CHAPTER 2 1.

Customs procedure should be simplified;

GENERAL AND COMMON PROVISIONS 2. There should be transparency of and accessibility to information,
rules and regulations in the Bureau in order to make trade easier;
SEC. 101 Declaration of Policy – It is hereby declared the policy of
the State to protect and enhance government revenue, institute fair 3. Emphasize on information and communications technology (ICT)
and transparent customs and tariff management that will efficiently T=to speed up customs operation;
facilitate international trade, prevent and curtail any form of
customs fraud and illegal acts, and modernize customs and tariff 4. Simplifies customs procedure on goods declaration, lodgement,
warehousing, valuation and processing;
administration. Towards this end, the state shall
(a) Develop and implement programs for the continuous 5. Institute professionalism and meritocracy in customs
administration
enhancement of customs systems and processes that will
harmonize customs procedure; The new provisions reflect the general spirit of the RKC in so
(b) Adopt clear and transparent customs rules, regulations, far as trade facilitation function of the Bureau is concerned.
policies and procedures, consistent with international
standards and customs best practices; Likewise, the new provision in this Act are consistent with
(c) Establish a regime of transparency and accessibility to customs the International Harmonized System Code (IHSC), the ASEAN
information, customs laws, rules, regulations, administrative Harmonized Tariff Nomenclature (AHTN) and the World Customs
policies, procedures and practices, in order to ensure Organization standards.
informed, and diligent compliance with customs practices and For better understanding of the CMTA, the author deemed
procedures by stakeholders; it necessary to add the environmental factors that justify the
(d) Consult, coordinate and cooperate with other government passage of CMTA (RA 10863) of wit.
relative to customs laws agencies and private sectors
implementing and developing customs policies; Environmental Factors that Justify the passage of the CMTA (RA
(e) Provide a fair and expeditious administrative and judicial 10863)
appellate remedy for customs relative grievances and matters;
1. The establishment of the World Trade Organization (WTO) and
(f) Employ modern practices in customs administration and utilize
regional trading arrangements such as APEC and AFTA;
information and communications technology in the
implementation of customs functions; and 2. Reduced tariff barriers trough WTO;

(g) Institute professionalism and meritocracy in customs tax and 3. Increase globalization of trade;
administration by attracting and retaining competent and 4. Rapid growth in international cargo
capable customs officers and personnel to enforce the
provisions of this act; 5. A highly competitive international business environment
6. Removal of many non-tariff barriers
Notes: The new declared policies of the state relative to
customs laws manifest the intent of law makers that the 7. Growth in e-commerce; and
customs law shall be:
8. Increased focus in trade security
 (g) Authorized Economic Operator (AEO) refers to the importer,
exporter, customs broker, forwarder, freight forwarder, transport
The Philippine acceded to the RKC in June 2010, the 72 nd country to provider, and any other II entity duly accredited by the Bureau
do so. To date, there are 92 members who acceded. Based on the based on the World Customs Organization (WCO) Framework of
provisions of RKC, a contracting party has three years from the date Standards to Secure and Facilitate Global Trade, the Revised Kyoto
of accession to comply with the regular standards and five years to Convention (RKC), the WCO Supply Chain Management Guidelines
comply with transitional standards. and the various national best practices to promote trade facilitation
As a contracting party to the RKC, THE Philippines is and to provide a seamless movement of goods across borders
committed to make its national law consistent with the General through secure international trade supply chains with the use of
Annex to the convention and with the standards and recommended risk management and modern technology;
practices of the specified annexes which it accepted. (h) Bill of Lading (BIL) refers to a transport document issued by
SEC 102. Definition of Terms- As used in this act: shipping lines, carriers and international freight forwarders or non-
vessel operating common carrier for water-borne freight. The
(a) Abatement refers to the reduction or diminution, in whole or in holder or consignee of the bill has the right to claim delivery of the
part, of duties and taxes where payment has not been made; goods at the port of destination. It is a contract of carriage that
(b) Actual or Outright Exportation refers to the customs procedure includes carrier conditions, such as limits of liability and claims
applicable to goods which, being in free circulation leave the procedures. In addition, it contains transport instructions to
Philippine territory and are intended to remain permanently outside shipping lines and carriers, a description of the goods, and
it; applicable transportation charges;

(c) Admission refers to the act bringing imported goods directly or (i) Bureau refers to the Bureau of Customs;
through transit into a free zone; (j) Carrier refers to the person actually transporting goods or in
(d) Airway Bill (AWB) Refers to a transport document for airfreight charge of or responsible for the operation of the means of transport
used by airlines and international freight forwarders which specify such as airlines, shipping lines, freight forwarders, cargo
the holder or consignee of the bill who has the right to claim consolidators, non-vessel operating common carriers and other
delivery of the goods when they arrive at the port of destination. It international transport operators;
is a contract of carriage that includes carrier conditions, such as (k) Clearance refers to the completion of customs and other
limits of liability and claims procedures. In addition, it contains government formalities necessary to allow goods to enter for
transport instructions to airlines and carriers, a description of the consumption, warehousing, transit or transshipment, or to be
goods, and applicable transportation charges; exported or placed under another customs procedure;
(e) Appeal refers to the remedy by which a person who is aggrieved (I) Commission refers to the Tariff Commission.
or adversely affected by any action, decision, order of omission of
the Bureau, seeks redress before the Bureau, the secretary of (m)Conditional Importation refers to the customs procedure known
finance, or competent court, as the case may be; under the Revised Kyoto Convention (RKC) as temporary admission
in which certain goods can be brought into a customs territory
(f) Assessment refers to the process of determining the amount of
conditionally relieved totally or partially from payment of import
duties and taxes and other charges due on imported and exported
goods; duties and taxes; such goods must be imported for a specific
purpose and must be intended for re-exportation within a specified
period and without having undergone any change except normal (v) Foreign Exporter refers to one whose name appears on
depreciation due to the use made of them. documentation attesting to the export of the product to the
Philippines regardless of the manufacturer's name in the invoice.
(n) Constructive Import or Export refers to the movement of
(w)Free Zone refers to special economic zones registered with the
imported or exported goods to and from a free zone and customs
Philippine Economic Zone Authority (PEZA) under Republic Act No.
territory;
7916, as amended, duly chartered or legislated free ports Special
(0) Customs Broker refers to any person who is a bona fide holder Economic Zones and Freeports such as Clark Freeport Zone, Poro
of a valid Certificate of Registration/Professional Identification Card Point Freeport Zone, John Hay and Special Economic Zone and Subic
issued by the Professional Regulatory Board and Professional Bay Freeport Zone under Republic Act No. 20 7227 as amended by
Regulation Commission pursuant to Republic Act No. 9280, Republic Act No. 9400, the Aurora Special Economic Zone under
otherwise known as the "Customs Broker Act 19 of 2004;" Republic Act No. 9490, the Cagayan Special Economic Zone and
Freeport under Republic Act No. 7922, the Zamboanga City Special
(p) Customs Office refers to any customs administrative unit that is Economic Zone under Republic Act No. 7903, and Freeport Area of
competent and authorized to perform all or any of the functions Bataan under Republic Act No. 9728 and such other freeports as
enumerated under customs and tariff laws; established or maybe created by law;
(q) Customs Officer, as distinguished from a clerk or employee, (x) Goods refer to articles, wares, merchandise and any other items
refers to a person whose duty, not being clerical or manual in which are subject of importation or exportation;
nature, involves the exercise of discretion in performing the
function of the Bureau. It may also refer to an employee authorized (y) Goods declaration refers to a statement made in the manner
to perform a specific function of the Bureau as provided in this Act; prescribed by the Bureau and other appropriate agencies, by which
the persons concerned indicates the procedure to be observed in
(r) Customs Territory refers to areas in the Philippines where the application for the entry or admission of imported or exported
customs and tariff laws may be enforced. goods and the particulars of which the customs administration shall
(s) Entry refers to the act, documentation and process of bringing require;
imported goods into the customs territory, including goods coming (z) Importation refers to the act of bringing in of goods from a
from free zones; foreign territory into Philippine territory, whether for consumption,
(t) Export Declaration refers to the act, documentation, and warehousing, or admission as defined in this Act.
process of bringing goods out of Philippine territory; (aa) Freight Forwarder refers to a local entity that acts as a cargo
(u) Flexible Clause refers to the power of the President upon intermediary and facilitates transport of goods on behalf of its client
recommendation of the NEDA to increase, reduce or remove without assuming the role of a carrier, which can also perform other
existing protective tariff rates of import duty, but in no case be forwarding services, such as booking cargo space, negotiating
higher than 100% ad valorem, to establish import quota or to ban freight rates, preparing documents, advancing freight payments,
importation of any commodity as maybe necessary, to impose providing packing/crating, trucking and warehousing, engaging as
additional duty on all import not exceeding 10% ad valorem an agent/representative of a foreign non-vessel operating as a
whenever necessary. common carrier/cargo consolidator named in a master bill of lading
as consignee of a consolidated shipment, and other related
undertakings; subports of entry. A principal port of entry is the chief port of entry
of the Customs District wherein it is situated and is the permanent
(bb) International Freight Forwarder refers to persons responsible station of the District Collector of such port.  Subports of entry are
for the assembly and consolidation of shipments into single lot, and under the administrative jurisdiction of the District Collector of the
assuming, in most cases, the full responsibility for the international principal port of entry of the Customs District. Port of entry as used
Transport of such shipment from point of receipt to the point of in this Act shall include airport of entry;
destination;

(cc) Jurisdictional Control refers to the power and rights of the (ii) Port of Discharge, also called Port of Unloading, refers to a place
Bureau in exercising supervision and police authority over all seas where a vessel, ship, aircraft or train unloads its shipments, from
within the jurisdiction of the Philippine territory and over all coasts, where they will be dispatched to their respective consignees;
ports, airports, harbors, bays, rivers and inland waters whether
navigable or not from the sea; (jj) Re-exportation means exportation of goods which have been
imported;

(dd) Lodgement refers to the registration, of a goods declaration

(kk) Release of Goods refers to the action by the Bureau to permit
with the Bureau;
goods undergoing clearance to be placed at the disposal of the
(ee) Non-Vessel Operating Common Carrier (NVOCC) refers to an party concerned;
entity, which may or may not own or operate a vessel that provides
a point-to-point service which may include several modes of (ll) Refund refers to the return, in whole or in part, of duties and
transport and/or undertakes group age of less container load (LCL) taxes paid on goods;
shipments and issues the corresponding transport document;
(mm) Security refers to any form of guaranty, such as a surety bond,
cash bond, standby letter of credit or irrevocable letter of credit,
(ff) Outright Smuggling refers to an act of importing goods into the
which ensures the satisfaction of an obligation to the Bureau;
country without complete customs prescribed importation
documents, or without being cleared by customs or other
(nn) Smuggling refers to the fraudulent act of importing any goods
regulatory government agencies, for the purpose of evading
into the Philippines, or the act of assisting in receiving, concealing,
payment of prescribed taxes, duties and other government charges;
buying, selling, disposing or transporting such goods, with full
knowledge that the same has been fraudulently imported, or the
(gg) Perishable Good refers to goods liable to perish or goods that
fraudulent exportation of goods. Goods referred to under this
depreciate greatly in value while stored or which cannot be kept
definition shall be known as smuggled goods;
without great disproportionate expense, which may be proceeded
to, advertised and sold at auction upon notice if deemed (oo) Taxes refer to all taxes, fees and charges imposed under this
reasonable; Act and the National Internal Revenue Code (NIRC) of 1997, as
amended, and collected by the Bureau;
(hh) Port of Entry refers to a domestic port open to both domestic
and international trade, including principal ports of entry and
(pp) Technical Smuggling refers to the act of importing goods into
the country by means of fraudulent, falsified or erroneous registered. These were deleted in CMTA because some were
declaration of the goods to its nature, kind, quality, quantity or modified to attune to current practices while others already
weight, for the purpose of reducing or avoiding payment of acquired judicial notice and acceptance.
prescribed taxes, duties and other charges;
Under this act, new terms were defined such as abatement, actual
or outright exportations, admission, airway bill, bureau, carrier,
(qq) Tentative Release refers to a case where the assessment is exportation, foreign exporter, importation, freight forwarder,
disputed and pending review, an importer may put up a cash bond international freight forwarder, outright smuggling, perishable
equivalent to the duties and taxes due on goods before the goods, port of entry and security.
importer can obtain the release of said goods;
SEC. 103. When Importation Begins and Deemed Terminated. –
Importation begins when the carrying vessel or aircraft enters the
(rr) Transit refers to the customs procedure under which goods, in Philippine territory with the intention to unload therein.
its original form, are transported under customs control from one Importation is deemed terminated when:
customs office to another, or to a free zone;

(ss) Transshipment refers to the customs procedure under which

(a) The duties, taxes and other charges due upon the goods have
goods are transferred under customs control from the importing
been paid or secured to be paid, at the port of entry unless the
means of transport to the exporting means of transport within the
goods are free from duties, taxes and other charges and legal
area of one customs office, which is the office of both importation permit for Withdrawal has been granted: or
and exportation;

(b) In case the goods are deemed free of duties, taxes and other
(tt) Traveler refers to any person who temporarily enters the charges, the goods have legally left the jurisdiction of the Bureau.
territory of a country in which he or she does not normally resides
Notes: formerly section 1202 of the TCCP (Tariff and Customs Code
(non-resident), or who leaves that territory, and any person who
of The Philippines of 1978 as amended)
leaves the territory of a country in which he or she normally resides
(departing resident) or who returns to that territory (returning Importation begins when the carrying vessel or aircraft enters the
resident); Philippine territory; and the intention to unload its carried goods. It
ends up payment of duties, taxes, and other charges due upon the
(uu) Third Party refers to any person who deals directly with the imported goods or secured to be paid, at a port of entry, the legal
Bureau, for and on behalf of another person, relating to the permit for withdrawal shall have been granted, or in case of duty
importation, exportation, movement or storage of goods. and tax free goods until they legally left the jurisdiction of the
Bureau.
Notes: as provided in TCCP, section 3519, the following words or
phrases were defined: foreign port; port of entry; coastwise ports;
vessels; aircraft; bill of lading; articles; transit good; seized property; SEC. 104. When Duty and Tax are Due on Imported Goods. – Except
tariff and customs law; taxes; secretary commission; person, as otherwise provided for in this Act or in other laws, all goods,
dutiable value; bulk cargo; smuggling; contrabands; and duly when imported into the Philippines, shall be subject to duty upon
importation, including goods previously exported from the Notes: as a general rule all imported articles are subject to and
Philippines. taxes unless otherwise provided by law. Formerly section 204 of the
TCCP, Adopted taken into account General Annex, Standards 4.4,
Unpaid duties, taxes and other charges, shall incur legal interest of 4.5 and 4.15 of RKC.
twenty percent (20%) per annum computed from the date of final
The RKC mandates that National legislation shall specify the point in
assessment under Section 429 of this Act, when payment becomes
due and demandable. The legal interest shall likewise accrue on any time to be taken into consideration for the purpose of determining
the rates of duties and taxes.
fine or penalty imposed.
Upon payment of the duties, taxes and other charges, the Bureau Imported goods shall be subject to the rates of import duty existing
at the time of entry, or withdrawal from warehouse, in the
shall issue the necessary receipt or document as proof of such
payment. Philippines for consumption. Section 1611 of this act, clearly
mandates that provision of section 104 of tariff nomenclature and
Notes: first paragraph has been lifted from section 100 of the rates of import Duty of TCCP, specially providing for the tariff
former code and ensuing paragraphs are new provisions. Adopted sections, chapters headings and subheadings and the rates of
from the RKC, General Annex, Chapter 4, and Standards 4.1, 4.8, import duty, shall still apply and shall supplement this act. SEC.
4.9, 4.11, and 4.15. The RKC provides that National legislation shall
106. Declarant. – A declarant may be a consignee or a person who
define the circumstances when liability to duties and taxes is
incurred has the right to dispose of the goods. The declarant shall lodge a
goods declaration with the Bureau and may be:
It must be pointed out that goods refer to articles, wares,
merchandise and any other items which are subject of importation (a) The importer, being the holder of the bill of lading; or
(b) The exporter, being the owner of the goods to be shipped out;
or exportation (paragraph (X) of section 102)
or
As a general rule, all importation shall be subjected to payment of (c) A customs broker acting under the authority of the importer or
duties and taxes upon importation, except in cases of 1, conditional from a holder of the bill; or
importation; 2 relief consignment; 3 conditionally tax and or duty
(d) A person duly empowered to act as agent or attorney-in-fact for
exempt importation; and 4 imports that enter a free zone.
each holder.
SEC. 105. Effective Date of Rate of Import Duty. – Imported goods
In case the consignee or the person who has the right to dispose of
shall be subject to the import duty rates under the applicable tariff
heading that are effective at the date of importation or upon the goods is a juridical person, it may authorize a responsible officer
of the company to sign the goods declaration as declarant on its
withdrawal from the warehouse for consumption. In case of
withdrawal from free zones for introduction to the customs behalf.
The goods declaration submitted to the Bureau shall be processed
territory, the duty rate at the time of withdrawal shall be applicable
on the goods originally admitted, whether withdrawn in its original by the declarant or by a licensed customs broker: Provided, That for
importations, a transition period of two (2) years from the
or advanced form.
effectivity of this Act is hereby provided during which subparagraph
(d) of this section shall not be implemented by the
In case of goods sold at customs public auction, the duty rates at Bureau: Provided, further, That after two (2) years from the
the date of the auction, shall apply for purposes of implementing effectivity of this Act, subparagraph (d) of this section shall take into
Section 1143(a) of this Act.
effect consistent with international standards and customs best the declaration made and the duties of the declarant as against the
practices. licensed customs broker.
Notes: New provision adopted from RKC, General annex Chapter 3, The provision mandates that the declarant shall sign the goods
standards 3.6,to 3.8 and chapter 8.1 of RKC which specifies that declaration even when assisted by a licensed customs broker, who
persons concerned shall have the choice of transacting business are required to sign the goods declaration.
with the Bureau either directly or by designating a third party to act
on their behalf.
SEC. 108. Penalties for Errors in Goods Declaration. – The Bureau
The RKC provides that “the declarant shall be held responsible for
the customs for the accuracy of particulars given in the goods shall not impose substantial penalties for errors when such errors
are inadvertent and there was no fraudulent intent or gross
declaration and the payment of duties and taxes” 3.8 standard
chapter 3, clearance and other customs formalities. negligence in the commission thereof: Provided, that in order to
discourage repetition of such errors, a penalty may be imposed but
Clearly explains who will be a declarant, including in a role of shall not be excessive.
consignee.
Notes: New provision this provision regarding errors in the goods
Under the new law, lodgement of goods declaration can be done by declaration is adopted from the RKC, General Annex, chapter 3,
either (a) importer (b) exporter (c) customs broker (d) a person duly standards 3.39.
empowered to act as agent or attorney in fact for each holder.
The RKC mandates that the customs shall not impose substantial
SEC. 107. Rights and Responsibilities of the Declarant. – The penalties for errors where they are satisfied that such errors are
declarant shall be responsible for the accuracy of the goods inadvertent and that there has been no fraudulent intent or gross
declaration and for the payment of all duties, taxes and other negligence. Where they consider it necessary to discourage a
charges due on the imported goods. The licensed customs broker repetition of such errors, a penalty may be imposed but shall be no
shall likewise be responsible for the accuracy of the goods greater than is necessary for this purpose.
declaration but shall not be responsible for the payment of duties,
taxes and other charges due on the imported goods. This foster free global trade by imposing only slight penalties on
such inadvertent errors.

The declarant shall sign the goods declaration, even when assisted SEC. 109. Application of Information and Communications
Technology. – In accordance with international standards, the
by a licensed customs broker, who shall likewise sign the goods
declaration. Bureau shall utilize information and communications technology to
enhance customs control and to support a cost-effective and
Notes: New provision. Adopted from the RKC, General Annex, efficient customs operations geared towards a paperless customs
chapter 3, standards 3.8 to 3.10 environment.
The Bureau shall communicate, exchange and process trade- and
The RKC requirement is that the declarant shall be held responsible logistics-related information in the national and regional level for
for the customs for the accuracy of the particulars given in the the efficient and prompt clearance of goods and commodities in a
goods declaration and the payment of the duties and taxes. technology-neutral and secured infrastructure for business,
This provision defines clearly that the importer as the declarant is industries, and government.
the one primarily responsible for the truthfulness and accuracy of
The security of data and communication shall be in a manner that is telegram, telex or telecopy. Throughout this rules, the term
consistent with applicable local and internationally accepted electronic data message shall be equivalent to and be used
standards on information security. interchangeably with electronic document
The Bureau shall likewise include as part of its systems and Electronic Document refers to information or the representation of
processes, a disaster preparedness and recovery plan to ensure information, data, figures, symbols, or however represented by
business continuity by maintaining its uptime goal for its electronic which a right is established or an obligation extinguished or by
and online services. which a fact may be proved and affirmed, which is received,
recorded, transmitted, stored, processed, retrieved or produced
For purposes of customs procedures, electronic documents, electronically.
permits, licenses or certificates shall be acceptable and shall have
the legal effect, validity or enforceability as any other document or
legal writing: Provided, that when the prescribed requirements are SEC. 110. Relationship between the Bureau and Third Parties. –
duly complied with, the Bureau shall: Parties may transact business with the Bureau either directly or
through a designated third party to act on their behalf.
(a) Recognize the authenticity and reliability of electronic
documents;
The customs transactions directly transacted by a party shall not be
(b) Transmit approval in the form of electronic data messages or treated less favorably or be subject to more stringent requirements
than those transacted through a designated third party.
electronic documents; and
(c) Require and/or accept payments and issue receipts A designated third party shall have the same rights and obligations
acknowledging such payments through systems using electronic as the designating party when transacting business with the Bureau.
data messages or electronic documents.
Subject to the provisions of existing laws, treaties, convention and
The introduction and implementation of information and international agreements, the Secretary of Finance shall make the
communications technology shall be undertaken with due necessary guidelines for the defined relationship of the Bureau and
consultation with directly affected parties and stakeholders. third parties.
Notes: New provision adopted from the RKC, General annex, SEC. 111. Information of General Application. – All laws, decisions,
chapter 7, standards 7.1 to 7.4 chapter 6, standard 6.9. rulings, circulars, memoranda and orders of the Bureau shall be
The RKC requirement is that the customs shall apply information published in accordance with law.
technology to support customs operations, where it is cost-effective To foster an informed compliance regime, the Bureau shall ensure
and efficient for the customs and for the trade. The customs shall that all relevant and available information of general application
specify the condition for its application. The use of IT is a mandate pertaining to customs operations and procedures which are not
of the ASEAN integration towards the creation of an ASEAN confidential or intended for the Bureau's internal use only, shall be
common market readily accessible to any interested person.
Electronic data message refers to information generated, sent, Any new information, amendment or changes in customs law,
received, or stored by electronic optical or similar means, but not administrative procedures or requirements, shall, as far as
limited to, electronic data interchange (EDI) electronic mail,
practicable, be made readily available prior to its effective date of Notes: New provision, Adopted from the RKC, General Annex,
implementation unless advance notice is precluded. chapter 9, standards 9.8 to 9.9
SEC. 112. Information of a Specific Nature. – The Bureau shall The RKC provides that at the written request of the person
provide information, not otherwise confidential or for the Bureau's concerned customs shall notify their decision in writing with in a
internal use only, relating to a specific matter as may be requested period specified in a national legislation. Where the decision is
by an interested party for legitimate use. adverse to the person concerned the reasons shall be given and the
right of appeal is advice
The Bureau may require the payment of a reasonable fee in
providing such information. The requested information shall be The cited provision should be read in relation to section 1502,
release d within reasonable time from the filing of the request and publication and confidentiality of certain information ruling of this
payment of the required fee. Act.
SEC. 114. Right of Appeal, Forms and Ground. – Any party adversely
affected by a decision or omission of the Bureau pertaining to an
Notes: New provision adopted from the RKC, General Annex, importation, exportation, or any other legal claim shall have the
chapter 9 standards 9.4 to 9.7. right to appeal within fifteen (15) days from receipt of the
The RKC requirement is that when the customs cannot supply questioned decision or order.
information free of charge, any charge shall be limited to the An appeal in writing shall be filed within the period prescribed in
approximate cost of the service rendered. this Act or by regulation and shall specify the grounds thereof.
This provides for rules that the Bureau must adopt in case a third
party is requesting some information on a particular import or The Bureau may allow a reasonable time for the submission of
export customs procedure. supporting evidence to the appeal.

The provision is the consequence use of IT in customs procedure. CHAPTER 3

SEC. 113. Decision and Ruling. – The Bureau shall, consistent with TYPES OF IMPORTATION
Section 1502 of this Act, issue binding and advance decision and
ruling at the request of an interested party on matters pertaining to SEC. 115. Treatment of Importation. – Imported goods shall be
importation or exportation of goods. deemed "entered" in the Philippines for consumption when the
Upon written request of the interested party, the Bureau shall notify goods declaration is electronically lodged, together with any
the party of its decision in writing within the period specified in this required supporting documents, with the pertinent customs office.
Act or by regulation. Should the decision be adverse to the
requesting interested party, the reasons thereof shall be indicated Notes: Lifted from Sec. 205 of the TCCP
and the party shall be advised of the party's right of appeal.
This provides the use of information technology in Bureau’s
The ruling and decision shall be issued by the Bureau within thirty operations by stating that an import for consumption is deemed
(30) days from the submission of the necessary documents and entered when it’s electronically lodged.
information.
Entry as defined in part of section 102 refers to the act, (c) Written or printed goods, negatives or cinematographic films,
documentation and process of bringing imported goods into the photographs, engravings, lithographs, objects, paintings, drawings
customs territory, including goods coming from the free zones; or other representation of an obscene or immoral character;
SEC. 116. Free Importation and Exportation. – Unless otherwise (d) Any goods manufactured in whole or in part of gold, silver or
provided by law or regulation, all goods may be freely imported into other precious metals or alloys and the stamp, brand or mark does
and exported from the Philippines without need for import and not indicate the actual fineness of quality of the metals or alloys;
export permits, clearances or licenses.
Notes: New provision, adopted from the RKC specific, annex b (e) Any adulterated or misbranded food or goods for human
chapter 1 specific standards 1 and 2 consumption or any adulterated or misbranded drug in violation of
relevant laws and regulations;
The RKC provides that clearance for home use shall be governed by
the provisions of this chapter and insofar as applicable by the (f) Infringing goods as defined under the Intellectual Property Code
provisions of the general annex. and related laws; and

Free importation/exportation are goods that may be legally traded (g) All otter goods or parts thereof which importation and
in and out of the country. exportation are explicitly prohibited by law or rules and regulations
issued by the competent authority.
SEC. 117. Regulated Importation and Exportation. – Goods which
are subject to regulation shall be imported or exported only after Notes: Lifted from Sec. 101 of the TCCP with modifications by
securing the necessary goods declaration or export declaration, transferring subparagraphs 1, 5, 6, 9, and 10 to Sec. 11-Ristricted
clearances, licenses, and any other requirements, prior to importation and exportation of this act by adding infringing goods
importation or exportation. In case of importation, submission of as defined under the intellectual property code and related laws.
requirements after arrival of the goods but prior to release from This divides prohibited importations into (1) inherently destructive
customs custody shall be allowed but only in cases provided for by goods, paragraphs a, to d and (2) goods prohibited by law,
governing laws or regulations. paragraphs e, to g.
SEC. 118. Prohibited Importation and Exportation. – The CAO 6-2002 provides the rules and regulations implementing the
importation and exportation of the following goods are prohibited: intellectual property code of the Philippines in relation to the
(a) Written or printed goods in any form containing any matter provisions of the trade related intellectual property rights (TRIPS)
advocating or inciting treason, rebellion, insurrection, sedition which has its objectives of prohibiting the importation of goods that
against the government of the Philippines, or forcible resistance to infringe upon all intellectual property rights.
any law of the Philippines, or written or printed goods containing
any threat to take the life of, or inflict bodily harm up on any person The agreement on trade related aspects of intellectual property
in the Philippines; rights (TRIPS) is an internationally treaty administered by the World
Trade Organization which sets down the minimum standards for
(b) Goods, instruments, drugs and substances designed, intended or most forms of intellectual property (IP) regulation with in all
adapted for producing unlawful abortion, or any printed matter member countries of the (WTO).
which advertises, describes or gives direct or indirect information
where, how or by whom unlawful abortion is committed;
SEC. 119. Restricted Importation and Exportation. – Except when
authorized by law or regulation, the importation and exportation of
the following restricted goods are prohibited:
(a) Dynamite, gunpowder, ammunitions and other explosives,
firearms and weapons of war, or parts thereof;
(b) Roulette wheels, gambling outfits, loaded dice, marked cards,
machines, apparatus or mechanical devices used in gambling or the
distribution of money, cigars, cigarettes or other goods when such
distribution is dependent on chance, including jackpot and pinball
machines or similar contrivances, or parts thereof; (c) Lottery and
sweepstakes tickets, except advertisements thereof and lists of
drawings therein;
(d) Marijuana, opium, poppies, coca leaves, heroin or other
narcotics or synthetic drugs which are or may hereafter be declared
habit forming by the President of the Philippines, or any compound,
manufactured salt, derivative, or preparation thereof, except when
imported by the government of the Philippines or any person duly CHAPTER 4
authorized by the Dangerous Drugs Board, for medicinal purposes;
RELIEF CONSIGNMENT
(e) Opium pipes or parts thereof, of whatever material; and
SEC. 120. Relief Consignment. – Goods such as food, medicine,
(f) Any other goods whose importation and exportation are equipment and materials for shelter, donated or leased to
restricted. government institutions and accredited private entities for free
distribution to or use of victims of calamities shall be treated and
The restriction to import or export the above stated goods shall entered as relief consignment.
include the restriction on their transit. Upon declaration of a state of calamity, clearance of relief
Notes: Lifted from Sec. 101 of the TCCP with modifications by consignment shall be a matter of priority and subject to a simplified
extracting sub paragraphs 1, 5, 6, 9, 10, from prohibited customs procedure. The Bureau shall provide for:
importations. (a) Lodging of a simplified goods declaration or of a provisional or
incomplete goods declaration subject to completion of the
declaration within a specified period;
(b) Lodging, registering and checking of the goods declaration and
supporting documents prior to the arrival of the goods, and their
release upon arrival;
(c) Clearance beyond the designated hours of business or away from
customs offices and waiver of any corresponding charges; and
 BUREAU OF CUSTOMS
(d) Examination and/or sampling of goods only in exceptional
circumstances. CHAPTER 1

The Department of Finance (DOF) and the Department of Social GENERAL ADMINISTRATION
Welfare and Development (DSWD) shall jointly issue the rules and
regulations for the implementation of tins provision. SEC. 200. Chief Officials of the Bureau. – The Bureau shall be
headed by a Commissioner and shall be assisted by at least four (4)
Notes: New provision adopted from the RKC, Specific Annex, but not more than six (6) Deputy Commissioners.
chapter 5 standards 1 to 3 recommended practices 4 to 6.
The Commissioner shall be appointed by the President of the
The RKC mandates that, Relief consignments received as gifts by Philippines.
approved organizations for use by or under the control of such
organizations, or for distribution free of charge by them or under The Deputy Commissioners shall also be appointed by the President
their control, should be admitted free of import duties and free of and at least majority of whom shall come from the ranks of the
economic import prohibitions or restrictions. Bureau.
It simplifies the importation procedures for foreign donations in Notes: Lifted from Sec. 601 of the TCCP with modifications.
case of calamities for providing a simplified goods declaration in
relief consignment. This amended the number of Chief officials of the Bureau of
Customs from five (5) Deputy Commissioners to at least four (4)
Relief consignment refers to goods such as food, medicine, deputy Commissioners, but not more than six with the mandate
equipment and materials for shelter donated as leased to that at least majority of the Deputy Commissioners shall came from
government institutions and accredited private entities, for free the ranks of the Bureau.
distributions to or use of victims of calamities.
SEC. 201. Powers and Functions of the Commissioner. – The
SEC. 121. Duty and Tax Treatment. – Relief consignment, as defined Commissioner shall have the following powers and functions:
in Section 120, imported during a state of calamity and intended for
a specific calamity area for the use of the calamity victims therein, (a) Exclusive and original jurisdiction, to interpret the provisions of
shall be exempt from duties and taxes. this Act, in collaboration with other relevant government agencies,
Notes: New Provision, RKC, recommended practice 4, Annex B, subject to review by the Secretary of Finance;
Chapter 3, relief from import duties and taxes Specific Annex B. (b) Exercise any customs power, duties and functions, directly or
The RKC should provide, Relief from Import duties and Taxes should indirectly;
be granted without regard to the country of origin of goods or the
country from which they arrived except where an international (c) Review any action or decision of any customs officer performed
instrument provides for reciprocity. pursuant to the provisions of this Act;
(d) Review and decide disputed assessments and other matters
related thereto, subject to review by the Secretary of Finance and
TITLE II exclusive appellate jurisdiction of the Court of Tax Appeals (CTA);
(e) Delegate the powers vested under this Act to any customs (e) Facilitation and security of international trade and commerce
officer with the rank equivalent to division chief or higher, except through an informed compliance program
for the following powers and functions:
(f) Supervision and control over the entrance and clearance of
(1) Promulgation of rules and regulations; vessels and aircraft engaged in foreign commerce;
(2) Issuance, revocation or modification of rulings; and (g) Supervision and control over the handling of foreign mails
arriving in the Philippines for the purpose of collecting revenues and
(3) Compromise or abate of customs obligations. preventing the entry of contraband;
(f) Assignment or reassignment of any customs officer subject to the (h) Supervision and control on all import and export cargoes, landed
approval of the Secretary of Finance: Provided, That District or stored in piers, airports, terminal facilities, including container
Collectors and other customs officers that perform assessment yards and freight stations for the protection of government revenue
functions shall not remain in the same area of assignment for more and prevention of entry of contraband;
than three (3) years; and
(i) Conduct a compensation study with the end view of developing
and recommending to the President a competitive compensation
(g) Perform all other duties and functions as may be necessary for and remuneration system to attract and retain highly qualified
the effective implementation of this Act and other customs related personnel, while ensuring that the Bureau remains financially sound
laws. and sustainable;
Notes: New provisions that defines the power and functions of the
Commissioner of the Bureau, among which are 1) Exclusive and (j) Exercise of exclusive original jurisdiction over forfeiture cases
original jurisdiction to interpret the provision of this Act, in under this Act; and
collaboration with other relevant government agencies, subject to (k) Enforcement of this Act and all other laws, rules and regulations
review by the Secretary of Finance; 2) Exercise any customs power, related to customs administration.
duties and functions directly or indirectly and 3 compromise or
abatement customs obligations. SEC. 203. Annual Report of the Commissioner. – The Commissioner
shall submit to the President, the Congress of the Philippines and
SEC. 202. Functions of the Bureau.  – The Bureau shall exercise the the NEDA an annual report on the performance of the Bureau, on or
following duties and functions: before March 31 of the following year.
(a) Assessment and collection of customs revenues from imported SEC. 204. Promulgation of Rules and Regulations. – The
goods and other dues, fees, charges, fines and penalties accruing Commissioner, subject to the approval of the Secretary of Finance,
under this Act; shall promulgate rules and regulations for the enforcement of this
(b) Simplification and harmonization of customs procedures to Act. The Commissioner shall regularly prepare and publish an
facilitate movement of goods in international trade; updated customs manual, and the rules, regulations and decisions
of the Bureau. The Commissioner shall furnish the Congress of the
(c) Border control to prevent entry of smuggled goods; Philippines, the NEDA and the Tariff Commission with electronic
(d) Prevention and suppression of smuggling and other customs copies of department orders, administrative orders, circulars, and
fraud; rules and regulations promulgated pursuant to this Act.
SEC. 205. Copies of Goods Declaration. – The Commissioner shall The principal ports of entry shall be located in Aparri, San Fernando,
regularly furnish the NEDA, the Philippine Statistics Authority (PSA), Manila, Manila International Container Port, Ninoy Aquino
the Bureau of Internal Revenue (BIR.) and the Tariff Commission International Airport, Subic, Clark, Batangas, Legaspi, Iloilo, Cebu,
electronic copies of all customs goods declaration processed and Tacloban, Surigao, Cagayan de Oro, Zamboanga, Davao, Limay and
cleared by the Bureau. such other ports that may be created pursuant to this Act.
Upon request, the Tariff Commission shall have access to, and the For the effective enforcement of the Bureau's functions and without
right to be furnished with copies of liquidated goods declaration hampering business and commercial operations of the ports, sea
and other documents supporting the goods declaration as finally ports and airport authorities and private ports and airport operators
filed in the Commission on Audit (COA). shall provide suitable areas for examination and for other customs
For this purpose, the Bureau shall maintain electronic records of equipment free of charge within, a definite period of time, as
goods declaration and other documents supporting the declaration. agreed with private port and airport operations, if any.
Notes: Lifted from Sec. 701 of the TCCP, with modifications on
paragraph 3 by adding the words and without hampering business
and commercial operations after the term Bureau’s function and the
CHAPTER 2 words within a definite period of time, as agreed with private port
and airport operations, if any, after the term customs equipment
CUSTOMS DISTRICTS AND PORTS OF ENTRY free of charge.
As defined in Sec. 102 (hh) of this Act, Port of entry refers to a
SEC. 206. Customs Districts. – For administrative purposes, the domestic port open to both domestic and international trade,
Philippines shall be divided into as many Customs Districts as including principal ports of entry and subports of entry. A principal
necessary, the respective limits of which may be changed from time port of entry is the chief port of entry of the Customs District
to time by the Commissioner, with the approval of the Secretary of wherein it is situated and is the permanent station of the district
Finance. collector of such port. Subports of entry are under the
administrative jurisdiction of the district collector of the principal
Each Customs District shall be supervised by one (1) District port of entry of the Customs District. Port of entry as used in this act
Collector, assisted by as many Deputy District Collectors as may be shall include airport of entry.
necessary.  The choice of the location of a District Office, its
business hours and the staffing pattern thereof, shall be based on SEC. 208. Power of the President to Open and Close Any Port.  –
the particular requirements of each district. Upon the recommendation of the Secretary of Finance, the
President may open or close any port of entry. Upon closure of a
Notes: Lifted from Sec. 701 of the TCCP, with modifications. This port of entry, the existing personnel shall he reassigned by the
allows the commissioner to establish Customs District as needed. Commissioner, subject to the approval of the Secretary of Finance,
SEC. 207. Ports of Entry. – All ports of entry shall be under the SEC. 209. Assignment of Customs Officers and Employees to Other
supervision and control of a Customs District.  A District Collector Duties. – The Commissioner, with the approval of the Secretary of
shall be assigned in the principal ports of entry while a Deputy Finance, may assign any employee of the Bureau to any port,
District Collector may be assigned to other types of ports of entry. service, division or office of the Bureau within the Bureau's staffing
pattern or organizational structure, or may assign any employee
other duties: Provided, That such assignment shall not affect the the Deputy District Collector. The Deputy District Collector assigned
employee's tenure of office nor result in a change of status, to a sub-port shall be under the supervision and control of the
demotion in rank and/or salary deduction. District Collector of the corresponding principal port.
Notes: Lifted from Sec. 703 of the TCCP, with modifications. SEC. 211. Temporary Succession of Deputy District Collector to
This leaves the authority to assign or re-assigns the Bureau’s Position of Acting District Collector. – In the absence or disability of
employees to the Commissioner upon the approval of the DOH a District Collector or, in case of vacancy, the Deputy District
Secretary, to any customs office, without diminution in salary, Collector shall temporarily discharge the duties of the District
benefits and ranks. Collector. Should there be no Deputy District Collector, the District
Collector shall designate, in writing, a senior ranking customs officer
to temporarily perform the duties of the District Collector. In case
there are two (2) or more senior ranking customs officers with equal
length of service, a drawing of lots shall be undertaken. The District
Collector shall report the designation to the Commissioner within
twenty-four (24) hours after the designation.
SEC. 212. Records to be Kept by Customs Officers. – District
Collectors, Deputy District Collectors, and customs officers acting in
SEC. 210. Duties of the District Collector. – The District Collector such capacities must maintain permanent records of official
shall have the following duties in their assigned Customs District: transactions and turn-over all records and official papers to their
(1) Ensure entry of all imported goods at the customs office; respective successors or other authorized officials.  The records shall
be made available for inspection by other authorized officials of the
(2) Prevent importation and exportation of prohibited goods; Bureau.

(3) Ensure legal compliance of regulated goods and facilitate the If required, the District Collector shall affix the official dry seal of the
flow of legitimate trade; Bureau on all documents and records requiring authentication.

(4) Examine, classify and value imported goods; Notes: Lifted from Sec. 701 of the TCCP, with modifications by
indicating that the duty to keep the records rests on the District
(5) Assess and collect duties, taxes and other charges on imported Collector, Deputy District Collectors, and assigned customs officers.
goods;
As defined in Sec. 102 Customs Officer refers to as distinguished
(6) Hold and dispose imported goods in accordance with this Act; from a clerk or employee, refers to a person whose duty, not being
clerical or manual in nature, of the Bureau.it may also refer to an
(7) Prevent smuggling and other customs fraud; and employee authorized to perform a specific function of the Bureau as
provided in this Act.
(8) Perform other necessary duties that may be assigned by the
Commissioner for the effective implementation of this Act. Sec. 213. Reports of the District Collector to the Commissioner. –
The District Collector shall report to the Commissioner any probable
Subject to the supervision and control of the District Collector, the or initiated litigation within the Customs District and shall submit
duties and functions of the District Collector may be delegated to regular monthly reports on all district transactions.
Notes: Notes: Lifted from Sec. 701 of the TCCP, with modifications
by indicating that the duty to keep the records rests on the District Goods seized by deputized officers pursuant to this section shall be
Collector, Deputy District Collectors, and assigned customs officers. physically turned-over immediately to the Bureau, unless provided
under existing laws, rules and regulations.
For this purpose, mission orders shall clearly indicate the specific
name carrying out the mission and the tasks to be carried out.

Subject to the approval of the Secretary of Finance, the

Commissioner shah1 define the scope, areas covered, procedures
and conditions governing the exercise of such police authority
including custody and responsibility for the seized goods.  The rules
and regulations to this effect shall be furnished to the concerned
government agencies and personnel for guidance and compliance.

All seizures pursuant to this section must be effected in accordance

with the provisions on the conduct of seizure proceedings provided
for in Chapters 3 and 4 of Title XI of this Act.
Notes: Lifted from Sec. 2203 of the TCCP, with modifications by
CHAPTER 3 delegating the authority of defining the scope, areas covered,
procedures and conditions governing responsibility for the seized
EXERCISE OP POLICE AUTHORITY goods to the commissioner instead of the secretary of finance,
subject to the approval of the Secretary of Finance.
214. Persons Exercising Police Authority. – For the effective Sec. 215. Place Where Authority May be Exercised. – All persons
implementation of this Act, the following persons are authorized to exercising police authority as described in the preceding section
effect search, seizure, and arrest shall, only exercise powers within customs premises as provided for
(a) Officials of the Bureau, District Collectors, Deputy District in Section 303 of this Act, and within the limits of the authority
Collectors, police officers, agents, inspectors and guards of the granted by the Commissioner.
Bureau; Port and airport authorities in all ports of entry shall provide
(b) Upon authorization of the Commissioner, officers and members authorized customs officers with unhampered access to all premises
of the Armed Forces of the Philippines (AFP) and national law within their administrative jurisdiction.
enforcement agencies; and Notes: Lifted from Sec.2204 of the TCCP, with modifications.
(c) Officials of the BIR on all cases falling within the regular This reinforces the authority of the commissioner over port and
performance of their duties, when payment of internal revenue airport considered as port of entry, in relation to section 303-
taxes is involved. control over premises used for customs purposes of this act.
All officers authorized by the Commissioner to exercise police
authority shall at all times coordinate with the Commissioner.
Sec. 216. Exercise of Power of Seizure. – Any person exercising Warehouse, store, or any building, structure or enclosure that is
police authority under this Act has the power and duty to seize any used for storage of goods, it shall not be considered as a dwelling
vessel, aircraft, cargo, goods, animal or any other movable property house for purposes of this Act.
when the same is subject to forfeiture or when they are subject of a
fine imposed under this Act. Notes: Copied from Sec. 2208 of the TCCP, with changes by
simplifying what is considered as dwelling house instead of using
Sec. 217. Duty of Officer to Disclose Official Character. – For the verbose language.
proper exercise of police authority, any authorized person shall
Sec. 220. Authority to Search Dwelling House. – A dwelling house
disclose the nature of the authority upon being questioned at the
time of exercise thereof and shall exhibit the corresponding written may be entered and searched only upon warrant issued by a Judge
of a competent court, the sworn application thereon showing
authority issued by the Commissioner.
probable cause and particularly describing the place to be searched
and the goods to be seized.
Notes: Lifted from Sec. 2209 of the TCCP, with modifications,
mandating that only a warrant issued by a judge of a competent
court should be used by the Bureau in entering a dwelling house for
purpose of searching and seizure goods.
This provision follows the constitutional rights of the people inside
their dwelling house .The right of the people to be secure in their
persons, houses, papers, and effects against unreasonable searches
Sec. 218. Authority to Require Assistance and Information. – Any and seizures of whatever nature and for any purpose shall be
person exercising police authority may demand the assistance of inviolable and no search warrant or warrant of arrest shall issue
and request information from the Philippine National Police (PNP), except upon probable cause to be determined personally by the
the AFP and other national law enforcement agencies, when judge after examination under oath or affirmation of the
necessary, to effect any search, seizure or arrest.  It shall be the complainant and the witnesses he may produce, and particularly
duty of any police officer and other national law enforcers to give describing the place to be searched and the persons or things to be
such lawful assistance. seized.

Notes: Lifted from sec. 2207 of the TCCP, with minor changes by Sec. 221. Authority to Search Vessels or Aircrafts and Persons or
adding authority to the person exercising police authority to request Goods Conveyed Therein. – Any person exercising police authority
information from the Philippine National Police, AFP, and other under this Act may board, inspect, search and examine a vessel or
national Law enforcement agency in addition to the provision that aircraft and any container, trunk, package, box or envelope found
they can demand assistance in order to effect any search, seizure or on board, and physically search and examine any person thereon. In
arrest, if necessary. case of any probable violation of this Act, the person exercising
police authority may seize the goods, vessel, aircraft, or any part
Sec. 219. Authority to Enter Properties. – Any person exercising thereof.
police authority may, at any time, enter, pass through, and search
any land, enclosure, warehouse, store, building or structure not Such power to search includes removal of any false bottom,
principally used as a dwelling house. partition, bulkhead, or any other obstruction for the purpose of
When a security personnel or any other employee lives in the uncovering any concealed dutiable or forfeitable goods.
 may demand evidence of payment of duties and taxes on imported
The proceeding herein authorized shall not give rise to any claim for goods openly for sale or kept in storage. In the event that the
damage caused to the goods, vessel or aircraft, unless there is gross interested party fails to produce such evidence within fifteen (15)
negligence or abuse of authority in the exercise thereof. days, the goods may be seized and subjected to forfeiture
proceedings: Provided, That during the proceedings, the interested
Sec. 222. Authority to Search Vehicles, Other Carriers, Persons and party shall be given the opportunity to prove or show the source of
Animals. – Upon reasonable cause, any person exercising police the goods and the payment of duties and taxes thereon: Provided,
authority may open and examine any box, trunk, envelope, or other further, That when the warrant of seizure has been issued but
container for purposes of determining the presence of dutiable or subsequent documents presented evidencing proper payment are
prohibited goods. This authority includes the search of receptacles found to be authentic and in order, the District Collector shall,
used for the transport of human remains and dead animals. Such within fifteen (15) days from the receipt of the motion to quash or
authority likewise includes the power to stop, search, and examine recall the warrant, cause the immediate release of the goods seized,
any vehicle or carrier, person or animal suspected of holding or subject to clearance by the Commissioner: Provided, finally, That
conveying dutiable or prohibited goods. the release thereof shall not be contrary to law.

Notes; Lifted from Sec. 2211 of the TCCP, with minor amendment Notes: Lifted from Sec. 2536 of the TCCP, with amendments. This
by replacing the word “right” to the authority in the title and states that a customs officer may inspect and visit the premises of
including the search of receptacles used for the transport of human the importer or exporter only upon the authorization of the
remains and dead animals in the authority of the person exercising Bureau’s Commissioner.
police authority.

Sec. 223. Authority to Search Persons Arriving From Foreign TITLE III

Countries. – Upon reasonable cause, travelers arriving from foreign
countries may be subjected to search and detention by the customs CUSTOMS JURISDICTION AND CUSTOMS CONTROL
officers.  The dignity of the person under search and detention shall
be respected at all times. Female inspectors may be employed for CHAPTER 1
the examination and search of persons of their own sex.
CUSTOMS JURISDICTION
Notes: Lifted from Sec. 2212 of the TCCP, with modifications on the
part of travelers arriving from foreign countries that they may  Sec. 300. Customs Jurisdiction. – For the effective implementation
subjected to search and the detention by the customs officer only of this Act, the Bureau shall exercise jurisdiction over all seas within
for a “reasonable clause”. A provision is added in order to respect at Philippine territory and all coasts, ports, airports, harbors, bays,
all times the dignity of the person under search and detention. rivers and inland waters whether navigable or not from the sea and
Moreover, the new provision is now gender sensitive by mandating any means of conveyance.
that female inspector may be employed for the examination and
search of female traveler. The Bureau shall pursue imported goods subject to seizure during
its transport by land, water and air and shall exercise jurisdiction as
Sec. 224. Power to Inspect and Visit. – The Commissioner or any may be necessary for the effective enforcement of this Act. When a
customs officer who is authorized in writing by the Commissioner, vessel or aircraft becomes subject to seizure for violation of this Act,
a pursuit of such vessel or aircraft which began within the territorial The Bureau shall seek to cooperate and conclude mutual
waters or air space may continue beyond the same, and the vessel administrative assistance agreements with other customs
or aircraft may be seized in the high seas or international air space. administrations to enhance customs control. The Bureau shall
consult, coordinate, and cooperate with other government
Notes: Lifted from Sec. 603 of the TCCP, with modifications. regulatory agencies, free zones authorities, and the customs
Customs jurisdiction is the authority vested by law in the Bureau stakeholders, in general, to enhance customs control.
over territory, facilities, at legal processes and procedures.
Notes: New provision adopted from the RKC, General Annex,
Chapter 6, standards 6.1 and 6.7 Customs control is the power to
exercise customs jurisdiction. The new provision mandate the full of
risk management principles in customs control, including maximum
use of account-based post entry audit clearances.

Sec. 302. Enforcement of Port Regulation of the Bureau of

Quarantine. – Customs officials and employees shall cooperate with
the quarantine authorities in the enforcement of the port
quarantine regulations promulgated by the Bureau of Quarantine
and shall give effect to the same insofar as connected with matters
of shipping and navigation.

Sec. 303. Control Over Premises Used for Customs Purposes. – The

Bureau shall, for customs purposes, have exclusive control, direction
and management of customs offices, facilities, warehouses, ports,
airports, wharves, infrastructure and other premises in the Customs
Districts, in all cases without prejudice to the general police powers
CHAPTER 2 of the local government units (LGUs), the Philippine Coast Guard
and of law enforcement agencies in the exercise of their respective
CUSTOMS CONTROL functions.

Sec. 301. Customs Control Over Goods. – All goods, including means Sec. 304. Power of the President to Subject Premises to Customs
of transport, entering or leaving the customs territory, regardless of Jurisdiction. – When public interest requires, the President may, by
whether they are liable to duties and taxes, shall be subject to executive order, declare any public wharf, landing place,
customs control to ensure compliance with this Act. infrastructure, street or land, in any port of entry under the
jurisdiction of the Bureau as may be necessary, for customs
In the application of customs control, the Bureau shall employ purposes and/or to authorize a port or terminal operator to transfer
audit-based controls and risk management systems, use automation overstaying cargoes in an inland depot or terminal.
to the fullest extent possible, and adopt a compliance measurement
strategy to support risk management. Sec. 305. Trespass or Obstruction of Customs Premises. – No
person shall enter or obstruct a customs office, warehouse, port,
airport, wharf, or other premises under the control of the     Bureau
without prior authority, including the streets or alleys where these This authorizes the bureau, to establish temporary storage prior to
faculties are located. goods declaration.

Notes: Lifted from Sec. 2201 of the TCCP, with modifications. A TITLE IV
warehouse is the facility used for the lodgement and storage of
goods, and may include any structure use to hold goods, stores or IMPORT CLEARANCE AND FORMALITIES
wares temporarily or a length of time.
CHAPTER 1
Sec. 306. Special Surveillance for the Protection of Customs
Revenue and Prevention of Smuggling. – The Bureau shall conduct GOODS DECLARATION
surveillance on vessels or aircrafts entering Philippine territory and
on imported goods entering the customs office: Provided, That the Sec. 400. Goods to be Imported through Customs Office. – All goods
function of the Philippine Coast Guard to prevent and suppress the imported into the Philippines shall be entered through a customs
illegal entry of these goods, smuggling and other forms of customs office at a port of entry, or may be admitted to or removed from a
fraud and violations of maritime law and its proper surveillance of free zone as defined in this Act, as the case may be.
vessels entering and/or leaving Philippine territory as provided in
Republic Act No. 9993, otherwise known as the "Philippine Coast Notes: lifted from Sec. 1201 of the TCCP, with modifications on the
Guard Law of 2009", shall continue to be in force term “goods” instead of articles and admission and removal of
imported goods in free zone.
Notes: Lifted from Sec. 2202 of the TCCP, with modifications as to
the law strengthening the Philippine Coast Guard. The importance of this provision is that it recognizes free zones as
port of entry, in accordance with the RKC.
This mandates that the BOC and the Coast Guard must coordinate in
order to suppress smuggling and other forms of customs fraud of Sec. 401. Importations Subject to Goods Declaration. – Unless
violations of maritime law. otherwise provided for in this Act, all imported goods shall be
subject to the lodgement of a goods declaration. A goods
Sec. 307. Temporary Storage of Goods. – Subject to the rules and declaration may be for consumption, for customs bonded
regulations to be issued by the Secretary of Finance, the warehousing, for admission, for conditional importation, or for
Commissioner shall establish a system for temporary storage of customs transit.
imports prior to goods declaration in case of abandoned or
overstaying-goods. Notes: Lifted from Sec. 1302 of the TCCP, with modifications.
Instead of import entry, it is now called goods declaration.
Notes: Adopted from the RKC, Specific Annex A, chapter 2, Specific
standards 1 to 6. This enumerates the classification of goods subject to declaration.
Paragraph (y) of Sec. 102 defines goods declaration as statement
The RKC mandates that the Customs Shall authorize the made in the manner prescribed by the Bureau and other
establishment of temporary stores whenever they deemed it appropriate agencies, by which the persons concerned indicate the
necessary to meet the requirements of the trade. procedure to be observed in the application for the entry or
admission of imported goods and the particulars of which the
customs administration shall require.
Sec. 402. Goods Declaration for Consumption. – All goods If the Bureau accepts a provisional goods declaration, the duty
declaration for consumption shall be cleared through a formal entry treatment of the goods shall not be different from that of goods
process except for the following goods which shall be cleared with complete declaration. 'I Goods under a provisional goods
through an informal entry process; declaration may be released upon posting of any required security
equivalent to the amount ascertained to be the applicable duties
(a) Goods of a commercial nature with Free on Board (FOB) or Free and taxes.
Carrier at (FCA) value of less than fifty thousand pesos (P50,
000.00). Every three (3) years after the effectivity of this Act, the Notes: New provision adopted from the RKC, General Annex, and
Secretary of Finance shall adjust this amount as provided herein to Chapter 3, standards 3.13, 3, 14 and 3.17.
its present value, using the Consumer Price Index (CPI) as published
by the PSA; and The RKC requirement is that – where for reasons deemed valid by
the customs, the declarant does not have all the information
(b) Personal and household effects or goods, not in commercial required to make the goods declaration, a provisional or incomplete
quantity, imported in a passenger's baggage or mail. goods declaration shall be allowed to be lodged, provided that it
contains the particulars deemed the necessary by the Customs and
The Commissioner may adjust the value of goods of commercial that the declarant undertakes to complete it within a specific
nature that shall be cleared through an informal entry process period.
without prejudice to the periodic adjustment period in
subparagraph (a) of this section. This fosters free trade which is the aim of the RKC and contains a
provision regarding a time limit of 45 days in order to make a
All importations entered through a formal entry process shall be provisional good declaration.
covered by a letter of credit or any verifiable commercial document
evidencing payment or in cases where there is no sale for export, by As worded under this act goods declaration may be lodged and
any commercial document indicating the commercial value of the provisionally accepted notwithstanding incompleteness of declared
goods. information or supporting import documents. As provided in
paragraph 2, once accepted, provisional goods declaration prevents
Notes: Lifted from Sec. 13012 of the TCCP, with modifications and abandonment to take place.
take into account RKC provisions that leaves the procedure for
imports instead for consumption to the country of importation. Sec. 404. Owner of Imported Goods. – All goods imported into the
Philippines shall be deemed to be the property of the consignee or
Sec. 403. Provisional Goods Declaration. – Where the declarant the holder of the bill of lading, airway bill or other equivalent
does not have all the information or supporting documents required transport document if duly endorsed by the consignee therein, or, if
to complete the goods declaration, the lodging of a provisional consigned to order, duly endorsed by the consignor. The
goods declaration may be allowed: Provided, That it substantially underwriters of abandoned goods and the salvors of goods saved
contains the necessary information required by the Bureau and the from wreck at sea, coast, or in any area of the Philippines, may be
declarant undertakes to complete the information or submit the regarded as the consignees.
supporting documents within forty-five (45) days from the filing of
the provisional goods declaration, which period may be extended by Notes: Lifted from Sec. 203 of the TCCP, with modifications.
the Bureau for another forty-five (45) days for valid reasons.
The RKC provides that a declarant is any person who has the right to This emphasizes that government importations shall pay taxes and
dispose the goods, he is also responsible for the accuracy of the duties, except those conditionally tax and/or duty exempt
particulars in the declaration. It is recommended that this provision importation as provided for in section 800 of this Act.
be deleted because the government may consider the declarant as
the owner of the goods for importation purposes. Sec. 407. Goods Declaration and Period of Filing. . – As far as
practicable, the format of the goods declaration shall conform with
Sec. 405. Liability of Importer for Duties and Taxes. – Unless international standards. The data required in the goods declaration
relieved by laws or regulations, the liability for duties, taxes, fees, shall be limited to such particulars that are deemed necessary for
and other charges attached to importation constitutes a personal the assessment and collection of duties and taxes, the compilation
debt due and demandable against the importer in favor of the of statistics and compliance with this Act. The Bureau shall require
government and shall be discharged only upon payment of duties, the electronic lodgement of the goods declaration.
taxes, fees and other charges. It also constitutes alien on the
imported goods which may be enforced while such goods are under The Bureau shall only require supporting documents necessary for
customs' custody. customs control to ensure that all requirements of the law have
been complied with. Translation of supporting documents shall not
Notes: Lifted from Sec. 1204 of the TCCP, with modifications. be required except when necessary.

The lifeblood theory constitutes the theory of taxation which Goods declaration must be lodged within fifteen (15) days from the
provides that the existence of the government is a necessity; the date of discharge of the last package from the vessel or aircraft. The
main source of revenue of the government is taxes this are the life- period to file the goods declaration may, upon request, be extended
blood of the government. The primary purpose of taxation is to on valid grounds for another fifteen (15) days: Provided, That the
generate funds for the state to finance the needs of the citizenry request is made before the expiration of the original period within
and to advance the common wealth. The government chiefly reliefs which to file the goods declaration: Provided, however, That the
on taxation to obtain that means to carry on its operation. period of the lodgement of the goods declaration maybe adjusted
by the Commissioner.
Pursuant to section 131 of NIRC as amended, excise taxes on
imported articles shall be paid by the owner or importer to the
customs office. Sec. 408. Lodgement and Amendment of Goods Declaration. – The
Bureau shall permit the electronic lodgement of the goods
SBC. 406. Importations by the Government. – Except those declaration at any designated customs office. The Bureau shall, for
provided for in Section 800 of this Act, all importations by the valid reason and under terms and conditions provided by
government for its own use or that of its subordinate branches or regulation, permit the declarant to amend the goods declaration
instrumentalities, or corporations, agencies or instrumentalities that has already been lodged: Provided, that the request to amend
owned or controlled by the government, shall be subject to the the goods declaration, together with the intended amendments,
duties, taxes, fees and other charges under this Act. must be received prior to final assessment or examination of the
goods.
Notes: Lifted from Sec. 1205 of the TCCP, with modifications.
Notes: New provision adopted from the RKC, General Annex,
Chapter 3, and Standards 3.27 to 3. 29.
This is an RKC mandated provision that the customs shall permit the SEC. 410. Entry of Goods in Part for Consumption and in Part for
declarant to amend the goods declaration that has been already Warehousing. – Goods declaration covered by one bill of lading or
lodged, provided when the request is received they have not begun airway bill over goods which are meant in part for consumption and
to check the goods declaration or to examine the goods. in part for warehousing may be both entered simultaneously for
release at the port of entry.
Under this provision, a declarant can now amend its goods
declaration prior to final assessment or examination of goods for SEC. 411. Contents of Goods Declaration. – Goods declaration shall
valid reason. contain the names of the consignee, importing vessel or aircraft
port of departure, port of destination and date of arrival, the
Valid reasons may be: 1) clerical error or any other discrepancy in number and marks of packages, or the quantity, if in bulk, the
the electronic lodgement without any intent to commit fraud or, 2) nature and correct commodity description of the goods contained
to correct simple clerical errors between the data manifest and the therein, its value as set forth in a proper invoice, and such other
goods declaration. information as may be required by rules and regulations.  Where
the declarant does not have all the information required to make
SEC. 409. Advance Lodgement and Clearance. – The Bureau may the goods declaration, a provisional or incomplete goods
provide for the lodgement and clearance of goods declaration and declaration shall, for certain cases and for reasons deemed valid by
supporting documents prior to the arrival of the goods under such the Bureau, be allowed to be lodged: Provided, That it contains the
terms and conditions as may be provided by rules and regulations to particulars deemed necessary by the Bureau for the acceptance of
be promulgated under this Act. the entry filed and that the declarant undertakes to complete it
within forty-five (45) days from the filing of the provisional goods
Notes: New provision adopted from the RKC, General Annex, declaration in accordance with Section 403 of this Act
Chapter 3, Standards 3.21. It mandates that under certain
conditions to be laid down by the Bureau, Goods declaration may be
lodged in advance prior to the arrival of the goods subject to terms
and conditions.

The RKC mandates that the National Legislation shall make

provisions for the lodging and registering or checking of the goods SEC. 412. Statements to be Provided in the Goods Declaration. –
declaration and supporting documents prior to arrival of the goods. No entry of imported goods shall be allowed unless the goods
declaration has been lodged with the Bureau.  The goods
In order for traders to access information about permits and declaration shall, under penalties of falsification or perjury, contain
licenses they need to comply with to export or import a product, the following statements:
the ASEAN Trade Repository, has been created. It is a web portal
that contains links to information or preferential tariffs offered (a) The invoice and goods declaration contain an accurate and
under ATIGA and other Agreement of ASEAN with its Dialogue faithful account of the prices paid or payable for the goods and
Partners and rules of origin. It also has information in most favored other adjustments to the price actually paid or payable, and that
nation tariffs, best practices in trade facilitation, including advance nothing has been omitted therefrom or concealed whereby the
rulings, tariff classification and origin valuation. government of the Republic of the Philippines might be defrauded
of any part of the duties and taxes lawfully due on the goods; and
(b) To the best of the declarant's information and belief, all the SEC. 414. Commercial and Noncommercial Invoice. – Commercial
invoices and bills of lading or airway bills relating to the goods are invoice of imported goods shall contain the following:
the only ones in existence relating to the importation in question, (a) The agreed price paid or to be p aid for the goods;
and that these documents are in the same state as when they were
received by the declarant, and the declaration thereon are in all (b) The adjustments to the price paid or to be paid as defined in
respects genuine and true. Section 701(1) of this Act, if not yet included in the invoice, as may
be applicable;
Goods declaration shall be submitted electronically pursuant to
Republic Act No. 8792, otherwise known as the "Electronic (c) The names of the buyer, seller, and the time and place of sale;
Commerce Act of 2000". Such declarations when printed and
certified by a competent customs officer as a faithful reproduction (d) The port of entry;
of the electronic submission shall be considered as actionable
documents for purposes of prosecuting a declarant if the (e) A sufficient description to enable the accurate identification of
declarations are found to be fraudulent. goods for tariff classification, customs valuation, and statistical
purposes, indicating the correct commodity description, in
Notes: Copied from Sec. 1304 of TCCP, with modifications. Adopted customary term or commercial designation, the grade or quality,
from the RKC, General Annex, Chapter 3, standards 3.12. numbers, marks or symbols under which they are sold by the seller
or manufacturer, together with the marks and number of packages
This mandates that the Bureau shall limit the data required in the in which the goods are packed;
goods declaration to only such particulars as are deemed necessary
for assessment and collection of duties and taxes, the compilation (f) The quantities in the weights or measures of the goods shipped;
of statistics and the application of customs laws. and

(g) Any other fact deemed necessary for the proper examination,
customs valuation, and tariff classification of the goods as may be
prescribed by rules and regulations.

SEC. 413. Description of Goods. – Under such terms and conditions

prescribed under the rules and regulations, the description of the To the extent possible, the above requirements shall also apply to
goods in the goods declaration must be sufficient and specific in goods imported but not covered by sale, such as goods on
detail to enable the goods to be identified for customs valuation, consignment or lease, samples, or donations, covered by a
statistical purposes, and classification to the appropriate tariff consignment, pro forma invoice, or other noncommercial invoice.
heading and subheading in the currency of the invoice, and in such
other particulars necessary for the proper assessment and Notes: Lifted from Sec. 1308 of the TCCP, with modifications
collection of duties and taxes. The quantity and value of each of the detailing the contents of the commercial invoice simplifying the
several classes of goods shall be separately declared according to required content thereof and with reference to transaction value of
their respective headings or subheadings and the totals of each goods under section 701 of this Act.
heading or subheading shall be duly shown.
As a guide, as defined in business dictionary, commercial invoice remains of the wreck upon proper examination and inspection. The
refers to documents required by customs to determine true value of remains of a wrecked vessel shall include not only its hull and
the imported goods, for assessment of duties and taxes. A rigging, but also all sea stores, goods and equipment, such as sails,
commercial invoice must identify the buyer and seller, and clearly ropes and chain anchors.
indicate the; 1) date and terms of sale; 2) quantity weight and/or
value of the shipment 3) type of packaging 4) complete description SEC. 418. Derelicts and Goods from Abandoned Wrecks. – Derelicts
of goods 5) unit value and total value and 6) insurance, shipping and and all goods recovered from sea or from abandoned wrecks shall
other charges ( as applicable). be under the jurisdiction of the port where the goods arrive, and
shall be retained in the custody of the Bureau. If not claimed by the
SEC. 415. Mode of Payment and Terms of Trade. – Subject to owner, underwriter or salvor, the same shall be deemed as property
existing laws and rules on foreign currency exchange, the of the government.
internationally accepted standards and practices on the mode of
payment or remittance covering import and export transactions, When such goods are brought into port by lighters or other craft,
including standards developed by international trading bodies such each vessel shall submit a manifest of their respective cargo.
as the International Chamber of Commerce (ICC) on trading terms The customs officer nearest the scene of the wreck shall take charge
(incoterms) and on international letters of credit such as the of the goods saved and shall give immediate notice to the District
Uniform Customs and Practice for Documentary Credits (UCPDC), Collector or the nearest customs office.
shall be recognized.
In order to prevent any attempt to commit fraud, the District
SEC. 416. Examination of Samples. – Customs officers shall see to it Collector shall be represented at the salvage of the cargo by
that representative samples taken during examination shall be customs officers who shall examine and receive the inventory made
properly receipted for and retained within a reasonable period of on the cargo.
time.  The quantity and value of the samples taken shall be noted in
the specified box of goods declaration or electronic form. Such Derelicts and goods salvaged from foreign vessels or aircrafts
samples shall be duly labeled as will definitely identify them with recovered from sea or wreck are prima facie dutiable and may be
the importation for which they are taken. entered for consumption or warehousing. If claimed to be of
Philippine production, and consequently conditionally duty-free,
proof must be submitted as in ordinary cases of reimportation of
goods. Foreign goods landed from a vessel or aircraft in distress is
SEC. 417. Forwarding of Cargo and Remains of Wrecked Vessel or dutiable if sold or disposed of in the Philippines.
Aircraft. – When vessels or aircrafts are wrecked within the Before any goods taken from a recent wreck are admitted to the
Philippines, the original owners or consignees of the cargo, or by its customs territory, the same shall be appraised, and the owner or
underwriters, in ease of abandonment, may seek approval from the importer shall have the same right to appeal as in ordinary
Bureau to forward the goods saved from the wreck to the ports of importation.
destination without going through, the customs office in the district
in which the goods were cast ashore or unloaded. Upon approval, No part of a Philippine vessel or aircraft or its equipment, wrecked
the goods may be forwarded with particular manifests and duly either in Philippine or foreign waters, shall be subject to duty.
certified by a customs officer in charge of the goods.

The owner of the vessel or aircraft may be permitted to export the

 CHAPTER 2
(b) The goods are subject to an Alert Order issued by competent
EXAMINATION OF GOODS authority;

SEC. 419. Examination of Goods. – Examination of goods, when (c) The goods are electronically selected for physical examination;
required by the Bureau, shall be conducted immediately after the
goods declaration has been lodged. Priority in the examination shall (d) There are issues and controversies surrounding the goods
be given to live animals, perishable goods and other goods requiring declaration and the import clearance process; or
immediate examination.
(e) The importer or declarant requests for the examination of the
Whenever necessary, a system of coordination and joint goods.
examination of goods shall be established by the Bureau and other
regulatory agencies under existing laws and regulations. The Commissioner may exempt from physical examination the
goods of authorized economic operators or of those provided for
As a general rule, the Bureau may examine the goods in the under any existing trade facilitation program of the Bureau.
presence of the declarant or an authorized representative. 
Examination of the goods in the absence of the declarant or Physical examination, when required, shall be conducted in an
authorized representative may be allowed in exceptional expeditious manner.
circumstance and for valid and justifiable grounds, as may be
defined by regulations promulgated by the Secretary of Finance, SEC. 421. Duties of Customs Officer Tasked to Examine the
upon recommendation of the Commissioner.  The Bureau may Imported Goods., – In the examination, classification, and valuation
require the declarant to be present or to be represented at the of the goods, the customs officer shall:
examination of the goods or to render any assistance necessary to
facilitate the examination. (a) Determine whether the packages for examination and their
contents are in accordance with the goods declaration, invoice and
The Bureau shall take samples of the goods only when needed to other pertinent documents;
establish the tariff description and value of goods declared, or to
ensure compliance with this Act. Samples drawn shall be as minimal (b) Take samples of the imported goods for examination or
as possible. laboratory analysis when necessary;

(c) Issue a receipt for a sample taken and retained during

examination; and
SEC. 420. Conditions for Examination. – Pursuant to internationally
accepted standards, the Bureau may adopt nonintrusive (d) Report whether the goods have been correctly declared as to
examination of goods, such as the use of x-ray machines. value, quantity, measurement, weight, tariff classification and not
imported contrary to law.
Physical examination of the goods shall be conducted when:
Failure on the part of the customs officer to perform the above
(a) It is directed by the Commissioner on account of a derogatory duties shall be penalized according to Section 1431 of Title XIV of
information; this Act.
 tentative and such assessment shall be completed upon final
SEC. 422. Customs Expenses Constituting Charges on Goods. – The readjustment and submission by the declarant of the additional
cost of examination shall be for the account of the importer or information or documentation required to complete the declaration
exporter, subject to proper accounting and documentation.  All within the period provided in Section 403 of this Act.
expenses incurred by the Bureau for the handling or storage of
goods and other necessary operations shall be chargeable against SEC. 427. Readjustment of Appraisal, Classification or Return. –
the goods, and shall constitute a lien thereon. Such appraisal, classification or return, as finally passed upon and
approved or modified by the District Collector, shall not be altered
CHAPTER 3 or modified in any manner, except:
ASSESSMENT AND RELEASE
(1) Within one (1) year after payment of the duties, upon statement
SEC. 423. Determination of the De Minimis Value. – No duties and of error in conformity with Section 912 of this Act, as approved by
taxes shall be collected on goods with an FOB or FCA value often the District Collector;
thousand pesos (P10,000.00) or below. The Secretary of Finance
shall adjust the de minimis value as provided herein every three (3) (2) Within fifteen (15) days after such payment, upon request for
years after the effectivity of this Act.  The value herein stated shall reappraisal or reclassification addressed to the Commissioner by the
be adjusted to its present value using the CPI, as published by the District Collector, if the appraisal or classification is deemed to be
PSA. low;

SEC. 424. Duty of Customs Officer Tasked to Assess Imported (3) Upon request for reappraisal and/or reclassification, in the form
Goods. – For purposes of assessing duties and taxes on imported of a timely protest addressed to the District Collector by the
goods, the customs officer shall classify, value, and determine the interested party if the latter should be dissatisfied with the appraisal
duties and taxes to be paid. The customs officer shall prepare and or return; or
submit an assessment report as established under this Act.
(4) Upon demand by the Commissioner after the completion of
SEC. 425. Tentative Assessment of Goods Subject to Dispute compliance audit in accordance with the provisions of this Act.
Settlement. – Assessment shall be deemed tentative if the duties
and taxes initially assessed are disputed by the importer. The SEC. 428. Assessment of Duty on Less Than Entered Value. – Duty
assessment shall be completed upon final readjustment based on shall not be assessed in any case upon an amount less than the
the tariff ruling in case of classification dispute, or the final entered value, unless by direction of the Commissioner in cases
resolution of the protest case involving valuation, rules of origin, when the importer certifies at the time of entry that the entered
and other customs issues. value is higher than the dutiable value and that the goods are so
entered in order to meet increases made by the appraiser in similar
The District Collector may allow the release of the imported goods cases then pending re-appraisement; and the lower assessment
under tentative assessment upon the posting of sufficient security shall be allowed only when the importer's contention is sustained
to cover the applicable duties and taxes equivalent to the amount by a final decision, and shall appear that such action of the importer
that is disputed. was taken in good faith after due diligence and inquiry.

SEC. 426. Tentative Assessment of Provisional Goods Declaration. – SEC. 429. Final Assessment. – Assessment shall be deemed final
Assessment of a provisional goods declaration shall be deemed
fifteen (15) days after receipt of the notice of assessment by the charges due on the goods unless the person to whom the release
importer or consignee. was authorized assumes such liability.

SEC. 430. Period of Limitation. – In the absence of fraud and when SEC. 435. Withholding Release Pending Satisfaction of Lien. –
the goods have been finally assessed and released, the assessment When the District Collector is duly notified through a lawful order of
shall be conclusive upon all parties three (3) years from the date of a competent court of a Hen for freight, lighterage or general
final payment of duties and taxes, or upon completion of the post average upon any imported goods, the District Collector shall
clearance audit. withhold the release of the goods unless the claim has been paid or
secured.  In case of disagreement, the District Collector may release
SEC. 431. Release of Goods after Payment of Duties and Taxes. – the goods after payment of the freight and lighterage due on the
Goods declared shall be released when duties and taxes and other quantity or weight landed as actually determined.
lawful charges have been paid or secured and all the pertinent laws,
rules and regulations have been complied with. SEC. 436. Fine or Surcharge on Goods. – Goods subject to any fine
or surcharge shall be released only after the payment of the fine or
When the Bureau requires laboratory analysis of samples, detailed surcharge.
technical documents or expert advice, it may release the goods
before the results of such examination are known after posting of CHAPTER 4
sufficient security by the declarant.
SPECIAL PROCEDURES
SEC. 432. Release of Goods to the Holder of Bill of Lading or
Airway Bill. – Any customs officer who releases goods to the SEC. 437. Traveler and Passenger Baggage. – The Bureau shall
consignee or lawful holder of the bill of lading or airway bill shall not provide simplified customs procedure for traveler and baggage
be liable for any defect or irregularity in its negotiation unless the processing based on international agreements and customs best
customs officer has notice of the defect or irregularity. practices.

SEC. 433. Release of Goods Without Production, of Bill of Lading or Travelers shall be permitted to export goods for commercial pm-
Airway Bill. – No customs officer shall release goods to any person poses, subject to compliance with the necessary export formalities
without the submission of the bill of lading or airway bill covering and payment of export duties, taxes and charges, if any.
the goods, except on written order of the carrier or agent of the
vessel or aircraft, in which case neither the government nor the SEC. 438. Postal Item or Mail. – Postal item or mail shall include
customs officer shall be held liable for any damage arising from letter-post and parcels, as described in international practices and
wrongful release of the goods: Provided, That when the release of agreements, such as the Acts of the Universal Postal Union (AUPU),
goods is made against such written order, the customs officer shall currently in force.
require the submission of a copy of the bill.

A simplified procedure shall be used in the clearance of postal item

SEC. 434. Release of Goods Upon Order of Importer. – An importer or mail, including the collection of the applicable duties and taxes
may issue a written authorization for the release of goods stored in on such items or goods.
a bonded warehouse to another person.  Such authorization shall
not relieve the importer from liability for the duties, taxes and other When all the information required by the customs are available in
the special declaration form for postal items as provided in the
AUPU or similar international agreements, the special declaration  EXPORT CLEARANCE AND DECLARATION
form and supporting documents shall be the goods declaration.
However, a separate goods declaration shall be required for the SEC. 500. Export Declaration. – All goods exported from the
following: Philippines, whether subject to export duty or not, shall be declared
through a competent customs office through an export declaration,
(a) Goods whose value fall within the level that the Commissioner duly signed electronically or otherwise by the party making the
has determined to be taxable and thus must be covered by a goods declaration.
declaration;
The description of the goods in the export declaration must contain
(b) Prohibited and regulated goods; sufficient and specific information for statistical purposes as well as
for the proper valuation and classification of the goods.
(c) Goods, the exportation of which must be certified; and
SEC. 501. Export Product to Conform to Standard Grades. – If
(d) Imported goods under a customs procedure other than for applicable, products shall conform to export standard grades
consumption. ' established by the government.  The packaging of the said goods
shall likewise be labeled and marked, in accordance with related
SEC. 439. Express Shipment – The Bureau shall provide simplified laws and regulations.  Export declaration may not be granted for
customs procedures based on international standards and customs goods violating the aforementioned requirements.
best practices for air shipments considered as time-sensitive and
requiring pre-arrival clearance.  Express shipments of accredited air SEC. 502. Lodgement and Processing of Export Declaration. – The
express cargo operators may be released prior to the payment of Bureau shall promulgate rules and regulations to allow manual and
the duty, tax and other charges upon posting of a sufficient security. electronic lodgement and processing of the export declaration.

SEC. 440. Establishment of Advance Customs Clearance and SEC. 503. Rules of Origin.. – Pursuant to the applicable rules of
Control Program. – The Bureau may establish and implement a origin, the Bureau or any other designated government agency may
voluntary program on advance customs clearance and control on determine the origin of goods for export and, if appropriate, issue
containerized cargoes. The details of the voluntary advance customs the corresponding certificates of origin.  However, the exporter may
clearance shall be subject to the rules and regulations to be issued adopt a self-certification system: Provided, That it is duly accredited
by the Bureau after conducting the necessary public hearings and by the Bure au or any other authorized government agencies.
consultations with the concerned sectors.

TITLE V
TITLE VI
EXPORT CLEARANCE AND FORMALITIES
CUSTOMS TRANSIT AND TRANSSHIPMENT
CHAPTER 1
CHAPTER 1
 duties and taxes at the port of entry: Provided, That any conditions
CUSTOMS TRANSIT and security required by the Bureau are complied with.

SEC. 600. Customs Transit in the Customs Territory. – Customs Goods for consumption and other goods intended for customs
transit within the customs territory shall be allowed for goods transit not covered by the immediately preceding paragraph shall
except those intended for consumption, to be transported as be subject to the payment of duties and taxes at the port of
follows: discharge.

(a) From port of entry to another port of entry as exit point for SEC. 602. Carrier's Security. – Carriers that transport imported
outright exportation; goods that shall be placed under customs transit from a port of
entry to other ports, shall post a general transportation security
(b) From port of entry to another port of entry or inland customs amounting to at least fifty thousand pesos (P50,000.00). Such
office; security shall ensure the complete and immediate delivery of goods
to the customs officer at the port of destination and the payment of
(c) From inland customs office to a port of entry as exit point for pertinent customs charges and expenses and other transfer costs.
outright exportation; and The amount of the security may be adjusted by the Commissioner,
upon approval of the Secretary of Finance.
(d) From one port of entry or inland customs office to another port
of entry or inland customs office.
CHAPTER 2
A transit permit is required for goods transported under customs
transit. However, transfer of goods in customs transit from one CUSTOMS TRANSSHIPMENT
means of transport to another shall be allowed: Provided, That any
customs seal or fastening is not broken or tampered. SEC. 603. Customs Transshipment. – Goods admitted for
transshipment shall not be subject to the payment of duties and
The party responsible for the compliance of the obligations imposed taxes: Provided, That the goods declaration for customs
on customs transit shall ensure that the goods are presented intact transshipment particularly indicates such nature of the goods, duly
and in due course at the customs office of destination.  Failure to supported by commercial or transport documents or evidence as
comply with the aforementioned obligations or like-wise failure to required by the Bureau.
follow a prescribed itinerary or period for delivery of the goods may
immediately subject the goods to the corresponding duties, taxes Goods for transshipment must be exported from the Philippines
and other applicable fines, penalties, and surcharges. within thirty (30) days from arrival thereof.  The Commissioner may
allow an extension of such period after the establishment of valid
SBC. 601. Duty and Tax on Goods Intended for Transit. – Transit reasons.
goods admitted for storage in a customs bonded warehouse, or for
outright exportation at the port of destination or inland customs SEC. 604. Goods Entered for Immediate Re-exportation. – Where
office, and goods intended for transit covered by Republic Act No. an intent of re-exportation of the goods is shown by the bill of
10668, otherwise known as "An Act Allowing Foreign Vessels to lading, invoice, manifest, or other satisfactory evidence, the whole
Transport and Co-Load Foreign Cargoes for Domestic Transshipment or a part of a bill comprising not less than one package may be
and for Other Purposes", shall not be subject to the payment of entered for immediate reexportation under security.  The District
Collector shall designate the vessel or aircraft in which the goods be followed. If the importer so requests but it is impossible to
are loaded constructively as a warehouse to facilitate the direct determine the customs value under Section 705 of this Act, the
transfer of the goods to the exporting vessel or aircraft. customs value shall be determined under Section 704.

Unless it shall appear in the bill of lading, airway bill, invoice, When the customs value cannot be determined under Sections 701
manifest, or other satisfactory evidence, that goods arriving in the through 705, it may be determined under Section 706 of this Act.
Philippines are destined for transshipment, no exportation thereof
will be permitted except under entry for immediate reexportation SEC. 701, Transaction Value System – Method One. – The
under sufficient security in an amount equal to the ascertained transaction value shall be the price actually paid or payable for the
duties, taxes and other charges. goods when sold for export to the Philippines adjusted in
accordance with the provisions of tins section: Provided, That:
Upon the reexportation of the goods, and the production of proof
of landing beyond the limits of the Philippines, the security shall be (a) There are no restrictions as to the disposition or use of the goods
released. by the buyer other than restrictions which:

(i) Are imposed or required by law or by Philippine authorities;

TITLE VII
(ii) Limit the geographical area in which the goods may be resold; or
IMPORT DUTY AND TAX
(iii) Do not substantially affect the value of the goods;
CHAPTER 1
(b) The sale or price is not subject to some condition or
BASIS OF VALUATION consideration for which a value cannot be determined with respect
to the goods being valued; and
SEC. 700. Sequential Application of Valuation Methods. – Imported
goods shall be valued in accordance with the provisions of Section (c) The buyer and the seller are not related, or where the buyer and
701 of this Act whenever the conditions prescribed therein are the seller are related, that the transaction value is acceptable for
fulfilled. customs purposes under the provisions hereof.

Where the customs value cannot be determined under the For purposes of this Act, persons shall be deemed related only if:
provisions of Section 701 of this Act, it is to be determined by
proceeding sequentially through the succeeding sections hereof to (i) They are officers or directors of one another's business;
the first such section under which the customs value can be
determined.  Except as provided in Section 704 of this Act, it is only (ii) They are legally recognized partners in business;
when the customs value cannot be determined under the provisions
of a particular section that the provisions of the next section in the  (iii) There exists an employer-employee relationship between them;
sequence can be used.
(iv) Any person directly or indirectly owns, controls or holds five
If the importer does not request that the order of Sections 704 and percent (5%) or more of the outstanding voting stocks or shares of
705 of this Act be reversed, the normal order of the sequence is to both seller and buyer;
 (b) Cost of containers;
(v) One of them directly or indirectly controls the other;
(c) Cost of packing, whether for labor or materials;
(vi) Both of them are directly or indirectly controlled by a third
person; (d) Value, apportioned as appropriate, of the following goods and
services: materials, components, parts and similar items
(vii) Together they directly or indirectly control a third person; or incorporated in the imported goods; tools; dies; moulds and similar
items used in the production of imported goods; materials
(viii) They are members of the same family, including those related consumed in the production of the imported goods; and
by affinity or consanguinity up to the fourth civil degree. engineering, development, artwork, design work and plans and
sketches undertaken elsewhere than in the Philippines and
Persons who are associated in business with one another in that necessary for the production of imported goods, where such goods
one is the sole agent, sole distributor or sole concessionaire, and services are supplied directly or indirectly by the buyer free of
however described, of the other shall be deemed to be related for charge or at a reduced cost for use in connection with the
the purposes of this Act if they fall within, any of the eight (8) cases production and sale for export of the imported goods; and
cited in the preceding paragraph.
(e) Amount of royalties and license fees related to the goods being
In a sale between related persons, the transaction value shall be valued that the buyer must pay either directly or indirectly, as a
accepted as basis for customs valuation whenever the importer condition of sale of the goods to the buyer.
demonstrates that such value closely approximates one of the
following occurring at or about the same time: (2) Value of any part of the proceeds of any subsequent resale,
disposal or use of the imported goods that accrues directly or
(a) The transaction value in sales to unrelated buyers of identical or indirectly to the seller;
similar goods for export to the same country of importation;
(3) Cost of transport of the imported goods from the port of
(b) The customs value of identical or similar goods as determined exportation to the port of entry in the Philippines;
under the provisions of Section 704 of this Act; or
(4) Loading, unloading and handling charges associated with the
(c) The customs value of identical or similar goods are determined transport of the imported goods from, the country of exportation to
under the provisions of Section 705 of this Act. the port of entry in the Philippines; and

In determining the transaction value, the following shall be added to (5) Cost of insurance.
the price actually paid or payable for the imported goods:
All additions to the price actually paid or payable shall be made only
(1) To the extent that they are incurred by the buyer but are not on the basis of objective and quantifiable data.
included in the price actually paid or payable for the imported
goods: SEC. 702. Transaction Value of Identical Goods – Method Two. –
Where the dutiable value cannot be determined under method one,
(a) Commissions and brokerage fees except buying commissions; the dutiable value shall be the transaction value of identical goods
sold for export to the Philippines and exported at or about the same
time as the goods being valued.  For purposes of this section, additions usually made for profit and general expenses in
"Identical goods" refer to goods which are the same in all respects, connection with sales in such country of imported goods of the
including physical characteristics, quality and reputation.  Minor same class or kind;
differences in appearances shall not preclude goods otherwise
conforming to the definition from being regarded as identical. (2) The usual costs of transport and insurance and associated costs
incurred within the Philippines;
If, in applying this section, more than one transaction value of
identical goods are found, the lowest value shall be used to (3) Where appropriate, the costs of: (i) transport of the imported
determine the customs value. goods from the port of exportation to the port of entry in the
Philippines; (ii) loading, unloading and handling charges associated
SEC. 703. Transaction Value of Similar Goods - Method Three. – with the transport of the imported goods from the country of
Where the dutiable value cannot be determined under the exportation to the port of entry in the Philippines; and (iii)
preceding method, the dutiable value shall be the transaction value insurance; and
of similar goods sold for export to the Philippines and exported at or
about the same time as the goods being valued. For purposes of this (4) The customs duties and other national taxes payable in the
section, "Similar goods" refer to goods which, although not alike in Philippines by reason of the importation or sale of the goods.
all respects, have like characteristics and similar component
materials which enable them to perform the same functions and to If neither the imported goods nor identical nor similar imported
be commercially interchangeable. The quality of the goods, its goods are sold at or about the time of importation of the goods
reputation and the existence of a trademark shall be among the being valued in the Philippines in the conditions they were
factors to be considered in determining whether goods are similar. imported, the customs value shall, subject to the conditions set
forth in the preceding paragraph, be based on the unit price at
If, in applying this section, more than one transaction value of which the imported goods or identical or similar imported goods
identical goods are found, the lowest such value shall be used to sold in the Philippines in the condition they were imported and at
determine the customs value. the earliest date after the importation of the goods being valued,
but before the expiration of ninety (90) days after such importation.
SEC. 704. Deductive Value – Method Four. – Where the dutiable
value cannot be determined under the preceding method, the If neither the imported goods nor identical nor similar imported
dutiable value shall be the deductive value unless otherwise goods are sold in the Philippines in the condition as imported, then,
requested by the importer as provided in Section 700 hereof. The if the importer so requests, the dutiable value shall be based on the
deductive value which shall be based on the unit price at which the unit price at which the imported goods, after further processing, are
imported goods or identical or similar imported goods are sold in sold in the greatest aggregate quantity to persons in the Philippines
the Philippines, in the same condition as when imported, in the who are not related to the persons from whom they buy such
greatest aggregate quantity, at or about the time of the importation goods, subject to allowance for the value added by such processing
of the goods being valued, to persons not related to the persons and deductions provided under subsections (1), (2), (3) and (4)
from whom they buy such goods, subject to deductions for the hereof.
following:

(1) Either the commissions usually paid or agreed to be paid or the SEC. 705. Computed Value – Method Five. – Where the dutiable
value cannot be determined under the preceding method, the
dutiable value shall be the computed value of the sum of: (1) The selling price in the Philippines of goods produced in the
Philippines;
(1) The cost or the value of materials and fabrication or other
processing employed in producing the imported goods; (2) A system that provides for the acceptance for customs purposes
of the higher of two (2) alternative values;
(2) The amount for profit and general expenses equal to that usually
reflected in the sale of goods of the same class or kind as the goods (3) The price of goods in the domestic market of the country of
being valued which are made by producers in the country of exportation;
exportation for export to the Philippines;
(4) The cost of production, other than computed values, that have
(3) The freight, insurance fees and other transportation expenses been determined for identical or similar goods in accordance with
for the importation of the goods; method five hereof;

(4) Any assist, if its value is not included under paragraph (1) hereof; (5) The price of goods for export to a country other than the
and Philippines;

(5) The cost of containers and packing, if their values are not (6) Minimum customs values; or
included under paragraph (1) hereof.
(7) Arbitrary or fictitious values.
The Bureau shall not require or compel any person not residing in
the Philippines to produce for examination, or to allow access to, SEC. 707. Ascertainment of the Accuracy of the Declared Value. –
any account or other record for the purpose of determining a Nothing in this section shall be construed as restricting or calling
computed value. However, information supplied by the producer of into question the right of the Bureau to ascertain the truth or
the goods for the purposes of determining the customs value may accuracy of any statement, document or declaration presented for
be verified in another country with the agreement of the producer customs valuation purposes. When a declaration has been
and provided that said producer will give sufficient advance notice presented and when the Bureau has reason to doubt the truth or
to the government of the country in question and that the latter accuracy of the particulars or of documents produced in support of
does not object to the investigation. such declaration, it may ask the importer to provide further
explanation, including documents or other evidence, that the
SEC. 706. Fallback Value–Method Six. – If the dutiable value cannot declared value represents the total amount actually paid or payable
be determined under the preceding methods described above, it for the imported goods, adjusted in accordance with the provisions
shall be determined by using other reasonable means and on the of Section 701 of this Act.
basis of data available in the Philippines. If the importer so requests,
the importer shall be informed in writing of the dutiable value If in the course of determining the dutiable value of imported
determined under method six and the method used to determine goods, it becomes necessary to delay the final determination of
such value. such dutiable value, the importer shall nevertheless be able to
secure the release of the imported goods upon posting of a
No dutiable value shall be determined under method six on the sufficient security in an amount equivalent to the duties and taxes in
basis of: dispute conditioned on the payment of additional duties and taxes,
if any, as may be determined: Provided, That prohibited goods shall Secretary of Finance, and thereafter If still dissatisfied, to the CTA as
not be released under any circumstance. provided for in Section 1136 of this Act.

If, after receiving further information, or in the absence of a Where no appeal is made by the importer, or upon reaffirmation of
response, the Bureau still has reasonable doubts on the truth or the Commissioner's decision during the appeals process, the Bureau
accuracy of the declared value, it may deem that the customs value or its agents shall sell the acquired goods pursuant to existing laws
of the imported goods cannot be determined under method one, and regulations.
without prejudice to an importer's right to appeal pursuant to
Section 1104 of this Act. Before taking a final decision, the District Nothing in this section limits or affects any other powers of the
Collector shall communicate to the importer, in writing if requested, Bureau with respect to the disposition of the goods or any liability
the grounds for doubting the truth or accuracy o£ the particulars or of the importer or any other person with respect to an offense
documents produced and give the importer a reasonable committed in the importation of the goods.
opportunity to respond. When a final decision is made, the Bureau
shall communicate its decision, and the grounds therefor in writing. SEC. 710. Marking of Imported Goods and Containers. – (A)
Marking of Goods, – Except as hereinafter provided, all goods of
SEC. 708. Exchange Rate. – For the assessment and collection of foreign origin imported into the Philippines or their containers, as
import duty upon imported goods and for other purposes, the value provided in subsection (B) hereof shall be conspicuously marked in
and prices thereof quoted in foreign currency shall be converted any official language of the Philippines as legibly, indelibly and
into the currency of the Philippines at the current rate of exchange permanently as the nature of the goods or container will permit and
or value specified or published, from time to time, by the Bangko in such manner as to indicate to an ultimate purchaser in the
Sentral ng Pilipinas (BSP). Philippines the name of the country of origin of the goods. Pursuant
thereto, the Commissioner shall, with the approval of the Secretary
of Finance:
CHAPTER 2
(1) Determine the character of words and phrases or abbreviation
SPECIAL DUTIES AND TRADE REMEDY MEASURES thereof which shall be acceptable as indicating the country of origin
and prescribe any reasonable method of marking, whether by
SEC. 709. Government's Right of Compulsory Acquisition. – In order printing, stenciling, stamping, branding, labeling or by any other
to protect government revenues against undervaluation of goods, reasonable method, and in a conspicuous place on the goods or
the Commissioner may, motu proprio or upon the recommendation container where the marking' shall appear;
of the District Collector, acquire imported goods under question for
a price equal to their declared customs value plus any duties already (2) Require the addition of other words or symbols which may be
paid on the goods, payment for which shall be made within ten (10) appropriate to prevent deception or mistake as to the origin of the
working days from issuance of a warrant signed by the goods or as to the origin of any other goods with which such
Commissioner for the acquisition of such goods. imported goods is usually combined subsequent to importation but
before delivery to an ultimate purchaser; and
An importer who is dissatisfied with a decision of the Commissioner
pertaining to this section may, within twenty (20) working days after (3) Authorize the exception of any goods from the requirements of
the date on which notice of the decision is given, appeal to the marking if:
 requirements of marking, the immediate container, if any, of such
(i) Such goods are incapable of being marked; goods, or such other container or containers of such goods, shall be
marked in such manner as to indicate to an ultimate purchaser in
(ii) Such goods cannot be marked prior to shipment to the the Philippines the name of the country of origin of such goods in
Philippines without injury; any official language of the Philippines, subject to all provisions of
this section, including the same exceptions as are applicable to
(iii) Such goods cannot be marked prior to shipment to the goods under paragraph (3) of subsection (A).
Philippines, except at an expense economically prohibitive of their
importation; (C) Pine for Failure to Mark. – If, at the time of importation any good
or its container, as provided in subsection (B) hereof, is not marked
(iv) The marking of a container of such goods will reasonably in accordance with the requirements of this section, there shall be
indicate the origin of such goods; levied, collected, and paid upon such good a marking duty of five
percent (5%) of dutiable value, which shall be deemed to have
(v) Such goods are crude substances; accrued at the time of importation,

(vi) Such goods are imported for use by the importer and not (D) Release Withheld Until Marked. – No imported goods held in
intended for sale in their imported or any other form; customs custody for inspection, examination, or assessment shall be
released until such goods or their containers shall have been
(vii) Such goods are to be processed in the Philippines by the marked in accordance with the requirements of this section and
importer or for the importer's account other than for the purpose of until the amount of duty estimated to be payable under subsection
concealing the origin of such goods and in such manner that any (C) of this section shall have been deposited.
mark contemplated by this section would necessarily be obliterated,
destroyed, or permanently concealed; (E) The failure or refusal of the owner or importer to mark the
goods as herein required within a period of thirty (30) days after
(viii) An ultimate purchaser, by reason of the character of such due notice shall constitute as an act of abandonment of said goods
goods or by reason of the circumstances of their importation, must and their disposition shall be governed by the provisions of this Act
necessarily know the country of origin of such goods even though relative to abandonment of imported goods.
they are not marked to indicate their origin;
SEC. 711. Dumping Duty. –
(ix) Such goods were produced more than twenty (20) years prior to The provisions of Republic Act No. 8752, otherwise known as the
their importation into the Philippines; or "Anti-Dumping Act of 1999", are hereby adopted.

(x) Such goods cannot be marked after importation except at an SEC. 712. Safeguard Duty. – The provisions of Republic Act No.
expense which is economically prohibitive, and the failure to mark 8800, otherwise known as the "Safeguard Measures Act", are
the goods before importation was not due to any purpose of the hereby adopted.
importer, producer, seller or shipper to avoid compliance with this
section. SEC. 713. Countervailing Duty. –
The provisions of Republic Act No. 8751, otherwise known as "An
(B) Marking of Containers. – Whenever goods are exempt under Act Strengthening the Mechanisms for the Imposition of
paragraph (3) of subsection (A) of this section from the Countervailing Duties on Imported Subsidized Products,
Commodities or Articles of Commerce in Order to Protect Domestic public interest, to issue a further proclamation directing that such
Industries from Unfair Trade Competition, Amending for the product of said country or such goods imported in their vessels be
Purpose Section 302, Part 2, Title II, Book I of Presidential Decree excluded from importation into the Philippines.
No. 1464", otherwise known as the "Tariff and Customs Code of the
Philippines, as Amended", are hereby adopted. (c) Any proclamation issued by the President under this section
shall, if the President deems it consistent with the interest of the
SEC. 714. Discrimination by Foreign Countries. – Without prejudice Philippines, extend to the whole of any foreign country or may be
to the Philippine commitment in any ratified international confined to any subdivision or subdivisions thereof:  Provided, That
agreements or treaty, the following recourse shall be applicable in the President may, whenever the public interest requires, suspend,
case of discrimination by foreign countries: revoke, supplement or amend any such proclamation.

(a) When the President finds that the public interest will be served (d) All goods imported contrary to the provisions of this section shall
thereby, the President shall, by proclamation, specify and declare be forfeited to the government of the Philippines and shall be liable
new or additional duties in an amount not exceeding one hundred to be seized, prosecuted and condemned in like manner and under
percent (100%) ad valorem upon goods wholly or in part the growth the same regulations, restrictions, and provisions as may from time
or product of, or imported in a vessel of any foreign country to time be established for the recovery, collection, distribution, and
whenever the President shall find as a fact that such country: remission or forfeiture to the government by the tariff and customs
laws. Whenever the provision of this section shall be applicable to
(1) Imposes, directly or indirectly, upon the disposition or importations into the Philippines of goods wholly or in part the
transportation in transit or through reexportation from such growth or product of any foreign country, it shall be applicable
country of any goods wholly or in part the growth or product of the thereto, whether such goods are imported directly or indirectly.
Philippines, any unreasonable charge, exaction, regulation or
limitation which is not equally enforced upon the like goods of every (e) It shall be the duty of the Commission to ascertain and at all
foreign country; or times be informed whether any of the discriminations against the
commerce of the Philippines enumerated in subsections (a) and (b)
(2) Discriminates in fact against the commerce of the Philippines, of this section are practiced by any country; and if and when such
directly or indirectly, by law or administrative regulation or practice, discriminatory acts are disclosed, it shall be the duty of the
by or in respect to any customs, tonnage, or port duty, fee, charge, Commission to bring the matter to the attention of the President,
exaction, classification, regulation, condition, restriction or and to recommend measures to address such discriminatory acts.
prohibition, in such manner as to place the commerce of the
Philippines at a disadvantage compared with the commerce of any (f) The Secretary of Finance shall make such rules and regulations as
foreign country. are necessary for the execution of a proclamation that the President
may issue in accordance with the provisions of this section.
(b) If at any time the President shall find it to be a fact that any
foreign country has not only discriminated against the commerce of
the Philippines, as aforesaid, but has, after the issuance of a
proclamation as authorized in subsection (a) of this section,
maintained or increased its said discrimination against the
commerce of the Philippines, the President is hereby authorized, if
deemed consistent with the interests of the Philippines and of
 TITLE VIII other charges within six (6) months from the date of acceptance of
the goods declaration: Provided, That the Bureau may extend the
TAX AND DUTY DEFERMENT, PREFERENCE AND EXEMPTION time for exportation or payment of duties, taxes and other charges
for a term not exceeding sis (6) months from the expiration of the
CHAPTER 1 original period;

CONDITIONALLY TAX AND/OR DUTY-EXEMPT IMPORTATION (c) Cost of repairs, excluding the value of the goods used, made in
foreign countries upon vessels or aircraft documented, registered or
SEC. 800. Conditionally Tax and/or Duty-Exempt Importation. – licensed in the Philippines, upon proof satisfactory to the Bureau:
The following goods shall be exempt from the payment of import (1) that adequate facilities for such repairs are not afforded in the
duties upon compliance with the formalities prescribed in the Philippines; or (2) that such vessels or aircrafts, while in the regular
regulations which shall be promulgated by the Commissioner with course of their voyage or flight, were compelled by stress of
the approval of the Secretary of Finance: Provided, That goods sold, weather or other casualty to put into a foreign port to make such
bartered, hired or used for purposes other than what they were repairs in order to secure the safety, seaworthiness, or
intended for and without prior payment of the duty, tax or other airworthiness of the vessels or aircrafts to enable them to reach
charges which would have been due and payable at the time of their port of destination;
entry if the goods had been entered without the benefit of this
section, shall be subject to forfeiture and the importation shall (d) Goods brought into the Philippines for repair, processing or
constitute a fraudulent practice against customs laws: Provided, reconditioning to be reexported upon completion of the repair,
however, That a sale pursuant to a judicial order or in liquidation of processing or reconditioning: Provided, That the Bureau shall
the estate of a deceased person shall not be subject to the require security equal to one hundred percent (100%) of the duties,
preceding proviso, without prejudice to the payment of duties, taxes and other charges thereon, conditioned for the exportation
taxes and other charges: Provided, further, That the President may, thereof or payment of the corresponding duties, taxes and other
upon the recommendation of the Secretary of Finance, suspend, charges within six (6) months from the date of acceptance of the
disallow or completely withdraw, in whole or in part, any goods declaration;
conditionally free importation under this section:
(e) Medals, badges, cups, and other small goods bestowed as
(a) Aquatic products such as fishes, crustaceans, mollusks, marine trophies or prizes, or those received or accepted as honorary
animals, seaweeds, fish oil, roe, caught or gathered by fishing distinction;
vessels of Philippine registry: Provided, That they are imported in
such vessels or in crafts attached thereto: Provided, however, That (f) Personal and household effects belonging to returning residents
they have not been landed in any foreign territory or, if so landed, including household appliances, jewelry, precious stones, and other
that they have been landed solely for transshipment without having goods of luxury which were formally declared and listed before
been advanced in condition; departure and identified under oath before the District Collector
when exported from the Philippines by such returning residents
(b) Equipment for use in the salvage of vessels or aircrafts, not upon their departure therefrom or during their stay abroad;
available locally, upon identification and the giving of a security in personal and household effects including wearing apparel, goods of
an amount equal to one hundred percent (100%) of the ascertained personal adornment, toilet goods, instruments related to one's
duties, taxes and other charges thereon, conditioned for the profession and analogous personal or household effects, excluding
exportation thereof or payment of corresponding duties, taxes and luxury items, vehicles, watercrafts, aircrafts and animals purchased
in foreign countries by residents of the Philippines which were
necessary, appropriate, and normally used for their comfort and In addition to the privileges granted under the immediately
convenience during their stay abroad, accompanying them on their preceding paragraph, returning Overseas Filipino Workers (OFWs)
return, or arriving within a reasonable time which, barring shall have the privilege to bring in, tax and duty-free, home
unforeseen and fortuitous events, in no case shall exceed sixty (60) appliances and other durables, limited to one of every kind once in
days after the owner's return. a given calendar year accompanying them on their return, or
arriving within a reasonable time which, barring unforeseen and
For purposes of this section, the phrase "returning residents" shall fortuitous events, in no case shall exceed sixty (60) days after every
refer to nationals who have stayed in a foreign country for a period returning OFW's return upon presentation of their original passport
of at least sis (6) months. Returning residents shall have tax and at the port of entry: Provided, That any amount in excess of FCA
duty exemption on personal and household effects: Provided, That: value of one hundred fifty thousand pesos (P150,000.0,0) for
personal and household effects or of the number of duty-free
(1) It shall not be in commercial quantities; appliances as provided for under this section, shall be subject to the
corresponding taxes and duties: Provided, further, That every three
(2) It is not intended for barter, sale or for hire; and (3) years after the effectivity of this Act, the Secretary of Finance
shall adjust the amount herein stated to its present value using the
(3) Limited to the FCA or FOB value of: CPI as published by the PSA;

(i) Three hundred fifty thousand pesos (P350,000.00) for those who (g) Residents of the Philippines, OFWs or other Filipinos while
have stayed in a foreign country for at least ten (10) years and have residing abroad or upon their return to the Philippines shall be
not availed of this privilege within ten (10) years prior to returning allowed to bring in or send to their families or relatives in the
resident's arrival; Philippines balikbayan boxes which shall be exempt from applicable
duties and taxes imposed under the NIRC of 1997, as
(ii) Two hundred fifty thousand pesos (P250,000.00) for those who amended: Provided, That balikbayan boxes shall contain personal
have stayed in a foreign country for a period of at least five (5) but and household effects only and shall neither be in commercial
not more than ten (10) years and have not availed of this privilege quantities nor intended for barter, sale or for hire and that the FCA
within five (5) years prior to returning resident's arrival; or value of which shall not exceed one hundred fifty thousand pesos
(P150,000.00): Provided, further, That every three (3) years after the
(iii) One hundred fifty thousand pesos (P150,000.00) for those who effectivity of this Act, the Secretary of Finance shall adjust the
have stayed in a foreign country for a period of less than five (5) amount herein stated to its present value using the CPI as published
years and have not availed of this privilege within six (6) months by the PSA: Provided, finally, That residents of the Philippines, OFWs
prior to returning resident's arrival. or other Filipinos can only avail of this privilege up to three (3) times
in a calendar year. Any amount in excess of the allowable non-
Any amount in excess of the above-stated threshold shall be subject dutiable value shall be subject to the applicable duties and taxes;
to the corresponding duties and taxes under this Act.
(l) For purposes of this Act, OFWs refer to holders of valid passports
Every three (3) years after the effectivity of this Act, the Secretary of duly issued by the Department of Foreign Affairs (DFA) and certified
Finance shall adjust the amount herein stated to its present value by the Department of Labor and Employment (DOLE) or the
using the CPI as published by the PSA. Philippine Overseas Employment Administration (POEA) for
overseas employment purposes. They cover all Filipinos, working in
a foreign country under employment contracts, regardless of their exceeding three (3) months from the expiration of the original
professions, skills or employment status in a foreign country; and (2) period;
Calendar Year refers to the period from January 1 to December 31.
(i) Professional instruments and implements, tools of trade,
(h) Wearing apparel, goods of personal adornment, toilet goods, occupation or employment, wearing apparel, domestic animals, and
portable tools and instruments, theatrical costumes and similar personal and household effects belonging to persons coming to
effects accompanying travelers, or tourists, or arriving within a settle in the Philippines or Filipinos or their families and
reasonable time before or after their arrival in the Philippines, descendants who are now residents or citizens of other countries,
which, are necessary and appropriate for the wear and use of such such parties hereinafter referred to as overseas Filipinos, in
persons according to the nature of the journey, their comfort and quantities and of the class suitable to the profession, rank or
convenience: Provided, That this exemption shall not apply to goods position of the persons importing said items, for their own use and
intended for other persons or for barter, sale or hire: Provided, not for barter or sale, accompanying such persons, or arriving within
however, That the Bureau may require either a written commitment a reasonable time: Provided, That the Bureau may, upon the
or a security in an amount equal to one hundred percent (100%) of production of satisfactory evidence that such persons are actually
the ascertained duties, taxes and other charges thereon, coming to settle in the Philippines and that the goods are brought
conditioned for the exportation thereof or payment of the from their former place of abode, exempt such goods from the
corresponding duties, taxes and other charges within three (3) payment of duties and taxes: Provided, further, That vehicles,
months from the date of acceptance of the goods vessels, aircrafts, machineries and other similar goods for use in
declaration: Provided, further, That the Bureau may extend the time manufacture, shall not fall within this classification and shall
for exportation or payment of duties, taxes and other charges for a therefore be subject to duties, taxes and other charges;
term not exceeding three (3) months from the expiration of the
original period. (j) Goods used exclusively for public entertainment, and for display
in public expositions, or for exhibition or competition for prizes, and
Personal and household effects and vehicles belonging to foreign devices for projecting pictures and parts and appurtenances
consultants and experts hired by, or rendering service to, the thereof, upon identification, examination, and appraisal and the
government, and their staff or personnel and families accompanying giving of a security in an amount equal to one hundred percent
them or arriving within a reasonable time before or after their (100%) of the ascertained duties, taxes and other charges thereon,
arrival in the Philippines, in quantities and of the kind necessary and conditioned for exportation thereof or payment of the
suitable to the profession, rank or position of the person importing corresponding duties, taxes and other charges within three (3)
said items, for their own use and not for barter, sale or months from the date of acceptance of the goods
hire: Provided, That the Bureau may require either a written declaration: Provided, That the Bureau may extend the time for
commitment or a security in an amount equal to one hundred exportation or payment of duties, taxes and other charges for a
percent (100%) of the ascertained duties, taxes and other charges term not exceeding three (3) months from the expiration of the
thereon, upon the goods classified under this subsection; original period; and technical and scientific films when imported by
conditioned for the exportation thereof or payment of the technical, cultural and scientific institutions, and not to be exhibited
corresponding duties, taxes and other charges within three (3) for profit: Provided, further, That if any of the films is exhibited for
months after the expiration of their term or contract: Provided, profit, the proceeds therefrom shall be subject to confiscation, in
however, That the Bureau may extend the time for exportation or addition to the penalty provide under this Act;
payment of duties, taxes and other charges for a term not
(k) Goods brought by foreign film producers directly and exclusively
used for mailing or recording motion picture films on location in the including kraft paper bags for locally manufactured cement for
Philippines, upon their identification, examination and appraisal and export, including corrugated boxes for bananas, mangoes,
the giving of a security in an amount equal to one hundred percent pineapples and other fresh fruits for export, except other containers
(100%) of the ascertained duties, taxes and other charges thereon, made of paper, paperboard and textile fabrics, which are of such
conditioned for exportation thereof or payment of the character as to be readily identifiable and/or reusable for shipment
corresponding duties, taxes and other charges within three (3) or transportation of goods shall be delivered to the importer
months from the date of acceptance of the goods declaration, thereof upon identification, examination and appraisal and the
unless extended by the District Collector for another three (3) giving of a security in an amount equal to one hundred percent
months; photographic and cinematographic films, underdeveloped, (100%) of the ascertained duties, taxes and other charges thereon,
exposed outside the Philippines by resident Filipino citizens or by within six (6) months from the date of acceptance of the goods
producing companies of Philippine registry where the principal declaration;
actors and artists employed for the production are Filipinos, upon
affidavit by the importer and identification that such exposed films (o) Supplies which are necessary for the reasonable requirements of
are the same films previously exported from the Philippines, As the vessel or aircraft in its voyage or flight outside the Philippines,
used in this paragraph, the terms "actors" and "artists" include the including goods transferred from a bonded warehouse in any
persons operating the photographic camera or other photographic Customs District to any vessel or aircraft engaged in foreign trade,
and sound recording apparatus by which the film is made; for use or consumption of the passengers or its crew on board such
vessel or aircraft as sea or air stores; or goods purchased abroad for
sale on board a vessel or aircraft as saloon stores or air store
(l) Importations for the official use of foreign embassies, legations supplies: Provided, That any surplus or excess of such vessel or
and other agencies of foreign governments: Provided, That those aircraft supplies arriving from foreign ports or airports shall be
foreign countries accord like privileges to corresponding agencies of dutiable;
the Philippines. Goods imported for the personal or family use of
members and attaches of foreign embassies, legations, consular (p) Goods and salvage from, vessels recovered after a period of two
officers and other representatives of foreign (2) years from the date of filing the marine protest or the time when
governments: Provided, however, That such privilege shall be the vessel was wrecked or abandoned, or parts of a foreign vessel or
accorded under special agreements between, the Philippines and its equipment, wrecked or abandoned in Philippine waters or
the countries which they represent: Provided, further, That the elsewhere: Provided, That goods and salvage recovered within the
privilege may be granted only upon specific instructions of the said period of two (2) years shall be dutiable;
Secretary of Finance pursuant to an official request of the DFA on
behalf of members or attaches of foreign embassies, legations, (q) Coffins or urns containing human remains, bones or ashes, used
consular officers and other representatives of foreign governments. personal and household effects (not merchandise) of the deceased
person, except vehicles, the FCA value of which does not exceed
(m) Imported goods donated to or, for the account of the Philippine one hundred fifty thousand pesos (P15 0,000.00), upon
government or any duly registered relief organization, not operated identification as such: Provided, That every three (3) years after the
for profit, for free distribution among the needy, upon certification effectivity of this Act, the value herein stated shall be adjusted to its
by the DSWD or the Department of Education (DepED), or the present value using the CPI as published by the PSA;
Department of Health (DOH), as the case may be;
(r) Samples of the kind, in such quantity and of such dimension or
(n) Containers, holders and other similar receptacles of any material construction as to render them unsaleable or of no commercial
value; models not adapted for practical use; and samples of recognized breed, duly registered in the record or registry
medicines, properly marked "sample-sale punishable by law", for established for that breed, and certified as such by the Bureau of
the purpose of introducing new goods in the Philippine market and Animal Industry (BAI):
imported only once in a quantity sufficient for such purpose by a
person duly registered and identified to be engaged in that
trade: Provided, That importations under this subsection shall be
previously authorized by the Secretary of Finance: Provided,
however, That importation of sample medicines shall have been
previously authorized by the Secretary of Health, and that such
samples are new medicines not available in the Provided, further, That the certification of such record, and pedigree
Philippines; Provided, further, That samples not previously of such animal duly authenticated by the proper custodian of such
authorized or properly marked in accordance with this section shall record or registry, shall be submitted to the District Collector,
be levied the corresponding tariff duty. together with the affidavit of the owner or importer that such
animal is the animal described in said certificate of record and
Commercial samples, except those that are not readily and easily pedigree: Provided, finally, That the animals and plants are certified
identifiable as in the case of precious and semi-precious stones, cut by the NEDA as necessary for economic development;
or uncut, and jewelry set with precious or semi-precious stones, the
value of any single importation of which does not exceed FCA value (t) Economic, technical, vocational, scientific, philosophical,
of fifty thousand pesos (P50.000.00) upon the giving of a security in historical and cultural books or publications, and religious books like
an amount equal to the ascertained duties, taxes and other charges Bibles, missals, prayer books, the Koran, Ahadith and other religious
thereon, conditioned for the exportation of said samples within books of similar nature and extracts therefrom, hymnal and hymns
three (3) months from the date of the acceptance of the goods for religious uses: Provided, That those which may have already
declaration or in default thereof, the payment of the corresponding been imported but are yet to be released by the Bureau at the
duties, taxes and other charges: Provided, That if the FCA value of effectivity of this Act may still enjoy the privilege herein provided
any single consignment of such commercial samples exceeds fifty upon certification by the DepED that such imported books and/or
thousand pesos (P50,000.00), the importer thereof may select any publications are for economic, technical, vocational, scientific,
portion of the same not exceeding the FCA value of fifty thousand philosophical, historical or cultural purposes or that the same are
pesos (P50.000.00) for entry under the provision of this subsection, educational, scientific or cultural materials covered by the
and the excess of the consignment may be entered in bond, or for International Agreement on Importation of Educational Scientific
consumption, as the importer may elect: Provided, further. That and Cultural Materials (IAESCM) signed by the President of the
every three (3) years after the effectivity of this Act, the Secretary of Philippines on August 2,1952, or other agreements binding upon the
Finance shall adjust the amount herein stated to its present value Philippines. Educational, scientific and cultural materials covered by
using the CPI as published by the PSA. (s) Animals, except race international agreements or commitments binding upon the
horses, and plants for scientific, experimental propagation or Philippine government so certified by the DepED.
breeding, and for other botanical, zoological and national defense
purposes: Provided, That no live trees, shoots, plants, moss and (u) Philippine goods previously exported from the Philippines and
bulbs, tubers and seeds for propagation purposes may be imported returned without having been advanced in value or improved in
under this section, except by order of the government or other duly condition by any process of manufacturing or other means, and
authorized institutions: Provided, however, That the free entry of upon which no drawback or bounty has been allowed, including
animals for breeding purposes shall be restricted to animals of instruments and implements, tools of trade, machinery and
equipment, used abroad by Filipino citizens in the pursuit of their the Department of Agriculture (DA) or the Secretary of the
business, occupation or profession; and foreign goods previously Department of Trade and Industry (DTI), as the case may be;
imported when returned after having been exported and loaned for
use temporarily abroad solely for exhibition, testing and (x) Spare parts of vessels or aircraft of foreign registry engaged in
experimentation, for scientific or educational purposes; and foreign foreign trade when brought into the Philippines exclusively as
containers previously imported which have been used in packing replacements or for the emergency repair thereof, upon proof
exported Philippine goods and returned empty if imported by or for satisfactory to the District Collector that such spare parts shall be
the account of the person or institution who exported them from utilized to secure the safety, seaworthiness or airworthiness of the
the Philippines and not for sale, barter or hire subject to vessel or aircraft, to enable it to continue its voyage or flight;
identification: Provided, That Philippine goods falling under this
subsection upon which drawback or bounty have been, allowed (y) Goods exported from the Philippines for repair, processing or
shall, upon reimportation thereof, be subject to a duty under this reconditioning without having been substantially advanced in value,
subsection equal to the amount of such drawback or bounty; and subsequently reimported in its original form and in the same
state: Provided, That in case the reimported goods advanced in
(v) Aircraft, equipment and machinery, spare parts, commissary and value, whether or not in their original state, the value added shall
catering supplies, aviation gas, fuel and oil, whether crude or be subject to the applicable duty rate of the tariff heading of the
refined except when directly or indirectly used for domestic reimported goods; and
operations, and such other goods or supplies imported by and for
the use of scheduled airlines operating under congressional (z) Trailer chassis when imported by shipping companies for their
franchise: Provided, That such goods or supplies are not locally exclusive use in handling containerized cargo, upon posting a
available in reasonable quantity, qualify and price and are necessary security in an amount equal to one hundred percent (100%) of the
or incidental to the proper operation of the scheduled airline ascertained duties, taxes and other charges due thereon, to cover a
importing the same; period of one (1) year from the date of acceptance of the entry,
which period, for meritorious reasons, may be extended by the
(w) Machineries, equipment, tools for production, plans to convert Commissioner from year to year, subject to the following
mineral ores into saleable form, spare parts, supplies, materials, conditions:
accessories, explosives, chemicals, and transportation and
communications facilities imported by and for the use of new mines (1) That they shall be properly identified and registered with the
and old mines which resume operations, when certified to as such Land Transportation Office (LTO);
by the Secretary of the Department of Environment and Natural
Resources (DENR), upon the recommendation of the Director of
Mines and Geosciences Bureau, for a period ending five (5) years (2) That they shall be subject to customs supervision fee to be fixed
from the first date of actual commercial production of saleable by the District Collector and subject to the approval of the
mineral products: Provided, That such goods are not locally Commissioner;
available in reasonable quantity, quality and price and are necessary
or incidental in the proper operation of the mine; and aircrafts (3) That they shall be deposited in the customs territory when not in
imported by agro-industrial companies to be used by them in their use; and
agriculture and industrial operations or activities, spare parts and
accessories thereof, when certified to as such by the Secretary of (4) That upon the expiration of the period prescribed above, duties
and taxes shall be paid unless otherwise reexported.
 CHAPTER 2
(aa) Any officer or employee of the DFA, including any attache, civil
or military or member of the staff assigned to a Philippine CUSTOMS WAREHOUSES
diplomatic mission abroad by the Department or any similar officer
or employee of other departments assigned to any Philippine SEC. 801. Establishment and Supervision of Customs Bonded
consular office abroad, or any AFP military personnel accorded Warehouses. – When the business of the port requires such
assimilated diplomatic rank or on duty abroad who is returning from facilities, the District Collector, subject to the approval of the
a regular assignment abroad, for reassignment Commissioner, shall designate and establish warehouses for use as
public and private bonded warehouses, yards, or for other special
to the home office, or who dies, resigns, or is retired from the purposes. All such warehouses and premises shall be subject to the
service, after the approval of this Act, shall be exempt from the supervision of the District Collector who shall impose such
payment of all duties and taxes on personal and household effects, conditions as may be deemed necessary for the protection of the
including one (1) motor car which must have been ordered or revenue, and of the goods stored therein. In the exercise of the
purchased prior to the receipt by the mission or consulate of the District Collector's supervisory functions herein and in the Bureau's
order of recall, and which must be registered in the name of the implementation of this chapter, existing contracts of private
officer or employee: Provided, That this exemption shall apply only operators with appropriate government agency or regulator, such
to the value of the motor car and to the aggregate assessed value of as, but not limited to, the Philippine Ports Authority (PPA), Subic Bay
the personal and household effects, the latter not to exceed thirty Metropolitan Authority (SBMA) and Phividec Industrial Authority
percent (30%) of the total amount received by the officer or (PIA) and their respective authorities and powers already granted by
employee in salary and allowances during the latest assignment law pertinent to such contracts, shall not be impaired or adversely
abroad, but not to exceed four (4) years: Provided, however, That affected.
this exemption shall not be availed of more than once every four (4)
years: Provided, further, That the officer or employee concerned Goods manufactured in whole or in part of imported materials, and
must have served abroad for not less than two (2) years. intended for exportation, may be made and manufactured in a
bonded manufacturing warehouse subject to the following
The provisions of general and special laws, to the contrary conditions:
notwithstanding, including those granting franchises, there shall be
no exemption whatsoever from the payment of duties except as (1) The manufacturer shall file sufficient security for the faithful
provided for in this Act; those granted to government agencies, observance of all laws, rules and regulations applicable thereto; (2)
instrumentalities or government-owned or -controlled corporations The application for the establishment of bonded warehouses must
(GOCCs) with existing contracts, commitments, agreements, or be made in writing and filed with the customs officer, describing the
obligations with foreign countries requiring such exemption; those premises, the location, and capacity of the same, and the purpose
granted to international institutions, associations or organizations for which the building is to be used, pursuant to Section 804 of this
entitled to exemption pursuant to agreements or special laws; and Act;
those that may be granted by the President upon prior
recommendation of the NEDA in the interest of national economic (3) From the receipt of the application, the customs officer shall
development. examine the premises, evaluate its location, construction, and
means provided for the safekeeping of the goods;

(4) The customs officer may authorize the establishment of the

customs bonded warehouse, and accept a bond for its operation describing the premises, location, capacity and purpose thereof.
and maintenance if the applicant was compliant with the prescribed
requirements; and Upon receipt of such application, the District Collector shall examine
the premises of such proposed warehouse, particularly its location,
(5) The operator of the bonded warehouse shall pay an annual construction and storage facilities. The District Collector, with the
supervision fee in an amount to be fixed by the Commissioner. approval of the Commissioner, may authorize the establishment of
customs warehouses, and accept the required security for its
SEC. 802. Types of Customs Bonded Warehouses (CBWs). – operation and maintenance. The operator of such CBW and CFW
Customs bonded warehouses may be classified as either shall pay an annual supervision fee, as determined by the
manufacturing or nonmanufacturing. Commissioner.

Manufacturing customs bonded warehouse may be of the following SEC. 805. Responsibility of Operators. – The operator of a CBW or
types: (a) miscellaneous customs bonded warehouse; (b) customs CFW shall comply with the customs requirements on establishment,
common bonded warehouse; or (c) industry-specific bonded security, suitability and management, including stock-keeping and
warehouse. accounting- of the goods, of the CBW or CFW.

Nonmanufacturing customs bonded warehouse include: (a) public Upon lawful demand, the operator of a CBW or CFW shall allow
bonded warehouse; (b) private bonded warehouse; or (c) other authorized representatives of the Bureau access to the premises at
customs facilities. a reasonable time, and to all documents, books and records of
accounts pertaining to the operations of the CBW or CFW.
SEC. 803. Types of Customs Facilities and Warehouses (CFWs). —
Customs facilities and warehouses shall include: In case of loss of the goods stored in a CBW or CFW due to
operator's gross negligence or willful misconduct, the operator shall
(a) Container yard; be liable for the payment of duties and taxes due thereof. The
government assumes no legal responsibility over the safekeeping of
(b) Container freight station; goods stored in any customs warehouse, yard or premises.

(c) Seaport warehouses; and SEC. 806. Customs Control Over CBWs and CFWs. – The Bureau
shall, for customs purposes, exercise control over, direct and
(d) Airport warehouses. manage CBWs and CFWs pursuant to Section 303 of this Act and
likewise over the goods thereat pursuant to Section 301 of this
Subject to consultation with the NEDA and the DTI, and based on Act: Provided, That the Bureau shall not be liable for any loss or
prevailing economic circumstances, the Secretary of Finance may, damage of the goods stored for safekeeping in any CBW, CFW, yard
upon the recommendation of the Commissioner, create or dissolve or premises.
certain types of warehouses.
SEC. 807. Discontinuance of CBW and CFW. – The use of any CBW
SEC. 804. Application for Operation of a Customs Warehouse. – and CFW may be discontinued by the District Collector when
Application for the establishment of CBW and CFW shall be filed conditions so warrant, or upon receipt of a written request from the
with the District Collector where the CBW or CFW is located, operator thereof: Provided, That all the requirements of the laws
and regulations have been complied with by said operator. Where
dutiable goods are stored in such premises, the same must be SEC. 811. Period of Storage in CBWs. – Goods entered for
removed at the risk and expense of the operator: Provided, warehousing may remain in a CBW for a maximum period of one (1)
however, That the premises shall not be relinquished, and its use year from the time of its arrival thereat. For perishable goods, the
shall not be discontinued until after a careful examination of the storage period shall be three (3) months from the date of arrival,
account of the warehouse shall have been made. Discontinuance of extendable for valid reasons, and upon written request, to another
the use of any warehouse shall be effective upon approval thereof three (3) months. Goods not withdrawn after the expiration of the
by the District Collector who shall, within ten (10) days, inform the prescribed period shall be deemed as abandoned, as provided
Commissioner of such action in writing. under Section 1129 of this Act.

Notice of discontinuance made by the operator shall not result in The Commissioner shall, in consultation with the Secretary of Trade
the discharge from any duties, taxes, fees and other charges and Industry, establish a reasonable storage period limit beyond
imposed on dutiable goods in said warehouse. one (1) year for bonded goods for manufacturing and intended for
exp ort, the processing into finished products of which requires a
SEC. 808. Warehousing Security on Goods Stored in CBWs. – For longer period based on industry standard and practice, subject to
goods declared in the entry for warehousing in CBWs, the District the approval of the Secretary of Finance.
Collector shall require the importer to post a sufficient security
equivalent to the computed duties, taxes and other charges, SEC. 812. Exemption from Duty of Goods in CBWs. – Goods duly
conditioned upon the withdrawal of the goods within the period entered for warehousing in CBWs shall be exempt from duty and tax
prescribed by Section 811 of this Act or the payment of duties, taxes within the allowed period for storage unless withdrawn for
and other charges and compliance with all importation consumption, exportation or transit to a free zone or another CBW,
requirements. in which case, such withdrawal will be subject to the applicable
rules and regulations on the liquidation of the warehousing entry.
SEC. 809. Withdrawal of Goods from CBWs. – – Imported goods
shall be withdrawn from the CBWs when the necessary withdrawal SEC. 813. Records to be Kept by CBW Operators. – An account shall
permit has been filed, together with any related document required be kept by the Bureau of all goods delivered to a CBW, and a report
by any provision of this Act and other regulations. shall be made by the CBW operator containing a detailed statement
of all imported goods entered and withdrawn from the CBW. The
Goods entered under sufficient security as provided in Section 1507 Bureau shall specify the format of the report and may require
of this Act may be withdrawn at any time for consumption, transit, electronic submission.
or exportation. The withdrawal must be made by the CBW operator
or its duly authorized representative. All documents, books, and records of accounts concerning the
operation of any CBW shall, upon demand, be made available to the
SEC. 810. Release of Goods from CFWs. – Imported goods shall be District Collector or the representative of the District Collector for
released when the goods declaration is electronically lodged, examination or audit. For record purposes, all documents shall be
together with any related document required by any provision of kept for three (3) years.
this Act and other regulations. All goods entered into the CFWs shall
be subject to the filing of a goods declaration within the period CHAPTER 3
specified under Section 407 of this Act.
FREE ZONES
 CHAPTER4
SEC. 814. When Goods are Admitted and Withdrawn. – Imported
goods shall be admitted into a free zone when the goods STORES
declaration, together with required documents as required by
existing laws and regulations, are electronically lodged with the SEC. 818. Stores for Consumption. – Stores for consumption shall
Bureau and other relevant government authorities at the time of include:
admission.
(a) Goods intended for use by the passengers and the crew on
Imported goods shall be withdrawn from the free zone for entry to board vessels, aircrafts, or trains, whether or not sold; and
the customs territory when the goods declaration is electronically (b) Goods necessary for the operation and maintenance of vessels,
lodged, together with required documents at the time of the aircrafts, or trains including fuel and lubricants but excluding spare
withdrawal from the free zone. parts and equipment which are either on board upon arrival or are
taken on board during the stay in the customs territory of vessels,
SEC. 815. Exemption from Duty and Tax of Goods in Free Zones. – aircrafts, or trains used, or intended to be used, in international
Unless otherwise provided by law and in accordance with the traffic for the transport of persons for remuneration or for the
respective laws, rules and regulations of the free zone authorities, industrial or commercial transport of goods, whether or not for
goods admitted into a free zone shall not be subject to duty and tax. remuneration.

SEC. 816. Movement of Goods into and from Free Zones. – The SEC. 819. Stores to be Taken Away. – For purposes of this chapter,
entry of goods into a free zone, whether directly or through the "stores to be taken away" means goods for sale to the passengers
customs territory, shall be covered by the necessary goods and the crew of vessels, aircrafts, or trains with a view to being
declaration for admission or transit. Withdrawal from the free zone landed, which are either on board upon arrival or are taken on
into the customs territory shall be covered by the necessary goods board during the stay in the customs territory of vessels, aircrafts,
declaration for consumption or warehousing. or trains used, or intended to be used, in international traffic for the
transport of persons for remuneration or for the industrial or
Transfer of goods from one free zone into another free zone shall commercial transport of goods, whether or not for remuneration.
likewise be covered by the necessary transit permit.
SEC. 820. Exemption from Duties and Taxes of Stores. – Customs
The implementing rules and regulations on the transit of goods treatment of stores should apply uniformly, regardless of the
admitted into, exported from, withdrawn into the customs territory, country of registration or ownership of vessels, aircraft, or trains.
and moved between free zones shall be formulated and issued Stores which are carried in a vessel, aircraft, or train arriving in the
jointly by the Bureau and the free zone authorities. customs territory shall be exempted from import duties and taxes
provided that they remain on board. Stores for consumption by the
SEC. 817. Coordination With Free Zone Authority. – To ensure passengers and the crew imported as provisions on international
compliance with customs laws and regulations, the Bureau shall express vessels, aircrafts, or trains shall be exempted from import
coordinate with the governing authority of the free zone. duties and taxes: Provided, That:

(a) Such goods are purchased only in the countries crossed by the
international vessels and aircrafts in question; and
 aircraft, or train, in such quantities as are deemed reasonable for
(b) Any duties and taxes chargeable on such goods in the country operation and maintenance during the voyage or flight, after due
where they were purchased are paid. regard of the quantity of such stores already on board.

Stores necessary for the operation and maintenance of vessels, Replenishment of stores that are exempted from duties and taxes
aircrafts, or trains which are on board these means of transport shall be allowed for vessels, aircrafts, or trains which have arrived in
shall be exempted from import duties and taxes: Provided, the customs territory, and which need to replenish their stores for
further, That they remain on board while these means of transport the journey to their final destination in the customs territory,
are in the customs territory. The Bureau shall allow the issue of subject to the same conditions provided in this Chapter. SEC.
stores for use on board during the stay of a vessel 821. Goods Declaration for Stores. – When a declaration concerning
stores on board vessels arriving in the customs territory is required
in the customs territory in such quantities as the customs authority by the Bureau, the information required shall be kept to the
deems reasonable with due regard to the number of the passengers minimum and as may be necessary for customs control.
and the crew and to the length of the stay of the vessel in the
customs territory. The Bureau should allow the issue of stores for The quantities of stores which are supplied to vessels during its stay
use on board by the crew while the vessel is undergoing repairs in a in the customs territory should be recorded on the required goods
dock or shipyard: Provided, finally, That the duration of stay in a declaration concerning stores.
dock or shipyard is considered to be reasonable.
The Bureau shall not require the presentation of a separate
When an aircraft is to land at one or more airports in the customs declaration of remaining stores on board a vessel, an aircraft or a
territory, the Bureau should allow the issuance of stores for train. No separate declaration concerning stores should be required
consumption on board both during the stay of the aircraft at such upon departure of vessels from the customs territory. When a
intermediate airports and during its flight between such airports. declaration is required concerning stores taken on board the vessels
or aircrafts upon departure from the customs territory, the
The Bureau shall require a carrier to take appropriate measures to information required shall be kept to the minimum as may be
prevent any unauthorized use of the stores including sealing of the necessary for customs control.
stores, when necessary. It shall require the removal of stores from
the vessel, aircraft, or trains for storage elsewhere during its stay in When a vessel, aircraft, or train arrives in the customs territory,
the customs territory only when the Bureau considers it necessary. stores on board shall:

Vessels, aircrafts, or trains which depart for an ultimate foreign (a) Be cleared for consumption or placed under another customs
destination shall be entitled to take on board, exempted from duties procedure, subject to compliance with the conditions and
and taxes, the following: formalities applicable in each case; or

(1) Stores in such quantities as the Bureau deems reasonable with (b) Subject to prior authorization by the Bureau, be transferred
due regard to the number of the passengers and the crew, to the respectively to another vessel, aircraft, or train assigned to an
length of the voyage or Sight, and to any quantity of such stores international route.
already on board; and

(2) Stores necessary for the operation and maintenance of a vessel,

 TITLE IX manufacture of the goods exported with their quantity, value, and
amount of duties paid thereon, should be established satisfactorily;
DUTY DRAWBACK AND REFUND
(2) The duties refunded or credited shall not exceed one hundred
CHAPTER 1 percent (100%) of duties paid on the imported materials used;

DUTY DRAWBACK (3) There is no determination by the NEDA of the requirement for
certification on nonavailability of locally-produced or manufactured
SEC. 900. Basis of Duty Drawback. – (A) On Fuel Used for competitive substitutes for the imported materials used at the time
Propulsion of Vessels. – On all fuel imported into the Philippines of importation;
used for propulsion of vessels engaged in trade with foreign
countries, or in the coastwise trade, a refund or tax credit shall be (4) The exportation shall be made within one (1) year after the
allowed not exceeding ninety-nine percent (99%) of the duty importation of materials used and claim of refund or tax credit shall
imposed by law upon such fuel, which shall be paid or credited be filed within six (6) months from the date of exportation; and
under such rules and regulations as may be prescribed by the
Commissioner with the approval of the Secretary of Finance. (5) When two or more products result from the use of the same
imported materials, an apportionment shall be made on its
equitable basis.
(B) On Petroleum Oils and Oils Obtained from Bituminous Minerals,
Crude, Eventually Used for Generation of Electric Power and for the SEC. 901. Payment of Drawbacks. – Eligible claims for refund or tax
Manufacture of City Gas. – On petroleum oils and oils obtained from credit shall be paid or granted by the Bureau to claimants within
bituminous materials, crude oil imported by nonelectric utilities, sixty (60) days after receipt of properly accomplished
sold directly or indirectly, in the same form or after processing, to claims: Provided, That a registered enterprise under Republic Act
electric utilities for the generation of electric power and for the No. 5186, otherwise known as the "Investment Incentives Act", or
manufacture of city gas, a refund or tax credit shall be allowed not Republic Act No. 6135, otherwise known as the "Export Incentives
exceeding fifty percent (50%) of the duty imposed by law upon such Act of 1970", which has previously enjoyed tax credits based on
oils, which shall be paid or credited under such rules and regulations customs duties paid on imported raw materials and supplies, shall
as may be prescribed by the Commissioner with the approval of the not be entitled to a drawback under this section with respect to the
Secretary of Finance. same importation subsequently processed and re-exported.

(C) On Goods Made from Imported Materials. – Upon exportation of The Secretary of Finance may, upon the recommendation of the
goods manufactured or produced in the Philippines, including the Commissioner, promulgate rules and regulations allowing partial
packing, covering, putting up, marking or labeling thereof either in payments of drawbacks pursuant to this section,
whole or in part of the imported materials for which duties have
been paid, a refund or tax credit shall be allowed for the duties paid SEC. 902. Prescription of Drawback Claim. – A claim and application
on the imported materials so used including the packing, covering, for a drawback shall prescribe if it is not filed within one (1) year
putting up, marking or labeling thereof, subject to the following from the date of importation in case of Section 900, paragraphs (A)
conditions: and (B) and within one (1) year from the date of exportation in the
case of Section 900, paragraph (C), subject to such rules and
(1) The actual use of the imported materials in the production or
regulations as may be issued by the Commissioner, upon approval that would be applicable on such waste or scrap if imported in same
of the Secretary of Finance. state; and

CHAPTER 2 (c) When there are shortages due to the nature of the goods.

REFUND AND ABATEMENT SEC. 905. Abatement for Damage Incurred During Voyage. –
Except as otherwise provided, no abatement of duties shall be made
SEC. 903. Refund of Duties and Taxes. – Refund shall be granted on account of damage incurred or deterioration suffered during the
where it is established that duties and taxes have been overcharged voyage of importation; and duties will be assessed on the actual
as a result of an error in the assessment or goods declaration. quantity imported as determined by the customs officers
concerned.
Where permission is given by the Bureau for goods originally
declared for a customs procedure with payment of duties and taxes SEC. 906. Abatement or Refund of Duty on Missing Package. –
to be placed under another customs procedure, a refund shall be When any package appearing on the manifest or bill of lading or
made of any duties and taxes charged in excess of the amount due airway bill is missing, an abatement or refund of the duty shall he
under the new procedure, subject to such regulation issued for the made if it is certified by the importer or consignee, under pain of
purpose. penalty for falsification or perjury, and upon production of proof
satisfactory to the Collector concerned, that the package in question
has not been unlawfully imported into the Philippines.
A refund shall not be granted if the amount of duties and taxes
involved is less than five thousand pesos (P5,000.00): Provided, That SEC. 907. Abatement or Refund for Deficiency in Contents of
the Secretary of Finance, in consultation with the Commissioner, Packages. – If, upon opening of any package, a deficiency in the
may adjust the minimum amount specified in this Act, taking into quantity of the goods is found to exist based upon the invoice, such
account the CPI as published by the PSA. deficiency shall be certified, under pain of penalty for falsification or
perjury, by the customs officers concerned and upon the production
SEC. 904. Abatement of Duties and Taxes. – When goods have not of proof showing that the shortage occurred before the arrival of
yet been released for consumption or have been placed under the goods in the Philippines. Upon sufficient proof thereof, the
another customs procedure, provided that no other offense or proper abatement or refund of the duty shall be made.
violation has been committed, the declarant shall neither be
required to pay the duties and taxes nor be entitled to refund SEC. 908. Abatement or Refund of Duties on Goods Lost or
thereof in any of the following cases: Destroyed After Arrival. – The Bureau may abate or refund the
amount of duties accruing or paid on any goods that have been lost
(a) When, at the request of the declarant, the goods are abandoned, due to injury, theft, destruction through fire or through any other
or as determined by the Bureau, the goods are destroyed or causes, upon satisfactory proof of the same, under any of the
rendered commercially valueless while under customs control. Any following circumstances:
cost herein incurred shall be borne by the declarant;
(a) While 'within the territory of any port of entry, prior to
(b) When goods are destroyed or irrecoverably lost by accident unloading' under the Bureau's supervision;
or force majeure, the remaining waste or scrap after destruction, if
taken into consumption, shall be subject to the duties and taxes (b) While remaining in customs custody after unloading;
 that its carcass on board or in customs custody is removed in the
(c) While in transit from the port of entry to any port in the manner required by the Bureau and at the expense of the importer.
Philippines; and
SEC. 911. Investigation Required in Case of Abatements and
(d) While released under sufficient security for export except in case Refunds. – The Customs Officer concerned shall, in all cases of
of loss by theft. abatement or refund of duties, submit an examination report as to
any fact discovered which indicates any discrepancy and cause the
SEC. 909. Abatement and Refund of Defective Goods. – Under corresponding adjustment on the goods declaration.
conditions to be set by the Commissioner, and with the approval of
the Secretary of Finance, an abatement and refund shall be granted SEC. 912. Refund Arising from Correction of Errors. – Manifest
on imported or exported goods which are found defective or clerical errors made on an invoice or entry, errors in return of
otherwise not in accordance with, the agreed specifications at the weight, measure and gauge, when duly certified under penalties of
time of importation or exportation and are returned either to the falsification or perjury by the surveyor or examining officer when
supplier or to another person designated by the supplier, subject to there are such officers at the port, and errors in the distribution of
the following conditions: charges on invoices not involving any question of law and certified
under penalties of falsification or perjury by the examining customs
(a) The goods have not been worked, repaired, or used in the officer, may be corrected in the computation of duties, if such errors
country of importation, and are reexported within, a reasonable are discovered before the payments of duties, or if discovered
time; and within one (1) year after release from customs custody of imported
goods upon written request and notice of error from the importer,
(b) The goods have not been worked, repaired, or used in the or upon statement of error certified by the District Collector.
country to which, they were exported, and are reimported within a
reasonable time. For the purpose of correcting errors specified in the next preceding
paragraph, the Bureau is authorized to make refunds within the
Use of the goods shall, however, not hinder the refund if such use statutory time limit.
was indispensable to discover the defects or other circumstances
which caused the reexportation or reimportation of the goods. SEC. 913. Claims for Refund. – All claims and application for refund
of duties and taxes shall be made in writing and filed with the
As an alternative to reexportation or reimportation, the goods may Bureau within twelve (12) months from the date of payment of
be expressly abandoned or destroyed or rendered commercially duties and taxes.
valueless under customs control as the Bureau may decide. In such,
case, the importer shall not be entitled to an abatement or a refund If, as a result of the refund of duties, a corresponding refund of
if it does not defray the costs of such abandonment, destruction, or internal revenue taxes on the same importation becomes due, the
rendition. Bureau shall cause the refund of internal revenue taxes in favor of
the importer after issuance of a certification from the Commissioner
SEC. 910. Abatement of Duty on Dead or Injured Animals. – Where of Internal Revenue, when applicable.
it is certified, under pain of penalty for falsification or perjury, and
upon production of proof satisfactory to the Bureau that an animal The importer may file an appeal of a denial of a claim for refund or
subject of importation dies or suffers injury before arrival, or while abatement, whether it is a full or partial denial, with the
in customs custody, the duty due thereon shall be abated provided Commissioner within thirty (30) days from the date of the receipt of
 the denial.  The Commissioner shall render a decision within thirty activities.
(30) days from the receipt of all the necessary documents
supporting the application.  Within thirty (30) days from receipt of SEC. 1002. Access to Records. – Any authorized officer of the Bureau
the decision of the Commissioner, the case may also be appealed to shall be given by the importer and customs broker full and free
the CTA. access to the premises where the records are kept, to conduct audit
examination, inspection, verification, and investigation of those
Notwithstanding the provisions in the preceding paragraphs, the records relevant to such investigation or inquiry.
filing of claims for refund of national internal revenue taxes shall be
governed by the provisions provided under the NIRC of 1997, as A copy of any document certified by or on behalf of the importer is
amended. admissible in evidence in all courts as if it were the original copy.

A customs officer is not entitled to enter the premises under this

TITLE X section unless, before so doing, the officer produces to the person
occupying or apparently in charge of the premises written evidence
POST CLEARANCE AUDIT of the fact of being duly authorized. The person occupying or
apparently in charge of the premises entered by an officer shall
SEC. 1000. Audit and Examination of Records. – Within three (3) provide the officer with all reasonable facilities and assistance for
years from the date of final payment of duties and taxes or customs the effective exercise of the officer's authority under this section.
clearance, as the case may be, the Bureau may conduct an audit
examination, inspection, verification, and investigation of records Unless otherwise provided herein or in other provisions of law, the
pertaining to any goods declaration, which shall include statements, Bureau may, in case of disobedience, invoke the aid of the proper
declarations, documents, and electronically generated or machine regional trial court within whose jurisdiction the matter falls. The
readable data, for the purpose of ascertaining the correctness of the court may punish contumacy or refusal as contempt. In addition,
goods declaration and determining the liability of the importer for the fact that the importer or customs broker denies the authorized
duties, taxes and other charges, including any fine or penalty, to customs officer full and free access to importation records during
ensure compliance with this Act. the conduct of a post clearance audit shall create a presumption of
inaccuracy in the transaction value declared for their imported
SEC. 1001. Scope of the Audit.  – The audit of importers shall be goods and constitute grounds for the Bureau to conduct a
conducted when firms are selected by a computer-aided risk reassessment of such goods.
management system, the parameters of which are to be based on
objective and quantifiable data, subject to the approval of the In addition, the imposition of the appropriate criminal sanctions
Secretary of Finance upon recommendation of the Commissioner. provided under this Act and other administrative sanctions may be
The criteria for selecting firms to be audited shall include: concurrently invoked against contumacious importers, including the
suspension of the delivery or release of their imported goods.
(a) Relative magnitude of customs revenue to be generated from
the firm; (b) The rates of duties of the firm's imports; SEC. 1003. Requirement to Keep Records. – (a) All importers are
required to keep at their principal place of business, in the manner
(c) The compliance track records of the firm; and prescribed by regulations to be issued by the Commissioner and for
a period of three (3) years from the date of final payment of duties
(d) An assessment of the risk to revenue of the firm's import and taxes or customs clearance, as the case may be, all records
pertaining to the ordinary course of business and to any activity or required to keep at their principal place of business, in the manner
information contained in the records required by this title in prescribed by regulations to be issued by the Commissioner and for
connection with any such activity. a period of three (3) years from the date of filing of the goods
declaration, copies of the abovementioned records covering the
For purposes of the post clearance audit and Section 1005 of this transactions handled.
Act, the term importer shall include the following
(c) Locators or persons authorized to bring imported goods into free
(1) Importer-of-record or consignee, owner or declarant, or a party zones, such as the special economic zones and free ports, are
who: required to keep subject-records of all its activities, including in
whole or in part, records on imported goods withdrawn from said
(i) Imports goods into the Philippines or withdraws such goods into zones into the customs territory for a period of three (3) years from
the Philippine customs territory for consumption or warehousing; the date of filing of the goods declaration.
files a claim for refund or drawback; or transports or stores such
goods carried or held under security; or Failure to keep the records required by this Act shall constitute a
waiver of this right to contest the results of the audit based on
(ii) Knowingly causes the importation or transportation or storage of records kept by the Bureau.
imported goods referred to above, or the filing of refund or
drawback claim.

(2) An agent of any party described in paragraph (1); or SEC. 1004. Power of the Commissioner to Obtain Information and
Issue Summons. – For the effective implementation of the post
(3) A person whose activities require the filing of a goods clearance audit functions of the Bureau, the Commissioner is hereby
declaration. authorized to:

A person ordering imported goods from a local importer or supplier (a) Obtain on a regular basis from any person, in addition to the
in a domestic transaction shall be exempted from the requirements person who is the subject of a post clearance audit or investigation,
imposed by this section unless: or from any office or officer of the national and local governments,
government agencies and instrumentalities, including the BSP and
(1) The terms and conditions of the importation are controlled by GOCCs, any information such as costs and "volume of production,
the person placing the order; or receipts or sales and gross income of taxpayers, and the names,
addresses, and financial statements of corporations, regional
(2) The circumstances and nature of the relationship between the operating headquarters of multinational companies, joint accounts,
person placing the order and the importer or supplier are such that associations, joint ventures or consortia and registered
the former may be considered as the beneficial or true owner of the partnerships, and their members, whose business operations or
imported goods; or activities are directly or indirectly involved in the importation or
exportation of imported goods or products manufactured from
(3) The person placing the order had prior knowledge that they will imported component materials;
be used in the manufacture or production of the imported goods.
(b) Summon the person liable for duties and taxes or required to file
(b) All parties engaged in customs clearance and processing are goods declaration, or any officer or employee of such person, or any
person having possession, custody, or care of the books of accounts
and other accounting records containing entries relating to the (b) Fraud. – When the material false statement or act in connection
business of the person liable for duties and taxes, or any other with the transaction was committed or omitted knowingly,
person, to appear before the Commissioner or the duly authorized voluntarily and intentionally, as established by clear and convincing
representative at a time and place specified in the summons and to evidence, the offender who is charged for committing fraud and is
produce such books, papers, records, or other data, and to give found guilty thereof, shall be penalized with a fine equivalent to six
testimony; (6) times of the revenue loss and/or imprisonment of not less than
two (2) years, but not more than eight (8) years.
(c) Take such, testimony of the person concerned, under oath, as
may be relevant or material to such inquiry; or The decision of the Commissioner, upon proper hearing, to impose
penalties as prescribed in this section may be appealed in
(d) Obtain information from banks or other financial institutions on accordance with Section 1104 of this Act.
commercial documents and records pertaining specifically to
payments relevant to import transaction. SEC. 1006. Records to be Kept by the Bureau. – The Bureau shall
keep a database of importer and broker profiles which shall include
The provisions of the foregoing paragraphs notwithstanding, a record of audit results and the following information and papers:
nothing in this section shall be construed as granting the
Commissioner the authority to inquire into bank deposits of persons
or entities mentioned in this Title. (a) Articles of Incorporation;

SEC. 1005. Failure to Pay Correct Duties and Taxes on Imported (b) The company structure, which shall include, but not limited to,
Goods. – Any person who, after being subjected to post clearance incorporators and board of directors key officers, and organizational
audit and examination as provided in Section 1000 of this Act, is structure;
found to have incurred deficiencies in. duties and taxes paid for
imported goods, shall be penalized according to two (2) degrees of (c) Key importations;
culpability subject to any mitigating, aggravating, or extraordinary
factors that are clearly established by available evidence as (d) Privileges enjoyed;
described hereunder:
(e) Penalties; and (1) Risk categories.
(a) Negligence. – When a deficiency results from an offender's
failure, through an act or acts of omission or commission, to The Bureau shall furnish the BIR and the DOF a copy of the final
exercise reasonable care and competence in ensuring that a audit results within thirty (30) days from the issuance thereof.
statement made is correct, the offender shall be charged for
committing negligence, and, if found guilty shall be penalized with a
fine equivalent to one hundred twenty-five percent (125%) of the TITLE XI
revenue loss: Provided, That subject to Section 108 of this Act, no
substantial penalty shall be imposed on an inadvertent error ADMINISTRATIVE AND JUDICIAL PROCEDURES
amounting to simple negligence, as defined by rules promulgated by
the Secretary of Finance, upon recommendation of the CHAPTER 1
Commissioner;
 regulations.
ADVANCE RULING AND DISPUTE SETTLEMENT
When the declared origin of the goods, not subject of a request for
SEC. 1100. Classification Ruling. – An importer or exporter may file advance ruling on origin, is in dispute, the matter shall be resolved
a written application for an advance ruling on the tariff classification in accordance with Section 1106 of this Act on "protest".
of goods with the Commission. The Commission shall render a ruling
within thirty (30) days from, receipt of a properly documented SEC. 1103. Conditions for Application and Effect of Advance Ruling. –
application. An application for an advance ruling shall cover only one (1) product
or item. The application for advance ruling shall be filed at least
When a declared tariff classification of goods, not subject of a ninety (90) days before the importation or exportation of the
pending application for advance ruling, is in dispute, the importer, product or item, as the case may be.
exporter, or the Bureau shall submit the matter to the Commission
for a ruling, without prejudice to the application of Section 1106 of SEC. 1104. Administrative and Judicial Appeals. – An aggrieved
this Act on "protest": Provided, That such rulings of the Commission party may, within thirty (30) days from receipt of an adverse ruling
on commodity classification shall be binding upon the Bureau, or decision, appeal the same to the CTA without prejudice to the
unless the Secretary of Finance shall rule otherwise. authority of the Secretary of Finance to review decisions adverse to
the government in accordance with Sections 1127 and 1128 of this
Act, as the case may be.
SEC. 1101. Valuation Ruling. – An importer or exporter may file a
written application for an advance valuation ruling on the proper SEC, 1105. Implementing Rules and Regulations. – The Secretary of
application of a specific method on customs valuation of specific Finance, upon the recommendation of the Bureau and the
goods as prescribed in Title VII, Chapter 1 of this Act. Commission, shall promulgate rules and regulations to implement
the preceding provisions on advance ruling.
The application for a valuation ruling shall be filed with the
Commissioner who shall issue a ruling within thirty (30) days from CHAPTER 2
submission of the application form and supporting documents as
may be required by rules and regulations. PROTEST

When the valuation method of goods not subject of an application SEC. 1106. Protest – When a ruling or decision of the District
for advance valuation ruling or the declared customs value is in Collector or customs officer involving goods with valuation, rules of
dispute, the matter shall be resolved in accordance with Section origin, and other customs issues is made, except the fixing of fines
1106 of this Act on "protest". in seizure cases, the party adversely affected may appeal by way of
protest against such ruling or decision by presenting to the
SEC. 1102. Ruling on the Rules of Origin. – An importer or exporter Commissioner at the time when payment of the amount claimed to
may file a written application for a ruling on whether the goods be due the government is made, or within fifteen (15) days
qualify as originating under the rules of origin of the applicable thereafter, a written protest setting forth the objection to the ruling
preferential trade agreement. The application for an advance ruling or decision in question and the reasons therefore.
on origin shall be filed with the Commissioner who shall act on the
application within thirty (30) days from receipt of the application Subject to the approval of the Secretary of Finance, the
and supporting documents as may be required by rules and Commissioner shall provide such rules and regulations as to the
requirement for payment or nonpayment of the disputed amount derogatory information regarding possible noncompliance with this
and in case of nonpayment, the release of the importation under Act. An alert order will result in the suspension of the processing of
protest upon posting of sufficient security. the goods declaration and the conduct of physical or nonintrusive
inspection of the goods within forty-eight (48) hours from issuance
SEC. 1107. Protest Exclusive Remedy in Protestable Case. – In all of the order. Within forty-eight (48) hours or, in the case of
cases subject to protest, the interested party who desires to have perishable goods, within twenty-four (24) hours from inspection,
the action of the District Collector reviewed, shall file a protest as the alerting officer shall recommend the continuance of processing
provided in Section 1106 of this Act, otherwise the action of the of goods in ease of a negative finding, or issuance of a warrant of
District Collector shall be final and conclusive. seizure and detention if a discrepancy between the declaration and
actual goods is found. The Bureau's information system shall
SEC. 1108. Form and Scope of Protest. – A protest shall be filed in immediately reflect the imposition or lifting of an alert order.
accordance with the prescribed rules and regulations promulgated
under this section. It shall specify the particular decision or ruling of Derogatory information shall indicate the violations and other
the District Collector for which protest is being made, and shall necessary specifics thereof. For this purpose, the following shall not
indicate the particular ground or grounds upon which the protesting be considered derogatory information:
party bases the claim for relief. The scope of a protest shall be
limited to the particular goods subject of a goods declaration, but (a) General allegations of undervaluation;
any number of issues may be raised in a protest with reference to
the goods declaration constituting the subject matter of the protest. (b) General allegations of misclassification without providing the
appropriate tariff heading and duty of the shipment to be alerted;
SEC. 1109. Samples to be Furnished by Protesting Parties. – If the
nature of the goods permit, importers filing protests involving (c) General allegations of over-quantity without indicating the
questions of fact must, upon demand, present to the Commissioner source of information supporting the allegation;
samples of the goods which are the subject matter of the protest.
The samples of the goods shall be verified by the customs officer (d) General allegations of misdeclaration in the entry without
who made the classification, against which the protests are filed. indicating the suspected actual contents thereof; and

SEC. 1110. Decision in Protest. – When a protest is filed in proper (e) General allegations of importations contrary to law without
form, the Commissioner shall render a decision within thirty (30) indicating the specific law or rule to be violated.
days from receipt of the protest. In case the protest is sustained, in
whole or in part, the appropriate order shall be made, and the entry No alert order shall be issued on account of allegations of
reassessed, if necessary. undervaluation unless said undervaluation is caused by the
submission to customs of forged or spurious invoice or other
commercial documents.
CHAPTER 3
An alert order may be issued only after lodgement of the goods
ALERT ORDERS declaration and prior to the release of goods from customs custody.
Under no circumstances shall, the suspension of the processing of
SEC. 1111. Alert Orders. – Alert orders are written orders issued by goods declaration be allowed except through an alert order issued
customs officers as authorized by the Commissioner on the basis of by an authorized customs officer.
 board goods of foreign growth, produce, or manufacture in excess
The costs of the physical inspection shall be borne by the of the amount necessary for sea stores, without such goods having
Bureau: Provided, That such cost shall be reimbursed by the owner been properly entered or legally imported;
prior to the release of the goods if the physical inspection results in
the assessment of additional duties or taxes or the issuance of a (c) Any vessel or aircraft into which shall be transferred cargo
warrant of seizure. unloaded contrary to law prior to the arrival of the importing vessel
or aircraft at the port of destination;
The Commissioner shall be notified of the recommendation by the
alerting officer within twenty-four (24) hours from the issuance of (d) Any part of the cargo, stores, or supplies of a vessel or aircraft
the alert order. Alert orders shall be dated and assigned a unique arriving from a foreign port which is unloaded before arrival at the
reference number in series which shall be the basis for reporting to vessel's or aircraft's port of destination and without authority from
and monitoring by the Commissioner and the Secretary of Finance. the customs officer; but such cargo, ship, or aircraft stores and
supplies shall not be forfeited if such unloading was due to accident,
The Bureau shall create a central clearing house for alert orders and stress of weather, or other necessity and is subsequently approved
shall submit reports quarterly on the status thereof. by the District Collector;

(e) Goods which are fraudulently concealed in or removed contrary

SEC. 1112. Alert Orders on Perishable Goods. – When the subject of to law from any public or private warehouse, container yard, or
the alert order are perishable goods, the Bureau shall attach to the container freight station under customs supervision;
recommendation a certificate stating that the goods are perishable.
(f) Goods, the importation or exportation of which are effected or
attempted contrary to law, or any goods of prohibited importation
CHAPTER 4 or exportation, and all other goods which, in the opinion of the
District Collector, have been used, are or were entered to be used
SEIZURE AND FORFEITURE as instruments in the importation or the exportation of the former;

SEC. 1113. Property Subject to Seizure and Forfeiture. – Property (g) Unmanifested goods found on any vessel or aircraft if manifest
that shall be subject to seizure and forfeiture include: therefor is required;

(a) Any vehicle, vessel or aircraft, including cargo, which shall be (h) Sea stores or aircraft stores adjudged by the District Collector to
used unlawfully in the importation or exportation of goods or in be excessive, when the duties and taxes assessed by the District
conveying or transporting smuggled goods in commercial quantities Collector thereon are not paid or secured forthwith upon
into or from any Philippine port or place. The mere carrying or assessment of the same;
holding on board of smuggled goods in commercial quantities shall
subject such vehicle, vessel, aircraft, or any other craft to (i) Any package of imported goods which is found upon examination
forfeiture: Provided, That the vehicle, vessel, aircraft or any other to contain goods not specified in the invoice or goods declaration
craft is not used as a common carrier which has been chartered or including all other packages purportedly containing imported goods
leased for purposes of conveying or transporting persons or cargo; similar to those declared in the invoice or goods declaration to be
the contents of the misdeclared package;
(b) Any vessel engaging in the coastwise trade which shall have on
 thereof or the agent in charge of the means of conveyance used as
(j) Boxes, cases, trunks, envelopes, and other containers of aforesaid has no knowledge of or participation in the unlawful
whatever character used as receptacle or as device to conceal goods act: Provided, That a prima facie presumption shall exist against the
which are subject to forfeiture under this Act or which are so vehicle, vessel, or aircraft under any of the following circumstances:
designed as to conceal the character of such goods;
(a) If the conveyance has been used for smuggling before;
(k) Any conveyance actually used for the transport of goods subject
to forfeiture under this Act, with its equipage or trappings, and any (b) If the owner is not in the business for which the conveyance is
vehicle similarly used, together with its equipment and generally used; and
appurtenances. The mere conveyance of smuggled goods by such
transport vehicle shall be sufficient cause for the outright seizure (c) If the owner is not financially in a position to own such
and confiscation of such transport vehicle but the forfeiture shall conveyance.
not be effected if it is established that the owner of the means of
conveyance used as aforesaid, is engaged as common carrier and SEC. 1115. Conditions Affecting Forfeiture of Goods. – The
not chartered or leased, or that the agent in charge thereof at the forfeiture shall be effected only when and while the goods are in
time, has no knowledge of the unlawful act; and the custody or within the jurisdiction of customs officers, or in the
possession or custody of or subject to the control of the importer,
(1) Goods sought to be imported or exported: exporter, original owner, consignee, agent of another person
effecting the importation, entry or exportation in question, or in the
(1) Without going through a customs office, whether the act was possession or custody of or subject to the control of persons who
consummated, frustrated, or attempted; shall receive, conceal, buy, sell, or transport the same, or aid in any
of such acts, with knowledge that the goods were imported, or were
(2) Found in the baggage of a person arriving from abroad and the subject of an attempt at importation or exportation contrary to
undeclared by such person; law.

(3) Through a false declaration or affidavit executed by the owner, SEC. 1116. Seizure or Release of Goods. – The District Collector shall
importer, exporter, or consignee concerning the importation of issue an order of release or a warrant of seizure within five (5) days,
such, goods; or two (2) days in case of perishable goods, upon the
recommendation of the alerting officer or any other customs officer.
(4) On the strength of a false invoice or other document executed The District Collector shall immediately make a report of such
by the owner, importer, exporter, or consignee concerning the seizure or release to the Commissioner.
importation or exportation of such goods; or
SBC. 1117. Warrant of Seizure or Order of Release. – The District
(5) Through any other practice or device contrary to law by means Collector shall have the authority to issue a warrant of seizure of the
of which such goods entered through a customs office to the goods upon determination of the existence of probable cause and in
prejudice of the government. case of nonexistence thereof, the issuance of order of release. In
case the District Collector issued an order of release, the District
SEC. 1114. Properties not Subject to Forfeiture in, the Absence of Collector shall immediately transmit all the records to the
Prima Facie Evidence. – The forfeiture of the vehicle, vessel, or Commissioner who shall automatically review within forty-eight (48)
aircraft shall not be effected if it is established that the owner hours, or within twenty-four (24) hours in case of perishable goods.
When no decision is made by the Commissioner within the Collector, the seized goods shall be forfeited ipso facto in favor of
prescribed period, the imported goods shall be deemed released. the government to be disposed of in accordance with this Act.

The lifting of the alert order shall be issued by the District Collector SEC. 1122. Seizure of Vessel or Aircraft for Delinquency of Owner
only upon the affirmation of the decision of the District Collector by or Officer. – When the owner, agent, master, pilot in command or
the Commissioner, or after the lapse of the period of review by the other responsible officer of any vessel or aircraft becomes liable for
Commissioner, whichever is earlier. any violation of this Act, the vessel or aircraft may be seized and be
subjected to forfeiture proceedings for the settlement of any fine or
SEC. 1118. Sale of Perishable Goods During Forfeiture penalty for which such person is liable. In determining whether or
Proceedings. – Upon motion of the importer of the perishable not to seize a vessel or aircraft, the Bureau shall take into account
goods, the goods may be sold at a public auction during the the amount of fine or penalty in relation to the commercial impact
pendency of the forfeiture proceedings. The proceeds of the auction that may be caused to international trade by the seizure or
shall be held in escrow until the final resolution of the proceedings. detention as well as the value of the vessel or aircraft.

SEC. 1119. Service of Warrant of Seizure. – The District Collector SEC. 1123. Burden of Proof in Forfeiture Proceedings. – In all
shall cause the service of warrant of seizure to the owner or proceedings for the forfeiture of any vehicle, vessel, aircraft, or
importer of the goods or the authorized representative thereof. The goods under this Act, the burden of proof shall be borne by the
owner or importer shall be given an opportunity to be heard during claimant.
the forfeiture proceedings.
SEC. 1124. Settlement of Pending Seizure Case by Payment of Fine
For the purpose of serving the warrant, the importer, consignee, or or Redemption of Forfeited Goods. – Subject to the approval of the
person holding the bill of lading or airway bill shall be deemed the Commissioner, the District Collector may allow the settlement by
"owner" of the goods. For the same purpose, "authorized payment of fine or the redemption of forfeited goods, during the
representative" shall include any agent of the owner and if the course of the forfeiture proceeding. However, the Commissioner
owner or the agent is unknown, any person having possession of may accept the settlement by redemption of any forfeiture case on
the goods at the time of the seizure. appeal. No settlement by payment of fine shall be allowed when
there is fraud or when the discrepancy in duties and taxes to be
Service of warrant to an. unknown owner shall be effected by paid between what is determined and what is declared amounts to
posting the warrant for fifteen (15) days in a public place at the more than thirty percent (30%).
concerned district, and by electronic or printed publication.
In case of settlement by payment of fine, the owner, importer,
SEC. 1120. Description, Classification and Valuation of Seized exporter, or consignee or agent shall offer to pay a fine equivalent
Goods. – The District Collector shall cause the preparation of a list to thirty percent (30%) of the landed cost of the seized goods. In
and particular description, classification, and valuation of the goods case of settlement by redemption, the owner, importer, exporter, or
seized and valuation of identical or similar goods. consignee or agent shall offer to pay the redeemed value equivalent
to one hundred percent (100%) of the landed cost.
SEC. 1121. Proceedings in Case of Property Belonging to Unknown
Parties. – If, within fifteen (15) days after service of warrant, no Upon payment of the fine or payment of the redeemed value, the
owner or agent can be found or appears before the District goods shall be released and all liabilities which may attach to the
goods shall be discharged without prejudice to the filing of The decision of the Commissioner may be served through the
administrative or criminal case. recognized modes of service under existing law.

Settlement of any seizure case by payment of the fine or SEC. 1127. Automatic Review in Forfeiture Cases. – The
redemption of forfeited goods shall not be allowed when there is Commissioner shall automatically review any decision by the District
fraud, or where the importation is prohibited or the release of the Collector adverse to the government. The entire records of the case
goods is contrary to law. shall be elevated within five (5) days from the promulgation of the
decision. The Commissioner shall decide on the automatic review
SEC. 1125. Decision in Forfeiture Cases. – In forfeiture cases, the within thirty (30) days, or within ten (10) days in the case of
District Collector shall issue an order for hearing within fifteen (15) perishable goods, from receipt of the records. When no decision is
days, or five (5) days in case of perishable goods, from issuance of rendered within the prescribed period or when a decision adverse
the warrant. The District Collector shall render a decision within to the government is rendered by the Commissioner involving
thirty (30) days upon termination of the hearing, or within ten (10) goods with FOB or FCA value of ten million pesos (P10,000,000.00)
days in case of perishable goods. The decision shall include a or more, the records of the decision of the Commissioner, or of the
declaration of forfeiture, the imposition of a fine or such other District Collector under review, as the case may be, shall be
action as may be proper. automatically elevated within five (5) days for review by the
Secretary of Finance. The decision issued by the Secretary of
Finance, whether or not a decision was rendered by the
CHAPTER 5 Commissioner within thirty (30) days, or within ten (10) days in the
case of perishable goods, from receipt of the records, shall be final
APPEAL IN PROTEST AND FORFEITURE CASES upon the Bureau.

SEC. 1126. Appeal to the Commissioner. – In forfeiture cases, the SEC. 1128. Automatic Review by the Secretary of Finance in Other
person aggrieved by the decision of a District Collector may, within Cases. – In cases not involving protest or forfeiture, the
fifteen (15) days or five (5) days in case of perishable goods, from Commissioner shall automatically review any decision by the District
receipt of the decision, file a written notice of appeal, together with Collector that is adverse to the government. The records of the case
the required appeal fee to the District Collector, furnishing a copy to shall be elevated to the Commissioner within five (5) days from the
the Commissioner. The District Collector shall immediately transmit promulgation of the decision. The Commissioner shall decide on the
all the records of the proceedings to the Commissioner, who shall automatic review within thirty (30) days from receipt of the records,
review and decide on the appeal within thirty (30) days from receipt or within ten (10) days in the case of perishable goods. When no
of the records, or fifteen (15) days in the case of perishable decision is rendered within the prescribed period or when any
goods: Provided, That if within thirty (30) days, no decision is decision rendered by the Commissioner is adverse to the
rendered, the decision of the District Collector under appeal shall be government, the records of the ease under review shall be
deemed affirmed. An appeal filed beyond the period herein automatically elevated within five (5) days for the review of the
prescribed shall be dismissed. Secretary of Finance. The decision issued by the Secretary of
Finance, whether or not a decision was rendered by the
Appeals to protest cases shall be governed by Section 114 of this Commissioner within thirty (30) days from receipt of the records, or
Act. within ten (10) days in the case of perishable goods, shall be final
upon the Bureau.
 (e) When the owner or importer fails to claim goods in customs
CHAPTER 6 bonded warehouses within the prescribed period.

ABANDONMENT The due notice requirement under this section may be provided by
the Bureau through electronic notice or personal
SEC. 1129. Abandonment, Kinds and Effects of. – Imported goods service: Provided, That for non-regular importers, notification shall
are deemed abandoned under any of the following circumstances: be by registered mail or personal service. For this purpose, the
accreditation of importers, exporters, and other third parties shall
(a) When the owner, importer, or consignee of the imported goods include provision for mandatory receipt of electronic notices.
expressly signifies in writing to the District Collector the intention to
abandon the same; or SEC. 1130. Treatment and Disposition of Abandoned Goods. –
Expressly abandoned goods under paragraph (a) of Section 1129 of
(b) When the owner, importer, consignee, or interested party after this Act shall ipso facto be deemed the property of the government
due notice, fails to file the goods declaration within the prescribed and shall be disposed of in accordance with the provisions of this
period in Section 407 of this Act: Provided, That the term goods Act.
declaration shall include provisional or incomplete goods
declaration deemed valid by the Bureau as provided in Section 403 If the Bureau has not disposed of the abandoned goods, the owner
of this Act.  For this purpose, it is the duty of the District Collector to or importer of goods impliedly abandoned may, at any time within
post a list of all packages discharged and their consignees, whether thirty (30) days after the lapse of the prescribed period to file the
electronically or physically in the District Office, or send a notice to declaration, reclaim the goods provided that all legal requirements
the consignee within five (5) days from the date of discharge; or have been complied with and the corresponding duties, taxes and
other charges, without prejudice to charges and fees due to the
(c) Having filed such goods declaration, the owner, importer, port or terminal operator, as well as expenses incurred have been
consignee or interested party after due notice, fails to pay the paid before the release of the goods from customs custody.
assessed duties, taxes and other charges thereon, or, if the
regulated goods failed to comply with Section 117 of this Act, within When the Bureau sells goods which have been impliedly
fifteen (15) days from the date of final assessment: Provided, That if abandoned, although no offense has been discovered, the proceeds
such regulated goods are subject of an alert order and the assessed of the sale, after deduction of any duty and tax and all other charges
duties, taxes and other charges thereof are not paid within fifteen and expenses incurred as provided in Section 1143 of this Act, shall
(15) days from notification by the Bureau of the resolution of the be turned over to those persons entitled to receive them or, when
alert order, the same shall also be deemed abandoned; or this is not possible, held at their disposal for a specified period.
After the lapse of the specified period, the balance shall be
(d) Having paid the assessed duties, taxes and other charges, the transferred to the forfeiture fund as provided in Section 1151 of this
owner, importer or consignee or interested party after due notice, Act.
fails to claim the goods within thirty (30) days from payment.  For
this purpose, the arrastre or warehouse operator shall report the
unclaimed goods to the District Collector for disposition pursuant to CHAPTER 7
the provisions of this Act; or
OTHER ADMINISTRATIVE PROCEEDINGS
 constructive distraint the property of a delinquent importer who, in
SEC. 1131. Authority of the Commissioner to Make Compromise. – the opinion of the Commissioner, is retiring from any business
Subject to the approval of the Secretary of Finance, the subject to duty and tax, or is intending to leave the Philippines, or to
Commissioner may compromise any administrative case arising remove the property therefrom, or to hide or conceal the property,
under this Act involving the imposition of fines and surcharges, or to perform any act tending to obstruct the proceedings for
including those arising from the conduct of a post clearance audit, collecting the duty and tax due, or which may be due.
unless otherwise specified by law.
The constructive distraint of personal property shall be effected by
Cases involving forfeiture proceedings shall however not be subject requiring the importer or any person in possession or control of
to any compromise. such property to sign a receipt covering the property, to obligate to
preserve the distrained property on the state and condition at the
time of the government's seizure of the same, and not to dispose of
CHAPTER 8 the same in any manner whatsoever, without the express authority
of the Commissioner.
CIVIL REMEDIES FOR THE COLLECTION OF DUTIES AND TAXES
In case the importer or the person in possession and control of the
SEC. 1132. Remedies for the Collection of Duties, Taxes, Fines, property sought to be placed under constructive distraint refuses or
Surcharges, Interests, and Other Charges. – The civil remedies for fails to sign the receipt herein referred to, the customs officer
the collection of import duties, taxes, fees, or charges resulting from effecting the constructive distraint shall proceed to prepare a list of
the conduct of a post clearance audit shall be obtained by: such property and, in the presence of two (2) witnesses, leave a
copy thereof in the premises where the property distrained is
(a) Distraint of goods, chattels, or effects, and other personal located, after which the said property shall be deemed to have been
property of whatever character, including stocks and other placed under constructive distraint.
securities, debts, credits, bank accounts, and interest in and rights
to personal property, and by levy upon real property and interest in SEC. 1134. Summary Remedies. – (A) Distraint of Personal
rights to real property; and (b) Civil or criminal action. Property. – Upon failure of the person owing any delinquent duty,
tax and other charges to pay at the time required, the
Either or both of these remedies may be pursued at the discretion Commissioner shall seize and distraint the goods, chattels or effects,
of the Bureau: Provided, That the remedies of distraint and levy and the personal property, including stocks and other securities,
shall not be allowed when the amount of duties and taxes involved debts, credits, bank accounts, and interests in and rights to personal
is not more than ten thousand pesos (10,000.00). property of such persons, in sufficient quantity to satisfy the duty,
tax or other charge and the expenses of the distraint and the cost of
The Bureau shall advance the amounts needed to defray costs of the subsequent sale.
collection by means of civil or criminal action, including the
preservation or transportation of personal property distrained and The officer serving the warrant of distraint shall make or cause to be
the advertisement and sale thereof, as well as of real property and made an account of the goods, chattels, effects, or other personal
improvements thereon. property distrained, a copy of which, signed by the said officer, shall
be left either with the owner or person from whose possession such
SEC. 1133. Constructive Distraint of the Property. – To safeguard goods, chattels, or effects or other personal property were taken, or
the interest of the government, the Commissioner may place under at the dwelling or other place of business of such person and with
someone of suitable age and discretion, to which list shall be added
a statement of the sum demanded and note of the time and place The levy shall be effected by writing upon the certificate a
of sale. description of the property on which levy is made. At the same
time, written notice of the levy shall be mailed to or served upon
Stocks and other securities shall be distrained by serving a copy of the register of deeds of the province or city where the property is
the warrant of distraint upon the importer and upon the president, located and upon the importer, or if the latter is not in the
manager, treasurer, or other responsible officer of the corporation, Philippines, upon the agent or the manager of the business from
company or association, which issued the said stocks or securities. which the liability arose, or if there be none, to the occupant of the
property in question.
Debts and credits shall be distrained by leaving with the person
owing the debts or having in his/her possession or under his/her In case the warrant of levy on real property is not issued before or
control such credits, or with his/her agent, a copy of the warrant of simultaneously with the warrant of distraint on personal property,
distraint. The warrant of distraint shall be sufficient authority to the and the personal property of the importer is not sufficient to satisfy
person owing the debts or having in his possession or under his the duty and tax due, the Commissioner or a duly authorized
control any credits belonging to the importer to pay to the representative shall, within thirty (30) days after execution of the
Commissioner the amount of such debts of credits. distraint, proceed with the levy on the real property of the
importer.
Bank accounts shall be garnished by serving a warrant of
garnishment upon the importer and upon the president, manager, Within ten (10) days after receipt of the warrant, a report on any
treasurer, or other responsible officer of the bank Upon the receipt levy shall be submitted by the levying officer to the
of the warrant of garnishment, the bank shall turn over to the Commissioner: Provided, That the Commissioner may lift such
Commissioner so much of the bank accounts as may be sufficient to warrants of levy issued, subject to the rules and regulations
satisfy the claim of the government. promulgated pursuant to this Act.

A report on the distraint shall, within ten (10) days from receipt of
the warrant, be submitted by the Commissioner to the Secretary of CHAPTER 9
Finance: Provided, That the Commissioner shall have the power to
lift such order of distraint subject to the rules and regulations JUDICIAL PROCEEDINGS
promulgated pursuant to this Act.
SEC. 1135. Supervision and Control over Criminal and Civil
(B) Levy on Real Property. – After the expiration of the period within Proceedings. – Civil and criminal actions and proceedings instituted
which to pay the duty, tax and other charges as prescribed in this on behalf of the Government under the authority of this Act or
section, real property may be levied upon, before, simultaneously, other laws enforced by the Bureau shall be brought in the name of
or after the distraint of personal property belonging to the the government of the Philippines and shall be prosecuted and
importer. To this end, the Commissioner or the duly authorized handled by the Bureau with the assistance of the Department of
representative shall prepare a duly authenticated certificate Justice (DOJ): Provided, That the determination of the existence of
showing the name of the importer and the amounts of the duty and probable cause and the subsequent filing of any criminal or civil
tax and penalty due. The certificate shall operate with the force of a case with the proper court against violators of this Act shall
legal execution throughout the Philippines. exclusively belong to the DOJ: Provided, however, That no civil or
criminal action for the recovery of duties or the enforcement of any
fine, penalty or forfeiture under this Act shall be filed in court
without the approval of the Commissioner. (a) Abandoned goods;

SEC. 1136. Review by the CTA. – Unless otherwise provided in this (b) Goods entered under warehousing entry but not withdrawn, or
Act or by any other law, the party aggrieved by the ruling or those whose duties and taxes have not been paid within the period
decisions of the Commissioner may appeal to the CTA, in the prescribed under Section 811 of this Act;
manner and within the period prescribed by law and regulations.
Decisions of the Secretary of Finance when required by this Act, (c) Forfeited goods, other than prohibited, restricted and regulated
may likewise be appealed to the CTA. goods; after liability have been established by the proper
administrative or judicial proceedings in conformity with the
Unless an appeal is made to the CTA in the manner and within the provisions of this Act; and
period prescribed by law and regulations, the ruling or decision of
the Commissioner or the Secretary of Finance shall be final and (d) Goods subject to a valid lien for customs duties, taxes and other
executory. charges collectible by the Bureau, after the expiration of the period
allowed for payment thereof.
SEC. 1137. Exclusive Jurisdiction of the Bureau. – Jurisdiction over
imported goods and goods for exportation shall be exclusive to the SEC. 1140. Place of Disposition of Goods. – Upon the order of the
Bureau, or the Secretary of Finance, when under review by the District Collector, goods may be sold or otherwise disposed of at the
latter, subject to the proceedings described in this title. port where the goods are located, unless the Commissioner shall
direct its transfer to another port.
Except for the CIA, no court may issue any order or decision until all
the remedies for administrative appeal have been exhausted. SEC. 1141. Mode of Disposition. – The goods subject to disposition
may be donated to another government agency or declared for
SEC. 1138. Fraud Investigation and Prosecution. – No criminal case official use of the Bureau, after approval of the Secretary of Finance,
for violation of this title shall be instituted without the approval of or sold at a public auction within thirty (30) days after a ten (10)-day
the Commissioner pursuant to the provisions of this Act. notice posted at a public place at the port where the goods are
located and published electronically or in a newspaper of general
The Bureau shall have the power to investigate and institute circulation.
smuggling cases committed within its jurisdiction: Provided, That in
case of inquest, the same may be instituted by the apprehending For purposes of donating the goods as above described, goods
customs officer. suitable for shelter or consisting of foodstuffs, clothing materials or
medicines may be donated to the DSWD.
CHAPTER 10
SEC. 1142. Disqualification to Participate in Auction Sale. – No
DISPOSITION OF PROPERTY IN CUSTOMS CUSTODY customs officer or employee, their spouses and relatives within the
fourth degree of consanguinity or affinity shall be allowed to bid
SEC. 1139. Goods Subject to Disposition. – Goods in customs directly or indirectly, in any customs auction.
custody that are in the following conditions and status shall be
subject to disposition: SEC. 1143. Disposition of Proceeds. – The following expenses and
obligations shall be paid from the proceeds of the sale in the order
provided: and two (2) representatives from the Bureau. If the goods are found
to be injurious to public health, the Board shall report this to the
(a) Customs duties, except in the case of forfeited goods; District Collector, who shall order its destruction in an appropriate
manner or order its reexportation in accordance with this Act.
(b) Taxes and other charges due the government;
The District Collector shall immediately coordinate with the health
(c) Government storage charges; and quarantine officers at the port of entry for the disposition of
goods injurious to public health.
(d) Expenses for the appraisal, advertisement, and sale of auctioned
goods; SEC. 1146. Disposition of Prohibited Good. – Prohibited goods, as
provided in Section 118 of this Act, shall be destroyed, except
(e) Arrastre and private storage charges and demurrage charges; paragraph (d) thereof which shall be turned over to the BSP. All
and goods suitable for shelter, foodstuffs, clothing materials or
medicines may be disposed in accordance with Section 1141 of this
(f) Freight, lighterage or general average, on the voyage of Act.
importation, of which due notice shall have been given to the
District Collector. SEC. 1147. Disposition of Restricted Goods. – Restricted goods as
described in Section 119 of this Act shall be disposed as follows:
The Commissioner is authorized to determine the maximum charges
to be recovered by private entities concerned under subsections (e) (a) Dynamite, gunpowder, ammunitions and other explosives,
and (f) of this section. firearms and weapons of war, and parts thereof shall be turned over
to the AFP;
SEC. 1144. Disposition of Perishable Goods. – Perishable goods as
defined under this Act when certified as such by the Bureau, may be (b) Roulette wheels, gambling outfits, loaded dice, marked cards,
sold at a public auction within five (5) days, after a three (3)-day machines, apparatus or mechanical devices used in gambling or the
notice. distribution of money, cigars, cigarettes, or other goods when such
distribution is dependent on chance, including jackpot and pinball
For this purpose, perishable goods shall include goods liable to machines or similar contrivances, or parts thereof shall be turned
perish or be wasted, or those that depreciate greatly in value while over to the appropriate government body or agency;
stored, or which cannot be kept without great disproportionate
expense. The Bureau shall proceed to advertise and sell the same at (c) Lottery and sweepstakes tickets, except advertisements thereof,
auction upon notice as shall be deemed to be reasonable. SEC. and lists of drawings therein shall be turned over to the appropriate
1145. Disposition of Goods Injurious to Public Health. – Goods in the government body or agency;
custody of the Bureau which, in the opinion of the District Collector
are injurious to public health, shall be seized. The District Collector (d) Marijuana, opium, poppies, coca leaves, heroin, or other
shall, if the matter is not disposable under the provisions relating to narcotics or synthetic drugs which are or may hereafter be declared
food and drugs, appoint three (3) members to constitute a Board to habit forming by the President of the Philippines, or any compound,
examine the goods. The Board shall be composed of one (1) manufactured salt, derivative, or preparation thereof, shall be
representative from either the DOH or other appropriate turned over to the Dangerous Drugs Board;
government agency or the local government unit (LGU) concerned,
 Act and subject to the claim of the owner or importer of an
(e) Opium pipes and parts thereof, of whatever material, shall be impliedly abandoned goods as provided in Section 1130 of this Act,
turned over to the Dangerous Drugs Board; and shall be deposited in an account to be known as Forfeiture Fund.

(f) All other restricted goods which are highly dangerous to be kept The Fund shall be in the name of and shall be managed by the
or handled shall be destroyed in a manner as the District Collector Bureau which is hereby authorized, subject to the usual government
deems appropriate. Otherwise, the restricted goods shall be turned accounting rules and regulations, to utilize it for the following
over to the proper government agency for appropriate handling. purposes:

SEC. 1148. Disposition of Regulated Goods. – Regulated goods shall (a) To outsource, subject to the rules on government procurement
be disposed of in a manner to be determined by the appropriate established by law, the management of the inventory, safekeeping,
regulatory agency. In the event that the regulatory agency allows maintenance and sale of goods enumerated in Section 1139 of this
the disposition of the regulated goods with commercial value and Act to private service providers: Provided, That the Bureau shall
capable of legitimate use, these shall be disposed of in accordance retain jurisdictional control and supervision over these goods as
with Section 1141 of this Act. well as the operations of the service provider so contracted;

SEC. 1149. Disposition of Unsold Goods for Want of Bidders. – (b) To facilitate customs seizure, abandonment and forfeiture
Goods subject to sale at public auction by the Bureau shall be sold proceedings and the disposition of goods under Section 1139 of this
at a price not less than the landed cost of the goods adjusted for Act, particularly those to be disposed of other than through public
normal depreciation. sale;

Goods which remain unsold after at least two (2) public biddings (c) To enhance customs intelligence and enforcement capability to
either due to the lack of bidders or for the lack of an acceptable bid, prevent smuggling; and
may be donated to another government agency or declared for
official use of the Bureau. If the goods are not suitable either for (d) To support the modernization program and other operational
official use or donation, these may be subject to reexport as efficiency and trade facilitation initiatives of the Bureau.
government property or sold through a negotiated sale. In case of The DOF and the Department of Budget and Management (DBM)
negotiated sale, the same shall be subject to the approval of the shall, upon the recommendation of the Bureau, issue a joint
Secretary of Finance and executed in the presence of a regulation to implement the provisions of this section.
representative of the COA. For purposes of donating the goods as
above described, goods suitable for shelter or consisting of
foodstuffs, clothing materials or medicines may be donated to the TITLE XII
DSWD.
THIRD PARTIES
SEC. 1150. Disposition of Smuggled Goods. – Smuggled goods,
when forfeited, shall be disposed of as provided in Section 1148 of CHAPTER 1
this Act.
CUSTOMS SERVICE PROVIDERS
SEC. 1151. Forfeiture Fund. – All proceeds from public auction sales
after deduction of the charges as provided in Section 1143 of this SEC. 1200. Customs Brokers and Other Service Providers. – Upon
the recommendation of the Commissioner, the Secretary of Finance
shall issue the necessary rules and regulations for the registration of (a) The vessel's general declaration;
customs brokers and the accreditation of other customs service
providers to ensure compliance with this Act and the rules and (b) The original manifest of all cargoes destined for the port, to be
regulations that shall be promulgated to implement it. returned with the endorsement of the boarding officers;

(c) Three (3) copies of the original manifest, one of which, upon
CHAPTER 2 certification by the boarding officer as to the correctness of the
copy, shall be returned to the master;
CARRIERS, VESSELS, AND AIRCRAFTS
(d) A copy of the cargo stowage plan;
SEC. 1201. Ports Open to Vessels and Aircrafts Engaged in Foreign
Trade. – Vessels and aircrafts engaged in foreign trade shall visit (e) Two (2) copies of the store list;
designated ports of entry only except as otherwise especially
allowed by law: Provided, That no existing and valid government (f) One (1) copy of the passengers list;
contract covering the handling of import and export cargo shall be
diminished or impaired. Every vessel or aircraft arriving within a (g) One (1) copy of the crew list;
Customs District of the Philippines from a foreign port shall dock at
the designated port of entry and shall be subject to the authority of (h) The original copy of all through cargo manifest, for deposit with
the District Collector of the port while within its jurisdiction. the customs officer who has jurisdiction over the vessel while in
port;
SEC. 1202. Control of Customs Officer Over Boarding or Leaving of
Incoming Vessel and Over Other Vessel Approaching the Former. – (i) The passengers manifest containing the names of all foreigners,
Upon the arrival in port of any vessel engaged in foreign trade, it in conformity with the requirements of the immigration laws in
shall be unlawful for any person, except the pilot, consul, force in the Philippines;
quarantine officers, customs officers, or other duly authorized
persons, to board or leave the vessel without permission of the (j) One (1) copy of the original duplicate of fully accomplished bill of
customs officer concerned. It shall likewise be unlawful for any lading;
tugboat, rowboat, or other craft to go alongside such vessel and for
any person so authorized to board the vessel to take any (k) The shipping goods and register of the vessel of Philippine
unauthorized person to board the same, or allow loitering near or registry; and
alongside such vessel.  Unauthorized tugboats and other vessels
shall keep away from such vessel engaged in foreign trade at a (l) Such other related documents.
distance of not less than fifty (50) meters.
SEC. 1204. Manifest Required of Vessel from Foreign Port. – Every
SEC. 1203. Documents to be Produced by the Master Upon Entry of vessel from a foreign port must have on board a complete manifest
Vessel. – Upon entry of a vessel engaged in foreign trade, the of all its cargoes.
master thereof shall present the following certified documents to
the customs boarding officers: All cargoes intended to be landed at a port in the Philippines must
be described in separate manifests for each port of call. Each
manifest shall include the port of departure and the port of delivery shall provide electronic copies of the manifest to the Chairperson of
with, the marks, numbers, quantity, and description of the packages the COA. The master shall immediately present to the District
and the names of the consignees. Every vessel from a foreign port Collector the original copy of the cargo manifest properly endorsed
must have on board complete manifests of passengers and baggage, by the boarding officer, and for inspection, the ship's register, or
in the prescribed form, setting forth the destination and all other documents in lieu thereof, together with the clearance and
particulars required by immigration laws. Every vessel shall present other papers granted to the vessel at the port of departure for the
to the proper customs officers upon arrival in ports of the Philippines.
Philippines a complete list of all sea stores then on board. If the
vessel does not carry cargo or passengers, the manifest must show SEC. 1207. Production of Philippine Crew. – The master of a
that no cargo or passenger is carried from the port of departure to Philippine vessel returning from abroad shall produce the entire
the port of destination in the Philippines. crew listed in the vessel's shipping crew manifest. If any member is
missing, the master shall produce proof satisfactory to the District
A true and complete copy of the cargo manifest shall be Collector that the member has died, or absconded, has been
electronically sent in advance by the shipping company, NVOCC, forcibly impressed into another service, or has been discharged. In
freight forwarder, cargo consolidator, or their agents within the cut- case of discharge in a foreign country, the master shall produce a
off period as may be determined by the Bureau before the arrival of certificate from the consul, vice consul, or consular agent of the
the carrying vessel at the port of entry. Upon arrival of the carrying Philippines there residing, showing that such discharge was effected
vessel, the shipping company, NVOCC, freight forwarder, cargo with the consent of the aforesaid representative of the Philippines.
consolidator, or their agents shall provide two (2) hard copies of the
cargo manifest to the Bureau in case the port of entry is either the SEC. 1208. Record of Arrival and Entry of Vessels and Aircraft. – A
Port of Manila (PoM) or the Manila International Container Port record shall be made and kept open to public inspection in every
(MICP), and one (1) copy only in the case of the other ports of entry. Customs District of the date of arrival and entry of all vessels and
aircraft.
A cargo manifest shall in no case be changed or altered after entry
of vessel, except by means of an amendment, under oath, by the SEC. 1209. Arrest of Vessel or Aircraft Departing Before Entry
master, consignee or agent thereof, which shall be attached to the Made. – When a vessel or aircraft arriving within the limits of a
original manifest: Provided, That after the invoice and/or goods Customs District from a foreign port departs or attempts to depart
declaration covering an importation have been received and before entry shall have been made, not being thereunto compelled
recorded in the office of the appraiser, no amendment of the by stress of weather, duress of enemies, or other necessity, the
manifest shall be allowed, except when it is obvious that a clerical District Collector of the port may cause the arrest and bring back
error or any other discrepancy has been committed in the such vessel or aircraft to the most convenient port with the
preparation of the manifest, without any fraudulent intent, the assistance of other concerned agencies.
discovery of which would not have been made until after
examination of the importation has been completed. SEC. SEC. 1210. Discharge of Ballast. – When not brought to port as
1205. Translation of Manifest. – The cargo manifest and each copy goods, ballast of no commercial value may be discharged upon
thereof shall be accompanied by a translation in English, if originally permit granted by the District Collector for the purpose.
written in another language.
SEC. 1211. Time of Unloading Cargo. – Unloading of cargo from a
SEC. 1206. Manifests for the Commission on Audit and District vessel or aircraft from a foreign port during official nonworking
Collector. – Upon arrival of a vessel from a foreign port, the Bureau hours shall be allowed subject to payment of service fees by
shipping lines, airlines, or other interested p arties at rates of a foreign government shall be in accordance with the agreement
prescribed by the Commissioner. by and between the Philippines and the foreign government.

SEC. 1212. Entrance of Vessel through Necessity. – When a vessel SEC. 1215. Clearance of Vessel for Foreign Port. – Before a
from a foreign port is compelled, by stress of weather or other clearance shall be granted to any vessel bound to a foreign port, the
necessity to put into any other port than that of its destination, the master or the agent thereof shall present to the District Collector
master within twenty-four (24) hours after its arrival, shall make a the following properly authenticated documents:
protest under oath setting forth the causes or circumstances of such
necessity. This protest, if not made before the District Collector, (a) A bill of health from the quarantine officer or officer of the public
must be produced and lodged with the District Collector. health service in the port;

Within the same time, the master shall make a report to the District (b) Three (3) copies of the manifest of export cargo, one of which,
Collector if any part of the cargo was unloaded from necessity or upon certification by the customs officer as to the correctness of the
lost by casualty before arrival, and produce sufficient proof to the copy, shall be returned to the master;
District Collector of such necessity or casualty before the latter who
shall give the approval thereto and the unloading shall be deemed (c) Two (2) copies of the passengers list, showing foreigners and
to have been lawfully effected. other passengers;

SEC. 1213. Unloading of Vessel in Port from Necessity. – If a (d) The register and shipping goods, if the vessel is of Philippine
situation arises where the unloading of the vessel is required registry;
pending sojourn in port, the District Collector shall, upon sufficient
proof of the necessity, grant a permit therefore, and the goods shall (e) Clearance issued by the last port of entry; and
be unloaded and stored under the supervision of customs officers.
(f) A certificate from the Philippine Postal Corporation to the effect
At the request of the master of the vessel or the owner thereof, the that it received timely notice of the sailing of the
District Collector may grant permission to enter the port and pay vessel: Provided, That the District Collector shall not permit any
duties, taxes and other charges on, and dispose of, such part of the vessel to sail for a foreign port if the master or agent thereof refuses
cargo as may be perishable in nature or as may be necessary to to receive bags of mail delivered to the same by the Philippine
defray the expenses attending the vessel. Postal Corporation for transport upon reasonable compensation. In
case the Postmaster General and the master or agent do not come
Upon departure, the cargo, or a part thereof, may be reloaded on to an agreement concerning the amount of the compensation to be
board the vessel, and the vessel may proceed with the same to its paid for the carriage of the mail, the matter shall be submitted for
destination, subject only to the charge for storing and safekeeping decision to a Board of Referees to be composed of three (3)
of the goods and the fees for entrance and clearance. No port members appointed, respectively, by the Philippine Postal
charges shall be collected on vessels entering through stress of Corporation, the agency of the company to which the vessel
weather, duress or other urgent necessities. concerned belongs, and the Bureau, who shall fix a reasonable rate
of compensation.
SEC. 1214. Entry and Clearance of Vessels of a Foreign
Government. – The entry and clearance of transport or supply ship SEC. 1216. Detention of Warlike Vessel Containing Arms and
Munitions. – District Collectors shall report to the proper authorities
or detain any vessel of commercial registry manifestly built for of departure, and without such extension the original clearance
warlike purposes and about to depart from the Philippines with a shall be nullified.
cargo consisting principally of arms and munitions of war,
SEC. 1219. Advance Notice of Aircraft Arrival. – (A) Nonscheduled
when the number of men shipped on board or other circumstances Arrivals. – Before an aircraft comes into any area in the Philippines
render it probable that such vessel is intended to be employed by from any place outside thereof, a timely notice of the intended
the owner or owners to cruise or commit hostilities upon the flight shall be furnished to the District Collector or other customs
subjects, citizens, or property of any foreign principality or state, or officer-in-charge at or nearest the intended place of first landing,
of any colony, district, or people with whom the Philippines is at and to the quarantine and immigration officers-in-charge at or
peace, until the decision of the President of the Philippines is nearest such place of landing. If dependable facilities for giving
rendered thereon, or until the owner or owners shall give a security, notice are not available before departure, the use of any radio
in double the value of the vessel and cargo, that it will not be so equipment shall be appropriate as long as it will result in the giving
employed, if in the discretion of the District Collector such security of adequate and timely notice of the aircraft's approach, otherwise
will prevent the violation of the provisions of this section. landing shall be made at a place equipped with navigational
facilities. If, upon landing in any area, the government officers have
SEC. 1217. Oath of Master of Departing Vessel. – The master of a not arrived, the pilot-in-command shall hold the aircraft and any
departing vessel shall state under oath that: baggage and goods thereon intact and keep the passengers and
crew members in a segregated place until the inspecting officers
(a) All cargoes conveyed on the vessel, destined for the Philippines, arrive.
have been duly discharged or accounted for;
(B) Scheduled Arrivals. – Such advance notice will not be required in
(b) A true copy of the outgoing cargo manifest has been furnished the case of an airline arriving in accordance with the regular
to the Bureau; schedule filed with the District Collector for the Customs District in
which the place of first landing area is situated, and also with the
(c) No letters or packets, not enclosed in properly stamped envelope quarantine and immigration officers-in-charge of such place.
sufficient to cover postage, have been received or will be conveyed,
except those relating to the vessel; and that all mails placed on SEC. 1220. Landing at International Airport of Entry. – Except in
board the vessel before its last clearance from the Philippines have case of emergency or forced landings, aircraft arriving in the
been delivered at the proper foreign port; and Philippines from any foreign port or place shall make the first
landing at an international airport of entry, unless permission to
(d) If clearing without passenger, the vessel will not carry upon the land elsewhere other than at an international airport of entry is first
instant voyage, from the Philippine port; any passenger of any class, obtained from the Commissioner. In such cases, the owner,
or other person not entered upon the ship's declaration. operator, or person in charge of the aircraft shall pay the expenses
incurred in inspecting the aircraft, goods, passengers, and baggage
SEC. 1218. Extension of Time for Clearance. – At the time of carried thereon, and such aircraft shall be subject to the authority of
clearance, the master of a departing vessel shall be required to the District Collector at the airport while within its jurisdiction.
indicate the time of intended departure, and if the vessel should
remain in port forty-eight (48) hours after the time indicated, the Should an emergency or forced landing be made by an aircraft
master shall report to the District Collector for an extension of time coming into the Philippines at a place outside the jurisdiction of the
latter, the pilot-in-command shall not allow goods, baggage,
passenger, or crew member to be removed or to depart from the
landing place without permission of a customs officer, unless such (5) Names and nationality of crew members;
removal or departure is necessary for purposes of safety,
communication with customs officers, or preservation of life, health, (6) Passengers manifest showing places of embarkation and
or property. As soon as practicable, the pilot-in-command, or a destination;
member of the crew-in-charge, or the owner of the aircraft, shall
communicate with the customs officer at the intended place of first (7) Cargo manifest showing information as to airway bill number,
landing or at the nearest international airport or other customs port the number of packages related to each airway bill number, nature
of entry in the area and make a full report of the circumstances of of goods, destination, and gross weight, together with a copy of
the flight and of the emergency or forced landing. each airway bill securely attached thereto;

SEC. 1221. Report of Arrival and Entry of Aircraft. – The pilot-in- (8) Store list; and
command of any aircraft arriving from a foreign port or place shall
immediately report its arrival to the District Collector at the airport (9) Such other documents as may be required by the Bureau.
of entry or to the customs officer detailed to meet the aircraft at the
place of first landing. Upon arrival, such aircraft shall be boarded by (b) The general declaration shall be written in English and duly
a quarantine officer, and after pratique or health clearance is signed by the pilot-in-command or operator of the aircraft, or the
granted, shall be boarded by a customs officer; subsequently no authorized agent. The section on health, and customs clearances,
person shall be permitted to board or leave the aircraft without the however, shall be signed only by the pilot-in-command or when
permission of the customs officer. The pilot-in-command or any necessary, by a crew member when the general declaration itself
other authorized agent of the owner or operator of the aircraft shall has been signed by a non-crew member. If the aircraft does not
make the necessary entry. No such aircraft shall, without previous carry cargoes or passengers, such facts must be shown in the
permission from the District Collector, depart from the place of first manifest.
landing or discharge goods, passengers, or baggage.
(c) A cargo manifest shall in no case be changed or altered after
SEC. 1222. Documents Required in Making Entry for Aircraft. – (a) entry of the aircraft, except by means of an amendment by the
For the purpose of making entry, there shall be presented to the pilot-in-command or authorized agent thereof, under oath, and
boarding customs officer four (4) copies of a general declaration attached to the original manifest: Provided, That after the invoice
which shall contain the following data, unless any of such data is and/or goods declaration covering an importation have been
otherwise presented on a separate official form: received and recorded in the office of the appraiser, no amendment
shall be allowed except when it is obvious that a clerical error or any
(1) Name of owner or operator of aircraft, registration marks and other discrepancy has been committed without any fraudulent
nationality of aircraft, and flight number of identification; intent in the preparation of the manifest, the discovery of which
could not have been made until after complete examination of the
(2) Points of clearance and entry, and date of arrival; importation.

(3) Health and customs clearance at the last airport of departure; SEC. 1223. Manifests for the Commission on Audit (COA) and
District Collector. – Upon arrival of an aircraft from a foreign port,
(4) Itinerary of aircraft, including information as to airport of origin the Bureau shall provide electronic copies of the manifest to the
and departure dates; Chairperson of the COA. The master shall immediately present to
the District Collector the original copy of the cargo manifest
properly endorsed by the boarding officer, and for inspection, the (a) All cargoes conveyed on the aircraft destined to the Philippines
aircraft's register or other documents in lieu thereof, together with have been duly discharged and accounted for; and
the clearance and other papers granted to the aircraft at the port of
departure for the Philippines. (b) The aircraft has not received nor will convey any letter or packet
not enclosed in properly stamped envelope sufficient to cover
SEC. 1224. Clearance of Aircraft for Foreign Port. – (a) Any aircraft postage, except those relating to the cargo of the aircraft, and that
bound to a foreign port shall, before departure, be granted there was delivery to the proper foreign port of all mails placed on
clearance by the Commissioner at an airport of entry where such board said aircraft before clearance from the Philippines.
aircraft has been authorized to make its landing; and
If an aircraft is cleared to depart without passengers, the aircraft
(b) Before clearance shall be granted to an aircraft bound to a shall not carry any passenger thereon.
foreign port, there shall be presented to the District Collector or to
the customs officer detailed at the place of departure four (4) copies A record shall be made and kept open to public inspection in every
of a general declaration signed by the pilot-in-command or customs office at an airport of entry of the dates of arrival and entry
authorized agent of an aircraft which shall contain the following of all aircraft.
data; (1) Name of owner or operator of aircraft, registration marks
and nationality of aircraft, and flight number of identification;
CHAPTER 3
(2) Port of clearance, data thereof and destination;
OTHER THIRD PARTIES
(3) Health and customs clearance;
SEC. 1226. Supervision and Regulation of Third Parties. – Third
(4) Itinerary of aircraft, including information as to airport of parties transacting with the Bureau on behalf of importers and
destination and departure date; consignees shall be treated equally as true importers or consignees.

(5) Names and nationality of crew members; Third parties transacting with the Bureau shall be liable for acts
ommitted in violation of this Act and related laws.
(6) Passengers manifest showing places of destination;
Upon the recommendation of the Commissioner, the Secretary of
(7) Export cargo manifest showing information as to airway bill Finance shall issue rules and regulations to govern and regulate the
number, the number of packages related to each airway bill conduct of all third parties dealing directly with
number, nature of goods, destination, and gross weight, together
with a copy of each airway bill securely attached thereto; and
the Bureau in relation to the importation, exportation, movement,
(8) Store list showing stores loaded. storage and clearance of goods for and on behalf of another person.
The rules and regulations shall provide for specific conditions when
SEC. 1225. Oath of Person-in-Charge of Departing Aircraft. – The third parties may or may not directly transact with the Bureau and
pilot-in-command or authorized agent of such departing aircraft shall provide a written notice in case such third parties are, for valid
shall also state under oath to the effect that: reasons, barred from transacting with the Bureau. Third party is
defined under Section 102(uu) of this Act. For purposes of this
section, third parties may also refer to logistics providers; importers, SEC. 1228. Trade Facility for AEO. – The Secretary of Finance shall,
exporters, carriers, airlines, shipping lines, shipping agents, upon the recommendation of the Commissioner, issue the
forwarders, consolidators, port and terminal operators, and necessary rules:
warehouse operators, if such persons or entities transacted with the
Bureau. (a) To supervise and regulate the conduct and operations of the
AEO s, consistent with international best practices, the World
Customs Organization (WCO) framework of standards to secure and
CHAPTER 4 facilitate global trade, and other international conventions and
agreements;
AUTHORIZED ECONOMIC OPERATORS (AEOs)
(b) To develop a trade facilitation program for AEOs and other
SEC. 1227. Treatment of Authorized Economic Operators (AEOs). – authorized persons consistent with international best practices and
The Bureau shall promulgate the necessary procedures and international conventions and agreements; and
requirements for the compliance of Authorized Economic Operators
(AEOs). For AEOs who have displayed diligence in complying with (c) To recognize existing facilities where the authority or right to
the rules and the submission of official customs requirements, and operate AEOs has been granted by the relevant government agency
have satisfactorily managed their commercial records, the Bureau or regulator through a contract, where the Bureau shall:
shall extend the following incentives:
(i) Only require an endorsement by the relevant agency or
(a) Release of the goods upon provision of the minimum regulator;
information necessary to identify the goods and permit the
subsequent completion of the final goods declaration; (ii) Issue a certificate of authority as a matter of course; and

(b) Grant of clearance of the goods at the declarant's premises or (iii) Ensure that the term of the certificate of authority shall be
another place authorized by the Bureau; and coterminous with the applicable government contract or any
extension thereof.
(c) Other special procedures such as:
The Bureau shall implement the provisions of this chapter without
(i) Allowing a single goods declaration for all imports or exports in a interfering, or impeding AEO operations as well as existing
given period where goods are imported or exported frequently by operations of wharves, container yards, container freight stations,
the same person; warehouses, examination areas and other facilities located in
customs territory and/or in airports and seaports. The Bureau shall
(ii) Use of commercial records to self-assess their duty and tax likewise ensure that any subsequent rules, regulations, orders or
liability and, where appropriate, to ensure compliance with other memoranda issued in relation to AEOs shall be consistent with the
customs requirements; and appropriate government agency's or regulator's prevailing operating
procedures and international hest practices.
(iii) Allowing the lodgement of goods declaration by means of an
entry in the records by the authorized person to be supported Existing contracts of private operators with appropriate government
subsequently by a supplementary goods declaration. agency or regulator, such as, but not limited to, the PPA, SBMA. and
PIA and their respective authorities and powers already granted by less than ten percent (10%), or when the declared tariff heading is
law pertinent to such contract, shall not be impaired or adversely rejected in a formal customs dispute settlement process involving
affected with the Bureau's implementing rules and regulations on difficult or highly technical question of tariff classification, or when
AEOs. the tariff classification declaration relied on an official government
ruling.

TITLE XIII There is undervaluation when: (a) the declared value fails to
disclose in full the price actually paid or payable or any dutiable
CUSTOMS FEES AND CHARGES adjustment to the price actually paid or payable; or (b) when an
incorrect valuation method is used or the valuation rules are not
SEC. 1300. Customs Dues, Fees and Charges. – For services properly observed, resulting in a discrepancy in duty and tax to be
rendered and documents issued by the Bureau, dues, fees and paid between what is legally determined as the correct value
charges shall be collected as may be provided under existing against the declared value. When the undervaluation is established
regulations issued by the Secretary of Finance, upon the without the need to go through the formal dispute settlement
recommendation of the Commissioner. process provided for in this Act, a surcharge shall be imposed
equivalent to two hundred fifty percent (250%) of the duty and tax
SEC. 1301. General Provision on the Authority to Increase or due. No surcharge shall be imposed when the discrepancy in duly is
Decrease Dues, Fees and Charges. –The Secretary of Finance may, less than ten percent (10%); or the declared value is rejected as a
upon the recommendation of the Commissioner, increase or result of an official ruling or decision under the customs dispute
decrease the dues, fees and charges collectible by the Bureau to settlement process involving difficult or highly technical question
protect the interest of the government. relating to the application of customs valuation rules.

A discrepancy in duty and tax to be paid between what is legally

TITLE XIV determined and what is declared amounting to more than thirty
percent (30%) shall constitute a prima facie evidence of fraud.
OFFENSES AND PENALTIES
When the misdeclaration, misclassification or undervaluation is
CHAPTER 1 intentional or fraudulent, such as when a false or altered document
is submitted or when false statements or information are knowingly
CRIMES AND OTHER OFFENSES made, a surcharge shall be imposed equivalent to five hundred
percent (500%) of the duty and tax due and that the goods shall be
SEC. 1400. Misdeclaration, Misclassification, Undervaluation, in subject to seizure regardless of the amount of the discrepancy
Goods Declaration. – Misdeclaration as to quantity, quality, without prejudice to the application of fines or penalties provided
description, weight, or measurement of the goods, or under Section 1401 of this Act against the importer and other
misclassification through insufficient or wrong description of the person or persons who willfully participated in the fraudulent act.
goods or use of wrong tariff heading resulting to a discrepancy in
duty and tax to be paid between what is legally determined upon SEC. 1401. Unlawful Importation or Exportation. – Any person who
assessment and what is declared, shall be subject to a surcharge shall fraudulently import or export or bring into or outside of the
equivalent to two hundred fifty percent (250%) of the duty and tax Philippines any goods, or assist in so doing, contrary to law, or shall
due. No surcharge shall be imposed when the discrepancy in duty is receive, conceal, buy, sell, or in any manner facilitate the
transportation, concealment, or sale of such goods after
importation, or shall commit technical smuggling as defined in this (e) Imprisonment of not less than six (6) years and one (1) day but
Act shall be penalized by: not more than twelve (12) years, or a fine of not less than one
million five hundred thousand pesos (P 1,500,000.00) but not more
(a) Imprisonment of not less than thirty (30) days and one (1) day than fifteen million pesos (P15,000,000.00), or both, if the appraised
but not more than six (6) months, or a fine of not less than twenty- value of the goods unlawfully imported, to be determined in the
five thousand pesos (P25,000.00) but not more than seventy-five manner prescribed under this Act, including duties and taxes,
thousand pesos (P75,000.00), or both, if the appraised value of the exceeds five million pesos (P5,000,000.00) but not more than fifty
goods unlawfully imported, to be determined in the manner million pesos (P50,000,000.00);
prescribed under this Act, including duties and taxes, of the goods
unlawfully imported does not exceed two hundred fifty thousand (f) Imprisonment of not less than twelve (12) years and one (1) day
pesos (P250,000.00); but not more than twenty (20) years, or a fine of not less than
fifteen mill-inn pesos (P15,000,000.00) but not more than fifty
(b) Imprisonment of not less than six (6) months and one (1) day but million pesos (P50,000,000.00), or both, if the appraised value of
not more than one (1) year, or a fine of not less than seventy-five the goods unlawfully imported, to be determined in the manner
thousand pesos (P75,000.00) but not more than one hundred fifty prescribed under this Act, including duties and taxes, exceeds fifty
thousand pesos (P150,000.00), or both, if the appraised value of the million pesos (P50,000,000.00) but not more than two hundred
goods unlawfully imported, to be determined in the manner million pesos (P200,000,000.00);
prescribed under this Act, including duties and taxes, exceeds two
hundred fifty thousand pesos (P250,000.00) but not more than five (g) If the appraised value of the goods unlawfully imported to be
hundred thousand pesos (P500,000.00); determined in the manner prescribed under this Act, including
duties and taxes, exceeds two hundred million pesos
(c) Imprisonment of not less than one (1) year and one (1) day but (P200,000,000.00) or if the aggregate amount of the appraised
not more than three (3) years, or a fine of not less than one value of the goods which are the subject of unlawful importation
hundred fifty thousand pesos (P150,000.00) but not more than committed in more than one instance, including duties and taxes,
three hundred thousand pesos (P300,000.00) or both, if the exceeds two hundred million pesos (P200,000,000.00), the same
appraised value of the goods unlawfully imported, to be determined shall be deemed as a heinous crime and shall be punishable with a
in the manner prescribed under this Act, including duties and taxes, penalty of reclusion perpetua and a fine of not less than fifty million
exceeds five hundred thousand pesos (P500,000.00) but not more pesos (P50,000,000.00); and
than one million pesos (P 1,000,000.00);
(h) The penalty of prision mayor shall be imposed when the crime of
(d) Imprisonment of not less than three (3) years and one (1) day serious physical injuries shall have been committed, and the penalty
but not more than six (6) years, or a fine of not less than three of reclusion perpetua shall be imposed when the crime of homicide
hundred thousand pesos (P300,000.00) but not more than one shall have been committed by reason or on the occasion of the
million five hundred thousand pesos (P 1,500,000.00), or both, if the unlawful importation.
appraised value of the goods unlawfully imported, to be determined
in the manner prescribed under this Act, including duties and taxes, In applying the above scale of penalties, an offender who is a
exceeds one million pesos (P1,000,000.00) but not more than five foreigner shall be deported without further proceedings after
million pesos (P5,000,0 00.00); serving the sentence. If the offender is a public officer or employee,
the penalty which is the next higher in degree shall be imposed in
addition to the penalty of perpetual disqualification from public are not declared by any person arriving within the Philippines, such
office, and disqualification to vote and to participate in any public goods shall be seized and the person may obtain release of such
election. If the offender fails to pay the fine, subsidiary goods, if not imported contrary to any law, upon payment of a
imprisonment shall be served. surcharge equivalent to thirty percent (30%) of the landed cost of
such goods, in addition to all duties, taxes and other charges due.
When, upon trial for violation of this section, the defendant is Nothing in this section shall preclude the filing of criminal action
shown to have had possession of the goods in question, possession against the offender.
shall be deemed sufficient evidence to authorize conviction unless
the defendant shall explain the possession to the satisfaction of the SEC. 1405. Vessel, Seacraft, or Aircraft Departing Before
court: Provided, That each act of unlawful importation or Undergoing Customs Formalities. – Any vessel, seacraft, or aircraft
exportation shall be deemed as a separate offense: Provided, arriving within the limits of a Customs District from a foreign port
however, That payment of the tax due after apprehension shall not which departs before undergoing customs formalities, without
constitute a valid defense in any prosecution, under this being compelled to do so by stress of weather, pursuit or duress of
section: Provided, further, That outright smuggling shall also be enemies, or other necessity, shall be liable for a fine of not less than
punishable under this section: Provided, finally, That the rights and one hundred thousand pesos (P100,000.00) but not more than
privileges provided in this Act for the importers, consignees, three hundred thousand pesos (P300,000.00).
exporters, service providers, third parties and other third parties
who committed this offense shall be revoked. SEC. 1406. Obstruction to Boarding Officer. – If the master or pilot-
in-command or any member of the complement of any vessel or
SEC. 1402. Failure or Refusal of Party to Give Evidence or Submit aircraft arriving at the Philippine port obstructs or hinders any
Documents for Assessment. – When the owner, importer or officer from lawfully going on board such vessel or aircraft for the
consignee of any imported goods, or the agent of either, fails or purpose of enforcing this Act, or intentionally causes any officer to
refuses, upon lawful demand in writing by any customs officer to be so obstructed or hindered, the vessel or aircraft shall be liable to
appear, lawfully depose, or submit to examination or to answer any a fine of not less than one hundred thousand pesos (P100,000.00)
material question or refuses to produce records, accounts or but not more than three hundred thousand pesos (P300,000.00).
invoices in possession pertaining to the value, classification or
disposition of the goods in question and deemed material in SEC. 1407. Unlawful Boarding or Leaving of Vessel or Aircraft. – If,
assessing the same, the District Collector shall assess a surcharge of upon arrival at the Philippine port, any master of a vessel or pilot-in-
twenty percent (20%) on the dutiable value of the goods which is command of an aircraft engaged in a foreign trade permits any
the subject of the importation. person to board or leave the vessel or aircraft without the
permission of the customs officer-in-charge, the owner or operator
SEC. 1403. Other Fraudulent Practices Against Customs Revenue. – of such vessel or aircraft shall he liable for a fine of not less than one
Any person who makes or attempts to make any entry of imported hundred thousand pesos (100,000.00) but not more than three
or exported goods by means of any false or fraudulent statement, hundred thousand pesos (P300,000.00).
document or practice or knowingly and willfully files any false or
fraudulent claim for payment of drawback or refund of duties shall, SEC. 1408. Unloading of Cargo Before Arrival at Port of Entry. – If,
for each act, be punished in accordance with the penalties upon the arrival within the limits of any Customs District of the
prescribed in Section 1401 of this Act. Philippines of any vessel or aircraft engaged in foreign trade, the
master or pilot-in-command thereof permits any part of the cargo
SEC. 1404. Failure to Declare Baggage. – Whenever dutiable goods to be unloaded before arrival at the port of entry, and without
authority from a proper customs officer, the owner, operator, or
agent of such vessel or aircraft shall he liable for a fine of not less SEC. 1412. Failure to Supply Advance and Requisite Manifests. –
five hundred thousand pesos (P500,000.00) but not more than two Failure to transmit the electronic manifest within the required time
million pesos (P2,000,000.00): Provided, That no fine shall accrue as may be prescribed by the Bureau, prior to arrival of the carrying
upon satisfactory proof to the proper District Collector that the vessel or aircraft at the port of entry shall make the owner,
unloading was rendered necessary by stress of weather, accident or operator, or agent of the vessel or aircraft liable for a fine of not less
other necessity: Provided, however, That the fine imposed herein than one hundred thousand pesos (P100,000.00) but not more than
shall be without prejudice to the application of fines or penalties three hundred thousand pesos (P300,000.00).
provided under Section 1401 of this Act.
If the transit time from port of origin to port of entry is at least
SEC. 1409. Unloading of Cargo at Improper Time or Place After seventy-two (72) hours, the shipping or forwarding agent of the
Arrival. – The owner or operator of any vessel or aircraft from which carrier or the vessel who fails to submit the manifest at least
cargo is discharged upon arrival in the Philippines at a time or place twenty-four (24) hours before entry shall likewise be liable for a fine
other than that designated by the District Collector, shall be fined of not less than one hundred thousand pesos (P100,000.00) but not
not less one hundred thousand pesos (P100,000.00) but not more more than three hundred thousand pesos (P300,000.00).
than three hundred thousand pesos (P300,000.00): Provided, That
no fine shall accrue upon satisfactory proof to the proper District SEC. 1413. Disappearance of Manifested Goods. – When any
Collector that the unloading was rendered necessary by stress of package or goods mentioned in the manifest meant to be unloaded
weather, accident or other necessity. at the port of destination is not unloaded upon the arrival of the
vessel or aircraft, its agent shall be liable for a fine of not less than
SEC. 1410. Failure to Exhibit or Deposit Documents. – When the one hundred thousand pesos (P100,000.00) but not more than
master of a vessel or pilot-in-command of an aircraft engaged in three hundred thousand pesos (P300,000.00) unless the
foreign trade fails to submit to the District Collector at the time of disappearance of the package or the goods in question was not due
entry of the vessel or aircraft the register or other documents in lieu to the negligence of the master of the vessel or pilot-in-command of
thereof, together with the clearance and other documents granted an aircraft, and is explained to the satisfaction of the District
by the customs officers to the vessel or aircraft at the last foreign Collector.
port of departure, or fails to exhibit any certificate or other
documents required to be then exhibited, the owner or operator of The owner, operator, or agent of a vessel or aircraft shall be liable
such vessel or aircraft shall be liable for a fine of not less than one for the payment of the same fine when a package or goods listed in
hundred thousand pesos (P100.000.00) but not more than three the manifest does not tally materially in character or otherwise with
hundred thousand pesos (P300,000.00). the description thereof in the manifest.

SEC. 1411. Bringing of Unmanifested Arms, Explosives or War SEC. 1414. Discrepancy Between Actual and Declared Weight of
Equipment. – The owner, operator, or agent of a vessel or aircraft Manifested Goods. – If the gross weight of goods or package
arriving at a port in the Philippines bearing cargo consisting of described in the manifest or bill of lading exceeds the declared
firearms, gunpowder, cartridges, dynamite or any other explosives, weight by more than ten percent (10%), and such discrepancy was
munitions or equipment of war not contained in the manifest of the due to the negligence of the master or pilot-in-command, the
vessel or aircraft, or which are concealed on board, shall be liable owner, employee, operator or agent of the importing vessel or
for a fine of not less than five hundred thousand pesos aircraft shall be liable for a fine of not more than twenty percent
(P500,000.00) but not more than one million pesos (P1,000,000.00). (20%) of the value of the package or goods in respect to which the
deficiency exists. cleared for without having been impelled to do so by necessity, shall
be prima facie proof that the original statement of the actual
SEC. 1415. Discrepancy With the Master's or Pilot's-in-Command destination of the vessel or aircraft was false.
Report. – When a vessel or aircraft arriving from a foreign port is
compelled by necessity to unload in another port other than the SEC. 1418. Affixing Seals. – Any person who, without authority,
port of entry and permission is granted by the District Collector for affixes or attaches a customs seal, fastening, or any mark, or
the unloading of the vessel or aircraft or the delivery of any part of fastening purporting to be a customs seal, to any vessel, aircraft,
the cargo and it shall be found that there is discrepancy between vehicle, warehouse, or package, shall be penalized with
the cargo unloaded and the report of the master or the pilot-in- imprisonment of not less than six (6) months and one (1) day but
command and such discrepancy is not satisfactorily explained, the not more than one (1) year, and shall be liable for a fine of not less
owner, operator or agent of the vessel or aircraft shall be liable for a than one hundred thousand pesos (P100,000.00) but not more than
fine of not less than one hundred thousand pesos (P100,000.00) but three hundred thousand pesos (P300,000.00). If the offender is a
not more than three hundred thousand pesos (P300,000.00). foreigner, the offender shall be deported after serving the sentence.
If the offender is a public officer or employee, the offender shall
SEC. 1416. Failure to Report Fraud. – A master, pilot-in-command suffer an additional penalty of perpetual disqualification to hold
or other officer, owner or agent of any vessel or aircraft trading with public office and disqualification from exercising the right to vote
or within the Philippines who has knowledge of the commission of and to participate in any election.
fraud that shall result in the loss or diminution of customs revenue
but fails to report all information relative thereto to the Distract SEC. 1419. Breaking of Seal Placed by Customs Officers. – If any
Collector shall be penalized with imprisonment of not less than six seal placed by a customs officer upon any vessel or aircraft or
(6) months and one (1) day but not more than one (1) year and shall compartment thereof, or upon any box, trunk or other package of
be liable for a fine of not less than one hundred thousand pesos goods on board is broken, the owner, operator, or agent of the
(P100,000.00) but not more than three hundred thousand pesos vessel or aircraft shall be liable for a fine of not less than one
(P300,000.00).  If the offender is a foreigner, the offender shall be hundred thousand pesos (P100,000.00) but not more than three
deported after serving the sentence.  If the offender is a public hundred thousand pesos (P300,000.00) for each broken or
officer or employee, the offender shall suffer additional penalty of destroyed seal.
perpetual disqualification to hold public office, to vote and to
participate in any election. All the benefits due from service in the SEC. 1420. Breaking of Lock or Fastening Placed by Customs
government, including the separation and retirement benefits, shall Officers. – If any lock or other fastening device placed by a customs
be forfeited. officer upon any hatch door, or other means of communication in
the hold of a vessel or aircraft, or other part thereof for the security
SEC. 1417. False Statement of Vessel's or Aircraft's Destination. – of the same during the night time, is unlawfully opened, broken or
When the master or pilot-in-command of a vessel or aircraft loaded removed, or if any of the goods contained in the hold or in the other
with goods shall make a false statement as to the next destination compartments so secured is clandestinely abstracted and landed,
of such vessel or aircraft when that information is required by a the owner, operator, or agent of the vessel or aircraft shall be liable
customs officer, the owner or operator of such vessel or aircraft for a fine of not less than one hundred thousand pesos
shall be liable for a fine of not less than one hundred thousand (P100,000.00) but not more than three hundred thousand pesos
pesos (P100,000.00) but not more than three hundred thousand (P300.000.00).
pesos (P300,000.00). The arrival of a vessel or aircraft at a different
port other than the one it had been originally authorized and SEC. 1421. Removal, Breakage, and Alteration of Marks. – Any
person who, without authority, willfully removes, breaks, injures, removed from any such vessel, vehicle or warehouse, or shall aid or
defaces or alters any customs seal or other fastening or mark placed abet such removal, shall suffer the penalties provided in Section
upon any vessel, vehicle, on land, sea or air, warehouse or package 1401 hereof.
containing merchandise or baggage in bond or in customs custody,
shall be punished with the penalty prescribed in Section 1420 SEC. 1425. Failure to Pay Duties, Taxes and Other Charges. – For
hereof. failure to pay the duties, taxes and other charges of an assessment
within fifteen (15) days from the date of final assessment, a
SEC. 1422. Unauthorized Withdrawal of Imported Goods from surcharge of ten percent (10%) of the total assessed amount or
Bonded Warehouse. – Any person who causes the unauthorized balance thereon shall be added and collected, which surcharge shall
withdrawal of imported goods stored from a CBW shall be liable for be increased to twenty-five percent (25%) if the delinquency lasts
payment of a surcharge of fifty percent (50%) of duties, taxes, for more than one (1) year.
customs fees, and charges, found to be due and unpaid. The
amount of surcharge shall be added to the duties, taxes and charges SEC. 1426. Breach of Security. – Upon breach of security require d
due on the goods withdrawn. If the delinquency lasts for more than to be filed under this Act, the District Collector, subject to the
one (1) year, the surcharge shall be increased by twenty-five approval of the Commissioner, may accept in satisfaction thereof a
percent (25%) of the unpaid duties and taxes annually: Provided, smaller stun than that mentioned in the penalty clause of the
That where the withdrawal is attended with fraud, such as when a security, but in no case less than the amount necessary to indemnify
fake or altered withdrawal permit is submitted, the warehouse the government for the damage occasioned by such breach.
operator shall be held liable under the pertinent provisions of this
Act, without prejudice to the suspension or revocation of the SEC. 1427. Failure to Keep Importation Records and Full Access to
warehousing privileges granted by the Bureau pursuant to this Act. Customs Officers. – Any person who fails to keep all the records of
importations or books of accounts, business and computer systems
SEC. 1423. Removing or Repacking Goods in Warehouse. – Any and all customs commercial data in the manner prescribed under
person who fraudulently conceals, removes, or repacks this Act, shall be punished with imprisonment of not less than three
merchandise in any warehouse or fraudulently alters, defaces, or (3) years and one (1) day but not more than six (6) years and/or a
obliterates any mark or numbers placed upon packages deposited in fine of one million pesos (Pl,000,000.00). This penalty shall likewise
such warehouse, or shall aid or abet any such acts, shall be be imposed against importers and brokers who deny an authorized
punished with the penalties prescribed in Section 1418 hereof. customs officer full and free access to such records, books of
accounts, business and computer systems, and all customs
Merchandise so concealed, removed, or repacked, or packages commercial data including payment records, without prejudice to
upon which marks, numbers or the values thereof have been so the imposition of the administrative sanctions by the Bureau against
altered, defaced, or obliterated shall be forfeited in favor of the contumacious importers, including the authority to hold delivery or
government. release of their imported goods.

SEC. 1424. Removing Goods from Customs Custody. – Any person SEC. 1428. Concealment or Destruction of Evidence of Fraud. – Any
who enters any warehouse, or any vehicle loaded with or containing person who willfully conceals or destroys any invoice, book, or
merchandise with intent to unlawfully remove therefrom any document relating to any goods liable to duty after an inspection
merchandise or baggage in such vessel, vehicle or warehouse or thereof has been demanded by the District Collector or at any time
otherwise in customs custody or control, or any person who conceals or destroys any such invoice, book, or document for the
receives or transports any merchandise or baggage unlawfully purpose of suppressing any evidence of fraud therein contained,
shall be penalized with imprisonment of not less than three (3)
years and one (1) day but not more than six (6) years and shall be The fines imposed herein shall be without prejudice to the
liable for a fine of not less than three hundred thousand pesos application of fines or penalties provided under special laws and
(P300,000.00) but not more than one million pesos (P1,000,000.00). regulations.

SEC. 1429. Other Offenses. – The owner or operator of a vessel, SEC. 1430. Violations of this Act and Rules and Regulations in
aircraft or train shall be liable for a fine for the following acts: General. – Any person who violates any other provision of this Act
or the rules and regulations issued pursuant thereto, shall be
(a) For anchoring at any dock, pier, wharf, quay, or bulkhead other penalized with imprisonment of not less than thirty (30) days and
than a port of entry, a fine of not less than five hundred thousand one (1) day but not more than one (1) year, or be liable for a fine of
pesos (P500,000.00) but not more than one million pesos not less than one hundred thousand pesos (P100,000.00) but not
(P1,000,000.00) for overseas vessels; more than three hundred thousand pesos (P300,000.00), or both. If
the offender is a foreigner, the offender shall be deported after
(b) For dumping of garbage or slops over the sides of the vessel serving the sentence. If the offender is a public officer or employee,
within three (3) miles from the nearest coastline, a fine of not less the offender shall be disqualified from holding public office, from
than one million pesos (P1,000,000.00) but not more than ten exercising the right to vote and to participate in any public election
million pesos (P10,000,000.00); for ten (10) years.

(c) For dumping or causing to spread crude oil, kerosene, or gasoline

in the bay or at the piers within three (3) miles from the nearest CHAPTER 2
coastline, a fine of not less than one million pesos (P1,000,000.00)
but not more than ten million pesos (P 10,000,000.00) for each PENALTIES IMPOSED UPON BUREAU EMPLOYEES
offense;
SEC. 1431. Statutory Offenses of Officers and Employees. – Every
(d) For loading gasoline or any other petroleum products at a place officer, agent, or employee of the Bureau or of any other agency of
other than that designated, by the regulations, a fine of not less the government charged with the enforcement of the provisions of
than five hundred thousand pesos (P500,000.00) but not more than this Act, who shall be found guilty of any delinquency as described
one million pesos (P1,000,000.00) for each offense; below shall be penalized with imprisonment of not less than six (6)
years and one (1) day but not more than twelve (12) years, and
(e) For causing the emission and spread of harmful gas, fumes and perpetual disqualification to hold public office, from exercising the
chemicals, a fine of not less than one million pesos (P1,000,000.00) right to vote and to participate in any public election and a fine of
but not more than ten million pesos (P10,000,000.00) for each not less than five hundred thousand pesos (P500,000.00), but not
offense; and more than one million pesos (P1,000,000.00):

(f) For transporting hazardous waste, radioactive waste and other (a) Extortion or willful oppression under color of law;
toxic substances as provided under the Basel Convention and
Republic Act No. 6969, otherwise known as the "Toxic Substances (b) Knowingly demanding other or greater sums that are authorized
and Hazardous and Nuclear Wastes Control Act of 1990", the by law or receive any fee, compensation, or reward except as by law
penalty shall be forfeiture of the vessel in favor of the government. prescribed, for the performance of any duty;
(c) Willfully neglecting to give receipts, as required by law, for any SEC. 1432. Failure to Report Fraud. – Any employee of the Bureau
sum collected in the performance of duty, or who willfully neglect who has knowledge of any fraud committed against the government
to perform any of the duties enjoined bylaw; pertaining to customs revenue, and who fails to report all
information relative thereto to the District Collector, shall be
(d) Conspiring or colluding with another or others to defraud the penalized with imprisonment of not less than six (6) years and one
customs revenue or otherwise violate the law; (1) day but not more than twelve (12) years and a fine of not less
than five hundred thousand pesos (P500,000.00) but not more than
(e) Providing an opportunity for any person to defraud the one million pesos (1,000,000.00). The offender shall suffer the
government of customs revenue or failing to do any act with the additional penalty of perpetual disqualification to hold public office,
intent to enable any person to defraud the government of customs to vote and to participate in any election. All the benefits of the
revenue; offender due from service in the government, including separation
and retirement benefits, shall be forfeited.
(f) Negligently or designedly permitting the violation of the law by
any other person; SEC. 1433. Liability for Other Offenses. – The fines and penalties
imposed in this chapter shall be without prejudice to the application
(g) Making or signing for any false entry or entries in any book, of fines or penalties provided under Chapter 1 of this title and
making or signing any false certificate or return in any case where special laws and regulations.
the law requires the making by them of such entry certificate or
return;
TITLE XV
(h) Failing to report knowledge or information to their superior
officer about an act or acts of fraud committed in revenue collection MISCELLANEOUS PROVISIONS
as required by law;
SEC. 1500. Information, Decisions, and Rulings. – The Bureau shall
(i) Demanding or accepting or attempting, without authority, to ensure that all information of general application pertaining to
collect directly or indirectly as payment or otherwise, any sum of customs, including revisions or amendments thereto, shall be
money or other thing of value for the compromise, adjustment, or available to the general public.
settlement of any charge or complaint for any violation or alleged
violation of law; SEC. 1501. Period to Issue Ruling. – Unless otherwise provided in
this Act, the issuing authority shall act on the application for ruling
(j) Unlawfully disclosing confidential information gained during any within thirty (30) days from receipt of the application and
investigation or audit, or using such information for personal gain or supporting documents as may be required by regulation. Within
to the detriment of the government, the Bureau, or third parties. three (3) days from issuance of a ruling, the issuing authority shall
notify the requesting party of such ruling.
All the benefits due from service in the government, including
separation and retirement benefits, of an officer, agent, or SEC. 1502. Publication and Confidentiality of Certain Information
employee of the Bureau or of any other agency of the government in Ruling – The Bureau and the Commission shall regularly publish
charged with the enforcement of the provisions of this Act found its rulings in a manner accessible to the public. For this purpose,
guilty of the foregoing violations shall be forfeited. each application for ruling shall be assigned a title and unique ruling
number for easy reference. The publication shall contain special security where transactions of a particular party are
information on the goods involved, the body or summary of the numerous, may accept general security extending over such periods
ruling, particularly the grounds relied upon to support the ruling, of time and covering such transactions of the party in question as
but shall exclude the name of the requesting party and other may be satisfactory to the District Collector.
information which by their very nature are confidential, including
those which the requesting party indicated in its application as
confidential in nature. Except in the context of judicial proceedings, SEC. 1507. Security. – The Bureau shall prescribe the forms and
any disclosure of confidential information under this section shall amount of security required to guarantee the payment of duties
not be made except upon the written consent of the beneficiary of and taxes and other obligations provided for in this Act.
the advance ruling.
Any party required to provide security shall have the option to
SEC. 1503. Duty of District Collector to Report Rulings to the choose from any form of security prescribed by the Bureau. The
Commissioner. – When any new or unsettled question shall be Bureau may not require security if satisfied that an obligation to the
determined by a District Collector, and if the matter is not otherwise Bureau will be fulfilled, but shall require and accept a general
appealed for review in the ordinary course, the District Collector security from declarants who regularly declare goods at different
shall notify the Commissioner of the decision and submit an offices in customs territory under such terms and conditions as
adequate statement of the facts involved. maybe determined by the Commissioner.

SEC. 1504. Application of Established Ruling or Decision. – A ruling The required amount of security shall be the lowest possible and
or decision of the Commissioner which determines the construction shall not exceed the amount of imposable duties, taxes and other
or application of any provision of law imposing customs duties and charges.
taxes, and which changes any existing established valuation,
classification, rules of origin and other customs rules, interpretation When the obligation under which the security was required has
or practice shall not take effect until thirty (30) days after public been satisfied, the security shall be discharged immediately.
notice shall have been given in the form of a published decision.
When the ruling or decision favors the taxpayers, it shall become SEC. 1508. Customs Service Fees. – Customs personnel may be
effective immediately. assigned by a District Collector to render overtime work and other
customs services and shall be paid for such services by the Bureau,
SEC. 1505. Authority of Official to Administer Oaths and Take according to service fees fixed by the Commissioner and approved
Testimony. – The Commissioner, District Collectors and their by the Secretary of Finance. The Bureau may charge additional
deputies, and other customs officers especially deputized by the customs service fees when applicable, subject to the rates
District Collector shall have authority to administer oaths and take prescribed under existing rules and regulations.
testimony in connection with any matter within the jurisdiction of
the Bureau and, in connection therewith, may require the SEC. 1509. Testimony in Writing. – When testimony is taken in any
production of relevant papers, documents, books and records in proceeding or matter under the authority of the Bureau, either
accordance with law. party may require that the testimony shall be made in writing, and
when so taken, the written testimony shall be filed with the Office
SEC. 1506. General Security. – In cases where securities are of the District Collector and to be preserved for use or reference
required to be given under the provisions of this Act and related until the final decision has been reached.
customs laws, the District Collector, instead of requiring separate
 convention pertaining to trade facilitation, supply chain security,
SEC. 1510. District Collector Not Liable in Respect to Ruling in and related matters, whether or not the Philippines is a signatory to
Customs Cases. – Every District Collector or other officials of the such international agreement or convention.
Bureau shall not be in any way personally liable on account of any
official ruling or decision as to which the person claiming to be
aggrieved has the right to obtain either an administrative or judicial
review. Except for misdelivery of goods, a District Collector may not,
in the absence of abuse of authority, be liable to any person for any TITLE XVI
loss occasioned either by the official act or the acts of the
subordinates. TARIFF ADMINISTRATION AMD POLICY

SEC. 1511. Interest Prohibited to be Held by Customs Employees. – CHAPTER I

Any person employed under the authority of the government in the
assessment of duties, taxes, fees and other charges in connection TARIFF COMMISSION
with imports or exports, shall not own, either in whole or in part,
any vessel or aircraft or act as attorney, agent or consignee for the SEC. 1600. Chief Officials of the Tariff Commission and
owner of any vessel or aircraft or of any cargo loaded on board the Qualifications. – The officials of the Tariff Commission shall consist
vessel or aircraft; and shall not import or be involved, directly or of a Chairperson and two (2) Commissioners to be appointed by the
indirectly, in the importation of any goods for sale into the President of the Philippines. The Chairperson and the
Philippines. Commissioners shall be natural-born citizens of the Philippines, of
good moral character and proven integrity, and who, by experience
SEC. 1512. Reward to Persons Instrumental in the Actual Collection and academic training possess the necessary qualifications requisite
of Additional Revenues Arising from the Discovery of Violations of for developing expert knowledge of tariff and trade related matters.
this Act. – A cash reward equivalent to twenty percent (20%) of the During their terms of office, the Chairperson and the Commissioners
actual proceeds from the sale of smuggled goods and confiscated shall not engage in the practice of any profession, or intervene
goods or actual collection of additional revenues shall be given to directly or indirectly in the management or control of any private
the customs and non-customs informers or whistleblowers who are enterprise which may, in anyway, be affected by the functions of
instrumental in the collection of additional revenues arising from their office. They shall not be, directly or indirectly, financially
the discovery of violations of this Act in accordance with the rules interested in any contract with the government, or any subdivision
and regulations to be issued by the Secretary of Finance. or instrumentality thereof.

SEC. 1513. Outsourcing of Non-Sovereign Customs Functions to SEC. 1601. Appointment and Compensation of Officials and
Private Entities. – Subject to the approval of the Secretary of Employees. – All employees of the Commission shall be appointed
Finance, the Bureau may outsource any of its non-sovereign and by the Chairperson in accordance with, the Civil Service Law except
ancillary function to a qualified and competent private entity in as the private secretaries to the offices of the Chairperson,
accordance with, government rules on service procurement. Commissioners and Executive Director.

SEC. 1514. International Standards and Best Practices. – The SEC. 1602. Official Seal. – The Commission is authorized to adopt an
Bureau may adopt international standards and best practices in official seal.
customs administration laid down by international agreement or
 goods, until the plantilla positions necessary for undertaking such
SEC. 1603. Functions of the Commission. – The Commission shall function have been approved and filled-up: Provided, That such
have the following functions: delegation of function shall not extend beyond three (3) years from
the effectivity of this Act.
(a) Adjudicate cases on the application of trade remedies against
imports pursuant to Sections 711, 712 and 713 of this Act; SEC. 1604. Reports of the Commission. –The Commission shall place
at the disposal of the President and any Member of the Congress of
(b) Study the impact of tariff policies and programs on national the Philippines all information at its command. It shall conduct such
competitiveness and consumer welfare in line with the economic investigation and submit reports as may be required by the
objectives of the government; President and the Congress of the Philippines. It shall likewise
report to the President and Congress on the first Monday of
(c) Administer the Philippine tariff schedules and tariff December of each year and hereafter, a statement of methods
nomenclatures; adopted and a summary of all reports made during the year.

(d) Issue advance rulings on tariff classification of imported goods SEC. 1605. Access to Documents and Assistance to the
and render rulings on disputes over tariff classification of goods Commission. – The Commission or its duly authorized
pursuant to Section 1100 of this Act, except in cases involving goods representative shall have access to any document, paper or record
on which the Commission has provided advance ruling on tariff pertinent to the subject matter under investigation, in the
classification; possession of any person, firm, copartnership, corporation, or
association engaged in the production, importation, or distribution
(e) Provide the President and Congress with independent analysis, of goods under investigation, and shall have power to summon
information and technical support on matters related to tariff and witnesses, take testimony, administer oaths, and to issue subpoena
nontariff measures affecting Philippine industries and exports for duces tecum requiring the production of books, papers, or
policy guidance; documents relating to the matter under investigation. The
Commission may also request the views, recommendations, and
(f) Analyze the nature and composition, and the classification of assistance of any government office, agency, or instrumentality who
goods according to tariff commodity classification and heading shall be expected to cooperate fully with the Commission.
number for customs and other related purposes, which information
shall be furnished the NEDA, DTI, DA, DOF, DENR, and BSP; SEC. 1606. Sworn and Verified Statements. – The Commission may
order the taking of sworn statements at any stage of any proceeding
(g) Review the trade agreements for negotiation and trade or investigation before it. The sworn statements must be made
agreements entered into by the Philippines and make before a person duly authorized to administer oaths.
recommendations, if necessary, on the consistency of the terms of
the agreements with the national policy objectives; The Commission is authorized to require any importer, grower,
producer, manufacturer or seller to file with the Commission a
(h) Conduct public consultations and public hearings pursuant to its statement, under oath, giving the selling prices in the Philippines of
functions; and goods imported, grown, produced, fabricated or manufacture d by
such person.
(i) Deputize or delegate, to appropriate government agency its
function of rendering rulings on disputes over tariff classification of SEC. 1607. Implementing Rules and Regulations. – The Commission
shall promulgate and adopt such rules and regulations as may be recommendations to the NEDA within thirty (30) days after the
necessary to carry out the provisions of this Act. termination of the public hearings.

(c) The power of the President to increase or decrease rates of

import duty within the limits fixed in subsection (a) hereof shall
include the authority to modify the form of duty.  In modifying the
CHAPTER 2 form of duty, the corresponding ad valorem or specific equivalents
of the duly with respect to imports from the principal competing
FLEXIBLE TARIFF foreign country for the most recent representative period shall be
used as basis.
SEC. 1608. Flexible Clause. – (a) In the interest of the general
welfare and national security, and, subject to the limitations (d) Any order issued by the President pursuant to the provisions of
prescribed under this Act, the President, upon the recommendation this section shall take effect thirty (30) days after promulgation,
of the NEDA, is hereby empowered to: except in the imposition of additional duty not exceeding ten
percent (10%) ad valorem which shall take effect at the discretion of
(1) Increase, reduce, or remove existing rates of import duty the President.
including any necessary change in classification. The existing rates
may be increased or decreased to any level, in one or several stages, (e) The power delegated to the President as provided for in this
but in no case shall the increased rate of import duty be higher than section shall be exercised only when Congress is not in session.
a maximum of one hundred percent (100%) ad valorem; (2)
Establish import quotas or ban imports of any commodity, as may (f) The power herein delegated may be withdrawn or terminated by
be necessary; and Congress through a joint resolution.

(3) Impose an additional duty on all imports not exceeding ten The NEDA shall promulgate rules and regulations necessary to carry
percent (10%) ad valorem whenever necessary: Provided, That upon out the provisions of this section.
periodic investigations by the Commission and recommendation of
the NEDA, the President may cause a gradual reduction of rates of SEC. 1609. Promotion of Foreign Trade. – (a) For the purpose of
import duty granted in Section 1611 of this Act, including those expanding foreign markets for Philippine products as a means of
subsequently granted pursuant to this section. assisting in the economic development of the country, in
overcoming domestic unemployment, in increasing the purchasing
(b) Before any recommendation is submitted to the President by the power of the Philippine peso, and in establishing and maintaining
NEDA pursuant to the provisions of this section, except in the better relations between the Philippines and other countries, the
imposition of an additional duty not exceeding ten percent (10%) ad President, shall, from time to time:
valorem, the Commission shall conduct an investigation and shall
hold public hearings wherein interested parties shall be afforded (1) Enter into trade agreements with foreign governments or
reasonable opportunity to be present, to produce evidence and to instrumentalities thereof; and
be heard. The Commission shall also hear the views and
recommendations of any government office, agency, or (2) Modify import duties, including any necessary change in
instrumentality. The Commission shall submit its findings and classification and other import restrictions as are required or
appropriate to carry out and promote foreign trade with other
countries: Provided, That in modifying import duties or fixing import industry has suffered or is being threatened with injury and whether
quota, the requirements prescribed in subsection (a) of Section or not the wholesale prices at which the domestic products are sold
1608 of this Act shall be observed: Provided, however, That any are reasonable, taking into account the cost of raw materials, labor,
modification in import duties and the fixing of import quotas overhead, a fair return on investment, and the overall efficiency of
pursuant to the various trade agreements the Philippines has the industry.
entered into, shall not be subject to the limitations of aforesaid
subsection (a) of Section 1608.
(2) The NEDA shall evaluate the report of the Commission and
(b) The duties and other import restrictions as modified in submit recommendations to the President.
subsection (a) of this section, shall apply to goods which are the
growth, produce, or manufacture of the specific country, whether (3) Upon receipt of the report of the findings and recommendations
imported directly or indirectly, with which the Philippines has of the NEDA, the President may prescribe adjustments in the rates
entered into a trade agreement: Provided, That the President may of import duties, withdraw, modify or suspend, in whole or in part,
suspend the application of any concession to goods which are the any concession under any trade agreement, establish import quota,
growth, produce, or manufactured product of the specific country or institute such other import restrictions, as the NEDA
because of acts or policies which tend to defeat the purposes set in recommends to be necessary in order to fully protect domestic
this section, including the operations of international cartels; and industry and the consumers, subject to
the duties and other import restrictions as negotiated shall be in
force and effect from and after such time as specified in the order, the condition that the wholesale prices of the domestic products
without prejudice to the Philippine commitments in any ratified shall be reduced to, or maintained at, the level recommended by
international agreement or treaty. the NEDA unless, for good cause shown, an increase thereof, as
recommended by the NEDA is authorized by the President. Should
(c) Nothing in this section shall be construed to give any authority to increases be made without such authority, the NEDA shall
cancel or reduce in any manner the indebtedness of any foreign immediately notify the President who shall allow the importation of
country to the Philippines or any claim of the Philippines against any competing-products in such quantities as to protect the public from
foreign country. the unauthorized increase in wholesale prices.

(d) Before any trade agreement is concluded with any foreign (f) This section shall not prevent the effectivity of any executive
government or instrumentality thereof, reasonable public notice of agreement or any future preferential trade agreement with any
the intention to negotiate an agreement with such government or foreign country.
instrumentality shall be given in order that interested persons may
have an opportunity to present their views to the Commission. The (g) The NEDA and the Commission shall promulgate such reasonable
Commission shall seek information and advice from the DTI, DA, procedures, rules and regulations as they may deem necessary to
DOF, DENR, DFA and BSP, and from such other sources as it may execute their respective functions under this section.
deem appropriate.

(e) In advising the President, on a trade agreement entered into by CHAPTER 3

the Philippines, the following shall be observed:
TARIFF NOMENCLATURE AND RATE OF DUTY
(1) The Commission shall determine whether or not the domestic
 goods, even if one of them gives a more complete or precise
SEC. 1610. General Rules for the Interpretation (GRI). –The description of the goods.
classification of goods and its tariff nomenclature as provided
pursuant to this Act shall be governed by the following principles: (b) Mixtures, composite goods consisting of different materials or
made up of different components, and goods put up in sets for
(1) The titles of sections, chapters and subchapters are provided for retail sale, which cannot be classified by reference to 3(a), shall be
easy reference only. For legal purposes, classification shall be classified as if they consisted of their essential character, insofar as
determined according to the terms of the headings and any relative this criterion is applicable.
section or chapter notes and, provided such headings or notes do
not otherwise require, according to the following1 provisions: (c) When goods cannot be classified by reference to 3(a) or 3(b),
they shall be classified under the heading which occurs last in
(2)(a) Any reference in a heading to the goods shall be taken to numerical order among those which equally merit consideration;
include a reference to the same in their incomplete or unfinished
form or state: Provided, That the incomplete or unfinished goods (4) Goods which cannot be classified in accordance with the above
have the essential character, as presented, of the complete or Rules shall be classified under the heading appropriate to the goods
finished goods. It shall also be taken to include a reference to the to which they are most akin.
same, in their complete or finished form or state (or falling- to be
classified as complete or finished by virtue of this Rule), presented (5) In addition to the foregoing provisions, the following Rules shall
unassembled or disassembled. apply with respect to the goods referred to therein:

(b) Any reference in a heading to a material or substance shall be (a) Camera cases, musical instrument cases, gun cases, drawing
taken to include a reference to mixtures or combinations of that instrument cases, necklace cases and similar containers, specially
material or substance with other materials or substances. Any shaped or fitted to contain specific goods or set of goods, suitable
reference to goods of a given material or substance shall be taken for long-term use and presented with the goods for which they are
to include a reference to goods consisting wholly or partly of such intended, shall be classified with such goods when of a kind
material or substance. The classification of goods consisting of more normally sold therewith. The Rule does not, however, apply to
than one material or substance shall be according to the principles containers which give the whole its essential character; and
of Rule 3.
(b) Subject to the provisions of Rule 5(a), packing materials and
(3) When by application of Rule 2(b) or for any other reason, goods packing containers presented with the goods therein shall be
are, prima facie, classifiable under two (2) or more headings, classified with the goods if they are of a kind normally used for
classification shall be effected as follows: packing such goods. However, this provision does not apply when
such packing materials or packing containers are clearly suitable for
(a) The heading which provides the most specific description shall repetitive use.
be preferred to headings providing a more general description.
However, when two (2) or more headings each refer to part only of (6) For legal purposes, the classification of goods in the subheadings
the materials or substances contained in mixed or composite goods of a heading shall be determined according to the terms of those
or to part only of the items in a set put up for retail sale, those subheadings and any related subheading notes and, mutatis
headings are to be regarded as equally specific in relation to those mutandis, to the above Rules, on the understanding that only
subheadings at the same level are comparable. For the purposes of
the Rule, the relative section and Chapter Notes also apply, unless referred to as the Committee, is hereby constituted in accordance
the context otherwise requires. with the provisions of this Act. The Committee shall be composed of
the Chairpersons of the Committee on Ways and Means of the
SEC. 1611. Tariff Nomenclature and Rates of Impart Duty. – The Senate and House of Representatives and four (4) additional
provisions of Section 104 on Rates of Import Duty of Presidential members from each House, to be designated by the Senate
Decree No. 1464, otherwise known as the Tariff and Customs Code President and the Speaker of the House of Representatives,
of the Philippines of 1978, as amended, specifically providing for the respectively. The Committee shall, among others, in aid of
tariff sections, chapters, headings and subheadings and the rates of legislation:
import duty, shall still apply and shall supplement this Act. There
shall be levied, collected and paid upon all imported goods the rates (a) Monitor and ensure the proper implementation of this Act;
of duty indicated thereon except as otherwise specifically provided
for in this Act:  Provided, That the maximum rate shall not exceed (b) Review the collection performance of the Bureau; and
one hundred percent (100%) ad valorem.
(c) Review the implementation of the programs of the Bureau.
The rates of duty provided or subsequently fixed pursuant to
Sections 1608 and 1609 of this Act shall be subject to periodic
investigation by the Tariff Commission and may be revised by the In furtherance of the hereinabove cited objectives, the Committee
President, upon the recommendation of the NEDA. shall require the Bureau to submit all pertinent information which
includes:
It shall also apply to all products, whether imported directly or
indirectly, of all foreign countries, which do not discriminate against (1) Industry audits;
Philippine export products. An additional one hundred percent
(100%) across-the-board duty shall be levied on the products of any (2) Collection performance data; and
foreign country which discriminates against Philippine export
products. (3) Status report on administrative, civil and criminal actions
initiated against persons.
SEC. 1612. Tariff Nomenclature and Rates of Export Duty. – The
provisions of Section 514 on Export Products Subject to Duty and
Rates of Presidential Decree No. 1464, otherwise known as the TITLE XVIII
Tariff and Customs Code of 1978, as amended, specifically providing
for the export products subject to duty and rates, shall still apply FINAL PROVISIONS
and shall supplement this Act.
SEC. 1800. Implementing Rules and Regulations. – The Secretary of
Finance shall, upon the recommendation of the Commissioner,
TITLE XVII promulgate the necessary rules and regulations for the effective
implementation of this Act.
CONGRESSIONAL OVERSIGHT COMMITTEE
SEC. 1801. Transitory Provisions. – All suits, proceedings, or
SEC. 1700. Congressional Oversight Committee. – The prosecutions whether civil or criminal, for causes arising or acts
Congressional Customs and Tariff Oversight Committee, herein done or committed prior to the effectivity of this Act, shall be
commenced and prosecuted within the same time in the same
manner and with the same effect as if this Act had not been enacted
and all rights acquired, offenses committed, and penalties or
forfeitures or liabilities waived prior to the said effectivity shall not
be affected thereby.

Approved,
SEC 1802. Saving Clause. – All other laws, acts, executive orders,
and Customs Administrative Orders (CAOs), Customs Memorandum (Sgd.) FRANKLIN M. DRILON(Sgd.) FELICIANO BELMONTE JR.
Orders (CMOs), orders, memoranda, circulars, rules and regulations President of the Senate Speaker of the House
issued by the Bureau, under the provisions of Presidential Decree of Representatives
No. 1464, otherwise known as the Tariff and Customs Code of the
Philippines of 1978, as amended, not inconsistent with the This Act which is a consolidation of House Bill No. 5525 and Senate
provisions of this Act, shall remain valid unless the same will be Bill No. 2968 was finally passed by the House of Representatives and
repealed or amended accordingly, pursuant to the provisions of this the Senate on February 2, 2016.
Act.
(Sgd.) OSCAR G. YABES(Sgd.) MARILYN B. BARUA-YAP
SEC. 1803. Repealing Clause. – Presidential Decree No. 1464, Secretary of the Senate Secretary General
otherwise known as the Tariff and Customs Code of the Philippines House of Representatives
of 19785 as amended, and Presidential Decree No. 1853 which
require any applicant for letter of credit covering imports to deposit
the full amount of duties due on the importation, are hereby Approved: MAY 30 2016
expressly repealed. All other laws, acts, presidential decrees,
executive orders, rules and regulations or parts thereof inconsistent
with the provisions of this Act are hereby expressly repealed, (Sgd.) BENIGNO S. AQUINO III
amended or modified accordingly. President of the Philippines

SEC. 1804. Separability Clause. – If any provision of this Act is

declared invalid or unconstitutional, the remaining provisions or
parts shall remain in full force and effect.

SEC. 1805. Effectivity. – This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in a newspaper of
general circulation.