facilitate positive adjustment to import competition shall be submitted 24to the Commission by any (a) firm in the domestic industry, (b) certified or 25recognized union or group of workers in the domestic industry, (c) local 26community, (d) trade association representing the domestic industry, or (e) 27other person or the group of person. 28 29Section 12. Determination of Serious Injury or Threat Thereof.-In reaching a 30positive determination that the increase in the importation of the product under 31consideration is causing serious injury or threat thereof to a domestic industry 32producing like products or directly competitive products , all relevant factors 33having a bearing on the situation of the domestic industry shall be evaluated. 34These shall include, in particular, in ports of the products concerned in 35absolute and relative terms, the shared of the domestic market taken by the 36increased imports, and changes in the level of sales production, productivity, 37capacity and employment. 38Such positive determination shall not be made unless the investigation 39demonstrates, on the basis of objective evidence, the existence of the causal 40link between the increased imports of the product under consideration con 41serious injury or threat thereof to the domestic industry. When factors other 42than increased import are causing injury, such injury shall not be attributed to 43increased imports other than increased imports are causing jury shall not be 44attributed to increased imports 45 46Section 13. Adoption of Definitive Measure- Upon its positive determination 47the Commission shall recommend to the Secretary an appropriate definitive 48measures, in the form of 49a. An increase in, or imposition of, any duty on the imported product; 50b. A decrease in or the imposition of a tariff-rate quota (MAV) on the 2 3
224

1 1product; 2c. A modification or imposition of any quantitative restriction on the 3importation of the product into the Philippines; 4d. One or more appropriate adjustment measure, including into the 5provision of trade adjustment measure, including the provision of trade 6adjustment assistance; 7e. Any combination of action described in subparagraph (a) to (d). 8The Commission may also recommend other actions, including the initiation of 9international negotiation to address the underlying cause of the increase of 10imports of the product, to alleviate the injury or threat thereof to the domestic 11industry, and to facilitate positive adjustment to import competition. 12The general safeguard measure shall be limited to the extent of redressing or 13pre venting the injury and to facilitate adjustment by the domestic industry 14from the adverse effects directly attributed to the increased imports Provided, 15however, that when quantitative import restriction are used, such measure 16shall not reduce the quantity of imports below the average imports for the 17three (3) preceding representative years, unless clear justification is given that 18a different level is necessary to prevent or remedy a serious injury. 19A general safeguard measure shall not be applied to a product originating 20from a developing country if its share of total imports of the product is less that 21three percent (3%) provided, however, The developing countries with less 22than three percent (3%) share collectively account for not more than nine 23percent (9%) of the total imports. 24The decision imposing a general safeguard measure, the (1) year, shall be 25reviewed at regular intervals for purpose of liberalizing or reducing its intensity 26the industry benefiting from the application of a general safeguard measure 27shall be required too show positive adjustment within the allowable be 28terminate where the benefiting industry fails to show any improvement, as 29may be determined be by the Secretary. 30 The Secretary shall issue a written instruction to the heads of the concerned 31government agencies to implement the appropriate general safeguard 32measure as terminated by the Secretary within fifteen (150days from receipt 33of the report. 34In the event of a negative final determination, or if the cash bond in excess of 35the definitive safeguard duty assessed, the Secretary shall immediately issue, 36through the Secretary of Finance, a written instruction to the Commissioner of 37Customs authorizing the return of the cash bond or the remainder thereof, as 38the cash may be, previously collected provisional general safeguard measure 39within in the event of a negative final determination, or if the cash bond is in 40excess of the definitive safeguard duty assessed, the Secretary shall 41immediately issue, through the Secretary of Finance, a written instruction to 42the Commissioner of Customs, authorizing the return of the cash bond or the 43remainder thereof, as the case may be, previously collected as provisional 44general safeguard measure within ten (10) days from the date a final decision 45has been made: Provided, That the government shall not be liable for any 46interest on the amount to be returned. The Secretary shall not accept for 47consideration another petition from the same industry, with respect to the 48same imports under consideration within one (1) year after the date of 49rendering such a decision. 50When the definitive safeguard measure is in the form of a tariff increase, such 2 3
225

1 1increase shall be not subject to the maximum levels of tariff as set forth in 2Section 401 (a) of the Tariff and Customs Code of the Philippines. 3 4Section 14. Contents of the Report by the Commission. - Based on its 5findings, the Commission shall submit to the Secretary: (a) the investigation 6report; (b) the proposed recommendations; (c) a copy of submitted adjustment 7plan; and (d) the commitments made by the domestic industry to import 8competition. 9The report shall also include a description of the short and long-term effects of 10the affirmative or negative recommendation, as the case may be, on the 11petitioner, the domestic industries, the consumers, the workers, and the 12communities where production facilities of such industry are located. 13The Commission, after submitting the reports Secretary shall make it available 14to the public except confidential information obtained under Section 10 the 15publish a summary in two (2) newspapers of general circulation. 16 17Section 15. Limitations on Actions. - The duration of the period of an action 18taken under the General Safeguard Provisions of this Act shall not exceed 19four (4) years. Such period shall include the period, if any, in which provisional 20safeguard relief under Section 8 was in effects. 21The effective period of any safeguard measure, including any extensions 22thereof under Section 19 may not, in the aggregate, exceed ten (10) years. 231. Any additional duty, or any duty imposed under this Section may be 24specific and/or ad valorem. It shall be in the amount necessary to prevent or 25redress or remedy the injury to the domestic industry; 262. If the quantitative restriction is used, such measure shall not reduce the 27quantity of imports below the level of a recent period which shall be the 28average of imports in the last three (3) representative years of which the 29statistics are available, unless clear justification is given that a different levels 30is necessary to prevent or remedy serious injury; 313. An action described in Section 13 (a), (b), or (c) that has an effective 32period of more than one (1) year shall be phased down at regular intervals 33within the period in which the action is in effect; 344. Within two (2) years after the expiration of the action, the Secretary 35shall not accept any further petition for the same article: Provided, however, 36That a safeguard measure with a duration of one hundred eighty (180) days 37or less may be applied again to the same product if: 38i. At least one (1) year has elapsed since the date of introduction of the 39safeguard measure; and 40ii. Such measure has not been applied on the same product more than 41twice in the five (5) year period immediately preceding the date of introduction 42of the measure. 43 44Section 16. Monitoring. So long as any action taken under Section 13 45remains in effect, the Commission shall monitor developments with respect to 46the domestic industry, including the progress and specific efforts made by 47workers and firms in the domestic industry to make a positive adjustment to 48import competition. 491. If the initial application of action taken under Section 13 exceeds three 50(3) years, or if an extension of such action exceeds three (3) years, the 2 3
226

1 1Commission shall submit to the Secretary a report on the results of the 2monitoring, not later than the date which is the midpoint of the initial period, 3and of each such extension, during which the action is in effect. 42. The Commission in the preparation of each monitoring report shall 5conduct a hearing at which interested parties shall be given reasonable 6opportunity to be present, to present evidence, and to be heard. 7 8Section 17. Notice of General Safeguard Measure.- The Secretary shall notify 9the concerned Committee on Safeguards of the World Trade Organization: 10a. When initiating an action relating to serious injury or threat thereof and 11the reasons for it.; 12b. When adopting a provisional general safeguard measure following a 13positive preliminary determination; and 14c. When applying or extending a definitive general safeguard measure 15following a positive final determination. 16 17Section 18. Reduction, Modification, and Termination of Action. - Action taken 18under Section 13 may be reduced, modified, or terminated by the Secretary 19only after: 20a. Taking into account the results of the monitoring indicated in the report 21submitted by the Commission under Section 16, he determines that: 22i. No adequate efforts to make a positive adjustment to import 23competition have been undertaken by the domestic industry; and 24ii. Changed economic circumstances have impaired the effectiveness of 25action taken under Section 13. 26b. A majority of the representative of the domestic industry submit to the 27Secretary, at least one (1) year before the expiration, a petition requesting 28such reduction, modification, or termination on the basis that the domestic 29industry has made a positive adjustment to import competition. 30If reduction, modification, or termination of action is being requested for an 31action that has been effect for three (3) year or less, the petitioning industry 32shall submit its request to the Secretary. The Secretary shall refer the request 33to the Commission, which shall conduct an investigation following the 34producers under Section 9, to be completed within sixty (60) days from receipt 35of the request. The Commission shall submit a report to the Secretary who 36shall then take action after taking into consideration conditions under Section 3716(1) and (2), not later than thirty (30) days after receipt of the Commissions 38report. 39 40Section 19. Extension and Re-application of Safeguard Measure. 411. Subject to the review under Section 16, an extension of the measure 42may be requested by the petitioner if the action continues to be necessary to 43prevent or remedy the serious injury and there is evidence that domestic 44industry is making positive adjustment to import competition. 452. The petitioner may appeal to the secretary at least ninety (90) days 46before the expiration of the measure for an extension of the period by stating 47concrete reasons for the need thereof and a description of the industrys 48adjustment performance and future plan. The secretary shall immediately 49refer the request to the Commission. Following the procedures required under 50Section 9, the commission shall then submit a report to the Secretary not later 2 3
227

1 1that sixty (60) days from its receipt of the request Within seven (7) days from 2receipt of the report, the secretary shall issue an order granting or denying the 3petition In case an extension is Granted. The same shall be more liberal that 4the initial application. 5 6Section 20. Evaluation of Effectiveness of Action After termination of any 7action under Section 13, the Commission shall evaluate the effectiveness of 8the actions taken by the domestic industry in facilitating positive adjustment to 9import competition 10The Commission shall hold a public hearing on the effectiveness of the action 11at which all interested parties shall be afforded opportunity to present 12evidence or testimony. 13 14SPECIAL SAFEGUARD MEASURE FOR AGRICULTURAL PRODUCTS 15 16Section 21. Authority to impose the special Safeguard Measure. - The 17Secretary of Agriculture shall issue a department order requesting the 18Commissioner of Customs, through the Secretary of Finance, to impose an 19addition special safeguard duty on an agricultural product, consistent with 20Philippine international treaty obligations, if. 21A. its cumulative import volume in a given year exceeds its trigger volume 22subject to the conditions state in this Act, in section 23 below; or but not 23concurrently; and 24B. Its actual c.i.f. import price is less that its trigger price subject to the 25Conditions State in this Act, in Section 24 below. 26 27Section 22. Initiation of action Involving Special Safeguard Measure. - Any 28person, whether natural or juridical, may request the Secretary to verify if a 29particular product can be imposed a special safeguard duty subject to the 30conditions set in Section 21 of this Act. The request shall include date which 31would show that the volume of imports of a particular product has exceeded 32its trigger volume or that the c.i.f. import price of a particular product has gone 33below its trigger price. The secretary shall come up with a finding within five 34(5) working days from the receipt of a request. 35The Secretary may, motu proprio, initiate the imposition of a special safeguard 36measure following the satisfaction of the conditions for imposing the measure 37set in this Chapter. 38 39Section 23. Determination of Special Duty Based on the Volume Test.- The 40special safeguard duty allowed to be imposed on the basis of the volume test 41pursuant to Section 21 (a) of this act shall be determined as follows: 42a. The trigger volume referred to in Section 21 (a) of this Act is the 43amount obtained, after adding the change in the annual domestic 44consumption of the agricultural product under consideration for the two (2) 45preceding years for which data are available, to: 46i. One hundred twenty-five percent (125%) of the average annual volume 47of imports of the agricultural product under consideration in the three (3) 48immediately preceding years for which data are available, hereinafter referred 49to as the average import volume, if the market access opportunity is at most 50ten percent (10%); or 2 3
228

1 1ii. One hundred ten percent (110%) of the average annual import volume, 2if the market access opportunity exceeds ten percent (10) but is not more that 3thirty percent (30%);or 4iii. One hundred five percent (105%) of the average annual import volume 5if the market access opportunity exceeds thirty percent (30%) 6Provided, That if the change in the volume of domestic consumption 7mentioned above is not taken into account in computing the trigger volume. 8The trigger volume shall be equal to one hundred twenty-five percent (125%) 9of the average import volume for the immediate three (3) preceding years for 10which data are available, unless a clear justification is given that a different 11level is necessary to prevent or remedy serious injury: Provided, further, that 12the trigger volume shall at least be one hundred five percent (105%) of the 13average imports of the agricultural product under consideration. 14b. The special safeguard duty to be imposed subject to the conditions 15state under the volume test shall be appropriately set to a level not exceeding 16one-third of the applicable out-quota customs duty on the agricultural product 17under consideration in the year when it is imposed: Provided, That this duty 18shall only be maintained until the end of the year in which it is imposed: 19Provided, further, That this duty may be reduced or terminated in special 20cases such as when a shortage of a particular agricultural product exists, as 21determined by the Secretary. 22c. In transitu volumes of imports of the agricultural product under 23consideration at the time the special safeguard duty is imposed shall be 24exempted from the additional duty. However, such volumes shall be counted 25in the computation or the cumulative volume of imports of the said agricultural 26product for the following year 27 28Section 24. Determination of Special safeguard Duty Based on the Price 29Test.- The additional duty allowed to be imposed on the basis of the price test 30pursuant to Section 21 (b) of this Act shall be determined as follows: 31a. The trigger price referred to in section 21(b) of this Act is the average 32actual c.i.f. import price or relevant reference price of the agricultural product 33under consideration from 1986 to 1988, unless a clear justification is given 34that a different reference price is necessary to prevent or remedy serious 35injury. The secretary shall publish the list of trigger prices corresponding to 36each of the agricultural products covered by this Act, after the conduct of 37public hearings on the subject; and 38b. The special safeguard duty to be imposed subject to the conditions 39stated under Section 21 (b) of this Act shall be computed as follows: 40i. Zero, if price difference exceeds ten percent (10%) of the trigger price; 41or 42ii. Thirty percent (30%) of the amount by which the price difference 43exceeds ten percent (10%) of the trigger price, if the said difference exceeds 44ten percent (10%) but is at most forty percent (40%) of the trigger price; or 45iii. Fifty percent (50%) of the amount by which the price difference 46exceeds forty percent (40%) of the trigger price, plus the additional duly 47imposed under Section 24(b)(ii) if the said difference exceeds forty percent 48(40%) but is at most sixty percent (60%) of the trigger price; or 49iv. Seventy percent (70%) of the amount by which the price difference 50exceeds sixty percent (60%) of the trigger price, plus the additional duties 2 3
229

1 1imposed under Section 24 (b) (ii) and (b) (iii), if the said difference exceeds 2sixty percent (60%) and is at most seventy-five percent (75%) of the trigger 3price; or 4v. Ninety percent (90%) of the amount by which the price difference 5exceeds seventy-five percent (75%) of the trigger price; plus the additional 6duties imposed under Section 24 (b)(ii), (b)((iii), and (b)(iv), if the said 7difference exceeds seventy-five percent (75%) of the trigger price. 8As far as practicable, a special safeguard measure determined under the 9provisions of this Section shall not be resorted to when the volume of the 10imported agricultural product under consideration is declining. 11 12Section 25. Agricultural Products Subject to Minimum Access Volume 13Commitments. The special safeguard duty shall not apply to the volumes of 14the imported agricultural product under consideration that are brought into the 15country under the minimum access volume mechanism: Provided, however, 16That these volumes shall be included in computing the cumulative volume of 17imports of the said agricultural product pursuant to Section 21 (a) of this Act. 18 19Section 26. Perishable and Seasonal Agriculture Products. - Shorter time 20periods and different reference prices may be used in determining the 21applicable special safeguard measure taking into account the special 22characteristics of perishable and seasonal agricultural imports. 23 24Section 27. Notice of Special Safeguard Measure. - The Secretary shall make 25the administration of the safeguard measure transparent by giving notice in 26writing to the WTO Committee on Agriculture, in advance to the extent 27practicable, and seasonal agricultural products, notification shall be made 28from first action in any period. 29The notice shall include relevant data or as may be deemed necessary, 30information and methods used in cases where changes in consumption 31volumes must be allowed to individual tariff lines subject to action under 32Chapter III of this Act. 33Where a special safeguard measure action is taken under the provisions of 34this Act, the Secretary shall consult with interest WTO members and provide 35all relevant information on the conditions of the application of such action. 36 37Section 28. Duration of Special Safeguard Measures. - The special safeguard 38measures for agricultural products shall lapse with the duration of the reform 39process in agriculture as determined in the WTO. Thereafter, recourse to 40safeguard measures shall be subject to the provisions on general safeguard 41measures as provided in Chapter II of this Act. 42 43CHAPTER IV 44SPECIAL PROVISIONS 45 46Section 29. Judicial Review. - Any interest party who is adversely affected by 47the ruling of the Secretary in connection with the imposition of a safeguard 48measure may file with the Court of Tax Appeals, a petition for review of such 49ruling within thirty (30) days from receipt thereof: Provided, however, That the 50filing of such petition for review shall not in any way stop, suspend or 2 3
230

1 1otherwise toll the imposition or collection of the appropriate tariff duties or the 2adoption of other appropriate safeguard measures, as the case may be. 3The petition for review shall comply with the same requirements and shall 4follow the same rules of procedure and shall be subject to the same 5disposition as in appeals in connection with adverse rulings on tax matters to 6the Court of Appeals. 7 8Section 30. Penalty Clause. - Any government official or employee who shall 9fail to initiate, investigate, and implement the necessary actions as provided in 10this Act and the rules and regulations to be issued pursuant hereto, shall be 11guilty of gross neglect of duty and shall suffer the penalty of dismissal from 12public service and absolute disqualification from holding public office. 13 14Section 31. Prohibition of Concurrent Recourse to Safeguard Measures. 15There shall be no recourse to the use of the general safeguard measure 16under Chapter II of this Act concurrently with the special safeguard measure 17as provided for under Chapter III of this Act and vice-versa. 18 19Section 32. Issuance of Implementing Rules and Regulations. Within sixty 20(0) days after affectivity of this Act, the Determent of Agriculture and the 21Department of Trade and Industry in consultation with the Department of 22Finance, the Bureau of Customs, the National Economic and Development 23Authority, and the Tariff Commission, after consultations with domestic 24industries and with the approval of the Congressional Oversight Committee 25which is hereby created under this Act, shall promulgate the necessary rules 26and regulations to implement this Act. 27 28Section 33. Oversight. - There shall be a Congressional Oversight Committee 29composed of the Chairmen of the Committee on trade and Industry, the 30Committee on Ways and Means, and the Committee on Agriculture of both 31the Senate and the House of Representatives to oversee the implementation 32of this Act. 33 34Section 34. Administrative System Support. - Upon the effectivity of this Act, 35any sum as may be necessary for the Department of Agriculture, the 36Department of Trade and Industry, and Tariff Commission to undertake their 37functions efficiently and effectively shall be included in the General 38Appropriations Act. 39The aforementioned government agencies are hereby authorized to collect 40such fees, charges, and safeguard duties that are deemed necessary. Fifty 41percent (50%) of the revenue collected from such fees, charges, and 42safeguard duties shall be set aside in a Remedies Fund which shall be 43earmarked for the use of these agencies in the implementation of remedies, 44including the safeguard measures. The remaining fifty percent (50%) shall be 45deposited under a special account to be created in the National Treasury and 46shall be earmarked for competitiveness enhancement measures for the 47industries affected by the increased imports. The disposition thereof shall be 48determined through the General Appropriations Act. 49 50Section 35. Assistance to Farmers and Fisherfolk. - To safeguard and 2 3
231

1 1enhance the interest of farmers and Fisherfolk, nothing in this Act shall in any 2manner affect the provisions Republic Act No. 8435, otherwise known as the 3Agriculture and Fisheries Modernization Act. 4 5Section 36. Conditions for Application of Safeguard Measures. - In the 6application of any safeguard measure under this Act, the following conditions 7must be observed: 81. All actions must be transparent and shall allow any anti-competitive, 9monopolistic or manipulative business device; and 102. Pursuant to the non-impairment clause of the Constitution, nothing in 11this Act shall impair the obligation of existing supply contracts. 12 13 14SECTION 2 MARKING DUTY 15 16Marking of Imported Articles and Containers. 17 18A. Marking of Articles. - Except as hereinafter provided, every article of 19foreign origin (or its container, as provided in subsection "b " hereof) imported 20into the Philippines shall be marked in any official language of the Philippines 21and in a conspicuous place as legibly, indelibly and permanently as the nature 22of the article (or container) will permit in such manner as to indicate to an 23ultimate purchaser in the Philippines the name of the country of origin of the 24article. The Commissioner of Customs shall, with the approval of the 25department head, issue rules and regulations to 26 271. Determine the character of words and phrases or abbreviation thereof 28which shall be acceptable as indicating the country of origin and prescribe any 29reasonable method of marking, whether by printing, stenciling, stamping, 30branding, labelling or by any other reasonable method, and a conspicuous 31place on the article or container where the marking shall appear. 32 332. Require the addition of any other words or symbols which may be 34appropriate to prevent deception or mistake as to the origin of the article or as 35to the origin of any other article with which such imported article is usually 36combined subsequent to importation but before delivery to an ultimate 37purchaser; and 38 393. Authorize the exception of any article from the requirements of marking 40if: 41 42a. Such article is incapable of being marked; 43b. Such article cannot be marked prior to shipment to the Philippines 44without injury; 45c. Such article cannot be marked prior to shipment to the Philippines, 46except at an expense economically prohibitive of its importation; 47d. The marking of a container of such article will reasonably indicate the 48origin of such article; 49e. Such article is a crude substance; 50f. Such article is imported for use by the importer and not intended for 2 3
232

1 1sale in its imported or any other form; 2g. Such article is to be processed in t he Philippines b y t he importer o r f 3or h is account otherwise than for the purpose of concealing the origin of such 4article and in such manner that any mark contemplated by this section would 5necessarily be obliterated, destroyed or permanently concealed; 6h. An ultimate purchaser, by reason of the character of such article or by 7reason of the circumstances of its importation must necessarily k now t he 8country o f origin o f such article even though it is not marked to indicate its 9origin; 10i. Such article was produced more than twenty years prior to its 11importation into the Philippines; or 12j. Such article cannot be marked after importation except at an expense 13which is economically prohibitive, and the failure to mark the article before 14importation was not due to any purpose of the importer, producer, seller or 15shipper to avoid compliance with this section. 16 17B. Marking of Containers. - Whenever an article is exempted under 18subdivision (3) of subsection "a " of this section from the requirements of 19marking, the immediate container, if any, of such article, or such other 20container or containers of such article as may be prescribed by the 21Commissioner of Customs with the approval of the department head, shall be 22marked in such manner as to indicate to an ultimate purchaser in the 23Philippines the name of the country of origin of such article in any official 24language of the Philippines, subject to all provisions of this section, including 25the same exceptions as are applicable to articles under subdivision (3) of 26subsection "a ". 27 28C. Marking Duty for Failure to Mark. - If at the time of importation any 29article (or its container, as provided in subsection "b " hereof), is not marked in 30accordance with the requirements of this section, there shall be levied, 31collected and paid upon such article a marking duty of 5 per cent ad valorem, 32which shall be deemed to have accrued at the time of importation, except 33when such article is exported or destroyed under customs supervision and 34prior to the final liquidation of the corresponding entry. 35 36D. Delivery Withheld Until Marked. No imported article held in customs 37custody for inspection, examination or appraisement shall be delivered until 38such article and/or its containers, whether released or not from customs 39custody, shall have been marked in accordance with the requirements of this 40section and until the amount of duty estimated to be payable under subsection 41"c " of this section shall have been deposited. Nothing in this section shall be 42construed as excepting any article or its container from the particular 43requirements of marking provided for in any provision of law. 44 45E. The failure or refusal of the owner or importer to mark the articles as 46herein required within a period of thirty days after due notice shall constitute 47as an act of abandonment of said articles and their disposition shall be 48governed by the provisions of this Code relative to abandonment of imported 49articles. 50 2 3
233

1 1 2SECTION 3 COUNTERVAILING DUTY 3 4Section 1: Definition of Terms 51) Domestic industry' shall refer to the domestic producers as a whole of 6the like product, commodity or article or to those of them whose collective 7output of the product, commodity or article constitutes a major proportion of 8the total d domestic production of those products, except that when producers 9are related to the exporters or importers or are themselves importers of the 10allegedly subsidized product or a like product from other countries, the term 11'domestic industry' may be interpreted as referring to the rest of the 12producers. In case the market in the Philippines is divided into two or more 13competitive markets, the term 'domestic industry' shall refer to the producers 14within each market although their production does not constitute a significant 15portion of the total domestic industry: Provided, That there is a concentration 16of subsidized imports into such a separate market: and Provided, further, That 17the subsidized imports are causing injury to the producers of all or almost all 18of the production within such market. 192) 'Interested parties' shall include: 20a) An exporter or foreign producer or the importer of a product subject to 21investigation, or the government of the exporting country or a trade or 22business association a majority of the members of which are producers, 23exporters or importers of such product; 24b) A producer of the like product in the Philippines or a trade and 25business association a majority of the members of which produce the like 26product in the Philippines; and 27c) Labor unions that are representative of the industry or coalitions of 28producers and/or labor unions. 293) Like product' shall mean a product, commodity or article which is 30identical, i.e., alike in all respects to the product, commodity or article or in the 31absence of such product, commodity or article, another product, commodity or 32article which, although not alike in all respects, has characteristics closely 33resembling those of the imported product, commodity or article under 34consideration. 35 36"Whenever any product, commodity or article of commerce is granted directly 37or indirectly by the government in the country or origin or exportation, any kind 38or form of specific subsidy upon the production, manufacture or exportation of 39such product, commodity or article, and the importation of such subsidized 40product, commodity or article has caused or threatens to cause material injury 41to a domestic industry or has materially retarded the growth or prevents the 42establishment of a domestic industry as determined by the Tariff Commission 43(hereinafter referred to as the 'Commission'), the Secretary of Trade and 44Industry, in the case of non-agricultural product, commodity or article, or the 45Secretary of Agriculture, in the case of agricultural product, commodity or 46article (both of whom are hereinafter simply referred to as 'the Secretary,' as 47the case may be) shall issue a department order imposing a countervailing 48duty equal to the ascertained amount of the subsidy. The same levy shall be 49imposed on the like product, commodity or article thereafter imported to the 50Philippines charges imposed by law on such imported product, commodity or 2 3
234

1 1article. 2(A) Initiation of Action. - A countervailing action may be initiated by the 3following: 41) Any person, whether natural or juridical, who has an interest to protect, 5by filing a verified petition for the imposition of a countervailing duty by or on 6behalf of the domestic industry; 72) The Secretary of Trade and Industry or the Secretary of Agriculture, as 8the case may be, in special circumstances where there is sufficient evidence 9of an existence of a subsidy, injury and causal link. 10(B) Requirements. - A petition shall be filed with the Secretary and shall be 11accompanied by documents, if any, which are reasonably available to the 12petitioner and which contain information supporting the facts that are essential 13to establish the presence of the elements for the imposition of a countervailing 14duty, and shall further state, among others: 151) The domestic industry to which the petitioner belongs and the particular 16domestic product, commodity or article or class of domestic product, 17commodity or article being prejudiced; 182) The number of persons employed, the total capital invested, the 19production and sales volume, and the aggregate production capacity of the 20domestic industry that has been materially injured or is threatened to be 21materially injured or whose growth or establishment has been materially 22retarded or prevented; 233) The name and address of the known importer, exporter, or foreign 24producer, the country of origin or export, the estimated aggregate or 25cumulative quantity, the port and the date of arrival, the import entry 26declaration of the imported product, commodity or article, as well as the 27nature, the extent and the estimated amount of the subsidy thereon; and 284) Such other particulars, facts or allegations as are necessary to justify 29the imposition of countervailing duty on the imported product, commodity or 30article. 31"A petition for the imposition of a countervailing duty shall be considered to 32have been made 'by or on behalf of the domestic industry' if it is supported by 33those domestic producers whose collective output constitutes more than fifty 34percent (50%) of the total production of the like product produced by that 35portion of the domestic industry expressing either support for or opposition to 36the application. However, an investigation shall be initiated only when 37domestic producers supporting the application account for at least twenty -five 38percent (25%) of the total production of the like product produced by the 39domestic industry. In cases involving an exceptionally large number of 40producers, degree of support or opposition may be determined by using 41statistically valid sampling techniques or by consulting their representative 42organizations. 43"Within ten (10) days from his receipt of the petition or information, the 44Secretary shall review the accuracy and adequacy of the information or 45evidence provided in the petition to determine whether there is sufficient basis 46to justify the initiation of an investigation. If there is no sufficient basis to justify 47the initiation of an investigation, the Secretary shall dismiss the petition and 48shall properly notify the Secretary of Finance, the Commissioner of Customs 49and other parties concerned regarding such dismissal. The Secretary shall 50extend legal, technical and other assistance to the concerned domestic 2 3
235

1 1producers and their organizations at all stages of the countervailing action. 2(C) Notice to the Secretary of Finance. - Upon his receipt of the petition, the 3Secretary shall, without delay, furnish the Secretary of Finance with a 4summary of the essential facts of the petition, and request the latter to 5immediately inform the Commissioner of Customs regarding such petition and 6to instruct him to gather and secure all import entries covering such allegedly 7subsidized product, commodity or article without liquidation. The 8Commissioner of Customs shall submit to the Secretary a complete report on 9the number, volume, and value of the importation of the allegedly subsidized 10product, commodity or article within ten (10) days from his receipt of the 11instruction from the Secretary of Finance, and to make similar additional 12reports every ten (10) days thereafter. 13(D) Notice to and Answer of Interested Parties. - Within five (5) days from 14finding of the basis to initiate an investigation, the Secretary shall notify all 15interested parties, and shall furnish them with a copy of the petition and its 16annexes, if any. T he interested p arties s hall, not later than thirty (30) days 17from their receipt o f t he notice, submit their answer, including such relevant 18evidence or information as is reasonably available to them to controvert the 19allegations of the petition. If they fail to submit their answer, the Secretary 20shall make such preliminary determination of the case on the basis of the 21facts and/or information available. 22"The Secretary shall avoid, unless a decision has been made to initiate an 23investigation, any publicizing of the petition. However, after receipt of a 24properly documented petition and before proceeding to initiate an 25investigation, he shall notify the government of the exporting country about 26the impending investigation. 27 28"(E) Preliminary Determination. - Within twenty (20) days from his receipt of 29the answer of the interested parties, the Secretary shall, on the basis of the 30petition of the aggrieved party and the answer of such interested parties and 31their respective supporting documents or information, make a preliminary 32determination on whether or not a prima facie case exists for the imposition of 33a provisional countervailing duty in the form of a cash bond equal to the 34provisionally estimated amount of subsidy. Upon finding of a prima facie case, 35the Secretary shall immediately issue, through the Secretary of Finance, a 36written instruction to the Commissioner of Customs to collect the cash bond, 37in addition to the corresponding ordinary duties, taxes and other charges 38imposed by law on such product, commodity or article. The posting of a cash 39bond shall be required not earlier than sixty (60) days from the date of 40initiation of the investigation. The cash bond shall be deposited with a 41government depository bank and shall be held in trust for the respondent 42importer. The application of the cash bond shall not exceed four (4) months. 43"The Secretary shall immediately transmit his preliminary findings together 44with the records of the case to the Commission for its formal investigation." 45(F)Termination of Investigation by the Secretary or the Commission. - The 46Secretary or the Commission, as the case may be, shall motu proprio 47terminate the investigation at any stage of the proceedings if the amount of 48subsidy is de minimis as defined in existing international trade agreements of 49which the Republic of the Philippines is a party; or where the volume of the 50subsidized imported product, commodity or article, actual or potential, or the 2 3
236

1 1injury is negligible. " 2(G) Formal Investigation by the Commission. - Immediately upon its receipt of 3the records of the case from the Secretary, the Commission shall commence 4the formal investigation and shall accordingly notify in writing all interested 5parties and, in addition, give public notice of such investigation in two (2) 6newspapers of general circulation. 7In the formal investigation, the Commission shall essentially determine: 81) The nature and amount of the specific subsidy being enjoyed by the 9imported product, commodity or article in question; 102) The presence and extent of the material injury or the threat thereof to, 11or the material retardation of the growth, or the prevention of the 12establishment of, the affected domestic industry; and 133) The existence of a causal relationship between the allegedly 14subsidized imported product, commodity or article and the material injury or 15threat thereof to, or the material retardation of the growth, or the prevention of 16the establishment of, the affected domestic industry. 17"The Commission is hereby authorized to require any interested party to allow 18it access to, or otherwise provide, necessary information to enable the 19Commission to expedite the investigation. In case any interested party refuses 20access to, or otherwise does not provide, necessary information within a 21reasonable period of time or significantly impedes the investigation, a final 22determination shall be made on the basis of the facts available. 23"The formal investigation shall be conducted in a summary manner. No 24dilatory tactics nor unnecessary or unjustified delays shall be allowed, and the 25technical rules or evidence s hall not be applied strictly. 26(H) Determination of the Existence of Subsidy. - A subsidy is deemed to 27exist: 281) When the government or any public body in the country of origin or 29export of the imported product, commodity or article extends financial 30contribution to the producer, manufacturer or exporter of such product, 31commodity or article in the form of: 32a) Direct transfer of funds such as grants, loans or equity infusion; or 33b) Potential direct transfer of funds or assumption of liabilities such as 34loan guarantees; or 35c) Foregone or uncollected government revenue that is otherwise due 36from the producer, manufacturer o r exporter of the product, commodity or 37article: Provided, That the exemption of any exported product, commodity or 38article from duty or tax imposed on like product, commodity or article when 39destined for consumption in the country of origin and/or export or the 40refunding of such duty or tax, shall not be deemed to constitute a grant of a 41subsidy: Provided, further, That should a product, commodity or article be 42allowed drawback by the country of origin or export, only the ascertained or 43estimated amount by which the total amount of duties and/or internal revenue 44taxes was discounted or reduced, if any, shall constitute a subsidy; or 45d) Provision of goods or services other than general infrastructure; or 46e) Purchases of goods from the producer, manufacturer or exporter; 47f) Payments to a funding mechanism; or 48g) Other financial contributions to a private body to carry out one or more 49of the activities mentioned in subparagraphs (a) to (0 above; or 502) When there is a benefit conferred. 2 3
237

1 1(i) Determination of Specific Subsidy. - In the determination of whether or not 2a subsidy is specific, the following principles shall apply: 31) Where the government or any public body in the country of origin or 4export of the imported product, commodity or article explicitly limits access to 5a subsidy to certain enterprises, such subsidy shall be specific; 62) Where such government or public body through a law or regulation 7establishes objective criteria and conditions governing the eligibility for, and 8the amount of, a subsidy, specificity shall not exist: Provided, That the 9eligibility is automatic and that such criteria or conditions are strictly adhered 10to. Objective criteria shall mean those which are neutral, do not favor certain 11enterprises over others, and are economic in nature and horizontal in 12application, such as number of employees or size of enterprise; 133) In case a subsidy appears to be non -specific according to 14subparagraphs (1) and (2) above, but there are reasons to believe that the 15subsidy may in fact be specific, factors that may be considered are: use of a 16subsidy program by a limited number of certain enterprises for a relatively 17longer period; granting of disproportionately large amounts of subsidy to 18certain enterprises; and exercise of wide and unwarranted discretion for 19granting a subsidy; and 204) A subsidy which is limited to certain enterprises located within a 21designated geographical region within the territory of the government or public 22body in the country of origin or export shall be specific. 23(J) Determination of Injury. - The presence and extent of material injury or 24threat thereof to a domestic industry, or the material retardation of the growth, 25or the prevention of the establishment of a nascent enterprise because of the 26subsidized imports, shall be determined by the Secretary or the Commission, 27as the case may be, on the basis of positive evidence and shall require an 28objective examination of: 291) The volume of the subsidized imports, that is, whether there has been 30a significant increase either absolute or relative to production or consumption 31in the domestic market; 322) The effect of the subsidized imports on prices in the domestic market 33for the like product, commodity or article, that is, whether there has been a 34significant price undercutting, or whether the effect of such imports is 35otherwise to depress prices to a significant degree or to prevent price 36increases, which otherwise would have occurred to a significant degree; 373) The effect of the subsidized imports on the domestic producers of the 38like product, commodity or article, including an evaluation of all relevant 39economic factors and indices having a bearing on the state of the domestic 40industry concerned, such as, but not limited to, actual and potential decline in 41output, sales, market share, profits, productivity, return on investments, or 42utilization of capacity; factors affecting domestic prices; actual or potential 43negative effects on the cash flow, inventories, employment, wages, growth, 44ability to raise capital or investments and, in the case of agriculture, whether 45there has been an increased burden on the support programs of the national 46government; and 474) Factors other than the subsidized imports which at the same time are 48injuring the domestic industry, such as: volumes and prices of non -subsidized 49imports of the product, commodity or article in question; contraction in 50demand or changes in the patterns of consumption; trade restrictive practices 2 3
238

1 1of and competition between the foreign and domestic producers; 2developments in technology and the export performance and productivity of 3the domestic industry 4"In determining threat of material injury, the Secretary or the Commission, as 5the case may be, shall decide on the basis of facts and not merely allegation, 6conjecture or remote possibility. The change in circumstances which would 7create a situation in which the subsidized imports would cause injury should 8be clearly foreseen and imminent considering such relevant factors as: 91) Nature of the subsidy in question and the trade effects likely to arise 10therefrom; 112) Significant rate of increase of subsidized imports into the domestic 12market indicating the likelihood of substantially increased importations; 133) Sufficient freely disposable, or an imminent substantial increase in, 14capacity of the exporter of such subsidized imported product, commodity or 15article indicating the likelihood of substantially increased subsidized imports to 16the domestic market, taking into account the availability of other markets to 17absorb the additional exports; 184) Whether these subsidized imports are entering at prices that will have 19a significant depressing or suppressing effect on domestic prices, and will 20likely increase demand for further imports; and 215) Inventories of the product, commodity or article being investigated. 22"In the case where the effect of the subsidized import will materially retard the 23growth or prevent the establishment of a domestic industry, information on 24employment, capital investments, production and sales, and production 25capacity of said domestic industry can be augmented or substituted by 26showing through a factual study, report or other data that an industry which 27has potential to grow domestically is adversely affected by the subsidized 28import. For this purpose, the Department of Trade and Industry for non 29-agricultural products, and the Department of Agriculture for agricultural 30products, shall conduct continuing studies to identify and determine the 31specific industries, whether locally existing or not, which have the potential to 32grow or to be established domestically and whose growth or establishment 33will be retarded or prevented by a subsidized import. 34(K) Cumulation of Imports. - When imports of products, commodities or 35articles from more than one (1) country are simultaneously the subject of an 36investigation for the imposition of a countervailing duty, the Secretary or the 37Commission, as the case may be, may cumulatively assess the effects of 38such imports only if: 391) The amount of subsidization established in relation to the imports from 40each country is more than de minimis as defiridd in existing international trade 41agreements of which the Republic of the Philippines is a party; and 422) The volume of such imports from each country is not negligible; and 433) A cumulative assessment of the effects of such imports is warranted in 44the light of the conditions of competition between the imported products, 45commodities or articles, and the conditions of competition between the 46imported products, commodities or articles and the like domestic products, 47commodities or articles. 48(L) Public Notices and Consultation Proceedings. - The Secretary or the 49Commission, as the case may be, shall make public notices and conduct 50consultation with the government of the exporting country when: 2 3
239

1 11) Initiating an investigation; 22) Concluding or suspending an investigation; 33) Making a preliminary or final determination; 44) Making a decision to accept an undertaking or the termination of an 5undertaking; and 65) Terminating a definitive countervailing duty. 7(M) Voluntary Undertaking. - When there is an offer from any exporter of 8subsidized imports to revise its price, or where the government of the 9exporting country agrees to eliminate or limit the subsidy or take other 10measures to that effect, the Commission shall determine if the offer is 11acceptable and make the necessary recommendation to the Secretary. If the 12undertaking is accepted, the Secretary may advise the Commission to 13terminate, suspend or continue the investigation. The Secretary may also 14advise the Commission to continue its investigation upon the request of the 15government of the exporting country. The voluntary undertaking shall lapse if 16there is a negative finding of the presence of a subsidy or material injury. In 17the event of a positive finding of subsidization and material injury, the 18undertaking will continue, consistent with its terms and the provisions of this 19section. 20(N) Final Determination and Submission of Report by the Commission. - The 21Commission shall complete the formal investigation and submit a report of its 22findings to the Secretary within one hundred twenty (120) days from receipt of 23the records of the case: Provided, however, That it shall, before a final 24determination is made, inform all the interested parties of the essential facts 25under consideration which form the basis for the decision to impose a 26countervailing duty. Such disclosure should take place in sufficient time for the 27parties to defend their interests. 28 29(O) Imposition of Countervailing Duty. - The Secretary shall, within ten (10) 30days from his receipt of an affirmative final determination by the Commission, 31issue a department order imposing the countervailing duty on the subsidized 32imported product, commodity or article. He shall furnish the Secretary of 33Finance with the copy of the order and request the latter to direct the 34Commissioner of Customs to cause the countervailing duty to be levied, 35collected and paid, in addition to any other duties, taxes and charges imposed 36by law on such product, commodity or article. 37 38"In case of an affirmative final determination by the Commission, the cash 39bond shall be applied to the countervailing duty assessed. If the cash bond is 40in excess of the countervailing duty assessed, the remainder shall be returned 41to the importer immediately: Provided, That no interest shall be payable by the 42government on the amount to be returned. If the cash bond is less than the 43countervailing duty assessed, the difference shall not be collected. 44"If the order of the Secretary is unfavorable to the petitioner, the Secretary 45shall, after the lapse of the period for appeal to the Court of Tax Appeals, 46issue through the Secretary of Finance a department order for the immediate 47release of the cash bond to the importer. 48(P) Duration and Review of Countervailing Duty. As a general rule, any 49imposition of countervailing duty shall remain in force only as long as and to 50the extent necessary to counteract a subsidization which is causing or 2 3
240

1 1threatening to cause material injury. However, the need for the continued 2imposition of the countervailing duty may be reviewed by the Commission 3when warranted, motu proprio or upon direction of the Secretary. 4"Any interested party may also petition the Secretary for a review of the 5continued imposition of the countervailing duty: Provided, That at least six (6) 6months have elapsed since the imposition of the countervailing duty, and 7upon submission of positive information substantiating the need for a review. 8Interested parties may request the Secretary to examine: (1) whether the 9continued imposition of the countervailing duty is necessary to offset the 10subsidization; and/or (2) whether the injury will likely continue or recur if the 11countervailing duty is removed or modified. 12 13"If the Commission determines that the countervailing duty is no longer 14necessary or warranted, the Secretary shall, upon its recommendation, 15immediately issue a department order terminating the imposition of the 16countervailing duty and shall notify all parties concerned, including the 17Commissioner of Customs through the Secretary of Finance, of such 18termination. 19"Notwithstanding the provisions of the preceding paragraphs of this 20subsection, any countervailing duty shall be terminated on a date not later 21than five (5) years from the date of its imposition (or from the date of the most 22recent review if that review has covered both subsidization and material 23injury), unless the Commission has determined, in a review initiated at least 24six (6) months prior to the termination date upon the direction of the Secretary 25or upon a duly substantiated request by or on behalf of the domestic industry, 26that the termination of the countervailing duty will likely lead to the 27continuation or recurrence of the subsidization and material injury. 28 29"The procedure and evidence governing the disposition of the petition for the 30imposition of countervailing duty shall equally apply to any review carried out 31under this subsection. Such review shall be carried out expeditiously and shall 32be concluded not later than ninety (90) days from the date of the initiation of 33such a review. 34 35(Q) Judicial Review. - Any interested party who is adversely affected by the 36department order of the Secretary on the imposition of the countervailing duty 37may file with the Court of Tax Appeals a petition for review of such order 38within thirty (30) days from his receipt of notice thereof: Provided, however, 39That the filing of such petition for review shall not in any way stop, suspend or 40otherwise toll the imposition and collection of the countervailing duty on the 41imported product, commodity or article. 42 43"The petition for review shall comply with the same requirements, follow the 44same rules of procedure, and be subject to the same disposition as in appeals 45in connection with adverse rulings on tax matters to the Court of Tax Appeals. 46 47(R) An inter-agency committee composed of the Secretaries of Trade and 48Industry, Agriculture, and Finance, the Chairman of the Tariff Commission, 49and the Commissioner of Customs shall promulgate all rules and regulations 50necessary for the effective implementation of this section. (As amended by 2 3
241

1 1Republic Act No. 8751 dated 07 August 1999) 2 3SECTION 4 ANTI-DUMPING DUTY 4 5Section I. Definition of Terms 6 71) Anti -dumping duty refers to a special duty imposed on the importation 8of a product, commodity or article of commerce into the Philippines at less 9than its normal value when destined for domestic consumption in the 10exporting country, which is the difference between the export price and the 11normal value of such product, commodity or article. 122) Export price refers to (1) the ex -factory price at the point of sale for 13export; or (2) the F.O.B. price at the point of shipment. In cases where (1) or 14(2) cannot be used, then the export price may be constructed based on such 15reasonable basis as the Secretary or the Commission may determine. 163) Normal value refers to a comparable price at the date of sale of the like 17product, commodity or article in the ordinary course of trade when destined for 18consumption in the country of export. 194) Domestic industry refers to the domestic producers as a whole of the 20like product or to those of them whose collective output of the product 21constitutes a major related to the exporters or importers or are themselves 22importers of the allegedly dumped product, the term 'domestic industry' may 23be interpreted as referring to the rest of the producers. 245) Dumped import product refers to any product, commodity or article of 25commerce introduced into the Philippines at an export price less than its 26normal value in the ordinary course of trade, for the like product, commodity 27or article destined for consumption in the exporting country, which is causing 28or is threatening to cause material injury to a domestic industry, or materially 29retarding the establishment of a domestic industry producing the like product. 306) Like product refers to a product which is identical or alike in all respects 31to the product under consideration, or in the absence of such a product, 32another product which, although not alike in all respects, has characteristics 33closely resembling those of the product under consideration. 347) Non -selected exporter or producer refers to an exporter or producer 35who has not been initially chosen as among the selected exporters or 36producers of the product under investigation. 37 38(a) Anti Dumping Duty. Whenever any product, commodity or article of 39commerce imported into the Philippines at an export price less than its normal 40value in the ordinary course of trade for the like product, commodity or article 41destined for consumption in the exporting country is causing or is threatening 42to cause material injury to a domestic industry, or materially retarding the 43establishment of a domestic industry producing the like product, the Secretary 44of Trade and Industry, in the case of non -agricultural product, commodity or 45article, or the Secretary of Agriculture, in the case of agricultural product, 46commodity or article (both of whom are hereinafter referred to as the 47Secretary, as the case may be), after formal investigation and affirmative 48finding of the Tariff Commission (hereinafter referred to as the Commission), 49shall cause the imposition of an anti -dumping duty equal to the margin of 50dumping on such product, commodity or article and on like product, 2 3
242

1 1commodity or article thereafter imported to the Philippines under similar 2circumstances, in addition to ordinary duties, taxes and charges imposed by 3law on the imported product, commodity or article. However, the anti 4-dumping duty may be less than the margin if such lesser duty will be 5adequate to remove the injury to the domestic industry. Even when a 11 t he 6requirements f or t he imposition have been fulfilled, the decision on whether 7or not to impose a definitive anti -dumping duty remains the prerogative of the 8Commission. It may consider, among others, the effect of imposing an anti 9-dumping duty on the welfare of consumers and/or the general public, and 10other related local industries. 11 12In the case where products are not imported directly from the country of origin 13but are exported to the Philippines from an intermediate country, the price at 14which the products are sold from the country of export in the Philippines shall 15normally be compared with the comparable price in the country of export. 16However, comparison may be made with the price in the country of origin, if 17for example, the products are merely transshipped through the country of 18export, or such products are not produced in the country of export, or there is 19no comparable price for them in the country of export. 20 21(b) Initiation of Action. An anti-dumping investigation may be initiated upon 22receipt of a written application from any person whether natural or juridical, 23representing a domestic industry, which shall include evidence of: a) dumping, 24b) injury, and c) causal link between the dumped imports and the alleged 25injury. Simple assertion, unsubstantiated by relevant evidence, cannot be 26considered sufficient to meet the requirements of this paragraph. The 27application shall contain such information as is reasonably available to the 28applicant on the following: 1) the identity of the applicant and a description of 29the volume and the value of the domestic production of the like product of the 30applicant; 2) a complete description of the alleged dumped product, the name 31of the country of origin or export under consideration, the identity of each 32known exporter or foreign producer, and a list of known persons importing the 33product under consideration; 3) information on the normal value of the product 34under consideration in the country of origin or export; and 4) information on 35the evolution of the volume of the alleged dumped imports, the effect of these 36imports on the price of the like product in the domestic market, and the 37consequent impact of the imports on the domestic industry. 38 39"Philippine Trade, Agriculture or Finance Attaches and other Consular 40Officials or Attach6s in the concerned exporting member countries are 41mandated to furnish the applicant pertinent information or documents to 42support his complaint within a period not exceeding thirty (30) days from 43receipt of a request. 44 45"The application shall be filed with the Secretary of Trade and Industry in the 46case of non -agricultural product, commodity or article, or with the Secretary 47of Agriculture in the case of agricultural product, commodity or article. The 48Secretary shall require the petitioner to post a surety bond in such reasonable 49amount as to answer for any and all damages which the importer may sustain 50by reason of the filing of a frivolous petition. He shall immediately release the 2 3
243

1 1surety bond upon making an affirmative preliminary determination. 2 3"The application shall be considered to have been made "by or on behalf of 4the domestic industry " if it is supported by those domestic producers whose 5collective output constitutes more than fifty percent (50%) of the total 6production of the like product produced by that portion of the domestic 7industry expressing either support for or opposition to the application. In cases 8involving an exceptionally large number of producers, the degree of support 9and opposition may be determined by using a statistically valid sampling 10technique or by consulting their representative organizations. However, no 11investigation shall be initiated when domestic producers expressly supporting 12the application account for less than twenty -five percent (25%) of total 13production of the like product produced by the domestic industry. 14 15"in exceptional circumstances, the Philippines may be divided into two or 16more competitive markets and the producers within each market may be 17regarded as a separate industry if (a) the producers within such market have 18the dominant market share; and (b) the demand in that market is not 19substantially supplied by other producers elsewhere in the Philippines. 20 21"if, in special circumstances, the Secretary decides to initiate an investigation 22without having received a written application by or on behalf of a domestic 23industry for the initiation of such investigation, he shall proceed only if he has 24sufficient evidence of dumping, injury and a causal link, to justify the initiation 25of an investigation. 26 27"Within five (5) working days from receipt of a properly documented 28application, the Secretary shall examine the accuracy and adequacy of the 29petition to determine whether there is sufficient evidence to justify the initiation 30of investigation. If there is no sufficient evidence to justify initiation, the 31Secretary shall dismiss the petition and properly notify the Secretary of 32Finance, the Commissioner of Customs, and other parties concerned 33regarding such dismissal. The Secretary shall extend legal, technical, and 34other assistance to the concerned domestic producers and their organizations 35at all stages of the anti -dumping action. 36 37(c) Notice to the Secretary of Finance. - Upon receipt of the application, the 38Secretary shall, without delay, notify the Secretary of Finance and furnish him 39with a complete copy 6f the application, or information in case the initiation is 40made o n h is own motion including its annexes, if any. The Secretary o f 41Finance s hall immediately inform the Commissioner of Customs regarding 42the filing and pendency of the application or information and instruct him to 43gather and to furnish the Secretary within five (5) days from receipt of the 44instructions of the Secretary of Finance copies of all import entries and 45relevant documents covering such allegedly dumped product, commodity or 46article which entered the Philippines during the last twelve (12) months 47preceding the date of application. The Commissioner of Customs shall also 48make such similar additional reports on the number, volume, and value of the 49importation of the allegedly dumped product, commodity or article to the 50Secretary every ten (110) days thereafter. 2 3
244

1 1 2(d) Notice to Exporting Member-Country. - Upon receipt of a properly 3documented application and before proceeding to initiate an investigation, the 4Secretary shall notify the government of the exporting country about the 5impending anti -dumping investigation. However, the Secretary shall refrain 6from publicizing the application for the initiation of the investigation before a 7decision has been made to initiate an investigation. 8 9(e) Notice to Concerned Parties and Submission of Evidences. - Within two 10(2) days from initiation of the investigation and after having notified the 11exporting country, the Secretary shall identify all interested parties, i.e., 12protestee -importer, exporter and/or foreign producer, notify and require them 13to submit within thirty (30) days from receipt of such notice evidences and 14information or reply to the questionnaire to dispute the allegations contained 15in the application. At this point, the respondent is given the opportunity to 16present evidences to prove that he is not involved in dumping. He shall furnish 17them with a copy of the application and its annexes subject to the requirement 18to protect confidential information. The notice shall be deemed to have been 19received five (5) days from the date on which it was sent to the respondent or 20transmitted to the appropriate diplomatic representative of the exporting 21member, or an official representative of the exporting territory. If the 22respondent fails to submit his answer, he shall be declared in default, in which 23case, the Secretary shall make such preliminary determination of the case on 24the basis of the information available, among others, the facts alleged in the 25petition and the supporting information and documents supplied by the 26petitioner. 27 28(f) Preliminary Determination. - Not later than thirty (30) working days from 29receipt of the answer of the respondent importer, exporter, foreign producer, 30exporting member -country, and other interested parties, the Secretary shall, 31on the basis of the application of the aggrieved party and the answer of the 32respondent/s and their respective supporting documents or information, make 33a preliminary determination of the application for the imposition of an anti 34-dumping duty. 35 36in the preliminary determination, the Secretary shall essentially determine the 37following: 38 391) Price difference between the export p rice and t he normal value of the 40article in question in the country of export or origin; 412) The presence and extent of material injury or threat of injury to the 42domestic industry producing like product or the material retardation of the 43establishment of a domestic industry; and 443) The causal relationship between the allegedly dumped product, 45commodity or article and the material injury or threat of material injury to the 46affected domestic industry or material retardation of the establishment of the 47domestic industry. 48 49"The preliminary finding of the Secretary, together with the records of the case 50shall, within three (3) days, be transmitted b y t he Secretary to the 2 3
245

1 1Commission for its immediate formal investigation. In case his preliminary 2finding is affirmative, the burden of proof is shifted to the respondent to rebut 3the preliminary finding. The Secretary shall immediately issue, through the 4Secretary of Finance, written instructions to the Commissioner of Customs to 5impose within three (3) days from receipt of instructions a cash bond equal to 6the provisionally estimated anti -dumping duty but not greater than the 7provisionally estimated margin of dumping in addition to any other duties, 8taxes and charges imposed by law on like articles. The cash bond shall be 9deposited with the government depository bank and shall be held in trust for 10the respondent. Moreover, the posting of the cash bond shall only be required 11no sooner than sixty (60) days from the date of initiation of the investigation. 12The date of initiation of the investigation is deemed to be the date the 13Secretary publishes such notice in two (2) newspapers of general circulation. 14The Secretary shall cause such publication immediately after a decision to 15initiate the investigation has been made. The provisional anti -dumping duty 16may only be imposed for a four (4) -month period which may be extended to 17six (6) months upon request by the exporters representing a significant 18percentage of the trade involved. However, a provisional anti -dumping duty 19lower than the provisionally estimated margin of dumping can be imposed for 20a period of six (6) to nine (9) months, if it is deemed sufficient to remove or 21prevent the material injury. 22 23(g) Termination of Investigation. - The Secretary or the Commission as the 24case may be, shall motu proprio terminate the investigation at any stage of 25the proceedings if the provisionally estimated margin of dumping is less than 26two percent (2%) of export price or the volume of dumped imports or injury is 27negligible. The volume of dumped imports from a particular country shall 28normally be regarded as negligible if it accounts for less than three percent 29(3%) of the imports of the like article in the Philippines unless countries which 30individually account for less than three percent (3%) of the imports of the like 31article in the Philippines collectively account for more than seven percent (7%) 32of the total imports of that article. 33 34(h) Investigation of the Commission. - Within three (3) working days upon its 35receipt of the records of the case from the Secretary, the Commission shall 36start the formal investigation and shall accordingly notify in writing all parties 37on record and, in addition, give public notice of the exact initial date, time and 38place of the formal investigation through the publication of such particulars 39and a concise summary of the petition in two (2) newspapers of general 40circulation. 41 42"In the formal investigation, the Commission shall essentially determine the 43following: 44 451) If the article in question is being imported into, or sold in the Philippines 46at a price less than its normal value; and the difference, if any, between the 47export price and the normal value of the article. 482) The presence and extent of material injury or the threat thereof to the 49domestic industry, or the material retardation of the establishment of a 50domestic industry; 2 3
246

1 13) The existence of a casual relationship between the allegedly dumped 2product, commodity or article and the material injury or threat of material injury 3to the affected domestic industry, or material retardation of the establishment 4of a domestic industry; 54) The anti -dumping duty to be imposed; and 65) The duration of the imposition of the anti -dumping duty. 7 8"The formal investigation shall be conducted in a summary manner. No 9dilatory tactics or unnecessary or unjustified delays shall be allowed and the 10technical rules of evidence used in regular court proceedings shall not 11be applied. 12 13" In case any and all of the parties on record fail to submit their answers to 14questionnaires/position papers within the prescribed period, the Commission 15shall base its findings on the best available information. 16 17"The Commission shall complete the formal investigation and submit a report 18of its findings, whether favorable or not, to the Secretary within one hundred 19twenty (120) days from receipt of the records of the case: Provided, however, 20That the Commission shall, before a final determination is made, inform all the 21interested parties in writing of the essential facts under consideration which 22from the basis for the decision to apply definitive measures. Such disclosure 23should take place in sufficient time for the parties to defend their interests. 24 25(i) Determination of Material Injury or Threat Thereof. - The presence and 26extent of material injury to the domestic industry, as a result of the dumped 27imports shall be determined on the basis of positive evidence and shall 28require an objective examination of, but shall not be limited to the following: 29 301) The rate of increase and amount of imports, either in absolute terms or 31relative to production or consumption in the domestic market; 322) The effect of the dumped imports on the price in the domestic market 33for like product, commodity or article, that is, whether there has been a 34significant price undercutting by the dumped imports as compared with the 35price of like product, commodity or article in the domestic market, or whether 36the effect of such imports is otherwise to depress prices to a significant 37degree or prevent price increases, which otherwise would have occurred, to a 38significant degree; and 393) The effect of the dumped imports o n t he domestic producers or the 40resulting retardation o f the establishment of a domestic industry 41manufacturing like product, commodity or article, including an evaluation of all 42relevant economic factors and indices having a bearing on the state of the 43domestic industry concerned, such as, but not limited to, actual or potential 44decline in output, sales, market share, profits, productivity, return on 45investments, or utilization of capacity; factors affecting domestic prices; the 46magnitude of dumping; actual and potential negative effects on cash flow, 47inventories, employment, wages, growth, and ability to raise capital or 48investments. 49 50The extent of injury of the dumped imports to the domestic industry shall be 2 3
247

1 1determined by the Secretary and the Commission upon examination of all 2relevant evidence. Any known factors other than the dumped imports which at 3the same time are injuring the domestic industry shall also be examined and 4the injuries caused by these factors must not be attributed to the dumped 5imports. The relevant evidence may include, but shall not be limited to, the 6following: 7 81) The volume and value of imports not sold at dumping prices; 92) Contraction in demand or changes in consumption pattern; 103) Trade restrictive practices and competition between foreign and 11domestic producers; 124) Developments in technology; and 135) Export performance and productivity of the domestic industry. 14 15"A determination of threat of material injury shall be based on facts and not 16merely on allegation, conjecture or remote possibility. The change in 17circumstances which will create a situation in which the dumping will cause 18injury must be clearly foreseen and imminent. In making a determination 19regarding the existence of a threat of material injury, the following shall be 20considered, inter lia, collectively: 21 221) A significant rate of increase of the dumped imports in the domestic 23market indicating the likelihood of substantially increased importation; 242) Sufficient freely disposable, or an imminent, substantial increase in 25capacity of the exporter indicating the likelihood of substantially increased 26dumped exports to the domestic market, taking into account the availability of 27other export markets to absorb any additional exports; 283) Whether imports are entering at prices that will have a significant 29depressing or suppressing effect on domestic prices and will likely increase 30demand for further imports; and 314) Inventories of the product being investigated. 32 33(j) Voluntary price undertaking executed by the exporter or foreign producer 34under oath and accepted by the affected industry that he will increase his 35price or will cease exporting to the Philippines at a dumped price, thereby 36eliminating the material injury to the domestic industry producing like product. 37Price increases under such undertakings shall not be higher than necessary 38to eliminate the margin of dumping. 39 40"A price undertaking shall be accepted only after a preliminary affirmative 41determination of dumping and injury caused by such dumping has been 42made. No price undertaking shall take effect unless it is approved by the 43Secretary after a recommendation by the Commission. 44 45"Even if the price undertaking is acceptable, the investigation shall 46nevertheless be continued and completed by the Commission if the exporter 47or foreign producer so desires or upon advice of the Secretary. The 48undertaking shall automatically lapse in case of a negative finding. In case of 49any affirmative finding, the undertaking shall continue, consistent with the 50provisions of Article VI of the GATT 1994. 2 3
248

1 1 2(k) Cumulation of Imports. - When imports of products, commodities or articles 3from more than one country are simultaneously the subject of an anti 4-dumping investigation, the Secretary or the Commission may cumulatively 5assess the effects of such imports only if the Secretary and the Commission 6are convinced that: 7 81) The margin of dumping established in relation to the imports from each 9country is more than de minimis as defined in Subsection G; 102) The volume of such imports from each country is not negligible, also as 11defined in Subsection G; and 123) A cumulative assessment of the effects of such imports is warranted in 13the light of the conditions of competition between the imported products, 14commodities or articles, and the conditions of competition between the 15imported products and the like domestic products, commodities or articles. 16 17(l) Imposition of the Anti -Dumping Duty. - The Secretary shall, within ten (10) 18days from receipt of the affirmative final determination by the Commission, 19issue a Department Order imposing an anti -dumping duty on the imported 20product, commodity or article, unless he has earlier accepted a price 21undertaking from the exporter or foreign producer. He shall furnish the 22Secretary of Finance with the copy of the order and request the latter to direct 23the Commissioner of Customs to collect within three (3) days from receipt 24thereof the definitive antidumping duty. 25 26"in case a cash bond has been filed, the same shall be applied to the anti 27-dumping duty assessed. If the cash bond is in excess of the anti -dumping 28duty assessed, the remainder shall be returned to the importer immediately 29including interest earned, if any: Provided, That no interest shall be payable 30by the government on the amount to be returned. If the assessed anti 31-dumping duty is higher than the cash bond filed, the difference shall not be 32collected. 33 34"Upon determination of the anti -dumping duty, the Commissioner of Customs 35shall submit to the Secretary, through the Secretary of Finance, certified 36reports on the disposition of the cash bond and the amounts of the anti 37-dumping duties collected. 38 39"In case of a negative finding by the Commission, the Secretary shall issue, 40after the lapse of the period for the petitioner to appeal to the Court of Tax 41Appeals, through the Secretary of Finance, an order for the Commissioner of 42Customs for the immediate release of the cash bond to the importer. In 43addition, all the parties concerned shall also be properly notified of the 44dismissal of the case. 45 46(m) Period Subject to Anti -Dumping Duty. - An anti -dumping duty may be 47levied retroactively from the date the cash bond has been imposed and 48onwards, where a final determination of injury is made, or in the absence of 49provisional measures, a threat of injury has led to actual injury. Where a 50determination of threat of injury or material retardation is made, anti -dumping 2 3
249

1 1duties may be imposed only from the date of determination thereof and any 2cash bond posted shall be released in an expeditious manner. However, an 3anti -dumping duty may be levied on products which were imported into the 4country not more than ninety (90) days prior to the date of application of the 5cash bond, when the authorities determine for the dumped product in question 6that: 7 81) There is a history of dumping which caused injury or that the importer 9was, or should have been, aware that the exporter practices dumping and that 10such dumping would cause injury; and 112) The injury is caused by massive dumped imports of a product in a 12relatively short time which in light of the timing and the volume of the dumped 13imports and other circumstances (such as rapid build -up of inventories of the 14imported product) is likely to seriously undermine the remedial effect of the 15definitive antidumping duty to be applied: Provided, That the importers 16concerned have been given an opportunity to comment. 17 18"No duties shall be levied retroactively pursuant to herein subsection on 19products entered for consumption prior to the date of initiation of the 20investigation. 21 22(n) Computation of Anti-Dumping Duty. If the normal value of an article 23cannot be determined, the provisions for choosing alternative normal value 24under Article VI of GATT 1994 shall apply. 25 26"If possible, an individual margin of dumping shall be determined for each 27known exporter or producer of t he article u rider investigation. I n cases w 28here t he number of exporters, producers, importers or types of products 29involved is so large as to make such determination impracticable, the 30Secretary and the Commission may limit their examination either to a 31reasonable number of interested parties or products by using samples which 32are statistically valid on the basis of information available to them at the time 33of the selection, or to the largest percentage of volume of exports from the 34country in question which can reasonably be investigated. 35 36"However, if a non -selected exporter or producer submits information, the 37investigation must extend to that exporter or producer unless this will prevent 38the timely completion of the investigation. 39 40"New exporters or producers who have not exported to the Philippines during 41the period of investigation will be subject to an accelerated review. No anti 42-dumping duties shall b a imposed during the review. Cash bonds may be 43requested to ensure that in case of affirmative findings, anti -dumping duties 44can be levied retroactively to the date of initiation of the review. 45 46(o) Duration and Review of the Anti -Dumping Duty. - As a general rule, the 47imposition of an antidumping duty shall remain in force only as long as and 48to the extent necessary to counteract dumping which is causing or threatening 49to cause material injury to the domestic industry or material retardation of the 50establishment of such industry. 2 3
250

1 1 2"However, the need for the continued imposition of the anti -dumping duty 3may be reviewed by the Commission when warranted motu proprio, or upon 4the direction of the Secretary, taking into consideration the need to protect the 5existing domestic industry against dumping. 6"Any interested party with substantial positive information may also petition 7the Secretary for a review of the continued imposition of the anti -dumping 8duty: Provided, That a reasonable period of time has elapsed since the 9imposition of the anti -dumping duty. Interested parties shall have the right to 10request the Secretary to examine: 1) whether the continued imposition of the 11anti -dumping duty is necessary to offset dumping; and 2) whether the injury 12would likely continue or recur if the anti -dumping duty were removed or 13modified, or both. 14 15"if the Commission determines that the anti -dumping duty is no longer 16necessary or warranted, the Secretary shall, upon its recommendation, issue 17a department order immediately terminating the imposition of the anti 18-dumping duty. All parties concerned shall be notified accordingly of such 19termination, including the Secretary of Finance and the Commissi6ner of 20Customs. 21 22"The duration of the definitive anti -dumping duty s hall not exceed five (5) 23years from the date of its imposition (or from the date of the most recent 24review if that review has covered both dumping and injury) unless the 25Commission has determined in a review initiated before that date on their own 26initiative or upon a duly substantiated request made by or on behalf of the 27domestic industry within a reasonable time period prior to the termination date 28that the termination of the anti -dumping duty will likely lead to the 29continuation or recurrence of dumping and injury. 30 31"The provisions of this Section regarding evidence and procedures shall apply 32to any review carried out under this Subsection and any such review should 33be carried out expeditiously and should be conducted not later than one 34hundred fifty (150) days from the date of initiation of such review. 35 36(p) Judicial Review. - Any interested party in an anti -dumping investigation 37who is adversely affected by a final ruling in connection with the imposition of 38an anti -dumping duty may file with the Court of Tax Appeals, a petition for the 39review of such ruling within thirty (30) days from his receipt of notice of the 40final ruling: Provided, however, That the filing of such petition for review shall 41not in any way stop, suspend, or otherwise hold the imposition or collection, 42as the case may be, of the anti -dumping duty on the imported product, 43commodity or article. The rules of procedure of the court on the petition for 44review filed with the Court of Tax Appeals shall be applied. 45 46(q) Public Notices. - The Secretary or the Commission shall inform in writing 47all interested parties on record and, in addition, give public notices by 48publishing in two (2) newspapers of general circulation when: 491) Initiating an investigation; 502) Concluding or suspending investigation; 2 3
251

1 13) Making any preliminary or final determination whether affirmative or 2negative; 34) Making a decision to accept or to terminate an undertaking; and 45) Terminating a definitive anti -dumping duty. 5 6Commissioner of Customs a list of imported products susceptible to unfair 7trade practices. The Commissioner of Customs is hereby mandated to submit 8to the Secretary monthly reports covering importations of said products, 9including but not limited to the following: 101) Commercial invoice; 112) Bill of lading; 123) Import entries; and 134) Pre -shipment reports. 14 15"Failure to comply with the submission of such report as provided herein shall 16hold the concerned officials liable and shall be punished with a fine not 17exceeding the equivalent of six (6) months salary or suspension not 18exceeding one (1) year. 19(r) Administrative Support. - Upon the effectivity of this Act, the Departments 20of Trade and Industry, Agriculture and the Tariff Commission, shall ensure the 21efficient and effective implementation of this Act by creating a special unit 22within their agencies that will undertake the functions relative to the 23disposition of anti-dumping cases. All anti -dumping duties collected shall be 24earmarked for the strengthening of the capabilities of these agencies to 25undertake their responsibilities under this Act. " (As amended by Republic Act 26No. 8752 dated 12 August 1999) 27 28 29 TITLE 2- OPERATIONS 30 31CHAPTER 1 RULES OF ORIGIN 32 33(Ref: CMO 2-2010) 34 35Section 1 Definition of Terms 36 371.1 Rules of Origin refers to set of rules that determines whether an article 38qualifies for preferential tariff. 39 40Section 2 Administrative Provisions 41 422.1 The Export Coordination Division (ECD) shall exercise oversight 43function on all activities related to the issuance and utilization of Certificates of 44Origin (COs) whether unilateral, bilateral, regional or multilateral. 45 462.2 Accordingly, ECD shall have the responsibility of pre-evaluating all 47exporters and their export products for CO issuance purposes regardless of 48where the Export Declarations are processed and regardless of ports of 49loading. However, authorized issuance of COs can be delegated by the Chief, 50ECD to Export Divisions or equivalent units of all the Collection Districts 2 3
252

1 1where Export Declarations are processed, provided, products exported has a 2pre-approved evaluation from the Chief, ECD. 3 42.3 Likewise, ECD, in coordination with Formal Entry Divisions and/or its 5equivalent units in all Collection Districts shall design a post evaluation 6system of COs that cover imported products, to ensure that proper and 7appropriate duties and taxes are collected. 8 92.4 ECD is hereby directed to establish and maintain a comprehensive 10database of information related to the issuance of all types of COs as well as 11pre-evaluated exporters and their products including their production or 12manufacturing processes and product costing. (Refer to Annexes A, B, C). 13 14The retention period for customs copies of COs issued, supporting documents 15and the 201 file of pre-evaluated exporters shall follow the Operational 16Certification Procedure of ROO. 172.5 ECD is also directed to establish and maintain a comprehensive 18database of information related to the utilization of all kinds of COs for post 19evaluation purposes, and statistical record to comply with international 20agreement on ROO. 21 222.6 In this regard a monthly report shall be generated by the ECD on all 23COs issued and utilized indicating therein among others export/import product 24descriptions, volume, HS code of the importing country, originating rule used, 25FOB value, country of destination/origin and similar information which are 26needed for policy consideration purposes. 27 282.7 ECD shall have the responsibility of coordinating with the MISTG for 29the possible CO automated applications, issuance, transmission, retrieval and 30records keeping of exporters' 201-file. 31 322.8 Responses to all retro-verifications shall be centralized to ECD and 33accordingly all Chiefs/Heads of Export Divisions or equivalent units of all 34Collection Districts are required to direct all queries to the ECD. The formal 35answers by the BOC to all retro-verifications shall be signed by the Deputy 36Commissioner, AOCG upon recommendation of the Chief, ECD. 37 38In cases of doubts in the veracity of COs issued by the authorized agency of a 39contracting party and presented for utilization, the Chief, ECD, following the 40operational procedure on ROO, may recommend to the Commissioner, thru 41the Deputy Commissioner, AOCG, request for retro-verification to issuing 42authority of the contracting party. Communications to this effect shall be 43signed by the Commissioner. 44 45ECD, upon approval of the Deputy Commissioner, AOCG, may conduct its 46own retro-verifications upon receipt of any valid derogatory information that 47issuance and/or utilization of a particular CO is tainted with irregularity. Result 48of such retro-verification including recommended action shall be submitted by 49the Chief, ECD to the Deputy Commissioner, AOCG. 50 2 3
253

1 12.9 By virtue of its enhanced functions, additional staff or realignment or 2recall of personnel with items at ECD may be done. To concentrate on these 3functions, ECD shall no longer process Export Declarations, however, the 4supervision of the One Stop Export Declaration Center (OSEDC) will remain 5in the ECD. 6 72.10 ECD shall be the lead office in the training of customs officials and 8employees and stakeholders with regard to ROO. 9 102.11 ECD shall directly report to the Deputy Commissioner, AOCG on all 11matters related to ROO, and perform other appropriate functions consistent 12with the tasks of the AOCG that may be assigned by the Commissioner. 13 14Section 3 Operational Provisions 15 163.1 All Chiefs of the Export Divisions (EDs) of all Collection Districts are 17required to provide ECD, within thirty (30) days from effectivity of this Order, 18all documents on hand, like 201 files, bill of materials, production flowcharts, 19product costing, that pertains to exporters and export products that have been 20approved for purposes of CO issuances. 21 223.2 Accordingly, in case of Metro Manila applicants, all applications for pre23evaluation of exporters and export products for purposes of CO issuance shall 24be addressed to ECD. Evaluation and approval/disapproval of applications 25shall be made within ten (10) working days from receipt of application. 26Communications sent by ECD for additional supporting documents, requests 27for clarification or similar issues shall toll the running of the ten (10) working 28day period. The period shall commence running upon receipt of responsive 29written answers from applicants 30 313.3 For provincial applicants the same shall be addressed to the Chief, ED 32concerned who shall make the proper recommendation to the Chief, ECD. 33The recommendation shall be forwarded within five (5) working days. The 34Chief, ECD shall evaluate, approve or disapprove and communicate action 35within five (5) working days from receipt of recommendation from Chief, ED. 36Communications sent by ECD for additional supporting documents, requests 37for clarification or similar issues shall toll the running of the five (5) working 38day period. The period shall commence running upon receipt of responsive 39written answers from applicants. 40 41Refer to Annex "A" for standardized application form which shall be signed 42and under oath by the proprietor in case applicant is operating on single 43proprietorship or doing business as natural person or in case of juridical 44exporters by a responsible official duly authorized as supported by a 45Corporate Secretary's Certificate. 46 47Supporting documents shall all be in original copies signed by the applicant 48and in case of photocopies to be certified "true and correct" by the applicant. 49 503.4 Upon receipt of applications or recommendations the Chief, ECD shall 2 3
254

1 1assign an Evaluating Officer from ECD and/or ED concerned for provincial 2ports. 3 4The Evaluating Officer shall have the responsibility of document checking and 5if necessary conducting plant/factory visit to validate information submitted by 6an exporter-applicant. 7 8The Evaluating Officer is given five (5) working days to make recommendation 9to the Chief, ECD who in turn is given five (5) working days to approve or 10disapprove the recommendation. 11 12A written notice for the approval or disapproval of the application shall be 13given to the exporter-applicant within two (2) days from approval or 14disapproval of the Chief, ECD, copy furnished Deputy Commissioner, AOCG. 15 163.5 For the purpose of initial database of COs issued and utilized, all 17Export Divisions and Formal Entry/Warehousing Divisions and/or their 18equivalent units in all Collection Districts and sub-ports, and special units like 19the at One Stop Shop Processing located at the Phil-Export, and Export 20Processing Zones are required to submit a report of all Certificates of Origin 21issued and utilized for the period January 2008 up to effectivity of this Order. 22 23ECD is tasked to prepare the report format and all concerned are directed to 24submit the report within thirty (30) days from the issuance of this Order. 25 26Thereafter all concerned are required to submit a monthly report of the 27following list to the ECD, in the manner to be prescribed by the Chief, ECD, to 28be submitted latest every 10th of the following month: 29 30a. COs issued (Export Transactions) 31b. COs utilized (Import Transactions) 32c. Pre-evaluated exporters and products 33 34It shall be the responsibility of the ECD to come up with a consolidated report 35every 16th of the month of all COs issued for preferential tariff purposes and 36COs presented for imported products, noting in the remarks if dishonored, to 37the Commissioner thru the Deputy Commissioner, AOCG and to the Bureau 38of International Trade Relations (BITR), Department of Trade and Industry 39(DTI). 403.6 All communications related to the retro-verification request shall be 41forwarded to ECD copy furnished the Deputy Commissioner, AOCG. The 42Chief, ECD in coordination with the ED concerned is given 15 days to draft 43the official reply to the retro-verification to be signed by the Deputy 44Commissioner, AOCG. 45 463.7 In cases ECD has discovered that CO was procured through deceit, 47misrepresentation, machination or through an act of fraud, the Chief ECD may 48recommend to the Deputy Commissioner, AOCG, that this be referred to 49Investigation Prosecution Division and the Legal Service for possible filing of 50administrative, civil and criminal case against the culprits. 2 3
255

1 1 2 3CHAPTER 2 PROCESSING OF EXPORT DECLARATION 4 5I. Who may avail of the Service 6 71. Exporters or their duly authorized representatives 82. Customs Brokers 9 10II. Documentary Requirements 11 121. Regular Export 13a. Export Declaration 14b. Proforma Invoice 15c. Packing list 162. Under Section 2001 to 2004 (Warehousing) 17a. Export Declaration 18b. Proforma Invoice 19c. Packing list 20d. Certificate of Identification (signed by WAD) 21e. Certificate of Inspection and Loading 22f. Boatnote (not mandatory) 233. Under Drawback 24a. Export Declaration 25b. Proforma Invoice 26c. Packing list 27d. Shipment Information Slip issued by CIIS 284. Under Bond/for repair 29a. Export Declaration 30b. Proforma Invoice 31c. Packing list 32d. Certificate of Identification (signed by COO I) 335. Regulated Products 34a. Export Declaration 35b. Proforma Invoice 36c. Packing list 37d. Commodity Clearance/Export Permit 386. Transshipment 39a. Special Permit to Load 40b. Proforma Invoice/Packing List 41c. Copy of Processed Export Declaration from the outports 42d. Copy of Cargo Manifest 43e. Copy of Domestic Bill of Lading 44 45III. Procedures 461. Exporter/Broker submits duly accomplished Export Declaration 47together with appropriate documentary requirements. 482. The Receiving Clerk receives export declaration, checks completeness 49of documentary requirements including CDS requirements and assigns the 50application to a Customs Operations Officer for proper evaluation. 2 3
256

1 13. The COO I checks completeness, accuracy and consistency of the 2data in the documents and conducts examination of the shipment if: 3a. Covered by Alert Order 4b. With positive x-ray scanning result 5c. Covered by re-export bond 6d. Subject for repair 71) Issue Certificate of Identification in case of items c and d 82) Initial the export declaration and forward the documents to the 9Assistant Chief for review 104. The Assistant Chief reviews the evaluation of the COO I 115. The Chief approves and sign the Export Declaration 126. The Receiving Clerk stamps authority to load, issues reference 13number, segregates copies of documents and release original and duplicate 14copies of export declaration to the exporter or broker for transmittal to CCCD 15or PID 16 17 CHAPTER 3 PORT OPERATIONS 18 19I. ADMINISTRATIVE PROVISIONS 20 21Section 1. BAY SERVICE SECTION or EQUIVALENT OFFICE 22 23 24The Bay Service Section is in charge of boarding formalities and the entrance 25and clearance of foreign vessels. It supervises and implements security 26measures in the discharging/loading of import/export shipments as well as to 27incoming/outgoing crew, passengers and visitors on board such vessels. 28 29The Bay Service Section shall be headed by a Chief, who shall have direct 30supervision and control over all personnel therein. He shall issue instructions 31to the Customs Senior Boarding Officer, and who shall in turn be held 32responsible for their proper execution of the instructions given from time to 33time and to render reports. 34 35Section 2. UNIFORMS AND INSIGNIA (PIERS AND INSPECTION 36DIVISION) 37 38The Chief, Bay Service Section, Customs Senior Boarding Officers, Customs 39Inspectors, Customs Guards and Wharfingers shall always wear the 40appropriate and prescribed uniform, insignia, nameplate, Customs badge, 41black shoes and regulation cap. 42 43Section 3. DUTIES AND RESPONSIBILITIES OF CUSTOMS 44OPERATIONS OFFICER III (CUSTOMS SENIOR BOARDING OFFICERS) 45 46A. Customs Senior Boarding Officer shall have the following duties and 47responsibilities: 48 491. Board incoming foreign vessels outside the breakwater or harbor, 50unless prevented by stress of weather. When boarding a vessel, the Customs 2 3
257

1 1Senior Boarding Officer shall be assisted by the Customs Inspector assigned 2on a vessel. 3 4During boarding formalities, only the Customs Senior Boarding Officer and the 5Customs Inspector shall be allowed to enter the Captains cabin unless the 6Captain chooses to give the boarding information to the Customs Senior 7Boarding Officers outside the Captains cabin. 8 92. Obtain from the Master of a vessel the necessary information as 10required in BOC OPM Form No. 15 (Records of Vessel Boarded). 11 123. Seal sea stores in the presence of ships officer and the Customs 13Inspector assigned on board. Under penalty of law, the Customs seal so 14affixed shall not be broken while the vessel is within the jurisdictional limits of 15the Philippines except when the vessel is in port and only upon written 16application to withdraw supplies signed by the Master and approved by 17Collector of Customs or his duly authorized representatives. Only the 18Customs Senior Boarding Officer, in the presence of the Customs Inspector, 19may break the seal and allow the withdrawal of such quantities as may be 20authorized, and re-seal the sea store compartment after such withdrawal. 21Sea stores when adjusted by the Collector of Customs to be excessive or 22when duties assessed thereon are not paid, such excess sea stores shall be 23treated as that provided for in Section 2530 of the Tariff and Customs Code of 24the Philippines, as amended. 25 264. See to it that all Customs Inspectors and Customs Guards on duty are 27in their proper prescribed uniforms. Unless the Customs Inspectors are 28properly uniformed, the Customs Senior Boarding Officer shall not allow their 29embarking on the launch and shall report them as absent. In such cases, he 30can assign any available unassigned Customs Inspector or if no Customs 31Inspector is available, an acting Customs Inspector to take charge of the 32vessel until a regular Customs Inspector assigned reports in proper uniform. 33In case of necessity, the Customs Senior Boarding Officer can temporarily 34take charge of the vessel until the regular Customs Inspector is on board. In 35every case, the Customs Senior Boarding Officer, shall, without delay, report 36his action to the Chief, Bay Service Section (or its equivalent office). 37 385. See to it that a Customs Inspector or Customs Guard assigned to a 39vessel is provided with the necessary stationary and supplies. He shall also 40see to it that Customs Inspectors have a copy of the Tariff and Customs Code 41of the Philippines and a Manual for Port Operations. 42 43B. Report of Customs Senior Boarding Officers 44 451. Upon his return from an official trip in the bay, the Customs Senior 46Boarding Officer shall transmit to the Chief, Bay Service Section (or its 47equivalent office) all reports, entries and other documents delivered to him by 48the Master, Agent or the Customs Inspector assigned on board vessels. 49 502. He shall prepare and submit his trip report on BOC OPM Form No. 15 2 3
258

1 1(Records of Vessel Boarded) to the Chief, Bay Service Section (or its 2equivalent office) and make reports of any deviation from the assignment 3order issued to the Customs Inspectors and Customs Guards. 4 5Section 4. DUTIES AND RESPONSIBILITIES OF CUSTOMS 6OPERATIONS OFFICER I (CUSTOMS INSPECTORS) 7 8A. Customs Inspectors shall have the following duties and responsibilities: 9 101. Supervise the discharge and loading of cargo and to supervise 11continuous surveillance to protect the interests of the Customs Service, 12pursuant to Section 2202 of the Tariff and Customs Code of the Philippines, 13as amended. 14 152. Be responsible for the proper disposal of all cargo and stores on board 16vessels under their charge. It is their duty to see to it that no cargo or stores 17of any description are discharged from, or received on, the vessel without 18authority from the Collector of Customs, or his authorized representative. 193. Represent the Customs Service in his official relations with the 20passengers, ships officers, owners, agents and consignees, and should see 21to it that the dignity of the service is not impaired. 22 234. Stay in the vessel to which he has been assigned until he is relieved by 24proper authority, except as hereinafter provided, or it be necessary in the 25interest of the service that immediate action be taken. 26 275. Honor any order, request, or permit of any description only from the 28following named officials: 29 30(a) Commissioner of Customs or Deputy Commissioner of Customs; 31(b) Collector of Customs or Deputy Collector for Operations; 32(c) Chief or Asst. Chief, Piers and Inspection Division; 33(d) Chief, Bay Service Section; 34(e) Customs Senior Boarding Officers. 35 366. Endeavour to work in harmony at all times with Customs employees of 37other divisions and with the Immigration officers on board with respect to the 38enforcement of immigration laws, rendering assistance to those officials in the 39performance of their duties. In case of Philippine registered vessels returning 40from abroad, conducts mustering of crew, pursuant to Section 1011 of the 41Tariff and Customs Code of the Philippines, as amended. 42 437. Cooperate with quarantine authorities in the enforcement of port 44quarantine regulations promulgated by the Bureau of Quarantine and shall 45give effect to the same, in so far as they are connected with matters of 46shipping and navigation, pursuant to Section 605 of the Tariff and Customs 47Code of the Philippines, as amended. 48 498. Familiarize themselves with the provisions of the Tariff and Customs 50Code of the Philippines, as amended, Customs Administrative Orders, 2 3
259

1 1Customs Memorandum Orders and Circulars issued by the Bureau of 2Customs pertinent to their duties. 3 49. Refer the matter to the Customs Senior Boarding Officer or Chief, Bay 5Service Section (or equivalent office) for decision, in case he is in doubt as to 6the proper action to be taken. 7 8B. Specific Duties upon Assuming Charge of Vessel 9 101. It shall be the first duty of a Customs Inspector upon assuming charge 11of a vessel, especially a passenger vessel, to immediately assign a Customs 12Guard at each accommodation ladder or gangway with the instruction not to 13allow persons to board the vessel without a written pass, excepting the 14stevedores to attend to the discharging or loading of cargoes. 15 162. The Customs Inspector shall instruct Customs Guards assigned on the 17gangway to conduct body searches, if necessary, on all persons boarding or 18disembarking from the vessel. 193. While the vessel is docked at the pier or wharf, the Customs Inspector 20shall make periodic inspection to ascertain that all ropes and cables from 21vessel to dock are provided with rat guards and that adequate safeguards are 22employed, such as the covering of the holes through which ropes and cables 23pass. 24 254. If the vessel docks at night, the Customs Inspector shall require proper 26lighting at the gangway. 27 28C. Relationship of Customs Inspectors with Customs Guards under His 29Supervision 30 311. The Customs Inspector shall see to it that the Customs Guards 32assigned on the vessel are in complete uniform and present a neat and clean 33appearance. Their official badges must be displayed conspicuously. He 34should impress upon them the necessity of courtesy in their official dealings 35with passengers, ships officers, consignees, and other concerned. He shall 36instruct them that all disputes and all questions wherein the element of doubt 37enters should be submitted immediately to the Customs Inspector on board 38and satisfy himself that the Customs Guard to whom he issues instructions 39thoroughly understands them, so that errors may be avoided. 40 412. He shall report to the Customs Senior Boarding Officer on duty the 42unexplained absence of any Customs Guard assigned to him. 43 443. An efficiency report for Customs Guards shall be submitted by the 45Customs Inspector for each vessel of which he is in charge. Customs Guards, 46who are incompetent, negligent in the performance of their official duties, or 47guilty of disobedience, shall be the subject of a special informal report, which 48shall be submitted with the efficiency report. 49 504. He shall maintain a logbook to keep a record of events, during his tour 2 3
260

1 1of duty, to include Customs Guard/s sent ashore or to another vessel on 2official business specifying the following: 3 4(a) Time of Departure; 5(b) Nature of business; 6(c) Destination; 7(d) Where and when he is to report upon the completion of his business; 8(e) Time returned. 9 10When Customs Guards are ordered to report to the Customs Senior Boarding 11Officers launch at a certain time, a similar note shall be given, addressed to 12the Customs Senior Boarding Officer. These records shall always be rendered 13on the logbook furnished to Customs Inspectors, so that absent Customs 14Guards can be accounted for. 15 165. It is essential that an accurate check be secured on all cargoes 17discharged from, and loaded on, a vessel. Customs Inspectors shall instruct 18their Customs Guards to check independently of other checkers, and to 19submit their Customs Guards Report. 206. He shall submit the Discharging Sequence and/or Inward Foreign 21Manifest duly received in the logbook by the Customs Wharfinger. 22 23D. Report after Termination of Duty 24 25A Customs Inspector, returning to shore after the vessel of which he was in 26charge has sailed, or returning to station from an outport assignment, shall 27immediately report to the Chief, Bay Service Section (or its equivalent office) 28and submit all reports relative to his assignment to the latter who shall 29properly endorse them to the Chief, Piers and Inspection Division (or its 30equivalent office). 31 32The Customs Inspector, upon submission of his reports, shall register the time 33and date of his vessels departure in the priority listing of Customs Inspectors 34for assignments. A Customs Inspector who has not submitted his records and 35documents pertinent to his vessel assignment shall not be given assignment 36to a new vessel until he has submitted his reports and documents. 37 38The reports of a Customs Inspector shall include as supporting documents the 39following: 40 411. Duly accomplished Inspectors Certificate of Lading, in case of break42bulk and conventional cargoes. The original copy together with the Export 43Permits to be submitted to the Export Processing Division concerned; 44 452. Shipside Permits, if any, properly endorsed at the back thereof with 46accompanying transfer notes and Customs Guards Check Report; 47 483. Accomplished Certificate of Inspection (CI), Certificate of Identification 49and Loading (CIL), if any; 50 2 3
261

1 14. Certificate of Date of Last Cargo Discharged accomplished by Customs 2Inspector onboard and bearing the seal of the Master of the vessel, to be 3submitted to the office of the Chief, Piers and Inspection Division (or its 4equivalent office); 5 65. Clearance of a vessel indicating therein the time and date the vessel 7actually sails and the berth assignment and the period of time the vessel stays 8at such berths and/or anchorage for transmittal to the Customs Clearance 9Officer; 10 116. General Permit issued by the Customs Senior Boarding Officer 12properly endorsed at the back thereof; and 13 147. All shipping documents required from the Master upon boarding a 15vessel, permits properly endorsed, and reports of all violations of Customs 16rules and regulations that may come into his attention. 17 18All permits, entries and other documents received by the Customs Inspector 19on board of a vessel shall be endorsed by him, upon completion of his portion 20of the action directed. Such endorsements shall always show: 21 22 231. The date when the action was accomplished; 24 252. The action taken; and 26 273. The portion of the action unaccomplished, except in some instances 28where another Customs Official is to perform the unaccomplished action. 29 30The date and the time of receipt of any official document shall always be 31noted therein by the Customs Inspector who shall initial the same. 32 33Section 5. PORT UTILIZATION SECTION 34 35The Port Utilization Section supervises the receiving, handling, custody, 36monitoring, movement and release of shipments at the Piers/Customs Zone. 37 38The Port Utilization Section shall be headed by a chief who shall perform the 39following functions: 40 411. Supervise all Wharfingers, Assistant Wharfingers, Customs Guards 42assigned at Container Yards, Outside CY-CFS and Customs Gatekeepers; 43 442. Act on all written reports submitted by the personnel under his 45supervision; 46 473. Be responsible for the conduct, vigilance, efficiency, neat and clean 48appearance of all personnel under him; 49 504. Require all Wharfingers, Assistant Wharfingers, Customs Guards, and 2 3
262

1 1Customs Gatekeepers to be in complete uniform while on duty; 2 35. Assign his personnel properly apportioning their overtime as equitable 4and as fairly as possible; 5 66. Exercise direct supervision over Customs Gatekeepers; 7 87. Inspect piers, wharves, warehouses, container freight and the 9container terminal inside the Customs Zone as frequently as possible, 10submitting to the Chief, Piers and Inspection Division (or its equivalent office) 11such reports as may be necessary; 12 138. See to it that cargoes are transferred properly and promptly to bonded 14carriers, bonded warehouse and private warehouses, covered by proper 15transfer notes; 16 179. Recommend to the Chief, Piers and Inspection Division (or its 18equivalent office), for the interest of the service and with consultation with the 19Wharfingers In-Charge of the piers, the reshuffling of personnel under him to 20the different piers; 21 2210. Supervise the Wharfingers in the preparation, rating and submission to 23the chief of division the performance rating of all personnel under them. He 24shall rate all Wharfingers In-Charge of the piers; 25 2611. Recommend any personnel who are deserving, capable and willing, 27pursuant to civil service rules and regulations for any promotion that are 28subject to be filled up; 29 3012. Implement all lawful orders given to him from time to time by proper 31customs authorities with regard to his section. 32 33Section 6. DUTIES AND RESPONSIBILITIES OF ASSISTANT CUSTOMS 34OPERATIONS OFFICER (WHARFINGERS) 35 36A. At the Pier/CY-CFS 37 381. There shall be one Wharfinger In-Charge of each pier, who shall be 39responsible for the efficiency and discipline of Customs personnel under him; 40 412. He shall exercise effective supervision over the Arrastre Contractors 42service regarding receiving, handling, custody and delivery of cargoes; 43 443. He shall note carefully the condition of the fender piles and draft at the 45piers and submit reports thereon; 46 474. He shall cooperate and assist other officers of the government 48performing official function at the piers; 49 505. He shall supervise the cleaning of the piers and see to it that garbage 2 3
263

1 1and obnoxious cargoes are disposed of promptly and properly; 2 36. He shall cooperate with, and assist the Enforcement and Security 4Service (ESS) in maintaining peace and order at the pier, including the 5exclusion of unauthorized persons inside the pier shed/warehouse and 6premises; 7 87. He shall recommend the transfer and shifting of cargoes from pier to 9pier only, to government bonded warehouses inside and outside the Customs 10premises; 11 128. He shall process delivery permits and other types of Customs permits; 13Vis--vis the Official Receipt/Statement of Settlement of Duties and Taxes 14(SSDT) issued by the Formal/Informal Entry Division, prior to the release of 15cargo; 16 179. He shall, or thru his authorized representative, accept delivery permits 18and other types of Customs permits officially hand carried by official 19messengers of the Bureau and shall properly distribute the same to 20concerned shed/warehouse Wharfinger where the cargoes are stored; 21 2210. He shall submit daily, weekly, monthly, and annual reports thru proper 23channels, to the Chief, Piers and Inspection Division (or its equivalent office); 24 2511. He shall implement all lawful orders given to him from time to time by 26proper customs authorities; 27 2812. He shall submit report of Overstaying Cargoes to the Chief, Piers and 29Inspection Division (or its equivalent office). 30 31B. Outside CY-CFS (Off-Dock) 32 331. There shall be one (1) Wharfinger In-Charge of Outside CY-CFS (Off34Dock) who shall be responsible for the efficiency and discipline of Customs 35personnel under him; 36 372. He shall receive the Transfer Note, Inbound Container and Inward 38Foreign Manifest from the Customs Guard; 39 403. He shall supervise the stripping of the containers; 41 424. He shall receive the Stripping Tally Sheet from the CY-CFS 43Warehouseman; 44 455. He shall process delivery permits and other types of customs permits; 46Vis--vis the Official Receipt/Statement of Settlement of Duties and Taxes 47(SSDT) issued by the Formal/Informal Entry Division, prior to the release of 48cargo; 49 506. He shall see to it that the cargoes are released and delivered only to 2 3
264

1 1the proper parties in accordance with the marks, countermarks and registry 2number of the carrying vessel; 3 47. He shall assign a Customs Guard, prepare and sign Transfer Note as 5well as supervise the transfer of cargoes to the local ports, economic zones 6and bonded warehouses either inside or outside customs zone including 7coastwise transit cargoes and other places designated by customs; 8 98. In all cases of transfers of packed containers covered by Warehousing 10Permits or other permits where duties and taxes have not been paid, the 11container shall be sealed with a Customs seal by the Wharfinger concerned in 12the presence of the Customs Examiner concerned. Said Wharfinger shall see 13to it that the containers transferred be underguarded until received at the 14Customs Bonded Warehouse by the Customs Warehouseman assigned 15thereat. If there is no Customs Warehouseman or anybody authorized by the 16Collector of Customs to receive the same, such containers shall remain 17underguarded continuously by the Customs Guard until the same is properly 18released by the Bureau of Customs; 199. He shall maintain a logbook to record events such as examination 20made, hold/alert order, notice of Warrant of Seizure and Detention (WSD) and 21samples taken; 22 2310. He shall report to the Collector of Customs within twenty-four (24) 24hours from the time the article is deemed abandoned and submit a monthly 25report on Abandoned/Overstaying Cargoes to the Office the Chief, Piers and 26Inspection Division (or its equivalent office). 27 28Section 7. DUTIES AND RESPONSIBILITIES OF ASSISTANT CUSTOMS 29OPERATIONS OFFICER (DESIGNATED ASSISTANT WHARFINGERS) 30 311. Each cargo shed/warehouse shall be under the direct charge and 32supervision of an Assistant Wharfinger, who shall maintain his office inside 33the shed/warehouse; 34 352. He shall prepare, rate, and submit rating of his pier shed/warehouse 36Customs Guards to the Wharfinger In-Charge of the pier; 37 383. He shall supervise the opening and closing of the cargo 39shed/warehouse. The keys shall be secured in his office and shall be returned 40in the box provided for in the office of the Officer In-Charge of the pier after 41the shed/warehouse has been closed; 42 434. He shall not allow unauthorized persons inside the cargo 44shed/warehouse with or without operation; 45 465. He shall process all delivery permits pertaining to his shed/warehouse 47before authorizing delivery of cargo therefrom; 48 496. He shall supervise closely the activities of the Customs Guards 50assigned in his shed/warehouse; 2 3
265

1 1 27. He shall clear the pier berth of lighters and other obstructions during 3the berthing and/or departure of vessel; 4 58. He shall assist the Wharfinger In-Charge of the pier and to execute all 6his orders; 7 89. He shall prepare and sign Transfer Notes as well as supervise the 9transfer of cargoes to the local ports, economic zones and bonded 10warehouses either inside or outside Customs Zone including coastwise transit 11cargoes and other places designated by customs; 12 1310. He shall see to it that no inflammable, dangerous or obnoxious cargoes 14are stowed inside the shed/warehouse; 15 1611. He shall coordinate with the arrastre shed/warehouse security 17personnel and Enforcement and Security Service (ESS) in the prevention of 18pilferage of cargoes and other anomalies to defraud the customs revenues; 1912. He shall perform all functions that may be assigned to him from time to 20time by superior authorities. 21 22Section 8. DUTIES AND RESPONSIBILITIES OF ASSISTANT CUSTOMS 23OPERATIONS OFFICER (CUSTOMS GUARDS) 24 25A. At the Pier/CY-CFS 26 271. A Customs Guard shall see to it that no inflammable, dangerous and 28obnoxious cargoes are discharged on the dock without proper permit; 29 302. When assigned to delivery work, he shall scrutinize the delivery permit 31properly processed and signed by the processing Wharfinger; 32 333. He shall check carefully the load on the truck against the gate pass 34issued in accordance with the mark, countermarks, registry number and total 35number of packages; 36 374. He shall see to it that all deliveries made are duly recorded on the 38Customs Guards delivery sheet; 39 405. He shall see to it that the Wharfingers copy of the delivery permit is 41retained and the same to be forwarded to the Wharfinger concerned upon the 42completion of the delivery; 43 446. When assigned as conduction guard, he shall see to it that the cargo 45destined for transfer reaches its destination safely and the covering transfer 46note properly signed by the Warehouseman/Storekeeper or Wharfinger or 47Customs Guard concerned, as the case may be. 48 49B. On Board Vessel 50 2 3
266

1 11. A Customs Guard shall see to it that no person is allowed to board the 2vessel without a written pass, excepting the stevedores to attend to the 3discharging or loading of cargoes at each accommodation ladder or gangway; 4 52. He shall conduct body searches, if necessary, on all persons coming in 6and out of the vessel; 7 83. He shall perform Customs surveillance on board the vessel or on 9carriers containing cargo in transit that has not been released from Customs 10supervision; 11 124. He shall check cargoes being discharged from, or loaded on, a vessel; 13 145. He shall act as couriers on official business; 15 166. He shall see to it that no empty lighters stay alongside the pier without 17proper permit. 18 19C. Outside CY-CFS (Off-Dock) 20 211. A Customs Guard shall assist the shed/warehouse Wharfinger in 22supervising the receiving, handling, custody, delivery and stowage of cargo 23inside the shed/warehouse by the arrastre operators, to include witnessing the 24stripping/devanning and sign the Cargo Stripping Report; 25 262. He shall assist the shed/warehouse Wharfinger in attending the 27inventory of bad order cargo and signed the Bad Order Inspection Certificate 28issued by the arrastre operator. 29 30D. Others 31 32A Customs Guard shall perform any other work or function that may be 33assigned to him from time to time by his superiors. 34 35Section 9. DUTIES AND RESPONSIBILITIES OF ASSISTANT CUSTOMS 36OPERATIONS OFFICER (DESIGNATED CUSTOMS GATEKEEPERS) 37 381. A Customs Gatekeeper shall report punctually at the terminal gate 39assigned to him and shall remain thereat until properly relieved or otherwise 40directed to perform other duties by his superiors; 41 422. He shall not allow merchandise to pass through the gate without a gate 43pass. He shall verify the genuineness of the said pass as well as the 44signatures appearing thereon. He shall check the cargo covered by gate pass 45as to marks, number, quantity of packages and registry number of the 46carrying vessel. He may hold the truck or merchandise if he has valid reasons 47to believe that the merchandise is different from what is shown in the gate 48pass, reporting the matter promptly to the Wharfinger In-Charge of the pier 49where the cargo came from; 50 2 3
267

1 13. He must verify and see to it that all gate passes (customs copy) are 2countersigned by the Wharfinger of the corresponding pier, where applicable; 3 44. He shall see to it that gate passes with alterations and/or notations 5shall not be honored without the signature of the Pier Superintendent and the 6Wharfinger; 7 85. He shall collect all gate passes which shall be submitted to the office of 9the Wharfinger for reportorial purposes at the end of each working day; 10 116. Customs Gatekeeper In-Charge shall supervise his men properly at the 12Customs Zone and pier gate, assisting them on whatever problems that may 13arise, and if not resolved the same should be referred to the Wharfinger in 14charge of the pier where the cargo came from; 15 167. Customs Gatekeeper assigned at the exit gates shall be required to 17open all empty containers to verify whether they are indeed empty and shall 18keep records of the approved requests/permits issued and report any 19discrepancy to the office of the Wharfinger In-Charge. 20 21Section 10. REPORTING TIME OF CUSTOMS PERSONNEL 22 23The reporting time for Customs Senior Boarding Officers, Customs Inspectors 24and Customs Guards are as follows: 25 261. Customs Senior Boarding Officers, Customs Inspectors and Customs 27Guards not assigned to vessel shall report at, and stay in, the office of the 28Chief, Piers and Inspection Division(or its equivalent office) and observe 29regular working hours. They shall perform such duties as may be assigned to 30them by the Chief or Assistant Chief of the Division and the Chief, Bay 31Service Section (or its equivalent office). 32 332. Customs Senior Boarding Officers, Customs Inspectors and Customs 34Guards assigned to vessels arriving before 8:00 a.m. and after 5:00 p.m. shall 35report for duty at least two (2) hours before the vessels estimated time of 36arrival. 37 38Section 11. MEALS AND ACCOMMODATIONS FOR DESIGNATED 39CUSTOMS INSPECTORS AND CUSTOMS GUARDS 40 41A. On Board Vessel 42 43The Customs Senior Boarding Officer shall, when necessary, invite the 44attention of the Master of the vessel to Customs regulations which require the 45serving of meals and providing of suitable accommodations to Customs 46Inspector and Customs Guards assigned on board. 47 48If meals are not provided on board, the fact shall be certified by the Master or 49Chief Steward of the vessel to entitle the Customs Inspector and Customs 50Guards to meal allowances at the rate provided for in existing regulations. 2 3
268

1 1 2B. To Outports/Travel Expenses 3 4Customs Inspectors and Customs Guards traveling at the request and 5expense of shipping lines or other entities shall be allowed suitable 6accommodations and actual and necessary expenses for board and lodging 7subject to existing rules and regulations. 8 9Customs officials and employees duly assigned on board vessels shall be 10furnished with suitable accommodations and free regular meals. Whenever, 11meals are available on board a vessel, Customs Inspector and Customs 12Guards assigned thereon shall not take their meals ashore, except when 13there is good justification for doing so and only when at least a Customs 14Guard is left on board. 15 16While traveling on official business, they shall be allowed suitable, actual and 17necessary transportation expenses, depending not only in the class and type 18of transportation used but also on the circumstances of time and place. They 19shall, however, use the most reasonable and expeditious means of 20transportation available, whether by land, water or air, to and from their 21destination. Where established and regular common carrier transportation 22services are available, such services shall be utilized whenever possible. The 23hire of special conveyance will be allowed only in extreme cases of 24emergency and where conveniently scheduled common carrier service is not 25available. 26 27 28Section 12. LEAVE OF ABSENCE 29 30Application for vacation leave shall be filed and approved before such leave of 31absence is enjoyed by any officer or employee, unless prevented by 32unforeseen circumstances beyond his control. 33 34Application for sick leave shall be filed within two (2) days after return to duty 35and, if in excess of three (3) days shall be supported by a medical certificate. 36 37Any officer or employee detained by causes beyond his control and unable to 38report for duty at the prescribed hour of reporting must notify the office in 39which he is employed to that effect within two(2) hours, if practicable, of such 40prescribed hour, on the first day of absence. Absence from duty without prior 41permission will be cause for disciplinary measures, unless satisfactorily 42explained. 43 44 45II. OPERATIONAL PROVISIONS 46 47Section 13. STATUTORY PROVISIONS ON ENTRANCE AND 48CLEARANCE 49 50The provisions of Section 1001-1025 of the Tariff and Customs Code of the 2 3
269

1 1Philippines, as amended on Entrance and Clearance of Vessels, are deemed 2incorporated in this Manual. 3 4Section 14. PRE-ARRIVAL 5 6A. Notice of Arrival (NOA) with Estimated Time of Arrival (ETA) 7 8(a) The Shipping Agent or representative of any vessel engaged in foreign 9trade entering any of the Philippine ports of entry shall notify the Piers and 10Inspection Division, Bay Service Section (or its equivalent office) of the 11vessels arrival and all other particulars at least twenty-four (24) hours in 12advance. 13 14(b) Upon receipt of the Notice of Arrival (NOA), the Customs Inspector or 15E2M-OIC of the Piers and Inspection Division, Bay Service Section (or its 16equivalent office) shall perform the following functions: 17 18(1) Electronically verify the vessel registry number/principal and other 19vessel information thru Client Profile Registration System (CPRS); 20 21(2) Input the Estimated Time of Arrival (ETA) in the E2M Customs System; 22 23(3) Encode the time and date in the system and affix his signature on the 24hardcopy of the Notice of Arrival; 25 26(4) Furnish the Customs Boarding Team a copy of the processed Notice of 27Arrival (NOA). 28 29 30B. Assignment of Customs Boarding Team 31 32The Customs Boarding Team shall be assigned by the Chief, Bay Service 33Section (or equivalent office) thru a duly signed Assignment Order. 34 35The following Customs Personnel shall be the members of the Customs 36Boarding Team: 37 381. Customs Senior Boarding Officer; 39 402. Customs Inspector; 41 423. Customs Guard/s. 43 44C. Submission of Advance Electronic Manifest before Arrival of Vessels 45Engaged in Foreign Trade thru E2M Customs System and Penalties 46 47The submission of electronic copy of Inward Foreign Manifest (e-IFM) and 48electronic copy of Consolidated Cargo Manifest (e-CCM) must be done 49through any of the Value Added Service Providers (VASPs) accredited by the 50BOC. The e-IFM, in the case of shipping lines must be electronically 2 3
270

1 1submitted at least twelve (12) hours before arrival of the carrying vessel. The 2e-CCM, in case of Non-Vessel Operating Common Carrier (NVOCC)/Cargo 3Consolidator/Co-Loader/Break-bulk Agent, must be submitted at least six (6) 4hours before arrival of the carrying vessel. 5 6The cut-off time for e-manifest (e-IFM and e-CCM) submission is calculated 7from the submitted Estimated Date and Time of Arrival using the BOC 8Gateway Service Clock. The e-IFM must be submitted ahead of the e-CCM. If 9the e-CCM is submitted ahead of the e-IFM, the e-CCM will not be registered 10in the E2M Customs System, but has to be re-submitted when the e-IFM is 11already registered. 12 13Registration of e-manifest 14 15The system automatically registers a manifest in the E2M Customs System if 16the manifest meets the submission deadline. However, if the deadline is 17missed, the concerned shipping line/agent should submit a formal request 18letter to the office the Deputy Collector for Operations to allow a BOC-initiated 19manual registration of the manifest in E2M. Only the Deputy Collector for 20Operations can approve the request and execute the manual registration 21(through the Direct Register function) in E2M. A late or non-compliant 22submission fee will be charged for this procedure following the schedule of 23fines provided in Section 2521 of the Tariff and Customs Code of the 24Philippines, as amended: 25 261. Late Submission 27 28(a) First Offense Php10,000.00 29(b) Second Offense Php20,000.00 30(c) Third Offense Php30,000.00 31 322. Non-compliant Submission Php30,000.00 33 34The count for the number of offenses shall be set to zero at the 35beginning of each calendar year. 36 37Section 15. ARRIVAL 38 39A. Documents/Permits 40 411. Quarantine Certificate for Incoming Vessels from a Foreign Port 42 43Entry of vessels from any port or place outside of the Philippines shall not be 44permitted until they have obtained a Quarantine Certificate issued under the 45authority of the Bureau of Quarantine. However, if a vessel has already been 46issued a Quarantine Certificate in the first Philippine port of entry, she will not 47be required to undergo another Quarantine formalities at succeeding ports of 48call in the Philippines. 49 50No person shall be allowed to board or leave the vessel before they are 2 3
271

1 1cleared by the Bureau of Quarantine, except the pilot who is governed by the 2Quarantine regulations in such contingencies. 3 4The Certificate shall be part of the required documents to be received by the 5Customs Senior Boarding Officer from the Master of the vessel. 6 7No Quarantine Permit shall be required for the discharge of regularly 8manifested cargo, including animals, plants, etc., unless otherwise required by 9law or regulations. However, if animals or plants are carried as baggage, their 10discharge shall be subject to the regulations promulgated by the Bureau or 11office concerned. 12 132. Entrance of Vessel from a Foreign Port 14 15Upon arrival of a vessel from a foreign port, BOC OPM Form No. 9 (Oath of 16Entering Vessel from a Foreign Port) with Customs Documentary Stamp duly 17accomplished by the Master in four (4) copies shall be presented to the office 18of the Customs Clearance Officer within twenty-four (24) hours. 19 203. Documents to be Produced by Master Upon Entry of Vessel 21 22The following documents properly accomplished shall be submitted by the 23Master to the Customs Senior Boarding Officer: 24 25(a) Quarantine Certificate (Pratique); 26 27(b) Clearance of vessel from last port of call; 28 29(c) Original and four (4) copies of Inward Foreign Manifest duly signed by 30the Master; 31 32(d) Three (3) copies each of the following: 33 341. Crew list 352. Passengers list 363. Passengers list for aliens (as required by immigration law in force in the 37Philippines) 384. Copy of original duplicate of bills of lading 395. Bonded Store list 406. Narcotics & Dangerous drugs list 417. Ships Store list 428. Mail list 439. Firearms & ammunition list 4410. Crews declaration list 4511. Parcel list 4612. Shipping articles and register of the vessel of Philippine Registry 47 48(e) Through Cargo Manifest/s, if any, which shall be deposited to the 49Customs Inspector and shall be returned to the master prior to departure to 50other ports; 2 3
272

1 1 2(f) Cargo Stowage Plan or Hatch List; 3 4(g) If passenger vessel, three copies of disembarking passengers list and 5their baggage declaration. 6 7The Customs Senior Boarding Officer shall, after carefully comparing the 8copies with the original manifest, stamp each of such manifests on the last 9page thereof with a rubber stamp provided for that purpose, and verify that the 10necessary information required in accordance with Section 12, item No. 4 11hereto is contained therein. 12 13All documents, except copies for the Customs Inspector on board the vessel, 14shall be forwarded to the office of the Chief, Bay Service Section (or its 15equivalent office), for transmittal to offices concerned. 16 174. Inward Foreign Manifest (IFM) and Consolidated Cargo Manifest 18(CCM) Contents 19The hardcopy of the Inward Foreign Manifest required to be submitted by the 20Master of the Vessel to the Boarding Officer shall contain the following 21information: 22 23(a) Bill of Lading number 24(b) Marks and numbers of cartons, drums, boxes, crates and other forms 25of protective packaging (for break-bulk) 26(c) Container and seal number if containerized and initials FCL, if full 27container load, and LCL, if less container load. 28(d) Number of packages 29(e) Kind of packages (cartons, boxes, crates, drums, etc.) 30(f) Contents of Description of Cargo 31(g) Shipper 32(h) Consignee 33(i) Gross weight in metric tons 34(j) Measurement in cubic meters 35(k) Port of origin 36(l) Notify party 37 38Inward Foreign Cargo Manifest submitted not in accordance with the above 39requirements shall be rejected. 40 41The Customs Senior Boarding Officer shall, with his initials, note down on all 42the copies of Inward Foreign Cargo Manifest delivered to him by the Master of 43the vessel, the specific time and date when such documents were received. 44 45If the Inward Foreign Cargo Manifest is not in the English language the 46Customs Senior Boarding Officer shall require its translation to English before 47accepting the same. 48 49All articles, wares, goods, merchandise, and any other cargo including 50unaccomplished baggage, and orders or encargo from abroad, received by 2 3
273

1 1the master, officers and crew of vessels without bills of lading or not covered 2by manifests or parcel list shall be subject to seizure as unmanifested cargo 3under the Customs law. 4 5Distribution of Inward Foreign Manifest (IFM) Hard Copies 6 7The Inward Foreign Manifest shall be distributed to the following offices: 8 9(a) Original copy Piers and Inspection Division (PID) or Equivalent 10 office 11(b) One copy Commission on Audit (COA) Resident Auditor 12 through the 13Office of the Commissioner (OCOM) 14(c) One copy Intelligence Group (IG) 15(d) One copy Assessment and Operations Monitoring Group 16 (AOCG) 17 185. Permits for Discharge and Lading of Cargo 19Unless the vessel has put into in distress, the Customs Senior Boarding 20Officer shall, upon placing the vessel under Customs surveillance and control, 21issue a General Permit. Such permit however, shall not constitute an 22authority for the loading of export cargo or delivery of import cargo at ships 23side without the required entries or permits as the case may be. 24 25The General Permit shall be endorsed by the Customs Inspector assigned on 26board the vessel mentioned in the permit at the back thereof showing whether 27all import cargoes has been discharged at the port or not. Such permit shall 28be included in his report after the termination of his assignment on board a 29vessel. 30 316. Endorsement of Permits 32 33The following permits shall be endorsed on the reverse side thereof: 34 35(a) The General Permit 36(b) The Shipside Permit 37(c) Permits for the sending of special consignments of cargo to the piers or 38to the Parcel Section 39(d) Permits issued by the Deputy Collector for Operations or its equivalent 40office for the transfer of cargo from one vessel to another 41 42On the same permit and directly under the preceding endorsement, the 43receiving Customs Inspector shall make an endorsement to the effect that he 44received the cargoes on board the vessel to which he is assigned. 45 46All endorsements and returns shall be signed over the printed name and 47executed clearly and legibly especially with reference to any figures that may 48be included. 49 50All minor corrections shall be initialled by the endorsing officer. 2 3
274

1 1 2All other permits shall be endorsed on the reverse side thereof. 3 47. Shipside Permits 5 6Shipside Permit, when duly processed and approved by the Collector of 7Customs or the Deputy Collector for Operations or its equivalent office, as the 8case may be, is an authority for the Customs Inspector assigned on a vessel 9to allow the discharge of cargoes specified on the permit at shipside unto 10lighters, underguarded. 11 12Three (3) kinds of Shipside Permits: 13 14(a) Regular Shipside Permit - issued by the Deputy Collector for 15Operations or its equivalent office as now presently required for all cargoes 16which belong to the categories of regular shipside cargoes under existing 17regulations. 18 19(b) Special Shipside Permit - when cargoes do not belong to regular 20shipside cargoes, such as ballast, garbage, provisions, watering, bunkering, 21vessel parts for repair the ships agent has to get the authority from the 22Collector of Customs prior to the processing and approval by the Deputy 23Collector for Operations or its equivalent office. 24 25(c) Temporary Shipside Permit - is a written authority to discharge cargoes 26at shipside unto lighter as per order of the Collector of Customs. The permit 27shall be forwarded direct to the Customs Inspector of the carrying vessel 28without entry being filed. This is issued only as an emergency measure so as 29not delay ship operations. This permit is also issued on Saturdays, Sundays 30and holidays when there are no offices to process the regular shipside permit. 31Several conditions are usually imposed in the issuance of this Temporary 32Permit, among which are: 33 34 That the cargo is underguarded continuously until released by the 35Bureau of Customs; 36 37 That the lighter shall not be taken out of the Customs designated barge 38pool area until the Regular Shipside Permit is issued by the Deputy Collector 39for Operations or its equivalent office, and is presented to the Customs 40Inspector of the carrying vessel; and 41 42 That the Deputy Collector for Operations/Chief, Piers and Inspection 43Division (PID) or its equivalent office be duly notified of the discharge under 44the Temporary Permit. 45 46Pending Issuance of Shipside Permits 47 48Pending issuance of shipside delivery permit, the Customs Inspector on board 49may receive written requests from consignees, countersigned by the ships 50agents, and approved by the Collector of Customs, that certain designated 2 3
275

1 1goods be discharged into separate carriers. Under such circumstances, the 2same procedure is enjoined as in the case of shipside delivery except that the 3consignment shall be held alongside the vessel underguarded. Provided that, 4in case no permit is received by the Customs Inspector on board within 5seventy-two (72) hours from the time of discharge, the Chief, Bay Service 6Section (or its equivalent office) shall be advised accordingly so that the cargo 7may be sent to the Customs designated barge pool area/piers/wharf, 8underguarded. 9 10The Customs Inspector assigned on a vessel who allows the discharge of 11cargoes at shipside shall comply strictly with the conditions and/or 12requirements stated on the permit and prior to the unloading of the cargoes, 13he must first check the cargoes mentioned in the permit against the Inward 14Foreign Manifest. 15 16After effecting total discharge of cargoes unto lighter, the Customs Inspector 17shall endorse the shipside permit at the back thereof specifying the quantity of 18cargoes discharged. He must indicate the names of lighters loaded and the 19corresponding names of the Customs Guards in charge of each lighter 20loaded. A copy of a transfer note covering the shipment together with the 21corresponding Guards Check Report made by the Customs Guard in charge 22shall be attached to the shipside permit for submission to the Records 23Section, Piers and Inspection Division (or its equivalent unit). 24 258. Transfer Note (Boat Note) 26 27Shall be made in sextuplicate by the Customs Inspector on board. For 28cargoes delivered at shipside, the transfer note shall show the following: 29 30(a) Name of vessel and registry number 31(b) Name of lighter 32(c) Name of Broker and/or Consignee 33(d) Shipside Permit Number 34(e) Marks and Numbers 35(f) Kinds and Description of Goods 36(g) Time and Date lighter left alongside the vessel 37(h) Names and signatures of Customs Inspector, Customs Guard In38Charge of Lighter and the Patron of the Lighter 39(i) Any other information and/or remarks such as, conditions set forth on 40the Shipside Permit by the Collector of Customs. 41 42The copies of the prepared transfer note shall be distributed as follows: 43 44Original and Duplicate To Customs Guard In-charge 45 46Triplicate Attached to the Shipside Permit together with the Guards Check 47report 48 49Quadruplicate To Patron of the Lighter 50 2 3
276

1 1Quintuplicate Inspectors file 2 3Sextuplicate Attached to the booklet of the Transfer Note (Issuing Officer) 4 5B. Boarding Sequence 6 7The vessel upon arrival from a foreign port at the port of entry and after the 8issuance of the Quarantine Certificate (Pratique) by the Bureau of Quarantine 9shall be boarded in the following order: 10 111. Customs Senior Boarding Officer, Customs Inspector and Customs 12Guards assigned to the vessel. 13 142. Immigration Officer 15 163. Department of Agriculture or Plant/Animal/Fisheries Quarantine 17Representative (as required) 18 194. Other agencies or persons authorized by the Collector of Customs. 20 21C. Customs Boarding Team on Foreign Vessel 22 231. The Customs Senior Boarding Officer shall place the vessel under 24Customs control and surveillance by posting a Customs Inspector and 25Customs Guards thereon. 26 272. No person shall be permitted to go on board such vessel except the 28pilot, consul, Health Officials, Immigration and Customs officers without the 29permission of the Customs Inspector on board the vessel. 30 313. No tugboat, rowboat, or other watercrafts shall be allowed to go 32alongside the vessel to ferry any person to or from the vessel without a permit 33from the Collector of Customs or his duly authorized representative. 34 354. Unauthorized, tugboats, rowboats and other watercrafts shall keep 36away from such vessel engaged in foreign trade at a distance of not less than 37fifty (50) meters. 38 39D. Actual Time of Arrival (ATA) of Foreign Vessel thru E2M Customs 40System 41 42After boarding formalities, the E2M-OIC of Piers and Inspection Division-Bay 43Service Section, shall input the Actual Time of Arrival (ATA) from the boarding 44information sheet submitted by the Customs Boarding Officer. 45 46E. Submission of Supplemental Cargo Manifest 47 48Supplemental e-manifest submission is treated as non-compliant/late 49submission, and shall be subject to penalty as stated in Part II Section 14-C of 50this Manual. Supplemental e-manifest must be submitted in hard copies and 2 3
277

1 1electronic form within the period prescribed by regulation; otherwise, the 2shipments subject of the Supplemental Manifest will be considered 3unmanifested and subject to seizure proceedings. 4 5Submission of Supplemental e-manifest: 6 71. Cargoes/containers not listed in the IFM but are otherwise recorded in 8the Stowage Plan must be covered by a Supplemental e-manifest submitted 9to the BOC through the VASP not later than forty-eight (48) hours from date of 10discharge of the last package from the vessel; 11 122. For cargoes/containers not listed in the IFM and Stowage Plan, the 13Supplemental e-manifest must be submitted not later than twenty-four (24) 14hours from the date of last package; and 15 163. In both cases, the Deputy Collector for Operations and the Chief, Piers 17and Inspection Division (or its equivalent office) monitor the forty-eight (48) or 18the twenty-four (24) hours rule as the case may be before authorizing the 19registration of the supplemental e-manifest into the Electronic Manifest 20System (EMS). 21 22F. Unloading of Cargoes 23 241. Containerized 25 26(a) Discharging of containerized cargoes shall be authorized only upon 27issuance of a general permit by the Customs Senior Boarding Officer; 28 29(b) Thereafter, unloading of containers shall commence; 30 31(c) During unloading, the Customs Inspector/Customs Guard on board 32foreign vessel shall verify the container number/s against the discharging 33sequence; 34 35(d) Customs Inspector/Customs Guards shall check/inspect if container 36seals are intact; 37 38(e) Discharging Report shall be submitted upon completion of the 39unloading operation. 40 412. Bulk and Break bulk 42 43The clearance of cargoes for bulk and break-bulk cargoes/shipments such as 44liquids, chemicals, petroleum products and all other cargo shipped in 45bulk/break-bulk the duties and taxes of which are normally determined by 46weight (e.g. wood, steel, coal, grain, etc.) shall be governed by pertinent 47regulations. Regulations allow under certain conditions the filing of import 48entry/ies and payment of proper duties, taxes and other fees prior to the 49arrival of the vessel in the Philippine port of destination and immediately 50cause the discharge and withdrawal of the same from Customs premises 2 3
278

1 1and/or custody provided that the declarations in the import entry/ies are 2confirmed by the Load Port Survey (LPS) Report and upon presentation of the 3proof of payment of duties, taxes and other fees as well as compliance with 4other pre-requisite for valid importation. 5 6The accredited surveyor may be allowed to board the vessel for purposes of 7securing/need for a Discharge Port Survey (DPS) Report due to absence of a 8Load Port Survey (LPS) Report or upon agreement by the shipper and 9consignee, upon appropriate instruction from the One Stop Shop (OSS) 10headed by the Deputy Commissioner of Assessment and Operations 11Coordinating Group (AOCG). 12 13In the event that the shipment is covered by an alert order or that the 14shipment is different from the details in the entry, the Customs Inspector or 15the Customs Guard assigned on board the vessel shall inform in writing the 16Formal Entry Division or its equivalent office (Attention: the concerned 17customs examiner/appraiser) thru the office of the Chief, Piers and Inspection 18Division, indicating therein the exact location of the shipment for the usual 19customs examination and processing of the entry. 20 212.1. Unloading of Bulk and Break-bulk Cargoes at Shipside 22 23Shipside discharge of cargoes shall be authorized only upon presentation of 24necessary shipside permit issued by the Deputy Collector for Operations. 25Upon receipt of the shipside permit, the Customs Inspector assigned on board 26shall: 27 28(a) Verify the subject shipment covered by the shipside permit against the 29Inward Foreign Manifest as to the correctness of marks and numbers, 30quantity, kind of merchandise, weight, etc.; 31 32(b) Issue a transfer note in sextuplicate covering the shipment mentioned 33on the permit, setting forth the conditions and/or requirements imposed by the 34Collector of Customs on the face of the shipside permit; 35 36(c) Assign a Customs Guard to check the Shipside Permit so that only 37those authorized to be discharged are unloaded; 38 39(d) Assign a regular Customs Guard to underguard the lighter with the 40cargoes if the permit so stipulates; 41 42(e) When bulk cargoes are to be discharged unto lighters, the Customs 43Inspector shall not allow any cargo to be unloaded without first obtaining the 44ton/inch immersion table of the lighter from the patron. 45 46After discharge of bulk cargoes at shipside, the Customs Inspector on board 47must sign and attest to the long tally of the Consignee Surveyor report. 48 49In cases wherein the vessel is anchored at the anchorage, personal effects, 50parcel cargoes and the like may be discharged at shipside unto the launch for 2 3
279

1 1subsequent immediate delivery to the office of Bay Service Section (or its 2equivalent office), underguarded, where the goods shall be duly received by 3the Customs personnel in-charge thereat on the face of the transfer note. 4 5Cargoes shall be released upon presentation to the Customs Inspector on 6board a Statement of Settlement of Duties and Taxes (SSDT) duly issued by 7the Formal Entry Division or its equivalent office. 8 9Duties of Customs Inspectors Relative to Import Cargo 10 11(a) Unless the Collector of Customs permits their discharge into lighter or 12carriers to subserve public interest, all vessels arriving from foreign port shall 13discharge their import cargo at officially designated piers. 14 15(b) All cargoes from vessels that go alongside the piers, except 16hereinafter specified, shall be discharged thereon and no check or accounting 17shall be undertaken by the Customs Inspector on board of the vessel, except 18to satisfy himself that the cargo is actually thereunto discharged, and that the 19ships checker is actually checking the cargo being discharged. If a 20sling/tango crane goes down without any tally, he should not allow it to be 21discharged until the tally sheet is attached to the sling/tango crane. Upon 22completion of discharge, either by dockside or shipside, the Customs 23Inspector shall secure a written certificate from the ships headchecker to the 24effect that all Import cargo has been discharged as required by law and the 25Customs Inspector be furnished cargo receipts (tally sheets) for all cargoes so 26discharged by the ships headchecker of shipping company. 27 28(c) All import cargoes discharged at shipside shall be checked by Customs 29Guards detailed for that purpose by the Customs Inspector on board, and for 30each carrier, the said Customs Inspector shall accomplish a transfer note 31showing the quantity and description of the cargo in each lighter or carrier. A 32transfer note shall always accompany such cargo and information regarding 33damaged cargo shall be noted in the column for remarks. However, in the 34case of oil and gypsum in bulk, the quantity to be indicated in the transfer note 35shall merely be the estimated quantity based upon the report of Customs 36accredited marine surveyors or the reading of the vessels gauge, as the case 37may be. 38 39 40(d) The Customs Inspector on board the vessel shall permit shipside 41delivery upon receipt of the shipside delivery permit, provided transportation 42facilities for the cargo described therein are available. He shall detail a 43Customs Guard to take an accurate account of the number of packages and 44their marks and numbers. 45 46No cargo other than that described in the permit nor packages or quantity in 47excess of the number or amount indicated therein shall be delivered. Any 48excess found in the cargo being underguarded shall immediately be reported 49to the Chief, Bay Service Section (or its equivalent office). 50 2 3
280

1 1(e) In cases where a discrepancy occurs between the check of the 2Customs Guard and that of the other checkers on board as to the number of 3packages discharged into a carrier for shipside delivery, the Customs 4Inspector on board shall detail the same Customs Guard to accompany the 5carrier and re-check the cargo as it is being discharged at the consignees 6warehouse or wharf. Customs Inspectors shall instruct the Customs Guards 7accompanying such carriers to bring to the pier any package or quantity found 8on the carrier which is not included in the shipside permit. A Customs Guard 9shall be maintained on such carriers until the cargo has been totally 10discharged. 11 12(f) The delivery of cargo at ships side is the most important duty of a 13Customs Inspector. He shall take every precaution to avoid mistakes. He shall 14read every permit carefully to ascertain the kind and quantity of the cargo that 15he has authority to deliver. He shall see to it that the marks and numbers of 16the goods being discharged at shipside conform to all particulars as reflected 17in the Inward Foreign Manifest. 18 19(g) The Customs Inspector on board may also receive written permits from 20the Collector of Customs or Deputy Collector for Operations to send cargo for 21transfer to bonded warehouses, in which case he shall cause the goods to be 22checked by marks and numbers. Transfer notes in sextuplicate shall be duly 23accomplished and the original and duplicate thereof delivered to the Customs 24Guard in whose charge the consignment will be sent to the bonded 25warehouse indicated in the permit. The Customs Guard shall deliver the 26goods to the Customs Warehouseman / Storekeeper in charge of the bonded 27warehouse, taking his receipt on the face of the transfer notes which must 28show the exact time and date the goods were received at the warehouse. 29 30(h) Special permits are issued to send certain designated cargoes to the 31Customshouse. Under this circumstance, the goods together with the transfer 32note covering such cargoes shall be sent underguarded to the Bay Service 33Section, PID (or its equivalent office). 34 35(i) Packages manifested as parcels and those containing valuable goods, 36if the carrying vessel did not dock alongside the pier/wharf, shall be sent to 37the Bay Service Section, PID (or its equivalent office) on the boarding officers 38launch, if possible; if not, on the agents launch, underguarded. 39 40(j) Parcel listed articles shall be properly accomplished on B.C. Form No. 41174. Accompanying transfer notes shall be accomplished giving the marks 42and numbers and the names of consignee. 43 44(k) Goods from a foreign port may be transferred directly from the carrying 45vessel to another vessel engaged in the coastwise or foreign trade upon 46receipt of written permission from the Collector of Customs. Detailed 47instructions in regard to such cargo are given in Sections 17 and 18 of this 48manual. 49 50(l) Importations of arms and ammunitions shall be discharged immediately 2 3
281

1 1from vessel with proper transfer note to be sent to and receipted at the 2Customs Police Division for safekeeping and for proper disposition. 3 4(m) Goods remaining on board any vessel after the expiration of the period 5for discharge and not reported for transit/transshipment to another port may 6be unladen by the Customs authorities and stored at the vessels expense. 7Customs Inspectors must see to it that all cargoes destined for the port must 8be discharged at the port unless otherwise permitted by the Collector to 9remain on board, underguarded, if the vessel should clear for other local 10ports. If vessel will clear for foreign port the ships agent shall secure a permit 11from the Collector of Customs to over carry the remaining cargo. Such permit 12to over carry cargo shall be issued only upon guarantee of the ships agent 13that the overcarried cargo will be returned without delay to original port of 14discharge. 15 16Instructions to Customs Inspectors Relative to Carriers Receiving Import 17Cargo 18 19(a) No cargoes shall be discharged at shipside into open carriers, except 20those authorized for delivery thereat under existing Customs rules and 21regulations. All other cargoes shall be discharged into secured lighters, 22capable of being locked and sealed with customs seals. 23 24(b) Carriers alongside a vessel, having cargo that is under Customs 25supervision, shall not be permitted to shift to another vessel to receive cargo 26unless authorized by the Collector of Customs or the Deputy Collector for 27Operations of the port. 28 29(c) Empty carriers shall not be permitted to lie at night alongside a 30government pier, or a vessel moored thereto; or a vessel anchored in the 31harbor, or be attached to such piers or vessels by cables or ropes; or be 32attached to partly loaded carriers which may be alongside or fastened to such 33pier or vessel with import or export cargo; nor to carriers brought alongside to 34receive import cargo or discharge export cargo while the cargo on the pier or 35vessel is being worked at night. 36 37(d) Laden or partially laden carriers at shipside containing import cargo 38shall not be permitted to leave the vessel without permission from the 39Customs Inspector on board, except in cases of emergency. In such 40circumstance, they shall be locked and sealed and placed underguard. 41 42(e) All merchandise and other movable articles on board a vessel, not 43included in the cargo manifest or ship stores, shall be included in the list of 44ship stores. If not so included at the time of boarding, they shall be checked, a 45supplementary list prepared, and then sealed as part of the ship store. 46 47(f) The Customs Inspector shall, as soon as practicable after a vessel has 48been placed in his charge, verify by personal inspection the seal of the ship 49stores which may be broken. Ships firearms, except in unusual cases, shall 50not be placed under seal, but a check shall be taken of them, which shall be 2 3
282

1 1verified before the vessel sails, to insure that no arms have been unlawfully 2landed. 3 4(g) Ship stores may be discharged under the same conditions as other 5cargo but the written permission of the Quarantine officer shall be presented 6to the Customs Inspector before the discharge is permitted. Upon the receipt 7of a permit or approved application for the transfer of ship store directly from 8one vessel to another of the same line, the Customs Inspector on board shall 9send it under Customs Guard with transfer note. The lading of stores and 10provisions for ships use in reasonable quantities must be by permit issued by 11the Chief, Piers and Inspection Division (or its equivalent office) and by the 12Deputy Collector of Customs for Operations or his authorized representative 13in other ports of entry, provided that a vessel arriving and clearing on the 14same night may make such replenishments upon written request of the 15Master or Agent approved by the Deputy Collector for Operations or his 16authorized representatives. 17 18(h) An excess of supply in ships store in vessels arriving from foreign 19ports, and all articles purchased abroad for sale on board a vessel as saloon 20stores or supplies, are dutiable, but all ship stores and saloon stores or 21supplies not in excess of the proper requirements of the vessel in her voyage 22outside of the Philippines shall not be deemed dutiable. 23 24Surplus in ships stores shall not be transferred from one vessel to another, 25except to a vessel of the same line in active service in the foreign trade, and 26then only where such stores are bona fide ship stores and not cargo. In such 27cases, the transfer may be allowed under Customs supervision with the 28approval of the Collector of Customs or the Deputy Collector for Operations. 29 30The surplus ship stores of a vessel of Philippine registry shall be dutiable on 31her changing from the foreign status to a coastwise status. 32 332.2. Unloading of Cargoes at Dockside 34 35Import Cargoes 36 37All cargoes discharged at dockside from a vessel shall not be accounted for 38by the Customs Inspector. However, a Customs Guard on each working hatch 39must see to it that the ships checker is on board making a tally of each sling 40and if a sling goes down without a tally, the Customs Guard must stop the 41discharge from that hatch until such time that the checker does his job 42correctly. 43 44Passengers Baggage, Parcel List and Crews Personal Effects 45 46(a) The Customs Inspector shall cause the immediate discharge of all 47baggage, parcel cargoes and articles brought in by the ships crews and 48passengers for discharge at the pier. 49 50(b) The Customs Inspector shall remind the Chief Officer or the Purser of 2 3
283

1 1the vessel, if necessary, that baggage and parcels must be discharged 2promptly and have the same transferred, underguarded, to the Office of Bay 3Service Section, PID (or its equivalent office), where proper receipt will be 4noted on the face of the transfer note. (Subject for examination by Customs 5Examiners). No permit is required for the discharge and landing of baggage. 6 7(c) If baggage and parcels are to be discharged into a carrier in the 8stream, the Customs Inspector shall assign a Customs Guard to underguard 9such baggage and parcels to the Office of the Bay Service Section, PID (or its 10equivalent office) where the receiving Customs Personnel In-Charge thereat 11will sign. 12 13(d) For purposes of determining whether encargo or entrusted shipments 14of merchandise or articles from abroad be included in the parcel list (B.C. 15Form No. 174), hereunder is the criteria: 16 17Any cargo which is found to exceed 350 lbs. (159 kilos) in weight and 40 cu. 18ft. (1.13 cu. Meters) in measurements shall not be included in Parcel List 19and as such the Customs Inspector shall not allow the discharge unless the 20shipping agent concerned shall file a supplemental cargo manifest for said 21parcel or cargo within twenty-four (24) hours after the arrival of the carrying 22vessel and pay the corresponding duties and taxes with either the Informal 23Entry Division or Formal Entry Division depending on the weight and 24measurement of the said cargo. The time and date of discharge to the Bay 25Service Section (or equivalent office) of each parcel cargo shall be duly noted 26by the Customs Inspector on board under the last column of his copy of the 27parcel list. Under no circumstances shall any parcel cargo destined for other 28ports of entry be authorized for discharge at the pier without proper authority 29from the Collector of Customs. 30 31Section 16. DEPARTURE 32 33A. Documents/Permits 34 351. Documents Required for Exportation 36 371.1. In General 38 39(a) Export Declaration 40(b) Commercial Invoice 41(c) Packing list 42(d) Export permit (for regulated cargoes) 43 441.2. Additional Documents Required 45 46(a) CBW Shipments Transfer Note, Certificate of Identification 47(CI) and Certificate of Inspection and Loading (CIL) 48 49(b) PEZA Shipments PEZA Transfer Note and PEZA Tally 50Sheet 2 3
284

1 1 2(c) Provincial Loading Transit Cargo Manifest 3 4(d) Constructive Warehousing and Immediate ExportationPrevious 5Import Entry and Internal Revenue 6Declaration(IEIRD), Reexportation Bond and 7Transshipment Permit 8 9(e) Special Permit to Load Letter request from Shipping Lines 10and list 11 of containers intended for loading 12 132. Inspectors Certificate of Lading/Report of Customs Inspector on Board 14 15The Inspectors Certificate of Lading is accomplished by the Customs 16Inspector on board of a carrying vessel for all conventional export cargoes 17loaded into vessels. The Inspectors Certificate of Lading shall be 18accomplished in five (5) copies and signed by the Customs Inspector on 19board vessel. 20 21He shall submit the original copy of the Inspectors Certificate of Lading 22together with the working copies of the Export Declaration/Permits covered by 23the report to the Export Division/Processing Office (or its equivalent office) 24concerned within five (5) working days after the departure of the carrying 25vessel to which the conventional export cargoes are loaded. 26 27The Customs Inspector shall maintain a running list of all Export 28Declaration/Permits presented to him covering export cargoes to be loaded on 29board a vessel to which he is assigned. From the prepared list, the Customs 30Inspector shall prepare the Inspectors Certificate of Lading covering such 31exportation indicating therein the actual number and kinds of goods loaded. 32Prior to the clearance of vessel to sail, the Customs Inspector shall verify and 33examine whether the Outward Foreign Manifest issued to the Master of the 34carrying vessel together with the ships clearance tallies with the prepared 35Inspectors Certificate of Lading. Should there be a discrepancy as to the 36correctness of entry in the Outward Foreign Manifest with that of the 37Inspectors Certificate of Lading, the Customs Inspector on board shall not 38allow the vessel to sail until such Outward Foreign Manifest is corrected. 39 40For ports wherein a Customs Container Control Division (or its equivalent 41office) does not operate, the Customs Inspector of the Piers and Inspection 42Division thereat shall act as the Stuffing or Loading Inspector, as the case 43may be. And as such, the assigned Customs Inspector shall observe the 44enumerated duties and responsibilities as herein provided. 45 463. Customs Clearance of Foreign Vessel 47 48For purposes of clearances of a vessel, the following documents shall be 49presented to the PID Clearance Section prior to the issuance of clearance: 50 2 3
285

1 1(a) BOC OPM Form No. 12 - Outward Foreign Manifest (4 copies) 2 1 original copy 3 3 photocopies 4 5(b) BOC OPM Form No. 10 - Oath of Master in Manifest in Clearance for a 6Foreign Port (4 copies) 7 1 original copy (with Customs Documentary Stamp) 8 3 photocopies 9 10(c) BOC OPM Form No. 11 - Oath of Master to Foreign Vessel Clearing 11Without Passengers (4 copies) 12 1 original copy (with Customs Documentary Stamp) 13 3 photocopies 14 15(d) BOC OPM Form No. 2 - Clearance of Vessel to a Foreign Port (2 16copies) 17 1st original copy (Customs copy with Customs Documentary Stamp) 18 2nd original copy (Master of the Vessels copy with original seal and 19signature of the Collector of Customs or his duly authorized representative) 20 21(e) BOC OPM Form No. 3 - Clearance of Customs Inspector assigned on 22board in 3 copies 23 1st copy for Clearance Officer 24 2nd copy for the Shipping Agent 25 3rd copy for the Customs Inspector on Board 26 27(f) B.C. Form No. 88 - Statistic Supplemental in 4 copies 28 29(g) Bureau of Quarantine Clearance for Outgoing Vessels 30 31(h) Plant Quarantine Clearance 32 33(i) Post Office Clearance 34 35(j) Request for Customs clearance by shipping agency signed by the 36Customs Inspector concurring that the vessel in which he is assigned is ready 37to sail for foreign port. 38 39(k) The register and shipping articles, if the vessel is of Philippine Registry. 40 41(l) The consular certificate of entry, if the vessel is of Foreign Registry, 42when required. 43 44When a vessel from a foreign port is compelled by stress of weather or other 45necessity to put into any port other than that of her destination, such vessel in 46distress i.e., for bunkering, watering, provisioning, sheltering, emergency 47repairs, landing sick crew member or other like causes, other than for loading 48or unloading of cargoes, the Customs Senior Boarding Officer shall place the 49vessel under Customs surveillance and supervision by posting the Customs 50Inspector on board. Upon receipt of marine protest that the vessel put into 2 3
286

1 1port for the purpose of relieving distress and that no cargo or passenger will 2be discharged or laden, the vessel may be permitted to sail subject to the 3usual entrance and clearance formalities at the Customs house. 4 5B. Stuffing and Loading of Cargoes 6 71. Containerized 8 91.1. Instructions Relative to Stuffing of Containerized Export Cargoes 10 11(a) Upon the issuance of the Authority to Load, the Export 12Declarations/Permits duly processed at the Export Division (or its equivalent 13office) shall be forwarded to the Customs Container Control Division (or its 14equivalent office) by Exporters/Shippers or Customs Representatives. 15 16(b) The Notice of Stuffing shall be submitted at least twenty-four (24) hours 17in advance indicating therein the kind and quantity to be stuffed, the container 18number to which cargoes shall be stuffed, the time stuffing will start, the 19address where stuffing will be done, and the name of the Exporter/Shipper. 20 21(c) The assigned Stuffing Inspector shall not allow stuffing of export 22cargoes into the container van unless the duly processed Export Declarations/ 23Permits of the cargoes to be stuffed shall have been presented with the 24Authority to Load stamped thereon. 25 26 27(d) The assigned Stuffing Inspector shall supervise the actual stuffing 28which shall be conducted in the presence of representatives from all parties 29concerned. 30 31He shall carefully verify export declarations/permits to ascertain the exact 32quantity and kind of cargo to be stuffed into the container. Hence, he shall be 33at the place of stuffing to supervise actual stuffing and shall remain until 34stuffing is concluded and the doors of the container van are closed, locked 35and properly sealed. 36 37(e) Upon completion of the conduct of stuffing, the assigned Stuffing 38Inspector shall affix his signature on the stuffing report/sequence attesting to 39the fact that the cargoes were indeed stuffed into the container. In case of 40stuffing at CY-CFS outside customs zone, he shall issue a transfer note with 41cargo details and the cargo underguarded by the CY-CFS Customs Guard for 42delivery to the Loading Inspector assigned to the carrying vessel. 43 44(f) Duties and Responsibilities of the Stuffing Inspector 45 46(1) The Stuffing Inspector shall supervise the actual stuffing at the place 47where it shall be conducted; 48 49(2) He shall see to it that only those export cargoes with duly processed 50export declarations/ permits with the Authority to load shall be allowed to be 2 3
287

1 1stuffed into the container van; 2 3(3) He shall ascertain that the accompanying supporting 4documents/attachments to export declarations/ permits are complete and 5correspond to what has been declared therein; 6 7(4) He shall make sure that any discrepancy in the export declarations/ 8permits as against the export cargoes to be stuffed is rectified accordingly; 9 10(5) Upon completion of the stuffing, he shall ascertain that the doors of the 11container van are closed, locked and properly sealed; 12 13(6) In case of stuffing at CY-CFS outside customs zone, he shall issue a 14transfer note with cargo details; 15 16(7) Upon the departure of the vessel to which the container van was 17loaded, he shall accomplish the Inspectors Certificate of Lading (ICL); 18 19(8) As to warehousing export shipments, he shall certify and sign the 20Certificate of Inspection and Loading (CIL); and 21 22(9) Shall perform such other duties that may be assigned to him from time 23to time by his superiors. 24 25(g) Inspectors Certificate of Lading/Report of the Stuffing Inspector 26 27 The Stuffing Inspector shall accomplish the Inspectors Certificate of 28Lading specifying the number of containers and description of goods 29appearing on each of the Export Declaration/Permit noting in the Remarks 30Column the van number opposite the cargoes contained in one Export 31Declaration/Permit. 32 33 For export cargoes stuffed or placed in container vans, the Inspectors 34Certificate of Lading (ICL) shall be accomplished in five (5) copies and signed 35by the Stuffing Inspector assigned to conduct actual stuffing. 36 37 He shall submit the original copy of the ICL together with the working 38copies of the Export Declarations/Permits covered by the report to the Export 39Division (or its equivalent office) concerned within five (5) working days after 40the departure of the carrying vessel to which the containerized export cargoes 41were loaded. 42 43(h) Duty requirements and Overtime Work Conditions 44 45 All incidental expenses (allowance, meal and transportation allowance) 46attendant to the services rendered by the Stuffing Inspector for the conduct of 47actual stuffing shall be for the account of the exporter/shipper and/or CY-CFS 48operator served. 49 501.2. Stuffing of Containers in Customs Bonded Warehouses 2 3
288

1 1 2 When export cargoes are to be stuffed in containers at shippers 3Customs Bonded Warehouse, the stuffing shall be supervised by the 4Warehouseman. Upon completion of stuffing, the Warehouseman shall seal 5the container and take note on his transfer note the number of the container, 6the kind and quantity of its contents, and also state therein that the same is to 7be transferred from the Customs Bonded Warehouse to the destined port of 8loading. Customs Guard assigned to the Customs Bonded Warehouse shall 9underguard the container until properly received by the Customs Container 10Control Division (or its equivalent office) Loading Inspector. 11 121.3. Loading of Bulk and Break-Bulk Export Cargoes at Shipside 13 14(a) Loading of export cargoes shall be effected only upon presentation to 15the Customs Inspector on board a duly approved loading permit. The 16Customs Inspector onboard must see to it that the name of the carrying 17vessel stated in the loading permit is correct. 18 19(b) All cargoes at shipside shall have appropriate permits for such loading. 20The Customs Inspector shall take note of the names of lighters where the 21export cargoes are loaded, specifying the marks and numbers and must see 22to it that what was loaded conform to the number of packages appearing on 23the export entry. 24 25(c) Loading of bulk cargoes at shipside shall be subject to weighing. The 26Importer concerned shall make a request for the assignment of a Customs 27Guard to check the actual weighing of such bulk cargoes in their respective 28warehouses prior to loading on barges. 29 30(d) Loading of containers, whether loaded or empty at shipside from 31lighters should not be allowed because of the difficulty of checking the 32numbers and contents of loaded containers should verification be required. All 33containers whether loaded or not should be loaded from the pier. 34 351.4. Instructions Relative to Loading of Containerized Export Cargoes 36 37(a) The Loading Inspector assigned to the carrying vessel shall verify and 38ascertain that the export declarations/permits with container numbers 39indicated therein have been duly processed at the Customs Container Control 40Division (or its equivalent office), duly signed by the Chief, Customs Container 41Control Division or his duly authorized representative. 42 43(b) The Loading Inspector shall not allow the loading of containerized 44export cargoes into his assigned vessel without the corresponding duly 45processed export declarations/ permits with the Authority to Load stamped 46thereon. 47 48The Loading Inspector shall allow the loading only upon presentation of an 49authority to load by the following: 50 2 3
289

1 1 Export Division/OSEDC for regular exports, Special Permits to Load 2(SPL) (local transshipment), CBW export shipments, and PEZA shipments; 3 4 Export Coordination Division (ECD) for Export Declarations processed 5by ECD for provincial loading; 6 7 Office of the Deputy Collector for Operations for constructive 8warehousing and immediate exportation and foreign transshipment permits; 9and 10 11 CCCD for SPL empty containers. 12 13(c) The Loading Inspector shall make sure that the containers to be loaded 14are indeed intended to his assigned vessel and for that particular voyage of 15the vessel. 16 17Upon verification that all the export containerized cargoes are covered by 18export declarations/permits, he shall then consolidate all the pertinent export 19declarations/permits and sign the Sequence of Loading prepared by the 20Shipping agent and submits the same to the Customs Inspector on board the 21carrying vessel before commencement of loading. 22 23(d) Duties and Responsibilities of the Loading Inspector 24 25(1) The Loading Inspector shall inspect and see to it that all containerized 26export cargoes are covered by duly processed export declarations/ permits 27prior to loading; 28 29(2) He shall sign and submit the Sequence of Loading prepared by the 30shipping agent to the Inspector on board carrying vessel; 31 32(3) He shall prepare and sign Inspectors Certificate of Lading (ICL) and 33forward the same to the export division/processing office/its equivalent unit 34concerned, together with copies of approved export declarations/permits 35within five (5) working days from the departure of the vessel; 36 37(4) He shall certify and sign Certificate of Inspection and Loading (CIL) 24 38hours after the departure of the vessel (for Warehousing shipments); and 39 40(5) He shall perform such other duties that may be assigned to him from 41time to time by his superiors. 42 43(e) Inspectors Certificate of Lading/ Report of Loading Inspector 44 45After completion of loading, the Loading Inspector assigned to carrying vessel 46shall, within five (5) working days after the vessels departure, accomplish the 47Inspectors Certificate of Lading (ICL) and attached therewith properly 48endorsed export declarations/ permits to be submitted to the export division/ 49processing office/ its equivalent unit concerned. 50 2 3
290

1 1(f) Duty requirements and overtime working conditions 2 3The District Collector of Customs may authorize overtime services when the 4interest of the service so requires. 5 6The overtime services rendered by the Loading Inspectors are to be paid by 7the shipping agent, exporter/shipper, as the case may be, pursuant to the 8rates provided for by the regulations. 9 102. Bulk and Break-bulk 11 122.1. Loading of Export Cargoes at Dockside 13 14Export permits covering export loading shall be presented to the Customs 15Inspector prior to actual loading. The Customs Guard shall make a tally of the 16actual packages/containers being loaded, checking the number of the 17packages, marks and numbers against the export entry presented. 18 19The Customs Inspector shall have no authority to inspect or open the goods 20being loaded unless otherwise authorized in writing by the Collector of 21Customs. 22 232.2. Loading of Bulk and Break-bulk Export Cargo 24 25(a) The Customs Inspector on board the vessel shall permit the lading of 26export cargo only upon presentation of an authority to load issued by the 27following: 28 29 Export Division/One Stop Export Documentation Center for CBW 30Shipments, Regular Exports and PEZA; 31 32 Export Coordination Division (ECD) for Export Declarations processed 33by ECD for provincial loading; 34 35 Office of the Deputy Collector for Operations for Constructive 36Warehousing and immediate exportation and foreign transshipment permits. 37 38He shall carefully verify the loading permit as to the quantity and kind of 39cargoes to be laden on board the vessel. He shall comply with the instructions 40appearing in the permit, if any, of the issuing authority. He shall make certain 41that the cargo to be exported is intended for the vessel of which he is in 42charge and for that particular voyage of the vessel. 43 44(b) For all exportations loaded at shipside, the exporter will send to the 45Customs Inspector on board of the vessel, through the patron of the carrier, a 46note or conduce, which will show: 47 48(1) Name of the vessel to which the cargo is consigned; 49(2) Name and license number of the carrier; 50(3) Number of bags, bales, cartons, etc., it contains; 2 3
291

1 1(4) Name of the exporter; and 2(5) Number of the export declaration. 3 4(c) As it is being loaded, export cargo shall be checked by marks and 5numbers, if any, except shipments of bulk cargoes. The Customs Inspector on 6board must see to it that only those authorized on the loading permit are to be 7loaded. The Customs Guard assigned to supervise loading of exports must 8see to it that each export declaration presented for loading must be 9accompanied by a Guards Check Report made by him. 10 11(d) When export cargo weighed on shore under Customs supervision is 12exported, no quantity in excess of the weight declared shall be received on 13board. However, if the weight of the total number of packages loaded is less 14than the weight declared, the Customs Inspector on board shall make note of 15this fact on the export declaration which shall be attested by the chief officer 16of the vessel. 17 18(e) Upon completion of lading, the Customs Inspector on board shall 19execute the Inspectors Certificate of Lading in five (5) copies. He shall see to 20it that all export declarations presented to him for loading are all accounted for 21and all the cargoes stated therein have been fully loaded, otherwise, he shall 22make a report of discrepancy when such cargo appearing therein the permit 23are short shipped. 24 252.3. Loading of Passengers Baggage/Crew Personal Effects 26 27The Customs Inspector on board shall not examine incoming passengers 28baggage. However, if no examiner is on hand, during night time, Sundays and 29holidays, the Customs Inspector on board may inspect and pass the hand30carried personal effects of incoming passengers, retaining on board articles, 31goods and effects subject to duty and/or tax which should be sent to the office 32of the Bay Service Section, PID (or its equivalent office) under transfer notes 33and underguarded. The Customs Inspector shall also render transfer notes 34and on the face of the original of which the receiving customs personnel in 35charge at the office of the Bay Service Section, PID (or its equivalent office) 36shall indicate his receipt. 37 38Outgoing passengers taking valuables or jewellery abroad shall be advised to 39secure certificates of identification from the Export Division (or its equivalent 40office), and it shall be the duty of the Customs Inspector on board the vessel 41to verify that such articles are actually taken on board by attesting on the 42certificate of identification that such jewelleries are actually brought by the 43passenger on board. 44 45Section 17. CUSTOMS TRANSIT 46 47Customs Transit means the Customs procedure under which goods are 48transported under Customs control from one Customs office to another. 49 50Customs Transit operation refers to the transport of goods from an office of 2 3
292

1 1departure to an office of destination under Customs Transit. 2 3Customs Transit by overland transportation shall be subject to such additional 4conditions as proper Customs authorities may impose; provided it shall be 5underguarded until received by the Collector of Customs or Deputy Collector 6for Operations at the port of destination; and, provided, further, that the 7compartment where the cargo is stored or each and every package thereof be 8sealed with Customs seal. 9 10There are four kinds of Customs Transit Operation: 11 12(a) From Port of Entry to another Port of Entry as exit point for Outright 13Exportation (i.e., Local, POM to Subic); 14 15(b) From Port of Entry to another Port of Entry/Inland Customs Office (i.e., 16POM to PEZA or Outside CY-CFS/Off-Dock); 17 18(c) From an Inland Customs Office to Port of Entry as exit point for 19Outright Exportation (i.e., PEZA to POM); and 20 21(d) From one Port of Entry/Inland Customs Office to another Port of 22Entry/Inland Customs Office (i.e., CBW to CBW, CBW to PEZA and PEZA to 23PEZA). 24 25When import cargo is transferred from a foreign vessel to a coastwise vessel 26for transit to a coastwise port, the Customs Inspector on board of the latter 27vessel shall require, besides the permit duly approved by the Deputy Collector 28of Customs for Operations, transfer note in duplicate and a transit cargo 29manifest in triplicate. He shall cause the cargo to be checked onboard 30carefully, by marks and numbers. All packages that are placed under seal 31shall be marked sealed and initialed by the assigned Customs Guard. The 32Customs Inspector together with the Master or Chief officer of the receiving 33vessel, shall then execute a certificate on the face of each copy of the transit 34cargo manifest and in the transfer note, which shall state the number of 35packages received on board, the number of packages short shipped, where 36the cargo is stowed, and the location and number of Customs seals used. The 37Customs Inspector or Customs Guard on board shall indicate short shipments 38and/or bad order shipments in the column or remarks on every copy 39opposite the items as manifested, initialing the note. 40 41After the transit cargo has been received on board, it shall be sealed. 42Necessary alterations and certificates shall be executed on the face of each 43copy of the manifest. The original copy of the transit manifest shall be 44delivered by the Customs Inspector to the Master of the vessel who should be 45advised to turn over the same without delay to the Collector of Customs of the 46port of destination: while the duplicate and triplicate copies shall be forwarded 47to the Chief, Piers and Inspection Division (or its equivalent office). 48 49Section 18. TRANSSHIPMENT 50 2 3
293

1 1Customs procedure under which goods are transferred under Customs control 2from the importing means of transport to the exporting means of transport 3within the area of one Customs office which is the office of both importation 4and exportation (i.e., Foreign Transshipment) 5 6A. Special Instructions to Customs Inspectors Relative to the Discharge of 7Transshipped Cargo 8 91. Goods from a foreign port may be transshipped direct from the carrying 10vessel to another vessel engaged in the coastwise or foreign trade upon 11receipt of written permission from the Collector of Customs. 12 132. When a foreign Transshipment Permit, authorizing the transfer of cargo 14from a foreign port is received by a Customs Inspector on board of a foreign 15vessel, he shall permit the discharge of the consignment, causing it to be 16checked by marks and numbers. A description of the consignment shall 17appear in the permit, or in a list attached, and the utmost precaution shall be 18taken that no cargo is discharged on its authority other than that described 19therein. Besides the permit, the Customs Inspector shall require 20transit/transshipment cargo manifest in triplicate. The transit/transshipment 21cargo manifest shall be forwarded to the receiving vessel, together with the 22corresponding transfer note in triplicate to be received by the Master of the 23carrying vessel and noted by the Wharfinger or the Customs Inspector on 24board of the receiving vessel. 25 263. Bulk and Break-bulk cargoes for foreign transshipment shall either be 27discharged directly into the receiving vessel if it comes alongside, or 28otherwise transshipped to it in lighters or discharged at the pier for eventual 29loading to the receiving vessel. In the latter case, only lighters capable of 30being secured, locked, sealed, Customs accredited and insured shall be used. 31The cargo destined for each port shall be discharged into separate lighters or 32into separate compartments of the same lighter; provided, that the 33compartments can be separately locked and sealed. Any deviation from the 34requirements of this Section shall be made only upon instructions from the 35Collector of Customs or other proper authorities. 36 37The lighters containing the transit/transshipment cargo shall remain 38underguard until it is loaded in the receiving vessel and properly receipted by 39the master of said vessel. 40 414. Containerized cargoes for foreign transshipment shall be discharged at 42the pier for eventual loading to the receiving vessel under the same conditions 43stated in Section18-A, item no. 2 above. 44 45B. Instructions Relative to Foreign Transshipment (by CCCD) 46 47After having been duly processed at the Deputy Collector for Operations, the 48Foreign Transshipment Permit, in case of containerized cargoes, with its 49supporting documents shall be coursed through the Customs Container 50Control Division (or its equivalent office) for posting of container numbers and 2 3
294

1 1their eventual loading. 2 3The Loading Inspector assigned to carrying vessel shall verify the correctness 4of the container numbers indicated in the permit prior to loading of 5transit/transshipment cargoes on board the carrying vessel. 6 7Section 19. TRANSFER OF IMPORTED CARGO TO OUTSIDE CY-CFS 8(BY CCCD) 9 10After having been duly processed at the Office of the Deputy Collector for 11Operations, the Permit to Transfer to Outside CY-CFS shall be coursed 12through the Customs Container Control Division (or its equivalent office) for 13posting of container numbers and their eventual transfer. 14 15The Permit to transfer to outside CY-CFS shall then be transmitted to the 16office of the Chief, PID (or its equivalent office). 17 18III. MISCELLANEOUS PROVISIONS 19 20Section 20. CERTIFICATE FOR QUARANTINED CARGO 21 22When cargo manifested for any port in the Philippines is retained on board the 23importing vessel by order of the quarantine officer or any other officer 24authorized to issue such order, the Customs Inspector onboard after verifying 25said cargo, shall make a certificate of constructive lading as to the Bill of 26Lading. 27 28Section 21. USE OF BOARDING WATERCRAFT 29 30The Customs Senior Boarding Officer shall not permit anyone to go with the 31Customs boarding watercraft upon departure from the pier except Customs 32Inspectors and Customs Guards duly assigned to vessels to be boarded. 33Customs Inspectors and Customs Guards assigned by the Chief, Bay Service 34Section (or its equivalent office) to substitute for absent personnel and those 35especially granted in writing by the Chief, Piers and Inspection Division (or its 36equivalent office)may be given the privilege to use the boarding watercraft . 37 38Section 22. BAGGAGE DECLARATION ENTRY 39 40Baggage declaration, properly accomplished by incoming passengers, shall 41be presented to the Customs Inspector on board or to Customs Examiner or 42Appraiser upon boarding of the vessel. It is required that an itemized 43enumeration thereon of the articles obtained abroad showing quantity and the 44corresponding invoice price should be made in the baggage declarations. 45Articles, wares, goods, merchandise and any other cargo acquired abroad not 46so declared shall be liable to seizure and subject to the penalties of the 47Customs Law. 48 49Section 23. VESSEL CLEARING FOR FOREIGN PORTS APPLYING FOR 50BUNKERS 2 3
295

1 1 2The Customs Inspector on board of a vessel clearing for foreign ports and 3applying for bunkers shall require the master thereof to transmit together with 4his application the usual affidavit, containing the following: 5 61. Name and nationality of vessel; 72. Amount of fuel oil available on board for its propulsion at time of entry; 83. Vessels daily consumption of oil at sea; 94. Vessels daily consumption of oil in port; 105. Port or ports of call during the voyage and duration of vessels stay at 11each port; and 126. The amount of bunkers applied for. 13 14Section 24. UNLOADING OF CARGO BY DISTRESSED VESSEL 15 16A distressed vessel in port desiring to unload cargo for the duration of the 17vessels sojourn there at may be issued a permit to discharge her cargo upon 18written request of the Master or Agent, approved by the Collector of Customs 19under such terms and conditions he may deem proper. 20 21If the cargoes discharged will be cleared or entered in the port where they are 22discharged, the unloading of this class of cargo shall be subject to the same 23rules and regulations prescribed for cargoes destined for the port. 24 25Unless authorized by a Shipside Discharge Permit such cargoes shall be 26discharged unto the pier. If discharged into lighters, such lighters must be of 27the closed type and must be secured, locked and sealed with Customs seal 28and must remain underguard until final disposition thereof is made. 29 30Section 25. SHIPS MAIL 31 32Ships mail shall be examined as they are being taken from the ship, and all 33mails addressed to persons other than the agents of the vessel shall be 34delivered to the mail clerk. Any dutiable articles or merchandise, other than 35mail, found in the mail bags shall be subject to duties and taxes or seizure. 36 37Section 26. LABORERS AND SHIPS LAUNDRY 38 39All stevedores, labourers and other persons of similar status shall be 40thoroughly searched by, or under the immediate supervision of, the Customs 41Inspector on board, upon their leaving the vessel. Any such person found with 42pilfered articles or those not authorized for discharge in his person shall be 43arrested. 44 45For bundles of clothing, ships linen or laundry, etc. which are to be taken 46ashore for laundering, a list shall be prepared by the Inspector who shall 47check them against such list upon their return onboard so that the 48corresponding duties and/or taxes may be assessed and collected on those 49unaccounted for before the vessel sails. 50 2 3
296

1 1Section 27. SEIZURES 2 3The Customs Inspector or Customs Guard making seizure shall deliver to the 4owner or the claimant, and if unclaimed, to the master of the vessel, a receipt 5describing the articles seized. He shall forward immediately the articles seized 6together with the seizure report and transfer note to the Chief, Piers and 7Inspection Division (or its equivalent office). 8 9Section 28. ARRESTS 10 11Upon searching a vessel or any person on board thereof, the Customs 12Inspector or Customs Guard on board is authorized and required to search, 13arrest and even detain, conformably with law, any person found committing 14act or acts contrary to law. When a person is apprehended under such 15circumstances, the Customs Inspector on board shall conduct an informal 16investigation, after termination whereof, the person arrested together with the 17evidence shall be turned over to the Enforcement and Security Service (ESS) 18for appropriate action. A report in detail, showing the name of the person 19arrested, the reason for the arrest, and action taken, shall be submitted 20without delay, to the Chief, Piers and Inspection Division (or its equivalent 21office). 22 23Section 29. SMALL BOATS ALONGSIDE VESSELS 24 25Small boats, authorized by the PPA to engage in ferry services may be 26permitted to come alongside the vessel. A Customs Guard shall be stationed 27at all times while a small boat, launch or any watercraft is alongside, and it 28shall be thoroughly searched before being permitted to depart. 29 30Section 30. CUSTOMS GUARDS FOR VESSELS LYING ALONGSIDE 31 32A Customs Guard shall be detailed by the Customs Inspector on board of a 33vessel when another vessel is lying alongside, whose duty shall be to see that 34no contraband articles or merchandise is passed from one vessel to the other. 35This duty shall be arranged in rotation, so that the vessel will be under 36continuous surveillance until its departure. 37 38Section 31. HEAVING ANCHOR AND SAIL 39 40Upon receipt of a notice of clearance, the Customs Inspector on board shall 41allow the vessel to heave anchor and sail. But if, for any reason, the ship does 42not leave and remains in port for more than forty-eight (48) hours after the 43time of departure indicated in the clearance, the Master or Agent shall be 44required to secure from the Customs Clearance Officer an extension of time 45for departure, without which the original clearance shall be of no force or 46effect. 47 48 49Section 32. REPAIR OF VESSEL EQUIPMENT 50 2 3
297

1 1Upon the filing of a bond/underguard (Sec. 105 of the Tariff and Customs 2Code of the Philippines, as amended) guaranteeing their re-exportation, and 3approved by the Collector of Customs, the landing of sails, casks, 4chronometers and other portions of the vessels equipment for the purpose of 5having them repaired shall be permitted. The Customs Inspector shall 6describe the articles or equipment so released in sufficient detail to enable 7easy and ready identification upon their return. 8 9Section 33. CONVERSION OF VESSEL STATUS 10 11A. From Foreign to Coastwise 12 13Vessels of foreign status may be converted to a coastwise status after the 14following requirements are fully complied with and submitted to the Collector 15of Customs thru the Customs Clearance Officer as pre-requisite to the 16issuance of clearance: 17 181. Certification from the concerned office of the Bureau that Import Entry 19had been filed and duties and taxes had been paid and/or secured to be paid; 20 212. Certification of Conversion issued by the Maritime Industry Authority; 22 233. Certification from the Chief, Piers and Inspection Division and Chief, 24Bay Service Section (or their equivalent offices) with the Enforcement and 25Security Service (ESS) as member of the searching team, that the vessel has 26been fully searched for contraband cargoes indicating therein the results of 27the searching mission; 28 294. Certification from the shipping agency attested by the Customs 30Inspector on board that all foreign cargoes are fully discharged from vessel; 31 325. Inventory list of ships stores and saloons and crew declaration list shall 33be duly accomplished, signed by the master of the vessel and attested by the 34Customs Inspector on board. 35 36Such vessel shall be subject to continuous underguarding until final clearance 37is issued by the office of the Deputy Collector for Operations. 38 39B. From Coastwise to Foreign 40 41Vessels of coastwise status may be converted to a foreign status subject to 42the following requirements: 43 441. Certification of Conversion issued by the Maritime Industry Authority; 452. Duly processed Export Declarations/Permits. 46 47Section 34. LETTERS TO COLLECTOR 48 49The Customs Senior Boarding Officer shall collect all letters in the vessels 50possession addressed to the Collector of Customs, and transmit them without 2 3
298

1 1delay to the Customs house. 2 3Section 35. REFUSE AND GARBAGE 4 5No refuse, garbage and the like shall be thrown or jettisoned inside any 6harbor more especially while the ship is alongside piers. All damaged and 7rotten cargoes shall be disposed of upon arrangement and permission of the 8Collector of Customs and at the area designated by said official or duly 9authorized representative after consultation with the Philippine Coast Guard 10and/or the Department of Environment and Natural Resources (DENR). 11 12Master of vessels desiring to load or discharge ballast shall first obtain 13permission from the Collector of Customs or Surveyor of the Port and shall 14obey the instruction given them by the harbor master as to where the ballasts 15shall be taken from or discharged, as the case may be. 16 17Section 36. FIREARMS, CARE AND USE 18 19Care should be exercised in the use of firearms. The unnecessary display of 20firearms is prohibited. An employee should remember that the law will hold 21him personally responsible for the results of the use of firearms by him. A 22weapon should not be drawn or used except in self-defense or to prevent the 23commission of a felony. While it is not intended that an officer or employee 24should jeopardize his own life or the life of an associate when danger 25threatens, it is intended that extreme caution and cool deliberation control his 26actions. 27 28Officers and employees shall not be permitted to carry firearms while on duty 29until they have been thoroughly instructed in the proper care and use of such 30weapons. All firearms will be inspected by the Chief, Piers and Inspection 31Division (or its equivalent office) periodically to see that they are kept in 32condition for proper use. 33 34All side arms must be holstered and properly carried on official duty. 35 36Section 37. INSTRUCTIONS RELATIVE TO DISCHARGING, 37WITHDRAWAL AND LOADING OF EMPTY CONTAINERS 38 391. Discharging of Empty Containers 40 41The Shipping Agent prior to the discharge of empty containers shall furnish 42the Customs Container Control Division (or its equivalent office) a copy of the 43approved Sequence of Discharge and a Separate Listing of Empty Containers 44to be discharged from the carrying vessel for monitoring and aging purposes. 45 462. Withdrawal of Empty Containers 47 48The Shipping Agent concerned shall present a letter request to the Chief, 49Customs Container Control Division (or its equivalent office) for withdrawal of 50empty container from the pier. Once approved, the Deputy Collector for 2 3
299

1 1Operations, the Chief, Enforcement Security Service (ESS) and the Chief, 2Piers and Inspection Division shall be furnished copies of the request and the 3permit to withdraw issued. 4 5The original copy of the approved request with the withdrawal permit shall be 6forwarded to the Wharfinger In-Charge for the issuance of the Gate Pass. The 7Customs Gatekeepers and Customs ESS Personnel assigned at the exit 8gates shall be required to open all empty containers to verify whether they are 9indeed empty and shall keep records of the approved requests/ permits 10issued and report any discrepancy to their respective Chiefs of offices. 11 123. Loading of Empty Containers 13 14Prior to the loading of empty containers on board carrying vessel, the 15Shipping Agent concerned shall apply for a Special Permit to Load (SPL) in a 16letter application made for that purpose at the Customs Container Control 17Division (or its equivalent office). 18 19It shall be the responsibility of the Customs Container Control Division (or its 20equivalent office) to physically inspect every empty container brought into/ 21unloaded unto the port and to verify if indeed the same is empty as 22represented by the concerned parties. The empty containers shall be 23inspected upon their arrival into/after their unloading unto the port and not 24when these empty containers are being loaded into the carrying vessel. For 25this purpose, the Chief, Customs Container Control Division (or its equivalent 26office) shall coordinate with the concerned shipping agent and the arrastre 27operator for the segregation of these empty containers and for their inspection 28while in the port. 29 30In approving the Authority to Load Empty Containers, the Chief, Customs 31Container Control Division (or its equivalent office) shall ensure that the empty 32containers specified therein have already been duly inspected. Accordingly, 33the approval of the Authority to Load is also his confirmation that the Customs 34Container Control Division (or its equivalent office) has conducted the 35required inspection and that the containers covered by such authority have 36been verified to be empty indeed. 37 38No further inspection of empty containers, for which an Authority to Load has 39already been approved, shall be required during loading of the same, except 40when otherwise directed in writing by the District Collector of Customs, the 41Commissioner of Customs or their duly authorized representatives. 42 43The Loading Inspector concerned shall furnish the Customs Inspector on 44board carrying vessel a copy of the SPL with the list of empty containers. He 45shall, after the duration of loading, also indorse the list of containers loaded on 46board vessel by reporting it in his ICL to be submitted to the Export Division 47(or its equivalent office). 48 49Section 38. INSTRUCTIONS RELATIVE TO THE WITHDRAWAL OF 50SHUT-OUT CONTAINERIZED EXPORT 2 3
300

1 1 21. Withdrawal of Shut-out containerized export cargoes 3 4All applications for the withdrawal of shut-out containerized export cargoes 5shall be directly filed with the Chief, CCCD (or its equivalent office). 6 7Spot-checking of the contents of the subject containers shall no longer be 8required but instead the following precautionary measures shall be 9undertaken: 10 11(a) The application to withdraw shut-out containerized export cargoes shall 12be accompanied at all times by the following: 13 14(1) Certification of the Shipping Agent concerned attesting to such fact; 15 16(2) An Equipment Interchange Receipt (EIR); and 17 18(3) A Copy of Export Declaration/ Permit/Inquiry; 19(b) The spot-checking shall be confined only to determine whether the 20original shipping agent seal affixed after the stuffing operations is intact; 21 22(c) In case the containerized export cargoes are deliveries from a CBW, 23which fact shall be indicated in the application, the same shall not be 24withdrawn, unless accompanied by a Customs Guard who shall guard the 25same until the shipment is received by the assigned Customs 26Warehouseman/ Customs Storekeeper at the CBW. 27 28For this purpose, the Chief, Customs Container Control Division (or its 29equivalent office) shall coordinate with the Chief, Bonded Warehouse 30Operating Division concerned for the underguarding requirements. 31 32In case the particular CBW is not indicated in the application, the Chief, 33Customs Container Control Division (or its equivalent office) shall have a 34complete file of all active CBWs and accredited members obtained from each 35CBW Operating Division for reference purposes. 36 37Section 39. SHIFTING OF CARGOES 38 39Shipping agent shall submit a written request for shifting of cargoes to the 40office of the Chief, Piers and Inspection Division (or its equivalent office) 41which in turn shall recommend its approval to the Deputy Collector for 42Operations. 43 44Section 40. DEVANNING, STRIPPING AND STUFFING 45 46Consignee shall submit a written request for devanning, stripping and stuffing 47to the office of the Chief, Piers and Inspection Division (or its equivalent office) 48which in turn shall recommend its approval to the Deputy Collector for 49Operations. 50 2 3
301

1 1Section 41. DIRECT TO TRUCK TRANSFER 2 3For direct transfer of container/cargo from vessel to truck, consignee/customs 4broker shall submit a written request to the office of the Chief, Piers and 5Inspection Division (or equivalent office) which in turn shall recommend its 6approval to the Deputy Collector for Operations 7 8Section 42. OVERTIME PERMIT 9 10All requests for overtime work by Piers and Inspection Division (or its 11equivalent office) personnel other than those regular activities mentioned in 12this manual shall be recommended by the Chief, Piers and Inspection Division 13(or its equivalent office) and approved by the Deputy Collector for Operations. 14 15Section 43. DISCHARGING OF VESSEL SLUDGE 16 17All requests for discharging of Vessel Sludge shall be recommended by the 18Chief, Piers and Inspection Division (or its equivalent office) and approved by 19the Deputy Collector for Operations. 20 21Sample of sludge shall be taken by the Customs Examiner from Formal Entry 22Division (or its equivalent office) for examination purposes. 23 24Section 44. BUNKERING PERMIT 25 26All requests for vessel bunkering/refueling shall be recommended for approval 27by the Chief, Piers and Inspection Division (or its equivalent office) to the 28Chief, Port Operations Service, AOCG. 29 30Section 45. LEISURE/RACING YACHT 31 32The boarding formalities shall as far as practicable apply to leisure crafts, 33yachts, foreign fishing vessels and local fishing vessels from abroad. This 34provision shall include all vessels arriving in the country that are participants 35of regattas or similar competitions. 36 37During boarding formalities, the Master/Owner of the yacht/other similar 38vessel shall manifest/state its intention/purpose of its journey in the 39Philippines. He must indicate if its voyage is for pleasure/indicate intended 40period of stay in the Philippines, conversion from foreign to coastwise, 41payment of duties and taxes or conduct of business in the Philippines. 42 43IV. HARBOR REGULATIONS RELATED TO CUSTOMS 44 45A. Vessel Entering Port 46 471. All vessels entering any port, of entry or coastwise, in the Philippines 48shall show their colors and signal their official numbers or letters and such 49signals shall be kept flying till the vessel is boarded by the proper officials. All 50vessels within two (2) miles before arriving at designated quarantine 2 3
302

1 1anchorage shall display their aforementioned signals. 2 32. When mail is to be discharged the vessel shall inform the port 4authorities by the prescribed signal at the earliest opportunity. 5 6B. Flag Signals or Calls 7 81. At the Philippine ports of entry signals will be responded to and from 9the Customs house or pilot signal tower. 10 112. The following signals or calls shall be used in all Philippine ports of 12entry. 13 14a. Customs International Code Flags E & C; at night three or four short 15blasts of whistle and waving of a light. 16 17b. Quarantine International Code Flag Q at the fore. 18 19c. Pilot International Code Flag G or P T; at night 20 21(1) The pyrotechnic light, commonly known as a blue light, every 15 22minutes; 23 24(2) A bright white light, flashed or shown at short frequent intervals just 25above the hull for about a minute at a time or; 26 27(3) The International Code Signal P T by flashing light. 28 29d. Explosives or inflammables International Code flag B at the fore. 30 31e. Medical assistance International Code flag or Customs call. 32 33f. Contagious or infectious disease International Code flags EZQ 34 35g. Death Customs and quarantine calls or International Code flags, ENL 36 37h. Distress by day: International Code flags N C or gun or other 38explosives signals, fired at intervals of about a minute, or the distress signal 39consisting of a square flag having either above or below it a ball or anything 40resembling a ball; at night: 41 42 43(1) A gun or other explosive signal fired at intervals or about a minute, 44 45(2) Flames on the vessel (as from a burning tar, barrel, oil barrel, etc.), or 46 47(3) Rockets or shells, throwing stars of any color or description, fired one 48at a time, at short intervals. 49 50i. Mail International Code flag Y. 2 3
303

1 1 2j. Water boat International Code flags R C Q or F U. 3 4k. PID-ESS Customs call 5 6l. Harbor master International Code flags G Y T. 7 8m. Maneuvering International Code flag D: at night, 9 10C. Quarantine Requirements 11 12Deaths, illness or accidents, involving physical to any person on board a 13vessel in a harbor, shall beat once reported to the Collector of Customs and 14the quarantine officer. 15 16D. Repair/Dry Docking of Vessels 17 18No repairs except minor once shall be allowed on any vessel in a port without 19the permission of the Collector of Customs or the Deputy Collector for 20Operations as well as its transfer to designated place of dry docking, and shall 21be subject to continuous underguarding until final clearance. 22 23For dry docking the following documents are required: 24 25(a) Searching and inventory report 26(b) Approval from the Office of the Deputy Collector for Operations 27(c) Certification from contractor (scope of work and duration of repair) 28 29E. Sunken Vessel 30 31Whenever the navigation of any harbor or navigable river tributary thereto 32shall be obstructed by any sunken vessel, boat, watercraft or other similar 33obstruction has existed for a period longer than thirty days or whenever 34abandonment can be established in a less space of time, the sunken vessel, 35boat, watercraft, or other obstruction, may be broken up, removed, sold, or 36otherwise disposed of by the Collector of Customs, in his discretion, at the 37expenses of the owner: Provided, however, that if navigation of a waterway is 38prevented or seriously endangered by any obstruction, the Collector of 39Customs may cause its removal immediately and before the expiration of 40thirty days at the expense of the owner thereof. 41 42F. Lighters/Tugs and other Watercraft 43 44Lighters shall not be tied nor removed from alongside a vessel without 45permission of the Customs Inspector on board such vessel. 46 47G. Police Authority performed by Customs Officers 48 491. Custom officers have the power to arrest within harbor limits persons 50violating the customs, immigration and navigation laws and regulations and 2 3
304

1 1persons committing crimes or breaches of the peace. Such arrest shall be 2reported without delay to their superior officer. 3 42. Any person who assaults, resists, opposes or interferes in any manner 5with a customs officer in the discharge of his duty shall be liable and subject 6to the penalties prescribed by law. 7 8H. Rat Guards 9 101. When any vessel either of foreign or Philippines Registry, is at any 11dock, pier, wharf, quay or bulkhead, such vessel shall take proper precautions 12to prevent the passage of rodents to or from the vessel. The vessel shall be 13fended off from the pier, wharf, quay, bulkhead, or dock not less than six feet 14and acceptable rat guards, as prescribed, shall be fixed on all connecting 15lines, and, in addition, all cargo nets, chutes and similar devices extending 16between the vessel and shore structure, shall be removed at night unless in 17actual use, as shall all gangways and ladders unless guarded or properly 18lighted. 19 202. The master of any vessel of foreign registry of Philippine registry 21engaged in foreign trade whether lying alongside a pier, dock, quay, wharf or 22bulkhead, or in the stream, shall have suitable rat guards placed on all lines 23between idle lighters or small boats or other carriers and the vessel which 24must be so fastened that the guard will remain at right angles to and tight on 25the line. 26 273. No cargo shall be discharged from or received on board a vessel lying 28alongside a pier, wharf, quay, dock or bulkhead or in the stream before 29suitable rat guards have been placed on all the lines loading from the carriers 30to the vessel and from the vessel to the pier, wharf, quay, dock or bulkhead, 31except in the case of coastwise vessels handling coastwise cargo to or from 32barges, lighters, or other carriers or from barges, lighters, or other carriers 33when the rat guard requirement on lines between vessel and carrier maybe 34dispensed with. 35 36I. Other Special Anchorages 37 38Likewise all other boats and water crafts are prohibited to anchor or to linger 39around any vessel whether moored at a pier or anchored in the harbor at a 40distance of less than 50 meters from said vessel unless especially authorized 41by the Collector of Customs. 42 43J. Specific Regulation 44 451. No empty lighters or carriers shall lie at night alongside a Philippine 46Government pier or alongside a vessel moored thereto; nor shall empty 47lighters or carriers be attached to such pier or vessel by cables or ropes or 48attached to loaded or partly loaded carriers which may be alongside or 49fastened to such pier or vessel. 50 2 3
305

1 12. Empty lighters or carriers alongside or attached to such pier or vessel 2during daytime shall be removed therefrom before nightfall. 3 43. The provisions contained in paragraph 1 and 2 above hereof shall not 5apply to carriers partially laden with import or export cargo or to empty carriers 6which may have been prepared, or which are preparing to receive cargo from 7a pier, or vessel, when delivery from a pier or discharge of a vessel during 8night time has been duly authorized. 9 104. Any vessel or other water craft in the Philippine Harbor shall, when a 11case of sickness occurs on board, immediately hoist the regulation quarantine 12flag (yellow) and keep the same flying until boarded and passed upon by an 13inspector of the Quarantine Bureau. The flag shall be of sufficient size and so 14placed as to be plainly visible. 15 16GLOSSARY OF TERMS 17 18Ballast Heavy cargo, which is loaded on board a vessel or 19aircraft merely for the purpose of making it steady, to enable it to navigate in 20the event of scarcity of other cargo. When not brought to port as article, 21ballast of no commercial value may be discharged upon permit granted by the 22Collector of Customs for such purpose. 23 24 Mentioned in Section 35 of this Manual. 25 26Berth The part of the pier/wharf that is occupied by a vessel, or any 27place in which a vessel may lie at anchor or at a dock. 28 29 Mentioned in Sections 4 and 7 of this Manual. 30 31Bill of Lading Is a transport document for ocean freight issued by 32shipping lines, carriers an International Freight Forwarders or Non Vessel 33Operating Common Carrier. 34 35 Mentioned in Sections 15 and 20 of this Manual. 36 37Bond An instrument designed chiefly to guarantee the integrity and 38honesty of the principal, his ability, financial responsibility, and his compliance 39with law or contract; a guarantee of performance. It is an agreement whereby 40one party, called the surety, obligates itself to a second party, called the 41obligee, to answer for the default of a third party, called the principal. 42 43 Mentioned in Sections 16 and 32 of this Manual. 44 45Break-bulk Non-containerized cargo which is grouped or 46consolidated for shipment and broken down or subdivided Into Unitized 47Cargo, such as in Pallets, or Packed in Bags or Boxes. 48 49 Mentioned in Sections 4,14,15 and 16 of this Manual. 50 2 3
306

1 1Bulk Liquid or dry goods shipped in bulk, not packed or bundled in 2separate unites. Include commodities that are loose or in mass and require to 3be pumped, shoveled, scooped, grabbed or forked during loading or 4unloading. 5 6 Mentioned in Sections 4,15 and 16 of this Manual. 7 8Cargo Manifest Is a declaration of the entire cargo, the object of 9which is to furnish the customs officers with a list to check against, to inform 10our revenue officers, what goods are being brought into the country, and to 11provide a safeguard against goods being brought into this country on a vessel 12and then smuggled ashore. In Maritime Law, is a record or statement in 13writing, carried by a vessel, containing information with respect to the vessels 14cargo, passengers, and other matters required by statute or regulations. 15 16 Mentioned in Sections 14, 15, 17 and 18 in this Manual. 17 18Carrier Means the person actually transporting goods or in 19charge of or responsible for the operation of the means of transport. 20 21 Mentioned in Sections 5, 8, 11, 14, 15 and 16 in this Manual. 22 23 24Customs Clearance Means the accomplishment of the customs 25formalities necessary to allow goods to enter for home use, warehousing, 26transit or transshipment, or to be exported or placed under another customs 27procedure. 28 29 Mentioned in Sections 16 and 31 of this Manual. 30 31 32Coastwise Ports Are such domestic ports as are open to coastwise 33trade only. These include all ports, harbors, and places not ports of entry. 34 35 Mentioned in Section 17 of this Manual. 36 37Container Freight Station Means normally a warehouse or a transit 38shed adjacent to the Container Yard used for sorting and storage of container 39cargo both for import and export. 40 41 Mentioned in Sections 5, 6, 7, 8, 16, 17 and19 of this Manual. 42 43Containerized Cargo Cargo stuffed inside a container van with 44the external dimensions and ratings enumerated in series 1 of ISO 668-1976 45which are specially designated to facilitate ready handling particularly their 46transfer from one mode of transport to another without intermediate reloading. 47 48 Mentioned in Sections 15, 16 and 18 of this Manual. 49 50 2 3
307

1 1Devanning Transfer of cargo from one container to another 2container. 3 4 Mentioned in Sections 8 and 41 of this Manual. 5 6Discharge Port Survey 7(DPS) A report issued by an Accredited Cargo Surveying Company 8(ACSC) for Bulk/Break-Bulk Cargo after the conduct of a survey at the port of 9discharge. 10 11 Mentioned in Section 15 of this Manual. 12 13Dry-dock Means a dock from which the water can be temporarily 14excluded, in order to effect repairs to hulls and keels of ships or vessels. 15 16 Mentioned in Part IV, Section D of this Manual. 17 18Encargo Entrusted shipment of merchandise or articles from 19abroad. 20 21 Mentioned in Section 15 of this Manual. 22 23Foreign Trade It is the commercial interchange of commodities 24between different countries; export and import trade. It is synonymous with 25the term foreign commerce, which is the trade between individuals or legal 26entities in different countries. 27 28 Mentioned in Section 15 of this Manual. 29 30Hatch An opening in ships deck through which cargo can be lowered. 31 32 Mentioned in Section 15 of this Manual. 33 34Less Container Load A container loaded with cargoes belonging 35to more than one consignee and/or covered by more than one bill of lading. 36 37 Mentioned in Section 15 of this Manual. 38 39Load Port Survey A report issued by an Accredited Cargo Surveying 40Company (ACSC) for Bulk/Break bulk Cargo to be imported into the 41Philippines. The report shall be submitted to the Bureau of Customs directly 42from the ACSC in a secure electronic format. 43 44 Mentioned in Section 15 of this Manual. 45 46Moor Means to secure a vessel alongside the berth by means of 47mooring ropes. 48 49 Mentioned in Section 15 of this Manual. 50 2 3
308

1 1Non-Vessel Operating Means a person, including an international 2freight forwarder, providing 3 4Common Carrier 5(NVOCC) Point-to-point international transport of shipments without 6operating or owing the means of transport or equipment. An NVOCC deals 7with the shipper and issues its own transport document (e.g. B/L or AWB) 8even though it commonly subcontracts the different stages of transport to 9vessel, aircraft, and truck operators. 10 11 Mentioned in Section 14 of this Manual. 12 13Port of Entry Is a domestic port open to both foreign and coastwise 14trade. The term includes principal ports of entry and subports of entry. A 15principal port of entry is the chief port of entry of the collection district. 16 17 Mentioned in Sections 15 and 17 of this Manual. 18 19Pratique Is a permission granted by quarantine officials to a vessel 20or air-craft to hold intercourse with the port after the ship or aircraft has 21complied with port regulations. 22 23 Mentioned in Section 15 of this Manual. 24 25Quay A landing place or pier, usually of solid construction, where 26vessels berth to load or unload cargo. 27 28 Mentioned in Part IV, Section H of this Manual. 29 30Regular Shipside Permit Required for all cargoes, which belong to 31the categories of regular shipside cargoes under the existing regulations. 32 33 Mentioned in Section 15 of this Manual. 34 35Saloon Stores Supplies listed as such which are intended for sale 36on board a vessel or aircraft. 37 38 Mentioned in Section 15 of this Manual. 39 40Sea Stores Articles specially foodstuff, such as food, wine, cigarettes, 41for use or consumption only of the passengers and crew on board the vessel 42or aircraft upon its voyage. 43 44 Mentioned in Section 3 of this Manual. 45 46Shifting of Cargoes Transferring of cargoes from vessel to vessel and 47vessel to dock, dock to vessel, hatch-to-hatch, and bay-to-bay. 48 49 Mentioned in Section 6 and 40 of this Manual. 50 2 3
309

1 1Ships Stores Consist of spare equipments such as chains, anchor and 2the likes, necessary for the safe navigation of ship. 3 4 Mentioned in Section 15 and 33 of this Manual. 5 6Shipside 7Permit Authority issued by the Collector of Customs or his/her 8authorized representative for the Customs Inspector assigned on a vessel to 9allow the discharge of cargoes specified on the permit at shipside unto 10lighters, underguard. 11 12 Mentioned in Sections 4 and 15 of this Manual. 13 14Special Shipside Permit When cargoes do not belong to the regular 15shipside cargoes, the broker and/or consignee has to get the authority from 16the Collector of Customs prior to the processing and approval by the Entry 17Processing Division. 18 19 Mentioned in Section 15 of this Manual. 20 21Stripping Unloading of all goods or cargoes from a container. 22 23 Mentioned in Sections 6, 8 and 41 of this Manual. 24 25Stuffing Filing a container with goods or cargoes. 26 27 Mentioned in Sections 16, 39 and 41 of this Manual. 28 29Temporary Shipside 30Permit Is a written authority to discharge cargoes at shipside unto 31lighter as per order of the Collector of Customs. 32 33 Mentioned in Section 15 of this Manual. 34 35Transit Means the Customs procedure under which goods are 36transported under Customs control from one Customs office to another. 37 38 Mentioned in Sections 8, 15 and 17 of this Manual. 39 40Transit Cargo Article arriving at any port from another port or 41place noted in the carriers manifest and destined for transit/transshipment to 42another local port or to a foreign port. 43 44 Mentioned in Sections 16, 17 and 18 of this Manual. 45 46Transshipment Means the Customs procedure under which goods 47are transferred under Customs control from the importing means of transport 48to the exporting means of transport within the area of one Customs office 49which is the office of both importation and exportation. 50 2 3
310

1 1 Mentioned in Sections 15 and 18 of this Manual. 2 3Vessels Include every sort of boat, craft or other artificial 4contrivance used, or capable of being used, as means of transportation on 5water. 6 7APPENDICES 8 9 Customs Administrative Order No. 3-2010 dated May 12, 2010 10Issued pursuant to Section 608 of the Tariff and Customs Code of the 11Philippines (TCCP), as amended, to supplement Administrative Order (AO) 12No. 243-A, dated 16 September 2009, and the Rules to Implement the Bulk 13and Break-bulk Cargo Clearance Enhancement Program(hereafter referred 14to as Rules) issued by the Committee for Accreditation of Cargo Surveying 15Companies (CACSC) 16 17 Customs Memorandum Order No. 18-2010 dated May 12, 2010 18Procedure for the Bulk and Break-bulk Cargo Clearance Enhancement 19Program Mandated under Administrative Order (AO) No. 243 as amended by 20AO 243-A 21 22 Customs Administrative Order No. 01-2007 Penalties related to 23Inward Foreign Manifest and Consolidated Cargo Manifest 24 25 Customs Administrative Order No. 4-82 dated October 5, 1982 Rules 26and regulations on the submission of Inward and Outward Foreign Manifests 27implementing Sections 1004to 1007, TCCP 28 29 Paragraphs 2, 3 of Section 1005, TCCP - Manifest required of vessel 30from foreign port 31 32 Paragraph 2 of Section 2516, TCCP 33 34 Paragraphs 2, 3, 4 of Section 1017, TCCP - Unlading vessel in Port 35from necessity 36 37 Section 605, TCCP - Enforcement of Port Regulation of Bureau of 38Quarantine 39 40 Section 906, TCCP - Requirement of Manifest in Coastwise Trade 41 42 Section 907, TCCP - Manifest required upon Departure from Port of 43Entry 44 45 Section 908, TCCP - Manifests required prior to unloading at Port of 46Entry 47 48 Section 909, TCCP - Departure of Vessel upon detailed manifest 49 50 Section 1001, TCCP - Ports open to vessels engaged in foreign trade2 3
311

1 1duty of vessel to make entry 2 3 Section 1002, TCCP - Control of Customs Official over Boarding or 4Leaving of incoming vessel and over other vessels approaching the former 5 6 Section 1003, TCCP - Quarantine certificate for incoming vessel 7 8 Section 1004, TCCP - Documents to be produced by the master upon 9entry of vessel 10 11 Section 1006, TCCP - Translation of Manifest 12 13 Section 1007, TCCP - Manifest for Commission on Audit and Collector 14 15 Section 1008, TCCP - Transit Cargo 16 17 Section 1009, TCCP - Clearance of Foreign Vessels to and from 18coastwise ports 19 20 Section 1010, TCCP - Requirements as to Delivery of Mail 21 22 Section 1011, TCCP - Production of Philippine Crew 23 24 Section 1012, TCCP - Record of Arrival and entry of vessels 25 26 Section 1013, TCCP - Arrest of vessel departing before entry made 27 28 Section 1014, TCCP - Discharge of Ballast 29 30 Section 1015, TCCP - Time of Unlading of Cargo 31 32 Section 1016, TCCP - Entrance of Vessel through necessity 33 34 Section 1018, TCCP - Entry and clearance of vessels of a foreign 35government 36 37 Section 1019, TCCP - Clearance of vessel for foreign port 38 39 Section 1020, TCCP - Detention of warlike vessel containing arms and 40munitions 41 42 Section 1021, TCCP - Manifest of export cargo to be delivered to 43Chairman, Commission on Audit 44 45 Section 1022, TCCP - Oath of Master of departing vessel 46 47 Section 1023, TCCP - Extension of time for clearance 48 49 Section 1025, TCCP - Export product to conform to standard grades 50 2 3
312

1 1 Section 1302 (b), TCCP 2 3 Section 1314, TCCP - Forwarding of Cargo and Remains of Wrecked 4Vessel or Aircraft 5 6 Section 1315, TCCP - Derelicts and Articles from Abandoned Wrecks 7 8 Sections 1901-1909, 2001-2004 in relation to Section 1008, TCCP, as 9amended 10 11 Section 2101, TCCP - Entry for immediate Transportation 12 13 Section 2102, TCCP - Bonding of Carrier Transporting Articles under 14the Preceding Section 15 16 Section 2103, TCCP Articles Entered for Immediate Exportation 17 18 Section 2505, TCCP - Failure to Declare Baggage 19 Section 2513, TCCP - Vessel or Aircraft Departing Before Entry Made 20 21 Section 2514, TCCP - Obstruction to Boarding Official 22 23 Section 2515, TCCP - Unlawful Boarding or Leaving of Vessel or 24Aircraft 25 26 Section 2516, TCCP - Failure to Deliver or Receive Mail 27 28 Section 2517, TCCP - Unlading of Cargo before Arrival at Port of 29Destination 30 31 Section 2518, TCCP - Unlading of Cargo at Improper Time and Place 32after Arrival 33 34 Section 2519, TCCP - Failure to Exhibit or Deposit Documents 35 36 Section 2520, TCCP - Bringing of unmanifested Arms, Explosives or 37War Equipment 38 39 Section 2521, TCCP - Failure to Supply Requisite Manifests 40 41 Section 2522, TCCP - Disappearance of Manifested Article 42 43 Section 2523, TCCP - Discrepancy between Actual and Declared 44Weight of Manifested Article 45 46 Section 2524, TCCP - Delivery of Cargo Not Agreeing with the 47Masters Pilots in Command Report 48 49 Section 2525, TCCP - Breaking of Seal Placed by Customs Officials 50 2 3
313

1 1 Section 2526, TCCP - Breaking of Lock or Fastening Placed by 2Customs Officials 3 4 Section 2527, TCCP - Disappearance of Trunk or Package specially 5noted by Customs Official 6 7 Section 2528, TCCP - False Statement of Vessels or Aircrafts 8Destination 9 10 Section 2529, TCCP - Other Offences 11 12 Section 2531, TCCP - Properties Not Subject to Forfeiture in the 13Absence of Prima Facie Evidence 14 15 Section 2533, TCCP - Enforcement of Lien, Administrative Fines, and 16Forfeitures 17 18 Section 2534, TCCP - Seizure of Vessel or Aircraft for Delinquency of 19Owner or Officer 20 21 Section 2535, TCCP - Burden of Proof in Seizure and/or Forfeiture 22 23 Subsections (g) & (h) of Section 2530, TCCP - Property Subject to 24Forfeiture under Tariff and Customs Laws 25 26 Unnumbered Memorandum dated April 21, 2006 Clearance 27requirements for Amendments to the Inward Foreign Manifest 28 29 Unnumbered Memorandum dated May 4, 2006 Restating the 30Memorandum dated April21, 2006 entitled Clearance requirements for 31amendments to the Inward Foreign Manifest 32 33ANNEXES 34 35FORM NO. TITLE 36 37BOC OPM FORM NO. 1 GENERAL PERMIT 38BOC OPM FORM NO. 2 CLEARANCE OF VESSEL TO A 39FOREIGN PORT 40BOC OPM FORM NO. 3 CLEARANCE OF CUSTOMS INSPECTOR 41ASSIGNED ON BOARD 42BOC OPM FORM NO. 4 INSPECTORS CERTIFICATE OF LAST 43CARGO DISCHARGE (CONTAINER/BULK CARGO) 44BOC OPM FORM NO. 5 CONTAINER DISCHARGING REPORT 45BOC OPM FORM NO. 6 PIER/SHIPSIDE DISCHARGING 46REPORT 47BOC OPM FORM NO. 7 ASSIGNMENT ORDER 48BOC OPM FORM NO. 8 CHECKLIST 49BOC OPM FORM NO. 9 OATH OF ENTERING VESSEL FROM A 50FOREIGN PORT 2 3
314

1 1BOC OPM FORM NO. 10 OATH OF MASTER TO MANIFEST IN 2CLEARANCE FOR A FOREIGN PORT 3BOC OPM FORM NO. 11 OATH OF MASTER TO FOREIGN VESSEL 4CLEARANCE WITHOUT PASSENGERS 5BOC OPM FORM NO. 12 OUTWARD FOREIGN MANIFEST 6BOC OPM FORM NO. 13 CUSTOMS INSPECTOR AFTER 7OPERATION REPORT 8BOC OPM FORM NO. 14 INWARD FOREIGN MANIFEST 9BOC OPM FORM NO. 15 RECORD OF VESSEL BOARDED 10BOC OPM FORM NO. 16 SHIPSIDE PERMIT 11 12 13CHAPTER 4 DISPOSAL OF PROPERTY UNDER CUSTOMS CUSTODY 14 154.1 Property Under Customs Custody Subject to Sale. 16 17 Property under customs custody subject to sale are: 18 19a. Abandoned articles; 20 21b. Articles entered under warehousing entry not withdrawn nor the duties 22and taxes paid thereon within the period prescribed under Section 1908 of this 23Code; 24 25c. Seized property, other than contraband, after liability to sale shall have 26been established by proper administrative or judicial proceedings in 27conformity with the provisions of this Code; 28 29d. Any article subject to a valid lien for customs duties, taxes or other 30charges collectible by the Bureau of Customs, after the expiration of the 31period allowed for the satisfaction of the same; and 32 33e. Property Acquired Thbrough Compulsory Acquisition. 34 354.2 MODES OF DISPOSITION OF ARTICLES UNDER CUSTOMS 36CUSTODY 37 38 The modes of disposition of articles shall be by Sale, Donation, 39Destruction/Condemnation and such other modes as specifically defined 40herein. 41 424.2.I SALE 43 444.2.1.1 PUBLIC AUCTION 45 464.2.1.1.1 Public Auction In the absence of any special provision of law, 47articles under customs custody shall be disposed of through sale by public 48auction. 49 504.2.1.1.2 Order to Conduct Public Auction The District Collector shall, 2 3
315

1 1within five (5) days from finality of Order of Forfeiture or Decree of 2Abandonment, issue a memorandum addressed to the Chief, Auction and 3Cargo Disposal Division (ACDD) or its equivalent unit to conduct the inventory 4and appraisal of the abandoned and forfeited articles. 5 64.2.1.1.3 Duty of the Chief, Auction and Cargo Disposal Division (ACDD) 7or its equivalent unit Within five (5) days from receipt of the Order of the 8District Collector, the Chief, ACDD or his authorized representative shall 9conduct the inventory at the same time the appraisal of the articles subject for 10Auction and prepare a report of the same. The report, which sets the floor 11price of the articles, shall be submitted by the Chief, ACDD, to the Collector of 12Customs for his approval. 13 144.2.1.1.4 Guidelines in Setting the Floor Price Articles subject to sale 15at public auction shall be sold at a price not less than the wholesale value of 16the canvassed domestic wholesale price of same, like or similar articles and in 17the usual wholesale quantities and in the ordinary course of trade, as 18determined by the concerned examiners/appraisers subject to the approval of 19the Chief, ACDD and the District Collector, provided, however, that the 20recommended floor price shall not be less than the sum of the total landed 21cost based on the published/circularized VRIS-OCOM test value plus taxes, 22taking into consideration the obsolescence, condition and/or reasonable 23depreciation. 24 254.2.1.1.5 Approval of the Floor Price Within two (2) days from receipt of 26the report from the Chief, ACDD or its equivalent unit, the District Collector 27shall approve or disapprove the floor price set. In case of approval, the District 28Collector shall Order the ACDD to proceed with the Auction, otherwise, he 29shall order to revise the floor price within the same period specified herein. 30 314.2.1.1.6 Notice of Public Auction Within two (2) days from receipt of 32the order of the District Collector to proceed with the Auction, the Chief, 33ACDD or its equivalent unit shall prepare the Notice of Public Auction to be 34approved by the District Collector within two (2) days from receipt of the 35Notice of sale. The Notice of Public Auction shall contain the following 36information: 37 38a. Specific time, date and place for the auction sale. 39b. Lot No. per sale lot (SI/AP No(s); name(s) of consignee). 40c. Specific description of the goods, as mandated by CAO 8-2007, per 41sale lot, including their quality, condition, volume/quantity and date of arrival. 42In no case shall the goods be described in general terms, e.g., Various 43Goods. In case of motor vehicles, the Notice shall specify the Year Model, 44Make/Brand, Vehicle Identification No. (VIN), Chassis and Engine Nos. As to 45perishable items, the expiry date shall be stated. 46d. Floor price per sale lot. 47e. Specific date, time and place for the inspection of all the items/lots 48which shall be 2 days prior to the auction date. 49f. The terms and conditions of the Public auction, such as, the 50registration requirements, sealed bid system, clustering, failed bidding, 2 3
316

1 1second auction, awarding and payment. 2 34.2.1.1.7 Offer on "AS IS WHERE IS" Basis. Unless otherwise indicated, 4all articles subject of disposition pursuant to this Order shall be offered for 5sale on an "AS IS WHERE IS" basis, with no warranty given as to their 6condition. All offers for sale shall not be deemed binding, in any manner, upon 7the Bureau of Customs. 8 9The quantity, number, weight, or measurement of the article/s subject of sale 10and/or as listed in the Notice of Sale shall be deemed subject to further 11determination prior to delivery; Provided that, in case any excess is 12discovered thereby, the awarded participant shall be required to pay for the 13excess, otherwise such excess shall not be deemed included in the sale and 14shall not be included in the delivery. In case any shortage is discovered, a 15proportionate allowance/ adjustment may be effected/authorized. 16 17Non-inspection by the participant of the article/s offered for sale shall not be a 18ground for refusal of the award. 194.2.1.1.8 Submission of the Notice of Sale to the Commissioner for 20Monitoring Purposes Upon approval of the Notice of Sale by the District 21Collector, the Chief, ACDD shall furnish the Commissioner of Customs a copy 22of the Notice and submit the following documents: 23 24a. Inventory of each sale lot covered by the Notice of Public Auction. 25b. Certificate of Finality of Forfeiture/Declaration of Abandonment or an 26Order of the District Collector to sell in public auction in satisfaction of a tax 27lien and/or to place the proceeds thereof under escrow. 28c. In the case of perishable items, a Certification from the assigned 29examiner/appraiser attesting to the fact that the goods are perishable and 30approved by the Chief, ACDD. 31 324.2.1.1.9 Auction Committee. Auction Committee or equivalent 33committee shall have the following composition: 34 35Chairman Deputy Collector for Operations 36Chief, Auction and Cargo Disposal Division or 37 Equivalent unit 38Vice-Chairman Chief, Law Division 39Members - Representative, COA 40Representative, Office of the Commissioner 41 42Representatives of the Port Operation Service (POS), Office of the 43Ombudsman, Other Government Agency (OGA) which issue clearances (in 44case of regulated items) and representative, Apprehending Unit, in case the 45auctioned articles was a result of apprehension, shall act as witnesses during 46proceedings of the Committee and/or in the conduct of the disposition of 47goods. 48 494.2.1.1.10 Duties and Responsibilities of the Auction Committee 50 2 3
317

1 1a. Provide certain formalities and procedures consistent with, and in 2pursuance to this Order, in connection with, auction sales and other modes of 3disposition of property under customs custody as provided for under the 4TCCP, as amended. 5 6b. To impose, administer and/or recommend to the District Collector the 7imposition of administrative and/or such other sanctions as maybe 8appropriated against any bidder, person or entity found to have committed 9disorderly act or any act prejudicial or inimical to the interest of the 10Government or violated any law, rules and regulations, in connection of any 11auction sale, negotiated sale, or any disposition of property subject of this 12Manual and in which the bidder, person or entity has participated directly or 13indirectly. 14 15c. To reject any and all bids/offers or any part thereof, waived any 16required formalities, and accept bids, offers most advantageous to the interest 17of the government conformably and consistent with the object of this Manual. 18 19d. To recommend to the Commissioner of Customs, thru the District 20Collector, any and all such matter as will promote the attainment of the 21objectives of this Order. 22 23e. To supervise the preparation and conduct of the sale/disposition of 24property subject of this Order. 25 264.2.1.1.11 Publication and Posting of Notice of Sale The Notice of 27Auction Sale, regardless of the aggregate amount of the covered sale lots, 28shall be published in at least one (1) newspaper of general circulation and 29posted at the Bureau website and/or at a conspicuous place/bulletin board 30within the premises of the Port, at least ten (10) calendar days prior to the 31date of auction sale or in the case of perishable goods at least three (3) 32calendar days. Except for Manila, Cebu, Cagayan de Oro and Davao, the 33Notice of Auction Sale shall also be posted at the bulletin board of the 34city/municipal hall where the port is located. 35 364.2.1.1.12 Conditions for Registration and Participation in Public Bidding 37The Chief, ACDD shall be responsible to ensure that only those who have 38complied with the following requirements shall register and participate in the 39public auction: 40 41a. Filing of the appropriate duly accomplished registration form. 42b. Payment of a non-refundable registration fee of Php4,000.00. 43c. Posting of a duly receipted bond in cash or managers check in an 44amount equivalent to 20% of the floor price for each sale lot. The bond shall 45be refunded to the losing bidder after the closing of the auction. The bond 46shall not, however, be required when the floor price of a sale lot is less than 47Php10,000.00. 48d. In auction sales involving regulated commodities, such as, rice or 49sugar, the bidder shall submit to the ACDD proof of qualification (i.e. 50NFA/SRA licenses) as an importer/trader of such goods. 2 3
318

1 1e. The names, addresses, TIN and other relevant circumstances of the 2registration shall be indicated in the logbook of registered bidders. 3f. Submission of the latest income and/or business tax returns duly 4stamped and received by the Bureau of Internal Revenue (BIR) and validated 5with the payment made thereon. 6 74.2.1.1.13 Sealed Bid System The sealed bids shall be submitted and 8opened in public by the Auction Committee at a time, date and place specified 9in the Notice of Auction Sale. The highest bid shall be declared as the winner 10except when clustering occurs. 11 124.2.1.1.14 Clustering System Clustering occurs when the difference 13between the highest and the second highest bid is within ten percent (10%) of 14the highest bid. In such cases, an open-bidding shall be conducted among the 15bidders of the particular sale lot who are present with the highest bid serving 16as the new floor price shall be considered and the highest bid in the open17bidding shall be declared as the winner. Otherwise, the highest sealed bid 18shall be declared as the winner. 194.2.1.1.15 Awarding of Sale At the end of each bidding, the highest 20bidder shall be required to pay in cash / managers check fifty percent (50%) 21of the bid price on the spot upon announcement of the winning bid as duly 22certified to by Auction Committee and the COA representative. The remaining 23balance shall be paid on the succeeding business day. 24 254.2.1.1.16 Delivery. The winning bidder shall have five (5) working days, 26excluding Saturdays and Holidays, within which to claim and receive delivery 27of the items/lots from the date of the sale. 28 29Where the winning bidder fails to so claim and receive delivery of the 30articles/lots awarded to him within said period, a storage fee based on existing 31rates shall be imposed/charged accordingly. 32 33Where the winning bidder fails to claim and receive delivery of the articles/lots 34awarded to him within thirty (30) days from the date of sale, he shall be 35deemed to have abandoned said goods and to have renounced all his rights 36thereto. In addition, all payments already made therein, including the fifty 37(50%) percent down payment shall be forfeited in favor of the government, 38without prejudice to such other administrative sanctions as may be 39recommended by the Committee to the District Collector or Commissioner of 40Customs. 41 424.2.1.1.17 Failed Bidding A failed bidding shall be declared by the 43auction Committee when any of the following circumstances occurs: 44 45a. When there is no bid tendered; 46b. When there is only one sealed bid, the same shall not be opened. 47c. When there are two sealed bids but there is only one bid higher than 48the floor price. 49d. When the highest bidder fails to comply with any of the payments 50required in Section 9 hereof, said bidder shall be disqualified from 2 3
319

1 1participating further in the auction sale and when applicable, the negotiated 2sale thereof without prejudice to the forfeiture of the cash bond and any 3payment made and imposition of other sanctions as may be warranted. 4 54.2.1.1.18 Second Bidding When a failed bidding is declared, the sale lot 6shall be offered in a second auction to be held on the third business day after 7the first failed auction at the same floor price, without need of further 8advertisement / posting. In case of perishable goods, the second auction shall 9be conducted on the first business day following the first bidding. 10 114.2.1.2 NEGOTIATED SALE 12 134.2.1.2.1 Negotiated Sale In case of a second failed bidding, the unsold 14lot shall be re-offered through negotiated sale. 15 164.2.1.2.2 Mandatory Reporting on the Second Failed Bidding After a second 17failed bidding, the District Collector shall submit a report to the Committee on 18Negotiated Sale, within forty-eight (48) hours, and in case of perishable 19articles, within twenty-four (24) hours with the following information: 20 21a. Abstract of bids per sale lot indicating the floor price, name of bidders 22and reason for the failed auction. 23b. Proof of Publication. 24c. District Collectors Certification on the two failed biddings conducted for 25said sale lot. 26d. In case of perishable articles, the District Collectors Certification to that 27effect. 28e. Such other requirements that may be imposed by the Committee. 29 304.2.1.2.3 Committee on Negotiated Sale A Committee on the 31Negotiated Sale is hereby constituted which shall be composed of the 32following: 33 34Chairman Deputy Commissioner 35 Assessment and Operations Coordinating Group (AOCG) 36 37Members OCOM Representative to be designated by 38the Commissioner of Customs, 39 40 AOCG Representative to be designated by the 41 Commissioner of Customs 42 43 Director, Port Operations Service 44 45 District Collector of the port concerned or his authorized 46 representative 47 48 Head To be designated by the Chairman, 49 Secretariat Committee on Negotiated Sale. 50 2 3
320

1 1The Committee shall have the following duties and functions: 2 3a. Implement the provisions of this Order relating to the conduct of 4negotiated sale. 5b. Conduct an ocular inspection of the sale lots. 6c. Reject any or all offers or any part thereof and consider offer/s most 7advantageous to the interest of the government. 8d. Recommend to the Secretary of Finance for acceptance of the offer/s 9most advantageous to the interest of the government. 10 11The Secretariat shall have the following duties and responsibilities: 12 13a. Cause the publication of the appropriate Notice in at least two (2) 14newspapers of general circulation specifying the date, place, and time of 15inspection of the lots described therein as well as the date and cut-off time for 16the submission of the requirements provided in Section 15 hereof. Publication 17shall be at least five (5) days prior to the date indicated therein and in case of 18perishable articles, at least two (2) calendar days. 19b. Coordinated with the ACDD of the concerned port on the posting 20requirements. 21c. Prepare the Report of the Proceedings of the Committee Meetings. 22d. Maintain records related to the functions/activities of the Committee. 23 244.2.1.2.4 Requirements and Procedure in Negotiated Sale. 25 26a. The participant shall submit to the Committee on Negotiated Sale 27within the prescribed period of time to be indicated in the Notice, the following: 28 291. Sealed offer to buy indicating the sale lot and the amount of his offer. 302. Tax Identification Number (TIN No.) 313. Official Receipt on the payment of a non-refundable registration fee 32P2,000.00. 334. Latest Income and/or Business Tax Returns duly stamped and 34received by the Bureau of Internal Revenue (BIR) and validated with the 35payment made thereon. 365. In case of negotiated sale involving regulated commodities, such as, 37rice or sugar, proof of qualification as importer/trader of such goods. 386. Such other requirements as the Committee may impose. 39 40Failure to meet any of the requirements enumerated above shall automatically 41disqualify the participant from participating further in the negotiated sale. 42 43b. There shall be no minimum prices and the sealed offers to buy must be 44submitted within the prescribed period of time indicated in the Notice. No offer 45to buy shall be entertained if submitted after the said period of time. The 46sealed offers to buy must be submitted within the prescribed period of time 47indicated in the Notice. No offer to buy shall be entertained if submitted after 48the said period of time. The sealed offers shall be opened in the presence of a 49COA representative. 50 2 3
321

1 1c. The participant whose offer is considered the most advantageous to 2the interest of the government shall be required to pay a guarantee cash 3deposit in an amount equivalent to twenty percent (20%) of the offer within 4twenty-four (24) hours from receipt of notice by the Committee prior to referral 5to the Secretary of Finance for consideration. Non-compliance herewith shall 6automatically disqualify the offeror from participating further in the negotiated 7sale. 8 9d. An additional thirty percent of the offer shall be paid in cash/managers 10check within forty-eight (48) hours from receipt of the notice from the 11Committee of the approval of the offer by the Secretary of Finance. The fifty 12percent (50%) remaining balance shall be paid in full within the succeeding 13business day. Non-compliance herewith shall cause the forfeiture of the 14deposit and any payment/s made without prejudice to the imposition of other 15sanctions as may be warranted. 16 17e. When the offer is rejected by the Secretary of Finance, the guarantee 18cash deposit shall be refunded and the unsold lot shall re-bidded in 19accordance with the herein provisions on auction or otherwise disposed of 20through the other permitted modes of disposal under the Tariff and Customs 21Code as warranted by the circumstances. 22 234.2.1.3 DONATION 24 254.2.1.3.1 Articles Subject to Donation- When the articles remains unsold 26in at least two public biddings for want of bidders or for lack of an acceptable 27bid, and the articles is suitable for shelter or consists of foodstuffs, clothing 28materials or medicines, then that article maybe given to government 29charitable institutions through the Department of Social Welfare and 30Development. 31 324.2.1.3.2 Donations of Unsold Articles for Want of Bidders- All requests 33for donation shall be coursed through the Office of the Commissioner which 34shall be subsequently endorse the same to the District Collector/s for 35determination of the availability of the items requested for donation. 36 374.2.1.3.3 Procedure in the Office of the District Collector- Within ten (10) 38days from receipt of the Endorsement of the Commissioner of Customs, the 39District Collector shall request the Chief of the ACDD or its equivalent unit to 40check the availability of the goods requested for donation. From the list 41submitted by the Chief, ACDD or its equivalent unit, the District Collector shall 42then determine which goods are eligible for donation to the DSWD, 43Government Charitable Institutions (GCI) or other government agency 44concerned and endorse the same together with the proposed Deed of 45Donation and Acceptance to the Commissioner of Customs for his approval. 46 474.2.1.3.4 Procedure in the Office of the Commissioner The 48Commissioner of Customs shall act on the recommendation of the District 49Collector within three (3) days from receipt thereof by endorsing the same 50with the supporting documents to the Secretary of Finance for 2 3
322

1 1approval/clearance. 2 3Upon receipt of the requested approval/clearance from the Secretary of 4Finance, the Commissioner of Customs shall then cause the execution of the 5Deed of Donation and Acceptance as prepared by the District Collector, and 6shall subsequently endorse the same to the latter for implementation. 7 8The District Collector through the Chief, ACDD or its equivalent unit shall 9inform the requesting agency of the approval of the Secretary of Finance of 10the proposed donation and shall ensure that the Deed of Donation and 11Acceptance is duly signed by the Commissioner of Customs and the 12authorized signatory of the donee-agency. 13 144.2.1.3.5 Turn-over of Donated Goods to the Donee It shall be the 15responsibility of the donee-agency to make the necessary arrangement for the 16actual transfer of the goods from customs custody to their own custody. The 17Chief, ACDD or its equivalent unit shall prepare and sign the corresponding 18Gate Pass authorizing the release of the articles from customs custody to the 19donee-agency. It shall be the responsibility of the Chief, ACDD or its 20equivalent unit to ensure that the donated goods are released to and received 21by the donee-agencys duly authorized representative. 22 234.2.1.3.6 Presence of other Representatives In all instances, release of 24donated goods shall always be witnessed by the Bureaus COA Resident 25Auditor or his duly authorized representative, representatives from POS, CIIS, 26ESS and Office of the Commissioner. 27 284.2.1.3.7 Immediate Turn-over of the Used Clothing to the DSWD 29Within ten (10) days from finality of the Decree of Forfeiture or Abandonment 30of the used clothing, the District Collector shall write a memorandum to the 31Commissioner of Customs informing the latter of the finality of the forfeiture 32and abandonment. Within the same period, the Commissioner of Customs 33shall issue a clearance allowing the District Collector to immediately turn-over 34the articles to the Department of Social Welfare and Development. The 35Collector of Customs shall, within ten (10) days from receipt of the Clearance 36turn over the used clothing to the DSWD. 37 384.2.1.3.8 Reporting The Chiefs of the ACDD or its equivalent unit shall, 39at the end of every month, submit to the Commissioner of Customs thru the 40Deputy Commissioner for Assessment and Operations Group a report on the 41volume and estimated value of goods actually donated and goods still to be 42donated. 43 444.2.1.3.9 Accountabilities It shall be the responsibility of the District/Port 45Collector to ensure the smooth, proper and effective implementation of 46procedures for Donation. The Chief, ACDD or its equivalent unit shall ensure 47that all the necessary documentation and clearances needed for the turn-over 48of the goods are complied with. 49 504.2.1.4 CONDEMNATION 2 3
323

1 1 24.2.1.4.1 Articles Liable for Condemnation/Destruction- Valueless, 3unsalable, or hazardous property maybe condemned and destroyed by 4pounding, burning, breaking, shredding, throwing or any other method by 5which the property is disposed beyond economic recovery. 6 74.2.1.4.2 Inventory of the Articles Subject for Condemnation/Destruction 8 The District Collector, which has the authority to identify articles liable for 9destruction/condemnation, shall direct the Condemnation Committee to 10conduct an inventory of the said articles and order the latter to prepare a 11detailed written plan for its destruction/condemnation. The written plan shall 12contain the following: 13 14a. Nature of the items/goods to be destroyed/condemned to include their 15packaging. 16 17b. Reasons why the articles are to be destroyed/condemned. 18 19c. Special/technical requirements needed to insure their complete 20destruction and to prevent their subsequent retrieval by persons or even by 21animals. 22 23d. Government agencies that must be present to witness/supervise the 24destruction/condemnation process and to insure that their own regulations on 25such activities are observed. 26 27e. The intended place of condemnation and the reason for its selection. 28 29f. The anticipated difficulties with emphasis on the problem or crowd 30control, looters and scavengers and in general security concerns and 31contingency measures thereto. 32 33g. Needed reports to be submitted after the destruction/condemnation by 34the signatories thereof. 35 36 374.2.1.4.3 Condemnation Committee A Condemnation Committee is hereby 38constituted which shall be composed of the following: 39 40Chairman Deputy Collector for Operation 41 42Members Director, Port Operations Service 43 Chief, ACDD or equivalent unit 44 Chief, Law Division 45 Representative of AISL 46 474.2.1.4.4 Approval of the District Collector and the Commissioner upon 48approval of the District Collector of the condemnation plan prepared by the 49Condemnation Committee, said written plan shall be forwarded to the 50Commissioner for approval. Within fifteen (15) days from receipt of the 2 3
324

1 1approved Condemnation plan, the District concerned shall carry out the said 2plan. 3 44.2.1.4.5 Presence of other Representatives In all instances, the 5condemnation shall always be witnessed by the Bureaus COA Resident 6Auditor or his duly authorized representative, representatives from POS, CIIS, 7ESS and Office of the Commissioner. 8 94.2.1.4.6 Condemnation Report. After condemnation, the Chief, ACDD or 10equivalent unit shall furnish the Office of the Commissioner a Certificate of 11Condemnation. 12 134.2.1.5 OTHER ARTICLES SUBJECT FOR DISPOSITION 14 154.2.1.5.1 PERISHABLE ITEMS 16 174.2.1.5.1.1 Articles liable for Deterioration Goods Liable to perish or be 18wasted are eligible for immediate disposition pursuant to Section 2607 of the 19TCCP when certified to by the Customs Examiner/Appraiser under the 20following conditions: 21 221. Live animal under Chapter 01 of the HS Code which may die due to: 23 241.1 Exposure to extreme temperature. 251.2 Inadequate holding area facilities. 26 272. Goods covered by Chapters 02- 23 of the HS Code which may spoil 28due to: 29 30 2.1 Growth of micro- organism. 31 2.2 Enzyme action. 32 2.3 Oxidation. 33 2.4 Dehydration. 34 2.5 Insufficiency or absence of ideal storage facilities. 35 363. Chemicals and pharmaceuticals which may spoil or lose its potency 37and thus cannot be used for the purpose for which it was originally intended 38due to : 39 40 3.1 Insufficiency or absence of ideal storage facilities. 41 3.2 Improper handling 42 3.3 Original packing or container has been destroyed. 43 44 3.4 Expiry date is six months or shorter based on the expiry date in the 45 immediate packing. 46 474. Those which in the opinion of the of the District Collector, after 48certification of the appraiser/examiner is liable to perish or be wasted or to 49depreciate greatly in value by keeping or which cannot be kept without great 50disproportionate expense whether such property consists of live animals or of 2 3
325

1 1any article. 2 34.2.1.5.1.2 Immediate Disposition of Perishable Articles Goods liable to 4perish or be wasted are eligible for immediate auction within three (3) days 5from public notice. 6 74.2.1.5.1.3 Examination of the Perishable Article Upon apprehension of 8perishable goods, the apprehending office shall request the Assessment 9Office of the Port concerned to conduct a thorough examination and to submit 10a detailed inventory and appraisal report. The representative(s) of the 11Apprehending Office and the representative(s) of the consignee, if available, 12shall sign as witness(es) of the inventory. 13 14 4.2.1.5.1.4 Order of the District Collector After Issuance of the Warrant of 15Seizure and Detention, the District Collector of Customs, moto propio, or upon 16recommendation of the Law Division shall approve the disposition of said 17goods pending seizure proceedings pursuant to Section 2607 of the TCCP. 18Upon approval by the District Collector, the Law Division shall immediately 19inform the ACDD so that auction sale can be scheduled as soon as possible. 20 214.2.1.5.1.5 Setting of the Floor Price by ACDD The Auction and Cargo 22Disposal Division of the Port Concerned shall determine and set the 23reasonable floor price of the perishable items based on the inventory and 24appraisal report furnished by the Assessment Office as reference. 25 264.2.1.5.1.6 Proceeds of the Auction The proceeds of the auction shall 27deposited in the escrow account to be awarded to the party in whose favor the 28case will be decided. 29 304.2.1.5.1.7 Failure to Dispose the Perishable Articles If for any reason the 31articles are not dispensed of within ten (10) days, a written explanation must 32be submitted to the Commissioner of Customs jointly signed by the 33apprehending unit, the Collector of the Port and the Chief of the ACDD. The 34explanation must contain the recommended course of action. 35 364.2.1.6 ARTICLES UNFIT FOR USE OR SALE OR INJURIOUES TO 37PUBLIC HEALTH 38 394.2.1.6.1 Creation of a Board When any article, which in the opinion of 40the Collector, is a menace to public health, is seized or otherwise comes into 41the custody of the Bureau of Customs, the Collector of the port shall, if the 42matter is not disposable under the provisions relating to food and drugs, 43appoint a board of three members to examine the article. Whenever possible, 44one member shall be a representative of the Department of Health or of local 45health officer, and the two others shall be responsible officials of the Bureau 46of Customs at least one of whom shall be an appraiser. 47 484.2.1.6.2 . Duty of the Board Such board shall examine said article, and 49if the same is found a be unfit or a menace to the public health, the board 50shall so report in writing to the Collector, who shall forthwith order its 2 3
326

1 1destruction in such manner as the case may require. Health authorities at port 2of entry shall collaborate with the collectors in such matters with reasonable 3dispatch. 4 54.2.1.7 CONTRABAND 6 74.2.1.7.1 Disposition of Contraband Article of prohibited importation or 8exportation, known as contraband, shall, in the absence of special provision, 9be dealt with as follows: 10 11a. Dynamite, gunpowder, ammunition and other explosives, firearms and 12weapons of war and parts thereof, shall be turned over to the Armed Forces 13of the Philippines; 14 15b. If the article in question is highly dangerous to be kept or handled, it 16shall forthwith be destroyed; 17 18c. Contraband coin or bullion, foreign currencies and negotiable 19instruments shall accrue to the Stabilization Fund of the Central Bank subject 20to the payment of the expenses incident to seizure, including the reward to the 21informer, if any; 22 23d. Other contraband of commercial value and capable of legitimate use 24may be sold under such restrictions as will insure its use for legitimate 25purposes only; but if the thing is unfit for use or the Collector is of the opinion 26that, if sold, it would be used for unlawful purposes, it shall be destroyed in 27such manner as the Collector shall direct. 28 294.2.1.7.2 Disposition of Counterfeit, Fake Products and other Prohibited 30Articles In case of seized items liable for violation of Intellectual Property 31laws, rules, and regulations, the same shall be turned over to the Intellectual 32Property Rights Division for the latters condemnation/destruction. 33 34Disposition of articles such as dangerous drugs and controlled precursor and 35essential chemicals shall be handled by the Enforcement and Security 36Service observing the proper procedure and documentation on the turned 37over to the proper government agencies concerned. 38 39Dangerous drugs should be turned over to the Philippine Drug Enforcement 40Agency within twenty four (24) hours from the time it was seized. 41 424.2.1.7.3 . Disposition of Seized and Forfeited Right-Hand Drive Vehicle 43Right Hand Drive (RHD) vehicle, although legally considered as contraband 44items, can be source of government revenues. Disposition of RHD vehicles 45under customs custody which has been seized/forfeited pursuant to Republic 46Act No. 8506 shall be in the following manner: 47 48a. Seized/forfeited RHD shall be sold at public auctions pursuant to Sec. 492609 (d) of the TCCP. 50 2 3
327

1 1b. The general guidelines specified under this Manual for the conduct of 2auction sales shall be strictly observed, with the following supplemental rules 3for auction sales involving RHDs: 4 5b.1. Expenses for the conversion of RHDs to Left-Hand Drive (LHD) shall 6be born by the winning bidder; 7b.2. The advertisement for the auction sale of RHDs shall state clearly all 8requirements and restrictions. 9 10b. RHDs for sale shall not be mixed with other items in single lot. 11 12c. RHDs that have been successfully auctioned off shall be converted to 13LHDs. Solely for the purpose of converting RHDs into LHDs, a motor vehicle 14repair shop, duly accredited and authorized as such by the Department of 15Trade and Industry and by Land Transportation Office, shall be established as 16special customs bonded warehouse for a limited duration by the Bureau of 17Customs. 18 19d. RHDs found being operated on the streets shall be automatically 20seized/forfeited in favor of the government notwithstanding the fact that it was 21previously auctioned by BOC. 22 23e. After successful auction, a RHD shall be transferred from the port 24premises straight to the special customs bonded warehouse established for 25the conversion of RHDs into LHDs, either with the use of a tow truck or by 26loading the same onto a truck. The transfer of RHD to such facility on its own 27automotive power is strictly phohibited. 28 29f. The transfer of any RHD vehicle to such conversion facility shall be 30done upon approval by the Commissioner of Customs and shall be 31continuously underguarded by a Customs Guard. 32 33g. The conversion facility shall issue Certificate of Conversion, in the form 34to be prescribed by the BOC, under oath, certifying to the fact of conversion. 35 36h. The LTO-Motor Vehicle Inspection Service shall certify to the 37roadworthiness of the subject vehicle. 38 39i. The Chief, Auction and Cargo Disposal Division (ACDD), or his/her 40equivalent unit shall assign an examiner who shall confirm the fact of 41conversion and thereafter shall commit a report on his/her examination, 42supported with pictures of the converted vehicle. 43 44j. When all of the above requirements are fully complied with, the District 45Collector, in whose jurisdiction the converted vehicle was sold, shall issue the 46corresponding release/clearance order to the accredited conversion facility. 47 48k. No BOC certificate of payment shall be issued and transmitted to the 49LTO unless and until such time all the above requirements under paragraphs 50d.1-d.4 shall have been complied with. 2 3
328

1 1 2l. In cases of RHDs that remain unsold after two failed biddings, whether 3for lack of qualified bidders or acceptable bids, the Commissioner of Customs 4may order its use by the Bureau for purposes of revenue collection, or for 5fighting smuggling, or other fraud against the government; or for the official 6use of another national agency; or for donation to a government charitable 7institution, through the Department of Social Welfare and development, 8pursuant to Sec. 2610 of the TCCP, or to negotiated sale subject to the above 9processes, conditions and/or requirements for the conversion of RHDs to 10LHDs. 11 124.2.1.8 UNSOLD ARTICLES FOR WANT OF BIDDERS 13 144.2.1.8.1 Official Use by BOC or other Government Agency When any 15article remains unsold in at least two public biddings for want of bidders or for 16the lack of an acceptable bid, and the article is suitable for official use, then 17the Collector shall report the matter immediately to the Commissioner of 18Customs who may, subject to the approval of the Secretary of Finance, 19authorize the official use of that article by the Bureau of Customs to promote 20the intensive collection of taxes and/or to help prevent or suppress smuggling 21and other frauds upon the Customs. If the article is not suitable for such use, 22then it may be channeled to the official use of other offices of the National 23Government. 24 254.2.1.8.2 Donation to Government Charitable Institutions If the article is 26suitable for shelter or consists of foodstuffs, clothing materials or medicines 27then that article shall be given to government charitable institutions through 28the Department of Social Services and Development. The procedure shall be 29the same as indicated in Part II hereof. 30 314.2.1.8.3 Re-exportation If the article offered for sale is not suitable 32either for official use or charity, then the same may be re-exported as 33government property through the Department of Trade or any other 34government entity through barter or sale. 354.2.1.8.4 Other Modes of Disposition If the article cannot be disposed 36of as provided above, the Collector shall report the matter immediately to the 37Commissioner who may, subject to the approval of the Secretary of Finance, 38dispose of the article to the best advantage of the government in a negotiated 39private sale which shall be consummated in the presence of a representative 40of the Commission on Audit, in the manner provided for by the TCCP. 41 424.2.1.9 SMUGGLED ARTICLES 43 44Disposition of Smuggled Articles. Smuggled articles, after liability to seizure or 45forfeiture shall have been established by proper administrative or judicial 46proceedings in conformity with the provisions of the TCCP, as amended, shall 47be disposed of as provided for in Section 2610: Provided, that articles whose 48importation is prohibited under Section 102 subparagraphs b, c, d, e and j 49shall, upon order to the Collector in writing, be burned or destroyed, in such 50manner as the case may require as to render them absolutely worthless, in 2 3
329

1 1the presence of a representative each from COA, DOJ, BOC and is possible, 2any representative of the private sector. 3 44.2.1.10 MISCELLANEOUS PROVISIONS 5 64.2.1.10.1 Disposition of Proceeds of Auction The following charges shall 7be paid from the proceeds of the sale in the order named: 8 9a. Expenses of appraisal, advertisement of sale. 10b. Duties except in the case of abandoned or forfeited articles. 11c. Taxes and other charges due the government. 12d. Government storage charges. 13e. Arrastre and private storage charges. 14f. Freight, lighterage or general average, on the voyage of importation, of 15which due notice shall have been given to the Collector 16 174.2.1.10.2 Disposition of Surplus from the Proceeds of Sale of Abandoned 18or Forfeited or Acquired Articles Except in the case of the sale of 19abandoned or forfeited articles, and articles which are not claimed by payment 20of duties, taxes and other charges and compliance with all legal requirements 21within prescribed period, any surplus remaining after the satisfaction of all 22unlawful charges as aforesaid shall retained by the Collector for ten (10) days 23subject to the call of the owner. 24 25Upon failure of the owner to claim such surplus within this period, the 26Collector shall deposit such amount in a special trust fund which shall be used 27solely for the purpose of financing the compu1scacquisition of imported goods 28by the government as provided in Section 2317 hereof. 29 30In all such cases the Collector shall report fully his action in the matter, 31together with all the particulars the Commissioner and to the Chairman on 32Audit After one year, the unused amounts in such special trust funds, except 33for an amount necessary to finance forced government acquisitions before the 34first auction . the succeeding year, shall be turned over to the Bureau of 35Treasury as customs receipts." (R.A. 9135, April 27, 2001) 36 374.2.1.10.3 Accountabilities The respective BOC personnel responsible to 38carry out the provisions of this Order shall have the following accountabilities: 39 40a) The customs officers and personnel are directed to perform their 41responsibilities as required therein. 42b) The District Collector shall be responsible for the smooth, proper and 43effective implementation of this Manual in all cases, under his/her district 44jurisdiction, where it applies. 45c) The Chief ACDD shall ensure that all requirements herein for the 46issuance of appropriate notices and clearance are complied with. 47d) The Chairman and all members of the Auction Committee shall be 48responsible in ensuring that all participating bidders are promptly qualified and 49that the winning bids or failed bids are properly declared. 50e) The examiner or appraiser shall be liable for any error caused 2 3
330

1 1by/emanating from their examination/appraisal. 2f) All signatories to any certificate/report required under this Manual shall 3be liable for any flaw/defect found therein. 4g) The Chief ACDD shall be responsible for allowing any unauthorized 5personnel to conduct any examination or spot checking activity. 6 7 CHAPTER 5 AIRPORT OPERATIONS 8 9TARMAC OPERATIONS 10( GREEN ZONE ) 11 121. Scope 13 14Tarmac operations involves those Customs activities undertaken at areas 15immediately outside the passenger terminal building, generally at the vicinity 16of the aircraft stand and its tubes. These areas are indicated in figure 1. (next 17page) The aircraft itself is part of Tarmac operations as are the passageways 18under the building providing access to the loading area and baggage 19conveyor belts into the Baggage Reclaim are of the Customs Arrival Hall. 20 212. Unit of Primary Responsibility 22 23The mission of the AOD is to ensure that all articles brought into the country 24by incoming passengers and aircraft crew, including regular air cargo, are 25conveyed to the designated Custom Areas, where they will undergo proper 26clearance procedure. 27 283. Responsibilities of AOD 29 30In general, these encompass the enforcement of procedures designed to 31conform with the requirements of part 2, Title III Sections 1101 to 1111 of the 32Customs and Tariff Code. 33 34These sections are important and should be studied by every officer in AOD. 35They should be read in conjunction with Customs Administrative Order 1/90 or 36any other superceding Order or Direction. 37 38 3.1 Boarding Formalities 39 40 The Boarding Officer is the officer with responsibility for the proper 41boarding of the aircraft. This responsibility includes the actions and 42performance of this team. 43 44The formal reception of the aircrafts arrival is signified by the acceptance, by 45the Boarding Officer, of the aircrafts General Declaration, The Passenger 46List, the Crew List, the Cargo Manifest and the Store List. 47 48The Cargo Manifest also known as the Inward Foreign Manifest (IFM), is 49important in the proper accounting of regular cargo, while the other 50documents are necessary to passenger and crew processing, and stores 2 3
331

1 1reconciliation. 2 3The General Declaration should be written in English and signed by the Pilot4in-Command or the Operator of the aircraft or the Authorized Agent with the 5proviso that the Health Section of the General Declaration shall only be 6signed by Pilot-in-Command or some other responsible member or crew, who 7then must sign the General Declaration. 8 9It is permissable to accept the other documents forming the Gen.Dec. on 10separate official forms. 11 123.2 Supervision of Unloading 13 14This includes the disembarkation of passenger and crew unloading of 15baggage, cargo and mail. Designated members of the Customs boarding 16team provide careful watch over baggage to ensure their security and proper 17conveyance to the designated receiving and clearing stations. 18 193.3 Supervision of Passenger and Crew Disembarkation 20 21Since passenger and crew carry hand baggage and other personal items, 22some possibly carrying controlled articles and substances concealed on or in 23their bodies, it is important that Customs supervise their disembarkation and 24movement towards and into the designated areas. 25 263.4 Aircraft Surveillance 27 28This necessarily includes physical watch over the aircraft and the activities 29around the aircraft during its stay at the stand, preventing and taking action 30against any breach of Customs Laws, Rules and Regulations. 31 323.5 Aircraft Searches 33 34Whenever the situation requires, a search of the aircraft may be undertaken 35for concealed articles. 36This search is normally undertaken when all passengers have disembarked. 37Searches may, however, be also undertaken before a planes departure, for 38illegally loaded articles and cargo. 39While it is sometimes necessary for a search to be carried out by members of 40the Boarding Team, searches are usually undertaken by a dedicated Search 41team under the control of a Team Leader, who is responsible for their actions. 42 434. Duties and Responsibilities of A.O.D. Personnel 44 454.1 Custom Boarding Officer 46 47The CBO is the officer in charge of the boarding team and is responsible to 48the chief of A.O.D. For all AOD activities on the flight assigned to him. His 49specific function are as follows: 50 2 3
332

1 1 Musters and checks attendance and uniforms of Customs Inspector 2and Customs Guards assigned to the flight. 3 Receives and inspects requisite documents from the Flight Purser, 4before allowing the disembarkation of passengers, crew and the discharging 5of passengers. Baggage and cargo. 6 Supervises and controls the inspection, search of the aircraft after the 7disembarkation of passengers. 8 Delegates supervision and control of the aircraft to the Customs 9Inspector assigned to the flight, after the boarding formalities. 10 Performs other duties and responsibilities in accordance with existing 11laws, rules and regulations or on orders of a competent authority. 12 134.2 Customs Inspector 14 15 Assists the Custom Boarding Officer in the boarding formalities, 16inspection and search of the aircraft. 17 Checks the Customs Guards assigned to the flight to ensure that they 18are properly fulfilling their allocated assignments. 19 Supervises the discharging and loading of cargo and passengers 20baggage. 21 Maintains watch over the aircraft at its stand during its stay, or 22completion for all operations in case of terminating flights. 23 Signs, when necessary, The Certificates of Identification of departing 24passengers regard to the possession of high duty goods seen to be in their 25possession. 26 Performs other duties and responsibilities as may be directed from time 27to time by competent Customs Authorities. 28 294.3 Customs Commissary Guard 30 31 Responsible to the Customs Boarding Officer and Customs Inspector 32for the following: 33 34 Assists the Customs Boarding Officer and the Customs Inspector 35during the boarding formalities by clearing the aerobridge of unauthorized 36persons who may obstruct or otherwise delay the speedy presentation of 37arrival documents and disembarkation of passengers. 38 39 Assisting in any aircraft search for any articles which appear to be 40alien, concealed, and unmanifested 41 42 Supervising the checking and inventory of remaining commissary items 43conducted by the inflight catering personnel, After checking, he ensures that 44all containers are closed, locked, and sealed. For QTA flights(foreign flights 45with a quick turn around)where the unconsumed stores may remain on 46board until departure, he ensures that the containers are secure on board 47until departure. 48For other, terminating, flights, he ensures the secure removal of the locked 49and cleared containers to the in-flight warehouse/bonded store. 50 2 3
333

1 1 Prevention of any person from leaving or boarding the aircraft without 2permission from the Customs Boarding Officer during the boarding formalities, 3disembarkation of passengers and landing check of the aircraft. 4 5 Performs other duties and responsibilities as may be directed from time 6to time by competent Customs Authority. 7 84.4 Customs Ramp Guard 9Responsible to the Customs Inspector, His/Her duties are: 10 11 Supervising the discharging of cargos from the aircraft. 12 Ensures that all cargo consigned to Manila is properly discharged. 13 Underguards the transfer of cargo from aircraft side to designated 14public bonded warehouses situated in the MIA complex and receives a duly 15receipted Air Note(CAO 3-86)from the Customs Warehouseman assigned 16thereat. 17 Supervises the checking and inventory of inbound cargo into the 18warehouse against the cargo manifest. 19 Exercises maximum vigilance in checking for unmanifested cargo and 20contraband. 21 224.5 Customs Baggage Guards 23 244.5.1 Outward Baggage Guard 25 26Responsible to the Customs Inspector for the following: 27 Witnesses the inspection both manually and by X-Ray on all outgoing 28baggage. 29 Supervises the security, build up, stuffing and loading of passengers 30baggage from build up area into baggage containers or igloo. 31 Prepares an Air Note, indicating container/igloo numbers, to be 32acknowledged by the assigned Customs Inspector on board the out going 33aircraft. 34 Escorts the conveyance of passengers baggage from the loading area 35to the outgoing aircraft. 36 Performs other duties and responsibilities as may be directed from 37tome to time by competent Customs Authority. 38 394.5.2 Customs Incoming Baggage Guards 40 Responsible to the Customs Inspector for the following: 41 42 Supervises the discharging of containerized and loose baggage of 43incoming passengers from the incoming aircraft. 44 Escorts this baggage from aircraft to terminal baggage area and 45subsequent loading onto baggage conveyor. 46 Performs other duties and responsibilities as may be directed from time 47to time by competent Customs Authority. 48 494.6 Customs Exports Guard 50 2 3
334

1 1Responsible to the Customs Inspector for the following: 2 3 Guards Exports Cargo from receiving airline warehouse to outgoing 4aircraft ensuring that cargo is properly documented and is accompanied by 5valid export documents such as export declaration permits issued by a bank, 6a permit to load, issued by the Export Division. These must be duly receipted 7by the assigned Customs Inspector on board the aircraft. 8 Ensures that no prohibited or contraband goods are illegally packed 9with the accredited export packages. 10 Endorses all exports permits, Certificates of Loading, etc. 11 Performs other dutied and responsibilities as may be directed from time 12to time by competent Customs Authority. 13 144.7 Customs Exports Guard 15Responsible to the Customs Inspector for the following: 16 17 Supervises the discharge of mails and parcels from the aircraft. 18 Oversees and guards the transfer of mails and parcels from the Airport 19to the Airmail Distribution Center, with the corresponding AV 7 documents, 20accepting due receipt on the face of the air note issued for the full transfer of 21these items. 22 Monitors foreign transit mail which is conveyed to the staging area until 23transshipment to its final destination. 24 Performs other duties and responsibilities as may be directed from time 25to time by the competent Customs Authority. 26 275. Pre-Arrival Operating Procedures 28 295.1 Flight Assignments 30 31The Chief, AOD, shall ensure that the schedules of flight assignments are 32issued well in advance of flight arrival. 33 345.2 Flight Schedules 35 36Scheduled flights are listed in the winter and summer schedules furnished by 37the Airline Operators Council (AOC). 38Non-schedule or extra flights on the other hand shall submit Notices of Arrival 39to AOD. These documents shall be the basis for the preparation of Flight 40Assignments. 41 425.3 Boarding Team Composition 43 44The regular composition of a boarding team is as follows: 45 One (1) Boarding Officer 46 One (1) Customs Inspector 47 Two (2) or more Customs Guards to act as Commissary, Baggage, 48Ramp, Export, Transit and Mail Guards as necessary and subject to additional 49personnel based risk factors. 50Baggage Guards may deal with incoming and outgoing baggage. 2 3
335

1 1 25.4 Muster of the Boarding Team 3 4Thirty minutes prior to the ETA of a flight, the assigned boarding officer shall 5muster his team at the vicinity of the arrival bay or in AOD office in order to: 6 Check attendance. 7 Inspect uniforms and fitness for duty of personnel. 8 Conduct briefing on any available flight information to include any 9general or specific instructions. 10 115.4.1 Any member of the boarding team shall not be allowed to assume duty 12under any of the following conditions. 13 14 Under the influence of liquor. 15 Incorrectly dressed. 16 Not in physical condition to perform his function. 17 Carrying firearms. 185.5 Replacement of Team Member 19If any member is unable to assume duty pursuant to 5.4.1 the Boarding 20Officer, or in his absence the next in rank shall immediately report the matter 21to the chief, AOD or the duly designated Duly Officer for the proper 22replacement. 23 246. Arrival Operating Procedure 25 266.1 Aircraft/Flight Identification Code 27(Listed in Annex A.) Is the Identification Code which is being used in the 28Aircraft Arrival display board and monitors. Also included in this Annex is 29some useful information on aircraft indentification. 30 316.2 Submission of Document 32Before any passenger disembarkation baggage and/or cargo unloading is 33permitted, certain documents are presented by the flight purser or responsible 34and competent member of the crew to the Custom Boarding Officer. These 35are needed for Entry before any person or thing is permitted to be landed. 36This are listed as follows: 37 386.2.1 General Declaration 39(See Sec 1105) containing the following information of the aircraft owner or 40operator, aircraft registration marks nationality and flight number. 41 42The General Declaration Shall Contain: 43 44 Point of Clearance and entry and date of arrival 45 Customs Clearance at the last airport of departure 46 Itinerary of aircraft and departure date from each airport of call 47 Names and Nationalities of crew members 48 496.2.2 Passenger Manifest 50 2 3
336

1 1 Names and Numbers of passengers 2 Their seat numbers 3 Boarding and destination airports of passenger 4 56.2.2 Cargo Manifest ( includes Transit Cargo Manifest ) 6 7 Air waybills 8 Brief details of consignments 9 10 116.3 Clearance to Unload 12Upon receipt of the above documents and with the concurrence of the Medical 13Officer of the Bureau of Quarantine, Department of Health (DOH), Customs 14Boarding Officer shall give clearance to disembark passengers and unload 15baggage and cargo. 16 176.4 Disembarking of Passengers and Crew 18The boarding teams are to ensure that no passenger or crew member 19disembark other than thru the designated disembarkation channels. At NAIA, 20the only disembarkation channels allowed are the tubes connecting the plane 21to the terminal. It may happen however, for some special flight, that 22passengers and crew are disembarked on the airport tarmac and into waiting 23vehicles. In these cases, the boarding team must ensure that all passengers 24and crew are conveyed directly to the designated Customs arrival clearance 25area. 26 276.5 Unloading of Check-In Baggage 28 29It is the duty of Customs baggage Guard to ensure that the baggage is 30conveyed, without interference, directly to the conveyor belts and transported 31into the Customs Arrival Area. 32 336.6 Unloading of Cargo 34 35In addition to passenger and passengers baggage, the aircraft may carry 36regular cargo, which must be conveyed to the designated Customs Public 37Bonded Warehouse. 38Annex C contains the warehouse assignment of aircraft calling at NAIA. 39Customs Guard must be on alert to detect any unmanifested cargo or 40erroneously manifested cargo.i.e. on the manifest but not on the aircraft. They 41must oversee the cargo from aircraft side to the warehouse, until properly 42receipted by the warehouse receiving personnel. 43Special attention should be given to human remains as cargo. 44 457. Aircraft Search Procedure 46 47Aircraft search is a procedure for detection for all articles which appear to be 48alien or out of place in an aircraft. For customs purposes it is to search for and 49find any uncustomed articles that may be concealed on the aircraft. Annex B 50provides further detailed information. 2 3
337

1 1 27.1 Legal Basis 3 47.1.1 Section 602. Function of the Bureau 5 The general dutiespowers and jurisdiction of the bureau shall include, 6inter alia: 7c. The supervision and control over the entrance and clearance of 8aircraft engaged in foreign commerce(Tariff and Customs Code of the 9Philippines, as amended.) 10 117.1.2 Section 2202. Special Surveillance for Protection of Customs Revenue 12and Prevention of Smuggling. 13 ..In order to prevent smuggling and to prevent smuggling and to 14secure the collection of the legal duties, taxes and other charges, the customs 15service shall exercise surveillance over the coast beginning when . . . aircraft 16enters Philippine territory and concluding when the article imported therein 17has been legally passed through the customshouse. 18 (Tariff and Customs Code of the Philippines as amended.) 197.1.3 Section 2203. Persons having Police Authority 20 For the enforcement of the tariff and customs laws the following 21persons are authorized to effect searches seizures and arrests conformably 22with the provision of said laws 23 a. Officials of the Bureau of Customs, district collectors, deputy 24collectors, police officers, agents, inspectors and guards of the Bureau of 25Customs . . . 26 (Tariff and Customs Code of the Philippines as amended.) 27 287.1.4 Section 2210. Right to Search Vessels or Aircrafts and Persons or 29Articles Conveyed 30 Therein. 31 32 It shall be lawful for any official or person exercising police 33authority under the 34 provisions to go aboard any aircraft within the limits of any 35collection district and to 36inspect search and examine said . . . aircraft and any trunk package box or 37envelope on board and to search any person on board the saidaircraftto 38use all necessary force to compel compliance; and if it shall appear that any 39breach or violation of the customs and tariff laws of the Philippines has been 40committed whereby or in consequence of which suchAircrafts or the article 41or any part thereof on board of or imported by suchAircraft is liable to 42forefeiture to make seizure of the same of any part thereof..The power 43of search herein above given shall extend to the removal of any falls nottom, 44partition bulkhead, or other abstraction so far as may be necessary to enable 45the officer to discover whether any dutiable or forfeitable articles may be 46concealed thereinNo proceeding herein shall give rise to any claime 47for damage thereby caused to articleor aircraft. 48( Tariff and Customs Code of the Philppines, as amended.) 49 507.2 Type of Search 2 3
338

1 1 27.2.1 Purpose 3 Routine Search When an aircraft is not under specific suspicion or 4the search is not as a result of any derogatory information report; to ensure 5that no articles are left by passengers. 6 7 Positive Search When the aircraft is under specific suspicion as a 8result of a derogatory information report of dutiable and/or forfeitable articles 9concealed on the aircraft. 10 117.2.2 Methodology 12 Routine Method search is limited to parts and areas within sight, view 13ang reach; no parts of the aircraft are detached or unscrewed. 14 15 Semi-rigid Method Search includes the removal of parts or paneling 16within reach and when the derogatory information report pin-points the 17location of the dutiable and/or forfeitable articles concealed in the aircraft. 18Customs may need assistance of maintenance personnel of the airline. 19 Rigid Method Search of all areas of the aircraft including external 20areas, theunderbelly and cargo holds. Periodically conducted on aircraft 21coming from. Or transitting through high-risk countries, or targeted as a result 22of a non specific derogatory information report wherein the location of 23uncostumed or prohibited articles concealed on the aircrafts is not known.a 24search of this depth requires assistance of suitably qualified flight and/or 25ground maintenance engineers. 26 27 7.3 Target for Search 28 29 Airlines with past records of smuggling 30 Airlines whose employees have past records of smuggling 31 Flights from countries / airports known to be sources of highly dutiable / 32taxable and / or prohibited drugs and other anti-social articles. 33 Flight transiting through countries / airports known to be sources of 34highly dutiable / taxable and / or prohibited drugs and other anti-social articles. 35 Flights covered by derogatory information or intelligence reports to be 36carrying dutiable / forfeitable articles concealed on the aircraft. 37 Flights from foreign airports without an Advance Notice of Arrival 38 397.4 Administrative Preparations 40 417.4.1 Division shall maintain in suitable forms: 42 43 Flight Risks Profile 44 Profile on Detections / Seizures of Uncostumed Items from Aircraft 45 Prifile on Detections / Seizures of Prohibited Drugs from Aircraft. 46 Profile Detections / Seizures of other Anti-Social Articles from Aircrafts 47 Cabin Configuration of all Aircraft calling at the NAIA. 48 49 507.4.2 Purpose - Division shall maintain at leased ten (10) sets of tool kits for 2 3
339

1 1 Aircraft search to include: 2 3 Screw-driver 4 Philips Screw-driver 5 Flash light 6 Mirror with extending handle 7 Snap-type Fastener locks 8 Hand-held or lapel radios, when available, on an issue-and-return 9basis. 10 At least one available camera 11 Fully stocked Narcotest kits. 12 137.4.3 A supply of forms indicating Aircraft Search Points ( Check Lists )for 14the various types of aircraft operating through NAIA. 15 167.5 Operational Procedures 17 187.5.1 Pre-Arrival Phase 19 The chief, AOD, or his Operations Assistant prepare the assignment of 20the Search Teams/s, as the needs arise 21 The Search Team Leader assembles the Team thirty (30)minutes 22before the arrival of target aircraft to: 23 Request for Airline representative, as witness. 24 Request for Flight / Ground engineers from airline maintainance, if 25needed. 26 Check serviceability of tools & equipment, including radios 27 Inspect team for: 28Attendance 29Appropriate dress 30Serviceability of tool kits and other equipment fitness of personnel. 31 Conduct briefing on available intelligence. 32 Assign work groups to specific areas and issue their Aircraft Search 33Points Lists. 34 357.5.2 Arrival Phase 36 37 The Team Leader shall ensure that the area in which the aircraft is 38parked, is cleared of all authorized personnel vehicles. 39 After disembarkatuion of passengers, team elements / members 40proceed to assigned areas. 41 Units report to the Team Leader, their location, in readiness to proceed 42with the search. 43 Team Leader issues the order to proceed with the search; 44(Refer to Annex B. Aircraft search points.) 45 Search Team elements / members proceed with the search in 46accordance with their Check List. If the search should result in negative 47findings, each reporting unit / member will complete the Check List report and 48submit same to the Team Leader 49 Should uncustomed items be found, the unit / member shall 50immediately informed to the Team Leader who should proceed immediately 2 3
340

1 1directly to the area and evaluate the situation. 2 The duty collector should be informed in the event of an initial positive 3finding. 4 If a camera is available, photographs of the item in its concealed 5positions should be taken where possible. 6 Items found should be retrieved from concealment under the direct 7supervision of the Duty Collector / Chief, AOD / Search Team Leader. 8 Upon and during retrieval, photographs of the item should be taken. 9 Itens retrieved from concealment shall be placed in a single bag / 10container and taped / Sealed. 11 Taped / sealed items should be taken and, after all necessary 12documentation has been completed, released to the In-Bond Section, 13Baggage assistance Division, under Held Baggage Receipt(HBR). Special 14arrangements for custody will sometimes be in force for certain items e.g. 15Narcotics( these are often handled by NARCOM or other competent agency 16High value goods may be deposit in the Collection Division safe. 17 188. Aircraft Surveillance 19 20Upon arrival of the aircraft at the airport, all members of the Team assigned to 21the flight shall maintain close watch on all persons entering, leaving, or in the 22vicinity of, the aircraft. Special attention should also be paid to baggage and 23cargo being unloaded or loaded, in order to detect violations / evasions of the 24tariff and customs laws, rules and regulations. 25 26INTELLIGENCE AND ENFORCEMENT OPERATIONS 27 (RED ZONE) 28 291. Scope 30 31 Intelligence and Enforcement Operations cover the Satellites, the 32Concourses, Transit Transfer Area, Inner Gate / Pre-Arrival Areas, 33Elevators fronting the Transit Desk, Comfort Rooms, Escalators connecting 34the Satellites to the Departure Area, Immigration Area, Southern end of 35Carousel Area and the Conveyor Belts at the Ramps Area during X-ray 36Operations. 37 382. Unit of Primary Responsibility: 39 40 INTELLIGENCE AND ENFORCEMENT CONTINGENT 41 42 The contingent compromises officers of the following; 43 44 ENFORCEMENT AND SECURITY SERVICE COMMAND and the 45CUSTOMS INTELLIGENCE AND INVESTIGATION SERVICE UNIT 46 473. The mission of the Intelligence and Enforcement Contingent is to: 48 49o Suppress and prevent smuggling and other frauds against Customs, 50o maintain peace and order, 2 3
341

1 1o secure life and property within the Customs zone,pursue inquiries 2regarding smuggling incidents at NAIA, with a view to securing evidence and 3statements indicating an offence under the Tariff & Customs Laws of the 4Philippines, leading to arrest and prosecution if necessary. 5 63.1 Functions of the Intelligence and Enforcement Contingent 7 83.1.1 Security Operations 9The posting of overt uniformed personnel to stationary assignments at various 10offices and installations to secure & protect personnel and property and 11cargoes within the customs zone. 12 133.1.2 Anti-smuggling Operations 14The posting of both over uniformed and covert plain clothes, personnel, to 15prevent and suppress smuggling and other frauds upon the customs. 16 173.1.3 Service of Warrants 18Warrants are served in the conduct of administrative and / or criminal 19proceedings in relation to the traffic and customs administration. 20 213.1.4 Detection and Recovery Operations 22The conduct of search & recovery operations for the purpose of detecting and 23recovery of smuggled articles, the seizure of same, and the arrest of violators 24of the Tariff and Customs Laws. Rules, and Regulations. 25 263.1.5 Traffic Management 27To establish and enforce personnel and vehicle identification, movement, and 28traffic control in the customs zone. 29 303.1.6 Intelligence Operations 31The establishment and management of a joint Intelligence and Enforcement 32Center manned by ESS and CIIS personnel to receive, collect, collate and 33evaluate information on violations and evasions of the Tariff and Customs 34Laws, Rules and Regulations and to translate same into useable intelligence 35with recommended courses of action to responsible end-users. 36 373.1.7 Liaison 38To serve as the contact office between the airpot and other government and 39non-government agencies in the enforcement of Tariff and Customs Laws, 40Rules and Regulations. 41 423.1.8 Administrative Intelligence 43To conduct extensive detection work and to intensify administrative 44intelligence activities in investigating administrative offenders in the customs 45service, to identify weaknesses in the tariff and customs administration and 46make recommendations for corrective measures. 47 483.1.9 X-ray Operations 49 50To operate the mobile x-ray unit and to scan baggage of passengers coming 2 3
342

1 1from high risk countries and ports for high duty / tax articles, prohibited drugs 2and other anti-social articles such as firearms. 3 44. Duties and Responsibilities of Personnel 5 64.1 Supervising Intelligence Officer 7 84.1.1 Security Operations 9-Supervises and coordinates the activities of a group of Intelligence Officers 10involved in different intelligence fuctions such as investigations on acts of 11economic espionage, sabotage, subversion and violations of the Tariff and 12Customs Laws in all the four major areas of operation, namely, 13o Ninoy Aquino International Airport 14o Customs Bonded warehouses 15o Piers Operations 16o Regional Field Units 17- Takes charge of the initial review of the reports submitted by lower level 18officers on their security mission activities and recommends solutions thereon. 19- Recommends training needs designed to raise the competence of the group. 20- Does related work. 21 4.2 Customs Agent 22o Arrests or detains offenders or suspicious characters found in 23unauthorized places within the area of jurisdiction. 24o Seizes the effects and instruments of violations. 25o Gives evidence in court. 26o Makes report of cases and activities to superior. 27 4.3 Customs Policeman 28o Enforces law and order on aircraft at airport within customs areas for 29the protection of life, property and the revenue. 30o Maintains peace and order within the customs areas & facilities. 31 32o Apprehends arrests and investigates violators of tariff and Customs 33Laws, Rules and Regulations. 34o Controls and regulates traffic flow within the customs zone. 35o Prepares and submits necessary reports. 36 375. Operating Procedures 385.1 The district Commander, ESS and the Officers-in-Charges, CIIS, 39prepare their respective assignments for their personnel based on a 2-shift or 40a 3-shift schedule on a weekly or monthly basis, as the case may be. 415.2 The Intelligence and Enforcement Operations Center 42 The small, integrated group of CIIS and ESS personnel shall: 43o Function as the nerve center of the Customs Passenger and Baggage 44Clearing Operations assisting the District Collector, Deputy Collector, and 45Chief of Arrival Operation Division in making responsive decisions on a 46continuous flow of intelligence, covering general or specific activities. 47o Gather and receive information from various sources. 48o Record all information received and collected and process it as follows; 49o Collation 50o Evaluation 2 3
343

1 1o Analysis 2o Dissemination 3(a) Indicative Intelligence is disseminated to alert concerned units on the 4tendency, or possibility, of an attempt to smuggle, defraud the government of 5its lawful revenue, or effect entry of prohibited, banned articles. 6(b) Tactical Intelligence is disseminated to action units to prevent or 7suppress attempts to smuggle and defraud the government to its lawful 8revenue, or effect entry of prohibited, banned articles. 9(c) Strategic Intelligence is relating to previous information and intelligence 10on file to determine developing patterns, and to plan future operation/pro11actions to meet general or specific situations. 125.2.1 Input and maintain all known intelligence into categorized data bases 13for easy reference and form the basis for a Risk Management Program. 145.2.2 Publish spot, and periodic, intelligence summaries to guide operational 15units in their day-to-day efforts to prevents and detect smuggling in all its 16forms. 175.2.3 Operate and maintain the Closed Circuit Television (CCTV) to record 18day to day operations at the Custom Arrival Area. 195.2.4 X-ray scans baggage from flights arriving or passing through high risk 20countries or other selected baggage. 215.2.5 Receive from the Customs Baggage Guard, AOD, and the train of 22containerized baggage. 235.2.6 Supervise the unloading of baggage from containers and loading on 24the X-ray belt for scanning and subsequent loading onto the conveyor belt 25feeding the carousels at the baggage Claim Area of the Customs Arrival Hall. 265.2.7 Baggage with positive findings, or suspected of containing high 27duty/tax articles, drugs or psychotropic substances and/or other anti-social 28articles, such as firearms, other weaponry, explosives, etc., is held temporarily 29and secretly marked in order to alert IEG operatives at the carousel (baggage 30claim) and the Examiners and/or flight Supervisors. 315.2.8 After the last clear baggage has been sent up the conveyor, baggage 32with secret markings (held until last so as clear the area of other passengers 33and their baggage is sent up to the baggage reclaim area, data and 34description of suspect baggage is transmitted but the X-ray team to the 35carousel surveillance team and the IEOC through radio communication. 365.3 Carry out surveillance of areas between aircraft and customs arrivals 37hall, i.e., Satellite-concourse-Immigration-Carousel. 385.4 Secure advance copy of Passenger Manifest from Airline Office or 39Customs Boarding Officer for scanning. 40o Target passengers, or suspects who are subject of information or 41intelligence provided by IEOC, or other sources. 42o Profile passengers based on port of embarkation, nationality etc. 435.4.1 Attempt to identify or recognize targets or profile passengers as they 44emerge from the satellite tube. 455.4.2 Carry out surveillance of targets, suspects or profiled passengers as 46they move through the concourse, identify travel companions, or other 47persons, if any, handovers, or possible dead-letter drops 485.4.3 Coordinate with Immigration Supervisor, where necessary, to obtain 49additional data on targets from their Debarkation Cards. 505.4.4 Continue surveillance and profiling at the Baggage Claim Carousel by 2 3
344

1 1moving elements or discreet observation from suitable sites, checking 2information with X-ray team, if available 35.4.5 Be prepared to contact relevant airline in order to obtain a copy of a 4suspect Passengers Nominal Record, (PNR) 56. Handling Information The Future 6 It is very probable that the work of the Contingent will greatly develop 7during the next few years with the installation of a modern data base. Direct 8access to this data base will, of course, be restricted for security reasons. 9However certain officers of E.S.S. and CIIS will have access to the 10information. As is normal with high security computer systems, access is 11graded that is to say, certain information will electronically be accessible 12only to high ranking officers. However, it should be possible to access much 13of the data through the Senior Officers of the Contingent. Should any officer 14have reasonable suspicion about a certain passenger, it should be possible to 15find out, with a phone call, whether or not the Department has further previous 16interest in Him. 176.1 Accessing the Database 18 To carry this scenario further forward, if there is nothing on the data 19base regarding the suspect, the officer will be able to inaugurate an entry into 20the data base by completing a form with as much detail as possible and 21submitting it through official channels. Regardless of how scant the 22information may be it will be considered for inclusion. Clearly the Officer 23should try to include the obvious identifying things regarding the subject-Full 24name, address in Philippines, age, approximate age, height, sex, passport 25number & nationality etc. All this is desirable but if not available a form could 26still be considered. Obtaining information such as this is very difficult without 27possibly arousing the suspicions of the subject. However it is surprising how 28may crooks believe that they are too smart to be caught out by a few simple 29questions. 306.2 Building the Database 31A data base, which, after all is just a store of available information, is only as 32good as its content. That content can be provided from many sources-a 33record of previous offences, well judged suspicion from an Examiner, 34information received from an informer etc. etc. It will be of prime importance 35that all information, however received should be evaluated and catalogued. 36This will, at NAIA, as elsewhere within the BOC be a task for fully trained 37officers of ESS and CIIS. Much of the information will be received from 38outside sources but a large portion can be contributed from alert officers as 39has already been discussed. A supply of forms will soon be available for use 40by these officers. 416.3 First Steps 42 Establishing a full database cannot be done overnight. |It will probably 43take at least two years to build up into a really effective weapon against 44smuggling. However the process has started and the first stage, the planning 45and setting up, is nearly complete. In the very near future, the second stage 46will be ready. This will provide access to detailed information on completed 47cases. CIIS and ESS will have these records on diskette and will be able to 48access all information thus available. 496.4 Integration and Co-operation 50 The next stages in the build up of this technology will take place as 2 3
345

1 1soon as the necessary high-tech security computers can be installed. This 2operation will take some little time but, given the co-operation of the staff 3concerned, should eventually provide a powerful weapon in the war against 4smugglers. All officers should remember that it is their duty to report any 5information or suspicions through official channels to the Contingent. 6 7CUSTOMS DUTY FREE SHOP 8OPERATIONS 9(BLUE ZONE) 10 111. SCOPE 12 13The Duty Free Shop of the Philippines caters to the need of the travelling 14clientele of the airport by affording duty-free articles for their travel needs, 15gifts, and presents for welcoming family members, relatives and/or business 16associates. The Customs Duty Free Shops Division supervises and monitors 17all Duty Free Shops/Outlets at the Arrival Area, the Arrival Extension Area, the 18Duty Free Shop Plaza and other outlets distributed throughout the Districts 19territorial jurisdiction. 20 211.1 Unit of Primary Responsibility 22 23CUSTOMS DUTY FREE SHOPS DIVISION 24 251.2 Activities of the Customs Duty Free Shops Division 26 271.2.1 Supervises and controls the movements and transfers of imported 28cargoes arriving at the airport and other ports of entry, to the warehouses of 29the Duty Free Shops (Operator), and releases items to its stores and sales 30outlets. 31 321.2.2 Monitors the sales of Imported Duty Articles Customs personnel 33oversee the sales activities of all Duty Free Philippines stores and outlets to 34ensure that only qualified purchasers are served and compliance with the 35customs laws, rules and regulations is observed. 36 371.2.3 Maintenance of Records 38Maintenance of up-to-date and systematic records. Monitoring activities are 39recorded in various forms of reports to effectively control storage, 40withdrawal/release from bonded warehouses to the stores and outlets 41 421.2.4 Collection of Duties, Taxes and other Charges 43The Monitoring and Control measures are also designed to check purchases 44in excess of the privilege allowances for the purpose of assessing and 45collecting duties, taxes and other charges on such excesses. 46 471.25 Charges Collection 48Assistance is given in the collection of fees and other charges. The privilege 49to operate Customs Bonded Warehouse provides for fees and other charges 50to be paid periodically to BOC. 2 3
346

1 1 21.2.6 Seizure of Various Articles 3Articles which are illegally withdrawn or sold are liable to seizure. The 4continuous monitoring and surveillance conducted by customs personnel is 5aimed at detecting illegal withdrawals from the Customs Bonded Warehouse, 6sales to unauthorized persons, and excess purchases upon which no duty or 7tax were paid. 8 91.3 Duties and responsibilities of Personnel 10 111.3.1 Duty Collector 12 13o Supervises the conduct of personnel in the performance of their 14assigned and responsibilities. 15 16o Conducts occasional spot checks of actual sales to arriving and transit 17passengers to see if the sale is being conducted in accordance with 18prescribed rules and regulations. 19 20o Seizes illegally withdrawn or sold articles pursuant to existing laws, 21rules & regulations. 22 23o Prepares and submits incident and discrepancy reports to higher 24authorities with regards to the conduct of spot-checking activity. 25 261.3.2 Supervisor 27 28o Monitor the sales of all imported duty/tax free merchandise in 29accordance with existing laws, rules & regulations. 30 31o Monitors and records all sales invoices, daily sales and submits reports 32thereof. 33 34o Seizes illegally withdrawn or sold articles pursuant to existing laws, 35rules & regulations. 36 37o Prepares and submits incident and discrepancy reports to higher 38authorities with regards to the conduct of spot-checking activity. 39 401.3.2 Customs Guard 41 42o Ensures that only those articles purchased are taken out by the 43passengers. 44 45o Escorts passenger who have purchased goods in excess of their 46privilege to the Customs Examination Area and notifies the collector/Appraiser 47on duty of the purchases made. 48 49o Conducts Surveillance activities, especially during peak sales hours. 50 2 3
347

1 1o Reports to the Collector of Customs or Chief, Customs Duty Free 2Shops Division, All violations of customs rules and regulations that come to 3his attention. 4 51.4 Procedures 6 71.4.1 The Chief, Customs Duty Free Shops Division, prepares the Monthly 8Schedule of Assignments of the personnel of the Division, one (1) week 9before the end of the month and posts the Schedule on the Bulletin Board. 10 111.4.2 Thirty (30) minutes before assumption of duty, the shift supervisor in all 12area of operation, shall muster those assigned to his/her shift at their 13respective areas of assignment, to: 14 15o Check Attendance 16 17o Inspect uniforms and physical condition of personnel 18 19o Conduct briefing on general, and/or special instructions. 20 21o All Duty personnel station themselves in their proper areas of 22assignment, and watch proceeding as arriving passengers move through the 23concourse to the Duty Free Shops Stores at the Arrivals and the Arrival 24Extension Area 25 26o At random, Conducts checks on purchasing passengers status as 27stamped on his/her passport and verifies same with the passenger, verifies 28also that the required purchase data has been indicated on the 29passport/airline ticket by the DFP sales representative. 30 31o As the occasion arises escort passenger who has purchased in excess 32of the privilege limit to the Customs Arrival Area and refers the matter to a 33flight supervisor/Duty Collector/Chief, Arrival Operations Division for the 34assessment of duty/tax due on the excess purchase/s. 35 36o Apprehend persons who are not passengers, but have availed 37themselves of the duty free privileges and seize all articles illegally purchased. 38o Prepare Offense Report and escort the person to the Duty Collector or 39Chief, Arrival Operation Division for proper disposition. 40 41Section 4 42Passenger & Baggage Clearance Operations Yellow Zone 43 44PASSENGER & BAGGAGE PROCESSING OPERATIONS 45(YELLOW ZONE) 46 471. Scope 48 49Passenger and baggage Processing Operations involve those Customs 50activities undertaken from the Carousel Area (baggage Claim Counters) to the 2 3
348

1 1Exit Gates the Customs Arrival Examination Area. 2 32. Unit of Primary Responsibility 4 5ARRIVAL OPERATIONS DIVISION, 6PASSENGER SERVICE 7 8The mission of the Arrival Operations Division is to facilitate processing of 9passenger and baggage through customs, to collect duties, taxes and other 10charges on prescribed articles, and to take positive action against persons 11evading or attempting to evade duty, tax, prohibition or any other control in 12force at the time by virtue of the tariff and customs law, rules and regulations. 13This action includes the seizure, where necessary of the goods in question 14and arrest, where necessary, of persons concerned. 15 163. Functions of the Arrival Operations Division 17 183.1 Examination of Baggage of Incoming Passengers 19The opening, searching and verification of the contents of baggage selected 20for examination, in order to assess the liability to duty or tax on goods 21declared or not declared as the case may be. 22 233.2 Assessment of Duties and Taxes 24The determination, by examination of the amounts of duties and/ or taxes due 25on any article, and the collection of such amounts. 26 273.3 Seizure of Articles 28The seizure, where necessary, of articles not properly declared or prohibited 29articles, in accordance with laws, rules and regulations. 30 313.4 Examination/Inventory and appraisal of Seized Articles 32The examination/inventory of seized/abandoned articles and the appraisal 33thereof as a pre-requisite to seizure proceeding or disposal. 34 353.5 Processing of Re-exportation Commitments 36The examination, appraisal and classification of imported goods subject to re37exportation, to determine the amount and mode of guarantee that may be 38needed to protect government interest. (See Annex G of this section) 39 403.6 Processing of Certificates of Identification 41The examination & verification of articles previously exported from the 42Philippines covered by a certificate of identification. (See Annex H of this 43section) 444. Duties and Responsibilities of Personnel 45 464.1 Chief Customs Operations Officer 47Exercises general supervision over all activities in the Customs Arrival Area. 48 494.2 Customs Operations Assistant Chief 50Assists the Chief Customs Operations Officer and takes over in the absence 2 3
349

1 1of the chief. 2 34.3 Flight Supervisor/Appraiser 4 5o Supervises the examination, classification and appraisal of imported 6articles for customs purposes. 7 8o Assigns and reviews the work of a team of examiners engaged in the 9examination, classification and appraisal of articles. 10 11o Instructs and advises subordinates on current procedures and ruling 12 13o Prepares seizures reports 14 15o Does related work. 16 174.4 Customs Operations Officer III/Examiner 18 19o Determines whether the packages for examination and their contents 20are in accordance with the Baggage Declaration, Entry, Invoices and other 21pertinent documents. 22 23o Completes a return of the detailed description of the articles as 24quantity, measurement, and weight and tariff classification and ensures that 25these articles are not imported contrary to law. 26 27o Submits samples to the laboratory for analysis, when feasible to do so, 28and when analysis is necessary to the proper classification, appraisal and/or 29admission into the Philippines of imported articles. 30 31o Carries out related work as may be assigned to him/her from time by 32competent customs authorities. 33 345. Pre-Arrival Operating Procedures 35 365.1 Flight Assignments 37 38o The Chief, A.O.D., shall ensure that the schedule assignments are 39issued in advance of flight arrivals. 40 415.2 Flight Schedules 42Scheduled flights are listed in the winter and summer schedules furnished by 43the airlines Operators council (AOC). Notices of Arrival for non-scheduled 44extra flights shall be the basis for the preparation of flight assignments. 45 465.3 Composition of Flight Assignments 47o The Regular Composition of a flight assignment is as follows: 48 49o One (1) Flight Supervisor/Appraiser 50 2 3
350

1 1o One (1) COO III/Examiner for every fifteen (15) passengers or as 2previously agreed upon by the Collector of Customs and the AOC. 3 45.4 Muster of Flight Team 5 6o Fifteen (15) minutes prior to ETA of a flight, the assigned Flight 7Supervisor shall muster his team at the Customs Examination Area to: 8 9o Check Attendance. 10 11o Inspect uniforms and physical condition of personnel. 12 13o Inspect tool kits. 14 15o Conduct briefing on flight information available to include general 16and/or special instructions. 17 185.5 Disqualification for Assuming Duty 19o Drunkenness 20 21o Improper uniforms 22 23o Physical discomfort/sickness 24 25o Any team member who is unable to assume duty shall be reported by 26the Flight Supervisor to the Chief, Arrival Operation Division, or the duly 27designated Duty Officer, for proper replacement. 28 296. Arrival Operating Procedures 30 316.1 The team members assume their respective stations upon 32announcement of the arrival of the flight. 33 346.2 Conduct visual assessment and profiling of passengers as they await 35customs clearance. Control inflow of passengers to the examination tables at 36a scale of one examiner to one passenger or contained, family group. 37(See Annex C&D of this Section and also Annex B of Section 2 of this Manual 38for Passenger Risk Profiling Visual Indicators) 39 406.3 Conduct interview of passengers based on the Baggage Declaration, 41Passport, Airline Ticket and other related documents as the examination of 42the baggage is conducted (Annex C) 43 446.3.1 The Customs Examiner at this point must clearly establish the 45ownership of the bags and contents presented to him/her by the passenger. A 46recommended method of ensuring the ownership is to use the following, or 47similar, questions. The questions are sometimes referred to as coffin nail 48question, as their purpose is to nail down, or establish ownership of the 49baggage and contents. 50 2 3
351

1 1 2o ARE THESE ALL YOURS BAGS? 3 4o DO ALL THESE BAGS BELONG TO YOU? 5 6o DID YOU PACK THE BAGS YOURSELF? 7 8o ARE FULLY AWARE OF THE CONTENTS? 9 10o HAVE THE BAGS BEEN UNATTENDED SINCE YOU PACKED 11THEM? 12 13o HAS ANY OTHER PERSON ASKED YOU TO CARRY ANYTHING 14FOR THEM? 15 166.3.2 for advice on Baggage Examination See Annex A of this Section. 17 186.4 Process passenger and Baggage 19o Clear passenger and baggage where are no dutiable/ forfeitable 20articles found. 21 22o Where declared dutiable/taxable articles in commercial quantities are 23found, escort the passenger with his/her baggage to the Secondary 24Examination Area and, after referring them to the see Annex I (Terminal 25Release) 26 27o Where dutiable or prohibited goods are found, and or the passenger is 28otherwise suspect, due to profiling or derogatory report or intelligence, escort 29passenger to an Exclusion Room or search and apply relevant search 30procedure. 31o See Annex A (Baggage Search) & B (Search of Persons) 32 33o Where there are high duty and/or tax articles detected/seized apply 34procedure under Annex E (procedure upon Detection/Apprehension of High 35Duty/Tax Articles). 36 37o Where there are prohibited/banned drugs detected & seized apply 38procedure under Annex D Part IV (Procedure upon Detection and 39Apprehension of Prohibited Drugs). 40 41o Where other anti-social articles (such as firearms, explosives, etc.) 42detected/seized apply procedures under Annex F. (procedure upon 43Detection/Apprehension of other Anti-social Articles) 44 45o Where the passenger declares inbound articles to be Temporarily 46Imported, and due to be Re-exported upon his departure, initiate process 47under a re-Exportation Commitment or similar arrangement. 48o See Annex G (Procedure for Processing Re-Export Commitment). 49 50o Where the passenger declares articles which are covered by a 2 3
352

1 1Certificate of Identification, apply procedure under Annex H (Procedure for 2Processing Certificates of Identification) 3 4o To process articles under Terminal Release, apply Procedure under 5Annex I (Procedure for Releasing Articles under Terminal Release.) 6 7BAGGAGE ASSISTANCE DIVISION 8 9INTERLINE BAGGAGE ROOM OPERATION (IBR) 10 111. Background 12 13The establishment of the Interline Baggage Room (IBR) is mandated namely: 14 151.1 Primary Baggage Function 16Receives and handles the following kinds of baggage placed at the IBR: 17o Mistagged baggage 18o Erroneously off-loaded baggage 19o Advance or delayed baggage 20o Left behind or unclaimed baggage 21o Transit baggage for foreign destinations 22 231.2 Other Baggage Functions 24 25o Processes, examines and appraises baggage before the same are 26releases to claimant. 27 28o Conducts inventory on all baggage which has been left unclaimed, for 29purposes of abandonment proceedings. 30 311.3 IBR is operated by Philippines Airlines (PAL) which is required to post 32a bond to guarantee compliance under CMO NO. 54-91. PAL, upon formal 33receipt of the articles in the IBR is to be held liable for any loss or damage 34proportionate to the value declared by the owner or its liability under existing 35international agreements, whichever is lower. 36 371.4 Under CMO No. 54-91 the following storage periods are provided: 38 39o Erroneously off-loaded baggage - 30 days 40 41o Mistagged baggage - 5 days plus 5 days extension 42 43o Transit baggage - generally 15 days 44 451.5 PAL is mandated to issue, subject to the approval by the District 46Collector, A Manual of Procedures covering IBR operations. Additionally, as 47part of its reporting responsibilities, PAL is required to submit to the district 48Collector a monthly list of all unclaimed or overstaying baggage which has 49remained in the IBR beyond the period of storage. Such overstaying or 50unclaimed baggage is to be transferred to the Collectors Corral for 2 3
353

1 1disposition, and shall not be released, if claimed, without payment of 2corresponding duties and taxes. 3 41.6 PAL is required also to submit a Monthly Inventory Report copy 5furnished the District Collector and the airlines concerned, of the contents of 6the IBR containing the following: 7 8o Date of Receipt of Baggage 9 10o Condition of the Baggage 11 122. Situation 13 142.1 Since its inception, IBR has blossomed into an important public service 15arm of the NAIA Customhouse. TO date, IBR handles the following baggage: 16 17o Mistagged baggage 18o Erroneously off-loaded baggage 19o Transit baggage (foreign destinations) 20o Advance or delayed baggage 21o Baggage for STORAGE 22o Transshipment baggage (Cebu Link) 23o Baggage FOR FORWARDING 24o Baggage/dutiable articles left and found on a Manila destined aircraft. 25 262.2 The documentary requirement for release of baggage varies 27accordingly to its class: 28 29o Mistagged baggage requires telex and a request for release from PAL. 30 31o Erroneously off-loaded baggage requires the same documentation 32above. 33 34o Advance or delayed baggage, requires a rush tag and usually a transit 35telex. 36 37o Transit Baggage, requires presentation of the Boarding Pass, with the 38claimant personally appearing to claim baggage accompanied by loader. 39Baggage is escorted to physical check-in. 40 41o Transshipment baggage (Cebu Link) requires Transshipment Permit, 42Air note and Gatepass. 43 44o FOR FORWARDING baggage requires logbook documentation, 45telex, or request for forwarding and a release authorization from claimant. 46 473. Logging of Baggage 48 49A Memorandum, issued on 18 August 1993, implemented the following 50measures in the public interest: 2 3
354

1 1 2o All baggage received or released at the IBR must be logged with the 3following details: 4o Date, Time Flight No., Passengers name. 5 6o Class of baggage, i.e. transit, delayed, storage, Cebu Link, off-loaded, 7mistagged, unclaimed etc. 8 9o Circumstances of release, i.e. owners claim, telex, authorization, 10Boarding Pass No. 11 12o Name and Address of claimant, or agent, who must affix signature. 13 14o Code Number of Customs Examiner & Appraiser. 15 163.1 Collection Report 17A Collection Report is to be filed daily, showing: 18 19o Flight ID 20o Name of Passenger and/or agent 21o Description of article(s) 22o Number of packages and weight 23o Breakdown and total of taxes & duties collected 24o Code number of Custom Examiner and Appraiser 25o Class of Baggage 26 273.2 Submission by Officer-in-Charge of a monthly inventory indicating, on a 28per flight, per date basis, the number of bags received and the number of 29bags released. 30 313.3 Submission by Officer-in Charge of a monthly status report of 32overstaying and abandoned cargoes, including all necessary details in order 33to facilitate transfer to the Collectors Corral. 34 35PART II CUSTOMS BAGGAGE ROOM (CBR) 36 374.1 Background 38 39Custom Memorandum 54-91 established not one but two baggage stores in 40the arrivals area. One, the Interline Baggage Room has been discussed in 41Part I; the other is the Customs Baggage Room (CBR). Both are part of the 42Baggage Assistance Division and they are situated at opposite sides of the 43baggage hall at NAIA. 44 455. Details of the scope and operation of the IBR and the classes of 46baggage handled therein have been discussed. 47Scope & Operation of the CBR is as follows: 48 495.1 The Customs Baggage Room receives and Handles the storage of the 50following classes of baggage held by customs, due to: 2 3
355

1 1 2o Insufficient funds for duties & taxes assessed. 3o Pending presentation of any permit/clearance issued by the 4government agency concerned. 5o Being held as a violation of the customs and tariff laws, as well as any 6rules & regulation and other related laws. 7o Baggage which has arrived from a flight without tag or other identifying 8marks and is left unclaimed in the customs inspection area, prior notice 9having been issued to the airline concerned. 10 115.2 Other Functions of CBR 12 13o Examines, conducts inventory and appraises all baggage held in bond 14(except where this function has already been performed in the Baggage 15Examination Area). 16 17o Recommends the following actions when suitable: 18 19o Release of baggage after payment of duties & taxes. 20 21o Inventory and appraisal of baggage/articles which have remained 22unclaimed, for purposes of abandonment proceedings. 23 24o Performs such other actions as may be required by the district 25collector, Customs. 26 275.3 Other Provisions of CMO 54-91 with regard to CBR 28 29o The CBR shall be operated by the Bureau of Customs under the 30immediate supervision of the In Bond Section, Baggage Assistance Division. 31 32o The period of storage and the disposition of baggage/articles in the 33CBR shall be governed by the rules and regulations which have been or 34hereinafter may be presented by the district collector of customs. 35 366. Receipt of Baggage/Articles for Storage 37 38Receipt of Articles held by customs and placed at the CBR shall be affected in 39the following manner: 40 41o A Held Baggage Receipt (HBR) shall be prepared by the Customs 42Examiner after examination and appraisal of the baggage has been 43conducted. 44 45o The baggage shall be weighed prior to actual receipt of the same by 46the Customs Warehouseman assigned at the CBR. Thereafter the Customs 47Examiner, Appraiser, Warehouseman and Duty Collector will affix their 48signature on the HBR. 49The original to passenger, duplicate to B.A.D. triplicate to CDMD. 50 2 3
356

1 16.1 Report of Unclaimed/Overstaying Bags 2The chief Baggage Assistance Division shall submit to the District Collector a 3monthly list of all unclaimed or overstaying articles/baggage which have 4remained in the CBR beyond the storage period prescribed by the District 5Collector of Customs. 6 76.2 Monthly Inventory & Report 8The In-Bond Section shall undertake the monthly inventory of the contents of 9CBR and shall report thereof on the official form prescribed for that purpose. 10The same shall be prepared by the Customs Warehouseman concerned, duly 11signed by the Customs Examiner, Custom Appraiser, the Chief, B.A.D. and 12the COA representative/ Apprehending Officer in those cases of alerted 13cargoes. 14 15SECTION 5 16PASSENGER AND BAGGAGE MANAGEMENT MANUAL 17LAW DIVISION 18 19LEGAL MATTERS 20 211. Unit of Primary Responsibility 22 23Within the collection District the, LAW DIVISION is the UNIT of PRIMARY 24RESPONSIBILITY 25 261.1 Scope 27Since all the activities of the Bureau of customs are governed by the Laws of 28the Philippines, it is essential that the Bureau be guided by trained and 29qualified Legal Officers. This guidance is provided by the Law Division who 30provide legal advice and interpretation as and when required. 31 32These duties include: 33 34o Assisting in the enforcement of the tariff & customs laws, and all other 35laws, rules and regulations relating to the tariff and customs administration: 36o Initiating the Bureaus exercise of exclusive original jurisdiction over 37seizure and forfeiture cases under the tariff and customs laws. 38 392. Responsibilities 40 41o Assists the District Collector in the legal aspect of his administrative 42responsibilities and provides legal advice and services to the Collection 43District; 44 45o Renders opinion and ruling on customs matters involving interpretation 46and application of laws and implementing regulations; 47 48o Representing the District in court whenever summoned by subpoena 49or made a party litigant therein and collaborate with the Office of the Solicitor 50General in prosecuting cases against importers/surety companies liable under 2 3
357

1 1their forfeited bonds and when the District Collector is a party defendant or 2respondent in any other cases; 3 4o Conducts investigations and hearing on seizures, protests and other 5cases and submits finding and proposes decision for signature of the District 6Collector; 7 8o Processes and submits recommendation on all applications for 9Customs Brokers Licence and other permits to operate in the Customs Zone 10and keeps and maintains a current roster of duly licensed customs brokers 11and brokage firms and other pertinent records thereto; 12 13o Institutes abandonment proceedings on overstaying cargoes and 14evaluates requests for the lifting thereof; 15o Receives and processes claims for refund; 16o Evaluates claims for reward; 17o Acts on Special Powers of Attorney and authorizations relating to 18customs matters, including issuances of clearance; 19o Submits periodic reports and other data that may be required; 20o Performs other functions consistent with the assigned tasks. 21 22 BOOK III LEGAL AND COMPLIANCE 23 24 TITLE 1 LEGAL 25 26CHAPTER 1 PROHIBITED IMPORTATIONS 27 28Note: See Section 101, TCCP. 29 30Section 1 Definition of Terms 31 321.1 Prohibited Importation 33 34Refers to an article by reason of its character, nature, essence or by law, rule 35or regulation is not allowed entry or may be allowed entry subject to certain 36conditions. 37 381.2 Absolutely Prohibited Importation 39 40Refers to an article by reason of its character, nature or essence is repulsive 41to morals, customs and traditions or by law, rule or regulation is not allowed 42entry. 43 441.3 Qualifiedly Prohibited Importation 45 46Refers to an article by reason of law, rule or regulation is not allowed entry but 47may be allowed entry subject to compliance to certain conditions. 48 49It is also termed as regulated article. 50 2 3
358

1 11.4 Import Permit 2 3Refers to a document issued by a regulating agency that allows entry of 4qualifiedly prohibited articles. 5It is also termed as import authority or import clearance. 6 71.5 Regulatory Agency 8 9Refers to a government agency by law, rule or regulation is tasked to issue 10import permits for qualifiedly prohibited articles. It shall also refer to an 11agency tasked to regulate entry of certain articles to the Philippines through 12means other than issuing import permit. 13 14Section 2 Administrative Provisions 15 162.1 Import Permit Must Accompany an Import Entry 17 18Depending on law, rule or regulation of a regulating agency an Import Permit 19may be secured before departure of carrying vessel or aircraft from the port of 20origin, while carrying vessel or aircraft is already in transit or when shipment 21has already arrived. However, concerned office at the Bureau of Customs 22shall not accept any import entry covering qualifiedly prohibited article not 23supported or accompanied by an Import Permit. Concerned office shall refer 24not only to the office tasked to accept import entries but to the e2m Customs 25System in case of electronic import entry lodging. 26 272.2 When Import Entry Need not be Accompanied by an Import Permit 28 29 There are regulatory agencies which by the nature of their functions as 30provided for by law, rule or regulation regulate entry of certain articles but do 31not issue import permits to allow entry of such articles. However, importers 32before they can import such articles must comply with the requirements of 33such agency. An example is in the case of processed foods, cosmetics, food 34supplements, drugs and pharmaceutical products where the importer must 35secure a Permit to Operate (PTO) and Certificate of Product Registration 36(CPR) from the Food and Drug Administration (FDA) before they can engage 37in the importation of such products. 38 392.3 Legal Effect of Whether an Importation is Absolutely Prohibited or 40Qualifiedly Prohibited 41 42 Whether an importation is absolutely prohibited or qualifiedly prohibited 43or an importer has failed to comply with the requirements of a regulating 44agency the legal effect is the same as the articles are subject to seizure and 45forfeiture proceedings. 46 47Section 3 - Operational Provisions 48 493.1 Importations Considered as Absolutely Prohibited 50 2 3
359

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 323.2 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 2 3 (a) Written or printed articles in any form containing any matter advocating or inciting treason, or rebellion, insurrection, sedition or subversion against the Government of the Philippines, or forcible resistance to any law of the Philippines, or containing any threat to take life of, or inflict bodily harm upon any person in the Philippines. (b) Written or printed, negatives or cinematographic film, photographs, engravings, lithographs, objects, paintings, drawings or other representation of an obscene or immoral character. (c) Articles, instruments, drugs and substances designed, intended or adapted for producing unlawful abortion, or any printed matter which advertises or describes or gives directly or indirectly information where, how or by whom unlawful abortion is produced. (d) Loaded dice and marked cards. (e) Any article manufactured in whole or in part of gold, silver or other precious metals or alloys thereof, the stamps, brands or marks or which do not indicate the actual fineness of quality of said metals or alloys. (f) Any adulterated or misbranded articles of food or any adulterated or misbranded drug in violation of the Foods and Drugs Act. (g) Opium pipes and parts thereof, of whatever material. (h) All other articles and parts thereof, the importation of which is absolutely prohibited by law or rules and regulations issued by competent authority. Importations Considered as Qualifiedly Prohibited (a) Dynamite, gunpowder, ammunitions and other explosives, firearms and weapons of war, and parts thereof, except upon authority from the Firearms and Explosives Office (FEO) of the Philippine National Police (PNP) or agency of government that may be given authority by law, rule or regulation. (b) Roulette, wheels, gambling outfits, machines, apparatus or mechanical devices used in gambling or the distribution of money, cigars, cigarettes or other articles when such distribution is dependent on chance, including jackpot and pinball machines or similar contrivances, or parts thereof upon authority from the Philippine Gaming Corporation (PAGCOR) or any agency of government that may be given authority by law, rule or regulation. (c) Lottery and sweepstakes tickets except those authorized by the Philippine Government, advertisements thereof, and lists of drawings therein upon authority from the Philippine Charity Sweepstakes Office
360

1 1 (PCSO) or any agency of government that may be given authority by 2 law, rule or regulation. 3 4 (d) Marijuana, opium, poppies, coca leaves, heroin or any other narcotics 5 or synthetic drugs which are or may hereafter be declared habit 6 forming by the President of the Philippines, or any compound, 7 manufactured salt, derivative or preparation thereof, except when 8 imported by the Government of the Philippines or any person duly 9 authorized by the Dangerous Drugs Board, Department of Health 10 (DOH) for medicinal purposes only or any government agency 11 authorized by law, rule or regulation. 12 13 (e) All other articles and parts thereof, the importation of which is 14 qualifiedly prohibited by law or rules and regulations issued by 15 competent authority or any law, rule or regulation authorizing an 16 agency of government to regulate entry of certain articles though not 17 necessarily through issuance of import permits. 18CHAPTER 2 CONDITIONALLY-FREE IMPORTATIONS 19 20Note: Reference: CAO 7-72. In bold letters as proposed additions, 21changes and rationale) 22 23Section 1 Definition of Terms 24 251.1 Conditionally Free Importation 26 27Refers to an article importation of which is duty free provided certain 28conditions set forth by law is complied with. 29 30Section 2 Administrative Provisions 31 322.1 Tax Exempt Certificate (TEC) or any other form of certificate or 33indorsement from the Department of Finance Must Accompany an 34Import Entry 35 36TEC or any other form of certificate or indorsement from the Department 37of Finance granting duty and tax exemption may be secured before 38departure of carrying vessel or aircraft from the port of origin, while 39carrying vessel or aircraft is already in transit or when shipment has 40already arrived. However, concerned office at the Bureau of Customs 41shall not accept any import entry covering conditionally-free 42importations not accompanied by any indorsment or TEC from DOF. 43Concerned office shall refer not only to the office tasked to accept 44import entries but to the e2m Customs System in case of electronic 45import entry lodging. 46 472.2 Payment of Value Added Tax (VAT) and/or Excise Tax 48

2 3

361

1 1Unless specifically exempt by the DOF in its Indorsement to BOC 2importation under conditionally free importation shall be subject to 3payment of VAT and/or excise tax. 4 5Section 3 Operational Provisions 6 73.1 Aquatic products (e.g. fish, crustaceans, mollusks, marine animals, 8seaweeds, fish oil, roe), may be allowed free of entry upon presentation of the 9following: 10 11 (1) If the gathering and carrying vessels are one and the same, a 12 certificate of the master of the vessel showing: 13 14 (a) That such aquatic products were caught by his 15 vessel which is of Philippine registry; 16 17 (b) That such aquatic products are imported in such 18 vessel or aircraft attached thereto; 19 20 (c) That such aquatic products have not been landed 21 in any foreign territory or, if so landed, they have 22 been landed solely for transshipment without 23 having been advanced in condition. 24 25 (2) If the carrying vessel is other than the gathering vessel the following 26 shall be presented: 27 28 (a) Certificate of the master of the gathering vessel showing that 29 such aquatic products were caught or gathered by vessel which 30 is of Philippine registry; 31 32 (b) Certificate of the master of the carrying vessel that such 33 aquatic products are imported in his vessel which is of Philippine 34 registry or in crafts attached thereto; 35 36 (c) Evidence satisfactory to the Collector that such products have 37 not been landed in any foreign territory or, if landed, they have 38 been landed solely for transshipment without having been 39 advanced in condition. 40 413.2 Equipment for use in the salvage of vessels or aircraft may be allowed 42free entry upon presentation to the Collector of Customs of the following: 43 44 (1) Certificate duly issued by the National Economic Development 45 Authority (NEDA) that said equipment is not available locally; 46 47 (2) Certificate duly issued by the Philippine Coast Guard (PCG) (for 48 vessel) or the Civil Aviation Authority of the Philippines (CAAP), (for 49 aircraft) that said equipment is for use in the salvage of vessels or 50 aircraft, as the case may be; 2 3
362

1 1 2 (3) Bond in an amount equal to one and one-half (1.5X) the ascertained 3 duties, taxes and other charges, conditioned for exportation thereof 4 within six (6) months from the date of acceptance of the import entry, 5 or in the default thereof, the payment of the corresponding duties, 6 taxes and other charges due thereon. 7 8Upon prior application of the importer/owner the Collector may extend the 9time for exportation for a term not exceeding six (6) months from the 10expiration of the original period of the bond. 11 12 (4) Articles shall be identified upon entry and re-identified upon re13 exportation. Proof of identification shall be the certificate by the 14 Customs officials concerned. 15 163.3 Cost of repairs, excluding the value of the articles used, made in 17foreign countries upon vessels or aircrafts documented, registered or licensed 18in the Philippines shall be allowed free entry upon presentation to the 19Collector of Customs of the following: 20 21 (1) Certification from the National Shipyard and Steel Corporation, (can 22 be secured now from the Maritime Industry Authority (MARINA), (in 23 case of vessels) and Civil Aviation Authority of the Philippines 24 (CAAP) (in case of aircraft) that adequate facilities for such repairs 25 are not available or afforded in the Philippines; and 26 27 (2) An affidavit by the master of the vessel or pilot in command of the 28 aircraft that while in the regular course of her voyage or flight, the 29 same was compelled by stress of weather or other casualty to put 30 into a foreign port to make such repairs in order to secure the safety, 31 seaworthiness or airworthiness of the vessel or aircraft to enable her 32 to reach her port of destination; and that the repairs were incidental 33 and necessary for his use abroad. 34 353.4 Articles brought into the Philippines for repair, processing or 36reconditioning to be re-exported, upon completion of the repair, processing or 37reconditioning shall be allowed free entry upon presentation of the following: 38 39 (1) Affidavit executed by the importer stating that the articles were 40 brought into the Philippines solely for repair, processing or 41 reconditioning, as the case may be, and giving the name and address 42 of the firm or establishment where the repair, processing or 43 reconditioning of the articles shall be made; 44 45 (2) Bond in an amount equal to one and one-half (1.5X) times the 46 ascertained duties and taxes and other charges thereon, conditioned 47 for the for the re-exportation thereof within six (6) months from the 48 date of acceptance of the import entry or in default thereof, the 49 payment of the corresponding duties, taxes and other charges. 50 2 3
363

1 1For purposes of Section 105 of the TCCP, as amended the word processing 2denotes a progressive action or a series of acts or steps which do not change 3the nature and identity of the articles as differentiated from manufacturing. 4The latter implies the making of articles by expending of labor upon material 5to make a finished product, ordinarily taking a different form and usually 6having a different name and purpose from that of the material and includes 7any new combination of any old materials constituting a new result or 8production in the form of a vendible article, not being machinery. 9 103.5 Medals, badges, cups and other small articles bestowed as trophies or 11prizes or those received or accepted as honorary distinctions, such articles 12may be allowed entry free of duty upon proof evident on the articles 13themselves and satisfactory to the Collector of Customs that the same have 14been bestowed as trophies or prizes or accepted as honorary distinctions. 15 163.6 (A) Personal and household effects belonging to residents of the 17Philippines returning from abroad, including jewelry, precious stones and 18other articles of luxury , which were formally declared and listed before 19departure and identified under oath before the Collector of Customs when 20exported from the Philippines by such returning resident upon their departure 21therefrom or during their stay abroad, may be allowed entry free of duty: 22PROVIDED, That the following documents are submitted to the Collector. 23 24 (1) Certificate of Identification issued by the Customs 25 Examiner and approved by the Customs Appraiser upon 26 exportation; 27 28(2) Certificate of Identification issued by the Customs Examiner and 29approved by the Customs Appraiser showing that the articles imported are the 30identical articles exported by the returning resident. 31If the articles have been advanced in value while abroad, such increment in 32value shall be subject to duty. 33 34(B) Personal and household effects including wearing apparel, articles for 35personal adornment (except luxury items), toilet articles, portable appliances 36and instruments and similar personal effects, excluding vehicles, watercrafts, 37animals, purchased in foreign countries by residents of the Philippines, may 38be allowed entry free of duty: PROVIDED, That the following conditions are 39complied with: 40 41 (1) A declaration of the owner under oath stating: 42 43 (a) that the articles are necessary, appropriate and normally 44 used for their comfort and convenience during their stay 45 abroad; 46 47 (b) that the same articles had been used by them for more 48 than six (6) months abroad; 49

2 3

364

1 1 (c) that the article shall accompany them upon their return, or 2 shall arrive within ninety (90) days before or after their 3 return; 4 5 (d) that they are not in commercial quantities nor intended for 6 barter, sale or hire; 7 8 (e) that the total dutiable value thereof does not exceed two 9 thousand pesos (Php 2,000.00); 10 11(f) that he has not previously received the benefits under this subsection 12within one (1) year from and after the last exemption granted. 13 14The term returning resident as contemplated in Section 105(f) refers to one 15who has established permanent residence in the Philippines prior to his 16sojourn abroad for an indefinite period, but of a fixed purpose and having the 17intention of returning to the Philippines upon the accomplishment of the 18purpose of his trip. 19 20(2) If the total dutiable value of the personal and household effects (except 21luxury items), shall be in excess of two thousand pesos (Php 2,000.00), the 22same shall be subject to a fifty percent (50%) ad valorem duty across the 23board; 24 25(3) If the returning resident has not stayed abroad for six (6) months, his 26personal and household effects (except luxury items), the total dutiable value 27of which does not exceed two thousand pesos (Php 2,000.00) shall be subject 28to fifty per cent (50%) ad valorem across the board; and any excess thereof 29shall be subject to the corresponding duty collectible pursuant to Sections 205 30and 206 of the TCCP; 31 32(4) Use abroad for more than six (6) months may be proven by the owner 33by means of the following, other than his declaration: 34 35 (a) Sales Invoice or Deed of Purchase; and 36 37(b) Actual condition of the article. 38 39(5) Unless due to unforeseen circumstances, unaccompanied personal 40and household effects arriving more than ninety (90) days before or after the 41arrival of the owner in the Philippines should not be admitted free of duty 42under this subsection; 43 44(6) The length of use abroad shall be computed from the date of purchase 45to the date of shipment of the article in the case of advance baggage; and 46from the date of purchase of the article to the date of departure of the owner 47in the case of accompanied baggage or those baggage that may arrive later; 48

2 3

365

1 1(7) Exemptions from duty under this subsection, shall apply only to articles 2purchased and used abroad. Donations, gifts and articles acquired by means 3other than purchase are not included herein; 4 5(8) Whenever exemption from duty under this subsection is claimed on 6advance baggage, said baggage shall not be released unless the claimants 7representative files a bond equal to one and one-half (1.5X) times the 8difference between what he would have paid without exemption and what he 9should pay with exemption subject to the condition that should it be finally 10determined that the claimant is not entitled to the exemption, the bond shall 11answer for the difference in duties, taxes and other charges thereon; 12Provided, however, That the total dutiable value thereof shall not exceed two 13thousand pesos (Php 2,000.00); and any excess thereof shall be subject to 14the full payment of duty collectible pursuant to Sections 205 and 206 of the 15TCCP. 16 17The term personal effects embraces all articles of personally not 18merchandise and includes household effects. 19 20Household effects, under this sub-section are limited to such as are similar to 21books, libraries, furniture, carpets, paintings, tablewares, and other usual 22household furnishings, including wearing apparel, articles of personal 23adornment (excluding luxury items), toilet articles, portable appliances and 24instruments and similar personal effects, excluding vehicles, watercraft, 25aircraft and animals. 26 273.7 Personal and household effects and vehicles accompanying travelers, 28tourists, foreign consultants and experts hired by, and/or rendering service to 29the government and their staff or personnel and families, accompanying or 30arrival within a reasonable time before or after their arrival in the Philippines, 31may be allowed entry free of duty upon presentation to the Collector of 32Customs of the following: 33 34 (1) Declarations under oath setting forth that: 35 36 (a) they are foreign consultants and experts hired by or rendering 37 service to the government, together with their staff or personnel, 38 as evidenced by contracts entered into by and between them 39 and the government, or other documents of equal probative 40 value; 41 42 (b) such personal household effects and vehicles are necessary 43 and appropriate for the wear or use of such consultants and 44 experts according to the nature of their occupation; and 45 46(c) said articles are not intended for other persons or for barter, sale or 47hire. 48 49The foregoing document need not be required in the case of tourists or 50travelers. 2 3
366

1 1 2 (2) If the Collector so requires, a written commitment or a bond in an 3 amount equal to one and one-half (1.5X) times the ascertained 4 duties and taxes and other charges upon articles classified under 5 this subsection, conditioned for the exportation thereof or payment 6 of the corresponding duties, taxes and other charges within six (6) 7 months from the date of acceptance of the import entry in the case 8 of travelers and tourists. 9 10In the case of foreign consultants and experts and their staff or personnel or 11families, exportation of said articles covered by the bond shall be made within 12six (6) months after the expiration of their term or contract. 13 14In both instances, the Collector may extend the time for exportation or 15payment of duties, taxes and other charges for a term not exceeding six (6) 16months from the expiration of the original period 17 183.8 Professional instruments and implements, tools of trade, occupation or 19employment, wearing apparel, domestic animals, and personal and 20household effects, including those of the kind and class provided for under 21subsection G and belonging to persons coming to settle in the Philippines, 22may be allowed entry free of duty upon presentation to the Collector of 23Customs of the following: 24 25 (1) An affidavit showing: 26 27 (a) his name, address, position, rank or profession; 28 29 (b) that the article or articles are in quantities and of the 30 class suitable to his profession, rank or position 31 32 (c) that they belong to him and were in his possession 33 before his departure from his former place of abode and 34 are brought into the Philippines for his own use and not 35 for barter or sale or hire 36 37 (2) Evidence satisfactory to the Collector of Customs that: 38 39(a) he is actually coming to settle in the Philippines; 40 41(b) the articles are brought from his former place of abode; 42 43(c) the change of his residence is bona fide and is supported by the 44necessary immigration papers evidencing his coming to the Philippines as a 45settler; 46 47(d) that the privilege of free entry has never been previously granted to 48him; 49

2 3

367

1 1(e) the article or articles involved are not vehicles, vessels or aircraft, or 2machineries or other similar articles for use in manufacture. 3 4Unaccompanied baggage belonging to such persons must be owned or were 5in his possession before his departure from his former place of abode. 6 7For purposes of these regulations, the term persons coming to settle shall 8include missionaries, technicians, educators, officials, and other persons 9under contract or assigned to the Philippines for a specific or indefinite period 10of time. 11 123.9 (A) Articles used exclusively for public entertainment, and for 13display in public expositions, or for exhibition or competition for prizes and 14devices for projecting pictures and parts and appurtenances, thereof, may be 15allowed entry free of duty upon compliance with the requirements and/or 16conditions stated hereunder: 17 18(1) The owner or manager shall submit his affidavit to the Collector stating 19the following: 20 21 (a) the purpose for which the shipment was imported; 22 23 (b) that they are not for sale, barter or hire; and 24 25 (c) the items and their corresponding values. 26 27(2) That said articles must be identified, examined and appraised by the 28customs officials concerned and that a Certificate of Identification (CI) shall be 29issued therefore; 30 31(3) A bond shall be filed in an amount equal to one and one-half times the 32ascertained duties, taxes and other charges thereon, conditioned for 33exportation thereof or payment of the corresponding duties, taxes and other 34charges within six (6) months from the date of the acceptance of the import 35entry. 36 37However, the Collector may extend the time for exportation or payment of 38duties, taxes and other charges for a term not exceeding six (6) months from 39the expiration of the original period. 40 41(B) Technical and scientific films may be admitted entry free of duty upon 42presentation to the Collector of an affidavit by the owner or importer stating 43that: 44 45(1) The films are purely technical or scientific in character; 46 47(2) The same are being imported by a recognized technical, cultural and 48scientific institution; and that the same will not be shown or exhibited for profit. 49

2 3

368

1 1However, no motion pictures and their accessories shall be released from the 2Bureau without the corresponding permits issued by the Movie and Television 3Review and Classification Board (MTRCB). 4 5If any of the said film is exhibited for profit, the proceeds therefrom shall be 6subject to confiscation, in addition to the penalties provided for in Section 73610 of the TCCP. 8 93.10 (A) Articles brought by foreign film producers directly and exclusively 10used for making or recording motion picture films on location in the 11Philippines may be allowed entry free of duty upon presentation to the 12Collector of Customs of the following: 13 14(1) Affidavit by foreign film producers stating that the articles are not for 15sale, barter or hire but are directly and exclusively used for making or 16recording motion pictures on location in the Philippines and stating the 17itemized articles with their corresponding descriptions and values; 18 19(2) Said articles should be identified, examined, and appraised by customs 20officials concerned and that a Certificate of Identification (CI) shall be issued 21therefore; and 22 23(3) A bond shall be filed in an amount equal to one and one-half times 24(1.5X) the ascertained duties, taxes and other charges thereon, conditioned 25for exportation thereof or payment of the corresponding duties, taxes and 26other charges within six (6) months from the date of acceptance of the import 27entry. 28 29However, the Collector may extend the period for another six (6) months from 30the expiration of the original period. 31 32(B) Photographic and cinematographic films, undeveloped, exposed 33outside of the Philippines by resident Filipino citizens or by producing 34companies of Philippine registry may be allowed entry free of duty upon 35presentation to the Collector of Customs of the following: 36 37(1) Evidence showing that the owner is a resident Filipino citizen or a 38producing company of Philippine registry; 39(2) Affidavit by the owner stating that the negative films, undeveloped, are 40the same films which were brought outside of the Philippines where the same 41exposed by him for the production of filming of motion picture (specifying the 42title of the picture); that the principal actors and artists employed in the 43production of said picture are Filipinos (naming the principal actors and artists 44and their citizenships; 45 46(3) Said films should be identified prior to their exportation from the 47Philippines and re-identified upon entry by customs officials concerned and 48that certificates of identification in both cases should be presented. 49

2 3

369

1 1As used in this subsection. The term actors and artists include the persons 2operating the photographic camera or other photographic and sound 3recording apparatus by which the film is made. 4 53.11 (A) Importations for the official use of foreign embassies, legations, and 6other agencies of foreign governments may be allowed entry free of duty): 7PROVIDED, That the countries accord like privilege to corresponding 8agencies of the Philippines. 9 10For this purpose, a list of countries whose governments accords such 11reciprocal privileges shall be published from time to time. 12 13Packages bearing the official seal of a foreign government with which the 14Philippines has diplomatic relations, accompanied by certificates under such 15seal to the effect that they contain only official communications or documents, 16may be admitted free of duty without customs examination. 17 18(B) Articles imported for the personal or family use of the members and 19attaches of foreign embassies, legations, consular officers and other 20representative of foreign governments may be admitted free of duty, subject 21to the following conditions: 22 23(1) Such privilege is accorded such officials under special agreements 24between the Philippines and the countries which they represent; 25 26(2) The same privilege may be granted only upon specific instructions of 27the Secretary of Finance in each instance which will be issued only upon 28request of the Department of Foreign Affairs (DFA). 29 30No entry is required at the port of delivery for shipments admitted free of duty 31under this subsection, but a proper notation as to the disposition thereof shall 32be made on or attached to the manifest. 33 34Every proper means shall be afforded the foreign officials mentioned above to 35facilitate their passage through ports of the Philippines 36 373.12 Imported articles donated to or for the account of any duly registered 38relief organization, may be admitted free of duty, upon presentation to the 39Collector of the following: 40 41(1) Evidence showing that the articles are covered by Deed of Donation 42duly authenticated and Deed of Acceptance duly executed by the donees; 43 44(2) Evidence showing that the donee is a duly registered relief organization 45with the Securities and Exchange Commission (SEC) and Department of 46Social Welfare (NOTE: Now the Department of Social Welfare and 47Development (DSWD); and 48

2 3

370

1 1(3) That the articles donated are for free distribution among the needy, 2upon certification by the DSWD or the Department of Education, as the case 3may be. 4 53.13 Containers, holders and other similar receptacles of any material may 6be admitted free of duty subject to the following conditions: 7 8 (1) That they are not made of paper, paper board and textile fabrics; 9 10 (2) That they are of such character as to be readily identifiable and 11 /or re-usable for shipment or transportation of goods; 12 13 (3) That they should be identified, examined and appraised by 14 customs officials concerned, and that a Certificate of Identification 15 (CI) shall be issued therefore; 16 17 (4) Affidavit of the importer setting forth that said container shall be 18 exclusively used as containers of goods for exportation abroad, 19 and stating the value thereof; and 20 21 (5) That a bond shall be filed in an amount equal to one and one-half 22 (1.5X) times the ascertained duties, taxes and other charges 23 thereon, conditioned for the exportation thereof of payment of the 24 corresponding duties, taxes and other charges within six (6) 25 months from the date of acceptance of the import entry. 26 273.14 Supplies which are necessary for the reasonable requirements of the 28vessels or aircrafts in her voyage or flight outside of the Philippines; articles 29transferred from a bonded warehouse to any collection district to any vessel 30or aircraft; or articles purchased from abroad, may be allowed entry free of 31duty, subject to the following conditions: 32 33 (1) That the vessels or aircrafts are engaged in foreign trade; 34 35 (2) That said articles are for the use or consumption of the 36 passengers or crew on board as sea or air stores; 37 38 (3) That articles purchased abroad are for sale on board the vessels 39 or aircrafts as saloon store or air store supplies; and 40 41(4) That any surplus or excess of such vessel or aircraft supplies arriving 42from foreign ports or airports shall be dutiable. 43 443.15 Articles and salvage from vessels or parts of a foreign vessel or her 45equipment wrecked or abandoned in Philippine waters or elsewhere, may be 46allowed entry free of duty, if they are recovered after a period of two (2) years 47from the date of the filing of marine protest or at least at the time when the 48vessel was wrecked or abandoned. 49

2 3

371

1 1Articles and salvage recovered within the said period of two (2) years shall be 2dutiable. 3 4Entry free of duty of said articles and salvage or equipment of vessel is 5clarified as follows: 6 7(1) Foreign articles recovered from foreign vessels, wrecked or abandoned 8in Philippine or foreign waters after two (2) years from the date of filing of 9marine protests, or the time the vessel was wrecked are exempt from duty. If 10recovered within two (2) years, such articles are liable to payment of duty. 11Articles of Philippine production recovered from wrecked foreign vessels are 12exempt from duty regardless of the period of recovery thereof. Foreign 13merchandise recovered from wrecked Philippine vessels are subject to 14treatment similar to foreign merchandise recovered from wrecked foreign 15vessels; and 16 17(2) Parts of Philippine vessel or her equipment whether wrecked in 18Philippine waters or elsewhere are exempt from duty regardless of the period 19of her recovery. 20 213.16 Coffins or urns containing human remains, bones or ashes, and used 22personal and household effects of deceased persons, may be allowed entry 23free of duty upon compliance with the following requirements: 24 25(1) That the coffins or urns must contain the human remains, bones or 26ashes; 27 28 (4) That said personal and household effects are not merchandise or 29 vehicles; 30 31 (5) That the value of said coffins or urns and used personal or 32 household effects does not exceed ten thousand pesos (Php 33 10,000.00); and 34 35(4) That the Collector shall require an affidavit of a person having 36knowledge of the facts, or otherwise satisfy himself that the used personal 37and household effects belonged to the deceased. 38 393.17 (A) Samples of the kind may be entered free of duty provided they 40are in such quantity and dimensions or construction as to render them 41unsalable or of no appreciable commercial value, and upon previous 42authorization by the Secretary of Finance. 43 44Appreciable commercial value shall be determined by taking into 45considerations the kind and quantity of the samples and the status and 46circumstances of the importer. 47 48(B) Models may be allowed entry free of duty provided they are not 49adopted for practical use and upon previous authorization by the Secretary of 50Finance. 2 3
372

1 1 2Samples of the kind and models not adapted for practical use the importations 3of which are not previously authorized by the Secretary of Finance shall be 4levied the corresponding tariff duty. 5 6(C) Samples of medicines may be allowed entry free of duty provided the 7following conditions are complied with: 8 9(1) That they are properly marked SAMPLE- SALE PUNISHABLE BY 10LAW, and these words should be clearly and permanently printed, not merely 11pasted on the product label and/or box; 12 13(2) That they are imported for the purpose of introducing a new article in 14the Philippine market; 15 16(3) That they are imported only once in such quantity sufficient for the 17purpose; 18 19(4) That they are imported by a person duly registered and identified to be 20engaged in that trade; 21 22(5) That the importation of said sample of medicines was previously 23authorized by the Secretary of Finance and the Secretary of Health; 24 25(6) That such samples are new medicines not available in the Philippines 26as may be determined by the Secretary of Health or his authorized 27representative; 28 29(7) That they are not in commercial sizes nor shipped in bulk; 30 31(8) That they should arrive with or after the commercial stock and they 32should not exceed 20% of the latter; and 33 34(9) That the Collector of the Port of importation is furnished with a sworn 35statement containing samples and dates there are to be given. 36 37Said samples of medicines the importation of which are not previously 38authorized by the Secretary of Finance and the Secretary of Health, or their 39authorized representatives and/or which are not properly marked in 40accordance with this subsection, shall be levied the corresponding tariff duty. 41 42The Chief, Formal Entry Division, Chief, Informal Entry Division and Chief, 43Customs Postal Division in the Manila Customs house, and the Appraisers of 44every port of entry shall keep a record of importations of samples of medicine, 45listing said shipments by importers and indicating the kind of samples 46imported, dates of importation, quantity imported and values thereof. The 47record shall be referred to from time to time for the purpose of determining 48whether the privilege of free entry is being abused. 49

2 3

373

1 1(D) Commercial samples, except those that are not readily and easily 2identifiable (e.g., precious and semi-precious stones, cut or uncut, and jewelry 3set with precious or semi-precious stones), the value of any single importation 4of which does not exceed ten thousand pesos (Php10,000.00), may be 5allowed entry free of duty upon giving a bond in an amount equal to twice the 6ascertained duties, taxes and other charges thereon, conditioned for the 7exportation of said samples within six (6) months from the date of acceptance 8of the import entry, or in default thereof, the payment of the corresponding 9duties, taxes and other charges. 10 11The bond shall, among others, state that the importer shall not dispose of any 12or all of the samples without authority from the Collector. 13 14If the value of any single consignment of such commercial samples exceed 15ten thousand pesos (Php10,000.00), the importer thereof may select any 16portion of same not exceeding in value of ten thousand pesos (Php10,000.00) 17for entry under the provisions of this subsection, and the excess of the 18consignment may be entered in bond, or for consumption, as the importer 19may elect. 20 213.18 (A) Animals for scientific, experimental, zoological and national defense 22purposes, may be allowed entry free of duty subject to the following 23conditions: 24 25(1) That they are not race horses; and 26 27(2) That said animals are necessary for economic development as certified 28by the National Economic Development Authority (NEDA). 29 30(B) Animals for breeding purposes may be allowed entry free of duty upon 31presentation to the Collector of Customs of the following: 32 33(1) Certificate of pedigree duly authenticated by the Bureau of Animal 34Industry (BAI) showing that such animals are of a recognized breed and has 35been duly registered in the government book of record established for that 36breed; 37(2) Affidavit of the owner or importer that such animal is the identical 38animal described in said certificate of record of pedigree; and 39 40(3) Certificate issued by the National Economic Development Authority 41(NEDA) that said animals are necessary for economic development. 42 43(C) Plants for scientific, experimental, botanical and national defense 44purposes may be allowed entry free of duty subject to the condition that they 45are certified as necessary for economic development by the National 46Economic Development Authority (NEDA). 47 48(D) Live trees, shoots, plants, moss and bulbs, tubers and seeds, for 49propagation purposes may be allowed entry free of duty subject to the 50following conditions: 2 3
374

1 1 2(1) They are imported by order of the Government or duly authorized 3institutions; and 4 5(2) They are certified as necessary for economic development as certified 6by the National Economic Development Authority. 7 83.19 (A) Philosophical, historical, economic, scientific, technical and 9vocational books may be allowed entry free of duty subject to the following 10conditions: 11 12(1) That their importations are approved by the Department of Education. 13 14(2) The imported books and/or publications are not for sale, barter or hire; 15 16(3) Their quantities do not exceed ten (10) copies of any work when 17imported by an institution and two (2) copies of any one work when imported 18by an individual; and 19 20(4) That they are not for barter, sale or hire. 21 22(B) Bibles, missals, prayerbooks, Koran, ahadith and other religious books 23of similar nature and extracts therefrom, hymnal and hymns for religious uses, 24especially prepared books, music and other instrumental aids for the deaf, 25mute or blind and textbooks approved and prescribed by the Department of 26Education for use in the elementary schools in the Philippines provided they 27are not complete books in parts in periodical forms. 28 293.20 (A) Philippine articles previously exported from the Philippines may be 30allowed entry free of duty upon presentation to the Collector of Customs of the 31following: 32 33(1) Evidence of previous exportation from the Philippines, e.g., export 34entry, Certificate of Identification (CI) and other proof of equal probative value; 35 36(2) A written declaration made by foreign shipper before the Philippine 37Consul, or in ports where there is no Philippine Consult, before any person 38authorized to administer oaths stating that such Philippine articles were 39previously received by him from the Philippines; the reason for sending the 40same; and, whether or not said articles have been advanced in value or 41improved in condition by any process or manufacture; and that said articles 42are not for sale or hire; 43 44(3) A sworn written declaration made by the importer stating the reason for 45sending said Philippine articles abroad; whether drawback or bounty has been 46allowed; and whether or not said articles have been advanced in value or 47improved in condition by any process of manufacture or other means abroad; 48

2 3

375

1 1(4) Certificate of Identification (CI) issued by the customs officials 2concerned upon exportation and re-importation of said articles wherein the 3value of said articles shall be indicated. 4 5(B) Instruments and implements, tools of trade, machinery and equipment, 6may be allowed entry free of duty, subject to the following conditions: 7 8(1) Statement under oath shall be submitted by the importer to the 9Collector of Customs stating the following: 10 11 (a) That he is a Filipino citizen; 12 13 (b) That he previously exported those articles and used by 14 him abroad in the pursuit of his business, occupation or 15 profession; 16 17 (c) That said articles are returned without having been 18 advanced in value or improved in condition by any 19 process of manufacture or other means abroad; and 20 21 (d) That no drawback or bounty has been allowed in said 22 articles. 23 24(2) Certificate of Identification issued by the customs officials concerned 25upon exportation and re-importation of said articles, wherein the values of 26said articles shall be indicated. 27 28(C) Foreign articles previously imported when returned after having been 29exported may be allowed entry free of duty upon presentation to the Collector 30of Customs of the following: 31 32(1) Affidavit of the importer or owner stating that said articles were 33exported and loaned for use temporarily abroad solely for exhibition, testing or 34experimentation, for scientific or educational purposes; and whether or not 35drawback or bounty has been allowed thereon; 36 37(2) Certificate of Identification (CI) issued by the customs officials 38concerned upon exportation and re-importation of said articles. 39 40(D) Foreign containers previously imported may be allowed entry free of 41duty upon presentation to the Collector of Customs of the following: 42 43(1) Affidavit of the importer/owner or institutions stating that said 44containers have been used in packing exported Philippine articles; that they 45are returned to him empty; and the same are not for sale, barter or hire. 46 47(2) Certificates of Identification (CI) issued by the customs officials 48concerned upon exportation and re-importation of said articles. 49

2 3

376

1 1However, any such article enumerated above in letters (a) to (d) upon which 2drawback has been allowed shall, upon re-importation thereof, be subject to a 3duty equal to the amount of such drawback or bounty. 4 53.21 Aircraft, equipment and machinery, spare parts commissary and 6catering supplies, aviation gas, fuel and oil, whether crude or refined, and 7such other articles or supplies may be allowed free of entry provided that the 8following conditions are complied with: 9 10(1) It is imported by and for the use of scheduled airlines operating under 11Congressional franchise; 12 13(2) It is not locally available in reasonable quantity, quality and price; and 14 15(3) It is necessary or incidental for the proper operation of the scheduled 16airline importing the same; 17 183.22 Machineries, equipment, tools for production, plants to convert mineral 19ores into saleable form, spare parts, supplies, materials, accessories, 20explosives, chemicals, and transportation and communication facilities may 21be allowed free of entry subject to the following conditions: 22 23(1) That such is imported by and for the use of new mines and old mines 24which resume operations, when certified to as such by the Secretary of 25Agriculture and Natural Resources upon recommendation of the Director of 26Mines, for a period ending five (5) years from the date of actual commercial 27production of saleable mineral products; 28 29(2) That such articles are not locally available in reasonable quantity, 30quality and price; 31 32(3) That such is necessary or incidental in the proper operation of the 33mine; 34(4) That such aircrafts imported by Agro-industrial companies to be used 35by them in their agriculture and industrial operations or activities, spare parts 36and accessories thereof 37 383.23 Spare parts of vessels or aircraft of foreign registry engaged in foreign 39trade may be allowed free of entry subject to the following conditions: 40 41(1) It will be used exclusively as replacements or for the emergency repair 42thereof; 43 44(2) It will be utilized to secure the safety, seaworthiness or airworthiness of 45the vessel or aircraft to enable it to continue its voyage or flight. 46 473.24 Articles of easy identification exported from the Philippines for repair 48and subsequently re-imported may be allowed free of entry provided that the 49following conditions are complied with: 50 2 3
377

1 1 (1) It is not capable of being repaired locally; and 2 3(2) The cost of repairs made to any such article shall pay the rate of duty 4of thirty percent ad valorem 5 63.25 Trailer Chassis may be allowed free of entry subject to the following 7conditions: 8 9(1) That such is imported by shipping companies for their exclusive use in 10handling containerized cargo, 11 12 (2) It shall post a bond in an amount equal to one and one half times 13 the ascertained duties, taxes and other charges due thereon to 14 cover a period of one year from the date of acceptance of the 15 entry, which period for meritorious reasons may, be extended by 16 the Commissioner of Customs from year to year, subject to the 17 following conditions: 18 19(a) That they shall be properly identified and registered with the Land 20Transportation Commission; 21 22(b) That they shall be subject to customs supervision fee to be fixed by the 23Collector of Customs and subject to the approval of the Commissioner of 24Customs; 25 26(c) That they shall be deposited in the Customs zone when not in use; and 27 28(d) That upon the expiration of the period prescribed above, duties and 29taxes shall be paid unless otherwise re-exported 30 313.26 Other persons/articles entitled to duty-free importation. 32 333.26.1 Any officer or employee of the Department of Foreign Affairs (DFA) 34including attach, civil or military or member of his staff assigned to a 35Philippine diplomatic mission abroad by his Department (NOTE: Examples: 36Labor attach, POEA officer assigned abroad or any similar officer or 37employee assigned to a Philippine Consular office abroad military personnel 38accorded assimilated diplomatic rank on duty abroad who must be returning 39from a regular assignment abroad, for reassignment to his home office, or 40who dies, resigns, or is retired from the service. 41 423.26.2 Articles that may imported duty and tax free. 43 443.26.2.1 Personal and household effects; 45 463.26.2.2 Including one (1) motor vehicle which must have been ordered 47or purchased prior to the receipt by the mission or consulate of his order of 48recall and must be registered in his name. 49 503.26.2.2.1 Subject to following conditions: 2 3
378

1 1 2 a. The exemption shall apply only to the value of the motor car 3 and to the aggregate assessed value of said personal and 4 household effects; 5 6 b. The latter not to exceed thirty per cent (30%) of the total 7 amount received by such officer or employee in salary and 8 allowances during his latest assignment abroad but not to 9 exceed four (4) years; 10 11 c. The exemption shall not be availed of oftener than once 12 every four (4) years; and 13 14 d. The officer or employee concerned must have served abroad 15 for not less than two (2) years. 16 17CHAPTER 3 PROTEST 18 19Note: Reference: CMO 3-2002. In bold letters are proposed changes, 20additions and rationale. 21 22Section 1 Definition 23 241.1 Protest 25 26A remedy available to an importer/cogsignee/owner to contest the decision or 27ruling of a Collector of Customs. 28Section 2 - Administrative Provisions 29 302.1 Protest and Payment Upon Protest in Civil Matters 31 32When a ruling or decision of the Collector is made whereby liability for 33duties, taxes and other charges are determined, except the fixing of 34fines in seizure cases, the party adversely affected may protest such 35ruling or decision by presenting to the Collector at the time when 36payment of the amount claimed to be due the government is made, or 37within, (15) days thereafter, a written protest setting forth his objection 38to the ruling or decision in question with the reasons therefore. 39 40No protest shall be considered unless payment of the amount due after 41final liquidation has first been made and the protest presented must 42accompanied by Customs Official Receipt (BCOR) evidencing payment 43of docket fee per schedule underTitle 2, Book 6 of this Code. 44 45Note: Taken from Section 2308, TCCP 46 472.2 Protest Exclusive Remedy in Protestable Cases 48 49In all cases subject to protest, the interested party who desires to have 50the action of the Collector reviewed, shall make a protest, otherwise the 2 3
379

1 1action of the Collector shall be final and conclusive against him, except 2as to matters collectible for manifest error. 3 4Note: Taken from Section 2309, TCCP 5 62.3 Form and Scope of Protest 7 8The protest shall indicate with reasonable precision the particular 9ground or grounds upon which the protesting party bases his claim for 10relief. 11 12The scope of a protest shall be limited to the subject matter of a single 13adjustment or other independent transaction, but any number of issue 14may be raised in a protest with reference to the particular item or items 15constituting the subject matter. 16Single adjustment refers to the entire content of one liquidation, 17including all duties, fees, surcharges or fines incident thereto. 18Note: Taken from Section 2310, TCCP 19 202.4 Samples to be Furnished by Protesting Parties 21 22If the nature of the articles permit, importers filing protests involving 23question of fact must upon demand, supply the Collector with samples 24of the articles which are the subject matter of protest. Such samples 25shall be verified by the customs official who made the classification 26against which the protest are filed. 27 28Note. Taken from Section 2311, TCCP 29 30Section 3 - Operational Provisions 31 32COLLECTOR OF CUSTOMS 33 343.1 Upon the final determination of the Customs Value and/or the tariff 35classification by the VCRC, the importer adversely affected may file a formal 36protest with the office of the Collector of Customs through the Law Division of 37the port concerned on its equivalent unit in order to dispute the assessment at 38the time when payment of the amount claimed to be due the government is 39made based on the amount after final liquidation and/or upon receipt of 40the notice of the decision of the VCRC, as the case may be, by the importer or 41within fifteen (15) days thereafter 42 43An importer may however decide to pay under protest without availing 44of tentative release mechanism but the amount so paid must be based 45on final assessment computed on the bases of value and/or 46classification as determined by the collector of customs through the 47assessment division. the filing of protest must be made at the time of 48payment or within fifteen (15) days thereafter. 49 50Note: 2 3
380

1 1 2 a. Under CMO 37-2001 if an entry is hit by valuation screen 3 tentative release is availing but cash bond (preferred 4 guaranty) must be posted. If challenge is Appraiser 5 initiated, tentative release is availing without posting 6 bond. If the issue is tariff classification tentative release 7 is availing subject to posting of cash bond. 8 9VCRC has 20 working days to resolve cases before it from the date 10cases are calendared. Per CMO 7-2006, CVCRRC assumes jurisdiction 11of the case if VCRC fails to resolve the case within the period. 12 13Under said CMO, If VCRC decides in favor of importer, decision is 14subject to automatic review by CVCRRC. If decision is adverse to 15importer he can appeal to CVCRRC. 16If importer loses appeal he may pay under protest. If CVCRRC in its 17automatic review authority upholds decision of VCRC decision is final. 18If however, it reverses VCRC decision the importer may pay under 19protest 20 21 b. CVCRRC is recommended to be abolished. It is chaired 22 by the Commissioner and the CEO is the Dep. Com., 23 AOCG. The protest mechanism under the TCCP may 24 have been rendered nugatory because the Collector of 25 Customs is not expected to reverse a decision rendered 26 by the Commissioner of Customs through the Dep. 27 Com., AOCG. 283.2 The importer shall state in his protest the reasons therefore, and shall pay 29 the corresponding docket the rate of which is (to be fixed by Customs 30 Administrative Order No. 1-96A) .provided for under Title 2, Book 6 of 31 this Code. 32 333.3 When the protest is in proper form the Collector through the Law 34 Division shall issue an order of hearing within fifteen (15) days from 35 receipt of a valid protest. (Note: See section 2311, TCCP) 36 373.4 The (Collector) Law Division shall form a panel of experts to hear the 38 case. The panel shall be composed of a hearing office from the Law 39 Division, a COO V and a COO III from the assessment unit. 40 413.5 The (Collector) Law Division shall ensure that those involved in the initial 42 assessment of the subject importation shall not be chosen as members of 43 the above experts panel. 44 453.6 The Panel shall hear all parties to the case, and for this purpose, it shall be 46 authorized to issue the necessary notice of hearings, subpoenas and other 47 interlocutory orders, and likewise to receive evidence from all parties. 48

2 3

381

1 13.7 The Panel shall, within thirty (30) days from the first hearing, terminate the 2 proceedings and recommend through the Chief of the Law Division a 3 decision to the Collector of Customs for approval. 4 53.8 If for meritorious reason, the protest cannot be resolved within 30 days, 6 the panel shall request the Collector of Customs for additional time not 7 exceeding thirty (30) days within which to resolve the case. 8 93.9 The Collector of Customs shall render a final decision on the Protest within 10 fifteen (15) days from receipt of the recommended decision and shall, 11 thereupon, notify the importer in writing of such decision. A party 12 adversely affected by the decision of the Collector may file a Motion 13 for Reconsideration but such shall not roll the running of the fifteen 14 (15) day appeal period to the Commissioner. 15 163.10 If the Collector renders a decision adverse to the government, such 17 decision together with the entire records of the case shall be automatically 18 elevated to the Commissioner of Customs for automatic review within five 19 (5) days from the promulgation thereof. 20 213.11 On the other hand, if the importer is not satisfied with the Collectors 22 decision, he may, within fifteen (15) days after notification in writing by the 23 Collector of his action or decision, file a notice of appeal with the Collector 24 with a copy thereof furnished the Commissioner of Customs. 25 263.12 Thereupon, the Collector shall (immediately) within three (3) days 27 from perfection of appeal transmit all the records of the protest together 28 with the assailed decision, to the Commissioner, who shall approve, 29 modify or reverse the action or decision of the Collector and take such 30 steps and make such orders as may be necessary to give effect to his 31 decision. 32 33COMMISSIONER OF CUSTOMS 34 353.13 An appeal to the Commissioner of Customs thru: Appellate Division, 36 Legal Service shall only be perfected upon: a) filing of notice of appeal; b) 37 payment of appeal docket fee in accordance with the prescribed rates; and 38 c) Memorandum of Appeal at the option of the appellant within fifteen (15) 39 days from receipt of the notice of decision. 40 413.14 The appeal, regular or an automatic review shall be deliberated on by a 42 permanent board of three (3) to be created by the Commissioner of 43 Customs. The board shall be chaired by a lawyer from the Appellate 44 Division, Legal Service and two (2) Valuation Experts from the Import and 45 Assessment Service, as members who shall fill up the positions on a 46 rotation basis. 47 483.15 The Board shall recommend a decision to the Commissioner through 49 proper channels. 50 2 3
382

1 13.16 The Commissioner shall render a decision within thirty (30) days from 2 receipts of the records of the case from the Collector and shall notify the 3 appellant or aggrieved party in writing. 4 53.17 If within thirty (30) days from receipt of the record of the case no 6 decision by the Commissioner is rendered, it shall be deemed that the 7 Commissioner upheld the Collectors decision. If the decision is adverse 8 to the government, the case shall likewise be elevated to the Secretary of 9 Finance for automatic review. 10 11Note: This provision of CMO 3-02 is suggested to be reworded as 12follows: 13 14 In case of ordinary review, if within thirty (30) days from receipt 15of the record of the case no decision by the Commissioner is rendered, 16it shall be deemed that the Commissioner upheld the Collectors 17decision. 18 19IF ANY CASE INVOLVING THE ASSESSMENT OF DUTIES, THE 20COLLECTOR RENDERS A DECISION ADVERSE TO THE GOVERNMENT, 21SUCH DECISION SHALL BE AUTOMATICALLY ELEVATED TO, AND 22REVIEWED BY, THE COMMISSIONER; AND IF THE COLLECTOR'S 23DECISION WOULD BE AFFIRMED BY THE COMMISSIONER, SUCH 24DECISION SHALL HE AUTOMATICALLY ELEVATED TO, AND BE 25FINALLY REVIEWED BY, THE SECRETARY OF FINANCE: PROVIDED, 26HOWEVER, THAT IF WITHIN THIRTY (30) DAYS FROM RECEIPT OF THE 27RECORD OF THE CASE BY THE COMMISSIONER OR BY THE 28SECRETARY OF FINANCE, AS THE CASE MAY BE, NO DECISION IS 29RENDERED BY EITHER OF THEM, THE DECISION UNDER REVIEW 30SHALL BE FINAL AND EXECUTORY. 31 32 In its present form CMO 3-02 may be contrary to TCCP. In capital 33letters are the provisions of Section 2315, TCCP. 34 353.18 If the Commissioner decides in favor of the government and no appeal 36 is perfected within the reglementary period with the Court of Tax Appeals, 37 the decision of the Commissioner shall become final and executor. 38 39SECRETARY OF FINANCE 40 413.19 If the Commissioner renders a decision which is adverse to the 42 government, such decision shall be elevated to the Secretary of Finance 43 for automatic review and the records of proceedings shall accordingly be 44 forwarded to the latters office within five (5) days from the promulgation of 45 the decision. 46 473.20 As provided under Section 2315 of the TCCP, if within thirty (30) days 48 from receipt of the record of the case by the Secretary of Finance, no 49 decision is rendered, the decision under review shall be final and 50 executory. 2 3
383

1 1 23.21 The decision of the Secretary of Finance shall be final and executory, if 3 no appeals is perfected within the period as herein provided. 4 5COURT OF TAX APPEALS 6 73.22 If the importer is not satisfied by the decision of the Commissioner of 8 Customs or the Secretary of Finance, as the case may be, he may file an 9 appeal with the Court of Tax Appeals, within thirty (30) days from receipts 10 of a notice of such decision. 11 12Section 3 - Reportorial Requirements 13 143.1 District Collectors and the Deputy Commissioner, RCMG shall 15submit to the Commissioner every 16th and 1stday of the month a 16status report of protest cases before their offices. 17 18CHAPTER 4 SEIZURE AND FORFEITURE PROCEEDINGS 19 20Note: The main source is CAO 9-93 with succeeding issuance 21incorporated. In bold letters are suggested additions, changes and 22rationale) 23 24Section 1 Definition of Terms 25 261.1 Seizure 27 28The act of the Bureau of Customs of putting physical restraint on 29articles suspected of violating customs and tariff laws. 301.2 Forfeiture Proceedings 31 32An administrative proceedings where the owner/importer/owner of 33seized articles is given the opportunity to present evidence that the 34seized articles are not imported or attempted to be exported contrary to 35law. 36 37Section 2 - Administrative Provisions 38 392.1 These Rules shall be liberally constructed to carry out the objectives of 40the Tariff and Customs Code of the Philippines as amended and to assist the 41parties in obtaining just and expeditious disposition of seizure cases. (Sec. 2, 42CAO 9-93) 43As taxation is the lifeblood of the economy and seizure and forfeiture 44proceedings is in the nature of an administrative proceeding against the 45res the Bureau of Customs is not strictly bound by rules of evidence in 46the Rules of Court. 472.2 Enforcement of Administrative Fine and Forfeiture 48 49Administrative fines and forfeitures shall be enforced by the seizure of 50the vehicle, vessel or aircraft or other property subject to fine or 2 3
384

1 1forfeiture and by subsequent proceedings in conformity with the 2provisions of this Code. (Taken from Section 2533, TCCP) 3 42.3 Burden of proof in Seizure and/or Forfeiture. 5 6In all proceedings taken for the seizure and/or forfeiture of any vessel, vehicle, 7aircraft, beast or articles under the provisions of the tariff and customs laws, 8the burden of proof shall lie upon the claimant. (Taken from Sec. 2535, TCCP) 9 102.4 Warrant of Seizure and Detention (WSD) to be Issued only Upon 11 Probable Cause 12 13That probable cause shall be first shown for the institution of such 14proceedings and that seizure and/or forfeiture was made under the 15circumstances and in the manner described in this Code. (See Sec. 162535, TCCP) 17 18See ANNEX A for WSD Form. 19 202.5 Determination of Probable Cause 21 22The determination of probable cause is not subject of a formal hearing. 23 24There is presumption of probable cause that any vehicle, vessel or 25aircraft, cargo, article and other object has violated customs and/or tariff 26laws upon verified information and/or personal knowledge of any 27customs official/employee having police authority under the following 28conditions that: 29 30 a. Any vehicle, vessel or aircraft, including cargo, is being used or 31 was used unlawfully in the importation or exportation of articles 32 or in conveying and/or transporting contraband or smuggled 33 articles in commercial quantities into or from any Philippine port 34 or place. 35 36The mere carrying or holding on board of contraband or smuggled 37articles in commercial quantities by any vehicle, vessel or aircraft shall 38likewise give rise to the presumption of probable cause that there have 39been violation of customs or tariff laws: Provided, That the vessel, or 40aircraft or any other craft is not used as duly authorized common carrier 41and as such a carrier it is not chartered or leased; 42 43 b. Any vessel engaged in the coastwise has on board any article of 44 foreign growth, produce, or manufacture in excess of the 45 amount necessary for sea stores without such article having 46 been properly entered or legally imported; 47 48 c. Any vessel or aircraft is being used or has been used to 49 transfer cargo unladen contrary to law prior to the arrival of the 50 importing vessel or aircraft at her port of destination; 2 3
385

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 2 3

d. Any part of the cargo, stores or supplies of a vessel or aircraft arriving from a foreign port is being unladen or have been unladen before arrival at the vessel's or aircraft's port of destination and without authority from the customs officials; but there shall be no presumption of existence of violation of customs and tariff laws if such cargo, ship or aircraft stores and supplies is being unladen or have been unladen due to accident, stress of weather or other necessity and is subsequently approved by the Collector; e. Any article is being or have been fraudulently concealed in or removed contrary to law from any public or private warehouse, container yard or container freight station under customs supervision; f. Any article the importation or exportation of which is effected or attempted contrary to law, or any article of prohibited importation or exportation, and all other articles which, in the opinion of the Collector, have been used, are or were entered to be used as instruments in the importation or the exportation of the former;

g. Unmanifested article found on any vessel or aircraft if manifest therefore is required; h. Sea stores or aircraft stores adjudged by the Collector to be excessive, when the duties assessed by the Collector thereon are not paid or secured forthwith upon assessment of the same; i. Any package of imported article which is found by the examining official to contain any article not specified in the invoice or entry, including all other packages purportedly containing imported articles similar to those declared in the invoice or entry to be. the contents of the misdeclared package; Provided, That the Collector is of the opinion that the misdeclaration was contrary to law; Boxes, cases, trunks, envelopes and other containers of whatever character used as receptacle or as device to conceal article which is itself subject to forfeiture under the tariff and customs laws or which is so designed as to conceal the character of such articles;

j.

k. Any conveyance actually being used for the transport of articles subject to forfeiture under the tariff and customs laws, with its equipage or trappings, and any vehicle similarly used, together with its equipage and appurtenances including the beast steam or other motive power drawing or propelling the same. The mere conveyance of contraband or smuggled articles by such beast
386

1 1 or vehicle shall be sufficient cause for the outright seizure and 2 confiscation of such beast or vehicle but the forfeiture shall not 3 be effected if it is established that the owner of the means of 4 conveyance used as aforesaid, is engaged as common carrier 5 and not chartered or leased, or his agent in charge thereof at the 6 time, has no knowledge of the unlawful act; 7 8 l. Any article sought to be imported or exported: 9 10 (1) Without going through a customhouse, whether the act was 11 consummated, frustrated or attempted; 12 13 (2) By failure to mention to a customs official, articles found in 14 the baggage of a person arriving from abroad; 15 16 (3) On the strength of a false declaration or affidavit executed by 17 the owner, importer, exporter or consignee concerning the 18 importation of such article; 19 20 (4) On the strength of a false invoice or other document 21 executed by the owner, importer, exporter or consignee 22 concerning the importation or exportation of such article; 23 and 24 25 (5) Through any other practice or device contrary to law by 26 means of which such articles was entered through a 27 customhouse to the prejudice of the government. 28 29(Note: 30 31There is need to enumerate instances or define the nature of articles, 32vessels, aircrafts or any objects where existence of probable cause is 33presumed for purposes of issuance of WSD This is because forfeiture 34proceedings are delayed by requests for hearing for the determination 35of probable cause or motions for quashal of WSD by reason of its 36issuance before determination of probable cause. 37 38Please note that above enumerations are articles subject to forfeiture 39under Section 2530, TCCP.) 40 412.6 Criminal Proceedings May be Instituted Even During Pendency of 42 Seizure and Forfeiture Proceedings. 43 44The Bureau of Customs is not constrained by the pendency of the 45seizure and forfeiture proceedings in filing cases for the determination 46of probable cause with the Department of Justice. Utmost care must 47however be observed by the Bureau of Customs in filing criminal cases 48as probable cause in seizure and forfeiture cases are not always 49indicative of criminal liability of persons involved in such cases. 50Seizure and forfeiture proceedings are in the nature of proceedings 2 3
387

1 1against the res while criminal proceedings is a proceedings in 2personam where the evidence required is proof beyond reasonable 3doubt. Whether criminal liability lurks on the strength of the provision 4of the Tariff and Customs Code adduced in the information can only be 5determined in a separate criminal action. (Quote from Feeder Intl 6case) 7 8The filing of case before the DOJ shall be filed only with the approval of 9the Commissioner. (See Sec. 2401) 10 11(Note: See Feeder International Line, Pte. Ltd. vs. Court of Appeals, 197 12SCRA 848) 13 142.7 When Decision of the Collector is Considered as Adverse to Government 15 16A decision by the Collector of Customs on the merits of the case which fully or 17partially releases the shipment under seizure is an adverse decision subject to 18automatic review. (Sec. 11, CAO 9-93) 19 202.8 Release of Seized Imported Articles or Articles Attempted to be Exported. 21 22In any seizure proceeding, the release of imported articles or articles 23attempted to be exported shall not be allowed unless and until a decision of 24the Collector of Customs has been affirmed in writing by the Commissioner of 25Customs. (Sec. 12, CAO 9-93) 26 27Section 3 Operational Provisions 28 293.1 Issuance of Seizure and Detention. 30 31Upon probable cause that the articles were imported or attempted to be 32exported contrary to Tariff and Customs Laws, the Collector of Customs shall 33issue a Warrant of Seizure and Detention in Customs Form W7651, hereto 34attached as Annex A.. (Sec. 6, CAO 9-93) 35 36It is suggested to be changed to read: 37Upon probable cause as determined under Section 1.5 of this Chapter, 38the Collector of Customs shall issue a WSD. 39Note: This will broaden the subject matter of seizure. As it is under 40CAO 9-93 the same is limited to imported articles or attempted to be 41exported only. 42 433.2 Report of Seizure 44 45When a seizure is made for any cause, the District Collector shall within 46five 5) working days make report to the Commissioner and Chairman, 47Commission on Audit through BOC resident COA. (See sec. 2302, TCCP) 483.3 Notice 49

2 3

388

1 13.3.1 It shall be the mandatory duty of the District Collector or the concerned 2Law Division to furnish/notify all parties affected by seizure proceedings, 3including, but not limited to, the government prosecutors, apprehending 4office/unit, claimants/importers/exporters/owners or agents (See Sec. 2303, 5TCCP), or intervenors, with notice of hearing, copies of all Decisions, 6Orders, interlocutory or otherwise, and other proceedings taken in the case. 7(Sec. II.1, CMO 12-08) 8 9For this purposes an "agent" shall be deemed to include not only any 10agent in fact of the owner of the seized property but also any person 11having responsible possession of the property at the time of the seizure, 12if the owner or his agent in fact is unknown or cannot be reached. (See 13Sec. 2303, TCCP) 14Failure of the owner/importer/exporter or agent to appear in the 15scheduled hearing without any justifiable reason shall be construed as 16intention of not contesting the forfeiture of the seized articles. However, 17it shall not relieve the owner/importer/exporter or agent of any criminal 18liability arising from the importation or attempted exportation of the 19seized articles. 20 213.3.2 Such service/notice of Decisions, Orders or other proceedings shall 22preferably be forwarded to the Head of Office of the apprehending Office/Unit 23and Interested parties mentioned above, by personal service or, if not 24practicable, by registered mail with return card. Proof of such service of notice 25shall be attached to the records of the case and no case shall be forwarded / 26endorsed for action to the office of the Commissioner or the Deputy 27Commissioner, Revenue Collection Monitoring Group without such proof of 28service.(Sec. II.2, CMO 12-08 and Sec. I, CMO 29-97) 29 303.3.3 Notice to an unknown owner shall be effected by posting for 31fifteen (15) days such notice at the Bulletin Board of the Law Division of 32the Collection District concerned. Subject to instructions from the 33Commissioner, the District Collector notice by publication may be made. 34(See Sec. 2304) 35 363.3.4 If, within fifteen days after the notification prescribed under 37Section 2.3.3, no owner or agent can be found or appears before the 38Collector, the latter shall declare the property forfeited to the 39government to be sold at auction in accordance with law. (See Sec. 402306, TCCP) The Commissioner shall be informed of the forfeiture within 41five (5) days from the declaration of forfeiture. 42 433.4 Description, Appraisal, and Classification of Seized Property 44The District Collector shall cause the appraisal and classification of the 45property seized within five (5) days from seizure based on the same, like 46or similar article at its wholesale value in the local market in the usual 47wholesale quantities in the ordinary course of trade by at least two (2) 48appraisers and approved by the Chief, Auction and Cargo Disposal 49Division (ACDD). (See Sec. 2305, TCCP) The same shall be submitted to 50the Commissioner within five (5) working days from actual seizure. 2 3
389

1 1 23.5 Hearing 3 4 The Chief, Law Division in the notice to importer shall indicated 5therein the time and date of hearing which shall not be later than seven 6(7) days from receipt of such notice. 73.6 Provisional remedy of release for legitimate use. 8 93.6.1 If the owner or importer desires to secure the release of the property 10under seizure for legitimate use the Collector of Customs shall surrender it 11upon filing of a sufficient cash bond in an amount to be fixed by the Collector 12of Customs subject to the following conditions: 13 14 a. That the amount of the cash bond shall not in any case be 15 less than the appraised value of the article plus fine, 16 expenses and costs that may be adjudged in the case. 17 Appraised value shall mean the dutiable value of the 18 article plus duties taxes and other customs charges; 19 b. That there is no prima facie evidence of fraud attendant to 20 the importation; 21 c. That the importation of the article is not prohibited by law; 22 and 23 d. That the release under cash bond has been approved by 24 the Commissioner. (Sec. 4, CAO 9-93) 253.6.2 The release of the property under cash bond shall not relieve the 26owner or the importer of the goods from criminal liability arising from the 27importation/exportation of the shipment. (Sec. 5, CAO 9-93) 28 293.7 Forfeiture proceedings are summary in nature. 30 31To protect interest of government and the owner of seized articles 32forfeiture proceedings are summary and nature and shall be terminated 33within thirty (30) days from the initial hearing. 34Failure on the part of the Collector to render a decision shall be 35construed that he rendered a decision adverse to government and the 36Commissioner through the appellate division, Legal Service, RCMG 37shall exercise his authority review authority. The Collector shall turn 38over the records of the case at the most two (2) working days from the 39lapse of the prescribed period. 40In the formal hearing, un-controverted facts shall be stipulated on and issues 41to be heard shall be agreed upon in order to abbreviate the proceedings. The 42determination shall be made whether or not there is a violation of law from the 43facts and evidence presented. The District Collector of Customs shall then 44render a decision. (Sec. 7, CAO 9-93) 45 463.8. Appeal 47 48The person/party aggrieved by the decision or action of the Collector in any 49case of seizure may within fifteen (15) days after receipt of the notice in 50writing of the action or decision of the Collector of Customs, file a written 2 3
390

1 1notice to the Collector of Customs, copy furnished the Commissioner of 2Customs of his intention to appeal such action or decision of the Collector of 3Customs to the Commissioner of Customs. 4 5Upon perfection of the appeal, the Collector of Customs shall immediately 6transmit all the records of the proceedings to the Commissioner of Customs 7Attention: Appellate Division, Legal Service, RCMG. 8 9An appeal filed beyond fifteen days shall be deemed dismissed. The 10Commissioner of Customs shall approve, modify or reverse the Collector of 11Customs decision or action and take such steps and make appropriate orders 12as may be necessary to enforce or give effect to his decision. (Sec. 8, CAO 91393) 14 15The Appellate Division shall within thirty (30) days from receipt of the 16records of the case from the Collector make recommendation to the 17Commissioner who shall render a decision within fifteen (15) days from 18receipt of such recommendation. Failure on the part of the 19Commissioner to render a decision within the 15-day period shall be 20construed that he upheld the decision of the Collector under review. 21 223.9. Automatic review by the Commissioner on Action or Decision of the 23Collector Adverse to the Government 24 25Action or decision of the Collector of Customs adverse to the government 26shall be automatically reviewed by the Commissioner, thru the Appellate 27Division, Legal Service, RCMG.(First para., Sec. 9, CAO 9-93) A decision 28by the Collector of Customs on the merits of the case as contemplated in 29Section 7 hereof which fully or partially releases the shipment under seizure is 30an adverse decision subject to automatic review. (Sec. 11, CAO 9-93) 31 32The records of the case involving decision/action of the Collector of Customs, 33adverse to the government shall be elevated within five (5) days from the 34promulgation of the decision of the Collector of Customs. (Para. 2, Sec. 9, 35CAO 9-93) 36 37From receipt of the records of the case, the Commissioner of Customs shall 38render a decision on the automatic review within thirty (30) days. (Para. 3, 39Sec. 9, CAO 9-93) 40 41The decision of the Commissioner of Customs reversing the adverse decision 42of the Collector of Customs, on automatic review, shall, be final and 43executory. (Para. 4, Sec. 9, CAO 9-93) 44 453.10. Automatic Review by the Secretary of Finance 46 47In case the Commissioner of Customs affirms the adverse decision of the 48Collector of Customs, the records of the proceedings shall be elevated to the 49Secretary of Finance within five (5)days from promulgation of the decision by 50the Commissioner of Customs. 2 3
391

1 1 2In case the Commissioner of Customs fails to render a decision on automatic 3review on the adverse decision of the Collector of Customs within thirty (30) 4days from receipt of the records the case shall be deemed automatically 5appealed to the Secretary of Finance. The records of the proceedings shall be 6elevated by the Commissioner of Customs to the Secretary of Finance within 7five (5) days after the lapse of thirty (30) day review period. If the adverse 8decision of the Collector of Customs is affirmed by the Secretary of Finance, 9the affirmed decision shall become final and executory. 10If the value of the imported article under seizure is P5,000,000,00 or more, the 11adverse decision of the Collector of Customs shall be deemed automatically 12appealed to the Secretary of Finance. 13 14If within thirty (30) days from receipt of the records of the proceedings by the 15Secretary of Finance, no decision is rendered by him, the Commissioner's or 16the Collectors decision under appeal as the case may be, shall become final 17and executory. (Sec. 10, CAO 9-93) 18 19 CHAPTER 5 - SETTLEMENT BY 20 PAYMENT OF FINE AND REDEMPTION OF FORFEITED 21 ARTICLES 22 23Note: In bold letters are suggested changes to existing rules and 24regulations. 25Section 1 Definition of Terms 26 271.1 Settlement by Payment of Fine 28 29A remedy available to importers/consignees/owners where the release goods 30suspected of violating customs and tariff laws is allowed upon payment of fine 31subject to certain conditions imposed by law. 32 331.2 Redemption of Forfeited Article 34 35A remedy available to importers/consignees/owners where they are allowed to 36purchase forfeited articles in an amount called the redemption value subject to 37certain conditions imposed by law. 38 39Section 2 Administrative Provisions 40 412.1 Amount of Fine 422.2 Redemption Value 432.3 Settlement, Redemption or Quashal/Lifting of Warrant of Seizure and 44Detention (WSD) Subject to the Approval of the Commissioner. 45 46All Orders/Decisions of the District Collector for release of the shipment/s by 47way of redemption, settlement, or quashal/lifting of the WSD, shall be subject 48to the approval of the Commissioner of Customs (Sec. III.2, CMO 20-08) 49upon the recommendation of Deputy Commissioner, RCMG. 50 2 3
392

1 12.4 When Remedy of Settlement by Payment of Fine and Redemption of 2Forfeited Property Not Availing: 3 42.4.1 There is absence of fraud; 5 6 Cases which demonstrate the presence of fraud: 7 8 a. The use of forged or spurious documents; 9 10 b. The prima facie evidence of fraud under Section 2503; 11 12 c. The use of false machinations, misrepresentation, 13 concealment of facts that resulted in loss of revenues reaching 14 levels that is unconscionable and unbecoming of a law-abiding 15 taxpayer and citizen; 16 17d. Other cases similarly situated. (Sec. 1, CMO 87-92) 18 192.4.2 Articles imported are absolutely prohibited; 20 21Those importations falling under pars.b,c,d,e,g,h,j, of Section 101, TCCP as 22amended. (Sec. 2, Ibid.) 23(Note: Suggested to read: See Section 3, Title 1 of this Book. 24 252.4.3 Release of the property would be contrary to law. 26 27 a. For all importations falling under Section 101, TCCP as amended 28 not covered by Section 2 hereof; 29 30 b. When the seized shipment was consigned to fictitious consignees; 31 32 c. For importations where the consignee, importer or exporter has 33 disclaimed ownership of the seized articles; 34 35d. The commodity is explicitly disallowed for release under 36settlement/redemption by higher authorities or by regulation (Sec. 3, Ibid.) 37 382.5 When Remedies May be Availed. 39 402.5.1 Settlement by payment of fine 41 42The remedy may only be availed of while the case is pending hearing before 43the District Collector or the Commissioner during appeal. 44 452.5.2 Redemption of forfeited property 46 472.5.2.1. The District Collector, after the shipment has been declared forfeited 48may accept offer of redemption and or within the period of appeal, may accept 49the offer of the owner, importer, exporter, consignee or his agent to redeem 50the article/s. (Sec. III.1, CMO 20-08) 2 3
393

1 1 22.5.2.2 No redemption shall be allowed where the decision of forfeiture 3has become final and executory or where the importation is absolutely 4prohibited or where the release of the articles would be contrary to law. (Sec. 5III.3, CMO 20-08) 6 7Section 3 - Operational Provisions 8 93.1 Schedule of fines (CAO 4-94) 10 11To provide a uniform of fines in the settlement seizure cases pending hearing 12for purposes of consistency of action following schedule of fines is adopted: 13 143.1.1 For no-dollar importation of personally owned motor vehicles: 15 16 Commission of only one of the following: 17 18 a. Violation of any of the following requirements 19 Fine 20 21*Lack of BIS prior authority 20% 22*Lack of one year residency abroad 23*Lack of proof of income abroad 24*Lack of 6 months use/registration 25 b. Non-compliance of two (2) of above requirements 26 30% 27 c. Non-compliance of three (3) of above requirements 28 50% 29 d. Non-compliance of all the above-requirements 30 80% 31 e. Second violation of any of the above-requirements 32 30% 33 f. Third violation of any of the above-requirements no 34 settlement by fine 35 36Note: 37 38 1. It is suggested that the schedule of fines under CAO 4-94 for 39 no-dollar importation of previously owned vehicles be repealed 40 due to following: 41 42 Section 1, Part II of Guidelines to Implement EO 156 provides that: 43 Previously Owned Motor Vehicle (POV) refers to a vehicle with 44 gross vehicle weight not exceeding three (3) tons, previously 45 owned or registered under the name of a returning resident or 46 immigrant at least six (6) months prior to the date of application 47 for permit to import with the Bureau of Import Services (BIS). 48 49 a. Returning resident refers to a Filipino citizen who has 50 stayed in a foreign country for at least one (1) year and 2 3
394

1 1 which residency shall be accumulated within the three 2 (3) year period immediately preceding the date of filing 3 of the application to import POV. 4 b. Immigrant refers to a person issued any of the following 5 types of who under the Philippine Immigration Act of 6 1940, as amended: 7 i. A Filipino citizen and a holder of 13G Visa under 8 Section 13 Sub. G(13G); or 9 ii. A foreign national married to a Filipino and a 10 holder of 13A Visa under Section 13, Sub. A (13a); 11 or 12 iii. A Filipino citizen and holder of 47A issued to 13 awardees of Special Government Projects (SPG) 14 e.g. Philippine Retirement Authority and Balik15 Scientist Program. 16 17 However, while Section 5.1, Article 2 of EO 156 provides that all 18 imported vehicles found to be in violation of any provision in this 19 EO shall be subject to seizure without redemption by the BOC and 20 will not be subject to registration by the LTO unless disposed of 21 in accordance with the Tariff and Customs Code and does not 22 refer to settlement by payment of fine a person not qualified to 23 import previously owned vehicle under the provisions of EO 156 24 brings in a vehicle contrary to law. Therefore settlement by 25 payment of fine under the provisions of Section 2307, TCCP is not 26 availing. 27 283.1.2 Violation of Section 2503, TCCP 29 303.1.2.1 Undervaluation, misdeclaration and misclassification with more 31than 30 % discrepancy in duty but prima facie evidence of fraud satisfactorily 32rebutted 60 % 33 343.1.2.2 Second violation- no settlement by fine 35 363.1.3 No prior authority to import regulated importations 37 383.1.3.1 First violation 30% 39 403.1.3.2 Second violation 80% 41 423.1.3.3 Third violation no settlement by fine. 43 44Note: 45 46 1. It may not be proper for the Bureau of Customs to have a 47 schedule of fine in cases of failure to secure prior authority in 48 case of regulated importations due to following reasons: 49

2 3

395

1 1 a. BOC by the nature of its authority enforces rules and 2 regulations of regulating agencies. If the rules and 3 regulations of regulating agencies allow issuance of 4 authority to import prior to or upon carrying 5 vessels/aircrafts arrival there is no legal basis for 6 customs to impose penalty. A case in point is in the 7 case of NTC which issues import clearance upon arrival 8 of vessel/aircraft if an importer fails to secure prior 9 import authority. 10 11 b. Customs laws includes all laws, rules and regulations of 12 other agencies of government which pertain to 13 importation and exportation and therefore BOC can be 14 higher that its source of authority. 15 16 If the concern of BOC is that in some cases the regulating 17 agencies issues import permit post facto contrary to its rules and 18 regulations, BOC can enter into MOA with concerned agencies to 19 prevent such occurrence. 20 213.2 Computation of Redemption Value 22 23a. The redemption value shall be the domestic market value of forfeited 24articles using the following formula: 25 26Domestic Market Value/Redemption Value = total Landed Cost + Applicable 27Tax + Nominal Allowance per Standard Trade Practice for profit and general 28expenses which shall not be lower than 10% mark-up from the total landed 29costs. 30 31Total Landed Cost is the Sum of the Customs Value, Applicable Duty and 32Other Taxable Charges 33 34Note: 35 36 1. For transparency and minimize discretion BOC should come 37 up with a schedule of mark-up on per industry basis. On per 38 industry or the nature of importation the range may be from 39 low of 10% to 500% as for example processed food mark-up 40 of which may range from 10% to 15% only against 41 pharmaceutical and cosmetic products the mark-up of which 42 is significantly higher. 43 44b. In case of damage, obsolescence, spoilage, losses or depreciation as 45reflected in the inventory of the forfeited article/s subject of redemption, a 46Certification to this effect shall be issued by the assigned examiner and a 47standard/reasonable percentage may be allowed depending on the facts 48obtaining in each particular case. (Sec. IV, CMO 20-08) 49 503.3 Procedures in Settlement by Payment of Fine and Redemption 2 3
396

1 1 23.3.1 Offers for settlement of fine and redemption shall be addressed to the 3District Collector and shall follow hereunder timelines: 4 5 a. Upon receipt of an Offer of Settlement or Redemption, the Collector 6 concerned shall, within twenty-four (24) hours refer the same, 7 together with the pertinent records, to the Port Division/Section 8 concerned for assessment of the settlement or redemption value, 9 as the case may be. 10 11 b. The assigned Port Division/Section shall, within five (5) days from 12 receipt of the Order, submit its recommendation to the Collector of 13 Customs, who shall decide whether to accept or deny the offer 14 within five (5) days from receipt thereof. 15 16 c. In case of perishable goods, the assigned Port Division/Section 17 shall within forty-eight (48) hours from receipt submit its 18 recommendations and findings to the, Collector, who shall within 19 the same period decide whether settlement or redemption is proper. 20 21 d. In case the Collector of Customs accepts the Offer of Settlement or 22 Redemption, he/she shall immediately cause the transmittal of the 23 records of the seizure proceedings together with his/her decision, to 24 the Office of the Commissioner for the Commissioner's 25 consideration and approval. (CMO 9-2005) 263.3.2 The computation and/or determination of the fine imposable on the 27seized goods in the settlement of any seizure cases and the redemption value 28of the forfeited goods pursuant to Section 2307 of the TCCP shall be 29determined by the following: 30 313.3.2.1 Initially, by the District Collector who shall do so through the Auction 32and Cargo Disposal Division (ACDD) or appropriate assessment office or 33equivalent unit of the port concerned and who shall recommend the same for 34approval by the Commissioner of Customs; 35 363.3.2.2 During the review by the Commissioners Office of the favorable 37recommendation of the District Collector for settlement/redemption or while 38the seizure case is pending appeal at the Commissioners Office, by the 39Valuation and Classification Division (VCD), duly approved by the Director of 40the Import and Assessment Service (IAS) and duly noted by the Deputy 41Commissioner of the Assessment and Operation Coordinating group (AOCG); 42 433.3.2.3 The appropriate offices shall consult the Customs valuation 44databases, and shall also comply with (the relevant provisions of Customs 45Memorandum Order (CMO) No. 34-2002 and CMO No. 9-2005) appropriate 46timelines in the computation and/or determination of the fine imposable on 47the seized goods in the settlement of any seizure cases and the redemption 48value of the forfeited goods; 49

2 3

397

1 13.3.2.4 The case folder for the seizure case subject of a favorable 2recommendation by the District Collector for settlement or redemption shall be 3received by the Legal Service and evaluate the recommendation of the 4Collector and if found in order which shall immediately transmit the same to 5the VCD for review of the recommended fine or redemption value; 6 72.3.2.5 The VCD shall either concur with the recommended fine or 8redemption value or recommend for a higher computation fine or redemption 9value, with supporting basis for such action. 10 113.3.2.5.1 The VCD shall submit its recommendation to the IAS Director for 12approval, who in turn shall submit the same to the Deputy Commissioner for 13AOCG for due notation. The latter shall return the case folder to the Legal 14Service for the proper disposition of the case. 15 163.3.2.6 The Director of the Legal Service shall prepare the Disposition 17Form of the case containing the recommendation and with the attached 18appropriate document for clearance and counter-signature by the Deputy 19Commissioner for Revenue Collection Monitoring Group (RCMG) and finally 20for approval and signature by the Commissioner. 21 223.3.2.7 While the seizure case is pending appeal from a decision of 23forfeiture by the District Collector, it is possible that settlement or redemption 24may be allowed. If this happens, the Legal Service or the Commissioners 25Office shall refer the case folder to the VCD for computation and/or 26determination of the fine or redemption value. The VCD shall submit its 27recommendation to the IAS Director for approval, who in turn shall submit the 28same to the Deputy Commissioner for AOCG for due notation. The latter shall 29return the case folder to the Legal Service or the Commissioners Office for 30the proper disposition of the case. (CMO 26-09) 31 32SECTION 4. REPORTORIAL REQUIREMENTS 33 34In order to expedite approval of requests and offers of settlement by 35payment of fine and redemption following reports shall be made: 36 374.1. District Collectors shall submit to the Commissioner copy: Deputy 38Commissioner, RCMG every Tuesday of status report of all requests 39received for settlement by payment of fine and offers of redemption 40received for the period Monday to Friday of preceding week. 41 424.2 The Deputy Commissioner, RCMG shall submit to the 43Commissioner status report every Tuesday of all pending cases 44involving settlement by payment of fine and redemption. 45 46 47 CHAPTER 6 AUTOMATIC FORFEITURE 48 49Note: Existing regulations on automatic forfeiture are CAO 6-93 and 50CMO 48-93. In bold letters are proposed additions, changes and 2 3
398

1 1rationale. Included in this proposed regulation are abandoned articles 2in the light of Chevron case GR 178759 dated 11 Aug. 2008- where the 3Supreme Court stated that the term ipso facto is defined as by the 4very act itself or by mere act. Probably a close translation of the 5Latin term would be by the fact itself. Thus, there was no need for any 6affirmative act on the part of the government with respect to the 7abandoned imported articles since the law itself provides that the 8abandoned article shall ipso facto be deemed the property of the 9government. Ownership over the abandoned importation was 10transferred to the government by operation of law under Section 1802 of 11the TCC, as amended by RA 7651 12 13Please note of the provision under RKC GA Standard 3.45 14 153.45. Transitional Standard 16 17When the Customs sell goods which have not been declared within the 18time allowed or could not be released although no offence has been 19discovered, the proceeds of the sale, after deduction of any duties and 20taxes and all other charges and expenses incurred, shall be made over 21to those persons entitled to receive them or, when this is not possible, 22held at their disposal for a specified period. 23 24The Philippines has 60 months from the deposit of the instrument of 25accession to WCO in June 2010 to comply with this transitional 26standard. 27Also included in this proposed regulation are articles in CBWs used as 28storage facilities which have not withdrawn within the prescribed 29storage period. As provided for in Section 3.5.3, CAO 1-2009 articles 30not withdrawn at the expiration of the prescribed period shall he deemed 31abandoned and ipso facto forfeited in favor of Government: to be sold at 32public auction by the District Collector of Customs pursuant to Section 331908, of the TCCP. 34 35Section 1 Definition of Terms 36 37 1.1 Automatic Forfeiture 38 39It is a process where certain articles are forfeited in favor of the 40government without undergoing any formal forfeiture proceedings. 41 42 1.2 Misdeclared Article 43 44Misdeclared article shall mean that the article(s) as found upon examination 45does not tally with the details of the article(s) as declared in the entry, which 46details identify the declared articles in the entry both for tariff classification and 47statistical purposes and if the misdeclared article(s) found upon examination 48can be specifically classified in the Tariff and Customs Code, such 49misdeclared article(s) does not fall under the same tariff description in the 50terms of the headings and subheadings in the Code as those of the articles 2 3
399

1 1declared in the entry. (Sec. IIa, CAO 6-93 which implements Section 2503 as 2amended by RA 7651) 3 4 1.3 Undeclared Article 5 6Refers to an article not, specified in the entry or invoice. (Sec. IIb, CAO 6-93) 7 81.4 Abandonment of an Article 9 10 Refers to a situation arising from any of the following circumstances: 11 12 a. where the consignee, importer or owner who expressly signifies in 13 writing to the Collector his intention to abandon such article; or 14 15 b. when the consignee, importer or owner of any imported article or 16 interested party after due notice, fails to file an entry within thirty (30) 17 days, which shall not be extendible, from the date of discharge of the 18 last package from the vessel or aircraft; or 19 20 c. having filed such entry fails to claim his importation within fifteen (15) 21 days, which shall not likewise be extendible, from the date of posting 22 of the notice to claim such importation; (See Section 1801, TCCP) or 23 24 d. If no payment confirmation is received within fifteen (15) calendar 25 days from the date of receipt by the Authorized Agent Bank (AAB) of 26 the final payment instruction, then the importer shall be deemed to 27 have failed to claim his importation after filing the entry. (Sec. 4.2.5, 28 CAO 10-08) 29 301.5 Overstaying Article 31 Refers to a article not withdrawn from customs bonded warehouse 32(CBW) authorized to store imported articles at the expiration of the prescribed 33storage period of one (1) year from time of arrival at the port of entry. 34(Adopted Sec. 3.5.3, CAO 1-09) 35 36Section 2 Administrative Provisions 37 382.1 Articles Subject to Automatic Forfeiture 39 402.1.1 Misdeclared Articles 412.1.2 Undeclared Articles 422.1.3 Abandoned Articles 432.1.4 Overstaying Articles 44 452.2 Due Notice Before an Article May be Considered as Abandoned 46 472.2 Due notice to importer/consignees/owners shall take in the form of e48mail which shall be sent by e2m Customs System. 49 50Section 3 Operational Provisions 2 3
400

1 1 23.1 Procedures in Forfeiting Misdeclared and Undeclared Articles 3 43.1.1 Having found upon examination the existence of misdeclared/ 5undeclared articles as above described, the Examiner/Appraiser shall 6forthwith inform the Collector of Customs of such fact in a report clearly 7identifying the articles found as misdeclared or undeclared. (Sec. II, CMO 48893) 9 10 Note: Suggested to read: Having found upon examination the 11existence of misdeclared/undeclared articles, the concerned Customs 12Operations Officer shall indicate the same in the working copy of the 13IEIRD/SAD or transit declaration. He shall inform the Collector of 14Customs through the Chief, Formal Entry Division within the day of such 15discovery through a memorandum copy furnish the Commissioner. 16Failure on the part of the concerned COO of such discovery within the 17day shall subject him to disciplinary action. 18 193.1.2 After receipt of such report, the Collector of Customs if in concurrence 20thereto, shall direct the Auction and Cargo Disposal Division or its equivalent 21unit in other ports to dispose the misdeclared or undeclared articles pursuant 22to law. (Sec. III, CMO 48-93) 23 24 Note: Suggested to read: After receipt of such report, the 25Collector if in concurrence thereto, shall direct the ACDD to conduct 26inventory and dispose of the misdeclared or undeclared articles within 27thirty (30) days. The inventory taking shall be conducted within two (2) 28days from receipt of instructions from the Collector. 29 303.1.3 If the Collector of Customs is of the opinion that the declared articles in 31a shipment, where misdeclared or undeclared articles/items were found, are 32or were entered and have been used as instruments in the importations of the 33misdeclared or undeclared article(s), then he shall commence seizure 34proceedings on the declared articles under Section 2530(f) of the Tariff and 35Customs Code. (Sec. II, CMO 48-93) 36 37 Note: Suggested to read: The Collector of Customs will 38determine within five (5) days from receipt of report from the concerned 39COO through Chief, FED whether the declared articles in a shipment, 40where misdeclared or undeclared articles/items were found, are or were 41entered and have been used as instruments in the importation of the 42misdeclared or undeclared article(s). If so he shall immediately 43commence seizure proceedings on the declared articles under Section 442530(f) of the TCCP, as amended. 45 463.2 Procedures in Giving Notice to Importers/Consignees/Owners of 47Imported Articles 48 493.2.1 Notice to importer/consignee/owner 50 2 3
401

1 1Upon receipt of the Inward Foreign Manifest (IFM), in the case of 2shipping lines or airlines or Consolidated Cargo Manifest (CCM) in the 3case of international freight forwarders, e2m Customs System shall 4automatically generate an e-mail to the consignee, owner or importer 5using the e-mail address provided by the importer/owner in the CPRS 6stating therein: 7 8 The shipping line/airline and/or freight forwarder has transmitted 9to us the manifest covering your shipment per S/S ____________ or via 10____________ which is expected to arrive within the day of receipt of 11this notice. Pursuant to Section 1801(b) of the Tariff and Customs Code 12of the Philippines, as amended you are given thirty (30) days to file the 13covering import entry, which shall not be extendible, from the date of 14discharge of the last package from the vessel or aircraft. Failure to file 15the import entry within the prescribed period shall be construed that you 16have abandoned your shipment. Under Section 1802 of the same Code 17an abandoned article shall ipso facto be deemed the property of the 18government and shall be disposed of in accordance with the provisions 19of this Code. 20 213.2.2 e2m Customs System to block entry lodging after the lapse of the 22prescribed period for entry lodging 23 24 e2m Customs System automatically blocks the import entry lodging 25against a manifest with which no corresponding import entry was lodged. 26 273.3 Responsibility of Warehouseman in Monitoring Overstaying Articles 28 293.3.1 In the meantime that the Automated Bonds Management System 30(ABMS) is not yet operational, it shall be the responsibility of the 31Warehouseman assigned to CBW authorized to store imported articles 32to monitor the existence of overstaying articles on their warehouse of 33responsibility. 34 35Section 4 Reportorial Requirements 36 374.1 Report on Misdeclared and Undeclared Articles 38 394.1.1 The Collector of Customs shall submit a report to the 40Commissioner every 17th and 3rd of the month of articles found by 41concerned COO as misdeclared and undeclared. 42 434.1.2 The Chief, ACDD shall submit a report to the Collector every 17th 44and 3rd of the month of misdeclared and undeclared articles disposed 45through auction or other modes of disposing articles in customs 46custody. 47 484.2 Report on Abandoned Articles 49

2 3

402

1 14.2.1 MISTG shall generate a report of abandoned articles for every 2Collection District every Monday of the month and submit the same to 3the District Collectors copy furnish the Commissioner and Resident 4COA. 5 64.3 Report on Overstaying Articles 7 84.3.1 Warehousemen assigned to CBW used for storage purposes shall 9submit a report every 17th and 3rd of the month to the Chief, Public and 10Private Bonded Warehouse copy furnished the District Collector and 11Chief, ACDD of all articles overstaying articles in his warehouse of 12responsibility. 13 144.3.2 When ABMS is already operational MISTG shall electronically 15generate a report every 5th of the month of overstaying articles for the 16preceding month for each CBW and submit the same Chief, CBW 17Operating Divisions copy furnish the District Collectors, Commissioner 18and Resident COA. 19 20 CHAPTER 7 REFUND SYSTEM 21 22Section 1 Refund of Unutilized Advance Deposits of Customs Duties with 23Authorized Agent Banks (Ref: CAO 5-92 and CAO 10-2008) 24 251.1 Definition of Terms 26 271.1.1 Totally Unutilized Letter of Credit 28 A Letter of Credit which has been certified by the AAB as having been 29cancelled in its books because there are no corresponding importation made 30whatsoever and no outward remittance of foreign exchange. 311.1.2 Partially Unutilized Letter of Credit 32 33A Letter of Credit with either a total or partial remittance of foreign exchange. 34 351.2 Administrative Provisions 36 371.2.1 Period by which to file claim for refund 38 39The importer/claimant shall have a period of one (1) year from the date the 40totally or partially unutilized L/C is cancelled by the AAB. The same period 41applies to file claim refund where customs duty deposit has been made and 42confirmed under the PASS% but for valid reason the L/C applied for has not 43been opened. 44 451.3 Refund Procedures (Note: A proposal since the procedures under CAO 465-92 is for manual IED.) 47 481.3.1 For totally unutilized L/C and partially unutilized L/C, application for 49refunds shall be made in a standard form, marked ANNEX A, addressed to

2 3

403

1 1Collection Service Attention: Revenue Accounting Division (RAD) supported 2by following documents: 3 4 a. Copy of electronic IED; 5 b. Copy of a duly received request for L/C cancellation by the L/C 6 opening bank; 7 c. Certification from L/C opening bank that it has given due course to 8 the request for cancellation by the accountee and has submitted 9 an L/C application message to customs through PASS5 for the 10 covering IED to be cancelled; 11 d. Clearance from Collection Service. 12 131.3.2 In the instance that customs duty deposit has been made and 14confirmed by PASS5 but L/C not opened for valid reasons a letter request for 15IED cancellation addressed to Collection Service Attention: Revenue 16Accounting Division. Clearance from Collection Service must support the 17request letter. 18 191.3.3 Procedures at Bureau of Customs 20 211.3.3.1 RRD performs following: 22 23 a. Checks with PASS5 and compares whether the amount 24 requested for refund equals the amount in IED that has not been 25 unutlized or balance therein in case of partially utilized IED. 26 Performs operation in PASS5 to block the utilization of IED for 27 payment of duties and taxes. 28 29 b. Assigns docket number, indicates the date of receipt thereof, 30 initials the same and returns a copy of application to claimant. 31 Claims not supported by all requirements are returned to the 32 claimant. 33 34 c. Transmits the entire claim folder Director, Collection Service with 35 Disposition Form for approval/disapproval of the Commissioner of 36 Customs/Tax Credit Committee (Attn: Tax Credit Secretariat). 37 381.3.3.2 In case the Commissioner of Customs/Tax Credit Committee 39approves the claim for refund, the same is forwarded to the Accounting 40Division, Financial Management Office, for preparation of the following: 41 42 a. Journal Voucher for the Commissioner's approval; 43 b. Tax Credit Certificate (TCC) and Accountings Disposition Form 44 for the approval/signature of the Commissioner of Customs; 45 c. The claim folder with signed TCC is returned to the Accounting 46 Division for final recording and release to claimant or its 47 authorized representative; 48 d. The Accounting Division must keep a record of all issuances to 49 avoid double refunds or multiple use of proof of payment and 50 import entry declaration (IED) for refund. 2 3
404

1 1 21.4 Timeline to Process Refund 3 4Claims for refund under this Section shall have a processing time schedule of 5ten (10) working days at the Offices under the District Collector of Customs 6and another ten (10) working days in offices under the Commissioner of 7Customs. 8 91.5 Clearance 10 11Clearances issued by Collection Service must have control numbers for this 12purpose and shall be valid for a period of three (3) months. The Deputy 13Collector for Assessment of the Port concerned shall be furnished with a copy 14of the said clearance. 15 16SECTION 2 REFUND OF EXCESS PAYMENTS 17 182.1 Period to File Claim for Refund 19 20The importer/claimant shall have a period of one (1) year from the date of 21payment of the duties and taxes sought to be refunded. 22 232.2 Refund Procedures 24 252.2.1 Application for refund shall be made in a Standard Application form 26(Annex "B") to be filed by the claimant or authorized representatives at the 27Office of the District Collector of the concerned Port. The application shall be 28supported by the following documents: 29 a. Original copy of the Import Entry Internal Revenue Declaration 30 (IEIRD); 31 b. Original copy of the Bill of Lading, Commercial Invoice and Packing 32 List; 33 c. Clearance from LBD and Collection Service. 34 352.2.2 The Office of the District Collector, receives the application, checks the 36same for completeness, gives the application its docket number, indicates the 37date of receipt thereof, initials the same, returns a copy of application to 38claimant and forwards the claim folder to RAD for verification of payments. 39Claims not supported by all requirements are returned to the claimant. 40 412.2.3 The RAD prepares certification of payment remittance and forwards the 42claim folder to the Liquidation and Billing Division (LBD) for preparation of 43Statement of Refund which in turn shall forward all pertinent documents to the 44District Collector for his approval/signature. 45 462.2.4 The District Collector transmits the entire docket folder to Ruling and 47Research Division (RRD) for review and preparation of the necessary 48Disposition Form for approval/disapproval of the Commissioner of 49Customs/Tax Credit Committee (Attn: Tax Credit Secretariat). 50 2 3
405

1 12.2.5 In case the Commissioner of Customs/Tax Credit Committee approves 2the claim for refund, the same is forwarded to the Accounting Division, 3Financial Management Office, for preparation of the following: 4 5a. Journal Voucher for the Commissioner's approval; 6b. Tax Credit Certificate (TCC) and Accountings Disposition Form for the 7approval/signature of the Commissioner of Customs. 8 92.2.6 The claim folder with signed TCC is returned to the Accounting Division 10for final recording and release to claimant or its authorized representative. 11 122.2.7 The Accounting Division must keep a record of all issuances to avoid 13double refunds or multiple use of proof of payment for refund. 14 15Section 3 Refund or Release of Cash Bond 16 173.1 These procedures cover refunds or releases of cash bonds the 18requests for such are made more than one (1) year from posting. 19 203.2 Procedure 21 223.2.1 Application for Refund shall be made in a Standard Application form 23(Annex "C") to be filed by the claimant or authorized representatives at the 24Office of the District Collector of the concerned Port. The application shall be 25supported by the following documents: 26 27 a. Original copy of the Import Entry Internal Revenue Declaration 28 (IEIRD); 29 b. Original copy of the Bill of Lading, Commercial Invoice and Packing 30 List; 31 c. Clearance from LBD and Collection Service; 32 d. Indorsement from the Department of Finance, together with all of its 33 attachments, relative to the approval of the conditionally-free 34 importation. 35 363.2.2 The Office of the District Collector, receives the application, checks the 37same for completeness, gives the application its docket number, indicates the 38date of receipt thereof, initials the same, returns a copy of application to 39claimant and forwards the claim folder to RAD for verification of payments. 40Claims not supported by all requirements are returned to the claimant. 41 423.2.3 The RAD prepares certification of payment remittance and forwards the 43claim folder to the Liquidation and Billing Division (LBD) for preparation of 44Statement of Refund which in turn shall forward all pertinent documents to the 45District Collector for his approval/signature. 46 473.2.4 The District Collector transmits the entire claim folder to Ruling and 48Research Division (RRD) for review and preparation of the necessary 49Disposition Form for approval/disapproval of the Commissioner of 50Customs/Tax Credit Committee (Attn: Tax Credit Secretariat). 2 3
406

1 1 23.2.5 In case the Commissioner of Customs/Tax Credit Committee approves 3the claim for refund, the same is forwarded to the Accounting Division, 4Financial Management Office, for preparation of the following: 5 6 a. Journal Voucher for the Commissioner's approval; 7 b. Tax Credit Certificate (TCC) and Accountings Disposition Form for 8 the approval/signature of the Commissioner of Customs. 9 103.2.6 The claim folder with signed TCC is returned to the Accounting Division 11for final recording and release to claimant or its authorized representative. 12 133.2.7 The Accounting Division must keep a record of all issuances to avoid 14double refunds or multiple use of proof of payment for refund. 15 16 17 CHAPTER 8 SURCHARGES 18 19Schedule of Surcharges 20 21 1. Failure to Declare Baggage 22 23Whenever any dutiable article is found in the baggage of any person arriving 24within the Philippines which is not included in the baggage declaration, such 25article shall be seized and the person in whose baggage it is found may 26obtain release of such article, if not imported contrary to any law upon 27payment of treble the appraised value of such article plus all duties, taxes and 28other charges due thereon unless it shall be established to the satisfaction of 29the Collector that the failure to mention or declare said dutiable article was 30without fraud. 31 32Nothing in this section shall preclude the bringing of criminal action against 33the offender. (Sec. 2502, TCCP) 34 35 2. Failure to Pay Liquidated Charges 36 37For failure to pay the amount of liquidated duties, taxes and other charges of 38a liquidation within ten (10) working days after the notice of liquidation shall 39have been publicly posted in the customhouse, a surcharge of ten per cent 40(10%) of the total amount or balance found upon liquidation shall be added 41thereto and collected therewith, which surcharge shall be increased to twenty42five per cent (25%) if the delinquency lasts for more than one year. (Sec. 432501, TCCP) 44 45 3. Failure or Refusal of Party to Give Evidence or Submit Documents for 46 Examination 47 48When the owner, importer or consignee of any imported articles, or the agent 49of either, fails, or refuses, upon lawful demand in writing by any customs 50official to appear, make oath or submit himself to examination , or to answer 2 3
407

1 1any material question or refuses to produce records, accounts or invoices in 2his possession pertaining to the value, classification or disposition of the 3article in question and deemed material in appraising the same, the Collector 4shall assess a surcharge of twenty per column ad valorem on the articles 5which is the subject of the importation. (Sec. 2504, TCCP) 6 7 4. Unauthorized Withdrawal of Imported Articles from Bonded Warehouse 8 9Upon any unauthorized withdrawal of imported articles store in a custom 10bonded warehouse, a surcharge of fifty per cent (50%) of duties, taxes, 11custom fees and charges, found to be due and unpaid, shall be added thereto 12and collected. The surcharge shall be increased by twenty-five per cent (25%) 13annually of the unpaid taxes if the delinquency lasts for more than one year. 14(Sec. 2501-A, TCCP) 15 16 5. Undervaluation, Misclassification and Misdeclaration in Weight, 17 Measurement or Quantity (Source: CAO 10-93) 18 195.1 Definition of Terms 20 215.1.1 Undervaluation 22 23Undervaluation is the term used when the dutiable value of the imported 24article that shall be so declared that the duties, based on the declaration of 25the importer/broker on the face of the entry, would be less by at least ten 26percent (10%) than should be legally collected. 27 285.1.2 Misclassification 29Misclassification is the term used when the imported article so described and 30entered that the duties based on the importers/brokers description on the 31face of the entry, would be less by at least ten per cent (10%) than should be 32legally collected. 33 345.1.3 Misdeclaration in Weight, Measurement or Quantity. 35 36There is misdeclaration in weight, measurement or quantity when the dutiable 37weight, measurement or quantity of imported article is found upon 38examination to exceed by ten percent (10 %) or more than the entered weight, 39measurement or quantity. 40 415.2 Administrative Provisions 42 435.2.1 Formula to determine percentage of difference 44 455.2.1.1 Formula to determine the percentage of undervaluationn 46 47The percentage difference in undervaluation is determined by dividing the 48difference between the duty as found and the duty as declared, by the duty as 49found. 50 2 3
408

1 15.2.1.2 Formula to determine percentage of misclassification 2 3The percentage difference in misclassification shall be determined by dividing 4the difference between the duty as found and the duty as declared by the 5duty as found. 65.2.1.3 Formula to determine percentage of is misdeclaration 7 8The percentage difference in misdeclaration shall be determined by dividing 9the difference between the weight, measurement or quantity as found and the 10weight, measurement or quantity as declared in entry, by the weight, 11measurement or quantity as declared. 12 135.2.2 Amount of surcharge 14 155.2.2.1 For misclassification 16 17When the percentage difference in misclassification is ten per cent (10%) or 18more but not exceeding thirty per cent (30%), the amount of surcharge shall 19be as follows: 20 21 a. When the percentage difference is ten per cent (10%) or more 22 but not exceeding twenty per cent (20%), a one time surcharge of 23 the difference is customs duty shall be imposed. 24 25 b. when the percentage difference is twenty per cent (20%) or 26 more but not exceeding thirty per cent (30%), a two times 27 surcharge of the difference in customs duty shall be imposed. 28 29Note: There is overlap between a and b in the case of percentage 30difference is 20%. It is suggested that b be rephrased to read when 31the percentage difference is more than 20 per cent (20%) 32 335.2.2.2 For undervaluation, misdeclaration in weight, measurement or 34quantity 35 36 When the percentage difference in undervaluation/misdeclaration in 37weight, measurement or quantity is ten percent (10 %) or more, but not 38exceeding thirty percent (30 %), the amount of surcharge shall be as follows: 39 40 a. When the percentage difference is ten percent (10 %) or more 41 but, not exceeding twenty percent (20 %), a one time surcharge of 42 the difference in customs duty shall be imposed. 43 44 b. When the percentage difference is twenty percent (20 %) or more 45 but not exceeding thirty percent (30 %) a two times surcharge of 46 the difference in customs duty shall be imposed. 47 48Note: Same comment as in Sec. 5.2.2.1 49

2 3

409

1 1When the percentage difference exceeds thirty percent (30 %), the existence 2of fraud is presumed and the imported articles, shall be subject to seizure 3proceedings under Section 2530 of the Tariff and customs Code, as 4amended. 5 65.2.3 Non-imposition of surcharge 75.2.3.1 For undervaluation 8 9When the entered dutiable value is based on value information approved by 10the Commissioner of Customs or by the Port Collector of Customs or their 11duly authorized representatives. 12 135.3.2 For misclassification 14 15 a. When the imported article is described in sufficient detail to enable 16 the same to be identified for tariff classification, provided that if 17 specifically classified in the Tariff Code, it should also be described 18 in tariff description or terms of the heading and sub-heading of the 19 TCCP. 20 21 b. When the declared classification is based on official rulings of the 22 Department of Finance, Bureau of Customs, National Economic 23 Development Authority, Tariff Commission, Board of Investment, 24 Central Bank and related offices. 25 26 c. When the entered tariff classification is based on an advance 27 information on classification issued pursuant to Section 1313-a of 28 the TCCP. 29 30 5.3.3 Errors in valuation, tariff classification, return of weight, quantity or 31measurement 32 33 When the entered dutiable value, tariff classification, weight, 34measurement or quantity is attended by errors as defined under Section 1707, 35in relation to Section 1407-a of the TCCP. 36 375.3 Imposition of Surcharge is Mandatory 38The imposition of surcharge under Section 2503 of the Tariff and Customs 39Code, as amended, is mandatory. Surcharge properly imposed cannot be 40waived. Good faith on the part of the importer is not a valid defense. 41 425.4 Approval of the Commissioner 43 44Any situation relative to the imposition or non-imposition of surcharge not 45covered by the foregoing guidelines shall be resolved on a case-b-case basis 46by the Collector of Customs concerned with notice to the Commissioner of 47Customs in accordance with Section 3501 of the TCCP. 48 49 CHAPTER 9 PENALTIES 50 2 3
410

1 1 Schedule of Penalties Which Otherwise are Not Included in the Body of this 2Code. 3 41 Affixing Seals 5 6Any person who, without authority affixes or attaches a customs seal, 7fastening, or mark or any seal, fastening or mark purporting to be a customs 8seal, fastening or mark to any vessel, vehicle on land, sea or air, warehouse 9or package shall be punished with a fine of not more than twenty thousand 10pesos or imprisonment of not more than five years, or both. If the offender is 11an alien, he shall be deported after serving the sentence; and if he is a public 12official or employee, he shall suffer an additional penalty or perpetual 13disqualification to hold public office, to vote and to participate in any election. 14(Sec. 3606, TCCP) 15 162 Concealment or Destruction of Evidence of Fraud 17 18Any person who willfully conceals or destroys, any invoice, book or paper 19relating to any article liable to duty after an inspection thereof has been 20demanded by the Collector of any collection district, or at any time conceals or 21destroys any such invoice, book or paper for the purpose of suppressing any 22evidence of fraud therein contained, shall be punished with a fine of not more 23than five thousand pesos and imprisonment for not more than two years. 24(Sec. 3605, TCCP) 25 263 Failure to Report Fraud 27 28Any master, pilot in command or other officer, owner or agent of any vessel or 29aircraft trading with or within the Philippines and any employee of the Bureau 30of Customs who, having cognizance of any fraud on the customs revenue, 31shall fail to report all information relative thereto to the Collector as by law 32required, shall be punished by a fine of not more than five thousand pesos 33and imprisonment for not more than one year. If the offender is an alien, he 34shall be deported after serving the sentence. If the offender is a public official 35or employee, he shall suffer additional penalty of perpetual disqualification to 36hold public office, to vote and to participate in any election. (Sec. 3603, 37TCCP) 38 394 Removal, Breakage, Alteration of Marks 40 41Any person who, without authority, will fully removes, breaks, injure or 42defaces or alters any customs seal or other fastening or marked placed upon 43any vessel, vehicles, on land, sea or air, warehouse or package containing 44merchandise or baggage in bond or in customs custody, shall be punished 45with the penalty prescribed in Section 3606 of the TCCP, as amended. (Sec. 463607, TCCP) 47 485 Removing Goods from Customs Custody 49

2 3

411

1 1Any person who maliciously enters any warehouse, or any vehicle laden with 2or containing merchandise with intent unlawfully to remove therefrom any 3merchandise or baggage in such vessels, vehicle or warehouse or otherwise 4in customs custody or control, or any person who receives or transports any 5merchandise or baggage unlawfully removed from any such vessel, vehicle or 6warehouse, or shall aid or abet such removal, shall suffer the penalties 7provided in Section 3606 hereof. (Sec. 3609, TCCP) 8 96 Removing or Repacking Goods in Warehouse 10 11Any person who fraudulently conceals, removes, or repacks merchandise in 12any warehouse or fraudulently alters, defaces or obliterates any marks or 13numbers placed upon packages deposited in such warehouse, or shall aid or 14abet in any such acts or omission, shall be punished with the penalties 15prescribed in Section 3606 hereof. 16 17Merchandise so concealed, removed or repacked or packages upon which 18marks or numbers have been so altered, defaced or obliterated, or the value 19thereof, shall be forfeited to the government. (Sec. 3608, TCCP) 20 217. Statutory Offenses of Officials and Employees 22 23Every official, agent or employee of the Bureau of Customs or of any other 24agency of the government charged with the enforcement of the provisions of 25this Code, who is guilty of any delinquency herein below indicated shall be 26punished with a fine not less than five thousand pesos nor more than fifty 27thousand pesos and imprisonment for not less than one year nor more than 28ten years and perpetual disqualification to hold office, to vote, and to 29participate in any public election: 30 31a) Those guilty of extortion or willful oppression under color of law. 32 33b) Those who knowingly demand other or grater sums than are 34authorized by law or receive any fee, compensation, or reward except as by 35law prescribed, for the performance of any duty. 36 37c) Those who willfully neglect to give receipts, as required by law for any 38sum collected in the performance of duty, or who willfully neglect to perform 39any of the duties enjoined by law. 40 41d) Those who conspire or collude with another or others to defraud the 42customs revenue or otherwise violate the law. 43 44e) Those who willfully make opportunity for any person to defraud the 45customs revenue or who do or fail to do any act with intent to enable any 46person to defraud said revenue. 47 48f) Those who negligently or designedly permit the violation of the law by 49any other person. 50 2 3
412

1 1g) Those who make or sign any false entry or entries in any book or make 2or sign any false certificate or return in any case where the law requires the 3making by them of such entry, certificate or return. 4 5h) Those who, having knowledge or information of a violation of the tariff 6and customs laws or any fraud committed on the revenue collectible by the 7Bureau of Customs, fail to report such knowledge or information to their 8superior official or to report as otherwise required by law. 9 10i) Those who, without the authority of law, demand or accept or attempt 11to collect directly or indirectly as payment of otherwise, any sum of money or 12other thing of value for the compromise, adjustment or settlement of any 13charge or complaint for any violation or alleged violation of law. 14 15j) Those who, without the authority of law, disclose confidential 16information gained during any investigation or audit, or use such information 17for personal gain or to the detriment of the government, the Bureau of third 18parties. (Sec. 3604, TCCP) 19 208. Unlawful Importation 21 22Any person who shall fraudulently import or bring into the Philippines, or 23assist in so doing, any article, contrary to law, or shall receive, conceal, buy, 24sell, or in any manner facilitate the transportation, concealment, or sale of 25such article after importation, knowing the same to have been imported 26contrary to law, shall be guilty of smuggling and shall be punished with: 27 281) A fine of not less than fifty pesos nor more than two hundred pesos and 29imprisonment of not less than five days or more than twenty days, If the 30appraised value, to be determined in the manner prescribed under this Code, 31including duties and taxes, of the article unlawfully imported does not exceed 32twenty-five pesos; 33 342) A fine of not less than eight hundred pesos nor more than five 35thousand pesos and imprisonment of not less than six months and one day 36nor more than four years, if the appraised value, to be determined in the 37manner prescribed under this Code, including duties and taxes of the article 38unlawfully imported exceeds twenty-five pesos but does not exceed fifty 39thousand pesos; 40 413) A fine of not less than six thousand pesos nor more than eight 42thousand pesos and imprisonment of not less than five years and one day nor 43more than eight years, if the appraised value, to be determined in the manner 44prescribed under this Code, including duties and taxes, of the article 45unlawfully imported is more than fifty thousand pesos but does not exceed 46one hundred fifty thousand pesos; 47 484) A fine of not less than eight thousand pesos nor more than ten 49thousand pesos and imprisonment of not less than eight years and one day 50nor more than twelve years, if the appraised value, to be determined in the 2 3
413

1 1manner prescribed under this Code, including duties and taxes, of the article 2unlawfully imported exceeds one hundred fifty thousand pesos; 3 45) The penalty of prison may shall be imposed when the crime of serious 5physical injuries shall have been committed and the penalty of reclusion 6perpetua to death shall be imposed when the crime of homicide shall have 7been committed by reason or on the occasion of the unlawful importation. 8 9In applying the above scale of penalties, if the offender is an alien and the 10prescribed penalty is not death, he shall be deported after serving the 11sentence without further proceedings for deportation. If the offender is a 12government official or employee, the penalty shall be the maximum as 13hereinabove pre scribed and the offender shall suffer an additional penalty of 14perpetual disqualification from public office, to vote and to participate in any 15public election. 16 17When, upon trial for violation of this section, the defendant is shown to have 18had possession of the article in question, possession shall be deemed 19sufficient evidence to authorize conviction unless the defendant shall explain 20the possession to the satisfaction of the court: Provide, however, That 21payment of the tax due after apprehension shall not constitute a valid defense 22in any prosecution under this section. (Sec. 3601, TCCP) 23 249.. Various Fraudulent Practices Against Customs Revenue 25 26Any person who makes or attempts to make any entry of imported or exported 27article by means of any false or fraudulent invoice, declaration, affidavit, letter, 28paper or by any means of any false statement, written or verbal, or by any 29means of any false or fraudulent practice whatsoever, or knowingly effects 30any entry of goods, wares or merchandise, at less than true weight or 31measures thereof or upon a false classification as to quality or value, or by the 32payment of less than the amount legally due, or knowingly and willfully files 33any false or fraudulent entry or claim for the payment of drawback or refund of 34duties upon the exportation of merchandise, or makes or files any affidavit 35abstract, record, certificate or other document, with a view to securing the 36payment to himself or others of any drawback, allowance, or refund of duties 37on the exportation of merchandise, greater than that legally due thereon, or 38who shall be guilty of any willful act or omission shall, for each offense, be 39punished in accordance with the penalties prescribed in the preceding 40section. (Sec. 3602, TCCP) 41 4210. Violations of Tariff and Customs Laws and Regulations 43 44Any person who violates a provision of this Code or regulations pursuant 45thereto, for which delinquency no specific penalty is provided, shall be 46punished by a fine of not more than one thousand pesos or by imprisonment 47for not more than one year, or both. If the offender is an alien, he shall be 48deported after serving the sentence and if the offender is a public official or 49employee, he shall suffer disqualification to hold public office, to vote and 50participate in any public election for ten years. (Sec. 3612, TCCP) 2 3
414

1 1 2 CHAPTER 10 - BONDS MANAGEMENT SYSTEM 3 4Section 1 Accreditation of Surety Companies 5 61.1 Accreditation of surety or bonding companies shall be centralized to 7the Bonds Audit Division (BAD), Collection Service, RCMG. 8 91.2 Only surety companies in good standing with the BOC shall qualify for 10accreditation. (Sec. 2, CMO 22-03) 11 121.2.1 To be in good standing a surety company: 13 14a. must have an authority from the Office of the President to engage in 15surety business; 16 17b. must be a holder of a Certificate of Authority duly issued by the 18Insurance Commission, which must be valid and effective at the time of 19application renewal and for the duration of the period applied for; 20 21c. must not have, as entity by itself, any due and demandable liabilities 22with the BOC at the time of the application of renewal; 23 24d. must have settled at least 70% of its outstanding obligations as a 25surety company of person/persons having transactions with BOC, if any, as of 26the first day of the immediately preceding quarter (e.g., as of July 1 for 27application for accreditation for the 4th Quarter). (Sec. 3.2, CMO 22-03) 28 291.3 Validity of accreditation. 30 31Accreditation shall be good and effective for a period of one quarter, 32renewable every quarter thereafter. For this purpose, a calendar year is 33divided as follows: 1st Quarter, January to March; 2nd Quarter, April to June; 343rd Quarter, July to September; 4th Quarter, October to December. (Sec. 3.3, 35CMO 22-03.) 36 371.4 For surety companies whose principal offices are located in Metro 38Manila, their applications for accreditation shall be filed with the BAD for 39approval of the Deputy Commissioner, RCMG upon the proper 40recommendation of the Chief, BAD and Director, Collection Service. 41 42For surety companies whose principal offices are located outside of Metro 43Manila, the applications shall be coursed through District Collectors who will 44transmit the applications to BAD after checking for completeness of 45supporting documents to the applications. 46 47The accreditation to be issued by BAD, RCMG shall be valid nationwide. 48 491.5 Requirements for Accreditation 50 2 3
415

1 1The surety company shall submit a written application for accreditation or 2renewal not later than fifteen (15) days prior to the onset of the quarter applied 3for which must be accompanied and supported by, in the original or duly 4authenticated copy, of the following: 5 61.5.1 Administrative Order issued by the Office of the President granting 7authority to the firm to engage in surety business; 8 91.5.2 Certificate of Authority issued by the Insurance Commission, indicating 10among others, its validity at the time of the application/renewal and for the 11duration of the quarter being applied for; 12 131.5.3 Copy of the latest audited annual financial statement of the surety 14company, but not exceeding one (1) year at the time of the 15application/renewal; 16 171.5.4 Certification of the Corporate Secretary of the surety firm indicating and 18attesting to the authority of the officer authorized to sign the bond, and 19exhibiting the authorized officials three (3) specimen signatures, initials and 20impression on the right and left hands thumbprints; 21 221.5.5 Statement under oath by the Corporate Secretary stating that as an 23entity by itself, it has no outstanding obligations with BOC, and that as a 24surety company, out of its total outstanding obligations in terms of the amount 25of the bonds issued in the past to BOC, the remaining unsettled obligations 26falls within the 30% threshold, as of the immediately preceding quarter. (Sec. 274, CMO 22-03)) 28 29The thirty (30%) rule shall apply only to the current matured accounts of not 30more than one (1) year older excluding at the time of filing such application of 31the preceding quarter, pending requests for abatement as certified by the 32Chief, Operating Division concerned. (Sec. I, CMO 7-07) 331.5.6 Outstanding Account Worksheet, showing the current accountability of 34the applicant surety company that the same is within the 30% threshold. 35 36In the computation of the 30% threshold of unsettled obligation, all accounts 37of surety firm shall be considered up to the extent of the amount unpaid or 38unsettled, including but not limited to accounts on bonds: 39 40 That are subject of pending court litigation; 41 That have been sequestered from bond principals, importers or 42consignees; 43 That have been issued involving valuation or classification 44issues/cases 45 46For purposes of computing the 30% threshold the Bonds Division shall 47prepare the Outstanding Account Worksheet which shall disclose the 48following information about outstanding accounts of the applicant surety 49company as of the first day of the immediately preceding quarter: 50 2 3
416

1 1 Kind of Bond 2 Bond Number 3 Amount of Bond 4 Name of Principal/Importer/Consignee 5 Amount of Charges 6 7The Outstanding Account Worksheet shall be certified true and correct by the 8Chief, Bonds Division and a copy thereof shall be furnished to the applicant 9surety company, Chief, LBD, concerned warehouse operating division and 10other concerned offices. 11 121.6 Upon receipt of the application with complete documentary 13requirements, the BAD shall review the same, particularly with respect to the 14authenticity and veracity of the documents submitted and the compliance with 15the 30% threshold rule. 16 17The review process shall be completed within seven (7) days. 18 191.7 In the conduct of the review, the BAD may verify with the concerned 20offices, such as, the Liquidation and Billing Division, Tax Exempt Division, 21Warehousing Operations Division or equivalent divisions, as well as with other 22various ports to ensure that all outstanding obligations of the applicant surety 23company are taken into account. 24 251.8 As part of the review process, the Chief, BAD, may recommend a 26course of action that would achieve a balanced liquidation of the outstanding 27accounts from previous years accountabilities with the more recent ones. 28 291.9 If in order, the Chief, BAD, shall forward the application/renewal to the 30Director, Collection Service for transmittal to the Deputy Commissioner, 31RCMG, for final approval, otherwise, it shall advise the applicant surety 32company of its action on the matter accordingly, copy furnished the Office of 33the Commissioner. 34 35Section 2 Settlement of Outstanding Accounts which are more than 1 Yr. 36Old 37 38The Surety and Bonding companies with unsettled or outstanding accounts 39arising from matured/expired bonds including those subject of court cases, 40must apply for staggered payments with the Commissioner of Customs thru 41the District Collector of Customs Attn: The Director, Collection Service and the 42Chief, Bonds Division. The proposed payment scheme should include an 43initial payment equivalent to thirty (30) percent of its total accountabilities with 44the remaining balance into equal monthly installments for a period of two (2) 45years which will be covered by post dated checks. (Sec. II, CMO 7-07) 46 47Section 3 Renewal of Accreditation 48

2 3

417

1 13.1 No renewal of accreditation shall be effected unless the 30% threshold 2requirement as year old accounts as the duly approved payment scheme as 3old accounts are fully satisfied/implemented. 4 53.2 Default of two (2) consecutive monthly settlements shall be treated as 6a breach of agreement and shall cause the recession of such agreement and 7the immediate suspension of its accreditation. The suspension shall only be 8lifted upon a new approved payment scheme duly approved by the 9Commissioner. (Sec. III, CMO 7-07) 10 11Section 4 - Repository of Original Copies of Bonds 12 134.1 The Central Records Management Division CRMD shall be the central 14repository of original copies of surety bonds posted with the Bureau of 15Customs. 16 174.2 Bonds Divisions or equivalent units of shall retain the duplicate copy of 18the bond and transmit the original copy to CRMD within five (5) days from 19posting by a duly accredited surety company. 20 21Section 5 - CANCELLATION OF BONDS 22 235.1. After liquidation of the entry, the Operating Division shall, within five (5) 24days from the completion of the liquidation, forward to the Bonds Division the 25complete documents required for liquidation, for the cancellation of the 26corresponding bond; 27 285.2. Within five (5) days from receipt of the above documents, the Chief, 29Bonds Division shall cancel the corresponding bond, notifying in writing the 30importer and the surety company of such cancellation; 31 325.3. The Bonds Division shall, within five (5) days from the cancellation of 33the bond, forward to the Liquidation and Billing Division a copy of the 34cancelled entry and the complete documents required for liquidation. 35 365.4. The Liquidation and Billing Division shall review the cancelled bond, 37entry, Statement of Liquidation and supporting documents for final liquidation 38within five (5) days from receipt of said documents from the Bonds Division; 39 405.5. The Bonds Division shall notify in writing the concerned Operating 41Division, WDRD and the Bonds Audit Division of such cancellation; 42 435.6. The Bonds Division shall likewise keep a record of all cancelled bonds 44and copies of corresponding liquidated entries, Statements of Liquidation and 45supporting documents. 46 47Section 6 - FORFEITURE OF BONDS 48 496.1 Pre-Forfeiture 50 2 3
418

1 16.1.1 From the time of importation and upon the issuance of the surety bond, 2all the necessary entries and/or supporting documents shall be reproduced by 3the Liquidation & Billing Division and copies thereof be furnished the Bonds 4Division and the BAD, Collection Service. The original copy of all entries shall 5be considered as security documents to be kept in a security storage area at 6the Liquidation & Billing Division (for consumption entry) and the WDRD (for 7warehousing entry) which shall be handled and controlled by an officer solely 8designated to manage said restricted area; 9 106.1.2 Upon maturity of the bond, the Bonds Division shall retrieve/recall the 11entry and the supporting documents thereof from the LBD (for consumption 12entries) or the WDRD (for warehousing entries) and submit a report to the 13BAD, Collection Service. 14 156.1.3 The Bonds Division, thru the District Collector of Customs of the port of 16entry shall notify both the obligor and the surety about the maturity of the 17bonds for payment and/or submission of documents to satisfy the conditions 18of the bond for cancellation, copy-furnished the BAD, Collection Service. 19 206.1.4 In the absence of such settlement or submission of required 21documents the District Collector of Customs, the list of all erring 22importer/surety company, together with all the necessary original copies of 23entries and/or supporting documents shall be forwarded to BAD and forfeiture 24proceedings shall follow. 25 266.1.5 The liability to prove that an obligation has been fulfilled shall rest upon 27the surety and/or the obligor through the submission of the following as the 28case may require: 29 306.1.5.1 Original copy of the official receipt or a copy thereof officially 31certified by the Chief, Accounting Division with the required documentary 32stamps; 33 346.1.5.2 Certification issued by the Chief, Liquidation and Billing Division 35and copy of the finally liquidated entry to the effect that the bond may be 36cancelled 37 386.1.6 It shall be the obligation of the surety company to reconcile its 39outstanding due and demandable bonds regularly every month including 40those that will mature one month hence to give them time to notify their 41respective clients. 42 436.2 Forfeiture 44 456.2.1 The Chief, BAD, thru the Director, Collection Service shall submit to the 46Deputy Commissioner, RCMG, the list of principal and surety and bonding 47companies with outstanding matured and expired bonds, stating the name of 48the CBW operator/importer, name of bonding company, bond numbers, 49amount of bonds/equivalent duties and taxes and expiry date, and 50recommend for the immediate issuance of the order of forfeiture of bonds, 2 3
419

1 1which remain outstanding after ninety (90) days from maturity thereof, within 2ten (10) working days from the lapse of said period of ninety (90) days. 3 46.2.2 The Deputy Commissioner, RCMG, shall indorse the list of principal 5and surety and bonding companies with outstanding matured and expired 6bonds, to the Commissioner for immediate issuance of order of forfeiture of 7bonds and/or order the filing of appropriate cases if warranted under the 8circumstances. 9 106.2.3 Upon issuance of such order by the Commissioner, the Deputy 11Commissioner, RCMG shall transmit copies of the same to the Director-Legal 12Service, Director-Collection Service and the District Collector concerned for 13the information and guidance of the Chiefs, Bonds Division, Operating 14Division, Liquidation and Billing Division, CBW operators, surety and bonding 15company. 16 176.2.4 Upon receipt of the Order of Forfeiture, the BAD, Collection shall: 18 196.2.4.1 Furnish the Insurance Commission of a copy of the same in 20order that the said agency can administratively act against the erring 21insurance firm; 22 236.2.4.2 Recommend the issuance of a hold order against all 24pending/future importations of the erring importer pursuant to Section 1508 of 25the TCCP. Any lifting of the hold order issued in relation hereto, may be lifted 26upon favorable recommendation by the Collection Service which shall signify 27that the erring importer has settled all its due and demandable obligations with 28the BOC in connection with the importation/s and bond/s under question; 29 306.2.4.3 Recommend the suspension of accreditation of the erring 31importer. In no case shall, the lifting of suspension of the importers 32accreditation be effected without the presentation of a bureau-wide clearance 33or certification from the Collection Service; 34 356.2.4.4 Cause the suspension/revocation of the Authority to Transact 36Business As Surety (ATBAS) of the errant surety firm. 37 386.2.5 The suspension/cancellation of the ATBAS of the erring insurance 39company and the exercise by the BOC of the provisions under Section 1508, 40TCCP, as amended, shall not bar the former from taking any other 41action/remedies available to it against the forfeited bond/s or the erring 42importer. 43 446.2.6 In case the surety company ceased to exist before the obligation with 45the Bureau is extinguished: 46 476.2.6.1 If a domestic surety - within three (3) year period from 48dissolution of a surety company the Law Division of the port of entry and/or 49Legal Service, Office of the Commissioner, shall file a claim under Section 77

2 3

420

1 1or 78 of the Corporation Law or under Rule 104 and 66 of the Revised Rules 2of Court; 3 46.2.6.2 In case of a foreign entry inquire from the Office of the Insurance 5Commissioner regarding the withdrawal of said foreign surety company and 6prosecute the claim in accordance with Sections 202-A, 202-B, 202-C, 202-D 7and 202-E of the Insurance Act. 8 96.2.7 As a preventive measure, the Bureau shall, henceforth, require that all 10bonds shall include the following agreement on the bond policy: 11 12"The herein surety company hereby agrees to settle immediately upon 13maturity the monetary value of the bond should the importer fail to fulfill the 14conditions herein guaranteed even without the production of the original entry 15and its supporting documents." 16 176.3 Post Forfeiture Regulations 18 196.3.1 Upon issuance of the Order of Forfeiture, any offer for the settlement of 20the importers/suretys obligations under the forfeited bonds shall be referred 21to the Office of the Commissioner for appropriate disposition; and the ports 22concerned and its operating divisions shall not entertain any transaction 23involving the forfeited bonds where civil/criminal cases and/or administrative 24cases, have already been initiated, unless referred to it by the Legal Service 25and the Collection Service. 26 276.3.2 Unless otherwise ordered by the Office of the Commissioner, bonds 28that are ordered forfeited shall immediately be referred by the Collection 29Service to the Legal Service, and the Collection Service shall assist in the 30prosecution of and/or the collection of duties and taxes due on the forfeited 31bonds. 32 33Section 7 - Penalties and surcharges for breach of Bond 34 35Without prejudice to other actions that the BOC may file against the 36importer/surety company, the following shall be imposed as follows: 37 387.1. For exportation made outside the prescribed period of exportation, 39payment of penalty equivalent to taxes/duties on the corresponding entry. 40However, in case there is partial exportation made within the prescriptive 41storage period the amount of penalty shall correspond to the duties and taxes 42due on the balance not exported in due time provided. 43 447.2. For failure to submit the required documents for liquidation within sixty 45(60) days from the date of complete or full exportation or payment although 46exported or paid within the prescribed period, progressive penalties shall be 47imposed and collected as follows: 48

2 3

421

1 17.2.1. 2% of the collectible duties and taxes when the liquidation documents 2are submitted within 30 days after the lapse of the required 60 day period for 3the liquidation; 4 57.2.2. 4% of the collectible duties and taxes when the liquidation documents 6are submitted within 60 days after the lapse of the required 60 day period for 7the liquidation; 8 97.2.3. 6% of the collectible duties and taxes when the liquidation documents 10are submitted within 90 days after the lapse of the required 60 day period for 11the liquidation; 12 137.2.4. 8% of the collectible duties and taxes when the liquidation documents 14are submitted within 120 days after the lapse of the required 60 day period for 15the liquidation; 16 177.2.5. 10% of the collectible duties and taxes when the liquidation documents 18are submitted within 150 days after the lapse of the required 60 day period for 19the liquidation; 20 217.3. However, in case the liquidation documents are submitted beyond 22thirty (30) days after the prescribed storage period, penalty equivalent to 23duties and taxes shall be imposed and collected even if the raw materials are 24exported within the prescribed period. 25 267.4. Late payment of duties and taxes 27 287.4.1. In addition to the penalty equivalent to duties and taxes due, payment 29of 1% per month of the collectible duties, taxes and other charges counted 30from the date of the expiry of the bond or bonds, up to the date of actual 31payment of duties and taxes. Nothing herein specified shall preclude the 32Collector of Customs concerned to proceed against the bond after expiration 33of the period stipulated if he deemed it necessary to protect the interest of the 34government. 35 367.5. Late extension of re-export bonds under Section 105 of the TCCP, as 37amended. 38 39 Surcharge for late filing of request for extension to re-export or late 40payment of duties and taxes under Section 105 of the TCCP after the first six 41(6) months period has lapsed shall be imposed. 42 43a. Php1,000.00 or 2% per month of the collectible duties and taxes 44whichever is higher, counted from the date of expiration of bond up to the date 45of filing and acceptance of the request for extension; 46 47b. The penal amount of the bond shall be imposed if there is no payment 48of duties and taxes or re-exportation after six (6) months from the expiration of 49date of the bond, and in addition thereto 2% per month of the collectible duties 50and taxes shall be collected. 2 3
422

1 1 2 CHAPTER 11 REWARD SYSTEM 3 4 TITLE 2 COMPLIANCE 5 6 7CHAPTER 1 STAKEHOLDER MANUAL REGISTRATION AND 8ACCREDITATION SYSTEM 9 10SECTION 1 IMPORTER ACCREDITATION 11 121.1 Administrative Provisions 13 141.1.1 Following are not covered by this Section but covered by other 15regulations with regard to manual or CPRS registration: 16 17 a. First and Last Importation for the year; 18 b. Importations by parcel post; 19 c. Importations covered by special laws, to wit: 20 d. Importations covered by the Special Economic Zone Act of 1995 21 (RA 7916); 22 e. Importations by enterprises covered by the Bases Conversion 23 Development Authority (RA 7227); 24 f. Importations of the Philippine Government, its agencies and 25 instrumentalities; 26 g. Importations by foreign embassies, consulates, legations, agencies 27 of other foreign governments and international organizations with 28 diplomatic status and recognized as such by the Government of the 29 Philippines, i.e. Asian Development Bank/World Health 30 Organization. 31 321.1.2 Only accredited importer shall be allowed to transact with BOC 33 34Only accredited importer for whom a Certificate of Accreditation was duly 35issued in accordance with this Order shall be allowed to transact business 36with the BOC; 37 381.1.3 One (1) time accreditation process. 39 40There shall be a one (1) time accreditation of importer. The Certificate of 41Accreditation shall be valid from the date of its approval and last unless 42otherwise suspended or revoked/cancelled; 43 441.1.4 Registration Fee 45 46Registration fee amounting to One Thousand Pesos (PHp1, 000.00) shall be 47paid by the applicant to the BOC prior to the filing of application for 48accreditation. 49

2 3

423

1 11.1.5 Customs Accreditation and Registration (CARE) Unit to be headed by 2a Chief is hereby created to perform the following functions: 3 4 a. Accredit importers and brokers; 5 b. Cancel/revoke/suspend accreditation of importers upon approval of 6 the Deputy Commissioner, RCMG observing due process. 7 81.1.5.1 Evaluators Team (ET) 9 10The Evaluators Team shall assess applications for accreditation based on 11information disclosed by applicants and recommend to the Chief, CARE 12applications for validation and/or inspection, based, among others on the 13following parameters: 14 15 a. Legitimacy of the business operations of the applicant; 16 b. Completeness of the documents required to be submitted 17 hereunder; 18 c. Absence of a variance or misrepresentation of material facts on 19 the part of the applicant vis--vis the documents submitted. 20 211.1.5.2 Information Validation Team 22 23There is hereby created a Validation Team (IVT) to perform information 24validation submitted by the applicant to include, among others, the following: 25 26 a. Existence of the applicant in the indicated place of business; 27 b. Existence of the applicants office, plant or warehouse, as the 28 case may be; 29 c. Actual business operations of the applicant or the impending 30 commencement thereof, as the case may be; 31 d. Genuineness of the documents presented in support of the 32 application; 33 e. Other facts material to the application for accreditation. 34 351.1.5.3 Supervision of CARE 36 37The Deputy Commissioner, Revenue Collection and Monitoring Group shall 38directly supervise the CARE and shall perform, among others, the following: 39 40 2. Operational Provisions 41 422.1 Where to File Application for Accreditation 43 442.1.1. All importers whose Head/Principal Offices are located in Metro Manila 45shall file their notarized application form with CARE Unit; 46 472.1.2. All importers whose Head/Principal Offices are located outside Metro 48Manila shall file the application with the CARE Satellite Office, or in case there 49is no such office in the area, with the Office of the District Collector or

2 3

424

1 1Port/Sub-port Collector under whose jurisdiction the geographical location of 2the Head/Principal Office of the applicant(s) is/are situated. 3 42.2. Accreditation Requirements 5 6All importers shall be required to file an application for accreditation in the 7prescribed form as in Annex A in case of a Corporation/Partnership/ 8Cooperative and Annex B in case of a Sole Proprietorship hereof, which 9shall be under oath and supported by the following documents: 10 11 a. BCOR evidencing payment of processing fee; 12 b. Printed CPRS application profile of importers duly lodged at the 13 chosen VASP; 14 c. For corporations, SEC Certificate of Registration, Articles of 15 Incorporation and By-laws and General Information Sheet as may be 16 applicable; 17 d. For partnerships, SEC Certificate of Registration, Articles of 18 Partnership and By-laws; 19 e. For cooperatives, Certificate of Cooperation issued by the 20 Cooperative Development Authority (CDA); 21 f. For sole proprietorships, proof of registration with the Department of 22 Trade and Industry; 23 g. Audited Financial Statement for the past year, if applicable; 24 h. BIR Certificate of Registration of the Applicant; 25 i. Income Tax of the company, partners, proprietor/owner for three (3) 26 years past year, as may be applicable; 27 j. Quarterly VAT Returns for the past three years, if applicable; 28 k. Company Profile with pictures of company premises indicated in the 29 application; 30 l. Location Map of principal place of business indicated in the 31 application; and 32 m. Personal profile of Corporate Officers, Owners/Proprietors, company 33 representative/s dealing with customs. 34All applications shall be filed in duplicate copies. The first copy shall be 35retained by the CARE for evaluation and record purposes, while the second 36copy shall be forwarded to the RATS Group. 37 382.3. Accreditation Procedure 39 402.3.1. All applicant importers are required to apply first for registration under 41CPRS; 42 432.3.2. Upon receipt of the "STORED" e-mail messages by the applicant under 44the CPRS, and applicant shall print a copy of the CPRS application profile to 45be submitted to the ICARE; 46 472.3.3. The application supported by the required documents for accreditation 48of importers shall be evaluated on a PASS/FAIL basis. Applications not acted 49upon within two (2) working days from receipt of the application shall be 50deemed approved. 2 3
425

1 1 22.3.4. Notice of denial or approval of applications of accreditations shall be 3sent via the CPRS under e2m Customs and shall be posted electronically at a 4conspicuous place; 5 62.3.5. CARE shall not be precluded from conducting the validation of 7information disclosed by the applicant randomly and the thorough evaluation 8of the application and supporting documents for accreditation based on the 9parameters enumerated in paragraphs 4.2 and 4.3 of this Order, respectively. 10 112.4. Reportorial Requirements 12 13An accredited importer, who is interested to continue his accreditation 14privileges, shall be required to submit the following on a prescribed date, viz: 15 162.4.1. Clear copy of Annual Income Tax Return (ITR) and Audited Financial 17Statement thirty (30) days after the required deadline of filing ITR under the 18law; 19 202.4.2. Clear copy of VAT Returns fifteen (15) days after the required filing of 21subject Returns under the law; 22 232.4.3. Clear copy of current Mayors Permit issued not later than March 1st of 24the current year; 25 262.4.4. Clear copy of the General Information Sheet for the partnership and 27corporation; 28 292.4.5. Notification and submission of supporting documents within thirty (30) 30days from happening of the event to the CARE Unit of any change in the 31material information previously declared and filed, such as, but not limited to 32the following: 33 34 a. Change of address, i.e. office address and/or warehouse address; 35 b. Change of Corporate Directors and Officers / Partners/ Cooperative 36 Directors and Officers; 37 c. Amendment/s to Articles of Incorporation/ Partnership / Cooperation 38 and By-Laws, as approved by the appropriate government 39 agencies; 40 d. Dissolution or closure / stoppage of business. 41 422.5 Disapproval, Suspension or Cancellation of Accreditation 43 44The application/accreditation may be disapproved, suspended or cancelled by 45reason of any of the following: 46 47 a. Submission of false information and / or material misrepresentation in 48 the application form as well as in any of the accompanying 49 documents required under this regulation;

2 3

426

1 1 b. Failure to submit the required reportorial requirements within the 2 prescribed period; 3 c. Failure to report to the proper customs authorities any fraud upon the 4 customs revenue which has come to the importers knowledge or 5 cognizance, or shall knowing assist or abet the importation or 6 exportation or entry of prohibited or any article which importation is 7 contrary to law. 8 9SECTION 2 CUSTOMS BROKERS ACCREDITATION 10 112. Definition of Terms 12 13When used in this rules and regulations, unless the context provide otherwise, 14the following terms or phrases shall have the meaning indicated. 152.1 Customs Broker refers to any bona fide holder of a valid Certificate of 16Registration/Professional Identification Card issued by the Professional 17Regulatory Commission, who is accredited to practice in the Bureau of 18Customs. 19 202.2 Customs Broker Practice refers to the professional services rendered 21by a customs broker in the Bureau of Customs pursuant to the pertinent 22provisions of Section 6, of R.A. No. 9280 otherwise known as the Customs 23Brokers Act of 2004, as amended by R.A. No. 9853. 24 252.3 BOC refers to the Bureau of Customs or any of its officer/official, 26other than the Commissioner, duly authorized to represent the said office. 27 282.4 Commissioner refers to the Commissioner of Customs. 29 302.5 PRC refers to the Professional Regulation Commission. 31 322.6 PRBCB refers to the Professional Regulatory Board for Customs 33Brokers created pursuant to Section 5 of R.A. No. 9280. 34 352.7 PRBCB Res. No. 01 s. 2010 refers to the Implementing Rules and 36Regulations of R. A. No. 9853. 37 382.8 GPP for Customs Brokers refers to General Professional Partnership 39of Customs Brokers which is formed by two (2) or more Customs Brokers 40under the provisions of Section 1767 of the Civil Code for the exercise of 41Customs Broker profession. 42 432.9 Customs Representative refers to full time employees of Customs 44Brokers, GPP and Corporations engaged in the business of customs 45brokerage accredited by the Bureau of Customs under this rules and 46regulations. 47 482.10 CARE refers to the Customs Accreditation and Registration Unit, 49headed by the Deputy Commissioner duly designated by the Commissioner 50(Deputy Commissioner). It shall have the responsibility and authority to 2 3
427

1 1accept applications and approve accreditation of Customs Brokers, GPP for 2Customs Brokers and Corporations. It shall also refer to any accreditation that 3may be created to replace I-CARE. 4 52.11 APO refers to the Accredited Professional Organization. For purposes 6of this regulation, it refers to the Chamber of Customs Brokers, Inc. (CCBI) or 7any professional organization of customs brokers which is or may hereafter be 8accredited by the PRC. 9 102.12 Corporations refers to a juridical entity which has a minimum paid up 11capital of one million pesos (Php 1,000,000.00) which primary purpose is to 12engage in the business of Customs Brokerage, duly registered with the 13Securities and Exchange Commission and BOC. 14 152.13 Engaging Or Hiring The Services Of Customs Broker refers to the 16Professional Contractual relationship between a customs Broker and a 17corporation evidenced by professional service contract. 18 192.14 Business Of Customs Brokerage refers to the business activities of 20corporations including representations for or in behalf of their importer-clients 21with the BOC as long as the corporation shall engage or hire the services of at 22least one (1) customs broker in his professional capacity. Making 23representation in behalf of importer-clients in BOC shall refer only to activities 24other than those in Section 6, Article II of R.A. No. 9280 and can only be 25undertaken through a customs broker or authorized customs representative(s) 26of customs brokers who shall be their full-time employees. 27 282.15 CPE refers to the Continuing Professional Education program of the 29PRC. 30 312.16 COA refers to the Certificate of Accreditation issued by I-CARE to 32prove that a customs broker is accredited with the Bureau of Customs. 33 342.2 Administrative Provisions 352.2.1 Accreditation of customs brokers required in transacting business with 36the Bureau of Customs. 37 38Accreditation is the process of registration and/or listing of customs broker 39desiring to engage in customs brokers practice. Customs Brokers desiring to 40practice their professions at the BOC shall apply for accreditation and obtain a 41COA. 42 432.2.2 Transaction for which services of a customs broker may not be 44required. 45 46An accreditation from the BOC is not required in the following transactions: 47 48 a. For ones own account A person dealing in customs and tariff 49 transaction at the Bureau of Customs solely for his own account

2 3

428

1 1 and not in behalf of another, unless the importer is engaged in the 2 general import of commercial nature. 3 b. Mail importations No registration is required of persons claiming 4 parcel in posts offices subject to customs clearance prior to 5 delivery; Provided, That the person claiming the mail is the 6 addressee shown on the parcel being cleared and positively 7 identified thru a valid ID card, and that the parcel does not contain 8 articles in commercial quantity required to be declared in a formal 9 entry/informal entry. 10 c. Diplomatic pouches and shipment claimed by authorized 11 representative of the foreign embassy, consulate, legation or 12 specialized agency of the United Nation concerned except non13 diplomatic shipments consigned to non-diplomatic officials or 14 employees of said offices. 15 162.2.3 Functions of CARE in relation to Customs Broker Accreditation 17 18CARE shall be responsible for processing the applications for accreditation of 19customs brokers, GPP for Customs Brokers and corporations engaged in the 20business of customs brokerage desiring to practice their profession in the 21Bureau of Customs or any representative thereof. 22 23CARE shall perform the following: 24 25 a. Receive/Process applications for accreditation. 26 b. Approve the application; Provided that, in case of disapproval of the 27 application, a Decision of Disapproval therefore shall be signed and 28 served to the applicant, APO and the PRBCB. 29 c. Keep and maintain a 201 file of all customs brokers applying for 30 accreditation, with the complete record of the application and final 31 disposition and all other relevant matter such as records of 32 investigations involving violation of law and/or customs rules and 33 regulation. 34 d. Such other task as may be directed by the Commissioner from time 35 to time which shall be done through a CAO 36 3. Procedure for Accreditation of Individual Customs Brokers 37 383.1 A duly accomplished application for accreditation (Annex C) under 39oath, together with the required supporting documents, in three (3) copies 40shall be submitted to ICARE upon payment of accreditation fee of One 41Thousand Five Hundred (P1,500.00), the official receipts of which shall be 42attached to the application. 43 443.2 All applicants whose Head/Principal Offices are located outside Metro 45Manila shall file the application with the ICARE Satellite Office, or in case 46there is no such office in the area, with the Office of the District Collector or 47Port/Sub-port Collector under whose jurisdiction the geographical location of 48the Head/Principal Office of the applicant(s) is/are situated. 49 503.3 Issuance, form, effect and validity of Certificate of Accreditation 2 3
429

1 1 23.3.1 Upon approval of the application a COA shall be issued under a BOC 3official seal upon payment of the documentary stamp tax of Php15.00. The 4COA shall have a serial number (aside from the printed serial number of the 5form) which shall be sequentially given and followed by the year of its validity 6(Example: No. 0000-2011). Said serial number shall be treated as a 7permanent identification number of the accredited customs broker concerned. 8 93.3.2 Issuance of a COA authorizes a customs brokers to practice his 10profession in any port of entry in the Philippines and shall be valid until such 11time the same is cancelled or revoked or the customs broker suspended for 12cause or upon failure of the customs broker to submit the yearly documentary 13requirement required of him to make his accreditation subsisting pursuant to 14Part III below. 15 163.3.3 CARE in cooperation with the APO and/or PRBCB reserves the right to 17check whether a customs broker is compliant with all government 18requirements relative the practice of customs broker profession. 19 203.4. Appeal to the Commissioner 21 223.4.1 The decision of the Deputy Commissioner-RCMG to disapprove an 23application for accreditation may be appealed to the Commissioner within (15) 24days from receipt of disapproval, without prejudice likewise to the filing of new 25application if the ground or basis of disapproval of the original application no 26longer exists. 27 283.4.2 The Commissioner shall decide the appeal within thirty (30) days from 29receipt of the records from I-CARE. 30 313.4.3 The filing of new application pending appeal is tantamount to 32withdrawal of subject appeal. 33 343.5 Documentary Requirements in Customs Brokers Accreditation 35 36The application shall be accompanied with verified photocopies of the 37following supporting documents: 38 39 a. Certificate of PRC Registration as a Customs Broker; 40 b. PRC Professional ID; 41 c. Certificate of Good Standing from APO; 42 d. Certificate of completion of twenty (20) credit units earned a year 43 before filing of accreditation application from a PRC accredited CPE 44 provider. This requirement shall not apply to newly passed customs 45 broker. 46 47A newly passed customs broker is defined as a customs broker who applied 48for accreditation less than one (1) year from passing the Customs Broker 49Licensure Examinations (CBLE); and 50 2 3
430

1 1 e. Certified list of customs representatives who must be customs 2 brokers full time employees with corresponding SSS numbers. 3 43.6 Annual Reportorial Requirements 5 6An accredited customs broker who is interested to continue his accreditation 7privileges, is enjoined to submit the following verified supporting documents, 8within fifteen (15) days before the lapse of one (1) year from date of CAO 9issuance and every year thereafter, viz: 10 11 a. Current PRC ID; 12 b. Certificate of Goods Standing from APO; 13 c. Certificate of completion of twenty (20) credit units earned a year 14 before submission of documents from a PRC accredited CPE service 15 provider; and 16 d. If applicable, List of Customs Representatives who must be customs 17 brokers full time employees with corresponding SSS numbers. 18 19 4. Accreditation of Corporations 20 214.1 Documentary Requirements 22 234.1.1 A duly accomplished application for accreditation signed by the 24corporations president or any corporate officer authorized under a board 25resolution as certified by the corporate secretary, under oath in three (3) 26copies shall be filed with I-CARE upon payment of accreditation fee of Five 27Thousand Pesos (P5,000.00), the official receipts of which shall be attached 28to the application. 29 30The application shall be accompanied with verified photocopies of the 31following: 32 33 a. SEC Registration and By-Laws; 34 b. Latest General Information Sheet (GIS); 35 c. Duly notarized contract with Customs Broker who is hired or 36 engaged in professional capacity and not as employee; 37 d. COA of hired or engaged Customs Broker who must be BOC 38 accredited. 39 404.2 Suspension of Certificate of Accreditation issued to corporations 41 42The certificate of accreditation issued by CARE to corporations shall be 43deemed suspended if the accredited customs broker with whom it has entered 44professional service contract is suspended by I-CARE or the Customs 45Brokers COA has been suspended/cancelled or revoked. 46 474.3 Annual Reportorial Requirements 48 49An accredited corporation interested to continue their accreditation privileges, 50is enjoined to submit the following verified supporting documents, within 2 3
431

1 1fifteen (15) days before the lapse of one (1) year from date of CAO issuance 2and every year thereafter, viz: 3 4 a. Valid Mayors Permit; 5 b. Latest General Information Sheet; 6 c. Notarized copy of contract with hired or engaged customs broker; 7 d. COA of hired or engaged customs broker. 8 9 5. Duties and Responsibilities of Customs Brokers 10 115.1 Record-keeping 12 13Customs Brokers shall keep and maintain, in a correct, orderly, and itemized 14manner, complete records and file copies of all his correspondence and other 15records relative to the conduct of his profession as provided for in Section 163514 of the TCCP. 175.1.1 Retention of Records 18 19Customs brokers shall keep at their stated office address copies of 20importation records in whatever form covering their professional practice 21including records enumerated therein for a period of three (3) years from the 22date of import entry filing. 23 24For Corporations, they shall keep and maintain, in a correct, orderly, and 25itemized manner, complete records for a period of three (3) years. 26 275.1.2 The records referred to above all be considered confidential and shall 28not be disclosed to any person other than his clients by the broker nor the 29Commissioner or his authorized representative, except by subpoena duces 30tecum issued by a duly authorized customs official or a court of competent 31jurisdiction. 32 335.1.3 During the period of retention, Customs Brokers shall maintain his 34records in such manner that they may readily be examined and made 35available upon demand for inspection, copying, reproduction, or other official 36use by the Commissioner for his authorized representative in the conduct of 37compliance audit. 38 395.1.4 Interference with examination of records 40 41A Customs Broker shall not refuse access to conceal, remove, or destroy the 42whole or any part of his records related to the practice of his professions as a 43customs broker which is being sought, or which the broker has reasonable 44grounds to believe may be sought, by the Commissioner or his authorized 45representative; nor shall a broker otherwise interfere, or attempt to interfere, 46with any proper and lawful order to procure or produce relevant information 47contained in such records required to be retained in the course of compliance 48audit. 49 505.2 Responsible supervision and control over their representatives 2 3
432

1 1 2Customs Brokers shall exercise strict supervision and control over their 3representatives when following up transactions related to their customs 4practice. They shall be held strictly responsible and solidarily liable for acts or 5commissions of their representative which, in the exercise of due and 6reasonable care and diligence, would have been prevented. 7 85.3 Diligence in correspondence paying monies 9 105.3.1. Customs Brokers shall exercise due diligence in handing financial 11settlements, in answering correspondence, and in the preparation in filing of 12documents relating to the practice of his profession and other customs 13matters handled by him. 14 155.3.2. Funds received by a broker from a client for payment of duties, taxes 16other charges or other debts or obligation to the Bureau of Customs shall be 17paid within in five (5) days from date of receipt of such funds or date due. 18Likewise customs brokers shall within ten (10) days account to their clients 19the funds or other charges received by them from the government or properly 20payable on account their clients business. 21 225.4 Conflicts of interest 23 24A Customs Broker who is an importer himself shall not act as such for another 25importer who imports goods and merchandise of the same general character 26as that imported by the broker unless the client has full knowledge of the 27matter. 28 295.5 False information 30 31A Customs Broker or his representative shall not file procure or assist the 32filing of any claim, or of any document, affidavit, or other paper known by him 33to be false and fraudulent, nor shall knowingly give, or solicit or procure the 34giving of, any false or misleading information or testimony in any matter 35pending before the Bureau of Customs or official representative thereof. 36 375.6 Undue influence upon government official and employees 38 39A customs Broker or his representative shall not influence or attempt to the 40influence the conduct of any BOC official or employee of the BOC in any 41matter pending before it or any official representative thereof, by the use of a 42threat, false accusation, duress, or the offer of any special inducement or 43promise of advantage, or by bestowing any girt of favor or other thing value. 44 455.7 Misuse of accreditation privilege 46 47A customs broker shall not permit this accreditation or his name to be used, 48directly or indirectly, by or for any non-registered customs broker or other 49person, other than his own representative(s). 50 2 3
433

1 15.8 Relations with a broker whose accreditation has been suspended or 2revoked. 3 4A customs broker shall not directly or indirectly: 5 6 a. Accept employment or use his service to effect a customs transaction 7 as an agent or surrogate of a Customs Broker whose accreditation 8 has been revoked, suspended or cancelled, and could no longer 9 practice his profession; 10 b. Assist in the furtherance of any customs transaction of such persons; 11 and 12 c. Permit any such person directly or indirectly to participate any 13 manner in the promotion, control or direction of his customs practice. 14 Nothing herein shall be deemed prohibit any customs broker from 15 acting as a broker or any bona fide importer or exporter, 16 notwithstanding if such importer or exporter is also Custom Broker 17 whose accreditation has been suspended, revoked, or cancelled. 18 195.9 Advise to clients 20 215.9.1 Withholding of false information. A customs broker shall not withhold 22information relative to any customs practice from a client/customer who is 23entitled to the information. He shall exercise due diligence to a certain the 24correctness of any information and shall not knowingly impart to a client any 25false information relative to his practice. 26 275.9.2 Error or omission by clients - A Customs Broker who knows that a 28client/customer has not complied with the law or regulation or has made an 29error on omission on, any document affidavit, of other paper which the law of 30regulation require such client to execute, shall advice his client/customer 31promptly of such fact. 32 335.9.3 Illegal schemes. A Customs Broker shall not suggest to a 34client/customer or a prospective client any scheme or plan known to be illegal 35or irregular designed to evade payment of any duty, tax or charge or other 36debt or obligation owing to government or any scheme aimed putting the BOC 37or any official representative thereof in disrepute. 38 395.10 Withdrawal of services as Customs Broker 40 41The right of a Customs Broker to withdraw his services, once assumed must 42arise only from justifiable cause. A broker should not abandon the unfinished 43task to the detriment of his client when the client insists upon unlawful course 44in conduct of custom practice or transactions, or if the client deliberately and 45with malicious intent disregards and agreement or obligation as to fees or 46expenses, in which case the broker maybe justified in withdrawing after 47submission of written notice of withdrawal which must be confirmed by the 48client and the Collector of Customs of the port concerned thereby allowing the 49client sufficient time to employ the services of another customs broker 50provided, that the client may discharge the services of the broker for cause or 2 3
434

1 1loss of confidence with Notice to the CARE and Collector of Customs 2concerned. Upon withdrawal, if services after a retainer or advance fees have 3been paid, the Customs Broker shall refund to the client such unearned 4potion. 5 65.11 Limitation of Liability 7 8A Customs Broker shall not evade liability with respect to a just claim by the 9client arising out of the wrongful act or negligence of the broker or his customs 10representatives in connection with a matter handled by him nor shall enter 11into a contract which purports to evade his liability. 12 135.12 Display of Certificate 14 15A Customs Broker must have an office for business where he shall display his 16Certificate of Accreditation as Customs Broker or photocopy thereof 17conspicuously in his office so that it may be seen by anyone transacting 18business in his office. 19 205.13 Change of Business Address 21 22A Customs Broker shall immediately notify his client of any change of office 23address and give written notice of his new address to the BOC copy furnished 24I-CARE and the Collector of the Port(s) where he is regularly practicing the 25profession, within ten (10) after moving the new address. 26 275.14 Seizure and Protest Cases 28 29A Customs Broker may represent by written consent, his clients in seizure and 30protest cases involving valuation or classification issues. 31 32 6. Cancellation, suspension or revocation of accreditation 336.1 Grounds for suspension or revocation of accreditation 34 35The grounds for suspension or revocation of accreditation as customs broker, 36GPP and accreditation of a corporation shall include, but not limited to, the 37following: 38 39 a. Deliberate failure or refusal without justifiable reason to comply with 40 the duties and responsibilities of Customs Broker or an accredited 41 corporation prescribed in this regulation. 42 43Justifiable reasons as contemplated herein shall mean any and all acts the 44commission of which shall not render him liable either administratively or 45criminally under existing laws, rules or regulations. 46 47 b. Misdeclaration or undervaluation of imported or exported articles that 48 resulted or would have resulted in the loss of government revenues, 49 or in evasion of any control regulation of the government.

2 3

435

1 1 c. Failure to report the proper customs authority any fraud upon the 2 customs revenue which has come to his knowledge or cognizance, 3 or shall knowingly assist or abet the importation or exportation or 4 entry of prohibited or any article which importation is contrary to law. 5 d. Misappropriation of the funds entrusted to a customs broker or 6 corporation by a client for payment of duties, taxes and other charges 7 and other accounts or obligation owing to the Bureau of Customs and 8 order authorized agencies of the Government. 9 e. Conviction of the customs broker or any board of directors or officers 10 of the corporation, at any time after filing of an application for 11 accreditation, of a crime involving moral turpitude. 12 f. Continued neglect of duty or incompetency. 13 g. Lack of proper supervision and control over their customs 14 representatives authorized to act on their behalf in connection with 15 practice of the professions in the case of customs broker and as an 16 employer in case of a corporation. 17 h. Discovery of false or misleading information in his application for 18 accreditation with respect to any material fact. 19 i. Failure to submit the annual reportorial requirements within the period 20 prescribed as mentioned in the herein regulation. 21 j. Violation of these rules and regulation. 22 23 7. Administrative Proceedings 24 257.1 Investigation of complaint or charge 26 277.1.1 Every complaint or charge against a Customs Broker, a GPP, or a 28Customs Brokerage, herein referred to as respondent, which may be the 29basis for disciplinary action, may be lodged with the Director, Legal Service 30(LS) who shall then refer the same to the Prosecution and Litigation Division 31(PLD), to determine if there is sufficient basis to recommend filing of charges 32against the respondent. 33 347.1.2 If the act complained of is serious and prima facie evidence is shown to 35support the complaint or charge, the Director, Legal service may motu propio 36issue an order of preventive suspension of the respondents accreditation for 37a period of 30 days. 38 397.2 Contents of statement/notice of charges 40 417.2.1. The statement of charges shall give a plain and concise, description 42and summation of the facts claimed to constitute grounds for suspension or 43revocation of the accreditation. A statement of charges which fairly informs 44the respondent of the charges against him so that they is able to prepare his 45answer, shall be deemed sufficient. 46 477.2.2. The notice of charges shall inform the respondent that: 48 49 a. He may be represented by counsel of his choice. 50 b. He will have the right to cross-examine witnesses. 2 3
436

1 1 c. He shall file in duplicate a verified answer to the charges within 2 a period of ten (10) working days after receipt thereof. 3 47.3 Commencement of formal proceedings 5 67.3.1. Within fifteen (15) days from the date of receipt of the verified answer 7submitted by the respondent, the Hearing Officer shall recommend any of the 8following: 9 10 a. Deletion form the statement of charges those which he deems to 11 have been satisfactorily answered by the broker, or 12 b. Dismissal of the charges altogether if he deems it to have been 13 satisfactorily answered by the broker. 14 157.3.2 Upon receipt of the recommendation of the Hearing Officer, the 16Director, LS shall determine and direct whatever course of action shall be 17taken. If based on (a) above, shall order the Hearing Officer to set the date 18and time of the hearing; if based on (b) above, shall so notify the broker 19accordingly. However, any decision to dismiss the charges is without 20prejudice to the filing of another charge based on other grounds as may be 21warranted. 22 237.3.3 Service of notice and statement of charges 24 257.3.3.1 The statement/notice of charges shall be delivered to the broker 26personally or by registered mail. If attempts to serve the same are 27unsuccessful, the notice and statement of charges shall be left with the 28contact person or the person in charge of the brokers office, properly 29acknowledged. 30 317.3.3.2 The APO and PRBCB shall be furnished copy of the statement 32of charges or notice of hearing to enable them to conduct their investigation 33on the matter and for appropriate disciplinary action on the broker as may be 34warranted. 35 367.3.4 Failure to Appear 37 38When a respondent broker or his counsel of record fails to appear on the date 39and time of a scheduled hearing, the Hearing Office shall proceed with the 40hearing ex parte as a scheduled and shall hear and receive evidence 41submitted in behalf of the Government, unless a timely motion for 42postponement for justifiable cause is made. 43 447.3.5 Hearing 45 467.3.5.1 The Director, Legal Service shall designate/assign a hearing officer as 47well as a government prosecutor from among the lawyers of the Legal 48Service. 49

2 3

437

1 17.3.5.2 Rights of respondent broker/corporation. The broker/corporation 2shall be given full opportunity to defend himself or through his counsel of 3records, to testify as witness or to present witnesses in his behalf who shall be 4subjected to cross-examination by the prosecutor, and shall have the right to 5examine all exhibits offered at the hearing and to cross-examine witnesses 6against him. 7 87.3.5.3 Interrogatories.- Upon written request of either party, the Hearing 9Officer may permit the position upon oral or written interrogatories to be taken 10before any officer duly authorized to administer oath. The other party shall be 11given a reasonable time in which to prepare cross-interrogatories and, if the 12deposition is oral, shall be permitted to cross-examined the witness. The 13deposition shall become part of the record of the case. 14 157.3.6 Order of hearing 16Unless the Hearing Officer directs otherwise for special reasons, the order of 17hearing shall be as follows: 18 19 a. The prosecutor shall produce evidence in support of the charges 20 prepared against the broker. 21 b. The respondent broker or counsel shall then offer evidence in support 22 of his defense. Counsels may be heard from each side in the order 23 herein prescribed but, in event, the prosecutor is entitled to the opening 24 and closing examination. 25 267.3.7 Evidence 27 28The rules of evidence shall be substantially followed in the reception of 29evidence, but technical errors in the admission of evidence which do not 30prejudice the substantial rights of any of the parties shall not vitiate the 31proceedings. 32 337.3.8 Postponements 34Hearings shall be conducted expeditiously and shall not exceed three (3) 35months from date of the first scheduled hearing. Postponements of the 36hearing may be granted to either party not more than two (2) times and not 37exceeding two (2) weeks for each postponement except when there are 38special circumstances or justifiable reasons which, in the opinion of the 39Hearing Officer, warrant the grant of the request for further postponement. If 40prosecutor request for more than two (2) postponements or more than one 41month postponement after the case has been set for hearing, the charge shall 42be dismissed. If the respondent broker request more than two (2) 43postponement or more than one month postponement, he may be considered 44in default and the Hearing Officer shall thereupon proceed to hear the 45testimony of the witnesses of the government and/or received documentary 46evidence, and shall draft the decision in the case for review and approval of 47the Commissioner, thru the Director, Legal Service. 48 497.3.9 Submission of Memorandum 50 2 3
438

1 1The Hearing Officer may, in his discretion require the prosecutor or 2respondent broker or both to submit a memorandum to support of their 3respective sides as may be warranted by the situation, with respect to their 4arguments relative to the facts in issue. 5 67.3.10 Contents of Decision 7 8The decision determining the merits of the case shall state clearly and 9distinctly the facts and the law or regulation on which it is based and signed 10by the Director, Legal Service and duly noted by the Deputy Commissioner, 11RCMG. If the charge is based on breach of these rules and regulations and/or 12the Code of Ethics of the customs broker profession, the same shall also be 13stated in the decision, copy of which shall be furnished the PRBCB in case if 14breach of the latter. 15 167.3.11 Partial proof of charges 17 18If the Director finds that one or more of the charges is not sufficiently proven, 19he may base his decision on any remaining charge(s) if the facts alleged are 20sufficiently established by preponderance of evidence. 21 227.3.12 Order of suspension or revocation of accreditation 23 24If one or more of the charges are sufficiently established by the evidence 25presented at the hearing, the decision of the Director shall contain an order of 26suspension or revocation of the brokers accreditation. 27 28To prevent the Customs Broker from transacting with the Bureau of Customs 29during the period of suspension of accreditation or when accreditation is 30revoked the Deputy Commissioner, MISTG shall be furnished copy of the 31decision for purposes of blocking the CPRS registration of the broker in the 32e2m Customs System. Likewise the Deputy Commissioner, EG, shall be 33furnished copy of the decision for purposes of making demand to the broker to 34surrender the Customs Passes issued to the brokers representatives. 35 36At the same time the Deputy Commissioner, RCMG may recommend the 37revocation of the license to the PRBCB if warranted and shall issue a 38Customs Memorandum Circular apprising all customs officials and employees 39if such recommendation is adopted. 40 417.3.13 Petition for reconsideration or re- hearing 42 43A customs broker whose accreditation has been suspended or revoked may 44within the period for perfecting an appeal as provided in Sec. 19 hereof file a 45verified petition with the Commissioner to have the order of suspension or 46revocation set aside or modified, or to grant a re-hearing of the case. No 47more than one petition for reconsideration or re-hearing shall be allowed. 48 497.3.14 Grounds for reconsideration or re-hearing 50 2 3
439

1 1No petition for reconsideration or re-hearing shall be entertained unless it is 2for any of the following causes: 3 4 a. The decision is manifestly not in conformity with the evidence and/or 5 facts presented; or 6 7 b. Newly discovered evidence which could not have been discovered and 8 produced during the hearing by the exercise of due diligence and which 9 is of such character as would probably warrant the modification and/or 10 reversion of the decision. 117.3.15 Action and procedure on petition 12 137.3.15.1 The Commissioner may, upon receipt of the petition, deny the 14same if he deems it devoid of merit or set aside the order of suspension or 15revocation and grant a re- hearing, when necessary. If the petition is based 16upon the cause mentioned in sub-section 15, a hereof and the 17Commissioner finds his decision to be not in conformity with the evidence 18and/or facts presented, he may amend his decision accordingly without 19necessary granting a re-hearing unless he deems the introduction of 20additional or new evidence if advisable. 21 227.3.15.2 If the Commissioner finds the Petition meritorious, he shall refer 23the petition to the Deputy Commissioner, RCMG, with instruction to re hear 24the case and take additional or new testimony or evidence. The Hearing 25Officer shall, within five (5) days from receipt of such referral, set the date 26and time for the re-hearing with due notice given to the petitioner-broker and 27the prosecutor at least ten (10) working days prior to the scheduled hearing. 28The procedure governing the re-hearing and the contents of the new decision 29shall be the same as that governing the original proceedings. 30 317.3.16 Effects of granting the petition 32 337.3.16.1 A petition for reconsideration and re-hearing given due course 34shall vacate the decision rendered and the case shall be heard de novo but 35the recorded evidenced taken during the course of the original proceedings so 36far as the same is material and competent to resolve the issues shall be 37reincorporated at the re-hearing without retaking the same. 38 397.3.16.2 A petition for reconsideration or re-hearing filed in time 40suspends the running of the period of appeal, and the time during which the 41petition has been pending shall be deducted from the period for perfecting an 42appeal. 43 447.3.17 Appeal to the secretary of finance; effect of 45 467.3.17.1 A decision of the Commissioner of Customs ordering the 47suspension of revocation of the accreditation of a customs broker or 48corporation may be appealed to the Secretary of Finance by filing with the 49Office of the Commissioner a notice of appeal and payment of the amount of 50Two Thousand (PhP2,000.00) Pesos as docket fee within fifteen (15) days 2 3
440

1 1after receipt of copy of the decision by the broker or counsel of record. If the 2notice appeal has been timely filed and the required amount of docket fee is 3paid, the appeal is deemed perfected. If no appeal is perfected within the 4period herein fixed, the decision of the Commissioner shall become final and 5executory. 6 7The order of suspension or revocation of the accreditation of customs broker 8or corporation shall not be stayed during the pendency of the appeal unless 9the Commissioner, on motion and after hearing as he may deem fair and just, 10should direct otherwise. 11 127.3.17.2 An appeal perfected while a petition for reconsideration or re13hearing is pending with the Commissioner constitute an abandonment of the 14petition and renders the same moot and academic 15 167.3.18 Action and procedure on appeal 17 187.3.18.1 Within five (5) working days after an appeal is perfected, the entire 19records of the case shall be transmitted by the Commissioner to the Secretary 20of Finance with each and every page duly numbered in consecutive manner. 21 227.3.18.2 Upon receipt of the records, the Secretary of Finance shall decide 23the case on the basis of evidence and records transmitted, aided by any 24memorandum and/or brief which the broker and/or prosecutor may submit. On 25the other hand, Secretary of Finance may dismiss the appeal on the grounds 26that the appeal is without merit or is made manifestly to delay, in which case 27the decision shall be deem revived and the case remanded to the 28Commissioner of Customs for execution. 29 307.3.18.3 The decision of the Secretary of Finance may be appealed to the 31President of the Philippines within fifteen (15) days from receipt of the 32decision thereof, otherwise, the same shall be considered final and executory. 337.3.19 Notice of reinstatement 34 35If the Commissioner of Customs or the Secretary of Finance on appeal after 36reviewing the records and the evidence adduced in the hearing finds that the 37charges or remaining charges, does not warrant suspension or revocation of 38the accreditation, he may render a decision ordering the lifting of suspension 39or revocation and serve the broker or corporation with Notice of 40Reinstatement. 41 427.3.20 Reprimand and/or fine 43 447.3.20.1 If the Commissioner of Customs, or the Secretary of Finance on 45appeal, after reviewing the records and evidence adduced in the hearing finds 46that the charges or remaining charges, even if duly established, is not 47sufficiently serious to warrant suspension or revocation of the accreditation, 48he may serve the broker with a written reprimand. Such reprimand and the 49facts on which it is based may be considered in connection with any 50disciplinary proceeding that may be instituted against the broker. 2 3
441

1 1 27.3.20.2 If a reprimand is deemed not adequate enough to deter the 3customs broker from committing the same of any other offence which would 4warrant a suspension of revocation of his accreditation, the Commissioner or 5the Secretary of Finance on appeal, may in addition to the reprimand may 6impose an administrative fine on the broker in the amount of One Thousand 7(PhP1,000.00) Pesos but not exceeding five thousand (PhP5,000.00) 8depending on the gravity of the case. 9 107.3.21 Report to the professional regulatory board for customs brokers and 11accredited professional organization 12 13The Commissioner of Customs shall, in the event a decision adverse to a 14respondent broker has become final and executory, furnish a copy of the 15decision to the APO and PRBCB for whatever action it may deem proper and 16appropriate to take under the premises. 17 187.3.22 Reapplication for accreditation 19 20One (1) year after the date of revocation or cancellation of registration with 21prejudice, a customs broker or corporation may petition the Commissioner for 22reaccreditation and registration as customs broker. Such petition shall not be 23favorably considered unless the Commissioner after considering the gravity of 24the offence or misconduct which gave rise to the petitioners disability is 25satisfied that the petitioner has refrained from all activities violative of the 26relevant provision of part 4 hereof and that petitioners conduct has been 27exemplary during the period of his disability. In any case, the Commissioner 28shall also take into account whether the petitioner has made reimbursement 29for the laws incurred on part of the government. 30 31 8. Representatives of customs brokers and corporations 32 33 8.1 Authority and qualifications of representatives of customs brokers 34 35Customs representatives of Customs Brokers must be full- time regular 36employees of the broker authorized to for and in his behalf in following up the 37processing of entries, permits and other customs documents related to the 38practice of the customs broker of his profession in so far as the mechanical 39aspect of the practice is concerned. Customs Representatives are not 40expected to delve on substantive aspect of the practice of the profession like 41customs valuation, tariff classification, rules of origin, requirements of 42regulatory agencies of government and similar aspects. 43 448.2 No person shall be employed as a customs representative unless he 45possess the following qualifications: 46 47 a. Must be a Filipino citizen of legal age; 48 b. Must be a college graduate;

2 3

442

1 1 c. Has completed a training program or seminar of at least four hours 2 for the currents year conducted by the APO or by any PRC 3 Accredited CPE Service Provider with certificate of attendance. 4 d. Current NBI Clearance 5 68.3 Authority and qualifications of representatives of corporations 7 88.3.1 Customs representatives of Corporations must be full- time regular 9employees of the Corporation authorized to for and in his behalf performing 10functions outside the scope of customs broker professional practice as 11defined in Section 6, RA 9280 and its implementing rules. 12 138.3.2 No person shall be employed as a customs representative unless he 14possesses the following qualifications: 15 16 a. Must be a Filipino citizen of legal age; 17 b. Must submit company-issued ID, SSS and TIN; 18 c. Certificate of Employment; 19 d. Current NBI Clearance 20 218.4 Action on unqualified customs representatives 22 23Any customs representative of broker found not to possess the required 24qualification shall be deleted from the certified list of representatives 25submitted by the broker. If a disqualification is found in the course of the 26processing of his application registration, his Customs Pass if already issued 27shall be confiscated by the ESS upon discovery of his disqualification. 28 298.5 Disciplinary action against errant customs representatives 30 31The following grounds shall be considered as sufficient basis for confiscation 32or denial of the Customs Pass issued: 33 34 a. Discovery of criminal record or conviction of a crime involving moral 35 turpitude; 36 b. Submission of a fake, spurious or forged document in the course of 37 acting or working on behalf of his employer or other persons doing 38 business with BOC; 39 c. Disorderly conduct while in the customs zone or premises, such as 40 selling of goods or merchandize and other forms of gross 41 misbehavior towards customs personnel and other customs broker or 42 their representatives. 43 d. Complaint or charge under oath imputing to the customs 44 representatives any inimical, dishonest or unethical conduct in the 45 performance of his assigned tasks; 46 e. Habitual delinquency in the commission of offences or violation of 47 rules and regulations promulgated by the Bureau of Customs; 48 f. Moonlighting or extending services on behalf of other brokers or 49 other corporations; and

2 3

443

1 1 g. Any order acts prejudicial to the interest of the government and its 2 revenues. 3 48.5.1 In addition to the confiscation or denial of his Custom Pass, the 5brokers representative shall be barred from entering the customs zone or 6premises pursuant to Opinion No. 195, series of 1956, of the Secretary of 7Justice published in BOC Circular Letter No.2917 dated 16 September 1958, 8which shall likewise be ordered by the Commissioner against customs broker 9whose accreditation has been suspended or revoked. 10 118.5.2 At the instance of broker of representative concerned or if the ground 12for the initial action taken as stated above is sufficiently serious or grave, I13CARE shall direct that an investigation be conducted on the matter. If prima 14facie evidence is found to support such initial action, the Commissioner shall 15issue a definitive ban against the representative concern; otherwise, the 16matter shall be considered closed and the Customs Pass already confiscated 17shall be returned. If the evidence adduced during the investigation so 18warrants, the proper criminal action shall be instituted against the brokers or 19corporations representative. 20 218.5.3 Notice of separation form or termination of service 22 23A customs broker shall, within five (5) working days from date of separation or 24termination of employment of its representative, give written notice thereof to 25the District Collector of the Port were said representative is assigned, copy 26furnished the Commissioner (Attn: CARE, ESS) containing the name of 27representative, the date the separation or termination became effective, and 28the number of the Customs Pass issued to him. If the said Customs Pass 29could not be returned, the reasons for the failure to return the same shall be 30stated in the notice. 31 328.5.3.1 Effect of failure to give timely notice 33 34The customs broker concerned shall be held responsible and liable for any 35violation of the rules and regulations or any irregularity that may be committed 36by his representatives, if no notice was sent as required in Sec.4 hereof. 37 38 9. Termination of employment of a broker by client 39 40A client importer/exporter may, at any time and for goods cause, terminate the 41services of his customs broker. Such termination, however, shall not bind the 42BOC or any representative thereof until written notice of such termination is 43filed with the CARE and the District Collector of the Port(s) concerned and 44after it has been circularize for the information and guidance of all concerned. 45The written notice to be filed shall expressly contain the written conformity 46(conforme) of the replacement broker whose service shall be acknowledge by 47the BOC or any representative thereof on the date of circularization of the 48written notice of charge. 49 50 10. Stationery the billing form statements 2 3
444

1 1 210.1 Stationery. The name and accreditation certificate number of customs 3brokers shall be printed and the brokers stationery and billing forms. Use of 4rubber-stamp imprint in said documents is prohibited Brokers shall desist from 5using in their official correspondence with the BOC or any representative 6thereof different or various kind of stationery. 7 810.2 Billing statements. All billing statements prepared by customs broker 9shall indicate, among others, the amount charged as professional fee which 10may or may be subject to valued added tax (VAT) as may be required 11pursuant to existing law, rules or regulations. 12 13 11. Signing of entries and other customs documents 14 15Customs broker shall, when signing entries and other customs documents, 16indicate/state his PRC ID NO., certificate of accreditation number and date of 17issuance below his printed name. 18 19 Example : JUAN A. DELA CRUZ 20 PRC ID NO. 1234 21 CA NO. 000-2005 22 ISSUED ON: MARCH 15, 2010 23 24 12. Roster of customs brokers 25 26The APO/PRBCB, within three (3) months after the date of effectivity of this 27Section, shall submit a list of all customs brokers with their respective office 28address and telephone number(s), to BOC thru the ICARE. The list shall be 29updated every end of April, August and December of each year. 30 31 13. Special provisions relative to general professional partnerships of 32 customs brokers 33 3413.1 Recognition by the Bureau of customs 35 36Customs Brokers who have pooled their professional expertise, talents and 37resources to form a general professional partnership (GPP) pursuant to the 38provisions on PARTNERSHIP (Title IX of Book IV or RA 386 (Civil Code of 39the Philippines may, at any time, file an application for official recognition of its 40juridical personality with the BOC which shall be separate and distinct from 41the personality of each of the partners, who must be customs brokers as 42defined under this Section.. 43 4413.2 Liability of signing partner and GPP. 45 46A Signing Partner filing or lodging or signing an import entry and other 47customs declaration for his personal account shall be personally liable therein 48and that the accredited GPP shall not be bound by such declarations. A 49Signing Partner signing for the accredited GPP shall indicate on the import

2 3

445

1 1entry and other customs declarations under his name the name of the GPP, in 2which case, the GPP shall be solidarily liable with the Signing Partner. 3 413.3 Procedure to obtain official recognition 513.3.1 Initially, a duly accomplished application for recognition in three (3) 6typewritten copies shall be submitted to the ICARE after payment of the non7refundable amount of three thousand pesos (P 3,000.00) per GPP as 8accreditation fee. The application, which must be under oath, shall be filed 9together with verified photocopies of the following supporting documents: 10 11 a. Articles of General Partnership with the corresponding Certificate 12 of Registration issued by the SEC attached thereto; 13 b. Certified list of the firms bona fide customs representatives 14 signed by the Managing Partner together with their corresponding 15 valid NBI clearance and SSS ID card; 16 c. Certification of Accreditation by at least one (1) partner; 17 d. Certificate of good standing from APO for non-accredited 18 partners; 19 e. Certificate of completion of twenty (20) credit CPE units issued by 20 a PRC accredited service provider for the year preceding 21 application for GPP recognition for non-accredited partners; 22 f. Valid PRC Certificate of Registration for non-accredited partners; 23 g. Valid PRC ID as Customs Broker for non-accredited partners. 24 2513.5 Issuance, form, validity and effect of certificate of recognition 26 2713.5.1 If CARE finds the application in order and complete with all the 28required documents, it shall issue a Certificate of Recognition of the GPP 29under its official seal upon payment of the required documentary stamp tax, 30the official receipt number of which shall be properly indicated. 31 3213.5.2 The certificate of recognition shall have a serial number to be given 33sequentially and followed by the year of its validity (Example: No. 0000-2006). 34The serial number shall be permanently assigned to the GPP concerned as its 35permanent identification number and only the year of its validity shall be 36changed when a new certificate is issued upon renewal by said GPP. 37 3813.5.3 Official correspondence addressed to the BOC or any 39representative thereof on matters relative to the practice of the customs 40broker profession of a GPP or for and in behalf of any of its partners shall be 41given due course only if the GPP has been officially recognized, except those 42pertaining to the personal concerns of any of its partner-signatories or any 43representative thereof, which shall be signed by such partner-signatory. 44 4513.6 Condition of recognized GPP 46 4713.6.1 A GPP firm shall have a Managing Partner who shall be the 48chief operating officer (COO) whose main task is to manage the GPPs 49practice of the customs broker profession and shall be the one shown on its

2 3

446

1 1Articles of General Partnership or the one chosen by the partners pursuant to 2a resolution of the partners. 3 413.6.2 A GPP firm must have two (2) or more partner-signatories if the 5scope of its practice extends to collection districts outside of Metro Manila. 6 713.6.3 Applications for accreditation by customs brokers who are partners in a 8GPP and application for recognition of the GPP may be made simultaneously. 9In such cases, the partners shall submit consolidated certified list of its 10customs representatives, which shall be attached to the application of 11recognition, to be signed by the Managing Partner. 12 1313.6.4 The Certificate of Recognition shall be valid and subsisting but 14subject to annual submission of documents hereunder together with BOC 15Official Receipt: 16 17 a. Valid Certificate of Accreditation of at least one partner; 18 b. Valid PRC ID of non-accredited partners; 19 c. APO certificate of good standing for non-accredited partners; 20 d. Certificate of completion of twenty (20) CPE units of non21 accredited partners issued by PRC accredited CPE service 22 provider for the preceding year; 23 e. Certified list of GPPs customs representatives who must be its 24 full-time employees. 25 2613.6.5 Unless allowed in writing by all partners no partner shall moonlight or 27surreptitiously offer and/or use his professional services solely in his own 28account and for his personal gain and benefit while still a member of the GPP 29firm. However, no partner shall allow himself to be a partner of another GPP, 30directly or indirectly, to avoid conflict of interests. 31 3213.6.6 The resignation, retirement, separation or death of one of the partners 33of a recognized GPP shall not result in the cancellation of the certificate of 34recognition granted by the BOC but only the cancellation of the certificate of 35accreditation of the partner concerned. In any such event, the Managing 36Partner of the GPP firm shall notify the CAS within ten (10) days after 37effectivity of the resignation, retirement or separation date of the partners 38demise. 39 4013.6.7 Any customs broker subsequently admitted as a regular partner into an 41existing recognized GPP shall be acknowledged as such upon proper 42notification to the CAS, which notice shall be accompanied with a photocopy 43of its amended Article of General Partnership duly filed with the SEC. 44 4513.6.8 The obligations of GPP partners among themselves and with third 46parties as well as the dissolution of the partnership shall be governed by the 47rules on GPP. In case of dissolution, the Managing Partner shall officially 48notify the CAS in writing of the date the winding up of its customs business 49will be completed for purposes of record. For the information of their clients

2 3

447

1 1and the transacting public, the Commissioner shall issue a circular stating 2when the existence of the GPP has been terminated 3 4SECTION 3 VALUE-ADDED SERVICE PROVIDERS (VASP) 5 63.1 Definition of Term 7 83.1.1 Value Added Service Provider (VASP) 9 10 A third party service provider of the interface between the e2m 11Customs System clients and BOC Gateway. 12 133.2 Administrative Provisions 14 153.2.1 VASP Accreditation Committee (VAC) (Note: Who are members? Or 16shall this Section add The Commissioner through a Customs Special 17Order shall create the VAS Accreditation Committee (VAC)?) 18 19The VASP Accreditation Committee created by the BOC to ensure the 20successful implementation of e-Customs Project, shall perform the following: 21 22 a. Facilitate and fast-track the accreditation process to effect the 23 transition of service offered by the current Entry Encoding center to 24 the VASPs. 25 b. Recommend relevant policies, responsibilities and liabilities of 26 VASPs, rules and processes related to all issues surrounding the 27 accreditation of VASPs. 28 29 c. Recommend evaluation criteria, business model and timeframes for 30 accreditation of VASPs for approval of the Commissioner of 31 Customs. 32 33 d. Publish and hold informational campaigns to ensure widest 34 circulation of the VASP program in partnership with the accredited 35 VASPs. 36 373.2.2 Accreditation Criteria 38 39The VASP Accreditation Committee shall observe the published accreditation 40criteria and shall recommend any amendments thereto to the Commissioner 41for approval. 42 433.2.3 Conditions for Accreditation 44 453.2.3.1 Service Level Undertaking (SLU) and Non-Disclosure 46Undertaking (NDU) 47 48The selected VASPs shall sign a Service Level Undertaking (SLU) and a Non49Disclosure Undertaking (NDU). 50 2 3
448

1 1 (Note: Should there not be a standard format?) 23.2.3.2 Accreditation Fees 3 4A one-time accreditation fee of PhP 200,000.00 (first year) and an annual fee 5of PhP 50,000.00 (second year onwards) shall be imposed. 6 73.2.3.3 Performance Bonds 8 9The accredited VASPs shall post a Performance Bond, issued by a BOC10accredited surety company, amounting to Five Million Pesos (PhP 5M), which 11shall be forfeited in favor of BOC in the event it is established that the 12selected VASP is in default in any of its obligations. 13 143.2.3.4 Probationary period 15 16The accredited VASPs shall undergo a six (6)-month probationary period 17(technical evaluation) after which the BOC shall decide whether or not it will 18grant full accreditation status to the VASP. 19 203.2.3.5 Period and Renewal of Accreditation 21 22The selected VASPs shall be given accreditation status for a period of three 23(3) years, inclusive of the probationary period, and will be renewable yearly 24thereafter subject to the evaluation of the quality of their performance as 25measured by the Service Level Undertaking (SLU), and compliance to 26Eligibility requirements. 27 283.2.3.6 Other Conditions 29 30 a) BOC may re-conduct the accreditation process 31 if there is only one (1) company accredited 32 within subject period. 33 34 b) BOC may carry out further accreditation 35 processes after three (3) years of operation of 36 the initially accredited VASPs. 37 38 c) After the six-month probationary period (where 39 a minimum of PhP 5 Million paid up capital was 40 required upon submission of application), the 41 minimum paid up capital shall be increased to 42 PhP 10 Million. 43 44 d) VASPs must successfully pass the technical 45 acceptance tests (including systems 46 integration, data security and integrity, 47 communications, and performance) that will be 48 conducted by the Management Information 49 Systems and Technology Group of the BOC for 50 the initial, the post probationary and the yearly 2 3
449

1 1 technical evaluation and validation, to qualify 2 for continuous accreditation. 3 43.2.4 Pre-Termination 5 6BOC reserves the right to pre-terminate the accreditation of a selected VASP 7for any of the following: 8 9 a) Violation of the provisions of this Order and related rules and 10 regulations, including SLU and NDU. 11 12 b) Violation of the Tariff and Customs Code of the Philippines, e13 Commerce Act and other related laws. 14 15 c) Actions inimical to the security and integrity of the BOC e-Customs 16 operations. 17 18 d) Other violations as may be determined by the Commissioner of 19 BOC. 20 213.2.5 Schedule of Fees Payable to VASP by the Transacting Public 22 23The VASPs will determine their respective fee structures based on several 24factors such as market conditions and systems sustainability requirements, 25among others. The BOC shall not collect those fees in behalf of the VASPs. 26 273.2.6 Systems for Import and Export Entries through VASPs 28 29The accredited VASPs, under existing agreements and/or regulations, shall 30develop the VASP front-end ICT system and establish necessary 31infrastructure and telecommunications facilities to allow electronic 32transactions. 33 34The BOC-VASP Gateway (operated by the BOC) shall be the sole 35connectivity of VASPs to the BOC e-Customs System for this purpose. The 36BOC clients shall be connected to the BOC-VASP Gateway via accredited 37VASP of their choice, which has the facility for the processing of import and 38export entries. 39 40The VASP facility shall be available to duly registered importers, exporters 41and their designated brokers. 42 433.2.7 VASP Implementation 44 45The BOC shall implement the VASP in phases in order to effectively manage 46the technical requirements and cushion the impact for change particularly 47among the external and internal stakeholders. BOC shall define the schedule, 48ports, and types of transactions that will be covered in each phase. 49 503.3 Operational Provisions of Accreditation Process 2 3
450

1 1 2 a. Through the VAC, BOC issues invitation for a Letter of Intent from 3 select ICT companies in the Philippines. This also includes the 4 Eligibility Requirements that interested candidates must meet in 5 order to be eligible for participating the accreditations process. 6 7 b. The VAC reviews the documents submitted by the candidate 8 companies that pass the eligibility requirements and qualified to 9 proceed to the next stage. 10 11c. BOC releases the Term of Reference, along with the Non Disclosure 12Understanding to be signed by the candidate VASP. The Terms of Reference 13includes the system and other critical requirements (for technical proposal) 14and financial requirements (for financial proposal). 15 16d. Candidate VASPs prepare and submit their technical and financial 17proposals. 18 19e. Candidate VASPs shall also start with the development of the VASP 20system based on the system requirements issued by BOC. At this point, BOC 21releases its Testing Criteria that will be used as guide for testing the VASP 22System of the candidate companies. 23 24f. Using the agreed Testing Criteria as reference, BOC organizes a 25Quality Assurance Team, composed of technical experts from MISTG which 26will determine the compliance of the candidate company to the system 27requirements. The testing shall also include, among others, checks for user28friendliness of the system. 29 30g. After the conduct of test and site visits, BOC shall now identify 31successful candidates that will be accredited to become VASP/s. 32 33h. BOC shall pre-qualify VASP Candidates. 34 35i. BOC shall release terms of reference. 36 37j. VASPs shall submit technical and financial proposal. 38 39k. VASP shall develop the System Application. 40 41l. BOC shall test for quality assurance the VASP System Application. 42 43m. BOC shall select and accredit the VASP. 44 45SECTION 4 CARGO SURVEYORS 46 474.1 Definition of Terms 48 494.1.1 Surveying Company. 50 2 3
451

1 1Refers to a reputable company with an international office network in all 2countries supplying imported articles to the Philippines and engaged in the 3business of cargo surveying of shipments. 4 54.1.2 Accredited Cargo Surveying Company. 6 7A surveying company processing a duly approved accreditation issued by the 8Committee for Accreditation of Cargo Surveying Companies (CACSC). 9 104.1.3 Committee for Accreditation of Cargo Surveying Companies (CACSC). 11 12The accreditation committee created under AO 24, as amended directly under 13the supervision and control of the Office of the President tasked and 14authorized to grant and approve accreditation of cargo surveying companies 15and periodically review the performance thereof The CACSC may also 16investigate violations of the provisions of this Order and thereafter suspend 17and/or revoke the accreditation given to a cargo surveying company. 18 194.1.4 Bulk Cargo 20 21Refers to cargoes in a mass of one commodity not packaged, bundled, bottled 22or otherwise packed. 23 244.1.5 Break-Bulk Cargo 25 26Refers to non-containerized general cargo stored in boxes, bales, pallet or 27other individuals units to be loaded onto or discharged from vessels. Not 28shipped in containers or bulk. 29 304.1.6 Bulk/Break-Bulk Cargo Surveying. 31 32Refers to the inspection, analysis and/or computation of bulk or break-bulk 33cargo for the purpose of determining the correct dutiable weight, quantity, 34description of goods in tariff terms, and/or cargo make or quality. 35 364.1.7 Customs Survey Inspectors (CSI). 37Organic employees and officers of the Bureau of Customs with special 38qualifications and technical training in cargo inspection and surveying and 39capable of rendering reliable and efficient survey reports relative to the same. 40 414.1.8 IFIA 42 43Shall refer to the International Federation of Inspection Agencies. 44 454.1.9 Load Port Survey Report, 46 47A report issued by an ACSC for Bulk/Break-Bulk cargo to be imported into the 48Philippines. The report shall be submitted to the BOC directly from the ASCS 49in a secure electronic format. 50 2 3
452

1 14.1.9.10 Discharge Port Survey (DPS) Report. 2 3A report issued by an ACSC for Bulk/Break-Bulk Cargo after the conduct of a 4survey at the port of discharge. 5 64.1.9.11 One Stop Shop (OSS). 7 8Shall mean the composite limit headed by the Deputy Commissioner for 9assessment and Operations A Group (AOCG) and composed of 10representatives from the Office of the Commissioner (OCOM), Management 11Information System and Technology Group (MISTG), Group (Enforcement 12Group (EG), Post Entry Audit PEAG), Risk Management Office (RMO), 13representatives of the Department of Trade and Industry (DTI) and Private 14Sector who are also members of the CACSC, and representative of the Office 15of the Presidential Adviser of Revenue Enhancement (OPARE). 16 17The OSS shall be responsible for confirming/approving requests for DPS 18made by importers of shipments not covered by the required LPS Reports 19 204.1.9.12 Motor Vehicles for Special Purposes. 21 22Those motor vehicles equipped to functions for a special purpose, e.g. 23cranes, backhoes, bulldozers, ambulances, buses, funeral hearse and the 24like. 25 264.2 Administrative Provisions 27 284.2.1 Composition of the Committee for Accreditation of Cargo Surveying 29Companies (CACSC) (Ref: CAO 6-2008) 30 31 a. Deputy Commissioner for Assessment and Operations Coordinating 32 Group (AOCG) Chairman 33 34 b. Deputy Commissioner for Management Information System and 35 Technology Group (MISTG) -Vice Chairman 36 37 c. Deputy Commissioner for Intelligence and Enforcement Group 38 (IEG)- Member 39 40 d. Deputy Commissioner for Revenue Collection Monitoring Group 41 (RCMG) Member 42 43 e. Deputy Collector for Operations, POM Member 44 45 f. Deputy Collector for Operations, MICP Member 46 47 g. Deputy Collector for Operations, Batangas Member 48 49 h. Representative from the Office of the Commissioner Member 50 2 3
453

1 1 i. Port Operations Service (POS) Director, Member 2 34.2.2 Functions 4 5 a. To grant and approve the accreditation of Cargo Surveying 6 Companies/Surveyors and the renewal of the same upon its 7 expiration upon application; 8 9 b. To monitor and periodically review the performance of Accredited 10 Surveying Companies/Surveyors through the POS; 11 12 c. To recommend the suspension or revocation of accreditations to 13 the Commissioner of Customs. 14 15 d. To perform such other functions relative to its creation and in 16 accordance with the provisions of this Section. 17 18e. To consult with the private sector on a regular basis. 19 204.2.3 Administrative Support. 21 22The CACSC shall be assisted and supportes1 by the Port Operations Service 23(POS) which shall receive, process, and recommend all applications for 24accreditation and renewal of accreditation of surveying companies for 25consideration and approval by the Committee. 26 274.2.4 Period to Approve Application. 28 29The CACSC shall grant or approve all applications for accreditation within 30fifteen (15) days from receipt of said application with complete supporting 31documents from the POS Secretariat. 32 334.2.5 Port Operation Service (POS) Allied Functions 34 35The POS shall likewise be responsible for the following matters for and in 36behalf of the CACSC: 37 a. To monitor and periodically review the performance of Accredited 38 Surveying Companies/Surveyors and recommend the suspension 39 or revocation of the same to the CACSC after due notice and 40 hearing; 41 42 b. To keep an updated record of all accredited Surveying Companies 43 including the pertinent documents required by the grant of 44 accreditation; 45 46 c. To have custody, storage and maintenance of all data/survey 47 reports; 48 49d. To maintain a priority or rotation list of members of the CSI for 50assignment on a per mission order basis, whenever necessary; 2 3
454

1 1e. To perform such other functions as provided by the CACSC and in 2accordance with the provisions of this Order. 3 44.2.6 Accreditation of Surveying Companies 5 6All cargo surveying companies engaged in the business of cargo surveying 7who wish to be accredited must apply for and receive accreditation from the 8Committee for Accreditation of Cargo Surveying Companies (CACSC). 9 104.2.7 Criteria for Surveying Companies 11 12Applicants for accreditation must have the following basic qualifications: 13 14 a. Minimum track record of ten (10) continuous years in international 15 bulk and break-bulk cargo surveying. 16 17 b. Member in good and reputable standing of the International 18 Federation of Inspection Agencies (IFIA). 19 20 c. International office network in all countries of supply to the 21 Philippines as shown in the updated company profile and 22 organizational structure. 23 24 d. Must possess and maintain the basic tools and implements needed 25 in bulk and break-bulk cargo surveying and must have the 26 competence and capability to conduct laboratory testing of cargoes 27 for qualitative analysis either using its own or accredited 28 laboratories. 29 30 e. Must be capable of receiving and transmitting electronic instructions 31 from authorized ship agents, importers or responsible customs 32 officials. 33 34 f. Must be able to issue reports and certificates in a secure electronic 35 format. 36 37 g. Must not have been blacklisted or its services terminated by any 38 Government or international entity by final and executory 39 judgement/order in the immediately preceding three (3) years, on 40 the grounds of poor performance and/or irregularity in dealings, 41 unless proven otherwise by competent and verifiable evidence as 42 considered by the CACSC and duly approved by the Commissioner 43 of Customs. 44 45h. Must be able submit a comprehensive Capacity Building Program for 46the Bureau of Customs' officials and personnel who will be directly involved in 47the implementation of this program. 48 494.2.8 Accreditation Procedure 50 2 3
455

1 14.2.8.1 Application. 2 3A surveying company wishing to apply for accreditation shall accomplish the 4Application Form, marked ANNEX A. A Service Level Undertaking/Non5Disclosure Agreement, marked ANNEX B shall be submitted by the 6Surveying Company as part of the requirements for the approval of the 7application. The complete application together with all the documentary 8requirements including a non-refundable application fee of PHP50,000.00 9shall be submitted to the CACSC through the Port Operation Service (POS). 104.2.8.2 Acceptance. 11 12The POS shall then make a preliminary determination as to the completeness 13of the application and the full payment of the application fee. 14 154.2.8.3 Physical Evaluation. 16 17The POS may conduct a physical inspection of the assets and an actual 18evaluation of the operations of the applicant if it deems it necessary before 19submitting its recommendation to CACSC. 20 214.2.8.4 Calendar. 22 23Upon the direction of the Chairman of the CACSC, the POS Secretariat shall 24calendar the meeting and issue the necessary notices to all members and 25interested parties. The CACSC shall evaluate and deliberate on the 26application and shall issue a Decision in writing approving or denying the 27application, stating the reason and area of non-compliance in case of denial. 28 294.2.8.5 Decision. 30 31The Committee shall inform the applicant in writing of the approval of its 32application and shall require the applicant to pay the necessary one time 33accreditation fee of PHP200,000.00 within fifteen (15) days from the receipt of 34such approval together with a Cash Bond in an amount of PHP1,000,000.00 35in accordance with the attached form. Applicants may re-submit denied 36applications which shall be treated as a new application subject to the 37payment of the processing fee. 38 394.2.8.6 Right of Appeal. 40 41Any surveyor which having completed an application to be accredited as a 42bulk or break bulk cargo surveying company and whose application for 43accreditation is rejected by the CACSC shall have the right of appeal to the 44Secretary of Finance within fifteen (15) days from receipt of the notice. It shall 45be fundamental to such appeal and the burden of the surveyor to demonstrate 46that it has satisfied the criteria for accreditation 47 484.2.8.7 Accreditation Certificate. 49

2 3

456

1 1Upon payment of the accreditation fee, the applicant shall be issued an 2Accreditation Certificate, indicating therein the Official Receipt Number and 3the period of validity of such accreditation. 4 5The CACSC shall meet as necessary when there are applications submitted 6for evaluation or when the Chairman or Commissioner of Customs require 7such to meet to deliberate on issues concerning the Bulk and Break-Bulk 8Cargo Clearance Enhancement Program. In any event, it shall be the 9responsibility of the POS Secretariat to issue notices of meetings and prepare 10the agenda therefore. 11 124.2.8.8 Annual Bond Requirement. 13 14All accredited cargo surveying companies shall be required to post an annual 15cash bond of One Million Pesos (PhP1,000,000.00) which shall stand as 16guarantee/security for any or all violations of the provisions of this Order and 17the undertakings as provided herein. The bond shall be constantly maintained 18at above-stated amount at any given time during the accreditation period. In 19cases where amounts are credited against the bond, it shall be the 20responsibility of the accredited surveyor to replenish the same within (ten) 10 21days from date of transaction. 22 234.2.8.9 Effectivity of Accreditation. 24 25The accreditation of Surveying Companies/Surveyors shall be effective for a 26period of three (3) consecutive years, unless sooner revoked for cause. 27 284.3 Renewal of Accreditation. 29 30Applications for renewal of accreditation shall be filed not earlier than ninety 31(90) calendar days but not later than thirty (30) calendar days prior to the date 32of expiration of accreditation. A late filing fee of ten (10%) percent of the 33accreditation fee shall be imposed on applications received out of the 34prescribed period. 35 364.4 Non-renewal of Suspended/Revoked Accreditations. 37No application for renewal of accreditation shall be accepted in cases where 38the Certificate of Accreditation has been suspended or revoked for cause 39during the time it was subsisting, unless subsequently lifted by the 40Commissioner of Customs upon the favorable recommendation of the 41CACSC. 42 434.5 Binding Effect. 44 45All accredited surveying companies and its surveyors are bound by the 46provisions of this Section and all other rules and regulations that may be 47issued by the Commissioner of Customs. 48 494.6 Confidentiality Clause. 50 2 3
457

1 1All accredited surveying companies shall submit a Service Level Undertaking 2and execute a Non-Disclosure Agreement in favour of and in such form as 3required by the Bureau of Customs. All information and/or data obtained by 4the accredited surveying company and any of its officers and employees in 5the performance of their surveying or any other activity incidental thereto shall 6be treated with utmost confidentiality, the unauthorized disclosure of which 7shall be subject to penalties and sanctions as determined by the CACSC in 8accordance with existing laws. 9 10This Section shall likewise apply to any BOC official or employee who obtains 11any information and/or data by virtue of this regulation. 12 134.7 Violation/Penalties. 14 15Any violation of any of the provisions of this Order shall cause the suspension 16or revocation of the accreditation of the surveying company as the case may 17be after due administrative notice and hearing without prejudice to the filing 18thereafter of appropriate administrative, civil or criminal charges against erring 19cargo surveying companies/surveyors. 20 214.8 Sanctions for Bureau of Customs Personnel. 22 23In addition to the sanctions imposed under the TCCP I as amended, and Civil 24Service laws, rules and regulations, any Bureau of Customs official and/or 25employee found to have violated any of the provisions of this regulation shall 26be immediately relieved and if warranted after due administrative notice and 27hearing, be transferred to another office or assigned to a less sensitive 28position in the Bureau. 29 304.9 Capacity Building Programs for BOC Personnel 31 32Capacity Building programs for BOC personnel in the form of technical 33training and continuing education in cargo surveying techniques shall be 34provided by the ACSC either in a Philippine or international forum. To declare 35the commitment of ACSCs to the Capacity Building Program for cargo survey 36Capacity Building Undertaking Form is hereby required from all ACSCs. 374.10 Schedule of Charges and Fees. 38 39The service of the ACSCs pursuant to this order shall entail no cost or charge 40for the government of the Republic of the Philippines. 41 42For additional services to the BOC, the ACSC shall be allowed to charge a fee 43in accordance with international standards and practices but in no case to 44exceed one-half of one percent (0.5%) of the FOB value of the cargo. This fee 45shall be payable by the exporter, unless otherwise agreed upon by and 46between the importer and exporter. 47 48SECTION 5 OFF-DOCK CONTAINER YARD/CONTAINER FREIGHT 49STATION (OD-CY/CFS) 50 2 3
458

1 1Note: References: CAO 6-96, CAO 5-94 and CMO 24-01. In bold letters 2are amendments) 3 45.1 Definition of Term 55.1 Off-Dock Container Yard/Container Freight Station (OD-CY/CFS) 6refers to a Container Freight Station (CFS) outside of customs zone 7accredited by the Bureau of Customs to break-bulk consolidated Less than 8Container Load (LCL) shipments by international freight forwarders and 9accept stuffing of LCL export shipments. 10 115.2 Administrative Provisions 12 135.2.1 Services Rendered by OD-CY/CFS 14 15 OD-CY/CFS may offer following services: 16 17 a. Break-bulking of LCL import shipments; 18 b. Stuffing of LCL export shipments. 19 205.2.2 Standard Charges 21 22OD-CY/CFSs are mandated to charge a standard fee as promulgated by the 23Bureau of Customs. See Chapter 2, Book 7. 24 255.2.3 Procedures and Penalties for Violations of Section 2.2 26 275.2.3.1 Upon presentation of a complaint showing official receipts of 28payment made to OD-CY/CFS Operators by consignee or their authorized 29customs representatives/brokers of the Port users Confederation which 30indicate a violation of this order, the District Collector shall immediately 31conduct a summary investigation following herein procedure: 32 335.2.3.1.1 A notice of investigation shall be given to the outside OD-CY/CF 34Operator being complained of with an order to present evidence that actual 35charges were made in accordance with this regulation. A copy of the notice 36shall be given to ACOP for information. 375.2.3.1.2 If the District collector finds a deliberate violation of this order, 38the following penalties and sanctions shall be imposed: 39 40 a. For the first offense, a penalty of fifty thousand pesos (Php 41 50,000) payable to the Bureau of Customs, and refund to the 42 consignee of 100% of the overcharge. Non-payment of the 43 penalty shall cause the suspension to transfer to the concerned 44 CY/CFS-OCZ Operator. 45 46 b. For the second offense, the District Collector shall order the 47 immediate suspension of transfers of containers to the erring 48 CY/CFS-OCZ Operator for a period of one (1) month. 49

2 3

459

1 1 c. For the third offense, the District Collector shall order the 2 immediate suspension of transfers of containers to the erring 3 CY/CFS-OCZ Operator and the District Collector shall initiate 4 proceeding for the revocation of the permit to operate against 5 the erring operator. 65.2.3.1.3 The Office of the Commissioner shall be furnished a copy of the 7findings and the penalty or sanctions imposed by the District Collector. Any 8appeal of said findings and order shall be made to the Commissioner. Any 9sanction such as, suspension or revocation of the permit to operate shall be 10applicable in both the Port of Manila and MICP. 11 125.2.4 Requirements for Accredited OD-CY/CFS 13 145.2.4.1 Provide for sufficient security to cover any loses on good 15transferred to the CY/CFS-OCZ. 16 17 a. Accredited OD-CY/CFS operators must form an Association of off 18 dock CFS's and shall put up an interest bearing account with the 19 any government bank with branch inside POM or MICP (under 20 CAO 5-94 it is with PNB Branch at Port Are that the account be 21 opened.) the outstanding balance of which must not be allowed 22 to go lower than two million pesos (one million pesos under 23 CAO 5-94) to answer for duties and taxes due on lost or 24 damaged shipments. 25 26If after three (3) working days from receipt of the demand letter the amount 27demanded is not paid by the erring OD-CY/CFS Operator, the Commissioner 28of Customs shall then send demand letter to the off dock CFS Association 29demanding payment within three (3) working days from receipt thereof, of the 30duties and taxes not paid by the erring CY/CFS-OCZ operator. Failure of the 31association to pay the amount within the prescribed period shall authorize the 32bank to automatically transfer the amount stated in the demand letter from the 33interest bearing account to the account of the Bureau of Customs. The bank 34shall issue to the Commissioner of Customs a confirmation letter stating that 35the transfer has been effected. 36 37 The bank shall automatically transfer the amount demanded upon 38presentation transfer the amount demanded upon presentation by the Bureau 39of Customs of the following documents: 40 41 a. Copy of Demand Letter sent to the off dock CFS Operators 42 Association; 43 b. Copy of Demand Letter to the erring CY/CFS-OCZ operator for 44 the payment of duties and taxes on goods entered in the 45 CY/CFS-OCZ; 46 c. Copy of the Customs Appraiser's computation of duties and 47 taxes that may be based on Clean Repot of Findings covering 48 the shipment or other available value information on file; 49 d. Approved CY/CFS-OCZ Transfer documents. 50 2 3
460

1 1CY/CFS-OCZ operators who are not members of the Association shall put up 2its own bank deposit equivalent to P 1.0 million under the same terms and 3conditions. 4 5The off dock CFS Operators Association must replenish the interest bearing 6account to meet the balance of P2.0 million within five (5) working days from 7the time of withdrawal from the account. In case of failure of the Association to 8replenish the account within the prescribed period, the Commissioner of 9Customs shall temporarily suspended all transfer of shipments destined to all 10members of the Association until the account has been replenished. 11 12 b. Each OD-CY/CFS operator shall submit proof to Customs 13 Bonded Warehouse Committee latest 15 January of every 14 year of annual one-year insurance bond at P5.0 million (P1.0 15 million under CAO 5-94) against fire/accident/pilferage at the OD16 CY/CFS renewable every year for articles stored or to be stored at 17 the OD-CY/CFS. 18 195.2.4.2 Operate a computerized warehouse inventory and audit system 20 21 To enable the Bureau of Customs to conduct audit on the integrity 22of the operations of accredited OD-CY/CFS operator the system must 23have connectivity with e2m Customs System. Of particular interest to 24the Bureau of Customs are articles stored considered as overstaying 25which ipso facto are deemed forfeited in favor of the government. 26 275.2.4.3 On Prevention of the Entry of Drugs and other Anti-social Goods 28 29 Accredited OD-CY/CFS operators are required to install in their 30warehouses drug detection equipment as well as other equipment that 31can detect articles like arms, munitions, explosives or other anti-social 32goods. 33 345.2.5 Authority to Check Compliance and Conduct Audit on Operations 35of OD-CY/CFS 36 37 WAMU through formal request from the Customs Bonded 38Warehouse Committee (CBWC) or in its own initiative conduct 39compliance and conduct audit on the operations of OD-CY/CFS with 40emphasis on the maintenance of automated inventory management 41system. 42 435.2.6 Detail of Customs Officials/Employees to OD-CY/CFS and Supervision 44Fees 45 46 The Bureau of Customs shall assign customs officials/employees 47to OD-CY/CFS for the purpose of protecting government lawful revenues 48and ensuring that said operators provide good service to their clients. 49

2 3

461

1 1 The annual supervision fee shall be equivalent to the assigned 2employees salaries, allowances, employees share of GSIS premium, 3employees share of Pag-Ibig Fund, employees Philhealth premium and 4similar expenses. After due consultation with the OD-CT/CFS 5association the BWC shall have the responsibility of computing 6andrecommending to the Commissioner of Customs the amount of 7annual supervision fees to be paid by the accredited OD-DY/CFS. 8 9 For 2012 the annual Supervision Fee shall be ____________ which 10shall be payable in advance beginning of each quarter. Adjustments to 11the annual Supervision Fee 12 13 Note: BWC will compute the annual Supervision Fee. 14 155.3 Guidelines in the Approval of Applications to Operate OD-CY/CFS 16 175.3.1 Capacity Utilization 18 19No new applications for a license to operate an OD-CY/CFS shall be given 20due course unless the Aggregate Capacity Utilization (ACU) of the existing 21ODCY/CFS for the immediately preceding 12 month period is in excess of 2250%. 23 24ACU shall be computed as follows: 25 26For purpose of estimating the capacity of an ODCY/CFS, the CFS capacity 27shall be the basis and be calculated as follows: 28 29Where: 30 31 A = Aggregate floor area in square meters 32 B = Allowance for mobility (35%) 33 C = Average stacking height (1.5 mtrs) 34 D = Average CBM per TEU (25 CBM) 35 E = Average number of days storage (5 days) 36 F= No. of working days in one year, i.e 248 days 37 385.3.2 An application to operate an ODCY/CFS must be supported by figures 39showing the following: 40 41 a. The volume of consolidated container inbound traffic over the last 42 24 months which shows a definite upward trend. 43 44 b. The ACU based on the last 12 months figure has broken the 50% 45 barrier. 46 c. A public hearing must be undertaken where the existing ODCY/CFS 47 operators may present their position on whether or not to license 48 new operators and the additional capacity required. 49

2 3

462

1 1c.1 For purposes of 2.6 Additional Capacity Required (ACR) or to be filled 2shall be computed as follows: 3 4ACR% = ACU% - 50% 5 6c.2 The smallest capacity to be filled must be the TEU requirements of 72000 sq. meters of CFS or 3868.8 TEUs. 8 9 d. In case the number of applicants exceeded the capacity to be filled, 10 the award shall be given according to the following prioritization: 11 12Priority 1: Existing ODCY/CFS operators with room for expansion in their 13present location and whose capacity utilization is in excess of 50%. 14 15Priority 2: New entrants with a proposed facility better than or equal to the 16best existing ODCY/CFS in terms of location, equipment and management 17team.) 18 19 20 SECTION 6 GPS SERVICE PROVIDERS 21 226.1 Definition of Terms 23 246.1.1 Customs Barcoded Seal. 25 26An optical machine-readable representation of transit data that is incorporated 27in the sealing tape used for breakbulk cargo. 28 296.1.2 Breakbulk Cargo. 30 31A non-containerized cargo which is grouped or consolidated for shipment and 32broken down or sub-divided into unitized cargo, such as in pallets or packed 33in bags or boxes. 34 356.1.3 Containerized Cargo. 36 37A cargo that uses standard intermodal containers that are standardized by the 38International Organization for Standardization (ISO) and can be loaded and 39sealed intact onto container ships, railroad cars, planes and trucks. 40 416.1.4 Electronic GPS-equipped Barrier Seal (EGBS) 42 43A reusable electronic device equipped with GPS that serves as barrier seal to 44the container door to ensure that the cargo is not tampered with while in 45transit. 46 476.1.5 Electronic GPS-equipped Barrier Seal Service Provider (EGBSSP) 48 49 BOC accredited company that provides EGBS 50 2 3
463

1 16.1.6 GPS 2 3Is a system satellites, computers, and receivers that is able to calculate the 4location of the user on a digital map. 56.1.7 Tracking and Monitoring System 6 7Secure and interactive web-based system used to provide the location and 8condition of transit cargo using GPS. 9 106.1.8 Transit 11 12Means the customs procedure under which goods are transported under 13customs control from one customs office to another as further specified 14hereof. 15 166.1.9 Transit Permit clearance issued by Customs to allow the transit of 17goods 18 196.1.10 Transshipment 20 21Means the customs procedure under which goods are transferred under 22customs control from the importing means of transport to the exporting means 23of transport within the area of one customs office which is the office of both 24importation and exportation 25 266.1.11 SAD 27 28Single Administrative Document is an aligned trade and customs document 29adhering to international documentary requirements and best business 30practices conforming to the UN Layout Key. 31 326.2 Administrative Provisions 33 346.2.1 Accreditation of Service Providers of Electronic GPS-equipped Barrier 35Seals 36 37The Committee on Accreditation of Service Providers(henceforth called 38CASP) headed by the Deputy Commissioner for AOCG shall accredit qualified 39private sector providers that would be allowed to supply the required CEGBS 40and the accompanying monitoring system. 41 426.2.2 The Committee on Accreditation of Service Providers (CASP) shall be 43composed of the following: 44 45Chairman Deputy Commissioner for AOCG 46Members Representatives from: 47 48a. The Legal Service 49b. The Intelligence Service 50c. Port Operations Service 2 3
464

1 1d. Administration Office 2e. MISTG 3f. Deputy Collector for Operations from 3 major ports (POM, MICP, NAIA) 4 56.2.3 Accreditation Process 66.2.3.1 Pre-Qualification 7 86.2.3.1.1. Through the Committee on the Accreditation of Service 9Providers (henceforth called CASP), BOC shall publish in two (2) newspapers 10of general circulation and the BOC website, an invitation for qualified private 11entities to apply for accreditation as Service Provider of Electronic GPS12equipped barrier seals, including the hardware and software required for the 13operation of the system. The publication shall include the Eligibility 14Requirements which applicants shall be asked to submit together with their 15application and proof of payment for the non-refundable processing fee in the 16amount Fifty Thousand Pesos (P50, 000,00). 17 186.2.3.1.2 The application together with the Eligibility Requirements shall 19be submitted to the Secretariat seven (7) days after the publication. Upon 20verification by the Secretariat that the submitted documents in compliance 21with the Eligibility Requirements are complete, the applicant shall be given a 22copy of the Terms of Reference (TOR) upon presentation of the Secretariat to 23the BOC Official Receipt representing the non-refundable payment of the 24processing fee in the amount of Fifty Thousand Pesos (P50,000.00). 25 266.2.3.1.3 The CASP shall proceed to shortlist eligible applicants by 27assessing the capability of each according to the following (numbers in 28parenthesis represent the maximum score that may be given to an applicant 29for each criterion, for the purpose of ranking applicants): 30 31i. Relevant experience (65); 32ii. Financial Capability (25); 33iii. Company Profile (10) 34 356.2.3.1.4 Upon instruction from the CASP, the Quality Assurance Team 36(henceforth called QAT shall conduct site visits to the office premises of each 37applicant for the purpose of short listing applicants. The QAT shall submit its 38findings and recommendations to the CASP, which shall serve as inputs to 39the pre-qualification process. 40 416.2.3.1.5 The CASP shall shortlist the top three (3) service providers from 42those who have submitted their applications and have been determined as 43eligible. The Committee shall issue a Decision in approving or denying the 44application. 45 466.2.3.1.6 The Secretariat shall notify in writing the applicants whose 47application have been denied attaching the corresponding Decision with the 48information that subject Decision can be appealed by filling a motion for 49reconsideration within three (3) days from receipt of the customs decision.

2 3

465

1 1CASP shall resolve such motion within forty-eight (48) hours from receipt of 2said motion. 3 46.2.3.1.7 Shortlisted applicants shall likewise be informed in writing of the 5Decision and shall be invited to a conference with the CASP to discuss the 6technical and financial proposals required by the accreditation process and to 7answer questions on the TOR. 8 96.2.3.2 Qualification 10 116.2.3.2.1 Shortlisted applicants shall be required to submit their technical and 12financial proposals to the Secretariat on or before the date to be announced 13during the abovementioned conference. 14 156.2.3.2.2 The technical proposal shall include the following: 16 17i. Authority of the signatory. 18 19ii. The proposed CASP organizational chart. If the applicant is a 20consortium of firms, the relationship between the firms in the consortium 21should be shown and the roles and responsibilities of each should be clearly 22described. The chart should also show how the organization will link with 23collaborating units of the BOC. 24 25iii. Approach and methodology, work plan, and schedule of 26implementation including pilot and role-out strategies. The section should 27describe how the GPS-equipped transit system will be put in place, including 28the phasing of implementation. The roles of the relevant units of the BOC in 29this effort should also be described. 30 31iv. Technical specifications of the required hardware and software, 32including the following: 33 34 The electronic GPS-equipped barrier seal, including the GPS system 35that supports it; 36 The hardware and software of the monitoring system; 37 The communications system. 38v. List of key personnel to be assigned to the CASP organization, their 39complete qualification and experience data; 40 41vi. Certificate under oath of compliance with existing labor laws and 42standards. 43 44vii. A sworn affidavit of compliance with the Disclosure Provision under 45Section 47 of R.A. 9184 (An Act Providing for the Modernization, 46Standardization and Regulation of the Procurement Activities of the 47Government, and for Other Purposes) in relation to other provisions of R.A. 483019; 49

2 3

466

1 16.2.3.2.3 The financial proposal shall layout the price schedule of goods 2and services offered by the proponent Service Provider to include prices for 3one-time use of the electronic GPS-equipped barrier seal. The proposal shall 4also declare in sufficient detail the costs that underlie the price schedule, 5giving a clear picture as to how the prices were arrived at. It should also show 6how financial sustainability of operations is projected to be attained. Financing 7sources should be declared as well. 8 96.2.3.2.4 The technical and financial proposals shall be submitted to the 10Secretariat.(i) on or before the specified deadline, and (ii) in two (2) separate 11sealed envelopes, the first containing the financial proposal with the label 12Technical (or Financial) Proposal, Customs Electronic GPS-Equipped Barrier 13Seal Service Provider Accreditation and the name of the applicant in capital 14letters, addressed to the CASP. The two envelopes shall be further labeled: 15Do not open before (the date and time of opening of proposals). Both 16envelopes shall then be sealed in an outer envelope which shall be 17addressed to the Committee on the Accreditation of Service Providers of 18Customs Electronic GPS-Equipped Barrier Seals, Bureau of Customs. 19 206.2.3.2.5 The CASP shall open the proposals at the time, date and place 21specified in the Invitation to Apply for Eligibility and Accreditation. The 22applicants or their duly authorized representatives may attend the opening of 23proposals. All members of the CASP or their duly authorized representatives 24during proposal opening, shall initial every page of the original copies of all 25proposals received and opened. The minutes of the proposals opening shall 26be made available to the public upon written request. 27 286.2.3.2.6 Upon instruction from the CASP, the QAT shall conduct site 29visits and records verification to available information declared by applicants 30in the technical and financial proposals. The QAT shall conduct a testing and 31determination of the system requirements to be provided by the Service 32Provider. The QAT shall render a report of findings to the CASP. 33 346.2.3.2.7 The CASP shall evaluate applications using the Quality-Cost 35Based Evaluation (QCBE) Method, applying following criteria: 36 37i. Ability to supply the required number of CEGBS units with the proper 38specifications, including the approach to deploying them (e.g., pilot and roll39out- strategies) (20%); 40 41ii. Tracking and monitoring system (20%); 42 43iii. Communications system (10%); 44 45iv. Organization and management, to distribute, manage, secure and the 46CEGBS units deployed in the field (20%); 47 48v. Price level fees and charges (should be compared with fees and 49charges under the old transit system (20%); 50 2 3
467

1 1vi. Financial capability (10%). 2 36.2.3.2.8 The CASP shall issue a Decision in writing approving or denying 4the application for accreditation, stating the reason and area of non5compliance in case of denial. 6 76.2.3.2.9 BOC through the CASP shall select and accredit not more than 8three (3) Service Providers. 9 106.2.3.2.10 The CASP shall notify the pre-qualified Service Providers whose 11applications have been denied attaching the corresponding Decision with the 12information that subject Decision can be appealed by filing a motion for 13reconsideration within three (3) days from receipt of the customs decision. 14CASP shall resolve such motion within forty-eight (48) hours from receipt of 15the said motion. 16 176.2.3.2.11 In case of approval and upon payment of an initial accreditation 18fee in the amount of Php 50,000.00 (for the probationary accreditation), a 19Certificate of Probationary Accreditation shall be issued by the CASP to the 20Service Providers, indicating the Official Receipt Number probationary status 21for six (6) months of such accreditation. 22 236.2.3.2.12 After issuance of the Certificate of Probationary Accreditation, 24the CASP shall make an official announcement and/or publish the names of 25the accredited Service Providers for the information of the stakeholders. 26 276.2.3.2.13 The accredited Service Provider shall undergo the aforesaid six 28(6) month probationary period (technical evaluation) on the date effective on 29the date stated in the probationary certificate of accreditation after which the 30BOC through the CASP shall decide whether or not full accreditation status 31shall be granted. 32 336.2.3.2.14 Upon granting of full accreditation status and payment of the 34remaining accreditation fee in the amount Php250, 000.00 the applicant shall 35be issued an accreditation Certificate, indicating therein the Official Receipt 36Number and the period of validity of such accreditation. 376.2.4 Conditions for Accreditation 386.2.4.1. The selected Service Provider shall sign a Service Level 39Agreement (SLA) and a Non-Disclosure Undertaking (NDU). 40 416.2.4.2. Performance Bonds. 42 43The accredited Service Provider shall post a Performance Bond issued by a 44BOC-accredited surety company in the amount of Ten Million Pesos 45(Php10M) in favor of the Bureau of Customs, conditioned upon the Service 46Providers strict compliance with all the requirements for its accreditation, 47which bond shall automatically be forfeited in favor of the Bureau of Customs 48in case of breach thereof. 496.2.4.3 Technical Acceptance Tests. 50 2 3
468

1 1The accredited Service Provider must successfully pass the technical 2acceptance tests that will be conducted by the QAT for the initial, the post 3probationary and the yearly evaluation perform evaluation, to qualify for 4continuous accreditation. 5 66.2.4.4 Reservation to Change Accreditation Criteria. 7 8BOC reserves the right to change any of the accreditation criteria as may be 9deemed necessary by the Commissioner upon the recommendation of the 10CASP. 11 126.2.5 Period and Renewal of Accreditation 13 146.2.5.1 The selected Service Provider shall be given accreditation 15status for- the period of three (3) consecutive years, inclusive of the 16probationary period, and will be subject to renewal yearly thereafter. 17 186.2.5.2 An accredited Service Provider desiring to continue his services 19with the BOC is enjoined to file his accreditation renewal application with 20CASP at least sixty (60) days before the expiration of its three-year 21accreditation or one-year accreditation, as the case maybe, subject to the 22evaluation of the quality of their performance as measured by the Service 23Level Agreement (SLA), and compliance to Eligibility requirements. 24 256.2.5.3 No application for renewal of accreditation shall be accepted if 26the Certificate of Accreditation has been suspended or revoked during the 27time of unless subsequent subsistence, unless subsequently lifted by the 28CASP. 29 306.2.5.4 An application for renewal tiled beyond the prescribed period for 31application for renewal shall be considered a new application for the purpose 32only of charging the appropriate processing fee mentioned above. 33 346.2.6 Schedule of Fees 35 366.2.6.1 Accreditation and Renewal Fees Payable to BOC by the Service 37Provider. A one time accreditation fee of Php300,000.00 (Php50,000.00 for 38probationary accreditation and fee of Php250,000.00 upon approval of full 39accreditation status) good for three (3) years and a yearly renewal fee of 40Phpl.00,000.00 thereafter, shall be imposed. 41 426.2.6.2 Fees Payable to Service Provider by the transacting public. The 43Service Provider will determine its respective fee structures based on several 44factors such as market conditions and system sustainability requirements, 45among others, which shall be submitted in the financial proposal. The 46schedule of fees as proposed shall be one of the bases for accreditation and 47shall not increased without the prior approval by the BOC and the Department 48of The BOC shall not collect those fees in behalf of the Service Provider. 496.2.7 Pre-Termination of Agreement or Cancellation of Accreditation 50 2 3
469

1 16.2.8 BOC, through the CASP, may pre-terminate its Agreement with the 2accredited Service Providers or cancel Service Providers accreditation for 3any of the following: 4 5 a. Violation of the provisions of this Order and related rules and 6 regulations including SLA and NDU. 7 8 b. Violation of the Tariff and Customs Code of the Philippines, e9 Commerce Act and other related laws. 10 11 c. Actions inimical to the security and integrity of BOC operations. 12 13 d. Other violations as maybe determined by the Commissioner of BOC 14 15SECTION 7 ACCREDITATION OF SURETY COMPANIES 16 177.1 Administrative Provisions 18 197.1.1 Accreditation of surety or bonding companies shall be centralized to 20the Bonds Audit Division (BAD), Collection Service, RCMG. 21 227.1.2 Only surety companies in good standing with the BOC shall qualify for 23accreditation. (Sec. 2, CMO 22-03) 24 25To be in good standing a surety company: 26 27 a. must have an authority from the Office of the President to engage in 28 surety business; 29 30 b. must be a holder of a Certificate of Authority duly issued by the 31 Insurance Commission, which must be valid and effective at the 32 time of application renewal and for the duration of the period 33 applied for; 34 35 c. must not have, as entity by itself, any due and demandable 36 liabilities with the BOC at the time of the application of renewal; 37 38d. must have settled at least 70% of its outstanding obligations as a 39surety company of person/persons having transactions with BOC, if any, as of 40the first day of the immediately preceding quarter (e.g., as of July 1 for 41application for accreditation for the 4th Quarter). (Sec. 3.2, CMO 22-03) 42 437.1.3 Validity of accreditation. 44 45Accreditation shall be good and effective for a period of one quarter, 46renewable every quarter thereafter. For this purpose, a calendar year is 47divided as follows: 1st Quarter, January to March; 2nd Quarter, April to June; 483rd Quarter, July to September; 4th Quarter, October to December. (Sec. 3.3, 49CMO 22-03.) 50 2 3
470

1 17.1.4 For surety companies whose principal offices are located in Metro 2Manila, their applications for accreditation shall be filed with the BAD for 3approval of the Deputy Commissioner, RCMG upon the proper 4recommendation of the Chief, BAD and Director, Collection Service. 5 6For surety companies whose principal offices are located outside of Metro 7Manila, the applications shall be coursed through District Collectors who will 8transmit the applications to BAD together with clearance from the Bonds 9Division of the Collection District after checking for completeness and 10accuracy of supporting documents to the applications. 11 12The accreditation to be issued by RCMG shall be valid for the ports where the 13surety company intends to transact as indicated in their application for 14accreditation. 15 167.1.5 Requirements for Accreditation 17 18The surety company shall submit a written application for accreditation or 19renewal not later than fifteen (15) days prior to the onset of the quarter applied 20for which must be accompanied and supported by, in the original or duly 21authenticated copy, of the following: 22 a. Administrative Order issued by the Office of the President granting 23 authority to the firm to engage in surety business; 24 25 b. Certificate of Authority issued by the Insurance Commission, indicating 26 among others, its validity at the time of the application/renewal and for 27 the duration of the quarter being applied for; 28 29 c. Copy of the latest audited annual financial statement of the surety 30 company, but not exceeding one (1) year at the time of the 31 application/renewal; 32 33 d. Certification of the Corporate Secretary of the surety firm indicating and 34 attesting to the authority of the officer authorized to sign the bond, and 35 exhibiting the authorized officials three (3) specimen signatures, initials 36 and impression on the right and left hands thumbprints; 37 38 e. Statement under oath by the Corporate Secretary stating that as an 39 entity by itself, it has no outstanding obligations with BOC, and that as 40 a surety company, out of its total outstanding obligations in terms of the 41 amount of the bonds issued in the past to BOC, the remaining 42 unsettled obligations falls within the 30% threshold, as of the 43 immediately preceding quarter. (Sec. 4, CMO 22-03)) 44 45The thirty (30%) rule shall apply only to the current matured accounts of not 46more than one (1) year older excluding at the time of filing such application of 47the preceding quarter, pending requests for abatement as certified by the 48Chief, Operating Division concerned. (Sec. I, CMO 7-07) 49

2 3

471

1 1 f. Outstanding Account Worksheet, showing the current accountability of 2 the applicant surety company that the same is within the 30% 3 threshold. 4 5In the computation of the 30% threshold of unsettled obligation, all accounts 6of surety firm shall be considered up to the extent of the amount unpaid or 7unsettled, including but not limited to accounts on bonds: 8 9 That are subject of pending court litigation; 10 That have been sequestered from bond principals, importers or 11consignees; 12 That have been issued involving valuation or classification 13issues/cases 14 15For purposes of computing the 30% threshold the Bonds Division shall 16prepare the Outstanding Account Worksheet which shall disclose the 17following information about outstanding accounts of the applicant surety 18company as of the first day of the immediately preceding quarter: 19 20 Kind of Bond 21 Bond Number 22 Amount of Bond 23 Name of Principal/Importer/Consignee 24 Amount of Charges 25 26The Outstanding Account Worksheet shall be certified true and correct by the 27Chief, Bonds Division and a copy thereof shall be furnished to the applicant 28surety company, Chief, LBD, concerned warehouse operating division and 29other concerned offices. 30 317.2 Timetable and Procedure in Processing Applications for Accreditation 32 337.2.1 Upon receipt of the application with complete documentary 34requirements, the BAD shall review the same, particularly with respect to the 35authenticity and veracity of the documents submitted and the compliance with 36the 30% threshold rule. 37 38The review process shall be completed within seven (7) days. 39 407.2.2 In the conduct of the review, the BAD may verify with the concerned 41offices, such as, the Liquidation and Billing Division, Tax Exempt Division, 42Warehousing Operations Division or equivalent divisions, as well as with other 43various ports to ensure that all outstanding obligations of the applicant surety 44company are taken into account. 45 467.2.3 As part of the review process, the Chief, BAD, may recommend a 47course of action that would achieve a balanced liquidation of the outstanding 48accounts from previous years accountabilities with the more recent ones. 49

2 3

472

1 17.2.4 If in order, the Chief, BAD, shall forward the application/renewal to the 2Director, Collection Service for transmittal to the Deputy Commissioner, 3RCMG, for final approval, otherwise, it shall advise the applicant surety 4company of its action on the matter accordingly, 5 67.3 Renewal of Accreditation 7 87.3.1 No renewal of accreditation shall be effected unless the 30% threshold 9requirement as year old accounts as the duly approved payment scheme as 10old accounts are fully satisfied/implemented. 11 127.3.2 Default of two (2) consecutive monthly settlements shall be treated as 13a breach of agreement and shall cause the recession of such agreement and 14the immediate suspension of its accreditation. The suspension shall only be 15lifted upon a new approved payment scheme duly approved by the 16Commissioner. (Sec. III, CMO 7-07) 17 18SECTION 8 CUSTOMS AUDITORS 19 208.1 Customs Auditors 21 22Refers to persons who are BOC accredited authorized to represent before the 23Bureau importers undergoing compliance audit or present before it a 24Compliance Program for an importer. 25 268.2 Persons Qualified to be Accredited as Customs Auditors 27 28Only lawyers and Customs Brokers are qualified to be accredited as Customs 29Auditors. 30 318.3 Office to Accredit Customs Auditors 32 33 PEAG shall be responsible in accrediting and maintaining the roster of 34Customs Auditors. 35 368.4 Accreditation Procedures 37 388.3.1 Customs Brokers who are already BOC accredited may express their 39intention in writing addressed to Assistant Commissioner, PEAG to be 40accredited as Customs Auditors. No accreditation fee is required. 41 428.3.1.1 The Certificate of Accreditation as Customs Auditor to be issued 43by PEAG shall have the same expiration date as that of the Certificate of 44Accreditation as Customs Broker of the applicant customs broker. 45 468.3.2 Members of the bar who intends to be accredited as Customs Lawyers 47may apply in writing with PEAG with following supporting documents: 48 49a. BOC OR evidencing payment of accreditation fee of P1,000.00; 50b. Current IBP Identification Card; 2 3
473

1 1c. Evidence of MCLE compliance; 2d. Current BIR Certificate of Registration. 3 48.3.2.1 PEAG shall accept applications and issue a Certificate of 5Accreditation as Customs Auditors within ten (10) working days from receipt 6of application after diligently checking the completeness and accuracy of 7supporting documents. 8 98.3.2.2 The Certificate of Accreditation shall be valid up to 31 January of 10the following year and applications for renewal must be submitted latest ten 11(10) working days Certificate expiration day. Supporting documents to the 12application for renewal shall be the same as that for original applications. 13 14SECTION 9 SUPER GREEN LANE ACCREDITATION 15(Ref: CMO 28-2003) 16 179.1 Super Green Lane 18 19 Refers to a trade facilitation initiative by the Bureau of Customs where 20accredited importers are given the privilege of a fast tracked customs 21clearance of pre-qualified articles without being subjected to the Selectivity 22Module. 23 249.2 Administrative Provisions 25 269.2.1 Qualifications for Accreditation. 27 28An importer may be accredited as an SGL user, provided he/she meets the 29following qualifications: 30 31 a. The importer is accredited by the Bureau of Customs: 32 b. The importer has been actively engaged in the import business for 33 at least one year at the time of filing his/her application for SGL 34 accreditation; 35 36 c. The importer is a regular importer of the same type of articles; 37 38 d. The importer is a BOC-registered user of remote lodgment 39 facilities and a holder of Certificate of Registration for that 40 purpose; and 41 42 e. The importer is willing to undergo Voluntary Audit 43 449.2.2 Qualifications of SGL Shipments 45 46Shipments shall qualify for SGL treatment only when: 479.2.2.1 They are in the list of importables in the concerned SGL users 48accreditation or in the duly approved amendments to the list of importables; 49

2 3

474

1 19.2.2.2 They are either freely importable commodities; or if regulated, 2covered by a continuing Import Authority issued by the concerned/proper 3government agencies; 4 59.2.2.3 They are declared under consumption entries, thus subject to 6taxes and duties 7 89.2.3 The Super Green Lane (SGL) Committee is the accrediting body. 9 109.2.3.1 Composition. 11 12The SGL Committee shall be headed by the Deputy Commissioner for 13Assessment and Operations Coordinating Group (AOCG) as chairman. 14 15It shall be composed of two sub-committees, namely, the Accreditation Sub16Committee (AS) and the Import Compliance Sub-Committee (ICS); and it shall 17be supported by the SGL Committee Secretariat created under Customs 18Special Order. 19 209.2.3.2 Functions. 21 22The Committee shall meet regularly or as often as may be necessary to carry 23out its functions, namely: 24 25 a. Evaluate the findings/recommendations of the AS and ICS with 26 respect to the qualification of the applicant under the SGL 27 Program and the acceptability of the list of importables, or 28 amendments thereto, if any, as provided herein; 29 30 b. Based on its own evaluation of AS/ICS 31 findings/recommendations, undertake any appropriate measure 32 it deems necessary towards the approval or disapproval of the 33 application. 34 35 c. Handle and resolve all issues arising from or in connection with 36 SGL accreditation and operation, including issues coming from 37 SGL accredited importers; 38 39 d. Develop/formulate and recommend to the Commissioner of 40 Customs new policies or policy changes relating to the 41 implementation/enhancement of the SGL; 42 43 e. Submit to the Commissioner of Customs a report on the 44 progress of the SGL program monthly or as often as may be 45 required; and 46 47 f. Perform such other functions as may be assigned to it by higher 48 authorities. 499.2.3.3 The Accreditation Sub-Committee (AS) 50 2 3
475

1 19.2.3.3.1 Composition. 2 3The AS shall be headed by the Director, Customs Intelligence and 4Investigation Service (CIIS). 5 6It shall have as members, the Head of SGL Secretariat, the Heads of the ICSs 7in the three major ports of entry, a representative from the Post Entry Audit 8Group Trade Information and Risk Analysis Office (PEAG-TIRAO), a CIIS 9representative, and others assigned by the Committee Chair to serve as 10members. 11 129.2.3.3.2 Functions. 13 14It shall meet regularly or as often as may be necessary to perform the 15following tasks: 16 17 a. Evaluate SGL applications and, for this purpose, conduct 18 standard background checks on SGL applicants to determine 19 their qualifications, taking into account the following: 20 21 Applicant is accredited with BOC as Importer; 22 23 Applicant has been actively engaged in the Import business for at least 24one year at the time of the filing of his/her application for SGL accreditation, 25with good track record of compliance with Customs laws, rules and 26regulations; 27 28 Applicant is willing to be audited under the customs voluntary audit 29system; 30 Information provided by Applicant in the SGL Application Form (Annex 31A) is complete as required; 32 33 Applicants list of importables do not include/involved prohibited 34articles; 35 If applicants list of importables include regulated articles, such 36importables are covered by the appropriate clearance or Import Authority from 37the concerned government agency; 38 39 The value declaration and tariff classification of the importables listed in 40the Application Form meet the minimum standard of (initial) acceptability for 41purposes of accreditation; 42 43 Applicant has money accountability clearance from the concerned BOC 44offices; 45 46 Other criteria that may be set by the BOC at a later time; 47 b. Assist the applicant through an interactive process (face-to-face 48 or telephone interview, internet exchange, etc) in clarifying 49 issues found/raised during the evaluation and, if necessary, in 50 fully understanding the import of his/her answers. For this 2 3
476

1 1 purpose, the AS shall develop a standardized interview system 2 to ensure productivity and to facilitate the entire process; 3 4 c. Evaluate the list of importables as to the initial acceptability of 5 their declared value and tariff classification; and identify any 6 value or tariff declaration in said list that may be recommended 7 for compliance audit; 8 9 d. On the basis of evaluation, submit its findings/recommendations 10 to the SGL Committee for final/appropriate action; 11 12 e. Prepare an accreditation plan identifying priorities for SGL 13 accreditation based on data provided by MISTG; and 14 15 f. Perform such other functions as may be assigned to it by the 16 SGL Committee 17 189.2.3.4 The Import Compliance Sub-Committee (ICS) 19 209.2.3.4.1 Composition. 21 22The ICS shall be headed by the Director, Import and Assessment Service 23(IAS) or his duly designated representative. 24 25It shall have as members the heads of the ICSGs in the Port of Manila, Manila 26(POM), Manila International Container Port (MICP) and NAIA Customs house, 27the Chief Valuation and Classification Division, and by other persons 28designated by the Committee Chair. 29 309.2.3.4.2 Functions. 31 32The ICS shall meet regularly or as often as may be necessary to do the 33following: 34 35 a. Review the findings and recommendations of the ICS units in 36 the POM, MICP and NAIA with respect to an SGL users 37 importations as against his/her list of importable commodities, 38 as approved by the SGL Committee; 39 40 b. Resolve the differences among the ICS units of the concerned 41 Ports and come up with a common approved list (Annex A-5) 42 and/or list of issues/questions to be raised during the meeting 43 with the Applicant/SGL user; 44 45 c. Participate in the deliberations of the AS with respect to the 46 valuation and classification or articles in SGL applicants list of 47 importables or amendments, if any, to said list; and the initial 48 acceptability of such valuation under the Transaction Value 49 System; 50 2 3
477

1 1 d. Validate the compliance issues identified in the post-release 2 validation of the entry declaration as against the information 3 and/or amendments thereto, if any, as provided by the SGL user 4 to BOC in the Application Form/amendments and recommend to 5 the SGL Committee such appropriate measures as it may deem 6 necessary; 7 8 e. When appropriate, recommend that as SGL user/shipment be 9 subjected to compliance audit; and 10 11 f. Perform such other functions as may be assigned to it by the 12 SGL Committee. 13 149.2.3.5 SGL Secretariat 15 16The SGL Secretariat, which shall be composed as provided for in a CSO shall 17keep an efficient reporting and monitoring system. For this purpose it shall: 18 19 a. Provide administrative support to the SGL Committee; 20 b. Provide invitees/applicants to the SGL Program with SGL 21 application form and list of requirements; 22 c. Receive and review completeness of submitted documents from 23 SGL applicants; 24 d. Schedule the meeting of a SGL applicant with the AS and ICS; 25 e. Monitor the timely submission of the required reports, as follows: 26 27 MISTG: Form 2 (Annex D) Entry Statistics 28 29 Form 4 (Annex F) Detailed SGL Entries Weekly Report 30 Summary of Transactions per SGL user, 31 32 By ICS Form 3 (Annex E), Operational Issues and 33 Problems Report; 34 35 f. Submit membership status report (Form 1, Annex C) to the SGL 36 Committee; and 37 38 g. Keep and secure all pertinent documents handled by the SGL 39 Committee and its Sub-Committees. 40 419.2.4 Support Structure 42 43Management Information System and Technology Group (MISTG) In support 44of the SGL Program, the MISTG shall: 45 46 a. Provide the necessary infrastructure to enable the electronic 47 lodgment of SGL entries, including provisions to allow accredited 48 service providers to charge fees for electronic lodgment/SGL 49 registration; 50 2 3
478

1 1 b. Develop/install the necessary computer system/facilities to support 2 the SGL Program; 3 4 c. Within the first month of every calendar year, submit to the AS, 5 copy furnished the SGL secretariat, a list of the top 1,000 importers 6 in terms of taxes and duties paid during the previous year, arranged 7 from the highest to the lowest; 8 9 d. Through the Systems Development Division (SDD), submit to the 10 SGL Secretariat, for dissemination to the concerned ICS units, 11 Entry Statistics (Form 2, Annex D) on a monthly basis; 12 13 e. Through the SDD, submit a detailed SGL Entries Weekly Report to 14 the SGL Secretariat, for dissemination to the concerned ICS Units, 15 copy furnished the concerned the SGL member company; and 16 17 f. Prepare a monthly summary of transactions, per SGL-accredited 18 importer/user, in a form similar to Form 4 (Annex F), and provide 19 each SGL user with his/her respective copy thereof; 20 219.2.5 Certificate of Accreditation 22 239.2.5.1 The Certificate of Accreditation (CA) issued shall be subject to periodic 24review by the SGL Committee through the respective ICS units. The SGL 25Committee shall develop an account based monitoring of the import activities 26of all the members, as well as the over-all performance of the SGL system as 27a whole. 28 299.2.5.2 A CA shall remain valid until suspended, cancelled, or revoked 30by the Commissioner of Customs upon the recommendation of the SGL 31Committee, after due notice and hearing, on any of the following grounds: 32 33 a. When the accredited importer fails or refuses, without justifiable 34 reason, to submit the hard copies of import entries filed through 35 the SGL facility, or any supporting import documents, within the 36 prescribed period. 37 38 b. When the SGL application or importation itself is tainted with fraud 39 or willful misrepresentation. 40 41 c. Submission of any fake document during accreditation or in the 42 importation process. 43 44 d. Failure or refusal, without justifiable cause, to pay additional 45 duties and taxes lawfully demanded after post entry (release) 46 verification by ICS within the prescribed period. 47 e. When the SGL user utilizes the SGL facility to process and clear a 48 shipment not included in the approved list of importable 49 commodities. 50 2 3
479

1 1 f. Violation of any of the express or implied terms and conditions of 2 the accreditation, e.g., failure to promptly update or inform the 3 SGL Committee of any changes in the commodities being 4 imported, as well as in their description, unit values and the like. 5 6 g. Failure or refusal, without any valid ground, to comply with any 7 lawful order or directive issued officially by the SGL Committee or 8 any of its sub-committees, or by any other higher authority. 9 109.3 Accreditation Procedures for SGL Accreditation 11 12 SGL accreditation can either be by invitation or by application. 13 149.3.1 By Invitation: 15 169.3.1.1 MISTG shall, within the first month of every calendar year, 17generate the list of top 1,000 importers in terms of duties and taxes paid 18during the previous year, arranged from the highest to the lowest. 19 209.3.1.2 MISTG shall submit the list to the AS, copy furnished the SGL 21Secretariat. 22 239.3.1.3 On the basis of that list, AS shall recommend to the SGL 24Committee the importers to be invited into the SGL Program, taking into 25account the requirements to qualify as SGL users. 26 279.3.1.4 The SGL Committee shall act on recommendation, either by 28nixing it or by sending an invitation, together with the SGL application form 29and a list of other documentary requirements to be submitted to the SGL 30Secretariat. 31 329.3.2 By Application: 33 349.3.2.1 Any importer who meets the qualification requirements per this 35regulation may apply for SGL accreditation. 36 379.3.2.2 Those recommended for invitation but subsequently were not 38invited may also apply by securing /accomplishing/submitting the SGL 39application form and list of documentary requirements from the SGL 40Secretariat. 41 429.3.3 Common Provisions for Both Manner of Application 43 449.3.3.1 The SGL Secretariat shall make available the application form to 45invitees/applicants to/for SGL Program/accreditation and the list of 46documentary requirements. 47 489.3.3.2 Invitees/applicants shall submit to the SGL Secretariat the duly 49accomplished application form and all Annex A (1-5) and soft copy, in MS 50Excel format of Annex A-5 in addition to the hard copy. 2 3
480

1 1 29.3.3.3 Attached to the application form and annexes shall be the 3following documents: 4 5 a. Import Permit/License (with respect to regulated articles, duly 6 issued by the appropriate regulatory agency of the government; 7 otherwise, regulated articles shall not be included in the list of 8 allowable importations by the concerned SGL user); 9 10 b. Duly sworn affidavit that the applicants imports are not prohibited; 11 12 c. Clearance from the Chiefs of Collection Service, Collection 13 Division, Bonds Division, Liquidation and Billing Division in the 14 Port of Manila, Manila International Container Port and NAIA 15 Customs house, attesting that the applicant has no outstanding 16 obligation/accountability with BOC; and 17 18 d. BOC Certificate of Registration as an Importer. 19 209.3.3.4 The SGL Secretariat shall check the completeness of the 21submitted documents and, if lacking, requires the needed additional 22documents; otherwise, it shall forward the submissions to the AS for 23review/appropriate action, except Annex A-5, which shall be forwarded to the 24ICS. 25 269.3.3.5 The SGL Secretariat shall schedule a meeting with the 27applicant, AS and ICS, not later than ten (10) working days from receipt of all 28required submissions, for purposes of validating and clarifying information 29thereon. 30 319.3.3.6 Within five (5) days from such meeting, the AS shall deliberate 32on the application and submit its recommendations to the SGL Committee. 33 349.3.3.7 The SGL Committee shall review the recommendations of the 35AS and shall, after deliberation, undertake as may be appropriate one of the 36following measures: (a) notify the applicant of outstanding issues and 37additional documents and information required, if any; (b) inform the applicant 38that his application has been denied, and the reason(s) therefore; or (c) 39recommend the applicants accreditation for the approval of the 40Commissioner. 41 429.3.3.8 If for approval, the SGL Committee shall prepare the Certificate 43of Accreditation for signature of the Commissioner. 44 45SECTION 10 REGISTRATION OF ONCE-A-YEAR IMPORTER 46(Ref: CMO 44-2009) 47 4810.1 Once-A Year Importer. 49

2 3

481

1 1 An individual, company, corporation or partnership who has a single 2shipment covered by one Bill of Lading and one import entry declaration for a 3given calendar year. 4 510.2 Administrative Provisions 6 710.2.1 The Once-A-Year importation shall be evaluated and recommended for 8approval by the CIIS Officer-in-Charge (OIC in every port and approved by the 9District Collector of the port. 10 1110.2.2 An importer previously accredited as regular importer cannot avail of 12the provisions of this regulatin. 13 1410.2.3 The payment of duties and taxes of a Once -A-Year importation shall 15follow the provisions regarding PASS5. 16 1710.2.4 Once-A-Year importations shall be processed under the Formal Entry 18(Consumption) or Informal Entry Declarations, as appropriate. 19 2010.2.5 The application for CPRS Registration of a Once-A-Year Importer shall 21be filled with the Value Added Service Providers (VASPs). The Once-A-Year 22Importer CPRS Registration Form is in Annex A 23 2410.3 Operational Provisions 25 2610.3.1. The Once-A-Year Importer applies for his CPRS registration 27through VASP using the form in Annex A. 28 2910.3.2 The applicant presents his supporting documents to the CIIS OIC in the 30concerned collection district port 3110.3.3 The following are the required supporting documents 32 3310.3.3.1 Corporation/Company 34 35 a. TIN of Company; 36 b. SEC Registration Number/DTI Registration; 37 c. Bill of Lading/Air Waybill of Lading; 38 d. IEIRD or Informal Entry as the case may be; 39 e. Notarized e2M CPRS Application Form 40 4110.3.3.2 Individual 42 43 a. TIN of Applicant; 44 b. Bill of Lading/Air Waybill of Lading; 45 c. IEIRD or Informal Entry as the case may be; 46 d. Notarized e2m CPRS Application Form 47 4810.3.4 Evaluation and Approval Process. 49

2 3

482

1 110.3.4.1 The CIIS OIC shall evaluate the application form and the 2required supporting documents and accordingly recommend the approval or 3disapproval of the application. 4 510.3.4.2 The District Collector shall approve/disapprove the application, 6which shall be tagged in CPRS. 7 810.3.4.3 MISTG shall activate the approved registration 9 1010.3.4.4 Client Receipt of the CPRS Feedback 11 1210.3.4.4.1 Upon approval of the CPRS Registration, the Once-A-Year 13Importer shall automatically receive an e-mail notification from the e2m 14Customs System with the Certificate of Registration (COR) as attachment in 15the e-mail address that he indicated in his application for CPRS Registration. 16 1710.3.4.4.2 If the Once-A-Year Importer fails to get his copy of the COR in 18the e-mail, he forwards his notification e-mail of approval to the MISTG e-mail 19address (cprs@customs.gov.ph) and request for a copy of his COR. The 20COR shall be re-sent to the Once-A-Year Importers e-mail address. (Some e21mail providers and corporate e-mail accounts do not accept e-mail 22attachments. The applicant should indicate an e-mail address in his CPRS 23application that will not reject an e-mail attachment). 24 2510.3.4.4.3 If the Once-A-Year Importer fails to get an e-mail notifying him of 26the approval of his CPRS Registration, but his name is listed in the Approval 27List of Once-A-Year Importers in the BOC website (www.customs.gov.ph), he 28corrects or replaces the e-mail address in his CPRS record to where the e29mail notification and COR will be sent. (This happens when the e-mail 30address provided is erroneous, non-existent or inactive) 31 3210.3.4.5 The List of Approved Once-A-Year Importers shall be published 33in the Customs website. 34 3510.3.4.6 Disapproved applications for CPRS Registration may be 36corrected and re-lodged at the VASP by repeating registration steps. 37 3810.3.4.7 Enrollment with Authorized Agent Bank (AAB) 39 4010.3.4.7.1 The Once-A-Year Importer submits his COR to any of the AABs 41to enroll his bank account existing or new, from where his Customs duties and 42taxes shall be debited. The list of AABs is available in the BOC website. 43 4410.3.4.7.2 The AAB completes the enrollment process and provides the 45Once-A-Year Importer with his Bank Reference Number and electronically 46transmits the same to e2m Customs System through the BOC-Bankers 47Association of the Philippines-Philippine Clearing House Corporation (BOC48BAP/PCHC) internet portal. 49

2 3

483

1 110.3.4.7.3 The Once-A-Year importer shall indicate the Bank Reference 2Number in his Once-A-Year importation declaration. 3 4 5 CHAPTER 2 LIQUIDATION SYSTEM 6 72.1 Definition of Terms 8 92.1.1 Liquidation is a post clearance control on per import entry basis for 10ascertainment on whether duties and taxes were correctly assessed/paid and 11determination whether customs law, rules and regulations and other 12applicable laws were complied with: 13 14Liquidation of an import entry involves the determination of following but not 15limited to: 16 17a. Accuracy/correctness of entered value, valuation method used, tariff 18classification, quantity or volume; 19b. Correct payment of special duties or safeguard duty; 20c. Correct payment of excise tax; 21d. Compliance with laws, rules and regulations pertaining to the 22importation of regulated articles (e.g. License to Operate (LTO) and 23Certificate of Product Registration (CPR) in case of articles subject to Food 24and Drug Administration (FDA) rules and regulations); 25e. Compliance with the pertinent Rules of Origin, if preferential tariff rate 26is availed of; and 27f. Authenticity of required documents attached to the entry. 28 292.1.2 Discrepancy Report (DR) is a statement of result of the liquidation of 30entry/entries with discrepancies.(Discrepancy Report Form is attached and 31marked as ANNEX A). 32 332.1.3 Final Assessment for the purpose of this Order shall be defined as 34assessment made by the FED. 35 362.2 Administrative Provisions 37 382.2.1 All formal entries for immediate consumption shall be subject to post 39liquidation. 40 412.2.2 The Chief, FED or equivalent unit shall transmit to the LBD or 42equivalent unit and LAAD all import entries with the attached documents 43within two (2) working days from final assessment. 44 452.2.3 Liquidation and Billing division (LBD) under the supervision of the 46Deputy Collector for Assessment shall have following functions: 47 48 a. Liquidate entries in ascending order and date of lodgment within 49 thirty (30) days from receipt of entries together with the

2 3

484

1 1 requirements attached thereto from the Formal Entry Division (FED) 2 or equivalent unit. 3 b. Liquidated entries must be posted within seven (7) days from actual 4 liquidation and posted in a conspicuous place within the concerned 5 ports for three (3) consecutive weeks. 6 c. Transmit liquidated entries to the LAAD five (5) days from actual 7 liquidation of entries. 8 d. Transmit unliquidated entries to the LAAD, upon written request. 9 102.2.4 Liquidation and Assessment Audit Division (LAAD) of Collection 11Service shall have following functions: 12 13 a. Conduct audit on liquidation and assessment; 14 15 b. Conduct audit on the entries filed and transmitted by the FED to the 16 LBD through the E2M System; 17 18 c. Any discrepancy found in the conduct of audit, the LAAD shall notify 19 concerned importer/s on the additional duties and taxes assessed, 20 copy furnished the DC concerned; 21 22 d. For the purpose of exercising its assessment audit function, the 23 LAAD may request at random from LBDs or equivalent units copies 24 of unliquidated entries together with supporting documents; 25 26 e. Conduct audit on the proper maintenance of required logbooks by 27 LBD; 28 29 f. Require LBD to submit weekly Status Report on DRs sent to 30 concerned importers; 31 32 g. Recommend to DC to exercise authority to hold delivery under 33 Section 1508 of the TCCP of delinquent importers through the 34 Director, Collection Service and Deputy Commissioner, RCMG 35 copy furnish the Commissioner; 36 37 h. Recommend to the Commissioner through the Director, Collection 38 Service and Deputy Commissioner, RCMG the filing of appropriate 39 criminal, civil and administrative charges against erring 40 importers/brokers including but not limited to suspension/revocation 41 of accreditation. 42 432.3 Operational Provisions 44 452.3.1 Import Entry and Internal Revenue Declaration (IEIRD) or Single 46Administrative Documents (SAD) together with required attached documents 47routed to the Yellow and Red Lanes shall be entered in the logbook and 48forwarded by the FED to the LBD or its equivalent unit within two (2) working 49days from final assessment. For purposes of IEIRD or SAD routed to the 50Green Lane or Super Green Lane (SGL) the same shall be entered in the 2 3
485

1 1logbook and forwarded by the FED to the LBD or its equivalent unit within two 2(2) working days from receipt thereof. 3 42.3.2 FED and LBD shall maintain records of daily transmittal/receipt of 5IEIRD and SAD through the use of logbook system and shall be held 6accountable for its safekeeping. The said logbook shall have format and 7information and must contain (a) date entry filed; (b) import entry number; (c) 8customs broker; (d) documents attached to the entry and (e) date received by 9LBD. 10 11Likewise, an LBD Control Logbook, shall be maintained, which shall serve 12as Record of Liquidation with the following information: 13 14a. Import Entry Number; 15b. Consignees Name; 16c. Customs Broker; 17d. Documents attached to the entry; 18e. Date received from FED; 19f. Assigned Liquidator; 20g. Date Liquidated; 21h. Discrepancy Report (DR) Control Number; 22i. Amount of discrepancy; 23j. DR received by importer or broker; 24k. 2nd notice received by importer or broker; 25l. Date hold delivery under Section 1508, TCCP issued; 26m. Date transmitted and received by COA. 27 282.3.3 The LAAD shall audit the completeness of import entries transmitted to 29LBD by the FED as against the import entries filed daily through e2m 30Customs System access provided by MISTG. 31 322.3.4 The following shall be performed by the LBD in liquidating an entry: 33 34 a. In liquidating an entry a liquidator (Customs Operations Officer or 35 Assessor) must consider the provisions of Section 2.3.2; 36 b. Liquidators are required to use red ball pens or sign pens in making 37 liquidations for easy reference when audits or liquidations are 38 made; 39 c. Sign import entry and LBD Control Logbook; 40 d. If discrepancy on an entry is discovered prepares DR for signature 41 of the Assistant Chief and Chief, LBD. 42 432.3.4.1 In case of final liquidation: 44 452.3.4.1.1 Prepare summary of entries liquidated with no discrepancies 46noted and forward the same for approval by the Chief, LBD or designated 47subordinate employee and post the same in the LBD Bulletin Board latest 4810:00 am the following day; 49

2 3

486

1 12.3.4.1.2 Prepare summary of entries liquidated for the day with 2discrepancies noted and approved by the Chief, LBD or designated 3subordinate employee and post the same in the LBD Bulletin Board latest 410:00 am the following day; 5 62.3.4.1.3 The posted daily summary of entries per Sections 2.3.4.1.1 and 72.3.4.1.2 shall contain the name of importer, import entry number, date of 8filed, vessel or aircrafts name, port of arrival, date of arrival and amount of 9discrepancy and shall be posted for two (2) consecutive weeks. 10 112.3.4.1.4 Importers with liquidated entries shall be notified through e-mail 12or the Customs Broker who signed the covering entry notified through e-mail 13or copy of the DR sent to importer through the Customs Broker who signed 14the covering import entry or DR sent directly to importer by mail or personal 15service. 16 172.3.4.1.5 A second notice shall be given to the importer through any of the 18means under the preceding Section two (2) weeks after first notice. Failure 19on the part of the importer to settle the outstanding amount indicated in the 20DR within two (2) weeks from sending of second notice shall result to 21suspension of the importers registration with the Bureau of Customs. 22 23 To this effect LBD shall make a formal recommendation to the District 24Collector for the suspension of the importers registration. The District 25Collector as a matter of course shall indorse the same to MISTG for 26implementation. 27 282.3.4.2 In case of tentative liquidation. 29 302.3.4.2.1 LBD shall maintain a logbook of entries tentatively liquidated a 31summary report of which shall be submitted to the District Collector and Chief, 32LAAD every 17th and 3rd of the month. The report shall contain among others 33following: 34 35 a. Name of importer; 36 b. Import entry number; 37 c. Date import entry filed; 38 d. Circumstances why entry was tentatively liquidated; and 39 e. Date final liquidation is scheduled. 40 412.3.4.2.2 MISTG shall develop an automated system of monitoring 42tentative liquidations in the e2m Customs System which shall be made 43available to the District Collector, LBD and LAAD. 44 452.3.5 Daily liquidated entries together with attached documents and summary 46of final and tentative liquidation shall be forwarded by LBD or equivalent unit 47to the LAAD within two (2) days from liquidation. 48 492.3.5.1 LAAD shall perform audit on liquidated entries using risk 50management tools and sampling techniques and shall transmit to the Office of 2 3
487

1 1the Resident COA copy of liquidated entries received from LBD within thirty 2(30) days from receipt. 3 42.3.6 Remedies Available to Importers Receiving DRs. 5 6 Following remedies may be availed of by importers receiving DRs: 7 8 a. In cases of valuation, classification or preferential tariff issues 9 contest the DR before the VCRC; or 10 b. Pay under protest. 11 122.4 Transitory Provisions 13 14DCs through LBDs and equivalent units are required to submit to the Deputy 15Commissioner, RCMG Attention: Chief, LAAD within fifteen (15) working days 16from effectivity of this regulation a report which shall contain following 17information: 18 19 a. Entries received from FEDs which have not been liquidated; and 20 b. List and ageing of outstanding Discrepancy Reports issued. 21 22 CHAPTER 3 RECORDS KEEPING 23 24Section 1 Definition of Terms 25 261.1 Recordskeeping Requirement 27 28A requirement (an imposition) of law requiring certain persons to keep all the 29records of their importations and/or books of accounts, business and/or 30computer systems and all other customs commercial data, in whatever form, 31including payment records relevant for the verification of the accuracy of the 32transaction value declared by the importers/customs brokers on the import 33entry. (Adopted from Section A.1.a, CAO 4-2004) 34 351.2 Importer 36 37The term "importer" shall include the importer of record/consignee, beneficial 38owner, agent of the persons effecting the importation in question or any other 39person or entity who knowingly causes the goods to be imported. 40The phrase "knowingly causes the goods to be imported" covers domestic 41transactions where: 42 431. The terms and conditions of importation are controlled by the person 44placing the order with the importer (for example, the importer is not on 45independent contractor but rather is the agent of the person placing the order; 46whereas a consumer who purchases an imported automobile from a domestic 47dealer would not be required to maintain records, a transit authority that 48prepared detailed specifications from which imported subway cars or buses 49were manufactured would be required to maintain records); or

2 3

488

1 12. Technical data, molds, equipment, other production assistance, material, 2components, or parts are furnished by the person placing the order with the 3importer with knowledge that they will be used in the manufacture or 4production of imported goods. (Sec. IV. A.1. b, CAO 4-2004) 5 6Section 2 Administrative Provisions 7 82.1 Rationale Behind the Recordskeeping Requirement 9 10 To enable fast releases at the border, importers and customs brokers 11shall assure Customs that their entry declarations are in accordance with the 12customs laws, rules and regulations, accordance with respect to tariff 13classification, customs value, quantity and country of origin. For the purpose, 14the law requires them to keep at their respective places of business, for the 15period specified above, certain records of identified, to be used in conducting 16the compliance (verification) audit. (Sec. II.B, CMO 2-2002) 17 18 Note: Please take note that Section 3514, TCCP provides that All 19importers are required to keep at their principal place of business, in the 20manner prescribed by regulations to be issued by the Commissioner of 21Customs and for a period of three (3) years from the date of importation, 22all the records of their importations and/or books of accounts, business 23and computer systems and all customs commercial data including 24payment records relevant for the verification of the accuracy of the 25transaction value declared by the importers/customs brokers on the 26import entry. 27 28 The law is clear that the purpose of maintaining records is for 29purposes of verifying the accuracy of the transaction value declared by 30the importers/customs brokers in the import entry. In practice PEAG 31conducts audit which extends to tariff classification and country of 32origin which is beyond what the law provides. 33 34 Therefore there is need to amend the law to expand the scope of 35post entry audit which somehow the BOC may have realized. Thus its 36proposed amendment to the TCCP to expand scope of post entry audit 37is expressed in paragraph 1, Section 1100 of CMTA which provides that 38for this purpose, a duly authorized officer shall have full and free 39access to all recordsFOR THE PURPOSE OF ASCERTAINING THE 40CORRECTNESS OF THE DECLARATION IN THE IMPORT ENTRY AND 41DETERMINING THE LIABILITY OF THE IMPORTER FOR DUTIES AND 42TAXES However paragraph of same section limits the scope of post 43entry audit to entered transaction value thus it provides thatin 44addition, THE FACT THAT THE IMPORTER AND/OR CUSTOMS BROKER 45DENIES THE AUTHORIZED CUSTOMS OFFICER FULL AND FREE 46ACCESS TO IMPORTATION RECORDS DURING THE CONDUCT OF A 47POST ENTRY AUDIT SHALL CREATE A PRESUMPTION OF 48INACCURACY IN THE TRANSACTION VALUE DECLARED FOR THE 49IMPORTED GOODS and constitute grounds for the Bureau to conduct a 50re-assessment of such goods. 2 3
489

1 1 22.2 Persons Required to Keep Records 3 4 The law requires importers and customs brokers to keep records. 5 62.3 Period to Keep Records 7 8 Records shall be kept for a period of three (3) years from date of filing 9of the import entry. 10 112.4 Place to Keep Records 12 13 Records shall be kept at the principal office of importers and customs 14brokers 15 162.5 Documents in Foreign Language 17 18 Where a document in a foreign language is presented to a customs 19officer in relation to the carrying out of any duty or the exercise of any power 20of the Bureau of Customs, said documents in foreign language must be 21accompanied with the translation in the official language of the Philippines. 22(See Sec. 3517, TCCP) 23 24Section 3 Operational Provisions 25 263.1 Records to be kept by importers. 27 The following records are required to be kept by importers: 28 29a. Company or entity structure including the following to the extent that they 30are relevant for the verification of the accuracy of the transaction value 31declared oil the import entry and necessary for the purpose of collecting the 32proper duties and taxes on imports, as the case may be: 33 341) Articles of Incorporation, articles of partnership, registration certificate 35with the Bureau of Domestic Trade and the like; 36 372) List of incorporators, stockholders, partners, board of directors, owner-, 383) Organizational structure; 39 404) Management and key personnel involved in the import processing including 41authorized declarants and their specimen signatures; 42 435) Capital composition; stock and transfer book; 44 456) Principals and/or subsidiaries and their capital composition, if applicable; 46 477) List of exporter/suppliers to which the importer is related pursuant to 48definition under the WTO Valuation Agreement. 49

2 3

490

1 1b. Ordering and purchase documentation to the extent that they are relevant 2for the verification of the accuracy of the transaction value declared on the 3import entry and necessary for the purpose of collecting the proper duties and 4taxes on imports, including the following: 5 61) Sales and other related agreements, in whatever form; including, whenever 7applicable, those covering distribution, royalty, agency, warranty, terms of 8payment, and the like; 9 102) Correspondence or communication relating to the import transaction, in 11whatever form, including, whenever applicable, purchase orders, vouchers, 12confirmations, proforma invoice, acknowledgment receipts, notices, 13advisories, and the like; 14 153) Product description or specifications, brochures, manual, catalogue, 16pamphlet, flier, literature, if applicable; 17 18c. Shipping, importation, exportation, and transportation documentation 19including the following to the extent that they are relevant for the verification of 20the accuracy of the transaction value declared an the import entry and 21necessary for the purpose of collecting the proper duties and taxes on 22imports, as the case may be: 23 241) Import and/or export entry; 25 262) Invoice and/or consignment notes; 27 283) Import and export licenses/permits; 29 304) Ocean bill of lading, and/or master air waybill, and/or house air waybill, 31and/or consolidator bill of lading; 32 335) Shipping instructions, and/or freight forwarders instructions; 34 356) Certificates of Origin, and/or Certificates of Eligibility, and/or Certificate of 36Inspection and/or Loading; 37 387) Freight and insurance contracts; 398) Packing Lists; 40 419) Transshipment permits, and/or boatnotes, and/or special permits to 42transfer; 43 4410) Quota Allocation and/or Certificates; 45 4611) Customs brokerage agreements, and/or billings, and/or statement of 47accounts, and/or receipts; 48 4912) Receipts for arrastre charges, cargo handling and storage fees; 50 2 3
491

1 113) Short shipped/bad order reports, if applicable; 2 314) Goods tally records, if applicable; 4 515) Letters of credit, application for letter of credit, bank details; 6 716) Remittance advice; 8 917) Credit card transactions; 10 1118) Telegraphic money transfers; 12 1319) Offshore monetary transactions; and 14 1520) Evidence of payments by any other means, including information detailing 16non-cash compensation transactions. 17 18d. Manufacturing, stock, and resale documentation including the following to 19the extent that they are relevant for the verification of the accuracy of the 20transaction value declared on the import entry and necessary for the purpose 21of collecting the proper duties and taxes on imports: 22 231) Inward goods register/receipts journal; 24 252) Stock register/inventory records; 26 273) Production records; 28 294) Costing records; 30 315) Sales records; 32 33e. The following bank documents, financial statements and other accounting 34information to the extent that they are relevant for the verification of the 35accuracy of the transaction value declared on the import entry and necessary 36for the purpose of collecting the proper duties and taxes on imports: 37 381) Receipts, cashbooks; 392) Schedules of accounts payables and accounts receivables; and 40 413) Cheque records. 42 43f. To the extent that they are relevant for the verification of the accuracy 44of the transaction value declared on the import entry and necessary for the 45purpose of collecting the proper duties and taxes on imports, and if applicable 46charts and codes of accounts, ledgers, financial statements, accounting 47instruction manuals, and systems and program documentation that describes 48the accounting system used by the importer. 49

2 3

492

1 1g. Whenever applicable, papers, books, registers, discs, films, tapes, sound 2tracks, and other devices or things in or on which information contained in the 3records described in paragraphs (a) to (f) of this regulation are recorded or 4stored. (Sec. A.2, CAO 4-2004) 5 63.2 Records to be kept by customs brokers 7 8All Bureau of Customs accredited customs brokers are required to keep at 9their principal place of business, for a period of three (3) years from the date 10of importation copies of the importation records in whatever form covering 11transactions that they handle including records enumerated in preceding 12Section 3.1(c) from items 1 to 13. (Sec. A.2(g), CAO 4-04) 13. 143.3 Records to be kept by Bureau of Customs 15 16The Bureau of Customs shall likewise keep a record of audit results in a 17database of importer and broker profiles, to include but not limited to: 18 19a. Articles of Incorporation; 20 21b. The company structure, wbich shall include but not be limited to: 22 231) Incorporators and Board of Directors; 24 252) Key officers; and 26 273) Organizational structure 28 29c. Key importations; 30 31d. Privileges enjoyed; 32 33e. Penalties; and 34 35f. Risk category (ies). 36 37Section 4 Penalties for Failure to keep Records 38 39Any person who fails to keep and maintain all the records required to be kept 40and maintained under Section IV.A of this Order shall be subject to the 41following: 42 431. Administrative fine equivalent to twenty percent (20%) ad valorem on the 44article/s subject of the importations for which no records were kept and 45maintained as prescribed in Section 2504 of the Customs Code. 46 472. Hold delivery or release of subsequent imported articles to answer for the 48fine, any revised assessment, and/or as a penalty for failure to keep records. 49The Commissioner shall sign the Order after proper hearing. 50 2 3
493

1 13. Criminal prosecution punishable with a fine of not less than one hundred 2thousand pesos (PhP100,000) but not more than two hundred thousand 3pesos (PhP200,000) and/or imprisonment of not less two (2) years and one 4(1) day but not more than six (6) years. 5 6Section 5 Failure and/or Refusal to give full and free access 7 8Any importer and/or broker who denies an authorized officer full and free 9access under Section IV.B hereof to the records required to be kept and 10maintained as specified in Section IV.A of this Order shall be subject to the 11following: 12 131. Punishment for contempt, for contumacy or refusal from the proper court 14having criminal jurisdiction. 15 162. Re-assessment of the importations subject to audit applying the correct 17valuation method based on available data, the declared transaction value 18being presumed inaccurate. 19 203. Administrative fine equivalent to twenty percent (20%) ad valorem on the 21articles subject of the importations for which na records were kept and 22maintained as prescribed in Section 2504 of the Customs Code. 23 24 254. Hold delivery or release of subsequent imported articles to answer for the 26fine, any revised assessment, and/or as a penalty for failure or refusal to give 27full and free access. The Commissioner shall sign the Order after proper 28hearing. 29 305. Criminal prosecution punishable with a fine of not less than one hundred 31thousand pesos (PhP100,000) but not more than two hundred thousand 32pesos (PhP200,000) and/or imprisonment of not less than two (2) years and 33one (1) day but not more than six (6) years. 34 35 CHAPTER 4 POST ENTRY AUDIT 36 37Section 1. Definition of Terms 38 391.1 Post Entry Audit 40 41Post Entry Audit is synonymous with compliance audit. Compliance Audit is 42essentially a control mechanism done at the back-end of cargo clearance. It 43aims to facilitate trade by allowing release of low risk imports with minimum 44customs intervention at the border. Customs, however, retains an option to 45verify the truthfulness and accuracy of import entry declarations within three 46years from date of filing of the import entry, by looking at the pertinent records 47of the importer-auditee as well as those of their customs brokers, as defined 48in this Code. (Adopted from Sec. II.A,CMO 2-2002). 49 501.2 Types of Post Entry Audit 2 3
494

1 1 21.2.1 Voluntary Compliance Audit 3 4These audits shall be conducted under the BOCs Compliance Program which 5shall be developed to make compliant those firms that contribute up to 80% of 6customs revenue. The program shall be voluntary. Successful applicants firms 7shall be chosen using criteria that determine their respective risk levels. The 8Voluntary Compliance Audit shall focus on determining whether the firms 9systems and procedures, particularly its inventory, financial and record10keeping systems, all lead to the generation of compliant customs declarations. 11The objective of the audit shall be to assist the firm in becoming compliant. 12Part of the audit results shall therefore be a set of recommendations that 13would lead to higher compliance levels for the firm, as well as a time frame for 14acting on these recommendations. The audit shall also result in a risk rating 15for each firm, with the most compliant receiving the lowest risk rating. Those 16firms found to be highly compliant shall be given SGL (Super Green Lane) 17treatment and such other facility benefits to be provided in the Compliance 18Program. (Sec. IV.A, CMO 2-2002) 19 201.2.2 Enforced Compliance Audit 21 22These audits shall be conducted on firms that are not included in the 23Compliance Program and have been found to have compliance issues. (Sec. 24IV.A.2, CMO 2-2002) 25 26Section 2 Administrative Audit Provisions 27 282.1 When Audit of Importers Shall be Undertaken 29 302.1.1 When firms are selected by a computer-aided risk management 31system, the parameters of which are to be based on objective and quantifiable 32data which shall include, but not be limited to, the following: 33 341) Relative magnitude of customs revenue from the firm; 35 362) The rates of duties of the firm's imports; 37 383) The compliance track record of the firm; and 394) An assessment of the risk to revenue of the firm's import activities. 40 412.1.2 Detection of errors in import declarations which, if uncorrected, would 42result in substantial revenue loss or grave distortion of relevant statistical 43data. 44 452.1.3 When firms voluntarily request to be audited, subject to the approval of 46the Commissioner of Customs or importers apply for Voluntary Disclosure 47Payment (VDP). 48 492.1.4 When there is an industry complaint, derogatory information, or 50directives from other government agencies. (Page 27, PEA Primer) 2 3
495

1 1 22.2 When Customs Broker Shall be Audited 3 4Bureau of Customs accredited Customs Brokers shall be audited to validate 5the information provided by their client importers and/or fill information gaps 6discovered during the course of a compliance audit. (Page 26, PEA Primer in 7relation to Section 3516(b) , TCCP)) 8 92.3 Timetable to Finish Audit 10 11Ideally, the audit should be finished within one hundred twenty (120) days 12from receipt of all requested documents. (Page 27, PEA Primer) 13 142.4 Confidentiality Clause 15 16All information which is by nature confidential, or which is provided on a 17confidential basis for the purposes of Customs valuation, or which was 18confidentially obtained in the course of the conduct of compliance audit, shall 19be treated as strictly confidential by the authorities concerned who shall not 20disclose it without the specific permission of the persons or government 21providing such information, except to the extent that it may be required to be 22disclosed in the context of judicial proceedings, and violation of such 23confidentiality shall be prosecuted under subsection (j) of Section 3604 of the 24Customs Code. (Sec. VI.D, CAO 4-2004) 252.5 Assistance of Proper Regional Trial Court in the Conduct of Post Entry 26 Audit 27 28Unless otherwise provided herein or in other provisions of law, the Bureau of 29Customs may, in case of disobedience, invoke the aid of the proper regional 30trial court within whose jurisdiction the matter falls. The court may punish 31contumacy or refusal as contempt. In addition, the fact that the 32importer/broker denies the authorized customs officer full and free access to 33importation records during the conduct of a post-entry audit shall create a 34presumption of inaccuracy in the transaction value declared for their imported 35goods and constitute grounds for the Bureau of Customs to conduct a re36assessment of such goods using the alternate methods of valuation as 37applicable. (Sec. IV.B.6, CAO 4-04) 38 392.6 Certified Copies of Documents Admissible in Evidence in All Courts as it 40 Were the Original 41 42In the conduct of post entry audit an authorized Customs officer may require 43the importer and/or broker to make certified copies of any such documents or 44extracts thereof. A copy of any such document certified by or on behalf of the 45importer/broker is admissible in evidence in all courts as if it were the original. 46(Sec. IV.B.2-3, CAO 4-2004) 47 482.7 Authorized Customs Official Shall Only Enter any Premises to be Audited 49 Unless an Audit Notification Letter (ANL) is Produced 50 2 3
496

1 1An authorized customs officer shall not enter any premises under this Section 2unless, before so doing, the officer produces to the person in charge of the 3premises the following: 1) duplicate original of the AUDIT NOTIFICATION 4LETTER (ANL) issued by the Commissioner of Customs addressed to the 5importer/broker, and 2) official Customs identification card. The person in 6charge of the promises entered by an officer shall provide the officer with all 7reasonable facilities and assistance for the effective exercise of powers to 8conduct post entry audit. (Sec. IV.B.4, CAO 4-04) 9 102.8 Commencement of Post Entry Audit 11 12No audit shall commence without the issuance by the Commissioner of 13Customs of an ANL. (Sec. IV.B.5, CAO 4-04) 14 15Section 3 Procedures in the Conduct of Post Entry Audit 16 173.1 Profiling and Information Analysis 18 19This involves the process of (a) gathering information by downloading 20customs data on the targeted importer and collating information from other 21sources both internally and externally; (b) profiling the companys activities on 22the basis of the captured data; (c) identifying risk shipments according the 23issues involved for verification purposes; (d) sampling of exception reports 24according to nature of variances, e.g. unit FOB value, tariff heading, freight 25and the like, (e) reviewing of past decisions of BOC vis--vis the selected 26shipments; and (f) preparing a report for the Commissioner to serve as basis 27for the grant of authority to conduct field audit; and other similar activities. 28 293.2 Audit Notification 30 31Upon approval of Commissioner to commence audit, an Audit Notification 32Letter (ANL), specimen marked ANNEX A, shall be issued and sent to the 33company identified for audit. The ANL shall state the following: 34 353.2.1 Statutory basis and purpose of the audit; 363.2.2 Date and time of pre-audit conference and commencement of audit; 373.2.3 Members of the customs audit team; 383.2.4 Documents or records to be readied for audit verification 393.2.5 Request for company tour or walk-through to familiarize the audit team 40with the companys operations (e.g., warehousing, manufacturing involving 41imported articles). 42 43To be attached to the ANL are a General Customs Questionnaire, specimen 44marked ANNEX B, and a form requiring a brief description of the processes 45relating to the companys import purchasing (ordering) payment, and 46inventory systems to be filled out and sent back to BOC prior to the pre-audit 47conference. 483.3 Audit Preparation/Audit Proper 49

2 3

497

1 1Upon receipt of additional information, the Post Entry Audit Group will make 2the necessary customization of a general audit plan to fit the circumstances of 3the auditee company with the end view of achieving the specific audit 4objectives in the most expeditious and transparent manner. In particular, the 5Audit plan will aim at (a) getting information on goods flow, financial flow, 6order process flow and tracing, testing of sample entries to ensure that such 7flows operate as explained; and (b) validating the completeness and 8correctness of the information provided by the importer in the import entry 9declaration relative to the risk or issues identified in the profiling stage. 10 113.4 Pre-Audit Conference with Auditee 12 13In the pre-audit conference, the customs audit team will formally introduce 14themselves to the receiving officers of the auditee-company their written 15authority to conduct the audit. The audit team shall brief the company 16personnel on, among others, the purposes of audit, the specified date of audit 17commencement, the estimated length of time of perform and complete the 18audit, the types of documentation for review and examination, and to identify 19individual(s) in the company to serve as liaison for the audit team and those to 20be interviewed in the course of the audit. The conference shall include the 21factory/office as may be requested by BOC. 22 233.5 Conduct of Audit Proper Field Audit 24 253.5.1 A field audit involves the examination and review of the auditees 26records and documents based on the audit plan, It also includes interviewing 27of responsible personnel in order for auditors to gain an understanding of the 28firms activities which impact on the information provided in the import entry 29declaration. 30 313.5.2 The extent of field audit will depend on the nature of the companys 32operations and the level of reliance auditors will have on the internal controls 33of the company relative to the storage and retrieval of information needed by 34the auditors in attaining their specific audit objectives. 35 363.5.3 The field audit will aim to verify, among others, that in all the firms 37import transaction38 393.5.3.1 Imported are valued using the appropriate customs valuation 40method; 413.5.3.2 Such values are correct and complete as to the price paid or 42payable and the dutiable adjustments thereto; 433.5.3.3 Goods are property described and the correct tariff 44classifications are used; 453.5.3.4 Quantity of goods, as reported are correct; 463.5.3.5 Declarations are correct as to country of origin; 473.5.3.6 Special or preferential tariff rates are correctly applied and 48importer is qualified to avail of special/preferential rates. 49

2 3

498

1 13.5.4 The companys brokers may be subject to a verification exercise to 2validate audit findings on the auditee. 3 43.5.5 The auditee shall extend necessary assistance to the audit team and 5the audit team shall exert every effort to complete the task without 6unnecessary disrupting the daily operations of the company. PEAG shall, with 7the approval of the Commission of Customs, draw up an audit manual to 8serve as internal guidelines in the conduct of field audit. The manual shall 9include audit techniques, handling of information obtained, auditors decorum, 10and their general conduct. 113.6 Exit Conference 12 13Prior to issuing a final report, auditors will meet with company representatives 14to discuss the following: 15 163.6.1 Audit findings where the company will be provided the chance to check 17accuracy of facts as established. 183.6.2 Areas identified by the audit team as needing improvement to make the 19company more compliant with Customs regulations. 203.6.3 A calculation of underpayment of duties and taxes, plus possible 21administrative penalties, if any. 223.6.4 Any comment or observation by the company on audit conduct and audit 23findings which shall be incorporated in the audit report. 243.7 Audit Reporting 25 26Upon completion of the audit and the Exit Conference, the PEAG will prepare 27a Final Audit Report and Recommendation (FARR) to be submitted to the 28Commissioner of Customs for approval and/or appropriate action/instruction. 29Once the FARR is approved, the BOC shall furnish the auditee(s) with an 30official copy thereof. 31 323.8 Audit Monitoring and Implementation 33 343.8.1 The PEAG shall come up with a secure system of maintaining audit 35reports and records including internal and external communications. 36 373.8.2 The PEAG shall develop an internal audit system to ensure that all 38tasks to audit operations are completed and on time and that approved audit 39recommendation are properly implemented. 40Section 4 Procedures in Filing Administrative Complaint 41 424.1. The PEAG shall prepare the administrative compliant to be signed 43under oath by the auditor or auditors concerned and approved by the Section 44Head and the Unit Head. The compliant shall state clearly the basis thereof 45and shall attach thereto all pertinent documents and records in support 46thereof. In case the compliant proceeds from the audit findings, the audit 47report shall be attached. 48 494.2 Once accomplished, the complaint, including all enclosures, shall be 50forwarded to the Commissioner of Customs for approval of the filing of the 2 3
499

1 1complaint. After approval of the filing, the same shall be forwarded to the 2Legal Service which shall assign an individual docket number for all the 3complaints lodged under this Order (CMO 1-2002). 4 54.3 Upon receipt of the complaint, the Legal Service shall immediately 6send a copy of the complaint, including attachments pertinent to the 7complaint, to the importer and/or customs broker, as the case may be, who 8shall be given a period of fifteen (15) days from the receipt of the complaint, to 9answer said complaint. Upon receipt of the answer, the complainant office 10shall be given a period of five (5) days to make an optional reply copy11furnished the respondents, after which the case shall be scheduled for 12hearing with notice to all concerned parties. 13 144.4 The proceedings at the Legal Service shall be summary in character. 15To expedite the hearing, unnecessary postponements are discouraged, while 16marathon hearings are enjoined. 17 184.5 In lieu of the formal hearing, the parties may opt for the submission of 19memoranda with optional time to file rebuttal and sur-rebuttal, after which the 20case shall be deemed submitted for resolution. 21 224.6 When the case is submitted for resolution after hearing or through the 23filing of memoranda, the Legal Service shall, within fifteen (15) days 24thereafter, prepare a decision for the signature of the Commissioner of 25Customs. The decision shall be without prejudice to the criminal or any other 26administrative action the Bureau may take against the erring respondent/s. 27 284.7 If the Commissioner of Customs does not agree with the proposed 29decision or needs further information to act thereon, he may remand the case 30to the Legal Service stating the matter of issues that still have to be clarified, 31or may come up with his own decision on the basis of the arguments and 32evidence presented and forming part of the record. 33 344.8 Within thirty (30) days from receipt of the decision of the Commissioner 35of Customs, the respondents may appeal the same to the Court of Tax 36Appeals in the manner prescribed by law and existing rules and regulation. 37 38Section 5 Penalty for Failure to Pay Correct Duties and Taxes on Imported 39Goods Discovered After Post Entry Audit 40 415.1 Any person who, after being subjected to post-entry audit and 42examination as provided in Sections IV B and C of Customs Administrative 43Order No. 5-2001, is found to have incurred deficiencies in duties and taxes 44paid for imported goods, shall be penalized according to three (3) degrees of 45culpability subject to any mitigating, aggravating or extraordinary factors that 46are clearly established by the available evidence: 47 485.1.1 Negligence. When a deficiency results from an offenders failure, 49through an act or acts of omission or commission, to exercise reasonable care 50and competence to ensure that a statement made is correct, it shall be 2 3
500

1 1determined to be negligent and punishable by an administrative fine 2equivalent to not less than one-half (1/2) but not more than two (2) times the 3revenue loss. 4 55.1.2 Gross Negligence. When a deficiency results from an act or acts of 6omission or commission done with actual knowledge or wanton disregard for 7the relevant facts and with indifference to or disregard for the offenders 8obligation under these rules or the Customs Code, it shall be determined to be 9grossly negligent and punishable by an administrative fine equivalent to not 10less than two and a half (2-1/2) but not more than four (4) times the revenue 11loss. 12 135.1.3 Fraud. When the material false statement or act in connection with the 14transaction was committed or omitted knowingly, voluntarily and intentionally, 15as established by clear and convincing evidence , it shall be determined to be 16fraudulent and be punishable by an administrative fine equivalent to not less 17than eight (8) times the revenue loss. 18 195.1.4 Criminal prosecution under Section 3611 of the TCCP. 20 21Section 6 Reportorial Requirements 22 23The Assistant Commissioner, PEAG is required to submit every 17 th and 3rd of 24the month status report of importers and customs being audited. Such status 25report shall include date ANL is issued, stage of audit and completed audit. 26 27 CHAPTER 5 VOLUNTARY DISCLOSURE PAYMENT 28 29Section 1 Definition of Terms 30 311.1 Voluntary Disclosure Payment (VDP) 32 33Voluntary Disclosure Payment (VDP) provides importers the remedy to 34correct under certain conditions any erroneous, inaccurate or insufficient 35information declared to customs arising from sheer mistakes, inadvertence, or 36negligence without the imposition of any fine or penalty in appropriate cases. 37It shall not apply when the wrong entry declaration was attended with fraud, 38as defined in Section 3611 of the TCCP, as amended. (Sec. II.B, CAO 5-07) 39 40Section 2 Administrative Provisions 41 422.1 When VDP is available 43 44The program shall only available (a) prior to the receipt of an Audit Notification 45Letter (ANL) or (b) upon receipt of an ANL but prior to the scheduled date of 46field audit. (Sec. II.C, CAO 5-2007) 47 482.2 Benefits of Valid Voluntary Disclosure. 49

2 3

501

1 12.2.1 No fine or penalty shall be imposed on the deficiency in duties and 2taxes but only to the extent of the amount and the issues disclosed. 3 42.2.2 The applicant shall earn a least priority status in the annual audit 5selection process for all its auditable importations, subject to the following 6conditions: 7 82.2.3 Submission by the applicant of a customs compliance program 9designed specifically to address the cause or causes of the errors or mistakes 10made in the entry declarations as disclosed and generally to enhance the 11level of competence of its personnel, agents, or officers in charge of its import 12clearance operations. 13 142.2.4 Compliant behavior established through random sampling and review 15of future import activities showing faithful and serious implementation of its 16customs compliance program. 17 182.2.5. Amount of voluntary disclosure payment is not less than One Million 19(PHP1,000,000.00) Pesos per application. 20 21Least priority status shall mean that the importer may not be considered for 22audit selection for the next two years from the date of application. (Sec. IV, 23CMO 18-07) 24 25 2.3 Requirement When an Applicant is a Corporation 26 27When the applicant is a corporation, the application shall be supported by a 28Company board Resolution authorizing the signatory in the application form to 29make the disclosure and to bind the company thereto. 30 31 2.4. Special Verification Unit (SVU) 32 33The SVU, an office within PEAG, shall keep and maintain all records 34pertaining to all applications for voluntary disclosure, including the amount of 35duties and taxes collected, in a manner that would enable easy identification, 36allow authorized access to, and cause prompt retrieval of the case folder/or 37specific documents pertaining thereto. 38Section 3 Operational Provisions 39 403.1. Step One 41 423.1.1 The importer shall accomplish Form B to be signed by a duly 43authorized and responsible officer of the disclosing company, business entity 44or natural person, as the case may be. 45 463.1.2 The importer shall pay the amount of duties and taxes based on the 47disclosed deficiency to the Collection Division of the Port of Manila, which 48shall issue an Official Receipt therefore. The Collection Division shall credit 49the collected amount to the respective Collection District(s) where the import 50entry involved in the voluntary disclosure was filed in accordance with existing 2 3
502

1 1accounting and auditing rules and regulations or policies applicable in the 2premises. Upon acceptance of the payment and issuance of the Official 3Receipt, the Chief, Collection Division, POM, shall provide the PEAG Office, 4Attention: SVU, with a copy of the Official Receipt through an appropriate 5inter-office endorsement stating the name of the applicant and the amount of 6duties and taxes paid as disclosed. Format of the Endorsement is hereto 7attached as Annex C. 8 93.1.3 The duly accomplished Form B, together with the required 10documentary attachments which shall all be properly marked and certified by 11the applicant, as well as the original copy of the Official Receipt of payment, 12shall be filed with the Office of the Assistant Commissioner of the Post Entry 13Audit Group. The original Official Receipt shall be returned to the applicant 14after the same has been viewed and examined by the responsible evaluating 15officer at the Office of the Assistant Commissioner for PEAG. 16 173.2 Step two - The duly accomplished Form B shall be processed and 18 evaluated by the designated officer of the SVU, who shall perform the 19 following functions: 20 213.2.1 Verify the completeness of the information provided by the applicant in 22the accomplished Form B. 23 243.2.2. Check the sufficiency of the documents attached, including the 25payment of duties and taxes as disclosed, and/or the information provided to 26support the voluntary disclosure and necessary to conduct effective disclosure 27verification. 28 293.2.3 Ensure that the application form is accompanied by a comparative 30computation table showing (a) tariff classification or customs unit value, etc. 31originally declared as against the tariff classification or customs unit value, 32etc., as disclosed and (b) the duties and taxes originally paid and those 33resulting from the voluntary disclosure. 34 353.2.4 Determine whether the applicant is qualified under the coverage and 36exclusionary clauses of the VDP program. 37 383.2.5 When the formal requirements are incomplete or otherwise not 39complied with, when the applicant is not qualified under Section 4.3, he 40evaluating officer shall advise the applicant in writing of such fact and provide 41him with a period of fifteen (15) working days within which to complete or 42comply with the formal requirements. If after the lapse of the period given, the 43applicant remains non-compliant, the voluntary disclosure application shall be 44denied by the Assistant Commissioner, PEAG with formal notice to the 45applicant. 46 473.2.6 Once the completeness and validity as t form of the duly accomplished 48Form B has been established, the assigned officer shall conduct a disclosure 49verification, in coordination with the Trade Information Risk Analysis Office 50(TIRAO), on the disclosed customs issues, product lines, tariff headings; 2 3
503

1 1customs value, number of import entries, and the like, using the standard 2operating procedure to be established for the purpose. When necessary, the 3evaluating officer may request the applicant to appear before the office or to 4submit further information/document to clarify any matter which is the subject 5of the voluntary disclosure made. 6 73.2.7 Review the basis and accuracy of the computation made by the 8disclosing party with respect to the disclosed declaration errors or mistakes. 9When the disclosed deficiency is based on royalty or license fee payments 10conditioned on local, after-import sales, or on proceeds from subsequent 11resale of the imported goods, the evaluating officer shall recommend a 12formula of computation t ensure a fair and reasonable accounting of such 13deficiencies using the generally-accepted accounting and auditing principles 14(GAAP) and methods. 15 163.2.8 While the coverage of the verification shall be limited to the matters as 17disclosed, the evaluating officer may recommend the conduct of a full audit 18when fraud is uncovered or evident bad faith in the disclosure made is 19established at any stage of the evaluation process. 20 213.2.9 Prepare and submit a brief summary of findings and recommendations, 22through the Director, Compliance Audit Office, to the Assistant Commissioner, 23PEAG for office approval. 24 253.3 Step three - The Assistant Commissioner, PEAG, shall evaluate the 26 findings and recommendations of the SVU and direct such actions as 27 may be necessary to complete staff action on the matter. 28 293.3.1 When the recommendation is for the acceptance of the application on 30the ground that the deficiency in duties and taxes proceeded from innocent 31error or plain negligence, he shall require the applicant to submit a Customs 32Compliance Improvement Plan (CCIP). The CCIP format is hereto attached 33as ANNEX A of this Chapter . 34 353.3.2 When the recommendation is for the denial of the voluntary disclosure 36application on account of the existence of fraud as uncovered, or of bad faith ( 37as when material information available to the applicant is knowingly withheld 38to intentionally mislead customs) in the disclosure itself as established during 39the verification process, the PEAG shall, after due notice, initiate action 40leading to the conduct of full audit of the applicant firm following the existing 41procedure without prejudice to the institution of an enforcement investigation 42as the Commissioner of Customs may direct. 43 443.3.3 The recommended action to be taken on the voluntary disclosure 45application shall be forwarded to the Commissioner of Customs for final 46approval. 47 483.4 Step Four - The approved action shall be returned to the Assistant 49 Commissioner, PEAG, for implementation with notice to the applicant. 50 2 3
504

1 1Section 4 Reportorial Requirements 2 3The Assistant Commissioner, PEAG shall submit to the Commissioner a 4weekly report status of pending VDP applications. 5 6 7 BOOK IV INTELLIGENCE AND ENFORCEMENT 8 9 TITLE ONE INTELLIGENCE AND ENFORCEMENT 10 11CHAPTER 1 HOLD ORDER SYSTEM 12 13Section 1 Definition of Terms 14 15(a) Hold Order shall refer to an order duly issued by any of the Holding 16Authority authorized in this order for the purpose of suspending the release of 17a shipment or part of a shipment suspected or confirmed to be in violation of 18the TCCP or any of the laws or rules it is mandated to implement from the 19jurisdiction of the Bureau of Customs. For a hold order to be valid, the order 20must, as far as practicable, contain information sufficient to identify the 21violation/s committed. 22 23(b) Holding Authority shall refer to the offices enumerated under these rules 24which are allowed to issue or approve Hold Orders. 25 26(c) Requesting Office/Party shall refer to lawfully existing offices recognized 27by the Holding Authority. For this purpose however, the Hold Order shall be 28signed by the Holding Authority. 29 30(d) Action Officer/Officer-on-Case shall refer to the person or persons 31specified in the Hold Order who is mandated to witness the examination of 32shipment subject of a hold order or, under exceptional circumstances to be 33stated hereinafter, conduct the examination of a held shipment. 34 35(e) Duty Officer shall refer to the person designated by the Commissioner of 36Customs who is responsible in receiving duly issued Hold Orders and in 37assigning the corresponding number of a given Hold Order. 38(f) Examination as used in these rules shall refer to the physical inspection 39of the held shipment by the examiner in the presence of the officer on case for 40purposes of verifying the suspected or unconfirmed violations. 41 42(g) Officer-On-Case Report shall refer to the written report prepared by the 43Officer/s-On-Case as a result of the actions taken to validate the imputed 44violation as stated in the hold order with the corresponding recommendation. 45 46(h) Warrant of Seizure and Detention shall refer to the order issued by the 47District Collector authorizing seizure and detention of articles suspected of 48violating customs and tariff laws pursuant to Section 2301 of the TCCP. 49

2 3

505

1 1(i) Order of Lifting of Hold Order shall refer to the order directing the lifting of 2hold order issued against the subject shipment after compliance with the 3recommendation contained in the officer-on-case report, or such other 4recommendations made in the course of the lifting of the said hold order. 5 6(j) Cargo Requiring Special Handling shall refer to items which may be 7spoiled or lose its potency and thus cannot be used for the purpose for which 8the item was originally intended, or items which by their nature and character 9requires a special manner of handling or disposal. 10 11Section 2 Administrative Provisions 12 132.1 Designation of Officer-On-Case. For Hold Orders issued by the Holding 14Authority itself, the Holding Authority shall be responsible in designating the 15officer on case tasked to carry out the Order. For Hold Orders emanating or 16requested by an office recognized by the Holding Authority, the chief/head of 17the requesting office shall designate the officer on case tasked to carry out the 18Order. 19 202.1.1 To carry out this task, an officer on case shall not be given additional 21assignment until the Order is lifted or until said officer on case renders a final 22report on the implementation of the said Order. 23 242.2 Duty and Responsibility of the Officer-on-Case/Requesting Office/Holding 25Authority. A designated officer on case shall endeavor to carry out the order 26within the five (5) working days from issuance of the Hold order. For this 27purpose, the officer on case shall personally notify the named consignee or 28his representative within 24 hours from the issuance of the order and, in case 29of failure to personally notify, cause the publication of the said order in any 30conspicuous place at the port of discharge. 31 322.2.1 On the other hand, the Chief/Head of the requesting office shall be 33responsible in monitoring the progress of the implementation made by the 34officer on case and shall insure that the officer on case complies with the 35applicable provisions of this and other related rules. 36 372.3 Held Shipment to be Prioritized. A Holding Authority shall give priority to 38any held shipment. Unless the delay is due to fortuitous event or due to the 39fault of the consignee or his representative, any undue delay in the 40implementation of a Hold Order shall be a ground for administrative action 41against the officer on case and/or the requesting and/or approving authority. 42 432.4 Miscellaneous provisions 44 452.4.1 No customs employee shall be assigned or designated as officer on 46case without the consent of his/her chief or head of office. In case of conflict 47due to a violation of this provision, the office assigning the officer on case as 48such shall be liable for any incident accruing from the non-implementation of 49the hold order. 50 2 3
506

1 12.4.2 A shipment or any part thereof already placed on Hold and examined 2according to the provisions of this rule shall not be the subject of a 3subsequent Hold Order or examination. 4 52.4.3 In shipments placed on Hold and found to be in order as declared by 6the consignee, the cost of stripping and stuffing of the contents thereof shall 7be borne by the office so issuing the Hold Order. 8 92.4.4 In cases where the shipment or part thereof is prohibited, any of the 10offices allowed under this rule to issue a hold order may hold the shipment 11prior to arrival of the shipment or before the filing of an import entry. 12 13Section 3 Operational Provisions 14 153.1 Offices Authorized to Issue Hold Orders. The Offices authorized to 16issue Hold Orders are the Office of the Commissioner, the Deputy 17Commissioner for Intelligence, the Deputy Commissioner for Enforcement, the 18Deputy Commissioner for RCMG as head of the Run After The Smugglers 19program, the Director of the Customs Enforcement and Security Service, the 20Director of the Customs Intelligence and Investigation Service, the District 21Collectors, and the Chief, Intellectual Property Rights Division. 22 233.2 Justification For Hold Orders. All Hold Orders shall be accompanied by 24a written justification specifying, as far as can be ascertained, the particular 25violation of the shipment to be held. Whenever possible, the justification shall 26state therein, the following, to wit: 27 28(a) If the Hold Order is based on non-declaration/misdeclaration on 29description, weight, quantity or measurement, the percentage difference 30thereof may be indicated; 31 32(b) If the Hold is based on classification, the recommended classification and 33the higher rate of duty including its percentage difference shall be stated, 34provided, that in Hold Orders issued under this subsection, the Hold shall be 35made after final assessment by the concerned section has been completed; 36and 37 38(c) If the Hold Order is based on other grounds, the justification may 39categorically state the violation with a citation of the law, rules or regulations. 40The justification sheet shall be in the format provided in this Order, which shall 41be CMO ___ Form A-1. 42 433.3 Strict Compliance to Hold Order Form. Hold Orders in whatever form 44inconsistent with this Order shall be deemed null and void, and any person or 45office found to have violated this order shall be held administratively and/or 46criminally accountable. 47 483.4 Presentation of Hold Order for Recordation. Hold Order issued by the 49offices enumerated herein must be presented to the duty officer designated 50for that purpose at the Office of the Commissioner for recording and 2 3
507

1 1monitoring purposes. The duty officer shall be responsible in assigning the 2corresponding number of the Hold Order and in affixing the seal of the 3Commissioner of Customs. 4 53.5 Routing of Hold Order. Immediately after the seal of the Commissioner 6is affixed on the duly accomplished Hold Order, the order shall be brought by 7the officer on case to the District Collector and the Chief, Piers and Inspection 8Division or its equivalent at the port of discharge and to the concerned 9arrastre operator, which must be received thereat. The District Collector shall 10forward the Hold Order to the chief of the concerned assessment division, 11who in turn shall assign a corresponding examiner. In all cases, the receiving 12office shall indicate in the Hold Order the exact date and time the Hold Order 13was received by the concerned office. 14 153.6 Personal Service, Posting of Holder Order, and Examination. The 16officer on case shall personally serve to the consignee or his authorized 17representative a copy of the Hold Order within 24 hours from the issuance 18thereof. In case personal service cannot be made to the consignee or his 19authorized representative, the officer on case shall cause the posting of the 20Hold Order at official bulletin board or at a conspicuous place within the port 21of discharge for three (3) consecutive days. If after the lapse of the three-day22period from the first day of posting, the consignee or his representative fails to 23coordinate with the officer on case or the requesting office, the officer on case 24shall cause the conduct of the examination of the shipment, with or without 25the consignee or his representative. 26 273.7 One Hundred Percent Examination. A shipment on Hold shall be 28subject to One Hundred Percent (100%) examination. The examination shall 29be conducted by the examiner in the presence of the officer on case within 30three (3) working days from the issuance of the Hold Order. In case where 31posting is necessary to inform the consignee or his representative of the Hold 32Order, the examination shall be conducted within 6 working days from the 33issuance of the Hold Order. In the event the examination/verification is not 34conducted or concluded within the said period, a report to the issuing authority 35explaining said incident shall be submitted stating the reason for non36compliance thereto. 37 383.8 Report of Officer On Case. Upon completion of the 39examination/verification by the officer on case, a report shall be submitted by 40the officer on case to the issuing authority within two (2) working days from 41completion of examination. In cases where the Hold Order was issued upon 42the request of subordinate office, the report shall be submitted by the officer 43on case to the chief/head of the requesting office, also within two (2) working 44days. Regardless of the disposition made by the requesting authority on the 45report, the report shall be submitted to the issuing authority within the given 46period allowed by this rule. 47 483.9 Recommendation of Officer On Case. In the report to be submitted, the 49officer on case shall choose from any of the following courses of action, to wit: 50 2 3
508

1 1(a) Recommendation for ipso facto forfeiture due to non-declaration or 2misdeclaration on account of misdescription pursuant to Section 2503; 3 4(b) Recommendation for the issuance of Warrant of Seizure and Detention 5(WSD); 6 7(c) Recommendation for additional payment of duties and taxes, fine or 8surcharge; 9 10(d) Recommendation for submission of required documents, such as but not 11limited to import permits or licenses; 12 13(e) Recommendation for segregation, as the case may be; or 14 15(f) Recommendation to lift hold order to pave the way for the release of the 16held shipment. 17 18The report shall be in the format provided in this order, which shall be CMO 19___Form B. 20 213.10 Manner of Examination. In the conduct of examination, the officer on 22case shall be responsible in insuring that the items examined are properly 23identified and returned to the container. For evidentiary purposes, he shall 24take still photos of the container, the packages and the item/s itself. He shall 25likewise accomplish the minutes of the proceeding, to be signed by the 26examiner and the consignee or his representative, whenever applicable. The 27form of the minutes of the examination is attached hereto as CMO ___ Form 28C. 29 303.11 Shipments Requiring Special Handling. In cases of shipments 31requiring special handling and storage, such as but not limited to, perishable 32articles or provisions, the examination may be conducted at the premises of 33the consignee or at a designated place for such purpose. In such case, the 34hold order shall be temporarily lifted to allow the transfer of the shipment to 35the designated area where the examination shall be conducted. In no case 36shall temporary lifting be allowed without the express consent of the holding 37authority and without prior X-Ray inspection conducted on the shipment. 38 393.12 Unlawful Importation. If the importation of the said shipment in the 40immediately preceding paragraph is found to be unlawful and the issuance of 41WSD is sought, the officer on case shall make his report with his 42corresponding recommendation, appending therein the X-Ray image of the 43shipment and such other document required under the premises, and the 44shipment shall be returned to customs upon issuance of WSD. In such case, 45the District Collector concerned shall act on the recommendation within two 46(2) working days from receipt of the report. 47 483.13 Taking of Samples. Sample of items from the Held shipment shall be 49allowed to be taken provided the same is properly receipted and is physically 50required to be taken out of the container for examination or as evidence or, in 2 3
509

1 1the case of Intellectual Property Rights violation, for identification purposes. In 2all cases, only one sample of each kind shall be allowed to be taken from the 3held shipment. The sampling shall likewise be reflected in the minutes and 4the officer on case and the consignee shall put a mark on the sample 5sufficient to distinguish the goods. For samples not susceptible of marking, 6the sample shall be placed in a canister/container, which shall be marked by 7the examiner, consignee and officer on case. The mark shall be in the form of 8thumb mark or specimen signature, whichever is preferred. 9 103.14 Custody of Samples. The officer on case shall submit the samples 11taken from the held shipment to the head/chief of the holding authority or 12requesting office, as the case may be, who shall keep the sample in custody 13and who shall be responsible for the safekeeping of the said sample. The 14samples shall be made available as evidence in the seizure proceeding or in 15such other proceeding relative to the seizure, subject to the rules on evidence 16custody. 17 18 19 CHAPTER 2 VISITORIAL POWER 20 21Section 1 Visitorial Power, Definition. Visitorial power shall refer to the 22power of the Commissioner, the Collector of Customs, and of any other 23customs officer duly authorized by the Commissioner of Customs, to demand 24evidence of payment of duties and taxes on foreign articles openly offered for 25sale or kept in storage, and if no such evidence can be produced, such 26articles may be seized and subjected to forfeiture proceedings. 27 28Section 2 Administrative Provisions 29 302.1. Persons Authorized to Exercise Visitorial Power. The following may 31exercise or carry out the visitorial power, thus: 32 33(a) The Commissioner of Customs; 34(b) The District Collectors of Customs within their territorial jurisdiction; and 35(c) Any other customs officer with prior written authorization issued by the 36Commissioner of Customs. 37 382.2. Places Where Visitorial Power May Be Exercised. The visitorial power 39may be exercised: 40 41(a) Any place where foreign articles are openly offered for sale; or 42(b) Any place where foreign articles are kept in storage, provided, however, 43that in cases where these foreign articles are inside a dwelling house, the 44visitorial power shall be carried out only the strength of a valid search warrant. 45 462.3 Letter of Authority. Whenever visitorial power is exercised by a duly 47authorized customs officer or officers other than the Commissioner of 48Customs or the District Collector of Customs, a written authorization in the 49form of a Letter of Authority (LOA) shall be shown or exhibited whenever 50demanded by the owner or representative of the owner of the store or place 2 3
510

1 1visited. The Letter of Authority shall be duly signed by the Commissioner, 2identifying the authorized customs officer or officers, the store, stall, place of 3exhibition, warehouse, or any enclosure where the foreign articles are openly 4offered for sale or kept in storage, shall be shown or exhibited. This Letter of 5Authority shall not apply when the Commissioner of Customs or the District 6Collector of Customs himself exercises such visitorial power. 7 82.4 Safeguards. The following safeguards and other measures are hereby 9ordered: 10 11(a) Only authorized customs officers shall participate or be allowed to 12participate in the implementation and/or execution of the visitorial power; 13 14(b) In the implementation of the Letter of Authority, save in cases where 15violence is committed against the persons or properties of the customs 16officers implementing the same, no warrantless arrests on the persons found 17in custody of the smuggled goods shall be made. 18 19Section 3- Operational Provisions 20 213.1 Duties of Visiting Officer. In the exercise of the visitorial power, the 22customs official or officer otherwise known as the visiting officer, shall: 23 24(a) Enter the premises where smuggled goods are suspected to be openly 25sold or stored in the presence of the lawful occupant or any person in 26possession of the premises or in their absence, in the presence of any two 27witnesses who are residents or official of the same barangay, or 28representatives or occupants of the building or place where the goods are 29sold or stored. 30 31(b) Conduct an inventory of the foreign articles, if upon demand, the owner, 32occupant or person in possession of the premises cannot show evidence of 33payment of duties and taxes. 34 35(c) Issue an Inventory Receipt to the owner, his representative, the lawful 36occupant, or in their absence, to the building administrator or to the barangay 37official having jurisdiction over the premises. The Inventory Receipt shall 38contain a detailed description of the things and goods seized from the place 39where the goods are openly sold or stored. 40 41(d) Forward the Inventory Report to the Collector, through the Law Division for 42the issuance of Warrant of Seizure and Detention and for other appropriate 43actions, retaining a photocopy for the examiner/appraiser for the computation 44of duties and taxes and other charges and/or surcharge and penalties, if any. 45 463.2 Transport, Custody of, and Responsibility Over the Goods/Articles 47Seized. The Commissioner of Customs or any officer exercising visitorial 48power may tap, harness or utilize transport facilities for the transport of the 49seized goods/articles and suitable warehouse or storage areas, constituting 50the same as virtual customs warehouses for this purpose. The renumeration 2 3
511

1 1and other charges appurtenant thereto shall constitute as liens over the goods 2when sold at public auction or disposed of in accordance with the provisions 3of the TCCP, as amended. 4 53.3 Special Customs Area. For reasons of security, safety, and economy, the 6Commissioner may constitute the premises upon which foreign goods/articles 7are openly offered for sale, or kept in storage, as a Special Customs Area for 8the duration of the exercise of the visitorial power or other proceedings related 9thereto. The Bureau of Customs may conduct the inventory, examination, 10appraisal, assessment and/or collection of duties and taxes due the foreign 11goods in such special customs area. The seized goods or articles are 12deemed, for all intents and purposes, in customs custody. 13 143.4 One-Stop Shop. The Commissioner may issue an Order establishing a 15One-Stop-Shop (OSS) in the Special Customs Area or premises where the 16visitorial power is being exercised with the appointment of a Special Customs 17Area Collector by the Commissioner. The OSS, the composition of which shall 18be determined by the Commissioner, shall endeavor to resolve with finality all 19issues and matters thereat, including the payment of duties and taxes within 20the premises. 21 223.5 Summary Rules for Processing Goods/Articles Seized. To expedite 23proceedings in accordance with law, the following summary rules shall be 24observed: 25 26(a) For goods where Warrant of Seizure and Detention has not been issued 27on account of the offer of the owner to pay duties and taxes thereon, the 28Special Customs Area Collector shall, upon receipt of the Inventory Report on 29the goods/articles seized or deemed in customs custody, when no evidence of 30payment of duties and taxes has been produced, cause the verification of the 31following facts: 32 33 (1) Proof of payment of duties and taxes; 34 (2) Good faith of the claimant; 35 (3) Whether or not the goods were locally manufactured; 36 (4) Whether or not the goods were imported without violating the TCCP, 37other related laws, as well as relevant rules and regulations. 38(b) Upon verification of the foregoing facts and finding sufficient justification to 39release the goods to the claimant, the Special Customs Area Collector shall, 40subject to the approval of the Commissioner or his duly authorized 41representative, issue an Order allowing the payment of duties, taxes and/or 42fines, and forthwith release the goods. 43 44(c) In case where WSD has been issued against the shipment, the seizure 45and forfeiture proceedings shall be held in accordance with law. 46 47(d) If the facts and circumstances so warrant, the District Collector, through 48the Law Division, shall issue an Order or Decision allowing the release upon 49payment of duties and taxes thereon by recalling the WSD duly issued, or 50settlement of the case pursuant to Section 2307, of the TCCP, as amended. 2 3
512

1 1For this purpose, the approval of settlement by the port/special collector shall 2carry with it the approval of the Commissioner unless otherwise directed or 3reprobated. 4 5(e) For compelling reasons as may be determined by the Commissioner, the 6resolution of the forfeiture proceedings at the One-Stop-Shop, involving 7shipments that have already been transported to a customs special 8warehouse may still be allowed. 9 103.6 Use of BC Form 177. To facilitate the assessment and collection of 11duties and taxes, penalties and other charges accruing on the seized articles, 12BC Form 177 (Informal Entry) is hereby adopted, provided, that the normal 13documentary requirements such as bill of lading, commercial invoice and 14packing list, among others, are dispensed with. In lieu thereof, the said entry 15shall be supported by the LOA, WSD, Inventory Receipt, Summary Decision, 16and such other documents as may be deemed required. Provided further, that 17the cost of the aforesaid form is for the account of the owner, his/her 18representative or agent. 19 20Section 4 Reportorial Requirements. The officer-on-case or head of the 21team conducting the visitorial power shall render progress reports during and 22after the actual visit, and shall submit the same to the Commissioner within 24 23hours from the conclusion thereof. 24 25Section 5 Specimen Forms. To serve as guide in the implementation of this 26Order, the attached annexes shall from integral part hereof. 27 28Section 6 Right of Owner of Goods. During the seizure and forfeiture 29proceedings, the person or entity for whom such articles have been seized 30shall be given the opportunity to prove or show the source of such articles and 31the payment of duties and taxes thereon. 32 33 34 CHAPTER 3 SYSTEM IN THE ISSUANCE OF MISSION ORDER 35 36Section 1 Mission Order, Definition. A mission order is a written order 37signed by a competent official giving authority to a customs personnel with 38police authority to conduct law enforcement. 39 40Section 2 When Mission Order is Required. A mission order is a 41requirement for all law enforcement activities undertaken solely or participated 42by the Bureau of Customs personnel and conducted outside of the ports of 43entry, customs bonded warehouses, other areas considered as customs 44zone, and such places indicated in the law enforcement operations, which 45activities include: 46 47(a) Application for and/or implementation of judicial search warrants; 48 49(b) Execution of Warrants of Seizure and Detention Outside Customs 50Areas/Zones; 2 3
513

1 1 2(c) Conduct of visitorial powers of the Commissioner of Customs pursuant to 3Section 2536 of the Tariff and Customs Code of the Philippines (TCCP), as 4amended; 5 6(d) Responding to the request for assistance from other government 7agencies in the application for and implementation of judicial search warrants 8and in general the conduct of anti-smuggling operations; and 9 10(e) Other data gathering, information verification, profiling activities, and 11surveillance operations relative to the law enforcement activities of the unit 12concerned. 13 142.1 No customs personnel shall engage in any of the law enforcement 15activities referred above without a Mission Order. 16 17Section 3. Authority to Issue Mission Orders for the Conduct of Law 18Enforcement Operations. Only the following officials of this Bureau are 19authorized to approve applications for the conduct of operations as provided 20in Section 2 hereof: 21 22(a) The Commissioner of Customs; 23 24(b) The Deputy Commissioner, Intelligence Group; 25 26(c) The Deputy Commissioner, Enforcement Group; 27 28(d) The Deputy Commissioner, RCMG as head of the Run After Smugglers 29program; 30 31(e) The Service Chiefs of CIIS and ESS; and 32 33(f) The District Collector of Customs. 34 353.1 Requests from other Bureau offices and other government agencies must 36be coursed thru the foregoing officials accordingly. 37 38Section 4. Application for the Issuance of a Mission Order. Applications for 39the issuance of Mission Order shall be filed with any of the officials mentioned 40in Section 3 hereof. If the application is in response to the request of another 41government agency, it must be accompanied by a written request from the 42head of the agency or his duly authorized representative. The application 43must not be general in nature but must contain specific acts which constitute 44violation of the TCCP. 45 46Section 5. Evaluation of the Application. Only operations which are likely to 47succeed in the sense that the evidences for the violation/s imputed are 48obtainable and there are no alibis or defenses which cannot be overcome 49shall be approved. 50 2 3
514

1 1Section 6. Authentication and Recording. The duly signed Mission Order 2shall be presented to a duly designated Duty Officer at the Office of the 3Commissioner for the necessary Customs Seal and for logging in at the 4computer set up for the purpose. The Duty Officer shall make himself 5available to affected entities and others concerned regarding query on the 6authenticity of any Mission Order. 7 8Section 7. Format of Mission Order and Computer File. To the extent 9possible, the Mission Order must conform in text and substance to the format 10of Annex "A" hereof. Accordingly, the computer file must contain the following 11fields: 12 13(a) Date of the Mission Oder; 14(b) Requesting Office; 15(c) Date and Number and Issuing Judge of a Judicial Search Warrant, if any; 16(d) Name of firm mentioned in the approved Mission Order; 17(e) Address; 18(f) Contact Person; 19(g) Granting Authority; and 20(h) Objectives of the Mission Order. 21 22Section 8. Team Composition. To facilitate the conduct of the inventory and 23to ensure unity of efforts, the team of the requesting unit shall be 24accompanied by a representative from the Formal Entry 25Division/Warehousing Assessment Division. 26 27Section 9. Period to Complete the Mission Order. The duly issued Mission 28Order shall be valid for a period of fifteen (15) days unless a shorter period is 29specified. The Team must complete the mission within the validity date of the 30Mission Order. In the event the mission cannot be completed in time, a report 31must be rendered to the official who issued the Mission Order explaining the 32reason for the non-completion of the task and requesting for extension of the 33validity of the Mission Order stating the new date within which the mission can 34be finally completed. In cases of missions undertaken pursuant to a judicial 35search warrant, the lifetime of the Mission Order must be within the validity 36date of the approved search warrant. 37 38Section 10. Submission of Report. The team must submit a report to the 39issuing official within five (5) days from the completion of the mission. A copy 40of the report duly received by the issuing official must be presented to the 41Duty Officer for recording. 42 43Section 11. Progress and Final Report. The official who issued the Mission 44Order shall submit a weekly progress report to the Office of the Commissioner 45on the action taken on the Mission Order until a final report is rendered. 46 47 48CHAPTER 4 INTELLECTUAL PROPERTY RIGHT PROTECTION 49 50Section 1 Definition of Terms 2 3
515

1 1 2(a) "Intellectual Property Rights" shall consist of (1) Copyright and Related 3rights; (2) Trademarks and Service Marks; (3) Geographic Indication; (4) 4Patents for invention, utility model and industrial design; (5) Lay-out Design 5(Topographies) of Integrated Circuits; and (6) Protection of Undisclosed 6Information and shall hereafter to be referred to singly or collectively as "IPR 7 8".(b) "Infringing Goods' as used in this Order means articles imported in 9violation of the IP Code and other related laws. 10(c) "Mark" means any visible sign capable of distinguishing the goods 11(trademarks) or services (service marks) of an enterprise and shall include a 12stamped or marked container of good. 13(d) "Collective Mark" means any visible sign designated as such in the 14application for registration and capable of distinguishing the origin or any 15other common characteristics, including the quality of goods or services of 16different enterprises which use the sing under the control of the registered 17owner of the collective mark. 18(e) Trade Name" means the name or designation identifying or distinguishing 19an enterprise. 20(f) "Copyrighted Work" refers to any of those works whether published or 21unpublished, mentioned under Sections 172 and 173 of the IP Code. 22(g) "Patented Invention' refers to any technical solution of a problem in any 23field of human activity which is new, involves an inventive step, and is 24industrially applicable. It may be or may relate to a product, a process, or an 25improvement of any of the foregoing, including microorganism, non-biological 26and micro- biological processes for which a patent has been duly issued by 27the Intellectual Property Office. 28 29(h) "Utility Model" refers to any new model of implements or tools or of any 30industrial product or of part of the same, which does not possess the quality of 31invention but which is of practical utility by reason of its form, configuration, 32construction or composition. 33(i) "Industrial Design" refers to any composition of lines or colors or any three34dimensional form, whether or not associated with lines or colors; provided that 35such composition or form gives a special appearance to and can serve as a 36pattern for an industrial product or handicraft. 37(j) "Lay-out Design", which is synonymous with "Topography", means the 38three-dimensional disposition, however expressed, of the elements, at least 39one of which is an active element, and of some or all of the interconnections 40of an integrated circuit, or such a three-dimensional disposition prepared for 41an integrated circuit intended for manufacture 2 3
516

1 1(k) "Geographical Indication" are indications which identify a good as 2originating in the territory of a country, or a region or locality in the territory, 3where a given quality, reputation, or other characteristics of the good are 4essentially attributable to its geographical origin. 5Section 2 Administrative Provisions 62.1 What Are Prohibited. The following are prohibited: 7(a) Those which shall copy or simulate any mark or trade name registered 8with the Intellectual property office (IPO) in accordance with the IP Code, 9without the authorization or consent of the registrant or its duly authorized 10agent. 11(b) Those which shall copy or simulate any well-known mark as determined by 12competent authority, without the authorization or consent of the owner or its 13duly authorized agent. 14(c) Those which are judicially determined to be unfairly competing with the 15products bearing marks whether registered or not. 16(d) Those which constitute as a piratical copy or likeness of any work, whether 17published or unpublished, on which a copyright subsists. 18(e) Those which present themselves as substantial simulation of any 19machine, article, product, or substance duly patented under the IP Code, 20without the authorization or consent of the patentee or its duly authorized 21agent. 22(f) Those which use false or misleading description, symbol, or label that is 23likely to cause confusion, mistake, or deception as to the affiliation, 24connection; or association of the imported goods with another person's goods; 25or those which misrepresent their nature, characteristics, qualities, or 26geographic origin. 272.2 Who May Request for Suspension of Release 282.2.1. IPR Recorded with BOC. The Bureau shall maintain an IPR Registry 29where IP Holders may record their IPR, together with other relevant 30information that the Bureau may use for the effective implementation and 31enforcement of this Order. 322.2.1.1 An IPR Holder/Owner, or his agent, may apply with the Commissioner 33of Customs for the recording of his IPR and the product/s covered by such 34right/s upon the submission of the following requirement: 352.2.1.2 An affidavit attesting that the applicant is the rightful owner of the IPR 36sought to be recorded, or in case of a representative or an agent, that he is 37duly authorized by the IPR Holder/Owner to make the application, and that the 38person or other entitles in the submitted list, if any, are so authorized or not 2 3
517

1 1distribution of such products covered by the IPR, together with a sufficient 2description of the products covered by the IPR sought to be recorded, 3together with samples thereof, if possible, to aid the Bureau in implementing 4this regulation. 52.2.2 IPR not Recorded with BOC 62.2.2.1 The IPR Holder/Owner, or his duly designated agent, who has not 7recorded in accordance with Section II.C.! of this order his IPR and the 8product or products protected thereunder, may request either the 9Commissioner of Customs, Director, CIIS, Chief IPRD or the District Collector 10of Customs concerned in case of ports of entry outside of Metro Manila 11(outports) to issue an alert or hold order against any importation suspected to 12contain infringing goods upon submission of the documents enumerated in 13Section II.C.l.l. to 2. 142.2.2.2 In meritorious cases, the Commissioner of Customs, CIIS Director, 15Chief IPRD or the District Collector of Customs concerned in case of ports of 16entry outside of Metro Manila (outports) shall issue the alert or hold order; the 17goods shall be examined in the presence of the IPR I Holder/Owner or his 18duly authorized agent who shall be accordingly notified of the time and place 19of the examination. Notwithstanding the absence of the IPR Holder/Owner or 20his agent who has been notified of the scheduled date and time of 21examination, the inspection shall proceed and the examining official shall, 22through proper channel, make his findings and recommendation to the 23Commissioner, Director CIIS, Chief IPRD or District Collector of Customs, as 24the case may be. 252.3 Documentary Requirements 262.3.1 In the case of IPR registered with the IPO, three (3) certified true copies 27of the Certificate of Registration issued by the said office 28 292.3.2 In the case of IPR not registered with the IPO, three (3) certified true 30copies of a decision or resolution of a court or other competent authority 31declaring or recognizing the claim to an IPR 322.3.3 In the case of copyright and related rights, an Affidavit executed by the 33IPR Holder/Owner or his duly authorized representative stating that: 34(a) At the time specified therein, copyright subsists in the work or other 35subject matter; 36(b) He or the person named therein is the owner of the copyright; and 37(c) The copy of the work or other subject matter annexed thereto is a true 38copy thereof. 2 3

518

1 12.3.4 Payment of recordation fee of Two Thousand Pesos (P 2,000.00) per 2product but in no case to exceed Twenty Thousand Pesos (P 20,000.00) per 3IPR Holder/Owner. 42.4 Purpose of Documentary Requirements. The foregoing documentary 5requirements are solely for the purpose of identifying the IPR Holder/Owner 6and providing the Bureau with minimum information that will help its officers in 7effectively monitoring and evaluating infringing goods at the border. Such 8requirements therefore may in certain meritorious circumstances be 9liberalized for as long as the basic purposes for which the above requirements 10are imposed are achieve. The IPR Holder/Owner or his representative shall 11be notified of the time and place of examination. 122.5 Validity of Recordation. The recordation of IPRs and product or products 13covered therein shall be valid for two (2) year from date of the recording and 14renewable every two years thereafter. 152.6 Random Checks. The Bureau reserves the right to conduct, on its own 16initiative, random inspection of goods/shipments under existing regulations on 17the issuance of alert or hold orders, in connection with the discharge of its 18police functions over imports and exports. 192.7 Intellectual Property Rights Risk Management and Database Support 20System. The Bureau of Customs shall establish a risk assessment program 21and a management information system where all relevant data for the 22effective enforcement of the IP Code shall be gathered, stored and utilized to 23monitor, screen out, and interdict infringing goods at the border and on a post 24entry basis. For the purpose, it shall establish appropriate linkages with the 25Intellectual Property Office, other concerned law enforcement agencies, and 26the private sector. 27Section 3 Operational Provisions 28 293.1 Procedure in IPR Recordation. For purposes of IPR recordation, the 30following procedure shall be followed: 31(a) Applicant shall accomplish the prescribed application form before the 32Intellectual property Rights Division. 33(b) The application shall be accompanied by the Affidavit referred to in 34Section 2 hereof, and provide such other relevant information, as required in 35the same section. 36(c) Applicant shall pay the recordation fee. 37(d) Upon compliance with the above requirements, the IPU shall prepare for 38the Commissioner's signature a Customs Memorandum Circular addressed to 39all Collector of Customs setting forth the fact of recordation together with a 40description or model of the registered product of products. 41(e) After receipt of the Circular, the Collector of Customs concerned shall 42distribute copy or copies of documents containing relevant data on the IPR 2 3
519

1 1and covered product or products among the front-line customs assessment 2officers, and to direct them to monitor imports accordingly. 33.2 Procedure on the Request for the Issuance of Hold Order. For purposes 4of requesting for the issuance of a hold order, the following procedure shall be 5followed: 6(a) The IPR Holder/Owner or his agent shall request in writing the 7Commissioner of Customs, Director OIS, Chief IPRD or the District Collector 8of Customs in the case of outports, for the issuance of an alert or hold order 9on goods suspected to be infringing and 10(b) The applicant shall attach all documentary requirements and other 11relevant information about his IPR and the product or products covered 12therein, as provided in Section 2, hereof. 133.3 Seizure Proceedings Involving Infringing Goods. 143.3.1 Upon seizure, the Collector shall, within five (5) working days from date 15of seizure, give the claimant, importer or the owner of the seized article or his 16agent a written notice of the seizure and shall give him the opportunity to be 17heard. For the purpose of giving such notice, the importer, consignee, or 18person holding the bill of lading shall be deemed the owner of the seized 19property described in the bill of lading. For the same purpose "agent" shall be 20deemed to include not only the agent in fact of the owner of the seized 21property but also any person having legal possession of the property at the 22time of the seizure, if the owner or his agent in fact is unknown or cannot be 23reached. 243.3.2. In case of an unknown owner or claimant, the notice shall be effected 25posting for five (5) days in public corridor of the customhouse of the district in 26which the seizure is made, and in the discretion of the Commissioner, by 27publication in a newspaper, or by such other means as he shall deem 28desirable. 293.4 Disposition of Forfeited Goods. 303.4.1. If within ten (10) days after due notification prescribe in the preceding 31paragraph, no claimant, owner or agent appears or can be found, the 32Collector shall declare the property forfeited in favor of the government 333.4.2 After due notice is served, the Collector shall immediately set the case 34for hearing. The case shall be decided within Twenty (20) working days from 35the date the case is set for hearing. 363.4.3. After due notice is served, the Collector shall immediately set the case 37for hearing. The case shall be decided within Twenty (20) working days from 38the date the case is set for hearing.

2 3

520

1 13.4.4. The disposition of goods forfeited by final decree shall be governed by 2existing laws and regulations applicable in the premises with due regard to the 3statutory policy on IPR protection. To expedite action on the disposition of 4forfeited articles, the Bureau, through the IPRD, shall within 30 days from 5creation issue supplemental guidelines relating to the handling and 6safekeeping of these goods, including provision for internal and external 7coordination, and logistical support. 8 9 CHAPTER 5 INTERNAL INVESTIGATION AND PROSECUTION

10 11Section 1 Definition of terms 12 13(a) Complaint shall refer to such acts or omissions leveled against a customs 14employee which constitutes a wrongdoing or a violation of the terms of his 15employment as provided for under existing laws, civil service rules, as well as 16other rules and regulations. 17 18(b) Preliminary Investigation shall refer to that stage where the investigating 19officer conducts examination of records and documents submitted by the 20complainant and the customs employee, including other documents readily 21available from the Bureau of Customs and from other government offices. 22During the said investigation, the parties are given the opportunity to submit 23affidavits and counter-affidavits. 24 25(c) Formal Charge shall refer to the document signed by the Commissioner 26setting forth the acts or omissions of the customs employee which constitute 27the wrongdoing or the violation for which he is being charged. 28 29(d) Preventive Suspension shall refer to such order issued by the 30Commissioner suspending the employment of the customs employee during 31the pendency of the proceedings, effective immediately upon the filing of a 32formal charge and after service or such order to said employee. 33 34(e) Decision shall refer to the final disposition of the complaint against the 35customs employee as approved by the Commissioner of Customs, whether in 36the form of a dismissal of the complaint, finding the customs employee liable 37as charged, or otherwise finding him liable for a lesser offense. 38 39Section 2 Proceedings before the Internal Investigation and Prosecution 40Division 41 422.2 Complaint 43 442.1.1 Form of Complaint - A complaint against a customs employee shall be in 45writing subscribed and sworn to by the complainant. Complaints initiated by 46the disciplining authority, however, need not be under oath. Requests for 47investigations shall be treated as complaints only when ordered by the 2 3
521

1 1Commissioner, his Deputies, District Collectors, Directors or the Central 2Grievance Committee. 3 42.1.2 Contents of Complaint. The complaint shall contain the following: 5 6(a) full name and address of the complainant; 7 8(b) full name and address of the person complained of, as well as the latters 9position and office of employment; 10 11(c) a narration of the relevant and material facts which shows the acts or 12omissions allegedly committed by the employee complained of; 13 14(d) certified true copies of documentary evidence and affidavits of the 15complainants witnesses, if any and; 16 17(e) certification and statement of non-forum shopping. 18 19Failure to comply with any of foregoing requirements will result in the 20dismissal of the complaint 21 222.1.3 Complaint, Where Filed. A complaint shall be filed, at any time, before 23the Internal Inquiry and Prosecution Division (IIPD) of the Customs 24Intelligence and Investigation Service. 25 262.1.4 Action on the Complaint. Upon receipt of the complaint, the IIPD office 27clerk shall, within twenty-four (24) hours from receipt thereof, make a case 28folder and assign a docket number therein, clearly indicating the name(s) of 29the Customs personnel complained of or subject of investigation and the 30complainant(s), if any. Within the twenty-four (24) hour period, he shall 31forward the case folder to the Chief IIPD who, in turn, shall, within forty-eight 32(48) hours from receipt, assign the same to an investigator. 33 342.2 Complaint against IIPD personnel. A complaint against IIPD personnel 35shall be in the same form addressed directly to the Commissioner. The latter, 36within five (5) days from receipt thereof shall constitute an independent body 37to conduct the requisite preliminary investigation. The preliminary 38investigation shall be conducted in the same manner as provided herein. 39 402.3 Anonymous Complaints. No anonymous complaint shall be entertained 41unless verifiable by sufficient means through documentary, object or direct 42evidence. In the absence of supporting evidence, the anonymous complaint 43shall be dismissed outright. 44 452.4 Preliminary Investigation, Procedure. The preliminary investigation shall 46be conducted in the following manner: 47 48(a) Within five (5) days from receipt of the case folder from the Chief, IIPD, the 49Investigating Officer shall evaluate the same. If he finds no ground to continue 50with the investigation, he shall recommend the dismissal of the complaint, 2 3
522

1 1otherwise he shall issue a subpoena, attaching therein a copy of the 2complaint and the supporting affidavits and documents, if any, to the 3respondent, directing him to file his Counter-Affidavit. 4 5(b) Within ten (10) days from receipt of the subpoena, the respondent shall 6submit his Counter-Affidavit and that of his witnesses and other supporting 7documents relied upon for his defense, copy furnished the complainant. The 8respondent shall not be allowed to file a Motion to Dismiss the complaint in 9lieu of his Counter-Affidavit. 10 11(c) If the respondent cannot be subpoenaed, or if subpoenaed, does not 12submit his Counter-Affidavit within the ten (10) day period, the investigating 13officer shall resolve the complaint based on the evidence presented by the 14complainant. 15 16(d) The investigating officer may set clarificatory hearings if there are facts 17and issues that need to be clarified from any of the parties or their witnesses. 18Any of the parties may be present at the clarificatory hearings but may not 19cross-examine the other party or his witnesses. Any party may, however, 20submit to the investigating officer questions which may be asked to the other 21party or to the witness concerned. 22 23(e) Clarificatory hearings shall be held and terminated within fifteen (15) days 24from submission of the respondents counter-affidavit or from the expiration of 25the period for the submission of such counter-affidavit. 26 27(f) The Preliminary Investigation shall not exceed forty five (45) days from 28receipt of complaint; Provided, that the forty five-day-period may be extended 29only for valid and compelling reasons. 30 312.4.1 Failure of respondent or of the complainant to appear in the Preliminary 32Investigation or to submit his counter-affidavit shall be considered as waiver of 33his right thereof. 34 352.5 Resolution of Cases and Quantum of Evidence. Within fifteen (15) days 36from termination of the Preliminary Investigation or after the expiration of the 37period to file counter-affidavit and no counter-affidavit was filed, the 38Investigating Officer shall submit an Investigation Report to the Chief, IIPD for 39his concurrence, containing therein his findings which constitute a prima facie 40case against the respondent that would warrant the issuance of a Formal 41Charge; provided, however, that if no prima facie case is found, the 42Investigating Officer shall recommend, with concurrence of the Chief IIPD, for 43the dismissal of the complaint. Such recommendation for the dismissal of the 44complaint, shall be immediately forwarded to the Commisisioner for his 45approval. 46 472.6 Formal Charge. Upon finding of a prima facie case, a Memorandum shall 48be prepared, signed by the Investigating Officer duly concurred by the Chief 49IIPD, recommending that a Formal Charge be issued against the erring 50customs employee. The Memorandum and the Formal Charge, together with 2 3
523

1 1the entire case folder shall be forwarded to the Director, CIIS. The latter, if he 2concurs with the finding(s), shall, within ten (10) days from receipt thereof 3forward the same to the Deputy Commissioner, Intelligence Group. 4Otherwise, the Director, CIIS may return the same to the IIPD for further 5investigation. Such reinvestigation shall not exceed fifteen (15) days from 6receipt of the case folder by the IIPD. The Deputy Commissioner, Intelligence 7Group, may also order a reinvestigation within the same period, if he is not 8satisfied with the findings submitted to him, otherwise, he shall, within ten (10) 9days from receipt thereof, forward the Formal Charge, together with the case 10folder, to the Commissioner of Customs for his appropriate action. 11 122.6.1 Whenever warranted, the Formal Charge shall include the issuance of a 13Preventive Suspension against the customs employee 14 152.7. Preventive Suspension. The Commissioner may issue motu propio an 16order of preventive suspension, or upon petition of the complainant or as 17recommended by the IIPD, if there are reasonable grounds to believe that: 18 19(a) the respondent is guilty of charges against him which would warrant 20removal from the service; 21 22(b) if the respondent's continued stay in office may prejudice the just, fair and 23independent disposition of the case filed against him; or 24 25(c) if the charge against respondent involves (a) dishonesty, (b) oppression, 26(c) grave misconduct; or (e) neglect in the performance of duty. 27 282.7.1 Effectivity. Such preventive suspension shall take effect immediately 29upon the filing of the Formal Charge and upon service of the Formal Charge 30to the respondent. 31 322.7.2 Reassignment In Lieu of Preventive Suspension. In lieu of preventive 33suspension, the Commissioner may reassign respondent to other units of the 34Bureau during the formal proceedings. 35 362.7.3. Duration. The preventive suspension shall continue until the case is 37terminated, however, in no case shall the total period of preventive 38suspension exceed ninety (90) days. 39 402.7.4 Automatic Reinstatement. Unless charged with other violations and a 41separate and distinct preventive suspension has been issued, the respondent 42shall be automatically reinstated upon expiration of the period of preventive 43suspension. The Directors of the Legal Service and of the Administration 44Office, are tasked to monitor the service/compliance of the preventive 45suspension. 46 472.7.5 Issuance of Personnel Order. The Commissioner or the Deputy 48Commissioner, Internal Administration Group, pursuant to existing laws rules 49and regulations, for purposes of clarifying/determining if the respondent is 50reinstated to his previous position or to a new position, and to determine the 2 3
524

1 1date of effectivity of the reinstatement, shall issue a Personnel Order to that 2effect. The same shall be served to the parties and the Directors of the Legal 3Service and the Administration Office, for information and their appropriate 4action. 5 6Section 3. Proceedings Before the Legal Service. 7 83.1. Formal Proceedings 9 103.1.1. Transmittal of the Case Folder to the Legal Service. Within ten (10) 11days from receipt of the Formal Charge and the case folder, and immediately 12upon his approval of the Formal Charge, the Commissioner shall forward the 13same to the Legal Service through the Deputy Commissioner, Revenue and 14Collection Monitoring Group. 15 163.1.2. Routing of the Case Folder to the Chief, Prosecution and Legal 17Division. Within five (5) days from receipt of the Formal Charge and the case 18folder, the Deputy Commissioner, Revenue and Collection Monitoring Group 19shall forward the same to the Director, Legal Service who shall immediately 20forward the Chief, Prosecution and Litigation Division (PLD). 21 223.1.3. Action of the Chief, Prosecution and Legal Division. Within ten (10) 23days from receipt of the case folder, if the Chief, PLD finds no sufficient cause 24to warrant further proceedings on the basis of the Formal Charge and the 25documents attached thereto, he shall recommend to the Director of the Legal 26Service the outright dismissal of the case, otherwise, he shall immediately 27assign a Hearing Officer and a Prosecutor for the conduct of formal 28proceedings. 29 303.1.4 Issuance of Summons. The Hearing Officer shall, within five (5) days 31from receipt of the Formal Charge, issue summons requiring the respondent 32to file his Answer to the Formal Charge. 33 343.1.5 Answer. Within ten (10) days from service of summons, the respondent 35shall file his Answer to the complaint and serve a copy thereof to the 36complainant and the IIPD. 37 383.1.6 Effect of Failure to Answer. Should the respondent fail to file his Answer 39to the Formal Charge within the period prescribed above, he shall be 40considered to have waived his right to file the same. The Hearing Officer shall 41then proceed to decide on the case on the basis of the Formal Charge and 42the documents attached thereto. Should the Hearing Officer need to clarify 43some facts or findings from the complainant or from the IIPD, he shall set 44clarificatory hearings to aid him in deciding the case. 45 463.1.7 Hearing. Within three (3) days from receipt of respondents Answer or 47after the lapse of the period given to respondent within which to submit his 48answer, the Hearing Officer shall set the same for formal hearing requiring the 49parties and their witnesses to appear on the date, time and place indicated in 50the notice of hearing. 2 3
525

1 1 23.1.7.1 In the course of the hearings, respondent may be represented by 3counsel if he so desires. 4 53.1.7.2 No motion for postponement or continuance shall be allowed by the 6Hearing Officer except upon meritorious grounds and subject to the 7requirement of expeditious disposition of cases. In any case, formal hearings, 8including clarificatory hearings, shall be terminated within thirty (30) days from 9the submission of respondents Answer or after the lapse of the period given 10to respondent within which to submit his Answer. 11 123.1.7.3 The conduct of formal hearing by the PLD shall be summary in 13nature. Subject to the requirements of due process in administrative cases, 14the technicalities of law, procedure and evidence shall not strictly apply 15thereto. The Hearing Officer may avail himself of all reasonable means to 16ascertain speedily the facts of the case. He shall take full control of the 17proceedings, with proper regard to the right of the parties to due process, and 18shall limit the presentation of evidence to matters relevant to the issues before 19him and necessary for a just and speedy disposition of the case. 20 213.1.8. Submission of Position Papers. Within fifteen (15) days from the 22termination of the formal hearings, the parties shall submit their respective 23Position Papers. After the lapse of said period, with or without the parties 24submission of their respective position papers, the case shall be deemed 25submitted for decision. 26 273.2. Decision 28 293.2.1. Rendition of Decision. Not later than fifteen (15) days after the case is 30deemed submitted for decision, the Hearing Officer shall submit a proposed 31decision containing his findings and recommendations to the Director of the 32Legal Service. The Director of the Legal Service shall, within fifteen (15) days 33indicate his concurrence and forward the same for the approval of the Deputy 34Commissioner for Revenue Collection and Monitoring Group (RCMG). The 35latter shall likewise have the same period of fifteen (15) days within which to 36approve or disapprove the findings of the Director of the Legal Service. 37Except for valid and compelling reasons, the period for review by the Director, 38Legal Service and the Deputy Commissioner, RCMG shall not exceed thirty 39(30) days. The Deputy Commissioner, RCMG shall thereafter immediately 40forward his findings to the Commissioner for the latters final approval. 41 423.2.2 Contents of Decision. The decision shall be signed by Commissioner 43and shall contain a clear and concise statement of the (a) facts of the case, 44(b) the issues involved (c) the applicable laws, rules, and jurisprudence, and 45(d) the conclusions and the reasons thereof. 46 473.2.3. Service of the Decision. The Decision as approved by the 48Commissioner of Customs shall be served personally or by registered mail to 49the respondent or to his counsel, if respondent is represented by counsel. 50 2 3
526

1 13.2.4. Finality of the Decision. The Decision becomes final and executory 2after the lapse of fifteen (15) days from receipt of the Decision by respondent 3or his counsel, unless a Motion for Reconsideration or Reinvestigation has 4been timely filed. 5 63.2.5 Motion for Reconsideration or Reinvestigation. A motion for 7reconsideration or reinvestigation may only be entertained if filed within fifteen 8(15) days from receipt of the decision and based only on the following 9grounds: 10 11(a) Grave errors of facts or laws or serious irregularities have been committed 12prejudicial to the interest of the respondent; or 13 14(b) New evidence had been discovered which materially affects the order, 15directive or decision. 16 173.2.5.1 Only one motion for reconsideration or reinvestigation shall be 18allowed. 19 203.2.6 Routing of Motion for Reconsideration or Reinvestigation. Immediately 21upon receipt of any motion for reconsideration or reinvestigation, the 22Commissioner shall send the same together with the case folder to the 23Deputy Commissioner, RCMG who shall forward the same to the Chief, PLD 24through the Director, Legal Service, who shall resolve the same within fifteen 25(15) days from the date of receipt of the said motion and case folder. 26 273.2.7 Reinvestigation Proceedings. If a reinvestigation is in order, the Chief, 28PLD shall send a notice of hearing and shall conduct the reinvestigation 29proceedings in same the manner as how hearings are conducted and 30thereafter render his decision based on the evidence presented. Likewise, if 31the motion for reconsideration is meritorious, the Chief, PLD shall make the 32proper recommendation in the same manner as how a decision is rendered. 33However, if the Chief, PLD denies the motion for recommendation or 34reinvestigation, he shall immediately forward his recommendation to the 35Commissioner, through and after the review of the Director, Legal Service and 36the Deputy Commissioner, RCMG. The decision shall become final and 37executory after the lapse of fifteen (15) days from receipt of the respondent or 38his counsel. 39 403.2.8. Execution of the Decision. Upon finality of the Decision, the Office of 41the Commissioner shall indorse the same to the Internal Administration 42Group, who shall forward a copy of the Decision to the Human Resource 43Management Division for implementation. The Central Records Management 44Division, the Legal Service, and the IIPD shall each be furnished copies of the 45Decision. 46 473.2.9 Case Folders to RIPS in Case of Dismissal. In case of graft-related 48administrative cases involving Customs personnel, including, but not limited to 49offenses under Republic Act Nos. 3019 and 6713, offenses classified as 50grave offenses under Civil Service Rules and Regulations, and other similar 2 3
527

1 1offenses, where the decision against any or all of the respondents is for 2dismissal of the formal charge, the IAG shall furnish the Revenue Integrity 3Protection Service (RIPS) of the Department of Finance certified true copies 4of the entire case folder within five (5) days from receipt thereof. 5 63.3 Execution Pending Appeal. The respondent may appeal the decision of 7the Commissioner to the Civil Service Commission, however, such appeal 8shall not stay the execution of the decision. 9 103.4. Motion to Dismiss Based on Unreasonable Length of Time to Resolve. 11Upon motion of the respondent, any complaint against him pending 12investigation before the IIPD or pending hearing before the Legal Service and 13not resolved for more than one (1) year from the time the complaint is filed 14may be ordered dismissed, unless the delay in the proceedings is attributable 15to respondents own acts or are due to fortuitous events or force majeure. 16The customs official or employee responsible for such unreasonable delay 17shall be dealt with accordingly in accordance with applicable laws and 18regulations. 19 20Section 4. Miscellaneous Provisions 21 224.1 Prohibited Pleadings. Other than those pleadings mentioned above, no 23other pleadings may be allowed before the IIPD or the Legal Service. Motions 24like motion to dismiss, motion to inhibit, motion to transfer hearings, motion 25for clarification, motion for bills of particular and other similar pleadings which 26would cause unncessary to delay the conduct of administrative proceedings 27shall not be allowed. 28 294.2 Confidentiality of Investigations and Hearings. All investigations and 30hearings of cases shall be strictly confidential. Any person who, without the 31authority of law, shall deliberately disclose confidential information gained 32during such investigation or hearing shall be dealt with in accordance with 33Section 3604 of the Tariff and Customs Code and this Code. 34 354.3 Rules of Court, Application. In all matters not provided in these rules, the 36Rules of Court and/or Uniform Rules on Administrative Cases shall apply, only 37in a supplementary character or by analogy, whenever practicable and 38convenient. 39 40 BOOK V INFORMATION AND COMMUNICATIONS TECHNOLOGY 41 42 TITLE 1 CLIENT PROFILE REGISTRATION SYSTEM (CPRS) 43 44 (Ref:CMO 39-2008) 45 46Section 1 Definition of Terms 47 481.1 Client Profile Registration System (CPRS) is a process where 49 stakeholders are registered with the e2m Customs System for purposes of 50 transacting BOC. 2 3
528

1 1 2Section 2 Administrative Provisions 3 42.1 The below stakeholders shall continue to comply with 5 accreditation/registration/licensing/clearance requirements of government 6 agencies regulating or exercising supervision over their operations, as 7 follows: 8 9 Stakeholders Accredited by Accrediting Agency 10 Other Government 11 Agencies (OGA) 12 13 Value-Added Service Provider BOC VASP Accreditation 14 Committee 15 Airlines Civil Aeronautics Board 16 Shipping Lines Maritime Industry Authority 17 Exporters Registered with Board of Investments 18 Investment Promotions Philippine Economic Zone 19 Agencies Authority 20 Clark Development 21Corporation 22 Subic Bay Metropolitan 23Authority 24 Cagayan Special Economic 25Zone 26 Authority 27 Zamboanga City Special 28 Economic Zone 29Authority 30 Other Exporters Philippine Exporters 31 Confederation, 32 Inc 33 Arrastre Operators Philippine Ports Authority 34 Authorized Agent Bank Bangko Sentral ng Pilipinas 35 (Bankers Association of the 36 Philippines) 37 Forwarders/Consolidators Philippine Shippers Bureau 38 (NVOCCs) (Sea Freight) 39 Civil Aeronautics Board (Air 40Freight) 41 42 Above-listed stakeholders shall be registered in CPRS by their 43 respective accrediting agencies using the Other Government Agency 44 (OGA) gateway of e2m Customs. In this Order, the above stakeholders 45 shall be referred to as OGA-Registrants. 462.2 Clients and Stakeholders (referred to as Registrants for brevity), whether 47 filing/submitting e-documents under e2m Customs or just entities to be 48 referred to in e2m Customs transactions shall apply for e2m Customs 49 registration by electronically submitting the data and information listed in 2 3
529

1 1 Annex A. The e2m Customs shall utilize these data to properly identify 2 clients and stakeholders and ensure that they are extended the 3 appropriate access levels and treated in accordance with their respective 4 client types. 5 62.3 Registrants shall register in CPRS for every role they will assume in their 7 transactions with e2m Customs. As an example, if an exporter is also an 8 importer, this stakeholder must register twice. As an importer, he applies 9 for CPRS registration with Customs using a VASP. As an exporter, he will 10 be registered by the accrediting agency. 11 122.4 Only VASP-Registrants with valid and existing BOC accreditation obtained 13 pursuant to existing Orders such as those listed in Sections 2.3, shall 14 apply for Client Profile Registration. Where a Registrant is proven to have 15 violated this provision, the BOC registering office shall immediately de16 activate the CPRS registration of the registrant, without prejudice to the 17 filing of an administrative case against him. De-activation of OGA18 Registrant shall be made after official notification to the accrediting agency 19 concerned stating the reason for the de-activation. 20 212.5 An advisory shall be posted in the Customs website www.customs.gov.ph 22 that registration approval for the data build-up shall be based solely on a 23 valid and existing accreditation under the Customs Accreditation 24 Secretariat (CAS) for importers and brokers and under other BOC units 25 who are in charge of accreditation of remaining stakeholders covered by 26 Section 2.1. 27 28 The list of brokers and importers accredited by CAS and the list of 29 stakeholders accredited by other BOC offices shall be published in the 30 Customs website for the guidance of all concerned. 31 32 OGAs are enjoined to similarly publish in their respective websites the list of their accredited stakeholders.

332.6 For the initial registration of stakeholders covered by this Order, the 34 validity of the registration is three hundred sixty five (365) days reckoned 35 from the date of approval of the registration. 36 372.7 BOC shall accredited the VASP's CPRS program for Phase 2 acceptance 38 of CPRS Applications from clients. 39 402.8 VASP-Registrants shall use the services of VASPs accredited for Phase 2 41 e2m Customs implementation to electronically submit, via the Internet, 42 their applications for registration in CPRS. 43 442.9 OGA-Registrants (stakeholders listed in Provision 2.1) must submit the 45 data requirements in Annex A to their respective accrediting agencies. The 46 OGAs shall register their stakeholders in CPRS using the e2m Customs 47 National Single Window (NSW) gateway. 48 2 3
530

1 12.10 Stakeholders who are successfully registered in CPRS shall be issued 2 the following electronic identification: 3 42.10.1. A Customs Client Number. The Customs Client Number (CCN) is the 5stakeholder's unique identifier in the CPRS for every role that the stakeholder 6acquires in the CPRS registration. 7 8The CCN is issued to the stakeholder by way of a Certificate of Registration 9(CoR). (Annex B). 102.10.2. A Digital Signature. All transactions in e2m Customs are required to 11be electronically signed by the entity submitting the transaction. e2m Customs 12shall issue a digital signature to each stakeholder who will be directly 13transacting with e2m Customs. 14 152.11 CPRS requires importers to nominate at least one e2m Customs16 registered broker in their CPRS applications. In view of this, Customs 17 brokers must endeavor to register at the earliest possible time, get their 18 Customs Client Number and supply this to their importer-clients. After 19 registration, however, importers may avail of the services of registered 20 brokers other than the one they nominated in their CPRS registration. 21 222.12 Stakeholders who are operating a Customs Bonded Warehouse (CBW) 23 for imports, shall register in CPRS as warehouse operators. After a 24 successful CPRS registration, the CBW operator shall be issued an e2m 25 warehouse code. Importers availing of the warehousing services of a CBW 26 shall indicate the CBW warehouse code in the importer's CPRS 27 registration. In view of this, a CBW operator must endeavor to register as 28 early as possible so that it can provide importers using its CBW with the 29 aforementioned warehouse code. 30 312.13 To facilitate their e2m Customs registration, it is recommended that 32 importers and other VASP-registrants use the services of customs brokers 33 who have already been registered in CPRS because 1) these brokers are 34 already enrolled with VASPs and 2) they have been trained in using the 35 CPRS for e2m Customs registration. On the other hand, importers and 36 other clients who are considering applying for Client Profile registration on 37 their own would still have to first enroll with a VASP and undergo training 38 on using the CPRS for e2m registration. 39 402.14 Photographs and specimen signatures required should be digitized so 41 these can be electronically submitted with the registration applications. 42 Digitized documents should comply with technical requirements in Annex 43 A. 44 452.15 Stakeholders are informed, through e-mail messages sent to 46 addresses designated in their applications, of the status of their application 47 at every stage of the approval process. 48 2 3
531

1 12.16 Importers shall use their COR to enroll their bank accounts with 2 Authorized Agent Banks as debit accounts for payment of duties and 3 taxes. 4 52.17 The Deputy Commissioner, MISTG, shall have over-all responsibility 6 for the implementation of this Order, provided that the Customs 7 Accreditation Secretariat under the supervision of the Deputy 8 Commissioner, AOCG, shall have the approving authority for stakeholders 9 applications for e2m Customs registration under pertinent Customs 10 regulations. 11 122.18 The Deputy Commissioner for MISTG and AOCG shall constitute a 13 Task Force on the Integration of BOC Registration Requirements which 14 shall, in consultation with representatives of stakeholders-group, review 15 registration requirements and procedure provided under existing Orders 16 towards integrating data and documentary requirements, as well as 17 procedures, for all stakeholders, which will meet/satisfy the needs of all 18 BOC Offices. 19Section 3 Operational Provisions 20 213.1 MISTG 22 233.1.1. MISTG shall activate the VASP gateway and the NSW gateway to 24enable the internet lodgment of stakeholders' CPRS applications. 25 263.1.2. MISTG shall publish in the BOC website the CPRS application forms for 27each of the registrant types. The application form shall be downloadable from 28the BOC website. When printed and filled out, the application form may 29function as a source document for the data entry of the electronic CPRS 30application. Accredited VASPs must likewise make said form available in their 31websites for the convenience of registrants. 32 333.1.3. The Deputy Commissioner, MISTG, shall recommend to the 34undersigned, entities and processes for the convenient and secure generation 35and distribution of the digital certificates to the stakeholders after the approval 36of their CPRS application 37 383.1.4. MISTG shall provide the accrediting agencies with user manuals and 39instructions in the use of CPRS. The accrediting agency shall have the 40responsibility to transfer this knowledge to their respective stakeholders. 41 423.1.5. MISTG shall issue a digital certificate to the accredited VASPs. The 43VASPs shall use this digital certificate to sign CPRS applications that are 44lodged by the VASP-Registrants. 45 463.1.6. MISTG shall issue user names and digital certificates to each of the 47Accrediting Agencies (hereafter to be referred to as "Agency") as follows 48 2 3
532

1 13.1.6.1. The is issued a user name and digital certificate to be used by the 2"supervisor", a responsible officer in the Agency who will be tasked to retrieve 3the electronic CPRS applications of the Agency's stakeholders for review prior 4to submission to CPRS. As an accrediting entity, the Agency can verify the 5data presented by the stakeholder in the electronic CPRS application against 6its own accreditation database 73.1.6.2. Only the "supervisor" has CPRS access for submission of the 8stakeholder's application to e2m Customs. 9 103.1.6.3. MISTG shall issue a user name and digital certificate to a "clerk", an 11Agency's employee who shall encode the stakeholder's paper application 12forms submitted to the Agency for CPRS. The encoded CPRS applications 13are to be retrieved from the CPRS database by the 'supervisor' and reviewed 14before the official electronic submission to CPRS. When submitted to CPRS, 15these records shall have the status of 'ACCREDITED'. 16 173.1.6.4. The issuance of the user names and digital certificates shall follow the 18procedure to be implemented based on Provision 3.1.3. 19 203.1.6.5. For the limited period of CPRS data build-up, MISTG shall issue 21temporary 'clerk' user names and digital certificates to Agencies. These user 22names and digital certificates shall be distributed by the OGAs to their 23stakeholders to enable the stakeholders themselves to encode their CPRS 24applications using the BOC's NSW gateway. The temporary user names and 25digital certificates shall be invalidated at the end of the data build-up phase of 26CPRS. 27 283.2 VASP Registrants 29 303.2.1 Prior to applying for e2m Customs registration, stakeholders should 31 verify the remaining validity periods of their registrations with 32 designated. BOC offices pursuant to existing CMOs/CAOs indicated in 33 Provision 2.3. Where the remaining validity period of a stakeholder's 34 accreditation is already short, it is recommended that the stakeholder 35 renew his accreditation before applying for e2m Customs registration to 36 avoid any possibility that his e2m Customs registration will be de37 activated due to his having violated Provision 2.4. 38 393.2.2 Stakeholders shall file their applications for e2m Customs registration 40 through Phase 2-accredited VASPs, as provided in Section 2.8, using 41 their own e2m Customs-enabled computer facilities or e2m Customs42 enabled computer facilities in business centers and internet cafes. 43 443.2.3 Stakeholders and their VASPs, through which the stakeholders lodged 45 their applications for e2m registration, shall receive e-mail messages 46 indicating either "Error" or successful progress in the processing of 47 applications by the CPRS, as follows: 48 493.2.3.1. Stored the electronic application is officially accepted by CPRS. 50 2 3
533

1 13.2.3.2. Approved - the CPRS application has undergone verification and is 2approved. 3 43.2.4 Stakeholders who receive "Error" messages should resolve the errors 5 through their VASPs and re-file their applications as soon as the errors 6 are resolved. 7 83.2.5 Upon approval of the stakeholder's CPRS application, the stakeholder 9 shall receive an e-mail message with the CoR attached. The e-mail 10 and the attachment are automatically generated by CPRS. The 11 stakeholder shall receive this e-mail and attachment in the e-mail 12 address declared in his application. The CoR can be printed by the 13 stakeholder using his own PC. The stakeholder's VASP shall also be 14 provided a copy of the e-mail and the CoR attachment. 15 163.2.6 The stakeholder shall get his digital certificate through a process to be 17 identified by the Deputy Commissioner, MISTG as stated in Provision 18 3.1.3. 19 203.2.7 Once the stakeholder gets possession of the digital certificate, the 21 safekeeping of the digital certificate and the password becomes the 22 stakeholder's responsibility. If the password is compromised, the 23 stakeholder can request for a replacement digital certificate. This 24 process for acquiring a replacement digital certificate shall likewise be 25 described in the process to be implemented from Provision 3.1.3. 26 273.2.8 Importers shall present their CoR to Authorized Agent Banks and enroll 28 the bank accounts which they will use for the automatic debit payments 29 of duties and taxes of their importations. AABs shall issue Bank 30 Reference Numbers for enrolled bank accounts to importers and 31 electronically transmit the same to the e2m Customs System using 32 their Bank Payment Gateways. The procedure for the application for 33 and issuance of the Bank Reference Numbers is explained in the CAO 34 entitled "Payment Application Secure System version 5.0". 35 363.2.9 Stakeholders shall be advised by their VASP on how to use the digital 37 certificate for signing their electronic documents for submission to e2m 38 Customs. 39 403.3 OGA-Registrants 41 423.3.1 OGA Registrants shall be informed by their accrediting agencies on 43 what mode to follow in the submission of the CPRS application to the 44 OGA gateway. 45 463.3.1.1 OGA Registrants advised to encode their CPRS applications 47 directly into CPRS using the OGA gateway shall immediately 48 acquire a temporary user name, password and digital certificate 49 from his accrediting agency. 50 2 3
534

1 13.3.1.1.1. OGA Registrants uses an Internet browser to go to the URL 2www.customs.gov.ph/nsw. 3 43.3.1.1.2. OGA Registrant logs in, using the temporary user name and 5password provided him by his accrediting agency. OGA Registrant follows the 6steps in the CPRS User Manual for the functions that he will perform. 7 83.3.1.1.3. OGA Registrant encodes his CPRS application on-line and 9"STORES" his application. The OGA Registrant electronically signs his 10application using his temporary digital certificate. The STORED application 11shall automatically appear in the "supervisor's" list of applications needing 12review and submission to the OGA gateway. 13 143.3.1.1.4. OGA Registrant may inform the OGA 'supervisor' that he has 15'STORED' his CPRS application as a secondary-notice 16 173.3.1.2 OGA Registrants advised to submit paper application forms shall 18 submit the manually filled-in forms to the OGA. The OGA "clerk" 19 shall encode the application form in CPRS. 20 213.3.2 The OGA Registrant waits for the e-mail notification from CPRS on the 22 status of his CPRS application: 23 243.3.2.1. Accredited this e-mail notification is sent when the OGA 25"supervisor" successfully submits the application record to CPRS. 26 273.3.2.2. Approved this e-mail notification is sent, together with the COR 28attachment, when the CPRS application is approved. 29 303.3.2.3. E-mail notifications and the COR attachment are system-generated. 31 323.4 Value Added Service Provider 33 343.4.1 VASPs shall develop their own CPRS data capture Internet program 35 that will allow VASP-Registrants to encode their CPRS application 36 forms for submission to e2m Customs. The CPRS programs must be 37 accredited by BOC specifically for the Phase 2 Data Build-Up. 38 393.4.2 VASPs shall enable their clients to file their applications for e2m 40 Customs registration online. When necessary, the VASP shall be 41 provided by MISTG with temporary digital certificates for limited periods 42 to be used solely for e2m Customs CPRS Data Build-up. 43 443.4.3 VASPs are responsible for training the VASP-Registrants enrolled with 45 them. 46 2 3
535

1 13.4.4 2 3 4 5 63.4.5 VASPs shall resolve error messages with the designated BOC 7 officers, in behalf of their clients, and advise their clients on the 8 appropriate resolution of the errors. 93.4.6 It shall be the responsibility of the VASPs to verify the completeness of 10 data, photos and signatures of their clients before the Application for 11 Registration is lodged with CPRS. 123.5 Other Accrediting Agencies 13 143.5.1 Agencies must exercise due diligence in accrediting their respective 15 stakeholders before effecting their Client Profile Registration. 16 173.5.2 Agencies shall assign the "clerk" and "supervisor" user names and 18 digital certificates issued by MISTG to the appropriate Agency staff. 19 203.5.3 The Agency shall inform the BOC of the mode of submission to be 21 followed by the Agency for the data build-up phase. 22 233.5.3.1 24 25 26 273.5.3.2 28 29 30 31 32 333.5.4 The "clerk" and the "supervisor" shall use an Internet browser to reach 34 the OGA Gateway of URL www.customs.gov.ph/nsw. After successful 35 log-in, the users follow the instructions set forth in the User Manual. 36 373.5.5 Accrediting agencies shall set up their own stakeholder support 38 systems for the following activities: 2 3
536

VASPs shall immediately inform their clients of the data, photo and signature requirements for e2m Customs registration and provide training on the use of the CPRS, and particularly on encoding of application data using their data capture screens.

If the Agency shall take responsibility for encoding the CPRS application, it shall require its stakeholders to submit to it their manually filled-out application forms.

If the Agency shall allow its stakeholders to encode their own CPRS applications on-line to the OGA Gateway, the Agency shall inform BOC and request for temporary user names and digital certificates that the stakeholders will use to access the OGA Gateway CPRS application and to sign their submission.

1 13.5.5.1 2 3 4 53.5.5.2 6 7 8 9 103.5.5.3 11 123.5.5.4 13 Training of their stakeholders in the fill-up of the screen form or the paper data sheet to use in the OGA CPRS. Establishment of Help Desks and Customer Support Units to assist their stakeholders in using CPRS. Distribution of temporary user names and digital certificates to be issued by MISTG, for the use of their stakeholders in initially applying for registration in CPRS, if the Agency opts to allow its stakeholders to encode their own CPRS application on-line. Accrediting agencies shall inform their stakeholders on the need for registration in CPRS, the procedure to follow and other information necessary for the clients' compliance with CPRS registration.

143.6 Bureau of Customs I-CARE 15 163.6.1 VASP-Registrants 17 183.6.1.1 19 20 21 22 233.6.1.2 24 25 26 27 28 29 30 313.6.1.3 32 33 34 353.6.2 OGA-Registrants 36 373.6.2.1 38 2 3 Upon its receipt of the CPRS application, CPRS shall automatically send OGA-Registrants the "ACCREDITED" e-mail message.
537

Upon receipt of error-free applications for e2m registration, the CPRS shall automatically send VASP-Registrants and their VASPs the "STORED" e-mail messages. Applications with errors shall receive error messages.

From the effective date of this Order up to 31 January 2009. CAS shall adopt a facilitated, one step approval process wherein, upon verification that the stakeholder is included in the database of valid and existing accreditations, it shall forthwith approve the client's application. After 31 January 2009, the approval process by CAS shall follow the regular procedure to be covered by a separate Order.

Upon approval of the CPRS Application, an e-mail message with the CoR attachment will be sent by CPRS to the stakeholder and the stakeholder's VASP.

1 1 23.6.2.2 3 4 5 6 7 83.6.2.3 9 10 113.6.3 12 13 14 15 The approving BOC office shall endeavor to complete the approval of registration applications on the same day that the same is received at e2m Customs. The approving office may set a cut-off time of two (2) hours before end of working hours after which applications received will be considered as next-day submissions. Upon approval of the CPRS Application, an e-mail message with the CoR attachment will be sent by CPRS to the stakeholder. Approval of the Application for Registration of stakeholders from OGA shall be approved forthwith unless there is a valid and subsisting Suspension Order to hold the processing of all transactions of the registrant issued by the Commissioner of Customs or office duly authorized by him.

16 17 BOOK VI GENERAL ADMINISTRATION 18 19 TITLE 1 RECONSTRUCTION OF LOST DOCUMENTS 20 21TITLE 2 FEES AND CHARGES 22 23CHAPTER 1 IMPORT PROCESSING AND TRANSIT DECLARATION FEE 24(IPF) 25 261.1 Informal Entry P250.00 27 281.2 Import Entry for Immediate Consumption 29 30 Dutiable Value of Shipment 31 32Up to P 250,000 500.00 33Over P 250,000 to 500,000 1,000.00 34Over P 500,000 to 750,000 1,500.00 35Over P 750,000 2,000.00 36 371.2 Warehousing Entry 500.00 38 391.3 Transit Declaration 500.00 40 41CHAPTER 2 REFUND PROCESSING FEE AND DOCKET FEE 42 43On ordinary claims for refund of tax and duty payments, including cash bonds; 44and for each formal protest/appeal from the decision of the District 45Collector/Valuation & Classification Review Committee (VCRC) 2 3
538

1 1Amount of Claim/ Protested Amount Processing Fee/ 2Docket Fee 3Up to P 50,000 4Over P 50,000 to 100,000 1,200 5Over P 100,000 to 200,000 1,400 6Over P 200,000 to 300,000 1,600 7Over P 300,000 to 400,000 1,800 8Over P 400,000 to 500,000 2,000 9Over P 500,000 to 750,000 3,000 10Over P 750,000 to 1,000,000 4,000 11Over P1,000,000 6,000 12 13CHAPTER 3 ADMINISTRATIVE FEES 14 153.1. Issuance of Certificates 16 173.1.1. Certificate of Payment P 200 18 193.1.2. Tax Credit Certificate P 200 20 213.1.3. Certificate of Clearance from Outstanding Account, Tax Credit, 22 Tax Debit, and related matters P 200 23 243.1.4. Other certificates not herein specified, if such 25 are issued in the course of routine administration 26 and do not subserve any special pecuniary 27 interest of the party concerned therein P 200 28 293.2. Issuance of Permits 30 313.2.1To render overtime services for 32 processing / releasing imported goods P 800 33 343.2.2 To take cigars aboard ship, per thousand cigars 35 (secured by/given topersons, 36 other than the passengers) P 200 37 383.2.3 To take cigarettes aboard ship, 39 per thousand cigarettes, (secured by/ 40given to persons other than the passengers) P 200 41 423.2.4 Transshipment of cigar and / or cigarettes 43 from one foreign vessel to another peso equivalent 44 of four US 45 Dollars ($4.00) 46 per cartons of 47 fifty reams 48 493.3. Registration Fees 50 2 3
539

1 13.3.1. To participate in public auction sale, per auction P 4,000 plus 2of 1% 3 of the floor price 4 53.3.2. For importers to transact Business 6 with the Bureau P 2,000 7 83.3.3. For renewal/updates of the registration 9 of importers, per year P 1,000 10 113.4. Accreditation Fees 12 133.4.1. To practice Customs Broker Profession and brokerage business: 14 15 Individual Broker P1,000 16 Brokerage firms and General 17 Professional Partnership P2,000 18 193.4.2. Annual Supervision Fee, per year for Customs Broker and brokerage 20 business 21 22 Individual P600 23 Brokerage Firms P1,000 24 253.4.3. For Commercial Banks and Surety 26 Companies to transact business 27with the Bureau, per quarter P1,000 28 29CHAPTER 4 - CUSTOMS DOCUMENTARY STAMP 30 31For each entry for immediate transportation in bond P 200 32 33For each bond accepted or renewed P 400 34 35For each approval of application in 36respect to transaction covered by general bond P400 37 38For each amendment allowed to a 39foreign Inward Manifest P200 40 41For every formal protest filed 42before the Collector of Customs P400 43 44For each appeal in protest and seizure cases P400 45 46For each set of IEIRD P530 47 48For each CEWE P530 49 50For each Transshipment Permit P230 2 3
540

1 1 2For each Permit to Transfer Outside CY-CFS P230 3 4For each Informal Entry Declaration P265 5 6 7 8CHAPTER 5 ACCOUNTABLE FORMS 9 10(Ref: CMO 12-2001 INCREASED BY 25%) 11 12BC Form Description Selling 13Price/pad 14 1541 Special Permit to Transfer P 1,000.00 16177 Informal Import Declaration and Entry P 1,000.00 17190 Request for Value Classification /InformationP 1,000.00 18194 Permit to Deliver Imported Goods P 1,000.00 19197 Withdrawal Permit P 1,000.00 20198 Warehousing Permit P 1,000.00 21199 Transshipment Permit P 1,000.00 22201 NAIA- Gatepass P 1,000.00 23218 Certificate of Identification P 1,000.00 24219 Certificate of Inspection P 1,000.00 25236 Import Entry and Internal Revenue Declaration 26P1,250.00 27237 Entry Rider P 1,000.00 28242 Warehousing Entry CEWE PEZA P1,250.00 29Form A Certificate of Origin GSP P 1,000.00 30Form D Certificate of Origin ATIGA P 1,000.00 31Form AK Certificate of Origin ASEAN-Korea FTA 32Form E Certificate of Origin ASEAN-China FTA 33Form JP Certificate of Origin - JPEPA 34Form AJP Certificate of Origin ASEAN-Japan Economic 35Partnership 36Form AANZ 37Form AI Certificate of Origin ASEAN-India FTA 38IED Import Entry Declaration Form P 1,000.00 39 40 CHAPTER 6 WAREHOUSING SUPERVISION FEES 41 42(Ref: CMO 95-90, increased by 50%) 43 44There shall be collected from the owner/operator, annual supervision fees at 45the following rates: 46 471. For a small industry/enterprises P 100,000.00 48 492. For a medium industry/enterprises P 200,000.00 50 2 3
541

1 13. For a large industry /enterprise and a 2 CBW operating, regardless of total 3 assets, as a common or trading warehouse P 500,000.00 4 5For this purpose, the classification shall be in accordance with the NEDA 6classification of industries and which is currently as follows; 7 81. Small Industries - Enterprises, excluding agriculture, with total assets of P 9 500,000.00 but less than P 5 million. 10 112. Medium Industries - Enterprises, excluding agriculture, with total assets of 12 P 5 million but less than P 10 million. 13 143. Large Industries - Enterprises, excluding agriculture, with total assets of 15 over P 10 million. 16 17 TITLE 3 OVERTIME PAY 18 19 CHAPTER 1: RULES AND REGULATIONS GOVERNING THE OVERTIME 20 SERVICES AND PAY; TRAVELING, BOARD AND LODGING EXPENSES 21 AND / OR MEAL ALLOWANCE AT ALL SEAPORTS OF ENTRY 22 23Section I - AUTHORITY TO ALLOW RENDITION OF OVERTIME SERVICES 24 (CAO 2-82) 25 261. The District Collector of Customs may authorize customs official and 27 employees of the district to render overtime services when the interest of 28 the service requires, and the services so rendered are to be paid by 29 shipping companies, ship owners/operators, importers, exporters, customs 30 brokers or other parties served; Provided, however, that no casual 31 employees shall be authorized to render overtime work. 32 332. When there is a shortage of regularly appointed personnel to meet the 34 requirements or exigencies of the service, the District Collector may 35 designate and assign any competent and regularly appointed personnel of 36 the district to render overtime services in an acting capacity; 37 38 Provided, however, that such designations and assignments shall be 39 made only upon the recommendation of the chief of division to which the 40 personnel belongs, who shall certify that the working efficiency of his 41 division will not be hampered or in any way be adversely affected by such 42 designation and assignment, which recommendation shall be favorably 43 indorsed by the Deputy Collector concerned who has authority over the 44 personnel concerned; 45 46 Provided, further, that the personnel concerned shall first be given a 47 thorough briefing as to the nature of his duties and responsibilities to be 48 certified to by the briefing official concerned before the personnel is 49 authorized to render actual over time services; 50 2 3
542

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 193. 20 21 22 23 24 25 26 27 28 29 30 31 32 33 344. 35 36 37 38 39 40 Provided, furthermore, that the deputy Collector concerned may, upon advice by the Chief of the Division concerned, request for the revocation of the designation/assignment when the rendition of overtime service of the personnel concerned is working to the prejudice of the efficiency of the service, in the division/Section/Unit affected, and Provided, finally, that all designations in an acting capacity shall be reviewed by the District Collector before the end of each month to determine whether the requirements or the exigencies of the service or the personal conduct or activities of the personnel concerned in his area of assignment warrant or justify extension of his designation. In no case shall designations in an acting capacity for purposes of rendering overtime service exceed ninety (90) days; Provided however, that any such designation which is not extended and renewed by the District Collector at the end of each month shall be deemed automatically revoked after the last day of the month preceding. The Commissioner of Customs may issue designation of personnel in an acting capacity for overtime purpose to such positions as may be required in the exigencies of the service if the duration of such designations is for a period of more than ninety (90) days; Provided, however, that such personnel so designated shall have passed the screening process conducted for such purpose and have been found to be competent and qualified by the District Collector; Provided, however, that only personnel holding an item of Customs Guard shall be designated in an acting capacity as Customs Inspector; Provided, furthermore, that those who have already been so designated by the District Collector prior to the effectivity of this Order shall not be affected until such designation is revoked and; Provided, finally, that only personnel from the Piers and Inspection Division, whose appointment is a regular Customs Inspector or higher shall be designated as Acting Senior Customs Inspector. In case an emergency situation arises at any given time and there is a shortage or absence of regularly appointed or assigned personnel, the District Collector or his authorized representative may designate other regularly appointed personnel to render overtime services in an acting capacity, in order to cope with the emergency; Provided, however, that such emergency designation shall last only during the duration thereof.

41SECTION II - RATES OF OVERTIME PAY (CAO 2-2004) 42 43The following rates of compensation for overtime services rendered by 44Customs officials and employees on board vessel at all ports of entry shall be 45as follows: 46 471. On Board Vessel 48 491.1. For Boarding Formalities P1,500.00/vessel 2 3
543

1 1 21.2. For Entrance and Clearance P 725.00/vessel 3 41.3. For supervision of vessel during 5 the loading and unloading of cargoes P3,000.00/day 6 71.4. For supervision of vessel other than 8 no. 3, such as bunkering and other 9 emergency purposes like medical, 10 sheltering, repair, Marine accidents, 11 dockyardlay up and others P1,500.00/day 12 132. At the Pier/Ship side 14 152.1. For cargo control supervision and examination rendered by the 16 following Customs Officers: 17 182.1.1. COO III & COO II P67.00/hour 19 202.1.2. COO I P60.00/hour 21 222.1.3. Asst. COO P53.00/hour 23 242.2. For cargo control supervision by the 25 Customs Container Control Division P2,500/day 26 273. Terms and Conditions (1 and 2) 28 293.1. The flat rates or lump sum fees provided above, are inclusive of 30 overtime and holiday fees, meals and transportation allowances. For 31 the lump sum fee provided in 1.3 & 1.4 and 2.2, the same shall be 32 distributed among the concerned personnel in accordance with the 33 sharing prescribed in Section II.4 of this order. 34 353.2. Rates per day means per day of 24 hour continuous service 36 commencing from the time of boarding and ending at the time of 37 disembarkation from the vessel, except that, when the vessel stayed 38 for less than one day for loading/unloading of cargoes, this will be 39 considered as one (1) whole day. 40 413.3. After the first 24 hours, any succeeding service rendered over 12 hours 42 is considered one full day while any succeeding service rendered 43 under 12 hours is considered one half day. 443.4. In the case or co loaders, only the principal agent or vessel operator 45 shall be billed for overtime services. 46 474. Overtime Pay in All Seaports of Entry Under the East Asia Growth Areas 48 (EAGA) for Vessels Including Cargoes Coming from Member Countries of 49 the "Brunei, Indonesia, Malaysia, Philippines East Asia Growth Areas" 50 (BIMP-EAGA) (CAO 6-2006) 2 3
544

1 1 24.1. On-Board Vessel 3 44.1.1. Boarding Formalities P750.00/vessel 5 64.1.2. Entrance and Clearance P362.50/vessel 7 84.1.3. Supervision over Loading and P1,500.00/day 9 Unloading of Cargoes 10 114.1.4. Supervision of Vessel for emergency P750.00/day 12 call such as bunkering, discharging 13 patient, sheltering, repair, stress of 14 weather, marine accident, dockyard 15 lay up and others 16 174.2. At the Pier/Ship-side 18 19Cargo Control Supervision and Examination rendered by the following 20customs officers and employees: 21 224.2.1. COO III and COO II P33.50/hr. 23 244.2.2. COO I P30.00/hr. 25 264.2.3. Asst. COO P26.50/hr. 27 284.2.4. Customs Container Control Division/ 29 or equivalent unit P1,250.00/day 30 31 32 335. Standard for the Disbursement of Flat Rate Compensation for Overtime 34 Services and Allowances (CMO 35-93) 35 365.1. The distribution and sharing of flat rates of compensation shall be 37 based on the ratios of the salaries of the personnel assigned to the 38 total collected, as hereunder demonstrated; 39 40 41 CUSTOMS INSPECTOR CUSTOMS GUARD 42 Salary P 3,309.00 P 2,355.00 43 % Share 58% 42% 44 Share in P P1,160.00 P840.00 45 46 CUSTOMS INSPECTOR CUSTOMS GUARD CUSTOMS GUARD 47 Salary P 3,309.00 P 2,355.00 P 2,355.00 48 % Share 42% 29% 29% 49 Share in P P840.00 P580.00 P580.00 50 2 3
545

1 15.2. The salaries of the personnel concerned, used without deduction as 2 base figures, shall be taken from the payroll of the previous month; and 3 45.3. Any excess in decimal points shall be computed in favor of the 5 Customs Inspector or other supervisory officer. 6 7SECTION III OVERTIME PERIOD FOR OFF-SHORE/PIER CUSTOMS 8 PERSONNEL (CAO2-82) 9 101. On regular working days, overtime period shall commence at the close of 11 the prescribed regular office hours and shall terminate not later than the 12 start of the prescribed regular office hours of the next working day; 13 Provided, however, that the interval between 12:00 noon and 1:00 P.M. of 14 a working day shall also be considered an overtime period. 15 162. On Saturdays and Sundays, overtime period shall commence at the 17 prescribed regular office hours on Friday or the last working day of the 18 week and shall terminate not later than the start of the prescribed regular 19 office hours on the following Monday or next working day, unless the 20 service is sooner terminated. 21 223. On legal holidays, overtime period shall commence at the close of the 23 prescribed regular office hours of the working day immediately preceding 24 and shall terminate not later than the start of the prescribed regular office 25 hours of the following working day, unless the service is sooner 26 terminated. 27 28 29SECTION IV NUMBER OF CUSTOMS PERSONNEL TO BE ASSIGNED 30 ON BOARD EACH VESSEL AND IN THE PIER / OUTPORT 31 FOR OVERTIME PURPOSES (CAO 2-82) 32 331. For the purposes of assignment of Customs Personnel, the following rules 34 shall be observed, to wit: 35 361.1. On Board Vessel 37 381.1.1. On vessel that is not working cargo anchored in the stream or tied up 39 alongside the pier, whether in the port of entry or outport, there shall be 40 assigned on board one (1) Customs Inspector and one (1) Customs 41 Guard for customs surveillance and supervision, and in case the vessel 42 is working cargo that is loading and/or unloading general cargo of 43 various kinds and different marks, one (1) additional Customs Guard 44 shall be assigned for each hatch to be worked but not to exceed three 45 (3) guards for all such hatched. 46 471.1.2. If the cargo to be loaded or unloaded is in bulk such as, but not limited 48 to fertilizer, chemicals, molasses, oil, sugar, logs, copra and rice, there 49 shall be assigned only one (1) Customs Guard to supervise such 50 operations irrespective of the number of working hatches, in addition to 2 3
546

1 1 one (1) Customs Inspector and one (1) Customs Guard assigned on 2 board the vessel for customs surveillance and supervision. 3 41.1.3. In the case of containerized vessel, whether working cargo or not, only 5 one (1) Customs Inspector and one (1) Customs Guard shall be 6 assigned on board for customs surveillance and supervision. 7 81.1.4. When a foreign vessel proceeds to an outport to discharge or loaded 9 cargo, one (1) Customs Inspector and one (1) Customs Guard only 10 shall be assigned to accompany the vessel and they shall be entitled to 11 overtime pay. 12 131.1.5. On board a purely passenger vessel, there shall be assigned one (1) 14 Customs Inspector and one (1) Customs Guard for customs 15 surveillance and supervision and one (1) additional Customs Guard for 16 each accommodation ladder in use. 17 181.1.6. In the case of mix cargo and passenger vessel, there shall be assigned 19 on board one (1) Customs Inspector and one (1) Customs Guard for 20 customs surveillance and supervision, and one (1) additional Customs 21 Guard shall also be assigned, if the vessel is loading and/or unloading 22 general cargo of various kinds and marks for each hatch being worked 23 but not to exceed three (3) guards for all hatches, or if the vessel is 24 loading or unloading bulk cargo such as but not limited to fertilizer, 25 chemicals, molasses oil, sugar, logs, copra, and rice, only one (1) 26 Customs Guard shall be assigned to supervise, the operations, 27 regardless of the number of hatches being worked; and another 28 additional Customs Guard for each accommodation ladder in use by 29 passengers. 30 311.1.7. At the piers/off-shore, Customs officials and employees for cargo 32 control, supervision and examination; 33 341.1.7.1. When a vessel is arriving or departing, one (1) Wharfinger and one 35 (1) Shed Customs Guard shall work overtime at the assigned berth 36 or cargo shed in the pier to perform all necessary customs functions 37 until said vessel is either properly secured or, in case of departure, 38 until cleared at the pier. However, in case of passenger liner one 39 (1) Wharfinger, and one (1) Gatekeeper at the main gate of the pier 40 shall be on duty while the vessel is in port tied up alongside the pier 41 and they shall be entitled to overtime outside the official working 42 hours. The shipping company, firm or person who made the 43 request for the overtime services of said customs personnel shall 44 pay such services. 45 461.1.7.2. When the vessel is discharging or loading cargo at the pier, there 47 shall be assigned one (1) Wharfinger and one (1) Shed Customs 48 Guard at the corresponding cargo shed and one (1) Gatekeeper at 49 the main gate of the pier, who shall work overtime. The shipping 50 company, firm or person who made the request for the rendition of 2 3
547

1 1 overtime services by said customs personnel shall pay such 2 services. 3 41.1.7.3. In case of containerized vessel discharging or loading cargo, there 5 shall be assigned one (1) Wharfinger and one (1) Customs Guard 6 at the Container Terminal Area who shall work overtime. Their 7 overtime services shall be paid by the shipping company or party 8 that requested for the rendition of such overtime service. 9 101.1.7.4. In case of delivery from pier, one (1) Wharfinger shall take care of 11 the delivery of the cargoes from each shed in the pier, with one (1) 12 delivery Customs Guard for each truck loading but not to exceed 13 two (2) guards for each importer or broker, and one (1) Gtaekeeper 14 (Customs Guard) for each lane of the trucks, passing out of the 15 gate. Their overtime service shall be paid pro rata or share and 16 share alike by importers or brokers. 17 181.1.7.5. In case of transit of transit cargo being received and handled at 19 coastwise pier from transhipment on board an inter-island vessel to 20 the port of destination, one (1) Customs Guard and one (1) 21 Wharfinger who jointly receive the cargo shall be entitled to render 22 overtime services until said cargo is loaded and receipted for by the 23 master of the vessel. The shipping company or broker acting as 24 agent of the consignee or importer shall be liable for such overtime 25 services. 26 271.1.7.6. In case of oil shipment being pumped through a submarine pipeline 28 from the carrying vessel to the shore tank, one (1) Customs Guard 29 shall be assigned to this tank. The overtime service shall be paid 30 by the shipping company. 31 321.1.7.7. At other piers or places where a vessel loads or unloads cargo, one 33 (1) Wharfinger shall be assigned to render overtime service where 34 he is called upon to receive and/or take inventory of the cargo. 35 Likewise, one (1) Customs Guard may also be assigned thereat 36 where he is called upon to underguard the cargo. Their overtime 37 services shall be for the account of the shipping company 38 concerned. 39 402. For Underguuarding Services: 41 422.1. Customs Guard shall be assigned for conduction or underguarding of 43 cargoes from vessel to the Baggage Inspection Room or 44 Customhouse. Overtime services shall be paid when such services 45 are requested or rendered after regular office hours. 46 472.2. There shall be assigned one (1) Custom Guard for each lighter on 48 board LASH (Lighter Aboard Ship) containerized vessel when said 49 lighter conveys the cargo on board thereof to the place of delivery. 50 Overtime services are for the ships account. 2 3
548

1 1 22.3. 3 4 5 6 7 82.4. 9 10 11 12 13 14 15 16 172.5. 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 352.6. 36 37 38 39 40 41 42 432.7. 44 45 46 47 48 49

Where cargoes have to be shifted from the ship to the pier; from ship to lighter; from one vessel to another vessel or from one pier to another pier, one (1) Customs Guard shall be assigned to oversee the operations. His overtime services shall be paid by the shipping company or its agent. In the case of conduction or underguard services, there shall be one (1) Customs Guard for each lighter, truck or other means of transportation for each trip and shall remain on duty until the cargoes being underguarded have been signed for by the guard-in-charge or other responsible customs personnel, and if the merchandise being underguarded is taken to a warehouse, one(1) Customs Guard shall remain in-charge thereat until he is released by the Customs Bonded Warehouse Storekeepers. With regards to gasoline, kerosene and other fuel in bulk or in any form transferred from Manila Bay to Pandacan Wharf or any other similar place in the case of Port of Manila and from the pier to any other place in the case of ports outside of Manila, there shall be one (1) conducting guard for one to four lighters; however, if there are more than four (4) lighters at any time, an additional guard shall be assigned, provided, finally, that for every excess of four (4) lighters; a Custom Guard shall be assigned for underguarding purposes. The Custom Guard assigned at the pier/off-shore to underguard said lighter shall only be released thereat after proper turnover shall have been made and the goods are duly receipted for by the Guard-in-charge. There shall be one (1) Guard for each working pump on the jetty or wharf and another guard on each tank. The Customs Examiner assigned to examine the goods shall release the guard on the jetty or wharf after the lighters have been emptied, and shall also release the guard on the shore tank after the reading of the meter of the tank, the time and date of release to be noted on the guards botenote. In case of export cargoes from Customs Bonded Manufacturing Warehouse are loaded on truck, lighter or other means of transportation for subsequent loading on board vessel, one (1) conducting Customs Bonded Warehouse Guard shall be assigned to underguard said cargoes, who shall be relieved only after subject exportation has been duly receipted for by the Customs Inspector / Shed Supervisor. Overtime services are for the shippers account. For customs entrance formalities and clearance of vessel; there shall be assigned only one (1) Senior Boarding Officer and one (1) Entrance and Clearance Officer to a vessel. In the South Harbor, Port of Manila, the Assistant Entrance and Clearance Officer shall be authorized to render overtime services at the rates specified above. Their overtime services shall be paid by the shipping company concerned.

2 3

549

1 1SECTION V - LIMITATIONS ON CONTINOUS OVERTIME SERVICES 2 ANDOVERTIME ALLOWANCE (CAO 2-82) 3 41. No customs official or employees shall be allowed to render continuous 5 overtime services at one time for more than eighteen (18) hours, including 6 regular office and overtime hours. He shall work eight (8) hours regular 7 time and ten (10) hours straight overtime on Sundays and Holidays, which 8 shall be followed by a relief interval of six (6) hours rest for which no 9 overtime pay shall be collectible, except in the following cases: 10 111.1. When the personnel concerned is assigned at an outport and no 12 substitute is available; 13 141.2. When an vessel is scheduled to sail but does not sail on the scheduled 15 time, the overtime services of Customs personnel on duty may be 16 extended; 17 181.3. When an employee is waiting for a relief but no relief is available; 19 201.4. When relief is not possible because of continuous assumption of 21 responsibility until completion of the particular assignment involved. 22 23SECTION VI ASSIGNEMENT OF CUSTOMS INSPECTORS, GUARDS, 24 AND OTHER CUSTOMS PERSONNEL FOR OVERTIME 25 SERVICES AND THE DISTRIBUTION OF MONTHLY 26 OVERTIME PAY (CAO 2-82) 27 281. The assignment of Customs Inspector, Customs Guard as well as other 29 authorized Customs personnel for overtime services at the Port of Manila, 30 shall be made strictly on a rotation basis in accordance with the list of 31 priority of assignments prepared and submitted to the Piers and Inspection 32 Division (PID) by the Bureau of Customs Computer Center (BCCC). 33 342. The BCCC shall submit in advance every fifteen (15) days a list of priority 35 of assignments for overtime services to the PID for implementation within 36 the week. The Chief of the PID shall submit to the Collector, Port of 37 Manila, thru the Administrative Branch, the list of assignment of Customs 38 personnel for overtime services made within the month as per priority 39 listing of the BCCC to assure compliance by the PID. The Collector of the 40 Port of Manila shall submit every fifteen (15) days thru the Administrative 41 Branch, a report of the number of hours served (regular and overtime) by 42 the Customs personnel; including the report on any change, deletion 43 and/or addition to the list of Inspector, Guards and other Customs 44 personnel. 45 463. In ports and subports other than the Port of Manila, assignment of 47 Customs Inspectors, Guards and other Customs personnel for overtime 48 services shall also be effected strictly on a rotation basis. For this 49 purpose, every port is required to submit a list of Customs personnel who 50 are authorized to render overtime services to the BCCC. The BCCC shall 2 3
550

1 1 furnish the ports concerned with the list of priority of assignment for 2 overtime services to the Collector of Customs concerned every month, 3 which shall be followed by him or his duly authorized representative at the 4 end of every each month, the Port Collector shall submit a monthly list of 5 assignment of their respective personnel who have rendered overtime 6 services for the said month in order to ensure compliance with the list of 7 priority assignment by BCCC. 8 94. The Collector of Customs or his duly authorized representative shall as 10 much as possible strictly follow the list of priority assignment of Customs 11 personnel for overtime services, provided, however, in the exigencies of 12 the service he may deviate from the same as the need arises. In no case 13 shall the assignment for overtime services of Acting Inspector or Acting 14 Customs Guard be made if there are available regular Inspectors and 15 Guards for the assignment; provided further, that the Customs employees 16 designated as Acting Customs Guards are prohibited to perform the duties 17 of Acting Inspector at the same time and vice-versa; and provided finally, 18 that the designation of Acting Inspector shall first be made from among 19 qualified regular Customs Guards. 20 215. Assignment of Acting Customs Guard shall be in accordance with the 22 rotation policy which shall be prepared by BCCC. The Chief, PID shall 23 submit to the BCCC copies of the designation of Customs personnel 24 authorized to render overtime services. 25 266. All assignments for overtime services shall be strictly complied with and 27 failure to do so by the employee concerned without any valid justification 28 and notice in advance shall constitute a sufficient cause for appropriate 29 administrative disciplinary action against him. 30 31 32SECTION VII - MEAL ALLOWANCE AND OTHER EXPENSES (CAO 02332004) 34 351. When customs personnel are required to travel outside of their official 36 stations in order to render above services, in addition to the flat rates or 37 lump sum fees provided for in 1.A. and B above, the transportation, meal 38 and lodging allowances incurred during the travel shall be reimbursed 39 according to the following rates: 40 411.1 Meal allowance P50.00/meal 421.2 Transportation Allowance P50.00/way 431.3 Lodging Allowance P150.00/day 44 452. Terms and Conditions: 46 472.1 Customs personnel shall be entitled to reimbursable expenses 48 enumerated above only during their travel commencing from the time 49 they leave their official station and ending upon boarding the vessel

2 3

551

1 1 and/or commencing from the time of disembarkation and ending upon 2 reaching their official station. 3 42.2 Meal allowance shall be paid only if the travel time embrace any part of 5 the following periods: 6 7 Breakfast 6:00 AM to 8:00 AM 8 Lunch 12:00 Noon to 1:00 PM 9 Supper 6:00 PM to 8:00 PM 10 Midnight Repast 11:00 PM to 1:00 AM 11 122.3 Land transportation each way shall be within the 8 km radius from 13 official station to pier terminal or vice versa. For over 8 km distance, the 14 existing published fare or current market rate for the fastest means of 15 public transport such as airline economy fare, deluxe class boat ticket 16 and air conditioned bus shall apply. Transportation allowance for any 17 category shall not be reimbursed if the tickets are provided free by the 18 shipping line/requesting party. 19 202.4 Hotel or lodging accommodation shall also be provided by the shipping 21 line/requesting party. Otherwise, claims for reimbursement shall not 22 exceed the rate provided in Sec. II.1.4 above. 23 24SECTION VIII DEPOSIT REQUIREMENT FOR OTHER EXPENSES IN 25 CONNECTION WITH OVERTIME SERVICES (CAO 226 82) 27 281. Any person or firm who, in compliance with Custom rules and regulations 29 or on his own initiative, requests for the overtime services of Customs 30 officials and for employees whereby transportation and other necessary 31 expenses shall be incurred, will be required before such services are 32 rendered to deposit the total estimated expenses with the Customs 33 Cashier. The cashier or the duly authorized Disbursing Officer shall then 34 make the necessary advances from said deposit to the Customs personnel 35 who will render such services only upon written proof of his/her 36 assignment order. No further advances shall be authorized until the 37 previous account shall have been duly liquidated. 38 392. Immediately after the return of the Customs personnel to his/her official 40 station, he/she shall liquidate such advance by submitting duly 41 accomplished vouchers and receipts to the Accounting Officer concerned 42 and shall refund the unexpended amount, if there is any, with the Customs 43 Cashier. 44 45SECTION IX CLAIMS FOR OVERTIME PAY, TRAVELING AND OTHER 46EXPENSES 47 (CAO 2-82) 48 491. Payment of overtime pay, traveling expenses and meal allowance shall be 50 effected in accordance with the following procedures: 2 3
552

1 1 1.1 2The Customs personnel shall prepare the necessary vouchers supported by 3statements of overtime services render duly accomplished in BC Forms Nos. 435 and 35-A upon the completion of their overtime assignment and submit the 5same to the Administrative Unit of the port. 6 1.2 7The Administrative Unit of the port in turn shall check the vouchers, certifies to 8their correctness, approve the same for payment and shall forward the billing 9to the shipping companies concerned or other entities who shall make 10payment thereof within seven (7) days from receipt of the statement of 11account. 12 1.3 13Such companies or entities shall send payment as per statement to the 14Administrative Unit of the port in the account of the Collector of Customs who 15shall deposit said amount in the general fund of agency concerned. 16 172. Port Collectors shall submit to the Accounting Division, office of the 18 Commissioner, BOC, copy furnish the AISL/PSAA within five (5) days after 19 the end of each month, an itemized report of collections and disbursement 20 of payment services rendered by Customs personnel. (CAO 3-91) 21 223. In cases where Customs personnel render overtime services in favor of 23 two or more parties or entities at the same time, payment of such services 24 shall be made on a pro rata basis in accordance with the rate of overtime 25 pay prescribed in Section II.2.1, hereof. 26 27SECTION X PROHIBITED ACTS OF CUSTOMS PERSONNEL (CAO 2-82) 28 291. In order to maintain the faith and confidence of the general public, all 30 Customs officials and employees, except Cashiers or Collecting Officers of 31 the Bureau, are prohibited from receiving cash under any circumstances 32 as payment for overtime services rendered. 33 342. No substitution and/or replacement of any assigned personnel shall be 35 made except upon the authority issued by the Chief, Piers and Inspection 36 Division or the Collector of Customs, in the case of ports other than the 37 Port of Manila, unless such authority has been delegated to any other 38 subordinate Customs official. 39 40SECTION XI PENAL PROVISIONS (CAO 2-82) 41 421. Any Customs official or employee who violates any provision of this order 43 shall be subject to disciplinary action and any shipping company or other 44 private person or firm who violate any provisions of this order shall be 45 subject to penalties provided for by law. 46 47 48CHAPTER 2: RULES AND REGULATIONS GOVERNING THE OVERTIME 49SERVICES AND PAY TRAVELING, BOARD AND LODGING EXPENSES

2 3

553

1 1AND/OR MEAL ALLOWANCE AT THE NINOY AQUINO INTERNATIONAL 2AIRPORT 3 4Section I - AUTHORITY TO ALLOW RENDITION OF OVERTIME SERVICES 5 61. The District Collector of Customs may authorize customs official and 7 employees of the district to render overtime services when the interest of 8 the service requires, and the services so rendered are to be paid by airline 9 companies, aircraft owners/operators, importers, exporters, customs 10 brokers or other parties served; Provided, however, that no casual 11 employees shall be authorized to render overtime work. (CAO 7-92) 12 132. When there is a shortage of regularly appointed personnel to meet the 14 requirements or exigencies of the service, the District Collector may 15 designate and assign any competent and regularly appointed personnel of 16 the district to render overtime services in an acting capacity subject to the 17 following limitations/conditions: 18 19The chief of the division where the overtime services are to be rendered shall 20first advise the District Collector of Customs that the division needs the 21services of additional personnel for overtime purposes; 22 23The chief of the division where the customs personnel proposed to be 24designated in an acting capacity is regularly assigned shall likewise certify 25that the working efficiency of his division will not be hampered or in any 26manner affected by the proposed designation or assignment; 27 28No customs personnel shall be designated or assigned in an acting capacity 29for overtime purposes unless he/she possesses the minimum qualifications 30required for the position under the civil service regulations; 31 32The personnel designated or assigned in an acting capacity shall undergo at 33least ONE (1) month on-the-job training. The chief of the division shall 34determine if the personnel concerned is ready to perform the duties and 35assume the responsibilities of the position to which he/she is designated or 36assigned. 37 38The chief of the division shall conduct a monthly evaluation of the 39performance of customs personnel designated or assigned to the division for 40overtime purposes. The performance evaluation report shall be submitted to 41the Deputy Collector of Customs exercising jurisdiction over the division. The 42Deputy Collector shall base on the report his recommendation to the District 43Collector whether the privilege of the concerned personnel to render overtime 44service in an acting capacity should be renewed or cancelled." (CAO 1-2005) 45 463. The Commissioner of Customs may issue designation of personnel in an 47 acting capacity for overtime purpose to such positions as may be required 48 in the exigencies of the service if the duration of such designations is for a 49 period of more than ninety (90) days; Provided, however, that such 50 personnel so designated shall have been found to be competent and 2 3
554

2.1

2.2

2.3

2.4

2.5

1 1 qualified by the District Collector; Provided, however, that no personnel 2 holding an item lower than Clerk II or a position of equivalent range shall 3 be designated in an acting capacity as customs examiner in the 4 Passenger Departure Area; Provided, that those who have already been 5 so designated by the District Collector prior to the effectivity of this Order 6 shall not be affected until such designation is revoked and; Provided 7 Customs Operation Officer I or a position of equivalent salary grade shall 8 be designated in an acting capacity as Customs Operation Officer III and 9 authorized to render over time services in the Passenger Arrival Area. 10 (CAO 7-92) 11 124. In case an emergency situation arises at any given time and there is a 13 shortage or absence of regularly appointed or assigned personnel, the 14 District Collector or his authorized representative may designate on the 15 spot other regularly appointed personnel to render overtime services in an 16 acting capacity in order to cope with the emergency; Provided, however, 17 that such emergency designation shall last only during the duration 18 thereof. (CAO 7-92) 19 20SECTION II - RATES OF OVERTIME PAY (CAO 1-2005) 21 221. The following rates of compensation per hour of overtime services 23 rendered by customs officials and employees at the NAIA shall be as 24 follows: 25 261.1 Collector of Customs P 83.00 27 281.2 Supervisors/Customs Operation 29 Officer V/Boarding Officers P74.00 30 311.3 Customs Inspectors/Customs Operation 32 Officer III/Cashiers/Document 33 Processors/Warehousemen/storekeepers P70.00 34 351.4 Clerks/Customs Guards/Gatekeepers P66.00 36 372. Rates of Overtime Pay in All Airports of Entry Under the East Asia Growth 38 Areas (EAGA) for Aircrafts Including Cargoes Coming from Member 39 Countries of the "Brunei, Indonesia, Malaysia, Philippines East Asia 40 Growth Areas" (BIMP-EAGA) (CAO 6-2006) 41 422.1 Collector of Customs P41.50/hr. 43 442.2 Supervisor/COO V/Boarding Officer P37.00/hr. 45 462.3 COO III/Inspector/Cashier/Document P35.00/hr. 47 Processor/Warehouseman/Storekeeper 48 492.4 Clerk/Customs Guard/Gatekeeper P33.00/hr. 50 2 3
555

1 1SECTION III - OVERTIME PER PERIOD (CAO 7-92) 2 31. On regular working days, overtime period shall commence at the close of 4 the prescribed regular office hours and shall terminate not later than the 5 start of the prescribed regular office hours of the next working days; 6 Provided, however, that the interval between 12:00 noon and 1:00 P.M. of 7 a working day shall also be considered an overtime period. 8 92. On Saturdays and Sundays, overtime period shall commence at the 10 prescribed regular office hours on Friday or the last working day of the 11 week and shall terminate not later than the start of the prescribed regular 12 office hours on the following Monday or next working day, unless the 13 service is sooner terminated. 14 153. On legal holidays, overtime period shall commence at the close of the 16 prescribed regular office hours of the working day immediately preceding 17 and shall terminate not later than the start of the prescribed regular office 18 hours of the following working day, unless the service is sooner 19 terminated. 20 21SECTION IV - COMMENCEMENT AND TERMINATION OF OVERTIME 22 SERVICES (CAO 7-92) 23 241. In case of aircraft arrivals, overtime services shall commence one (1) hour 25 prior to the scheduled time of arrival and shall terminate two (2) hours after 26 actual flight arrival. 27 282. In case of aircraft departure, overtime shall commence two and one-half (2 29 1/2) hours before the scheduled time of departure and shall terminate one30 half (1/2) hour after the actual departure of the aircraft unless a longer 31 check-in period is requested on a case-to-case basis. 32 333. In case of delays, changes or cancellation of a scheduled arrival or 34 departure of an aircraft, proper CIQ notices thereof shall be presented at 35 least three (3) hours before the scheduled time of arrival or departure, 36 otherwise the customs personnel concerned shall be entitled to overtime 37 pay for the waiting period caused by the failure to give the proper CIQ 38 notices as required heretofore; Provide, however, that the waiting period 39 falls within the overtime period prescribed under Section III above. 40 414. In case of failure to present the proper CIQ notices required in the 42 preceding paragraph, a waiting period from the scheduled time of arrival or 43 departure lasting a fraction of an hour or less than thirty (30) minutes shall 44 be disregarded, and awaiting period lasting (30) minutes of an hour or 45 more shall be considered as one (1) hour. 46 475. Actual time of arrival of an aircraft shall be the time when the aircraft is on 48 block, and actual time of departure shall be the time when the aircraft is off 49 the block as recorded by the Aircraft Operations Division. 50 2 3
556

1 1SECTION V - PERSONNEL COMPLEMENT FOR ARRIVAL AND 2DEPARTURE 3 (CAO 7-92) 4 51. For technical flight were no passenger or cargo is enplaned or deplaned, 6 or where passengers or crew are permitted to remain only on the transit 7 lounge, one (1) Boarding Officer and one (1) Guard shall be required to 8 service the flight; Provided, however, that one (1) Examiner shall be 9 included if a crew rest is involved whereby the crew is permitted to leave 10 the airport premises. 11 122. For pure cargo flights and no crew rest is involved, the required 13 complement to service the arrival shall be one (1)Boarding Officer and not 14 less than two (2) Guards. 15 163. For inbound commercial flights, or diverted flights where hotel 17 accommodations provided the passengers, the required complement to 18 service the aircraft shall be as follows: 19 20 Collector of Customs one (1) 21 22 Boarding Officer one (1) 23 24 Inspector (Supervisor) one (1) 25 26 Guards not less than two (2) 27 28 Customs Operations Officer V one (1) 29 30 Customs Operations Officer III one (1) 31 per fifteen (15) passengers 32 33 34 Customs Operations Officer III, 35 Document Processor, Cashier, 36 Storekeeper, Clerk one (1) each 37 384. For outbound commercial flights or diverted flights where hotel 39 accommodations have been provided the passengers, the required 40 complement to service the aircraft shall be as follows: 41 42 Customs Operations Officer V one (1) 43 44 Customs Operations Officer III one (1) 45 Per twenty-five passengers 46 47 Inspectors one (1) 48 49 Guards not less than two (2) 50 2 3
557

1 15. The airline companies shall inform the District Collector in writing at least 2 (5) days before the end of each month the number of examiners and 3 guards to service their flights (arrival and departure) based on the ratio of 4 one (1) Examiner for every fifteen (15) deplaning or twenty-five (25) 5 enplaning passengers for his guidance in the assignment of such 6 personnel, but without prejudice to the authority of the District Collector to 7 assign more customs personnel to a specific flight if and when the interest 8 of the service so requires; Provided, however, that the same guards shall 9 service both arrival and departure in case of a turn-around flight; Provided, 10 finally that the number of guards to service purely terminating flight shall 11 not be less than two (2), for purely departing flights not less than two 12 (2),and for turn-around flights not less than four(4). 13 146. All assignments for overtime services shall be strictly complied with. The 15 failure to do so without valid justification and notice in advance by the 16 personnel concerned shall continue sufficient cause for appropriate 17 administrative disciplinary action. 18 19SECTION VI - LIMITATIONS ON CONTINOUS OVERTIME SERVICES 20 ANDOVERTIME ALLOWANCE(CAO 7-92) 21 221. No customs official or employees shall be allowed to render continuous 23 overtime services at any one time for more than eighteen (18) hours, 24 including regular office and overtime hours. 25 262. Customs personnel may work eight (8) hours regular time and ten (10) 27 hours straight overtime on Saturdays, Sundays and legal holidays which 28 shall be followed by a relief interval of six (6) hours rest for which no 29 overtime pay shall be collectible, except in the following instances: 30 31a. When the personnel concerned is assigned outside of the NAIA and no 32 substitute is available; 33 34b. When an aircraft is scheduled to depart but does not depart on the 35 scheduled time of departure; 36 37c. When a personnel concerned is waiting for a relief but no relief is 38 available; 39 40d. When relief is not possible because of continuous assumption of 41 responsibility until termination or completion of the particular assignment 42 involved. 43 44SECTION VII - TRAVELLING ALLOWANCE 45 461. Customs officials and employees assigned to render overtime services in 47 connection with the arrivals and departures of aircraft shall be entitled to a 48 flat rate ONE HUNDRED TEN PESOS (P110.00) transportation allowance 49 for each way from residence to NAIA and vice-versa; Provided, however, 50 that no transportation allowance shall be charged on regular working day if 2 3
558

1 1 the overtime services terminate within THREE (3) hours from the close of 2 the prescribed regular office hours or commence within THREE (3) hours 3 before the start of the prescribed regular office hours.(CAO 1-2005) 4 52. However, on a regular working day, two-way transportation allowance 6 shall be charged if the overtime services commence three (3) hours after 7 the close of the prescribed regular office hours or terminate three (3) hours 8 before the start of the prescribed regular office hours, and also during 9 Saturdays, Sundays and legal holidays. (CAO 7-92) 10 113. To prevent any overlapping of claims, two-way transportation allowance 12 prescribed under the preceding paragraph shall be charged only in cases 13 where the time gap from the time that an overtime service terminates to 14 the time when the next overtime service commence is more than three (3) 15 hours, two flight assignments is less than three (3) hours, one-way 16 transportation allowance (residence to NAIA) shall be charged to the first 17 assigned flight and one-way transportation allowance (NAIA to residence) 18 shall be charged to the next flight. (CAO 7-92) 19 204. Customs personnel travelling on official business at the request of an 21 aircraft owner/operator or other interested party shall not be entitled to 22 travelling allowance; Provided, however, that the party concerned shall 23 provide for the necessary transportation. (CAO 7-92) 24 255. In cases where the party requesting for overtime services cannot provide 26 the necessary transportation the customs personnel concerned shall be 27 provided by the requesting party suitable, actual and necessary 28 transportation allowance depending not only on the class and type of 29 transportation used but also on the circumstances of time and place; 30 Provided, however, that the customs personnel concerned shall use the 31 most reasonable and expeditious means of transportation available, 32 whether by land, water or air, to and from his destination. The hire of 33 special conveyance shall be allowed only in cases where regularly 34 scheduled common carrier transportation service is not available; and 35 provided, finally, that only one conveyance shall be hired by a group of 36 customs personnel for the same purposes. (CAO 7-92) 37 38SECTION VIII - MEAL ALLOWANCE AND OTHER EXPENSES 39 401. Customs personnel assigned to render overtime services in connection, 41 with the arrivals and departures of aircraft shall be entitled to meal 42 allowance, including midnight repast at a flat rate of ONE HUNDRED TEN 43 PESOS (P110.00) per meal; Provided, however, that the overtime service 44 rendered embrace any part of the following periods: 45 46 Breakfast................ from 6:00 a.m. to 8:00 a.m. 47 48 Lunch.................... from 12:00 noon to 1:00 p.m. 49 50 Supper................... from 6:00 p.m. to 8:00 p.m. 2 3
559

1 1 2 Midnight Repast....from 11:00 p.m. to 1:00 a.m. 3 4 Provided, further, that no meal allowance for lunch shall be charged during 5 regular working days; Provided, finally that no customs personnel shall 6 charge more than one meal allowance for any meal period authorized 7 under this paragraph irrespective of the number of flights/aircraft to which 8 he/she is assigned or airline companies served. (CAO 1-2005) 9 102. Customs personnel assigned to continuous underguarding duty outside 11 NAIA shall be provided by the requesting party with free board and lodging 12 or reimbursement for all reasonable and necessary expenses incurred for 13 board and lodging duly covered by official receipts; Provided, that claims 14 and payment for reimbursement of such expenses shall be coursed 15 through the District Collector of Customs-NAIA who may approved, modify 16 or deny payment of an expense. (CAO 1-2005) 17 18SECTION IX - BILLING AND PAYMENT OF OVERTIME SERVICES (CAO 71992) 20 211. The billing or statement shall be signed and sent by the District Collector 22 to the airline concerned for payment every fifteenth and thirtieth day of the 23 month. Each airline shall pay promptly the amount charged through the 24 District Collector who shall issue a receipt for such payment. 25 262. The billing for overtime services shall be accompanied by daily and 15-day 27 summaries, with supporting documents, of overtime services rendered 28 which shall contain the following information: 29 301.1. Customs department or division rendering overtime, the number of 31 hours rendered by customs personnel in such division and the amount 32 of charges accruing to each division such as (1) overtime charges, (2) 33 meals and (3) transportation allowances; and 34 351.2. Name(s) of airline services, their flight numbers and actual time of 36 arrival and departure, and the number of passengers arriving or 37 departing per airline. 38 39SECTION X - OPERATIONAL PROCEDURE IN BILLING AND PAYMENT 40 OF OVERTIME SERVICES (CAO 7-92) 41 421. The Division concerned - shall prepare and submit claims for payment of 43 overtime services rendered by customs personnel to the Deputy Collectors 44 concerned. In this connection, the division concerned shall: 45 461.1. Keep and maintain updated ledger/record of customs personnel 47 authorized to render overtime services; 48 491.2. Check flight attendance report of overtime services rendered by 50 customs personnel in their respective divisions; 2 3
560

1 1 21.3. Assess the amount of claim for overtime, meals and transportation 3 allowances; 4 51.4. Verify from ledger/records to ensure that there will be no over lapping 6 of billing; 7 81.5. Forwarded to the Deputy Collector concerned for review claims for 9 overtime services; 10 112. The Deputy Collectors - shall counter-check bills/statements submitted by 12 the divisions concerned so that overtime charges shall in no case overlap, 13 recommend payment of claims for overtime services to the District 14 Collector. 15 163. The District Collector - shall approve claim for payment of overtime; send 17 the bill to the airline concerned every thirtieth day of the month. 18 194. Airline Concerned - shall pay overtime services rendered by customs 20 personnel to the District Collector, NAIA, based on the approved bill 21 submitted by the District Collector. 22 235. Payroll & Disbursement Section, Administrative Division shall receive 24 payments from airlines addressed to the District Collector; prepare 25 overtime payroll for payment of overtime. 26 27 28SECTION XI - DEPOSIT REQUIREMENT FOR OTHER EXPENSES IN 29 CONNECTION WITH OVERTIME SERVICES (CAO 7-92) 30 311. Any person or firm who, in complying with customs rules and regulations 32 or on his own initiative, requests for the overtime services of customs 33 officials and/or employees whereby transportation and other necessary 34 expenses will be incurred shall be required, before such services are 35 rendered, to deposit the total estimated expenses with the customs 36 cashier. 37 38 39CHAPTER 3: RULES AND REGULATIONS GOVERNING OVERTIME 40SERVICES AND PAYMENT OF CORRESPONDING OFFSHORE DUTY 41PAY AND OVERTIME SERVICE PAY APPLICABLE TO THE OFFSHORE 42OPERATIONS OF THE OPERATOR OF THE OIL DRILLING AND 43EXPLORATION UNDER SERVICE CONTRACT NO. 56 IN THE SOUTH 44SULU SEA. (CAO 2-2009) 45 46I. TO ALLOW RENDITION OF OVERTIME SERVICES 47 481. The District Collector of the Port of Zamboanga shall assign and deploy 49 customs officials, employees, and/or deputies to render overtime services 50 in connection with the Off-shore Operations of the OPERATOR in the 2 3
561

1 1 South Sulu Sea under Service Contract No. 56. Such assignment shall be 2 covered by the appropriate Customs Personnel Order setting forth the 3 duration of the assignment and other relevant terms and conditions as well 4 as any limitation on the power and functions of the employees assigned; 5 62. The assignment of customs officials, employees, and/or deputies shall be 7 made strictly on rotation basis. Provided, however, that in no instance shall 8 the duratio1i of an assignment exceed twenty-eight (28) consecutive days 9 at any given time. 10 11II. OFFSHORE DUTY PAY AND OVERTIME SERVICES PAY: 12 13Taking into consideration the unique circumstances attendant in the subject 14Offshore Operations, including concomitant hardship and inconvenience of 15affected customs officials, employees, and/or deputies who will be required to 16stay on the drill vessel West Aquarius with Panamanian Registry No, 348211709 (herein after referred to as the DRILL VESSEL) under on-call status, the 18following rates are hereby prescribed: 19 201. OFFSHORE DUTY PAY 21 22A offshore duty pay of Eight Thousand Five Hundred Pesos (Php8,500.00) 23per day separate from the overtime service pay, shall be paid to the customs 24officials, employees and/or deputies, counted from day of their arrival at the 25rig but excluding the day of their departure from the DRLLL VESSEL; 26 27 282. OVERTIME SERVICE PAY 29 302.1 Boarding Formalities - Php11,800 per Clearance 31 322.2 Cargo Examination (if required - Php11,800 per vessel/aircraft 33 342.3 Underground (if required) - Php11,800 per vessel/aircraft 35 362.4 Inspection/Supervision (if required - Php11,800 per vessel/aircraft 37 38The foregoing lump sum rates shall be applicable only for the duration of the 39exploration phase of Service Contract No. 56 and do not include the provision 40or reimbursement of travel- related and other necessary expenses of customs 41officials, employees, and/or deputies; 42 43The OPERATOR shall be responsible for withholding the appropriate amount 44of tax on payments of the OFFSHORE DUTY RATE and remitting such 45withheld amounts to the Bureau of Internal Revenue. The Administrative Unit 46of the Port of Zamboanga shall provide the OPERATOR with the information 47necessary to remit such withholding and OPERATOR shall submit to the 48Administrative Unit of the Port of Zamboanga evidence of such payments. 49The Port of Zamboanga shall be responsible for withholding the appropriate 50amount of tax on all other payments made to customs officials, employees 2 3
562

1 1and/or other authorized government personnel, and remitting and reporting 2such withheld amounts to the Bureau of Internal Revenue. 3 4The duration of the assignment of Customs officials, employees and/or 5deputies for off-shore duties shall be for a minimum period of fifteen (15) 6calendar days but in no way shall it exceed twenty eight (28) days. The 7minimum period of assignment to offshore duty may be reduced for valid 8reasons provided however that the District Collector shall immediately assign 9a replacement so as not to hamper the operations of the drill vessel. 10III. INVOICING AND PAYMENT FOR SERVICES 11 121. After completion of the assignment of each customs officials, employees, 13 and/or deputies, he or she shall prepare and submit the necessary 14 voucher supported by detailed statement of all the services rendered 15 within the duration of his or her assignment duly accomplished in BC Form 16 Nos. 35 and 35-A to the Administrative Unit of the Port of Zamboanga; 17 182. In turn, the Administrative Unit of the Port of Zamboanga shall check the 19 vouchers, certify their correctness, approve the same for payment, and 20 forward the corresponding Billing Statement to the OPERATOR or its 21 authorized representative for payment; 22 233. All Billing Statements must be paid in full within ten (10) days from receipt 24 thereof, unless prior thereto a written notice disputing the amounts in the 25 Billing Statement is sent to the Administrative Unit of the Port of 26 Zamboanga. Where written notice of a disputed amount is submitted, all 27 undisputed amounts must be paid within ten (10) days from receipt of the 28 Billing Statement; 29 304. Payments shall be made in cash or check to the official cashier of the Port 31 of Zamboanga for deposit into an official bank account of the Port of 32 Zamboanga established in a duly authorized depository bank for 33 government funds and subject to disbursement and audit requirements as 34 prescribed for such accounts under applicable laws and regulations, After 35 payment, an official receipt covering said payment shall be issued by the 36 Administrative Unit of the Port of Zamboanga to the OPERATOR or its 37 authorized representative to acknowledge receipt of payment; 38 395. Upon payment of the full invoiced amounts, the OPERATOR shall have no 40 further payment obligations relative to the services which are the subject of 41 the invoice; 42 436. All customs officials, employees, and/or deputies assigned/deployed to 44 render offshore overtime services are prohibited from receiving payment of 45 offshore duty pay and overtime pay for services rendered directly from 46 OPERATOR or its representatives for services rendered; 47 487. Any customs officials, employees, and/or deputies who shall violate any 49 provision of this Administrative Order shall be subject to disciplinary action. 50 Violation by the OPERATOR or its representative of any provision of this 2 3
563

1 1 Administrative Order shall be subject to the imposition of the penalties 2 provided for by law. 3 4IV. TRAVEL, INSURANCE AND RELATED EXPENSES 5 61. The OPERATOR shall be responsible for all reasonable traveling, board 7 and lodging, and other necessary incidental expenses of customs officials, 8 employees, and/or deputies performing work in connection with Offshore 9 Operations in the South Sulu Sea under Service Contract No. 56; 102. Prior to the deployment of customs officials, employees, and/or deputies 11 to their Offshore work station, the District Collector of the Port of 12 Zamboanga shall notify the OPERATOR or its authorized agent of the 13 projected travel schedules of concerned customs officials, employees, 14 and/or deputies; 15 163. The OPERATOR shall secure individual personal insurance policy in favor 17 of deployed customs officials, employees, and/or deputies covering all 18 risks or injuries during their travel to and from their designated offshore 19 work station as well as during their stay thereat; 20 214. The OPERATOR shall provide airline tickets, hotel vouchers, meal tickets 22 or the like, or provide cash advances for reasonable airfare, 23 accommodations, meals and other necessary incidental expenses for the 24 projected travel. Such cash advances shall be covered by a receipt and 25 shall be subject to liquidation. All tickets, vouchers and cash advances 26 shall be returned to the OPERATOR or its authorized agent, if the travel is 27 cancelled for any reason; 28 295. Nothing herein shall diminish the authority or responsibility of customs 30 officials, employees and/or other authorized government personnel under 31 applicable laws and regulations. They shall retain full discretion to grant or 32 deny clearances, certifications, permits and licenses and take such other 33 actions within their regulatory mandate as is permitted or required under 34 applicable laws and regulations. 35 36V. PAYMENT OF OTHER OVERTIME SERVICES 37 38Payment of overtime for other boarding formalities and customs services 39rendered not connected to offshore duty assignments shall be billed in 40accordance with the prescribed rates under existing customs administrative 41orders. 42 43 44CHAPTER 4: RULES AND REGULATIONS GOVERNING THE RENDITION 45OF OVERTIME SERVICES AND THE PAYMENT OF CORRESPONDING 46OVERTIME SERVICE PAY APPLICABLE TO SERVICE CONTRACT NO. 59 47LOCATED OFF THE SOUTHWEST TIP OF PALAWAN ISLAND IN THE 48SOUTH CHINA SEA. (CAO 6-2010) 49 501. DEFINITION OF TERMS 2 3
564

1 1 2For purposes of this Administrative Order, the following terms shall have the 3following meanings as herein defined. 4 51.1 Boarding Formalities refers to the boarding formalities conducted 6 onboard the foreign vessel by government officials composed of 7 Customs, Immigration and Quarantine Officials (CIQ) upon her arrival 8 from foreign port at any port of entry in the Philippines for purposes of 9 inspection by the Quarantine and Customs Officers and the 10 presentation by the vessel master/captain of the vessel documents 11 mentioned in Section 1004 of the TCCP, as amended. However, pay 12 for boarding formalities as mentioned herein is exclusive of the fees to 13 be collected by the Immigration and Quarantine Official, which shall be 14 billed separately by their respective agencies. 15 161.2 Cargo Examination refers to the conduct of examination by the 17 Customs Officers to determine that the exact contents, invoice and 18 other pertinent documents declared by the declarant in the entry filed 19 with the Bureau are correct. 20 211.3 Exploration Period means the seven (7) year period, or any extension 22 thereof, referred to in Section 4.01 of Service Contract 59, during which 23 the OPERATOR is allowed to perform Exploration Operations in the 24 Contract Area. 25 261.4 Inspection/Supervision refers to the supervision and control by the 27 customs inspector/s and/or guards assigned on board the foreign 28 vessel while within the jurisdiction of the collection district of the port, 29 for purposes of monitoring the activities conducted on board and thus 30 ensure that Customs laws and regulations are complied with, which 31 shall be required only when Customs official have probable cause to 32 believe based on personal knowledge of facts or circumstances that 33 customs laws or regulations are being violated. 34 351.5 Offshore duty refers to the time spent by a customs employee 36 required to stay on board a vessel located at sea a considerable 37 distance from shore for the purpose of performing official functions 38 such as, but not limited to, monitoring the entry of foreign articles, and 39 such other functions by a customs employee as may be necessary for 40 enforcing customs laws and regulations. 41 42 Any capitalized term used herein and not specifically defined shall have 43 same meaning as defined in Service Contract 59. 44 452. AUTHORITY TO ALLOW RENDITION OF OVERTIME SERVICES 46 472.1 The District Collector of the Port of Batangas shall assign and deploy 48 customs officials, employees and/or deputies to render overtime 49 services in connection with the Offshore Operations of the OPERATOR 50 in offshore areas of the South China Sea under Service Contract No. 2 3
565

1 1 59 (hereinafter referred to as SC 59). Such assignment shall be 2 covered by the appropriate. Customs Personnel Order setting forth the 3 duration of the assignment and other relevant terms and conditions as 4 well as any limitation on the power and functions of the employees 5 assigned. 6 72.2 In the deployment of customs officials, employees and/or deputies to 8 the site of the Offshore Operations the District Collector shall deploy 9 only customs officials, employees and/or deputies of the Port of Puerto 10 Princesa, unless exceptional circumstances do not permit the 11 deployment of such customs officials, employees of and/or deputies, in 12 which case personnel to be assigned shall be from the Collection 13 District. 14 153. OVERTIME SERVICES PAY AND OFF SHORE DUTY PAY 16 173.1 OVERTIME SERVICES PAY 18 193.1.1 BoardingForma1ities Php11,800.00 per 20 Clearance 21 223.1.2 Cargo Examination Php11,800.00 per 23 vessel/aircraft 24 253.1.3 Under guarding (if required) Php11,800,00 per 26 vessel/aircraft 27 283.1.4 Inspection/Supervision Php11,800.00 per 29 vessel/aircraft 30 (if required) 31 323.2 The OPERATOR shall inform the Port of Batangas at least five (5) 33 days from the expected arrival of each vessel arriving from a foreign 34 port to perform Exploration Operations in the Contract Area or perform 35 support or supply operations as may be necessary under Service 36 Contract 59. 37 383.3 The Collector of the Port of Batangas shall assign boarding officers, 39 inspectors and examiners in accordance with Part II hereof, who shall 40 perform Exploration Operations in the Contract Area in Accordance 41 with their rates provided herein. 42 433.4 Prior to or upon arrival of the vessel/s, the CONTRACTOR shall file the 44 corresponding Consumption Entry to effect the release of the shipment 45 Customs Custody, attaching thereto the Tax Exemption Certificate from 46 the Department of Finance favorably indorsing the Exemption 47 Certificate issued by the Department of Energy in accordance with 48 Presidential Decree No. 87, also known as the Oil Exploration and 49 Development Act of 1972. 50 2 3
566

1 14. OFFSHORE DUTY PAY 2 34.1 Taking into consideration the unique circumstances attendant in the 4 subject Offshore Operations, including the concomitant hardship and 5 inconvenience of affected customs officials, employees and/or deputies 6 who may be required to stay on a Vessel under on-call status, an 7 Offshore Duty Pay of EIGHT THOUSAND FIVE HUNDRED PESOS 8 (Php 8,500.00) per day, computed as 24 continuous hours or a fraction 9 thereof separate from the overtime service pay, shall be payable for the 10 services of each customs officials, employees and/or deputies required 11 to remain on board a Vessel after the first twenty four (24) hours upon 12 arrival. No Offshore Duty Pay shall be payable for services rendered by 13 any customs officials, employees and/or deputy required to remain 14 onboard a vessel for a period of less than twenty-four (24) hours. 15 164.2 The foregoing lump sum rates shall be applicable only for the duration 17 of the Exploration Period of SC 59. 18 195. TAXES ON OVERTIME SERVICE PAY OFFSHORE DUTY PAY 20 215.1 Offshore Duty Pay 22 23 The OPERATOR shall be responsible for withhold the appropriate 24 amount of tax on payments of a Offshore Duty Pay and remitting such 25 withheld amount to the Bureau of Internal Revenue (BIR) in accord with 26 applicable laws, rules and regulations. The Administrative Unit of the 27 Port of Batangas shall provide the OPERATOR with the information 28 necessary to remit the amount withheld and the OPERATOR submit to 29 the Administrative Unit of the Port of Batangas appropriate 30 documentary evidence of payments. 31 325.2 The Port of Batangas shall be responsible withholding the appropriate 33 amount of tax on payment made to customs officials and employees, 34 including payment of the Overtime Service Pay and remitting and 35 reporting such withheld amounts to the BIR. 36 376. INVOICING AND PAYMENTS FOR SERVICES 38 396.1 After completion of the assignment of each customs officials, 40 employees, and/or deputies, he or shall prepare and submit the 41 necessary voucher supported by a detailed statement of all the 42 services rendered within the duration of his or her assignment duly 43 accomplished (hereinafter referred to as the Billing Statement") in BC 44 Form Nos. 35 and 35-A to the Administrative Unit of the Port of 45 Batangas. 46 476.2 In turn, the Administrative Unit of the Port shall cheek the vouchers, 48 certify their correctness, approves the same for payment, and forward 49 the corresponding Billing Statement to the OPERATOR or its 50 authorized representative for payment. 2 3
567

1 1 26.3 All Billing Statement must be paid in full within thirty (30) calendar days 3 from receipt thereof. Any dispute in the Billing Statement must be made 4 in writing and submitted to the Administrative Unit of the Port within five 5 (5) days from receipt of said Billing Statement. Any amount payable not 6 subject of the written dispute must be paid within the Thirty (30) day 7 period. 8 96.4 Payments shall be made by the OPERATOR or its authorized 10 representative, by check, to the cashier of the Bureau of Customs, Port 11 of Batangas, for deposit into an official bank account established in a 12 duly authorized depository bank for government funds and subject to 13 disbursement and audit requirements as prescribed for such accounts 14 under applicable laws and regulations. An officials receipt covering 15 said payment shall be issued by the Administrative Unit of the Port of 16 Batangas, through its Cashier to the OPERATOR or its authorized 17 representative to acknowledge receipt of payment. 18 196.5 Upon payment of the full invoiced amounts, the OPERATOR shall be 20 relieved from further payment obligations relative to the services, which 21 are the subject of the Billing Statement. 22 236.6 All Customs officials, employees, and/or deputies assigned/deployed to 24 render offshore overtime services are prohibited from receiving directly 25 from the OPERATOR or any of its representatives payment for 26 offshore duty pay and overtime pay for services rendered. 27 286.7 Any customs officials, employees, and/or deputies who shall violate 29 any provision of this Administrative shall be subject to disciplinary 30 action. Violation by Operator or its representatives of any provision of 31 Administrative Order shall be subject to the imposition of the penalties 32 provided for by law. 33 347. TRAVEL AND RELATED EXPENSES 35 367.1 In exceptional cases where the Bureau of Customs shall, deploy 37 customs officials, employees, and/or deputies from offices other than 38 OPERATOR shall be responsible for all reasonable traveling, board 39 and lodging and other incidental expenses of customs officials, 40 employees, and/or deputies to the site of the Offshore Operations or 41 other site as may be requested by the Operator in connection with 42 rendering services for Offshore Operations under SC 59. 43 447.2 Prior to the deployment of customs officials, employee and/or deputies 45 to their Offshore Operations work station or other site as requested by 46 the OPERATOR, of the District Collector of the Port of Batangas shall 47 notify the OPERATOR or its authorized representative of the projected 48 travel schedules of concerned customs officials, employees, and/or 49 deputies. 50 2 3
568

1 17.3 Following receipt of schedules per Paragraph V.B above, the 2 OPERATOR shall make the necessary arrangements for reasonable 3 transportation, accommodation and meals, as well as for other 4 necessary incidental expenses, for the projected travel arrangements 5 may include issuance of tickets or, which shall be covered by an 6 acknowledgement receipt duly signed by the Customs personnel 7 concerned. Any ticket or voucher not utilized due to travel cancellation 8 for whatever reason shall be returned to the OPERATOR or its 9 authorized representative and duly acknowledged. 10 118. PAYMENT FOR OTHER OVERTIME SERVICES 12 138.1 Payments for overtime for boarding formalities and customs services 14 rendered not connected to offshore duty assignments shall be billed in 15 accordance with the prescribed rates under existing Customs 16 Administrative Orders. 17 189. AUTHORITY OF CUSTOMS OFFICIALS 19 209.1 Nothing herein shall diminish the authority responsibility of customs 21 officials, employees and/or other authorized government personnel 22 under applicable laws and regulations. They shall retain full discretion 23 to grant or deny clearances, certifications, permits and licenses and 24 take such other actions within their regulatory mandate as permitted or 25 required under applicable laws and regulations. 26 27 28 TITLE 4 WAREHOUSING CHARGES 29 30 CHAPTER 1 AIRPORT WAREHOUSE FEES 31 32Ref:CAO 7-2007 33 34Chapter 1 Airport Warehouse Operations 35 36Section 1 Definition of Terms 37 381.1 General Cargo 39 40 All cargoes not included in the above enumeration for special cargo, 41 each kind, class or nature is described herein below. 42 431.2 Special Cargo 44 451.2.1 Baggage and personal effects shipments that are handled with 46 special care and provided special storage locations. 47 481.2.2 Perishables shipments shown as such in the Cargo Manifest (CM) 49 and Airway bill (AWB) or labeled/identified on the package/s as such,

2 3

569

1 1 hence requiring storage under specified temperatures. (All aquatic 2 products fall under this classification). 3 41.2.3 Valuable Cargo shipments shown in the CM and/or AWB as such or 5 so labeled/identified on the package/s pursuant to IATA regulations. 6 7Section 2 - Administrative Provisions 8 92.1 The standardized service charges shall apply to Philippine Skylanders, 10 Inc., Philippine airlines, Peoples Aircargo& Warehousing Co. Inc., 11 Delbros Inc., Cargohaus Inc. (formerly U-Warehouse), DHL Express 12 Philippines Inc., Miascor Cargo Logistics, and TMW Worldwide Express, 13 all Customs Bonded Warehouses within the NAIA Complex. 14 152.2 The standardized rates apply until such time that a new order is issued 16 to change the rates. 17 18Section 3 Standardized Rates 19 203.1 Schedule of fees are as follows 21 223.3.1 Basic Storage Rates 23 24 Rate PHP 1.76/kg/day 25 Minimum Charge 101.27/day 26 27 Exception: Documents and Diplomatic Pouches 28 293.3.2 Special Cargo Rates 30 313.3.2.1 Minimum Charge PHP 201.75/day 323.3.2.2 Baggage and Personal Effects 1.76/kg/day 333.3.2.3 Perishables 3.53/kg/day 343.3.2.4 Valuable Cargo 3.53/kg/day 353.3.2.5 Dangerous Drugs &Restricted Articles 3.53/kg/day 363.3.2.6 Live Animals, Fowls Plan 3.53/kg/day 373.3.2.7 Human Remains 3.53/kg/day 38 393.3.3 Service Charges 40 413.3.3.1 For shipment whose weight per AWB is 42 less than one hundred (100) kilograms PHP 0.69/kg/day 433.3.3.2For shipment whose weight per AWB is 44 one hundred (100) kilograms or more 1.02/kg/day 45 463.3.4 Ancillary Charges 47 483.3.4.1 Backdoor Release Rate PHP 5.63/kg 49 Minimum Charge 336.75/kg 50 Maximum Charge 562.00/AWB 2 3
570

1 1 23.3.4.2 Deconsolidation Fees PHP 283.00/HAWB 3 43.3.4.3 Returned Shipment Rate PHP 56.27/kg 5 Minimum Charge 337.50 6 Maximum Charge 562.50 7 8Note: Source: CAO 7-07 9CHAPTER 2 OFF-DOCK CONTAINER YARD (CY) AND CONTAINER 10FREIGHT STATION (CFS) 11 12Section 1 - Administrative Provisions 13 141.1 Standardized charges and fees 15 16 Off-dock CY-CFS are mandated to charge standard charges and fees as 17 provided for in this regulation. 18 191.2 Measurement and weight 20 21 Rates based on Revenue Tons (measurement/weight) shall be based on 22 measurements/weights declared in the manifest/bill of lading unless a 23 discrepancy in weight or measurement of more than 12% is officially 24 reported to the Bureau of Customs by the operator and wharfinger, in 25 which case the actual measurement or weight shall be the basis for 26 applying the approved rates. 27 281.3 Penalties and Sanctions for violations 29 30 See Book 4. 31 32Section 2 Operational Provisions 33 342.1 Standardized rates 35 36 The rates to be charged by outside CY/CFS-OCZ operators for 37 consolidated import cargo shall exceed the following: 38 392.1.1 Storage Php 20.00/Revenue Ton (RT)/ day counted from the date of 40stripping 41 422.1.2 Arrastre&WharfagePhp 157.00/Revenue Ton (Note 1) 43 442.1.3 Documentation Php 500.00/Bill of Lading 45 462.1.4 Stripping & Cargo Out Handling Php 500.00/Revenue Ton 47 482.1.5 OLRS Php 100.00/Bill of Lading 49

2 3

571

1 12.1.6 Insurance Min. Php 500.00/Bill of 2 Lading or 1/8 of cargo 3 value whichever is 4 higher (Note 2) 5 62.1.7 Heavy Lift/ Oversize over 7 Three RevenueTon single Unit Cargo Php 1,200.00/Revenue 8 Ton 9 102.1.8 Dangerous Cargo 100% Surcharge on 11 Storage, Stripping and 12 handling 13 14 15Note 16 171. Arrastre and Wharfage rates shall be adjusted proportionally in case of any 18 increase in arrastre and wharfage rates as promulgated by the Philippine 19 Port Authority. 20 212. Insurance charge shall be waived by CY/CFS-OCZ operator if cargo 22 owner/consignee presents a general and continuing waiver of cargo claims 23 against the warehouse operator making the warehouse operator a co24 insured party in the marine insurance. 25 263. Value-added Tax shall be subject to BIR. 27 284. The standardized schedule of rates must be posted on a 29 conspicuous place in the OD-CY/CFS to enable transacting public to 30 compare actual charges with prescribed rates. 31 32Reference: CMO 24-2001 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 2 3
572

1 1 2 3 4

2 3

573