FILE

EPARTMENT
BUREAU
OF FINANCE

OF
CUSTOMS
REPUBLIC OF THE PHILIPPINES

U.P. LAW CENTER OFFICE of the NATIONAL

ADMINISTRATIVE REGISTER Administrative Rules and
Regulations

DEPARTMENT OF FINANCE BUREAU OF

CUSTOMS

OCT 05 2016

RE
ECEIVE
TIME: 60 BY:

INTERNAL ADMINISTRATION GROUP CENTRAL RECORDS

MANAGEMENT DIVISION
‫اكا‬

October 4, 2016

The Director

Office of the National Administrative Register (ONAR) UP

 Law Center Diliman, Quezon City

Sir/ Ma'am:

Transmitted are three (3) certified true copies and a soft copy (word format in
compact disc rewritable) of the CAO 02-2016 re: Imported Goods with De Minimis Value
not Subject to Duties and Taxes.

Thank you.

UPDOR #
3307905
Very truly yours,

Сравн
GLADYS C. CABUGAWAN Chief, CRMD
 South Harbor, Gate 3, Port Area, Manila 1099 Tel. Nos. 705-6052, 705-6067 (CRMS) Website:
www.customs.gov.ph Email: helpdesk2@customs.gov.ph (CRMS)
DEPARTMENT
BUREAU
OF

OF
FINANC
E
CUSTOMS
REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF

CUSTOMS
MASTER COPY

U.P. LAW CENTER

OFFICE of the NATIONAL ADMINISTRATIVE REGISTER
Administrative Rules and Regulations

OCT 05 2016

RES
ECEIVE
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 any

TIME:

1:0
BY:

Lof

NO.
CUSTOMS ADMINISTRATIVE ORDER (CAO)
02-2016

SUBJECT:
IMPORTED GOODS WITH DE MINIMIS VALUE NOT SUBJECT TO DUTIES AND TAXES

Introduction. This CAO implements Section 423, Chapter 3, Title IV, and other relevant
sections of Republic Act No. 10863, otherwise known as the Customs Modernization and
Tariff Act (CMTA).

Section 1. Scope. This CAO covers all importations, which otherwise are dutiable, with an
FCA or FOB De Minimis Value.

Section 2. Objectives.

2.1. To minimize importation and customs administration costs in the

clearance of importations with De Minimis Value, without compromising customs
border enforcement control.

2.2. To be responsive to the growing trade liberalization and facilitation thrust

in consonance with the different applicable international trade agreements.

Section 3. Definition of Terms. For the purposes of this CAO, the following terms are
defined accordingly:

3.1. Commercial Quantity For purposes of entry and

clearance of regulated importations for personal use, it shall refer to
 quantity for a given kind or class of articles which are in excess of what is
compatible or commensurate with a person's normal requirements for personal
use.

3.2. De Minimis Value - The value of goods for which no duty or tax is
collected. Goods with De Minimis Value are considered importations of
negligible amount1 and entitled to immediate release.

Certified True Copy

3.3. FCA - An international commercial term covered by the Incoterms rules developed by
International Chamber of Commerce (ICC) which means free carrier or that the seller delivers the
goods to the carrier Alexander C.Montemayor or another person nominated by the
buyer at the seller's premises
a ming
Admin Officer V
CRMD-BOC

1 cf CMTA, Title IV, Chapter 3, Section

423

Ө
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02-2016
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amo

or another named place. The parties are well advised to specify clearly as possible the
point within the named place of delivery, as the risk passes to the buyer
at that point.2

3.4. FOB - An international commercial term covered by the Incoterms rules

developed by International Chamber of Commerce (ICC) which means free on
board or that the seller delivers the goods on board the vessel nominated by
the buyer at the named port of shipment or procures the goods already
delivered. The risk of loss of or damage to the goods passes when the
goods are on board the vessel, and the buyer bears all costs from that
moment onwards.3
 3.5. Prohibited Importation - The importation of the following goods
are prohibited:

Certified True Copy

A. Ming
(a) Written or printed goods in any form containing any matter
advocating or inciting treason, rebellion, insurrection, sedition against the
government of the Philippines, or forcible resistance to any law of the
Philippines, or written or printed goods containing any threat to take the
life of, or inflict bodily harm upon any person in the Philippines;

(b) Goods, instruments, drugs and substances designed, intended

or adapted for producing unlawful abortion, or any printed matter
which advertises, describes or gives direct or indirect information where,
how or by whom unlawful abortion is committed;
 (c) Written or printed goods, negatives or cinematographic films,
photographs, engravings, lithographs, objects, paintings, drawings
or other representation of an obscene or immoral character;

(d) Any goods manufactured in whole or in part of gold, silver or

other precious metals or alloys and the stamp, brand or mark does
not Indicate the actual fineness of quality of the metals or alloy;

(e) Any adulterated or misbranded food or goods for human consumption

or any adulterated or misbranded drug in violation of relevant laws and
regulations;

Alexander C. Montemayor (f) Infringing goods as defined under the Intellectual

Property Code
Admin Officer V
CRMD-BOC
and related laws; and

Ø
International Commercial Terms 2010.
3
Ibid.

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U.P. LAW CENTER
OFFICE of the NATIONAL ADMINISTRATIVE
REGISTER Administrative Rules and Regulations

OCT 05 2016

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마

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(g) All other goods or parts thereof which importation are

explicitly
prohibited by law or rules and regulations issued by the
competent authority. 4

3.6. Regulated Importation - Goods which are subject to regulation shall

be imported only after securing the necessary goods declaration,
clearances, licenses, and any other requirements, prior to importation. In
case of importation, submission of requirements after arrival of the goods but
prior to release from customs custody shall be allowed but only in cases
provided for by governing laws or regulations.5

3.7. Restricted Importation - Except when authorized by law or regulation,

the importation of the following restricted goods are prohibited:
Certified True Copy

tilling
(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
authorized by the Dangerous Drugs Board, for medicinal purposes;

(e) Opium pipes or parts thereof, of whatever material; and

(f) Any other goods whose importation are restricted.

Alexander C. Montemayor The restriction to import the above stated

goods shall include the
Admin Officer V
CRMD-BOC
restriction on their transit.
6

amy
4
 cf CMTA, Title I, Chapter 3, Section 118
5 cf CMTA, Title I, Chapter 3,
Section 117
6

cf CMTA, Title I, Chapter 3, Section 119

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‫فا‬
U.P. LAW CENTER OFFICE of the NATIONAL
ADMINISTRATIVE REGISTER Administrative Rules and
Regulations

GCT 05 2016

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BY:

for
MASTER COPY
amp

Section 4. General Provisions.

4.1. The law sets the De Minimis Value at Php 10,000.00 (Ten Thousand
Pesos) FCA or FOB or below. The Secretary of Finance shall adjust the De
Minimis Value as provided herein, every three (3) years after the effectivity of
the CMTA to its present value using the Consumer Price Index, as published
by the Philippine Statistics Authority."

4.2. De Minimis importations shall be lodged and processed under a

simplified system and with the use of information and communications
technology (ICT) enabled system to allow advance clearance, and ensure
proper customs monitoring and control, which captures and preserves
pertinent data on De Minimis importations.

4.3. De Minimis importations shall, as far as practicable, be subject to a

 non-intrusive examination (e.g. x-ray or any other equivalent device) on a
random basis based on existing selectivity scheme used by the Bureau.

4.4. The customs examiner, may, based on internationally accepted customs

administration risk management principles, physically inspect the imported
goods.

4.5. Treatment of De Minimis importations brought by passengers or sent thru

Balikbayan boxes or as postal parcels shall be without prejudice to the
application of Sec. 800 of the CMTA on Conditionally-Free importations.

4.6. Importations of tobacco goods, wines, spirits, within the De Minimis value
shall be subject to the provisions of National Internal Revenue Code (NIRC), as
amended, on excise tax.

4.7. Goods forfeited for violations of this CAO shall be disposed of in

accordance with Chapter 10, Title XI, of the CMTA.

Section 5. Exclusions from Immediate Release.

The following importations shall not be entitled to immediate release as De

Minimis importations:

5.1. Importations declared as "without commercial value" or "of no

Certified True Copycommercial value" or with specific amount but qualified by the
phrase
"for customs purposes" or analogous phrases.

A. Min
Alexander C. Montemayo Hence, the sender, importer, consignee, freight
forwarder, or air express operator must declare the specific value of the goods
Admin Officer V
CRMD-BOC

cf CMTA, Title I, Chapter 3, Section 423

Page 4 of 6 - CAO NO. 02 - 2016

け
U.P. LAW CENTER
 OFFICE of the NATIONAL ADMINISTRATIVE REGISTER
Administrative Rules and Regulations

OCT 05 2016

RECEIVE
D
ECEIVE
MASTER COPY

supported by available invoice, receipt or equivalent document, if any, except for

correspondences and documents classified under Category 1 of the WCO
Guidelines for the Immediate Release of Consignments by Customs.

5.2. Tobacco and liquor products carried by passengers in excess of the

allowable limits but within the De Minimis value.

5.3. Goods subject to requirements or conditions imposed by the concerned

regulatory agency, unless for personal use and within the limits allowed by
regulations.

Regulated importations with De Minimis value shall comply with the

requirements of the concerned regulatory agencies. However, when the
importation consists of regulated products for personal use and in limited
quantity as determined by the implementing regulatory agencies, the
same may be processed and released by the Bureau.

5.4. Prohibited and Restricted importations.

5.5. Importations to be entered conditionally free, for warehousing, for

transit, and/or admission to free zone.

Section 6. Penal Provision. Violations of this CAO committed by any person, officer or
employee shall be penalized in accordance with Title XIV of the CMTA and other
 applicable penal provisions.

Section 7. Periodic Review. Unless otherwise provided, this CAO shall be reviewed
every three (3) years and be amended or revised, if necessary.

Section 8. Repealing Clause. This CAO specifically amends or repeals previously

issued CAOS and Customs Memorandum Orders (CMO) which are inconsistent with the
provisions herein stated.

Section 9. Separability Clause. If any part of this CAO is declared unconstitutional or

contrary to existing laws, the other parts not so declared shall remain in full force and effect.

Section 10. Effectivity. This CAO shall take effect after fifteen (15) days from
publication at the Official Gazette or a newspaper of national circulation.

The Office of National Administrative Register (ONAR) of the UP Law center shall be
Certiprovided three (3) certified copies
of this CAO.

а шир
Copy

Alexander C. Montemayor
Admin Officer V
CRMD-BOC

‫ف‬
U.P. LAW CENTER
OFFICE of the NATIONAL ADMINISTRATIVE REGISTER
Administrative Rules and Regulations

OCT 05 2016

RECEIV
 ED
Page 5 of 6 CAO NO. 02-2014
TIME:
BY:

amy
amy

Minsk dow
NICANOR E. FAELDON Commissioner

Burau of Customs
NICANOR E. FAELDON
Commissioner

16-01368

SEP 28 2016

Approved:

わ
Corux
CARLOS G. DOMINGUEZ III

Secretary
MASTER COPY
Informational Section. As the title denotes this section only provides information and
does not give rise to any substantive or formal rights or obligations.

1. History. This is the first CAO dealing on De Minimis value.

2. Related Policies.

CMO No. 13-2010

--

Procedures for the Implementation of E2M Customs System

Phase 4. Informal Entry of Commercial Goods in All Seaports Nationwide
• CMO No. 10-2012
Implementation of Department Order 57-2011
(Emphasizing Duty and VAT Exempt Status of Imported Goods)
CAO No. 08-2014 - Guidelines on the Imposition of Customs Documentary Stamp Tax
and Processing Fees for Informal Entries
CMO No. 6-2014 - Realignment of the X-ray Inspection Project (XIP) to the
Enforcement Group and Designation of Duty Customs Examiners at the XIP
Designated Examination Area/ Field Office by the District Collector.
3. Webpage, Forms, Handbooks and other References.

a. Informal Entry Declaration Form

b. http://customs.gov.ph/importation/
c. International Commercial Terms 2010

d. World Customs Organization (WCO) Guidelines for the Immediate Release of

Consignments by Customs
e. National Internal Revenue Code (NIRC), as amended.

Page 6 of 6 - CAO NO.

02-2014

Certified True Copy

Alexander C. Montemayor
Admin Officer V
CRMD-BOC
U.P. LAW CENTER OFFICE of the NATIONAL
ADMINISTRATIVE REGISTER Administrative Rules
and Regulations

OCT 05 2016

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TIME:
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or