Final Draft BOC Code of Regulations Jan 17 2012

BUREAU OF CUSTOMSCODE OF REGULATIONS OF 2012

BOOK I – BUREAU OF CUSTOMS, ORGANIZATION AND FUNCTIONS

TITLE ONE – ORGANIZATION AND FUNCTIONS

CHAPTER 1 – ORGANIZATION

Section 1 – Chief Officials.The Bureau of Customs shall be headed by and shall be under the control and supervision of a Commissioner, appointed by the President, upon the recommendation by the Secretary of Finance. He shall be assisted by six (6) Deputy Commissioners and an Assistant Commissioner, namely:

(a) Deputy Commissioner for the Revenue Collection and Monitoring Group;

(b) Deputy Commissioner for the Assessment and Operations Coordinating Group;

(c) Deputy Commissioner for the Intelligence Group;

(d) Deputy Commissioner for the Enforcement Group;

(e) Deputy Commissioner for the Internal Administration Group;

(f) Deputy Commissioner for the Management Information Systems Technology Group; and

(g) Assistant Commissioner for the Post Entry Audit Group.

The aforementioned Deputy and Assistant Commissioners shall be appointed by the President upon the recommendation of the Commissioner of Customs.

Section 2 – Structural Organization

2.1. Composition. – The Bureau of Customs shall be composed of the following:

(a) Customs Revenue Collection Monitoring Group, headed and supervised by a Deputy Commissioner and composed of the following services, each of which shall be headed by a Service Chief:

(1) Legal Service, composed of the following:

(i) Ruling and Research Division;(ii) Prosecution and Litigation Division;(iii) Appellate Division; and(iv) Tax Exempt Division.

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(2) Collection Service, composed of the following:

(i) Collection Performance/Evaluation Division;(ii) Liquidation and Assessment Audit Division;(iii) Bonds Audit Division.

(3) Financial Service, composed of the following:

(i) Revenue Accounting Division; and(ii) Statistical Analysis Division.

(b) Customs Assessment and Operations Coordinating Group, headed and supervised by a Deputy Commissioner and composed of the following services, each of which shall be headed by a Service Chief:

(1) Imports and Assessment Service, composed of the following:

(i) Valuation and Classification Division;(ii) Assessment Coordination and Monitoring Division; and(iii) Warehouse Coordination Division.

(2) Ports Operations Service composed of the following:

(i) Auction and Cargo Disposal Division; (ii) Export Coordination Division;(iii) Port Operations Division.

(c) Intelligence Group, headed and supervised by a Deputy Commissioner and composed of the following service, which shall be headed by a Service Chief:

(1) Intelligence and Investigation Service, composed of the following:

(i) Intelligence Division;(ii) Investigation and Prosecution Division;(iii) Internal Inquiry and Prosecution Division;(iv) Intellectual Property Rights Division; and(v) Warehousing Audit Monitoring Unit.

(d) EnforcementGroup, headed and supervised by a Deputy Commissioner and composed of the following service, which shall be headed by a Service Chief:

(1) Enforcement and Security Service, composed of the following:

(i) Customs Police Division;(ii) Water Patrol Division;(iii) Radio Communication Division.

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(e) Internal Administration Group, headed and supervised by Deputy Commissioner and composed of the following:

(1) Financial Management Office, composed of the following;

(i) Budget Division;(ii) Planning & Policy Research Division; and(iii) Accounting Division.

(2) Administration Office, composed of the following:

(i) Human Resources Management Division;(ii) Public Information and Assistance Division;(iii) General Services Division;(iv) Central Records Management Division;(v) Medical and Dental Division; and(vi) Internal Control/Management Division.

(f) Management Information System & Technology Group, headed and supervised by a Deputy Commissioner and composed of the following services, each of which shall be headed by a Service Chief:

(1) Planning and System Development Service, composed of the following:

(i) Planning, Management and Information Division; and(ii) System Development Division.

(2) Technology Management Service, composed of the following:

(i) System Management Division; and(ii) Technical Support Division.

(g) Post Entry Audit Group, headed and supervised by an Assistant Commissioner and composed of the following services, each of which shall be headed by a Service Chief:

(1) Trade Information & Risk Analysis Office, composed of the following:

(i) Trade Information Analysis Division I; and(ii) Trade Information Analysis Division II.

(2) Compliance Assessment Unit, composed of the following:

(i) Audit Division I;(ii) Audit Division II;(iii) Audit Division III;(iv) Audit Division IV; and(v) Audit Division V.

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(h) Collection Districts and Subports.The Bureau shall have seventeen (17) Collection Districts each of which shall be headed by a Collector of Customs of appropriate level referred to as District Collector of Customs. Each Collection District shall have as many sub-ports as necessary to maximize revenue collection and to prevent smuggling and fraud against customs. The following are the seventeen (17) Collection Districts and thirty eight (38) subports under the direct control and supervision by the Commissioner, namely:

(1) Collection District I – Port of San Fernando, with three (3) subports namely – (1) EPZA Baguio, (2) Sual, and (3) Salumague;

(2) Collection District IIA – Port of Manila, with six (6) subport namely – (1) Harbor Center, (2) Masinloc, (3) FTI, (4) Postal Office, (5) EPZA Cavite and (6) PEZA Laguna;

(3) Collection District IIB – Manila International Container Port, with North Harbor as its subport;

(4) Collection District III – Ninoy Aquino International Airport, with two (2) subports namely – (1) Manila Domestic Airport, (2) Central Mail Exchange Center;

(5) Collection District IV – Port of Batangas, with two (2) subports, namely – (1) Siain, and (2) Puerto Princesa;

(6) Collection District V – Port of Legaspi, with two (2) subports, namely – (1) Tabacco, and (2) Jose Panganiban;

(7) Collection District VI – Port of Iloilo, with Pulupandan as its subport;

(8) Collection District VII – Port of Cebu, with two (2) subports namely – (1) Mactan, and (2) Dumaguete;

(9) Collection District VIII – Port of Tacloban, with three (3) subports namely – (1) Isabel, (2) Catbalogan, and (3) San Jose;

(10) Collection District IX – Port of Surigao, with two (2) subports, namely – (1) Bislig, and (2) Nasipit;

(11) Collection District X – Port of Cagayan De Oro, with two (2) subports namely – (1) Ozamis, and (2) Iligan;

(12) Collection District XI – Port of Zamboanga, with four (4) subports namely – (1) Zamboanga International Airport, (2) Jolo, (3) Tawi-Tawi, and (4) Basilan;

(13) Collection District XII – Port of Davao with three (3) subports namely – (1) Dadiangas, (2) Mati, and (3) Parang;

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(14) Collection District XIII – Port of Subic;

(15) Collection District XIV – Port of Clark International Airport (EO 55);

(16) Collection District XV – Port of Aparri with four (4) subports namely – (1) Laoag International Airport, (2) Currimao, (3) Tuguegarao Airport; and (4) Port Irene (EO 707); and

(17) Collection District XVI – Port of Limay and Mariveles, with Mariveles as its subport (EO 727).

CHAPTER 2 – FUNCTIONS

Section 1 – Functions of the Bureau of Customs.The Bureau of Customs shall have the following functions:

(a) Collect customs duties, taxes and the corresponding fees, charges and penalties;

(b) Account for all customs revenues collected;

(c) Exercise police authority for the enforcement of tariff and customs laws;

(d) Prevent and suppress smuggling, pilferage and all other economic frauds within all ports of entry;

(e) Supervise and control exports, imports, foreign mails, and the clearance of vessels and aircrafts in all ports of entry;

(f) Administer all legal requirements that are appropriate;

(g) Prevent and prosecute smuggling and other illegal activities in all ports under its jurisdiction;

(h) Exercise supervision and control over its constituent units; and

(i) Perform such other functions as may be provided by law.

Section 2 – Functions of Groups, Services, and Divisions.

2.1. Customs Revenue Collection Monitoring Group. The Customs Revenue Collection Monitoring Group, headed by a Deputy Commissioner who shall have direct control and supervision over the Legal Service, the Collection Service, and the Financial Service including the offices therein,shall have the following functions:

(a) Maintain an updated accounting for all Customs revenues collected;

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(b) Administer legal requirements of the Bureau of Customs to include litigation and prosecution of cases;

(c) Provide the Commissioner of Customs with accurate and timely information and analysis of collection statistics;

(d) Conduct continuing audit of liquidated entries and outstanding bonds; and

(e) Perform such other appropriate functions consistent with the assigned tasks of the group and others which may be given by the Commissioner.

2.1.1 Legal Service.The Legal Service shall be headed by a Customs Service Chief and shall have direct control and supervision over the Appellate Division, the Ruling and Research Division, the Prosecution and Litigation Division, and the Tax Exempt Division.

2.1.1.1 Ruling and Research Division. The Ruling and Research Division shall have the following functions:

(a) Recommend to the Commissioner opinions, rulings and memoranda on matters relating to Customs laws, rules and regulations;

(b) Review claims for abatements, refunds and rewards and prepares the corresponding action for the consideration of the Commissioner;

(c) Render legal service to the Commissioner and other official/employees of the Bureau;

(d) Submit periodic reports and other data as may be required; and

(e) Perform other functions consistent with the assigned tasks.

2.1.1.2 Appellate Division. The Appellate Division shall have the following functions:

(a) Review decisions of the District Collector of Customs in seizure, protest and administrative cases elevated to the Commissioner on appeal or review and prepares the corresponding decisions;

(b) Collaborate with the Office of the Solicitor General in the prosecution of cases of appeal to the Court of Tax Appeals or the Supreme Court;

(c) Submit periodic reports and other data as may be required; and

(d) Perform other functions consistent with the assigned tasks.

2.1.1.3 Prosecution and Litigation Division. The Prosecution and Litigation Division shall have the following functions:

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(a) Hear administrative cases against customs personnel for violations of laws, rules and regulations;

(b) Collaborate with the Prosecutor’s Office on the proper prosecution of criminal cases filed for violation of customs laws and other related laws;


(d) Perform other appropriate functions consistent with the assigned tasks.

2.1.1.4 Tax Exempt Division. The Tax Exempt Division shall have the following functions:

(a) Indorse and transmit to the District Collector of the Customs, Tax Exempt and Certificates of Authority issued by concerned government agencies;

(b) Evaluate and conduct studies on exemptions under Section 105 of the Tariff and Customs Code (TCCP) and recommend action to the Department of Finance through the Commissioner of Customs;



2.1.2 Collection Service - The Collection Service shall be headed by a Customs Service Chief and shall have direct control and supervision over the Collection Performance Evaluation Division, the Liquidation and Assessment Audit Division, and the Bonds Audit Division.

2.1.2.1 Collection Performance Evaluation Division. The Collection Performance Evaluation Division shall have the following functions:

(a) Gather and evaluate collection performance reports of the different collection districts;

(b) Provide the Commissioner with the accounts and timely information of collection performance;

(c) Submit periodic reports and other data that may be required; and


2.1.2.2 Liquidation Audit and Assessment Division. The Liquidation Audit and Assessment Division shall have the following functions:

(a) Conduct a continuing and systematic accounting and audit liquidated entries;

(b) Formulate policies and guidelines affecting audit of liquidated entries;

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2.1.2.3 Bonds Audit Division. The Bonds Audit Division shall have the following functions:

(a) Maintain a systematic and updated reports on bonds;

(b) Formulate policies and guidelines on Bonds Audit;

(c) Conduct a continuing and systematic accounting and audit of outstanding bonds;

(d) Submit the necessary periodic reports and other data that may be required; and

(e) Perform such other appropriate functions consistent with the assigned tasks.

2.1.3 Financial Service - The Financial Service shall be headed by a Customs Service Chief and shall have direct control and supervision over the Revenue Accounting Division and the Statistical Analysis Division.

2.1.3.1 Revenue Accounting Division. The Revenue Accounting Division shall have the following functions:

(a) Receive and analyzes report of collection from all collection districts;

(b) Receive and reconcile the Abstract of Remittance submitted by Authorized Agents Banks (AAB) against the debt advice submitted by the Central Bank;

(c) Prepare Reports of Collection on direct payments and payments through banks;

(d) Submit periodic reports; and

(e) Perform other functions consistent with the assigned tasks.

2.1.3.2 Statistical Analysis Division. The Statistical Analysis Division shall have the following functions:

(a) Gather, analyze, and generate reports on revenue collection of imports and exports;

(b) Set-up annual targets of collection districts based on the previous year’s collection and other relevant statistical sources and economic trends;


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2.2. Customs Assessment and Operations Coordinating Group. The Customs Assessment and Operations Coordinating Group, headed by a Deputy Commissioner who shall have direct control and supervision over the Imports and Assessment Service and thePorts Operations Service including the offices therein, shall have the following functions:

(a) Regularly gather and upon approval of the Commissioner, publish values of commodities imported into the Philippines, such values being the bases for the computation of customs duties and other revenues;

(b) Monitor for decision making purposes the implementation of rules and regulations governing assessment, warehousing and support operations;

(c) Monitor auction and disposal activities together with port/airport operations related activities for decision-making purposes; and

(d) Perform other appropriate functions consistent with the assigned tasks of the Group which may be given by the Commissioner.

2.2.1 Import Assessment Service. This office shall be headed by a Customs Service chief and shall have direct supervision and control over the Valuation and Classification Division, Assessment Coordination and Monitoring Division and the Warehouse Coordination Division.

2.2.1.1 Valuation and Classification Division. This office shall perform the following functions:

(a) provide technical advice on the correct classification and valuation of imported articles and commodities;

(b) gather, collect, verify, publish and disseminate current valued in the form of valuation and classification circulars and revision orders, check the valuation and classification of the articles as declared on the advance copies of import entries from all ports;

(c) provide liaison and coordination with the agencies that have dealing on matters pertaining to valuation and classification;

(d) submit periodic reports and other data that may be required; and

(e) perform other functions consistent with assigned tasks.

2.2.1.2 Assessment Coordination and Monitoring Division. This office shall perform the following functions:

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(a) coordinate and monitor all activities relating to implementation of rules and regulations governing assessment of customs duties, taxes and other charges;

(b) coordinate and provide liaison with other government agencies and instrumentalities as well as private entities that have dealings on matters pertaining to imports, assessment services and related activities;

(c) submit periodic reports and other data that may be required; and

(d) perform other functions consistent with the assigned tasks.

2.2.1.3 Warehouse Coordination Division. This office shall perform the following functions:

(a) coordinate and monitor policies and guidelines for the effective implementation of laws, rules and regulations on bonded warehousing;

(b) coordinate and evaluate warehousing activities, including the liquidation of materials, formulate effective internal control system to prevent possible violations of customs laws, rules and regulations;

(c) submit periodic reports and other data that may be required; and


2.2.2 Port Operations Service. This office shall be headed by a Customs Service Chief and shall have direct supervision and control over the Auction and Cargo Disposal Division, Export Coordination Division and the Port Operations Division.

2.2.2.1 Auction and Cargo Disposal Division. This office shall perform the following functions:

(a) coordinate and monitor storage, inventory, auction and disposal activities to ensure effective implementation of customs laws, rules and regulations;

(b) maintain an up-to-date record of abandoned and/or auctioned merchandise;

(c) formulate and monitor policies/guidelines or modes of cargo disposal;

(d) submit periodic reports and other data that may be required; and

(e) perform such other functions consistent with the assigned tasks.

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2.2.2.2 Export Coordination Division. This office shall perform the following functions:

(a) coordinate and monitor export activities in all collection districts;

(b) provide technical advice and act in consultation on export matters;

(c) provide liaison and coordination with agencies that have dealings on matters pertaining to export;

(d) submit necessary periodic reports and other data that may be required; and

(e) perform other functions consistent with the assigned tasks.

2.2.2.3 Port Operations Division. This office shall perform the following functions:

(a) coordinate and monitor all ports operation activities of the collection district;

(b) ascertain that established policies, regulations and standard procedures and programs on port operations are complied with;

(c) provide liaison and coordination with agencies that have dealings on matters pertaining to report operations;

(d) submit the necessary periodic reports and other data that may be required; and

(e) perform other function consistent with the assigned tasks.

2.3. Customs Intelligence Group. The Customs Intelligence Group, headed by a Deputy Commissioner who shall have direct control and supervision over the Intelligence and Investigation Service including the offices therein, shall have the following functions:

(a) Regularly and consistently gather intelligence information related to customs and economic activities for proper dissemination to the Customs offices concerned;

(b) Conduct internal inquiry and investigation which may serve as the basis for prosecution; and

(c) Perform such other appropriate functions consistent with the assigned tasks of the Group and others which may be given by the Commissioner.

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2.3.1 CustomsIntelligence and Investigation Service. The Customs Intelligence and Investigation Service shall be headed by a Customs Service Chief and shall have direct supervision and control over the Intelligence Division, the Investigation and Prosecution Division, the Internal Inquiry and Prosecuted Division, the Intellectual Property Rights Division, and the Warehousing Audit Monitoring Unit.

2.3.1.1 Intelligence Division. The Intelligence Division shall have the following functions:

(a) Provide accurate and complete intelligence information for the effective administration and operation of the Bureau in accordance with existing tariff and customs laws;

(b) collect, collate and evaluate data and information on acts in violation of the Tariff and Customs Laws, rules and regulations and translate the same into usable intelligence information for dissemination to end-users;

(c) coordinate with other offices/ agencies in all the necessary periodic reports and other data that may be required; and


2.3.1.2 Investigation and Prosecution Division. The Investigation and Prosecution Division shall have the following functions:

(a) Conduct investigation on cases involving violations of the tariff and Customs Laws, rules and regulations;

(b) examine records of importations and determine the authenticity of suspected documents; recommend the filing of administrative and/or criminal charge(s) arising from violations of the tariff and Customs Code, its rules and regulations and prosecute cases filed in courts and/ or administrative bodies;

(c) maintain a centralized record of cases investigated/ prosecuted and establish liaison with other government agencies;

(d) submit periodic reports and other data that may be required;

(e) and perform other functions consistent with assigned tasks.

2.3.1.3 Internal Inquiry and Prosecution Division. The Internal Inquiry and Prosecution Division shall have the following functions:

(a) conduct background investigation on applicants and employees of the Bureau;

(b) initiate investigation and prosecute, if warranted, administrative cases against customs employees;

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(c) investigate and take appropriate action against security violations;

(d) perform liaison and coordination activities with other government agency/officials;

(e) submit periodic reports and other data that may be required; and

(f) perform other functions consistent with the assigned tasks.

2.3.1.4 Intellectual Property Rights Division. The Intellectual Property Rights Division shall perform the following functions:

(a) Handle all application for recordation of IPRs and products covered therein;

(b) Issue Alert/Hold Orders against shipments suspected of containing infringing goods;

(c) Investigate cases involving IPR violations and to make recommendations for prosecution of violations of the TCCP in relation to the IP Code;

(d) Gather and manage data relative to IP Enforcement;

(e) Coordinate all BOC enforcement activities relating to IPR matters;

(f) Draw up appropriate training programs on IPR border control enforcement;

(g) Liaise with other office/agencies and coordinate with the National Committee on Intellectual Property Rights (NCIPR);

(h) Represent the government exclusively in all seizure and forfeiture proceedings relating to IPR matters.

2.3.1.5 Warehousing Audit Monitoring Unit. The Warehousing Audit Monitoring Unit shall have the following functions.

(a) Lead in the investigation of all cases relating to illegal withdrawal, diversion, unliquidated entries, and violations of the Tariff and Customs Code of the Philippines, as amended, pertaining to warehousing operations;

(b) Conduct an inventory audit of warehouses suspected or found to have committed any infraction of the warehousing law, rules and regulations;



2.4. Customs Enforcement Group. The Customs Enforcement Group,headed by a Deputy Commissioner who shall have direct control and supervision over

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the Enforcement and Security Service including the offices therein, shall have the following functions:

(a) Exercise police authority conferred by the Tariff and Customs Code or other laws which include the enforcement of seizures and forfeitures and the imposition of penalties and fines; and

(b) Perform such other appropriate functions consistent with the assigned tasks of the Group and others which may be given by the Commissioner.

2.4.1 Enforcement and Security Service. TheEnforcement and Security Service shall be headed by a Customs Service Chief and shall have direct supervision and control over the Customs Police Division, Water Patrol Division, and Radio Communication Division

2.4.1.1 Customs Police Division. The Customs Police Division shall have the following functions:

(a) Maintain peace and order, security and protection of all cargoes and properties within the customs installations, buildings and properties and render police assistance to all needing the same while within the customs jurisdiction;

(b) prevent and suppress smuggling pilferage theft and all cases of frauds and various evasions of customs laws and other regulations enforced by the Bureau;

(c) conduct searches seizures and arrests on board vessels, aircrafts, vehicles, warehouses, piers wharves and other customs premises consistent with the existing rules and regulations relative thereto;

(d) establish and enforce personnel and vehicles identification, movement and traffic control;

(e) submit periodic reports and data that may be required; and


2.4.1.2 Water Patrol Division. The Water Patrol Division shall have the following functions:

(a) Maintain peace and order and enforce customs laws, rules and regulation and pertinent provisions of the Revised Philippine Merchant Marine Regulations (RPMR) within the waters, rivers streams, harbors and anchorages under the jurisdiction of the Bureau and such other bodies of water whether navigable from the sea or not;

(b) prevent and suppress smuggling, pilferage and theft (piracy) committed on board vessels and within the jurisdiction of the Bureau;

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(c) conduct searches, seizures and arrest on board vessels for violations of Customs Laws, rules and regulations;

(d) maintain and repair all patrol-crafts and equipment to ensure operational efficiency;

(e) undertake searches of vessels applying for conversion from foreign to coastwise trade and vice versa;

(f) submit periodic reports and other data that may be required; and

(g) perform other function consistent with the assigned tasks.

2.4.1.3 Radio Communication Division. The Radio and Communication Division shall have the following functions:

(a) plan, design, install and maintain radio stations, antennae towers, and other communication system;

(b) act as the liaison between the National Telecommunication Commission and the Bureau;

(c) disseminate local transshipments telegraphic permits to all ports and assimilate the necessary feedback on the same;

(d) provide training for radio operators and technicians in accordance with the latest trend in telecommunication techniques; coordinate the operation of all customs radio stations throughout the country;

(e) submit periodic reports and other data that may be required; and


2.5. Customs Internal Administration Group. The Customs Internal Administration Group,headed by a Deputy Commissioner who shall have direct control and supervision over the Financial Management Office and the Administration Office including the offices therein, shall have the following functions:

(a) assist the Commissioner of Customs in the formulation of policies and in the setting up of objectives relative to financial, administrative, personnel, planning and management improvement services of the Bureau;

(b) approve and/or sign travel orders of central office personnel and/or personnel in the outports who have official transactions at the Central Office upon the recommendation of the District Collectors concerned;

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(c) approve applications of central office personnel for vacation, sick and maternity leaves with or without pay for a period in excess of 60 days but not beyond one year as required by existing rules and regulations;

(d) represent the Commissioner in meetings and conference which have relevance to his scope of jurisdiction;

(e) sign Memorandum Circulars and other publications for general circulation;

(f) sign applications of central office personnel for business outside office hours;

(g) review official communications and documents relevant to internal administration for the signature of the Commissioner; and

(h) Perform such other appropriate functions consistent with the assigned tasks of the Group and others which may be given by the Commissioner.

2.5.1 Financial Management Office. The office shall be headed by a Customs Operation Chief and shall have direct supervision and control over the Budget Division, Accounting Division, Planning and Policy Research Division, and Management Information and Data Systems Division.

2.5.1.1 Budget Division. This office shall perform the following functions:

(a) provide policy guidance and control on financial matters for all offices nationwide of the Bureau;

(b) provide assistance on budget techniques and procedures and the preparation of budget jurisdiction of all offices;

(c) render periodic report and other data as required; and


2.5.1.2 Accounting Division. This office shall perform the following functions:

(a) certify to the availability of funds for expenditures;

(b) process, check and verify disbursement from all ports of entry;

(c) record and maintain books of original entry with corresponding subsidiary ledgers for disbursement;

(d) prepare trial balance with related schedules;

(e) render periodic reports and other data as may be required; and


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2.5.1.3 Planning and Policy Research Division. This office shall perform the following functions:

(a) formulate projection in management improvement activities;

(b) conduct and supervise policy research and development studies;

(c) study and recommend improvement on structural organization and operating procedures;

(d) develop and maintain management and operational manual;

(e) render periodic report and other data as required; and


2.5.1.4 Management Information and Data Systems Division. This office shall perform the following functions:

(a) create and develop information systems for planning, implementation and control of customs operation;

(b) provide management with systematic approaches to applied procedures;

(c) apply Electronic Data Processing Techniques;

(d) submit periodic reports and other data as may be required; and


2.5.2 Administrative Office. The office shall be headed by a Customs Operation Chief II and shall have direct supervision and control over the Human Resource Management Division, General Services Division, Central Records Management Division, Public Information and Assistance Division and Medical & Dental Division.

2.5.2.1 Human Resources Management Division. This office shall perform the following functions:

(a) develop and recommend personnel management policies;

(b) develop and administer program on recruitments, selection,

(c) appointment and placement, career and employee development, employee relations, welfare services and incentive systems;

(d) provide assistance on matters concerning attendance, leave of absence, appointments, promotions, transfers and other personnel actions;

(e) research, develop and conduct training programs;

(f) maintain personnel records and statistics;

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(g) submit periodic reports and other data as required; and

(h) perform other functions consistent with the assigned tasks.

2.5.2.2 General Services Division. This office shall perform the following functions:

(a) provide assistance and services pertaining to administrative management improvement;

(b) provide policy guidance on the care, maintenance and repair of equipment, building and public utilities;

(c) providemessengerial, custodial and other utility services;

(d) process requisition for materials and equipment, receive, store and conduct inventories on them;

(e) receive, collect and deposit cash and prepare payrolls for payment of the Bureau’s obligations;

(f) receive, maintain and control of the pool of motor vehicles acquired through seizure/donations and other modes of acquisition;

(g) submit periodic reports and other data as required; and


2.5.2.3 Central Records Management Division. This office shall perform the following functions:

(a) establish and maintain sound records management programs;

(b) receive, record and transmit/deliver documents and correspondence to all Bureau offices;

(c) provide classification and filing system for all documents and correspondence that needs to be maintained;

(d) reproduce, disseminate, maintain an updated compilation of all customs orders and circular issued and signed by the Commissioner and make the same available to interested parties;

(e) submit periodic reports and other as may be required; and


2.5.2.4 Public Information and Assistance Division. This office shall perform the following functions:

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(a) provide direction and guidance in the dissemination of information on Bureau wide programs, operations and activities;

(b) provide frameworks for rendering assistance to the general public;

(c) receive complaints and grievances from the public and prepare referrals to the concerned offices and monitor actions taken;

(d) submit periodic reports and other data as required; and


2.5.2.5 Medical and Dental Division. This office shall perform the following functions:

(a) Perform physical examination of applicant for entrance to service, employees for reinstatement, promotions and for evaluation of physical disability;

(b) Attends to first aid treatment of accidents occurring in the Bureau;

(c) Inspect office buildings, piers, harbors and canteens operating within the limits of the Bureau, renders a weekly report to the Chief on the health and sanitary conditions of the surroundings;

(d) Attend to the removal of spoiled goods or malodorous damaged cargoes from the premises;

(e) Perform minor operations, treatment of accident cases, etc.;

(f) Attend to all custom employee coming to the Clinic for consultation and treatment;

(g) Prescribe and dispense medicine;

(h) Prepare requisitions of medical equipment, medicine and supplies needed by the Section;

(i) Keep record of clinical cases, medical supplies, medicine, drugs, instruments and equipment;

(j) Perform dental examinations, extractions and treatment;

(k) Conduct oral prophylaxis, gives advice on dental care and corrects dental defects;

(l) Treat mouth diseases such as alveolar abscesses, pyorrhea alveolaris, etc.;

(m) Do minor oral surgery when indicated;

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(n) Prepare requisition of dental equipment, medicine and supplies needed by the Section;

(o) Keeps records of dental cases; and

(p) Perform other functions consistent with the assigned tasks

2.5.2.6 Internal Control/Management Division. This office shall perform the following functions:

(a) Ensure that all rules and regulations and procedures governing the operations of the Bureau of Customs are strictly followed and are being uniformly applied;

(b) Ensure that all programs, projects contracts, agreements and others are properly implemented and complied with;

(c) Help in the safeguarding of assets and resources of the Bureau of Customs;

(d) Assist the management in identifying obsolete and or modifying /ineffective Rules, Regulations and Orders;

(e) Identify areas of improvements and developments concerning day to day activities of the Bureau of Customs;

(f) Identify weakness and leakages that hamper and derail in carrying out the mandates and vision of the Bureau of Customs;

(g) Ensure that the Bureau is observing Customs’ International best practices;Help improve the quality of service of the Bureau;

(h) Help improve the quality of service of the Bureau;

(i) Conduct strategic review and evaluation of the operations and performances of the Bureau;

(i) Assist the Change Management Team in drafting the Staffing/Organizational structure of the Internal Control Office in line with the Rationalization of the Bureau pursuant to EO 366; and

(k) Perform other related activities as may be mandated by the Commissioner of Customs.

2.6. Customs Management Information System & Technology Group. The Customs Management Information System & Technology Group,headed by a Deputy Commissioner who shall have direct control and supervision over the Planning and System Development Service and the Technology Management Service including the offices therein, shall have the following functions:

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(a) Upgrade and maintain the present information technology group where it will have a more strategic position within the Bureau of Customs organization setup and provide a functional structure which will encompass the functions which are seen as vital in the attainment of the vision of a modernized trade facilitating and globally competitive Bureau of Customs; and

(b) Perform such other appropriate functions consistent with the assigned tasks of the Group and others which may be given by the Commissioner.

2.6.1 Planning and System Development Service. The Planning and Systems Development Service shall be headed by a Customs Service Chief who shall have direct control and supervision over Planning, Management and Information Division and the System Development Division. This office shall perform the following functions:

(a) Develop information systems and technology plans;

(b) Design and recommend systems architecture;

(c) Develop information systems;

(d) Standardize operating procedures;

(e) Generate information on the various operations of the Bureau; and

(f) Perform such other functions consistent with the assigned tasks.

2.6.1.1 Planning, Management and Information Division. This office shall have the following functions:

(a) Facilitate the development of information system and technology plan;

(b) Conduct continuous researches on IT and advise management on appropriate adaptation of new technology;

(c) Guide or assist management on acquisition of automation equipment and software;

(d) Access, analyze and report management information for client servicing;

(e) Prescribe guidelines and standards in implementing the functions of MISTG units;

(f) Ensure compliance to quality assurance standards in performance of functions; and

(g) Perform such other functions consistent with the assigned tasks.

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2.6.1.2 System Development Division. This office shall perform the following tasks:

(a) Determine the appropriate information system architecture for the Bureau based on operational needs and characteristics;

(b) Set up or establish policies, procedures and standards for the development of information system;

(c) Develop standard operating procedures for the Bureau’s various operations;

(d) Undertake and manage systems analysis, development, testing and documentation;

(e) Provide user-support services on developed programs;

(f) Guide and assist management in the acquisition of software packages;

(g) Update database and reference tables according to government and BOC regulations;

(h) Ensure compliance to quality assurance standards in performance of functions;

(i) Conduct quality assurance testing of application programs; and

(j) Perform such other functions consistent with the assigned tasks.

2.6.2 Technology Management Service. The Technology Management Service shall be headed by a Customs Service Chief who shall have direct control and supervision over the System Management Division and Technical Support Division. This office shall provide support services to all IT related projects of the Bureau in terms of: (1) management and administration of HW and System Software; (2) IT facilities management; and (3) provision of support sites in terms of network, system and equipment requirement. This office shall cover:

(a) Server Administration;

(b) Database Administration;

(c) Network Administration;

(d) System Implementation;

(e) Training (application and office automation);

(f) Email and Internet;

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(g) Site Support;

(h) ICT Facilities Management;

(i) Security and Account Management; and

(j) Inventory and IT Supplies Management

2.6.2.1 System Management Division. This office shall perform the following functions:

(a) System Implementation;

(b) Change Management Training;

(c) Helpdesk;

(d) Procurement of IT equipment and Supplies; and

(e) Application Support.

2.6.2.2 Technical Support Division. This office shall perform the following functions:

(a) ICT Server room management;

(b) Server Administration;

(c) Network Administration;

(d) Database Administration;

(e) Site Monitoring;

(f) System Administration;

(g) Email Management;

(h) Internet and Website Administration;

(i) ICT Security Administration;

(j) User Management; and

(k) ICT Facilities Management.

2.7. Customs Post Entry Audit Group. The Customs Post Entry Audit Group,headed by an Assistant Commissioner who shall have direct control and supervision over the Trade Information & Risk Analysis Office and the

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Compliance Assessment Unit including the offices therein, shall have the following functions:

(a)Set the framework and benchmarks for compliance measurements of industry groups;

(b) In coordination with Management Information System and Technology Group (MISTG), direct the development of a computer aided risk management system using the data warehousing technology and other statistical tools;

(c) Implement the computer-aided risk management system to develop and establish audit selection parameters based on objective and quantifiable data;

(d) Establish and recommend audit targets to the Commissioner of Customs.

(e) Set policies, guidelines, manuals and standard operating procedures relating to the audit and continuously assess how audit performance can be improved by better and more fine-tuned policies and guidelines;

(f) Formulate audit work plan for approved audit targets;

(g) Conduct audit examination, inspection, verification or investigation in accordance with the set policies, guidelines, manuals and standard operating procedures;

(h) Prepare and submit audit reports;

(i) Develop and implement a customs compliance program; and

(j) Perform such other appropriate functions consistent with the assigned tasks of the Group and others which may be given by the Commissioner.

2.7.1 Trade Information & Risk Analysis Office. This office shall be headed by a Service Director and shall have direct control and supervision over the (1) Trade Information Analysis Division I, and the (2) Trade Information Analysis Division II. This office shall perform the following functions:

(a) Set the framework and benchmarks for compliance of measurements of industry group;

(b) Direct the development of computer aided risk management system, in coordination with Management Information System & Technology Group (MISTG) using the data warehousing technology and other statistical tools.

(c) Implement the computer aided risk management system to develop and establish audit selection parameters based on objective and quantifiable data.

(d) Establishes and recommend audit targets to the commissioner of Customs.

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(e) Set policies, guidelines, manual and standard operating procedure relating to the audit and continuously assess how the audit performance can be improved by better and more fine-tuned policies and guidelines.

2.7.2 Compliance Assessment Unit. This office shall be headed by a Service Director and shall have direct control and supervision over (1) Audit Division I, (2) Audit Division II, (3) Audit Division III , (4) Audit Division IV, and (5) Audit Division V. This office shall perform the following functions:

(a) Formulate audit work plan for approved audit targets;

(b) Conduct audit examination, inspection, verification or investigation in accordance with the set policies, guidelines, manuals and standard operating procedures;

(c) Prepare and submit audit reports; and

(d) Develop and implement a customs compliance program.

Section 3 – Functions of District Collectors and Port Collectors: Port of Manila, MICP, Port of Cebu, and NAIA.

3.1District Collectors and Port Collectors.Each Collection District shall be headed and supervised by a District Collector while each subport will be headed by a Port Collector. The Collectors shall have the following functions:

(a) Collect duties, taxes, fees, charges, penalties and fines accruing to the Government under the Tariff and Customs Code and related laws;

(b) Exercise police powers conferred to him/her by the Tariff and Customs Code or other laws which include the enforcement of penalties and fines;

(c) Examine goods, assess duties, fees, charges, penalties and fines accruing to the Government under the Tariff and Customs Code and other related laws;

(d) Supervise the entrance and clearance of vessels and aircraft engaged in foreign commerce;

(e) Supervise and control handling of foreign mails arriving in the Philippines;

(f) Supervise all import and export cargoes landed and/or stored in piers, airports, terminal facilities, yards and freight stations;

(g) Perform such other appropriate functions consistent with the assigned task of the District/Port Collectors and those which may be given by the Commissioner (lifted from EO 127)

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3.1.1 Power of the Commissioner to Reassign Collectors. The Commissioner of Customs may, in the exigency of the service reassign the District Collectors within the appropriate levels of Collectors of Customs VI or V as the case may be. The Collector of Customs V as District Collector, may be assigned as Deputy Collectors at the Ports of Manila, NAIA, MICP and Cebu while those designated as deputies of these aforementioned districts may be assigned as District Collectors of the collection district by the Collector of Customs V.

3.2 District Collector, Collection District II-A: Port of Manila

3.2.1 Office of the District Collector of Customs, Functions. The Collection District II-A shall be headed and supervised by a Collector of Customs VI and herein referred to as the District Collector. The District Collector shall have the following functions:

(a) collect duties, taxes, fees, charges, penalties and fines accruing to the Government under the Tariff and Customs Code and related Laws;

(b) exercise police powers conferred to him/her by the Tariff and Customs Code or other Laws which include the enforcement of penalties and fines accruing to the Government under the Tariff and Customs Code or other Laws which include the enforcement of penalties and fines accruing to the Government under the Tariff and Customs Code and other related Laws;

(c) supervise the entrance and clearance of vessels engaged in foreign commerce;

(d) supervising and controlling handling of foreign malls arriving in the Philippines;

(e) supervising all imports and export cargoes and freight stations; and

(f) perform such appropriate functions consistent with the assigned tasks of the District Collector and those which may be given by the Commissioner of Customs.

3.2.2 Office of the Deputy Collector for Administration. This office shall be headed by a Collector of Customs V and shall have direct supervision and control over the Administrative Division, Law Division and Sub-ports under Collection District II- A.

3.2.2.1 Administrative Division. This office shall have the following functions:(a) provide assistance and services to the Collection District on matters pertaining to budget, finance and personal;

(b) provide the Collection District with efficient equipment, records, supplies, disbursement, messengerial, janitorial and other administrative/ general utility services;

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(c) submit periodic reports and other data as may be required; and


3.2.2.2 Law Division. This office shall have the following functions:

(a) assist the District Collector in the legal aspect of the administrative responsibilities and provide legal advice and services to the Collection District;

(b) render opinions and rulings on customs matters involving interpretations and application of laws and implementing regulations;

(c) represent the District Collector in court whenever summoned by subpoena or made a party litigant therein and collaborate with the Office of the Solicitor General in prosecuting cases against importers / surety companies liable under their forfeited bonds and when the District Collector is a party defendant or respondent in any other cases;

(d) conduct investigations and hearings on seizures, protest and other cases, and submit findings and proposed decision for signature of the District Collector of Customs;

(e) process and submit recommendation on all application for Customs Brokers license and other permits to operate in the Customs Zone, and keep and maintain up-to-date roster of duly licensed Customs Brokers and Brokerage firms and other pertinent records thereto;

(f) institute abandonment proceedings on overstaying cargoes and detention upon application of persons of agencies exercising police authority;

(g) receive and process drawback claims;

(h) act on Special Powers of Attorney and authorization relating to business transactions with the Bureau including issuance of clearances;

(i) submit periodic reports and other data that may be required; and

(j) perform other functions consistent with the assigned tasks.

3.2.2.3 Sub-ports. The Collection District II-A shall have the following sub-ports of entry namely; (1) Harbor Center, (2) Masinloc, (3) FTI, (4) Postal Office, (5) EPZA Cavite and (6) PEZA Laguna. Each sub-port shall be headed by a Collector of Customs who shall be referred to as Port Collector, and shall perform similar functions attributed to the District Collector within the area of his/her jurisdiction in order to maximize revenue collection and prevent smuggling and frauds against customs.

3.2.3 Office of the Deputy Collector for Assessment. Headed by a District Collector V, this office shall have direct supervision and control over the Entry Processing Division, Formal Entry Division, Informal Entry Division, Bonds

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Division, Collection Division, Liquidation and Billing Division, Customs Postal Division and Warehousing Assessment Division.

3.2.3.1 Entry Processing Division. This office shall have the following functions:

(a)receive, check and verify entry declarations and documents of importation, ascertain that the required documents are attached to the entry and examine said documents for correctness and authenticity;

(b) prepare and issue Order of Payment (OP);

(c) match statements and declarations on the entry against the data indicated on the inward cargo manifest;

(d) designate the specific number of cases, crates or packages for examination according to prescribed rules and regulations and transmit original entry declaration to designated Examiner’s and Appraiser’s Section concerned;

(e) accept and process special permits for shipside discharge, transfer, transshipment, as well as the loading of provisions for the ships’ use;


(g) perform other functions consistent with the assigned tasks.

3.2.3.2 Formal Entry Division. This office shall have the following functions:

(a) examine, classify and appraise imported articles covered by formal entry and assess customs duties and taxes and other charges, subject to existing customs laws and regulations in so far as release of the shipment is concerned;

(b) examine passengers’ and crew member’s baggage for the purpose of preventing entry of banned prohibited articles;

(c) recommend the institution of seizure and forfeiture proceedings against cargoes found to be misdeclared or undervalued and banned and regulated or prohibited merchandise in accordance with existing laws, rules and regulations;

(d) submit the necessary periodic reports and data as may be required of the division; and


3.2.3.3 Bonds Division. This office shall have the following functions:

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(a) control and supervise the processing, approval and/or cancellation of customs bond;

(b) process all entries covered by bonds before any delivery or withdrawal of shipment could be affected;

(c) device standardized surety forms in conformity with the requirements of the Tariff and Customs Code and Insurance Code;

(d) keep in custody all bonds and other pertinent public documents;

(e) collect bonded obligations through appropriate judicial and/or administrative measures in coordination with the Law Division whenever necessary;

(f) submit the necessary periodic reports and data as may be required of the division; and

(g) perform such other appropriate functions consistent with the assigned tasks.

3.2.3.4 Collection Division. This office shall have the following functions:

(a) receive payments of customs duties, taxes and other charges;

(b) authorize the delivery of goods after full payment of Government charges and compliance with Central Bank (CB) rules and regulations and all other requirements;

(c) remit daily collection to the National Treasury;

(d) issue bills for deferred/ suspended payments;

(e) submit the necessary periodic reports and data as may be required; and


3.2.3.5 Liquidation and Billing Division. This office shall have the following functions:

(a) verify, check and review computations of formal, informal and withdrawal entries based on the applicable foreign exchange rates, the correct dutiable and taxable values, taking into account the returns made by the examiner and appraiser as to the description of the commodities, tariff paragraph and rate of duties and taxes;

(b) maintain daily record of all liquidated entries and post in the public corridors list of entries found with discrepancies and indicate therein the name of importers and serial numbers of entries;

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(c) compute fines and other charges;

(d) prepare and transmit letters of demand to importers, brokers, government agencies and send bill/statement of accounts for all receivables including short duties, taxes, fines and other charges due to the Bureau of Customs;

(e) prepare statement of refunds and tax credits and notify importers concerned accordingly; compute, record, control and coordinate collection of amounts remaining unpaid and unsettled;

(f) forward to the Law Division all dockets of cases uncollected accounts for possible court action after the prescribed period for compliance has lapsed and payment has not been made;

(g) maintain an effective system of accounting for all entries received and ensure security and control over all unliquidated entries kept in the division;

(h) submit the necessary periodic reports and data as may be required of the division; and

(i) perform other functions consistent with assigned tasks.

3.2.3.6 Customs Postal Division. This office shall have the following functions:

(a) coordinate with the Foreign Surface Mail Distribution Center of the Bureau of Post in monitoring the movement and transfer of foreign parcels/mailbags form the Piers to the Bureau of Posts;

(b) examine classify and appraise imported merchandise received through the mails;

(c) authorize the release of imported parcels upon compliance with existing Customs/Postal laws, rules and regulations;

(d) examine and appraise exportable items exported through the mails by verifying and checking the correctness of documents submitted whether it is in accordance with the existing Customs/Postal laws, rules and regulations and other related laws;

(e) recommend the institution of seizure and/or forfeiture proceedings against cargoes found to be misdeclared or undervalued and banned, prohibited, abandoned/unclaimed imported merchandise in accordance with customs and/or postal laws, rules and regulations;

(f) provide a system of monitoring and reporting of parcels received and transferred to customs postal stations;

(g) submit the necessary periodic reports and data that may be requires of the division; and

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3.2.3.7 Warehousing Assessment Division. This office shall have the following functions:

(a) examine, classify and appraise imported raw materials/goods destined for bonded warehouses;

(b) check and verify the correctness of all returns on warehousing entries with regards to tariff paragraphs, rate of duty and description of imported goods;

(c)compute and determine the correct dutiable and taxable values of the imported goods;

(d) recommend the institution of seizure and/or forfeiture proceedings against cargoes found to be misdeclared or undervalued and banned, prohibited, abandoned/unclaimed imported merchandise in accordance with existing laws, rules and regulations;

(e) submit the necessary periodic reports and data as may be required of the division; and


3.2.4 Office of the Deputy Collector for Operations. This office shall be headed by a Collector of Customs V and shall have direct supervision and control over the Public/ Private Bonded Warehouse Division, Miscellaneous Manufacturing Bonded Warehouse Division, Garment and Textile Manufacturing Bonded Warehouse Division, Warehousing Inspection Division, Warehousing Documentation and Records Division, Piers and Inspection Division, Auction and Cargo Disposal Division, Export Division and Customs Container Control Division.

3.2.4.1 Public/Private Bonded Warehouse Division. This office shall have the following functions:

(a) supervise and oversee the operations of the public/private bonded warehouse;

(b) receive, store and release cargoes by authority of the Deputy Collector for Operations, authorized to be warehoused in the public/private warehouses; (c) Issue warehousing permits;

(d) maintain systematic records of all customs transactions of individual public/private bonded warehouses;

(e) submit the necessary periodic reports and data that may be required of the division; and


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3.2.4.2 Miscellaneous Manufacturing Bonded Warehouse Division. This office shall have the following functions:

(a) supervise and oversee the operations of the miscellaneous manufacturing bonded warehouses;

(b) receive, store and release cargoes authorized by the Deputy Collector for Operations to be warehoused in the miscellaneous manufacturing bonded warehouses;

(c) issue warehousing permits;

(d) oversee the packing, stuffing and transfer of goods to loading points for re-exportation;

(e) determine imported material usage against accepted formula of manufacture and review export documents to establish fact of exportation of finished goods for the purpose of recommending cancellation of bonds and liquidation of entries;

(f) Maintain systematic records of all customs transactions of individual miscellaneous manufacturing bonded warehouses;

(g) submit the necessary periodic reports and data as may be required of the division; and


3.2.4.3 Garments and Textile Manufacturing Bonded Warehouse Division. This office shall have the following functions:

(a) supervise and oversee the operations of the garments and textile manufacturing bonded warehouses;

(b) receive, store and release cargoes authorized by the Deputy Collector for Operations to be warehoused in the garment and textile bonded warehouses;

(c) issue warehousing permits;

(d) oversee the packing, stuffing and transfer to loading points of goods for re-exportation;

(e) determine imported material usage against accepted formula of manufacture and review export documents to establish fact of exportation of finished goods for the purpose of recommending cancellation of bonds and liquidation of entries;

(f) maintain systematic records of all customs transactions of individual garment and textile manufacturing bonded warehouses;

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(g) submit the necessary periodic reports and data as may be required of the division; and


3.2.4.4 Warehousing Inspection Division. This office shall have the following functions:

(a) inspect premises and facilities and applicants for the establishment of bonded warehouses and subcontractors, as well as of all registered and operating customs bonded warehouse;

(b) conduct physical and records inventories of imported raw materials, finished goods, wastages and by-products;

(c) submit the necessary periodic reports and data as may be required of the division; and


3.2.4.5 Warehousing Documentation and Records Division. This office shall have the following functions:

(a) keep and maintain a centralized recording system of all transactions of the three (3) operating divisions involved in customs bonded warehousing;

(b) provide a system of monitoring, recording and filing of statistical reports necessary to ensure compliance with customs laws, rules and regulations;

(c) submit the necessary periodic reports and data as may be required of the division; and


3.2.4.6 Piers and Inspection Division. This office shall have the following functions:

(a) conduct customs boarding formalities and place the vessel and cargoes under continuous under guarding in accordance with existing laws, rules and regulations;

(b) supervise the discharge and loading of cargoes;

(c) receive and distribute Inward Cargo Manifest to offices concerned;

(d) supervise the issuance of entrance and departure clearance of vessels in coordination with the concerned agencies;

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(e) keep and update record of vessels data such as group and net tonnage as well as volume of imports, exports and transshipment cargoes;

(f) coordinate with the Philippine Port Authority (PPA) and arrastre contractor for location of cargoes;

(g) coordinate with Entry Processing Division and the arrastre contractor in reporting to the District Collector unentered and/or overstaying cargoes;

(h) supervise the release or transfer of cargoes from the piers;

(i) submit the necessary periodic reports and data as may be required of the division; and


3.2.4.7 Auction and Cargo Disposal Division. This office shall have the following functions:

(a) keep custody of seized, forfeited, unclaimed and abandoned merchandise and maintain an up-to-date record and inventory thereof;

(b) dispose at public auction all merchandise subject to sale and employ such other modes of disposition thereof, in accordance with laws, rules and regulations;

(c) coordinate with the offices concerned for the purpose of instituting abandonment proceedings;



3.2.4.8 Custom Container Control Division. This office shall have the following functions:

(a) monitor all incoming and outgoing containers and trailer chassis;

(b) supervise the stripping/stuffing of all containers inside or outside customs zone as the case maybe;

(c) Supervise the operations of Container Yard/Container Freeport Station (CY/CFS) outside customs zone; Submit the necessary periodic reports and data as may be required of the division; and


3.2.4.9 Export Division. This office shall have the following functions:

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(a) receive, check and verify export entry declarations and supporting documents;

(b) examine export cargoes to determine compliance with existing laws, rules and regulations;

(c) assess and collect export duties and other charges;

(d) prepare and issue Orders of Payment, authority or permit to load cargoes for export and/or for re-exportation and Certificates of Origin, identification, re-exportation or non-shipment;



3.3 District Collector, Collection District II-B: Manila International Container Port

3.3.1 Office of the District Collector of Customs, Functions. The Collection District II-B shall be headed and supervised by a Collector of Customs VI and herein referred to as the District Collector. The District Collector shall have the following functions:




(d) supervise and control handling of foreign malls arriving in the Philippines;

(e) supervise all imports and export cargoes and freight stations; and


3.3.2 Office of the Deputy Collector for Administration. This office shall be headed by a Collector of Customs V and shall have direct supervision and control overthe Administrative Division, Law Division, and the Sub-port of North Harbor.

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3.3.2.1 Administrative Division. This office shall have the following functions:

(a) provide assistance and services to the Collection District on matters pertaining to budget, finance and personal;















3.3.2.3 Sub-port of North Harbor. The sub-port shall be headed and supervised by a Collector of Customs IV or III andherein referred to as the

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Port Collector. He shall perform similar functions attributedto the District Collector within hi specific area of jurisdiction.

3.3.3 Office of the Deputy Collector for Assessment. Headed by a District Collector V, this office shall have direct supervision and control over the Entry Processing Division, Formal Entry Division, Informal Entry Division, Bonds Division, Collection Division, Liquidation and Billing Division, Customs Postal Division and Warehousing Assessment Division.













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(a) verify, check and review computations of formal, informal and withdrawal entries based on the applicable foreign exchange rates, the correct dutiable and taxable values, taking into account the returns made by the examiner and

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appraiser as to the description of the commodities, tariff paragraph and rate of duties and taxes;









3.3.4 Office of the Deputy Collector for Operations. This Office shall be headed by a Collector of Customs V and shall have direct supervision and control over the Bonded Warehouse Division, Auction and Cargo Disposal Division, Export Division and Customs Container Control Division.

3.3.4.1 Bonded Warehouse Division. This office shall have the following functions:





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3.3.4.3Auction and Cargo Disposal Division. This office shall have the following functions:






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3.3.4.4Custom Container Control Division. This office shall have the following functions:

(a) monitor all incoming and outgoing containers and trailer chassis;

(b) supervise the stripping/stuffing of all containers inside or outside customs zone as the case maybe;

(c) Supervise the operations of Container Yard/Container Freeport Station (CY/CFS) outside customs zone; Submit the necessary periodic reports and data as may be required of the division; and


3.3.4.5Export Division. This office shall have the following functions:







3.4 District Collector, Collection District VII: Port of Cebu

3.4.1 Office of the District Collector of Customs, Functions. The Collection District VII shall be headed and supervised by a Collector of Customs VI and herein referred to as the District Collector. The District Collector shall have the following functions:



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3.4.2 Office of the Deputy Collector for Administration. This Office shall be headed by a Collector of Customs V and shall have direct supervision and control over the Administrative Division, Law Division and Sub-Ports of Mactan, and Dumaguete.










(e) process and submit recommendation on all application for Customs Brokers license and other permits to operate in the Customs Zone, and keep

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and maintain up-to-date roster of duly licensed Customs Brokers and Brokerage firms and other pertinent records thereto;






3.4.2.3 Sub-ports. The Collection District shall have the following sub-ports of entry, namely: I. Mactan shall be headed by a Customs Collector III or IV; II. Dumaguete by a Customs Collector II or III.The said Collector of Customs shall be referred to as Port collector and shall perform similar functions attributed to the District Collector within his/her area of jurisdiction in order to maximize revenue collection and prevent smuggling and fraud against customs.









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3.4.3.2 Assessment Division. This office shall have the following functions:
















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3.4.4 Office of the Deputy Collector for Operations. This office shall be headed by a Collector of Customs V or VI and shall have direct supervision

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and control over the Bonded Warehouse Division, Piers and Inspection Division and the Export Division.

3.4.4.1 Public/Private Bonded Warehouse Division. This office shall have the following functions:
















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3.5 District Collector, Collection District III: Ninoy Aquino International Airport

3.5.1 Office of the District Collector of Customs, Functions. The Collection District III shall be headed and supervised by a Collector of Customs VI and herein referred to as the District Collector. The District Collector shall have the following functions:







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3.5.2 Office of the Deputy Collector for Administration. This office shall be headed by a Collector of Customs V and shall have direct supervision and control over the Administrative Division, Law Division, Customs Data Monitoring Division, Central Mail Exchange Center (sub-port) and Manila Domestic Airport (sub-port).















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3.5.2.3 Customs Data Monitoring Division. This office shall have the following functions:

(a) Set up procedures and guidelines for the grouping, screening, analyzing, encoding, transcribing and controlling of accomplished permit to deliver imported goods (PDIG), Currency declarations, re-export commitments, certificate of identification, certificates of origin and other documents;

(b) transcribe data into computer acceptable media for electronic data processing;

(c) submit periodic reports as may be required; and


3.5.2.4 Airmail Distribution Center (sub-port). This sub-port shall be headed by a Collector of Customs III or IV and shall perform the following functions:

(a)examine, classify and appraise imported merchandise coming through the airmail;

(b) assess and collect duties, taxes and other customs charges due thereon and/or authorize release/transfer thereof after complying with the requirements of existing laws, rules and regulations;

(c) recommend the institution of seizure and/or forfeiture proceedings against cargoes found to be misdeclared and undervalued, and banned, prohibited, abandoned/unclaimed merchandise in accordance with customs and/or postal laws, rules and regulations;

(d) provide a system of monitoring and reporting of parcels transferred to Postal Stations;

(e) submit periodic reports and data as may be required; and


3.5.2.5 Manila Domestic Airport (sub-port). This sub-port shall be headed by a Collector of Customs I and shall perform the following functions:

(a) control and supervise local transshipments to other domestic airport;

(b) receive and supervise the transfer of exports from other domestic ports to the MIA;

(c) control the entry of barter trade goods and other imported articles through the Domestic Airport in accordance with the provisions of the Barter Trade

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Law as well as the Tariff and Customs Code and examine, appraise and collect customs duties and taxes, if any.















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3.5.3.3Informal Entry Division. This office shall have the following functions:

(a) examine, classify and appraise imported articles covered by informal entry and assess customs duties and taxes and other charges, subject to existing customs laws and regulations in so far as release of the shipment is concerned;





3.5.3.4Bonds Division. This office shall have the following functions:










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3.5.3.6Liquidation and Billing Division. This office shall have the following functions:










3.5.4 Office of the Deputy Collector for Passenger Services. The office shall be headed by a Collector of Customs V and shall have direct supervision and

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control over the Arrival Operations Divisions, Departure Operations Divisions, and the Baggage Assistance Divisions.

3.5.4.1 Arrival Operations. This office shall have the following functions:

(a) Examine, classify and appraise accompanied personal effects of incoming passengers, crew, members and transit passengers in compliance with all laws, rules and regulations applicable thereon;

(b) assess duties and taxes and other charges due thereon, recommend seizure and/or forfeiture proceedings against banned and/or prohibited articles in accordance with laws rules and regulations;

(c)implement rules and regulations of the Central Bank and other government agencies concerned; submit periodic reports and data as may be required; and

(d) perform other functions consistent to the assigned tasks.

3.5.4.2 Baggage Assistance Division. This office shall have the following functions:

(a) receive and store articles, luggages held in bond;

(b) supervise the storage of transit and unaccompanied luggages;

(c) conduct inventory examinations and appraisal of in bond interline baggages, and collect duties and taxes, if any;

(d) submit reports and data s may be required; and


3.5.5 Office of the Deputy Collector for Operations. This office shall be headed by a Collector of Customs V and shall have direct supervision and control over the Aircraft Operations division, Bonded Warehouse Division, export Division, Auction and Cargo Disposal Division and Customs Duty free Shops Division.

3.5.5.1 Aircraft Operations Division. This office shall have the following functions:

(a) conduct the entrance and clearance of aircraft and the boarding formalities attendant thereto;

(b) supervise, control and coordinate the handling/conduction/underguarding of import/export transit/cargoes from and to the aircraft or from the public customs bonded warehouse to designated destinations whenever duties and taxes are still due and collectible;

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(c) keep and update records of volume of imports, exports and transit cargoes;

(d) coordinate with the Entry Processing Division in reporting to the District Collector unentered and/or overstaying cargoes;

(e) receive and distribute Inward Cargo Manifest and Airway Bills to offices concerned;

(f) submit periodic reports and other data as may be required; and


3.5.5.2 Bonded Warehouse Division. This office shall have the following functions:


(b) receive, store and release cargoes by authority of the Deputy Collector for Operations, authorized to be warehoused in the public/private warehouses;

(c) Issue warehousing permits;











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3.5.5.4Auction and Cargo Disposal Division. This office shall have the following functions:






3.5.5.5 Customs Duty-Free Shops Division. This Office shall have the following functions:

(a) Supervise and control the movement and transfer of imported cargoes discharged from NAIA and other ports of entry to the warehouse of the Duty-Free Shops operator and release them to all sales outlets/stores in accordance with existing customs rules and regulations;

(b) monitor the sale of all imported duty-free items;

(c)maintain update and systematic records and devise effective control system for all goods transferred to, stored in, sold, release by or withdrawn firm Duty-Free Shops warehouse/sales outlets;

(d) assist in the collection if fees and other charges from the Duty-Free shop Operators;

(e) submit periodic reports and data as may be required; and


BOOK II – ASSESSMENT AND OPERATIONS

TITLE 1 – ASSESSMENT

SECTION 1 – PRINCIPLES AND STANDARDS IN THE DETERMINATION OF DUTIABLE VALUE

1.1 Principles

1.1.1 It is imperative that the rules for the application of the provisions of the

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WVA be elaborated in order to provide greater uniformity and certainty in its implementation;

1.1.2 There is a need for a fair, uniform and neutral system for the valuation of goods for customs purposes that precludes the use of arbitrary or fictitious dutiable values;

1.1.3 The basis for valuation of goods for customs purposes should, to the greatest extent possible, be the transaction value of the goods being valued;

1.1.4 The dutiable value should be based on simple and equitable criteria consistent with commercial practices and that valuation procedures should be of general application without distinction between sources of supply; and

1.1.5 Valuation procedures should not be used to combat dumping.

1.2 Standards

1.2.1 Sequential Application of Valuation Methods

1.2.1.1 The methods of valuation are set out in a sequential order of application. The primary method for customs valuation is the Transaction Value and imported goods are to be valued in accordance with the provisions of this method whenever the conditions prescribed for its use are fulfilled.

1.2.1.2 Where the dutiable value cannot be determined under the Transaction Value method, it is to be determined by proceeding sequentially through the succeeding methods to the first such method under which the dutiable value can be determined. Except as provided under Section 1.2.3.1, paragraph 3 of this Order, it is only when the dutiable value cannot be determined under the provisions of a particular method that the provisions of the next method in the sequence can be used.

1.2.2 Use of Generally Accepted Accounting Principles (GAAP)

1.2.2.1 "Generally accepted accounting principles" refers to the recognized consensus or substantial authoritative support within a country at a particular time as to which economic resources and obligations should be recorded as assets and liabilities, which changes in assets and liabilities should be recorded, how the assets and liabilities and changes in them should be measured, what information should be disclosed and how it should be disclosed, and which financial statements should be prepared. These standards may be broad guidelines of general application as well as detailed practices and procedures.

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1.2.2.2 For purposes of this Order, the Bureau of Customs (BOC) shall utilize information prepared in a manner consistent with the generally accepted accounting principles in the country which is appropriate for the Valuation Method in question. For example, the determination of usual profit and general expenses under the provisions of Method Four would be carried out utilizing information prepared in a manner consistent with the generally accepted accounting principles of the country of importation which is the Philippines. On the other hand, the determination of usual profit and general expenses under the provisions of Method Five would be carried out utilizing information prepared in a manner consistent with the generally accepted accounting principles of the country of production. As a further example, the determination of the value of assist in the form of tools, dies, moulds, and similar items used in the production of the imported goods undertaken in the Philippines would be carried out utilizing information in a manner consistent with the generally accepted accounting principles of the Philippines.

1.2.3 Rules on Customs Valuation

1.2.3.1 General Provisions

The primary method in determining the dutiable value of imported goods shall be Method One: The Transaction Value, whenever the conditions prescribed for its use are fulfilled.

However, if the dutiable value cannot be determined with the use of Method One, the following valuation methods shall be applied in sequential order:

Method Two: The Transaction Value of Identical Goods

Method Three: The Transaction Value of Similar Goods

Method Four: Deductive Value

Method Five: Computed Value

Method Six: Fallback Value

However, at the request of the importer, the order of application of Methods Four and Five may be reversed; provided, that the Commissioner of Customs agrees to such request taking into consideration that the reversal of the sequential order will not give rise to real difficulties for the BOC in determining the dutiable value under Method Five.

If the importer does not request that the order of Method Four and Method Five be reversed, the normal order of the sequence shall be followed. If the importer does so request but it then proves impossible

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to determine the dutiable value under the provisions of Method Five, the dutiable value shall be determined under the provisions of Method Four, if it can be so determined.

Where the dutiable value cannot be determined under the provisions of Methods One to Five, it shall be determined under the provisions of Method Six.

SECTION 2 – METHOD ONE: THE TRANSACTION VALUE

2.1 Price Actually Paid or Payable

2.1.1 The dutiable value of imported goods shall be the transaction value, that is, the price actually paid or payable for the goods when sold for export to the Philippines adjusted in accordance with the provisions of Section 2.8 of this Order and subject to the conditions specified in Section 2.3 herein.

2.1.2 The price actually paid or payable is the total payment made or to be made by the buyer to or for the benefit of the seller for the imported goods. The payment need not necessarily take the form of a transfer of money. Payment may be made by way of letters of credit or negotiable instruments. Payment may be made directly or indirectly. An example of an indirect payment would be the settlement by the buyer, whether in whole or in part, of a debt owed by the seller.

The price actually paid or payable refers to the price for the imported goods. Thus, the flow of dividends or other payments from the buyer to the seller that do not relate to the imported goods are not part of the dutiable value.

2.2 Concept of Sale and Sale for Export

2.2.1 Sale

The transaction value of the imported goods is based on the price actually paid or payable for those goods when sold; therefore, there must be a sale for export to the Philippines as one of the conditions for the application of Method One.

The WVA itself provides no definition of a sale. It merely states that there must be a specific commercial operation that meets certain requirements and conditions. WCO Advisory Opinion 1.1 provides guidance in this matter by elaborating on the concept of "sale" as it appears in the WVA. It states that a sale may be described as follows:

2.2.1.1 A commercial operation which involves a buyer and a seller;

2.2.1.2 The buyer agrees to obtain certain goods;

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2.2.1.3 An agreement to exchange the ownership of the goods at a time and for a price or other consideration;

2.2.1.4 A compensation occurs as the transfer for that ownership and acquisition for those goods; and

2.2.1.5 Both parties acknowledge that the transactionconstitutes a commercial operation.

2.2.2 No Sale

Since one of the underlying principles of the WVA is to use the transaction value of the imported goods to the greatest extent possible, then the term "sale" should be taken in its widest sense.

Goods that might be considered not to be subject to a sale would include, among others, the following:

2.2.2.1 Free consignments, like, gifts, samples and promotional items;

2.2.2.2 Goods imported on consignments;

2.2.2.3 Goods imported by intermediaries, who do not purchase the goods and who sell them after importation;

2.2.2.4 Goods imported by branch offices which are not separate legal entities;

2.2.2.5 Goods imported under a hire or leasing contract; and

2.2.2.6 Goods supplied on loan, which remain the property of the sender.

2.2.3 Sale for Export

Only transactions involving an actual international transfer of goods may be used in valuing merchandise under the transaction value method.

2.2.4 “Sold for Export” in a Series of Sales

In a series of sales situation, the price actually paid or payable for the imported goods when sold for export to the Philippines is the price paid in the last sale occurring prior to the introduction of the goods into the Philippines, instead of the first (or earlier) sale.

2.3 Conditions Under Method One

Method One shall be used if the following conditions are fulfilled:

2.3.1 There must be no restrictions as to the disposition or use of the

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goods by the buyer, other than restrictions which:

2.3.1.1 Are imposed or required by law or by Philippine authorities;

2.3.1.2 Limit the geographical area in which the goods may be resold; and

2.3.1.3 Do not substantially affect the value of the goods.

An example would be the case where a seller requires a buyer of automobiles not to sell or exhibit them prior to a fixed date which represents the beginning of a model year.

2.3.2 The sale or price must not be subject to some conditions or considerations for which a value cannot be determined with respect to the goods being valued.

If the sale or price is subject to some conditions or considerations for which a value cannot be determined with respect to the goods being valued, the transaction value shall not be acceptable for customs purposes. Some examples of this include:

2.3.2.1 The seller establishes the price of the imported goods on condition that the buyer will also buy other goods in specified quantities.

2.3.2.2 The price of the imported goods is dependent upon the price or prices at which the buyer of the imported goods sells other goods to the seller of the imported goods.

2.3.2.3 The price is established on the basis of a form of payment extraneous to the imported goods, such as where the imported goods are semi-finished goods which have been provided by the seller on condition that the seller will receive a specified quantity of the finished goods.

Conditions or considerations relating to the production or marketing of the imported goods shall not result in rejection of the transaction value. Examples:

2.3.2.4 Buyer furnishes the seller with engineering and plans undertaken in the Philippines shall not result in rejection of the transaction value for the purposes of Method One.

2.3.2.5 Buyer undertakes on his own account, even though by agreement with the seller, activities relating to the marketing of the imported goods, and the value of those activities is not part of the dutiable value nor shall such activities result in rejection of the transaction value.

2.3.3 No part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the

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provisions of Section 2.8.

2.3.4 The buyer and the seller are not related, or where they are related, such relationship did not influence the price of the goods. The buyer and the seller shall be deemed to be related only if:

2.3.4.1 They are officers or directors of one another's businesses;

2.3.4.2 They are legally recognized partners in business;

2.3.4.3 They are employer and employee;

2.3.4.4 Any person directly or indirectly owns, controls or holds five (5) per cent or more of the outstanding voting stock or shares of both of them;

2.3.4.5 One of them directly or indirectly controls the other;

2.3.4.6 Both of them are directly or indirectly controlled by a third person;

2.3.4.7 Together they directly or indirectly control a third person; or

2.3.4.8 They are related by affinity or consanguinity up to the fourth civil degree.

For the purpose of Section 2.3.4, one person shall be deemed to control another when the former is legally or operationally in a position to exercise restraint or direction over the latter.

Persons who are associated in business with one another, in that, one is the sole agent, sole distributor or sole concessionaire, however described, of the other shall be deemed to be related if they fall within the criteria of Section 2.3.4.

2.4 Acceptance of Method One in Related Sale

If the buyer and seller are related, the use of the transaction value method is acceptable if either of the two following circumstances is present:

2.4.1 The circumstances surrounding the transaction demonstrate that the relationship did not influence the price actually paid or payable. It is not intended that there should be an examination of the circumstances in all cases where the buyer and the seller are related. Such examination will only be required where there are doubts about the acceptability of the price. Where the Collector of Customs has no doubts on the acceptability of the price, it should be accepted without requesting further information from the importer.

For example, the Collector of Customs may have previously examined

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the relationship, or he may already have detailed information concerning the buyer and the seller, and may already be satisfied from such examination or information that the relationship did not influence the price.

Where the Collector of Customs is unable to accept the transaction value without further inquiry, he should give the importer an opportunity to supply such further detailed information as may be necessary to enable him to examine the circumstances surrounding the sale. In this context, the Collector of Customs should be prepared to examine relevant aspects of the transaction, including the way in which the buyer and seller organize their commercial relations and the way in which the price in question was arrived at, in order to determine whether the relationship influenced the price. Where it can be shown that the buyer and seller, although related under the provisions of Section 2.3.4 buy from and sell to each other as if they were not related, this would demonstrate that the price had not been influenced by the relationship.

As an example of this, if the price had been settled in a manner consistent with the normal pricing practices of the industry in question or with the way the seller settles prices for sales to buyers who are not related to the seller, this would demonstrate that the price had not been influenced by the relationship.

As a further example, where it is shown that the price is adequate to ensure recovery of all costs plus a profit which is representative of the firm's overall profit realized over a representative period of time (e.g. on an annual basis) in sales of goods of the same class or kind, this would demonstrate that the price had not been influenced.

2.4.2 The transaction value closely approximates to one of the following test values occurring at or about the same time:

2.4.2.1 The transaction value in sales to unrelated buyers of identical or similar goods for export to the Philippines; or

2.4.2.2 The deductive value of identical or similar goods determined in accordance with Method Four; or

2.4.2.3 The computed value of identical or similar goods determined in accordance with Method Five.

In applying the foregoing tests, due account shall be taken of demonstrated differences in commercial levels, quantity levels, adjustments and costs incurred by the seller in sales in which the seller and the buyer are not related that are not incurred by the seller in sales in which the seller and the buyer are related.

The tests set forth in Section 2.4.2 are to be used at the initiative of

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the importer and only for comparison purposes. Substitute values may not be established under the provisions of Section 2.4.2 of this Order.

2.5 Collector of Customs’ Action when there is Ground that Relationship has Influenced the Price

If, in the light of information provided by the importer or otherwise, the Collector of Customs has grounds for considering that the relationship influenced the price, he shall communicate the ground/s to the importer and the importer shall be given a reasonable opportunity to respond. If the importer so requests, the communication of the ground/s shall be in writing.

If the importer contests the issue that the relationship influenced the price, the matter shall be raised and resolved through the existing dispute settlement mechanism, like, the Valuation and Classification Review Committee (VCRC).

2.6 Significance of Test Values

Test values provide an opportunity for the importer to demonstrate that the transaction value closely approximates to a "test" value previously accepted by the Collector of Customs and is therefore acceptable under the provisions of Method One.

Where a test under Section 2.4.2 is met, it is not necessary to examine the question of influence under Section 2.4.1. If the Collector of Customs has already sufficient information to be satisfied, without further detailed inquiries, that one of the tests provided in Section 2.4.2 has been met, there is no reason for him to require the importer to demonstrate that the test can be met. In Section 2.4.2.1 the term "unrelated buyers" means buyers who are not related to the setter in any particular case.

2.7 Close Approximation of Values

A number of factors must be taken into consideration in determining whether one value "closely approximates" to another value. These factors include the nature of the imported goods, the nature of the industry itself, the season in which the goods are imported, and, whether the difference in values is commercially significant. Since these factors may vary from case to case, it would be impossible to apply a uniform standard such as a fixed percentage, in each case. For example, a small difference in value in a case involving one type of goods could be unacceptable while a large difference in a case involving another type of goods might be acceptable in determining whether the transaction value closely approximates to the “test" values set forth in Section 2.4.2 of Method One.

2.8 Adjustments

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In determining the dutiable value under the provisions of Method One, the following adjustments shall be added to the price actually paid or payable for the imported goods being valued to the extent that they are incurred by the buyer, provided there is objective and quantifiable data to form the basis of the adjustment, and if such value has not been included in the price actually paid or payable:

2.8.1 Commissions and brokerage fees (except buying commissions);

Commissions and brokerage fees include selling commissions which are paid by the seller to his agent in the promotion and sale of his products. Selling commission may take the form of an indentor’s commission, selling agent's commission, or manufacturer's representative commission.

The term brokerage fees refer to a commission paid to a broker who arranges the transaction between a seller and a buyer. Such may be paid by the seller or the buyer or by both the seller and the buyer. This normally applies to the commodities market. It does not refer to the customs broker's professional fees in customs clearance paid by the importer which is considered a post importation expense.

Buying commissions are fees paid by an importer to the importer's agent for the service of representing the importer abroad in the purchase of the goods being valued.

2.8.2 Cost of containers which are treated as being one for Customs purposes with the goods in question;

2.8.3 Cost of packing whether for labor or materials;

2.8.4 Assists;

"Assist" is defined as the value, apportioned as appropriate, of certain goods and services supplied directly or indirectly by the buyer free of charge or at a reduced cost for use in connection with the production and sale for export of the imported goods, to the extent that such value has not been incorporated in the price actually paid or payable. The goods and services are:

2.8.4.1 Materials, components, parts and similar itemsincorporated in the imported goods;

2.8.4.2 Tools, dies, moulds and similar items used in the production of the imported goods;

2.8.4.3 Materials consumed in the production of the imported goods; and

2.8.4.4 Engineering, development, artwork, design work, and plans and

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sketches undertaken elsewhere than in the Philippines and necessary for the production of the imported goods.

There are two factors involved in the apportionment of the elements, namely, the value of the element itself and the way in which that value is to be apportioned to the imported goods. The apportionment of these elements should be made in a reasonable manner appropriate to the circumstances and in accordance with GAAP.

Concerning the value of the element, if the importer acquires, the element from a seller not related to the importer at a given cost, the value of the element is that cost. If the element was produced by the importer or by a person related to the importer, its value would be the cost of producing it. If the element had been previously used by the importer, regardless of whether it had been acquired or produced by such importer, the original cost of acquisition or production would have to be adjusted downward to reflect its use in order to arrive at the value of the element.

Finally, once a value has been determined for the element, it is necessary to apportion that value to the imported goods. Various possibilities exist. For example, the value might be apportioned to the first shipment if the importer wishes to pay duty on the entire value at one time. As another example, the importer may request that the value be apportioned over the number of units produced up to the time of the first shipment. As a further example, the importer may request that the value be apportioned over the entire anticipated production where contracts or firm commitments exist for that production. The method of apportionment used will depend upon the documentation provided by the importer.

As an illustration of the above, an importer provides the producer with a mould to be used in the production of the imported goods and contracts with the producer to buy 10,000 units. By the time of arrival of the first shipment of 1,000 units, the producer has already produced 4,000 units. The importer may request the Collector of Customs to apportion the value of the mould over 1,000 units, 4,000 units or 10,000 units.

In order to minimize the burden for both the importer and Collector of Customs in determining the values to be added, data readily available in the buyer's commercial record system should be used in so far as possible.

For those elements supplied by the buyer which were purchased or leased by the buyer, the addition would be the cost of the purchase or the lease. No addition shall be made for those elements available in the public domain, other than the cost of obtaining copies of them.

Further, the manner in with which it may be possible to calculate the

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values to be added will depend on a particular firm's structure and management practice, as well as its accounting methods.

Example: It is possible that a firm which imports a variety of products from several countries maintains the records of its design centre outside the Philippines in such a way as to show accurately the costs attributable, to a given product. In such cases, a direct adjustment may appropriately be made under the provisions of Section 2.8.

Another example is that - a firm may carry the cost of the design centre outside the Philippines as a general overhead expense without allocation to specific products. In this instance, an appropriate adjustment could be made under the provisions of Section 2.8 with respect to the imported goods by apportioning total design centre costs over total production benefiting from the design centre and adding such apportioned cost on a unit basis to imports.

Variations in the above circumstances will, of course, require different factors to be considered in determining the proper method of allocation.

In cases where the production of the element in question involves a number of countries and over a period of time, the adjustment should be limited to the value actually added to that element outside the Philippines.

2.8.5 Royalties and license fees related to the goods being valued that the buyer must pay, either directly or indirectly, as a condition of sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable;

The royalties and license fees may include, among other things, payments in respect to patents, trademarks and copyrights. However, the charges for the right to reproduce the imported goods in the Philippines shall not be added to the price actually paid or payable for the imported goods in determining the dutiable value.

Payments made by the buyer for the right to distribute or resell the imported goods shall not be added to the price actually paid or payable for the imported goods if such payments are not a condition of the sale for export to the Philippines.

2.8.6 The value of any part of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues directly or indirectly to the seller;

An example of this element is that when the contract of sale between buyer and seller states that a certain percentage of the sales proceeds of an imported article is remitted to the seller.

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2.8.7 The cost of transport of the imported goods to the port of entry in the Philippines; loading, unloading and handling charges associated with the transport of the imported goods to the port of entry in the Philippines; and

The cost of transportation would include those costs for physically moving the goods to the port of entry in the Philippines. This cost could include such charges as trucking (inland freight, rail freight, ocean freight, air freight and barge or lighterage and postal costs).

2..8.7.1 The freight charge to be applied shall be based on the amount indicated in the Air Waybill or Bill of Lading.

2.8.7.2 Freight charges whether prepaid or collect shall be required to be clearly indicated in the Bill of Lading (air or ocean) for approval or statistical purposes. [CMO 2-90]

2..8.7.3 In case of bulk shipments, the certified copy of Charter Party document or Freight Contract, and Stowage Plan shall be presented to show the actual freight charge, all of which shall be attached to the working copy of the Entry. [CMO 22-2007 Section 3.2 (3.2.1 to 3.2.5 c)]

a. For bulk/general cargo shipments made by the National Food Authority (NFA), the freight charge if not lower than 10% of the CFR value of the commodity may be accepted.

In case of refrigerated shipment, a certification from shipping lines as to the freight paid must be presented for Customs verification.

b. In the absence of a certification from the shipping lines, the following freight charges may be used as reference:

b.1 Shipments coming from China — should not be lower than:

$1,700.00/40 ft Reefer Container (Guangshou, China)$1,300.00/20 ft Reefer Container (Guangshou, China)$1,500.00/20 ft Reefer Container (Xiamen, China)$1,800.00/40 ft Reefer Container (Xiamen, China)$1,800.00/20 ft Reefer Container (Shanghai, China)$3,200.00/40 ft Reefer Container (Shanghai, China)$3,200.00/40 ft Reefer Container (Shanghai, China)$1,350.00/20 ft Reefer Container (Dalian, China)$1,680.00/40 ft Reefer Container (Dalian, China)

b.2 Shipments coming from Hongkong — $1,600.00/40 ft container reefer van.

b.3 Shipments coming from Singapore:

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$900.00/20 ft container reefer$1,850.00/40 ft container reeferPlus: BAF ($70/20' & 140/40')

b. 4 Shipments coming from Los Angeles, USA:

$3,050.00/20 ft Reefer Container$6,100.00/40 ft Reefer Container

c. If it is a 20 ft. container reefer van, then the freight should be 50% of the freight charge of a 40 ft. In case lower, the same shall be subject to further verification by the BOC

To illustrate further, there may be cases where the imported goods are transported by the importer's own vessel/aircraft. Although the cost of transportation has not been paid to a third party, to arrive at the dutiable value, the importer must, nevertheless, calculate the "actual cost" for that transportation of the goods to the country of importation. The example of such calculation would be a depreciation of the costs of the fuel, lubricants, parts, the vessel or aircraft itself and other related charges relating to the voyage/flight plus the salaries of the crew. This calculation should be based on the generally accepted accounting principles (GAAP).

Charges for loading, unloading and handling could be attributed to a number of different activities. Loading and unloading would include, in part, the movement of goods onto or from any conveyance. Handling would include any number of activities surrounding the physical movement of the goods such as preparation of manifests, B/L or AWB, obtaining any export license, and any other shipping arrangement. All these charges must be associated with the transportation of the goods before the vessel reaches the port of importation.

2.8.8 The cost of insurance.

2.8.8.1 If the terms of sale are CIF/CIP, the amount of the actual insurance premium shall be used in the assessment, provided that if such amount is lower than 2% of the FOB value for general cargo and 4% of the FOB value for dangerous/inflammable goods, chemicals and other high risk cargoes, the same shall be subject to further verification by the BOC.

2.8.8.2 If a shipment is covered by a local or domestic insurance, the amount of insurance premium actually paid may be accepted. However, if the premium is lower than 2% of the FOB value for general cargo and 4% of the FOB value for dangerous/inflammable goods, chemicals and other high risk cargoes, then a Certification from the insurance

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company as to the actual premium paid shall be presented to the BOC together with the Original Official Receipt. A copy of that Official Receipt shall be certified as a true copy by the assigned Customs Appraiser/Examiner which shall be attached to the original Working Entry.

2.8.8.3 For shipments not covered by a local insurance, then the amount of insurance declared on the Entry may be accepted, provided that if such amount is lower than 2% of the FOB value for general cargo and 4% of the FOB value for dangerous/inflammable goods, chemicals and other high risk cargoes, the same shall be subject to further verification by the BOC.

2.8.8.4 For direct importations by the government, the original copy of the Marine Open Policy issued by the Government Service Insurance System (GSIS) together with a true copy shall be presented to BOC (Attn: Import Assessment Service) certified by the latter. The Bureau shall apply the actual GSIS insurance premium rate.

a. If insured by a Surety company other than GSIS, apply Section 2.8.8.2.

b. If not covered by a local insurance, apply Section 2.8.8.3.

2.8.8.5 The amount of insurance shall be declared in the IEIRD Box no. 90 and the equivalent appropriate box in the SAD for the electronic lodgment. [CMO 22-2007 Section 3.1 (3.1.1 – 3.1.5)]

The word insurance under this Section means those charges for insurance for the goods during transportation, loading, unloading and handling. WCO Advisory Opinion 13.1 states that the word "insurance" should be interpreted as referring solely to insurance costs incurred for the goods during the transport of the imported goods to the port or place of importation.

2.9 Post Importation Charges/Costs

The dutiable value must not include the following charges or costs, if they are distinguished from the price actually paid or payable for the goods:

2.9.1 Charges for construction, erection, assembly, maintenance or technical assistance, undertaken after importation on imported goods such as industrial plant, machinery or equipment;

2.9.2 Cost of transport after importation; and

2.9.3 Duties, taxes and other charges paid for the imported goods.

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2.10 All additions to the price actually paid or payable shall be made only on the basis of objective and quantifiable data.

Where objective and quantifiable data do not exist with regard to the additions required to be made under the provisions of Section 2.8, the transaction value cannot be determined under the provisions of Method One. As an illustration of this, a royalty is paid on the basis of the price in a sale in the importing country of a litre of a particular product that was imported by the kilogram and made up into a solution after importation. if the royalty is based partially on the imported goods and partially on other factors which have nothing to do with the imported goods (such as when the imported goods are mixed with domestic ingredients and are no longer separately identifiable, or when the royalty cannot be distinguished from special financial arrangements between the buyer and the seller), it would be inappropriate to attempt to make an addition for the royalty. However, if the amount of this royalty is based only on the imported goods and can be readily quantified, an addition to the price actually paid or payable can be made.

2.11 No Additions shall be made in the price actually paid or payable in determining the dutiable value except as provided for in Section 2.8.

SECTION 3 – METHOD TWO: THE TRANSACTION VALUE OF IDENTICAL GOODS

3.1 If the dutiable value of imported goods cannot be determined with the use of Method One, the dutiable value shall be determined under Method Two or 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.

In applying this Method, the transaction value of identical goods in a sale at the same commercial level and in substantially the same quantity as the goods being valued shall be used to determine the dutiable value. Where no such sale is found, the transaction value of identical goods sold at a different commercial level and/or in different quantities, adjusted to take account of differences attributable to commercial level and/or to quantity, shall be used, provided that such adjustments can be made on the basis of demonstrated evidence which clearly establishes the reasonableness and accuracy of the adjustment, whether the adjustment leads to an increase or a decrease in the value.

3.2 "Exported at or about the same time" is generally to be interpreted as exportation of the identical goods forty five (45) days before or after the date of bill of lading or airway bill of lading of the goods being valued, This external time standard must allow for practical application of the Method in question. Hence, the words "or about" should be regarded as intended simply to make the terms "at the same time" somewhat less rigid. In addition, it should be noted that according to Section 1.1.4, the

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dutiable value should be based on simple and equitable criteria consistent with commercial practice. Starting from these principles "at or about the same time” should be taken to cover a period of time, as close to the date of exportation as possible, within which commercial practices and market conditions which affect price remain the same. In the final analysis, the question must be decided on a case by case basis within the overall context of the application of Method Two.

3.3 Identical imported goods are defined as goods, which are:

3.3.1 the same in all respects including physical characteristics, quality and reputation;

3.3.2 produced by the producer of the goods being valued; and

3.3.3 produced in the same country as the goods being valued.

The definition of identical goods excludes imported goods for which engineering, development, artwork, design work, and plans and sketches is undertaken in the Philippines and is provided by the buyer to the producer of the goods free of charge or at a reduced cost.

Where there are no identical goods produced by the same person in the country of production of the goods being valued, identical goods produced by a different person in the same country may be taken into account.

Minor differences in appearance would not preclude goods which otherwise conform to the definition from being regarded as identical.

3.4 If no sale of identical goods at the same commercial level and in substantially the same quantity as the goods being valued is found, the transaction value of identical goods sold at a different commercial level and/or in different quantity may be utilized. Such transaction value of identical goods shall be adjusted upwards or downwards to account for demonstrated differences between the goods being valued and the identical goods, to take account of:

3.4.1 Commercial level differences;

3.4.2 Quantity differences; and

3.4.3 Significant differences for transportation costs due to variances in the mode and/or distance of transport.

3.5 In applying Method Two, the Collector of Customs shall, wherever possible, use a sale of identical goods at the same commercial level and in substantially the same quantities as the goods being valued. Where no such sale is found, a sale of identical goods that takes place under any one of the following three conditions may be used:

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3.5.1 A sale at the same commercial level but in different quantities;

3.5.2 A sale at a different commercial level but in substantially the same quantities; or

3.5.3 A sale at a different commercial level and in different quantities.

Having found a sale under any one of these three conditions adjustments will then be made, as the case may be, for:

3.5.3.1 Quantity factors only;

3.5.3.2 Commercial level factors only; or

3.5.3.3 Both commercial level and quantity factors.

The expression "and/or” allows the flexibility to use the sales and make the necessary adjustments in any one of the three conditions described above.

A condition for adjustment because of different commercial levels or different quantities is that such adjustment, whether it leads to an increase or a decrease in the value, be made only on the basis of demonstrated evidence that clearly establishes the reasonableness and accuracy of the adjustments, e.g. valid price lists containing prices referring to different levels or different quantities. As an example of this, if the imported goods being valued consist of a shipment of 10 units and the only identical imported goods for which a transaction value exists involved a sale of 500 units, and it is recognized that the seller grants quantity discounts, the required adjustment may be accomplished by resorting to the seller's price list and using that price applicable to a sale of 10 units. This does not require that a sale had to have been made in quantities of 10 as long as the price list has been established as being bona fide through sales at other quantities. In the absence of such an objective measure, however, the determination of a dutiable value under the provisions of Method Two is not appropriate.

3.6 If in applying Method Two, more than one transaction value of identical goods is found, the lowest of such value shall be used to determine the dutiable value of the imported goods.

SECTION 4 – METHOD THREE: THE TRANSACTION VALUE OF SIMILAR GOODS

4.1 If the dutiable value of imported goods cannot be determined under the preceding methods, the dutiable value shall be the transaction value of similar goods sold for export to the Philippines and exported at or about the same time as the goods being valued.

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In applying this Method, the transaction value of similar goods in a sale at the same commercial level and in substantially the same quantity as the goods being valued shall be used to determine the dutiable value. Where no such sale is found, the transaction value of similar goods sold at a different commercial level and/or in different quantities, adjusted to take account of differences attributable to commercial level and/or to quantity, shall be used, provided that such adjustments can be made on the basis of demonstrated evidence which clearly establishes the reasonableness and accuracy of the adjustment, whether the adjustment leads to an increase or a decrease in the value.

4.2 "Exported at or about the same time" is generally to be interpreted as exportation of the similar goods forty five (45) days before or after the date of bill of lading or airway bill of lading of the goods being valued. This external time standard must allow for practical application of the Method in question. Hence, the words "or about" should be regarded as intended simply to make the terms "at the same time" somewhat less rigid. In addition, it should be noted that according to Section 1.1.4, the dutiable value should be based on simple and equitable criteria consistent with commercial practice. Starting from these principles "at or about the same time" should be taken to cover a period of time, as close to the date of exportation as possible, within which commercial practices and market conditions which affect price remain the same. In the final analysis, the question must be decided on a case by case basis within the overall context of the application of Method Three.

4.3 Similar goods are defined as goods which, although not alike in all respects -

4.3.1 Have like characteristics and like component materials;

4.3.2 Are capable of performing the same functions as the goods being valued;

4.3.3 Are commercially interchangeable with the goods being valued;

4.3.4 Are produced in the same country of the goods being valued; and

4.3.5 Are produced by the producer of the goods being valued.

The definition of similar goods excludes imported goods for which engineering, development, artwork, design work, and plans and sketches is undertaken in the Philippines and is provided by the buyer to the producer of the goods free of charge or at a reduced cost.

Where there are no similar goods produced by the same person in the country of production of the goods being valued, similar goods produced by a different person in the same country may be taken into account.

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4.4 Where no sale of similar goods at the same commercial level and substantially the same quantity as the goods being valued is found, similar goods at different commercial level and/or in different quantity may be utilized. Such transaction value of similar goods shall be adjusted upwards or downwards to account for demonstrated differences between the goods being valued and the similar goods, to take account of:

4.4.1 Commercial level differences;

4.4.2 Quantity differences; and

4.4.3 Significant differences for transportation costs due to variances in the mode and/or distance of transport.

4.5 In applying Method Three, the Collector of Customs shall, wherever possible, use a sale of similar goods at the same commercial level and in substantially the same quantities as the goods being valued. Where no such sale is found, a sale of similar goods that takes place under any one of the following three conditions may be used:

4.5.1 A sale at the same commercial level but in different quantities;

4.5.2 A sale at a different commercial level but in substantially the same quantities; or

4.5.3 A sale at a different commercial level and in different quantities.

Having found a sale under any one of these three conditions adjustments will then be made, as the case may be, for:

4.5.4 Quantity factors only;

4.5.5 Commercial level factors only; or

4.5.6 Both commercial level and quantity factors.

The expression "and/or" allows the flexibility to use the sales and make the necessary adjustments in any one of the three conditions described above.

A condition for adjustment because of different commercial levels or different quantities is that such adjustment, whether it leads to an increase or a decrease in the value, be made only on the basis of demonstrated evidence that clearly establishes the reasonableness and accuracy of the adjustments, e.g. valid price lists containing prices referring to different levels or different quantities. As an example of this, if the imported goods being valued consist of a shipment of 10 units and the only similar imported goods for which a transaction value exists involved a sale of 500 units, and it is recognized that the seller grants

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quantity discounts, the required adjustment may be accomplished by resorting to the seller's price list and using that price applicable to a sale of 10 units. This does not require that a sale had to have been made in quantities of 10 as long as the price list has been established as being bona fide through sales at other quantities. In the absence of such an objective measure, however, the determination of a dutiable value under the provisions of Method Three is not appropriate.

4.6 If in applying Method Three, more than one transaction value of similar goods is found, the lowest of such value shall be used to determine the dutiable value of the imported goods.

SECTION 5 – METHOD FOUR: THE DEDUCTIVE VALUE

5.1 By this method, the dutiable value is determined on the basis of sales in the Philippines of the goods being valued or of identical or similar imported goods, less certain specified expenses resulting from the importation and sale of the goods.

5.2 The sales in the Philippines must meet the following conditions:

5.2.1 The imported goods or identical or similar imported goods have been sold in the Philippines in the same condition as imported;

5.2.2 Sales of the imported goods being valued or of identical or similar imported goods have taken place at or about the time of importation of the goods being valued. The expression "at or about the time of importation of the goods being valued" shall mean a period extending 45 days prior to and 45 days following the importation of the goods being valued;

5.2.3 The purchaser must not be related to the importer from whom he buys such goods; and

5.2.4 The purchaser in the Philippines must not have supplied assists, either directly or indirectly.

5.3 A deductive value is determined by making a deduction from the established price per unit for the aggregate of the following elements:

5.3.1 Commissions generally earned on a unit basis in connection with sales in the Philippines for goods of the same class or kind, or

5.3.2 Additions usually made for in connection with sales profit and general expenses in the Philippines for goods of the same class or kind;

5.3.3 The usual transport, insurance and associated costs incurred within the Philippines; and

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5.3.4 Customs duties and other national taxes payable in the Philippines by reason of the importation or sale of the goods.

5.4 The term "unit price" means the price at which the greatest number of units is sold in sales to persons who are not related to the persons from whom they buy such goods at the first commercial level after importation at which such sales take place.

As an example of this, goods are sold from a price list which grants favorable unit prices for purchases made in larger quantities.

Sale quantity

Unit price Number of sales

Total Quantitysold at each

price

1-10 units 100 10 sales of 5 units

5 sales of 3 units

65

11-25 units 95 5 sales of 11 units

55

over 25 units

90 1 sale of 30 units1 sale of 50 units

80

The greatest number of units sold at a price is 80; therefore, the unit price in the greatest aggregate quantity is 90.

As another example of this, two sales occur. In the first sale, 500 units are sold at a price of 95 currency units each. In the second sale, 400 units are sold at a price of 90 currency units each. In this example, the greatest number of units sold at a particular price is 500; therefore, the unit price in the greatest aggregate quantity is 95.

A third example would be the following situation where various quantities are sold at various prices.

(a) Sales

Sale quantity Unit price

40 units 10030 units 9015 units 10050 units 9525 units 10535 units 905 units 100

(b) Totals

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Total quantity sold Unit price

65 9050 9560 10025 105

In this example, the greatest number of units sold at a particular price is 65; therefore, the unit price in the greatest aggregate quantity is 90.

5.5 Any sale in the Philippines, as described in Section 5.4 above, to a person who supplies directly or indirectly free of charge or at reduced cost for use in connection with the production and sale for export of the imported goods any of the elements specified Section 2.8.4 should not be taken into account in establishing the unit price for the purposes of this Method.

5.6 It should be noted that "profit and general expenses" referred to in Section 5.3 should be taken as a whole. The figure for the purposes of this deduction should be determined on the basis of information supplied by or on behalf of the importer unless the importer's figures are inconsistent with those obtained in sales in the country of importation of imported goods of the same class or kind. Where the importer's figures are inconsistent with such figures, the amount for profit and general expenses may be based upon relevant information other than that supplied by or on behalf of the importer.

5.7 The "general expenses" include the direct and indirect costs of marketing the goods in question.

5.8 Local taxes payable by reason of the sale of the goods for which a deduction is not made under the provisions of Section 5.3.4 shall be deducted under the provisions of Section 5.3.2 as general expenses.

5.9 In determining either the commissions or the usual profits and general expenses under the provisions Section 5.3 hereof, the question whether certain goods are "of the same class or kind" as other goods must be determined on a case-to-case basis by reference to the circumstances involved. Sales in the Philippines of the narrowest group or range of imported goods of the same class or kind, which includes the goods being valued, for which the necessary information can be provided, should be examined. For purposes of this Method, "goods of the same class or kind" includes goods imported from the same country as the goods being valued as well as goods imported from other countries.

5.10 If no sales of the imported goods or of identical or similar imported goods took place at or about the time of importation of the goods being valued, it is permitted to use sales of the imported goods or identical or similar imported goods, sold in the Philippines in the same condition as

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imported, at the earliest date after importation of the goods being valued but before the expiration of 90 days after such importation. For the purpose of this Section, the "earliest date" shall be the date by which sales of the imported goods or of identical or similar imported goods are made in sufficient quantity to establish the unit price.

5.11 If there are no sales of identical or similar imported goods in the condition as imported that meet all the above requirements, the importer may choose to use sales of the imported goods being valued after further processing.

5.11.1 Where the method in Section 5.11 is used, deductions made for the value added by further processing shall be based on objective and quantifiable data relating to the cost of such work. Accepted industry formulas, recipes, methods of construction, and other industry practices would form the basis of the calculations.

5.11.2 It is recognized that the method of valuation provided for in Section 5.11 would normally not be applicable when, as a result of the further processing, the imported goods lose their identity. However, there can be instances where, although the identity of the imported goods is lost, the value added by the processing can be determined accurately without unreasonable difficulty. On the other hand, there can also be instances where the imported goods maintain their identity but form such a minor element in the goods sold in the Philippines that the use of this valuation method would be unjustified. In view of the above, each situation of this type must be considered on a case-to-case basis.

SECTION 6 – METHOD FIVE: THE COMPUTED VALUE

6.1 Under this method, the dutiable value is determined on the basis of the cost of production of the goods being valued, plus an amount for profit and general expenses usually reflected in sales from the country of exportation to the Philippines of goods of the same class or kind.

6.2 The dutiable value may be calculated as follows:

6.2.1 Determine the aggregate of the relevant costs, charges and expenses or the value of:

6.2.1.1 Materials employed in producing the imported goods;

6.2.1.2 Fabrication, production or other processing costs for the imported goods (direct and indirect labor, factory overheads);

The following are to be added if not included in Sections 6.2.1.1 and 6.2.1.2 above:

6.2.1.3 Cost of containers which are treated as being one for Customs purposes with the goods in question;

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6.2.1.4 Cost of packing whether for labor or materials;

6.2.1.5 Assists (apportioned in a reasonable manner in accordance with generally accepted accounting principles); and

6.2.1.6 Engineering, development, artwork, design, work, and plans and sketches undertaken in the Philippines and charged to the producer.

6.2.2 Add amount for profit and general expenses equal to that usually reflected in sales of goods of the same class or kind as the goods being valued which are made by producers in the country of exportation for export to the Philippines.

6.2.3 Add the cost of transport, loading, unloading and handling charges, insurance and related charges to the port or place of entry in the Philippines as referred to in Sections 2.8.7 and 2.8.8.

6.3 As a general rule, dutiable value is determined under this Method on the basis of information readily available in the country of importation. In order to determine a computed value, however, it may be necessary to examine the costs of producing the goods being valued and other information which has to be obtained from outside the Philippines. Furthermore, in most cases the producer of the goods will be outside the jurisdiction of the authorities of the Philippines. The use of the computed value method will generally be limited to those cases where the buyer and seller are related, and the producer is prepared to supply to the authorities of the Philippines the necessary costing and to provide facilities for any subsequent verification which may be necessary.

6.4 The "cost or value" referred to Section 6.2.1 is to be determined on the basis of information relating to the production of the goods being valued supplied by or on behalf of the producer. It is to be based upon the commercial accounts of the producer, provided that such accounts are consistent with the generally accepted accounting principles applied in the country where the goods are produced.

6.5 The "cost or value" shall include the cost of elements specified in Sections 2.8.2 and 2.8.3. It shall also include the value, apportioned as appropriate under the provisions of Section 2.8, of any element specified in Section 2.8.4 which has been supplied directly or indirectly by the buyer for use in connection with the production of the imported goods. The value of the elements specified in Section 2.8.4.4 which are undertaken in the Philippines shall be included only to the extent that such elements are charged to the producer. It is to be understood that no cost or value of the elements referred to in this paragraph shall be counted twice in determining the computed value.

6.6 The "amount for profit and general expenses" referred to in Section 6.2.2 is to be determined on the basis of information supplied by or on behalf of the producer unless the producer's figures are inconsistent with those

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usually reflected in sales of goods of the same class or kind as the goods being valued which are made by producers in the country of exportation for export to the Philippines.

It should be noted in this context that the "amount for profit and general expenses" has to be taken as a whole. It follows that if, in any particular case, the producer's profit figure is low and the producers general expenses are high, the producer's profit and general expenses taken together may nevertheless be consistent with that usually reflected in sales of goods of the same class or kind.

6.6.1 Such a situation might occur, for example, if a product is being launched in the Philippines and the producer accepted a nil or low profit to offset high general expenses associated with the launch. Where the producer can demonstrate a low profit on sales of the imported goods because of particular commercial circumstances, the producer's actual profit figures should be taken into account provided that the producer has valid commercial reasons to justify them and the producer's pricing policy reflects usual pricing policies in the branch of industry concerned.

6.6.2 Such a situation might occur, for example, where producers have been forced to lower prices temporarily because of an unforeseeable drop in demand, or where they sell goods to complement a range of goods being produced in the Philippines and accept a low profit to maintain competitiveness. Where the producer's own figures for profit and general expenses are not consistent with those usually reflected in sales of goods of the same class or kind as the goods being valued which are made by producers in the country of exportation for export to the Philippines, the amount for profit and general expenses may be based upon relevant information other than that supplied by or on behalf of the producer of the goods.

6.7 Where information other than that supplied by or on behalf of the producer is used for purposes of determining the computed value, the Collector of Customs shall inform the importer, if the latter so requests, of the source of such information, the data used and the calculations based upon such data, subject to the provisions of Sec. VI-D of CAO No. 4-2004 (Confidentiality Clause).

6.8 The "general expenses" referred to in Section 6.2.2 covers the total costs (direct and indirect) of producing and selling the goods for export which are not included under Section 6.2.1.

6.9 Whether certain goods are "of the same class or kind" as other goods, must be determined on a case-to-case basis with reference to the circumstances involved. In determining the usual profits and general expenses under the provisions of Method Five sales for export to the Philippines of the narrowest group or range of goods, which includes the goods being valued, for which the necessary information can be

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provided, should be examined. For purposes of Method Five, "goods of the same class or kind" must be from the same country as the goods being valued.

6.10 The Collector of Customs shall not require or compel any person not residing in the Philippines to produce for examination, or to allow access to, any account or other record for the purposes of determining a computed value However, information supplied by the producer of the goods for the purpose of determining the dutiable value may be verified in another country with the agreement of the producer and provided they will give sufficient advance notice to the government of the country in question and the latter does not object to the investigation.

SECTION 7 – METHOD SIX: THE FALLBACK VALUE

7.1 When the dutiable value cannot be determined under any of the previous methods of valuation, it shall be determined by using other reasonable means consistent with the principles and general provisions of GATT 1994, the WVA, and on the basis of data available in the Philippines.

7.2 If the importer so requests, he shall be informed in writing of the dutiable value determined under Method Six and the method used to determine such value.

7.3 No dutiable value shall be determined under Method Six on the basis of:

7.3.1 The selling price in the Philippines of goods produced in the Philippines;

7.3.2 A system that provides for the acceptance for customs purposes of the higher of two alternative values;

7.3.3 The price of goods in the domestic market of the country of exportation;

7.3.4 The cost of production, other than computed values, that have been determined for identical or similar goods in accordance with Method Five hereof;

7.3.5 The price of goods for export to a country other than the Philippines;

7.3.6 Minimum dutiable values; or

7.3.7 Arbitrary or fictitious values.

7.4 Dutiable values determined under the provisions of Method Six should, to the greatest extent possible, be based on previously determined dutiable values.

7.5 The methods of valuation to be employed under Method Six should be those laid down in Method One through Method Five, but a reasonable

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flexibility in the application of such methods would be in conformity with the aims and provisions of Method Six.

Some examples of reasonable flexibility are as follows:

7.5.1 Identical goods - the requirement that the identical goods should be exported at or about the same time as the goods being valued could be flexibly interpreted; identical imported goods produced in a country other than the country of exportation of the goods being valued could be the basis for customs valuation; dutiable values of identical imported goods already determined under the provisions Methods Four and Five could be used.

7.5.2 Similar goods - the requirement that the similar goods should be exported at or about the same time as the goods being valued could be flexibly interpreted; similar imported goods produced in a country other than the country of exportation of the goods being valued could be the basis for customs valuation; dutiable values of similar imported goods already determined under the provisions of Methods Four and Five could be used.

7.5.3 Deductive method - the requirement that the goods shall have been sold in the "condition as imported" in Section 5.2.1 could be flexibly interpreted; the "90 days" requirement referred to in Section 5.10 could be administered flexibly.

CHAPTER 2 – TARIFF CLASSIFICATION

SECTION 1 GENERAL RULES FOR THE INTERPRETATION OF THE ASEAN HARMONIZED TARIFF NOMENCLATURE

1.1 Classification of goods in the nomenclature shall be governed by the

following principles:

RULE 1 The titles of Sections, Chapters and sub Chapters are provided for ease of

reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions.

EXPLANATORY NOTE (I) The Nomenclature sets out in systematic form the goods handled in

international trade. It groups these goods in Sections, Chapters and sub Chapters which have been given titles indicating as concisely as possible the categories or types of goods they cover. In many cases, however, the variety and number of goods classified in a Section or

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Chapter are such that it is impossible to cover them all or to cite them specifically in the titles.

(II) Rule 1 begins therefore by establishing that the titles are provided “ for

ease of reference only ”. They accordingly have no legal bearing on classification.

(III) The second part of this Rule provides that classification shall be

determined : (a) according to the terms of the headings and any relative Section or

Chapter Notes, and (b) where appropriate, provided the headings or Notes do not otherwise

require, according to the provisions of Rules 2, 3, 4, and 5. (IV) Provision (III) (a) is self evident, and many goods are classified in the

Nomenclature without recourse to any further consideration of the Interpretative Rules (e.g., live horses (heading 01.01), pharmaceutical goods specified in Note 4 to Chapter 30 (heading 30.06)).

(V) In provision (III) (b), the expression “ provided such headings or Notes

do not otherwise require ” is intended to make it quite clear that the terms of the headings and any relative Section or Chapter Notes are paramount, i.e., they are the first consideration in determining classification. For example, in Chapter 31, the Notes provide that certain headings relate only to particular goods. Consequently those headings cannot be extended to include goods which otherwise might fall there by reason of the operation of Rule 2 (b).

RULE 2

(a) Any reference in a heading to an article shall be taken to include a

reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled.

(b) Any reference in a heading to a material or substance shall be taken to

include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3.

EXPLANATORY NOTE

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RULE 2 (a)(Incomplete or unfinished articles)

(I) The first part of Rule 2 (a) extends the scope of any heading which refers

to a particular article to cover not only the complete article but also that article incomplete or unfinished, provided that, as presented, it has the essential character of the complete or finished article.

(II) The provisions of this Rule also apply to blanks unless these are

specified in a particular heading. The term “ blank ” means an article, not ready for direct use, having the approximate shape or outline of the finished article or part, and which can only be used, other than in exceptional cases, for completion into the finished article or part (e.g., bottle preforms of plastics being intermediate products having tubular shape, with one closed end and one open end threaded to secure a screw type closure, the portion below the threaded end being intended to be expanded to a desired size and shape).

Semi manufactures not yet having the essential shape of the finished articles

(such as is generally the case with bars, discs, tubes, etc.) are not regarded as “ blanks ”.

(III) In view of the scope of the headings of Sections I to VI, this part of the

Rules does not normally apply to goods of these Sections. (IV) Several cases covered by the Rule are cited in the General Explanatory

Notes to Sections or Chapters (e.g., Section XVI, and Chapters 61, 62, 86, 87 and 90).

RULE 2 (a)

(Articles presented unassembled or disassembled) (V) The second part of Rule 2 (a) provides that complete or finished

articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport.

(VI) This Rule also applies to incomplete or unfinished articles presented

unassembled or disassembled provided that they are to be treated as complete or finished articles by virtue of the first part of this Rule.

(VII) For the purposes of this Rule, “ articles presented unassembled or

disassembled ” means articles the components of which are to be assembled either by means of fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only assembly operations are involved.

No account is to be taken in that regard of the complexity of the assembly method. However, the components shall not be subjected to

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any further working operation for completion into the finished state.

Unassembled components of an article which are in excess of the number required for that article when complete are to be classified separately.

(VIII)Cases covered by this Rule are cited in the General Explanatory Notes to

Sections or Chapters (e.g., Section XVI, and Chapters 44, 86, 87 and 89).

(IX) In view of the scope of the headings of Sections I to VI, this part of the

Rule does not normally apply to goods of these Sections.

RULE 2 (b)(Mixtures and combinations of materials or substances)

(X) Rule 2 (b) concerns mixtures and combinations of materials or

substances, and goods consisting of two or more materials or substances. The headings to which it refers are headings in which there is a reference to a material or substance (e.g., heading 05.07 ivory), and headings in which there is a reference to goods of a given material or substance (e.g., heading 45.03 articles of natural cork). It will be noted that the Rule applies only if the headings or the Section or Chapter Notes do not otherwise require (e.g., heading 15.03 lard oil, not ... mixed).

Mixtures being preparations described as such in a Section or Chapter Note or in a heading text are to be classified under the provisions of Rule 1.

(XI) The effect of the Rule is to extend any heading referring to a material or

substance to include mixtures or combinations of that material or substance with other materials or substances. The effect of the Rule is also to extend any heading referring to goods of a given material or substance to include goods consisting partly of that material or substance.

(XII) It does not, however, widen the heading so as to cover goods which

cannot be regarded, as required under Rule 1, as answering the description in the heading; this occurs where the addition of another material or substance deprives the goods of the character of goods of the kind mentioned in the heading.

(XIII)As a consequence of this Rule, mixtures and combinations of materials

or substances, and goods consisting of more than one material or substance, if prima facie classifiable under two or more headings, must therefore be classified according to the principles of Rule 3.

RULE 3

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When by application of Rule 2 (b) or for any other reason, goods are prima facie, classifiable under two or more headings, classification shall be effected as follows:

(a) The heading which provides the most specific description shall be

preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.

(b) Mixtures, composite goods consisting of different materials or made up

of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3 (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.

(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 numerical order among those which equally merit consideration.

EXPLANATORY NOTE (I) This Rule provides three methods of classifying goods which, prima facie,

fall under two or more headings, either under the terms of Rule 2 (b) or for any other reason. These methods operate in the order in which they are set out in the Rule. Thus Rule 3 (b) operates only if Rule 3 (a) fails in classification, and if both Rules 3 (a) and (b) fail, Rule 3 (c) will apply. The order of priority is therefore (a) specific description; (b) essential character; (c) heading which occurs last in numerical order.

(II) The Rule can only take effect provided the terms of headings or Section or

Chapter Notes do not otherwise require. For instance, Note 4 (B) to Chapter 97 requires that goods covered both by the description in one of the headings 97.01 to 97.05 and by the description in heading 97.06 shall be classified in one of the former headings. Such goods are to be classified according to Note 4 (B) to Chapter 97 and not according to this Rule.

RULE 3 (a)

(III) The first method of classification is provided in Rule 3 (a), under which the

heading which provides the most specific description of the goods is to be preferred to a heading which provides a more general description.

(IV) It is not practicable to lay down hard and fast rules by which to determine

whether one heading more specifically describes the goods than another, but in general it may be said that :

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(a) A description by name is more specific than a description by class (e.g., shavers and hair clippers, with self contained electric motor, are classified in heading 85.10 and not in heading 84.67 as tools for working in the hand with self contained electric motor or in heading 85.09 as electro mechanical domestic appliances with self contained electric motor).

(b) If the goods answer to a description which more clearly identifies them,

that description is more specific than one where identification is less complete.

Examples of the latter category of goods are : (1) Tufted textile carpets, identifiable for use in motor cars, which are to be

classified not as accessories of motor cars in heading 87.08 but in heading 57.03, where they are more specifically described as carpets.

(2) Unframed safety glass consisting of toughened or laminated glass,

shaped and identifiable for use in aeroplanes, which is to be classified not in heading 88.03 as parts of goods of heading 88.01 or 88.02 but in heading 70.07, where it is more specifically described as safety glass.

(V) However, when two or more headings each refer to part only of the

materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description than the others. In such cases, the classification of the goods shall be determined by Rule 3 (b) or 3 (c).

RULE 3 (b)

(VI) This second method relates only to : (i) Mixtures. (ii) Composite goods consisting of different materials. (iii) Composite goods consisting of different components. (iv) Goods put up in sets for retail sales. It applies only if Rule 3 (a) fails. (VII) In all these cases the goods are to be classified as if they consisted of

the material or component which gives them their essential character, insofar as this criterion is applicable.

(VIII) The factor which determines essential character will vary as between

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different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.

(IX) For the purposes of this Rule, composite goods made up of different

components shall be taken to mean not only those in which the components are attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts.

Examples of the latter category of goods are : (1) Ashtrays consisting of a stand incorporating a removable ash bowl. (2) Household spice racks consisting of a specially designed frame (usually

of wood) and an appropriate number of empty spice jars of suitable shape and size.

As a general rule, the components of these composite goods are put up in a

common packing. (X) For the purposes of this Rule, the term “ goods put up in sets for retail

sale ” shall be taken to mean goods which : (a) consist of at least two different articles which are, prima facie,

classifiable in different headings. Therefore, for example, six fondue forks cannot be regarded as a set within the meaning of this Rule;

(b) consist of products or articles put up together to meet a particular need

or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without

repacking (e.g., in boxes or cases or on boards). The term therefore covers sets consisting, for example, of different foodstuffs

intended to be used together in the preparation of a ready to eat dish or meal.

Examples of sets which can be classified by reference to Rule 3 (b) are : (1) (a) Sets consisting of a sandwich made of beef, with or without cheese,

in a bun (heading 16.02), packaged with potato chips (French fries) (heading 20.04) :

Classification in heading 16.02.

(b) Sets, the components of which are intended to be used

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together in the preparation of a spaghetti meal, consisting of a packet of uncooked spaghetti (heading 19.02), a sachet of grated cheese (heading 04.06) and a small tin of tomato sauce (heading 21.03), put up in a carton :

Classification in heading 19.02.

The Rule does not, however, cover selections of products put up together and consisting, for example, of :

A can of shrimps (heading 16.05), a can of pâté de foie (heading 16.02), a can of cheese (heading 04.06), a can of sliced bacon (heading 16.02), and a can of cocktail sausages (heading 16.01); or

A bottle of spirits of heading 22.08 and a bottle of wine of heading

22.04.

In the case of these two examples and similar selections of products, each item is to be classified separately in its own appropriate heading.

(2) Hairdressing sets consisting of a pair of electric hair clippers (heading

85.10), a comb (heading 96.15), a pair of scissors (heading 82.13), a brush (heading 96.03) and a towel of textile material (heading 63.02), put up in a leather case (heading 42.02) :

Classification in heading 85.10. (3) Drawing kits comprising a ruler (heading 90.17), a disc

calculator (heading 90.17), a drawing compass (heading 90.17), a pencil (heading 96.09) and a pencil sharpener (heading 82.14), put up in a case of plastic sheeting (heading 42.02) :

Classification in heading 90.17. For the sets mentioned above, the classification is made according to the

component, or components taken together, which can be regarded as conferring on the set as a whole its essential character.

(XI) This Rule does not apply to goods consisting of separately packed

constituents put up together, whether or not in a common packing, in fixed proportions for the industrial manufacture of, for example, beverages.

RULE 3 (c)

(XII) When goods cannot be classified by reference to Rule 3 (a) or 3 (b), they

are to be classified in the heading which occurs last in numerical order among those which equally merit consideration in determining their classification.

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RULE 4

Goods which cannot be classified in accordance with the above Rules shall be classified under the heading appropriate to the goods to which they are most akin.

EXPLANATORY NOTE (I) This Rule relates to goods which cannot be classified in accordance

with Rules 1 to 3. It provides that such goods shall be classified under the heading appropriate to the goods to which they are most akin.

(II) In classifying in accordance with Rule 4, it is necessary to compare the

presented goods with similar goods in order to determine the goods to which the presented goods are most akin. The presented goods are classified in the same heading as the similar goods to which they are most akin.

(III) Kinship can, of course, depend on many factors, such as description,

character, purpose.

RULE 5 In addition to the foregoing provisions, the following Rules shall apply in

respect of the goods referred to therein : (a) Camera cases, musical instrument cases, gun cases, drawing instrument

cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long term use and presented with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This Rule does not, however, apply to containers which give the whole its essential character;

(b) Subject to the provisions of Rule 5 (a) above, packing materials and

packing containers presented with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.

EXPLANATORY NOTE

RULE 5 (a)(Cases, boxes and similar containers)

(I) This Rule shall be taken to cover only those containers which : (1) are specially shaped or fitted to contain a specific article or set of

articles, i.e., they are designed specifically to accommodate the article for which they are intended. Some containers are shaped in the form of

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the article they contain; (2) are suitable for long term use, i.e., they are designed to have a durability

comparable to that of the articles for which they are intended. These containers also serve to protect the article when not in use (during transport or storage, for example). These criteria enable them to be distinguished from simple packings;

(3) are presented with the articles for which they are intended, whether or

not the articles are packed separately for convenience of transport. Presented separately the containers are classified in their appropriate headings;

(4) are of a kind normally sold with such articles; and (5) do not give the whole its essential character. (II) Examples of containers, presented with the articles for which they are

intended, which are to be classified by reference to this Rule are : (1) Jewellery boxes and cases (heading 71.13); (2) Electric shaver cases (heading 85.10); (3) Binocular cases, telescope cases (heading 90.05); (4) Musical instrument cases, boxes and bags (e.g., heading 92.02); (5) Gun cases (e.g., heading 93.03). (III) Examples of containers not covered by this Rule are containers such as

a silver caddy containing tea, or an ornamental ceramic bowl containing sweets.

RULE 5 (b)

(Packing materials and packing containers) (IV) This Rule governs the classification of packing materials and packing

containers of a kind normally used for packing the goods to which they relate. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use, for example, certain metal drums or containers of iron or steel for compressed or liquefied gas.

(V) This Rule is subject to Rule 5 (a) and, therefore, the classification of

cases, boxes and similar containers of the kind mentioned in Rule 5 (a) shall be determined by the application of that Rule.

RULE 6

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For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related Subheading Notes and, mutatis mutandis, to the above Rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this Rule the relative Section and Chapter Notes also apply, unless the context otherwise requires.

EXPLANATORY NOTE (I) Rules 1 to 5 above govern, mutatis mutandis, classification at

subheading levels within the same heading. (II) For the purposes of Rule 6, the following expressions have the

meanings hereby assigned to them : (a) “ subheadings at the same level ” : one dash subheadings (level 1) or two

dash subheadings (level 2).

Thus, when considering the relative merits of two or more one dash subheadings within a single heading in the context of Rule 3 (a), their specificity or kinship in relation to a given article is to be assessed solely on the basis of the texts of the competing one dash subheadings. When the one dash subheading that is most specific has been chosen and when that subheading is itself subdivided, then, and only then, shall the texts of the two dash subheadings be taken into consideration for determining which two dash subheading should be selected.

(b) “ unless the context otherwise requires ” : except where Section or

Chapter Notes are incompatible with subheading texts or Subheading Notes.

This occurs, for example, in Chapter 71 where the scope assigned to the term “ platinum ” in Chapter Note 4 (B) differs from that assigned to “ platinum ” in Subheading Note 2. For the purpose of interpreting subheadings 7110.11 and 7110.19, therefore, Subheading Note 2 applies and Chapter Note 4 (B) is to be disregarded.

(III) The scope of a two dash subheading shall not extend beyond that of the

one dash subheading to which the two dash subheading belongs; and the scope of a one dash subheading shall not extend beyond that of the heading to which the one dash subheading belongs.

NB:

1. Above was adopted from Explanatory Notes for the Harmonized Commodity Description and Coding System by the WCO and does not produce any binding legal effect.

2. The classification of goods in the ASEAN Harmonized Tariff

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Nomenclature (AHRN) is governed by the General Rules for the Interpretation of the AHRN under Section 103 of the Tariff and Customs Code, as amended.

SECTION 2 – ENTIRETY RULE

A whole plant in its entirety can be classified in one tariff heading provided following conditions are met:

2.1 The source of all materials to build a whole plant is located in a single place or origin and supplied by one entity only;

2.2 It is only by reason of logistics i.e. the whole plant cannot be transported in one single consignment under one vessel or aircraft and instead individual component or parts of the whole plant is transported the classification of under one tariff heading may be allowed;

2.3 The consignee/owner should give a written request for approval to the District Collector who has territorial jurisdiction over the port of discharge stating therein the reasons and providing full details of the break-down of items covering the whole plant; and

2.4 Approval of the District Collector must be secured prior to departure from country of origin of any part of the whole plant.

SECTION 3 – ADVANCE TARIFF RULING

3.1 From which office a tariff ruling may be secured.

Importers may secure advance tariff ruling from Tariff Commission under the provisions of Section 1313(a), TCCP or at IAS, AOCG.

3.2 Requirements in making request for tariff ruling from IAS:

3.2.1 Request in writing stating therein full details of article(s) intended to be imported;

3.2.2 Official Receipt evidencing payment of Advance Ruling Fee or Peso 1,000.00 per article;

3.2.3 Sample, when practicable;

3.2.4 Full specifications through relevant literature, brochure, drawings or plans.

VCD shall not issue a ruling for any article which is subject of a VCRC or protest case.

The requested ruling shall be issued within thirty (30) days from receipt of request.

3.3 When ruling is binding with the Bureau of Customs.

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3.3.1 Ruling by Tariff Commissioner

A tariff classification ruling of the Tariff Commission to be valid must meet following conditions:

a. Copy of the ruling is directly transmitted by the Tariff Commission directly to the IAS;

b. Duly published through a Customs Tariff Decision Circular (CTDC);

c. The actual shipment of article(s) covered by the ruling is the same as the article(s) submitted to the Tariff Commission for ruling as evidenced by physical examination of concerned customs operations officer; and

d. Secretary of Finance has not overturned the ruling.

3.3.2 Ruling by IAS

A tariff classification ruling issued by IAS to be valid must meet following conditions:

a. The actual shipment of article(s), covered by the ruling is the same article9s) submitted to VCD for ruling as evidenced by actual physical examination of concerned customs operations officer.

3.4 Shipments covered by advance ruling exempt from surcharge under the provisions of Section 2503, TCCP.

Shipments covered by an advance ruling is exempt surcharge under the provisions of Section 2503 in cases of misclassification provided the nature and character of the article(s) which is subject matter of the tariff ruling is the same as the article(s) that arrive in the Philippines as evidenced by physical examination of concerned customs operations officer.

CHAPTER 3 – DISPUTE RESOLUTION OF VALUATION AND CLASSIFICATION ISSUES

SECTION 1 – TENTATIVE RELEASE

1.1 Definition of Terms

1.1.1 Tentative Release

The process where a shipment is released to the Importer to avoid delay while the Valuation and Classification Review Committee (VCRC) deliberates on the valuation and/or tariff classification issues. (Sec. 3.1, CMO 45-09)

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1.1.2 Value Reference Information System (VRIS)

A data base system where the Bureau of Customs stores previously accepted transaction values for risk management purposes.

1.2 Administrative Provisions

1.2.1 Reference Value as Risk Management Tool

Customs shall consolidate all previously accepted transaction values through the existing Value Reference Information System (VRIS), and may publish the range of said values under such criteria as established for the purpose, to serve as a risk management tool. The VRIS value range shall be used as basis to raise doubt as to the truthfulness or accuracy of a given value declaration, which in turn may trigger a valuation query on the applicability of the method of valuation used by the importer.

Reference values cannot be used as substitute values for customs valuation purposes. However, such value information may be used as a risk management tool to establish doubt or to alert customs to do a value verification check either upfront thru a system created for the purpose or on a post-entry basis through the Post Entry Audit infrastructure. Further, reference value may end up being the applicable customs value in the event that the declared transaction value under Method 1 is rejected in appropriate cases and that such value qualifies under any of the alternate valuation methods found applicable in their order of priority.

1.2.1.1 Office Tasked to Maintain VRIS

The responsibility of establishing the Value Reference Information System (VRIS) as the database of information on the value and classification of imported goods shall be vested on the Director, Import Assessment Service (IAS). [CMO 31-2011, Section 2.1 to 2.5]

1.2.2 Where the Collector of Customs has Reasons to Doubt the Truth or Accuracy of the Declared Value and Classification

When an import declaration has been presented and where the Collector of Customs has reason to doubt the truth or accuracy of the particulars or of documents produced in support of this declaration, the Collector of Customs may ask the importer to provide further explanation, including documents or other evidence, that the declared value and/or classification represents the total amount actually paid or payable for the imported goods, adjusted in accordance with the rules on valuation.

If, after receiving further information, or in the absence of a response from the importer, the Collector of Customs still has reasonable doubts

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about the truth or accuracy of the declared value and/or classification, then it is deemed that the dutiable value of imported goods cannot be determined under Method One and/or classification cannot be accepted as entered. The Collector of Customs shall then proceed to determine the dutiable value under alternative methods sequentially and in the order of succession and/or p

Before taking a final decision, the Collector of Customs shall communicate to the importer, in writing if requested, the ground/s for doubting the truth or accuracy of the particulars or documents produced and the importer shall be given a reasonable opportunity to respond. When a final decision is made, the Collector of Customs shall communicate to the importer in writing his decision and the ground/s in support thereof.

1.2.3 Importer’s Right to Secure Release of Articles Under Sufficient

Guarantee and Right to Appeal.

When the Collector of Customs makes a final decision as to entered value and classification during clearance stage pursuant to preceding Section, the importer has the right to avail of the tentative release mechanism subject to posting of sufficient guarantee provided the importation in question is not prohibited by law.

1.2.4 Form and Amount of Release Guarantee

The amount of guarantee shall be the difference in the amount of duties and taxes declared against the amount of duties and taxes computed based on the recommended value and/or tariff classification. Cash bond shall be the preferred form of guarantee, but other forms may be allowed subject to the approval of the District Collector. (Sec. 3.2, CMO 45-09)

1.2.5 When Guarantee for Tentative Release Required and Not Required

Release Guarantee is required for entries hit by the Valuation Screen or in case of tariff classification issue while release guarantee in not required for Appraiser Initiated challenge of entered value.

1.2.6 Where Cash Bond shall be Deposited

All cash bonds shall be deposited with the In-House Banks under the BOC Trust Fund Account. (Sec. 3.3, CMO 45-09)

1.2.7 VCRC Cases Subject to Payment of Docket Fees

The amount of Docket Fees shall be in accordance with schedule under Title 2, Book 6 of this Code. Docket Fees shall be included in the payment instruction to the Authorized Agent Bank (AAB) under "Other Charges".

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1.2.8 Post Entry Modification of Entry

The import entry declaration shall be subject to post entry modification after the release of the decision of the VCRC. (Sec. 3.7, CMO 45-09)

1.3 Operational Provisions

1.3.1 Data Build-up for VRIS

To properly monitor the valuation and tariff classification of imported goods and for purposes of building the database of value information and classification, all District/Port Collectors are hereby directed to submit to the Office of the Director, IAS, all import documents, including the accompanying invoices and other commercial and shipping documents, whether the goods were entered under consumption or warehousing or destined to Freeports or special economic zones.

All District/Port Collectors are likewise directed to furnish the Office of the Director, IAS, decisions or rulings on value and classification issued by their respective Valuation ad Classification Review Committee to be utilized as source of information for the VRIS database and for the issuance of the lists of generally described goods to be subjected to 100% examination pursuant to Section VI of CAO 8-2007.

The Director, IAS is directed to coordinate with the Deputy Commissioner, MISTG, for technical support, including access to the Customs e2m system, to attain the objectives of this Order.

1.3.2 Operational Provisions on Tentative Release

1.3.2.1 The following steps in the e2m Customs System shall be observed for shipments NOT hit by Valuation Screen but with valuation issue where no guarantee is required (Appraiser-initiated):

1.3.2.1.1 After the VCRC Form 1 has been approved by the District Collector, the Customs Operations Officer (COO) III shall retrieve the Single Administrative Document (SAD) subject to Tentative Release and shall make the following changes:

a. Indicate the code as mentioned in Item 3.4 above for the corresponding amount of Docket Fee in "Box 13" of the SAD. The Docket Fee shall be automatically calculated by the E2M Customs System and included in the assessed amount.

b. Select in the Inspection Act the appropriate Tentative Release code indicated in Item E.1.6 above.

c. Indicate the Docket Number in the "Attached Document" page of the SAD.

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d. Update the SAD in the E2M Customs System.

1.3.2.1.2 After the COO III has accomplished Item 4.1.1, the COO V shall assess the SAD. Tentative assessment shall be based on the value and/or tariff classification declared by the importer/Customs broker.

1.3.2.1.3 A payment instruction shall be automatically sent to the AAB for debiting against the nominated bank account.

1.3.2.1.4 After confirmation of the payment under PASS5 by the AAB, the E2M Customs System shall automatically trigger a release instruction to the port operator/arrastre/CY-CFS

1.3.2.2 The following steps in the E2M Customs System shall be observed for shipments hit by Valuation Screen and/or with tariff classification issue/s where guarantee is required:

1.3.2.2.1 After the VCRC Form 1 has been approved by the District Collector, the COO III shall retrieve the SAD subject to Tentative Release.

1.3.2.2.2 Indicate the code for the corresponding amount of Docket Fee in "Box 13" of the SAD. The Docket Fee shall be automatically calculated by the System and included in the assessed amount.

1.3.2.2.3 The COO III shall make the temporary changes in the SAD to reflect the recommended value and/or tariff heading.

1.3.2.2.4 The COO III shall "Verify" and "Remote Check" the SAD for the E2M Customs System to compute the "Temporary" amount of duties and taxes based on the recommended value and/or tariff classification.

1.3.2.2.5 The COO III shall print the "Temporary" SAD and its corresponding "Temporary" Assessment Notice (TAN).

1.3.2.2.6 The COO III shall compute the difference between the declared and the recommended customs duties and taxes which shall be reflected in the TAN as the amount of the guarantee.

1.3.2.2.7 The COO III and the COO V shall print their names and affix their signatures on the TAN.

1.3.2.2.8 The Importer or his authorized representative shall bring the TAN and the "Temporary" SAD to the In-House Bank for deposit of the cash bond.

1.3.2.2.9 The In-House Bank shall ensure that the amount of cash bond corresponds to the amount reflected in the TAN duly signed by the COO III and COO V. After verification, the In-House Bank shall accept the cash bond and shall deposit it under the BOC Trust

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Fund.

1.3.2.2.10 The In-House Bank shall use the Cash Payment Miscellaneous function in the E2M Customs System to issue an electronic Customs Payment Receipt (ECR) to the Importer. The ECR represents the receipt for the posted cash bond.

1.3.2.2.11 The Importer/Customs broker shall return to the COO III and COO

V concerned showing his ECR.

1.3.2.2.12 The COO III shall retrieve from the E2M Customs System the SAD of the import declaration to be released tentatively and shall do the following:

1.3.2.2.12.1 Indicate the code for the corresponding amount of Docket Fee in "Box 13" of the SAD.

1.3.2.2.12.2 Select in the Inspection Act the appropriate Tentative Release code indicated in Item 3.6 above and the amount of guarantee posted.

2.2.2.12.3 Indicate the Docket Number and the Reference Number of the ECR in the "Attached Document" page of the SAD.

1.3.2.2.12.4 "Update" the SAD in the E2M Customs System.

1.3.2.2.13 Thereafter, the COO V shall "Assess" the SAD corresponding to the import declaration to be tentatively released. Assessment shall be based on the declared value and/or tariff classification.

1.3.2.2.14 Upon assessment by the COO V, a payment instruction shall be automatically sent by the E2M Customs System to the AAB.

1.3.2.2.15 Upon confirmation of payment of duties and taxes by the AAB, the E2M Customs System shall trigger a release instruction to the port operator/arrastre operator/CY-CFS.

SECTION 2 – VALUATION AND CLASSIFICATION REVIEW COMMITTEE (VCRC)

2.1 Composition:

2.1.1 Except as herein otherwise provided, the VCRC, organized District Port, shall be composed of the following:

a. District Collector — Chairmanb. Deputy Collector for Assessment — Vice Chairmanc. Chief, Formal Entry Division (FED) or Equivalent Unit — Memberd. Other personnel under the succeeding paragraph

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2.1.2 At the major ports of entry, particularly at the Port of Manila, Manila International Container Port and the NAIA Customhouse, other Customs officials may be designated to the VCRC as Vice-Chairman or member, upon the recommendation of the concerned District Collector and approval of the Commissioner of Customs. Provided that the Vice-Chairman shall have the rank not lower than a Collector of Customs IV/COC while the member, not lower than a COAC. At the ports where there are no Collector IV, COC or COAC, any officer with a rank not lower than COO III can be designated as a Vice-chairman/member.

2.1.3 The concerned COO V and COO III of the Section in the Formal Entry Division who contested the declared valuation or classification of a given shipment shall act as resource persons to the VCRC.

2.1.4 The VCRC Technical Support Team (VCRC-TST) shall provide administrative and technical support to the VCRC in the handling and disposition of VCRC cases. It shall be headed by the Vice-Chairman of the VCRC, unless the concerned District Collector assigns other qualified Customs official.

2.1.5 At the NAIA Customs, a VCRC-TST shall be established in each of the Customs Clearing Warehouse and shall be headed by the respective Special Duty Collector, unless the District Collector assigns other qualified Customs official.

2.1.6 All resolutions of the VCRC shall be signed by the District Collector as Chairman thereof.

2,2 Procedure at the VCRC Technical Support Team [CMO 37-2001]

2.2.1 Upon receipt of the pertinent documents, the VCRC-TST receiving clerk assigns a docket number to the case, enters the same in the VCRC-TST logbook and immediately within the day forwards the case documents to the Head, VCRC-TST. The Head, VCRC-TST, may, subject to the approval of the District Collector, resolve the case and authorize the release of single-item entries whose f.o.b. value as per appraiser's findings are not more than USD500 for seaports, and USD100 for airports.

2.2.2 The Head, VCRC-TST may, subject to the approval of the District Collector, likewise resolve cases without formal VCRC deliberation such as when the importer manifests in writing to voluntarily waive the application of method 1 and allow Customs to adopt the appropriate method of valuation, or when he is willing to pay based on classification rulings by the Department of Finance, the Commissioner of Customs, BOC-SGS Appeals Committee, or the VCRC.

2.2.3 Where the disposition requires additional payment of duties and taxes by 10% or more of the original assessment, the District Collector shall decide on whether or not to impose the appropriate surcharge pursuant

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regulation.

2.2.4 In any of the above cases, the Head, VCRC-TST, shall fill up the New VCRC Disposition Form (VCRC Form No. 2), Annex "Q" herein and refer it with the Entry to the concerned COO V for final assessment. The import entry shall then be forwarded to the Collection Division for payment verification and/or collection of additional duties and taxes, and surcharge, if any.

2.2.5 In all other cases where formal VCRC deliberation will be necessary, the Head, VCRC-TST shall notify importer or his customs broker or any of the personnel of either the importer or the customs broker who is in charge of the filing of the import entry to submit within ten (10) days from receipt of such notice a written explanation/justification as to the truthfulness and/or accuracy of the declared value, including any document or record in support thereof. He may also require the submission of specific documents which are relevant in the determination of the applicable method of valuation and the dutiable value based on (the method as may be found applicable. The notice shall be served by registered mail or personally, as the case may be. Attached as Annex "R" is the notification format (VCRC Form 3). Failure to submit within the regulated period the required explanation and for specific documents without justifiable cause shall be a ground for VCRC to reject the method of valuation used by the importer, and to proceed with the alternate method of valuation.

2.2.6. The Head, VCR-TST, shall transmit all cases requiring formal VCRC deliberation to the VCRC Chairman, recording in the logbook the docket numbers of such cases, their captions, among other relevant information, indicating the time and date such cases were referred to and received by the importer, and to proceed with the alternate method of valuation.

2.2.7 On the basis of such transmittals, the Head, VCR-TST, shall prepare a case digest using the information checklist provided for in VCRC Form 4, hereto attached as Annex "S" of this Order. This checklist shall be used to expedite the evaluation and resolution of issues presented before the VCRC. He shall also prepare the agenda to be deliberated upon by the VCRC. All cases received by the VCRC-TST shall be calendared immediately or not later than three (3) working days from receipt thereof without awaiting the written explanation/justification required of the importer as indicated in Section IV.D.5 above. Such written explanation/justification shall nonetheless be submitted to the VCRC within the reglementary period provided for in said Section IV.D.5.

2.3 Procedure at the VCRC

2.3.1 The VCRC Chairman shall convene the committee to deliberate the matters in the agenda at least once a week, or as often as necessary.

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All cases pending or not resolved in the last meeting are automatically calendared for the next meeting until the same is resolved, in addition to the new matters in the agenda. To expedite the resolution of cases, the Chair may create sub-groups, ad hoc bodies, and the like, aided by the information checklist (VCRC Form "4"), to closely study, analyze and summarize contending issue(s) and positions of the parties in a given case for deliberation by the Committee as a whole.

2.3.2 Cases referred to the VCRC shall be resolved within twenty (20) working days from date the same is calendared.

2.3.3 Cases resolved by the VCRC shall continue to be listed in the agenda for final confirmation by the VCRC before these are finally taken out of the agenda.

2.3.4 Those taken out of the agenda can no longer be reopened, except to correct manifest clerical error, or when the text of the resolution is different from what was decided upon during the deliberation as borne out by the records of the deliberations, or on account of a newly discovered evidence which was not available or could not be obtained during the deliberation of the case.

2.3.5 The VCRC-TST shall record the minutes of VCRC meetings and based on such records, prepare the VCRC decision for every case within eight (8) working hours after the same has been finally resolved by the committee. The VCRC-TST shall forward the prepared decision to the VCRC Chairman for signature within the same day the said decision was prepared. The VCRC Chairman shall act on the prepared decision within eight (8) working hours from the time the same is received by his office.

2.3.6 The VCRC decision shall essentially contain the following:

2.3.6.1 Brief Statement of Facts — description of the goods, consignee, entry number, country of exportation/origin/manufacture, declared value and tariff heading, other information available which is relevant to the case;

2.3.6.2 Issue — importer's declaration is being challenged/why Method 1 can

or cannot apply/what tariff heading to use;

2.3.6.3. BOC basis/position vs. importer's;

2.3.6.4 VCRC decision indicating reason(s) for adopting Method 1 or importer's declaration, or for rejecting Method 1 and decreeing the use of an alternate Method of valuation or use of a different tariff heading; and

2.3.6.5 Dutiable value based on the Method of valuation and the tariff classification as decided upon.

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2.3.6.6 The signed VCRC decision shall be immediately referred to the section concerned for implementation within the same day that the signed decision is received by that office.

2.3.6.7 The COO III concerned shall reflect in the SAD the value and/or tariff classification actually used based on the VCRC-TST (without formal deliberation) or VCRC (with formal deliberation) decision, as the case may be. In particular, he shall amend the following boxes, as may be applicable, based on said decision:

a. Customs Value (Box # 22)b. Item Customs Value (Box # 42)c. Freight Charges (Box # 9a)d. Insurance Charges (Box # 9b)e. Other Dutiable Charges (Box # 9c)f. Tariff Heading (Box #33)g. Valuation Method (Box # 43)h. SDV (Box # 39)i. Commodity Description (specific) (Box # 31)j. Other boxes necessary for amendment

2.3.6.8 COO V shall validate the amendment made, if any, by the COO III in the foregoing boxes.

2.3.6.9 The head, VCRC-TST, shall submit to the VCRC Chairman a running weekly report of the cases referred to VCRC and the action taken by it.

2.3.6.10 The VCRC Chairman shall in turn submit a weekly consolidated report to the Commissioner, the Deputy Commissioner for Assessment and Operations Group, and the Post Entry Audit Unit, using the VCRC Form No, 5, attached herein as Annex "T". The report shall be categorized as follows:

a. Decision by VCRC (VCRC-TST) without formal deliberation;

b. Decision by VCRC with formal deliberation.

2.3.7 Payment Under Protest

2.3.7.1 If the importer disputes the decision of the VCRC, he may pay under formal protest pursuant to Section 2308 of the TCCP.

SECTION 3 – HANDLING AND RELEASE OF CASH BOND

Note: Patterned after CMO 4-99

3.1 Administrative Provision

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3.1.1 Cash Guarantee shall be deposited by the Collecting Officer in a Special Trust Fund Account not later than the day following the date when received, or the maturity date of the check. BOC Form 38-A properly stamped in bold prints "CASH BOND" (PROVISIONAL) shall be issued whenever the cash/check guarantee is received.


3.2.1 Cash guarantee shall be treated as follows as soon as decisions had been released by the VCRC:

3.2.1.1 If the decision is in favor of government and if the cash given is equivalent to the additional assessed duties/taxes as decided, the Chief, Collection Division shall notify the Chief, Administrative Division (Attn.: Chief Accountant) to prepare the Disbursement Voucher , and the Disbursing Officer to issue the corresponding check payable to the Bureau of Customs (for the account of the importer). Upon receipt of the check at the Collection Division, the Collecting Officer shall issue BOC Form No. 38-A (FINAL PAYMENT) to the importer indicating therein the respective amount of the duties, taxes and charges and specifying the import entry reference number of the shipment concerned.

3.2.1.2 If the amount of the cash/check guarantee is more than what is due, there are two disbursement vouchers and disbursement checks that the Administrative Division shall prepare, i.e.:

a. Disbursement voucher and check in the amount equivalent as decided payable to the BOC (for the account of the importer) to be forwarded to the Collection Division for the issuance of BOC Form 38-A (Final Payment) and

b. Disbursement voucher and check for the excess of the decided amount payable to the importer.

3.2.2 In the event that the additional duties and taxes due is more than the cash guarantee, the following shall be done:

a. The Chief, Administrative Division (Attn.: Chief Accountant) shall, as in Item No.3 .2.1 above, be notified to issue a Disbursement Voucher to cover the check payable to the BOC (for the account of the importer) in the full amount of the cash/check guarantee that was earlier deposited. The corresponding BOC Form 38-A (Final Payment) shall be issued by the collecting officer to the importer.

b. A demand letter shall be issued by the Chief, Collection Division for the unpaid portion.

3.2.3 If the Committee's decision is in favor of the importer, the Chief of the Collection Division shall notify the Chief, Adm. Division to issue a

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disbursement voucher and prepare a check payable to the importer in the full amount of the cash/check guarantee earlier deposited by the importer.

3.3 The following shall be required to support the Disbursement Vouchers:

3.3.1 Original copy of BOC Form 38-A (Cash Bond -Provisional) equivalent to the cash/check guarantee deposited to the Special Trust Fund Account.

3.3.2 Appropriate Notice/Instruction to the Chief, Administrative Division from the Chief, Collection Division.

3.3.3 VCRC Decision

3.3.4 Photocopy of the entry with final assessment of duties and taxes.

3.4 All final payments of additional duties and taxes shall be receipted and remitted to the General Fund of the Bureau of Treasury through authorized government banks following the accounting and auditing rules and regulations on revenue collections.

3.5 The Collecting Officer shall ensure the genuiness and authenticity of the check, or cash deposited, or post-dated checks with bank guarantee by taking the following security measures:

3.5.1 The person submitting the cash/check guarantee must be properly identified by requiring the presentation of his laminated company ill with picture, the SSS identification card and the written authority from the importer.

3.5.2 The complete name, address, and ID number of the person submitting the cash/check guarantee shall be duly recorded.

3.6 A temporary/provisional pre-numbered receipt shall be issued for all cash

guarantee duly signed by the Chief, Collection Division or his authorized collecting officer, recorded in a book bound log book and released as follows:

3.6.1 Original copy-released to importer

3.6.2 Photocopy or duplicate copy duly signed by the Chief, Collection Division or the authorized collecting officer to be attached to the entry.

.CHAPTER 4 – PREFERENTIAL TARIFF

SECTION 1 – FTA OVERSIGHT COMMITTEE IS HEREBY CREATED.

1.1 Composition

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The Committee shall be composed of the following:

a. Director, IAS - Chairmanb. Deputy Collector for Assessment, POM - Vice Chairmanc. Deputy Collector for Assessment, MICP - Memberd. Deputy Collector for Assessment, NAIA - Membere. Chief of the Export Coordination Division - Member/Head

Secretariatf. Chief, Export Division, POM - Member/

HeadTechnical

1.2 Functions

1.2.1 The Committee shall have following functions:

a. To Issue advance ruling on whether an article is originating or not for purposes of availing preferential tariff.

b. To see to it that the necessary mechanics for the effective implementation of the FTA Preferential Tariff Scheme are immediately put in place.

c. To formulate plans and policies and submit the necessary recommendations to the Commissioner of Customs on how the operations of the FTA Preferential Tariff Scheme may be made more effective and to devise ways preventing the possible abuse of the Tariff rate privileges accorded under it.

d. To coordinate with the private sector in the selective / random verification of the existence of businesses of certain suppliers for purposes of determining the origin of particular articles claiming for preference.

e. To computerize the implementation of the FTA Preferential Tariff Scheme.

1.2.2 The Secretariat shall be responsible for the administrative and logistical support of the Committee.

1.2.3 The Head Technical shall be responsible for providing legal and technical assistance in the evaluation process for Advance Ruling.

Section 2 – Advance Ruling


2.1.1 The Advance ruling shall be based on facts and circumstances presented by the applicant and any other relevant information in possession of the Committee.

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2.1.2 The Advance ruling shall be applicable to all importation of goods described in that ruling, imported within 1 year from the date of issuance of such ruling.

2.1.3 The Bureau of Customs may modify or revoke an advance ruling upon determination that it was based on an error of fact or law, the information provided is false or inaccurate or if there is a change in a material fact, or circumstances on which the ruling is based.

2.1.4 The presentation of a Certificate of Origin for the purpose of claiming preferential tariff treatment shall not in any way be waived by the issuance of the Bureau of Customs of an Advance ruling.


2.2.1. The would be importer or his authorized representative shall request in writing for a pre arrival evaluation of a product which he will intent to import and claim preferential tariff treatment under any free trade agreement implemented by the Bureau of Customs.

2.2..2. The request shall be submitted to the pre arrival consultation committee accompanied by the following information or document:

a. Name of the Importer/ Company (Complete Address and Contact Number);

b. Name of Exporter (Complete address and contact number);c. Company/ Factory Registration Details (Registration No. Validity,

etc);d. Product Details (Description, HS Code, Quantity, FOB Value);e. Country of Exportation and Transport Route;f. The complete list of all materials, parts or components (both locally

made or imported) used in the Manufacture of the product, with their respective country of origin, if imported;

g. Breakdown of the cost elements that make up the ex-factory cost, ex-factory prices and FOB price of the finished product;

h. The manufacturing operations to be performed on the product;i. Production Flowchart;j. Photo of Production process;k. Sample of the Product, if available;l. Additional documents that the committee may requires such as sale

receipts or invoices, certificate of origin, etc;m. Origin Criteria invoked for the product;n. Certification of the exporter.

(Note: Should the Committee charge certain fee for administrative cost of

processing the request for advance ruling?)

2.2.3. The Committee upon receipt of all the necessary information/documents shall evaluate the product to determine whether:

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2.2.3.1. It complies with the origin criteria of the product under specified Free Trade Agreement Rules of Origin.

2.2.3.2. It is included in the list of product given preferential tariff by the importing Party.

2.2.4 The Committee shall avail the assistance of various offices and experts involved in the implementation of the rules of origin to come up with a ruling.

2.2.5. The Committee shall issue the advance ruling after fifteen days from receipt all the necessary information from the applicant.

2.2.6 Appeal

In cases where the applicant is not amenable to the decision of the committee, it may be elevated to the District Collector.

2.2.7 Legal Sanction

The advance ruling once issued by an authorized official of the Bureau of Customs becomes a public document. Any person who furnishes or causes to be furnished false information in any material particular shall be liable and punishable under Revised Penal Code of the Philippines and other related laws.

Section 3 – Preferential Tariff Availment

3.1 Administrative Provision

3.1.1 Special Unit Created in Every Collection District.

A special unit shall be created in the Formal Entry Division (FED) in the Principal Port of Entry in every Collection District. This special unit shall be called Preferential Rate Unit – FED (PRU-FED).

3.1.1.1 Function

It shall evaluate applications of FTA member – countries for availment of tariff rate preferences on products exported by said Member – countries to Philippines under a particular Free Trade Agreement.

3.1.1.2 Composition

The PRU-FED shall be composed of customs personnel who are at least COO III in rank. Its Head as well as the members thereof, shall be designated by the District Collector.

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3.1.2 Mandatory Marking of Box 36 of IEIRD

For shipment availing of the preferential rate under a particular FTA, Box 36 of the import entry must be marked accordingly.

(Note: MISTG should get copy of this so that they can redesign the system to reject lodgement with out the mandatory marking of Box 36.)

3.1.3 Specific Certificate of Origin (CO) Form is a Mandatory Supporting Document

The specific CO Form is a mandatory supporting document in availing of preferential tariff.

3.1.4 All Entries Availing of Preferential Tariff to be Routed to Yellow or Red Lane

As a risk management protocol, all import entries availing of preferential tariff under an FTA shall be routed to either Yellow lane or Red lane depending on the parameters in the selectivity module.

(Note: RMO should be provided copy of this draft Order)

3.1.4 Rule When Philippine Rate of Duty Lower than FTA Rate

In the event that any subsequent changes are made in the basic Philippine rate of duty to a rate lower than the FTA rate, such article shall be automatically accorded the corresponding reduced rate of duty.

3.1.5 Settlement of Disputes

All disputes concerning the FTA Preferential Tariff Scheme shall be resolved by the Deputy Collector for Assessment within 60 days from the date of approval of tentative release, subject to the approval of the District Collector.

The assistance of the Tariff Commission may be sought for the ruling on tariff classification issues.

3.1.6 Monitoring System of Manager’s Check or Cashier’s Check Deposited as Guarantee in Case of Tentative Release.

The Collection Division of each Collection District shall put up an accounting and monitoring system to insure that there will be no stale checks put up for the tentative release of the shipments.

3.2 Procedures in verifying authority of CO.

3.2.1 Upon receipt of the CO, the PRU-FED Officer shall match the signature

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of the issuing official with specimen signature submitted;

3.2.2 The official seal / stamp on the CO shall also be matched with the sample submitted;

3.2.3 Any discrepancy found in the signatures and seal / stamp of the CO including the format, shall be subjected to verification with the issuing country.

3.2.4 Procedure in verifying the CO with the issuing country.

3.2.4.1 When there is a reasonable doubt as to the authenticity of the document or as to the accuracy of the information regarding the true origin of the products or certain parts thereof, a check with the issuing authority shall be undertaken in the following manner:

3.2.4.1.1 The PRU-FED officer assigned shall prepare an official written request on a customs letterhead addressed to the FTA Oversight Committee, specifying the reasons for the request and any additional information suggesting that the particulars given on the said CO maybe inaccurate.

3.2.4.1.2 The written request shall be signed by the PRU-FED officer duly noted by the Deputy Collector for Assessment and shall be accompanied by the original copy and triplicate of the CO.

3.2.4.1.3 The Deputy Collector for Assessment shall cause the transmittal of the request of the FTA Oversight Committee, Port Area, South Harbour, Manila, which in turn shall make the official verification with the issuing authority.

3.2.5 Procedure for Tentative Grant of Preferential status pending result of verification of the CO as provided for Section 3.2.4:

3.2.5.1 Unless there is a prima facie evidence or probable cause that the CO is spurious or, the information therein is false or the shipment itself is attendant with violations, the shipment maybe granted provisional release: under the terms described in Sections 3.2.5.3 and 3.2.5.4 below.

3.2.5.2 The PRU-FED officer assigned shall determine the difference of the duties and taxes due on the article/s based on the regular rate of duty and the FTA Preferential rate.

3.2.5.3 The PRU-FED officer subject to the approval of the Deputy Collector for Assessment shall require the importer to post a guarantee in the form of either a manager’s or cashier’s check which is equal to the difference in preceding Section 3.2.5.2 before tentative release of the shipment.

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3.2.5.4 The Cash Division shall hold the check in abeyance until an order to deposit or return the MC, or Cashier’s Check from the Deputy Collector for Assessment is received.

3.2.6 Procedure in evaluating whether or not to grant FTA Preferential rate:

Upon receipt of the entry from the Formal Entry, the PRU-FED shall verify whether or not the shipment qualifies for the Preferential Tariff treatment based on the following criteria:

a. The article/s indicated in the CO must correspond to the article/s imported. The discovery of minor discrepancies or obvious clerical or typographical errors in the statement made in the CO and in the other documents supporting the entry shall not render the application for preferential tariff invalid where it is clear that the CO of the article refers to the article/s imported.

b. The imported article/s must be included in the Philippine Tariff Reduction Schedule cited in specific Executive Order and circularized under particular Customs Memorandum Circular (CMC).

c. The imported article/s must be included in the Tariff Reduction Schedule of the applying ATIGA member country. If the article is included in the Tariff Reduction Schedule of the applicant ATIGA member country, and the rate of duty is 20% and below, the Tariff Rate Preference shall be allowed. But in case the rate of duty is more than 20%, the application for the Tariff Rate Preference shall not be allowed.

d. In case the imported article is in the Sensitive List of the exporting party under ACFTA and AKFTA, and the rate of duty is 10% and below, but said imported product is in the normal track of the importing FTA party, the applicable rate shall be the preferential rate of the importing party or the tariff rate of the exporting party whichever is higher as provided in the reciprocity provision in the cited FTA.

3.2.7 The PRU-FED after having determined that the criteria mentioned above have been met, shall verify whether the imported article had complied with the origin criteria of the rules of origin of a particular FTA, before granting the preferential rate of duty under said FTA.

3.2.8 The Deputy collector for Assessment, upon receipt of the entry with an FTA Preferential tariff application from the Chief, FED shall approve / disapprove the entry for which preferential tariff treatment is applied, based on the evaluation made by the PRU-FED and the recommendation, whether for approval or disapproval, if in his well considered opinion an error or omission of a material fact ad been made in the evaluation of a shipment, which otherwise would have

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resulted in the different recommendation.

The Deputy Collector for Assessment shall then forward the entry to the Chief, Liquidation and Billing Division.

3.2.9 The Chief, FED shall submit a monthly report in two copies of all transactions under the FTA Preferential Scheme (thru the Deputy Collector for Assessment) to the Chairman, FTA Oversight Committee, with the following date: Tariff Heading, Description of Articles, Country of Exportation, Origin Criteria and FOB Value.

One copy shall be furnished to the Chief, ECD-POS-AOCG who will then prepare a consolidated report for transmittal to the Director, Bureau of International Trade Relations (BITR), Department of Trade and Industry.

3.2.10 Procedure for Handling Protested Cases.

3.2.10.1 In all cases wherein the importer is not amenable to a decision, the PRU-FED officer shall elevate the matter to the Deputy Collector for Assessment.

3.2.10.2 The Deputy Collector for Assessment upon receipt of the protest shall endeavor to resolve the case immediately. However, if the importer is not satisfied with the decision of the Deputy Collector, he/she shall make a protest in writing indicating therein the reasons for the protest.

3.2.10.3 Upon receipt of a written protest, the case shall be heard by the Deputy Collector in the presence of the importer or his/her duly authorized representative and PRU-FED officer assigned who shall be guided by the terms of the FTA. In case of protest over classification of a particular item, the Deputy Collector may seek the assistance of the Tariff Commission.

3.2.10.4 The decision of the Deputy Collector shall be summary in nature. The case may be elevated to the District Collector under a regular protest case.

CHAPTER 5 – CUSTOMS CLEARING PROCEDURE

SECTION 1 – CONVENTION ON DESCRIPTION OF GOODS

(Ref: CAO 8-07 and CMO 28-07)


1.1.1 The convention described herein must be strictly observed in the following:

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a. In the proper encoding of the Single Administrative Document (SAD) in ACOS, or its upgrade;

b. In the proper filing of the IEIRD;

c. In the accomplishment of the returns of the COO III and COO V;

d. In describing articles for publication; and

e. In describing articles for statistical purposes.

1.1.2 Any delay in the processing of the entries or SAD due to failure to fully described the shipment shall be the full responsibility of the importer and/or broker.

1.1.3 The convention described herein shall be observed to the extent practicable, taking into account that some products such as raw materials may not have specific brand names, but are still susceptible to description in tariff terms.

1.1.4 It shall be the responsibility of the COO V together with the Chief, Formal Entry Division, to ensure proper implementation of this Section. MISTG shall ensure that the space provided for in the IEIRD or SAD shall be sufficient to accommodate description as per convention.

1.1.5 The Commissioner of Customs through the VRIS shall issue a list of products covered by this Section, together with specific per article guidelines on the proper description of goods.

1.1.6 The Chief, Formal Entry/Assessment Division of each Port/District shall compile a list indicating the entry number and other shipment details of companies violating this Section and shall submit the same regularly on a weekly basis the Head, Valuation Reference Information System (VRIS) and the Director, Trade Information Risk Analysis Office (TIRAO), Post Entry Audit Group (PEAG) for profiling purposes.

1.1.7 Goods declared in a general manner to avoid proper classification or valuation shall undergo 100% examination and are to be considered in a status of continuing alert, subject to the following:

1.1.8 Items enumerated under this Section as generally described and subsequent updates issued by the Commissioner shall be established as a separate Selectivity Parameter for Red Channel in the Selectivity Module of e2m Customs System.

1.1.9 Entries containing containerized generally described goods may be subjected to the Commissioner’s Special Stop.

1.1.10 For bulk shipments, generally described goods shall not be allowed special permits to discharge until full payment of correct duties and

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taxes are made.

1.1.11 Habitual violators or those violating this Section by persisting to declare their importation in a general manner shall be penalized in the following manner:

a. First Offense – Warningb. Second Offense – Suspension of Accreditation for 6 monthsc. Third Offense – Cancellation of accreditation and blacklisting as

an importer

1.2 Convention on Description of Goods

1.2.1 Motor Vehicles

For motor vehicles, the specific description shall be in accordance with the illustrative example:

Make ------------------------------ Nissan GX4Series ----------------------------- InfinityBody Type ------------------------ WagonYear Model ----------------------- 2006Gross Weight --------------------- 3,600 KilosNet Weight ----------------------- 1,800 KilosPiston Displacement ------------- 3,500 ccNo. of Cylinders ------------------- 6 cylindersEngine No. ------------------------ VK 45 (DE) 4494Chassis No. ---------------------- JNRBS08W25X402113VIN No. --------------------------- x x x x xFuel -------------------------------- Gas

1.2.1.1 Data on engine and chassis/VIN number shall be supported by stencil prints to validate the findings of the examiner (COO III)

1.2.1.2 It shall be the responsibility of the official signatories of the certificate of payment to ensure compliance with the above requirements.

1.2.1.3 For Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) members, participants in the Motor Vehicle Development Program (MVDP) and the Motorcycle Development Program, and other importers who are the authorized distributors of specific car brands in the Philippines, the Packing List attached to the consumption entry shall indicate the respective chassis and engine numbers.

1.2.2 Description of Articles

The description of articles must be in sufficient detail to enable the article to be identified for tariff classification, valuation and other statistical purposes including the following;

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a. General DescriptionPertains to the generic name or general name of the product, e.g. pump, engine, milk, bag, etc.

b. Specific DescriptionPertains to the specific description of 1.1., e.g. centrifugal (for pump), diesel (for engine), skimmed (for milk), shoulder (for bag), etc.

c. Make/BrandRefers to the brand name product e.g. Caterpillar, Nike, Gucci, Honda etc.

d. Model/StyleThe model number, style, reference and other reference e.g. “CRV 2007” for a Honda Civic car, model “Thinkpad R50e” for an IBM notebook, model “E90” for a Nokia cellular phone, etc.

e. Capacity/Quality/Grade/ProcessThe capacity, output, horsepower or other indication of size and performance, among others, of the product e.g. 200 h.p., 10 kw, 120 watts rms, etc.; or the description of quality grade specification or applicable standard e.g. technical grade 95%, JIS G 310 1/87 SS 41, etc.; or process by which the product is manufactured e.g. suspension, emulsion, dispersion, etc.

f. Retail PackagingThis pertains to the detailed packaging or measure within the unit used, e.g. 12x1L bottles, 24x300 oz cans, 150 kg bags, etc.

If said details are not provided for the invoice, an accompanying inspection report with the above details must be submitted as part of the working copy of the entry.

1.2.3 List of Manner of Describing Goods Considered as General Description Thus Subject to 100% Examination.

1 Plastic Products 51 Caseinates2 Packaging 52 Modified Starch3 Furniture 53 Natural Polymer4 Raw Materials 54 Aluminum Foil5 Slippers 55 Aluminum Containers6 Sandals 56 Metal Enclosure7 Milk 57 Surfactant8 Food Preparations 58 Acrylic Polymer9 Beverages 59 Fungicide10 Coffee 60 Inorganic Compound11 Soups 61 Wax12 Agricultural tyres 62 Oil13 Synthetic Polymer 63 Resin

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14 Carbon Black 64 Lubricant15 Accelerators 65 Alcohol Wood Pulp16 Petroleum Waxes 66 Phenol17 Wires 67 Glassware18 Other Chemicals 68 Household Articles19 Ballast 69 Dinner Set20 Filament Coils 70 Film21 Lamp 71 Animal Feed22 Bulb 72 Picture Tube for Colored TV (CTV)23 Colorant 73 Parts of Air conditioner24 Lamp 74 Electric Motor for Washing Machine25 Spare Parts 75 Valve26 Truck Replacement Parts 76 Bearing27 Egg Yolk 77 Piston Ring28 Vegetable 78 Automotive Spare Parts29 Leguminous Vegetable 79 Rice30 Fruit 80 Apples31 Fruit Peel 81 Spice Seeds32 Spices 82 Wheat Flour33 Muciiages & Thickeners 83 Oil Seeds34 Display 84 Seaweeds35 Poultry Fat 85 Pectic Substances36 Bovine Fat 86 Thermoplastic37 Vegetable Oil 87 Sheet Metal38 Meat Extracts 88 Shoes39 Pasta 89 Textile40 Prepared Vegetable 90 Fabric41 Fruit Juice 91 Machinery Parts42 Sauces 92 Paper Product43 Textured Protein Substances 93 Bingo Equipment44 Flavoring 94 Agricultural Machinery45 Materials for Flavoring 95 Equipment46 Unsaturated for Flavoring Monocarboxylic Acid 96 Bicycle

Spare Parts47 Polycarboxylic Acid 97 Motorcycle Spare Parts48 Carboxylic Acid 98 Kitchenware49 Acyclic Polyamine 99 Beer50 Essential Oil 100 Audio Video 101 Audio Equipment102 Video Equipment103 Used TV104 TV105 Stereo106 Digital Machine107 Digital Camera108 Photographic Equipment109 Article of Steel110 Wire Rods111 Bronze Rod

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112 Steel Billets113 Cold Rolled Steel114 Hot Rolled Steel115 Polycarbon Bottles116 Float Glass117 Articles of Glass118 Samples119 Toys120 Plastic Toys

SECTION 2 – PAYMENT OF DUTIES AND TAXES UNDER e2m CUSTOMS SYSTEM

2.1 Administrative Provisions (Ref. CAO 10-08.)

2.1.1 Use of Payment Application Secure System Version 5.0 (PASS5)

Under PASS5 which is a component of e2m Customs System, the duties, taxes and fees payable, both advance and final, will be transmitted to the AAB via a payment gateway through a secured communication channel and collected by debit from designated bank accounts.

2.1.2 Requirements of PASS5.

To be able to make payments of advance duty and final payables, the importer must have in place the following:

2.1.2.1 Customs Client Number (CCN).

The CCN is the importer' unique identifier in the e2m Customs, enabling him to obtain the services allowed by his profile. The CCN is issued by the BOC following the procedures for the Client Profile Registration System (CPRS). This number will also be required by the AAB when the importer opens a new or designates an. existing account to be referred to as a debit account for use in the system as well as in the issuance of the AAB Reference Number.

2.1.2.2 Debit accounts with AAB.

Importers have the option of putting up one or several of these accounts and with different AABs.

2.1.2.3 AAB Reference Number

This number is issued by the AAB following the putting up of the debit account by the importer. There shall be as many MB Reference numbers as there are nominated debit accounts.

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AABs shall have to upload these AAB Reference Numbers to the e2m Customs for the automated debit process to operate.

2.1.3 Modes of Payment

For Customs declarations lodged through the e2m Customs, the customs duties, taxes and other charges payable can only be paid by cash, and/or Tax Credit/Tax Debit Memo (TCC/TDM), and/or through "Deferred Payment Scheme" in the case of government importations and for broadcasting companies under existing laws and regulations.

2.1.3.1 Cash payments of Customs duties, taxes and other charges, including Import Processing Fee, Documentary Stamps and Container Security Fee, can only be paid through debit from the importer's nominated accounts in an MB/s as provided for in his Order."

2.1.3.2 TCC/TDM shall not be utilized for payment of duties, taxes and other charges to the MBs. Procedures for payments through TCC/TDM shall be governed by separate regulation/s to be issued by the Commissioner of Customs.

2.1.3.3 Existing procedures governing government importations where the Customs duties and taxes are settled under Joint Circular 2-91 dated 19 November 1991 and importations of broadcasting companies where the payment of duties and taxes are provided for under PD 1362 dated March 27, 1978, shall remain to be followed.

2.1.3.4 All Import Processing Fees (IPF) must be paid through the PASS5 except for government importations which may be paid either through the Customs Collection Office or through the PASS5.

2.1.4 Final Payment

The e2m Customs System shall compute the final amount payable as follows:

2.1.4.1 Total Assessment Net of Exemption Less: Advance Duty Paid Less: TCCs/TDMs applied referred to in the entry declaration Equals Final Amount Payable to AAB

2.1.4.2 Responsibility for Accuracy of Computation. It shall remain the responsibility of the importer to disclose and declare all relevant and applicable data and information in order to determine the proper duties, taxes and other charges due and payable.

2.1.4.3 Discontinuing the Direct Payment to the AAB. Consistent with the national roll-out schedule of the e2rn Customs, the procedure of presenting the printed IEIRD or SAD to an MB for final payment and

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machine validation of the amount collected shall be discontinued. In lieu thereof, the final payment will be debited by the concerned AAB from the designated debit account upon receipt of the final payment instructions from Customs via the payment gateway, subject to the bank's confirmation and security procedures for payment instructions.

2.1.4.4 Transmittal of Payment Confirmation. In all cases of payment instructions received, the AABs should complete the collection and thereafter transmit a payment confirmation to the electronic gateway payment unless there is no sufficient balance in the debit account.

2.1.4.5 Abandonment. If no payment confirmation is received within fifteen (15) calendar days from the date of receipt by tile MB of the final payment instruction, then the importer shall be deemed to have failed to claim his importation after filing the entry rendering the same liable to abandonment pursuant to Sec. 1801 of the TCCP.

2.1.4.6 Final Payment Bank. For shipments covered by LCs, final payment must be made to the same bank where the LC was opened.

2.1.4.7 To avoid delays declarants must ensure that the claims for duty exemptions have been duly processed pursuant to existing laws and regulations and have been uploaded to the corresponding databases prior to the lodgment of the SAD.


2.2.1 Advance Payment of Customs Duty Through Electronic Import Entry Declaration (IED)

2.2.1.1 The provision of Section 1, PD 1853 that no financial institution shall open any Letter of Credit (LC) covering imports unless the LC Applicant deposits the full amount of import duty payable on the importations shall remain in force and effect. lED shall continue to be used in declaring and paying the advance import duty.

2.2.1.2 Preparation and Lodgment of lED

Use of the paper lED has been discontinued. In lieu of the paper lED required for Letter of Credit opening under PO 1853 dated January 6, 1983, an electronic lED must be prepared and lodged through a BOC-accredited Value Added Service Provider (VASP) pursuant to existing regulations. The particulars of the goods to be imported as declared in the electronic lED and the LC application must be the same. Any misdeclaration in the lED shall be subject to the provisions of Section 2503 in relation to Section 3601 and 3602 of the TCCP, as amended.

2.2.1.3 System Computation of Payables

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The total amount payable as well as the amount payable in case to the AAB taking into account exemptions obtained as well as the data declared in the lED shall be computed by the e2m Customs System. For the net payable in cash to the AAB, a system generated payment instruction containing the AAB reference number designated by the importer in the lED will be transmitted to the Bank Payment Gateway. The Bank Payment Gateway shall route this payment instruction to the appropriate AAB.

2.2.1.4 Validity Period of lED

The net duty payable must be paid within the lED validity period which is seven (7) days reckoned from the date the payment instruction is generated by the system. Beyond the validity period, the e2m Customs will indicate the lED status as expired to serve the efficient management of the database, for which reason AAB's shall not accept payment without a new lED.

(Ref: CMO 27-09)

2.2.2 Utilization of Tax Exemption Certificate (TEC)

2.2.2.1 TEC to be issued on or after DOI.

2.2.2.1.1 Importers with shipments arriving at the implementation Port on or after DCI and intending to use a TEC to effect the release of the shipments shall apply for the exemption at any of the following DOF Revenue Department offices: Mabuhay Lane, internal Revenue Division and the Customs and Tariff Division.

2.2.2.1.2 The BIR, in the course of issuing an ATRIG, also prescribes exemption from excise tax or Value-Added Tax (VAT). The BIR shall encode the exemption details of the ATRIG Into e2m Customs TEC, in addition to encoding the details of the ATRIG In the e2m Customs LCS.

2.2.2.1.3 Aside from the currently required supporting documents (Bill of Lading, Invoice, etc.), importer shall also present to the DOF or BIR, as the case may be, a printout of the declaration printed out from his VASP submission (but not yet submitted to e2m Customs) to serve as a guide for the proper classification of the commodities being applied for exemption.

2.2.2.1.4 After the existing approval process (including the signing by the DOF designated signatory of the agency-issued TEC, details of TEC shall be encoded into the e2rn Customs Tax Exemption system. The electronic TEC shall be assigned a unique reference number by e2m Customs System.

2.2.2.1.5 This e2m Customs-assigned reference number is to be entered in

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the Terms of Payment Page of the declaration by the importer as provided in 4.1 hereof.

2.2.2.1.6 A copy of the e2m Customs TEC (Sample printout is in Annex B), and attached to the agency-issued TEC for release to the importer. The agency-issued hard-copy of the TEC shall be forwarded by official messenger to the Tax Exempt Division (TED) of the BOC.

2.2.2.1.7 The e2m Customs TEC and the agency-issued TEC are prepared only for DOF and the importer’s reference. The electronic TEC is the valid authorization for the tax exemption.

2.2.2.1.8 The Tax Exemption-issuing offices of the DOF may query the e2rn Customs Tax Exemption System to get the status of the TECs that they have issued,

2.2.2.2 TECs issued prior to DOI

2.2.2.2.1 Importers holding unused TECs issued prior to DOI shall bring their TECs to the original issuing office of the DOF Revenue Group or the BIR.

2.2.2.2.2 After verification against the agency files and completion of the approval process, the unused TEC shall be encoded into the e2rn Customs Tax Exemption System. The system shall assign a unique number to the TEC.

2.2.2.2.3 A copy of the e2m Customs TEC is printed and attached to the agency-issued TEC for release to the importer. There is no need for DOF to forward the print-out of the electronic TEC to the BOC TED as the latter office already has an electronic copy of the agency-issued TEC.

2.2.2.2.4 This e2m Customs-assigned reference number is to be entered in the Terms of Payment Page of the declaration by the importer.

2.2.2.3 The agency-issued TEC and the TEC printed from e2m Customs System shall be attached to the IEIRD.

2.2.2.3.1 Upon submission of the declaration to e2m Customs System through the VASP, the TEC and the declaration are electronically matched. A TEC cited in the declaration must be existing in the e2m Customs database at the time the declaration is lodged. Otherwise, the declaration is rejected by e2m Customs System. The importer may re-lodge the entry after making sure that the TEC has been successfully submitted by the DOF Revenue Department or the BIR office issuing ATRIG — Tax Exemptions.

2.2.2.3.2 The TEC is verified by the BOC Examiner at the Assessment Division using the TEC module of e2m Customs System.

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2.2.2.3.3 The BOC Tax Exempt Division (TED) shall conduct a review and evaluation of the agency-issued TEC it receives in parallel with the e2m Customs clearance process that the declaration is subjected to.

2.2.2.3.4 At any time that the TED discovers a Tax Exemption that is inappropriate or fraudulent, it shall immediately inform the originating office of the exemption who shall then cancel the TEC. Cancellation will render the Tax Exemption invalid during the e2m Customs matching of the Exemption against the importer declaration.

2.2.3 Utilization of a Tax Credit Certificate (TCC)

2.2.3.1` TCC Jointly Issued by BOC and DOF One-Stop Shop Center (OSSC)

2.2.3.1.1 The importer shall present a copy of the VASP printout of his declaration with the complete calculation of duties and taxes as supporting documents to his application to the District Collector of the Port for utilization of the TCC. The importer’s declaration is on a pending status with the VASP and has not been submitted to e2m Customs.

2.2.3.1.2 The processing of the application for utilization shall be performed following existing procedures.

2.2.3.1.3 Upon approval of the importer’s application for TCC utilization, the Tax Debit Memo (TDM) covering the single shipment shall be generated using the e2m Customs TCC module.

2.2.3.1.4 The TDM shall be printed out for the importer’s reference of the TDM Number. The electronic TDM uploaded in the e2m Customs TDM System shall be considered the authentic and authoritative document that is valid to be used for OSM payment.

2.2.3.1.5 An electronic ledger for the TCC is created in the system and this ledger shall be automatically updated as the TCC is utilized as payment of the duties and taxes in the clearance process of the single shipment.

2.2.3.1.6 The importer or his representative shall cite the TDM number in the Terms of Payment (TOP) page of the declaration that he wishes to pay with the TDM.

2.2.3.1.7 When a TDM is used for the payment of duties and taxes, the electronic TDM is automatically tagged USED by the System and shall not be available for subsequent payment of declarations. The importer may apply for a refund of the unutilized portions of the TDM, with the appropriate office.

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2.2.3.2 Solely-issued TCC by the DOF-OSSC (For BOI Companies)

2.2.3.2.1 The importer shall proceed to the implementation Port District Collector, presenting a copy of the VASP printout of his declaration with the complete calculation of his duties and taxes, among other supporting documents required for his application for utilization of the TCC. This declaration is on a pending status with the VASP and has not been submitted to e2m Customs System.

2.2.3.2.2 The processing of the application for utilization shall be performed following existing procedures.

2.2.3.2.3 The BOC Tax Credit Office shall evaluate and, with the proper clearance from the approving authority under existing guidelines, proceed to process the importer’s application for TCC utilization, marking the application with the approved amount following existing procedures.

2.2.3.2.4 The approved importer’s application and all supporting documents shall be brought by the importer to the DOF-OSSC who shall issue the TDM for the amount approved by the BOC. The DOF-OSSC shall issue one TDM for one single shipment covered by the self-declaration of the importer evidenced by his declaration printout.

2.2.3.2.5 Upon the approval of the application for a TDM, the processing office at the DOF shall encode the details of the TDM data into the e2m Customs TDM System.

2.2.3.2.6 The TDM shall be printed out for the importer’s reference of the TDM Number. The electronic TDM uploaded in the e2m Customs TDM System shall be considered the authentic and authoritative document that is valid to be used for non-cash payment.

2.2.3.2.7 The importer or his representative shall cite the TDM number in the Terms of Payment (TOP) page of the declaration that he wishes to pay with the TDM.

2.2.3.2.8 When a TDM is used for the payment of duties and taxes, it shall be marked USED automatically by the System and shall not be available for subsequent payment of declarations. Unutilized portions of the TDM, if any, shall be available for refund, under the existing refund process.

2.2.3.2.9 For a period of time before the DOI in the implementation Port, the OSSC shall issue new TDMs for utilization in the implementation Port under the existing system but with the validity period up to the day before the DOI only.

2.2.3.3 BOC-issued TCC

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2.2.3.3.1 The authority to use the TCC or a portion of it shall be termed a TDM in e2m Customs System to align DOF and BOC processing of TCCs.

2.2.3.3.2 An importer shall apply for the issuance of a TDM to cover a single importation in the implementation Port following the steps below:

2.2.3.3.2.1 If the original TCC is kept with any of the non- Manila ports, the importer shall retrieve the TCC from the non-Manila port and surrender the same to the Tax Credit Office in the Assessment and Operations Group (AOCG). The Tax Credit Office shall enter the balance of the TCC in the existing TCC System, hereinafter to be called Precedent TCC.

2.2.3.3.2.2 Following existing procedures for the application for a TDM, the importer requests for the issuance of a TDM to cover his single importation at the implementation Port.

2.2.3.3.2.3 Upon approval of the application by the approving authority under existing procedures, the Tax Credit Office shall issue the TDM from the Precedent TCC, currently executed through the issuance of a BOC Official Receipt (OR).

2.2.3.3.2.4 The TDM (BOC OR) from the Precedent TCC shall be encoded in e2m Customs TCC Module as an electronic TCC immediately after a new TDM (with a system-assigned number) shall be issued to the importer using e2m Customs TCC module. The TDM will have the same amount as the TCC rendering the TCC as completely USED. There shall no longer be any need to issue BOC OR to cover the TDM issued by the e2m Customs TCC system.

2.2.3.3.2.5 The e2m Customs TDM shall be printed out for the importer’s reference. The electronic TDM generated by the e2m Customs TCC module shall be considered the authentic and authoritative document that is valid to be used for non-cash payment.

2.2.3.2.2.6 The importer or his representative shall cite the e2m Customs TDM number in the Terms of Payment Page of the declaration that he wishes to pay with the TDM.

2.2.3.2.2.7 E2m Customs shall generate reports for both the Precedent TCC and the e2m Customs TCC. The reports shall be reconciled by the Tax Credit Office.

2.2.3.3 Recording of TCCs

2.2.3.3.1 After the issuance of the e2M TDM, the issuing agency [BOC Tax Credit Secretariat (TCS) or the DOF-OSSC] shall record, log and post the TDM amount stated in the e2m TDM printout, as well as

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the remaining balance of the TCC at the back of the certificate itself.

2.2.3.3.2 The Chairman or Director of the issuing agency concerned shall appoint the personnel as TDM- in-Charge, in addition to his duties as member of the TCS or DOF-OSSC, who shall perform the said task, covered by a bond issued by an accredited surety company of the bureau or department concerned. (Ref: CMO 6-2010)

2.2.4 Utilization of TDM with unused balances

2.2.4.1 TDMs with unused balances and intended to be used for OSM payment in the implementation Port starting DOI, shall be returned to the issuing office (DOF OSSC or the Tax Credit Office of the BOC) for their re-validation and conversion to new electronic TDMs.

2.2.4.2 The verification of the validity of the TDM balance shall be the responsibility of the issuing office. The holder of the TDM with unused balance shall be responsible for the presentation of documents required by the issuing office to establish the accuracy of the TDM balance.

2.2.4.3 For TDMs issued by the BOG, unused balances shall be administratively converted to electronic TCC using the e2m Customs TCC module, under COA audit procedures. New TDMs may be subsequently issued from this electronic TCC.

2.2.4.4 Authentication of TCC and Reporting its Utilization

a. The TCC to be utilized by the importer shall be properly authenticated.

b. The original TCC jointly issued by the DOF OSSC and the BOC shall be conveyed to the BOC Tax Credit Office, Attn: Deputy Commissioner for Assessment and Operations Group, by an OSSC-designated courier. The importer is given a photocopy of the TCC.

c. Before acceptance, the Tax Credit Office shall verify the authenticity of the said TCC using the DOF system DIVAS. The BOC Tax Credit Office shall treat the jointly-issued TCC in the same manner as a BOC-issued TCC by encoding the details of the TCC in the Tax Credit Module of e2m Customs.

d. The BOC Tax Credit Office shall be responsible for submitting TCC utilization reports to the DOF-OSSC on periodic intervals as agreed upon by the two offices. The BOC Tax Credit Office shall generate the TCC utilization report from e2m Customs System.

2.2.5 Utilization of IEDs with remaining or unused balance

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2.2.5.1 Importers wanting to use IEDs originally presented at the implementation Port and with remaining balances shall proceed to the implementation Port Cash Division section in charge of IEDs and secure a Certificate of Balance. There will be no change in the procedures for the issuance of the Certificate of Balance.

2.2.5.2 Importers wanting to use IEDs originally presented at ports other than the implementation Port to pay their declarations lodged at the implementation Port shall proceed to the Port holding the original IED and get a Certificate of Balance. There will be no change in the procedures for the issuance of the Certificate of Balance.

2.2.5.3 Importers with unused IEDs that they intend to use for payment of duties and taxes at the implementation port shall follow the same procedure for IEDs with remaining balances as provided In Item 4.9.1 and Item 4.9.2 above.

2.2.5.4 The Certificate of Balance shall be presented to the authorized officer of the Cash Division of the implementation Port for use of e2m Customs IED system. The authorized officer shall encode the data in the Certificate of Balance into e2m Customs IED using a special purpose program. The converted IED may retain the original IED number or be issued a new reference number by e2m Custom System.

2.2.5.5 Importer owning these IEDs shall have the responsibility to secure from the implementation Port the e2m Customs reference numbers for their converted IEDs.

2.2.5.6 The importer or his representative shall cite the e2m Customs IED number in the Terms of Payment Page of the declaration that he wishes to pay with the IED.

2.2.5.7 To reduce the conversion efforts, the Collector of the implementation Port is hereby tasked to encourage the immediate utilization of the IEDs with remaining balance for shipments arriving before the DOI.

2.2.6 Government importations

2.2.6.1 Government Agencies which are eligible for the deferred payment scheme must be registered in the CPRS with their Joint Order (JO) 2-91 identification number. Their eligibility shall be verified in the course of approval of their CPRS Registration.

2.2.6.2 The government agency shall secure a clearance from the Collection Service before lodgment their declaration.

2.2.6.3 Declaration of these pre-registered government agencies shall avail of the deferred payment scheme by entering the code “DPG in Part 2 of Box 37 - PROCEDURE of the SAD as provided in item 4.1 above.

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e2m Customs System checks that the government agency is eligible for the deferred payment scheme by verifying its eligibility in CPRS.

2.2.6.4 These importations shall be selected YELLOW to allow the examiner of the Assessment Division to verify the supporting documents of the government agency, including the clearance issued by the Collection Service.

SECTION 3 – PROCEDURES FOR FORMAL ENTRY FOR IMMEDIATE CONSUMPTION

3.1. Documentation Requirements

The following documents shall be used in clearing importations at the BOC:

a. Import Entry and Internal Revenue Declaration (IEIRD) Form — BC Form 236, which will include the Supplemental Declaration on Valuation (SDV) form.

b. Bill of Lading or Air Waybill or House Bill of Lading, where applicable;c. Commercial Invoice;d. Packing List; ande. Other additional document as may be required as for example Tax

Exempt Certificate (TEC), Import Permit/Clearance.f. Statement of Settlement of Duties and Taxes (SSDT)

Note: See Note on Section 3.3 below)

3.2. The IEIRD shall be based on self-assessment. As such, the importer and the customs broker shall make a complete and correct declaration of the specifications and/or particulars of the importation on the IEIRD and the SDV, which declaration shall be under oath and subscribed to by the importer and the Customs broker before a notary public or a Customs officer authorized to administer such oath under Section 3503 of TCCP under pain of prosecution for perjury. However, in the case of SDV, the Customs broker shall sign to attest to the authenticity of the signature of the importer.

3.3. The first step in customs clearing articles for immediate consumption is the payment of duties and taxes electronically through the PASS5 based on self-assessment. Thus e2m Customs System shall not accept an import entry lodging without any confirmation of payment of duties and taxes.

In the alternative: The first step in customs clearing articles for immediate consumption is the lodging of import entry and the automatic debit of the importer’s special account for the duties and taxes due on the shipment based on self-assessment.

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Note: There must however be some adjustments to be made in the e2m Custom System for Section 1.3 to be implementable.

Under the present procedures/system the first step in clearing articles for immediate consumption is electronic lodging of import entry. Payment of duties and taxes are made electronically after “final assessment” is made.

The current procedure may be contrary to Section 205, TCCP which states that “Imported articles shall be deemed “entered” in the Philippines for consumption when the specified entry form is properly filed and accepted, together with any related documents required by the provisions of this Code and/or regulations to be filed with such form at the time of entry, at the port or station by the customs official designated to receive such entry papers and ANY DUTIES, TAXES, FEES AND/OR OTHER LAWFUL CHARGES REQUIRED TO BE PAID AT THE TIME OF MAKING SUCH ENTRY HAVE BEEN PAID OR SECURED TO BE PAID with the customs official designated to receive such monies, provided that the article has previously arrived within the limits of the port of entry.”

Section 205 enumerates following elements of “entry”:

a) Filing of entry in specified form together with required documents;

b) Acceptance of entry by authorized customs official; c) Duties and taxes paid or secured to be paid to customs official

designated to receive; andd) Article has previously arrived within the limits of the port of

entry.

Before automation of customs processes, customs clearing procedures to implement Section 205 is as follows:

1st Import entry together with supporting documents are submitted to the Marine Division (now EDP) and Order of Payment (OP). The duties and taxes as computed by the Customs Broker is indicated in the OP. Marine Division perforates the Import Entry and OP for entry number. The Broker goes to the AAB and pay duties and taxes. (Who says that self-assessment is a new concept?)

2nd Marine Division checks manifest to determine whether articles covered by entry have arrived.

3rd Submitted documents to the Marine Division are transmitted to the Formal Entry Division (FED) for assessment purposes (valuation, classification and examination)

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4th After assessment at FED the import entry and supporting documents are transmitted to Liquidation and Billing Division (LBD) for liquidation. Any discrepancies found in the liquidation process are indicated in the import entry and findings posted in the Bulletin Board.

5th Import entry is then forwarded to the Cash Division (CD) which will compare the assessed amount versus actual payment by importer as evidenced by Central Bank Release Certificate (CBRC) and additional payments to be made per LBD. The AAB which received the payment transmits the original copy of the CBRC to CD. If everything in order DC authorizes release to the arrastre operator.

Under ACOS the following system/procedures was adopted:

1st Customs Broker (CB) prepares IEIRD based on self-assessment. Duties and taxes are paid to AAB which issues OR. (CAO 2-95).

2nd After payment CB goes to Entry Encoding Center (EEC) where data in the IERD are encoded into ACOS.

3rd CB goes to EPD to FED where final assessment is made. After final assessment entry is forwarded to CD.

4th CD checks through PASS4 the amount in final assessment versus actual payment made to AAB.

Under e2m payment of duties and taxes is made electronically after final assessment which may be contrary to the provisions of Section 205, TCCP that payment of duties and taxes should be made at the time of entry.

The rationale of Section 205 is that the importer is bound by his own statements and self-assessments made in the IEIRD which is made under oath. Further, if there are issues arising from the declarations the government is already in the possession of duties and taxes as computed based on self-assessments. The burden of proving the correctness of the declarations made in the import entry therefore rests on the shoulder of the importer.

3.4 Lodgment of Import Declarations under the e2m Customs System. (CMO 27-09)

3.4.1 Only Customs brokers and importers registered with CPRS and

manually registered with BOC accrediting office shall be allowed to submit import declarations in e2m Customs system.

3.4.2 e2m Customs import declarations shall only be electronically lodged

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through the accredited Value-Added Service Providers (VASP).

3.5 Licenses, Clearances and Permits

3.5.1 The Deputy Commissioner for Assessment and Operations Coordinating Group (AOCG) in coordination with the Deputy Commissioner for Management and Information System Technology Group (MISTG) shall identify the Asean harmonized tariff Nomenclature (AHTN) Codes that will require a license or permit, in consultation with the concerned other Government Agencies (OGAs). They shall jointly review the e2m Customs Required License reference Table (LRT) and endorse the list of additional commodity codes requiring a license or permit to be uploaded in the e2m customs system

3.5.2 In the e2m Customs System, the Importers/Customs brokers are required to secure licenses or permits for the covered commodities before the electronic lodgment of import declarations; otherwise the system will reject the lodgment of the import declaration.

3.5.3 In the case of ATRIG, where the commodity code for which the ATRIG is to be issued is not in the e2m Customs LRT, an appropriate communication from the concerned BIR office and duly endorsed by the Office of the Commissioner shall be sufficient for MISTG to provisionally upload the recommended AHTN code into the LRT, in consultation with the said agency.

3.5.4 Once the National Single Window (NSW) is made fully operational, a separate Customs regulations may be issued to cover the particular procedure to be followed by the importer in acquiring the electronic license or permit in each of the e2m Customs-ready issuing agency.

3.4.5 License and clearance issued by government agencies that are not yet connected to the NSW or not yet e2m Customs-ready shall continue to be processed under the current procedure.

3.4.6 All licenses and clearances shall be processed in the current procedure

of tagging the import declaration into the SELECTED channel to enable the verification of the license or clearance by the BOC examiner.

3.4.7 The importer or his authorized broker and other government agencies (OGA) shall use the AHTN Code listed in the LRT.

3.5 Entry Processing Unit (EPU) and Submission of Documents (CMO 27-09)

3.5.1 Yellow and Red Lane Shipments, the Importer/Customs Broker shall submit all copies of the IEIRD together with the required supporting documents to EPU on the date of electronic lodgment with e2m Customs System. If lodgment was accepted by the System on a

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

3.5.2 Green Lane Shipments, the Importer/Customs broker shall submit all copies of the IEIRD together with the required supporting documents to EPU on the date of electronic lodgment. If lodgment was accepted by the System on a date or time beyond BOC regular office hours, the IEIRD and supporting documents shall be submitted before noon of the next BOC regular working day. The Importer/Customs Broker shall indicate the computer-generated Customs Reference Number on the "Entry No." field found on the upper right side portion of Box No. 4 of the IEIRD thereof. The EPU shall stamp "Received" on the original working copy of the IEIRD, indicating the date and time of receipt, and then sign the same as evidence of receipt. The EPU shall validate the Customs Reference Number indicated in the IEIRD against the e2m Customs System. EPU shall then forward the submitted IEIRD and its supporting documents to the Formal Entry Sections concerned or equivalent units following the prescribed procedures.

SECTION 4 – EXAMINATION

Note: Main reference is CMO 17-08 with some changes.

4.1 Types of Customs Examination

4.1.1 Physical Examination of Goods

Means the physical inspection of goods by the Customs to satisfy themselves that the nature, origin, condition, quantity and value of the goods are in accordance with the particulars furnished in the Goods declaration. (Chap. 2, General Annex, RKC)

4.1.1.1. Regular examination

Means that an entry is routed to the Yellow Lane and that the consignment generally is not subject to 100% examination unless the customs officer conducting the examination has reason to believe its need.

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4..1.1.2 100% examination

Means that a consignment is subject of derogatory information thus its need. In containerized shipment the rule is that the shipping container shall be completely stripped of its contents to enable the customs officers conducting and witnessing the examination to determine the veracity of the derogatory information received. The 100% physical examination of individual packages and its contents shall depend on the due discretion of the examining officer.

4.1.2 Document examination

Means the act of checking the completeness, accuracy, authenticity of documents attached to the import entry as required by regulation.

4.1.3 Non-intrusive examination

Means the use of x-ray machine or any apparatus to validate whether the declaration in the covering import entry declarations, transit declarations or export declarations are accurate without physically touching the contents of a shipping container or package.


4.2.1 Truck Mounted Examination

The physical examination of Selected “RED” cargo on-board the trucks (TME) is not allowed except for shipments of agricultural products (meat, poultry, fruits and vegetables) that require quarantine clearance prior to release.

4.2.2 PEZA bound and Freeport Zone Shipments Not Subject to Physical Examination

PEZA bound and Freeport Zone shipments are not subject to physical examination at the port of discharge unless authorized in writing by the Commissioner. Such shipments may however be subject to x-ray examination upon the recommendation of the Deputy Collector for Operations. Physical examination may be conducted at the Customs Clearance Areas (CCA) or equivalent office at destination point jointly by customs and PEZA or Freeport Zone Authority.

4.2.3 Tagging of High risk Shipments by the Selectivity System.

High risk shipments may be tagged in the Selectivity System as either subject to X-ray inspection, or Selected Red and subject to physical examination.

4.2.4 Connectivity of x-ray Machines with e2m Customs System

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The hard copy of the x-ray inspection image of the containers subjected to x-ray inspection shall form part of the working copy of the corresponding entry documents in the meantime that x-ray machines are not yet connected with the e2m Customs System to enable customs operations officers at FED to check on line results of x-ray examinations.

4.2.5 Shipments Subjected to 100% Examination may Still be Subject of x-ray Examination or Vice-Versa.

Shipments which have been subjected to 100% examination are no longer subjected to x-ray examination unless there is derogatory information against the shipment.

Shipments which have been subjected to x-ray examination may still be subject to 100% examination upon receipt of derogatory information by concerned customs office.

4.2.6 Expenses with Regard Physical Examination

Expenses relative regular physical examination shall be for the account of the importer. In cases of special service/examinations like 100% examination and stripping./stuffing required by the BOC the rule is that in case of negative results the expenses shall be for the account of the office that requested the special examination. Expenses incurred in special examination shall be charged to the cargo.

4.2.7 Persons authorized to witness the conduct of physical examination: a. the customs broker who signed the entry and importer upon request;b. one authorized CIIS representative in cases it is the office that issued

the hold order or 100% examination;c. one authorized ESS representative in cases it is the office that issued

the hold order or 100%;d. Representative of the office which issued the hold order;e. Representative of the X-Ray Inspection Project for shipments tagged

as “suspect” or have image irregularities after x-ray examination. Non-organic Personnel are strictly barred from the Designated Examination

Areas.

4.2.8 Shipments Subject to 100% examination.

4.2.8.1 Shipments with Hold Order;

4.2.8.2 Shipments by once-a-year importers;

4.2.8.3 All shipments/importations declared in the shipping/commercial invoice and entry as stocklots, side-runs, cull rolls, seconds, mill lots, off-grade, B-grade, C-grade, used, second-hand, off-specs, sub-

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standard, off-quality, overruns, sweepings, overflow, recycled, “waste-waste”, reconditioned, refurbished, re-fashioned, surplus, scrap metals, metal waste, cut-up, bath-roll, odd lengths, unbranded and other similar descriptive terms;

4.2.8.4 Informal entries;

Memorandum Order titled: Supplemental Guidelines in the implementation of CMO 27-2009 re: Exa- All shipments covered by an informal entry and with the required Shippers Export Declaration and Packing list will be subjected to 100% scanning through the use of Scanning or X-ray machine. (subject of CMO 22-2011)mination of Shipments Selected for Red Lane or X-Ray Inspection shall apply.

4.2.8.5 Shipments found to be suspect or have image irregularities of the container/s after being subjected to x-ray inspection;

4.2.8.6 Generally described articles.

4.2.9 Rule on Examination of Bulk and Break-bulk Cargoes

4.2.9.1 Covered by Load Port Survey (LPS)

Shipments inspected by the Accredited Cargo Surveying Company (ACSC) at the loading port shall prima facie be deemed to have been examined for customs purposes pursuant to Section 1401 of the TCCP as amended, and shall no longer be re- examined upon arrival in the country but shall instead be immediately released transferred to the importer/consignee’s warehouse or facility following the procedures per regulation except in the following situation:

a. The surveyors report has been tampered or shows signs that the

same has been altered. b. The shipment is covered by an alert or hold order issued pursuant

to existing orders. c. Upon request of the importer if he disagrees with the findings of the

surveyor. d. If the Commissioner or the Collector has derogatory information that

there is a substantial variance between the declared and true quantity, measurement, weight and tariff classification of the shipment. (Sec. 4.7, CMO 18-2010)

4.2.9.2 Not covered by LPS

They shall I be subjected to extensive actual physical examinations, continuous under guarding until accomplishment and submission of the DPS and other Applicable control, the payment of the duties and

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taxes due the shipment including any administrative fine as may be imposed by the Bureau. (Sec. 7.1, Ibid.)

4.2.10 Rule on the Conduct of Physical Examination other than Bulk or Break Bulk Cargoes

4.2.10.1 Regular examination

Regular examination shall be conducted on formal entries which are routed to the Red Lane under following rules:

4.2.10.1.1 Full Container Load (FCL) shipments.

a. For shipments consisting of several containers, the square root rule shall apply. The selection of containers for examination shall be automatically generated by the system. (Sec. III.6.1, CMO 17-2008)

b. The COO IIIs should see to it that contents of the containers are unloaded to create a passage (canal) that will enable him/her to verify the innermost part of the container. (Sec. III.6.2, Ibid.)

4.2.10.1.2 Less than Container Load (LCL) shipments.

As a general rule one of every ten (10) package minimum of one (1) package or rounded off to the reason one (1) package shall be examined. However, the concerned customs operations officer upon due discretion may opt to examine more packages.

4.2.10.1.3 As a matter of course shipments subject to regular examination shall also be subject to documentary examination.

4.2.11 Rule When Discrepancy Discovered in the Course of Physical Examination

Should a discrepancy be noted after physical and/or X-ray examination, recommendation by x-ray personnel, CIIS and ESS personnel for seizure of the shipment or compliance to legal requirements shall be officially indorsed to the District Collector of the port concerned for his appropriate action within the same day that examination was conducted. Verbal recommendations shall not be honored.

SECTION 5 – ON LINE RELEASE SYSTEM (OLRS)

5.1 After completing e2m customs formalities and clearance procedures, release of the shipment shall be as follows:

5.1.1 An On-Line Release Instruction is immediately generated by the e2m

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Customs OLRS after the bank debit confirmation is received from the BOC-BAP/PCHC payment gateway.

5.1.2 For shipments stored at the Port temporary storage facility or at other transit sheds (CY-CFS, Dangerous Goods Area), e2m Customs System sends the electronic release instruction to the transit shed. The transit shed shall provide e2m Customs System with the electronic feedback message on the release of the shipment from the temporary storage facility.

5.1.3 Misrouted release instructions, defined as release instructions sent to a transit shed that does not store the cargo referred to, shall be routed to the correct transit shed as soon as the recipient transit shed informs e2m Customs OLRS of the mis-routing. The SAD is updated with the correct transit shed code by the designated BOC officer.

5.1.4 For shipments discharged at piers or discharge areas where connectivity is not present, a release instruction will be printed from the VASP by the importer/Customs broker, signed by the Port Collector or his designated representative and physically transmitted to the pier or discharge area. After the release, the paper containing the release instruction will be returned to the Port's PID or POD which will update the bill of lading status to signify shipment has been released to the consignee.

5.1.5 Only the release instructions described in Item 4.11.2 shall be honored by the transit shed. In cases of system breakdown which prevents the transmittal of the on-line release instructions, the Commissioner of Customs or his designated official, shall allow the use of the manual release instructions in the prescribed format under Item 4.11.4 above.

5.1.6 No other authorizations or approvals are required for the shipment release except for the electronic release instructions or in the case of non-Internet transit facilities, the duly-signed manual release instruction.

5.1.7 If a Hold and Alert Order has been applied to the bill of lading and this has not been lifted at the time of payment, no release instruction shall be generated to the transit sheds. Only upon lifting of the Hold and Alert Order will the release instruction be issued by e2m Customs System.

SECTION 6 – SUPER GREEN LANE (SGL) PROCESSING

6.1 For Super Green Lane Shipments, the Importer/Customs broker shall submit a copy of the duly notarized SAD printed from the VASP system (VASP-SAD) with all the required documents to the EPU on Tuesday or the second working day of the succeeding week.

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6.2 BCOR evidencing payment of SGL service fee per following schedule shall likewise be attached to the SAD: (CAO 6-2003)

FOB Value Amount

Below US$5,000.00 Php 500.00$5,000.00 to $100,000.00 1,000.00$100,001.00 to $200,000.00 1,500.00$200,001.00 to $500,000.00 2,000.00Over $500,000.00 2,500.00

6.3 The EPU shall stamp "Received" on the copy of the VASP-SAD, indicating the date and time of receipt, and then sign the same as evidence of receipt. The EPU shall validate the Customs Reference Number indicated in the VASP-SAD against the e2m Customs System. EPU shall then forward the submitted VASP-SAD & its supporting documents to the Formal Entry Sections concerned or its equivalent units following the prescribed procedures.

SECTION 7 – CARGO SURVEYING PROCEDURES FOR BULK AND BREAK-BULK CARGOES

7.1 The importer must inform his exporter of the requirements of this Order and shall ensure that the cargoes are surveyed by an ACSC. It is the responsibility of the importer of bulk and break bulk cargo to obtain from the BOC the names and overseas addresses of ACSCs and to communicate this information to the seller/exporter of the goods.

7.2 The exporter must contact the nearest office of the ACSC selected by

him to register his cargo falling under the coverage of AO 243-A and this Order and provide a full description, technical specification and quantity of the cargo.

7.3 The exporter must advise the selected ACSC of the whereabouts and availability of the cargo at least three (3) working days prior to the required date of survey. The exporter must present the goods in a manner to allow a full survey to be conducted. They must arrange and allow full access to the representative (surveyor) of the ACSC to allow a full survey to be conducted and submit complete copies of the final invoices to the ACSCs. The foregoing applies even to partial/split shipments.

7.4 The ACSC must make available to all interested parties the requirements of AO 243-A and this Order and the addresses of their offices/representatives in each country of supply. They must arrange to survey the cargo within three (3) working days of receipt of the request and seal the holds where necessary prior to the vessel sailing and issue the LPS prior to the arrival of the shipment in the Philippines within the prescribed period.

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7.5 Any importer obtaining the services of an ACSC pursuant to the preceding Section shall be allowed to file entries for the imported articles and pay the proper duties, taxes, and other fees therefor, prior to its arrival in the Philippine port of destination, Provided that:

7.5.1 The entry contains a full and true statement of all the articles which are the subject of the importation;

7.5.2 Declaration executed by the importer/consignee under oath on the following:

a. The invoice and entry contain a just and faithful account of the actual cost of said articles, including and specifying the cost of insurance and freight and other necessary charges, and that nothing has been omitted there from or concealed to the detriment of the proper collection of revenue by the Government;

b. The invoice and all bills of lading relating to the articles are the only ones in existence relating to the importation in question;

c. The entry, invoice and bill of lading, and the declaration thereon are in all respects genuine and true, and were made by the person by whom the same purportedly has been made.

7.6 As soon as the cargo arrives at the Philippine port of destination, the

importer may immediately cause the discharge and withdrawal of the same from customs premises and/or custody provided that the declarations in the import entries are confirmed by the LPS Report and upon presentation of the proof of payment of duties, taxes and other fees as well as compliance with other pre-requisite for a valid importation.

7.7 In the event that the shipment is covered by an alert order or that the shipment is different from the details in the entry, the Customs Inspector or the Customs Guard assigned on board the vessel shall return the delivery permit to the Formal Entry Divisions (Attn: the concerned examiner/appraiser) indicating therein the exact location of the shipment for the usual customs examination and processing of the entry.

7.7 The Port Collector shall cause the utilization of the LPS Report and the SR issued by an ACSC as integral parts of the documentation required for the clearance of Bulk/Break-Bulk Cargo in the determination of dutiable weight, volume, description, value and tariff classification of imported articles, without prejudice to an actual verification as it may be deemed proper.\

7.8 Shipments requiring the LPS without undergoing the same shall be subjected to the DPS by an ACSC selected by the importer and

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confirmed/approved by the OSS.

7.9 In the event the importer/consignee wishes to contest/re-confirm the LPS conducted, he may request, at his own costs, for the conduct of a DPS in accordance with the procedures herein which shall be performed by an ACSC other than the one which conducted the LPS. In this eventuality, the BOC shall determine which results (under the LPS or DPS) to apply for its purposes.

7.10 In requesting for the DPS, the importer shall inform the OSS of the need therefor at least three (3) days prior to the estimated date of arrival of the shipment.

7.11 In addition to the formal request for DPS, the importer, consignee or his authorized representative shall accomplish and execute under oath the importer's referral or information sheets shown in Annex "B" hereof, the requirements therein being deemed as forming an integral part of this Order and submit the same directly to the OSS. The importer shall likewise indicate in the referral its preference of the ACSC to conduct the DPS.

7.12 The OSS upon receipt of the accomplished importer's referral or

information sheet shall immediately assign the chosen ACSC to conduct the surveying activities. The ACSC preferred by the importer shall be given priority in the assignment unless there are valid reasons for the assignment by the OSS of a different ACSC to conduct the DPS. In the event that no preference is indicated by the importer or that the preferred ACSC cannot conduct the DPS, and that the OSS will have to make the assignment, an impartial system which ensures non-favoritism or non-bias for choosing the ACSC shall be employed.

7.13 The choice of ACSC to perform the surveying activities at the discharge port shall depend on the commodity and the availability/capability of the ACSC's services to conduct the survey for the subject commodity. For this purpose, all ACSCs are required to provide the CASCS and the BOC an updated list of all commodities that could be subject of their services, their accredited laboratories (local) and their authorized survey personnel.

7.14 Within twenty four (24) hours upon notification by the OSS, the chosen ACSC for the DPS shall endeavor to conduct the activity except when the surveying could not be conducted for reasons beyond the control of the ACSC. Additional expenses incurred by the importer in the form of storage and demurrage fees occasioned by the failure of the ACSC to conduct surveying activity within the prescribed period without any valid reason shall be borne by the ACSC.

7.15 In the event the chosen ACSC cannot perform the services for whatever reason, it shall immediately inform the OSS, or the authorized customs official as the case may be, who shall immediately assign an

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alternate ACSC to conduct the activity. The failure of the designated surveyor to perform his obligation shall be immediately reported to the CACSC for its appropriate action.

7.16 Copies of the DPS shall be submitted in both electronic and hard copies within twelve (12) hours upon termination of the surveying activities containing the details specified in 4.1.1 hereof.

7.17 Appeals

In the event that the importer/consignee disagrees with the findings made under the DPS, the importer/consignee may resort to payment of the duties and taxes due under protest, including the applicable fine/penalty, or cause the tentative release of the shipment under such conditions as the Collector may impose. The same appeal procedure for protest or for cases covered by the rules for Valuation and Classification Review Cases, as the case may be, shall be observed.

SECTION 8 – INFORMAL ENTRY

Ref.: CMO 13-2010

A.8.1 Coverage of subsection: Electronic lodging as informal entry in the e2m Customs of commercial goods.

A.8.1.2 e2m Customs System shall allow shipment to be declared under In Informal Entry if the following criteria are met:

• Total Customs Value is below US$500; • Total Gross Weight is less or equal to 300 kilograms;• Total number of packages is less or equal to 12;• The shipment volume is less or equal to one (1) cubic meter; and• The consignee is registered in CPRS as an individual entity.

A.8.1.3 All informal entry declarations have to be lodged through the VASPs. The printed copy of the SAD in the required number of copies and all other supporting documents must be submitted to the BOC.

A.8.1.4 Only Customs brokers and consigned registered with CPRS shall be allowed to submit informal entry declarations in e2m Customs System through the VASP.

A.8.1.5 The consignee may register himself on a Once-A-Year Importer

A.8.1.6 If an exemption is claimed under Section 105 of the Tariff and Customs Code of the Philippines (TCCP), such exemption code should be part of the allowable list.

A.8.1.7 Shipments that do not qualify for Informal Entry under the above

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criteria shall be lodged under Formal Entry.

A.8.1.8 Licenses, Clearances and Permits

A.8.1.8.1 The consignee/Customs broker is required to secure licenses or permits for the covered commodities before the electronic lodgment of import declarations; otherwise the system will reject the lodgment of the import declaration.

A.8.1.8.2 For license and clearance issued by government agencies that are not yet connected to the NSW or not yet e2m Customs-ready, the same shall be processed in the current procedure of tagging the import declaration into the SELECTED channel to enable the verification of the license or clearance by the BOC examiner.

A.8.1.9 Selectivity – Informal Entry declarations lodged under this Section shall be subject to Selectivity

A.8.1.10 Calculation of Duties, Taxes and Fees

A.8.1.11 Duties, taxes and fees shall be calculated using the taxation rules of e2m Customs, which are also applicable to Formal Entry declarations.

A.8.1.12 Duties are based on the tariff rates for the particular commodity code.

A.8.1.13 The Import Processing Fee (IPF) shall be calculated similar to the formal entry IPR

A.8.14 Payment of duties and taxes shall be settled using PASS5 for the automatic debit of the amount from the Importer's nominated bank account.

A.8.1.15 The consignee shall acquire a Bank Reference Number after CPRS Registration from his bank choice. The Bank Reference Number is mandatory in the Informal Entry SAD.

A.8.1.16 Other Modes of Settlement – Tax Exemptions are allowed as payment for duties and taxes.

A.8.2 Operations Provisions

A.8.2.1 Filling up of Informal Entry SAD

The Informal Entry SAD shall be filled up in accordance with guidelines in the filling up of the SAD for the Informal Entry of Commercial Goods.

A.8.2.2 Informal Entry Processing

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Informal Entry processing shall mainly follow the operational provisions for Formal Entry Declarations with the following revisions:

A.8.2.2.1 The Consignee/Customs Broker shall submit one (1) copy of the SAD including the Assessment Notice, printed from the VASP system, together with the required supporting documents to the Entry Processing Unit (EPU) on the date of electronic lodgment with e2m Customs System. If lodgment was accepted by the System on a date/time beyond BOC regular office hours, the Informal Entry SAD and supporting documents shall be submitted before noon of the next BOC regular working day. The EPU shall stamp “Received” on the VASP-SAD, indicating the date and time of receipt, and then sign the same as evidence of receipt. The EPU shall validate the Customs Reference Number indicated in the Informal Entry SAD against the E2M Customs System. The EPU shall then forward the submitted Informal Entry SAD and its supporting documents to the Informal Entry Division/Section concerned.

A.8.2.2.2 The Informal Entry Division/Section concerned shall follow the existing procedures specified for Update, Re- route, Assess except for informal entries selected Red.

A.8.2.3 Payment

A.8.2.3.1 To ensure that an E2M Customs declaration is accepted and assessed successfully, all Other Settlement Mode (OSM) payments claimed in the declaration should be existing in the E2M Customs database before the declaration making the reference is lodged. This is the responsibility of the consignee and his designated broker.

A.8.2.3.2 Payment for duties, taxes and other charges follows formal entry processing procedures

A.8.2.3.3 Utilization of a Tax Exemption Certificate shall follow formal entry processing procedures.

A.8.2.4 OLRS

The release process for Informal Entry Shipments shall follow the procedures for formal entry and the procedures described below for Red Lane channeled entries:

A.8.2.4.1 When an Informal Entry declaration is Post-Entry modified after the examination results in adverse findings, payment of the additional duties and taxes shall not initiate a release message to the Port Operator/ transit shed.

A.8.2.4.2 A manual release instruction shall be printed from e2m Customs

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System into a non-editable format (PDF) at the office of the Collector. This release instruction PDF shall be e-mailed from the Collector of the Port's official BOC e-mail address to a designated e-mail address of the Port Operator. Manual release instructions provided to the Port Operator by other means shall not be honored by the Port Operator.

B.8.1 Coverage of this subsection: Non-commercial Inbound Consolidated Balikbayan Box Shipments from Filipinos Abroad.

B.8.2 Definitions of Terms

B.8.2.1 Consolidation Shipment

Two (2) or more shipments from two (2) or more individual consignors/senders abroad, assembled and consolidated at one point of origin/exportation and shipped together under a single Master of Ocean Bill of Lading or Master Airway Bill by a Freight Forwarder /Consolidator to its Consolidation Agent in the Philippines.

B.8.2.2 Freight Forwarder/Consolidator

A duly licensed and registered foreign forwarding entity that procures the transport of goods and issues in its name House Bills of Lading to the individual consignee/senders and ships the consolidated shipment to its Consolidation Agent in the Philippines as Consignee, under one Master Bill of Lading or Master Airway Bill issued under its name.

B.8.2.3 Consolidation/Break Bulk Agent

The Philippine agent/representative of a Freight Forwarder/Consolidator accredited by the Philippine shippers Bureau, Department of Trade and Industry named in a Master Bill of Lading/Airway Bill as Consignee of a consolidated shipment.

B.8.2.4 Master Ocean Bill of Lading

An ocean bill of lading issued by common ocean carrier to a Freight Forwarder/Consolidator covering a consolidated shipment.

B.8.2.5 House Bill of Lading

A bill of lading covering a single, individual shipment/consignment issued by the Freight Forwarder/consolidator to the Consignor/Sender containing the names and address, respectively, of both the Consignor/Sender and the Consignee/Receiver and the detailed, specific description/s of the goods shipped.

B.8.2.6 Consolidated Cargo Manifest

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A true and correct manifest of all the individual shipments/consignments in a consolidated shipment destined to be unloaded in a port of entry in the Philippines, the same being attached as a Rider to the Inward Foreign Manifest of the carrying vessel.

B.8.3 Administrative Provisions

B.8.3.1 Accreditation/Registration

Consolidation Agent shall be allowed to transact business with the Bureau of Customs provided Agent and its Freight Forwarders abroad are duly accredited and registered with Bureau of Customs and Philippine Shippers Bureau (PSB) and the local Consular Office.

B.8.3.2 Accreditation of Consolidation/Break Bulk Agent

Consolidation/Break Bulk Agent accredited by the PSB must identify and submit a list of Freight Forwarders together with a copy of their contract/service agreement duly notarized by the Philippine Consular Office in the country of origin to in a prescribe format to the Director, Import Assessment Service, Office of the Commissioner of Customs, for each Freight Forwarder/ attaching thereto the true copies of the Original following documents:

a. Article of Incorporation, Partnership and Bylaws;

b. Certificate of Registration issued by the Philippine Shippers Bureau;

c. Financial Statements and Income Tax Return covering the last preceding year;

c. Fidelity Performance Bond. A bond in the amount of Two Million (Php2,000,000.00) pesos to guarantee faithful compliance with this regulation and all pertinent Customs rules and regulations as well as to answer for any damage which the Government, Senders and their Consignees may suffer from the misconduct or negligence of subject Consolidation/Break Bulk Agent and their Freight Forwarder for any financial obligation and liability in the release and delivery of consolidated Balikbayan boxes; and

e. Contract/Service Agreement

Consolidation/Breakbulk Agent must enter/execute a contract/service agreement with its Freight Forwarder that should contain the following covenants and provisions:

e.1 The consolidated shipment shall not contain any banned

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prohibited or highly regulated items. Freight Forwarder shall advice the Sender of the Philippine Customs Rules and Regulation on Balikbayan Boxes and ensures that no prohibited, banned or highly regulated items are included in their shipment;

e.2 Freight Forwarder must see to it that the Export Declaration and Packing list are properly accomplished and attached accordingly to the shipment;

e.3 Freight Forwarder must assure that individual shipment shall not exceed the limits as value, quantity, kind and frequency fixed by the Bureau of Customs; and

e.4 Freight Forwarder must cooperate and assist in determining who shall be held responsible in consolidated shipment that contains banned or prohibited items. For those found responsible, the Freight Forwarder shall assist in the prosecution under the governing laws of the Republic of the Philippines.

f. Financial Capability

Consolidation/Break Bulk Agent must demonstrate financial capability to transact and solicit business. Consolidation /Break Bulk Agent must assure that Freight Forwarder/s that it has the financial resources to cover cost of releasing and or delivery to the ultimate consignees. Freight Forwarders must be able to show proof of sufficient working capital, an adequate warehouse and office space for distribution of boxes and not in the public road or streets, and ample parking space for containers safety. Sufficient transport vehicles to service delivery, and in case of Sub-contract deliveries, to pre-qualify sub-contractors but still assume liability/responsibility of delivery;

g. Certificate of Registration or Authority from source agency. Consolidation/Break Bulk Agent must secure license and permit issued by the appropriate governing agency of the Freight Forwarder/s engaged in the business and those included in the same shipment. Master Loaders and Co-loaders business licenses and permits must be registered with the local consular offices of the foreign freight forwarders, and the same must bear local consular stamps and seals.

B.8.3.3 Registration/ Renewal- The registration/accreditation shall be a term of one (1) year, renewable yearly in writing fifteen days prior to the expiration date of One (1) year from the date of approval to be submitted to the Director, Import Assessment Service.

B.8.3.4 Consolidation Shipment Committee.

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In order to implement an efficient and centralized control and recording system, a consolidation shipment committee is hereby constituted as follows:

Chairman: Director, Import Assessment ServiceMembers: Chief, IED of POM, MICP and NAIARepresentative, Philippine Shippers BureauRepresentative, DDCAPRepresentative, CCBI

The Committee may issue its internal guidelines pursuant to, and consistent with this Order and its objectives, subject to the approval of the Commissioner of Customs

B.8.4 Operational Provisions

B.8.4.1 Documentary Requirements in Releasing Shipments

a. The inward foreign manifest with the corresponding rider or consolidated cargo manifest

b. The Master Ocean Bill of Lading with the corresponding individual house bills of ladings

c. Individual Packing List is essential as a reference to be used in case of examination of box. Sender must sign and attest that content is true, correct and accurate. Packing list must be individually attached to the box containing the goods.

B.8.4.2 Filing of the Import Entry

One Informal entry may be filed for every Ten (10) individual balikbayan boxes in a given consolidated shipment, provided that each container must have a Rider/manifest of all ultimate consignees plus individual packing list of each ultimate consignee attached to the box.

B.8.4.3 All entries covering individual consignments in a consolidated shipment shall be filed and processed altogether at the same time;

B.8.4.4 The examination of a consolidated shipment shall be conducted follows:

a. Regular Examination- All shipments covered by an informal entry and with the required Shippers Export Declaration and Packing list will be subjected to 100% scanning through the use of Scanning or X-ray machine.

b. All shipments covered by an informal entry without the required

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Packing list are subject to thorough 100% examination.

c. The assigned Customs Examiner may also conduct a thorough 100% examination for shipments covered by alert/hold order or those with derogatory information as to the true nature, quantity, measurement, value etc. of the shipment.

B.8.4.5 Appraisal

The appraisal of consolidated shipments shall be based on the nature/character of the article under appraisement on a per item basis subject to existing rules and regulations on the treatment of used, off-quality, second hand items.

SECTION 9 – POST ENTRY MODIFICATION OF SAD AND SAD CANCELLATION

Ref: CMO 53-2010


9.1.1 Post Modification of SAD (PMS)

PMS is a process used when it is necessary to revise the data in the SAD. For clarity, post modification of the SAD includes the post assessment and post entry modification. Post assessment is the stage where the shipment is already assessed but not yet released from Customs (i.e. Green Lane entries). Post entry, on the other hand, is the stage where the shipment has already been released from Customs (i.e. Tentatively-Released Entries)

9.1.2 SAD Cancellation

SC is a process used when it is necessary to revise data in the assessed SAD which cannot be done under PMS.


9.2.1 Post Modification of SAD (PMS)

9.2.1.1 The Tax Exemption Certificate declared in the original SAD shall still apply in the calculation of the allowed exemption during PMS.

9.2.1.2 Any additional duties and taxes calculated as a result of post assessment shall be settled at the In-House Bank using Cash Payment Module in the e2m Customs System.

9.2.1.3 The e2m Customs System shall send a release instruction to the port operator/arrastre/CY-CFS only once upon payment of the assessed duties and taxes due on the import declarations.

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9.2.1.4 Refund or excess payment of duties and taxes as a result of PMS shall be coursed through the Tax Credit Office, following existing procedures.

9.2.1.5 Refund or cash bond posted on tentatively released shipments as a result of PMS, shall be processed in accordance with regulation on the matter.

9.2.1.6 All the data in the SAD can be modified except the following:

a. Customs Office Code (Box at the top right hand corner)b. Model of Declaration/General Procedure Code (Box 1)c. Importer’s Reference Number/TIN No. (Box 8)d. Declarant’s Reference Number/TIN No. (Box 14)e. Registry/Manifest Number (Box 18)f. Bill of Lading Number (Box 40a)g. Type of Package (Box 31)h. Number of Packages (Box 31 & Box 6)i. Gross Weight (Box 35)j. Container Reference Number (Box 31)k. Warehouse (Box 49)l. All entries or data in the Attached Document Pagem. All entries or data in the Terms of Payment (TOP) Page

Necessary revision of the above-mentioned data shall require the cancellation of the SAD to be covered by an appropriate request (see Annex A). However, in the case of letters (i) and (j) above cancellation of SAD is not necessary. The number of packages and/or gross weight of the shipment can be modified in the Inspection Act of the SAD.

9.2.1.7 The use of ASYCUDA Post-Entry Revision Form for post entry modification shall be discontinued. In lieu thereof, the e2m post modification of SAD form shall be used.

9.2.1.8 The respective documents are required for PMS under the corresponding instances:

9.2.1.8.1 For correction of data encoded by the Customs Broker in the e2m Customs

• Letter Request of the Importer or Customs Broker addressed to the District Collector identifying the data in the SAD that needs to be corrected, stating the reasons and basis for correction.

9.2.1.8.2 For Tentative Release

• Copy of VCRC Resolution, as the case maybe• Prepared Discrepancy Report (D/R)

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9.2.1.8.3 For shipments subject to adjustment of either value and/or modifiable net weight and/or classification.

9.2.1.8.3.1 In case of Hold Order

• Lifting of Hold Order• Result of Magna-scale (if goods are dutiable by weight)• Report on the Result of Physical Examination• VRIS printout and/or other value info references, if necessary• Literature/Brochure and/or Tariff Commission Ruling, MSDS,

Chemical Analysis, if available• Prepared Discrepancy Report (D/R)

9.2.1.8.3.2 For Decisions rendered by Law Division

• Copy of the approved Decision or Order• Prepared Discrepancy Report (D/R)

9.2.1.8.3.3 For Other Cases (initiated by the COO III / COO V, Chief FED and other offices)

• VRIS printout and/or other value info references, if necessary• Literature/Brochure and/or Tariff Commission Ruling, MSDS,

Chemical Analysis, if available• Prepared Discrepancy Report (D/R)

9.2.1.10 The Discrepancy Report is no longer required if the percentage discrepancy is less than 10%

9.2.2 SAD Cancellation (SC)

9.2.2.1 The original Import Entry & Internal Revenue Declaration (IEIRD) shall be retained as the original working copy.

9.2.2.2 Electronic re-lodgment of new SAD to replace the cancelled SAD is necessary in order to clear the goods/shipment from Customs.

9.2.2.3 Cancellation of the SAD will revert back the status of the attached documents like the Import Entry Declaration (IED) for customs duty deposit, the license, clearance or permit, the Tax Exemption Certificate (TEC) and the Tax Debit Memo (TDM). However, if the SAD has already undergone final assessment by the COO V and the Other Settlements Modes (OSM) has been completed; payments debited from the importer’s account cannot be automatically refunded. The Importer shall follow the regular refund process.

9.2.2.4 The use of ASYCUDA Post-Entry Revision Form for post entry cancellation shall be discontinued. In lieu thereof, the e2m SAD cancellation form shall be used.

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9.2.2.5 Documents Required for the Cancellation of SAD under corresponding instances:

9.2.2.5.1 For Change of Consignee

• Letter Request addressed to the District Collector stating the reason for the change and duly approved by the District Collector.

9.2.2.5.2 Change of Customs Broker

• Letter Request addressed to the District Collector stating the reason for the change and duly approved by the District Collector.

9.2.2.5.3 Other modifiable data

• Letter Request addressed to the District Collector identifying the date in the SAD that needs correction and stating the reason and basis for correction and duly approved by the District Collector.

9.3.1 Operational Provisions for PMS for Correction of Data Encoded in the e2m Customs System

9.3.1.1 Importer/Customs Brokers shall submit to the Office of the District collector the original IEIRD or VASP-SAD print-out (for SGL entry) and the necessary documents required depending on the applicable instance listed in Section 9.2.1 above.

9.3.1.2 The District Collector or his designated official shall refer the letter request to the Division Chief and Section Chief or the concerned office for appropriate action.

9.3.1.3 The COO III and the COO V concerned shall review the request submitted. If the request for post modification of the SAD is inadequate and modifiable, the COO III and the COOV shall prepare the e2m post modification form. The Section concerned shall then forward the same to the Division Chief for his evaluation/action. If he concurs with the recommendation of the COO III and COO V, he then transmits the same documents to the District Collector for the latter’s approval/disapproval.

9.3.1.4 If the request is approved by the District Collector, the COO V shall access the e2m Customs System and make the necessary amendments in the SAD, reflect in the Inspection Act the amendments made and the reason/s therefore. He shall then print the modified SAD and attach it to the original import documents.

9.3.1.5 If the post modification of the SAD results to no additional duties and taxes, the Section concerned shall forward the entire documents to the Liquidation and Billing Division (LBD). The COO III, however, shall verify first if payment has been made on the subject shipment

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before the entire documents shall be transmitted to the LBD.

9.3.1.6 If the PMS results to additional duties & taxes, the Importer/Customs Broker shall proceed to the In-House Bank to pay the additional amount indicated in the Order of Payment Form (OPF) prepared by the COO III and duly signed by the COO V of Section concerned. However, if the Importer/Customs Broker does not agree with the re-assessment made, the Importer/Customs Broker may avail of tentative release or the remedy provided for under Section 2308 of the TCCP, as amended.

9.3.1.7 The In-House Bank shall accept the payment & enter the details of payment in the e2m Customs System using the Cash Payment Module. The In-House bank shall generate and print the e2m Customs Receipt (ECR). The ECR Number must be indicated in the BCOR to be issued by the In-House Bank to the Importer/broker together with the ECR.

9.3.1.8 After payment, the Importer/Customs Broker shall return to COO III and COO V to present his BCOR with the ECR attached.

9.3.1.9 The COO III shall verify that the appropriate payment has been made using the e2m Customs Cash Payment Module in the e2m Customs System.

9.3.1.10 If additional duties and taxes was confirmed “paid” the Section concerned shall forward the import document with all its attachments including the BCOR to the LBD.

9.3.2 Operational Provisions for Amendments to the Data Encoded for Tentative Release and shipments subject to adjustment of either value and/or modifiable net weight and/or reclassification.

9.3.2.1 Follow the procedures in Sections 9.3.1.5 to 9.3.1.10 above.

9.3.2.2 If the District Collector approves the recommendation and the assessment made, he shall forward the same documents to the Division Chief concerned. The Division Chief shall return the same documents to the concerned COO V, who shall access the e2m system, print the modified SAD and attach it to the original import documents.

9.3.2.3 After proper amendment of the details in the SAD, procedures indicated above under Sections 9.3.1.5 to 9.3.1.10 above shall be followed

9.3.3 PMS with Unpaid Account

9.3.3.1 All unpaid post modified SAD/s shall be forwarded by the Section concerned to the LBD for preparation of demand letter for signature

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by the District Collector.

9.3.3.2 The demand letter signed by the District Collector shall be forwarded to the Administrative Division, for mailing to the importer.

9.3.4 SAD Cancellation (SC)

9.3.4.1 .Follow same procedure in Sections 9.3.1.1 to 9.3.1.2 above.

9.3.4.2 The COO III and the COO V concerned shall review the request submitted. If the modification request is for data that are not modifiable, the COO III and COO V shall recommend for the SAD cancellation. The Section concerned shall then forward the same documents to the Division Chief for his evaluation/action. If he concurs with the recommendation of the COO III and COO V, he then transmits the same documents to the District Collector for the latter’s approval/disapproval.

9.3.4.3 After approval by the District Collector or his designated official, the same documents shall be returned to the Division Chief concerned for appropriate action.

9.3.4.4 The Division Chief shall forward the same documents to the COO V for SAD cancellation based on the approval of the District Collector.

9.3.4.5 After the SAD cancellation, the concerned COO V shall print the cancelled SAD and attach this to the original IEIRD, or SAD-IEIRD.

9.3.4.6 The Section concerned shall return the same import documents with all its attachments to the importer or his authorized representative for electronic re-lodgment of the new SAD to replace the cancelled SAD in the e2m Customs System through VASP.

9.3.4.7 After re-lodgment, the Importer/Customs Broker shall submit the new printout generated VASP-SAD together with the original documents to the Entry Processing Unit of the concerned port for clearance processing.

SECTION 10 – MANUAL PROCESSING OF IMPORT ENTRIES UNDER e2m CUSTOMS SYSTEM

(Note: Adopted from CMO 10-05 and CAO 8-08)


10.1.1 When Manual Processing Allowed

Manual processing of import entries shall be allowed in case of computer systems breakdown, power failure rendering the computer

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system non-operational and similar instances.

10.1.2 Official Authorized to Allow Manual Processing

Upon request by an importer/Customs Broker manual processing of importations shall be authorized only by the Deputy Commissioner, MISTG, or his authorized alternate as he deems necessary, as may be recommended by the District Collector.

An approval even for a single request from an importer/Customs Broker shall be construed as a general approval for acceptance of manual processing for all import entries until the duration of the situation per Section 9.1.1.

10.1.3 All automated systems not affected by the breakdown or power failure shall continue to be utilized.

10.1.4 Procedures which are not affected by the system breakdown or by the power failure shall, as much as practicable, continue to be observed.

10.1.5 Manual processing shall cease upon the re-activation of the computer system.

10.1.6 The computer system files shall be updated with information on the import entries/transshipments processed manually at the end of the day or as soon as the computer system is operational. The Chief, FED, Chief, Collection Division and Chief, Entry Processing Division shall be responsible for the updating of the information as required in the system.

10.2 Manual Processing of Entry

10.2.1 Importer/Customs Broker prepares IEIRD and goes to the bank with branch inside Customs Zone and deposits the duties and taxes as self-assessed. The bank shall send a letter to the Cash Division of the amount of deposit made together with copy of the Official Receipt.

10.2.2 The Importer shall present the IEIRD together with the required attachments thereto and the Official Receipt evidencing deposit of duties and taxes to the Entry Processing Division (EPD).

10.2.2 The EPU Document Processor shall verify the Bill of Lading and other information against the hard copies of the manifest. In the case seaports, the hard copies shall be requested at the Piers and Inspection Division (PID) or its equivalent unit.

10.2.3 The examiner/appraiser of the FED shall conduct the examination of the shipment and final assessment of the shipment shall be made on the dorsal part of the IEIRD. The working copy of the IEIRD is then sent to the Collection Division.

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10.2.4 The Collection Division shall furnish the Arrastre Operator of the approval for the release of the shipment with the blue copy of the entry indicating the approval for release of the shipment; copy furnished the Officer-in-Charge/Gatekeeper of the exit gate.

10.2.5 The Collection Division shall keep the original copies of the IERD and supporting documents for transmittal to FED for their electronic assessment, using e2m Customs System when the electronic system has become available.

10.2.6 The Collection Division shall submit a report to the district Collector at the end of the day until the reactivation of the computer system and on manually processed entries covering at least the following information:

a. Entry numbers;b. Consignee;c. Container number(s);d. Registry and Bill of Lading numbers/Airway bill of Lading numbers;e. Duties and Taxes paid, if any

CHAPTER 6 – CUSTOMS BONDED WAREHOUSE

I. Objective

I.1 To clearly define the rules and regulations on customs bonded warehousing operations.

II. ADMINISTRATIVE PROVISIONS

II.1. APPLICATION TO ESTABLISH AND OPERATE A CUSTOMS BONDED MANUFACTURING WAREHOUSE

II.1.1 PLACE. The application shall be submitted to the Commissioner of Customs through the District Collector of Customs of the Port/Subport where the majority of the importations to be stored shall be entered.

II.1.2 DOCUMENTARY REQUIREMENTS. Only applications with complete documentary requirements shall be accepted.

1) Duly accomplished and notarized Application Form (refer to Annex “A”).

2) Certified photo copies of Certificate of Registration with the SEC, Articles of Incorporation, and By-Laws duly certified by the Corporate Secretary; in case of partnership, photo copies of Articles of Partnerships; in case of sole proprietorship, Certificate of Registration with the Bureau of Domestic Trade.

3) Certified photo copies of BOI Registration including the Terms and

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Conditions of registration and in case of garments, a Garments and Textile Import Development Office (GTIDO) issued license;

4) Certified photo copies of applicant's Income Tax Returns and Audited Financial Statements submitted to BIR for the last two years immediately preceding the date of application; in case of new corporation, Interim Financial Statements duly signed by the applicant’s controller/accountant;

5) Certified photo copy of Mayor's Business Permit;

6) Comprehensive Company Profile;

7) Certified photo copies of Instrument evidencing absolute ownership or lease contract covering the proposed warehouse (if lease, contract must have minimum period of 1 year);

8) Plant location map showing means of access to the property;

9) Plant layout plan showing and describing the size and construction of the proposed warehouse together with the intended use of each compartment. In case of a customs common bonded warehouse applicant, the facility must be sufficient in space for the inspection and subsequent storage and safekeeping of imported goods prior to the delivery of goods to its accredited members;

10)Clearances from the offices or equivalent units of the port having jurisdiction over the warehouse to be secured by the applicant together with the application.

For APPLICANTS for CUSTOMS BONDED WAREHOUSE engaged in MANUFACTURING, including applicants for CUSTOMS COMMON BONDED WAREHOUSE, the following documents must be submitted in addition to the above:

11) Certified photo copies of Formula of Conversion issued by Industrial Technology Development Institute. In case of garments, the formula approved by GTIDO;

12)List of machineries and equipment and production capacity (refer to Annex “__”);

13)List and volume of Raw Materials to be imported (refer to Annex “__”). Such volume must be consistent with the submitted Formula of Conversion, Purchase Order or export performance two (2) years prior to application.

14)Certified photo copies of Patterns or sketches of the products to be

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manufactures. In case of garments, the pattern or sketches approved by GTIDO;

15)Certified photo copies of Toll Agreement in case of consigned goods/materials;

16)Favorable indorsement from the appropriate recognized industry;

For APPLICANTS for INDUSTRY SPECIFIC CUSTOMS BONDED WAREHOUSE, the following documents must be submitted in addition to numbers 1 to 10:

17)List and volume of Raw Materials to be imported (refer to Annex “__”). Such volume must be consistent with the submitted Letters of Intent of its proposed End-user Clients;

18)Favorable indorsement from the appropriate recognized industry

For APPLICANTS for AIRLINE OR AIRLINE CATERING CUSTOMS BONDED WAREHOUSE, the following documents must be submitted in addition to numbers 1 to 10:

19)Certified photo copies of Service Agreements/Letters of Intent if servicing other airlines.

20)Certified photo copies of approved permit/license from the Civil Aeronautics Board and the Air Transportation Office.

21)For local airline applicant, certified photo copies of its Congressional Franchise.

22)For airline catering applicant, a Statement containing the following:

a) Aircraft configuration;b) Flight frequency per month;c) Number and class of passengers and crew;d) Types and number of meals to be served;e) List of catering equipment to be supplied by airline client; f) List and volume of aircraft spare parts and supplies, inflight

equipment, stores and commissary items, consistent with its own or airline client’s requirements (refer to Annex “__”);and;

g) Photos and description of proposed menu(s).

II.1.3. INSPECTION, EVALUATION, APPROVAL OF APPLICATION AND ISSUANCE OF LICENSE TO OPERATE A CBMW.

II.1.3.1 INSPECTION.

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Upon receipt of the application the District Collector shall immediately direct the inspection of the warehouse. The assigned inspector shall submit the photos and Inspection Report (refer to Annex "__”) within five (5) working days upon receipt of the directive.

ll.1.3.2 EVALUATION, APPROVAL AND ISSUANCE OF LICENSE.

1) The evaluation shall be made by the District Collector of Customs through the Chief, Warehouse Operating Division concerned or equivalent unit of the port having jurisdiction over the applicant’s warehouse by accomplishing the attached Evaluation Report (refer to Annex “__”) within five (5) days from receipt of the Inspection Report.

2) Upon receipt of the Indorsement of District Collector of Customs, the Customs Bonded Warehouse Committee shall conduct a final evaluation/deliberation and make the requisite recommendation(s) for consideration of the Commissioner of Customs.

3) The Commissioner of Customs shall issue a Certificate formalizing the applicant’s approved license.

II.2 PRE-OPERATING STAGE.

The application upon receipt of the approval by the Commissioner of Customs shall further comply with the following before actual operations begin:

1) Payment of fifty (50) percent of warehousing fees to the District Collector of Customs;

2) Filing of a Customs Performance Bond with the District Collector to guarantee compliance with the provisions of laws and regulations on customs bonded warehouse in the amount of P200,000.00;

3) Posting of an Import Processing Fund in accordance with CMO No. 23-1997;

4) Registration with the Client Profile Registration System (CPRS) and Customs Accreditation and Registration (CARE) Unit;

5) Filing of a Warehousing Bond for Raw Materials in such amount to guarantee the payment of duties and taxes in case the imported raw materials are not manufactured and exported within the prescribed period;

6) Filing of a General Warehousing Bond in such amount as may be required by the District Collector for Customs Public Bonded Warehouse and Airline/Airline Catering Customs Bonded

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Warehouse;

7) Submission of a Board Resolution and a notarized Power of Attorney designating the person authorized to sign or act in behalf of the bonded warehouse, and the brokers authorized to transact with the Bureau of Customs;

8) Submission of a notarized Oath of Undertaking by the President that the CBW Operator shall at all times comply with the terms and conditions of his license and pertinent Customs laws, rules and regulations (refer to Annex “___”);

9) Installation of the appropriate signages (i.e. assigned CBW Number, Certificate of Registration issued by the Bureau of Customs etc.)

10)Compliance with conditions, if any, as imposed and embodied in the Inspection Report;

11)Installation of an acceptable automated materials management inventory system

II.3 ACCREDITATION FOR SUBCONTRACTING.

II.3.1 GENERAL CONSIDERATIONS. A CBW operator who acts either as a principal or subcontractor shall file for accreditation with the District Collector of Customs or Subport Collector of Customs. Subcontracting activities shall be governed by the following conditions:

1) Subcontracting work shall be limited only to a portion of the production process.

2) Subcontracting work shall be due to insufficiency of operational facilities or lack of material time to meet export commitment.

3) Accreditation by other agencies shall be without prejudice to the accreditation license issued by the Bureau of Customs.

4) In case of garments, only pre-cut or cut to pattern materials shall be transferred.

5) Upon completion of the processing done by the subcontractor, finished materials and the resulting wastages, if any, shall be returned to the principal customs bonded warehouse, PEZA enterprise or Freeport Zone locator which shall be subject of examination by Customs personnel to fully account for the duty free raw materials used in processing.

II.3.1 DOCUMENTARY REQUIREMENTS. Only applications with complete documentary requirements shall be accepted.

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II.3.1.1 For Non-CBW / PEZA / Freeport Zone Registered Firms.

1) Duly accomplished and notarized Application Form (Annex “__”).


3) Plant Location Map showing access to the property, Plant Layout Plan and Mayor’s Business Permit;

4) In case of garments, GTIDO approved accreditation as subcontractor;

5) Formula of Conversion issued by Industrial Technology Development Institute; in case of garments, the formula approved by GTIDO;

6) Service/Subcontracting Contract/Agreement;

7) List and volume of materials to be subcontracted and stages of production to be subcontracted. Such volume must likewise be consistent with the submitted Formula of Conversion.

8) List of machineries and equipment and production capacity (refer to Annex “__”);

9) Clearances from the offices or equivalent units of the port having jurisdiction over the warehouse to be secured by the applicant together with the application.

10)Waiver of Motion 1704 (d) of the Tariff and Customs Code of the Philippines

II.3.1.2 For CBW / PEZA / Freeport Zone Registered Firms.

1. Duly accomplished and notarized Application Form (Annex “__”).

2. Service/Subcontracting Contract/Agreement.

3. List and volume of materials to be subcontracted.

4. For CBW operator, certified photo copy of last renewed license

5. For PEZA registered enterprise:

5.1 Certified photo copy of Certificate of Registration; and,

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5.2 Certified photo copy of Letter of Authority (LOA) approved by PEZA

6. For Freeport Zone locator:

6.1 Certified photo copy of Certificate of Registration; and, 6.2 Certified photo copy of Letter of Authority (LOA) approved by the

Freeport Zone Authority.

II.3.2 INSPECTION, EVALUATION AND APPROVAL OF APPLICATION AND ISSUANCE OF CERTIFICATE OF ACCREDITATION.

II.3.2.1 For Non-CBW / PEZA / Freeport Zone Registered Firms.

1) Upon receipt of the application the District Collector shall immediately direct the inspection of the warehouse. The assigned inspector shall submit the photos and Inspection Report (refer to Annex "__”) within five (5) working days upon receipt of the directive.

2) The evaluation shall be made by the District Collector of Customs through the Chief, Warehouse Operating Division concerned or equivalent unit of the port having jurisdiction over the applicant-subcontractor by accomplishing the attached Evaluation Report (refer to Annex “__”) within five (5) days from receipt of the Inspection Report.

3) Upon receipt of the Indorsement of the District Collector of Customs, the Customs Bonded Warehouse Committee shall conduct a final evaluation/deliberation and make the requisite recommendation(s) for consideration of the Commissioner of Customs.

4) The Commissioner of Customs shall issue a Certificate formalizing the applicant’s approved accreditation.

II.3.2.2 For CBW / PEZA / Freeport Zone Registered Firms.

1) The evaluation shall be made by the District Collector through the Chief, Warehouse Operating Division concerned or equivalent unit of the port having jurisdiction over the applicant-subcontractor by accomplishing the attached Evaluation Report (refer to Annex “__”) within five (5) days from receipt of the application.


3) The Commissioner of Customs shall issue a Certificate

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formalizing the applicant’s approved accreditation.

II.4 ACCREDITATION FOR MEMBERSHIP TO A CUSTOMS COMMON BONDED WAREHOUSE.

II.4.1 GENERAL CONSIDERATIONS.

1) Any person, natural or juridical, who is an export registered firm may apply for membership to a Customs Common Bonded Manufacturing Warehouse.

2) A manufacturer-exporter shall be accredited with only one CCBMW.

3) The accredited member shall maintain in their place of business and to make available for inspection their books of accounts, supporting documents and records of imported materials.

4) The CCBMW operator and the accredited member shall at all times be jointly and severally liable for any accountabilities with the Bureau of Customs including responsibility for the liquidation of all raw materials imported by the accredited member.

5) No direct transfer from the Customs Zone to the accredited member shall be effected unless first delivered to the premises of the CCBMW for examination and withdrawal.

6) The accredited member shall secure the materials imported through the CCBMW against pilferage and loss thru fire, flood, and other such occurrences.

7) An accredited member of a CCBMW which has not effected any importation/exportation within a minimum period of one year shall be cause for the cancellation of his accreditation without prejudice to the filing another application.

II.4.2 DOCUMENTARY REQUIREMENTS. The application for membership should be submitted to the District Collector of Customs or Subport Collector of Customs. Only applications with complete documentary requirements shall be accepted.



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3) Plant Location Map showing access to the property, Plant Layout Plan and Mayor’s Business Permit.

4) Certified photo copies of BOI Registration including the Terms and Conditions of registration and in case of garments, a GTIDO issued license.

5) Formula of Conversion issued by Industrial Technology Development Institute. In case of garments, the formula approved by GTIDO;

6) List and volume of Raw Materials to be imported. Such volume must be consistent with the submitted Formula of Conversion, Purchase Order or export performance two (2) years prior to application.

7) List of machineries and equipment and production capacity (refer to Annex “__”);

8) Toll Agreement, in case of consigned goods/materials;

9) Favorable indorsement from the appropriate recognized industry;

10)Clearances from the offices or equivalent units of the port having jurisdiction over the warehouse to be secured by the applicant together with the application. If under FTI also an indorsement by FTI Collector.

II.4.3 INSPECTION, EVALUATION AND APPROVAL OF APPLICATION AND ISSUANCE OF CERTIFICATE OF ACCREDITATION.

II.4.3.1 INSPECTION. Upon receipt of the application the District Collector shall immediately direct the inspection of the warehouse. The assigned inspector shall submit the photos and Inspection Report (refer to Annex "__”) within five (5) working days upon receipt of the directive.

II.4.3.2 EVALUATION AND APPROVAL OF APPLICATION AND ISSUANCE OF CERTIFICATE OF ACCREDITATION.


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II.4.4 TRANSFER OF MEMBERSHIP FROM ONE CCBMW TO ANOTHER.

II.4.4.1 GENERAL CONSIDERATIONS.

1) The transfer of membership from one CCBMW to another shall not affect the storage period of nine (9) months extendible, for sufficient reasons, for another 3 months from the date of original transfer or conveyance to the CCBMW.

2) In case of garments manufacturer, the transfer must have prior approval by the GTIDO.

3) A constructive warehousing entry(ies) shall be filed by the new CCBMW for the account of the member which shall be used to liquidate the previous import entry(ies).

II.4.4.2 DOCUMENTARY REQUIREMENTS. The application for transfer of membership should be submitted to the District Collector of Customs or Subport Collector of Customs. Only applications with complete documentary requirements shall be accepted.

1) Letter of intent to transfer membership to another CCBMW.

2) Notarized statement by the member that it has no outstanding obligation with its current CCBMW.

3) Written approval or objection and reason(s) thereof by the current CCBMW to the transfer within five (5) days from receipt of letter of intent.

4) Acceptance Letter of the new CCBMW and its assumption of all liabilities of the member.

5) Certification from the Customs Warehouseman of the proposed CCBMW that its warehouse has sufficient physical capacity to accommodate the volume of importations of the applicant.

II.4.4.3 EVALUATION AND APPROVAL OF APPLICATION AND ISSUANCE OF CERTIFICATE OF ACCREDITATION

1) The request shall be evaluated by the Chief, Warehouse

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Operating Division concerned or FTI Customs Collector, as the case may be, for preliminary evaluation and recommendation.

2) The Evaluation and Recommendation Report of the Chief, Warehouse Operating division concerned or FTI Customs Collector shall be submitted to the District Collector for his consideration.


4) The Commissioner of Customs shall issue a Certificate formalizing the applicant’s approved transfer of accreditation.

II.5 ACCREDITATION AS END-USER CLIENT OF AN INDUSTRY-SPECIFIC CUSTOMS BONDED WAREHOUSE.


1) Any person, natural or juridical, who is a registered manufacturer-exporter firm may apply for accreditation as end-user client of an Industry-Specific Customs Bonded Warehouse.

2) The accredited end-user client shall maintain in their place of business and to make available for inspection their books of accounts, supporting documents and records of imported materials.

3) No direct transfer from the Customs Zone to the accredited end-user client shall be effected unless first delivered to the premises of the ICBMW for examination and withdrawal.

4) An accredited end-user client of an ICBMW who has not effected any importation/exportation within a minimum period of one year shall be cause for the cancellation of his accreditation without prejudice to the filing another application.

II.5.2 DOCUMENTARY REQUIREMENTS. The application for accreditation as end-user client of an ICBMW should be submitted to the District Collector of Customs or Subport Collector of Customs. Only applications with complete documentary requirements shall be accepted.


2) Photo copies of Certificate of Registration with the SEC, Articles of Incorporation, and By-Laws duly certified by the Corporate Secretary; in case of partnership, photo copies of Articles of

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Partnerships; in case of sole proprietorship, Certificate of Registration with the Bureau of Domestic Trade.

3) In case of PEZA registered enterprise or Freeport Zone locator, certified true copy of its Certificate of Registration and Product Activity.

4) Plant Location Map showing access to the property and Mayor’s Business Permit.

5) Letter of Intent stating among others the List and volume of Raw Materials to be imported.

6) Favorable indorsement from the appropriate recognized industry;

II.5.3 EVALUATION AND APPROVAL OF APPLICATION AND ISSUANCE OF CERTIFICATE OF ACCREDITATION.

II.5.3.1 EVALUATION AND APPROVAL OF APPLICATION AND ISSUANCE OF CERTIFICATE OF ACCREDITATION.




II.6 ASSIGNMENT OF CUSTOMS PERSONNEL.

II.6.1 The District Collector shall assign customs personnel to efficiently and effectively supervise the operations of the warehouse. The Customs personnel to be assigned may consist of a Warehouseman, a Storekeeper and a Customs Guard. Their duties and responsibilities are enumerated in Annex "D".

II.6.2 Customs employees assigned to work in CBWs shall strictly observe regular work hours set by the Civil Service Commission.

II.6.3 Upon the request of the CBW Operator or whenever necessary, the

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Collector of Customs shall require customs personnel assigned thereat to render overtime service. All work performed outside of regular office hours and days shall be considered overtime, the rate of which shall be prescribed in pertinent orders on overtime work. Overtime pay shall be charged to the account of the CBW Operator who shall remit it to the Collector of Customs for appropriate payment to the customs personnel concerned.

II.7 CUSTODY OF LOCKS

The door to a customs bonded warehouse must be secured with two (2) padlocks; one set shall be kept by the Customs Warehouseman and the other by the CBW Operator. The CBW Operator may install other forms of security or locking devices subject to the approval of the Collector of Customs.

II.8 RESPONSIBILITIES OF A CBW OPERATOR / ACCREDITED MEMBER OR SUBCONTRACTOR

The customs bonded warehouse operator shall be responsible in the operation and maintenance of his warehouse. He shall governed and at all times comply with pertinent customs laws, rules and regulations. He shall have as additional duties those enumerated in Annex "E".

II.9 APPLICATION FOR ESTABLISHMENT OF AN EXTENSION WAREHOUSE

11.9.1 GENERAL CONSIDERATIONS.

1) The proposed extension warehouse shall be located within the area of jurisdiction of the Port over which the main warehouse is under.

2) Customs personnel shall be assigned thereat and separate books of accounts shall be maintained by the CBW Operator and customs.

3) The extension warehouse shall be subject to the payment of warehouse supervision fee.

11.9.2 DOCUMENTARY REQUIREMENTS. The application for establishment of an extension warehouse should be submitted to the District Collector of Customs or Subport Collector of Customs. Only applications with complete documentary requirements shall be accepted.

1) Letter Request; 2) Certified photo copies of Instrument evidencing absolute

ownership or lease contract covering the proposed warehouse (if lease, contract must have minimum period of 1 year);

3) Plant location map showing means of access to the property and

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plant layout plan showing and describing the size and construction of the proposed warehouse together with the intended use of each compartment; and,

4) Mayor’s Business Permit.

5) In case of garments manufacturer, the proposed extension warehouse must have prior approval from the GTIS.

II.9.3 INSPECTION, EVALUATION, APPROVAL OF APPLICATION AND ISSUANCE OF A LICENSE TO OPERATE AN EXTENSION WAREHOUSE.


Upon receipt of the application, the District Collector shall immediately direct the inspection of the warehouse. The assigned inspector shall submit the photos and Inspection Report (refer to Annex "__”) within five (5) working days upon receipt of the directive.

ll.9.3.2 EVALUATION, APPROVAL AND ISSUANCE OF LICENSE.


2) Upon receipt of the Indorsement of District Collector of Customs, the Customs Bonded Warehouse Committee shall conduct a final evaluation/deliberation and make the requisite recommendation(s) for consideration of the Commissioner of Customs.

3) The Commissioner of Customs shall issue a Certificate formalizing the applicant’s approved license for an extension warehouse.

II.10 APPLICATION FOR CHANGE OF NAME


An application for change of name found to have been filed to evade the payment of lawful duties, taxes or any other accountability with the Bureau of Customs shall be a ground for the filing of the appropriate administrative and or legal action against the applicant.

II.10.2 DOCUMENTARY REQUIREMENTS.

1. Letter Request

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2. Certified photo copy of Certificate of SEC Registration

3. Certified photo copy of Amended Articles of Incorporation

4. Certified photo copy of Amended By-Laws

5. Certified photo copy of New General Information Sheet/Business Profile

6. Certified photo copy of Board Resolution adopting the change of name

7. Notarized Affidavit of Undertaking 8. Clearances from the offices or equivalent units of the port having

jurisdiction over the warehouse to be secured by the applicant together with the application. If under FTI also an indorsement by FTI Collector.

II.10.3 EVALUATION AND APPROVAL OF APPLICATION AND ISSUANCE OF CERTIFICATE OF CHANGE OF NAME.

1) The evaluation shall be made by the District Collector of Customs through the Chief, Warehouse Operating Division concerned or equivalent unit of the port having jurisdiction over the applicant’s warehouse within five (5) days from receipt of the application.

2) Upon receipt of the Indorsement of the District Collector of

Customs, the Customs Bonded Warehouse Committee shall conduct a final evaluation/deliberation and note the application for change of name.

3) Upon the applicant’s surrender of his Certificate of Registration, the Commissioner of Customs shall issue a new Certificate of Registration formalizing the applicant’s approved change of name.

II.11 APPLICATION FOR RELOCATION


A customs bonded warehouse operator, accredited member, end-user client or subcontractor shall secure the approval of the Bureau of Customs prior to any relocation.

II.11.2 DOCUMENTARY REQUIREMENTS.

The application for relocation shall be filed with the District Collector of Customs or Subport Collector of Customs. Only applications with complete documentary requirements shall be accepted.

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1) Letter Request2) Warehouse Location Map3) Warehouse Layout Plan 4) Lease Contract for a minimum of one (1) year or Instrument

evidencing ownership of the premises5) Mayor’s Business Permit

II.11.3 INSPECTION, EVALUATION AND APPROVAL OF APPLICATION.



ll.11.3.2 EVALUATION, APPROVAL AND ISSUANCE OF AMENDED LICENSE.


2) Upon receipt of the Indorsement of District Collector of Customs, the Customs Bonded Warehouse Committee shall conduct a final evaluation/deliberation and note the application for change of location.

3) Upon the applicant’s surrender of his Certificate of Registration, the Commissioner of Customs shall issue a new Certificate of Registration formalizing the applicant’s approved change of location.

II.12 APPLICATION FOR RENOVATION


A customs bonded warehouse operator, accredited member, end-user client or subcontractor shall secure the approval of the Bureau of Customs prior to any renovation.

11.12.2 DOCUMENTARY REQUIREMENTS.

The application for renovation must be submitted to the District Collector of Customs or Subport Collector of Customs. Only applications with complete documentary requirements shall be accepted.

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1) Letter Request2) Warehouse Layout Plan – Previous3) Warehouse Layout Plan – Proposed

II.12.3 INSPECTION, EVALUATION AND APPROVAL OF APPLICATION.



II.12.3.2 EVALUATION AND APPROVAL OF APPLICATION FOR RENOVATION.

1) The evaluation shall be made by the Chief, Warehouse Operating Division concerned or equivalent unit by accomplishing the attached Evaluation Report (refer to Annex “__”) within five (5) days from receipt of the Inspection Report.

2) Upon receipt of the Indorsement of Chief, Warehouse Operating Division, the District Collector of Customs shall conduct a final evaluation/deliberation and approve the application for renovation.

II.13 APPLICATION FOR PROVISIONAL AUTHORITY FROM THE DISTRICT COLLECTOR


A customs bonded warehouse operator may be granted a provisional authority by the District Collector of Customs exercising jurisdiction over it for the following requests:

1. Request for relocation where it can be clearly shown that the security of the bonded articles is compromised;

2. Requests for increase in volume and/or inclusion of additional importable materials to meet export commitments, but to exclude articles as may be pre-determined by the Commissioner of Customs; and,

3. Request for accreditation as subcontractor to meet export commitments where the applicant is an existing CBW operator, PEZA enterprise or Freeport Zone locator.

II.13.1 OTHER CONSIDERATIONS AND CONDITIONS.

The grant of a provisional authority by the District Collector of Customs

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is conditioned upon the following:

1. That the applicant has submitted all the documentary requirements appurtenant thereto;

2. That the applicant shall submit a notarized Affidavit of Undertaking to pay the duties and taxes on its importations entered under the provisional authority if the same is denied by the Customs Bonded Warehouse Committee or the Commissioner of Customs;

3. That the Chief, Warehouse Operating Division has made an in-depth evaluation of the request and made a favorable recommendation;

4. That the provisional authority shall be for a period as may be determined by the District Collector and subject to his suspension or revocation;

5. That the provisional authority is without prejudice to the final action of the Customs Bonded Warehouse Committee or the Commissioner of Customs;

II.14 APPLICATION FOR RENEWAL OF LICENSE


1) The license to operate a bonded warehouse shall be valid for two (2) years from date of grant of the license, renewable every two (2) years thereafter. The license to operate an industry-specific customs bonded warehouse shall be valid for three (3) years from date of grant of the license.

2) The application for renewal shall be filed not later than six (6) months before the expiration of the license to operate a CBW.

3) Full disclosure of the information required in the application form is mandatory under the pain of administrative and/or criminal prosecution or disapproval of the application whichever may be just and appropriate.

4) No renewal of authority/license to operate a CBW shall be given unless upon certification or clearance duly issued by the appropriate Services/Divisions/Units concerned that the applicant has no outstanding obligation or liability whatsoever, monetary or otherwise, with the Bureau of Customs.

5) Failure to file an application for renewal six (6) months prior to expiry shall automatically render the CBW subject to the appropriate penalty.

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6) The Chief, Warehouse Operating Division shall give proper and timely notice to the CBW operator to afford the applicant sufficient time to file his application.

7) An application for renewal filed after the expiry of his license shall be considered as a new application.

8) In the case of a Common Customs Bonded Warehouse operator, all his accredited members shall simultaneously file their renewal of accreditation together with the principal CCBW.

11.14.2 DOCUMENTARY REQUIREMENTS.

The application for renewal must be submitted to the District Collector of Customs or Subport Collector of Customs. Only applications with complete documentary requirements shall be accepted.

1) Accomplished Application for Renewal duly Notarized (Annex “__”)

2) Annual Stock Inventory Report as of ___ (Annex “__”)

3) Certified photo copy of Payment of Current Warehousing Fee

4) Certified photo copy of General Warehousing and Performance Bonds for the current year

5) Certified photo copy of Original/Previous Approved Permit.

6) Original Bureau of Customs Clearance

7) Import/Export Performance Report for the last two (2) years and nearest quarter of the current year (Annex “__”)

8) Comparative Audited Financial Statements and Income Tax Returns submitted to the BIR for the last two (2) years

9) SEC Certification that the company has neither been dissolved nor has applied for dissolution

10)Copy of its Last Approved Consolidated Statement of Monthly

Material Import Requirements (Annex “__”)

II.14.3 EVALUATION AND APPROVAL OF APPLICATION AND ISSUANCE OF CERTIFICATE OF RENEWAL.


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2) Upon receipt of the Indorsement of the District Collector of Customs, the Customs Bonded Warehouse Committee, through the Office of the Deputy Commissioner, Assessment and Operations Group, shall conduct a final evaluation/deliberation and render a decision on the application for renewal.

3) Upon the applicant’s surrender of his Certificate of Registration, the Commissioner of Customs shall issue a new Certificate of Registration formalizing the applicant’s approved renewed license.

II.15 REVOCATION OF LICENSE OF A CUSTOMS BONDED WAREHOUSE AND CANCELLATION OF ACREDITATION OF A MEMBER OF A COMMON BONDED WAREHOUSE OR SUBCONTRACTOR


1) The warehouse/place of business of the CBW operator, accredited member or subcontractor shall be made accessible to all authorized Customs Officials or representatives upon presentation of an approved mission order issued by the District Collector or Commissioner of Customs or their authorized representatives.

2) The Deputy Commissioners - Assessment and Operations Coordinating Group, Intelligence and Enforcement Group or Revenue Collection Monitoring Group, Chief, Warehouse Monitoring and Audit Unit, the Chiefs of the Warehouse Operating Divisions, Chief, Warehouse Inspection Division, Chairman, Customs Bonded Warehouse Division, and such other Customs personnel or any government agency (e.g. GTIS) may initiate the filing of a revocation proceedings against the operator of a customs bonded warehouse, and cancellation proceedings against the accreditation of a member of a common customs bonded warehouse or subcontractor, by filing a formal request with the District Collector of Customs having jurisdiction over the CBW on the following grounds:

2.1 Failure to file application for renewal;

2.2 Filing an application for renewal found to contain false information;

2.3 Being inactive for at least one (1) continuous year, i.e., no importation, or if there is one, no corresponding legal withdrawal of imported goods or exportation of finished products; and,

2.4 Violation of Customs rules and regulations and those being implemented by another government agency in relation to

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the operation of a CBW

3) This is without prejudice to the authority of the Commissioner of Customs to order that revocation/cancellation proceedings be instituted against the CBW.

4) The CBW operator, accredited member or subcontractor may, upon written request, file for the revocation or cancellation of his license or accreditation.

II.15.2 PROCEDURES.

1) In case of a Customs initiated revocation or cancellation/complaint, the District Collector of Customs shall order the Chief, Law Division to conduct a hearing and allow the CBW operator to controvert the evidence of the prosecution.

2) The administrative proceeding should be summary in nature and should be terminated within seven (7) working days from receipt of the order.

3) The assigned Hearing Officer may, upon approval of the District Collector, continue the hearing beyond the seven (7) day period on valid grounds not intended to delay the disposition of the case, but in no case shall exceed the non-extendible period of another fifteen (15) days.

5) After termination of the hearing, an Order for Revocation of License or Order of Cancellation of Accreditation shall be issued by the District Collector (refer to Annex “__”).

5) In case of a Customs initiated revocation or cancellation/complaint, the Order shall specifically cite the facts and circumstances of the case and the grounds as basis for the revocation/cancellation thereof, or dismiss the complaint subject to the review of the Commissioner of Customs.

6) After the Order becomes final and executory, all importations by the CBW shall be withheld release unless duties and taxes are paid thereon.

7) The CBW operator shall settle all his accountabilties with the Bureau of Customs.

8) All finished products for export shall be allowed to be exported.

9) In case of an adverse decision by the District Collector, the CBW operator/accredited member or subcontractor may file an appeal or motion for consideration with the Commissioner of Customs within five (5) days from receipt of the Order for Revocation of

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License/Cancellation of Accreditation.

10)Any ruling by the District Collector short of revocation/cancellation shall be considered as an adverse decision and shall be subject to automatic review by the Commissioner of Customs.

II.15.3 POST REVOCATION/CANCELLATION PROCEDURES.

1) Upon the issuance by the District Collector of the Order for Revocation of License/Cancellation Of Accreditation, the Chief, Warehouse Operating Division shall immediately cause the written notification to the CBW Operator/Accredited member or subcontractor and the Chief, Warehousing Inspection Division or appropriate Unit for the immediate closure of the CBW by sealing and putting it under guard on a twenty four hour basis at the operator's expense.

2) Upon receipt of the Order for Revocation of License/Cancellation Of Accreditation, the CBW operator/member/subcontractor shall immediately surrender to the Chief, Warehouse Operating Division all the books, records, and other documents relative to and required for the operation of the CBW.

3) The Chief, Warehouse Operating Division concerned shall immediately cause a complete inventory of all imported articles, raw materials, goods-in-process, and finished products. The inventory shall indicate, among others, the corresponding entries.

3) The Chief, Warehouse Operating Division concerned shall determine the extent of the accountability or liability of the CBW operator/member/subcontractor.

5) All goods inventoried in the CBW shall be transferred to the security warehouse of the Bureau of Customs, unless the duties, taxes and other charges are paid thereon. Pending the transfer of the goods to the security warehouse, the expenses for the round-the-clock security under guard and the storage of the goods at the CBW shall be for the account of the concerned operator.

6) No warehousing fee shall be collected; fees already collected shall not be refunded.

7) The payment by the CBW operator/member/subcontractor of his secondary accountabilities or liabilities shall be without prejudice to any other liability, administrative, criminal or otherwise, which shall subsist.

II.16 OTHER APPLICATIONS

II.16.1 NOTICE OF SEC APPROVED MERGER OF A CUSTOMS BONDED

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WAREHOUSE

II.16.1.1 DOCUMENTARY REQUIREMENTS.

The application for cognizance of a SEC approved Articles of Merger for licensing purposes shall be submitted to the District Collector of Customs or Subport Collector of Customs. Only applications with complete documentary requirements shall be accepted.

1) Letter Request

2) Certified photo copy of SEC approved Certificate of Filing of the Articles and Plan of Merger

3) Certified photo copy of New General Information Sheet/Business Profile

4) Certified photo copy of Board Resolution adopting the merger

5) Notarized Affidavit of Undertaking 6) Clearances from the offices or equivalent units of the port having

jurisdiction over the warehouse to be secured by the applicant together with the application.

II.16.1.2 EVALUATION AND APPROVAL OF APPLICATION AND ISSUANCE OF CERTIFICATE ARISING FROM THE MERGER


2) Upon receipt of the Indorsement of the District Collector of Customs, the Customs Bonded Warehouse Committee shall conduct a final evaluation/deliberation and note the application for change of name.

3) Upon the applicant’s surrender of his Certificate of Registration, the Commissioner of Customs shall issue a new Certificate of Registration formalizing the applicant’s approved merger.

II.16.2 NOTICE OF SEC APPROVED CONSOLIDATION OF A CUSTOMS BONDED WAREHOUSE

A customs bonded warehouse who is a party to a consolidation shall be treated as a new application. Hence, all documentary requirements, evaluation and administrative procedures shall be governed by Section

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II.1

OPERATIONAL PROCEDURES FOR AIRLINE AND AIRLINE CATERING CUSTOMS BONDED WAREHOUSE:

A. IMPORTATION:

I. DOCUMENTARY REQUIREMENTS: The operator shall file an Informal Entry (BC Form 177) together and Warehousing Permit (BC Form 198) together with other required documents:

1. Transshipment Permit, if any 2. Bill of Lading/Air Waybill3. Invoice4. Packing List5. Bond for Transit Cargo, in case of Transshipment6. Transit Cargo Manifest, in case of Transshipment7. License/Permit from appropriate government agency, if any

II. PROCEDURES:

1. The CBW operator or his authorized representative shall submit his request to the accredited Value Service Provider for encoding, manifest write-off, and collection of applicable fees.

2. Documents shall be presented to the Warehouse Assessment Unit (WAU) for assessment and collection of duties, taxes and penalties if any for: (1) Excess materials; (2) Materials not included in the approved List of Importable Materials; and, (3) Articles not covered by a favorable Indorsement from the Department of Finance.

3. Copies of the Informal Entry, Warehousing Permit and other documents shall be submitted to the Bonds Division.

4. Documents cleared by the WAU shall be forwarded to the Customs Bonded Warehouse Division (CBWD) for cross-checking against the approved importable list, encoding and processing by the Customs Account Officer and the Chief, CBWD. Copies of documents are retained.

5. Boat Note shall likewise be prepared by the Customs Account Officer for transmittal to the Warehouseman, Customs Public Bonded Warehouse for the release of the cargo to the Customs Guard of the Airline/Airline Catering CBW or Aircraft Operations Division.

6. Cargo is received at the warehouse by representative of the airline/airline catering CBW and by the Customs Warehouseman/Storekeeper assigned thereat by affixing their signatures on the Boat Note. Copies of documents including the Boat Note are retained by the CBW operator and Customs

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Warehouseman/Storekeeper and encoded in their respective data base.

7. Signed copy of Boat note is returned to the CBWD.

B. WITHDRAWAL OF ARTICLES:

I. DOCUMENTARY REQUIREMENTS: The operator shall accomplish a controlled/pre-numbered Requisition Slip which shall contain the following information:

a. Date of Requestb. Entry Numberc. Description of Unit of Measure of Articles to be Withdrawnd. Volume of Articles to be Withdrawne. Name of Airline(s) where articles are to be used. In case of inflight

stores, the Flight Number, Destination and Date of Loading must be indicated.

f. Other related informationg. Name of Requesting Partyh. Name of Approving Customs Officeri. Name of Receiving Party

II. PROCEDURES:

1. The operator shall file a signed controlled/pre-numbered Requisition Slip with the Customs Warehouseman.

2. The Customs Warehouseman verifies the data in the Requisition Slip versus his data, encodes the withdrawal and proceeds to the assigned compartment for the withdrawal of articles.

3. The Customs Warehouseman affixes his signature and turns over the articles to the CBW representative.

4. The CBW representative receives the goods and affixes his signature on the Requisition Slip.

5. Copies of the Requisition Slip are each retained by the CBW operator and Customs Warehouseman.

C. WITHDRAWAL OF ARTICLES FOR BONDED TO BONDED/PEZA/FREEPORT ZONE TRANSFER:

I. GENERAL CONSIDERATIONS:

Articles may be the subject of a bonded to bonded/PEZA/Freeport Zone transfer under the following conditions:

1. Termination of catering service agreement;2. Repair works to be undertaken; and,

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3. Threat of strike, lockout and other circumstances which, upon the determination of the District Collector, may be prejudicial to the security of the articles or the smooth operations of the warehouse

II. DOCUMENTARY REQUIREMENTS: The operator shall submit the following documents:

1. Letter Request;2. Letter of Intent for New Catering Service Agreement;3. PEZA Form 8105 or Freeport Zone Bring-In Permit; 4. List and Volume of Articles subject of request for transfer;5. Certification of Warehouseman that the Goods are Still Intact;6. Certificate of Identification duly signed by the operator and Customs

Warehouseman 7. Boat Note; 8. Invoice;9. Packing List; and,10.Prepared Indorsement Form for Transfer

III. PROCEDURES:

1. The operator shall file with the District Collector Attention: The Chief, Customs Bonded Warehouse Division, a request with all documentary requirements attached.

2. The Customs Account Officer shall verify all information contained in the request. If in order, he shall prepare an Indorsement for the signature of the Chief, CBWD to the WAU for the examination of goods.

3. The Customs Examiner, WAU shall proceed to examine the goods at the warehouse of the applicant, issue the corresponding findings and affix his signature on the Certificate of Identification. The Chief, WAU shall indorse the same to the Chief, CBWD.

4. The Customs Account Officer shall verify the findings of the Customs Examiner against the request. If in order, he shall affix his initial on the prescribed Indorsement for the signature of the Chief, CBWD who shall transmit the same to the Deputy Collector for Operations.

5. The Deputy Collector for Operations affixes his signature on the prescribed Indorsement to signify his concurrence and transmits it to the District Collector for his approval.

6. The District Collector approves the transfer by affixing his signature on the prescribed Indorsement and transmit the same to the Chief, CBWD for implementation.

7. The approved Indorsement with all its attachments is received by

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the CBW operator, copy furnished the Customs Warehouseman.

8. The procedures on withdrawal as provided in Section B are followed. Articles are delivered under continuous guard by the Customs Guard of the CBW or the Aircraft Operations Division until received by the recipient and Customs officer assigned thereat who shall affix their signatures on the Boat Note. The Boat Note shall be returned to the CBW where the goods originated.

9. The recipient of the goods shall file the requisite Constructive Import Entry, CEWE or other Customs Import Declaration.

10. In case of repair works, all articles must be returned to the CBW where the goods originated including unserviceable items provided by it.

D. EXPORTATION OF ARTICLES:

I. GENERAL CONSIDERATIONS: Articles may be the subject of exportation under the following conditions:

1. Expired, reject, unserviceable, unsaleable articles;2. Repair and calibration works; 3. Articles requested by international airline for use in its other

outbound stations;4. Disposition through sale to foreign buyer; and,5. Other circumstances which, upon the determination of the District

Collector, are reasonable and meritorious.

II. DOCUMENTARY REQUIREMENTS: The operator shall submit the documents:

1. Letter Request;2. List and Volume of Articles subject of request for transfer;3. Certification of Warehouseman that the Goods are Still Intact;4. Certificate of Identification; signed by the CBW operator and

Customs Warehouseman 5. Certification of Inspection and Loading;6. Boat Note; 7. Invoice and Packing List; and,8. Prepared Indorsement Form for Transfer

III. PROCEDURES:


2. The Customs Account Officer shall verify all information contained in the request. If in order, he shall prepare an Indorsement for the

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signature of the Chief, CBWD to the WAU for the examination of goods.





7. The approved Indorsement with all its attachments is received by the CBW operator, copy furnished the Customs Warehouseman.

8. The procedures on withdrawal as provided in Section B are followed. Articles are delivered under continuous guard by the Customs Guard of the CBW or the Aircraft Operations Division until received at the Export Division of the Port of Loading. The Customs officer assigned thereat shall affix his signature on the Boat Note which shall be returned to the CBW where the goods originated.

E. DISPOSITION OF ARTICLES THROUGH LOCAL SALE

I. GENERAL CONSIDERATIONS: Articles imported by airlines may not be disposed of through local sale unless authorized by the Department of Finance.


1. Letter Request;2. Favorable Indorsement from the Department of Finance;3. List and Volume of Articles subject of request of local sale;4. Certification of Warehouseman that the Goods are Still Intact;5. Certificate of Identification; signed by the CBW operator and

Customs Warehouseman 6. Invoice and Packing List; and, 7. Prepared Indorsement Form for Local Sale

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III. PROCEDURES:1. The operator shall file with the District Collector Attention: The

Chief, Customs Bonded Warehouse Division, a request with all documentary requirements attached.


3. The Customs Examiner, WAU shall proceed to examine the goods at the warehouse of the applicant, issue the corresponding findings and affix his signature on the Certificate of Identification. The Chief, WAU shall indorse the same to the Chief, Collection Division for collection of duties and taxes. Thereafter, all documents including the BOC Official Receipt, shall be forwarded to the Chief, CBWD.




7. The approved Indorsement with all its attachments is received by the CBW operator, copy furnished the Customs Warehouseman.

8. The procedures on withdrawal as provided in Section B are followed.

F. DISPOSITION OF ARTICLES THROUGH CONDEMNATION I. GENERAL CONSIDERATIONS: Expired, reject, unserviceable,

unsaleable articles may be disposed of through condemnation.


1. Letter Request;2. List and Volume of Articles subject of request of condemnation;3. Notarized Certification from the CBW operator that the articles

subject of request are either expired, reject, unserviceable, or

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unsaleable.4. Certification of Warehouseman that the Goods are Still Intact;5. Certificate of Identification; signed by the CBW operator and

Customs Warehouseman 6. Prepared Certificate of Condemnation and Destruction

III. PROCEDURES:




4. The Customs Account Officer shall verify the findings of the Customs Examiner against the request. If in order, he shall affix his initial on the prescribed Certificate of Condemnation and Destruction for the signature of the Chief, CBWD who shall transmit the same to the Deputy Collector for Operations.

5. The Deputy Collector for Operations affixes his signature on the prescribed Certificate of Condemnation and Destruction to signify his concurrence and transmits it to the District Collector for his approval.

6. The District Collector approves the transfer by affixing his signature on the prescribed Certificate of Condemnation and transmit the same to the Chief, CBWD for implementation.

7. The Customs Account Officer shall inform the CBW operator of the approval of his request and set the schedule of condemnation. A Letter of Notification shall be sent to the Commission on Audit.

8. The procedures on withdrawal as provided in Section B are followed.

9. The condemnation shall be witnessed and signed by the following:

9.1 CBW Operator9.2 Customs Warehouseman9.3 Representative from the Commission on Audit

10. A copy of the Certificate of Condemnation and Destruction shall be kept

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by the Customs Account Officer.

G. VALIDATION OF CONSUMPTION OF MATERIAL IMPORTS BY AIRLINE CATERING CUSTOMS BONDED WAREHOUSE

I. GENERAL CONSIDERATIONS: Articles withdrawn by airline catering customs bonded warehouse shall be validated against actual usage every six (6) months. Articles withdrawn in excess of actual meal requirements shall be subject to the collection of duties and taxes.

II. REPORTORIAL REQUIREMENTS: The operator shall submit the following reports:

1. Monthly Report on the Number of Meals Prepared and Loaded per airline-client every six (6) months (Refer to Annex “_”);

2. Summary of Number of Meals Prepared and Loaded covering the six (6) months period;

3. Monthly Report on Material Usage Requirements per airline-client every six (6) months (Refer to Annex “_”); and,

4. Summary of Material Usage Requirements covering the six (6) months period.

III. PROCEDURES:

1. The operator shall submit the above reports to the Customs Warehouseman assigned to the warehouse.

2. The Customs Warehouseman shall prepare and submit to the Chief, CBWD through the Customs Account Officer, the reports of the CBW operator and the following:

2.1 Monthly Report on Articles and Volume Withdrawn every six (6) months (Refer to Annex “_”); and,

2.2 Comparative Report on Articles and Volume Withdrawn versus Monthly Report on Material Usage Requirements every six (6) months.

3. The Customs Account Officer shall validate the reports submitted. A Discrepancy Report for articles withdrawn and ascertained to be in excess of actual meal requirements shall be prepared and submitted to the Chief, CBWD together with an Indorsement to the WAU.

4. The Chief, WAU shall make an assessment of the duties and taxes due and shall indorse the same to the Chief, Collection Division for collection of duties and taxes.

5. Thereafter, all documents including the BOC Official Receipt, shall be

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forwarded to the Chief, CBWD.

CHAPTER 7 – SPECIAL ASSESSMENTS

SECTION 1 – PREVIOUSLY OWNED VEHICLES UNDER THE NO-DOLLAR IMPORTATION SCHEME

1. Conditions to Import Previously Owned Vehicles (POV) Under the No-Dollar Importation (NDI) Scheme:

1.1 There is no outflow of dollar or any foreign exchange from the Philippines as the importer is the registered owner at the country of exportation;

1.2 Vehicles under this regulation are only those with gross vehicle weight not exceeding three (3) tons;

1.2.1 previously owned or registered under the name of a returning resident or immigrant at least six (6) months prior to the date of application for permit to import with the Bureau of Import Services (BIS);

1.2.1.1 Returning resident refers to a Filipino citizen who has stayed in a foreign country for at least one (1) year and which residency shall be accumulated within the three (3) year period immediately preceding the date of filing of the application to import POV.

1.2.1.2 Immigrant refers to a person issued any of the following types of who under the Philippine Immigration Act of 1940, as amended:

a. A Filipino citizen and a holder of 13G Visa under Section 13 Sub. G(13G); or

b. A foreign national married to a Filipino and a holder of 13A Visa under Section 13, Sub. A (13a); or

c. A Filipino citizen and holder of 47A issued to awardees of Special Government Projects (SPG) e.g. Philippine Retirement Authority and Balik-Scientist Program. (Part II, Sec. 1.a.3, Guidelines on E.O. 156)

2. Administrative Provisions

2.1 Basis of Dutiable of Value of POV under NDI Scheme.

2.1.1 Transaction Value or Method One is not the applicable valuation method for the no-dollar importations of previously owned vehicles under this regulation because there is no sale for export under this kind of importation. Method Two and Method Three are likewise not appropriate as previously accepted Transaction Values of POV and

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NDI are non-existent as Method One is deemed not applicable. Method Four finds no application either as by the nature of previously owned vehicles comparison is not appropriate. Method Five is not applicable either as the qualified importer who is also the exporter is not the manufacturer of the vehicle which is subject of valuation. Method Six therefore is deemed the applicable valuation method.

2.1.2 Blue Book Value or Red Book Value, Karo or World Car Book or other similar publications shall be the basis of dutiable value of POV under NDI with applicable straight line depreciation method of ten per cent (10%) per annum maximum of fifty per cent (50%) depreciation.

2.1.3 POV imported under the NDI scheme cannot be sold, transferred, bartered or its use assigned by the importer within the period of three (3) years from date of entry.

2.1.4 Duties and taxes due:

2.1.4.1 Customs duty shall be based on MFN but subject to preferential tariff upon presentation of valid Certificate of Origin;

2.1.4.2 Ad valorem tax shall be based on BIR rules and regulations under current regulation of which shall be based on landed cost; and

2.1.4.3 Value-added tax shall be based on BIR rules and regulations under current regulation is 12% on landed cost inclusive of ad valorem tax.

2.1.5 All imported personally owned motor vehicles found to be in violation of any provision of E.O. 156 shall be subject to seizure without redemption by the BOC and will not be subject to registration by the Land Transportation Office (LTO) unless disposed of in accordance with the Tariff and Customs Code. Neither shall settlement by payment of fine be availing as the importation in violation of EO 156 as the release of the articles will be contrary to law.


2.3.1 Documents to be presented together with the IEIRD/SAD in customs clearing process:

2.3.1.1 Bill of Lading;

2.3.1.2 Original copy of BIS Certificate of Authority to Import. When NSW facilities are already operational this requirement may be deleted;

2.3.1.3 Original copy of BIS Release Authority. When NSW facilities are already operational this requirement may be deleted;

2.3.1.4 Authenticated copy of document to prove that vehicle imported is original left-hand drive vehicles (i.e., conversion from original right-

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hand drive to left-hand drive) will only be allowed when it is covered by a road safety certificate issued by appropriate government agency in the country where the used motor vehicle will be imported;

2.3.1.5 Authenticated copy of roadworthiness and emission standards as certified by authorized agency in the country of origin and duly authenticated by the Philippine Embassy or Commercial Attaché;

2.3.1.6 Authenticated copy of old and new passport, with complete pages and stamped with valid 13A or 13G visa for immigrant importer;

2.3.1.7 Authenticated copy of car registration or title, with English translation if necessary;

2.3.1.8 Duly notarized waiver of ownership by registered co-owner/s in case the vehicle is registered in the names of two or more persons;

2.3.1.9 Alien Certificate of Registration (ACR) and Immigrant Certificate of Residence (ICR) for immigrant importer;

2.3.1.10 If importer is a returning resident authenticated copy of pages in passport showing stay abroad for an accumulated period of three (3) years before securing BIS Certificate of Authority to Import;

2.3.1.11 Affidavit under oath that the vehicle imported will not be sold, transferred or its use assigned within three (3) years from date of covering import entry filing; and

2.3.1.12 Affidavit under oath describing in specific terms vehicle being imported following the convention on description of vehicles.

2.3.2 The importer shall be treated as once-a-year importer and be accredited for the purpose of lodging covering import entry in the e2m Customs System.

2.3.3 The customs clearing process follows the regular processing of regular imported article except a special procedures in the issuance of Certificate of Payment (CP).

2.4 Reportorial Requirements

2.4.1 District Collectors through their respective Formal Entry Divisions (FED) in coordination with MISTG shall submit report on all importations of Personally Owned Vehicles to the Department of Trade Industry (DTI) Attn: Director, Bureau of Import Services as provided for under Section 4.1.2 of E.O. 156. Such information shall be submitted every month not later than 15 days after the end of the reference month.

SECTION 2 – IMPORTATION OF BRAND NEW AUTOMOBILES

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CONSIGNED TO MANUFACTURERS/DEALERS AND INDIVIDUALS

2.1. Definition of Terms

2.1.1 Automobile

Shall refer to any four (4) or more-wheeled motor vehicle regardless of seating capacity, which is propelled by gasoline, diesel, electricity or any other motive power; provided that, for purposes of these Regulations, buses, trucks, cargo van, jeeps/jeepneys/jeepney substitutes, single cab chassis, and special purpose vehicles as herein defined shall not be considered as automobiles.

Any motor vehicle, though referred to or otherwise denominated as truck, cargo van, jeep/jeepney/jeepney substitute, bus, single cab chassis, or special purpose vehicle, but not falling within the purview of the definitions stated in these regulations shall be classified as automobile and therefore subject to excise tax. (Chapter I, Sec. 2.b, BIR RR 25-2003)

2.1.2 Completely Build Up (CBU)

Shall refer to vehicles imported in completely assembled form and ready for use by the consumers. (Chapter I, Sec. 2.m, BIR RR 25-2003)

2.1.3 Importer

Shall refer to any person bringing motor vehicles into the country from a foreign country for the purpose of sale, for personal use or for use in business. It shall also refer to persons/enterprises duly registered with legislated freeport zones who purchase motor vehicles from establishments located within the customs territory. This shall also include owner/possessor/purchaser or transferee of motor vehicles intended for exclusive used within the freeport zone but are introduced or re-introduced into the customs territory. (Chapter I, Sec. 2.j, BIR RR 25-2003)

2.1.4 Manufacturer / Assembler

Shall refer to any person or group of persons, juridical or otherwise, who produces, assembles, fabricates, or otherwise manufactures a motor vehicle by combining body frame/chassis, engine, drive-train, suspension and other automotive parts, or one who alters any part of a motor vehicle to meet the specification of an automobile and render it fit for registration with the Land Transportation Office. It shall also include any person which manufactures, assembles, or fabricates motor vehicles from surplus and/or used parts. (Chapter I, Sec. 2.i, BIR RR 25-2003)

2.1.5 Semi-Knocked Down (SKD)

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Shall refer to parts and components for assembly purposes that are imported in partially assembled condition. SKDs include semi-assembled vehicles, for purposes of ad valorem tax the same shall be treated as CBU. (Chapter I, Sec. 2.l, BIR RR 25-2003)

2.1.6 Total Landed Value

Shall refer to the total of the (i) market value of the motor vehicles imported as indicated in the motor vehicle reference books, such as the Japanese and U.S. Red Book, Karo and World Car Book on automobile utility vehicles and other motor vehicles, or the dutiable value as defined in Sec. 201 of the Tariff and Customs Code of the Philippines as amended, whichever is higher; (ii) customs duties paid on the imported goods; and (iii) all other charges arising from, or incident to, the importation. (Chapter I, Sec. 2.h, BIR RR 25-2003)

2.1.7 Brand new automobile

To be considered brand new, the automobile shall be (a) of current or advance year model in the country of origin and/or manufacture, or (b) of year model immediately preceding year in the country of origin and/or manufacture provided that:

2.1.7.1 The automobile has a mileage of not more than 200 kilometers; and

2.1.7.2 The automobile has been acquired by the importer from the dealer as first owner.


2.2.1 Basis of Dutiable of Value of Brand New Automobiles

The primary method in determining the dutiable value of brand new automobiles is the Transaction Value and the alternative methods of valuation in sequential manner depending on the circumstances attendant to the importation.

2.2.2 Ad Valorem Tax

There shall be levied, assessed and collected an ad valorem tax on automobiles based on the importer’s selling price, net of excise and value-added tax, in accordance with the following schedule: (Chapter II, Sec. 4, BIR RR 25-2003)

Net Manufacturer’s/Importer’s Selling Price Tax Rate

Up to P600,000.00 2%

Over P 600,000.00 to P 1,100,000.00 P 12,000.00 plus 20%

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of the value in excess of P600,000.00

Over P 1,100,000.00 to P 2,100,000.00 P 112,000.00 plus 40% of the

value in excess of P1,100,000.00

Over P 2,100,000.00 P 512,000.00 plus 60% of the

value in excess of P2,100,000.00

2.2.3 The importer’s selling price shall refer to the price, net of excise and value added taxes, at which locally manufactured/assembled or imported automobiles are offered for sale by importer to the dealers, or to the public directly or through their sales agents, as reflected in the importer’s sworn statement duly filed with the BIR, or in their sales invoices/official receipts, whichever is higher. provided, that in computing the importer’s selling price, it shall always include the value of car air conditioner, radio and mag wheels including the cost of installation thereof whether or not the same were actually installed in the automobile. Provided, further, that in no case shall the importer’s selling price be less than the amount computed as follows:

80% x (Suggested Retail Price – Excise Tax –Value-Added Tax).

Provided, furthermore, that the importer’s selling price shall in no case be less than the cost of importation plus the industry profit margin of ten percent (10%) and other expenses incurred before the automobiles are sold to the market, provided, finally that the suggested retail price shall not be less than the actual selling price of the automobiles when sold to the market.

The value of other factory-installed accessory or optional equipment such as wheel covers, or any other attachment installed on the unit removed or sold, or previously removed and returned for purposes of installation thereof, as well as the costs of installation of the accessory, shall likewise form part of the importer’s selling price. In cases where accessories are installed outside the production/ assembly plant or after the release from the customs custody but before the actual sale of the imported automobile, as the case may be, and the costs of such accessories and the cost of the installations shall form part of the expenses of the importer, all subsequent billings therefore by the manufacturer/assembler or importer to the dealer or customer shall form part of the selling price. (Chapter II, Sec. 5, BIR RR 25-2003)

2.2.4 In case of automobiles that are imported for personal use and not for sale by the importer, the excise tax shall be computed based on the total landed value. Importation of more than one automobile unit by the same importer or the sale or transfer of an imported automobile within a twelve (12)-month period shall not be considered as importation not

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intended for sale for purposes of the preceding paragraph of this section.

Should there be importations of automobiles made in the name of several buyers but represented by a single person/entity, such importations shall be deemed an importation of automobile for resale; therefore, subject to ad valorem tax based on importer’s selling price to be paid by such person/entity representing the individual buyers. (Chapter II, Sec. 7, BIR RR 25-2003)


2.2.1 Shipping documents required for customs clearance

2.2.1.1 Bill of Lading which shall describe the importation according to the convention in the description of motor vehicles;

2.2.1.2 Commercial Invoice which shall describe the importation according to the convention in the description of motor vehicles;

2.2.1.3 In case the importer is a corporation or an individual in the business of importing vehicles for sale, authenticated copy of importer’s sworn statement filed with BIR selling price of the importation for sale to a dealer or to the general public and authenticated copy of actual sales invoice/official receipts issued when sale was conducted.

2.2.1.4 In case the importer is a corporation or individual who intends to use personally the vehicle being imported an affidavit under oath of undertaking that “he intends to use the imported vehicle for at least one (1) year from date of import entry filing and that if he sells the vehicle before the lapse of one (1) year period he shall pay the difference in ad valorem tax between what he paid from the Bureau of Customs and the actual selling price of the vehicle.”

The Certificate of Payment and LTO certification shall include the notation” NOT TO BE SOLD WITHIN ONE (1) YEAR. IF SOLD WITHIN ONE (1) YEAR FROM DATE OF IMPORT ENTRY FILING THE OWNER MUST SECURE CLEARANCE FROM THE BUREAU OF CUSTOMS.”

2.3 Issuance of Certificate of Payment

2.3.1 Administrative Provision

The regulations and procedures in the issuance of Certificate of Payment for brand new vehicles is the same as that of POV imported under the NDI scheme.

2.3.1.1 The District Collector shall issue / transmit the CP’s of motor vehicles under the following categories:

a. Personally owned motor vehicles or those for personal use;

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b. Importations of privileged individuals and entities (embassies, multinationals, ADB’s, etc.); and

c. Those subject of auction sales, settlement and/or redemption which are clearly personally-owned or for personal use. (Sec. 3.1.1, CMO 20-2011)

2.3.1.2 The Deputy Collector for Assessment shall issue and transmit CPs for all types of motor vehicle importations by members of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Automotive Vehicles Importers and Distributors (AVID), including motorcycles, semi-knocked down units and importations by members of said associations. (Sec. 3.1.2, CMO 20-2011)

2.3.1.3 To maintain the integrity of CPs, all blank CP forms shall be under the custody and safe-keeping of the Deputy Collector for Administration. (Sec. 3.2, CMO 20-2011)

2.3.1.4 To contain the distribution of blank CP forms for processing, the same shall be issued only upon formal written request from the FED Chief or any equivalent unit. The Chief FED, shall attach the working copy of the entry to the letter request to ensure that CP forms are issued in quantities enough for processing at any given time. (Sec. 3.3, CMO 20-2011)

2.3.1.5 The Deputy Collector for Administration shall provide the Chief FED or equivalent a daily report on the number of blank CP forms issued for reconciliation with the actual number of CPs processed for the day to determine if any CP remains accountable or not. (Sec. 3.4, CMO 20-2011)

2.3.1.6 In order to establish and maintain a comprehensive and updated database of all Brand New Vehicles processed and cleared through Customs, all heads of offices / sections or units concerned are hereby directed to submit to the EMVMCO a report on said importations in such a format as the EMVMCO shall require. (Sec. 3, Par. 1, CMO 27-2011)

2.3.1.7 For a centralized and coordinated approach on all kinds of queries received by the Bureau pertaining to CP issuances, all requests for verification of validity or authenticity of CP’s shall be referred to the EMVMCO which shall take the necessary action, including the verification of the correctness of the duties & taxes paid on the motor vehicle subject of the request / query. (Sec. 3, Par. 2, CMO 27-2011)

2.3.2 Operational Provisions

2.3.2.1 All import entries covering brand new motor vehicles before final assessment by the Customs Examiner / Appraiser of the duties and

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taxes due shall be indorsed to the Enforcement and Security Service Motor Vehicles Monitoring and Clearance Office (EMVMCO) for issuance of “Clearance of No Derogatory Information”. (Sec. 2, CMO 27-2011)

2.3.2.2 The EMVMCO upon receipt of the covering import entries shall check if the imported vehicle is the subject of any derogatory information received. The EMVMCO may also acquire the submission by the importer / consignee of an affidavit and other documents attesting to the legitimacy of the source / acquisition of the same. If none, the Chief EMVMCO shall issue a Certification or Clearance attesting that the importation is not the subject of any derogatory information. (Sec. 4.2, CSO 30-2011)

2.3.2.3 Prior to release of the import documents, the assigned EMVMCO personnel shall encode in the database established and maintained for such purpose, all pertinent details regarding the subject importation. (Sec. 4.3, CSO 30-2011)

2.3.2.4 Preparation of the CP shall be done by the concerned customs examiner of Section 5, FED or equivalent unit who retrieves the data submitted electronically by the importer / applicant applying for CP. (Sec. 4.1, CMO 20-2011)

2.3.2.5 The assigned customs examiner validates whether the engine and chassis number and the Vehicle Identification Number (VIN) as encoded by the importer / applicant matches with the details provided in the import entry filed with the Bureau. If the same matches, he / she then prepares the hard copy of the CP for review by the principal examiner and appraiser. (Sec. 4.2, CMO 20-2011)

2.3.2.6 The principal examiner and appraiser shall evaluate and review the CP prepared by the Customs Examiner against the encoded data. If in order, the accomplished CP shall be distributed and forwarded to the concerned officials, otherwise the CP shall be returned to the Customs Examiner assigned for further review / validation. (Sec. 4.3, CMO 20-2011)

2.3.2.7 The Collection Division Chief shall encode the amount paid and the official receipt number in the e-CP System and tagged it “paid.” (Sec. 4.4, CMO 20-2011)

2.3.2.8 The District Collector shall approve the CP by “tagging” it as approved and “post-evaluates” (transmits) the same electronically to the LTO. (Sec. 4.5, CMO 20-2011)

2.3.2.9 In the entire process of CP preparation and its transmittal to the LTO, it is understood that the motor vehicle importation has complied with all existing rules and regulations, particularly CAO No. 8-2007 on the specific description of imported articles. (Sec. 4.6, CMO 20-2011)

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2.3.2.10 To maintain the operational efficiency of the offices / units concerned and avoid delays in the electronic transmittals of CP to the LTO, the District Collector is hereby directed to ensure that in case absence of the primary official concerned, an alternate official is designated to assume the responsibility of transmitting electronically the CPs to LTO. (Sec. 4.7, CMO 20-2011)

2.3.2.11 Amendments of Certificate of Payment

2.3.2.11.1 Request for amendment/s of CP’s shall be filed with the District Collector of the port where the CP was originally issued through a formal letter-request for amendment together with a copy of the CP subject of the request. (Sec. 5.1, CMO 20-2011)

2.3.2.11.2 Request for amendment/s of CP’s issued under the BOC’s e-CP System shall be filed with the Deputy Collector for Assessment or Chief, Formal Entry Divisions, for action. (Sec. 5.2, CMO 20-2011)

2.3.2.11.3Amendment/s of CP’s issued prior to the implementation of the e-CP System shall be indorsed to the Office of the Commissioner (Attn: Chief of Staff) for transmittal to the LTO. (Sec. 5.3, CMO 20-2011)

SECTION 3 – TREATMENT OF IMPORTED ARTICLES DECLARED AS OFF-QUALITY

(Ref: CMO 21-2008)


All shipments/importations declared in the shipping/commercial invoice and entry as stocklots, side-runs, cull rolls, seconds, mill lots, off-grade, B-grade, C-grade, second-hand, off-specs, substandard, off-quality, overruns, sweepings, overflow, recycled, ‘waste-waste’, reconditioned, refurbished, re-fashioned, surplus, scrap, scrap metals, metal waste, cut-up, bath-roll, odd lengths, unbranded and other similar descriptive terms, shall be:

3.1.1 Subject to 100% examination in the presence of PCCI/FPI technical expert. Their absence shall however not deter the conduct of the examination;

3.1.2 Subject to clearance by the District Collector who shall be the Principal Accountable Officer.

3.1.3 Accompanied by a duly notarized Manufacturer’s and/or Supplier’s Certificate of Quality as to the actual condition/quality of the articles/s, indicating therein the attributes/qualities in physical measurable terms, such as but not limited to:

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3.1.3.1 Standard for the product being imported;3.1.3.2 Deviation from such standard which reduced its quality.

3.1.4 The Manufacturer’s and/or Supplier’s Certificate shall be authenticated by the Commercial Attache or Consulate at the Country of Origin as to the quality of the shipment and not merely an authentication on the genuineness of the signature of the document issued. Otherwise, the same shall not be considered by the Bureau.

3.1.5 Subject to Laboratory analysis by the Philippine Customs Laboratory. In case of unavailability of apparatus/equipment, PCL may indorse the article/s or sample thereof to the DOST or other accredited laboratories for analysis.

3.1.6 In the absence of the requirements prescribed under Sections 3.1.3 and 3.1.4, assessment shall be made using the VRIS Test Value or Published Reference Value for a prime quality articles.


Allowable Discount – a nominal discount per standard trade practice of the Industry based on the Customs value of brand new or prime quality article/s may be allowed for shipments/articles found by the Ports as sub-standard or off-quality which shall not exceed 30% discount, if the requirements under Sections 3.1.3, 3.1.4 and 3.1.5.

SECTION 4 – SHORT SHIPMENTS

Ref.: CMO 52-2010


4.1.1 BL of Short Shipped Cargoes should be marked “Short Shipped” when established as such.

4.1.2 Request for amendment of the IFM/BL shall be conditionally approved for short shipment known before lodgment subject to the results of actual 100% physical examination.

4.1.3 No claim for short shipment shall be allowed if the goods had been released without undergoing-physical examination.

4.1.4 Importation subject of short shipment shall be treated as one complete importation. The subsequent importation shall likewise be treated as one complete importation.

4.1.5 Upon assessment of the customs declaration, the licenses, clearances or permits (LCP) including tax exempt certificates (TEC) issued for the shipment shall be electronically tagged as USED. The importer shall

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re-apply with the OGA for re-issuance of the said LCP and TEC to cover the remaining balance of the subsequent importation, if any and allowed by existing laws and regulations.

4.1.6 All other settlement modes such as the non-cash payments and the Import Entry Declaration (IED) for advance duty payments shall be applied on the as shipment that actually arrived.

4.1.7 In case there is an excess in the payment of duties and taxes, alter applying the advance payment of duties and the amount endorsed and paid at the bank, the importer may apply for a refund thereof.

4.1.8 All import declarations subject of short shipment shall be channeled to Red Lane.


4.2.1 Procedure for Short shipment known before electronic lodgment of entry.

4.2.1.1 The Importer/Customs broker shall file a request for amendment of the IFM/BL with the Deputy Collector for Operations (see Annex A hereof).

4.2.1.2 The Deputy Collector for Operations shall conditionally approve the request for amendment subject to 100% physical examination.

4.2.1.3 The Office of the Deputy Collector for Operations shall encode the necessary details to cause the amendment of the electronic manifest corresponding to the subject B/L.

4.2.1.4 The Importer/Customs Broker, through the Value Added Service Provider (VASP), shall electronically lodge an entry based on the conditionally amended IFM/BL.

4.2.1.5 The Assessment Office shall conduct physical examination of the shipment and follow the corresponding procedure, depending on the results of the Physical examination conducted.

4.2.1.5.1 No discrepancy in volume and/or quantity.

The CDO V shall forward the working entry of the 1mport Entry and Internal Revenue Declaration (IEIRD) to the District Collector for final approval of the request for amendment.

4.2.1.5.2 Discrepancy in Volume and/or Quantity is less than the amended IFM/BL.

The COO III indicate the actual findings in the IEIRD and shall, upon approval by the District Collector, also make the necessary

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amendments in the SAD as follows:

a. Adjust the value to cover the actual quantity and volume of the subject shipment.

b. Reflect the actual findings in the Inspection Act, as to the actual quantity and volume of the subject shipment.

4.2.1.5.3 Discrepancy in Volume and/or Quantity is more than amended IFM/BL.

If discrepancy is 30% or less

4.2.1.5.3.1 Apply Customs Memorandum Order (CMO) No. 64-93 entitled “Guidelines in the Implementation of CAO 10-93 regarding the imposition of surcharge under Section 2503 of TCCP, as amended by RA 7651”

4.2.1.5.3.2 The COO III shall indicate the actual findings and appropriate penalty/fine (if applicable) in the IEIRD and shall, upon approval by the District Collector, also make the necessary amendments in the SAD as follows:

a. Adjust the CIF value to cover the whole quantity and volume of the subject shipment.

b. Indicate the amount of penalty/fine (Box 44), if of necessary based on item No. 4.1.5.3.1.

c. Reflect the actual findings in the Inspection Act, as to the actual quantity and volume of the subject shipment.

If discrepancy is more than 30% there is presumption of fraud and issuance of Warrant and Seizure Detention (WSD) is proper.

4.2.1.5.4 The COO III shall indicate the actual findings in the IEIRD and in the Inspection Act of the SAD and COO V shall recommend the issuance of WSD subject to the approval disapproval by the District Collector.

4.2.2 Short shipment known after filing entry

4.2.2.1 Follow the procedures in Section 4.2.1.5.2.

SECTION 5 – ARTICLES ENTERING CUSTOMS TERRITORY PREVIOUSLY ADMITTED INTO SPECIAL ECONOMIC ZONES AND FREEPORT ZONES


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5.1.1 Tariff Classification

The classification under the AHTN of foreign articles, whether or not they have been manufactured, blended or otherwise combined with domestic articles, shall be determined according to the conditions, nature and character of the article when admitted to the SEZ or FPZ. However, the rate of duty shall be based at the time of entry to the Customs Territory.

Note: The present wordings of existing customs issuances for FPZ i.e. Subic, Clark, Cagayan, Zamboanga, Bataan, Camp John Hay Freeport Zones as follows:

“The classification under the Tariff and Customs Code of the Philippines of foreign articles, whether or not they have been manufactured, blended or otherwise combined with domestic articles, shall be determined according to the conditions, nature and character of the entire article at the time of its transfer from (Subic, Clark, Zamboanga etc) to Customs Territory.”

In its present form the regulation can be interpreted to mean that when an article is processed into finished product the basis of the tariff classification is the character of the article at the time of entry to the Customs Territory which is that of a finished product.

Laws creating the different Freeport zones do not have specific provisions on how foreign articles previously admitted shall be classified when such articles on its form when imported or processed enter the Customs Territory.

Upon the other hand, Section 26 of RA 7916 or PEZA law provides that” goods manufactured by an ECOZONE enterprise shall be made available for immediate retail sales in the domestic market, subject to payment of corresponding taxes on the raw materials and other regulations that may be adopted by the PEZA.” So in practice finished products manufactured out of imported articles previously admitted to PEZA entering the Customs Territory are classified as raw materials while in the case of Freeport Zones the finished products are classified as such.

5.1.2 Valuation of Articles

The value of foreign articles or articles containing foreign article components, on which ad valorem duties (and taxes) are assessed shall be the price actually paid or payable for the entire article in the transaction that caused the article to be transferred to Customs Territory, minus the cost of any domestic article components of the entire article.Note: Above wordings are from current issuances for the

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different Freeport zones and it is suggested that it be adopted also for SEZ. The interpretation of the provision is that the articles for customs purposes the customs value shall be based on the transaction value of the articles when admitted to the SEZ or FPZ.

5.1.3 Value-added tax

The value-added tax on foreign articles or articles containing foreign article components shall be assessed and collected based on the total amount of the invoice issued by the registered locator of SEZ or FPZ to the buyer in the Customs Territory.

5.1.4 Excise-tax (for consideration)

If the foreign articles or articles containing foreign article components are subject to payment of excise-tax the buyer in the Customs Territory must secure an Authority to Release Imported Goods (ATRIG) from BIR before such articles may be released from the SEZ or FPZ.

5.2 Operational Provisions (for consideration)

5.2.1 The buyer from the Customs Territory for customs purposes shall be considered as the importer and therefore required to lodge import entry in the e2m Customs System through VASPs. As such the buyer must be BOC registered and CPRS registered.

5.2.2 The documents required for customs clearance shall be:

5.2.2.1 The commercial invoice issued by the registered locator of SEZ or FPZ as seller;

5.2.2.2 The transit declaration in the form of Single Administrative Document and shipping documents used in the admission of the foreign article to SEZ or FPZ;

5.2.2.3 Import Permit/Clearance from concerned government regulatory agency in case of qualifiedly prohibited or regulated articles.

5.2.3 In lodging the import entry the manifest, bill of lading, insurance and freight shall not be a mandatory field as there are not applicable in the transaction.

5.2.4 The clearance process follows the same process of an ordinary importation except that the articles shall be examined jointly by the Bureau of Customs and authorized personnel of the SEZ or FPZ before they are allowed exit from SEZ or FPZ.

SECTION 6 – AIR EXPRESS SHIPMENTS

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Ref: CMO 45-2010; CMO 50-2010; CMO 51-2010; CMO 46-98.

6.1 Scope

This regulation applies only to express consignments as herein defined and carried either as freight or as baggage by accredited Operators. This Order does not apply to other shipments which are traditionally transported as ordinary freight (whether shipped individually under one airline airway bill or as part of a consolidated shipment) which shall continue to be processed and cleared under existing informal and formal entry procedures.

This regulation shall, as far as practicable, also apply to other international airports of entry where there are express consignments as defined below.


6.2.1 Express Consignments - consolidated air shipments of articles/goods which are time-sensitive in character, usually under a door-to-door service arrangement with on-time delivery commitment, which are shipped under a master air waybill (MAWB) consigned to Express Cargo Operator (ECO)

6.2.2 Express Cargo Operator (ECO) - a company which provide and arrange, by order and in the interests of shippers/consignors, for the fast and rapid transport and delivery of express consignment (either as a direct common carrier or an indirect air carrier) and as such issues its own airwaybill to shippers/consignors of shipments under its solicitation.

6.2.3 Courier Services Operator (CSO) - a company which, by itself or in concert with affiliates or subcontractors, provide for the fast and rapid transport (as an indirect air carrier) and delivery of express consignments being brought and arriving as accompanied baggage of its courier flying as passenger of commercial airlines. (The passenger is commonly known and referred to as On-Board-Courier or OBC).

6.2.4 Package - a closed container (i.e. box/carton/envelope) or covering in which the contents of a consignment is packed ready for shipment or transport subject to weight and size limits imposed in section 5.0 hereof.

6.2.5 Consignment/Shipment (the terms are used interchangeably) -one or more packages received from one shipper/consignor at one address and addressed to one consignee at one final destination, receipted for in one lot and shipped under one air waybill (AWD). (Consignments consisting of two or more packages are referred to as "Multiple Package Shipments").

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6.2.6 Master air waybill (MAWB) - an air waybill showing, among other data elements, the consignee (nominal) at destination of a consolidated shipment, the total number of packages and total weight of the consolidation.

6.2.7 House air waybill (HAWB) - an air waybill showing all essential data elements of an individual consignment and its ultimate consignee at destination.

6.2.8 Customs - refers to the Bureau of Customs, an agency of the Government of the Republic of the Philippines, and its duly authorized officials and employees.


6.3.1 Express Consignments Clearance Office (ECCO)

6.3.1.1 For uniformity and consistency in the application and enforcement of customs laws and regulations, the composite units presently established in Customs Bonded Warehouses (CBWs) of Express Cargo Operators (ECOs) shall hereafter be named and referred to as Express Consignments Clearance Office (ECCO).

These ECCOs shall be under the operational supervision and control of the Deputy Collector for Assessment and shall separately be headed by a Special Deputy Collector. The OBC Clearance Center shall remain to be under the operational control and supervision of the Deputy Collector for Passenger Services.

6.3.1.2 The ECCO shall receive all shipping documentations transmitted electronically or manually covering express consignments in their area of responsibility and the processing and clearance/release of the consignments. It shall keep and maintain records of all express consignments. A methodology which will provide an effective audit trail of each and every consignment cleared/released by the ECCO shall be formulated and prescribed by the Deputy Collector for Assessment.

6.3.1.3 Each ECCO shall gather, collate and maintain an electronic database of values from invoices of consignments, in close liaison and coordination with the other ECCOs, which database shall be updated from time to time as the need arises and interlinked with the Valuation Section central database. Values established shall be uniformly applied in the appraisement and valuation of subsequent importations of the same, like, or similar articles goods from the same country of origin until officially revised. This provision on the application of established values, however, shall be amended accordingly upon the implementation of the transaction value, consistent with the WTO commitments.

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6.3.2 Categories Of Express Consignments And Restrictions

6.3.2.1 Consignment Categories - Express consignments shall be categorized as follows:

6.3.2.1.1 Documents (DOCS) - those generally considered as business, inter-office, or personal (BIP) in character which have no commercial value. Included under this category are diplomatic bags/pouches with official seal and international letter-mail (excluding parcels) for entry into the Philippine postal system. Representative examples of these consignments are listed in Appendix " A " hereof.

6.3.2.1.2 Non Documents (NON-DOCS) - Consignments which do not fall under the DOCS category, further sub-categorized as follows:

a. Low value non-dutiable consignments - Consignments whose aggregate amount of duties, taxes and other charges collectible is less than the amount authorized by law.

b. Low value dutiable consignments - Consignments above the duty, tax and charges limit whose value is not more than the established low value threshold FCA.

c. High value consignments - Consignments whose value is above the established low value threshold FCA.

6.3.2.2 Restrictions - No express consignments shall include any of the following:

a. Prohibited/Regulated imports under the Philippine laws;b. Laws Dangerous Goods/Hazardous substances such as

explosives and other hazardous chemicals under RA 6969;c. Valuable cargo such as jewelry, works of art and the like;d. Animal, fish and fowls (live or frozen);e. Foodstuff and highly perishable articles;f. Human remains/cadavers;g. Money (coins, cash, paper money and negotiable instruments

equivalent to cash); andh. Personal effects of Balikbayans, OFWs and other travelers.

6.3.3 Standards and Documentation

6.3.3.1 Package Weight and Size Limits - Unless compliance is not feasible due to the nature, size, or dimensions of the articles/goods to be transported, each express consignment package shall weight not more than thirty (30) kilograms and shall not exceed 1.50 meters for anyone dimension or 3 meters for the sum of the length and the greatest circumference measured in a direction other than that of the length. However, Customs may also consider clearly established and

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universally accepted international standards on the size and weight of express consignment package.

6.3.3.2 Description and Limit on Commodities

6.3.3.2.1 Articles/goods shall be described on commercial/pro-forma invoices in their normal trade description expressed in sufficiently precise terms to enable immediate and unambiguous identification and tariff classification of the commodity, preferably with correct H.S. Code for each commodity.

6.3.3.2.2 Low-value consignments (dutiable or non-dutiable) shall not contain more than five (5) commodities with different tariff classification or H.S. Codes per HAWB.

6.3.3.3 Method of Transport

6.3.3.3.1 DOCS and NON-DOCS consignments shall not be commingled in one bag/sack but placed in separate bags/sacks or other containers.

6.3.3.3.2 DOCS consignments shall be placed in Green-colored bags/sacks and NON-DOCS in bags/sacks ofa different color. Any bag/sack not of Green color shall be presumed to contain NON-DOCS consignments and shall be treated accordingly.

6.3.3.4 Manifest Requirements

6.3.3.4.1 A consolidated manifest copy shall be prepared and submitted for all DOCS and both low-value dutiable and non-dutiable NON-DOCS consignments. High value NON-DOCS consignments require submission of a separate Manifest.

6.3.3.4.2 Consol (consolidation) manifest shall contain, among others, the following data elements:

a. HAWB numbers of the consignments, with corresponding -

• Number of packages

• Brief description of commodities;

• Weight of the consignment (in kgs.);

• Value of the consignment;

• Name of shipper/consignor; and

• Name and address of consignee.6.3.3.4.3 OBC consol manifest shall contain, among others, the following

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data elements:

a. Flight number/identification of carrying aircraft;

b. Name and passport number of the courier;

c. Airport of origin;

a. Original airport of origin of a consignment (if a consignment/s originates from another airport);

d. Total number of bags/sacks;

e. Gross weight of all bags/sacks brought in; and

f. Baggage claim tag number of each bag/sack.

6.3.3.5 Each consignment shall be accompanied by the covering HAWB and commercial pro-forma invoice placed inside a transparent self-adhesive plastic document pouch which shall be securely affixed to the consignment with the face of the HAWB readable from the outside for easy identification of the consignment. For multiple package consignments, the document pouch shall be affixed to the #1 package, the rest of the packages to be properly identified or marked.

6.4 Expedited Operational Procedures

6.4.1 Post-Arrival Routines

6.4.1.1 For consignments carried as freight:

6.4.1.1.1 Upon arrival, the consignment shall be immediately transferred underguard to the CBW of the Operator concerned. In cases where short-shipment is noted, a Cargo Irregularity Report (CIR) shall be prepared by the representative of the airline. The CIR shall be noted by the assigned Customs Guard who shall secure a copy for record purposes.

6.4.1.1.2 Receiving Customs Warehouseman and Operator shall check the completeness of the consignments transferred before they are received and in-bonded, after which the Green-colored bags/sacks shall be segregated from the rest of the consignments.

6.4.1.2 For consignments carried as OBC baggage:

6.4.1.2.1 Assigned Customs Guard, guided by the pre-alert copy of the OBC consol manifest electronically or manually transmitted, shall upon arrival of the carrying aircraft segregate at the cargo break-down area the baggage of an arriving OBC in the presence of a

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CSO representative who shall make proper accounting of the consignments unladen. In cases where bag/sack is short-landed or cannot be accounted for, a Property Irregularity Report (PIR) shall be prepared by the CSO representative. The PIR shall be noted by the assigned Customs Guard who shall secure a copy for record purposes.

6.4.1.2.2 Receiving Customs Warehouseman and OBC-ECCO shall verify the bags/sacks transferred and check the baggage claim tag numbers against the pre-alert OBC consol manifest and transfer Boatnote. For consignments with discrepancy, the OBC-ECCO shall secure a copy of the PIR from the CSO representative.

6.4.2 Expedited Clearance/Release Procedures.

6.4.2.1 For DOCS and low-value non-dutiable NON-DOCS consignments:

6.4.2.1.1 These categories of consignments shall be processed and cleared/released using the consol manifest as the entry document with the covering MAWB as supporting document provided, that they are placed and transported in properly identified bags/sacks. The consignments shall be cleared/released only after each bag/sack has undergone an x-ray scan. Customs retains the right to physically examine packages as required, prior to release, or check the HA WB covering a particular consignment for verification purposes.

6.4.2.1.2 Any consignment found to contain dutiable articles/goods shall be segregated and cleared/released only after payment of duties and taxes provided, that the articles/goods found were not misdeclared or undeclared on the consol manifest or HAWB, otherwise appropriate enforcement action shall be taken including seizure. F or purposes of clearance/release of any dutiable consignment, the form STATEMENT AND RECEIPTS OF DUTIES COLLECTED ON INFORMAL ENTRY (BC Form 116) shall be used.

6.4.2.2 For low value dutiable NON-DOCS consignments (as amended by CMO 51-2010)

6.4.2.2.1 Low-value dutiable non-doc’s consignments shall be processed and cleared/released under consolidated informal entry or individually in cases where certain documentary requirements from other government agencies are still being secured or for some valid reason.

6.4.2.2.2 An Informal Import Declaration and Entry Form (BC Form 177) shall be filed together with the copy of the House Airways Bills (HAWBS) and corresponding commercial pro-form invoice as supporting documents, provided that one (1) consolidated informal entry shall cover not more than ten (10) individual HAWBs with different

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consignees.

6.4.2.2.3 A consolidated informal entry covering ten (10) individual HAWBS with different consignees shall not have an aggregate FOB value of not more than US$200.00, provided that an individual HAWB shall not have an FOB value of more than US$20.00, provided further that each HAWB shall not exceed 5 kg by weight.

6.4.2.2.4 The consolidated informal entry must specify each and every HAWB it covers, the number p of packages for every HAWB, Description, Weight and Value.

6.4.2.2.5 Payment of the required fees shall be for every HAWB under the filed consolidated entry. For example, for a consolidated entry covering 10 HAWBs, payment of the prescribed fees shall be computed as follows:

Informal Entry Form (inc. CDS and IPF) = Php 555.00

Php 265 (CDS) x 9 HAWBS = Php 2,385.00

Php 250 (IPF) x 9 HAWB = Php 2,250.00

Total fees for 10 HAWBS = Php 5,190.00

6.4.2.2.6. Consignments under this category shall still be cleared/released based on selective documentary examination but shall undergo regular x-ray scan prior to release if found in order, without prejudice however to the Bureau’s conducting a physical examination of the content of any suspected package or at random prior to release.

6.4.2.2.7. Any consignment forming part of consolidated informal entry found with discrepancy shall be segregated and cleared/released alter the appropriate action has been undertaken by Customs.

6.4.2.3 For high value NON-DOCS consignments:

6.4.2.3.1 This category of consignments shall be individually processed and cleared/released under existing formal entry procedures and shall pass the selectivity process based on e2m Customs System. No physical examination shall be made of consignments in the Green-Lane category unless based on derogatory information or Alert Notice received. Customs may conduct document examination of consignment channeled to the Yellow-Lane category but shall in all cases conduct physical examination of consignments in the Red-Lane category.

6.4.2.3.2 Consignments with a value of USD$500.00 FCA shall be cleared through formal entry.

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6.4.2.4 Advance Processing of Entries.

6.4.2.4.1 Advance processing of entries covering express consignments may be allowed; provided a pre-alert copy of the consol manifest has been electronically transmitted in advance under existing regulations. However, numbering of entries shall be made only after arrival of the consignments, and clearance/release authorized only upon submission of hard copies of the consol manifest submitted to the Customs Boarding Officer upon arrival of the carrying aircraft as well as other supporting documents. Customs, however, reserves the right to randomly conduct examination.

6.4.2.4.2 To avail of the privilege of advance processing, prior arrangement shall be made by the ECO concerned with the District Collector or his authorized representative at least one working day prior to the arrival of the carrying aircraft.

6.4.2.4.3 In the case of consignments arriving as baggage, their clearance/release shall be authorized only upon receipt by the OBC-ECCO of hard copies of the required supporting documents. No bag/sack shall be cleared/released unless the corresponding baggage claim tag has been surrendered to the OBC-ECCO for verification and record purposes.

6.4.2.4.4 At the sound discretion of the District Collector, release of low value dutiable (except a HAWB) NON-DOCS consignments without certain supporting documents may be authorized as a matter of privilege; provided, the Operator concerned presents a written undertaking under oath that the lacking documentary requirement shall be submitted within twenty-four (24) working hours after the clearance/release. In such cases, final liquidation of the entries shall be made only after submission of the required documents. Failure on the part of an Operator to faithfully comply with this undertaking shall be sufficient ground for cancellation of the privilege.

6.4.2.4.5 Advance processing of entry shall not be allowed for the following consignments:

a. Those subject of a Hold Order;

b. Those requiring import clearance/permit from the concerned government agency, unless submitted together with the entry;

c. Conditionally-free importations falling under sub-sections "d" "i" "J" " q" "t" and "x" of Section 105 of the Tariff and Customs Code of the Philippines, as amended; and

d. Those for transshipment to another local or foreign port.

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6.4.3 General Provisions

6.4.3.1 Determination of Freight for Shipment Arriving as Baggage. For the Express consignments arriving as baggage, the freight component shall be based on the IATA Area from whence the consignment came from, to wit:

IATA Area 1 USD$ 5.00/kg or fraction thereof



The freight component shall be revised upon publication of new IATA rates.

6.4.3.2 Treatment of Split Consignments.

Two or more low value NON-DOCS consignment which appears on the consol manifest to have the same shipper/consignor and the same consignee, whose aggregate value is USD$ 500.00 FCA or more or its equivalent in other foreign currency, shall be treated as a single consignment for customs purposes and cleared/released under one formal entry.

6.4.3.3 Alerting/Holding of consignments.

6.4.3.3.1 Customs law enforcement officers/agents shall not hold and stop delivery of express consignments after their release has been authorized, unless based on positive information that its clearance/release was attended with irregularity or its documentation is not in order or fraudulent. All held or alerted consignments shall be transferred to the Collector's Corral or similar facility in the CBW of the operator pending final resolution of the matter.

6.4.3.3.2 In the case of DOCS and low value non-dutiable NON-DOCS consignments, the corresponding HAWB number of a particular consignment whose delivery is held shall be highlighted with a colored text liner with proper notation of the ground for holding its delivery .After said action, the rest of the consignments shall be cleared/released if found in order.

6.4.3.4 Supplemental and Amendments to Consol Manifests.

6.4.3.4.1 Supplemental consol manifest for consignments not listed on the consol manifest originally submitted upon arrival of the carrying aircraft: Provided, however, that the supplemental consol manifest is submitted by the Operator concerned within six (6) hours from the time of arrival of the carrying aircraft or OBC. Supplemental consol

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manifest shall contain a notation of the time and date it was submitted and shall first be approved by the Special Deputy Collector or authorized representative before it will be given due course.

6.4.3.4.2 Consol manifests shall be amended or in accordance with existing regulation. Amendment to consol manifest shall, before it shall be given due course, be approved by the District Collector or his authorized representative.

6.4.3.5 Overtime Services of the Customs Personnel.

6.4.3.5.1 Customs personnel at the ECCOs shall be assigned, on rotation basis, to render overtime service after regular office hours and during Saturdays, Sundays and other non-working Holidays. Such services shall be requested by the Operator in advance and in writing, specifying the number of personnel required and other relevant information.

6.4.3.5.2 The Operator for whom such services has been rendered shall pay such services, including transportation and meal allowances based on rates prescribed under existing regulations.

6.4.3.6 Clearance of Express Consignments Through Customs

6.4.3.6.1 Customs clearance of DOCS and low value NON-DOCS consignments shall be handled by the ECO concerned through contracted licensed customs brokers, being part of their integrated customer service. For consignments arriving as baggage, customs clearance of consignments may handled by the CSO concerned at the OBC-ECCO.

6.4.3.6.2 For high value NON-DOCS consignments, customs clearance may be handled by the ECO/CSO concerned except in cases where the shipper/consignor indicates the name of the customs broker to handle clearance of the consignment appearing on the broker select option box of the HA WB or when the consignee authorizes a particular customs broker to handle customs clearance of his consignment.

6.4.4 Payment Deposit for Duties and Taxes and Guaranty.

Payment of duties and taxes shall be through PASS5.

The air cargo express operator shall deposit and maintain at all times in a duly accredited commercial bank the amount of not less than two million pesos (P2,000,000.00) specifically to guaranty immediate payment by the bank upon demand by the Bureau of Customs, in case of default on the part of the operator, of all assessed customs duties, taxes and other charges on importations the release of which have

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been secured under the provisions of regulation.

6.4.5 Delivered Duty Paid (DDP) or Bill to Shipper (BTS) Shipments (CMO 45-2010; CMO 50-2010)

ECO may be allowed to be the financial party for a particular shipment where the term of payment between the shipper and consignee is Delivered Duty Paid (DDP) and/or Delivered Duty Unpaid (DDU) where the consignee is a regular known customs of the ECO and have extended the credit to terms to ensure the delivery of shipment on a specified date and time. This should be applicable to both informal and formal entries where the Bureau of Customs is guaranteed to immediately collect the customs duty and tax due on shipments.

Note: The privilege of extending the special procedures for DDP/BTS to Delivered Duty Unpaid (DDU) or Bill to Consignee (BTC) may not be appropriate. (Please note that under INCOTERMS 2010 DDU has been replaced with DAP) As the advances to be made by EOs in behalf of their clients partakes of private financial arrangement it may not be proper for government (BOC) to extend its resources to EOs by reason of their financial arrangements with their clients. BOC has to make adjustments to its present system to accommodate the request of extending the DDP/BTS special procedures to DDU/BTC.

Financial institutions extending credits to importers for the payment of duties and taxes may be asking for same arrangement to ensure that the loans extended to importers are used for the purposes. The same may be true for freight forwarders which may have similar financial arrangements with their client importers.

6.4.5.1 Definition of Terms

6.4.5.1.1 Delivered Duty Paid - a commercial arrangement where the seller pays for all transportation costs, bears all risks until the goods has been delivered, and pays the duty (the term duty refers to customs duty, taxes, and other charges). The dutiable value of imported articles on DDP terms shall be based on the full DDP amount unless the post importation charges are distinguished from the price actually paid or payable.

6.4.5.1.2 Financial Party - the company who shall be responsible for the payment of duties and taxes in behalf of the supplier under the DDP/BTS commercial arrangement.

6.4.5.2 Administrative Provisions

6.4.5.2.1 The EO shall be recognized as the Financial Party in the DDP/BTS shipments

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6.4.5.2.2 The special arrangement for DDP/BTS is extended to named consignees/importers by the EO or its authorized representative. The special arrangement shall be tagged in the CPRS profile of the consignee / importer as “DDP-enabled”.

6.4.5.2.2.1 Expiration, cancellation or suspension of the importer’s CPRS profile shall automatically invalidate the importer’s DDP tag. However, successful renewal of the CPRS client profile shall reinstate the CPRS DDP tag of the importer.

6.4.5.2.2.2 Renewal of the CPRS registration, however, shall automatically enable the special procedure without the need of re-assignment.

6.4.5.2.2.3 The CPRS DDP - enabled tag may be invalidated at any time at the instance of the EO or its authorized representative when shipper has changed or stopped the terms of the DDP shipment or at the instance of the Customs Authorities based on adverse findings from audits and investigations that may be conducted.

6.4.5.2.2.4 Once tagged as “DDP- enabled”, the special arrangement shall be applicable to any EO not just the endorsing party.

6.4.5.2.3 The special procedure for DDP/BTS shipments shall cover both Formal and Informal Entries (Phase 3) in NAIA and other airports nationwide. (Subsequent CMOs written for Informal Entry implementation shall not diminish any of the rights and privileges accorded to DDP/BTS shipments through this Order.) Note: Deleted because it is legally untenable. What is granted by the CMO is a privilege and not a right granted by law)

6.4.5.2.4 EOs other than PCAEO members desiring to use the special procedure for their BTS/DDP shipments provided in this Order must apply for accreditation with the Deputy Commissioner for RCMG or the Deputy Commissioner in charge of BOC accreditation processes and demonstrate the following capabilities and actual practice:

a. Capability to send inward foreign manifest to BOC at least 2 hour prior to aircraft arrival.

b. Profile their Customers as to financial credibility and track record of compliance so that only shipments with shippers and consignees that are low risk should be declared following this procedure.

6.4.5.2.5 Yearly Evaluation

There shall be yearly evaluation to be done before the end of

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January of each year to determine the faithful compliance of EOs with regulation.

The Customs Team of Evaluators shall be composed of:

Director, IAS as the ChairmanMembers:

Head, Risk Management Office (RMO)Deputy Collector for Assessment, NAIAChief, Formal Entry Division, NAIA

6.4.5.2.6 Monthly Reporting by EOs Availing of the DDP/BTS Special Procedures

DDP is a purchase arrangement where the shipper includes in the quotation to the consignee/buyer the estimated customs duty and tax at the port of destination. As such EOs should be paying the amount of duty and tax as quoted by the shipper. Therefore, to check the accuracy of actual payments made to the government by the EOs in relation to the quotation by the shipper a monthly report shall be submitted by the EOs to BOC Attention: Director, IAS.

The report which shall be submitted every 5th of the month should contain the summary of all shipments cleared through the special procedures for DDP/BTS supported by following documents:

a. Import entries;b. HAWB;c. Commercial Invoices;d. Packing Lists, if any;e. Quotation of shippers to consignees.

6.4.5.3 Control by the Office of the Deputy Commissioner, RCMG (CMO 50-

2010)

6.4.5.3.1 The designed user in the Office of the Deputy Commissioner, RCMG shall tag the CPRS record of every consignee importer in the certified list submitted by the EO using the Special Arrangement Tab of CPRS.

6.4.5.3.2 Upon the instance of the EO or AOCG itself the designated user shall disable the DDP special arrangement of a consignee/importer. The special arrangement shall cease to be active for all EOs.

6.4.5.4 Express Operations (EO)

6.4.5.4.1 The EO shall register itself in CPRS with Nature of Business of "Air Express Operator”. As an importer, the EO can enroll its debit

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accounts with AABs to get Bank Reference Numbers. The EO shall advice the bank that the debit account is to be used under the DDP arrangement, in which case the EO is named in the declaration as the Financial Party.

6.4.5.4.2 The EO shall submit an initial list of importer- clients, using the format, arrangement to the Office of the Deputy Commissioner, RCMG. The latter shall review and approve the list which shall be the basis for tagging the importer’s client profile in CPRS as "DDP enabled".

6.4.5.4.3 Subsequent addition to the list shall be applied by email from the EO to the designated RCMG official who will immediately include the entity and tag the same based on the certification of the EO that the due diligence verification has been performed and to be subject to post audit by Customs.

6.4.5.4.4 The Deputy Commissioner, RCMG should provide at least two (2) e-mail addresses exclusively dedicated to receive requests for additions to the list of clients initially submitted by the EOs. (or other consolidators with DDP/BTS arrangements.) Note: Deleted as the regulation should be exclusive to air express operators and not to regular consolidators. To add: The EO requesting for additions to the list of clients by e-mail should confirm the e-mail in writing latest the following day e-mail was sent.

6.4.5.4.5 The EO may invalidate a consignee/importers DDP special arrangement at any time by official communication to the Deputy Commissioner, RCMG, stating the grounds therefore.

6.4.5.5 Declarant

6.4.5.5.1 The declarant shall indicate the model of declaration "4FD"or "4ID" for formal entry or informal entry, respectively, in Box 1 of the Single Administrative (SAD).

6.4.5.5.2 The declarant shall indicate the TIN of the EO in Box 9 of the SAD, labeled “Financial Party”.

6.4.5.5.3 The declarant shall indicate the Bank Reference Number of the EO in Box 28, Bank Ref. No.

6.4.5.5.4 The exporter (shipper/seller), the consignee (importer) and the declarant (customs broker) shall be declared in their appropriate boxes in the SAD following the existing rules for declaration.

6.4.5.6 Payment

6.4.5.6.1 The payment instruction message sent by e2m Customs to the PCHC-BAP payment gateway shall contain the BRN of the EO. The

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consignee in the payment instruction message shall be the EO.

6.4.5.6.2 The Bank shall follow its existing procedure to confirm debit of the account with the owner, in this case, the EO.

6.4.6 X-ray and Field Test Kits (For narcotics and dangerous drugs)

Each ECCO shall provide the Customs with X-ray and field test kits (for narcotics and dangerous drugs) in order to prevent the entry of illegal and anti-social goods.

6.4.7 Sanction Against Violations.

6.4.7.1 Express consignments arriving as baggage without an accompanying OBC shall be seized as unmanifested cargo pursuant to a ruling of the Supreme Court. If the bags/sacks containing such consignments are inadvertently brought to the Customs Arrival Area at the Passenger Terminal Building, it shall be immediately transferred underguard with Boatnote to the OBC-ECCO for appropriate action. No airline shall accept express consignments as check-in baggage unless verified to be accompanied by a duly authorized courier/passenger; otherwise, it may be held liable for carrying unmanifested cargo and subject to administrative sanctions.

6.4.7.2 Expedited clearance/release procedures may be discontinued if an Operator is found to repeatedly violate or fail to comply with any provision of this Order unless it demonstrates to show willingness to address them in a manner that will substantially preclude such violations or non-compliance, without prejudice to whatever administrative or criminal action which Customs may take for violations of the Customs laws and regulations if warranted.

Attachments: Appendix "A"

BIP DOCUMENTS FALLING UNDER THE DOCS CATEGORY INCLUDES BUT NOT LIMITED TO THE FOLLOWING:

a. Business and Inter-Office Documents

Accounting documents Invoices, completed

Bank statements Legal documents

Bid quotations Licenses/Permits

Blueprints Memoranda

Booklets/brochures Office records

(non-advertising)

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Budget statements/reports Operating agreements

Business cards Reports: Analysis - annual/sales/

Business correspondences Inventory/financial/conference

Cash letters Photocopies of BIP documents

Computer printouts Price lists

Contracts Proposals

Court transcripts Purchase ordersCrew lists Quotations

Customs documents Sales agreements

General business documents Statistical data

Insurance documents Technical drawing (non-comm'l)

Inter-Office Memos Trade confirmations Travel agendas/itineraries

b. Personal Documents

Bio-data/resumes Marriage certificates/licenses

Birth certificates Medical records

Employment papers Passports

Death certificates Photographs, personal

Income statements Tax papers

Immigration papers Visa applications

Letters and cards, personal X-ray films, exposed, personal Manuscripts

(NOTE: These articles must have no commercial value or taxable importance.)

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*Must not exceed ten (10) pieces; otherwise, they must be manifested as "NON-DOCS" and accompanied with a commercial invoice.

SECTION 7 – CUSTOMS CARGO CLEARANCE PROCEDURES FOR MCC FUNDED GOODS UNDER THE MILLENIUM CHALLENGE CORPORATION (MCC) CONTRACT

Ref: CMO 44-2010


7.1.1Beneficiary – means any of the following: (1) MCA-Philippines ; and (2) any Vendor.

7.1.2 Compact – means the Millenium Challenge Compact between the Republic of the Philippines and the United States of America.

7.1.3 DPWH – means the Department of Public Works and Highways.

7.1.4 DSWD – means the Department of Social Welfare and Development.

7.1.5 MMC – means the Millenium Challenge Corporation, a United States government corporation established pursuant to the U.S Millenium Challenge Act of 2003, as amended.

7.1.6 MCC Funded Contract – means a contract of the vendor with MCA-Philippines.

7.1.7 MCC Funded Goods – means goods and other property, works, technology and other assets, whether acquired, used or performed at any level or stage, under or in connection with the Compact, the Program or any Project.

7.1.8 Program – means the program being implemented by the Republic of the Philippines to achieve the goals and objectives described in the compact.

7.1.9 Project – means any of the following: (1) the KALAHI-CIDSS Project of DPWH; (2) the Secondary National Roads Development Project of the DPWH; and (3) the Revenue Administration Reform Project of BIR; and

7.1.10 Vendor – means any person, natural or juridical that provides MCC Funded Good


7.2.1 All beneficiaries of MCC-funded importations/goods shall apply for accreditation with the Bureau as an accredited importer by filing the

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required application form and submission of the documents listed in Annex A hereof, as applicable

7.2.2 BOC Accredited Importers/beneficiaries of MCC-funded Importations/goods shall likewise register with the Client Profile Registration System (CPRS) under the Bureau’s E2M System pursuant to CMO 39-2008 with their JO 2-91 identification number which eligibility will be verified in the course of the approval of their CPRS Registration

7.2.3 To facilitate their customs cargo clearance process, MCA-Philippines shall on a regular basis, provide the BOC through its Collection Service (CS) the following documents for reference purposes:

(i) List of vendors who will import MCC Funded Goods(ii) Certified true copies of the MCC Funded Contracts(iii) Certified true copy of the Certificate of Entitlement to Subsidy

(CES) for the year issued by the Fiscal Incentives Review Board (FIRB)

(iv) Certified true copy of the Special Allotment Release Order (SARO) for the year issued by the Department of Budget and Management

7.2.4 The CES and the SARO shall answer for the payment of the duties and taxes due on all incoming MCC-funded shipments consigned to the beneficiaries as defined in Section 1 hereof.

7.2.5 All beneficiaries and/or buyer must secure Tax Exemption Certificates from the Department of Finance prior to implementation so as to facilitate the processing at the Bureau of Customs of importations to be considered as conditionally-free


7.3.1 Prior to arrival of the MCC-Funded Importations, the intended Beneficiary shall secure the required clearance from the BOC’s Collection Service (BOC-CS) prior to lodgment of the Import Declaration through the VASP by submitting two sets (one original copy, one photocopy) of the following documents:

a. Photocopies of the CES and SARO;b. Certification of Official Importation issued by MCA-Philippines

following the prescribed form;c. Photocopy of the relevant MCC Funded Contract;d. Commercial and Shipping documents for the MCC Funded Goods

to be imported (e.g. Commercial Invoices, Packing Lists, Bill of Lading, Air Waybill);

e. Duly accomplished Import Entry, signed by the authorized representative of MCA Philippines;

f. Tentative Statement of Account following the prescribed format,

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endorsed by MCA Philippines; andg. Other documents as may later be deemed necessary.

7.3.2 Upon filing of the above documents with BOC-CS, BOC-CS shall inform the Beneficiary whether the documents are complete. The BOC-CS Director shall issue the corresponding clearance/indorsement to the District Collector within five (5) days of submission of the complete documents.

7.3.3 Lodgment and processing of the import entry shall follow the procedures prescribed under CMO 27-2009 on the Import Assessment System (IAS) under E2M Customs System

7.3.4 Within fifteen (15) days from the release of the MCC Funded Goods by BOC, the District Collector shall submit to BOC-CS the Statement of Account stating the amount of customs duties and internal revenue taxes actually assessed on the imported MCC Funded Goods

7.3.5 The BOC-CS shall credit the amount of customs duties and taxes stated on the Statement of Account against the amount of available tax subsidy under the CES and SARO

7.3.6 For importations to be entered conditionally-free for later re-exportation, the required Tax Exemption Certificate must be secured from the Department of Finance before lodgment and submission of the covering Import Declaration through the Value-Added Service Provider (VASP)

SECTION 8 – BOOK IMPORTATION

8.1 Regulation on book importation is governed by Department of Finance Department Order no. 57-2011 which was published in the 25th December 2011 issue of the Philippine Star is quoted as follows:

“Pursuant to Section 38 (1), Chapter 7, Book IV of Executive Order No. 292 or the Administrative Code of 1987, in relation to the Tariff and Customs Code of the Philippines (TCCP), as amended, the National Internal Revenue Code of 1997, other existing laws and international agreements, the following guidelines are hereby being issued to govern the clearance procedures for book importations.

1. `Rationale

These guidelines are being issued to emphasize the duty-free and VAT-exempt status of imported books, subject only to the exceptions provided under the Florence Agreement, and to clarify the procedure for their clearance and release from the Bureau of Customs.

2. Definition of Terms

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a. Florence Agreement – refers to the Agreement on the Importation of Educational, Scientific and Cultural Materials signed by the President of the Philippines on August 2, 1952, whereby the contracting States undertake not to apply customs duties or other charges on, or in connection with, the importation of books and materials listed in Annexes A to E thereof.

b. Commercial quantity – means quantity for a given kind or class of articles which are in excess of what is compatible and commensurate with a person’s normal requirements for personal use, as defined under Customs Memorandum Order No. 67-77.

c. Personal effects/personal use – As explained by Customs Administrative Order No. 7-72 or the implementing rules and regulations of Section 105 of the TCCP, as amended, this term refers to those embracing all articles of personality not considered as merchandise, including books.For purposes of this Order, books considered as personal effects or for personal use shall mean those, the quantities of which do not exceed twelve (12) copies of any one work when imported by an institution; or six (6) copies of any one work when imported by an individual.

3. Guidelines

All imported books, whether for commercial or personal use with the exception of those published by or for a private commercial enterprise essentially for advertising purposes as stated in Annex A of the Florence Agreement, are exempt from customs duties. Importation of books is likewise exempt from value-added tax (VAT) pursuant to Section 109 (R) of the National Internal Revenue Code.

3.1 For Books Imported in Commercial Quantities

Prior to the release by the Bureau of Customs (BOC) of books imported in commercial quantities, the importers must first present an endorsement from the Revenue Office of the Department of Finance for the duty- and VAT-free importation of books/materials covered by the Florence Agreement which shall be issued after submission of the following documents —

1. Bill of Lading/AirwayBill/Postal Registry Notice with BOC Tentative Assessment Sheet;

2. Commercial Invoice;

3. Packing List with title of books;

4. Authority of Representative (in lieu of consignee);

5. Affidavit to the effect that the shipment consists of books;

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6. In case of donated books – Deed of Donation duly authenticated by the Philippine Consulate abroad, and Deed of Acceptance;

7. Certification from the UNESCO Office in the Philippines attesting that the importation/s is/are covered by the Florence Agreement; and

8. Certificate of Registration with the National Book Development Board as book importer or publisher.

3.2 For Books Imported as Personal Effects or for Personal Use

The endorsement prescribed under Section 3.1 hereof shall not be required for books imported as personal effects or for personal use as defined under Section 2(b) of this Order, whether transported as accompanied baggage, through couriers or the post offices. Said importations however, should be cleared and released through the required declaration of goods as provided under existing rules and regulations.

4. Repealing Clause

All other DOF Department Orders, Circulars, Bureau of Customs issuances or provisions thereof, which are inconsistent with this Order, are hereby revoked, repealed or modified accordingly.

5. Effectivity

This Department Order shall take effect immediately upon publication in a newspaper of general circulation.”

CHAPTER 8 – SPECIAL DUTIES

Note: Codal Provisions

SECTION 1 – SAFEGUARD DUTY

Section 1. Definitions

1.1. “Agricultural product" refers to a specific commodity under Chapter 1 to 24of the Harmonized System (HS) of the Commodity Classification as used in the Tariff and Customs Code of the Philippines1.2. “Consumers" shall refer to the Tariff Commission;1.3. “Consumers " shall refer to natural person or organized consumer groups who are purchaser, lessees, recipient, or prospective purchasers, lessees, recipients of consumer products, services or credit;1.4. “Critical circumstances" shall mean circumstances where there is prima facie evidence that increased imports, where there absolute or relative to domestic production , are a substantial cause of serious injury or threat

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thereof to the domestic industry and that delay in taking action under this Act would cause damage to the industry that would be difficult to repair;1.5. “Directly competitive products" shall mean domestically-produced substitutable products:1.6. “Domestic industry" shall refer to the domestic producer, as a whole , of like or directly competitive products manufactured or produced in the Philippines or those whose collective output of like or directly competitive products constitutes a major proportion of products;1.7. “Interested parties" shall include domestic producers consumers, importers and exporters of the products under consideration1.8. “Like product" shall mean a domestic product which it identical, i.e., alike in all respects to the imported product under consideration, or in the absence of such a product, another domestic product which, although not alike in all respects, has characteristic: closely resembling those of the imported product under consideration1.9. “Market access opportunity" shall mean the percentage of the total annual volume of imports of an ‘agricultural product to the corresponding total volume of domestic consumption of the said product in the country in the three (3) immediately preceding years for which data are available;1.10. “Minimum Access Volume (mV)"is the amount of imports of an agricultural product allowed to be imported into the country at a customs duty lower than out-quota customs duty:1.11. “Positive adjustment to import competition " shall refer to the ability of the domestic industry to compete successfully with imports after measure, or to the orderly transfer of resources to other productive pursuits; and to the orderly transition of dislocated workers in the industry to other productive pursuits;1.12. “Price difference" is the amount obtained after subtracting the c.i.f. import price from the trigger price;1.13. " Product" shall refer to either to article, commodities or goods1.14. " Secretary injury" shall refer to either the Sectary of the department of Trade and Industry in the case of non-agricultural products or the Secretary of the Department of Agriculture in the case of agricultural products;1.15. " Serious injury" shall mean a significant impairment in the position of a domestic industry after evaluation by competent authorities of all relevant factor of an objective and quantifiable nature having a bearing on the situation of the industry concerned, in particular ,the rate and amount of the increase in imports of the products concerned in absolute and relative terms the share of the domestic market take by increased imports, change in level of sales, production, productivity, capacity utilization, profit and losses, and employment;1.16. " Substantial cause" means a cause which is important but not less than any other cause;1.17. " Threat of serious injury " shall be understood to mean serious injury that is imminent;1.18. " Trigger volume " is the price benchmark for applying the special safeguard measure; and1.19. " Trigger price" is the volume benchmark for applying the special safe guard measure.

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GENERAL SAFEGUARD MEASURE

Section 5. Condition the Application of General Safeguard Measure.- The Secretary shall apply a general safeguard measure upon a positive final determination of the Commission that a product is being imported in to the country in increased quantities, whether absolute or relative to the domestic production, as to be a substantial cause of serious injury or threat thereof to the domestic industry; however in the case of on- agricultural products; the Secretary shall first establish that the application of such safeguard measure will be in the public interest.

Section 6. Initiation of Action Involving General Safeguard Measure. Any person, whether natural or juridical, belonging to or representing a domestic industry may file with the secretary a verified petition requesting that action be taken to remedy the serious injury or prevent the threat thereof to the domestic industry caused by increased imports of the product under consideration.The petition shall include documentary evidence supporting the facts that are essential to establish:1. An increase in import of like or directly competitive products;2. The existence of serious injury or threat thereof to the domestic industry ; and3. The causal link between the increased imports of the product under consideration and the serious injury or threat thereof.The sectary shall review the accuracy and adequacy of the evidence adduced in the petition to determine the existence of a prima facie case that will justify the initiation of a preliminary investigation within five (5) day from receipt of the petitionThe Sectary may also initiate action upon the request of the President; or resolution of the House or Sale Committee On Agriculture, or house Or Senate Committee on Trade and Commerce.In the absence of such a petition, the Secretary may, motu proprio, initiate a preliminary safeguard investigation if there is evidence that increased imports of the product under consideration are a substantial cause of the threatening to substantially cause, serious injury to the domestic industry.The Secretary may extend legal, technical and other assistance to the concerned domestic producer and their organization at all stages of the safeguard action

Section 7. Preliminary Determination- Not later than thirty (30) days from receipt of the petition or a motu proprio initiation of the preliminary safeguard investigation. The Secretary shall on the basic of the evidence and submission of the interested parties, make a preliminary determination that increased imports of the product under consideration are a substantial cause of or threaten to substantially cause, serious injury to the domestic industry In the process of conducting a preliminary determination the Secretary shall notify the interested parties and shall require them to submit their answer within five (5) working days from receipt of such notice .The notice shall be deemed received five (5) working days from the date of transmittal to the respondent or appropriate diplomatic representative of the country of

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exportation or origin of the imported product under consideration.When information is not applied within the above time limit set by the Secretary or if the investigation is significantly impeded, decision will be based on the facts derived from the evidence at hand.Upon a positive preliminary determination that increased importation of the product under consideration is a substantial cause of, or threatens to substantially cause serious injury to the domestic industry the secretary shall without delay transmit its records to the Commission for immediate formal investigation.

Section 8. Provisional Messages.- In critical circumstances, which would be difficult to repair, and pursuant to a preliminary determination that increased import are a substantial cause of, or threaten to substantially cause, serious injury to the domestic industry, the Secretary shall immediately issue, through the Secretary of finance, a written instruction the Commissioner of Customs authorizing the imposition of a provisional general safeguard measure.Such measure shall take the from of a tariff increase, either ad valorem or specific, or both, to be paid through a cash bond set at a level sufficient to redress or present injury to the domestic injury provided, however, that in the case of agricultural products where the tariff increase may not be sufficient to redress or to prevent serious injury to the domestic producers or producers, a quantitative restriction may be set. The cash bond shall be deposited with a government depository bank and posted the bond. The duration of the provisional measure shall not exceed two hundred (200) days from the date of imposition during which period the requirements of the subsequent section of this Act on the initiation of a formal investigation notification and consultation shall have been met provided, That the duration any provisional measure shall be counted as part of the initial period and any extension, of the definitive final safeguard measure.When the provisional safeguard measure is in the from of a tariff increase, such increase shall not be subject or limited to the maximum level of the tariff as set forth in Section 401 (a) of the Tariff and Customs Code of the Philippines.

Section 9. Formal Investigation- within five (5) working days from receipt of the of the request from the Secretary, the Commission shall publish the notice of the commencement of the investigation, and public hearing which shall afford interested parties and consumers and opportunity to be present or to present evidence, to respond to the presentation of other parties and consumers, and otherwise be heard. The Commission shall submit evidence and position with respect to the importation of the subject article to the Commission within fifteen (15) days after the initiation of the investigation.The Commission shall complete its investigation and submit its report to the Secretary within one hundred twenty (120) calendars days from receipt of the referral by the Secretary, except when the Secretary certifies that then same is urgent, in which case the Commission shall complete the investigation and submit the report to the Secretary within sixty (60) days.

Section 10. Inspection of Evidence- The Commission shall make available for inspection by interested parties, copies of evidence submitted on or before the

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relevant due: Provided, however, that any information which is by nature confidential or which is provided on a confidential basis, shall upon cause being shown, not be disclosed without permission of the party submitting it. Parties providing confidential information may be requested to furnish non-confidential summaries thereof or if such parties indicate that such information cannot be summarized, the reasonsWhy a summary cannot be provided: provided, further, that if the Commission finds that a request for confidentiality is not warranted and if that party concerned is either unwilling to make the information public or to authorize its disclosure in generalized or summary from the Commissions may disregard such information unless it can be demonstrated to its satisfaction from appropriate sources that the information is correct.

Section 11. Adjustment plan.- In the course of its investigation, the Commission shall issue a appropriate notice to representatives of the concerned domestic industry or other parties to submit an adjustment plan to import competition, within forty-five (45) days upon receipt of the notice, except when the Secretary certifies of that the same is urgent, in which case the adjustment plan must be submitted within thirty (30) days.If the Commission make an affirmative determination of injury or threat thereof individual comments regarding actions such persons and entities intend to take to facilitate positive adjustment to import competition shall be submitted to the Commission by any (a) firm in the domestic industry, (b) certified or recognized union or group of workers in the domestic industry, (c) local community, (d) trade association representing the domestic industry, or (e) other person or the group of person.

Section 12. Determination of Serious Injury or Threat Thereof.-In reaching a positive determination that the increase in the importation of the product under consideration is causing serious injury or threat thereof to a domestic industry producing like products or directly competitive products , all relevant factors having a bearing on the situation of the domestic industry shall be evaluated. These shall include, in particular, in ports of the products concerned in absolute and relative terms, the shared of the domestic market taken by the increased imports, and changes in the level of sales production, productivity, capacity and employment.Such positive determination shall not be made unless the investigation demonstrates, on the basis of objective evidence, the existence of the causal link between the increased imports of the product under consideration con serious injury or threat thereof to the domestic industry. When factors other than increased import are causing injury, such injury shall not be attributed to increased imports other than increased imports are causing jury shall not be attributed to increased imports

Section 13. Adoption of Definitive Measure- Upon its positive determination the Commission shall recommend to the Secretary an appropriate definitive measures, in the form ofa. An increase in, or imposition of, any duty on the imported product;b. A decrease in or the imposition of a tariff-rate quota (MAV) on the product;

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

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Section 401 (a) of the Tariff and Customs Code of the Philippines.

Section 14. Contents of the Report by the Commission. - Based on its findings, the Commission shall submit to the Secretary: (a) the investigation report; (b) the proposed recommendations; (c) a copy of submitted adjustment plan; and (d) the commitments made by the domestic industry to import competition.The report shall also include a description of the short and long-term effects of the affirmative or negative recommendation, as the case may be, on the petitioner, the domestic industries, the consumers, the workers, and the communities where production facilities of such industry are located.The Commission, after submitting the reports Secretary shall make it available to the public except confidential information obtained under Section 10 the publish a summary in two (2) newspapers of general circulation.

Section 15. Limitations on Actions. - The duration of the period of an action taken under the General Safeguard Provisions of this Act shall not exceed four (4) years. Such period shall include the period, if any, in which provisional safeguard relief under Section 8 was in effects.The effective period of any safeguard measure, including any extensions thereof under Section 19 may not, in the aggregate, exceed ten (10) years.1. Any additional duty, or any duty imposed under this Section may be specific and/or ad valorem. It shall be in the amount necessary to prevent or redress or remedy the injury to the domestic industry;2. If the quantitative restriction is used, such measure shall not reduce the quantity of imports below the level of a recent period which shall be the average of imports in the last three (3) representative years of which the statistics are available, unless clear justification is given that a different levels is necessary to prevent or remedy serious injury;3. An action described in Section 13 (a), (b), or (c) that has an effective period of more than one (1) year shall be phased down at regular intervals within the period in which the action is in effect;4. Within two (2) years after the expiration of the action, the Secretary shall not accept any further petition for the same article: Provided, however, That a safeguard measure with a duration of one hundred eighty (180) days or less may be applied again to the same product if:i. At least one (1) year has elapsed since the date of introduction of the safeguard measure; andii. Such measure has not been applied on the same product more than twice in the five (5) year period immediately preceding the date of introduction of the measure.

Section 16. Monitoring. – So long as any action taken under Section 13 remains in effect, the Commission shall monitor developments with respect to the domestic industry, including the progress and specific efforts made by workers and firms in the domestic industry to make a positive adjustment to import competition.1. If the initial application of action taken under Section 13 exceeds three (3) years, or if an extension of such action exceeds three (3) years, the Commission shall submit to the Secretary a report on the results of the

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monitoring, not later than the date which is the midpoint of the initial period, and of each such extension, during which the action is in effect.2. The Commission in the preparation of each monitoring report shall conduct a hearing at which interested parties shall be given reasonable opportunity to be present, to present evidence, and to be heard.

Section 17. Notice of General Safeguard Measure.- The Secretary shall notify the concerned Committee on Safeguards of the World Trade Organization:a. When initiating an action relating to serious injury or threat thereof and the reasons for it.;b. When adopting a provisional general safeguard measure following a positive preliminary determination; andc. When applying or extending a definitive general safeguard measure following a positive final determination.

Section 18. Reduction, Modification, and Termination of Action. - Action taken under Section 13 may be reduced, modified, or terminated by the Secretary only after:a. Taking into account the results of the monitoring indicated in the report submitted by the Commission under Section 16, he determines that:i. No adequate efforts to make a positive adjustment to import competition have been undertaken by the domestic industry; andii. Changed economic circumstances have impaired the effectiveness of action taken under Section 13.b. A majority of the representative of the domestic industry submit to the Secretary, at least one (1) year before the expiration, a petition requesting such reduction, modification, or termination on the basis that the domestic industry has made a positive adjustment to import competition.If reduction, modification, or termination of action is being requested for an action that has been effect for three (3) year or less, the petitioning industry shall submit its request to the Secretary. The Secretary shall refer the request to the Commission, which shall conduct an investigation following the producers under Section 9, to be completed within sixty (60) days from receipt of the request. The Commission shall submit a report to the Secretary who shall then take action after taking into consideration conditions under Section 16(1) and (2), not later than thirty (30) days after receipt of the Commission’s report.

Section 19. Extension and Re-application of Safeguard Measure. – 1. Subject to the review under Section 16, an extension of the measure may be requested by the petitioner if the action continues to be necessary to prevent or remedy the serious injury and there is evidence that domestic industry is making positive adjustment to import competition.2. The petitioner may appeal to the secretary at least ninety (90) days before the expiration of the measure for an extension of the period by stating concrete reasons for the need thereof and a description of the industry’s adjustment performance and future plan. The secretary shall immediately refer the request to the Commission. Following the procedures required under Section 9, the commission shall then submit a report to the Secretary not later that sixty (60) days from its receipt of the request Within seven (7) days from

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receipt of the report, the secretary shall issue an order granting or denying the petition In case an extension is Granted. The same shall be more liberal that the initial application.

Section 20. Evaluation of Effectiveness of Action – After termination of any action under Section 13, the Commission shall evaluate the effectiveness of the actions taken by the domestic industry in facilitating positive adjustment to import competitionThe Commission shall hold a public hearing on the effectiveness of the action at which all interested parties shall be afforded opportunity to present evidence or testimony.

SPECIAL SAFEGUARD MEASURE FOR AGRICULTURAL PRODUCTS

Section 21. Authority to impose the special Safeguard Measure. - The Secretary of Agriculture shall issue a department order requesting the Commissioner of Customs, through the Secretary of Finance, to impose an addition special safeguard duty on an agricultural product, consistent with Philippine international treaty obligations, if.A. its cumulative import volume in a given year exceeds its trigger volume subject to the conditions state in this Act, in section 23 below; or but not concurrently; andB. Its actual c.i.f. import price is less that its trigger price subject to the Conditions State in this Act, in Section 24 below.

Section 22. Initiation of action Involving Special Safeguard Measure. - Any person, whether natural or juridical, may request the Secretary to verify if a particular product can be imposed a special safeguard duty subject to the conditions set in Section 21 of this Act. The request shall include date which would show that the volume of imports of a particular product has exceeded its trigger volume or that the c.i.f. import price of a particular product has gone below its trigger price. The secretary shall come up with a finding within five (5) working days from the receipt of a request.The Secretary may, motu proprio, initiate the imposition of a special safeguard measure following the satisfaction of the conditions for imposing the measure set in this Chapter.

Section 23. Determination of Special Duty Based on the Volume Test.- The special safeguard duty allowed to be imposed on the basis of the volume test pursuant to Section 21 (a) of this act shall be determined as follows:a. The trigger volume referred to in Section 21 (a) of this Act is the amount obtained, after adding the change in the annual domestic consumption of the agricultural product under consideration for the two (2) preceding years for which data are available, to:i. One hundred twenty-five percent (125%) of the average annual volume of imports of the agricultural product under consideration in the three (3) immediately preceding years for which data are available, hereinafter referred to as the average import volume, if the market access opportunity is at most ten percent (10%); orii. One hundred ten percent (110%) of the average annual import volume,

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if the market access opportunity exceeds ten percent (10) but is not more that thirty percent (30%);oriii. One hundred five percent (105%) of the average annual import volume if the market access opportunity exceeds thirty percent (30%)Provided, That if the change in the volume of domestic consumption mentioned above is not taken into account in computing the trigger volume. The trigger volume shall be equal to one hundred twenty-five percent (125%) of the average import volume for the immediate three (3) preceding years for which data are available, unless a clear justification is given that a different level is necessary to prevent or remedy serious injury: Provided, further, that the trigger volume shall at least be one hundred five percent (105%) of the average imports of the agricultural product under consideration.b. The special safeguard duty to be imposed subject to the conditions state under the volume test shall be appropriately set to a level not exceeding one-third of the applicable out-quota customs duty on the agricultural product under consideration in the year when it is imposed: Provided, That this duty shall only be maintained until the end of the year in which it is imposed: Provided, further, That this duty may be reduced or terminated in special cases such as when a shortage of a particular agricultural product exists, as determined by the Secretary.c. In transitu volumes of imports of the agricultural product under consideration at the time the special safeguard duty is imposed shall be exempted from the additional duty. However, such volumes shall be counted in the computation or the cumulative volume of imports of the said agricultural product for the following year

Section 24. Determination of Special safeguard Duty Based on the Price Test.- The additional duty allowed to be imposed on the basis of the price test pursuant to Section 21 (b) of this Act shall be determined as follows:a. The trigger price referred to in section 21(b) of this Act is the average actual c.i.f. import price or relevant reference price of the agricultural product under consideration from 1986 to 1988, unless a clear justification is given that a different reference price is necessary to prevent or remedy serious injury. The secretary shall publish the list of trigger prices corresponding to each of the agricultural products covered by this Act, after the conduct of public hearings on the subject; andb. The special safeguard duty to be imposed subject to the conditions stated under Section 21 (b) of this Act shall be computed as follows:i. Zero, if price difference exceeds ten percent (10%) of the trigger price; orii. Thirty percent (30%) of the amount by which the price difference exceeds ten percent (10%) of the trigger price, if the said difference exceeds ten percent (10%) but is at most forty percent (40%) of the trigger price; oriii. Fifty percent (50%) of the amount by which the price difference exceeds forty percent (40%) of the trigger price, plus the additional duly imposed under Section 24(b)(ii) if the said difference exceeds forty percent (40%) but is at most sixty percent (60%) of the trigger price; oriv. Seventy percent (70%) of the amount by which the price difference exceeds sixty percent (60%) of the trigger price, plus the additional duties imposed under Section 24 (b) (ii) and (b) (iii), if the said difference exceeds

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sixty percent (60%) and is at most seventy-five percent (75%) of the trigger price; orv. Ninety percent (90%) of the amount by which the price difference exceeds seventy-five percent (75%) of the trigger price; plus the additional duties imposed under Section 24 (b)(ii), (b)((iii), and (b)(iv), if the said difference exceeds seventy-five percent (75%) of the trigger price.As far as practicable, a special safeguard measure determined under the provisions of this Section shall not be resorted to when the volume of the imported agricultural product under consideration is declining.

Section 25. Agricultural Products Subject to Minimum Access Volume Commitments. – The special safeguard duty shall not apply to the volumes of the imported agricultural product under consideration that are brought into the country under the minimum access volume mechanism: Provided, however, That these volumes shall be included in computing the cumulative volume of imports of the said agricultural product pursuant to Section 21 (a) of this Act.

Section 26. Perishable and Seasonal Agriculture Products. - Shorter time periods and different reference prices may be used in determining the applicable special safeguard measure taking into account the special characteristics of perishable and seasonal agricultural imports.

Section 27. Notice of Special Safeguard Measure. - The Secretary shall make the administration of the safeguard measure transparent by giving notice in writing to the WTO Committee on Agriculture, in advance to the extent practicable, and seasonal agricultural products, notification shall be made from first action in any period.The notice shall include relevant data or as may be deemed necessary, information and methods used in cases where changes in consumption volumes must be allowed to individual tariff lines subject to action under Chapter III of this Act.Where a special safeguard measure action is taken under the provisions of this Act, the Secretary shall consult with interest WTO members and provide all relevant information on the conditions of the application of such action.

Section 28. Duration of Special Safeguard Measures. - The special safeguard measures for agricultural products shall lapse with the duration of the reform process in agriculture as determined in the WTO. Thereafter, recourse to safeguard measures shall be subject to the provisions on general safeguard measures as provided in Chapter II of this Act.

CHAPTER IVSPECIAL PROVISIONS

Section 29. Judicial Review. - Any interest party who is adversely affected by the ruling of the Secretary in connection with the imposition of a safeguard measure may file with the Court of Tax Appeals, a petition for review of such ruling within thirty (30) days from receipt thereof: Provided, however, That the filing of such petition for review shall not in any way stop, suspend or otherwise toll the imposition or collection of the appropriate tariff duties or the

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adoption of other appropriate safeguard measures, as the case may be.The petition for review shall comply with the same requirements and shall follow the same rules of procedure and shall be subject to the same disposition as in appeals in connection with adverse rulings on tax matters to the Court of Appeals.

Section 30. Penalty Clause. - Any government official or employee who shall fail to initiate, investigate, and implement the necessary actions as provided in this Act and the rules and regulations to be issued pursuant hereto, shall be guilty of gross neglect of duty and shall suffer the penalty of dismissal from public service and absolute disqualification from holding public office.

Section 31. Prohibition of Concurrent Recourse to Safeguard Measures. – There shall be no recourse to the use of the general safeguard measure under Chapter II of this Act concurrently with the special safeguard measure as provided for under Chapter III of this Act and vice-versa.

Section 32. Issuance of Implementing Rules and Regulations. – Within sixty (0) days after affectivity of this Act, the Determent of Agriculture and the Department of Trade and Industry in consultation with the Department of Finance, the Bureau of Customs, the National Economic and Development Authority, and the Tariff Commission, after consultations with domestic industries and with the approval of the Congressional Oversight Committee which is hereby created under this Act, shall promulgate the necessary rules and regulations to implement this Act.

Section 33. Oversight. - There shall be a Congressional Oversight Committee composed of the Chairmen of the Committee on trade and Industry, the Committee on Ways and Means, and the Committee on Agriculture of both the Senate and the House of Representatives to oversee the implementation of this Act.

Section 34. Administrative System Support. - Upon the effectivity of this Act, any sum as may be necessary for the Department of Agriculture, the Department of Trade and Industry, and Tariff Commission to undertake their functions efficiently and effectively shall be included in the General Appropriations Act.The aforementioned government agencies are hereby authorized to collect such fees, charges, and safeguard duties that are deemed necessary. Fifty percent (50%) of the revenue collected from such fees, charges, and safeguard duties shall be set aside in a Remedies Fund which shall be earmarked for the use of these agencies in the implementation of remedies, including the safeguard measures. The remaining fifty percent (50%) shall be deposited under a special account to be created in the National Treasury and shall be earmarked for competitiveness enhancement measures for the industries affected by the increased imports. The disposition thereof shall be determined through the General Appropriations Act.

Section 35. Assistance to Farmers and Fisherfolk. - To safeguard and enhance the interest of farmers and Fisherfolk, nothing in this Act shall in any

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manner affect the provisions Republic Act No. 8435, otherwise known as the Agriculture and Fisheries Modernization Act.

Section 36. Conditions for Application of Safeguard Measures. - In the application of any safeguard measure under this Act, the following conditions must be observed:1. All actions must be transparent and shall allow any anti-competitive, monopolistic or manipulative business device; and2. Pursuant to the non-impairment clause of the Constitution, nothing in this Act shall impair the obligation of existing supply contracts.

SECTION 2 – MARKING DUTY

Marking of Imported Articles and Containers.

A. Marking of Articles. - Except as hereinafter provided, every article of foreign origin (or its container, as provided in subsection "b " hereof) imported into the Philippines shall be marked in any official language of the Philippines and in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or container) will permit in such manner as to indicate to an ultimate purchaser in the Philippines the name of the country of origin of the article. The Commissioner of Customs shall, with the approval of the department head, issue rules and regulations to –

1. Determine the character of words and phrases or abbreviation thereof which shall be acceptable as indicating the country of origin and prescribe any reasonable method of marking, whether by printing, stenciling, stamping, branding, labelling or by any other reasonable method, and a conspicuous place on the article or container where the marking shall appear.

2. Require the addition of any other words or symbols which may be appropriate to prevent deception or mistake as to the origin of the article or as to the origin of any other article with which such imported article is usually combined subsequent to importation but before delivery to an ultimate purchaser; and

3. Authorize the exception of any article from the requirements of marking if:

a. Such article is incapable of being marked;b. Such article cannot be marked prior to shipment to the Philippines without injury;c. Such article cannot be marked prior to shipment to the Philippines, except at an expense economically prohibitive of its importation;d. The marking of a container of such article will reasonably indicate the origin of such article;e. Such article is a crude substance;f. Such article is imported for use by the importer and not intended for sale in its imported or any other form;

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g. Such article is to be processed in t he Philippines b y t he importer o r f or h is account otherwise than for the purpose of concealing the origin of such article and in such manner that any mark contemplated by this section would necessarily be obliterated, destroyed or permanently concealed;h. An ultimate purchaser, by reason of the character of such article or by reason of the circumstances of its importation must necessarily k now t he country o f origin o f such article even though it is not marked to indicate its origin;i. Such article was produced more than twenty years prior to its importation into the Philippines; orj. Such article cannot be marked after importation except at an expense which is economically prohibitive, and the failure to mark the article before importation was not due to any purpose of the importer, producer, seller or shipper to avoid compliance with this section.

B. Marking of Containers. - Whenever an article is exempted under subdivision (3) of subsection "a " of this section from the requirements of marking, the immediate container, if any, of such article, or such other container or containers of such article as may be prescribed by the Commissioner of Customs with the approval of the department head, shall be marked in such manner as to indicate to an ultimate purchaser in the Philippines the name of the country of origin of such article in any official language of the Philippines, subject to all provisions of this section, including the same exceptions as are applicable to articles under subdivision (3) of subsection "a ".

C. Marking Duty for Failure to Mark. - If at the time of importation any article (or its container, as provided in subsection "b " hereof), is not marked in accordance with the requirements of this section, there shall be levied, collected and paid upon such article a marking duty of 5 per cent ad valorem, which shall be deemed to have accrued at the time of importation, except when such article is exported or destroyed under customs supervision and prior to the final liquidation of the corresponding entry.

D. Delivery Withheld Until Marked. – No imported article held in customs custody for inspection, examination or appraisement shall be delivered until such article and/or its containers, whether released or not from customs custody, shall have been marked in accordance with the requirements of this section and until the amount of duty estimated to be payable under subsection "c " of this section shall have been deposited. Nothing in this section shall be construed as excepting any article or its container from the particular requirements of marking provided for in any provision of law.

E. The failure or refusal of the owner or importer to mark the articles as herein required within a period of thirty days after due notice shall constitute as an act of abandonment of said articles and their disposition shall be governed by the provisions of this Code relative to abandonment of imported articles.

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SECTION 3 – COUNTERVAILING DUTY

Section 1: Definition of Terms1) Domestic industry' shall refer to the domestic producers as a whole of the like product, commodity or article or to those of them whose collective output of the product, commodity or article constitutes a major proportion of the total d domestic production of those products, except that when producers are related to the exporters or importers or are themselves importers of the allegedly subsidized product or a like product from other countries, the term 'domestic industry' may be interpreted as referring to the rest of the producers. In case the market in the Philippines is divided into two or more competitive markets, the term 'domestic industry' shall refer to the producers within each market although their production does not constitute a significant portion of the total domestic industry: Provided, That there is a concentration of subsidized imports into such a separate market: and Provided, further, That the subsidized imports are causing injury to the producers of all or almost all of the production within such market.2) 'Interested parties' shall include: a) An exporter or foreign producer or the importer of a product subject to investigation, or the government of the exporting country or a trade or business association a majority of the members of which are producers, exporters or importers of such product;b) A producer of the like product in the Philippines or a trade and business association a majority of the members of which produce the like product in the Philippines; andc) Labor unions that are representative of the industry or coalitions of producers and/or labor unions.3) Like product' shall mean a product, commodity or article which is identical, i.e., alike in all respects to the product, commodity or article or in the absence of such product, commodity or article, another product, commodity or article which, although not alike in all respects, has characteristics closely resembling those of the imported product, commodity or article under consideration.

"Whenever any product, commodity or article of commerce is granted directly or indirectly by the government in the country or origin or exportation, any kind or form of specific subsidy upon the production, manufacture or exportation of such product, commodity or article, and the importation of such subsidized product, commodity or article has caused or threatens to cause material injury to a domestic industry or has materially retarded the growth or prevents the establishment of a domestic industry as determined by the Tariff Commission (hereinafter referred to as the 'Commission'), the Secretary of Trade and Industry, in the case of non-agricultural product, commodity or article, or the Secretary of Agriculture, in the case of agricultural product, commodity or article (both of whom are hereinafter simply referred to as 'the Secretary,' as the case may be) shall issue a department order imposing a countervailing duty equal to the ascertained amount of the subsidy. The same levy shall be imposed on the like product, commodity or article thereafter imported to the Philippines charges imposed by law on such imported product, commodity or article.

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(A) Initiation of Action. - A countervailing action may be initiated by the following:1) Any person, whether natural or juridical, who has an interest to protect, by filing a verified petition for the imposition of a countervailing duty by or on behalf of the domestic industry;2) The Secretary of Trade and Industry or the Secretary of Agriculture, as the case may be, in special circumstances where there is sufficient evidence of an existence of a subsidy, injury and causal link.(B) Requirements. - A petition shall be filed with the Secretary and shall be accompanied by documents, if any, which are reasonably available to the petitioner and which contain information supporting the facts that are essential to establish the presence of the elements for the imposition of a countervailing duty, and shall further state, among others:1) The domestic industry to which the petitioner belongs and the particular domestic product, commodity or article or class of domestic product, commodity or article being prejudiced;2) The number of persons employed, the total capital invested, the production and sales volume, and the aggregate production capacity of the domestic industry that has been materially injured or is threatened to be materially injured or whose growth or establishment has been materially retarded or prevented;3) The name and address of the known importer, exporter, or foreign producer, the country of origin or export, the estimated aggregate or cumulative quantity, the port and the date of arrival, the import entry declaration of the imported product, commodity or article, as well as the nature, the extent and the estimated amount of the subsidy thereon; and4) Such other particulars, facts or allegations as are necessary to justify the imposition of countervailing duty on the imported product, commodity or article."A petition for the imposition of a countervailing duty shall be considered to have been made 'by or on behalf of the domestic industry' if it is supported by those domestic producers whose collective output constitutes more than fifty percent (50%) of the total production of the like product produced by that portion of the domestic industry expressing either support for or opposition to the application. However, an investigation shall be initiated only when domestic producers supporting the application account for at least twenty -five percent (25%) of the total production of the like product produced by the domestic industry. In cases involving an exceptionally large number of producers, degree of support or opposition may be determined by using statistically valid sampling techniques or by consulting their representative organizations."Within ten (10) days from his receipt of the petition or information, the Secretary shall review the accuracy and adequacy of the information or evidence provided in the petition to determine whether there is sufficient basis to justify the initiation of an investigation. If there is no sufficient basis to justify the initiation of an investigation, the Secretary shall dismiss the petition and shall properly notify the Secretary of Finance, the Commissioner of Customs and other parties concerned regarding such dismissal. The Secretary shall extend legal, technical and other assistance to the concerned domestic producers and their organizations at all stages of the countervailing action.

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(C) Notice to the Secretary of Finance. - Upon his receipt of the petition, the Secretary shall, without delay, furnish the Secretary of Finance with a summary of the essential facts of the petition, and request the latter to immediately inform the Commissioner of Customs regarding such petition and to instruct him to gather and secure all import entries covering such allegedly subsidized product, commodity or article without liquidation. The Commissioner of Customs shall submit to the Secretary a complete report on the number, volume, and value of the importation of the allegedly subsidized product, commodity or article within ten (10) days from his receipt of the instruction from the Secretary of Finance, and to make similar additional reports every ten (10) days thereafter.(D) Notice to and Answer of Interested Parties. - Within five (5) days from finding of the basis to initiate an investigation, the Secretary shall notify all interested parties, and shall furnish them with a copy of the petition and its annexes, if any. T he interested p arties s hall, not later than thirty (30) days from their receipt o f t he notice, submit their answer, including such relevant evidence or information as is reasonably available to them to controvert the allegations of the petition. If they fail to submit their answer, the Secretary shall make such preliminary determination of the case on the basis of the facts and/or information available."The Secretary shall avoid, unless a decision has been made to initiate an investigation, any publicizing of the petition. However, after receipt of a properly documented petition and before proceeding to initiate an investigation, he shall notify the government of the exporting country about the impending investigation.

"(E) Preliminary Determination. - Within twenty (20) days from his receipt of the answer of the interested parties, the Secretary shall, on the basis of the petition of the aggrieved party and the answer of such interested parties and their respective supporting documents or information, make a preliminary determination on whether or not a prima facie case exists for the imposition of a provisional countervailing duty in the form of a cash bond equal to the provisionally estimated amount of subsidy. Upon finding of a prima facie case, the Secretary shall immediately issue, through the Secretary of Finance, a written instruction to the Commissioner of Customs to collect the cash bond, in addition to the corresponding ordinary duties, taxes and other charges imposed by law on such product, commodity or article. The posting of a cash bond shall be required not earlier than sixty (60) days from the date of initiation of the investigation. The cash bond shall be deposited with a government depository bank and shall be held in trust for the respondent importer. The application of the cash bond shall not exceed four (4) months."The Secretary shall immediately transmit his preliminary findings together with the records of the case to the Commission for its formal investigation."(F)Termination of Investigation by the Secretary or the Commission. - The Secretary or the Commission, as the case may be, shall motu proprio terminate the investigation at any stage of the proceedings if the amount of subsidy is de minimis as defined in existing international trade agreements of which the Republic of the Philippines is a party; or where the volume of the subsidized imported product, commodity or article, actual or potential, or the injury is negligible. "

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(G) Formal Investigation by the Commission. - Immediately upon its receipt of the records of the case from the Secretary, the Commission shall commence the formal investigation and shall accordingly notify in writing all interested parties and, in addition, give public notice of such investigation in two (2) newspapers of general circulation. In the formal investigation, the Commission shall essentially determine:1) The nature and amount of the specific subsidy being enjoyed by the imported product, commodity or article in question;2) The presence and extent of the material injury or the threat thereof to, or the material retardation of the growth, or the prevention of the establishment of, the affected domestic industry; and3) The existence of a causal relationship between the allegedly subsidized imported product, commodity or article and the material injury or threat thereof to, or the material retardation of the growth, or the prevention of the establishment of, the affected domestic industry."The Commission is hereby authorized to require any interested party to allow it access to, or otherwise provide, necessary information to enable the Commission to expedite the investigation. In case any interested party refuses access to, or otherwise does not provide, necessary information within a reasonable period of time or significantly impedes the investigation, a final determination shall be made on the basis of the facts available."The formal investigation shall be conducted in a summary manner. No dilatory tactics nor unnecessary or unjustified delays shall be allowed, and the technical rules or evidence s hall not be applied strictly.(H) Determination of the Existence of Subsidy. - A subsidy is deemed to exist:1) When the government or any public body in the country of origin or export of the imported product, commodity or article extends financial contribution to the producer, manufacturer or exporter of such product, commodity or article in the form of:a) Direct transfer of funds such as grants, loans or equity infusion; orb) Potential direct transfer of funds or assumption of liabilities such as loan guarantees; orc) Foregone or uncollected government revenue that is otherwise due from the producer, manufacturer o r exporter of the product, commodity or article: Provided, That the exemption of any exported product, commodity or article from duty or tax imposed on like product, commodity or article when destined for consumption in the country of origin and/or export or the refunding of such duty or tax, shall not be deemed to constitute a grant of a subsidy: Provided, further, That should a product, commodity or article be allowed drawback by the country of origin or export, only the ascertained or estimated amount by which the total amount of duties and/or internal revenue taxes was discounted or reduced, if any, shall constitute a subsidy; ord) Provision of goods or services other than general infrastructure; ore) Purchases of goods from the producer, manufacturer or exporter;f) Payments to a funding mechanism; org) Other financial contributions to a private body to carry out one or more of the activities mentioned in subparagraphs (a) to (0 above; or2) When there is a benefit conferred.(i) Determination of Specific Subsidy. - In the determination of whether or not

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a subsidy is specific, the following principles shall apply:1) Where the government or any public body in the country of origin or export of the imported product, commodity or article explicitly limits access to a subsidy to certain enterprises, such subsidy shall be specific;2) Where such government or public body through a law or regulation establishes objective criteria and conditions governing the eligibility for, and the amount of, a subsidy, specificity shall not exist: Provided, That the eligibility is automatic and that such criteria or conditions are strictly adhered to. Objective criteria shall mean those which are neutral, do not favor certain enterprises over others, and are economic in nature and horizontal in application, such as number of employees or size of enterprise;3) In case a subsidy appears to be non -specific according to subparagraphs (1) and (2) above, but there are reasons to believe that the subsidy may in fact be specific, factors that may be considered are: use of a subsidy program by a limited number of certain enterprises for a relatively longer period; granting of disproportionately large amounts of subsidy to certain enterprises; and exercise of wide and unwarranted discretion for granting a subsidy; and4) A subsidy which is limited to certain enterprises located within a designated geographical region within the territory of the government or public body in the country of origin or export shall be specific.(J) Determination of Injury. - The presence and extent of material injury or threat thereof to a domestic industry, or the material retardation of the growth, or the prevention of the establishment of a nascent enterprise because of the subsidized imports, shall be determined by the Secretary or the Commission, as the case may be, on the basis of positive evidence and shall require an objective examination of:1) The volume of the subsidized imports, that is, whether there has been a significant increase either absolute or relative to production or consumption in the domestic market;2) The effect of the subsidized imports on prices in the domestic market for the like product, commodity or article, that is, whether there has been a significant price undercutting, or whether the effect of such imports is otherwise to depress prices to a significant degree or to prevent price increases, which otherwise would have occurred to a significant degree;3) The effect of the subsidized imports on the domestic producers of the like product, commodity or article, including an evaluation of all relevant economic factors and indices having a bearing on the state of the domestic industry concerned, such as, but not limited to, actual and potential decline in output, sales, market share, profits, productivity, return on investments, or utilization of capacity; factors affecting domestic prices; actual or potential negative effects on the cash flow, inventories, employment, wages, growth, ability to raise capital or investments and, in the case of agriculture, whether there has been an increased burden on the support programs of the national government; and4) Factors other than the subsidized imports which at the same time are injuring the domestic industry, such as: volumes and prices of non -subsidized imports of the product, commodity or article in question; contraction in demand or changes in the patterns of consumption; trade restrictive practices of and competition between the foreign and domestic producers;

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developments in technology and the export performance and productivity of the domestic industry"In determining threat of material injury, the Secretary or the Commission, as the case may be, shall decide on the basis of facts and not merely allegation, conjecture or remote possibility. The change in circumstances which would create a situation in which the subsidized imports would cause injury should be clearly foreseen and imminent considering such relevant factors as:1) Nature of the subsidy in question and the trade effects likely to arise therefrom;2) Significant rate of increase of subsidized imports into the domestic market indicating the likelihood of substantially increased importations;3) Sufficient freely disposable, or an imminent substantial increase in, capacity of the exporter of such subsidized imported product, commodity or article indicating the likelihood of substantially increased subsidized imports to the domestic market, taking into account the availability of other markets to absorb the additional exports;4) Whether these subsidized imports are entering at prices that will have a significant depressing or suppressing effect on domestic prices, and will likely increase demand for further imports; and5) Inventories of the product, commodity or article being investigated."In the case where the effect of the subsidized import will materially retard the growth or prevent the establishment of a domestic industry, information on employment, capital investments, production and sales, and production capacity of said domestic industry can be augmented or substituted by showing through a factual study, report or other data that an industry which has potential to grow domestically is adversely affected by the subsidized import. For this purpose, the Department of Trade and Industry for non -agricultural products, and the Department of Agriculture for agricultural products, shall conduct continuing studies to identify and determine the specific industries, whether locally existing or not, which have the potential to grow or to be established domestically and whose growth or establishment will be retarded or prevented by a subsidized import.(K) Cumulation of Imports. - When imports of products, commodities or articles from more than one (1) country are simultaneously the subject of an investigation for the imposition of a countervailing duty, the Secretary or the Commission, as the case may be, may cumulatively assess the effects of such imports only if:1) The amount of subsidization established in relation to the imports from each country is more than de minimis as defiridd in existing international trade agreements of which the Republic of the Philippines is a party; and2) The volume of such imports from each country is not negligible; and3) A cumulative assessment of the effects of such imports is warranted in the light of the conditions of competition between the imported products, commodities or articles, and the conditions of competition between the imported products, commodities or articles and the like domestic products, commodities or articles.(L) Public Notices and Consultation Proceedings. - The Secretary or the Commission, as the case may be, shall make public notices and conduct consultation with the government of the exporting country when:1) Initiating an investigation;

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2) Concluding or suspending an investigation;3) Making a preliminary or final determination;4) Making a decision to accept an undertaking or the termination of an undertaking; and5) Terminating a definitive countervailing duty.(M) Voluntary Undertaking. - When there is an offer from any exporter of subsidized imports to revise its price, or where the government of the exporting country agrees to eliminate or limit the subsidy or take other measures to that effect, the Commission shall determine if the offer is acceptable and make the necessary recommendation to the Secretary. If the undertaking is accepted, the Secretary may advise the Commission to terminate, suspend or continue the investigation. The Secretary may also advise the Commission to continue its investigation upon the request of the government of the exporting country. The voluntary undertaking shall lapse if there is a negative finding of the presence of a subsidy or material injury. In the event of a positive finding of subsidization and material injury, the undertaking will continue, consistent with its terms and the provisions of this section.(N) Final Determination and Submission of Report by the Commission. - The Commission shall complete the formal investigation and submit a report of its findings to the Secretary within one hundred twenty (120) days from receipt of the records of the case: Provided, however, That it shall, before a final determination is made, inform all the interested parties of the essential facts under consideration which form the basis for the decision to impose a countervailing duty. Such disclosure should take place in sufficient time for the parties to defend their interests.

(O) Imposition of Countervailing Duty. - The Secretary shall, within ten (10) days from his receipt of an affirmative final determination by the Commission, issue a department order imposing the countervailing duty on the subsidized imported product, commodity or article. He shall furnish the Secretary of Finance with the copy of the order and request the latter to direct the Commissioner of Customs to cause the countervailing duty to be levied, collected and paid, in addition to any other duties, taxes and charges imposed by law on such product, commodity or article.

"In case of an affirmative final determination by the Commission, the cash bond shall be applied to the countervailing duty assessed. If the cash bond is in excess of the countervailing duty assessed, the remainder shall be returned to the importer immediately: Provided, That no interest shall be payable by the government on the amount to be returned. If the cash bond is less than the countervailing duty assessed, the difference shall not be collected."If the order of the Secretary is unfavorable to the petitioner, the Secretary shall, after the lapse of the period for appeal to the Court of Tax Appeals, issue through the Secretary of Finance a department order for the immediate release of the cash bond to the importer.(P) Duration and Review of Countervailing Duty. – As a general rule, any imposition of countervailing duty shall remain in force only as long as and to the extent necessary to counteract a subsidization which is causing or threatening to cause material injury. However, the need for the continued

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imposition of the countervailing duty may be reviewed by the Commission when warranted, motu proprio or upon direction of the Secretary."Any interested party may also petition the Secretary for a review of the continued imposition of the countervailing duty: Provided, That at least six (6) months have elapsed since the imposition of the countervailing duty, and upon submission of positive information substantiating the need for a review. Interested parties may request the Secretary to examine: (1) whether the continued imposition of the countervailing duty is necessary to offset the subsidization; and/or (2) whether the injury will likely continue or recur if the countervailing duty is removed or modified.

"If the Commission determines that the countervailing duty is no longer necessary or warranted, the Secretary shall, upon its recommendation, immediately issue a department order terminating the imposition of the countervailing duty and shall notify all parties concerned, including the Commissioner of Customs through the Secretary of Finance, of such termination."Notwithstanding the provisions of the preceding paragraphs of this subsection, any countervailing duty shall be terminated on a date not later than five (5) years from the date of its imposition (or from the date of the most recent review if that review has covered both subsidization and material injury), unless the Commission has determined, in a review initiated at least six (6) months prior to the termination date upon the direction of the Secretary or upon a duly substantiated request by or on behalf of the domestic industry, that the termination of the countervailing duty will likely lead to the continuation or recurrence of the subsidization and material injury.

"The procedure and evidence governing the disposition of the petition for the imposition of countervailing duty shall equally apply to any review carried out under this subsection. Such review shall be carried out expeditiously and shall be concluded not later than ninety (90) days from the date of the initiation of such a review.

(Q) Judicial Review. - Any interested party who is adversely affected by the department order of the Secretary on the imposition of the countervailing duty may file with the Court of Tax Appeals a petition for review of such order within thirty (30) days from his receipt of notice thereof: Provided, however, That the filing of such petition for review shall not in any way stop, suspend or otherwise toll the imposition and collection of the countervailing duty on the imported product, commodity or article.

"The petition for review shall comply with the same requirements, follow the same rules of procedure, and be subject to the same disposition as in appeals in connection with adverse rulings on tax matters to the Court of Tax Appeals.

(R) An inter-agency committee composed of the Secretaries of Trade and Industry, Agriculture, and Finance, the Chairman of the Tariff Commission, and the Commissioner of Customs shall promulgate all rules and regulations necessary for the effective implementation of this section.” (As amended by Republic Act No. 8751 dated 07 August 1999)

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SECTION 4 – ANTI-DUMPING DUTY

Section I. Definition of Terms

1) Anti -dumping duty refers to a special duty imposed on the importation of a product, commodity or article of commerce into the Philippines at less than its normal value when destined for domestic consumption in the exporting country, which is the difference between the export price and the normal value of such product, commodity or article.2) Export price refers to (1) the ex -factory price at the point of sale for export; or (2) the F.O.B. price at the point of shipment. In cases where (1) or (2) cannot be used, then the export price may be constructed based on such reasonable basis as the Secretary or the Commission may determine.3) Normal value refers to a comparable price at the date of sale of the like product, commodity or article in the ordinary course of trade when destined for consumption in the country of export.4) Domestic industry refers to the domestic producers as a whole of the like product or to those of them whose collective output of the product constitutes a major related to the exporters or importers or are themselves importers of the allegedly dumped product, the term 'domestic industry' may be interpreted as referring to the rest of the producers.5) Dumped import product refers to any product, commodity or article of commerce introduced into the Philippines at an export price less than its normal value in the ordinary course of trade, for the like product, commodity or article destined for consumption in the exporting country, which is causing or is threatening to cause material injury to a domestic industry, or materially retarding the establishment of a domestic industry producing the like product.6) Like product refers to a product which is identical or alike in all respects to the product under consideration, or in the absence of such a product, another product which, although not alike in all respects, has characteristics closely resembling those of the product under consideration.7) Non -selected exporter or producer refers to an exporter or producer who has not been initially chosen as among the selected exporters or producers of the product under investigation.

(a) Anti Dumping Duty. Whenever any product, commodity or article of commerce imported into the Philippines at an export price less than its normal value in the ordinary course of trade for the like product, commodity or article destined for consumption in the exporting country is causing or is threatening to cause material injury to a domestic industry, or materially retarding the establishment of a domestic industry producing the like product, the Secretary of Trade and Industry, in the case of non -agricultural product, commodity or article, or the Secretary of Agriculture, in the case of agricultural product, commodity or article (both of whom are hereinafter referred to as the Secretary, as the case may be), after formal investigation and affirmative finding of the Tariff Commission (hereinafter referred to as the Commission), shall cause the imposition of an anti -dumping duty equal to the margin of dumping on such product, commodity or article and on like product, commodity or article thereafter imported to the Philippines under similar

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circumstances, in addition to ordinary duties, taxes and charges imposed by law on the imported product, commodity or article. However, the anti -dumping duty may be less than the margin if such lesser duty will be adequate to remove the injury to the domestic industry. Even when a 11 t he requirements f or t he imposition have been fulfilled, the decision on whether or not to impose a definitive anti -dumping duty remains the prerogative of the Commission. It may consider, among others, the effect of imposing an anti -dumping duty on the welfare of consumers and/or the general public, and other related local industries.

In the case where products are not imported directly from the country of origin but are exported to the Philippines from an intermediate country, the price at which the products are sold from the country of export in the Philippines shall normally be compared with the comparable price in the country of export. However, comparison may be made with the price in the country of origin, if for example, the products are merely transshipped through the country of export, or such products are not produced in the country of export, or there is no comparable price for them in the country of export.

(b) Initiation of Action. An anti-dumping investigation may be initiated upon receipt of a written application from any person whether natural or juridical, representing a domestic industry, which shall include evidence of: a) dumping, b) injury, and c) causal link between the dumped imports and the alleged injury. Simple assertion, unsubstantiated by relevant evidence, cannot be considered sufficient to meet the requirements of this paragraph. The application shall contain such information as is reasonably available to the applicant on the following: 1) the identity of the applicant and a description of the volume and the value of the domestic production of the like product of the applicant; 2) a complete description of the alleged dumped product, the name of the country of origin or export under consideration, the identity of each known exporter or foreign producer, and a list of known persons importing the product under consideration; 3) information on the normal value of the product under consideration in the country of origin or export; and 4) information on the evolution of the volume of the alleged dumped imports, the effect of these imports on the price of the like product in the domestic market, and the consequent impact of the imports on the domestic industry.

"Philippine Trade, Agriculture or Finance Attaches and other Consular Officials or Attach6s in the concerned exporting member countries are mandated to furnish the applicant pertinent information or documents to support his complaint within a period not exceeding thirty (30) days from receipt of a request.

"The application shall be filed with the Secretary of Trade and Industry in the case of non -agricultural product, commodity or article, or with the Secretary of Agriculture in the case of agricultural product, commodity or article. The Secretary shall require the petitioner to post a surety bond in such reasonable amount as to answer for any and all damages which the importer may sustain by reason of the filing of a frivolous petition. He shall immediately release the surety bond upon making an affirmative preliminary determination.

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"The application shall be considered to have been made "by or on behalf of the domestic industry " if it is supported by those domestic producers whose collective output constitutes more than fifty percent (50%) of the total production of the like product produced by that portion of the domestic industry expressing either support for or opposition to the application. In cases involving an exceptionally large number of producers, the degree of support and opposition may be determined by using a statistically valid sampling technique or by consulting their representative organizations. However, no investigation shall be initiated when domestic producers expressly supporting the application account for less than twenty -five percent (25%) of total production of the like product produced by the domestic industry.

"in exceptional circumstances, the Philippines may be divided into two or more competitive markets and the producers within each market may be regarded as a separate industry if (a) the producers within such market have the dominant market share; and (b) the demand in that market is not substantially supplied by other producers elsewhere in the Philippines.

"if, in special circumstances, the Secretary decides to initiate an investigation without having received a written application by or on behalf of a domestic industry for the initiation of such investigation, he shall proceed only if he has sufficient evidence of dumping, injury and a causal link, to justify the initiation of an investigation.

"Within five (5) working days from receipt of a properly documented application, the Secretary shall examine the accuracy and adequacy of the petition to determine whether there is sufficient evidence to justify the initiation of investigation. If there is no sufficient evidence to justify initiation, the Secretary shall dismiss the petition and properly notify the Secretary of Finance, the Commissioner of Customs, and other parties concerned regarding such dismissal. The Secretary shall extend legal, technical, and other assistance to the concerned domestic producers and their organizations at all stages of the anti -dumping action.

(c) Notice to the Secretary of Finance. - Upon receipt of the application, the Secretary shall, without delay, notify the Secretary of Finance and furnish him with a complete copy 6f the application, or information in case the initiation is made o n h is own motion including its annexes, if any. The Secretary o f Finance s hall immediately inform the Commissioner of Customs regarding the filing and pendency of the application or information and instruct him to gather and to furnish the Secretary within five (5) days from receipt of the instructions of the Secretary of Finance copies of all import entries and relevant documents covering such allegedly dumped product, commodity or article which entered the Philippines during the last twelve (12) months preceding the date of application. The Commissioner of Customs shall also make such similar additional reports on the number, volume, and value of the importation of the allegedly dumped product, commodity or article to the Secretary every ten (110) days thereafter.

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(d) Notice to Exporting Member-Country. - Upon receipt of a properly documented application and before proceeding to initiate an investigation, the Secretary shall notify the government of the exporting country about the impending anti -dumping investigation. However, the Secretary shall refrain from publicizing the application for the initiation of the investigation before a decision has been made to initiate an investigation.

(e) Notice to Concerned Parties and Submission of Evidences. - Within two (2) days from initiation of the investigation and after having notified the exporting country, the Secretary shall identify all interested parties, i.e., protestee -importer, exporter and/or foreign producer, notify and require them to submit within thirty (30) days from receipt of such notice evidences and information or reply to the questionnaire to dispute the allegations contained in the application. At this point, the respondent is given the opportunity to present evidences to prove that he is not involved in dumping. He shall furnish them with a copy of the application and its annexes subject to the requirement to protect confidential information. The notice shall be deemed to have been received five (5) days from the date on which it was sent to the respondent or transmitted to the appropriate diplomatic representative of the exporting member, or an official representative of the exporting territory. If the respondent fails to submit his answer, he shall be declared in default, in which case, the Secretary shall make such preliminary determination of the case on the basis of the information available, among others, the facts alleged in the petition and the supporting information and documents supplied by the petitioner.

(f) Preliminary Determination. - Not later than thirty (30) working days from receipt of the answer of the respondent importer, exporter, foreign producer, exporting member -country, and other interested parties, the Secretary shall, on the basis of the application of the aggrieved party and the answer of the respondent/s and their respective supporting documents or information, make a preliminary determination of the application for the imposition of an anti -dumping duty.

in the preliminary determination, the Secretary shall essentially determine the following:

1) Price difference between the export p rice and t he normal value of the article in question in the country of export or origin;2) The presence and extent of material injury or threat of injury to the domestic industry producing like product or the material retardation of the establishment of a domestic industry; and3) The causal relationship between the allegedly dumped product, commodity or article and the material injury or threat of material injury to the affected domestic industry or material retardation of the establishment of the domestic industry.

"The preliminary finding of the Secretary, together with the records of the case shall, within three (3) days, be transmitted b y t he Secretary to the Commission for its immediate formal investigation. In case his preliminary

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finding is affirmative, the burden of proof is shifted to the respondent to rebut the preliminary finding. The Secretary shall immediately issue, through the Secretary of Finance, written instructions to the Commissioner of Customs to impose within three (3) days from receipt of instructions a cash bond equal to the provisionally estimated anti -dumping duty but not greater than the provisionally estimated margin of dumping in addition to any other duties, taxes and charges imposed by law on like articles. The cash bond shall be deposited with the government depository bank and shall be held in trust for the respondent. Moreover, the posting of the cash bond shall only be required no sooner than sixty (60) days from the date of initiation of the investigation. The date of initiation of the investigation is deemed to be the date the Secretary publishes such notice in two (2) newspapers of general circulation. The Secretary shall cause such publication immediately after a decision to initiate the investigation has been made. The provisional anti -dumping duty may only be imposed for a four (4) -month period which may be extended to six (6) months upon request by the exporters representing a significant percentage of the trade involved. However, a provisional anti -dumping duty lower than the provisionally estimated margin of dumping can be imposed for a period of six (6) to nine (9) months, if it is deemed sufficient to remove or prevent the material injury.

(g) Termination of Investigation. - The Secretary or the Commission as the case may be, shall motu proprio terminate the investigation at any stage of the proceedings if the provisionally estimated margin of dumping is less than two percent (2%) of export price or the volume of dumped imports or injury is negligible. The volume of dumped imports from a particular country shall normally be regarded as negligible if it accounts for less than three percent (3%) of the imports of the like article in the Philippines unless countries which individually account for less than three percent (3%) of the imports of the like article in the Philippines collectively account for more than seven percent (7%) of the total imports of that article.

(h) Investigation of the Commission. - Within three (3) working days upon its receipt of the records of the case from the Secretary, the Commission shall start the formal investigation and shall accordingly notify in writing all parties on record and, in addition, give public notice of the exact initial date, time and place of the formal investigation through the publication of such particulars and a concise summary of the petition in two (2) newspapers of general circulation.

"In the formal investigation, the Commission shall essentially determine the following:

1) If the article in question is being imported into, or sold in the Philippines at a price less than its normal value; and the difference, if any, between the export price and the normal value of the article.2) The presence and extent of material injury or the threat thereof to the domestic industry, or the material retardation of the establishment of a domestic industry;3) The existence of a casual relationship between the allegedly dumped

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product, commodity or article and the material injury or threat of material injury to the affected domestic industry, or material retardation of the establishment of a domestic industry;4) The anti -dumping duty to be imposed; and5) The duration of the imposition of the anti -dumping duty.

"The formal investigation shall be conducted in a summary manner. No dilatory tactics or unnecessary or unjustified delays shall be allowed and the technical rules of evidence used in regular court proceedings shall not be applied.

" In case any and all of the parties on record fail to submit their answers to questionnaires/position papers within the prescribed period, the Commission shall base its findings on the best available information.

"The Commission shall complete the formal investigation and submit a report of its findings, whether favorable or not, to the Secretary within one hundred twenty (120) days from receipt of the records of the case: Provided, however, That the Commission shall, before a final determination is made, inform all the interested parties in writing of the essential facts under consideration which from the basis for the decision to apply definitive measures. Such disclosure should take place in sufficient time for the parties to defend their interests.

(i) Determination of Material Injury or Threat Thereof. - The presence and extent of material injury to the domestic industry, as a result of the dumped imports shall be determined on the basis of positive evidence and shall require an objective examination of, but shall not be limited to the following:

1) The rate of increase and amount of imports, either in absolute terms or relative to production or consumption in the domestic market;2) The effect of the dumped imports on the price in the domestic market for like product, commodity or article, that is, whether there has been a significant price undercutting by the dumped imports as compared with the price of like product, commodity or article in the domestic market, or whether the effect of such imports is otherwise to depress prices to a significant - degree or prevent price increases, which otherwise would have occurred, to a significant degree; and3) The effect of the dumped imports o n t he domestic producers or the resulting retardation o f the establishment of a domestic industry manufacturing like product, commodity or article, including an evaluation of all relevant economic factors and indices having a bearing on the state of the domestic industry concerned, such as, but not limited to, actual or potential decline in output, sales, market share, profits, productivity, return on investments, or utilization of capacity; factors affecting domestic prices; the magnitude of dumping; actual and potential negative effects on cash flow, inventories, employment, wages, growth, and ability to raise capital or investments.

The extent of injury of the dumped imports to the domestic industry shall be determined by the Secretary and the Commission upon examination of all

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relevant evidence. Any known factors other than the dumped imports which at the same time are injuring the domestic industry shall also be examined and the injuries caused by these factors must not be attributed to the dumped imports. The relevant evidence may include, but shall not be limited to, the following:

1) The volume and value of imports not sold at dumping prices;2) Contraction in demand or changes in consumption pattern;3) Trade restrictive practices and competition between foreign and domestic producers;4) Developments in technology; and5) Export performance and productivity of the domestic industry.

"A determination of threat of material injury shall be based on facts and not merely on allegation, conjecture or remote possibility. The change in circumstances which will create a situation in which the dumping will cause injury must be clearly foreseen and imminent. In making a determination regarding the existence of a threat of material injury, the following shall be considered, inter lia, collectively:

1) A significant rate of increase of the dumped imports in the domestic market indicating the likelihood of substantially increased importation;2) Sufficient freely disposable, or an imminent, substantial increase in capacity of the exporter indicating the likelihood of substantially increased dumped exports to the domestic market, taking into account the availability of other export markets to absorb any additional exports;3) Whether imports are entering at prices that will have a significant depressing or suppressing effect on domestic prices and will likely increase demand for further imports; and4) Inventories of the product being investigated.

(j) Voluntary price undertaking executed by the exporter or foreign producer under oath and accepted by the affected industry that he will increase his price or will cease exporting to the Philippines at a dumped price, thereby eliminating the material injury to the domestic industry producing like product. Price increases under such undertakings shall not be higher than necessary to eliminate the margin of dumping.

"A price undertaking shall be accepted only after a preliminary affirmative determination of dumping and injury caused by such dumping has been made. No price undertaking shall take effect unless it is approved by the Secretary after a recommendation by the Commission.

"Even if the price undertaking is acceptable, the investigation shall nevertheless be continued and completed by the Commission if the exporter or foreign producer so desires or upon advice of the Secretary. The undertaking shall automatically lapse in case of a negative finding. In case of any affirmative finding, the undertaking shall continue, consistent with the provisions of Article VI of the GATT 1994.

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(k) Cumulation of Imports. - When imports of products, commodities or articles from more than one country are simultaneously the subject of an anti -dumping investigation, the Secretary or the Commission may cumulatively assess the effects of such imports only if the Secretary and the Commission are convinced that:

1) The margin of dumping established in relation to the imports from each country is more than de minimis as defined in Subsection G;2) The volume of such imports from each country is not negligible, also as defined in Subsection G; and3) A cumulative assessment of the effects of such imports is warranted in the light of the conditions of competition between the imported products, commodities or articles, and the conditions of competition between the imported products and the like domestic products, commodities or articles.

(l) Imposition of the Anti -Dumping Duty. - The Secretary shall, within ten (10) days from receipt of the affirmative final determination by the Commission, issue a Department Order imposing an anti -dumping duty on the imported product, commodity or article, unless he has earlier accepted a price undertaking from the exporter or foreign producer. He shall furnish the Secretary of Finance with the copy of the order and request the latter to direct the Commissioner of Customs to collect within three (3) days from receipt thereof the definitive anti¬dumping duty.

"in case a cash bond has been filed, the same shall be applied to the anti -dumping duty assessed. If the cash bond is in excess of the anti -dumping duty assessed, the remainder shall be returned to the importer immediately including interest earned, if any: Provided, That no interest shall be payable by the government on the amount to be returned. If the assessed anti -dumping duty is higher than the cash bond filed, the difference shall not be collected.

"Upon determination of the anti -dumping duty, the Commissioner of Customs shall submit to the Secretary, through the Secretary of Finance, certified reports on the disposition of the cash bond and the amounts of the anti -dumping duties collected.

"In case of a negative finding by the Commission, the Secretary shall issue, after the lapse of the period for the petitioner to appeal to the Court of Tax Appeals, through the Secretary of Finance, an order for the Commissioner of Customs for the immediate release of the cash bond to the importer. In addition, all the parties concerned shall also be properly notified of the dismissal of the case.

(m) Period Subject to Anti -Dumping Duty. - An anti -dumping duty may be levied retroactively from the date the cash bond has been imposed and onwards, where a final determination of injury is made, or in the absence of provisional measures, a threat of injury has led to actual injury. Where a determination of threat of injury or material retardation is made, anti -dumping duties may be imposed only from the date of determination thereof and any

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cash bond posted shall be released in an expeditious manner. However, an anti -dumping duty may be levied on products which were imported into the country not more than ninety (90) days prior to the date of application of the cash bond, when the authorities determine for the dumped product in question that:

1) There is a history of dumping which caused injury or that the importer was, or should have been, aware that the exporter practices dumping and that such dumping would cause injury; and 2) The injury is caused by massive dumped imports of a product in a relatively short time which in light of the timing and the volume of the dumped imports and other circumstances (such as rapid build -up of inventories of the imported product) is likely to seriously undermine the remedial effect of the definitive anti¬dumping duty to be applied: Provided, That the importers concerned have been given an opportunity to comment.

"No duties shall be levied retroactively pursuant to herein subsection on products entered for consumption prior to the date of initiation of the investigation.

(n) Computation of Anti-Dumping Duty. – If the normal value of an article cannot be determined, the provisions for choosing alternative normal value under Article VI of GATT 1994 shall apply.

"If possible, an individual margin of dumping shall be determined for each known exporter or producer of t he article u rider investigation. I n cases w here t he number of exporters, producers, importers or types of products involved is so large as to make such determination impracticable, the Secretary and the Commission may limit their examination either to a reasonable number of interested parties or products by using samples which are statistically valid on the basis of information available to them at the time of the selection, or to the largest percentage of volume of exports from the country in question which can reasonably be investigated.

"However, if a non -selected exporter or producer submits information, the investigation must extend to that exporter or producer unless this will prevent the timely completion of the investigation.

"New exporters or producers who have not exported to the Philippines during the period of investigation will be subject to an accelerated review. No anti -dumping duties shall b a imposed during the review. Cash bonds may be requested to ensure that in case of affirmative findings, anti -dumping duties can be levied retroactively to the date of initiation of the review.

(o) Duration and Review of the Anti -Dumping Duty. - As a general rule, the imposition of an anti¬dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing or threatening to cause material injury to the domestic industry or material retardation of the establishment of such industry.

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"However, the need for the continued imposition of the anti -dumping duty may be reviewed by the Commission when warranted motu proprio, or upon the direction of the Secretary, taking into consideration the need to protect the existing domestic industry against dumping."Any interested party with substantial positive information may also petition the Secretary for a review of the continued imposition of the anti -dumping duty: Provided, That a reasonable period of time has elapsed since the imposition of the anti -dumping duty. Interested parties shall have the right to request the Secretary to examine: 1) whether the continued imposition of the anti -dumping duty is necessary to offset dumping; and 2) whether the injury would likely continue or recur if the anti -dumping duty were removed or modified, or both.

"if the Commission determines that the anti -dumping duty is no longer necessary or warranted, the Secretary shall, upon its recommendation, issue a department order immediately terminating the imposition of the anti -dumping duty. All parties concerned shall be notified accordingly of such termination, including the Secretary of Finance and the Commissi6ner of Customs.

"The duration of the definitive anti -dumping duty s hall not exceed five (5) years from the date of its imposition (or from the date of the most recent review if that review has covered both dumping and injury) unless the Commission has determined in a review initiated before that date on their own initiative or upon a duly substantiated request made by or on behalf of the domestic industry within a reasonable time period prior to the termination date that the termination of the anti -dumping duty will likely lead to the continuation or recurrence of dumping and injury.

"The provisions of this Section regarding evidence and procedures shall apply to any review carried out under this Subsection and any such review should be carried out expeditiously and should be conducted not later than one hundred fifty (150) days from the date of initiation of such review.

(p) Judicial Review. - Any interested party in an anti -dumping investigation who is adversely affected by a final ruling in connection with the imposition of an anti -dumping duty may file with the Court of Tax Appeals, a petition for the review of such ruling within thirty (30) days from his receipt of notice of the final ruling: Provided, however, That the filing of such petition for review shall not in any way stop, suspend, or otherwise hold the imposition or collection, as the case may be, of the anti -dumping duty on the imported product, commodity or article. The rules of procedure of the court on the petition for review filed with the Court of Tax Appeals shall be applied.

(q) Public Notices. - The Secretary or the Commission shall inform in writing all interested parties on record and, in addition, give public notices by publishing in two (2) newspapers of general circulation when:1) Initiating an investigation;2) Concluding or suspending investigation;3) Making any preliminary or final determination whether affirmative or

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negative;4) Making a decision to accept or to terminate an undertaking; and5) Terminating a definitive anti -dumping duty.

Commissioner of Customs a list of imported products susceptible to unfair trade practices. The Commissioner of Customs is hereby mandated to submit to the Secretary monthly reports covering importations of said products, including but not limited to the following:1) Commercial invoice;2) Bill of lading;3) Import entries; and4) Pre -shipment reports.

"Failure to comply with the submission of such report as provided herein shall hold the concerned officials liable and shall be punished with a fine not exceeding the equivalent of six (6) months’ salary or suspension not exceeding one (1) year.(r) Administrative Support. - Upon the effectivity of this Act, the Departments of Trade and Industry, Agriculture and the Tariff Commission, shall ensure the efficient and effective implementation of this Act by creating a special unit within their agencies that will undertake the functions relative to the disposition of anti-dumping cases. All anti -dumping duties collected shall be earmarked for the strengthening of the capabilities of these agencies to undertake their responsibilities under this Act. " (As amended by Republic Act No. 8752 dated 12 August 1999)

TITLE 2- OPERATIONS

CHAPTER 1 – RULES OF ORIGIN

(Ref: CMO 2-2010)

Section 1 – Definition of Terms

1.1 Rules of Origin refers to set of rules that determines whether an article qualifies for preferential tariff.

Section 2 – Administrative Provisions

2.1 The Export Coordination Division (ECD) shall exercise oversight function on all activities related to the issuance and utilization of Certificates of Origin (COs) whether unilateral, bilateral, regional or multilateral.

2.2 Accordingly, ECD shall have the responsibility of pre-evaluating all exporters and their export products for CO issuance purposes regardless of where the Export Declarations are processed and regardless of ports of loading. However, authorized issuance of COs can be delegated by the Chief, ECD to Export Divisions or equivalent units of all the Collection Districts where Export Declarations are processed, provided, products exported has a

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pre-approved evaluation from the Chief, ECD.

2.3 Likewise, ECD, in coordination with Formal Entry Divisions and/or its equivalent units in all Collection Districts shall design a post evaluation system of COs that cover imported products, to ensure that proper and appropriate duties and taxes are collected.

2.4 ECD is hereby directed to establish and maintain a comprehensive database of information related to the issuance of all types of COs as well as pre-evaluated exporters and their products including their production or manufacturing processes and product costing. (Refer to Annexes A, B, C).

The retention period for customs copies of COs issued, supporting documents and the 201 file of pre-evaluated exporters shall follow the Operational Certification Procedure of ROO.2.5 ECD is also directed to establish and maintain a comprehensive database of information related to the utilization of all kinds of COs for post evaluation purposes, and statistical record to comply with international agreement on ROO. 2.6 In this regard a monthly report shall be generated by the ECD on all COs issued and utilized indicating therein among others export/import product descriptions, volume, HS code of the importing country, originating rule used, FOB value, country of destination/origin and similar information which are needed for policy consideration purposes.

2.7 ECD shall have the responsibility of coordinating with the MISTG for the possible CO automated applications, issuance, transmission, retrieval and records keeping of exporters' 201-file.

2.8 Responses to all retro-verifications shall be centralized to ECD and accordingly all Chiefs/Heads of Export Divisions or equivalent units of all Collection Districts are required to direct all queries to the ECD. The formal answers by the BOC to all retro-verifications shall be signed by the Deputy Commissioner, AOCG upon recommendation of the Chief, ECD.

In cases of doubts in the veracity of COs issued by the authorized agency of a contracting party and presented for utilization, the Chief, ECD, following the operational procedure on ROO, may recommend to the Commissioner, thru the Deputy Commissioner, AOCG, request for retro-verification to issuing authority of the contracting party. Communications to this effect shall be signed by the Commissioner.

ECD, upon approval of the Deputy Commissioner, AOCG, may conduct its own retro-verifications upon receipt of any valid derogatory information that issuance and/or utilization of a particular CO is tainted with irregularity. Result of such retro-verification including recommended action shall be submitted by the Chief, ECD to the Deputy Commissioner, AOCG.

2.9 By virtue of its enhanced functions, additional staff or realignment or

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recall of personnel with items at ECD may be done. To concentrate on these functions, ECD shall no longer process Export Declarations, however, the supervision of the One Stop Export Declaration Center (OSEDC) will remain in the ECD. 2.10 ECD shall be the lead office in the training of customs officials and employees and stakeholders with regard to ROO.

2.11 ECD shall directly report to the Deputy Commissioner, AOCG on all matters related to ROO, and perform other appropriate functions consistent with the tasks of the AOCG that may be assigned by the Commissioner.

Section 3 – Operational Provisions

3.1 All Chiefs of the Export Divisions (EDs) of all Collection Districts are required to provide ECD, within thirty (30) days from effectivity of this Order, all documents on hand, like 201 files, bill of materials, production flowcharts, product costing, that pertains to exporters and export products that have been approved for purposes of CO issuances.

3.2 Accordingly, in case of Metro Manila applicants, all applications for pre-evaluation of exporters and export products for purposes of CO issuance shall be addressed to ECD. Evaluation and approval/disapproval of applications shall be made within ten (10) working days from receipt of application. Communications sent by ECD for additional supporting documents, requests for clarification or similar issues shall toll the running of the ten (10) working day period. The period shall commence running upon receipt of responsive written answers from applicants

3.3 For provincial applicants the same shall be addressed to the Chief, ED concerned who shall make the proper recommendation to the Chief, ECD. The recommendation shall be forwarded within five (5) working days. The Chief, ECD shall evaluate, approve or disapprove and communicate action within five (5) working days from receipt of recommendation from Chief, ED. Communications sent by ECD for additional supporting documents, requests for clarification or similar issues shall toll the running of the five (5) working day period. The period shall commence running upon receipt of responsive written answers from applicants.

Refer to Annex "A" for standardized application form which shall be signed and under oath by the proprietor in case applicant is operating on single proprietorship or doing business as natural person or in case of juridical exporters by a responsible official duly authorized as supported by a Corporate Secretary's Certificate.

Supporting documents shall all be in original copies signed by the applicant and in case of photocopies to be certified "true and correct" by the applicant.

3.4 Upon receipt of applications or recommendations the Chief, ECD shall assign an Evaluating Officer from ECD and/or ED concerned for provincial

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ports.

The Evaluating Officer shall have the responsibility of document checking and if necessary conducting plant/factory visit to validate information submitted by an exporter-applicant.

The Evaluating Officer is given five (5) working days to make recommendation to the Chief, ECD who in turn is given five (5) working days to approve or disapprove the recommendation.

A written notice for the approval or disapproval of the application shall be given to the exporter-applicant within two (2) days from approval or disapproval of the Chief, ECD, copy furnished Deputy Commissioner, AOCG.

3.5 For the purpose of initial database of COs issued and utilized, all Export Divisions and Formal Entry/Warehousing Divisions and/or their equivalent units in all Collection Districts and sub-ports, and special units like the at One Stop Shop Processing located at the Phil-Export, and Export Processing Zones are required to submit a report of all Certificates of Origin issued and utilized for the period January 2008 up to effectivity of this Order.

ECD is tasked to prepare the report format and all concerned are directed to submit the report within thirty (30) days from the issuance of this Order.

Thereafter all concerned are required to submit a monthly report of the following list to the ECD, in the manner to be prescribed by the Chief, ECD, to be submitted latest every 10th of the following month:

a. COs issued (Export Transactions)b. COs utilized (Import Transactions)c. Pre-evaluated exporters and products

It shall be the responsibility of the ECD to come up with a consolidated report every 16th of the month of all COs issued for preferential tariff purposes and COs presented for imported products, noting in the remarks if dishonored, to the Commissioner thru the Deputy Commissioner, AOCG and to the Bureau of International Trade Relations (BITR), Department of Trade and Industry (DTI).3.6 All communications related to the retro-verification request shall be forwarded to ECD copy furnished the Deputy Commissioner, AOCG. The Chief, ECD in coordination with the ED concerned is given 15 days to draft the official reply to the retro-verification to be signed by the Deputy Commissioner, AOCG. 3.7 In cases ECD has discovered that CO was procured through deceit, misrepresentation, machination or through an act of fraud, the Chief ECD may recommend to the Deputy Commissioner, AOCG, that this be referred to Investigation Prosecution Division and the Legal Service for possible filing of administrative, civil and criminal case against the culprits.

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CHAPTER 2 – PROCESSING OF EXPORT DECLARATION

I. Who may avail of the Service

1. Exporters or their duly authorized representatives2. Customs Brokers

II. Documentary Requirements

1. Regular Exporta. Export Declarationb. Proforma Invoice c. Packing list2. Under Section 2001 to 2004 (Warehousing)a. Export Declarationb. Proforma Invoice c. Packing listd. Certificate of Identification (signed by WAD)e. Certificate of Inspection and Loadingf. Boatnote (not mandatory)3. Under Drawbacka. Export Declarationb. Proforma Invoice c. Packing listd. Shipment Information Slip issued by CIIS4. Under Bond/for repaira. Export Declarationb. Proforma Invoice c. Packing listd. Certificate of Identification (signed by COO I)5. Regulated Productsa. Export Declarationb. Proforma Invoice c. Packing listd. Commodity Clearance/Export Permit6. Transshipmenta. Special Permit to Loadb. Proforma Invoice/Packing Listc. Copy of Processed Export Declaration from the outportsd. Copy of Cargo Manifeste. Copy of Domestic Bill of Lading

III. Procedures1. Exporter/Broker submits duly accomplished Export Declaration together with appropriate documentary requirements.2. The Receiving Clerk receives export declaration, checks completeness of documentary requirements including CDS requirements and assigns the application to a Customs Operations Officer for proper evaluation.3. The COO I checks completeness, accuracy and consistency of the

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data in the documents and conducts examination of the shipment if:a. Covered by Alert Orderb. With positive x-ray scanning resultc. Covered by re-export bondd. Subject for repair1) Issue Certificate of Identification in case of items c and d2) Initial the export declaration and forward the documents to the Assistant Chief for review4. The Assistant Chief reviews the evaluation of the COO I5. The Chief approves and sign the Export Declaration 6. The Receiving Clerk stamps authority to load, issues reference number, segregates copies of documents and release original and duplicate copies of export declaration to the exporter or broker for transmittal to CCCD or PID

CHAPTER 3 – PORT OPERATIONS

I. ADMINISTRATIVE PROVISIONS

Section 1. BAY SERVICE SECTION or EQUIVALENT OFFICE

The Bay Service Section is in charge of boarding formalities and the entrance and clearance of foreign vessels. It supervises and implements security measures in the discharging/loading of import/export shipments as well as to incoming/outgoing crew, passengers and visitors on board such vessels.

The Bay Service Section shall be headed by a Chief, who shall have direct supervision and control over all personnel therein. He shall issue instructions to the Customs Senior Boarding Officer, and who shall in turn be held responsible for their proper execution of the instructions given from time to time and to render reports.

Section 2. UNIFORMS AND INSIGNIA (PIERS AND INSPECTION DIVISION)

The Chief, Bay Service Section, Customs Senior Boarding Officers, Customs Inspectors, Customs Guards and Wharfingers shall always wear the appropriate and prescribed uniform, insignia, nameplate, Customs badge, black shoes and regulation cap.

Section 3. DUTIES AND RESPONSIBILITIES OF CUSTOMS OPERATIONS OFFICER III (CUSTOMS SENIOR BOARDING OFFICERS)

A. Customs Senior Boarding Officer shall have the following duties and responsibilities:

1. Board incoming foreign vessels outside the breakwater or harbor, unless prevented by stress of weather. When boarding a vessel, the Customs Senior Boarding Officer shall be assisted by the Customs Inspector assigned

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on a vessel.

During boarding formalities, only the Customs Senior Boarding Officer and the Customs Inspector shall be allowed to enter the Captain’s cabin unless the Captain chooses to give the boarding information to the Customs Senior Boarding Officers outside the Captain’s cabin.

2. Obtain from the Master of a vessel the necessary information as required in BOC OPM Form No. 15 (Records of Vessel Boarded).

3. Seal sea stores in the presence of ship’s officer and the Customs Inspector assigned on board. Under penalty of law, the Customs seal so affixed shall not be broken while the vessel is within the jurisdictional limits of the Philippines except when the vessel is in port and only upon written application to withdraw supplies signed by the Master and approved by Collector of Customs or his duly authorized representatives. Only the Customs Senior Boarding Officer, in the presence of the Customs Inspector, may break the seal and allow the withdrawal of such quantities as may be authorized, and re-seal the sea store compartment after such withdrawal. Sea stores when adjusted by the Collector of Customs to be excessive or when duties assessed thereon are not paid, such excess sea stores shall be treated as that provided for in Section 2530 of the Tariff and Customs Code of the Philippines, as amended.

4. See to it that all Customs Inspectors and Customs Guards on duty are in their proper prescribed uniforms. Unless the Customs Inspectors are properly uniformed, the Customs Senior Boarding Officer shall not allow their embarking on the launch and shall report them as absent. In such cases, he can assign any available unassigned Customs Inspector or if no Customs Inspector is available, an acting Customs Inspector to take charge of the vessel until a regular Customs Inspector assigned reports in proper uniform. In case of necessity, the Customs Senior Boarding Officer can temporarily take charge of the vessel until the regular Customs Inspector is on board. In every case, the Customs Senior Boarding Officer, shall, without delay, report his action to the Chief, Bay Service Section (or its equivalent office).

5. See to it that a Customs Inspector or Customs Guard assigned to a vessel is provided with the necessary stationary and supplies. He shall also see to it that Customs Inspectors have a copy of the Tariff and Customs Code of the Philippines and a Manual for Port Operations.

B. Report of Customs Senior Boarding Officers

1. Upon his return from an official trip in the bay, the Customs Senior Boarding Officer shall transmit to the Chief, Bay Service Section (or its equivalent office) all reports, entries and other documents delivered to him by the Master, Agent or the Customs Inspector assigned on board vessels.

2. He shall prepare and submit his trip report on BOC OPM Form No. 15 (Records of Vessel Boarded) to the Chief, Bay Service Section (or its

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equivalent office) and make reports of any deviation from the assignment order issued to the Customs Inspectors and Customs Guards.

Section 4. DUTIES AND RESPONSIBILITIES OF CUSTOMS OPERATIONS OFFICER I (CUSTOMS INSPECTORS)

A. Customs Inspectors shall have the following duties and responsibilities:

1. Supervise the discharge and loading of cargo and to supervise continuous surveillance to protect the interests of the Customs Service, pursuant to Section 2202 of the Tariff and Customs Code of the Philippines, as amended.

2. Be responsible for the proper disposal of all cargo and stores on board vessels under their charge. It is their duty to see to it that no cargo or stores of any description are discharged from, or received on, the vessel without authority from the Collector of Customs, or his authorized representative.3. Represent the Customs Service in his official relations with the passengers, ship’s officers, owners, agents and consignees, and should see to it that the dignity of the service is not impaired.

4. Stay in the vessel to which he has been assigned until he is relieved by proper authority, except as hereinafter provided, or it be necessary in the interest of the service that immediate action be taken.

5. Honor any order, request, or permit of any description only from the following named officials:

(a) Commissioner of Customs or Deputy Commissioner of Customs;(b) Collector of Customs or Deputy Collector for Operations;(c) Chief or Asst. Chief, Piers and Inspection Division;(d) Chief, Bay Service Section;(e) Customs Senior Boarding Officers.

6. Endeavour to work in harmony at all times with Customs employees of other divisions and with the Immigration officers on board with respect to the enforcement of immigration laws, rendering assistance to those officials in the performance of their duties. In case of Philippine registered vessels returning from abroad, conducts mustering of crew, pursuant to Section 1011 of the Tariff and Customs Code of the Philippines, as amended.

7. Cooperate with quarantine authorities in the enforcement of port quarantine regulations promulgated by the Bureau of Quarantine and shall give effect to the same, in so far as they are connected with matters of shipping and navigation, pursuant to Section 605 of the Tariff and Customs Code of the Philippines, as amended.

8. Familiarize themselves with the provisions of the Tariff and Customs Code of the Philippines, as amended, Customs Administrative Orders, Customs Memorandum Orders and Circulars issued by the Bureau of

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Customs pertinent to their duties.

9. Refer the matter to the Customs Senior Boarding Officer or Chief, Bay Service Section (or equivalent office) for decision, in case he is in doubt as to the proper action to be taken.

B. Specific Duties upon Assuming Charge of Vessel

1. It shall be the first duty of a Customs Inspector upon assuming charge of a vessel, especially a passenger vessel, to immediately assign a Customs Guard at each accommodation ladder or gangway with the instruction not to allow persons to board the vessel without a written pass, excepting the stevedores to attend to the discharging or loading of cargoes.

2. The Customs Inspector shall instruct Customs Guards assigned on the gangway to conduct body searches, if necessary, on all persons boarding or disembarking from the vessel.3. While the vessel is docked at the pier or wharf, the Customs Inspector shall make periodic inspection to ascertain that all ropes and cables from vessel to dock are provided with rat guards and that adequate safeguards are employed, such as the covering of the holes through which ropes and cables pass.

4. If the vessel docks at night, the Customs Inspector shall require proper lighting at the gangway.

C. Relationship of Customs Inspectors with Customs Guards under His Supervision

1. The Customs Inspector shall see to it that the Customs Guards assigned on the vessel are in complete uniform and present a neat and clean appearance. Their official badges must be displayed conspicuously. He should impress upon them the necessity of courtesy in their official dealings with passengers, ship’s officers, consignees, and other concerned. He shall instruct them that all disputes and all questions wherein the element of doubt enters should be submitted immediately to the Customs Inspector on board and satisfy himself that the Customs Guard to whom he issues instructions thoroughly understands them, so that errors may be avoided.

2. He shall report to the Customs Senior Boarding Officer on duty the unexplained absence of any Customs Guard assigned to him.

3. An efficiency report for Customs Guards shall be submitted by the Customs Inspector for each vessel of which he is in charge. Customs Guards, who are incompetent, negligent in the performance of their official duties, or guilty of disobedience, shall be the subject of a special informal report, which shall be submitted with the efficiency report.

4. He shall maintain a logbook to keep a record of events, during his tour of duty, to include Customs Guard/s sent ashore or to another vessel on

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official business specifying the following:

(a) Time of Departure;(b) Nature of business;(c) Destination;(d) Where and when he is to report upon the completion of his business;(e) Time returned.

When Customs Guards are ordered to report to the Customs Senior Boarding Officer’s launch at a certain time, a similar note shall be given, addressed to the Customs Senior Boarding Officer. These records shall always be rendered on the logbook furnished to Customs Inspectors, so that absent Customs Guards can be accounted for.

5. It is essential that an accurate check be secured on all cargoes discharged from, and loaded on, a vessel. Customs Inspectors shall instruct their Customs Guards to check independently of other checkers, and to submit their Customs Guard’s Report.6. He shall submit the Discharging Sequence and/or Inward Foreign Manifest duly received in the logbook by the Customs Wharfinger.

D. Report after Termination of Duty

A Customs Inspector, returning to shore after the vessel of which he was in charge has sailed, or returning to station from an outport assignment, shall immediately report to the Chief, Bay Service Section (or its equivalent office) and submit all reports relative to his assignment to the latter who shall properly endorse them to the Chief, Piers and Inspection Division (or its equivalent office).

The Customs Inspector, upon submission of his reports, shall register the time and date of his vessel’s departure in the priority listing of Customs Inspectors for assignments. A Customs Inspector who has not submitted his records and documents pertinent to his vessel assignment shall not be given assignment to a new vessel until he has submitted his reports and documents.

The reports of a Customs Inspector shall include as supporting documents the following:

1. Duly accomplished Inspector’s Certificate of Lading, in case of break-bulk and conventional cargoes. The original copy together with the Export Permits to be submitted to the Export Processing Division concerned;

2. Shipside Permits, if any, properly endorsed at the back thereof with accompanying transfer notes and Customs Guard’s Check Report;

3. Accomplished Certificate of Inspection (CI), Certificate of Identification and Loading (CIL), if any;

4. Certificate of Date of Last Cargo Discharged accomplished by Customs

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Inspector onboard and bearing the seal of the Master of the vessel, to be submitted to the office of the Chief, Piers and Inspection Division (or its equivalent office);

5. Clearance of a vessel indicating therein the time and date the vessel actually sails and the berth assignment and the period of time the vessel stays at such berths and/or anchorage for transmittal to the Customs Clearance Officer;

6. General Permit issued by the Customs Senior Boarding Officer properly endorsed at the back thereof; and

7. All shipping documents required from the Master upon boarding a vessel, permits properly endorsed, and reports of all violations of Customs rules and regulations that may come into his attention.

All permits, entries and other documents received by the Customs Inspector on board of a vessel shall be endorsed by him, upon completion of his portion of the action directed. Such endorsements shall always show:

1. The date when the action was accomplished;

2. The action taken; and

3. The portion of the action unaccomplished, except in some instances where another Customs Official is to perform the unaccomplished action.

The date and the time of receipt of any official document shall always be noted therein by the Customs Inspector who shall initial the same.

Section 5. PORT UTILIZATION SECTION

The Port Utilization Section supervises the receiving, handling, custody, monitoring, movement and release of shipments at the Piers/Customs Zone.

The Port Utilization Section shall be headed by a chief who shall perform the following functions:

1. Supervise all Wharfingers, Assistant Wharfingers, Customs Guards assigned at Container Yards, Outside CY-CFS and Customs Gatekeepers;

2. Act on all written reports submitted by the personnel under his supervision;

3. Be responsible for the conduct, vigilance, efficiency, neat and clean appearance of all personnel under him;

4. Require all Wharfingers, Assistant Wharfingers, Customs Guards, and Customs Gatekeepers to be in complete uniform while on duty;

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5. Assign his personnel properly apportioning their overtime as equitable and as fairly as possible;

6. Exercise direct supervision over Customs Gatekeepers;

7. Inspect piers, wharves, warehouses, container freight and the container terminal inside the Customs Zone as frequently as possible, submitting to the Chief, Piers and Inspection Division (or its equivalent office) such reports as may be necessary;

8. See to it that cargoes are transferred properly and promptly to bonded carriers, bonded warehouse and private warehouses, covered by proper transfer notes;

9. Recommend to the Chief, Piers and Inspection Division (or its equivalent office), for the interest of the service and with consultation with the Wharfingers In-Charge of the piers, the reshuffling of personnel under him to the different piers;

10. Supervise the Wharfingers in the preparation, rating and submission to the chief of division the performance rating of all personnel under them. He shall rate all Wharfingers In-Charge of the piers;

11. Recommend any personnel who are deserving, capable and willing, pursuant to civil service rules and regulations for any promotion that are subject to be filled up;

12. Implement all lawful orders given to him from time to time by proper customs authorities with regard to his section.

Section 6. DUTIES AND RESPONSIBILITIES OF ASSISTANT CUSTOMS OPERATIONS OFFICER (WHARFINGERS)

A. At the Pier/CY-CFS

1. There shall be one Wharfinger In-Charge of each pier, who shall be responsible for the efficiency and discipline of Customs personnel under him;

2. He shall exercise effective supervision over the Arrastre Contractor’s service regarding receiving, handling, custody and delivery of cargoes;

3. He shall note carefully the condition of the fender piles and draft at the piers and submit reports thereon;

4. He shall cooperate and assist other officers of the government performing official function at the piers;

5. He shall supervise the cleaning of the piers and see to it that garbage and obnoxious cargoes are disposed of promptly and properly;

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6. He shall cooperate with, and assist the Enforcement and Security Service (ESS) in maintaining peace and order at the pier, including the exclusion of unauthorized persons inside the pier shed/warehouse and premises;

7. He shall recommend the transfer and shifting of cargoes from pier to pier only, to government bonded warehouses inside and outside the Customs premises;

8. He shall process delivery permits and other types of Customs permits; Vis-à-vis the Official Receipt/Statement of Settlement of Duties and Taxes (SSDT) issued by the Formal/Informal Entry Division, prior to the release of cargo;

9. He shall, or thru his authorized representative, accept delivery permits and other types of Customs permits officially hand carried by official messengers of the Bureau and shall properly distribute the same to concerned shed/warehouse Wharfinger where the cargoes are stored;

10. He shall submit daily, weekly, monthly, and annual reports thru proper channels, to the Chief, Piers and Inspection Division (or its equivalent office);

11. He shall implement all lawful orders given to him from time to time by proper customs authorities;

12. He shall submit report of Overstaying Cargoes to the Chief, Piers and Inspection Division (or its equivalent office).

B. Outside CY-CFS (Off-Dock)

1. There shall be one (1) Wharfinger In-Charge of Outside CY-CFS (Off-Dock) who shall be responsible for the efficiency and discipline of Customs personnel under him;

2. He shall receive the Transfer Note, Inbound Container and Inward Foreign Manifest from the Customs Guard;

3. He shall supervise the stripping of the containers;

4. He shall receive the Stripping Tally Sheet from the CY-CFS Warehouseman;

5. He shall process delivery permits and other types of customs permits; Vis-à-vis the Official Receipt/Statement of Settlement of Duties and Taxes (SSDT) issued by the Formal/Informal Entry Division, prior to the release of cargo;

6. He shall see to it that the cargoes are released and delivered only to the proper parties in accordance with the marks, countermarks and registry

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number of the carrying vessel;

7. He shall assign a Customs Guard, prepare and sign Transfer Note as well as supervise the transfer of cargoes to the local ports, economic zones and bonded warehouses either inside or outside customs zone including coastwise transit cargoes and other places designated by customs;

8. In all cases of transfers of packed containers covered by Warehousing Permits or other permits where duties and taxes have not been paid, the container shall be sealed with a Customs seal by the Wharfinger concerned in the presence of the Customs Examiner concerned. Said Wharfinger shall see to it that the containers transferred be underguarded until received at the Customs Bonded Warehouse by the Customs Warehouseman assigned thereat. If there is no Customs Warehouseman or anybody authorized by the Collector of Customs to receive the same, such containers shall remain underguarded continuously by the Customs Guard until the same is properly released by the Bureau of Customs;9. He shall maintain a logbook to record events such as examination made, hold/alert order, notice of Warrant of Seizure and Detention (WSD) and samples taken;

10. He shall report to the Collector of Customs within twenty-four (24) hours from the time the article is deemed abandoned and submit a monthly report on Abandoned/Overstaying Cargoes to the Office the Chief, Piers and Inspection Division (or its equivalent office).

Section 7. DUTIES AND RESPONSIBILITIES OF ASSISTANT CUSTOMS OPERATIONS OFFICER (DESIGNATED ASSISTANT WHARFINGERS)

1. Each cargo shed/warehouse shall be under the direct charge and supervision of an Assistant Wharfinger, who shall maintain his office inside the shed/warehouse;

2. He shall prepare, rate, and submit rating of his pier shed/warehouse Customs Guards to the Wharfinger In-Charge of the pier;

3. He shall supervise the opening and closing of the cargo shed/warehouse. The keys shall be secured in his office and shall be returned in the box provided for in the office of the Officer In-Charge of the pier after the shed/warehouse has been closed;

4. He shall not allow unauthorized persons inside the cargo shed/warehouse with or without operation;

5. He shall process all delivery permits pertaining to his shed/warehouse before authorizing delivery of cargo therefrom;

6. He shall supervise closely the activities of the Customs Guards assigned in his shed/warehouse;

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7. He shall clear the pier berth of lighters and other obstructions during the berthing and/or departure of vessel;

8. He shall assist the Wharfinger In-Charge of the pier and to execute all his orders;

9. He shall prepare and sign Transfer Notes as well as supervise the transfer of cargoes to the local ports, economic zones and bonded warehouses either inside or outside Customs Zone including coastwise transit cargoes and other places designated by customs;

10. He shall see to it that no inflammable, dangerous or obnoxious cargoes are stowed inside the shed/warehouse;

11. He shall coordinate with the arrastre shed/warehouse security personnel and Enforcement and Security Service (ESS) in the prevention of pilferage of cargoes and other anomalies to defraud the customs revenues;12. He shall perform all functions that may be assigned to him from time to time by superior authorities.

Section 8. DUTIES AND RESPONSIBILITIES OF ASSISTANT CUSTOMS OPERATIONS OFFICER (CUSTOMS GUARDS)

A. At the Pier/CY-CFS

1. A Customs Guard shall see to it that no inflammable, dangerous and obnoxious cargoes are discharged on the dock without proper permit;

2. When assigned to delivery work, he shall scrutinize the delivery permit properly processed and signed by the processing Wharfinger;

3. He shall check carefully the load on the truck against the gate pass issued in accordance with the mark, countermarks, registry number and total number of packages;

4. He shall see to it that all deliveries made are duly recorded on the Customs Guard’s delivery sheet;

5. He shall see to it that the Wharfinger’s copy of the delivery permit is retained and the same to be forwarded to the Wharfinger concerned upon the completion of the delivery;

6. When assigned as conduction guard, he shall see to it that the cargo destined for transfer reaches its destination safely and the covering transfer note properly signed by the Warehouseman/Storekeeper or Wharfinger or Customs Guard concerned, as the case may be.

B. On Board Vessel

1. A Customs Guard shall see to it that no person is allowed to board the

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vessel without a written pass, excepting the stevedores to attend to the discharging or loading of cargoes at each accommodation ladder or gangway;

2. He shall conduct body searches, if necessary, on all persons coming in and out of the vessel;

3. He shall perform Customs surveillance on board the vessel or on carriers containing cargo in transit that has not been released from Customs supervision;

4. He shall check cargoes being discharged from, or loaded on, a vessel;

5. He shall act as couriers on official business;

6. He shall see to it that no empty lighters stay alongside the pier without proper permit.

C. Outside CY-CFS (Off-Dock)

1. A Customs Guard shall assist the shed/warehouse Wharfinger in supervising the receiving, handling, custody, delivery and stowage of cargo inside the shed/warehouse by the arrastre operators, to include witnessing the stripping/devanning and sign the Cargo Stripping Report;

2. He shall assist the shed/warehouse Wharfinger in attending the inventory of bad order cargo and signed the Bad Order Inspection Certificate issued by the arrastre operator.

D. Others

A Customs Guard shall perform any other work or function that may be assigned to him from time to time by his superiors.

Section 9. DUTIES AND RESPONSIBILITIES OF ASSISTANT CUSTOMS OPERATIONS OFFICER (DESIGNATED CUSTOMS GATEKEEPERS)

1. A Customs Gatekeeper shall report punctually at the terminal gate assigned to him and shall remain thereat until properly relieved or otherwise directed to perform other duties by his superiors;

2. He shall not allow merchandise to pass through the gate without a gate pass. He shall verify the genuineness of the said pass as well as the signatures appearing thereon. He shall check the cargo covered by gate pass as to marks, number, quantity of packages and registry number of the carrying vessel. He may hold the truck or merchandise if he has valid reasons to believe that the merchandise is different from what is shown in the gate pass, reporting the matter promptly to the Wharfinger In-Charge of the pier where the cargo came from;

3. He must verify and see to it that all gate passes (customs copy) are

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countersigned by the Wharfinger of the corresponding pier, where applicable;

4. He shall see to it that gate passes with alterations and/or notations shall not be honored without the signature of the Pier Superintendent and the Wharfinger;

5. He shall collect all gate passes which shall be submitted to the office of the Wharfinger for reportorial purposes at the end of each working day;

6. Customs Gatekeeper In-Charge shall supervise his men properly at the Customs Zone and pier gate, assisting them on whatever problems that may arise, and if not resolved the same should be referred to the Wharfinger in charge of the pier where the cargo came from;

7. Customs Gatekeeper assigned at the exit gates shall be required to open all empty containers to verify whether they are indeed empty and shall keep records of the approved requests/permits issued and report any discrepancy to the office of the Wharfinger In-Charge.

Section 10. REPORTING TIME OF CUSTOMS PERSONNEL

The reporting time for Customs Senior Boarding Officers, Customs Inspectors and Customs Guards are as follows:

1. Customs Senior Boarding Officers, Customs Inspectors and Customs Guards not assigned to vessel shall report at, and stay in, the office of the Chief, Piers and Inspection Division(or its equivalent office) and observe regular working hours. They shall perform such duties as may be assigned to them by the Chief or Assistant Chief of the Division and the Chief, Bay Service Section (or its equivalent office).

2. Customs Senior Boarding Officers, Customs Inspectors and Customs Guards assigned to vessels arriving before 8:00 a.m. and after 5:00 p.m. shall report for duty at least two (2) hours before the vessel’s estimated time of arrival.

Section 11. MEALS AND ACCOMMODATIONS FOR DESIGNATED CUSTOMS INSPECTORS AND CUSTOMS GUARDS

A. On Board Vessel

The Customs Senior Boarding Officer shall, when necessary, invite the attention of the Master of the vessel to Customs regulations which require the serving of meals and providing of suitable accommodations to Customs Inspector and Customs Guards assigned on board.

If meals are not provided on board, the fact shall be certified by the Master or Chief Steward of the vessel to entitle the Customs Inspector and Customs Guards to meal allowances at the rate provided for in existing regulations.

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B. To Outports/Travel Expenses

Customs Inspectors and Customs Guards traveling at the request and expense of shipping lines or other entities shall be allowed suitable accommodations and actual and necessary expenses for board and lodging subject to existing rules and regulations.

Customs officials and employees duly assigned on board vessels shall be furnished with suitable accommodations and free regular meals. Whenever, meals are available on board a vessel, Customs Inspector and Customs Guards assigned thereon shall not take their meals ashore, except when there is good justification for doing so and only when at least a Customs Guard is left on board.

While traveling on official business, they shall be allowed suitable, actual and necessary transportation expenses, depending not only in the class and type of transportation used but also on the circumstances of time and place. They shall, however, use the most reasonable and expeditious means of transportation available, whether by land, water or air, to and from their destination. Where established and regular common carrier transportation services are available, such services shall be utilized whenever possible. The hire of special conveyance will be allowed only in extreme cases of emergency and where conveniently scheduled common carrier service is not available.

Section 12. LEAVE OF ABSENCE

Application for vacation leave shall be filed and approved before such leave of absence is enjoyed by any officer or employee, unless prevented by unforeseen circumstances beyond his control.

Application for sick leave shall be filed within two (2) days after return to duty and, if in excess of three (3) days shall be supported by a medical certificate.

Any officer or employee detained by causes beyond his control and unable to report for duty at the prescribed hour of reporting must notify the office in which he is employed to that effect within two(2) hours, if practicable, of such prescribed hour, on the first day of absence. Absence from duty without prior permission will be cause for disciplinary measures, unless satisfactorily explained.

II. OPERATIONAL PROVISIONS

Section 13. STATUTORY PROVISIONS ON ENTRANCE AND CLEARANCE

The provisions of Section 1001-1025 of the Tariff and Customs Code of the Philippines, as amended on Entrance and Clearance of Vessels, are deemed

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incorporated in this Manual.

Section 14. PRE-ARRIVAL

A. Notice of Arrival (NOA) with Estimated Time of Arrival (ETA)

(a) The Shipping Agent or representative of any vessel engaged in foreign trade entering any of the Philippine ports of entry shall notify the Piers and Inspection Division, Bay Service Section (or its equivalent office) of the vessel’s arrival and all other particulars at least twenty-four (24) hours in advance.

(b) Upon receipt of the Notice of Arrival (NOA), the Customs Inspector or E2M-OIC of the Piers and Inspection Division, Bay Service Section (or its equivalent office) shall perform the following functions:

(1) Electronically verify the vessel registry number/principal and other vessel information thru Client Profile Registration System (CPRS);

(2) Input the Estimated Time of Arrival (ETA) in the E2M Customs System;

(3) Encode the time and date in the system and affix his signature on the hardcopy of the Notice of Arrival;

(4) Furnish the Customs Boarding Team a copy of the processed Notice of Arrival (NOA).

B. Assignment of Customs Boarding Team

The Customs Boarding Team shall be assigned by the Chief, Bay Service Section (or equivalent office) thru a duly signed Assignment Order.

The following Customs Personnel shall be the members of the Customs Boarding Team:

1. Customs Senior Boarding Officer;

2. Customs Inspector;

3. Customs Guard/s.

C. Submission of Advance Electronic Manifest before Arrival of Vessels Engaged in Foreign Trade thru E2M Customs System and Penalties

The submission of electronic copy of Inward Foreign Manifest (e-IFM) and electronic copy of Consolidated Cargo Manifest (e-CCM) must be done through any of the Value Added Service Providers (VASPs) accredited by the BOC. The e-IFM, in the case of shipping lines must be electronically submitted at least twelve (12) hours before arrival of the carrying vessel. The

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e-CCM, in case of Non-Vessel Operating Common Carrier (NVOCC)/Cargo Consolidator/Co-Loader/Break-bulk Agent, must be submitted at least six (6) hours before arrival of the carrying vessel.

The cut-off time for e-manifest (e-IFM and e-CCM) submission is calculated from the submitted Estimated Date and Time of Arrival using the BOC Gateway Service Clock. The e-IFM must be submitted ahead of the e-CCM. If the e-CCM is submitted ahead of the e-IFM, the e-CCM will not be registered in the E2M Customs System, but has to be re-submitted when the e-IFM is already registered.

Registration of e-manifest

The system automatically registers a manifest in the E2M Customs System if the manifest meets the submission deadline. However, if the deadline is missed, the concerned shipping line/agent should submit a formal request letter to the office the Deputy Collector for Operations to allow a BOC-initiated manual registration of the manifest in E2M. Only the Deputy Collector for Operations can approve the request and execute the manual registration (through the “Direct Register” function) in E2M. A late or non-compliant submission fee will be charged for this procedure following the schedule of fines provided in Section 2521 of the Tariff and Customs Code of the Philippines, as amended:

1. Late Submission

(a) First Offense - Php10,000.00(b) Second Offense - Php20,000.00(c) Third Offense - Php30,000.00

2. Non-compliant Submission- Php30,000.00

The count for the number of offenses shall be set to zero at the beginning of each calendar year.

Section 15. ARRIVAL

A. Documents/Permits

1. Quarantine Certificate for Incoming Vessels from a Foreign Port

Entry of vessels from any port or place outside of the Philippines shall not be permitted until they have obtained a Quarantine Certificate issued under the authority of the Bureau of Quarantine. However, if a vessel has already been issued a Quarantine Certificate in the first Philippine port of entry, she will not be required to undergo another Quarantine formalities at succeeding ports of call in the Philippines.

No person shall be allowed to board or leave the vessel before they are cleared by the Bureau of Quarantine, except the pilot who is governed by the

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Quarantine regulations in such contingencies.

The Certificate shall be part of the required documents to be received by the Customs Senior Boarding Officer from the Master of the vessel.

No Quarantine Permit shall be required for the discharge of regularly manifested cargo, including animals, plants, etc., unless otherwise required by law or regulations. However, if animals or plants are carried as baggage, their discharge shall be subject to the regulations promulgated by the Bureau or office concerned.

2. Entrance of Vessel from a Foreign Port

Upon arrival of a vessel from a foreign port, BOC OPM Form No. 9 (Oath of Entering Vessel from a Foreign Port) with Customs Documentary Stamp duly accomplished by the Master in four (4) copies shall be presented to the office of the Customs Clearance Officer within twenty-four (24) hours.

3. Documents to be Produced by Master Upon Entry of Vessel

The following documents properly accomplished shall be submitted by the Master to the Customs Senior Boarding Officer:

(a) Quarantine Certificate (Pratique);

(b) Clearance of vessel from last port of call;

(c) Original and four (4) copies of Inward Foreign Manifest duly signed by the Master;

(d) Three (3) copies each of the following:

1. Crew list2. Passengers list3. Passengers list for aliens (as required by immigration law in force in the Philippines)4. Copy of original duplicate of bills of lading5. Bonded Store list6. Narcotics & Dangerous drugs list7. Ship’s Store list8. Mail list9. Firearms & ammunition list10. Crew’s declaration list11. Parcel list12. Shipping articles and register of the vessel of Philippine Registry

(e) Through Cargo Manifest/s, if any, which shall be deposited to the Customs Inspector and shall be returned to the master prior to departure to other ports;

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(f) Cargo Stowage Plan or Hatch List;

(g) If passenger vessel, three copies of disembarking passengers list and their baggage declaration.

The Customs Senior Boarding Officer shall, after carefully comparing the copies with the original manifest, stamp each of such manifests on the last page thereof with a rubber stamp provided for that purpose, and verify that the necessary information required in accordance with Section 12, item No. 4 hereto is contained therein.

All documents, except copies for the Customs Inspector on board the vessel, shall be forwarded to the office of the Chief, Bay Service Section (or its equivalent office), for transmittal to offices concerned.

4. Inward Foreign Manifest (IFM) and Consolidated Cargo Manifest (CCM) ContentsThe hardcopy of the Inward Foreign Manifest required to be submitted by the Master of the Vessel to the Boarding Officer shall contain the following information:

(a) Bill of Lading number(b) Marks and numbers of cartons, drums, boxes, crates and other forms of protective packaging (for break-bulk)(c) Container and seal number if containerized and initials FCL, if full container load, and LCL, if less container load.(d) Number of packages(e) Kind of packages (cartons, boxes, crates, drums, etc.)(f) Contents of Description of Cargo(g) Shipper(h) Consignee(i) Gross weight in metric tons(j) Measurement in cubic meters(k) Port of origin(l) Notify party

Inward Foreign Cargo Manifest submitted not in accordance with the above requirements shall be rejected.

The Customs Senior Boarding Officer shall, with his initials, note down on all the copies of Inward Foreign Cargo Manifest delivered to him by the Master of the vessel, the specific time and date when such documents were received.

If the Inward Foreign Cargo Manifest is not in the English language the Customs Senior Boarding Officer shall require its translation to English before accepting the same.

All articles, wares, goods, merchandise, and any other cargo including unaccomplished baggage, and orders or “encargo” from abroad, received by the master, officers and crew of vessels without bills of lading or not covered

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by manifests or parcel list shall be subject to seizure as unmanifested cargo under the Customs law.

Distribution of Inward Foreign Manifest (IFM) Hard Copies

The Inward Foreign Manifest shall be distributed to the following offices:

(a) Original copy - Piers and Inspection Division (PID) or Equivalent office

(b) One copy - Commission on Audit (COA) Resident Auditor through the

Office of the Commissioner (OCOM)(c) One copy - Intelligence Group (IG)(d) One copy - Assessment and Operations Monitoring Group

(AOCG)

5. Permits for Discharge and Lading of CargoUnless the vessel has put into “in distress”, the Customs Senior Boarding Officer shall, upon placing the vessel under Customs surveillance and control, issue a “General Permit”. Such permit however, shall not constitute an authority for the loading of export cargo or delivery of import cargo at ship’s side without the required entries or permits as the case may be.

The General Permit shall be endorsed by the Customs Inspector assigned on board the vessel mentioned in the permit at the back thereof showing whether all import cargoes has been discharged at the port or not. Such permit shall be included in his report after the termination of his assignment on board a vessel.

6. Endorsement of Permits

The following permits shall be endorsed on the reverse side thereof:

(a) The General Permit(b) The Shipside Permit(c) Permits for the sending of special consignments of cargo to the piers or to the Parcel Section(d) Permits issued by the Deputy Collector for Operations or its equivalent office for the transfer of cargo from one vessel to another

On the same permit and directly under the preceding endorsement, the receiving Customs Inspector shall make an endorsement to the effect that he received the cargoes on board the vessel to which he is assigned.

All endorsements and returns shall be signed over the printed name and executed clearly and legibly especially with reference to any figures that may be included.

All minor corrections shall be initialled by the endorsing officer.

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All other permits shall be endorsed on the reverse side thereof.

7. Shipside Permits

Shipside Permit, when duly processed and approved by the Collector of Customs or the Deputy Collector for Operations or its equivalent office, as the case may be, is an authority for the Customs Inspector assigned on a vessel to allow the discharge of cargoes specified on the permit at shipside unto lighters, underguarded.

Three (3) kinds of Shipside Permits:

(a) Regular Shipside Permit - issued by the Deputy Collector for Operations or its equivalent office as now presently required for all cargoes which belong to the categories of “regular shipside cargoes” under existing regulations.

(b) Special Shipside Permit - when cargoes do not belong to “regular shipside cargoes”, such as ballast, garbage, provisions, watering, bunkering, vessel parts for repair the ship’s agent has to get the authority from the Collector of Customs prior to the processing and approval by the Deputy Collector for Operations or its equivalent office.

(c) Temporary Shipside Permit - is a written authority to discharge cargoes at shipside unto lighter as per order of the Collector of Customs. The permit shall be forwarded direct to the Customs Inspector of the carrying vessel without entry being filed. This is issued only as an emergency measure so as not delay ship operations. This permit is also issued on Saturdays, Sundays and holidays when there are no offices to process the regular shipside permit. Several conditions are usually imposed in the issuance of this Temporary Permit, among which are:

That the cargo is underguarded continuously until released by the Bureau of Customs;

That the lighter shall not be taken out of the Customs designated barge pool area until the Regular Shipside Permit is issued by the Deputy Collector for Operations or its equivalent office, and is presented to the Customs Inspector of the carrying vessel; and

That the Deputy Collector for Operations/Chief, Piers and Inspection Division (PID) or its equivalent office be duly notified of the discharge under the Temporary Permit.

Pending Issuance of Shipside Permits

Pending issuance of shipside delivery permit, the Customs Inspector on board may receive written requests from consignees, countersigned by the ship’s agents, and approved by the Collector of Customs, that certain designated goods be discharged into separate carriers. Under such circumstances, the

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same procedure is enjoined as in the case of shipside delivery except that the consignment shall be held alongside the vessel underguarded. Provided that, in case no permit is received by the Customs Inspector on board within seventy-two (72) hours from the time of discharge, the Chief, Bay Service Section (or its equivalent office) shall be advised accordingly so that the cargo may be sent to the Customs designated barge pool area/piers/wharf, underguarded.

The Customs Inspector assigned on a vessel who allows the discharge of cargoes at shipside shall comply strictly with the conditions and/or requirements stated on the permit and prior to the unloading of the cargoes, he must first check the cargoes mentioned in the permit against the Inward Foreign Manifest.

After effecting total discharge of cargoes unto lighter, the Customs Inspector shall endorse the shipside permit at the back thereof specifying the quantity of cargoes discharged. He must indicate the names of lighters loaded and the corresponding names of the Customs Guards in charge of each lighter loaded. A copy of a transfer note covering the shipment together with the corresponding Guard’s Check Report made by the Customs Guard in charge shall be attached to the shipside permit for submission to the Records Section, Piers and Inspection Division (or its equivalent unit).

8. Transfer Note (Boat Note)

Shall be made in sextuplicate by the Customs Inspector on board. For cargoes delivered at shipside, the transfer note shall show the following:

(a) Name of vessel and registry number(b) Name of lighter(c) Name of Broker and/or Consignee(d) Shipside Permit Number(e) Marks and Numbers(f) Kinds and Description of Goods(g) Time and Date lighter left alongside the vessel(h) Names and signatures of Customs Inspector, Customs Guard In-Charge of Lighter and the Patron of the Lighter(i) Any other information and/or remarks such as, conditions set forth on the Shipside Permit by the Collector of Customs.

The copies of the prepared transfer note shall be distributed as follows:

Original and Duplicate To Customs Guard In-charge

Triplicate Attached to the Shipside Permit together with the Guard’s Check report

Quadruplicate To Patron of the Lighter

Quintuplicate Inspector’s file

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Sextuplicate Attached to the booklet of the Transfer Note (Issuing Officer)

B. Boarding Sequence

The vessel upon arrival from a foreign port at the port of entry and after the issuance of the Quarantine Certificate (Pratique) by the Bureau of Quarantine shall be boarded in the following order:

1. Customs Senior Boarding Officer, Customs Inspector and Customs Guards assigned to the vessel.

2. Immigration Officer

3. Department of Agriculture or Plant/Animal/Fisheries Quarantine Representative (as required)

4. Other agencies or persons authorized by the Collector of Customs.

C. Customs Boarding Team on Foreign Vessel

1. The Customs Senior Boarding Officer shall place the vessel under Customs control and surveillance by posting a Customs Inspector and Customs Guards thereon.

2. No person shall be permitted to go on board such vessel except the pilot, consul, Health Officials, Immigration and Customs officers without the permission of the Customs Inspector on board the vessel.

3. No tugboat, rowboat, or other watercrafts shall be allowed to go alongside the vessel to ferry any person to or from the vessel without a permit from the Collector of Customs or his duly authorized representative.

4. Unauthorized, tugboats, rowboats and other watercrafts shall keep away from such vessel engaged in foreign trade at a distance of not less than fifty (50) meters.

D. Actual Time of Arrival (ATA) of Foreign Vessel thru E2M Customs System

After boarding formalities, the E2M-OIC of Piers and Inspection Division-Bay Service Section, shall input the Actual Time of Arrival (ATA) from the boarding information sheet submitted by the Customs Boarding Officer.

E. Submission of Supplemental Cargo Manifest

Supplemental e-manifest submission is treated as non-compliant/late submission, and shall be subject to penalty as stated in Part II Section 14-C of this Manual. Supplemental e-manifest must be submitted in hard copies and electronic form within the period prescribed by regulation; otherwise, the

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shipments subject of the Supplemental Manifest will be considered unmanifested and subject to seizure proceedings.

Submission of Supplemental e-manifest:

1. Cargoes/containers not listed in the IFM but are otherwise recorded in the Stowage Plan must be covered by a Supplemental e-manifest submitted to the BOC through the VASP not later than forty-eight (48) hours from date of discharge of the last package from the vessel;

2. For cargoes/containers not listed in the IFM and Stowage Plan, the Supplemental e-manifest must be submitted not later than twenty-four (24) hours from the date of last package; and

3. In both cases, the Deputy Collector for Operations and the Chief, Piers and Inspection Division (or its equivalent office) monitor the forty-eight (48) or the twenty-four (24) hours rule as the case may be before authorizing the registration of the supplemental e-manifest into the Electronic Manifest System (EMS).

F. Unloading of Cargoes

1. Containerized

(a) Discharging of containerized cargoes shall be authorized only upon issuance of a general permit by the Customs Senior Boarding Officer;

(b) Thereafter, unloading of containers shall commence;

(c) During unloading, the Customs Inspector/Customs Guard on board foreign vessel shall verify the container number/s against the discharging sequence;

(d) Customs Inspector/Customs Guards shall check/inspect if container seals are intact;

(e) Discharging Report shall be submitted upon completion of the unloading operation.

2. Bulk and Break bulk

The clearance of cargoes for bulk and break-bulk cargoes/shipments such as liquids, chemicals, petroleum products and all other cargo shipped in bulk/break-bulk the duties and taxes of which are normally determined by weight (e.g. wood, steel, coal, grain, etc.) shall be governed by pertinent regulations. Regulations allow under certain conditions the filing of import entry/ies and payment of proper duties, taxes and other fees prior to the arrival of the vessel in the Philippine port of destination and immediately cause the discharge and withdrawal of the same from Customs premises and/or custody provided that the declarations in the import entry/ies are

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confirmed by the Load Port Survey (LPS) Report and upon presentation of the proof of payment of duties, taxes and other fees as well as compliance with other pre-requisite for valid importation.

The accredited surveyor may be allowed to board the vessel for purposes of securing/need for a Discharge Port Survey (DPS) Report due to absence of a Load Port Survey (LPS) Report or upon agreement by the shipper and consignee, upon appropriate instruction from the One Stop Shop (OSS) headed by the Deputy Commissioner of Assessment and Operations Coordinating Group (AOCG).

In the event that the shipment is covered by an alert order or that the shipment is different from the details in the entry, the Customs Inspector or the Customs Guard assigned on board the vessel shall inform in writing the Formal Entry Division or its equivalent office (Attention: the concerned customs examiner/appraiser) thru the office of the Chief, Piers and Inspection Division, indicating therein the exact location of the shipment for the usual customs examination and processing of the entry.

2.1. Unloading of Bulk and Break-bulk Cargoes at Shipside

Shipside discharge of cargoes shall be authorized only upon presentation of necessary shipside permit issued by the Deputy Collector for Operations. Upon receipt of the shipside permit, the Customs Inspector assigned on board shall:

(a) Verify the subject shipment covered by the shipside permit against the Inward Foreign Manifest as to the correctness of marks and numbers, quantity, kind of merchandise, weight, etc.;

(b) Issue a transfer note in sextuplicate covering the shipment mentioned on the permit, setting forth the conditions and/or requirements imposed by the Collector of Customs on the face of the shipside permit;

(c) Assign a Customs Guard to check the Shipside Permit so that only those authorized to be discharged are unloaded;

(d) Assign a regular Customs Guard to underguard the lighter with the cargoes if the permit so stipulates;

(e) When bulk cargoes are to be discharged unto lighters, the Customs Inspector shall not allow any cargo to be unloaded without first obtaining the ton/inch immersion table of the lighter from the patron.

After discharge of bulk cargoes at shipside, the Customs Inspector on board must sign and attest to the long tally of the Consignee Surveyor report.

In cases wherein the vessel is anchored at the anchorage, personal effects, parcel cargoes and the like may be discharged at shipside unto the launch for subsequent immediate delivery to the office of Bay Service Section (or its

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equivalent office), underguarded, where the goods shall be duly received by the Customs personnel in-charge thereat on the face of the transfer note.

Cargoes shall be released upon presentation to the Customs Inspector on board a Statement of Settlement of Duties and Taxes (SSDT) duly issued by the Formal Entry Division or its equivalent office.

Duties of Customs Inspectors Relative to Import Cargo

(a) Unless the Collector of Customs permits their discharge into lighter or carriers to subserve public interest, all vessels arriving from foreign port shall discharge their import cargo at officially designated piers.

(b) All cargoes from vessels that go alongside the piers, except hereinafter specified, shall be discharged thereon and no check or accounting shall be undertaken by the Customs Inspector on board of the vessel, except to satisfy himself that the cargo is actually thereunto discharged, and that the ship’s checker is actually checking the cargo being discharged. If a sling/tango crane goes down without any tally, he should not allow it to be discharged until the tally sheet is attached to the sling/tango crane. Upon completion of discharge, either by dockside or shipside, the Customs Inspector shall secure a written certificate from the ship’s headchecker to the effect that all Import cargo has been discharged as required by law and the Customs Inspector be furnished cargo receipts (tally sheets) for all cargoes so discharged by the ship’s headchecker of shipping company.

(c) All import cargoes discharged at shipside shall be checked by Customs Guards detailed for that purpose by the Customs Inspector on board, and for each carrier, the said Customs Inspector shall accomplish a transfer note showing the quantity and description of the cargo in each lighter or carrier. A transfer note shall always accompany such cargo and information regarding damaged cargo shall be noted in the column for remarks. However, in the case of oil and gypsum in bulk, the quantity to be indicated in the transfer note shall merely be the estimated quantity based upon the report of Customs accredited marine surveyors or the reading of the vessel’s gauge, as the case may be.

(d) The Customs Inspector on board the vessel shall permit shipside delivery upon receipt of the shipside delivery permit, provided transportation facilities for the cargo described therein are available. He shall detail a Customs Guard to take an accurate account of the number of packages and their marks and numbers.

No cargo other than that described in the permit nor packages or quantity in excess of the number or amount indicated therein shall be delivered. Any excess found in the cargo being underguarded shall immediately be reported to the Chief, Bay Service Section (or its equivalent office).

(e) In cases where a discrepancy occurs between the check of the

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Customs Guard and that of the other checkers on board as to the number of packages discharged into a carrier for shipside delivery, the Customs Inspector on board shall detail the same Customs Guard to accompany the carrier and re-check the cargo as it is being discharged at the consignee’s warehouse or wharf. Customs Inspectors shall instruct the Customs Guards accompanying such carriers to bring to the pier any package or quantity found on the carrier which is not included in the shipside permit. A Customs Guard shall be maintained on such carriers until the cargo has been totally discharged.

(f) The delivery of cargo at ship’s side is the most important duty of a Customs Inspector. He shall take every precaution to avoid mistakes. He shall read every permit carefully to ascertain the kind and quantity of the cargo that he has authority to deliver. He shall see to it that the marks and numbers of the goods being discharged at shipside conform to all particulars as reflected in the Inward Foreign Manifest.

(g) The Customs Inspector on board may also receive written permits from the Collector of Customs or Deputy Collector for Operations to send cargo for transfer to bonded warehouses, in which case he shall cause the goods to be checked by marks and numbers. Transfer notes in sextuplicate shall be duly accomplished and the original and duplicate thereof delivered to the Customs Guard in whose charge the consignment will be sent to the bonded warehouse indicated in the permit. The Customs Guard shall deliver the goods to the Customs Warehouseman / Storekeeper in charge of the bonded warehouse, taking his receipt on the face of the transfer notes which must show the exact time and date the goods were received at the warehouse.

(h) Special permits are issued to send certain designated cargoes to the Customshouse. Under this circumstance, the goods together with the transfer note covering such cargoes shall be sent underguarded to the Bay Service Section, PID (or its equivalent office).

(i) Packages manifested as parcels and those containing valuable goods, if the carrying vessel did not dock alongside the pier/wharf, shall be sent to the Bay Service Section, PID (or its equivalent office) on the boarding officer’s launch, if possible; if not, on the agent’s launch, underguarded.

(j) Parcel listed articles shall be properly accomplished on B.C. Form No. 174. Accompanying transfer notes shall be accomplished giving the marks and numbers and the names of consignee.

(k) Goods from a foreign port may be transferred directly from the carrying vessel to another vessel engaged in the coastwise or foreign trade upon receipt of written permission from the Collector of Customs. Detailed instructions in regard to such cargo are given in Sections 17 and 18 of this manual.

(l) Importations of arms and ammunitions shall be discharged immediately from vessel with proper transfer note to be sent to and receipted at the

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Customs Police Division for safekeeping and for proper disposition.

(m) Goods remaining on board any vessel after the expiration of the period for discharge and not reported for transit/transshipment to another port may be unladen by the Customs authorities and stored at the vessel’s expense. Customs Inspectors must see to it that all cargoes destined for the port must be discharged at the port unless otherwise permitted by the Collector to remain on board, underguarded, if the vessel should clear for other local ports. If vessel will clear for foreign port the ship’s agent shall secure a permit from the Collector of Customs to over carry the remaining cargo. Such permit to over carry cargo shall be issued only upon guarantee of the ship’s agent that the overcarried cargo will be returned without delay to original port of discharge.

Instructions to Customs Inspectors Relative to Carriers Receiving Import Cargo

(a) No cargoes shall be discharged at shipside into open carriers, except those authorized for delivery thereat under existing Customs rules and regulations. All other cargoes shall be discharged into secured lighters, capable of being locked and sealed with customs seals.

(b) Carriers alongside a vessel, having cargo that is under Customs supervision, shall not be permitted to shift to another vessel to receive cargo unless authorized by the Collector of Customs or the Deputy Collector for Operations of the port.

(c) Empty carriers shall not be permitted to lie at night alongside a government pier, or a vessel moored thereto; or a vessel anchored in the harbor, or be attached to such piers or vessels by cables or ropes; or be attached to partly loaded carriers which may be alongside or fastened to such pier or vessel with import or export cargo; nor to carriers brought alongside to receive import cargo or discharge export cargo while the cargo on the pier or vessel is being worked at night.

(d) Laden or partially laden carriers at shipside containing import cargo shall not be permitted to leave the vessel without permission from the Customs Inspector on board, except in cases of emergency. In such circumstance, they shall be locked and sealed and placed underguard.

(e) All merchandise and other movable articles on board a vessel, not included in the cargo manifest or ship stores, shall be included in the list of ship stores. If not so included at the time of boarding, they shall be checked, a supplementary list prepared, and then sealed as part of the ship store.

(f) The Customs Inspector shall, as soon as practicable after a vessel has been placed in his charge, verify by personal inspection the seal of the ship stores which may be broken. Ship’s firearms, except in unusual cases, shall not be placed under seal, but a check shall be taken of them, which shall be verified before the vessel sails, to insure that no arms have been unlawfully

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landed.

(g) Ship stores may be discharged under the same conditions as other cargo but the written permission of the Quarantine officer shall be presented to the Customs Inspector before the discharge is permitted. Upon the receipt of a permit or approved application for the transfer of ship store directly from one vessel to another of the same line, the Customs Inspector on board shall send it under Customs Guard with transfer note. The lading of stores and provisions for ship’s use in reasonable quantities must be by permit issued by the Chief, Piers and Inspection Division (or its equivalent office) and by the Deputy Collector of Customs for Operations or his authorized representative in other ports of entry, provided that a vessel arriving and clearing on the same night may make such replenishments upon written request of the Master or Agent approved by the Deputy Collector for Operations or his authorized representatives.

(h) An excess of supply in ship’s store in vessels arriving from foreign ports, and all articles purchased abroad for sale on board a vessel as saloon stores or supplies, are dutiable, but all ship stores and saloon stores or supplies not in excess of the proper requirements of the vessel in her voyage outside of the Philippines shall not be deemed dutiable.

Surplus in ship’s stores shall not be transferred from one vessel to another, except to a vessel of the same line in active service in the foreign trade, and then only where such stores are bona fide ship stores and not cargo. In such cases, the transfer may be allowed under Customs supervision with the approval of the Collector of Customs or the Deputy Collector for Operations.

The surplus ship stores of a vessel of Philippine registry shall be dutiable on her changing from the foreign status to a coastwise status.

2.2. Unloading of Cargoes at Dockside

Import Cargoes

All cargoes discharged at dockside from a vessel shall not be accounted for by the Customs Inspector. However, a Customs Guard on each working hatch must see to it that the ship’s checker is on board making a tally of each sling and if a sling goes down without a tally, the Customs Guard must stop the discharge from that hatch until such time that the checker does his job correctly.

Passenger’s Baggage, Parcel List and Crews Personal Effects

(a) The Customs Inspector shall cause the immediate discharge of all baggage, parcel cargoes and articles brought in by the ship’s crews and passengers for discharge at the pier.

(b) The Customs Inspector shall remind the Chief Officer or the Purser of the vessel, if necessary, that baggage and parcels must be discharged

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promptly and have the same transferred, underguarded, to the Office of Bay Service Section, PID (or its equivalent office), where proper receipt will be noted on the face of the transfer note. (Subject for examination by Customs Examiners). No permit is required for the discharge and landing of baggage.

(c) If baggage and parcels are to be discharged into a carrier in the stream, the Customs Inspector shall assign a Customs Guard to underguard such baggage and parcels to the Office of the Bay Service Section, PID (or its equivalent office) where the receiving Customs Personnel In-Charge thereat will sign.

(d) For purposes of determining whether “encargo” or entrusted shipments of merchandise or articles from abroad be included in the parcel list (B.C. Form No. 174), hereunder is the criteria:

Any cargo which is found to exceed 350 lbs. (159 kilos) in weight and 40 cu. ft. (1.13 cu. Meters) in measurements shall not be included in “Parcel List” and as such the Customs Inspector shall not allow the discharge unless the shipping agent concerned shall file a supplemental cargo manifest for said parcel or cargo within twenty-four (24) hours after the arrival of the carrying vessel and pay the corresponding duties and taxes with either the Informal Entry Division or Formal Entry Division depending on the weight and measurement of the said cargo. The time and date of discharge to the Bay Service Section (or equivalent office) of each parcel cargo shall be duly noted by the Customs Inspector on board under the last column of his copy of the parcel list. Under no circumstances shall any parcel cargo destined for other ports of entry be authorized for discharge at the pier without proper authority from the Collector of Customs.

Section 16. DEPARTURE

A. Documents/Permits

1. Documents Required for Exportation

1.1. In General

(a) Export Declaration(b) Commercial Invoice(c) Packing list(d) Export permit (for regulated cargoes)

1.2. Additional Documents Required

(a) CBW Shipments - Transfer Note, Certificate of Identification (CI) and Certificate of Inspection and Loading (CIL)

(b) PEZA Shipments - PEZA Transfer Note and PEZA Tally Sheet

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(c) Provincial Loading - Transit Cargo Manifest

(d) Constructive Warehousing and Immediate Exportation- Previous Import Entry and Internal RevenueDeclaration(IEIRD), Reexportation Bond andTransshipment Permit

(e) Special Permit to Load - Letter request from Shipping Lines and list of containers intended for loading

2. Inspector’s Certificate of Lading/Report of Customs Inspector on Board

The Inspector’s Certificate of Lading is accomplished by the Customs Inspector on board of a carrying vessel for all conventional export cargoes loaded into vessels. The Inspector’s Certificate of Lading shall be accomplished in five (5) copies and signed by the Customs Inspector on board vessel.

He shall submit the original copy of the Inspector’s Certificate of Lading together with the working copies of the Export Declaration/Permits covered by the report to the Export Division/Processing Office (or its equivalent office) concerned within five (5) working days after the departure of the carrying vessel to which the conventional export cargoes are loaded.

The Customs Inspector shall maintain a running list of all Export Declaration/Permits presented to him covering export cargoes to be loaded on board a vessel to which he is assigned. From the prepared list, the Customs Inspector shall prepare the Inspector’s Certificate of Lading covering such exportation indicating therein the actual number and kinds of goods loaded. Prior to the clearance of vessel to sail, the Customs Inspector shall verify and examine whether the Outward Foreign Manifest issued to the Master of the carrying vessel together with the ship’s clearance tallies with the prepared Inspector’s Certificate of Lading. Should there be a discrepancy as to the correctness of entry in the Outward Foreign Manifest with that of the Inspector’s Certificate of Lading, the Customs Inspector on board shall not allow the vessel to sail until such Outward Foreign Manifest is corrected.

For ports wherein a Customs Container Control Division (or its equivalent office) does not operate, the Customs Inspector of the Piers and Inspection Division thereat shall act as the Stuffing or Loading Inspector, as the case may be. And as such, the assigned Customs Inspector shall observe the enumerated duties and responsibilities as herein provided.

3. Customs Clearance of Foreign Vessel

For purposes of clearances of a vessel, the following documents shall be presented to the PID Clearance Section prior to the issuance of clearance:

(a) BOC OPM Form No. 12 - Outward Foreign Manifest (4 copies)

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1 original copy 3 photocopies

(b) BOC OPM Form No. 10 - Oath of Master in Manifest in Clearance for a Foreign Port (4 copies) 1 original copy (with Customs Documentary Stamp) 3 photocopies

(c) BOC OPM Form No. 11 - Oath of Master to Foreign Vessel Clearing Without Passengers (4 copies) 1 original copy (with Customs Documentary Stamp) 3 photocopies

(d) BOC OPM Form No. 2 - Clearance of Vessel to a Foreign Port (2 copies) 1st original copy (Customs copy with Customs Documentary Stamp) 2nd original copy (Master of the Vessel’s copy with original seal and signature of the Collector of Customs or his duly authorized representative)

(e) BOC OPM Form No. 3 - Clearance of Customs Inspector assigned on board in 3 copies 1st copy for Clearance Officer 2nd copy for the Shipping Agent 3rd copy for the Customs Inspector on Board

(f) B.C. Form No. 88 - Statistic Supplemental in 4 copies

(g) Bureau of Quarantine Clearance for Outgoing Vessels

(h) Plant Quarantine Clearance

(i) Post Office Clearance

(j) Request for Customs clearance by shipping agency signed by the Customs Inspector concurring that the vessel in which he is assigned is ready to sail for foreign port.

(k) The register and shipping articles, if the vessel is of Philippine Registry.

(l) The consular certificate of entry, if the vessel is of Foreign Registry, when required.

When a vessel from a foreign port is compelled by stress of weather or other necessity to put into any port other than that of her destination, such vessel “in distress” i.e., for bunkering, watering, provisioning, sheltering, emergency repairs, landing sick crew member or other like causes, other than for loading or unloading of cargoes, the Customs Senior Boarding Officer shall place the vessel under Customs surveillance and supervision by posting the Customs Inspector on board. Upon receipt of marine protest that the vessel put into port for the purpose of relieving “distress” and that no cargo or passenger will

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be discharged or laden, the vessel may be permitted to sail subject to the usual entrance and clearance formalities at the Customs house.

B. Stuffing and Loading of Cargoes

1. Containerized

1.1. Instructions Relative to Stuffing of Containerized Export Cargoes

(a) Upon the issuance of the Authority to Load, the Export Declarations/Permits duly processed at the Export Division (or its equivalent office) shall be forwarded to the Customs Container Control Division (or its equivalent office) by Exporters/Shippers or Customs Representatives.

(b) The Notice of Stuffing shall be submitted at least twenty-four (24) hours in advance indicating therein the kind and quantity to be stuffed, the container number to which cargoes shall be stuffed, the time stuffing will start, the address where stuffing will be done, and the name of the Exporter/Shipper.

(c) The assigned Stuffing Inspector shall not allow stuffing of export cargoes into the container van unless the duly processed Export Declarations/ Permits of the cargoes to be stuffed shall have been presented with the Authority to Load stamped thereon.

(d) The assigned Stuffing Inspector shall supervise the actual stuffing which shall be conducted in the presence of representatives from all parties concerned.

He shall carefully verify export declarations/permits to ascertain the exact quantity and kind of cargo to be stuffed into the container. Hence, he shall be at the place of stuffing to supervise actual stuffing and shall remain until stuffing is concluded and the doors of the container van are closed, locked and properly sealed.

(e) Upon completion of the conduct of stuffing, the assigned Stuffing Inspector shall affix his signature on the stuffing report/sequence attesting to the fact that the cargoes were indeed stuffed into the container. In case of stuffing at CY-CFS outside customs zone, he shall issue a transfer note with cargo details and the cargo underguarded by the CY-CFS Customs Guard for delivery to the Loading Inspector assigned to the carrying vessel.

(f) Duties and Responsibilities of the Stuffing Inspector

(1) The Stuffing Inspector shall supervise the actual stuffing at the place where it shall be conducted;

(2) He shall see to it that only those export cargoes with duly processed export declarations/ permits with the Authority to load shall be allowed to be stuffed into the container van;

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(3) He shall ascertain that the accompanying supporting documents/attachments to export declarations/ permits are complete and correspond to what has been declared therein;

(4) He shall make sure that any discrepancy in the export declarations/ permits as against the export cargoes to be stuffed is rectified accordingly;

(5) Upon completion of the stuffing, he shall ascertain that the doors of the container van are closed, locked and properly sealed;

(6) In case of stuffing at CY-CFS outside customs zone, he shall issue a transfer note with cargo details;

(7) Upon the departure of the vessel to which the container van was loaded, he shall accomplish the Inspector’s Certificate of Lading (ICL);

(8) As to warehousing export shipments, he shall certify and sign the Certificate of Inspection and Loading (CIL); and

(9) Shall perform such other duties that may be assigned to him from time to time by his superiors.

(g) Inspector’s Certificate of Lading/Report of the Stuffing Inspector

The Stuffing Inspector shall accomplish the Inspector’s Certificate of Lading specifying the number of containers and description of goods appearing on each of the Export Declaration/Permit noting in the “Remarks Column” the van number opposite the cargoes contained in one Export Declaration/Permit.

For export cargoes stuffed or placed in container vans, the Inspector’s Certificate of Lading (ICL) shall be accomplished in five (5) copies and signed by the Stuffing Inspector assigned to conduct actual stuffing.

He shall submit the original copy of the ICL together with the working copies of the Export Declarations/Permits covered by the report to the Export Division (or its equivalent office) concerned within five (5) working days after the departure of the carrying vessel to which the containerized export cargoes were loaded.

(h) Duty requirements and Overtime Work Conditions

All incidental expenses (allowance, meal and transportation allowance) attendant to the services rendered by the Stuffing Inspector for the conduct of actual stuffing shall be for the account of the exporter/shipper and/or CY-CFS operator served.

1.2. Stuffing of Containers in Customs Bonded Warehouses

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When export cargoes are to be stuffed in containers at shipper’s Customs Bonded Warehouse, the stuffing shall be supervised by the Warehouseman. Upon completion of stuffing, the Warehouseman shall seal the container and take note on his transfer note the number of the container, the kind and quantity of its contents, and also state therein that the same is to be transferred from the Customs Bonded Warehouse to the destined port of loading. Customs Guard assigned to the Customs Bonded Warehouse shall underguard the container until properly received by the Customs Container Control Division (or its equivalent office) Loading Inspector.

1.3. Loading of Bulk and Break-Bulk Export Cargoes at Shipside

(a) Loading of export cargoes shall be effected only upon presentation to the Customs Inspector on board a duly approved loading permit. The Customs Inspector onboard must see to it that the name of the carrying vessel stated in the loading permit is correct.

(b) All cargoes at shipside shall have appropriate permits for such loading. The Customs Inspector shall take note of the names of lighters where the export cargoes are loaded, specifying the marks and numbers and must see to it that what was loaded conform to the number of packages appearing on the export entry.

(c) Loading of bulk cargoes at shipside shall be subject to weighing. The Importer concerned shall make a request for the assignment of a Customs Guard to check the actual weighing of such bulk cargoes in their respective warehouses prior to loading on barges.

(d) Loading of containers, whether loaded or empty at shipside from lighters should not be allowed because of the difficulty of checking the numbers and contents of loaded containers should verification be required. All containers whether loaded or not should be loaded from the pier.

1.4. Instructions Relative to Loading of Containerized Export Cargoes

(a) The Loading Inspector assigned to the carrying vessel shall verify and ascertain that the export declarations/permits with container numbers indicated therein have been duly processed at the Customs Container Control Division (or its equivalent office), duly signed by the Chief, Customs Container Control Division or his duly authorized representative.

(b) The Loading Inspector shall not allow the loading of containerized export cargoes into his assigned vessel without the corresponding duly processed export declarations/ permits with the Authority to Load stamped thereon.

The Loading Inspector shall allow the loading only upon presentation of an authority to load by the following:

Export Division/OSEDC for regular exports, Special Permits to Load

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(SPL) (local transshipment), CBW export shipments, and PEZA shipments;

Export Coordination Division (ECD) for Export Declarations processed by ECD for provincial loading;

Office of the Deputy Collector for Operations for constructive warehousing and immediate exportation and foreign transshipment permits; and

CCCD for SPL empty containers.

(c) The Loading Inspector shall make sure that the containers to be loaded are indeed intended to his assigned vessel and for that particular voyage of the vessel.

Upon verification that all the export containerized cargoes are covered by export declarations/permits, he shall then consolidate all the pertinent export declarations/permits and sign the Sequence of Loading prepared by the Shipping agent and submits the same to the Customs Inspector on board the carrying vessel before commencement of loading.

(d) Duties and Responsibilities of the Loading Inspector

(1) The Loading Inspector shall inspect and see to it that all containerized export cargoes are covered by duly processed export declarations/ permits prior to loading;

(2) He shall sign and submit the Sequence of Loading prepared by the shipping agent to the Inspector on board carrying vessel;

(3) He shall prepare and sign Inspector’s Certificate of Lading (ICL) and forward the same to the export division/processing office/its equivalent unit concerned, together with copies of approved export declarations/permits within five (5) working days from the departure of the vessel;

(4) He shall certify and sign Certificate of Inspection and Loading (CIL) 24 hours after the departure of the vessel (for Warehousing shipments); and

(5) He shall perform such other duties that may be assigned to him from time to time by his superiors.

(e) Inspector’s Certificate of Lading/ Report of Loading Inspector

After completion of loading, the Loading Inspector assigned to carrying vessel shall, within five (5) working days after the vessel’s departure, accomplish the Inspector’s Certificate of Lading (ICL) and attached therewith properly endorsed export declarations/ permits to be submitted to the export division/ processing office/ its equivalent unit concerned.

(f) Duty requirements and overtime working conditions

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The District Collector of Customs may authorize overtime services when the interest of the service so requires.

The overtime services rendered by the Loading Inspectors are to be paid by the shipping agent, exporter/shipper, as the case may be, pursuant to the rates provided for by the regulations.

2. Bulk and Break-bulk

2.1. Loading of Export Cargoes at Dockside

Export permits covering export loading shall be presented to the Customs Inspector prior to actual loading. The Customs Guard shall make a tally of the actual packages/containers being loaded, checking the number of the packages, marks and numbers against the export entry presented.

The Customs Inspector shall have no authority to inspect or open the goods being loaded unless otherwise authorized in writing by the Collector of Customs.

2.2. Loading of Bulk and Break-bulk Export Cargo

(a) The Customs Inspector on board the vessel shall permit the lading of export cargo only upon presentation of an authority to load issued by the following:

Export Division/One Stop Export Documentation Center for CBW Shipments, Regular Exports and PEZA;

Export Coordination Division (ECD) for Export Declarations processed by ECD for provincial loading;

Office of the Deputy Collector for Operations for Constructive Warehousing and immediate exportation and foreign transshipment permits.

He shall carefully verify the loading permit as to the quantity and kind of cargoes to be laden on board the vessel. He shall comply with the instructions appearing in the permit, if any, of the issuing authority. He shall make certain that the cargo to be exported is intended for the vessel of which he is in charge and for that particular voyage of the vessel.

(b) For all exportations loaded at shipside, the exporter will send to the Customs Inspector on board of the vessel, through the patron of the carrier, a note or “conduce”, which will show:

(1) Name of the vessel to which the cargo is consigned;(2) Name and license number of the carrier;(3) Number of bags, bales, cartons, etc., it contains;(4) Name of the exporter; and

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(5) Number of the export declaration.

(c) As it is being loaded, export cargo shall be checked by marks and numbers, if any, except shipments of bulk cargoes. The Customs Inspector on board must see to it that only those authorized on the loading permit are to be loaded. The Customs Guard assigned to supervise loading of exports must see to it that each export declaration presented for loading must be accompanied by a Guard’s Check Report made by him.

(d) When export cargo weighed on shore under Customs supervision is exported, no quantity in excess of the weight declared shall be received on board. However, if the weight of the total number of packages loaded is less than the weight declared, the Customs Inspector on board shall make note of this fact on the export declaration which shall be attested by the chief officer of the vessel.

(e) Upon completion of lading, the Customs Inspector on board shall execute the Inspector’s Certificate of Lading in five (5) copies. He shall see to it that all export declarations presented to him for loading are all accounted for and all the cargoes stated therein have been fully loaded, otherwise, he shall make a report of discrepancy when such cargo appearing therein the permit are short shipped.

2.3. Loading of Passenger’s Baggage/Crew Personal Effects

The Customs Inspector on board shall not examine incoming passenger’s baggage. However, if no examiner is on hand, during night time, Sundays and holidays, the Customs Inspector on board may inspect and pass the hand-carried personal effects of incoming passengers, retaining on board articles, goods and effects subject to duty and/or tax which should be sent to the office of the Bay Service Section, PID (or its equivalent office) under transfer notes and underguarded. The Customs Inspector shall also render transfer notes and on the face of the original of which the receiving customs personnel in charge at the office of the Bay Service Section, PID (or its equivalent office) shall indicate his receipt.

Outgoing passengers taking valuables or jewellery abroad shall be advised to secure certificates of identification from the Export Division (or its equivalent office), and it shall be the duty of the Customs Inspector on board the vessel to verify that such articles are actually taken on board by attesting on the certificate of identification that such jewelleries are actually brought by the passenger on board.

Section 17. CUSTOMS TRANSIT

Customs Transit means the Customs procedure under which goods are transported under Customs control from one Customs office to another.

Customs Transit operation refers to the transport of goods from an office of departure to an office of destination under Customs Transit.

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Customs Transit by overland transportation shall be subject to such additional conditions as proper Customs authorities may impose; provided it shall be underguarded until received by the Collector of Customs or Deputy Collector for Operations at the port of destination; and, provided, further, that the compartment where the cargo is stored or each and every package thereof be sealed with Customs seal.

There are four kinds of Customs Transit Operation:

(a) From Port of Entry to another Port of Entry as exit point for Outright Exportation (i.e., Local, POM to Subic);

(b) From Port of Entry to another Port of Entry/Inland Customs Office (i.e., POM to PEZA or Outside CY-CFS/Off-Dock);

(c) From an Inland Customs Office to Port of Entry as exit point for Outright Exportation (i.e., PEZA to POM); and

(d) From one Port of Entry/Inland Customs Office to another Port of Entry/Inland Customs Office (i.e., CBW to CBW, CBW to PEZA and PEZA to PEZA).

When import cargo is transferred from a foreign vessel to a coastwise vessel for transit to a coastwise port, the Customs Inspector on board of the latter vessel shall require, besides the permit duly approved by the Deputy Collector of Customs for Operations, transfer note in duplicate and a transit cargo manifest in triplicate. He shall cause the cargo to be checked onboard carefully, by marks and numbers. All packages that are placed under seal shall be marked “sealed” and initialed by the assigned Customs Guard. The Customs Inspector together with the Master or Chief officer of the receiving vessel, shall then execute a certificate on the face of each copy of the transit cargo manifest and in the transfer note, which shall state the number of packages received on board, the number of packages short shipped, where the cargo is stowed, and the location and number of Customs seals used. The Customs Inspector or Customs Guard on board shall indicate short shipments and/or “bad order” shipments in the column or remarks on every copy opposite the items as manifested, initialing the note.

After the transit cargo has been received on board, it shall be sealed. Necessary alterations and certificates shall be executed on the face of each copy of the manifest. The original copy of the transit manifest shall be delivered by the Customs Inspector to the Master of the vessel who should be advised to turn over the same without delay to the Collector of Customs of the port of destination: while the duplicate and triplicate copies shall be forwarded to the Chief, Piers and Inspection Division (or its equivalent office).

Section 18. TRANSSHIPMENT

Customs procedure under which goods are transferred under Customs control

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from the importing means of transport to the exporting means of transport within the area of one Customs office which is the office of both importation and exportation (i.e., Foreign Transshipment)

A. Special Instructions to Customs Inspectors Relative to the Discharge of Transshipped Cargo

1. Goods from a foreign port may be transshipped direct from the carrying vessel to another vessel engaged in the coastwise or foreign trade upon receipt of written permission from the Collector of Customs.

2. When a foreign Transshipment Permit, authorizing the transfer of cargo from a foreign port is received by a Customs Inspector on board of a foreign vessel, he shall permit the discharge of the consignment, causing it to be checked by marks and numbers. A description of the consignment shall appear in the permit, or in a list attached, and the utmost precaution shall be taken that no cargo is discharged on its authority other than that described therein. Besides the permit, the Customs Inspector shall require transit/transshipment cargo manifest in triplicate. The transit/transshipment cargo manifest shall be forwarded to the receiving vessel, together with the corresponding transfer note in triplicate to be received by the Master of the carrying vessel and noted by the Wharfinger or the Customs Inspector on board of the receiving vessel.

3. Bulk and Break-bulk cargoes for foreign transshipment shall either be discharged directly into the receiving vessel if it comes alongside, or otherwise transshipped to it in lighters or discharged at the pier for eventual loading to the receiving vessel. In the latter case, only lighters capable of being secured, locked, sealed, Customs accredited and insured shall be used. The cargo destined for each port shall be discharged into separate lighters or into separate compartments of the same lighter; provided, that the compartments can be separately locked and sealed. Any deviation from the requirements of this Section shall be made only upon instructions from the Collector of Customs or other proper authorities.

The lighters containing the transit/transshipment cargo shall remain underguard until it is loaded in the receiving vessel and properly receipted by the master of said vessel.

4. Containerized cargoes for foreign transshipment shall be discharged at the pier for eventual loading to the receiving vessel under the same conditions stated in Section18-A, item no. 2 above.

B. Instructions Relative to Foreign Transshipment (by CCCD)

After having been duly processed at the Deputy Collector for Operations, the Foreign Transshipment Permit, in case of containerized cargoes, with its supporting documents shall be coursed through the Customs Container Control Division (or its equivalent office) for posting of container numbers and their eventual loading.

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The Loading Inspector assigned to carrying vessel shall verify the correctness of the container numbers indicated in the permit prior to loading of transit/transshipment cargoes on board the carrying vessel.

Section 19. TRANSFER OF IMPORTED CARGO TO OUTSIDE CY-CFS (BY CCCD)

After having been duly processed at the Office of the Deputy Collector for Operations, the Permit to Transfer to Outside CY-CFS shall be coursed through the Customs Container Control Division (or its equivalent office) for posting of container numbers and their eventual transfer.

The Permit to transfer to outside CY-CFS shall then be transmitted to the office of the Chief, PID (or its equivalent office).

III. MISCELLANEOUS PROVISIONS

Section 20. CERTIFICATE FOR QUARANTINED CARGO

When cargo manifested for any port in the Philippines is retained on board the importing vessel by order of the quarantine officer or any other officer authorized to issue such order, the Customs Inspector onboard after verifying said cargo, shall make a certificate of constructive lading as to the Bill of Lading.

Section 21. USE OF BOARDING WATERCRAFT

The Customs Senior Boarding Officer shall not permit anyone to go with the Customs boarding watercraft upon departure from the pier except Customs Inspectors and Customs Guards duly assigned to vessels to be boarded. Customs Inspectors and Customs Guards assigned by the Chief, Bay Service Section (or its equivalent office) to substitute for absent personnel and those especially granted in writing by the Chief, Piers and Inspection Division (or its equivalent office)may be given the privilege to use the boarding watercraft .

Section 22. BAGGAGE DECLARATION ENTRY

Baggage declaration, properly accomplished by incoming passengers, shall be presented to the Customs Inspector on board or to Customs Examiner or Appraiser upon boarding of the vessel. It is required that an itemized enumeration thereon of the articles obtained abroad showing quantity and the corresponding invoice price should be made in the baggage declarations. Articles, wares, goods, merchandise and any other cargo acquired abroad not so declared shall be liable to seizure and subject to the penalties of the Customs Law.

Section 23. VESSEL CLEARING FOR FOREIGN PORTS APPLYING FOR BUNKERS

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The Customs Inspector on board of a vessel clearing for foreign ports and applying for bunkers shall require the master thereof to transmit together with his application the usual affidavit, containing the following:

1. Name and nationality of vessel;2. Amount of fuel oil available on board for its propulsion at time of entry;3. Vessel’s daily consumption of oil at sea;4. Vessel’s daily consumption of oil in port;5. Port or ports of call during the voyage and duration of vessel’s stay at each port; and6. The amount of bunkers applied for.

Section 24. UNLOADING OF CARGO BY DISTRESSED VESSEL

A distressed vessel in port desiring to unload cargo for the duration of the vessel’s sojourn there at may be issued a permit to discharge her cargo upon written request of the Master or Agent, approved by the Collector of Customs under such terms and conditions he may deem proper.

If the cargoes discharged will be cleared or entered in the port where they are discharged, the unloading of this class of cargo shall be subject to the same rules and regulations prescribed for cargoes destined for the port.

Unless authorized by a Shipside Discharge Permit such cargoes shall be discharged unto the pier. If discharged into lighters, such lighters must be of the closed type and must be secured, locked and sealed with Customs seal and must remain underguard until final disposition thereof is made.

Section 25. SHIP’S MAIL

Ship’s mail shall be examined as they are being taken from the ship, and all mails addressed to persons other than the agents of the vessel shall be delivered to the mail clerk. Any dutiable articles or merchandise, other than mail, found in the mail bags shall be subject to duties and taxes or seizure.

Section 26. LABORER’S AND SHIP’S LAUNDRY

All stevedores, labourers and other persons of similar status shall be thoroughly searched by, or under the immediate supervision of, the Customs Inspector on board, upon their leaving the vessel. Any such person found with pilfered articles or those not authorized for discharge in his person shall be arrested.

For bundles of clothing, ship’s linen or laundry, etc. which are to be taken ashore for laundering, a list shall be prepared by the Inspector who shall check them against such list upon their return onboard so that the corresponding duties and/or taxes may be assessed and collected on those unaccounted for before the vessel sails.

Section 27. SEIZURES

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The Customs Inspector or Customs Guard making seizure shall deliver to the owner or the claimant, and if unclaimed, to the master of the vessel, a receipt describing the articles seized. He shall forward immediately the articles seized together with the seizure report and transfer note to the Chief, Piers and Inspection Division (or its equivalent office).

Section 28. ARRESTS

Upon searching a vessel or any person on board thereof, the Customs Inspector or Customs Guard on board is authorized and required to search, arrest and even detain, conformably with law, any person found committing act or acts contrary to law. When a person is apprehended under such circumstances, the Customs Inspector on board shall conduct an informal investigation, after termination whereof, the person arrested together with the evidence shall be turned over to the Enforcement and Security Service (ESS) for appropriate action. A report in detail, showing the name of the person arrested, the reason for the arrest, and action taken, shall be submitted without delay, to the Chief, Piers and Inspection Division (or its equivalent office).

Section 29. SMALL BOATS ALONGSIDE VESSELS

Small boats, authorized by the PPA to engage in ferry services may be permitted to come alongside the vessel. A Customs Guard shall be stationed at all times while a small boat, launch or any watercraft is alongside, and it shall be thoroughly searched before being permitted to depart.

Section 30. CUSTOMS GUARDS FOR VESSELS LYING ALONGSIDE

A Customs Guard shall be detailed by the Customs Inspector on board of a vessel when another vessel is lying alongside, whose duty shall be to see that no contraband articles or merchandise is passed from one vessel to the other. This duty shall be arranged in rotation, so that the vessel will be under continuous surveillance until its departure.

Section 31. HEAVING ANCHOR AND SAIL

Upon receipt of a notice of clearance, the Customs Inspector on board shall allow the vessel to heave anchor and sail. But if, for any reason, the ship does not leave and remains in port for more than forty-eight (48) hours after the time of departure indicated in the clearance, the Master or Agent shall be required to secure from the Customs Clearance Officer an extension of time for departure, without which the original clearance shall be of no force or effect.

Section 32. REPAIR OF VESSEL EQUIPMENT

Upon the filing of a bond/underguard (Sec. 105 of the Tariff and Customs

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Code of the Philippines, as amended) guaranteeing their re-exportation, and approved by the Collector of Customs, the landing of sails, casks, chronometers and other portions of the vessel’s equipment for the purpose of having them repaired shall be permitted. The Customs Inspector shall describe the articles or equipment so released in sufficient detail to enable easy and ready identification upon their return.

Section 33. CONVERSION OF VESSEL STATUS

A. From Foreign to Coastwise

Vessels of foreign status may be converted to a coastwise status after the following requirements are fully complied with and submitted to the Collector of Customs thru the Customs Clearance Officer as pre-requisite to the issuance of clearance:

1. Certification from the concerned office of the Bureau that Import Entry had been filed and duties and taxes had been paid and/or secured to be paid;

2. Certification of Conversion issued by the Maritime Industry Authority;

3. Certification from the Chief, Piers and Inspection Division and Chief, Bay Service Section (or their equivalent offices) with the Enforcement and Security Service (ESS) as member of the searching team, that the vessel has been fully searched for contraband cargoes indicating therein the results of the searching mission;

4. Certification from the shipping agency attested by the Customs Inspector on board that all foreign cargoes are fully discharged from vessel;

5. Inventory list of ship’s stores and saloons and crew declaration list shall be duly accomplished, signed by the master of the vessel and attested by the Customs Inspector on board.

Such vessel shall be subject to continuous underguarding until final clearance is issued by the office of the Deputy Collector for Operations.

B. From Coastwise to Foreign

Vessels of coastwise status may be converted to a foreign status subject to the following requirements:

1. Certification of Conversion issued by the Maritime Industry Authority;2. Duly processed Export Declarations/Permits.

Section 34. LETTERS TO COLLECTOR

The Customs Senior Boarding Officer shall collect all letters in the vessel’s possession addressed to the Collector of Customs, and transmit them without delay to the Customs house.

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Section 35. REFUSE AND GARBAGE

No refuse, garbage and the like shall be thrown or jettisoned inside any harbor more especially while the ship is alongside piers. All damaged and rotten cargoes shall be disposed of upon arrangement and permission of the Collector of Customs and at the area designated by said official or duly authorized representative after consultation with the Philippine Coast Guard and/or the Department of Environment and Natural Resources (DENR).

Master of vessels desiring to load or discharge ballast shall first obtain permission from the Collector of Customs or Surveyor of the Port and shall obey the instruction given them by the harbor master as to where the ballasts shall be taken from or discharged, as the case may be.

Section 36. FIREARMS, CARE AND USE

Care should be exercised in the use of firearms. The unnecessary display of firearms is prohibited. An employee should remember that the law will hold him personally responsible for the results of the use of firearms by him. A weapon should not be drawn or used except in self-defense or to prevent the commission of a felony. While it is not intended that an officer or employee should jeopardize his own life or the life of an associate when danger threatens, it is intended that extreme caution and cool deliberation control his actions.

Officers and employees shall not be permitted to carry firearms while on duty until they have been thoroughly instructed in the proper care and use of such weapons. All firearms will be inspected by the Chief, Piers and Inspection Division (or its equivalent office) periodically to see that they are kept in condition for proper use.

All side arms must be holstered and properly carried on official duty.

Section 37. INSTRUCTIONS RELATIVE TO DISCHARGING, WITHDRAWAL AND LOADING OF EMPTY CONTAINERS

1. Discharging of Empty Containers

The Shipping Agent prior to the discharge of empty containers shall furnish the Customs Container Control Division (or its equivalent office) a copy of the approved Sequence of Discharge and a Separate Listing of Empty Containers to be discharged from the carrying vessel for monitoring and aging purposes.

2. Withdrawal of Empty Containers

The Shipping Agent concerned shall present a letter request to the Chief, Customs Container Control Division (or its equivalent office) for withdrawal of empty container from the pier. Once approved, the Deputy Collector for Operations, the Chief, Enforcement Security Service (ESS) and the Chief,

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Piers and Inspection Division shall be furnished copies of the request and the permit to withdraw issued.

The original copy of the approved request with the withdrawal permit shall be forwarded to the Wharfinger In-Charge for the issuance of the Gate Pass. The Customs Gatekeepers and Customs ESS Personnel assigned at the exit gates shall be required to open all empty containers to verify whether they are indeed empty and shall keep records of the approved requests/ permits issued and report any discrepancy to their respective Chiefs of offices.

3. Loading of Empty Containers

Prior to the loading of empty containers on board carrying vessel, the Shipping Agent concerned shall apply for a Special Permit to Load (SPL) in a letter application made for that purpose at the Customs Container Control Division (or its equivalent office).

It shall be the responsibility of the Customs Container Control Division (or its equivalent office) to physically inspect every empty container brought into/ unloaded unto the port and to verify if indeed the same is empty as represented by the concerned parties. The empty containers shall be inspected upon their arrival into/after their unloading unto the port and not when these empty containers are being loaded into the carrying vessel. For this purpose, the Chief, Customs Container Control Division (or its equivalent office) shall coordinate with the concerned shipping agent and the arrastre operator for the segregation of these empty containers and for their inspection while in the port.

In approving the Authority to Load Empty Containers, the Chief, Customs Container Control Division (or its equivalent office) shall ensure that the empty containers specified therein have already been duly inspected. Accordingly, the approval of the Authority to Load is also his confirmation that the Customs Container Control Division (or its equivalent office) has conducted the required inspection and that the containers covered by such authority have been verified to be empty indeed.

No further inspection of empty containers, for which an Authority to Load has already been approved, shall be required during loading of the same, except when otherwise directed in writing by the District Collector of Customs, the Commissioner of Customs or their duly authorized representatives.

The Loading Inspector concerned shall furnish the Customs Inspector on board carrying vessel a copy of the SPL with the list of empty containers. He shall, after the duration of loading, also indorse the list of containers loaded on board vessel by reporting it in his ICL to be submitted to the Export Division (or its equivalent office).

Section 38. INSTRUCTIONS RELATIVE TO THE WITHDRAWAL OF SHUT-OUT CONTAINERIZED EXPORT

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1. Withdrawal of Shut-out containerized export cargoes

All applications for the withdrawal of shut-out containerized export cargoes shall be directly filed with the Chief, CCCD (or its equivalent office).

Spot-checking of the contents of the subject containers shall no longer be required but instead the following precautionary measures shall be undertaken:

(a) The application to withdraw shut-out containerized export cargoes shall be accompanied at all times by the following:

(1) Certification of the Shipping Agent concerned attesting to such fact;

(2) An Equipment Interchange Receipt (EIR); and

(3) A Copy of Export Declaration/ Permit/Inquiry;(b) The spot-checking shall be confined only to determine whether the original shipping agent seal affixed after the stuffing operations is intact;

(c) In case the containerized export cargoes are deliveries from a CBW, which fact shall be indicated in the application, the same shall not be withdrawn, unless accompanied by a Customs Guard who shall guard the same until the shipment is received by the assigned Customs Warehouseman/ Customs Storekeeper at the CBW.

For this purpose, the Chief, Customs Container Control Division (or its equivalent office) shall coordinate with the Chief, Bonded Warehouse Operating Division concerned for the underguarding requirements.

In case the particular CBW is not indicated in the application, the Chief, Customs Container Control Division (or its equivalent office) shall have a complete file of all active CBWs and accredited members obtained from each CBW Operating Division for reference purposes.

Section 39. SHIFTING OF CARGOES

Shipping agent shall submit a written request for shifting of cargoes to the office of the Chief, Piers and Inspection Division (or its equivalent office) which in turn shall recommend its approval to the Deputy Collector for Operations.

Section 40. DEVANNING, STRIPPING AND STUFFING

Consignee shall submit a written request for devanning, stripping and stuffing to the office of the Chief, Piers and Inspection Division (or its equivalent office) which in turn shall recommend its approval to the Deputy Collector for Operations.

Section 41. DIRECT TO TRUCK TRANSFER

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For direct transfer of container/cargo from vessel to truck, consignee/customs broker shall submit a written request to the office of the Chief, Piers and Inspection Division (or equivalent office) which in turn shall recommend its approval to the Deputy Collector for Operations

Section 42. OVERTIME PERMIT

All requests for overtime work by Piers and Inspection Division (or its equivalent office) personnel other than those regular activities mentioned in this manual shall be recommended by the Chief, Piers and Inspection Division (or its equivalent office) and approved by the Deputy Collector for Operations.

Section 43. DISCHARGING OF VESSEL SLUDGE

All requests for discharging of Vessel Sludge shall be recommended by the Chief, Piers and Inspection Division (or its equivalent office) and approved by the Deputy Collector for Operations.

Sample of sludge shall be taken by the Customs Examiner from Formal Entry Division (or its equivalent office) for examination purposes.

Section 44. BUNKERING PERMIT

All requests for vessel bunkering/refueling shall be recommended for approval by the Chief, Piers and Inspection Division (or its equivalent office) to the Chief, Port Operations Service, AOCG.

Section 45. LEISURE/RACING YACHT

The boarding formalities shall as far as practicable apply to leisure crafts, yachts, foreign fishing vessels and local fishing vessels from abroad. This provision shall include all vessels arriving in the country that are participants of regattas or similar competitions.

During boarding formalities, the Master/Owner of the yacht/other similar vessel shall manifest/state its intention/purpose of its journey in the Philippines. He must indicate if its voyage is for pleasure/indicate intended period of stay in the Philippines, conversion from foreign to coastwise, payment of duties and taxes or conduct of business in the Philippines.

IV. HARBOR REGULATIONS RELATED TO CUSTOMS

A. Vessel Entering Port

1. All vessels entering any port, of entry or coastwise, in the Philippines shall show their colors and signal their official numbers or letters and such signals shall be kept flying till the vessel is boarded by the proper officials. All vessels within two (2) miles before arriving at designated quarantine anchorage shall display their aforementioned signals.

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2. When mail is to be discharged the vessel shall inform the port authorities by the prescribed signal at the earliest opportunity.

B. Flag Signals or Calls

1. At the Philippine ports of entry signals will be responded to and from the Customs house or pilot signal tower.

2. The following signals or calls shall be used in all Philippine ports of entry.

a. Customs – International Code Flags E & C; at night three or four short blasts of whistle and waving of a light.

b. Quarantine – International Code Flag Q at the fore.

c. Pilot – International Code Flag G or P T; at night

(1) The pyrotechnic light, commonly known as a blue light, every 15 minutes;

(2) A bright white light, flashed or shown at short frequent intervals just above the hull – for about a minute at a time or;

(3) The International Code Signal P T by flashing light.

d. Explosives or inflammables – International Code flag B at the fore.

e. Medical assistance – International Code flag or Customs call.

f. Contagious or infectious disease – International Code flags EZQ

g. Death – Customs and quarantine calls or International Code flags, ENL

h. Distress – by day: International Code flags N C or gun or other explosives signals, fired at intervals of about a minute, or the distress signal consisting of a square flag having either above or below it a ball or anything resembling a ball; at night:

(1) A gun or other explosive signal fired at intervals or about a minute,

(2) Flames on the vessel (as from a burning tar, barrel, oil barrel, etc.), or

(3) Rockets or shells, throwing stars of any color or description, fired one at a time, at short intervals.

i. Mail – International Code flag Y.

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j. Water boat – International Code flags R C Q or F U.

k. PID-ESS – Customs call

l. Harbor master – International Code flags G Y T.

m. Maneuvering – International Code flag D: at night,

C. Quarantine Requirements

Deaths, illness or accidents, involving physical to any person on board a vessel in a harbor, shall beat once reported to the Collector of Customs and the quarantine officer.

D. Repair/Dry Docking of Vessels

No repairs except minor once shall be allowed on any vessel in a port without the permission of the Collector of Customs or the Deputy Collector for Operations as well as its transfer to designated place of dry docking, and shall be subject to continuous underguarding until final clearance.

For dry docking – the following documents are required:

(a) Searching and inventory report(b) Approval from the Office of the Deputy Collector for Operations(c) Certification from contractor (scope of work and duration of repair)

E. Sunken Vessel

Whenever the navigation of any harbor or navigable river tributary thereto shall be obstructed by any sunken vessel, boat, watercraft or other similar obstruction has existed for a period longer than thirty days or whenever abandonment can be established in a less space of time, the sunken vessel, boat, watercraft, or other obstruction, may be broken up, removed, sold, or otherwise disposed of by the Collector of Customs, in his discretion, at the expenses of the owner: Provided, however, that if navigation of a waterway is prevented or seriously endangered by any obstruction, the Collector of Customs may cause its removal immediately and before the expiration of thirty days at the expense of the owner thereof.

F. Lighters/Tugs and other Watercraft

Lighters shall not be tied nor removed from alongside a vessel without permission of the Customs Inspector on board such vessel.

G. Police Authority performed by Customs Officers

1. Custom officers have the power to arrest within harbor limits persons violating the customs, immigration and navigation laws and regulations and persons committing crimes or breaches of the peace. Such arrest shall be

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reported without delay to their superior officer.

2. Any person who assaults, resists, opposes or interferes in any manner with a customs officer in the discharge of his duty shall be liable and subject to the penalties prescribed by law.

H. Rat Guards

1. When any vessel either of foreign or Philippines Registry, is at any dock, pier, wharf, quay or bulkhead, such vessel shall take proper precautions to prevent the passage of rodents to or from the vessel. The vessel shall be fended off from the pier, wharf, quay, bulkhead, or dock not less than six feet and acceptable rat guards, as prescribed, shall be fixed on all connecting lines, and, in addition, all cargo nets, chutes and similar devices extending between the vessel and shore structure, shall be removed at night unless in actual use, as shall all gangways and ladders unless guarded or properly lighted.

2. The master of any vessel of foreign registry of Philippine registry engaged in foreign trade whether lying alongside a pier, dock, quay, wharf or bulkhead, or in the stream, shall have suitable rat guards placed on all lines between idle lighters or small boats or other carriers and the vessel which must be so fastened that the guard will remain at right angles to and tight on the line.

3. No cargo shall be discharged from or received on board a vessel lying alongside a pier, wharf, quay, dock or bulkhead or in the stream before suitable rat guards have been placed on all the lines loading from the carriers to the vessel and from the vessel to the pier, wharf, quay, dock or bulkhead, except in the case of coastwise vessels handling coastwise cargo to or from barges, lighters, or other carriers or from barges, lighters, or other carriers when the rat guard requirement on lines between vessel and carrier maybe dispensed with.

I. Other Special Anchorages

Likewise all other boats and water crafts are prohibited to anchor or to linger around any vessel whether moored at a pier or anchored in the harbor at a distance of less than 50 meters from said vessel unless especially authorized by the Collector of Customs.

J. Specific Regulation

1. No empty lighters or carriers shall lie at night alongside a Philippine Government pier or alongside a vessel moored thereto; nor shall empty lighters or carriers be attached to such pier or vessel by cables or ropes or attached to loaded or partly loaded carriers which may be alongside or fastened to such pier or vessel.

2. Empty lighters or carriers alongside or attached to such pier or vessel

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during daytime shall be removed therefrom before nightfall.

3. The provisions contained in paragraph 1 and 2 above hereof shall not apply to carriers partially laden with import or export cargo or to empty carriers which may have been prepared, or which are preparing to receive cargo from a pier, or vessel, when delivery from a pier or discharge of a vessel during night time has been duly authorized.

4. Any vessel or other water craft in the Philippine Harbor shall, when a case of sickness occurs on board, immediately hoist the regulation quarantine flag (yellow) and keep the same flying until boarded and passed upon by an inspector of the Quarantine Bureau. The flag shall be of sufficient size and so placed as to be plainly visible.

GLOSSARY OF TERMS

Ballast - Heavy cargo, which is loaded on board a vessel or aircraft merely for the purpose of making it steady, to enable it to navigate in the event of scarcity of other cargo. When not brought to port as article, ballast of no commercial value may be discharged upon permit granted by the Collector of Customs for such purpose.

- Mentioned in Section 35 of this Manual.

Berth - The part of the pier/wharf that is occupied by a vessel, or any place in which a vessel may lie at anchor or at a dock.

- Mentioned in Sections 4 and 7 of this Manual.

Bill of Lading - Is a transport document for ocean freight issued by shipping lines, carriers an International Freight Forwarders or Non Vessel Operating Common Carrier.


Bond - An instrument designed chiefly to guarantee the integrity and honesty of the principal, his ability, financial responsibility, and his compliance with law or contract; a guarantee of performance. It is an agreement whereby one party, called the surety, obligates itself to a second party, called the obligee, to answer for the default of a third party, called the principal.


Break-bulk - Non-containerized cargo which is grouped or consolidated for shipment and broken down or subdivided Into Unitized Cargo, such as in Pallets, or Packed in Bags or Boxes.

- Mentioned in Sections 4,14,15 and 16 of this Manual.

Bulk - Liquid or dry goods shipped in bulk, not packed or bundled in

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separate unites. Include commodities that are loose or in mass and require to be pumped, shoveled, scooped, grabbed or forked during loading or unloading.

- Mentioned in Sections 4,15 and 16 of this Manual.

Cargo Manifest - Is a declaration of the entire cargo, the object of which is to furnish the customs officers with a list to check against, to inform our revenue officers, what goods are being brought into the country, and to provide a safeguard against goods being brought into this country on a vessel and then smuggled ashore. In Maritime Law, is a record or statement in writing, carried by a vessel, containing information with respect to the vessel’s cargo, passengers, and other matters required by statute or regulations.

- Mentioned in Sections 14, 15, 17 and 18 in this Manual.

Carrier - Means the person actually transporting goods or in charge of or responsible for the operation of the means of transport.

- Mentioned in Sections 5, 8, 11, 14, 15 and 16 in this Manual.

Customs Clearance - Means the accomplishment of the customs formalities necessary to allow goods to enter for home use, warehousing, transit or transshipment, or to be exported or placed under another customs procedure.


Coastwise Ports - Are such domestic ports as are open to coastwise trade only. These include all ports, harbors, and places not ports of entry.


Container Freight Station - Means normally a warehouse or a transit shed adjacent to the Container Yard used for sorting and storage of container cargo both for import and export.

- Mentioned in Sections 5, 6, 7, 8, 16, 17 and19 of this Manual.

Containerized Cargo - Cargo stuffed inside a container van with the external dimensions and ratings enumerated in series 1 of ISO 668-1976 which are specially designated to facilitate ready handling particularly their transfer from one mode of transport to another without intermediate reloading.

- Mentioned in Sections 15, 16 and 18 of this Manual.

Devanning - Transfer of cargo from one container to another

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container.


Discharge Port Survey(DPS) - A report issued by an Accredited Cargo Surveying Company (ACSC) for Bulk/Break-Bulk Cargo after the conduct of a survey at the port of discharge.


Dry-dock - Means a dock from which the water can be temporarily excluded, in order to effect repairs to hulls and keels of ships or vessels.

- Mentioned in Part IV, Section D of this Manual.

Encargo - Entrusted shipment of merchandise or articles from abroad.


Foreign Trade - It is the commercial interchange of commodities between different countries; export and import trade. It is synonymous with the term “foreign commerce,” which is the trade between individuals or legal entities in different countries.


Hatch - An opening in ship’s deck through which cargo can be lowered.


Less Container Load - A container loaded with cargoes belonging to more than one consignee and/or covered by more than one bill of lading.


Load Port Survey - A report issued by an Accredited Cargo Surveying Company (ACSC) for Bulk/Break bulk Cargo to be imported into the Philippines. The report shall be submitted to the Bureau of Customs directly from the ACSC in a secure electronic format.


Moor - Means to secure a vessel alongside the berth by means of mooring ropes.


Non-Vessel Operating - Means a person, including an international

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freight forwarder, providing

Common Carrier(NVOCC) - Point-to-point international transport of shipments without operating or owing the means of transport or equipment. An NVOCC deals with the shipper and issues its own transport document (e.g. B/L or AWB) even though it commonly subcontracts the different stages of transport to vessel, aircraft, and truck operators.


Port of Entry - Is a domestic port open to both foreign and coastwise trade. The term includes principal ports of entry and subports of entry. A “principal port of entry is the chief port of entry of the collection district”.


Pratique - Is a permission granted by quarantine officials to a vessel or air-craft to hold intercourse with the port after the ship or aircraft has complied with port regulations.


Quay - A landing place or pier, usually of solid construction, where vessels berth to load or unload cargo.

- Mentioned in Part IV, Section H of this Manual.

Regular Shipside Permit - Required for all cargoes, which belong to the categories of regular shipside cargoes under the existing regulations.


Saloon Stores - Supplies listed as such which are intended for sale on board a vessel or aircraft.


Sea Stores - Articles specially foodstuff, such as food, wine, cigarettes, for use or consumption only of the passengers and crew on board the vessel or aircraft upon its voyage.


Shifting of Cargoes - Transferring of cargoes from vessel to vessel and vessel to dock, dock to vessel, hatch-to-hatch, and bay-to-bay.

- Mentioned in Section 6 and 40 of this Manual.

Ship’s Stores- Consist of spare equipments such as chains, anchor and

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the likes, necessary for the safe navigation of ship.

- Mentioned in Section 15 and 33 of this Manual.

Shipside Permit - Authority issued by the Collector of Customs or his/her authorized representative for the Customs Inspector assigned on a vessel to allow the discharge of cargoes specified on the permit at shipside unto lighters, underguard.


Special Shipside Permit - When cargoes do not belong to the regular shipside cargoes, the broker and/or consignee has to get the authority from the Collector of Customs prior to the processing and approval by the Entry Processing Division.


Stripping - Unloading of all goods or cargoes from a container.


Stuffing - Filing a container with goods or cargoes.


Temporary ShipsidePermit - Is a written authority to discharge cargoes at shipside unto lighter as per order of the Collector of Customs.


Transit - Means the Customs procedure under which goods are transported under Customs control from one Customs office to another.


Transit Cargo - Article arriving at any port from another port or place noted in the carriers manifest and destined for transit/transshipment to another local port or to a foreign port.


Transshipment - Means the Customs procedure under which goods are transferred under Customs control from the importing means of transport to the exporting means of transport within the area of one Customs office which is the office of both importation and exportation.


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Vessels - Include every sort of boat, craft or other artificial contrivance used, or capable of being used, as means of transportation on water. APPENDICES

Customs Administrative Order No. 3-2010 dated May 12, 2010 – Issued pursuant to Section 608 of the Tariff and Customs Code of the Philippines (TCCP), as amended, to supplement Administrative Order (AO) No. 243-A, dated 16 September 2009, and the “Rules to Implement the Bulk and Break-bulk Cargo Clearance Enhancement Program”(hereafter referred to as “Rules) issued by the Committee for Accreditation of Cargo Surveying Companies (CACSC)

Customs Memorandum Order No. 18-2010 dated May 12, 2010 – Procedure for the Bulk and Break-bulk Cargo Clearance Enhancement Program Mandated under Administrative Order (AO) No. 243 as amended by AO 243-A

Customs Administrative Order No. 01-2007 – Penalties related to Inward Foreign Manifest and Consolidated Cargo Manifest

Customs Administrative Order No. 4-82 dated October 5, 1982 – Rules and regulations on the submission of Inward and Outward Foreign Manifests implementing Sections 1004to 1007, TCCP

Paragraphs 2, 3 of Section 1005, TCCP - Manifest required of vessel from foreign port

Paragraph 2 of Section 2516, TCCP

Paragraphs 2, 3, 4 of Section 1017, TCCP - Unlading vessel in Port from necessity

Section 605, TCCP - Enforcement of Port Regulation of Bureau of Quarantine

Section 906, TCCP - Requirement of Manifest in Coastwise Trade

Section 907, TCCP - Manifest required upon Departure from Port of Entry

Section 908, TCCP - Manifests required prior to unloading at Port of Entry

Section 909, TCCP - Departure of Vessel upon detailed manifest

Section 1001, TCCP - Ports open to vessels engaged in foreign trade-duty of vessel to make entry

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Section 1002, TCCP - Control of Customs Official over Boarding or Leaving of incoming vessel and over other vessels approaching the former

Section 1003, TCCP - Quarantine certificate for incoming vessel

Section 1004, TCCP - Documents to be produced by the master upon entry of vessel

Section 1006, TCCP - Translation of Manifest

Section 1007, TCCP - Manifest for Commission on Audit and Collector

Section 1008, TCCP - Transit Cargo

Section 1009, TCCP - Clearance of Foreign Vessels to and from coastwise ports

Section 1010, TCCP - Requirements as to Delivery of Mail

Section 1011, TCCP - Production of Philippine Crew

Section 1012, TCCP - Record of Arrival and entry of vessels

Section 1013, TCCP - Arrest of vessel departing before entry made

Section 1014, TCCP - Discharge of Ballast

Section 1015, TCCP - Time of Unlading of Cargo

Section 1016, TCCP - Entrance of Vessel through necessity

Section 1018, TCCP - Entry and clearance of vessels of a foreign government

Section 1019, TCCP - Clearance of vessel for foreign port

Section 1020, TCCP - Detention of warlike vessel containing arms and munitions

Section 1021, TCCP - Manifest of export cargo to be delivered to Chairman, Commission on Audit

Section 1022, TCCP - Oath of Master of departing vessel

Section 1023, TCCP - Extension of time for clearance

Section 1025, TCCP - Export product to conform to standard grades

Section 1302 (b), TCCP

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Section 1314, TCCP - Forwarding of Cargo and Remains of Wrecked Vessel or Aircraft

Section 1315, TCCP - Derelicts and Articles from Abandoned Wrecks

Sections 1901-1909, 2001-2004 in relation to Section 1008, TCCP, as amended

Section 2101, TCCP - Entry for immediate Transportation

Section 2102, TCCP - Bonding of Carrier Transporting Articles under the Preceding Section

Section 2103, TCCP – Articles Entered for Immediate Exportation

Section 2505, TCCP - Failure to Declare Baggage Section 2513, TCCP - Vessel or Aircraft Departing Before Entry Made

Section 2514, TCCP - Obstruction to Boarding Official

Section 2515, TCCP - Unlawful Boarding or Leaving of Vessel or Aircraft

Section 2516, TCCP - Failure to Deliver or Receive Mail

Section 2517, TCCP - Unlading of Cargo before Arrival at Port of Destination

Section 2518, TCCP - Unlading of Cargo at Improper Time and Place after Arrival

Section 2519, TCCP - Failure to Exhibit or Deposit Documents

Section 2520, TCCP - Bringing of unmanifested Arms, Explosives or War Equipment

Section 2521, TCCP - Failure to Supply Requisite Manifests

Section 2522, TCCP - Disappearance of Manifested Article

Section 2523, TCCP - Discrepancy between Actual and Declared Weight of Manifested Article

Section 2524, TCCP - Delivery of Cargo Not Agreeing with the Master’s Pilot’s in Command Report

Section 2525, TCCP - Breaking of Seal Placed by Customs Officials

Section 2526, TCCP - Breaking of Lock or Fastening Placed by

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Customs Officials

Section 2527, TCCP - Disappearance of Trunk or Package specially noted by Customs Official

Section 2528, TCCP - False Statement of Vessel’s or Aircraft’s Destination

Section 2529, TCCP - Other Offences

Section 2531, TCCP - Properties Not Subject to Forfeiture in the Absence of Prima Facie Evidence

Section 2533, TCCP - Enforcement of Lien, Administrative Fines, and Forfeitures

Section 2534, TCCP - Seizure of Vessel or Aircraft for Delinquency of Owner or Officer

Section 2535, TCCP - Burden of Proof in Seizure and/or Forfeiture

Subsections (g) & (h) of Section 2530, TCCP - Property Subject to Forfeiture under Tariff and Customs Laws

Unnumbered Memorandum dated April 21, 2006 – Clearance requirements for Amendments to the Inward Foreign Manifest

Unnumbered Memorandum dated May 4, 2006 – Restating the Memorandum dated April21, 2006 entitled “Clearance requirements for amendments to the Inward Foreign Manifest”

ANNEXES

FORM NO. TITLE

BOC OPM FORM NO. 1 - GENERAL PERMITBOC OPM FORM NO. 2 - CLEARANCE OF VESSEL TO A FOREIGN PORTBOC OPM FORM NO. 3 - CLEARANCE OF CUSTOMS INSPECTOR ASSIGNED ON BOARDBOC OPM FORM NO. 4 - INSPECTOR’S CERTIFICATE OF LAST CARGO DISCHARGE (CONTAINER/BULK CARGO)BOC OPM FORM NO. 5 - CONTAINER DISCHARGING REPORTBOC OPM FORM NO. 6 - PIER/SHIPSIDE DISCHARGING REPORTBOC OPM FORM NO. 7 - ASSIGNMENT ORDERBOC OPM FORM NO. 8 - CHECKLISTBOC OPM FORM NO. 9 - OATH OF ENTERING VESSEL FROM A FOREIGN PORTBOC OPM FORM NO. 10 - OATH OF MASTER TO MANIFEST IN

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CLEARANCE FOR A FOREIGN PORTBOC OPM FORM NO. 11 - OATH OF MASTER TO FOREIGN VESSEL CLEARANCE WITHOUT PASSENGERSBOC OPM FORM NO. 12 - OUTWARD FOREIGN MANIFESTBOC OPM FORM NO. 13 - CUSTOM’S INSPECTOR AFTER OPERATION REPORTBOC OPM FORM NO. 14 - INWARD FOREIGN MANIFESTBOC OPM FORM NO. 15 - RECORD OF VESSEL BOARDEDBOC OPM FORM NO. 16 - SHIPSIDE PERMIT

CHAPTER 4 – DISPOSAL OF PROPERTY UNDER CUSTOMS CUSTODY

4.1 Property Under Customs Custody Subject to Sale.

Property under customs custody subject to sale are:

a. Abandoned articles;

b. Articles entered under warehousing entry not withdrawn nor the duties and taxes paid thereon within the period prescribed under Section 1908 of this Code;

c. Seized property, other than contraband, after liability to sale shall have been established by proper administrative or judicial proceedings in conformity with the provisions of this Code;

d. Any article subject to a valid lien for customs duties, taxes or other charges collectible by the Bureau of Customs, after the expiration of the period allowed for the satisfaction of the same; and

e. Property Acquired Thbrough Compulsory Acquisition.

4.2 MODES OF DISPOSITION OF ARTICLES UNDER CUSTOMS CUSTODY

The modes of disposition of articles shall be by Sale, Donation, Destruction/Condemnation and such other modes as specifically defined herein.

4.2.I SALE

4.2.1.1 PUBLIC AUCTION

4.2.1.1.1 Public Auction – In the absence of any special provision of law, articles under customs custody shall be disposed of through sale by public auction.

4.2.1.1.2 Order to Conduct Public Auction – The District Collector shall, within five (5) days from finality of Order of Forfeiture or Decree of

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Abandonment, issue a memorandum addressed to the Chief, Auction and Cargo Disposal Division (ACDD) or its equivalent unit to conduct the inventory and appraisal of the abandoned and forfeited articles. 4.2.1.1.3 Duty of the Chief, Auction and Cargo Disposal Division (ACDD) or its equivalent unit – Within five (5) days from receipt of the Order of the District Collector, the Chief, ACDD or his authorized representative shall conduct the inventory at the same time the appraisal of the articles subject for Auction and prepare a report of the same. The report, which sets the floor price of the articles, shall be submitted by the Chief, ACDD, to the Collector of Customs for his approval.

4.2.1.1.4 Guidelines in Setting the Floor Price – Articles subject to sale at public auction shall be sold at a price not less than the wholesale value of the canvassed domestic wholesale price of same, like or similar articles and in the usual wholesale quantities and in the ordinary course of trade, as determined by the concerned examiners/appraisers subject to the approval of the Chief, ACDD and the District Collector, provided, however, that the recommended floor price shall not be less than the sum of the total landed cost based on the published/circularized VRIS-OCOM test value plus taxes, taking into consideration the obsolescence, condition and/or reasonable depreciation.

4.2.1.1.5 Approval of the Floor Price – Within two (2) days from receipt of the report from the Chief, ACDD or its equivalent unit, the District Collector shall approve or disapprove the floor price set. In case of approval, the District Collector shall Order the ACDD to proceed with the Auction, otherwise, he shall order to revise the floor price within the same period specified herein.

4.2.1.1.6 Notice of Public Auction – Within two (2) days from receipt of the order of the District Collector to proceed with the Auction, the Chief, ACDD or its equivalent unit shall prepare the Notice of Public Auction to be approved by the District Collector within two (2) days from receipt of the Notice of sale. The Notice of Public Auction shall contain the following information:

a. Specific time, date and place for the auction sale.b. Lot No. per sale lot (SI/AP No(s); name(s) of consignee).c. Specific description of the goods, as mandated by CAO 8-2007, per sale lot, including their quality, condition, volume/quantity and date of arrival. In no case shall the goods be described in general terms, e.g., “Various Goods.” In case of motor vehicles, the Notice shall specify the Year Model, Make/Brand, Vehicle Identification No. (VIN), Chassis and Engine Nos. As to perishable items, the expiry date shall be stated.d. Floor price per sale lot.e. Specific date, time and place for the inspection of all the items/lots which shall be 2 days prior to the auction date.f. The terms and conditions of the Public auction, such as, the registration requirements, sealed bid system, clustering, failed bidding, second auction, awarding and payment.

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4.2.1.1.7 Offer on "AS IS WHERE IS" Basis. Unless otherwise indicated, all articles subject of disposition pursuant to this Order shall be offered for sale on an "AS IS WHERE IS" basis, with no warranty given as to their condition. All offers for sale shall not be deemed binding, in any manner, upon the Bureau of Customs.

The quantity, number, weight, or measurement of the article/s subject of sale and/or as listed in the Notice of Sale shall be deemed subject to further determination prior to delivery; Provided that, in case any excess is discovered thereby, the awarded participant shall be required to pay for the excess, otherwise such excess shall not be deemed included in the sale and shall not be included in the delivery. In case any shortage is discovered, a proportionate allowance/ adjustment may be effected/authorized.

Non-inspection by the participant of the article/s offered for sale shall not be a ground for refusal of the award.4.2.1.1.8 Submission of the Notice of Sale to the Commissioner for Monitoring Purposes – Upon approval of the Notice of Sale by the District Collector, the Chief, ACDD shall furnish the Commissioner of Customs a copy of the Notice and submit the following documents:

a. Inventory of each sale lot covered by the Notice of Public Auction.b. Certificate of Finality of Forfeiture/Declaration of Abandonment or an Order of the District Collector to sell in public auction in satisfaction of a tax lien and/or to place the proceeds thereof under escrow.c. In the case of perishable items, a Certification from the assigned examiner/appraiser attesting to the fact that the goods are perishable and approved by the Chief, ACDD.

4.2.1.1.9 Auction Committee. Auction Committee or equivalent committee shall have the following composition:

Chairman - Deputy Collector for OperationsChief, Auction and Cargo Disposal Division or

Equivalent unitVice-Chairman - Chief, Law DivisionMembers - Representative, COARepresentative, Office of the Commissioner

Representatives of the Port Operation Service (POS), Office of the Ombudsman, Other Government Agency (OGA) which issue clearances (in case of regulated items) and representative, Apprehending Unit, in case the auctioned articles was a result of apprehension, shall act as witnesses during proceedings of the Committee and/or in the conduct of the disposition of goods.

4.2.1.1.10 Duties and Responsibilities of the Auction Committee

a. Provide certain formalities and procedures consistent with, and in

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pursuance to this Order, in connection with, auction sales and other modes of disposition of property under customs custody as provided for under the TCCP, as amended.

b. To impose, administer and/or recommend to the District Collector the imposition of administrative and/or such other sanctions as maybe appropriated against any bidder, person or entity found to have committed disorderly act or any act prejudicial or inimical to the interest of the Government or violated any law, rules and regulations, in connection of any auction sale, negotiated sale, or any disposition of property subject of this Manual and in which the bidder, person or entity has participated directly or indirectly. c. To reject any and all bids/offers or any part thereof, waived any required formalities, and accept bids, offers most advantageous to the interest of the government conformably and consistent with the object of this Manual.

d. To recommend to the Commissioner of Customs, thru the District Collector, any and all such matter as will promote the attainment of the objectives of this Order.

e. To supervise the preparation and conduct of the sale/disposition of property subject of this Order.

4.2.1.1.11 Publication and Posting of Notice of Sale – The Notice of Auction Sale, regardless of the aggregate amount of the covered sale lots, shall be published in at least one (1) newspaper of general circulation and posted at the Bureau website and/or at a conspicuous place/bulletin board within the premises of the Port, at least ten (10) calendar days prior to the date of auction sale or in the case of perishable goods at least three (3) calendar days. Except for Manila, Cebu, Cagayan de Oro and Davao, the Notice of Auction Sale shall also be posted at the bulletin board of the city/municipal hall where the port is located.

4.2.1.1.12 Conditions for Registration and Participation in Public Bidding – The Chief, ACDD shall be responsible to ensure that only those who have complied with the following requirements shall register and participate in the public auction:

a. Filing of the appropriate duly accomplished registration form.b. Payment of a non-refundable registration fee of Php4,000.00.c. Posting of a duly receipted bond in cash or manager’s check in an amount equivalent to 20% of the floor price for each sale lot. The bond shall be refunded to the losing bidder after the closing of the auction. The bond shall not, however, be required when the floor price of a sale lot is less than Php10,000.00.d. In auction sales involving regulated commodities, such as, rice or sugar, the bidder shall submit to the ACDD proof of qualification (i.e. NFA/SRA licenses) as an importer/trader of such goods.e. The names, addresses, TIN and other relevant circumstances of the

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registration shall be indicated in the logbook of registered bidders.f. Submission of the latest income and/or business tax returns duly stamped and received by the Bureau of Internal Revenue (BIR) and validated with the payment made thereon.

4.2.1.1.13 Sealed Bid System – The sealed bids shall be submitted and opened in public by the Auction Committee at a time, date and place specified in the Notice of Auction Sale. The highest bid shall be declared as the winner except when clustering occurs.

4.2.1.1.14 Clustering System – Clustering occurs when the difference between the highest and the second highest bid is within ten percent (10%) of the highest bid. In such cases, an open-bidding shall be conducted among the bidders of the particular sale lot who are present with the highest bid serving as the new floor price shall be considered and the highest bid in the open-bidding shall be declared as the winner. Otherwise, the highest sealed bid shall be declared as the winner.4.2.1.1.15 Awarding of Sale – At the end of each bidding, the highest bidder shall be required to pay in cash / manager’s check fifty percent (50%) of the bid price “on the spot” upon announcement of the winning bid as duly certified to by Auction Committee and the COA representative. The remaining balance shall be paid on the succeeding business day.

4.2.1.1.16 Delivery. The winning bidder shall have five (5) working days, excluding Saturdays and Holidays, within which to claim and receive delivery of the items/lots from the date of the sale.

Where the winning bidder fails to so claim and receive delivery of the articles/lots awarded to him within said period, a storage fee based on existing rates shall be imposed/charged accordingly.

Where the winning bidder fails to claim and receive delivery of the articles/lots awarded to him within thirty (30) days from the date of sale, he shall be deemed to have abandoned said goods and to have renounced all his rights thereto. In addition, all payments already made therein, including the fifty (50%) percent down payment shall be forfeited in favor of the government, without prejudice to such other administrative sanctions as may be recommended by the Committee to the District Collector or Commissioner of Customs.

4.2.1.1.17 Failed Bidding – A failed bidding shall be declared by the auction Committee when any of the following circumstances occurs:

a. When there is no bid tendered;b. When there is only one sealed bid, the same shall not be opened.c. When there are two sealed bids but there is only one bid higher than the floor price.d. When the highest bidder fails to comply with any of the payments required in Section 9 hereof, said bidder shall be disqualified from participating further in the auction sale and when applicable, the negotiated

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sale thereof without prejudice to the forfeiture of the cash bond and any payment made and imposition of other sanctions as may be warranted.

4.2.1.1.18 Second Bidding – When a failed bidding is declared, the sale lot shall be offered in a second auction to be held on the third business day after the first failed auction at the same floor price, without need of further advertisement / posting. In case of perishable goods, the second auction shall be conducted on the first business day following the first bidding.

4.2.1.2 NEGOTIATED SALE

4.2.1.2.1 Negotiated Sale – In case of a second failed bidding, the unsold lot shall be re-offered through negotiated sale.

4.2.1.2.2 Mandatory Reporting on the Second Failed Bidding – After a second failed bidding, the District Collector shall submit a report to the Committee on Negotiated Sale, within forty-eight (48) hours, and in case of perishable articles, within twenty-four (24) hours with the following information:

a. Abstract of bids per sale lot indicating the floor price, name of bidders and reason for the failed auction.b. Proof of Publication.c. District Collector’s Certification on the two failed biddings conducted for said sale lot.d. In case of perishable articles, the District Collector’s Certification to that effect.e. Such other requirements that may be imposed by the Committee.

4.2.1.2.3 Committee on Negotiated Sale – A Committee on the Negotiated Sale is hereby constituted which shall be composed of the following:

Chairman - Deputy CommissionerAssessment and Operations Coordinating Group (AOCG)

Members - OCOM Representative – to be designated by the Commissioner of Customs,

AOCG Representative – to be designated by theCommissioner of Customs

Director, Port Operations Service

District Collector of the port concerned or his authorizedrepresentative

Head To be designated by the Chairman, Secretariat Committee on Negotiated Sale.

The Committee shall have the following duties and functions:

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a. Implement the provisions of this Order relating to the conduct of negotiated sale.b. Conduct an ocular inspection of the sale lots.c. Reject any or all offers or any part thereof and consider offer/s most advantageous to the interest of the government.d. Recommend to the Secretary of Finance for acceptance of the offer/s most advantageous to the interest of the government.

The Secretariat shall have the following duties and responsibilities:

a. Cause the publication of the appropriate Notice in at least two (2) newspapers of general circulation specifying the date, place, and time of inspection of the lots described therein as well as the date and cut-off time for the submission of the requirements provided in Section 15 hereof. Publication shall be at least five (5) days prior to the date indicated therein and in case of perishable articles, at least two (2) calendar days.b. Coordinated with the ACDD of the concerned port on the posting requirements.c. Prepare the Report of the Proceedings of the Committee Meetings.d. Maintain records related to the functions/activities of the Committee.

4.2.1.2.4 Requirements and Procedure in Negotiated Sale.

a. The participant shall submit to the Committee on Negotiated Sale within the prescribed period of time to be indicated in the Notice, the following:

1. Sealed offer to buy indicating the sale lot and the amount of his offer.2. Tax Identification Number (TIN No.)3. Official Receipt on the payment of a non-refundable registration fee P2,000.00.4. Latest Income and/or Business Tax Returns duly stamped and received by the Bureau of Internal Revenue (BIR) and validated with the payment made thereon.5. In case of negotiated sale involving regulated commodities, such as, rice or sugar, proof of qualification as importer/trader of such goods.6. Such other requirements as the Committee may impose.

Failure to meet any of the requirements enumerated above shall automatically disqualify the participant from participating further in the negotiated sale.

b. There shall be no minimum prices and the sealed offers to buy must be submitted within the prescribed period of time indicated in the Notice. No offer to buy shall be entertained if submitted after the said period of time. The sealed offers to buy must be submitted within the prescribed period of time indicated in the Notice. No offer to buy shall be entertained if submitted after the said period of time. The sealed offers shall be opened in the presence of a COA representative.

c. The participant whose offer is considered the most advantageous to

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the interest of the government shall be required to pay a guarantee cash deposit in an amount equivalent to twenty percent (20%) of the offer within twenty-four (24) hours from receipt of notice by the Committee prior to referral to the Secretary of Finance for consideration. Non-compliance herewith shall automatically disqualify the offeror from participating further in the negotiated sale.

d. An additional thirty percent of the offer shall be paid in cash/manager’s check within forty-eight (48) hours from receipt of the notice from the Committee of the approval of the offer by the Secretary of Finance. The fifty percent (50%) remaining balance shall be paid in full within the succeeding business day. Non-compliance herewith shall cause the forfeiture of the deposit and any payment/s made without prejudice to the imposition of other sanctions as may be warranted.

e. When the offer is rejected by the Secretary of Finance, the guarantee cash deposit shall be refunded and the unsold lot shall re-bidded in accordance with the herein provisions on auction or otherwise disposed of through the other permitted modes of disposal under the Tariff and Customs Code as warranted by the circumstances.

4.2.1.3 DONATION

4.2.1.3.1 Articles Subject to Donation- When the articles remains unsold in at least two public biddings for want of bidders or for lack of an acceptable bid, and the articles is suitable for shelter or consists of foodstuffs, clothing materials or medicines, then that article maybe given to government charitable institutions through the Department of Social Welfare and Development.

4.2.1.3.2 Donations of Unsold Articles for Want of Bidders- All requests for donation shall be coursed through the Office of the Commissioner which shall be subsequently endorse the same to the District Collector/s for determination of the availability of the items requested for donation.

4.2.1.3.3 Procedure in the Office of the District Collector- Within ten (10) days from receipt of the Endorsement of the Commissioner of Customs, the District Collector shall request the Chief of the ACDD or its equivalent unit to check the availability of the goods requested for donation. From the list submitted by the Chief, ACDD or its equivalent unit, the District Collector shall then determine which goods are eligible for donation to the DSWD, Government Charitable Institutions (GCI) or other government agency concerned and endorse the same together with the proposed Deed of Donation and Acceptance to the Commissioner of Customs for his approval.

4.2.1.3.4 Procedure in the Office of the Commissioner – The Commissioner of Customs shall act on the recommendation of the District Collector within three (3) days from receipt thereof by endorsing the same with the supporting documents to the Secretary of Finance for approval/clearance.

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Upon receipt of the requested approval/clearance from the Secretary of Finance, the Commissioner of Customs shall then cause the execution of the Deed of Donation and Acceptance as prepared by the District Collector, and shall subsequently endorse the same to the latter for implementation.

The District Collector through the Chief, ACDD or its equivalent unit shall inform the requesting agency of the approval of the Secretary of Finance of the proposed donation and shall ensure that the Deed of Donation and Acceptance is duly signed by the Commissioner of Customs and the authorized signatory of the donee-agency.

4.2.1.3.5 Turn-over of Donated Goods to the Donee – It shall be the responsibility of the donee-agency to make the necessary arrangement for the actual transfer of the goods from customs custody to their own custody. The Chief, ACDD or its equivalent unit shall prepare and sign the corresponding Gate Pass authorizing the release of the articles from customs custody to the donee-agency. It shall be the responsibility of the Chief, ACDD or its equivalent unit to ensure that the donated goods are released to and received by the donee-agency’s duly authorized representative.

4.2.1.3.6 Presence of other Representatives – In all instances, release of donated goods shall always be witnessed by the Bureau’s COA Resident Auditor or his duly authorized representative, representatives from POS, CIIS, ESS and Office of the Commissioner.

4.2.1.3.7 Immediate Turn-over of the Used Clothing to the DSWD – Within ten (10) days from finality of the Decree of Forfeiture or Abandonment of the used clothing, the District Collector shall write a memorandum to the Commissioner of Customs informing the latter of the finality of the forfeiture and abandonment. Within the same period, the Commissioner of Customs shall issue a clearance allowing the District Collector to immediately turn-over the articles to the Department of Social Welfare and Development. The Collector of Customs shall, within ten (10) days from receipt of the Clearance turn over the used clothing to the DSWD.

4.2.1.3.8 Reporting – The Chiefs of the ACDD or its equivalent unit shall, at the end of every month, submit to the Commissioner of Customs thru the Deputy Commissioner for Assessment and Operations Group a report on the volume and estimated value of goods actually donated and goods still to be donated.

4.2.1.3.9 Accountabilities – It shall be the responsibility of the District/Port Collector to ensure the smooth, proper and effective implementation of procedures for Donation. The Chief, ACDD or its equivalent unit shall ensure that all the necessary documentation and clearances needed for the turn-over of the goods are complied with.

4.2.1.4 CONDEMNATION

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4.2.1.4.1 Articles Liable for Condemnation/Destruction- Valueless, unsalable, or hazardous property maybe condemned and destroyed by pounding, burning, breaking, shredding, throwing or any other method by which the property is disposed beyond economic recovery. 4.2.1.4.2 Inventory of the Articles Subject for Condemnation/Destruction – The District Collector, which has the authority to identify articles liable for destruction/condemnation, shall direct the Condemnation Committee to conduct an inventory of the said articles and order the latter to prepare a detailed written plan for its destruction/condemnation. The written plan shall contain the following:

a. Nature of the items/goods to be destroyed/condemned to include their packaging.

b. Reasons why the articles are to be destroyed/condemned.

c. Special/technical requirements needed to insure their complete destruction and to prevent their subsequent retrieval by persons or even by animals.

d. Government agencies that must be present to witness/supervise the destruction/condemnation process and to insure that their own regulations on such activities are observed.

e. The intended place of condemnation and the reason for its selection.

f. The anticipated difficulties with emphasis on the problem or crowd control, looters and scavengers and in general security concerns and contingency measures thereto.

g. Needed reports to be submitted after the destruction/condemnation by the signatories thereof.

4.2.1.4.3 Condemnation Committee – A Condemnation Committee is hereby constituted which shall be composed of the following:

Chairman - Deputy Collector for Operation

Members - Director, Port Operations Service Chief, ACDD or equivalent unitChief, Law DivisionRepresentative of AISL

4.2.1.4.4 Approval of the District Collector and the Commissioner – upon approval of the District Collector of the condemnation plan prepared by the Condemnation Committee, said written plan shall be forwarded to the Commissioner for approval. Within fifteen (15) days from receipt of the approved Condemnation plan, the District concerned shall carry out the said

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plan.

4.2.1.4.5 Presence of other Representatives – In all instances, the condemnation shall always be witnessed by the Bureau’s COA Resident Auditor or his duly authorized representative, representatives from POS, CIIS, ESS and Office of the Commissioner.

4.2.1.4.6 Condemnation Report. After condemnation, the Chief, ACDD or equivalent unit shall furnish the Office of the Commissioner a Certificate of Condemnation.

4.2.1.5 OTHER ARTICLES SUBJECT FOR DISPOSITION

4.2.1.5.1 PERISHABLE ITEMS

4.2.1.5.1.1 Articles liable for Deterioration – Goods Liable to perish or be wasted are eligible for immediate disposition pursuant to Section 2607 of the TCCP when certified to by the Customs Examiner/Appraiser under the following conditions:

1. Live animal under Chapter 01 of the HS Code which may die due to:

1.1 Exposure to extreme temperature.1.2 Inadequate holding area facilities.

2. Goods covered by Chapters 02- 23 of the HS Code which may spoil due to:

2.1 Growth of microorganism.2.2 Enzyme action.2.3 Oxidation.2.4 Dehydration.2.5 Insufficiency or absence of ideal storage facilities.

3. Chemicals and pharmaceuticals which may spoil or lose its potency and thus cannot be used for the purpose for which it was originally intended due to :

3.1 Insufficiency or absence of ideal storage facilities.3.2 Improper handling3.3 Original packing or container has been destroyed.

3.4 Expiry date is six months or shorter based on the expiry date in the immediate packing.

4. Those which in the opinion of the of the District Collector, after certification of the appraiser/examiner is liable to perish or be wasted or to depreciate greatly in value by keeping or which cannot be kept without great disproportionate expense whether such property consists of live animals or of any article.

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4.2.1.5.1.2 Immediate Disposition of Perishable Articles – Goods liable to perish or be wasted are eligible for immediate auction within three (3) days from public notice.

4.2.1.5.1.3 Examination of the Perishable Article – Upon apprehension of perishable goods, the apprehending office shall request the Assessment Office of the Port concerned to conduct a thorough examination and to submit a detailed inventory and appraisal report. The representative(s) of the Apprehending Office and the representative(s) of the consignee, if available, shall sign as witness(es) of the inventory.

4.2.1.5.1.4 Order of the District Collector – After Issuance of the Warrant of Seizure and Detention, the District Collector of Customs, moto propio, or upon recommendation of the Law Division shall approve the disposition of said goods pending seizure proceedings pursuant to Section 2607 of the TCCP. Upon approval by the District Collector, the Law Division shall immediately inform the ACDD so that auction sale can be scheduled as soon as possible.

4.2.1.5.1.5 Setting of the Floor Price by ACDD – The Auction and Cargo Disposal Division of the Port Concerned shall determine and set the reasonable floor price of the perishable items based on the inventory and appraisal report furnished by the Assessment Office as reference.

4.2.1.5.1.6 Proceeds of the Auction – The proceeds of the auction shall deposited in the escrow account to be awarded to the party in whose favor the case will be decided.

4.2.1.5.1.7 Failure to Dispose the Perishable Articles – If for any reason the articles are not dispensed of within ten (10) days, a written explanation must be submitted to the Commissioner of Customs jointly signed by the apprehending unit, the Collector of the Port and the Chief of the ACDD. The explanation must contain the recommended course of action.

4.2.1.6 ARTICLES UNFIT FOR USE OR SALE OR INJURIOUES TO PUBLIC HEALTH

4.2.1.6.1 Creation of a Board – When any article, which in the opinion of the Collector, is a menace to public health, is seized or otherwise comes into the custody of the Bureau of Customs, the Collector of the port shall, if the matter is not disposable under the provisions relating to food and drugs, appoint a board of three members to examine the article. Whenever possible, one member shall be a representative of the Department of Health or of local health officer, and the two others shall be responsible officials of the Bureau of Customs at least one of whom shall be an appraiser.

4.2.1.6.2 . Duty of the Board –Such board shall examine said article, and if the same is found a be unfit or a menace to the public health, the board shall so report in writing to the Collector, who shall forthwith order its destruction in such manner as the case may require. Health authorities at port

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of entry shall collaborate with the collectors in such matters with reasonable dispatch.

4.2.1.7 CONTRABAND

4.2.1.7.1 Disposition of Contraband – Article of prohibited importation or exportation, known as contraband, shall, in the absence of special provision, be dealt with as follows:

a. Dynamite, gunpowder, ammunition and other explosives, firearms and weapons of war and parts thereof, shall be turned over to the Armed Forces of the Philippines;

b. If the article in question is highly dangerous to be kept or handled, it shall forthwith be destroyed;

c. Contraband coin or bullion, foreign currencies and negotiable instruments shall accrue to the Stabilization Fund of the Central Bank subject to the payment of the expenses incident to seizure, including the reward to the informer, if any;

d. Other contraband of commercial value and capable of legitimate use may be sold under such restrictions as will insure its use for legitimate purposes only; but if the thing is unfit for use or the Collector is of the opinion that, if sold, it would be used for unlawful purposes, it shall be destroyed in such manner as the Collector shall direct.

4.2.1.7.2 Disposition of Counterfeit, Fake Products and other Prohibited Articles – In case of seized items liable for violation of Intellectual Property laws, rules, and regulations, the same shall be turned over to the Intellectual Property Rights Division for the latter’s condemnation/destruction.

Disposition of articles such as dangerous drugs and controlled precursor and essential chemicals shall be handled by the Enforcement and Security Service observing the proper procedure and documentation on the turned over to the proper government agencies concerned.

Dangerous drugs should be turned over to the Philippine Drug Enforcement Agency within twenty four (24) hours from the time it was seized.

4.2.1.7.3 . Disposition of Seized and Forfeited Right-Hand Drive Vehicle – Right Hand Drive (RHD) vehicle, although legally considered as contraband items, can be source of government revenues. Disposition of RHD vehicles under customs custody which has been seized/forfeited pursuant to Republic Act No. 8506 shall be in the following manner:

a. Seized/forfeited RHD shall be sold at public auctions pursuant to Sec. 2609 (d) of the TCCP.

b. The general guidelines specified under this Manual for the conduct of

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auction sales shall be strictly observed, with the following supplemental rules for auction sales involving RHDs:

b.1. Expenses for the conversion of RHDs to Left-Hand Drive (LHD) shall be born by the winning bidder;b.2. The advertisement for the auction sale of RHDs shall state clearly all requirements and restrictions.

b. RHDs for sale shall not be mixed with other items in single lot.

c. RHDs that have been successfully auctioned off shall be converted to LHDs. Solely for the purpose of converting RHDs into LHDs, a motor vehicle repair shop, duly accredited and authorized as such by the Department of Trade and Industry and by Land Transportation Office, shall be established as special customs bonded warehouse for a limited duration by the Bureau of Customs.

d. RHDs found being operated on the streets shall be automatically seized/forfeited in favor of the government notwithstanding the fact that it was previously auctioned by BOC.

e. After successful auction, a RHD shall be transferred from the port premises straight to the special customs bonded warehouse established for the conversion of RHDs into LHDs, either with the use of a tow truck or by loading the same onto a truck. The transfer of RHD to such facility on its own automotive power is strictly phohibited.

f. The transfer of any RHD vehicle to such conversion facility shall be done upon approval by the Commissioner of Customs and shall be continuously underguarded by a Customs Guard.

g. The conversion facility shall issue Certificate of Conversion, in the form to be prescribed by the BOC, under oath, certifying to the fact of conversion.

h. The LTO-Motor Vehicle Inspection Service shall certify to the roadworthiness of the subject vehicle.

i. The Chief, Auction and Cargo Disposal Division (ACDD), or his/her equivalent unit shall assign an examiner who shall confirm the fact of conversion and thereafter shall commit a report on his/her examination, supported with pictures of the converted vehicle.

j. When all of the above requirements are fully complied with, the District Collector, in whose jurisdiction the converted vehicle was sold, shall issue the corresponding release/clearance order to the accredited conversion facility.

k. No BOC certificate of payment shall be issued and transmitted to the LTO unless and until such time all the above requirements under paragraphs d.1-d.4 shall have been complied with.

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l. In cases of RHDs that remain unsold after two failed biddings, whether for lack of qualified bidders or acceptable bids, the Commissioner of Customs may order its use by the Bureau for purposes of revenue collection, or for fighting smuggling, or other fraud against the government; or for the official use of another national agency; or for donation to a government charitable institution, through the Department of Social Welfare and development, pursuant to Sec. 2610 of the TCCP, or to negotiated sale subject to the above processes, conditions and/or requirements for the conversion of RHDs to LHDs.

4.2.1.8 UNSOLD ARTICLES FOR WANT OF BIDDERS

4.2.1.8.1 Official Use by BOC or other Government Agency – When any article remains unsold in at least two public biddings for want of bidders or for the lack of an acceptable bid, and the article is suitable for official use, then the Collector shall report the matter immediately to the Commissioner of Customs who may, subject to the approval of the Secretary of Finance, authorize the official use of that article by the Bureau of Customs to promote the intensive collection of taxes and/or to help prevent or suppress smuggling and other frauds upon the Customs. If the article is not suitable for such use, then it may be channeled to the official use of other offices of the National Government.

4.2.1.8.2 Donation to Government Charitable Institutions – If the article is suitable for shelter or consists of foodstuffs, clothing materials or medicines then that article shall be given to government charitable institutions through the Department of Social Services and Development. The procedure shall be the same as indicated in Part II hereof.

4.2.1.8.3 Re-exportation – If the article offered for sale is not suitable either for official use or charity, then the same may be re-exported as government property through the Department of Trade or any other government entity through barter or sale. 4.2.1.8.4 Other Modes of Disposition – If the article cannot be disposed of as provided above, the Collector shall report the matter immediately to the Commissioner who may, subject to the approval of the Secretary of Finance, dispose of the article to the best advantage of the government in a negotiated private sale which shall be consummated in the presence of a representative of the Commission on Audit, in the manner provided for by the TCCP.

4.2.1.9 SMUGGLED ARTICLES

Disposition of Smuggled Articles. Smuggled articles, after liability to seizure or forfeiture shall have been established by proper administrative or judicial proceedings in conformity with the provisions of the TCCP, as amended, shall be disposed of as provided for in Section 2610: Provided, that articles whose importation is prohibited under Section 102 subparagraphs b, c, d, e and j shall, upon order to the Collector in writing, be burned or destroyed, in such manner as the case may require as to render them absolutely worthless, in the presence of a representative each from COA, DOJ, BOC and is possible,

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any representative of the private sector.

4.2.1.10 MISCELLANEOUS PROVISIONS

4.2.1.10.1 Disposition of Proceeds of Auction – The following charges shall be paid from the proceeds of the sale in the order named:

a. Expenses of appraisal, advertisement of sale.b. Duties except in the case of abandoned or forfeited articles.c. Taxes and other charges due the government.d. Government storage charges.e. Arrastre and private storage charges.f. Freight, lighterage or general average, on the voyage of importation, of which due notice shall have been given to the Collector

4.2.1.10.2 Disposition of Surplus from the Proceeds of Sale of Abandoned or Forfeited or Acquired Articles – Except in the case of the sale of abandoned or forfeited articles, and articles which are not claimed by payment of duties, taxes and other charges and compliance with all legal requirements within prescribed period, any surplus remaining after the satisfaction of all unlawful charges as aforesaid shall retained by the Collector for ten (10) days subject to the call of the owner.

Upon failure of the owner to claim such surplus within this period, the Collector shall deposit such amount in a special trust fund which shall be used solely for the purpose of financing the compu1scacquisition of imported goods by the government as provided in Section 2317 hereof.

In all such cases the Collector shall report fully his action in the matter, together with all the particulars the Commissioner and to the Chairman on Audit After one year, the unused amounts in such special trust funds, except for an amount necessary to finance forced government acquisitions before the first auction . the succeeding year, shall be turned over to the Bureau of Treasury as customs receipts." (R.A. 9135, April 27, 2001)

4.2.1.10.3 Accountabilities – The respective BOC personnel responsible to carry out the provisions of this Order shall have the following accountabilities:

a) The customs officers and personnel are directed to perform their responsibilities as required therein.b) The District Collector shall be responsible for the smooth, proper and effective implementation of this Manual in all cases, under his/her district jurisdiction, where it applies. c) The Chief ACDD shall ensure that all requirements herein for the issuance of appropriate notices and clearance are complied with.d) The Chairman and all members of the Auction Committee shall be responsible in ensuring that all participating bidders are promptly qualified and that the winning bids or failed bids are properly declared.e) The examiner or appraiser shall be liable for any error caused by/emanating from their examination/appraisal.

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f) All signatories to any certificate/report required under this Manual shall be liable for any flaw/defect found therein.g) The Chief ACDD shall be responsible for allowing any unauthorized personnel to conduct any examination or spot checking activity.

CHAPTER 5 – AIRPORT OPERATIONS

TARMAC OPERATIONS( GREEN ZONE )

1. Scope

Tarmac operations involves those Customs activities undertaken at areas immediately outside the passenger terminal building, generally at the vicinity of the aircraft stand and it’s tubes. These areas are indicated in figure 1. (next page) The aircraft itself is part of Tarmac operations as are the passageways under the building providing access to the loading area and baggage conveyor belts into the Baggage Reclaim are of the Customs Arrival Hall.

2. Unit of Primary Responsibility

The mission of the AOD is to ensure that all articles brought into the country by incoming passengers and aircraft crew, including regular air cargo, are conveyed to the designated Custom Areas, where they will undergo proper clearance procedure.

3. Responsibilities of AOD In general, these encompass the enforcement of procedures designed to conform with the requirements of part 2, Title III Sections 1101 to 1111 of the Customs and Tariff Code.

These sections are important and should be studied by every officer in AOD. They should be read in conjunction with Customs Administrative Order 1/90 or any other superceding Order or Direction.

3.1 Boarding Formalities

The Boarding Officer is the officer with responsibility for the proper boarding of the aircraft. This responsibility includes the actions and performance of this team.

The formal reception of the aircrafts arrival is signified by the acceptance, by the Boarding Officer, of the aircraft’s General Declaration, The Passenger List, the Crew List, the Cargo Manifest and the Store List.

The Cargo Manifest also known as the Inward Foreign Manifest (IFM), is important in the proper accounting of regular cargo, while the other documents are necessary to passenger and crew processing, and stores reconciliation.

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The General Declaration should be written in English and signed by the Pilot-in-Command or the Operator of the aircraft or the Authorized Agent with the proviso that the Health Section of the General Declaration shall only be signed by Pilot-in-Command or some other responsible member or crew, who then must sign the General Declaration.

It is permissable to accept the other documents forming the Gen.Dec. on separate official forms.

3.2 Supervision of Unloading

This includes the disembarkation of passenger and crew unloading of baggage, cargo and mail. Designated members of the Customs boarding team provide careful watch over baggage to ensure their security and proper conveyance to the designated receiving and clearing stations.

3.3 Supervision of Passenger and Crew Disembarkation

Since passenger and crew carry hand baggage and other personal items, some possibly carrying controlled articles and substances concealed on or in their bodies, it is important that Customs supervise their disembarkation and movement towards and into the designated areas.

3.4 Aircraft Surveillance

This necessarily includes physical watch over the aircraft and the activities around the aircraft during it’s stay at the stand, preventing and taking action against any breach of Customs Laws, Rules and Regulations.

3.5 Aircraft Searches

Whenever the situation requires, a search of the aircraft may be undertaken for concealed articles.This search is normally undertaken when all passengers have disembarked. Searches may, however, be also undertaken before a plane’s departure, for illegally loaded articles and cargo.While it is sometimes necessary for a search to be carried out by members of the Boarding Team, searches are usually undertaken by a dedicated Search team under the control of a Team Leader, who is responsible for their actions.

4. Duties and Responsibilities of A.O.D. Personnel

4.1 Custom Boarding Officer

The CBO is the officer in charge of the boarding team and is responsible to the chief of A.O.D. For all AOD activities on the flight assigned to him. His specific function are as follows:

• Musters and checks attendance and uniforms of Customs Inspector

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and Customs Guards assigned to the flight.• Receives and inspects requisite documents from the Flight Purser, before allowing the disembarkation of passengers, crew and the discharging of passengers. Baggage and cargo.• Supervises and controls the inspection, search of the aircraft after the disembarkation of passengers.• Delegates supervision and control of the aircraft to the Customs Inspector assigned to the flight, after the boarding formalities.• Performs other duties and responsibilities in accordance with existing laws, rules and regulations or on orders of a competent authority.

4.2 Customs Inspector

• Assists the Custom Boarding Officer in the boarding formalities, inspection and search of the aircraft.• Checks the Customs Guards assigned to the flight to ensure that they are properly fulfilling their allocated assignments.• Supervises the discharging and loading of cargo and passenger’s baggage.• Maintains watch over the aircraft at its stand during its stay, or completion for all operations in case of terminating flights.• Signs, when necessary, The Certificates of Identification of departing passengers regard to the possession of high duty goods seen to be in their possession.• Performs other duties and responsibilities as may be directed from time to time by competent Customs Authorities.

4.3 Customs Commissary Guard

Responsible to the Customs Boarding Officer and Customs Inspector for the following:

• Assists the Customs Boarding Officer and the Customs Inspector during the boarding formalities by clearing the aerobridge of unauthorized persons who may obstruct or otherwise delay the speedy presentation of arrival documents and disembarkation of passengers.

• Assisting in any aircraft search for any articles which appear to be alien, concealed, and unmanifested

• Supervising the checking and inventory of remaining commissary items conducted by the inflight catering personnel, After checking, he ensures that all containers are closed, locked, and sealed. For QTA flights(foreign flights with a “quick turn around”)where the unconsumed stores may remain on board until departure, he ensures that the containers are secure on board until departure.For other, terminating, flights, he ensures the secure removal of the locked and cleared containers to the in-flight warehouse/bonded store.

• Prevention of any person from leaving or boarding the aircraft without

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permission from the Customs Boarding Officer during the boarding formalities, disembarkation of passengers and landing check of the aircraft.

• Performs other duties and responsibilities as may be directed from time to time by competent Customs Authority.

4.4 Customs Ramp GuardResponsible to the Customs Inspector, His/Her duties are:

• Supervising the discharging of cargos from the aircraft.• Ensures that all cargo consigned to Manila is properly discharged.• Underguards the transfer of cargo from aircraft side to designated public bonded warehouses situated in the MIA complex and receives a duly receipted Air Note(CAO 3-86)from the Customs Warehouseman assigned thereat.• Supervises the checking and inventory of inbound cargo into the warehouse against the cargo manifest.• Exercises maximum vigilance in checking for unmanifested cargo and contraband.

4.5 Customs Baggage Guards

4.5.1 Outward Baggage Guard

Responsible to the Customs Inspector for the following:• Witnesses the inspection both manually and by X-Ray on all outgoing baggage.• Supervises the security, build up, stuffing and loading of passenger’s baggage from build up area into baggage containers or igloo.• Prepares an Air Note, indicating container/igloo numbers, to be acknowledged by the assigned Customs Inspector on board the out going aircraft.• Escorts the conveyance of passengers baggage from the loading area to the outgoing aircraft.• Performs other duties and responsibilities as may be directed from tome to time by competent Customs Authority.

4.5.2 Customs Incoming Baggage GuardsResponsible to the Customs Inspector for the following:

• Supervises the discharging of containerized and loose baggage of incoming passengers from the incoming aircraft.• Escorts this baggage from aircraft to terminal baggage area and subsequent loading onto baggage conveyor.• Performs other duties and responsibilities as may be directed from time to time by competent Customs Authority.

4.6 Customs Exports Guard

Responsible to the Customs Inspector for the following:

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• Guards Exports Cargo from receiving airline warehouse to outgoing aircraft ensuring that cargo is properly documented and is accompanied by valid export documents such as export declaration permits issued by a bank, a permit to load, issued by the Export Division. These must be duly receipted by the assigned Customs Inspector on board the aircraft.• Ensures that no prohibited or contraband goods are illegally packed with the accredited export packages.• Endorses all exports permits, Certificates of Loading, etc.• Performs other dutied and responsibilities as may be directed from time to time by competent Customs Authority.

4.7 Customs Exports GuardResponsible to the Customs Inspector for the following: • Supervises the discharge of mails and parcels from the aircraft.• Oversees and guards the transfer of mails and parcels from the Airport to the Airmail Distribution Center, with the corresponding AV 7 documents, accepting due receipt on the face of the air note issued for the full transfer of these items.• Monitors foreign transit mail which is conveyed to the staging area until transshipment to its final destination.• Performs other duties and responsibilities as may be directed from time to time by the competent Customs Authority.

5. Pre-Arrival Operating Procedures

5.1 Flight Assignments

The Chief, AOD, shall ensure that the schedules of flight assignments are issued well in advance of flight arrival.

5.2 Flight Schedules

Scheduled flights are listed in the winter and summer schedules furnished by the Airline Operators Council (AOC).Non-schedule or extra flights on the other hand shall submit Notices of Arrival to AOD. These documents shall be the basis for the preparation of Flight Assignments.

5.3 Boarding Team Composition

The regular composition of a boarding team is as follows:• One (1) Boarding Officer• One (1) Customs Inspector• Two (2) or more Customs Guards to act as Commissary, Baggage, Ramp, Export, Transit and Mail Guards as necessary and subject to additional personnel based risk factors.Baggage Guards may deal with incoming and outgoing baggage.

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5.4 Muster of the Boarding Team

Thirty minutes prior to the ETA of a flight, the assigned boarding officer shall muster his team at the vicinity of the arrival bay or in AOD office in order to:• Check attendance.• Inspect uniforms and fitness for duty of personnel.• Conduct briefing on any available flight information to include any general or specific instructions.

5.4.1 Any member of the boarding team shall not be allowed to assume duty under any of the following conditions.

• Under the influence of liquor.• Incorrectly dressed.• Not in physical condition to perform his function.• Carrying firearms.5.5 Replacement of Team MemberIf any member is unable to assume duty pursuant to 5.4.1 the Boarding Officer, or in his absence the next in rank shall immediately report the matter to the chief, AOD or the duly designated Duly Officer for the proper replacement.

6. Arrival Operating Procedure

6.1 Aircraft/Flight Identification Code(Listed in Annex A.) Is the Identification Code which is being used in the Aircraft Arrival display board and monitors. Also included in this Annex is some useful information on aircraft indentification.

6.2 Submission of DocumentBefore any passenger disembarkation baggage and/or cargo unloading is permitted, certain documents are presented by the flight purser or responsible and competent member of the crew to the Custom Boarding Officer. These are needed for Entry before any person or thing is permitted to be landed.This are listed as follows:

6.2.1 General Declaration(See Sec 1105) containing the following information of the aircraft owner or operator, aircraft registration marks nationality and flight number.

The General Declaration Shall Contain:

• Point of Clearance and entry and date of arrival• Customs Clearance at the last airport of departure• Itinerary of aircraft and departure date from each airport of call• Names and Nationalities of crew members

6.2.2 Passenger Manifest

• Names and Numbers of passengers

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• Their seat numbers• Boarding and destination airports of passenger

6.2.2 Cargo Manifest ( includes Transit Cargo Manifest )

• Air waybills• Brief details of consignments•

6.3 Clearance to UnloadUpon receipt of the above documents and with the concurrence of the Medical Officer of the Bureau of Quarantine, Department of Health (DOH), Customs Boarding Officer shall give clearance to disembark passengers and unload baggage and cargo.

6.4 Disembarking of Passengers and CrewThe boarding teams are to ensure that no passenger or crew member disembark other than thru the designated disembarkation channels. At NAIA, the only disembarkation channels allowed are the tubes connecting the plane to the terminal. It may happen however, for some special flight, that passengers and crew are disembarked on the airport tarmac and into waiting vehicles. In these cases, the boarding team must ensure that all passengers and crew are conveyed directly to the designated Customs arrival clearance area.

6.5 Unloading of Check-In Baggage

It is the duty of Customs baggage Guard to ensure that the baggage is conveyed, without interference, directly to the conveyor belts and transported into the Customs Arrival Area.

6.6 Unloading of Cargo

In addition to passenger and passenger’s baggage, the aircraft may carry regular cargo, which must be conveyed to the designated Customs Public Bonded Warehouse.Annex C contains the warehouse assignment of aircraft calling at NAIA. Customs Guard must be on alert to detect any unmanifested cargo or erroneously manifested cargo.i.e. on the manifest but not on the aircraft. They must oversee the cargo from aircraft side to the warehouse, until properly receipted by the warehouse receiving personnel.Special attention should be given to human remains as cargo.

7. Aircraft Search Procedure

Aircraft search is a procedure for detection for all articles which appear to be alien or out of place in an aircraft. For customs purposes it is to search for and find any uncustomed articles that may be concealed on the aircraft. Annex B provides further detailed information.

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7.1 Legal Basis

7.1.1 Section 602. Function of the BureauThe general dutiespowers and jurisdiction of the bureau shall include,

inter alia:“……c. The supervision and control over the entrance and clearance of…aircraft engaged in foreign commerce…”(Tariff and Customs Code of the Philippines, as amended.)

7.1.2 Section 2202. Special Surveillance for Protection of Customs Revenue and Prevention of Smuggling.

“…..In order to prevent smuggling and to prevent smuggling and to secure the collection of the legal duties, taxes and other charges, the customs service shall exercise surveillance over the coast beginning when . . . aircraft enters Philippine territory and concluding when the article imported therein has been legally passed through the customshouse.” (Tariff and Customs Code of the Philippines as amended.)7.1.3 Section 2203. Persons having Police Authority

“……For the enforcement of the tariff and customs laws the following persons are authorized to effect searches seizures and arrests conformably with the provision of said laws…… ……a. Officials of the Bureau of Customs, district collectors, deputy collectors, police officers, agents, inspectors and guards of the Bureau of Customs . . .” (Tariff and Customs Code of the Philippines as amended.)

7.1.4 Section 2210. Right to Search Vessels or Aircrafts and Persons or Articles Conveyed Therein.

“……It shall be lawful for any official or person exercising police authority under the provisions to go aboard any … aircraft within the limits of any collection district and toinspect search and examine said . . . aircraft and any trunk package box or envelope on board and to search any person on board the said…aircraft…to use all necessary force to compel compliance; and if it shall appear that any breach or violation of the customs and tariff laws of the Philippines has been committed whereby or in consequence of which such…Aircrafts or the article or any part thereof on board of or imported by such…Aircraft is liable to forefeiture to make seizure of the same of any part thereof………..The power of search herein above given shall extend to the removal of any falls nottom, partition bulkhead, or other abstraction so far as may be necessary to enable the officer to discover whether any dutiable or forfeitable articles may be concealed therein…………No proceeding herein shall give rise to any claime for damage thereby caused to article…or aircraft.’’( Tariff and Customs Code of the Philppines, as amended.) 7.2 Type of Search

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7.2.1 Purpose• Routine Search – When an aircraft is not under specific suspicion or the search is not as a result of any derogatory information report; to ensure that no articles are left by passengers.

• Positive Search – When the aircraft is under specific suspicion as a result of a derogatory information report of dutiable and/or forfeitable articles concealed on the aircraft. 7.2.2 Methodology• Routine Method – search is limited to parts and areas within sight, view ang reach; no parts of the aircraft are detached or unscrewed.

• Semi-rigid Method – Search includes the removal of parts or paneling within reach and when the derogatory information report pin-points the location of the dutiable and/or forfeitable articles concealed in the aircraft. Customs may need assistance of maintenance personnel of the airline.• Rigid Method – Search of all areas of the aircraft including external areas, theunderbelly and cargo holds. Periodically conducted on aircraft coming from. Or transitting through high-risk countries, or targeted as a result of a non specific derogatory information report wherein the location of uncostumed or prohibited articles concealed on the aircrafts is not known.a search of this depth requires assistance of suitably qualified flight and/or ground maintenance engineers.

7.3 Target for Search

• Airlines with past records of smuggling• Airlines whose employees have past records of smuggling• Flights from countries / airports known to be sources of highly dutiable / taxable and / or prohibited drugs and other anti-social articles.• Flight transiting through countries / airports known to be sources of highly dutiable / taxable and / or prohibited drugs and other anti-social articles.• Flights covered by derogatory information or intelligence reports to be carrying dutiable / forfeitable articles concealed on the aircraft.• Flights from foreign airports without an Advance Notice of Arrival

7.4 Administrative Preparations

7.4.1 Division shall maintain in suitable forms:

• Flight Risks Profile• Profile on Detections / Seizures of Uncostumed Items from Aircraft• Prifile on Detections / Seizures of Prohibited Drugs from Aircraft.• Profile Detections / Seizures of other Anti-Social Articles from Aircrafts• Cabin Configuration of all Aircraft calling at the NAIA.

7.4.2 Purpose - Division shall maintain at leased ten (10) sets of tool kits for Aircraft search to include:

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• Screw-driver• Philips Screw-driver• Flash light• Mirror with extending handle• Snap-type Fastener locks• Hand-held or lapel radios, when available, on an issue-and-return basis.• At least one available camera• Fully stocked Narcotest kits.

7.4.3 A supply of forms indicating Aircraft Search Points ( Check Lists )for the various types of aircraft operating through NAIA.

7.5 Operational Procedures

7.5.1 Pre-Arrival Phase • The chief, AOD, or his Operations Assistant prepare the assignment of the Search Teams/s, as the needs arise• The Search Team Leader assembles the Team thirty (30)minutes before the arrival of target aircraft to:• Request for Airline representative, as witness.• Request for Flight / Ground engineers from airline maintainance, if needed.• Check serviceability of tools & equipment, including radios• Inspect team for:- Attendance- Appropriate dress- Serviceability of tool kits and other equipment fitness of personnel.• Conduct briefing on available intelligence.• Assign work groups to specific areas and issue their Aircraft Search Points Lists.

7.5.2 Arrival Phase

• The Team Leader shall ensure that the area in which the aircraft is parked, is cleared of all authorized personnel vehicles.• After disembarkatuion of passengers, team elements / members proceed to assigned areas.• Units report to the Team Leader, their location, in readiness to proceed with the search.• Team Leader issues the order to proceed with the search;(Refer to Annex B. Aircraft search points.)• Search Team elements / members proceed with the search in accordance with their Check List. If the search should result in negative findings, each reporting unit / member will complete the Check List report and submit same to the Team Leader• Should uncustomed items be found, the unit / member shall immediately informed to the Team Leader who should proceed immediately directly to the area and evaluate the situation.

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• The duty collector should be informed in the event of an initial positive finding.• If a camera is available, photographs of the item in its concealed positions should be taken where possible.• Items found should be retrieved from concealment under the direct supervision of the Duty Collector / Chief, AOD / Search Team Leader.• Upon and during retrieval, photographs of the item should be taken.• Itens retrieved from concealment shall be placed in a single bag / container and taped / Sealed.• Taped / sealed items should be taken and, after all necessary documentation has been completed, released to the In-Bond Section, Baggage assistance Division, under Held Baggage Receipt(HBR). Special arrangements for custody will sometimes be in force for certain items e.g. Narcotics( these are often handled by NARCOM or other competent agency High value goods may be deposit in the Collection Division safe.

8. Aircraft Surveillance

Upon arrival of the aircraft at the airport, all members of the Team assigned to the flight shall maintain close watch on all persons entering, leaving, or in the vicinity of, the aircraft. Special attention should also be paid to baggage and cargo being unloaded or loaded, in order to detect violations / evasions of the tariff and customs laws, rules and regulations.

INTELLIGENCE AND ENFORCEMENT OPERATIONS (RED ZONE)

1. Scope

Intelligence and Enforcement Operations cover the Satellites, the Concourses, Transit Transfer Area, Inner Gate / Pre-Arrival Areas, Elevators fronting the Transit Desk, Comfort Rooms, Escalators connecting the Satellites to the Departure Area, Immigration Area, Southern end of Carousel Area and the Conveyor Belts at the Ramps Area during X-ray Operations.

2. Unit of Primary Responsibility:

INTELLIGENCE AND ENFORCEMENT CONTINGENT -

The contingent compromises officers of the following;

ENFORCEMENT AND SECURITY SERVICE COMMAND and the CUSTOMS INTELLIGENCE AND INVESTIGATION SERVICE UNIT

3. The mission of the Intelligence and Enforcement Contingent is to:

o Suppress and prevent smuggling and other frauds against Customs,o maintain peace and order,o secure life and property within the Customs zone,pursue inquiries

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regarding smuggling incidents at NAIA, with a view to securing evidence and statements indicating an offence under the Tariff & Customs Laws of the Philippines, leading to arrest and prosecution if necessary.

3.1 Functions of the Intelligence and Enforcement Contingent –

3.1.1 Security Operations The posting of overt uniformed personnel to stationary assignments at various offices and installations to secure & protect personnel and property and cargoes within the customs zone.

3.1.2 Anti-smuggling OperationsThe posting of both over uniformed and covert plain clothes, personnel, to prevent and suppress smuggling and other frauds upon the customs.

3.1.3 Service of WarrantsWarrants are served in the conduct of administrative and / or criminal proceedings in relation to the traffic and customs administration.

3.1.4 Detection and Recovery OperationsThe conduct of search & recovery operations for the purpose of detecting and recovery of smuggled articles, the seizure of same, and the arrest of violators of the Tariff and Customs Laws. Rules, and Regulations.

3.1.5 Traffic ManagementTo establish and enforce personnel and vehicle identification, movement, and traffic control in the customs zone.

3.1.6 Intelligence OperationsThe establishment and management of a joint Intelligence and Enforcement Center manned by ESS and CIIS personnel to receive, collect, collate and evaluate information on violations and evasions of the Tariff and Customs Laws, Rules and Regulations and to translate same into useable intelligence with recommended courses of action to responsible end-users.

3.1.7 LiaisonTo serve as the contact office between the airpot and other government and non-government agencies in the enforcement of Tariff and Customs Laws, Rules and Regulations.

3.1.8 Administrative IntelligenceTo conduct extensive detection work and to intensify administrative intelligence activities in investigating administrative offenders in the customs service, to identify weaknesses in the tariff and customs administration and make recommendations for corrective measures.

3.1.9 X-ray Operations

To operate the mobile x-ray unit and to scan baggage of passengers coming from high risk countries and ports for high duty / tax articles, prohibited drugs

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and other anti-social articles such as firearms.

4. Duties and Responsibilities of Personnel

4.1 Supervising Intelligence Officer

4.1.1 Security Operations-Supervises and coordinates the activities of a group of Intelligence Officers involved in different intelligence fuctions such as investigations on acts of economic espionage, sabotage, subversion and violations of the Tariff and Customs Laws in all the four major areas of operation, namely,o Ninoy Aquino International Airporto Customs Bonded warehouseso Piers Operationso Regional Field Units- Takes charge of the initial review of the reports submitted by lower level officers on their security mission activities and recommends solutions thereon.- Recommends training needs designed to raise the competence of the group.- Does related work. 4.2 Customs Agento Arrests or detains offenders or suspicious characters found in unauthorized places within the area of jurisdiction.o Seizes the effects and instruments of violations.o Gives evidence in court.o Makes report of cases and activities to superior. 4.3 Customs Policemano Enforces law and order on aircraft at airport within customs areas for the protection of life, property and the revenue.o Maintains peace and order within the customs areas & facilities.

o Apprehends arrests and investigates violators of tariff and Customs Laws, Rules and Regulations.o Controls and regulates traffic flow within the customs zone.o Prepares and submits necessary reports.

5. Operating Procedures5.1 The district Commander, ESS and the Officers-in-Charges, CIIS, prepare their respective assignments for their personnel based on a 2-shift or a 3-shift schedule on a weekly or monthly basis, as the case may be.5.2 The Intelligence and Enforcement Operations Center

The small, integrated group of CIIS and ESS personnel shall:o Function as the ‘nerve center’ of the Customs Passenger and Baggage Clearing Operations assisting the District Collector, Deputy Collector, and Chief of Arrival Operation Division in making responsive decisions on a continuous flow of intelligence, covering general or specific activities.o Gather and receive information from various sources.o Record all information received and collected and process it as follows;o Collationo Evaluationo Analysis

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o Dissemination(a) Indicative Intelligence is disseminated to alert concerned units on the tendency, or possibility, of an attempt to smuggle, defraud the government of its lawful revenue, or effect entry of prohibited, banned articles.(b) Tactical Intelligence is disseminated to action units to prevent or suppress attempts to smuggle and defraud the government to its lawful revenue, or effect entry of prohibited, banned articles.(c) Strategic Intelligence is relating to previous information and intelligence on file to determine developing patterns, and to plan future operation/pro-actions to meet general or specific situations.5.2.1 Input and maintain all known intelligence into categorized data bases for easy reference and form the basis for a Risk Management Program.5.2.2 Publish spot, and periodic, intelligence summaries to guide operational units in their day-to-day efforts to prevents and detect smuggling in all its forms.5.2.3 Operate and maintain the Closed Circuit Television (CCTV) to record day to day operations at the Custom Arrival Area.5.2.4 X-ray scans baggage from flights arriving or passing through high risk countries or other selected baggage.5.2.5 Receive from the Customs Baggage Guard, AOD, and the train of containerized baggage.5.2.6 Supervise the unloading of baggage from containers and loading on the X-ray belt for scanning and subsequent loading onto the conveyor belt feeding the carousels at the baggage Claim Area of the Customs Arrival Hall.5.2.7 Baggage with positive findings, or suspected of containing high duty/tax articles, drugs or psychotropic substances and/or other anti-social articles, such as firearms, other weaponry, explosives, etc., is held temporarily and secretly marked in order to alert IEG operatives at the carousel (baggage claim) and the Examiners and/or flight Supervisors.5.2.8 After the last” clear baggage” has been sent up the conveyor, baggage with secret markings (held until last so as clear the area of other passengers and their baggage is sent up to the baggage reclaim area, data and description of suspect baggage is transmitted but the X-ray team to the carousel surveillance team and the IEOC through radio communication.5.3 Carry out surveillance of areas between aircraft and customs arrivals hall, i.e., Satellite-concourse-Immigration-Carousel.5.4 Secure advance copy of Passenger Manifest from Airline Office or Customs Boarding Officer for scanning.o Target passengers, or suspects who are subject of information or intelligence provided by IEOC, or other sources.o Profile passengers based on port of embarkation, nationality etc.5.4.1 Attempt to identify or recognize targets or profile passengers as they emerge from the satellite tube.5.4.2 Carry out surveillance of targets, suspects or profiled passengers as they move through the concourse, identify travel companions, or other persons, if any, handovers, or possible ‘dead-letter drops5.4.3 Coordinate with Immigration Supervisor, where necessary, to obtain additional data on targets from their Debarkation Cards.5.4.4 Continue surveillance and profiling at the Baggage Claim Carousel by moving elements or discreet observation from suitable sites, checking

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information with X-ray team, if available5.4.5 Be prepared to contact relevant airline in order to obtain a copy of a suspect Passenger’s Nominal Record, (PNR)6. Handling Information –The Future

It is very probable that the work of the Contingent will greatly develop during the next few years with the installation of a modern data base. Direct access to this data base will, of course, be restricted for security reasons. However certain officers of E.S.S. and CIIS will have access to the information. As is normal with high security computer systems, access is graded – that is to say, certain information will electronically be accessible only to high ranking officers. However, it should be possible to access much of the data through the Senior Officers of the Contingent. Should any officer have reasonable suspicion about a certain passenger, it should be possible to find out, with a phone call, whether or not the Department has further previous interest in Him.6.1 Accessing the Database

To carry this scenario further forward, if there is nothing on the data base regarding the suspect, the officer will be able to inaugurate an entry into the data base by completing a form with as much detail as possible and submitting it through official channels. Regardless of how scant the information may be it will be considered for inclusion. Clearly the Officer should try to include the obvious identifying things regarding the subject-Full name, address in Philippines, age, approximate age, height, sex, passport number & nationality etc. All this is desirable but if not available a form could still be considered. Obtaining information such as this is very difficult without possibly arousing the suspicions of the subject. However it is surprising how may crooks believe that they are too smart to be caught out by a few simple questions.6.2 Building the DatabaseA data base, which, after all is just a store of available information, is only as good as its content. That content can be provided from many sources-a record of previous offences, well judged suspicion from an Examiner, information received from an informer etc. etc. It will be of prime importance that all information, however received should be evaluated and catalogued. This will, at NAIA, as elsewhere within the BOC be a task for fully trained officers of ESS and CIIS. Much of the information will be received from outside sources but a large portion can be contributed from alert officers as has already been discussed. A supply of forms will soon be available for use by these officers.6.3 First Steps

Establishing a full database cannot be done overnight. |It will probably take at least two years to build up into a really effective weapon against smuggling. However the process has started and the first stage, the planning and setting up, is nearly complete. In the very near future, the second stage will be ready. This will provide access to detailed information on completed cases. CIIS and ESS will have these records on diskette and will be able to access all information thus available.6.4 Integration and Co-operation

The next stages in the build up of this technology will take place as soon as the necessary “high-tech” security computers can be installed. This

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operation will take some little time but, given the co-operation of the staff concerned, should eventually provide a powerful weapon in the war against smugglers. All officers should remember that it is their duty to report any information or suspicions through official channels to the Contingent.

CUSTOMS DUTY FREE SHOPOPERATIONS(BLUE ZONE)

1. SCOPE

The Duty Free Shop of the Philippines caters to the need of the travelling clientele of the airport by affording duty-free articles for their travel needs, gifts, and presents for welcoming family members, relatives and/or business associates. The Customs Duty Free Shops Division supervises and monitors all Duty Free Shops/Outlets at the Arrival Area, the Arrival Extension Area, the Duty Free Shop Plaza and other outlets distributed throughout the District’s territorial jurisdiction.

1.1 Unit of Primary Responsibility

CUSTOMS DUTY FREE SHOPS DIVISION

1.2 Activities of the Customs Duty Free Shops Division

1.2.1 Supervises and controls the movements and transfers of imported cargoes arriving at the airport and other ports of entry, to the warehouses of the Duty Free Shops (Operator), and releases items to its stores and sales outlets.

1.2.2 Monitors the sales of Imported Duty Articles Customs personnel oversee the sales activities of all Duty Free Philippines stores and outlets to ensure that only qualified purchasers are served and compliance with the customs laws, rules and regulations is observed.

1.2.3 Maintenance of RecordsMaintenance of up-to-date and systematic records. Monitoring activities are recorded in various forms of reports to effectively control storage, withdrawal/release from bonded warehouses to the stores and outlets

1.2.4 Collection of Duties, Taxes and other ChargesThe Monitoring and Control measures are also designed to check purchases in excess of the privilege allowances for the purpose of assessing and collecting duties, taxes and other charges on such excesses.

1.25 Charges CollectionAssistance is given in the collection of fees and other charges. The privilege to operate Customs Bonded Warehouse provides for fees and other charges to be paid periodically to BOC.

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1.2.6 Seizure of Various ArticlesArticles which are illegally withdrawn or sold are liable to seizure. The continuous monitoring and surveillance conducted by customs personnel is aimed at detecting illegal withdrawals from the Customs Bonded Warehouse, sales to unauthorized persons, and excess purchases upon which no duty or tax were paid.

1.3 Duties and responsibilities of Personnel

1.3.1 Duty Collector

o Supervises the conduct of personnel in the performance of their assigned and responsibilities.

o Conducts occasional spot checks of actual sales to arriving and transit passengers to see if the sale is being conducted in accordance with prescribed rules and regulations.

o Seizes illegally withdrawn or sold articles pursuant to existing laws, rules & regulations.

o Prepares and submits incident and discrepancy reports to higher authorities with regards to the conduct of spot-checking activity.

1.3.2 Supervisor

o Monitor the sales of all imported duty/tax free merchandise in accordance with existing laws, rules & regulations.

o Monitors and records all sales invoices, daily sales and submits reports thereof.

o Seizes illegally withdrawn or sold articles pursuant to existing laws, rules & regulations.

o Prepares and submits incident and discrepancy reports to higher authorities with regards to the conduct of spot-checking activity.

1.3.2 Customs Guard

o Ensures that only those articles purchased are taken out by the passengers.

o Escorts passenger who have purchased goods in excess of their privilege to the Customs Examination Area and notifies the collector/Appraiser on duty of the purchases made.

o Conducts Surveillance activities, especially during peak sales hours.

o Reports to the Collector of Customs or Chief, Customs Duty Free

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Shops Division, All violations of customs rules and regulations that come to his attention.

1.4 Procedures

1.4.1 The Chief, Customs Duty Free Shops Division, prepares the Monthly Schedule of Assignments of the personnel of the Division, one (1) week before the end of the month and posts the Schedule on the Bulletin Board.

1.4.2 Thirty (30) minutes before assumption of duty, the shift supervisor in all area of operation, shall muster those assigned to his/her shift at their respective areas of assignment, to:

o Check Attendance

o Inspect uniforms and physical condition of personnel

o Conduct briefing on general, and/or special instructions.

o All Duty personnel station themselves in their proper areas of assignment, and watch proceeding as arriving passengers move through the concourse to the Duty Free Shops Stores at the Arrivals and the Arrival Extension Area

o At random, Conducts checks on purchasing passenger’s status as stamped on his/her passport and verifies same with the passenger, verifies also that the required purchase data has been indicated on the passport/airline ticket by the DFP sales representative.

o As the occasion arises escort passenger who has purchased in excess of the privilege limit to the Customs Arrival Area and refers the matter to a flight supervisor/Duty Collector/Chief, Arrival Operations Division for the assessment of duty/tax due on the excess purchase/s.

o Apprehend persons who are not passengers, but have availed themselves of the duty free privileges and seize all articles illegally purchased.o Prepare Offense Report and escort the person to the Duty Collector or Chief, Arrival Operation Division for proper disposition.

Section 4Passenger & Baggage Clearance Operations – Yellow Zone

PASSENGER & BAGGAGE PROCESSING OPERATIONS(YELLOW ZONE)

1. Scope

Passenger and baggage Processing Operations involve those Customs activities undertaken from the Carousel Area (baggage Claim Counters) to the Exit Gates the Customs Arrival Examination Area.

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ARRIVAL OPERATIONS DIVISION,PASSENGER SERVICE

The mission of the Arrival Operations Division is to facilitate processing of passenger and baggage through customs, to collect duties, taxes and other charges on prescribed articles, and to take positive action against persons evading or attempting to evade duty, tax, prohibition or any other control in force at the time by virtue of the tariff and customs law, rules and regulations. This action includes the seizure, where necessary of the goods in question and arrest, where necessary, of persons concerned.

3. Functions of the Arrival Operations Division

3.1 Examination of Baggage of Incoming PassengersThe opening, searching and verification of the contents of baggage selected for examination, in order to assess the liability to duty or tax on goods declared or not declared as the case may be.

3.2 Assessment of Duties and TaxesThe determination, by examination of the amounts of duties and/ or taxes due on any article, and the collection of such amounts.

3.3 Seizure of ArticlesThe seizure, where necessary, of articles not properly declared or prohibited articles, in accordance with laws, rules and regulations.

3.4 Examination/Inventory and appraisal of Seized ArticlesThe examination/inventory of seized/abandoned articles and the appraisal thereof as a pre-requisite to seizure proceeding or disposal.

3.5 Processing of Re-exportation CommitmentsThe examination, appraisal and classification of imported goods subject to re-exportation, to determine the amount and mode of guarantee that may be needed to protect government interest. (See Annex G of this section)

3.6 Processing of Certificates of IdentificationThe examination & verification of articles previously exported from the Philippines covered by a certificate of identification. (See Annex H of this section)4. Duties and Responsibilities of Personnel

4.1 Chief Customs Operations OfficerExercises general supervision over all activities in the Customs Arrival Area.

4.2 Customs Operations Assistant Chief Assists the Chief Customs Operations Officer and takes over in the absence of the chief.

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4.3 Flight Supervisor/Appraiser

o Supervises the examination, classification and appraisal of imported articles for customs purposes.

o Assigns and reviews the work of a team of examiners engaged in the examination, classification and appraisal of articles.

o Instructs and advises subordinates on current procedures and ruling

o Prepares seizures reports

o Does related work.

4.4 Customs Operations Officer III/Examiner

o Determines whether the packages for examination and their contents are in accordance with the Baggage Declaration, Entry, Invoices and other pertinent documents.

o Completes a return of the detailed description of the articles as quantity, measurement, and weight and tariff classification and ensures that these articles are not imported contrary to law.

o Submits samples to the laboratory for analysis, when feasible to do so, and when analysis is necessary to the proper classification, appraisal and/or admission into the Philippines of imported articles.

o Carries out related work as may be assigned to him/her from time by competent customs authorities.

5. Pre-Arrival Operating Procedures

5.1 Flight Assignments

o The Chief, A.O.D., shall ensure that the schedule assignments are issued in advance of flight arrivals.

5.2 Flight SchedulesScheduled flights are listed in the winter and summer schedules furnished by the airlines Operator’s council (AOC). Notices of Arrival for non-scheduled extra flights shall be the basis for the preparation of flight assignments.

5.3 Composition of Flight Assignmentso The Regular Composition of a flight assignment is as follows:

o One (1) Flight Supervisor/Appraiser

o One (1) COO III/Examiner for every fifteen (15) passengers or as

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previously agreed upon by the Collector of Customs and the AOC.

5.4 Muster of Flight Team

o Fifteen (15) minutes prior to ETA of a flight, the assigned Flight Supervisor shall muster his team at the Customs Examination Area to:

o Check Attendance.

o Inspect uniforms and physical condition of personnel.

o Inspect tool kits.

o Conduct briefing on flight information available to include general and/or special instructions.

5.5 Disqualification for Assuming Dutyo Drunkenness

o Improper uniforms

o Physical discomfort/sickness

o Any team member who is unable to assume duty shall be reported by the Flight Supervisor to the Chief, Arrival Operation Division, or the duly designated Duty Officer, for proper replacement.

6. Arrival Operating Procedures

6.1 The team members assume their respective stations upon announcement of the arrival of the flight.

6.2 Conduct visual assessment and profiling of passengers as they await customs clearance. Control inflow of passengers to the examination tables at a scale of one examiner to one passenger or contained, family group.(See Annex C&D of this Section and also Annex B of Section 2 of this Manual for Passenger Risk Profiling Visual Indicators)

6.3 Conduct interview of passengers based on the Baggage Declaration, Passport, Airline Ticket and other related documents as the examination of the baggage is conducted (Annex C)

6.3.1 The Customs Examiner at this point must clearly establish the ownership of the bags and contents presented to him/her by the passenger. A recommended method of ensuring the ownership is to use the following, or similar, questions. The questions are sometimes referred to as “coffin nail” question, as their purpose is to “nail down”, or establish ownership of the baggage and contents.

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o ARE THESE ALL YOURS BAGS?

o DO ALL THESE BAGS BELONG TO YOU?

o DID YOU PACK THE BAGS YOURSELF?

o ARE FULLY AWARE OF THE CONTENTS?

o HAVE THE BAGS BEEN UNATTENDED SINCE YOU PACKED THEM?

o HAS ANY OTHER PERSON ASKED YOU TO CARRY ANYTHING FOR THEM?

6.3.2 for advice on Baggage Examination See Annex A of this Section.

6.4 Process passenger and Baggageo Clear passenger and baggage where are no dutiable/ forfeitable articles found.

o Where declared dutiable/taxable articles in commercial quantities are found, escort the passenger with his/her baggage to the Secondary Examination Area and, after referring them to the see Annex I (Terminal Release)

o Where dutiable or prohibited goods are found, and or the passenger is otherwise suspect, due to profiling or derogatory report or intelligence, escort passenger to an Exclusion Room or search and apply relevant search procedure.o See Annex A (Baggage Search) & B (Search of Persons)

o Where there are high duty and/or tax articles detected/seized apply procedure under Annex E (procedure upon Detection/Apprehension of High Duty/Tax Articles).

o Where there are prohibited/banned drugs detected & seized apply procedure under Annex D Part IV (Procedure upon Detection and Apprehension of Prohibited Drugs).

o Where other anti-social articles (such as firearms, explosives, etc.) detected/seized apply procedures under Annex F. (procedure upon Detection/Apprehension of other Anti-social Articles)

o Where the passenger declares inbound articles to be Temporarily Imported, and due to be Re-exported upon his departure, initiate process under a re-Exportation Commitment or similar arrangement.o See Annex G (Procedure for Processing Re-Export Commitment).

o Where the passenger declares articles which are covered by a Certificate of Identification, apply procedure under Annex H (Procedure for

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Processing Certificates of Identification)

o To process articles under Terminal Release, apply Procedure under Annex I (Procedure for Releasing Articles under Terminal Release.)

BAGGAGE ASSISTANCE DIVISION

INTERLINE BAGGAGE ROOM OPERATION (IBR)

1. Background

The establishment of the Interline Baggage Room (IBR) is mandated namely:

1.1 Primary Baggage FunctionReceives and handles the following kinds of baggage placed at the IBR:o Mistagged baggageo Erroneously off-loaded baggageo Advance or delayed baggageo Left behind or unclaimed baggageo Transit baggage for foreign destinations

1.2 Other Baggage Functions

o Processes, examines and appraises baggage before the same are releases to claimant.

o Conducts inventory on all baggage which has been left unclaimed, for purposes of abandonment proceedings.

1.3 IBR is operated by Philippines Airlines (PAL) which is required to post a bond to guarantee compliance under CMO NO. 54-91. PAL, upon formal receipt of the articles in the IBR is to be held liable for any loss or damage proportionate to the value declared by the owner or its liability under existing international agreements, whichever is lower.

1.4 Under CMO No. 54-91 the following storage periods are provided:

o Erroneously off-loaded baggage - 30 days

o Mistagged baggage - 5 days plus 5 days extension

o Transit baggage - generally 15 days

1.5 PAL is mandated to issue, subject to the approval by the District Collector, A Manual of Procedures covering IBR operations. Additionally, as part of its reporting responsibilities, PAL is required to submit to the district Collector a monthly list of all unclaimed or overstaying baggage which has remained in the IBR beyond the period of storage. Such overstaying or unclaimed baggage is to be transferred to the Collector’s Corral for disposition, and shall not be released, if claimed, without payment of

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corresponding duties and taxes.

1.6 PAL is required also to submit a Monthly Inventory Report copy furnished the District Collector and the airlines concerned, of the contents of the IBR containing the following:

o Date of Receipt of Baggage

o Condition of the Baggage

2. Situation

2.1 Since its inception, IBR has blossomed into an important public service arm of the NAIA Customhouse. TO date, IBR handles the following baggage:

o Mistagged baggageo Erroneously off-loaded baggageo Transit baggage (foreign destinations)o Advance or delayed baggageo Baggage for “STORAGE”o Transshipment baggage (Cebu Link)o Baggage “FOR FORWARDING”o Baggage/dutiable articles left and found on a Manila destined aircraft.

2.2 The documentary requirement for release of baggage varies accordingly to its class:

o Mistagged baggage requires telex and a request for release from PAL.

o Erroneously off-loaded baggage requires the same documentation above.

o Advance or delayed baggage, requires a rush tag and usually a transit telex.

o Transit Baggage, requires presentation of the Boarding Pass, with the claimant personally appearing to claim baggage accompanied by loader. Baggage is escorted to physical check-in.

o Transshipment baggage (Cebu Link) requires Transshipment Permit, Air note and Gatepass.

o “FOR FORWARDING” baggage requires logbook documentation, telex, or request for forwarding and a release authorization from claimant.

3. Logging of Baggage

A Memorandum, issued on 18 August 1993, implemented the following measures in the public interest:

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o All baggage received or released at the IBR must be logged with the following details:o Date, Time Flight No., Passenger’s name.

o Class of baggage, i.e. transit, delayed, storage, Cebu Link, off-loaded, mistagged, unclaimed etc.

o Circumstances of release, i.e. owner’s claim, telex, authorization, Boarding Pass No.

o Name and Address of claimant, or agent, who must affix signature.

o Code Number of Customs Examiner & Appraiser.

3.1 Collection ReportA Collection Report is to be filed daily, showing:

o Flight IDo Name of Passenger and/or agento Description of article(s)o Number of packages and weighto Breakdown and total of taxes & duties collectedo Code number of Custom Examiner and Appraisero Class of Baggage

3.2 Submission by Officer-in-Charge of a monthly inventory indicating, on a “per flight”, “per date” basis, the number of bags received and the number of bags released.

3.3 Submission by Officer-in Charge of a monthly status report of overstaying and abandoned cargoes, including all necessary details in order to facilitate transfer to the Collector’s Corral.

PART II CUSTOMS BAGGAGE ROOM (CBR)

4.1 Background

Custom Memorandum 54-91 established not one but two baggage stores in the arrivals area. One, the Interline Baggage Room has been discussed in Part I; the other is the Customs Baggage Room (CBR). Both are part of the Baggage Assistance Division and they are situated at opposite sides of the baggage hall at NAIA.

5. Details of the scope and operation of the IBR and the classes of baggage handled therein have been discussed.Scope & Operation of the CBR is as follows:

5.1 The Customs Baggage Room receives and Handles the storage of the following classes of baggage held by customs, due to:

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o Insufficient funds for duties & taxes assessed.o Pending presentation of any permit/clearance issued by the government agency concerned.o Being held as a violation of the customs and tariff laws, as well as any rules & regulation and other related laws.o Baggage which has arrived from a flight without tag or other identifying marks and is left unclaimed in the customs inspection area, prior notice having been issued to the airline concerned.

5.2 Other Functions of CBR

o Examines, conducts inventory and appraises all baggage held in bond (except where this function has already been performed in the Baggage Examination Area).

o Recommends the following actions when suitable:

o Release of baggage after payment of duties & taxes.

o Inventory and appraisal of baggage/articles which have remained unclaimed, for purposes of abandonment proceedings.

o Performs such other actions as may be required by the district collector, Customs.

5.3 Other Provisions of CMO 54-91 with regard to CBR

o The CBR shall be operated by the Bureau of Customs under the immediate supervision of the In Bond Section, Baggage Assistance Division.

o The period of storage and the disposition of baggage/articles in the CBR shall be governed by the rules and regulations which have been or hereinafter may be presented by the district collector of customs.

6. Receipt of Baggage/Articles for Storage

Receipt of Articles held by customs and placed at the CBR shall be affected in the following manner:

o A Held Baggage Receipt (HBR) shall be prepared by the Customs Examiner after examination and appraisal of the baggage has been conducted.

o The baggage shall be weighed prior to actual receipt of the same by the Customs Warehouseman assigned at the CBR. Thereafter the Customs Examiner, Appraiser, Warehouseman and Duty Collector will affix their signature on the HBR.The original to passenger, duplicate to B.A.D. triplicate to CDMD.

6.1 Report of Unclaimed/Overstaying Bags

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The chief Baggage Assistance Division shall submit to the District Collector a monthly list of all unclaimed or overstaying articles/baggage which have remained in the CBR beyond the storage period prescribed by the District Collector of Customs.

6.2 Monthly Inventory & ReportThe In-Bond Section shall undertake the monthly inventory of the contents of CBR and shall report thereof on the official form prescribed for that purpose.The same shall be prepared by the Customs Warehouseman concerned, duly signed by the Customs Examiner, Custom Appraiser, the Chief, B.A.D. and the COA representative/ Apprehending Officer in those cases of alerted cargoes.

SECTION 5PASSENGER AND BAGGAGE MANAGEMENT MANUALLAW DIVISION

LEGAL MATTERS


Within the collection District the, LAW DIVISION is the UNIT of PRIMARY RESPONSIBILITY

1.1 ScopeSince all the activities of the Bureau of customs are governed by the Laws of the Philippines, it is essential that the Bureau be guided by trained and qualified Legal Officers. This guidance is provided by the Law Division who provide legal advice and interpretation as and when required.

These duties include:

o Assisting in the enforcement of the tariff & customs laws, and all other laws, rules and regulations relating to the tariff and customs administration:o Initiating the Bureau’s exercise of exclusive original jurisdiction over seizure and forfeiture cases under the tariff and customs laws.

2. Responsibilities

o Assists the District Collector in the legal aspect of his administrative responsibilities and provides legal advice and services to the Collection District;

o Renders opinion and ruling on customs matters involving interpretation and application of laws and implementing regulations;

o Representing the District in court whenever summoned by subpoena or made a party litigant therein and collaborate with the Office of the Solicitor General in prosecuting cases against importers/surety companies liable under their forfeited bonds and when the District Collector is a party defendant or

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respondent in any other cases;

o Conducts investigations and hearing on seizures, protests and other cases and submits finding and proposes decision for signature of the District Collector;

o Processes and submits recommendation on all applications for Customs Broker’s Licence and other permits to operate in the Customs Zone and keeps and maintains a current roster of duly licensed customs brokers and brokage firms and other pertinent records thereto;

o Institutes abandonment proceedings on overstaying cargoes and evaluates requests for the lifting thereof;o Receives and processes claims for refund;o Evaluates claims for reward;o Acts on Special Powers of Attorney and authorizations relating to customs matters, including issuances of clearance;o Submits periodic reports and other data that may be required;o Performs other functions consistent with the assigned tasks.

BOOK III – LEGAL AND COMPLIANCE

TITLE 1 – LEGAL

CHAPTER 1 – PROHIBITED IMPORTATIONS

Note: See Section 101, TCCP.


1.1 Prohibited Importation

Refers to an article by reason of its character, nature, essence or by law, rule or regulation is not allowed entry or may be allowed entry subject to certain conditions.

1.2 Absolutely Prohibited Importation

Refers to an article by reason of its character, nature or essence is repulsive to morals, customs and traditions or by law, rule or regulation is not allowed entry.

1.3 Qualifiedly Prohibited Importation

Refers to an article by reason of law, rule or regulation is not allowed entry but may be allowed entry subject to compliance to certain conditions.

It is also termed as regulated article.

1.4 Import Permit

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Refers to a document issued by a regulating agency that allows entry of qualifiedly prohibited articles.It is also termed as import authority or import clearance.

1.5 Regulatory Agency

Refers to a government agency by law, rule or regulation is tasked to issue import permits for qualifiedly prohibited articles. It shall also refer to an agency tasked to regulate entry of certain articles to the Philippines through means other than issuing import permit.


2.1 Import Permit Must Accompany an Import Entry

Depending on law, rule or regulation of a regulating agency an Import Permit may be secured before departure of carrying vessel or aircraft from the port of origin, while carrying vessel or aircraft is already in transit or when shipment has already arrived. However, concerned office at the Bureau of Customs shall not accept any import entry covering qualifiedly prohibited article not supported or accompanied by an Import Permit. Concerned office shall refer not only to the office tasked to accept import entries but to the e2m Customs System in case of electronic import entry lodging.

2.2 When Import Entry Need not be Accompanied by an Import Permit

There are regulatory agencies which by the nature of their functions as provided for by law, rule or regulation regulate entry of certain articles but do not issue import permits to allow entry of such articles. However, importers before they can import such articles must comply with the requirements of such agency. An example is in the case of processed foods, cosmetics, food supplements, drugs and pharmaceutical products where the importer must secure a Permit to Operate (PTO) and Certificate of Product Registration (CPR) from the Food and Drug Administration (FDA) before they can engage in the importation of such products.

2.3 Legal Effect of Whether an Importation is Absolutely Prohibited or Qualifiedly Prohibited

Whether an importation is absolutely prohibited or qualifiedly prohibited or an importer has failed to comply with the requirements of a regulating agency the legal effect is the same as the articles are subject to seizure and forfeiture proceedings.

Section 3 - Operational Provisions

3.1 Importations Considered as Absolutely Prohibited

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(a) Written or printed articles in any form containing any matter advocating or inciting treason, or rebellion, insurrection, sedition or subversion against the Government of the Philippines, or forcible resistance to any law of the Philippines, or containing any threat to take life of, or inflict bodily harm upon any person in the Philippines.

(b) Written or printed, negatives or cinematographic film, photographs, engravings, lithographs, objects, paintings, drawings or other representation of an obscene or immoral character.

(c) Articles, instruments, drugs and substances designed, intended or adapted for producing unlawful abortion, or any printed matter which advertises or describes or gives directly or indirectly information where, how or by whom unlawful abortion is produced.

(d) Loaded dice and marked cards.

(e) Any article manufactured in whole or in part of gold, silver or other precious metals or alloys thereof, the stamps, brands or marks or which do not indicate the actual fineness of quality of said metals or alloys.

(f) Any adulterated or misbranded articles of food or any adulterated or misbranded drug in violation of the “Foods and Drugs Act.”

(g) Opium pipes and parts thereof, of whatever material.

(h) All other articles and parts thereof, the importation of which is absolutely prohibited by law or rules and regulations issued by competent authority.

3.2 Importations Considered as Qualifiedly Prohibited

(a) Dynamite, gunpowder, ammunitions and other explosives, firearms and weapons of war, and parts thereof, except upon authority from the Firearms and Explosives Office (FEO) of the Philippine National Police (PNP) or agency of government that may be given authority by law, rule or regulation.

(b) Roulette, wheels, gambling outfits, machines, apparatus or mechanical devices used in gambling or the distribution of money, cigars, cigarettes or other articles when such distribution is dependent on chance, including jackpot and pinball machines or similar contrivances, or parts thereof upon authority from the Philippine Gaming Corporation (PAGCOR) or any agency of government that may be given authority by law, rule or regulation.

(c) Lottery and sweepstakes tickets except those authorized by the Philippine Government, advertisements thereof, and lists of drawings therein upon authority from the Philippine Charity Sweepstakes Office

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(PCSO) or any agency of government that may be given authority by law, rule or regulation.

(d) Marijuana, opium, poppies, coca leaves, heroin or any 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, Department of Health (DOH) for medicinal purposes only or any government agency authorized by law, rule or regulation.

(e) All other articles and parts thereof, the importation of which is qualifiedly prohibited by law or rules and regulations issued by competent authority or any law, rule or regulation authorizing an agency of government to regulate entry of certain articles though not necessarily through issuance of import permits.

CHAPTER 2 – CONDITIONALLY-FREE IMPORTATIONS

Note: Reference: CAO 7-72. In bold letters as proposed additions, changes and rationale)


1.1 Conditionally Free Importation

Refers to an article importation of which is duty free provided certain conditions set forth by law is complied with.


2.1 Tax Exempt Certificate (TEC) or any other form of certificate or indorsement from the Department of Finance Must Accompany an Import Entry

TEC or any other form of certificate or indorsement from the Department of Finance granting duty and tax exemption may be secured before departure of carrying vessel or aircraft from the port of origin, while carrying vessel or aircraft is already in transit or when shipment has already arrived. However, concerned office at the Bureau of Customs shall not accept any import entry covering conditionally-free importations not accompanied by any indorsment or TEC from DOF. Concerned office shall refer not only to the office tasked to accept import entries but to the e2m Customs System in case of electronic import entry lodging.

2.2 Payment of Value Added Tax (VAT) and/or Excise Tax

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Unless specifically exempt by the DOF in its Indorsement to BOC importation under conditionally free importation shall be subject to payment of VAT and/or excise tax.


3.1 Aquatic products (e.g. fish, crustaceans, mollusks, marine animals, seaweeds, fish oil, roe), may be allowed free of entry upon presentation of the following:

(1) If the gathering and carrying vessels are one and the same, a certificate of the master of the vessel showing:

(a) That such aquatic products were caught by his vessel which is of Philippine registry;

(b) That such aquatic products are imported in such vessel or aircraft attached thereto;

(c) That such aquatic products have not been landed in any foreign territory or, if so landed, they have been landed solely for transshipment without having been advanced in condition.

(2) If the carrying vessel is other than the gathering vessel the following shall be presented:

(a) Certificate of the master of the gathering vessel showing that such aquatic products were caught or gathered by vessel which is of Philippine registry;

(b) Certificate of the master of the carrying vessel that such aquatic products are imported in his vessel which is of Philippine registry or in crafts attached thereto;

(c) Evidence satisfactory to the Collector that such products have not been landed in any foreign territory or, if landed, they have been landed solely for transshipment without having been advanced in condition.

3.2 Equipment for use in the salvage of vessels or aircraft may be allowed free entry upon presentation to the Collector of Customs of the following:

(1) Certificate duly issued by the National Economic Development Authority (NEDA) that said equipment is not available locally;

(2) Certificate duly issued by the Philippine Coast Guard (PCG) (for vessel) or the Civil Aviation Authority of the Philippines (CAAP), (for aircraft) that said equipment is for use in the salvage of vessels or aircraft, as the case may be;

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(3) Bond in an amount equal to one and one-half (1.5X) the ascertained duties, taxes and other charges, conditioned for exportation thereof within six (6) months from the date of acceptance of the import entry, or in the default thereof, the payment of the corresponding duties, taxes and other charges due thereon.

Upon prior application of the importer/owner the Collector may extend the time for exportation for a term not exceeding six (6) months from the expiration of the original period of the bond.

(4) Articles shall be identified upon entry and re-identified upon re-exportation. Proof of identification shall be the certificate by the Customs officials concerned.

3.3 Cost of repairs, excluding the value of the articles used, made in foreign countries upon vessels or aircrafts documented, registered or licensed in the Philippines shall be allowed free entry upon presentation to the Collector of Customs of the following:

(1) Certification from the National Shipyard and Steel Corporation, (can be secured now from the Maritime Industry Authority (MARINA), (in case of vessels) and Civil Aviation Authority of the Philippines (CAAP) (in case of aircraft) that adequate facilities for such repairs are not available or afforded in the Philippines; and

(2) An affidavit by the master of the vessel or pilot in command of the aircraft that while in the regular course of her voyage or flight, the same was compelled by stress of weather or other casualty to put into a foreign port to make such repairs in order to secure the safety, seaworthiness or airworthiness of the vessel or aircraft to enable her to reach her port of destination; and that the repairs were incidental and necessary for his use abroad.

3.4 Articles brought into the Philippines for repair, processing or reconditioning to be re-exported, upon completion of the repair, processing or reconditioning shall be allowed free entry upon presentation of the following:

(1) Affidavit executed by the importer stating that the articles were brought into the Philippines solely for repair, processing or reconditioning, as the case may be, and giving the name and address of the firm or establishment where the repair, processing or reconditioning of the articles shall be made;

(2) Bond in an amount equal to one and one-half (1.5X) times the ascertained duties and taxes and other charges thereon, conditioned for the for the re-exportation thereof within six (6) months from the date of acceptance of the import entry or in default thereof, the payment of the corresponding duties, taxes and other charges.

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For purposes of Section 105 of the TCCP, as amended the word “processing” denotes a progressive action or a series of acts or steps which do not change the nature and identity of the articles as differentiated from “manufacturing.” The latter implies the making of articles by expending of labor upon material to make a finished product, ordinarily taking a different form and usually having a different name and purpose from that of the material and includes any new combination of any old materials constituting a new result or production in the form of a vendible article, not being machinery. 3.5 Medals, badges, cups and other small articles bestowed as trophies or prizes or those received or accepted as honorary distinctions, such articles may be allowed entry free of duty upon proof evident on the articles themselves and satisfactory to the Collector of Customs that the same have been bestowed as trophies or prizes or accepted as honorary distinctions.

3.6 (A) Personal and household effects belonging to residents of the Philippines returning from abroad, including jewelry, precious stones and other articles of luxury , which were formally declared and listed before departure and identified under oath before the Collector of Customs when exported from the Philippines by such returning resident upon their departure therefrom or during their stay abroad, may be allowed entry free of duty: PROVIDED, That the following documents are submitted to the Collector.

(1) Certificate of Identification issued by the Customs Examiner and approved by the Customs Appraiser upon exportation;

(2) Certificate of Identification issued by the Customs Examiner and approved by the Customs Appraiser showing that the articles imported are the identical articles exported by the returning resident.If the articles have been advanced in value while abroad, such increment in value shall be subject to duty.

(B) Personal and household effects including wearing apparel, articles for personal adornment (except luxury items), toilet articles, portable appliances and instruments and similar personal effects, excluding vehicles, watercrafts, animals, purchased in foreign countries by residents of the Philippines, may be allowed entry free of duty: PROVIDED, That the following conditions are complied with:

(1) A declaration of the owner under oath stating:

(a) that the articles are necessary, appropriate and normally used for their comfort and convenience during their stay abroad;

(b) that the same articles had been used by them for more than six (6) months abroad;

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(c) that the article shall accompany them upon their return, or shall arrive within ninety (90) days before or after their return;

(d) that they are not in commercial quantities nor intended for barter, sale or hire;

(e) that the total dutiable value thereof does not exceed two thousand pesos (Php 2,000.00);

(f) that he has not previously received the benefits under this subsection within one (1) year from and after the last exemption granted.

The term “returning resident” as contemplated in Section 105(f) refers to one who has established permanent residence in the Philippines prior to his sojourn abroad for an indefinite period, but of a fixed purpose and having the intention of returning to the Philippines upon the accomplishment of the purpose of his trip.

(2) If the total dutiable value of the personal and household effects (except luxury items), shall be in excess of two thousand pesos (Php 2,000.00), the same shall be subject to a fifty percent (50%) ad valorem duty across the board;

(3) If the returning resident has not stayed abroad for six (6) months, his personal and household effects (except luxury items), the total dutiable value of which does not exceed two thousand pesos (Php 2,000.00) shall be subject to fifty per cent (50%) ad valorem across the board; and any excess thereof shall be subject to the corresponding duty collectible pursuant to Sections 205 and 206 of the TCCP;

(4) Use abroad for more than six (6) months may be proven by the owner by means of the following, other than his declaration:

(a) Sales Invoice or Deed of Purchase; and

(b) Actual condition of the article.

(5) Unless due to unforeseen circumstances, unaccompanied personal and household effects arriving more than ninety (90) days before or after the arrival of the owner in the Philippines should not be admitted free of duty under this subsection;

(6) The length of use abroad shall be computed from the date of purchase to the date of shipment of the article in the case of advance baggage; and from the date of purchase of the article to the date of departure of the owner in the case of accompanied baggage or those baggage that may arrive later;

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(7) Exemptions from duty under this subsection, shall apply only to articles purchased and used abroad. Donations, gifts and articles acquired by means other than purchase are not included herein;

(8) Whenever exemption from duty under this subsection is claimed on advance baggage, said baggage shall not be released unless the claimant’s representative files a bond equal to one and one-half (1.5X) times the difference between what he would have paid without exemption and what he should pay with exemption subject to the condition that should it be finally determined that the claimant is not entitled to the exemption, the bond shall answer for the difference in duties, taxes and other charges thereon; Provided, however, That the total dutiable value thereof shall not exceed two thousand pesos (Php 2,000.00); and any excess thereof shall be subject to the full payment of duty collectible pursuant to Sections 205 and 206 of the TCCP.

The term ”personal effects” embraces all articles of personally not merchandise and includes household effects.

Household effects, under this sub-section are limited to such as are similar to books, libraries, furniture, carpets, paintings, tablewares, and other usual household furnishings, including wearing apparel, articles of personal adornment (excluding luxury items), toilet articles, portable appliances and instruments and similar personal effects, excluding vehicles, watercraft, aircraft and animals.

3.7 Personal and household effects and vehicles accompanying travelers, tourists, foreign consultants and experts hired by, and/or rendering service to the government and their staff or personnel and families, accompanying or arrival within a reasonable time before or after their arrival in the Philippines, may be allowed entry free of duty upon presentation to the Collector of Customs of the following:

(1) Declarations under oath setting forth that:

(a) they are foreign consultants and experts hired by or rendering service to the government, together with their staff or personnel, as evidenced by contracts entered into by and between them and the government, or other documents of equal probative value;

(b) such personal household effects and vehicles are necessary and appropriate for the wear or use of such consultants and experts according to the nature of their occupation; and

(c) said articles are not intended for other persons or for barter, sale or hire.

The foregoing document need not be required in the case of tourists or travelers.

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(2) If the Collector so requires, a written commitment or a bond in an amount equal to one and one-half (1.5X) times the ascertained duties and taxes and other charges upon articles classified under this subsection, conditioned for the exportation thereof or payment of the corresponding duties, taxes and other charges within six (6) months from the date of acceptance of the import entry in the case of travelers and tourists.

In the case of foreign consultants and experts and their staff or personnel or families, exportation of said articles covered by the bond shall be made within six (6) months after the expiration of their term or contract.

In both instances, the Collector may extend the time for exportation or payment of duties, taxes and other charges for a term not exceeding six (6) months from the expiration of the original period

3.8 Professional instruments and implements, tools of trade, occupation or employment, wearing apparel, domestic animals, and personal and household effects, including those of the kind and class provided for under subsection “G” and belonging to persons coming to settle in the Philippines, may be allowed entry free of duty upon presentation to the Collector of Customs of the following:

(1) An affidavit showing:

(a) his name, address, position, rank or profession;

(b) that the article or articles are in quantities and of the class suitable to his profession, rank or position

(c) that they belong to him and were in his possession before his departure from his former place of abode and are brought into the Philippines for his own use and not for barter or sale or hire

(2) Evidence satisfactory to the Collector of Customs that:

(a) he is actually coming to settle in the Philippines;

(b) the articles are brought from his former place of abode;

(c) the change of his residence is bona fide and is supported by the necessary immigration papers evidencing his coming to the Philippines as a settler;

(d) that the privilege of free entry has never been previously granted to him;

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(e) the article or articles involved are not vehicles, vessels or aircraft, or machineries or other similar articles for use in manufacture.

Unaccompanied baggage belonging to such persons must be owned or were in his possession before his departure from his former place of abode.

For purposes of these regulations, the term “persons coming to settle” shall include missionaries, technicians, educators, officials, and other persons under contract or assigned to the Philippines for a specific or indefinite period of time.

3.9 (A) Articles used exclusively for public entertainment, and for display in public expositions, or for exhibition or competition for prizes and devices for projecting pictures and parts and appurtenances, thereof, may be allowed entry free of duty upon compliance with the requirements and/or conditions stated hereunder:

(1) The owner or manager shall submit his affidavit to the Collector stating the following:

(a) the purpose for which the shipment was imported;

(b) that they are not for sale, barter or hire; and

(c) the items and their corresponding values.

(2) That said articles must be identified, examined and appraised by the customs officials concerned and that a Certificate of Identification (CI) shall be issued therefore;

(3) A bond shall be filed in an amount equal to one and one-half times the ascertained duties, taxes and other charges thereon, conditioned for exportation thereof or payment of the corresponding duties, taxes and other charges within six (6) months from the date of the acceptance of the import entry.

However, the Collector may extend the time for exportation or payment of duties, taxes and other charges for a term not exceeding six (6) months from the expiration of the original period. (B) Technical and scientific films may be admitted entry free of duty upon presentation to the Collector of an affidavit by the owner or importer stating that:

(1) The films are purely technical or scientific in character;

(2) The same are being imported by a recognized technical, cultural and scientific institution; and that the same will not be shown or exhibited for profit.

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However, no motion pictures and their accessories shall be released from the Bureau without the corresponding permits issued by the Movie and Television Review and Classification Board (MTRCB).

If any of the said film is exhibited for profit, the proceeds therefrom shall be subject to confiscation, in addition to the penalties provided for in Section 3610 of the TCCP.

3.10 (A) Articles brought by foreign film producers directly and exclusively used for making or recording motion picture films on location in the Philippines may be allowed entry free of duty upon presentation to the Collector of Customs of the following:

(1) Affidavit by foreign film producers stating that the articles are not for sale, barter or hire but are directly and exclusively used for making or recording motion pictures on location in the Philippines and stating the itemized articles with their corresponding descriptions and values;

(2) Said articles should be identified, examined, and appraised by customs officials concerned and that a Certificate of Identification (CI) shall be issued therefore; and

(3) A bond shall be filed in an amount equal to one and one-half times (1.5X) the ascertained duties, taxes and other charges thereon, conditioned for exportation thereof or payment of the corresponding duties, taxes and other charges within six (6) months from the date of acceptance of the import entry.

However, the Collector may extend the period for another six (6) months from the expiration of the original period. (B) Photographic and cinematographic films, undeveloped, exposed outside of the Philippines by resident Filipino citizens or by producing companies of Philippine registry may be allowed entry free of duty upon presentation to the Collector of Customs of the following:

(1) Evidence showing that the owner is a resident Filipino citizen or a producing company of Philippine registry;(2) Affidavit by the owner stating that the negative films, undeveloped, are the same films which were brought outside of the Philippines where the same exposed by him for the production of filming of motion picture (specifying the title of the picture); that the principal actors and artists employed in the production of said picture are Filipinos (naming the principal actors and artists and their citizenships;

(3) Said films should be identified prior to their exportation from the Philippines and re-identified upon entry by customs officials concerned and that certificates of identification in both cases should be presented.

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As used in this subsection. The term “actors” and “artists” include the persons operating the photographic camera or other photographic and sound recording apparatus by which the film is made.

3.11 (A) Importations for the official use of foreign embassies, legations, and other agencies of foreign governments may be allowed entry free of duty): PROVIDED, That the countries accord like privilege to corresponding agencies of the Philippines.

For this purpose, a list of countries whose governments accords such reciprocal privileges shall be published from time to time.

Packages bearing the official seal of a foreign government with which the Philippines has diplomatic relations, accompanied by certificates under such seal to the effect that they contain only official communications or documents, may be admitted free of duty without customs examination.

(B) Articles imported for the personal or family use of the members and attaches of foreign embassies, legations, consular officers and other representative of foreign governments may be admitted free of duty, subject to the following conditions:

(1) Such privilege is accorded such officials under special agreements between the Philippines and the countries which they represent;

(2) The same privilege may be granted only upon specific instructions of the Secretary of Finance in each instance which will be issued only upon request of the Department of Foreign Affairs (DFA).

No entry is required at the port of delivery for shipments admitted free of duty under this subsection, but a proper notation as to the disposition thereof shall be made on or attached to the manifest.

Every proper means shall be afforded the foreign officials mentioned above to facilitate their passage through ports of the Philippines

3.12 Imported articles donated to or for the account of any duly registered relief organization, may be admitted free of duty, upon presentation to the Collector of the following:

(1) Evidence showing that the articles are covered by Deed of Donation duly authenticated and Deed of Acceptance duly executed by the donees;

(2) Evidence showing that the donee is a duly registered relief organization with the Securities and Exchange Commission (SEC) and Department of Social Welfare (NOTE: Now the Department of Social Welfare and Development (DSWD); and

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(3) That the articles donated are for free distribution among the needy, upon certification by the DSWD or the Department of Education, as the case may be.

3.13 Containers, holders and other similar receptacles of any material may be admitted free of duty subject to the following conditions:

(1) That they are not made of paper, paper board and textile fabrics;

(2) That they are of such character as to be readily identifiable and /or re-usable for shipment or transportation of goods;

(3) That they should be identified, examined and appraised by customs officials concerned, and that a Certificate of Identification (CI) shall be issued therefore;

(4) Affidavit of the importer setting forth that said container shall be exclusively used as containers of goods for exportation abroad, and stating the value thereof; and

(5) That a bond shall be filed in an amount equal to one and one-half (1.5X) times the ascertained duties, taxes and other charges thereon, conditioned for the exportation thereof of payment of the corresponding duties, taxes and other charges within six (6) months from the date of acceptance of the import entry.

3.14 Supplies which are necessary for the reasonable requirements of the vessels or aircrafts in her voyage or flight outside of the Philippines; articles transferred from a bonded warehouse to any collection district to any vessel or aircraft; or articles purchased from abroad, may be allowed entry free of duty, subject to the following conditions:

(1) That the vessels or aircrafts are engaged in foreign trade;

(2) That said articles are for the use or consumption of the passengers or crew on board as sea or air stores;

(3) That articles purchased abroad are for sale on board the vessels or aircrafts as saloon store or air store supplies; and

(4) That any surplus or excess of such vessel or aircraft supplies arriving from foreign ports or airports shall be dutiable.

3.15 Articles and salvage from vessels or parts of a foreign vessel or her equipment wrecked or abandoned in Philippine waters or elsewhere, may be allowed entry free of duty, if they are recovered after a period of two (2) years from the date of the filing of marine protest or at least at the time when the vessel was wrecked or abandoned.

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Articles and salvage recovered within the said period of two (2) years shall be dutiable.

Entry free of duty of said articles and salvage or equipment of vessel is clarified as follows:

(1) Foreign articles recovered from foreign vessels, wrecked or abandoned in Philippine or foreign waters after two (2) years from the date of filing of marine protests, or the time the vessel was wrecked are exempt from duty. If recovered within two (2) years, such articles are liable to payment of duty. Articles of Philippine production recovered from wrecked foreign vessels are exempt from duty regardless of the period of recovery thereof. Foreign merchandise recovered from wrecked Philippine vessels are subject to treatment similar to foreign merchandise recovered from wrecked foreign vessels; and

(2) Parts of Philippine vessel or her equipment whether wrecked in Philippine waters or elsewhere are exempt from duty regardless of the period of her recovery.

3.16 Coffins or urns containing human remains, bones or ashes, and used personal and household effects of deceased persons, may be allowed entry free of duty upon compliance with the following requirements:

(1) That the coffins or urns must contain the human remains, bones or ashes;

(4) That said personal and household effects are not merchandise or vehicles;

(5) That the value of said coffins or urns and used personal or household effects does not exceed ten thousand pesos (Php 10,000.00); and

(4) That the Collector shall require an affidavit of a person having knowledge of the facts, or otherwise satisfy himself that the used personal and household effects belonged to the deceased.

3.17 (A) Samples of the kind may be entered free of duty provided they are in such quantity and dimensions or construction as to render them unsalable or of no appreciable commercial value, and upon previous authorization by the Secretary of Finance.

Appreciable commercial value shall be determined by taking into considerations the kind and quantity of the samples and the status and circumstances of the importer. (B) Models may be allowed entry free of duty provided they are not adopted for practical use and upon previous authorization by the Secretary of Finance.

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Samples of the kind and models not adapted for practical use the importations of which are not previously authorized by the Secretary of Finance shall be levied the corresponding tariff duty.

(C) Samples of medicines may be allowed entry free of duty provided the following conditions are complied with:

(1) That they are properly marked “SAMPLE- SALE PUNISHABLE BY LAW”, and these words should be clearly and permanently printed, not merely pasted on the product label and/or box;

(2) That they are imported for the purpose of introducing a new article in the Philippine market;

(3) That they are imported only once in such quantity sufficient for the purpose;

(4) That they are imported by a person duly registered and identified to be engaged in that trade;

(5) That the importation of said sample of medicines was previously authorized by the Secretary of Finance and the Secretary of Health;

(6) That such samples are new medicines not available in the Philippines as may be determined by the Secretary of Health or his authorized representative;

(7) That they are not in commercial sizes nor shipped in bulk;

(8) That they should arrive with or after the commercial stock and they should not exceed 20% of the latter; and

(9) That the Collector of the Port of importation is furnished with a sworn statement containing samples and dates there are to be given.

Said samples of medicines the importation of which are not previously authorized by the Secretary of Finance and the Secretary of Health, or their authorized representatives and/or which are not properly marked in accordance with this subsection, shall be levied the corresponding tariff duty.

The Chief, Formal Entry Division, Chief, Informal Entry Division and Chief, Customs Postal Division in the Manila Customs house, and the Appraisers of every port of entry shall keep a record of importations of samples of medicine, listing said shipments by importers and indicating the kind of samples imported, dates of importation, quantity imported and values thereof. The record shall be referred to from time to time for the purpose of determining whether the privilege of free entry is being abused.

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(D) Commercial samples, except those that are not readily and easily identifiable (e.g., precious and semi-precious stones, cut or uncut, and jewelry set with precious or semi-precious stones), the value of any single importation of which does not exceed ten thousand pesos (Php10,000.00), may be allowed entry free of duty upon giving a bond in an amount equal to twice the ascertained duties, taxes and other charges thereon, conditioned for the exportation of said samples within six (6) months from the date of acceptance of the import entry, or in default thereof, the payment of the corresponding duties, taxes and other charges.

The bond shall, among others, state that the importer shall not dispose of any or all of the samples without authority from the Collector.

If the value of any single consignment of such commercial samples exceed ten thousand pesos (Php10,000.00), the importer thereof may select any portion of same not exceeding in value of ten thousand pesos (Php10,000.00) for entry under the provisions of this subsection, and the excess of the consignment may be entered in bond, or for consumption, as the importer may elect.

3.18 (A) Animals for scientific, experimental, zoological and national defense purposes, may be allowed entry free of duty subject to the following conditions:

(1) That they are not race horses; and

(2) That said animals are necessary for economic development as certified by the National Economic Development Authority (NEDA).

(B) Animals for breeding purposes may be allowed entry free of duty upon presentation to the Collector of Customs of the following:

(1) Certificate of pedigree duly authenticated by the Bureau of Animal Industry (BAI) showing that such animals are of a recognized breed and has been duly registered in the government book of record established for that breed;(2) Affidavit of the owner or importer that such animal is the identical animal described in said certificate of record of pedigree; and

(3) Certificate issued by the National Economic Development Authority (NEDA) that said animals are necessary for economic development.

(C) Plants for scientific, experimental, botanical and national defense purposes may be allowed entry free of duty subject to the condition that they are certified as necessary for economic development by the National Economic Development Authority (NEDA).

(D) Live trees, shoots, plants, moss and bulbs, tubers and seeds, for propagation purposes may be allowed entry free of duty subject to the following conditions:

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(1) They are imported by order of the Government or duly authorized institutions; and

(2) They are certified as necessary for economic development as certified by the National Economic Development Authority.

3.19 (A) Philosophical, historical, economic, scientific, technical and vocational books may be allowed entry free of duty subject to the following conditions:

(1) That their importations are approved by the Department of Education. (2) The imported books and/or publications are not for sale, barter or hire;

(3) Their quantities do not exceed ten (10) copies of any work when imported by an institution and two (2) copies of any one work when imported by an individual; and

(4) That they are not for barter, sale or hire.

(B) Bibles, missals, prayerbooks, Koran, ahadith and other religious books of similar nature and extracts therefrom, hymnal and hymns for religious uses, especially prepared books, music and other instrumental aids for the deaf, mute or blind and textbooks approved and prescribed by the Department of Education for use in the elementary schools in the Philippines provided they are not complete books in parts in periodical forms.

3.20 (A) Philippine articles previously exported from the Philippines may be allowed entry free of duty upon presentation to the Collector of Customs of the following:

(1) Evidence of previous exportation from the Philippines, e.g., export entry, Certificate of Identification (CI) and other proof of equal probative value;

(2) A written declaration made by foreign shipper before the Philippine Consul, or in ports where there is no Philippine Consult, before any person authorized to administer oaths stating that such Philippine articles were previously received by him from the Philippines; the reason for sending the same; and, whether or not said articles have been advanced in value or improved in condition by any process or manufacture; and that said articles are not for sale or hire;

(3) A sworn written declaration made by the importer stating the reason for sending said Philippine articles abroad; whether drawback or bounty has been allowed; and whether or not said articles have been advanced in value or improved in condition by any process of manufacture or other means abroad;

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(4) Certificate of Identification (CI) issued by the customs officials concerned upon exportation and re-importation of said articles wherein the value of said articles shall be indicated.

(B) Instruments and implements, tools of trade, machinery and equipment, may be allowed entry free of duty, subject to the following conditions:

(1) Statement under oath shall be submitted by the importer to the Collector of Customs stating the following:

(a) That he is a Filipino citizen;

(b) That he previously exported those articles and used by him abroad in the pursuit of his business, occupation or profession;

(c) That said articles are returned without having been advanced in value or improved in condition by any process of manufacture or other means abroad; and

(d) That no drawback or bounty has been allowed in said articles.

(2) Certificate of Identification issued by the customs officials concerned upon exportation and re-importation of said articles, wherein the values of said articles shall be indicated.

(C) Foreign articles previously imported when returned after having been exported may be allowed entry free of duty upon presentation to the Collector of Customs of the following:

(1) Affidavit of the importer or owner stating that said articles were exported and loaned for use temporarily abroad solely for exhibition, testing or experimentation, for scientific or educational purposes; and whether or not drawback or bounty has been allowed thereon;

(2) Certificate of Identification (CI) issued by the customs officials concerned upon exportation and re-importation of said articles.

(D) Foreign containers previously imported may be allowed entry free of duty upon presentation to the Collector of Customs of the following:

(1) Affidavit of the importer/owner or institutions stating that said containers have been used in packing exported Philippine articles; that they are returned to him empty; and the same are not for sale, barter or hire.

(2) Certificates of Identification (CI) issued by the customs officials concerned upon exportation and re-importation of said articles.

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However, any such article enumerated above in letters (a) to (d) upon which drawback has been allowed shall, upon re-importation thereof, be subject to a duty equal to the amount of such drawback or bounty.

3.21 Aircraft, equipment and machinery, spare parts commissary and catering supplies, aviation gas, fuel and oil, whether crude or refined, and such other articles or supplies may be allowed free of entry provided that the following conditions are complied with:

(1) It is imported by and for the use of scheduled airlines operating under Congressional franchise;

(2) It is not locally available in reasonable quantity, quality and price; and

(3) It is necessary or incidental for the proper operation of the scheduled airline importing the same;

3.22 Machineries, equipment, tools for production, plants to convert mineral ores into saleable form, spare parts, supplies, materials, accessories, explosives, chemicals, and transportation and communication facilities may be allowed free of entry subject to the following conditions:

(1) That such is imported by and for the use of new mines and old mines which resume operations, when certified to as such by the Secretary of Agriculture and Natural Resources upon recommendation of the Director of Mines, for a period ending five (5) years from the date of actual commercial production of saleable mineral products;

(2) That such articles are not locally available in reasonable quantity, quality and price;

(3) That such is necessary or incidental in the proper operation of the mine;(4) That such aircrafts imported by Agro-industrial companies to be used by them in their agriculture and industrial operations or activities, spare parts and accessories thereof

3.23 Spare parts of vessels or aircraft of foreign registry engaged in foreign trade may be allowed free of entry subject to the following conditions:

(1) It will be used exclusively as replacements or for the emergency repair thereof;

(2) It will be utilized to secure the safety, seaworthiness or airworthiness of the vessel or aircraft to enable it to continue its voyage or flight.

3.24 Articles of easy identification exported from the Philippines for repair and subsequently re-imported may be allowed free of entry provided that the following conditions are complied with:

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(1) It is not capable of being repaired locally; and

(2) The cost of repairs made to any such article shall pay the rate of duty of thirty percent ad valorem

3.25 Trailer Chassis may be allowed free of entry subject to the following conditions:

(1) That such is imported by shipping companies for their exclusive use in handling containerized cargo,

(2) It shall post a bond in an amount equal to one and one half times the ascertained duties, taxes and other charges due thereon to cover a period of one year from the date of acceptance of the entry, which period for meritorious reasons may, be extended by the Commissioner of Customs from year to year, subject to the following conditions:

(a) That they shall be properly identified and registered with the Land Transportation Commission;

(b) That they shall be subject to customs supervision fee to be fixed by the Collector of Customs and subject to the approval of the Commissioner of Customs;

(c) That they shall be deposited in the Customs zone when not in use; and

(d) That upon the expiration of the period prescribed above, duties and taxes shall be paid unless otherwise re-exported

3.26 Other persons/articles entitled to duty-free importation.

3.26.1 Any officer or employee of the Department of Foreign Affairs (DFA) including attaché, civil or military or member of his staff assigned to a Philippine diplomatic mission abroad by his Department (NOTE: Examples: Labor attaché, POEA officer assigned abroad or any similar officer or employee assigned to a Philippine Consular office abroad military personnel accorded assimilated diplomatic rank on duty abroad who must be returning from a regular assignment abroad, for reassignment to his home office, or who dies, resigns, or is retired from the service.

3.26.2 Articles that may imported duty and tax free.

3.26.2.1 Personal and household effects;

3.26.2.2 Including one (1) motor vehicle which must have been ordered or purchased prior to the receipt by the mission or consulate of his order of recall and must be registered in his name.

3.26.2.2.1 Subject to following conditions:

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a. The exemption shall apply only to the value of the motor car and to the aggregate assessed value of said personal and household effects;

b. The latter not to exceed thirty per cent (30%) of the total amount received by such officer or employee in salary and allowances during his latest assignment abroad but not to exceed four (4) years;

c. The exemption shall not be availed of oftener than once every four (4) years; and

d. The officer or employee concerned must have served abroad for not less than two (2) years.

CHAPTER 3 – PROTEST

Note: Reference: CMO 3-2002. In bold letters are proposed changes, additions and rationale.

Section 1 – Definition

1.1 Protest

A remedy available to an importer/cogsignee/owner to contest the decision or ruling of a Collector of Customs. Section 2 - Administrative Provisions

2.1 Protest and Payment Upon Protest in Civil Matters

When a ruling or decision of the Collector is made whereby liability for duties, taxes and other charges are determined, except the fixing of fines in seizure cases, the party adversely affected may protest such ruling or decision by presenting to the Collector at the time when payment of the amount claimed to be due the government is made, or within, (15) days thereafter, a written protest setting forth his objection to the ruling or decision in question with the reasons therefore.

No protest shall be considered unless payment of the amount due after final liquidation has first been made and the protest presented must accompanied by Customs Official Receipt (BCOR) evidencing payment of docket fee per schedule underTitle 2, Book 6 of this Code.

Note: Taken from Section 2308, TCCP

2.2Protest Exclusive Remedy in Protestable Cases

In all cases subject to protest, the interested party who desires to have the action of the Collector reviewed, shall make a protest, otherwise the

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action of the Collector shall be final and conclusive against him, except as to matters collectible for manifest error.

Note: Taken from Section 2309, TCCP

2.3Form and Scope of Protest

The protest shall indicate with reasonable precision the particular ground or grounds upon which the protesting party bases his claim for relief.

The scope of a protest shall be limited to the subject matter of a single adjustment or other independent transaction, but any number of issue may be raised in a protest with reference to the particular item or items constituting the subject matter.“Single adjustment” refers to the entire content of one liquidation, including all duties, fees, surcharges or fines incident thereto.Note: Taken from Section 2310, TCCP

2.4Samples to be Furnished by Protesting Parties

If the nature of the articles permit, importers filing protests involving question of fact must upon demand, supply the Collector with samples of the articles which are the subject matter of protest. Such samples shall be verified by the customs official who made the classification against which the protest are filed.

Note. Taken from Section 2311, TCCP


COLLECTOR OF CUSTOMS

3.1 Upon the final determination of the Customs Value and/or the tariff classification by the VCRC, the importer adversely affected may file a formal protest with the office of the Collector of Customs through the Law Division of the port concerned on its equivalent unit in order to dispute the assessment at the time when payment of the amount claimed to be due the government is made based on the amount after final liquidation and/or upon receipt of the notice of the decision of the VCRC, as the case may be, by the importer or within fifteen (15) days thereafter

An importer may however decide to pay under protest without availing of tentative release mechanism but the amount so paid must be based on final assessment computed on the bases of value and/or classification as determined by the collector of customs through the assessment division. the filing of protest must be made at the time of payment or within fifteen (15) days thereafter.

Note:

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a. Under CMO 37-2001 if an entry is hit by valuation screen tentative release is availing but cash bond (preferred guaranty) must be posted. If challenge is Appraiser initiated, tentative release is availing without posting bond. If the issue is tariff classification tentative release is availing subject to posting of cash bond.

VCRC has 20 working days to resolve cases before it from the date cases are calendared. Per CMO 7-2006, CVCRRC assumes jurisdiction of the case if VCRC fails to resolve the case within the period.

Under said CMO, If VCRC decides in favor of importer, decision is subject to automatic review by CVCRRC. If decision is adverse to importer he can appeal to CVCRRC.If importer loses appeal he may pay under protest. If CVCRRC in its automatic review authority upholds decision of VCRC decision is final. If however, it reverses VCRC decision the importer may pay under protest

b. CVCRRC is recommended to be abolished. It is chaired by the Commissioner and the CEO is the Dep. Com., AOCG. The protest mechanism under the TCCP may have been rendered nugatory because the Collector of Customs is not expected to reverse a decision rendered by the Commissioner of Customs through the Dep. Com., AOCG.

3.2The importer shall state in his protest the reasons therefore, and shall pay the corresponding docket the rate of which is (to be fixed by Customs Administrative Order No. 1-96A) .provided for under Title 2, Book 6 of this Code.

3.3When the protest is in proper form the Collector through the Law Division shall issue an order of hearing within fifteen (15) days from receipt of a valid protest. (Note: See section 2311, TCCP)

3.4The (Collector) Law Division shall form a panel of experts to hear the case. The panel shall be composed of a hearing office from the Law Division, a COO V and a COO III from the assessment unit.

3.5The (Collector) Law Division shall ensure that those involved in the initial assessment of the subject importation shall not be chosen as members of the above expert’s panel.

3.6The Panel shall hear all parties to the case, and for this purpose, it shall be authorized to issue the necessary notice of hearings, subpoenas and other interlocutory orders, and likewise to receive evidence from all parties.

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3.7The Panel shall, within thirty (30) days from the first hearing, terminate the proceedings and recommend through the Chief of the Law Division a decision to the Collector of Customs for approval.

3.8 If for meritorious reason, the protest cannot be resolved within 30 days, the panel shall request the Collector of Customs for additional time not exceeding thirty (30) days within which to resolve the case.

3.9The Collector of Customs shall render a final decision on the Protest within fifteen (15) days from receipt of the recommended decision and shall, thereupon, notify the importer in writing of such decision. A party adversely affected by the decision of the Collector may file a Motion for Reconsideration but such shall not roll the running of the fifteen (15) day appeal period to the Commissioner.

3.10 If the Collector renders a decision adverse to the government, such decision together with the entire records of the case shall be automatically elevated to the Commissioner of Customs for automatic review within five (5) days from the promulgation thereof.

3.11 On the other hand, if the importer is not satisfied with the Collector’s decision, he may, within fifteen (15) days after notification in writing by the Collector of his action or decision, file a notice of appeal with the Collector with a copy thereof furnished the Commissioner of Customs.

3.12 Thereupon, the Collector shall (immediately) within three (3) days from perfection of appeal transmit all the records of the protest together with the assailed decision, to the Commissioner, who shall approve, modify or reverse the action or decision of the Collector and take such steps and make such orders as may be necessary to give effect to his decision.

COMMISSIONER OF CUSTOMS

3.13 An appeal to the Commissioner of Customs thru: Appellate Division, Legal Service shall only be perfected upon: a) filing of notice of appeal; b) payment of appeal docket fee in accordance with the prescribed rates; and c) Memorandum of Appeal at the option of the appellant within fifteen (15) days from receipt of the notice of decision.

3.14 The appeal, regular or an automatic review shall be deliberated on by a permanent board of three (3) to be created by the Commissioner of Customs. The board shall be chaired by a lawyer from the Appellate Division, Legal Service and two (2) Valuation Experts from the Import and Assessment Service, as members who shall fill up the positions on a rotation basis.

3.15 The Board shall recommend a decision to the Commissioner through proper channels.

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3.16 The Commissioner shall render a decision within thirty (30) days from receipts of the records of the case from the Collector and shall notify the appellant or aggrieved party in writing.

3.17 If within thirty (30) days from receipt of the record of the case no decision by the Commissioner is rendered, it shall be deemed that the Commissioner upheld the Collector’s decision. If the decision is adverse to the government, the case shall likewise be elevated to the Secretary of Finance for automatic review.

Note: This provision of CMO 3-02 is suggested to be reworded as follows:

“In case of ordinary review, if within thirty (30) days from receipt of the record of the case no decision by the Commissioner is rendered, it shall be deemed that the Commissioner upheld the Collector’s decision.

IF ANY CASE INVOLVING THE ASSESSMENT OF DUTIES, THE COLLECTOR RENDERS A DECISION ADVERSE TO THE GOVERNMENT, SUCH DECISION SHALL BE AUTOMATICALLY ELEVATED TO, AND REVIEWED BY, THE COMMISSIONER; AND IF THE COLLECTOR'S DECISION WOULD BE AFFIRMED BY THE COMMISSIONER, SUCH DECISION SHALL HE AUTOMATICALLY ELEVATED TO, AND BE FINALLY REVIEWED BY, THE SECRETARY OF FINANCE: PROVIDED, HOWEVER, THAT IF WITHIN THIRTY (30) DAYS FROM RECEIPT OF THE RECORD OF THE CASE BY THE COMMISSIONER OR BY THE SECRETARY OF FINANCE, AS THE CASE MAY BE, NO DECISION IS RENDERED BY EITHER OF THEM, THE DECISION UNDER REVIEW SHALL BE FINAL AND EXECUTORY.”

In its present form CMO 3-02 may be contrary to TCCP. In capital letters are the provisions of Section 2315, TCCP.

3.18 If the Commissioner decides in favor of the government and no appeal is perfected within the reglementary period with the Court of Tax Appeals, the decision of the Commissioner shall become final and executor.

SECRETARY OF FINANCE

3.19 If the Commissioner renders a decision which is adverse to the government, such decision shall be elevated to the Secretary of Finance for automatic review and the records of proceedings shall accordingly be forwarded to the latter’s office within five (5) days from the promulgation of the decision.

3.20 As provided under Section 2315 of the TCCP, if within thirty (30) days from receipt of the record of the case by the Secretary of Finance, no decision is rendered, the decision under review shall be final and executory.

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3.21 The decision of the Secretary of Finance shall be final and executory, if no appeals is perfected within the period as herein provided.

COURT OF TAX APPEALS

3.22 If the importer is not satisfied by the decision of the Commissioner of Customs or the Secretary of Finance, as the case may be, he may file an appeal with the Court of Tax Appeals, within thirty (30) days from receipts of a notice of such decision.

Section 3 - Reportorial Requirements

3.1 District Collectors and the Deputy Commissioner, RCMG shall submit to the Commissioner every 16th and 1stday of the month a status report of protest cases before their offices.

CHAPTER 4 – SEIZURE AND FORFEITURE PROCEEDINGS

Note: The main source is CAO 9-93 with succeeding issuance incorporated. In bold letters are suggested additions, changes and rationale)


1.1 Seizure

The act of the Bureau of Customs of putting physical restraint on articles suspected of violating customs and tariff laws.1.2 Forfeiture Proceedings

An administrative proceedings where the owner/importer/owner of seized articles is given the opportunity to present evidence that the seized articles are not imported or attempted to be exported contrary to law.

Section 2 - Administrative Provisions

2.1 These Rules shall be liberally constructed to carry out the objectives of the Tariff and Customs Code of the Philippines as amended and to assist the parties in obtaining just and expeditious disposition of seizure cases. (Sec. 2, CAO 9-93) As taxation is the lifeblood of the economy and seizure and forfeiture proceedings is in the nature of an administrative proceeding against the res the Bureau of Customs is not strictly bound by rules of evidence in the Rules of Court.2.2Enforcement of Administrative Fine and Forfeiture

Administrative fines and forfeitures shall be enforced by the seizure of the vehicle, vessel or aircraft or other property subject to fine or

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forfeiture and by subsequent proceedings in conformity with the provisions of this Code. (Taken from Section 2533, TCCP)

2.3Burden of proof in Seizure and/or Forfeiture.

In all proceedings taken for the seizure and/or forfeiture of any vessel, vehicle, aircraft, beast or articles under the provisions of the tariff and customs laws, the burden of proof shall lie upon the claimant. (Taken from Sec. 2535, TCCP)

2.4Warrant of Seizure and Detention (WSD) to be Issued only Upon Probable Cause

That probable cause shall be first shown for the institution of such proceedings and that seizure and/or forfeiture was made under the circumstances and in the manner described in this Code. (See Sec. 2535, TCCP)

See ANNEX “A” for WSD Form.

2.5Determination of Probable Cause

The determination of probable cause is not subject of a formal hearing.

There is presumption of probable cause that any vehicle, vessel or aircraft, cargo, article and other object has violated customs and/or tariff laws upon verified information and/or personal knowledge of any customs official/employee having police authority under the following conditions that:

a. Any vehicle, vessel or aircraft, including cargo, is being used or was used unlawfully in the importation or exportation of articles or in conveying and/or transporting contraband or smuggled articles in commercial quantities into or from any Philippine port or place.

The mere carrying or holding on board of contraband or smuggled articles in commercial quantities by any vehicle, vessel or aircraft shall likewise give rise to the presumption of probable cause that there have been violation of customs or tariff laws: Provided, That the vessel, or aircraft or any other craft is not used as duly authorized common carrier and as such a carrier it is not chartered or leased;

b. Any vessel engaged in the coastwise has on board any article of foreign growth, produce, or manufacture in excess of the amount necessary for sea stores without such article having been properly entered or legally imported;

c. Any vessel or aircraft is being used or has been used to transfer cargo unladen contrary to law prior to the arrival of the importing vessel or aircraft at her port of destination;

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d. Any part of the cargo, stores or supplies of a vessel or aircraft arriving from a foreign port is being unladen or have been unladen before arrival at the vessel's or aircraft's port of destination and without authority from the customs officials; but there shall be no presumption of existence of violation of customs and tariff laws if such cargo, ship or aircraft stores and supplies is being unladen or have been unladen due to accident, stress of weather or other necessity and is subsequently approved by the Collector;

e. Any article is being or have been fraudulently concealed in or removed contrary to law from any public or private warehouse, container yard or container freight station under customs supervision;

f. Any article the importation or exportation of which is effected or attempted contrary to law, or any article of prohibited importation or exportation, and all other articles which, in the opinion of the Collector, have been used, are or were entered to be used as instruments in the importation or the exportation of the former;

g. Unmanifested article found on any vessel or aircraft if manifest therefore is required;

h. Sea stores or aircraft stores adjudged by the Collector to be excessive, when the duties assessed by the Collector thereon are not paid or secured forthwith upon assessment of the same;

i. Any package of imported article which is found by the examining official to contain any article not specified in the invoice or entry, including all other packages purportedly containing imported articles similar to those declared in the invoice or entry to be. the contents of the misdeclared package; Provided, That the Collector is of the opinion that the misdeclaration was contrary to law;

j. Boxes, cases, trunks, envelopes and other containers of whatever character used as receptacle or as device to conceal article which is itself subject to forfeiture under the tariff and customs laws or which is so designed as to conceal the character of such articles;

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

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or vehicle shall be sufficient cause for the outright seizure and confiscation of such beast or vehicle but the forfeiture shall not be effected if it is established that the owner of the means of conveyance used as aforesaid, is engaged as common carrier and not chartered or leased, or his agent in charge thereof at the time, has no knowledge of the unlawful act;

l. Any article sought to be imported or exported:

(1) Without going through a customhouse, whether the act was consummated, frustrated or attempted;

(2) By failure to mention to a customs official, articles found in the baggage of a person arriving from abroad;

(3) On the strength of a false declaration or affidavit executed by the owner, importer, exporter or consignee concerning the importation of such article;

(4) On the strength of a false invoice or other document executed by the owner, importer, exporter or consignee concerning the importation or exportation of such article; and

(5) Through any other practice or device contrary to law by means of which such articles was entered through a customhouse to the prejudice of the government.

(Note:

There is need to enumerate instances or define the nature of articles, vessels, aircrafts or any objects where existence of probable cause is presumed for purposes of issuance of WSD This is because forfeiture proceedings are delayed by requests for hearing for the determination of probable cause or motions for quashal of WSD by reason of its issuance before determination of probable cause.

Please note that above enumerations are articles subject to forfeiture under Section 2530, TCCP.)

2.6Criminal Proceedings May be Instituted Even During Pendency of Seizure and Forfeiture Proceedings.

The Bureau of Customs is not constrained by the pendency of the seizure and forfeiture proceedings in filing cases for the determination of probable cause with the Department of Justice. Utmost care must however be observed by the Bureau of Customs in filing criminal cases as probable cause in seizure and forfeiture cases are not always indicative of criminal liability of persons involved in such cases. Seizure and forfeiture proceedings are in the nature of proceedings

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against the res while criminal proceedings is a proceedings in personam where the evidence required is proof beyond reasonable doubt. “Whether criminal liability lurks on the strength of the provision of the Tariff and Customs Code adduced in the information can only be determined in a separate criminal action.” (Quote from Feeder Int’l case)

The filing of case before the DOJ shall be filed only with the approval of the Commissioner. (See Sec. 2401)

(Note: See Feeder International Line, Pte. Ltd. vs. Court of Appeals, 197 SCRA 848)

2.7When Decision of the Collector is Considered as Adverse to Government

A decision by the Collector of Customs on the merits of the case which fully or partially releases the shipment under seizure is an adverse decision subject to automatic review. (Sec. 11, CAO 9-93)

2.8Release of Seized Imported Articles or Articles Attempted to be Exported.

In any seizure proceeding, the release of imported articles or articles attempted to be exported shall not be allowed unless and until a decision of the Collector of Customs has been affirmed in writing by the Commissioner of Customs. (Sec. 12, CAO 9-93)


3.1 Issuance of Seizure and Detention.

Upon probable cause that the articles were imported or attempted to be exported contrary to Tariff and Customs Laws, the Collector of Customs shall issue a Warrant of Seizure and Detention in Customs Form W7651, hereto attached as Annex A.. (Sec. 6, CAO 9-93)

It is suggested to be changed to read:“Upon probable cause as determined under Section 1.5 of this Chapter, the Collector of Customs shall issue a WSD.”Note: This will broaden the subject matter of seizure. As it is under CAO 9-93 the same is limited to imported articles or attempted to be exported only.

3.2 Report of Seizure

When a seizure is made for any cause, the District Collector shall within five 5) working days make report to the Commissioner and Chairman, Commission on Audit through BOC resident COA. (See sec. 2302, TCCP)3.3 Notice

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3.3.1 It shall be the mandatory duty of the District Collector or the concerned Law Division to furnish/notify all parties affected by seizure proceedings, including, but not limited to, the government prosecutors, apprehending office/unit, claimants/importers/exporters/owners or agents (See Sec. 2303, TCCP), or intervenors, with notice of hearing, copies of all Decisions, Orders, interlocutory or otherwise, and other proceedings taken in the case. (Sec. II.1, CMO 12-08)

For this purposes an "agent" shall be deemed to include not only any agent in fact of the owner of the seized property but also any person having responsible possession of the property at the time of the seizure, if the owner or his agent in fact is unknown or cannot be reached. (See Sec. 2303, TCCP)Failure of the owner/importer/exporter or agent to appear in the scheduled hearing without any justifiable reason shall be construed as intention of not contesting the forfeiture of the seized articles. However, it shall not relieve the owner/importer/exporter or agent of any criminal liability arising from the importation or attempted exportation of the seized articles.

3.3.2 Such service/notice of Decisions, Orders or other proceedings shall preferably be forwarded to the Head of Office of the apprehending Office/Unit and Interested parties mentioned above, by personal service or, if not practicable, by registered mail with return card. Proof of such service of notice shall be attached to the records of the case and no case shall be forwarded / endorsed for action to the office of the Commissioner or the Deputy Commissioner, Revenue Collection Monitoring Group without such proof of service.(Sec. II.2, CMO 12-08 and Sec. I, CMO 29-97)

3.3.3 Notice to an unknown owner shall be effected by posting for fifteen (15) days such notice at the Bulletin Board of the Law Division of the Collection District concerned. Subject to instructions from the Commissioner, the District Collector notice by publication may be made. (See Sec. 2304)

3.3.4 If, within fifteen days after the notification prescribed under Section 2.3.3, no owner or agent can be found or appears before the Collector, the latter shall declare the property forfeited to the government to be sold at auction in accordance with law. (See Sec. 2306, TCCP) The Commissioner shall be informed of the forfeiture within five (5) days from the declaration of forfeiture.

3.4 Description, Appraisal, and Classification of Seized PropertyThe District Collector shall cause the appraisal and classification of the property seized within five (5) days from seizure based on the same, like or similar article at its wholesale value in the local market in the usual wholesale quantities in the ordinary course of trade by at least two (2) appraisers and approved by the Chief, Auction and Cargo Disposal Division (ACDD). (See Sec. 2305, TCCP) The same shall be submitted to the Commissioner within five (5) working days from actual seizure.

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3.5 Hearing

The Chief, Law Division in the notice to importer shall indicated therein the time and date of hearing which shall not be later than seven (7) days from receipt of such notice.3.6 Provisional remedy of release for legitimate use.

3.6.1 If the owner or importer desires to secure the release of the property under seizure for legitimate use the Collector of Customs shall surrender it upon filing of a sufficient cash bond in an amount to be fixed by the Collector of Customs subject to the following conditions:

a. That the amount of the cash bond shall not in any case be less than the appraised value of the article plus fine, expenses and costs that may be adjudged in the case. Appraised value shall mean the dutiable value of the article plus duties taxes and other customs charges;

b. That there is no prima facie evidence of fraud attendant to the importation;

c. That the importation of the article is not prohibited by law; and

d. That the release under cash bond has been approved by the Commissioner. (Sec. 4, CAO 9-93)

3.6.2 The release of the property under cash bond shall not relieve the owner or the importer of the goods from criminal liability arising from the importation/exportation of the shipment. (Sec. 5, CAO 9-93)

3.7 Forfeiture proceedings are summary in nature.

To protect interest of government and the owner of seized articles forfeiture proceedings are summary and nature and shall be terminated within thirty (30) days from the initial hearing.Failure on the part of the Collector to render a decision shall be construed that he rendered a decision adverse to government and the Commissioner through the appellate division, Legal Service, RCMG shall exercise his authority review authority. The Collector shall turn over the records of the case at the most two (2) working days from the lapse of the prescribed period.In the formal hearing, un-controverted facts shall be stipulated on and issues to be heard shall be agreed upon in order to abbreviate the proceedings. The determination shall be made whether or not there is a violation of law from the facts and evidence presented. The District Collector of Customs shall then render a decision. (Sec. 7, CAO 9-93)

3.8. Appeal

The person/party aggrieved by the decision or action of the Collector in any case of seizure may within fifteen (15) days after receipt of the notice in writing of the action or decision of the Collector of Customs, file a written

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notice to the Collector of Customs, copy furnished the Commissioner of Customs of his intention to appeal such action or decision of the Collector of Customs to the Commissioner of Customs.

Upon perfection of the appeal, the Collector of Customs shall immediately transmit all the records of the proceedings to the Commissioner of Customs Attention: Appellate Division, Legal Service, RCMG.

An appeal filed beyond fifteen days shall be deemed dismissed. The Commissioner of Customs shall approve, modify or reverse the Collector of Customs decision or action and take such steps and make appropriate orders as may be necessary to enforce or give effect to his decision. (Sec. 8, CAO 9-93)

The Appellate Division shall within thirty (30) days from receipt of the records of the case from the Collector make recommendation to the Commissioner who shall render a decision within fifteen (15) days from receipt of such recommendation. Failure on the part of the Commissioner to render a decision within the 15-day period shall be construed that he upheld the decision of the Collector under review.

3.9. Automatic review by the Commissioner on Action or Decision of the Collector Adverse to the Government

Action or decision of the Collector of Customs adverse to the government shall be automatically reviewed by the Commissioner, thru the Appellate Division, Legal Service, RCMG.(First para., Sec. 9, CAO 9-93) A decision by the Collector of Customs on the merits of the case as contemplated in Section 7 hereof which fully or partially releases the shipment under seizure is an adverse decision subject to automatic review. (Sec. 11, CAO 9-93)

The records of the case involving decision/action of the Collector of Customs, adverse to the government shall be elevated within five (5) days from the promulgation of the decision of the Collector of Customs. (Para. 2, Sec. 9, CAO 9-93)

From receipt of the records of the case, the Commissioner of Customs shall render a decision on the automatic review within thirty (30) days. (Para. 3, Sec. 9, CAO 9-93)

The decision of the Commissioner of Customs reversing the adverse decision of the Collector of Customs, on automatic review, shall, be final and executory. (Para. 4, Sec. 9, CAO 9-93)

3.10. Automatic Review by the Secretary of Finance

In case the Commissioner of Customs affirms the adverse decision of the Collector of Customs, the records of the proceedings shall be elevated to the Secretary of Finance within five (5)days from promulgation of the decision by the Commissioner of Customs.

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In case the Commissioner of Customs fails to render a decision on automatic review on the adverse decision of the Collector of Customs within thirty (30) days from receipt of the records the case shall be deemed automatically appealed to the Secretary of Finance. The records of the proceedings shall be elevated by the Commissioner of Customs to the Secretary of Finance within five (5) days after the lapse of thirty (30) day review period. If the adverse decision of the Collector of Customs is affirmed by the Secretary of Finance, the affirmed decision shall become final and executory.If the value of the imported article under seizure is P5,000,000,00 or more, the adverse decision of the Collector of Customs shall be deemed automatically appealed to the Secretary of Finance.

If within thirty (30) days from receipt of the records of the proceedings by the Secretary of Finance, no decision is rendered by him, the Commissioner's or the Collectors decision under appeal as the case may be, shall become final and executory. (Sec. 10, CAO 9-93)

CHAPTER 5 - SETTLEMENT BYPAYMENT OF FINE AND REDEMPTION OF FORFEITED

ARTICLES

Note: In bold letters are suggested changes to existing rules and regulations.Section 1 – Definition of Terms

1.1 Settlement by Payment of Fine

A remedy available to importers/consignees/owners where the release goods suspected of violating customs and tariff laws is allowed upon payment of fine subject to certain conditions imposed by law.

1.2 Redemption of Forfeited Article

A remedy available to importers/consignees/owners where they are allowed to purchase forfeited articles in an amount called the redemption value subject to certain conditions imposed by law.


2.1 Amount of Fine2.2 Redemption Value2.3 Settlement, Redemption or Quashal/Lifting of Warrant of Seizure and Detention (WSD) Subject to the Approval of the Commissioner.

All Orders/Decisions of the District Collector for release of the shipment/s by way of redemption, settlement, or quashal/lifting of the WSD, shall be subject to the approval of the Commissioner of Customs (Sec. III.2, CMO 20-08) upon the recommendation of Deputy Commissioner, RCMG.

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2.4 When Remedy of Settlement by Payment of Fine and Redemption of Forfeited Property Not Availing:

2.4.1 There is absence of fraud;

Cases which demonstrate the presence of fraud:

a. The use of forged or spurious documents;

b. The prima facie evidence of fraud under Section 2503;

c. The use of false machinations, misrepresentation, concealment of facts that resulted in loss of revenues reaching levels that is unconscionable and unbecoming of a law-abiding taxpayer and citizen;

d. Other cases similarly situated. (Sec. 1, CMO 87-92)

2.4.2 Articles imported are absolutely prohibited;

Those importations falling under pars.b,c,d,e,g,h,j, of Section 101, TCCP as amended. (Sec. 2, Ibid.)(Note: Suggested to read: See Section 3, Title 1 of this Book.

2.4.3 Release of the property would be contrary to law.

a. For all importations falling under Section 101, TCCP as amended not covered by Section 2 hereof;

b. When the seized shipment was consigned to fictitious consignees;

c. For importations where the consignee, importer or exporter has disclaimed ownership of the seized articles;

d. The commodity is explicitly disallowed for release under settlement/redemption by higher authorities or by regulation (Sec. 3, Ibid.)

2.5 When Remedies May be Availed.

2.5.1 Settlement by payment of fine

The remedy may only be availed of while the case is pending hearing before the District Collector or the Commissioner during appeal.

2.5.2 Redemption of forfeited property

2.5.2.1. The District Collector, after the shipment has been declared forfeited may accept offer of redemption and or within the period of appeal, may accept the offer of the owner, importer, exporter, consignee or his agent to redeem the article/s. (Sec. III.1, CMO 20-08)

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2.5.2.2 No redemption shall be allowed where the decision of forfeiture has become final and executory or where the importation is absolutely prohibited or where the release of the articles would be contrary to law. (Sec. III.3, CMO 20-08)


3.1 Schedule of fines (CAO 4-94)

To provide a uniform of fines in the settlement seizure cases pending hearing for purposes of consistency of action following schedule of fines is adopted:

3.1.1 For no-dollar importation of personally owned motor vehicles:

Commission of only one of the following:

a. Violation of any of the following requirementsFine

*Lack of BIS prior authority 20% *Lack of one year residency abroad *Lack of proof of income abroad*Lack of 6 months use/registration

b. Non-compliance of two (2) of above requirements 30%

c. Non-compliance of three (3) of above requirements 50%

d. Non-compliance of all the above-requirements 80%

e. Second violation of any of the above-requirements 30%

f. Third violation of any of the above-requirements no settlement by fine

Note:

1. It is suggested that the schedule of fines under CAO 4-94 for no-dollar importation of previously owned vehicles be repealed due to following:

Section 1, Part II of Guidelines to Implement EO 156 provides that: “Previously Owned Motor Vehicle (POV) refers to a vehicle with gross vehicle weight not exceeding three (3) tons, previously owned or registered under the name of a returning resident or immigrant at least six (6) months prior to the date of application for permit to import with the Bureau of Import Services (BIS).

a. Returning resident refers to a Filipino citizen who has stayed in a foreign country for at least one (1) year and

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which residency shall be accumulated within the three (3) year period immediately preceding the date of filing of the application to import POV.

b. Immigrant refers to a person issued any of the following types of who under the Philippine Immigration Act of 1940, as amended:

i. A Filipino citizen and a holder of 13G Visa under Section 13 Sub. G(13G); or

ii. A foreign national married to a Filipino and a holder of 13A Visa under Section 13, Sub. A (13a); or

iii. A Filipino citizen and holder of 47A issued to awardees of Special Government Projects (SPG) e.g. Philippine Retirement Authority and Balik-Scientist Program.

However, while Section 5.1, Article 2 of EO 156 provides that “all imported vehicles found to be in violation of any provision in this EO shall be subject to seizure without redemption by the BOC and will not be subject to registration by the LTO unless disposed of in accordance with the Tariff and Customs Code” and does not refer to settlement by payment of fine a person not qualified to import previously owned vehicle under the provisions of EO 156 brings in a vehicle contrary to law. Therefore settlement by payment of fine under the provisions of Section 2307, TCCP is not availing.

3.1.2 Violation of Section 2503, TCCP

3.1.2.1 Undervaluation, misdeclaration and misclassification with more than 30 % discrepancy in duty but prima facie evidence of fraud satisfactorily rebutted 60 %

3.1.2.2 Second violation- no settlement by fine

3.1.3 No prior authority to import regulated importations

3.1.3.1 First violation 30%

3.1.3.2 Second violation 80%

3.1.3.3 Third violation no settlement by fine. Note:

1. It may not be proper for the Bureau of Customs to have a schedule of fine in cases of failure to secure prior authority in case of regulated importations due to following reasons:

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a. BOC by the nature of its authority enforces rules and regulations of regulating agencies. If the rules and regulations of regulating agencies allow issuance of authority to import prior to or upon carrying vessel’s/aircraft’s arrival there is no legal basis for customs to impose penalty. A case in point is in the case of NTC which issues import clearance upon arrival of vessel/aircraft if an importer fails to secure prior import authority.

b. Customs laws includes all laws, rules and regulations of other agencies of government which pertain to importation and exportation and therefore BOC can be higher that its source of authority.

If the concern of BOC is that in some cases the regulating agencies issues import permit post facto contrary to its rules and regulations, BOC can enter into MOA with concerned agencies to prevent such occurrence.

3.2 Computation of Redemption Value

a. The redemption value shall be the domestic market value of forfeited articles using the following formula:

Domestic Market Value/Redemption Value = total Landed Cost + Applicable Tax + Nominal Allowance per Standard Trade Practice for profit and general expenses which shall not be lower than 10% mark-up from the total landed costs.

Total Landed Cost is the Sum of the Customs Value, Applicable Duty and Other Taxable Charges

Note:

1. For transparency and minimize discretion BOC should come up with a schedule of mark-up on per industry basis. On per industry or the nature of importation the range may be from low of 10% to 500% as for example processed food mark-up of which may range from 10% to 15% only against pharmaceutical and cosmetic products the mark-up of which is significantly higher.

b. In case of damage, obsolescence, spoilage, losses or depreciation as reflected in the inventory of the forfeited article/s subject of redemption, a Certification to this effect shall be issued by the assigned examiner and a standard/reasonable percentage may be allowed depending on the facts obtaining in each particular case. (Sec. IV, CMO 20-08)

3.3 Procedures in Settlement by Payment of Fine and Redemption

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3.3.1 Offers for settlement of fine and redemption shall be addressed to the District Collector and shall follow hereunder timelines:

a. Upon receipt of an Offer of Settlement or Redemption, the Collector concerned shall, within twenty-four (24) hours refer the same, together with the pertinent records, to the Port Division/Section concerned for assessment of the settlement or redemption value, as the case may be.

b. The assigned Port Division/Section shall, within five (5) days from receipt of the Order, submit its recommendation to the Collector of Customs, who shall decide whether to accept or deny the offer within five (5) days from receipt thereof.

c. In case of perishable goods, the assigned Port Division/Section shall within forty-eight (48) hours from receipt submit its recommendations and findings to the, Collector, who shall within the same period decide whether settlement or redemption is proper.

d. In case the Collector of Customs accepts the Offer of Settlement or Redemption, he/she shall immediately cause the transmittal of the records of the seizure proceedings together with his/her decision, to the Office of the Commissioner for the Commissioner's consideration and approval. (CMO 9-2005)

3.3.2 The computation and/or determination of the fine imposable on the seized goods in the settlement of any seizure cases and the redemption value of the forfeited goods pursuant to Section 2307 of the TCCP shall be determined by the following:

3.3.2.1 Initially, by the District Collector who shall do so through the Auction and Cargo Disposal Division (ACDD) or appropriate assessment office or equivalent unit of the port concerned and who shall recommend the same for approval by the Commissioner of Customs;

3.3.2.2 During the review by the Commissioner’s Office of the favorable recommendation of the District Collector for settlement/redemption or while the seizure case is pending appeal at the Commissioner’s Office, by the Valuation and Classification Division (VCD), duly approved by the Director of the Import and Assessment Service (IAS) and duly noted by the Deputy Commissioner of the Assessment and Operation Coordinating group (AOCG);

3.3.2.3 The appropriate offices shall consult the Customs valuation databases, and shall also comply with (the relevant provisions of Customs Memorandum Order (CMO) No. 34-2002 and CMO No. 9-2005) appropriate timelines in the computation and/or determination of the fine imposable on the seized goods in the settlement of any seizure cases and the redemption value of the forfeited goods;

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3.3.2.4 The case folder for the seizure case subject of a favorable recommendation by the District Collector for settlement or redemption shall be received by the Legal Service and evaluate the recommendation of the Collector and if found in order which shall immediately transmit the same to the VCD for review of the recommended fine or redemption value;

2.3.2.5 The VCD shall either concur with the recommended fine or redemption value or recommend for a higher computation fine or redemption value, with supporting basis for such action.

3.3.2.5.1 The VCD shall submit its recommendation to the IAS Director for approval, who in turn shall submit the same to the Deputy Commissioner for AOCG for due notation. The latter shall return the case folder to the Legal Service for the proper disposition of the case.

3.3.2.6 The Director of the Legal Service shall prepare the Disposition Form of the case containing the recommendation and with the attached appropriate document for clearance and counter-signature by the Deputy Commissioner for Revenue Collection Monitoring Group (RCMG) and finally for approval and signature by the Commissioner.

3.3.2.7 While the seizure case is pending appeal from a decision of forfeiture by the District Collector, it is possible that settlement or redemption may be allowed. If this happens, the Legal Service or the Commissioner’s Office shall refer the case folder to the VCD for computation and/or determination of the fine or redemption value. The VCD shall submit its recommendation to the IAS Director for approval, who in turn shall submit the same to the Deputy Commissioner for AOCG for due notation. The latter shall return the case folder to the Legal Service or the Commissioner’s Office for the proper disposition of the case. (CMO 26-09)

SECTION 4. REPORTORIAL REQUIREMENTS

In order to expedite approval of requests and offers of settlement by payment of fine and redemption following reports shall be made:

4.1. District Collectors shall submit to the Commissioner copy: Deputy Commissioner, RCMG every Tuesday of status report of all requests received for settlement by payment of fine and offers of redemption received for the period Monday to Friday of preceding week.

4.2 The Deputy Commissioner, RCMG shall submit to the Commissioner status report every Tuesday of all pending cases involving settlement by payment of fine and redemption.

CHAPTER 6 – AUTOMATIC FORFEITURE

Note: Existing regulations on automatic forfeiture are CAO 6-93 and CMO 48-93. In bold letters are proposed additions, changes and

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rationale. Included in this proposed regulation are abandoned articles in the light of Chevron case – GR 178759 dated 11 Aug. 2008- where the Supreme Court stated that “the term “ipso facto” is defined as “by the very act itself” or “by mere act.” Probably a close translation of the Latin term would be “by the fact itself.” Thus, there was no need for any affirmative act on the part of the government with respect to the abandoned imported articles since the law itself provides that the abandoned article shall “ipso facto” be deemed the property of the government. Ownership over the abandoned importation was transferred to the government by operation of law under Section 1802 of the TCC, as amended by RA 7651”

Please note of the provision under RKC GA Standard 3.45

3.45. Transitional Standard

“When the Customs sell goods which have not been declared within the time allowed or could not be released although no offence has been discovered, the proceeds of the sale, after deduction of any duties and taxes and all other charges and expenses incurred, shall be made over to those persons entitled to receive them or, when this is not possible, held at their disposal for a specified period.”

The Philippines has 60 months from the deposit of the instrument of accession to WCO in June 2010 to comply with this transitional standard. Also included in this proposed regulation are articles in CBWs used as storage facilities which have not withdrawn within the prescribed storage period. As provided for in Section 3.5.3, CAO 1-2009 “articles not withdrawn at the expiration of the prescribed period shall he deemed abandoned and ipso facto forfeited in favor of Government: to be sold at public auction by the District Collector of Customs pursuant to Section 1908, of the TCCP.”


1.1 Automatic Forfeiture

It is a process where certain articles are forfeited in favor of the government without undergoing any formal forfeiture proceedings.

1.2 Misdeclared Article

Misdeclared article shall mean that the article(s) as found upon examination does not tally with the details of the article(s) as declared in the entry, which details identify the declared articles in the entry both for tariff classification and statistical purposes and if the misdeclared article(s) found upon examination can be specifically classified in the Tariff and Customs Code, such misdeclared article(s) does not fall under the same tariff description in the terms of the headings and subheadings in the Code as those of the articles

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declared in the entry. (Sec. IIa, CAO 6-93 which implements Section 2503 as amended by RA 7651)

1.3 Undeclared Article

Refers to an article not, specified in the entry or invoice. (Sec. IIb, CAO 6-93)

1.4 Abandonment of an Article

Refers to a situation arising from any of the following circumstances:

a. where the consignee, importer or owner who expressly signifies in writing to the Collector his intention to abandon such article; or

b. when the consignee, importer or owner of any imported article or interested party after due notice, fails to file an entry within thirty (30) days, which shall not be extendible, from the date of discharge of the last package from the vessel or aircraft; or

c. having filed such entry fails to claim his importation within fifteen (15) days, which shall not likewise be extendible, from the date of posting of the notice to claim such importation; (See Section 1801, TCCP) or

d. If no payment confirmation is received within fifteen (15) calendar days from the date of receipt by the Authorized Agent Bank (AAB) of the final payment instruction, then the importer shall be deemed to have failed to claim his importation after filing the entry. (Sec. 4.2.5, CAO 10-08)

1.5 Overstaying ArticleRefers to a article not withdrawn from customs bonded warehouse

(CBW) authorized to store imported articles at the expiration of the prescribed storage period of one (1) year from time of arrival at the port of entry. (Adopted Sec. 3.5.3, CAO 1-09)


2.1 Articles Subject to Automatic Forfeiture

2.1.1 Misdeclared Articles2.1.2 Undeclared Articles2.1.3 Abandoned Articles2.1.4 Overstaying Articles

2.2 Due Notice Before an Article May be Considered as Abandoned

2.2 Due notice to importer/consignees/owners shall take in the form of e-mail which shall be sent by e2m Customs System.


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3.1 Procedures in Forfeiting Misdeclared and Undeclared Articles

3.1.1 Having found upon examination the existence of misdeclared/ undeclared articles as above described, the Examiner/Appraiser shall forthwith inform the Collector of Customs of such fact in a report clearly identifying the articles found as misdeclared or undeclared. (Sec. II, CMO 48-93)

Note: Suggested to read: “Having found upon examination the existence of misdeclared/undeclared articles, the concerned Customs Operations Officer shall indicate the same in the working copy of the IEIRD/SAD or transit declaration. He shall inform the Collector of Customs through the Chief, Formal Entry Division within the day of such discovery through a memorandum copy furnish the Commissioner. Failure on the part of the concerned COO of such discovery within the day shall subject him to disciplinary action.”

3.1.2 After receipt of such report, the Collector of Customs if in concurrence thereto, shall direct the Auction and Cargo Disposal Division or its equivalent unit in other ports to dispose the misdeclared or undeclared articles pursuant to law. (Sec. III, CMO 48-93)

Note: Suggested to read: “After receipt of such report, the Collector if in concurrence thereto, shall direct the ACDD to conduct inventory and dispose of the misdeclared or undeclared articles within thirty (30) days. The inventory taking shall be conducted within two (2) days from receipt of instructions from the Collector.”

3.1.3 If the Collector of Customs is of the opinion that the declared articles in a shipment, where misdeclared or undeclared articles/items were found, are or were entered and have been used as instruments in the importations of the misdeclared or undeclared article(s), then he shall commence seizure proceedings on the declared articles under Section 2530(f) of the Tariff and Customs Code. (Sec. II, CMO 48-93)

Note: Suggested to read: “The Collector of Customs will determine within five (5) days from receipt of report from the concerned COO through Chief, FED whether the declared articles in a shipment, where misdeclared or undeclared articles/items were found, are or were entered and have been used as instruments in the importation of the misdeclared or undeclared article(s). If so he shall immediately commence seizure proceedings on the declared articles under Section 2530(f) of the TCCP, as amended.”

3.2 Procedures in Giving Notice to Importers/Consignees/Owners of Imported Articles

3.2.1 Notice to importer/consignee/owner

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Upon receipt of the Inward Foreign Manifest (IFM), in the case of shipping lines or airlines or Consolidated Cargo Manifest (CCM) in the case of international freight forwarders, e2m Customs System shall automatically generate an e-mail to the consignee, owner or importer using the e-mail address provided by the importer/owner in the CPRS stating therein:

“The shipping line/airline and/or freight forwarder has transmitted to us the manifest covering your shipment per S/S ____________ or via ____________ which is expected to arrive within the day of receipt of this notice. Pursuant to Section 1801(b) of the Tariff and Customs Code of the Philippines, as amended you are given thirty (30) days to file the covering import entry, which shall not be extendible, from the date of discharge of the last package from the vessel or aircraft. Failure to file the import entry within the prescribed period shall be construed that you have abandoned your shipment. Under Section 1802 of the same Code “an abandoned article shall ipso facto be deemed the property of the government and shall be disposed of in accordance with the provisions of this Code.”

3.2.2 e2m Customs System to block entry lodging after the lapse of the prescribed period for entry lodging

e2m Customs System automatically blocks the import entry lodging against a manifest with which no corresponding import entry was lodged.

3.3 Responsibility of Warehouseman in Monitoring Overstaying Articles

3.3.1 In the meantime that the Automated Bonds Management System (ABMS) is not yet operational, it shall be the responsibility of the Warehouseman assigned to CBW authorized to store imported articles to monitor the existence of overstaying articles on their warehouse of responsibility.

Section 4 – Reportorial Requirements

4.1 Report on Misdeclared and Undeclared Articles

4.1.1 The Collector of Customs shall submit a report to the Commissioner every 17th and 3rd of the month of articles found by concerned COO as misdeclared and undeclared.

4.1.2 The Chief, ACDD shall submit a report to the Collector every 17th

and 3rd of the month of misdeclared and undeclared articles disposed through auction or other modes of disposing articles in customs custody.

4.2 Report on Abandoned Articles

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4.2.1 MISTG shall generate a report of abandoned articles for every Collection District every Monday of the month and submit the same to the District Collectors copy furnish the Commissioner and Resident COA.

4.3 Report on Overstaying Articles

4.3.1 Warehousemen assigned to CBW used for storage purposes shall submit a report every 17th and 3rd of the month to the Chief, Public and Private Bonded Warehouse copy furnished the District Collector and Chief, ACDD of all articles overstaying articles in his warehouse of responsibility.

4.3.2 When ABMS is already operational MISTG shall electronically generate a report every 5th of the month of overstaying articles for the preceding month for each CBW and submit the same Chief, CBW Operating Divisions copy furnish the District Collectors, Commissioner and Resident COA.

CHAPTER 7 – REFUND SYSTEM

Section 1 – Refund of Unutilized Advance Deposits of Customs Duties with Authorized Agent Banks (Ref: CAO 5-92 and CAO 10-2008)


1.1.1 Totally Unutilized Letter of Credit A Letter of Credit which has been certified by the AAB as having been cancelled in its books because there are no corresponding importation made whatsoever and no outward remittance of foreign exchange. 1.1.2 Partially Unutilized Letter of Credit

A Letter of Credit with either a total or partial remittance of foreign exchange.


1.2.1 Period by which to file claim for refund

The importer/claimant shall have a period of one (1) year from the date the totally or partially unutilized L/C is cancelled by the AAB. The same period applies to file claim refund where customs duty deposit has been made and confirmed under the PASS% but for valid reason the L/C applied for has not been opened.

1.3 Refund Procedures (Note: A proposal since the procedures under CAO 5-92 is for manual IED.)

1.3.1 For totally unutilized L/C and partially unutilized L/C, application for refunds shall be made in a standard form, marked ANNEX “A”, addressed to

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Collection Service Attention: Revenue Accounting Division (RAD) supported by following documents:

a. Copy of electronic IED;b. Copy of a duly received request for L/C cancellation by the L/C

opening bank; c. Certification from L/C opening bank that it has given due course to

the request for cancellation by the accountee and has submitted an L/C application message to customs through PASS5 for the covering IED to be cancelled;

d. Clearance from Collection Service.

1.3.2 In the instance that customs duty deposit has been made and confirmed by PASS5 but L/C not opened for valid reasons a letter request for IED cancellation addressed to Collection Service Attention: Revenue Accounting Division. Clearance from Collection Service must support the request letter.

1.3.3 Procedures at Bureau of Customs

1.3.3.1 RRD performs following:

a. Checks with PASS5 and compares whether the amount requested for refund equals the amount in IED that has not been unutlized or balance therein in case of partially utilized IED. Performs operation in PASS5 to block the utilization of IED for payment of duties and taxes.

b. Assigns docket number, indicates the date of receipt thereof, initials the same and returns a copy of application to claimant. Claims not supported by all requirements are returned to the claimant.

c. Transmits the entire claim folder Director, Collection Service with Disposition Form for approval/disapproval of the Commissioner of Customs/Tax Credit Committee (Attn: Tax Credit Secretariat).

1.3.3.2 In case the Commissioner of Customs/Tax Credit Committee approves the claim for refund, the same is forwarded to the Accounting Division, Financial Management Office, for preparation of the following:

a. Journal Voucher for the Commissioner's approval;b. Tax Credit Certificate (TCC) and Accounting’s Disposition Form

for the approval/signature of the Commissioner of Customs; c. The claim folder with signed TCC is returned to the Accounting

Division for final recording and release to claimant or its authorized representative;

d. The Accounting Division must keep a record of all issuances to avoid double refunds or multiple use of proof of payment and import entry declaration (IED) for refund.

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1.4 Timeline to Process Refund

Claims for refund under this Section shall have a processing time schedule of ten (10) working days at the Offices under the District Collector of Customs and another ten (10) working days in offices under the Commissioner of Customs.

1.5 Clearance

Clearances issued by Collection Service must have control numbers for this purpose and shall be valid for a period of three (3) months. The Deputy Collector for Assessment of the Port concerned shall be furnished with a copy of the said clearance.

SECTION 2 – REFUND OF EXCESS PAYMENTS

2.1 Period to File Claim for Refund

The importer/claimant shall have a period of one (1) year from the date of payment of the duties and taxes sought to be refunded.

2.2 Refund Procedures

2.2.1 Application for refund shall be made in a Standard Application form (Annex "B") to be filed by the claimant or authorized representatives at the Office of the District Collector of the concerned Port. The application shall be supported by the following documents:

a. Original copy of the Import Entry Internal Revenue Declaration (IEIRD);

b. Original copy of the Bill of Lading, Commercial Invoice and Packing List;

c. Clearance from LBD and Collection Service.

2.2.2 The Office of the District Collector, receives the application, checks the same for completeness, gives the application its docket number, indicates the date of receipt thereof, initials the same, returns a copy of application to claimant and forwards the claim folder to RAD for verification of payments. Claims not supported by all requirements are returned to the claimant.

2.2.3 The RAD prepares certification of payment remittance and forwards the claim folder to the Liquidation and Billing Division (LBD) for preparation of Statement of Refund which in turn shall forward all pertinent documents to the District Collector for his approval/signature.

2.2.4 The District Collector transmits the entire docket folder to Ruling and Research Division (RRD) for review and preparation of the necessary Disposition Form for approval/disapproval of the Commissioner of Customs/Tax Credit Committee (Attn: Tax Credit Secretariat).

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2.2.5 In case the Commissioner of Customs/Tax Credit Committee approves the claim for refund, the same is forwarded to the Accounting Division, Financial Management Office, for preparation of the following:

a. Journal Voucher for the Commissioner's approval;b. Tax Credit Certificate (TCC) and Accounting’s Disposition Form for the approval/signature of the Commissioner of Customs.

2.2.6 The claim folder with signed TCC is returned to the Accounting Division for final recording and release to claimant or its authorized representative.

2.2.7 The Accounting Division must keep a record of all issuances to avoid double refunds or multiple use of proof of payment for refund.

Section 3 – Refund or Release of Cash Bond

3.1 These procedures cover refunds or releases of cash bonds the requests for such are made more than one (1) year from posting.

3.2 Procedure

3.2.1 Application for Refund shall be made in a Standard Application form (Annex "C") to be filed by the claimant or authorized representatives at the Office of the District Collector of the concerned Port. The application shall be supported by the following documents:

a. Original copy of the Import Entry Internal Revenue Declaration (IEIRD);

b. Original copy of the Bill of Lading, Commercial Invoice and Packing List;

c. Clearance from LBD and Collection Service;d. Indorsement from the Department of Finance, together with all of its

attachments, relative to the approval of the conditionally-free importation.

3.2.2 The Office of the District Collector, receives the application, checks the same for completeness, gives the application its docket number, indicates the date of receipt thereof, initials the same, returns a copy of application to claimant and forwards the claim folder to RAD for verification of payments. Claims not supported by all requirements are returned to the claimant.

3.2.3 The RAD prepares certification of payment remittance and forwards the claim folder to the Liquidation and Billing Division (LBD) for preparation of Statement of Refund which in turn shall forward all pertinent documents to the District Collector for his approval/signature.

3.2.4 The District Collector transmits the entire claim folder to Ruling and Research Division (RRD) for review and preparation of the necessary Disposition Form for approval/disapproval of the Commissioner of Customs/Tax Credit Committee (Attn: Tax Credit Secretariat).

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3.2.5 In case the Commissioner of Customs/Tax Credit Committee approves the claim for refund, the same is forwarded to the Accounting Division, Financial Management Office, for preparation of the following:

a. Journal Voucher for the Commissioner's approval;b. Tax Credit Certificate (TCC) and Accounting’s Disposition Form for

the approval/signature of the Commissioner of Customs.

3.2.6 The claim folder with signed TCC is returned to the Accounting Division for final recording and release to claimant or its authorized representative.

3.2.7 The Accounting Division must keep a record of all issuances to avoid double refunds or multiple use of proof of payment for refund.

CHAPTER 8 – SURCHARGES

Schedule of Surcharges

1. Failure to Declare Baggage

Whenever any dutiable article is found in the baggage of any person arriving within the Philippines which is not included in the baggage declaration, such article shall be seized and the person in whose baggage it is found may obtain release of such article, if not imported contrary to any law upon payment of treble the appraised value of such article plus all duties, taxes and other charges due thereon unless it shall be established to the satisfaction of the Collector that the failure to mention or declare said dutiable article was without fraud.

Nothing in this section shall preclude the bringing of criminal action against the offender. (Sec. 2502, TCCP)

2. Failure to Pay Liquidated Charges

For failure to pay the amount of liquidated duties, taxes and other charges of a liquidation within ten (10) working days after the notice of liquidation shall have been publicly posted in the customhouse, a surcharge of ten per cent (10%) of the total amount or balance found upon liquidation shall be added thereto and collected therewith, which surcharge shall be increased to twenty-five per cent (25%) if the delinquency lasts for more than one year. (Sec. 2501, TCCP)

3. Failure or Refusal of Party to Give Evidence or Submit Documents for Examination

When the owner, importer or consignee of any imported articles, or the agent of either, fails, or refuses, upon lawful demand in writing by any customs official to appear, make oath or submit himself to examination , or to answer

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any material question or refuses to produce records, accounts or invoices in his possession pertaining to the value, classification or disposition of the article in question and deemed material in appraising the same, the Collector shall assess a surcharge of twenty per column ad valorem on the articles which is the subject of the importation. (Sec. 2504, TCCP)

4. Unauthorized Withdrawal of Imported Articles from Bonded Warehouse

Upon any unauthorized withdrawal of imported articles store in a custom bonded warehouse, a surcharge of fifty per cent (50%) of duties, taxes, custom fees and charges, found to be due and unpaid, shall be added thereto and collected. The surcharge shall be increased by twenty-five per cent (25%) annually of the unpaid taxes if the delinquency lasts for more than one year. (Sec. 2501-A, TCCP)

5. Undervaluation, Misclassification and Misdeclaration in Weight, Measurement or Quantity (Source: CAO 10-93)


5.1.1 Undervaluation

Undervaluation is the term used when the dutiable value of the imported article that shall be so declared that the duties, based on the declaration of the importer/broker on the face of the entry, would be less by at least ten percent (10%) than should be legally collected.

5.1.2 MisclassificationMisclassification is the term used when the imported article so described and entered that the duties based on the importer’s/broker’s description on the face of the entry, would be less by at least ten per cent (10%) than should be legally collected.

5.1.3 Misdeclaration in Weight, Measurement or Quantity.

There is misdeclaration in weight, measurement or quantity when the dutiable weight, measurement or quantity of imported article is found upon examination to exceed by ten percent (10 %) or more than the entered weight, measurement or quantity.


5.2.1 Formula to determine percentage of difference

5.2.1.1 Formula to determine the percentage of undervaluationn

The percentage difference in undervaluation is determined by dividing the difference between the duty as found and the duty as declared, by the duty as found.

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5.2.1.2 Formula to determine percentage of misclassification

The percentage difference in misclassification shall be determined by dividing the difference between the duty as found and the duty as declared by the duty as found. 5.2.1.3 Formula to determine percentage of is misdeclaration

The percentage difference in misdeclaration shall be determined by dividing the difference between the weight, measurement or quantity as found and the weight, measurement or quantity as declared in entry, by the weight, measurement or quantity as declared.

5.2.2 Amount of surcharge

5.2.2.1 For misclassification

When the percentage difference in misclassification is ten per cent (10%) or more but not exceeding thirty per cent (30%), the amount of surcharge shall be as follows:

a. When the percentage difference is ten per cent (10%) or more but not exceeding twenty per cent (20%), a one time surcharge of the difference is customs duty shall be imposed.

b. when the percentage difference is twenty per cent (20%) or more but not exceeding thirty per cent (30%), a two times surcharge of the difference in customs duty shall be imposed.

Note: There is overlap between “a” and “b” in the case of percentage difference is 20%. It is suggested that “b” be rephrased to read “when the percentage difference is more than 20 per cent (20%)…”

5.2.2.2 For undervaluation, misdeclaration in weight, measurement or quantity

When the percentage difference in undervaluation/misdeclaration in weight, measurement or quantity is ten percent (10 %) or more, but not exceeding thirty percent (30 %), the amount of surcharge shall be as follows:

a. When the percentage difference is ten percent (10 %) or more but, not exceeding twenty percent (20 %), a one time surcharge of the difference in customs duty shall be imposed.

b. When the percentage difference is twenty percent (20 %) or more but not exceeding thirty percent (30 %) a two times surcharge of the difference in customs duty shall be imposed.

Note: Same comment as in Sec. 5.2.2.1

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When the percentage difference exceeds thirty percent (30 %), the existence of fraud is presumed and the imported articles, shall be subject to seizure proceedings under Section 2530 of the Tariff and customs Code, as amended.

5.2.3 Non-imposition of surcharge5.2.3.1 For undervaluation

When the entered dutiable value is based on value information approved by the Commissioner of Customs or by the Port Collector of Customs or their duly authorized representatives.

5.3.2 For misclassification

a. When the imported article is described in sufficient detail to enable the same to be identified for tariff classification, provided that if specifically classified in the Tariff Code, it should also be described in tariff description or terms of the heading and sub-heading of the TCCP.

b. When the declared classification is based on official rulings of the Department of Finance, Bureau of Customs, National Economic Development Authority, Tariff Commission, Board of Investment, Central Bank and related offices.

c. When the entered tariff classification is based on an advance information on classification issued pursuant to Section 1313-a of the TCCP.

5.3.3 Errors in valuation, tariff classification, return of weight, quantity or measurement

When the entered dutiable value, tariff classification, weight, measurement or quantity is attended by errors as defined under Section 1707, in relation to Section 1407-a of the TCCP.

5.3 Imposition of Surcharge is MandatoryThe imposition of surcharge under Section 2503 of the Tariff and Customs Code, as amended, is mandatory. Surcharge properly imposed cannot be waived. Good faith on the part of the importer is not a valid defense. 5.4 Approval of the Commissioner

Any situation relative to the imposition or non-imposition of surcharge not covered by the foregoing guidelines shall be resolved on a case-b-case basis by the Collector of Customs concerned with notice to the Commissioner of Customs in accordance with Section 3501 of the TCCP.

CHAPTER 9 – PENALTIES

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Schedule of Penalties Which Otherwise are Not Included in the Body of this Code.

1 Affixing Seals

Any person who, without authority affixes or attaches a customs seal, fastening, or mark or any seal, fastening or mark purporting to be a customs seal, fastening or mark to any vessel, vehicle on land, sea or air, warehouse or package shall be punished with a fine of not more than twenty thousand pesos or imprisonment of not more than five years, or both. If the offender is an alien, he shall be deported after serving the sentence; and if he is a public official or employee, he shall suffer an additional penalty or perpetual disqualification to hold public office, to vote and to participate in any election. (Sec. 3606, TCCP)

2 Concealment or Destruction of Evidence of Fraud

Any person who willfully conceals or destroys, any invoice, book or paper relating to any article liable to duty after an inspection thereof has been demanded by the Collector of any collection district, or at any time conceals or destroys any such invoice, book or paper for the purpose of suppressing any evidence of fraud therein contained, shall be punished with a fine of not more than five thousand pesos and imprisonment for not more than two years. (Sec. 3605, TCCP)

3 Failure to Report Fraud

Any master, pilot in command or other officer, owner or agent of any vessel or aircraft trading with or within the Philippines and any employee of the Bureau of Customs who, having cognizance of any fraud on the customs revenue, shall fail to report all information relative thereto to the Collector as by law required, shall be punished by a fine of not more than five thousand pesos and imprisonment for not more than one year. If the offender is an alien, he shall be deported after serving the sentence. If the offender is a public official or employee, he shall suffer additional penalty of perpetual disqualification to hold public office, to vote and to participate in any election. (Sec. 3603, TCCP)

4 Removal, Breakage, Alteration of Marks

Any person who, without authority, will fully removes, breaks, injure or defaces or alters any customs seal or other fastening or marked placed upon any vessel, vehicles, on land, sea or air, warehouse or package containing merchandise or baggage in bond or in customs custody, shall be punished with the penalty prescribed in Section 3606 of the TCCP, as amended. (Sec. 3607, TCCP)

5 Removing Goods from Customs Custody

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Any person who maliciously enters any warehouse, or any vehicle laden with or containing merchandise with intent unlawfully to remove therefrom any merchandise or baggage in such vessels, vehicle or warehouse or otherwise in customs custody or control, or any person who receives or transports any merchandise or baggage unlawfully removed from any such vessel, vehicle or warehouse, or shall aid or abet such removal, shall suffer the penalties provided in Section 3606 hereof. (Sec. 3609, TCCP)

6 Removing or Repacking Goods in Warehouse

Any person who fraudulently conceals, removes, or repacks merchandise in any warehouse or fraudulently alters, defaces or obliterates any marks or numbers placed upon packages deposited in such warehouse, or shall aid or abet in any such acts or omission, shall be punished with the penalties prescribed in Section 3606 hereof.

Merchandise so concealed, removed or repacked or packages upon which marks or numbers have been so altered, defaced or obliterated, or the value thereof, shall be forfeited to the government. (Sec. 3608, TCCP)

7. Statutory Offenses of Officials and Employees

Every official, agent or employee of the Bureau of Customs or of any other agency of the government charged with the enforcement of the provisions of this Code, who is guilty of any delinquency herein below indicated shall be punished with a fine not less than five thousand pesos nor more than fifty thousand pesos and imprisonment for not less than one year nor more than ten years and perpetual disqualification to hold office, to vote, and to participate in any public election:

a) Those guilty of extortion or willful oppression under color of law.

b) Those who knowingly demand other or grater sums than are authorized by law or receive any fee, compensation, or reward except as by law prescribed, for the performance of any duty.

c) Those who willfully neglect to give receipts, as required by law for any sum collected in the performance of duty, or who willfully neglect to perform any of the duties enjoined by law.

d) Those who conspire or collude with another or others to defraud the customs revenue or otherwise violate the law.

e) Those who willfully make opportunity for any person to defraud the customs revenue or who do or fail to do any act with intent to enable any person to defraud said revenue.

f) Those who negligently or designedly permit the violation of the law by any other person.

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g) Those who make or sign any false entry or entries in any book or make or sign any false certificate or return in any case where the law requires the making by them of such entry, certificate or return.

h) Those who, having knowledge or information of a violation of the tariff and customs laws or any fraud committed on the revenue collectible by the Bureau of Customs, fail to report such knowledge or information to their superior official or to report as otherwise required by law.

i) Those who, without the authority of law, demand or accept or attempt to collect directly or indirectly as payment of otherwise, any sum of money or other thing of value for the compromise, adjustment or settlement of any charge or complaint for any violation or alleged violation of law.

j) Those who, without the authority of law, disclose confidential information gained during any investigation or audit, or use such information for personal gain or to the detriment of the government, the Bureau of third parties. (Sec. 3604, TCCP)

8. Unlawful Importation

Any person who shall fraudulently import or bring into the Philippines, or assist in so doing, any article, contrary to law, or shall receive, conceal, buy, sell, or in any manner facilitate the transportation, concealment, or sale of such article after importation, knowing the same to have been imported contrary to law, shall be guilty of smuggling and shall be punished with:

1) A fine of not less than fifty pesos nor more than two hundred pesos and imprisonment of not less than five days or more than twenty days, If the appraised value, to be determined in the manner prescribed under this Code, including duties and taxes, of the article unlawfully imported does not exceed twenty-five pesos;

2) A fine of not less than eight hundred pesos nor more than five thousand pesos and imprisonment of not less than six months and one day nor more than four years, if the appraised value, to be determined in the manner prescribed under this Code, including duties and taxes of the article unlawfully imported exceeds twenty-five pesos but does not exceed fifty thousand pesos;

3) A fine of not less than six thousand pesos nor more than eight thousand pesos and imprisonment of not less than five years and one day nor more than eight years, if the appraised value, to be determined in the manner prescribed under this Code, including duties and taxes, of the article unlawfully imported is more than fifty thousand pesos but does not exceed one hundred fifty thousand pesos;

4) A fine of not less than eight thousand pesos nor more than ten thousand pesos and imprisonment of not less than eight years and one day nor more than twelve years, if the appraised value, to be determined in the

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manner prescribed under this Code, including duties and taxes, of the article unlawfully imported exceeds one hundred fifty thousand pesos;

5) The penalty of prison may shall be imposed when the crime of serious physical injuries shall have been committed and the penalty of reclusion perpetua to death shall be imposed when the crime of homicide shall have been committed by reason or on the occasion of the unlawful importation.

In applying the above scale of penalties, if the offender is an alien and the prescribed penalty is not death, he shall be deported after serving the sentence without further proceedings for deportation. If the offender is a government official or employee, the penalty shall be the maximum as hereinabove pre scribed and the offender shall suffer an additional penalty of perpetual disqualification from public office, to vote and to participate in any public election.

When, upon trial for violation of this section, the defendant is shown to have had possession of the article in question, possession shall be deemed sufficient evidence to authorize conviction unless the defendant shall explain the possession to the satisfaction of the court: Provide, however, That payment of the tax due after apprehension shall not constitute a valid defense in any prosecution under this section. (Sec. 3601, TCCP)

9.. Various Fraudulent Practices Against Customs Revenue

Any person who makes or attempts to make any entry of imported or exported article by means of any false or fraudulent invoice, declaration, affidavit, letter, paper or by any means of any false statement, written or verbal, or by any means of any false or fraudulent practice whatsoever, or knowingly effects any entry of goods, wares or merchandise, at less than true weight or measures thereof or upon a false classification as to quality or value, or by the payment of less than the amount legally due, or knowingly and willfully files any false or fraudulent entry or claim for the payment of drawback or refund of duties upon the exportation of merchandise, or makes or files any affidavit abstract, record, certificate or other document, with a view to securing the payment to himself or others of any drawback, allowance, or refund of duties on the exportation of merchandise, greater than that legally due thereon, or who shall be guilty of any willful act or omission shall, for each offense, be punished in accordance with the penalties prescribed in the preceding section. (Sec. 3602, TCCP)

10. Violations of Tariff and Customs Laws and Regulations

Any person who violates a provision of this Code or regulations pursuant thereto, for which delinquency no specific penalty is provided, shall be punished by a fine of not more than one thousand pesos or by imprisonment for not more than one year, or both. If the offender is an alien, he shall be deported after serving the sentence and if the offender is a public official or employee, he shall suffer disqualification to hold public office, to vote and participate in any public election for ten years. (Sec. 3612, TCCP)

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CHAPTER 10 - BONDS MANAGEMENT SYSTEM

Section 1 – Accreditation of Surety Companies

1.1 Accreditation of surety or bonding companies shall be centralized to the Bonds Audit Division (BAD), Collection Service, RCMG.

1.2 Only surety companies in good standing with the BOC shall qualify for accreditation. (Sec. 2, CMO 22-03)

1.2.1 To be in good standing a surety company:

a. must have an authority from the Office of the President to engage in surety business;

b. must be a holder of a Certificate of Authority duly issued by the Insurance Commission, which must be valid and effective at the time of application renewal and for the duration of the period applied for;

c. must not have, as entity by itself, any due and demandable liabilities with the BOC at the time of the application of renewal;

d. must have settled at least 70% of its outstanding obligations as a surety company of person/persons having transactions with BOC, if any, as of the first day of the immediately preceding quarter (e.g., as of July 1 for application for accreditation for the 4th Quarter). (Sec. 3.2, CMO 22-03)

1.3 Validity of accreditation.

Accreditation shall be good and effective for a period of one quarter, renewable every quarter thereafter. For this purpose, a calendar year is divided as follows: 1st Quarter, January to March; 2nd Quarter, April to June; 3rd Quarter, July to September; 4th Quarter, October to December. (Sec. 3.3, CMO 22-03.)

1.4 For surety companies whose principal offices are located in Metro Manila, their applications for accreditation shall be filed with the BAD for approval of the Deputy Commissioner, RCMG upon the proper recommendation of the Chief, BAD and Director, Collection Service.

For surety companies whose principal offices are located outside of Metro Manila, the applications shall be coursed through District Collectors who will transmit the applications to BAD after checking for completeness of supporting documents to the applications.

The accreditation to be issued by BAD, RCMG shall be valid nationwide.

1.5 Requirements for Accreditation

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The surety company shall submit a written application for accreditation or renewal not later than fifteen (15) days prior to the onset of the quarter applied for which must be accompanied and supported by, in the original or duly authenticated copy, of the following:

1.5.1 Administrative Order issued by the Office of the President granting authority to the firm to engage in surety business;

1.5.2 Certificate of Authority issued by the Insurance Commission, indicating among others, its validity at the time of the application/renewal and for the duration of the quarter being applied for;

1.5.3 Copy of the latest audited annual financial statement of the surety company, but not exceeding one (1) year at the time of the application/renewal;

1.5.4 Certification of the Corporate Secretary of the surety firm indicating and attesting to the authority of the officer authorized to sign the bond, and exhibiting the authorized official’s three (3) specimen signatures, initials and impression on the right and left hands thumbprints;

1.5.5 Statement under oath by the Corporate Secretary stating that as an entity by itself, it has no outstanding obligations with BOC, and that as a surety company, out of its total outstanding obligations in terms of the amount of the bonds issued in the past to BOC, the remaining unsettled obligations falls within the 30% threshold, as of the immediately preceding quarter. (Sec. 4, CMO 22-03))

The thirty (30%) rule shall apply only to the current matured accounts of not more than one (1) year older excluding at the time of filing such application of the preceding quarter, pending requests for abatement as certified by the Chief, Operating Division concerned. (Sec. I, CMO 7-07)1.5.6 Outstanding Account Worksheet, showing the current accountability of the applicant surety company that the same is within the 30% threshold.

In the computation of the 30% threshold of unsettled obligation, all accounts of surety firm shall be considered up to the extent of the amount unpaid or unsettled, including but not limited to accounts on bonds:

• That are subject of pending court litigation;• That have been sequestered from bond principals, importers or consignees;• That have been issued involving valuation or classification issues/cases

For purposes of computing the 30% threshold the Bonds Division shall prepare the Outstanding Account Worksheet which shall disclose the following information about outstanding accounts of the applicant surety company as of the first day of the immediately preceding quarter:

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• Kind of Bond• Bond Number• Amount of Bond• Name of Principal/Importer/Consignee• Amount of Charges

The Outstanding Account Worksheet shall be certified true and correct by the Chief, Bonds Division and a copy thereof shall be furnished to the applicant surety company, Chief, LBD, concerned warehouse operating division and other concerned offices.

1.6 Upon receipt of the application with complete documentary requirements, the BAD shall review the same, particularly with respect to the authenticity and veracity of the documents submitted and the compliance with the 30% threshold rule.

The review process shall be completed within seven (7) days.

1.7 In the conduct of the review, the BAD may verify with the concerned offices, such as, the Liquidation and Billing Division, Tax Exempt Division, Warehousing Operations Division or equivalent divisions, as well as with other various ports to ensure that all outstanding obligations of the applicant surety company are taken into account.

1.8 As part of the review process, the Chief, BAD, may recommend a course of action that would achieve a balanced liquidation of the outstanding accounts from previous years accountabilities with the more recent ones.

1.9 If in order, the Chief, BAD, shall forward the application/renewal to the Director, Collection Service for transmittal to the Deputy Commissioner, RCMG, for final approval, otherwise, it shall advise the applicant surety company of its action on the matter accordingly, copy furnished the Office of the Commissioner.

Section 2 – Settlement of Outstanding Accounts which are more than 1 Yr. Old

The Surety and Bonding companies with unsettled or outstanding accounts arising from matured/expired bonds including those subject of court cases, must apply for staggered payments with the Commissioner of Customs thru the District Collector of Customs Attn: The Director, Collection Service and the Chief, Bonds Division. The proposed payment scheme should include an initial payment equivalent to thirty (30) percent of its total accountabilities with the remaining balance into equal monthly installments for a period of two (2) years which will be covered by post dated checks. (Sec. II, CMO 7-07)

Section 3 – Renewal of Accreditation

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3.1 No renewal of accreditation shall be effected unless the 30% threshold requirement as year old accounts as the duly approved payment scheme as old accounts are fully satisfied/implemented.

3.2 Default of two (2) consecutive monthly settlements shall be treated as a breach of agreement and shall cause the recession of such agreement and the immediate suspension of its accreditation. The suspension shall only be lifted upon a new approved payment scheme duly approved by the Commissioner. (Sec. III, CMO 7-07)

Section 4 - Repository of Original Copies of Bonds

4.1 The Central Records Management Division CRMD shall be the central repository of original copies of surety bonds posted with the Bureau of Customs.

4.2 Bonds Divisions or equivalent units of shall retain the duplicate copy of the bond and transmit the original copy to CRMD within five (5) days from posting by a duly accredited surety company.

Section 5 - CANCELLATION OF BONDS

5.1. After liquidation of the entry, the Operating Division shall, within five (5) days from the completion of the liquidation, forward to the Bonds Division the complete documents required for liquidation, for the cancellation of the corresponding bond;

5.2. Within five (5) days from receipt of the above documents, the Chief, Bonds Division shall cancel the corresponding bond, notifying in writing the importer and the surety company of such cancellation;

5.3. The Bonds Division shall, within five (5) days from the cancellation of the bond, forward to the Liquidation and Billing Division a copy of the cancelled entry and the complete documents required for liquidation.

5.4. The Liquidation and Billing Division shall review the cancelled bond, entry, Statement of Liquidation and supporting documents for final liquidation within five (5) days from receipt of said documents from the Bonds Division;

5.5. The Bonds Division shall notify in writing the concerned Operating Division, WDRD and the Bonds Audit Division of such cancellation;

5.6. The Bonds Division shall likewise keep a record of all cancelled bonds and copies of corresponding liquidated entries, Statements of Liquidation and supporting documents.

Section 6 - FORFEITURE OF BONDS

6.1 Pre-Forfeiture

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6.1.1 From the time of importation and upon the issuance of the surety bond, all the necessary entries and/or supporting documents shall be reproduced by the Liquidation & Billing Division and copies thereof be furnished the Bonds Division and the BAD, Collection Service. The original copy of all entries shall be considered as security documents to be kept in a security storage area at the Liquidation & Billing Division (for consumption entry) and the WDRD (for warehousing entry) which shall be handled and controlled by an officer solely designated to manage said restricted area;

6.1.2 Upon maturity of the bond, the Bonds Division shall retrieve/recall the entry and the supporting documents thereof from the LBD (for consumption entries) or the WDRD (for warehousing entries) and submit a report to the BAD, Collection Service.

6.1.3 The Bonds Division, thru the District Collector of Customs of the port of entry shall notify both the obligor and the surety about the maturity of the bonds for payment and/or submission of documents to satisfy the conditions of the bond for cancellation, copy-furnished the BAD, Collection Service.

6.1.4 In the absence of such settlement or submission of required documents the District Collector of Customs, the list of all erring importer/surety company, together with all the necessary original copies of entries and/or supporting documents shall be forwarded to BAD and forfeiture proceedings shall follow.

6.1.5 The liability to prove that an obligation has been fulfilled shall rest upon the surety and/or the obligor through the submission of the following as the case may require:

6.1.5.1 Original copy of the official receipt or a copy thereof officially certified by the Chief, Accounting Division with the required documentary stamps;

6.1.5.2 Certification issued by the Chief, Liquidation and Billing Division and copy of the finally liquidated entry to the effect that the bond may be cancelled

6.1.6 It shall be the obligation of the surety company to reconcile its outstanding due and demandable bonds regularly every month including those that will mature one month hence to give them time to notify their respective clients.

6.2 Forfeiture

6.2.1 The Chief, BAD, thru the Director, Collection Service shall submit to the Deputy Commissioner, RCMG, the list of principal and surety and bonding companies with outstanding matured and expired bonds, stating the name of the CBW operator/importer, name of bonding company, bond numbers, amount of bonds/equivalent duties and taxes and expiry date, and recommend for the immediate issuance of the order of forfeiture of bonds,

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which remain outstanding after ninety (90) days from maturity thereof, within ten (10) working days from the lapse of said period of ninety (90) days.

6.2.2 The Deputy Commissioner, RCMG, shall indorse the list of principal and surety and bonding companies with outstanding matured and expired bonds, to the Commissioner for immediate issuance of order of forfeiture of bonds and/or order the filing of appropriate cases if warranted under the circumstances.

6.2.3 Upon issuance of such order by the Commissioner, the Deputy Commissioner, RCMG shall transmit copies of the same to the Director-Legal Service, Director-Collection Service and the District Collector concerned for the information and guidance of the Chiefs, Bonds Division, Operating Division, Liquidation and Billing Division, CBW operators, surety and bonding company.

6.2.4 Upon receipt of the Order of Forfeiture, the BAD, Collection shall:

6.2.4.1 Furnish the Insurance Commission of a copy of the same in order that the said agency can administratively act against the erring insurance firm;

6.2.4.2 Recommend the issuance of a hold order against all pending/future importations of the erring importer pursuant to Section 1508 of the TCCP. Any lifting of the hold order issued in relation hereto, may be lifted upon favorable recommendation by the Collection Service which shall signify that the erring importer has settled all its due and demandable obligations with the BOC in connection with the importation/s and bond/s under question;

6.2.4.3 Recommend the suspension of accreditation of the erring importer. In no case shall, the lifting of suspension of the importer’s accreditation be effected without the presentation of a bureau-wide clearance or certification from the Collection Service;

6.2.4.4 Cause the suspension/revocation of the Authority to Transact Business As Surety (ATBAS) of the errant surety firm.

6.2.5 The suspension/cancellation of the ATBAS of the erring insurance company and the exercise by the BOC of the provisions under Section 1508, TCCP, as amended, shall not bar the former from taking any other action/remedies available to it against the forfeited bond/s or the erring importer.

6.2.6 In case the surety company ceased to exist before the obligation with the Bureau is extinguished:

6.2.6.1 If a domestic surety - within three (3) year period from dissolution of a surety company the Law Division of the port of entry and/or Legal Service, Office of the Commissioner, shall file a claim under Section 77

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or 78 of the Corporation Law or under Rule 104 and 66 of the Revised Rules of Court;

6.2.6.2 In case of a foreign entry inquire from the Office of the Insurance Commissioner regarding the withdrawal of said foreign surety company and prosecute the claim in accordance with Sections 202-A, 202-B, 202-C, 202-D and 202-E of the Insurance Act.

6.2.7 As a preventive measure, the Bureau shall, henceforth, require that all bonds shall include the following agreement on the bond policy:

"The herein surety company hereby agrees to settle immediately upon maturity the monetary value of the bond should the importer fail to fulfill the conditions herein guaranteed even without the production of the original entry and its supporting documents."

6.3 Post Forfeiture Regulations

6.3.1 Upon issuance of the Order of Forfeiture, any offer for the settlement of the importer’s/surety’s obligations under the forfeited bonds shall be referred to the Office of the Commissioner for appropriate disposition; and the ports concerned and its operating divisions shall not entertain any transaction involving the forfeited bonds where civil/criminal cases and/or administrative cases, have already been initiated, unless referred to it by the Legal Service and the Collection Service.

6.3.2 Unless otherwise ordered by the Office of the Commissioner, bonds that are ordered forfeited shall immediately be referred by the Collection Service to the Legal Service, and the Collection Service shall assist in the prosecution of and/or the collection of duties and taxes due on the forfeited bonds.

Section 7 - Penalties and surcharges for breach of Bond

Without prejudice to other actions that the BOC may file against the importer/surety company, the following shall be imposed as follows:

7.1. For exportation made outside the prescribed period of exportation, payment of penalty equivalent to taxes/duties on the corresponding entry. However, in case there is partial exportation made within the prescriptive storage period the amount of penalty shall correspond to the duties and taxes due on the balance not exported in due time provided.

7.2. For failure to submit the required documents for liquidation within sixty (60) days from the date of complete or full exportation or payment although exported or paid within the prescribed period, progressive penalties shall be imposed and collected as follows:

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7.2.1. 2% of the collectible duties and taxes when the liquidation documents are submitted within 30 days after the lapse of the required 60 day period for the liquidation;





7.3. However, in case the liquidation documents are submitted beyond thirty (30) days after the prescribed storage period, penalty equivalent to duties and taxes shall be imposed and collected even if the raw materials are exported within the prescribed period.

7.4. Late payment of duties and taxes

7.4.1. In addition to the penalty equivalent to duties and taxes due, payment of 1% per month of the collectible duties, taxes and other charges counted from the date of the expiry of the bond or bonds, up to the date of actual payment of duties and taxes. Nothing herein specified shall preclude the Collector of Customs concerned to proceed against the bond after expiration of the period stipulated if he deemed it necessary to protect the interest of the government.

7.5. Late extension of re-export bonds under Section 105 of the TCCP, as amended.

Surcharge for late filing of request for extension to re-export or late payment of duties and taxes under Section 105 of the TCCP after the first six (6) months period has lapsed shall be imposed.

a. Php1,000.00 or 2% per month of the collectible duties and taxes whichever is higher, counted from the date of expiration of bond up to the date of filing and acceptance of the request for extension;

b. The penal amount of the bond shall be imposed if there is no payment of duties and taxes or re-exportation after six (6) months from the expiration of date of the bond, and in addition thereto 2% per month of the collectible duties and taxes shall be collected.

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CHAPTER 11 – REWARD SYSTEM

TITLE 2 – COMPLIANCE

CHAPTER 1 – STAKEHOLDER MANUAL REGISTRATION AND ACCREDITATION SYSTEM

SECTION 1 – IMPORTER ACCREDITATION


1.1.1 Following are not covered by this Section but covered by other regulations with regard to manual or CPRS registration:

a. First and Last Importation for the year;b. Importations by parcel post;c. Importations covered by special laws, to wit:d. Importations covered by the Special Economic Zone Act of 1995

(RA 7916); e. Importations by enterprises covered by the Bases Conversion

Development Authority (RA 7227); f. Importations of the Philippine Government, its agencies and

instrumentalities; g. Importations by foreign embassies, consulates, legations, agencies

of other foreign governments and international organizations with diplomatic status and recognized as such by the Government of the Philippines, i.e. Asian Development Bank/World Health Organization.

1.1.2 Only accredited importer shall be allowed to transact with BOC

Only accredited importer for whom a Certificate of Accreditation was duly issued in accordance with this Order shall be allowed to transact business with the BOC;

1.1.3 One (1) time accreditation process.

There shall be a one (1) time accreditation of importer. The Certificate of Accreditation shall be valid from the date of its approval and last unless otherwise suspended or revoked/cancelled;

1.1.4 Registration Fee

Registration fee amounting to One Thousand Pesos (PHp1, 000.00) shall be paid by the applicant to the BOC prior to the filing of application for accreditation.

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1.1.5 Customs Accreditation and Registration (CARE) Unit to be headed by a Chief is hereby created to perform the following functions:

a. Accredit importers and brokers;b. Cancel/revoke/suspend accreditation of importers upon approval of

the Deputy Commissioner, RCMG observing due process.

1.1.5.1 Evaluators Team (ET)

The Evaluators Team shall assess applications for accreditation based on information disclosed by applicants and recommend to the Chief, CARE applications for validation and/or inspection, based, among others on the following parameters:

a. Legitimacy of the business operations of the applicant;b. Completeness of the documents required to be submitted

hereunder;c. Absence of a variance or misrepresentation of material facts on

the part of the applicant vis-à-vis’ the documents submitted.

1.1.5.2 Information Validation Team

There is hereby created a Validation Team (IVT) to perform information validation submitted by the applicant to include, among others, the following:

a. Existence of the applicant in the indicated place of business;b. Existence of the applicant’s office, plant or warehouse, as the

case may be;c. Actual business operations of the applicant or the impending

commencement thereof, as the case may be;d. Genuineness of the documents presented in support of the

application;e. Other facts material to the application for accreditation.

1.1.5.3 Supervision of CARE

The Deputy Commissioner, Revenue Collection and Monitoring Group shall directly supervise the CARE and shall perform, among others, the following:

2. Operational Provisions

2.1 Where to File Application for Accreditation

2.1.1. All importers whose Head/Principal Offices are located in Metro Manila shall file their notarized application form with CARE Unit;

2.1.2. All importers whose Head/Principal Offices are located outside Metro Manila shall file the application with the CARE Satellite Office, or in case there is no such office in the area, with the Office of the District Collector or

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Port/Sub-port Collector under whose jurisdiction the geographical location of the Head/Principal Office of the applicant(s) is/are situated.

2.2. Accreditation Requirements

All importers shall be required to file an application for accreditation in the prescribed form as in Annex “A” in case of a Corporation/Partnership/ Cooperative and Annex “B” in case of a Sole Proprietorship hereof, which shall be under oath and supported by the following documents:

a. BCOR evidencing payment of processing fee;b. Printed CPRS application profile of importers duly lodged at the

chosen VASP;c. For corporations, SEC Certificate of Registration, Articles of

Incorporation and By-laws and General Information Sheet as may be applicable;

d. For partnerships, SEC Certificate of Registration, Articles of Partnership and By-laws;

e. For cooperatives, Certificate of Cooperation issued by the Cooperative Development Authority (CDA);

f. For sole proprietorships, proof of registration with the Department of Trade and Industry;

g. Audited Financial Statement for the past year, if applicable;h. BIR Certificate of Registration of the Applicant; i. Income Tax of the company, partners, proprietor/owner for three (3)

years past year, as may be applicable;j. Quarterly VAT Returns for the past three years, if applicable;k. Company Profile with pictures of company premises indicated in the

application;l. Location Map of principal place of business indicated in the

application; andm. Personal profile of Corporate Officers, Owners/Proprietors, company

representative/s dealing with customs.All applications shall be filed in duplicate copies. The first copy shall be retained by the CARE for evaluation and record purposes, while the second copy shall be forwarded to the RATS Group.

2.3. Accreditation Procedure

2.3.1. All applicant importers are required to apply first for registration under CPRS;

2.3.2. Upon receipt of the "STORED" e-mail messages by the applicant under the CPRS, and applicant shall print a copy of the CPRS application profile to be submitted to the ICARE;

2.3.3. The application supported by the required documents for accreditation of importers shall be evaluated on a PASS/FAIL basis. Applications not acted upon within two (2) working days from receipt of the application shall be deemed approved.

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2.3.4. Notice of denial or approval of applications of accreditations shall be sent via the CPRS under e2m Customs and shall be posted electronically at a conspicuous place;

2.3.5. CARE shall not be precluded from conducting the validation of information disclosed by the applicant randomly and the thorough evaluation of the application and supporting documents for accreditation based on the parameters enumerated in paragraphs 4.2 and 4.3 of this Order, respectively.

2.4. Reportorial Requirements

An accredited importer, who is interested to continue his accreditation privileges, shall be required to submit the following on a prescribed date, viz:

2.4.1. Clear copy of Annual Income Tax Return (ITR) and Audited Financial Statement – thirty (30) days after the required deadline of filing ITR under the law;

2.4.2. Clear copy of VAT Returns – fifteen (15) days after the required filing of subject Returns under the law;

2.4.3. Clear copy of current Mayor’s Permit issued not later than March 1st of the current year;

2.4.4. Clear copy of the General Information Sheet for the partnership and corporation;

2.4.5. Notification and submission of supporting documents within thirty (30) days from happening of the event to the CARE Unit of any change in the material information previously declared and filed, such as, but not limited to the following:

a. Change of address, i.e. office address and/or warehouse address;b. Change of Corporate Directors and Officers / Partners/ Cooperative

Directors and Officers;c. Amendment/s to Articles of Incorporation/ Partnership / Cooperation

and By-Laws, as approved by the appropriate government agencies;

d. Dissolution or closure / stoppage of business.

2.5 Disapproval, Suspension or Cancellation of Accreditation

The application/accreditation may be disapproved, suspended or cancelled by reason of any of the following:

a. Submission of false information and / or material misrepresentation in the application form as well as in any of the accompanying documents required under this regulation;

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b. Failure to submit the required reportorial requirements within the prescribed period;

c. Failure to report to the proper customs authorities any fraud upon the customs revenue which has come to the importer’s knowledge or cognizance, or shall knowing assist or abet the importation or exportation or entry of prohibited or any article which importation is contrary to law.

SECTION 2 – CUSTOMS BROKERS ACCREDITATION

2. Definition of Terms When used in this rules and regulations, unless the context provide otherwise, the following terms or phrases shall have the meaning indicated.2.1 “Customs Broker” refers to any bona fide holder of a valid Certificate of Registration/Professional Identification Card issued by the Professional Regulatory Commission, who is accredited to practice in the Bureau of Customs.

2.2 “Customs Broker Practice” refers to the professional services rendered by a customs broker in the Bureau of Customs pursuant to the pertinent provisions of Section 6, of R.A. No. 9280 otherwise known as the Customs Brokers Act of 2004, as amended by R.A. No. 9853.

2.3 “BOC” refers to the Bureau of Customs or any of its officer/official, other than the Commissioner, duly authorized to represent the said office.

2.4 “Commissioner” refers to the Commissioner of Customs.

2.5 “PRC” refers to the Professional Regulation Commission.

2.6 “PRBCB” refers to the Professional Regulatory Board for Customs Brokers created pursuant to Section 5 of R.A. No. 9280.

2.7 “PRBCB Res. No. 01 s. 2010” refers to the Implementing Rules and Regulations of R. A. No. 9853.

2.8 “GPP for Customs Brokers” refers to General Professional Partnership of Customs Brokers which is formed by two (2) or more Customs Brokers under the provisions of Section 1767 of the Civil Code for the exercise of Customs Broker profession.

2.9 “Customs Representative” refers to full time employees of Customs Brokers, GPP and Corporations engaged in the business of customs brokerage accredited by the Bureau of Customs under this rules and regulations.

2.10 “CARE” refers to the Customs Accreditation and Registration Unit, headed by the Deputy Commissioner duly designated by the Commissioner (“Deputy Commissioner”). It shall have the responsibility and authority to

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accept applications and approve accreditation of Customs Brokers, GPP for Customs Brokers and Corporations. It shall also refer to any accreditation that may be created to replace I-CARE.

2.11 “APO” refers to the Accredited Professional Organization. For purposes of this regulation, it refers to the Chamber of Customs Brokers, Inc. (CCBI) or any professional organization of customs brokers which is or may hereafter be accredited by the PRC.

2.12 Corporations –refers to a juridical entity which has a minimum paid up capital of one million pesos (Php 1,000,000.00) which primary purpose is to engage in the business of Customs Brokerage, duly registered with the Securities and Exchange Commission and BOC.

2.13 Engaging Or Hiring The Services Of Customs Broker – refers to the Professional Contractual relationship between a customs Broker and a corporation evidenced by professional service contract.

2.14 Business Of Customs Brokerage – refers to the business activities of corporations including representations for or in behalf of their importer-clients with the BOC as long as the corporation shall engage or hire the services of at least one (1) customs broker in his professional capacity. Making representation in behalf of importer-clients in BOC shall refer only to activities other than those in Section 6, Article II of R.A. No. 9280 and can only be undertaken through a customs broker or authorized customs representative(s) of customs brokers who shall be their full-time employees.

2.15 “CPE” refers to the Continuing Professional Education program of the PRC.

2.16 “COA” refers to the Certificate of Accreditation issued by I-CARE to prove that a customs broker is accredited with the Bureau of Customs.

2.2 Administrative Provisions2.2.1 Accreditation of customs brokers required in transacting business with the Bureau of Customs. Accreditation is the process of registration and/or listing of customs broker desiring to engage in customs brokers practice. Customs Brokers desiring to practice their professions at the BOC shall apply for accreditation and obtain a COA.

2.2.2 Transaction for which services of a customs broker may not be required. An accreditation from the BOC is not required in the following transactions:

a. For one’s own account – A person dealing in customs and tariff transaction at the Bureau of Customs solely for his own account

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and not in behalf of another, unless the importer is engaged in the general import of commercial nature.

b. Mail importations – No registration is required of persons claiming parcel in posts offices subject to customs clearance prior to delivery; Provided, That the person claiming the mail is the addressee shown on the parcel being cleared and positively identified thru a valid ID card, and that the parcel does not contain articles in commercial quantity required to be declared in a formal entry/informal entry.

c. Diplomatic pouches and shipment claimed by authorized representative of the foreign embassy, consulate, legation or specialized agency of the United Nation concerned except non-diplomatic shipments consigned to non-diplomatic officials or employees of said offices.

2.2.3 Functions of CARE in relation to Customs Broker Accreditation CARE shall be responsible for processing the applications for accreditation of customs brokers, GPP for Customs Brokers and corporations engaged in the business of customs brokerage desiring to practice their profession in the Bureau of Customs or any representative thereof. CARE shall perform the following:

a. Receive/Process applications for accreditation. b. Approve the application; Provided that, in case of disapproval of the

application, a Decision of Disapproval therefore shall be signed and served to the applicant, APO and the PRBCB.

c. Keep and maintain a 201 file of all customs brokers applying for accreditation, with the complete record of the application and final disposition and all other relevant matter such as records of investigations involving violation of law and/or customs rules and regulation.

d. Such other task as may be directed by the Commissioner from time to time which shall be done through a CAO

3. Procedure for Accreditation of Individual Customs Brokers 3.1 A duly accomplished application for accreditation (Annex “C”) under oath, together with the required supporting documents, in three (3) copies shall be submitted to ICARE upon payment of accreditation fee of One Thousand Five Hundred (P1,500.00), the official receipts of which shall be attached to the application.

3.2 All applicants whose Head/Principal Offices are located outside Metro Manila shall file the application with the ICARE Satellite Office, or in case there is no such office in the area, with the Office of the District Collector or Port/Sub-port Collector under whose jurisdiction the geographical location of the Head/Principal Office of the applicant(s) is/are situated.

3.3Issuance, form, effect and validity of Certificate of Accreditation

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3.3.1 Upon approval of the application a COA shall be issued under a BOC official seal upon payment of the documentary stamp tax of Php15.00. The COA shall have a serial number (aside from the printed serial number of the form) which shall be sequentially given and followed by the year of its validity (Example: No. 0000-2011). Said serial number shall be treated as a permanent identification number of the accredited customs broker concerned.

3.3.2 Issuance of a COA authorizes a customs brokers to practice his profession in any port of entry in the Philippines and shall be valid until such time the same is cancelled or revoked or the customs broker suspended for cause or upon failure of the customs broker to submit the yearly documentary requirement required of him to make his accreditation subsisting pursuant to Part III below.

3.3.3 CARE in cooperation with the APO and/or PRBCB reserves the right to check whether a customs broker is compliant with all government requirements relative the practice of customs broker profession.

3.4. Appeal to the Commissioner 3.4.1 The decision of the Deputy Commissioner-RCMG to disapprove an application for accreditation may be appealed to the Commissioner within (15) days from receipt of disapproval, without prejudice likewise to the filing of new application if the ground or basis of disapproval of the original application no longer exists.

3.4.2 The Commissioner shall decide the appeal within thirty (30) days from receipt of the records from I-CARE.

3.4.3 The filing of new application pending appeal is tantamount to withdrawal of subject appeal.

3.5 Documentary Requirements in Customs Broker’s Accreditation

The application shall be accompanied with verified photocopies of the following supporting documents:

a. Certificate of PRC Registration as a Customs Broker;b. PRC Professional ID;c. Certificate of Good Standing from APO;d. Certificate of completion of twenty (20) credit units earned a year

before filing of accreditation application from a PRC accredited CPE provider. This requirement shall not apply to newly passed customs broker.

A newly passed customs broker is defined as a customs broker who applied for accreditation less than one (1) year from passing the Customs Broker Licensure Examinations (CBLE); and

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e. Certified list of customs representatives who must be customs broker’s full time employees with corresponding SSS numbers.

3.6 Annual Reportorial Requirements

An accredited customs broker who is interested to continue his accreditation privileges, is enjoined to submit the following verified supporting documents, within fifteen (15) days before the lapse of one (1) year from date of CAO issuance and every year thereafter, viz:

a. Current PRC ID; b. Certificate of Goods Standing from APO;c. Certificate of completion of twenty (20) credit units earned a year

before submission of documents from a PRC accredited CPE service provider; and

d. If applicable, List of Customs Representatives who must be customs broker’s full time employees with corresponding SSS numbers.

4. Accreditation of Corporations

4.1 Documentary Requirements

4.1.1 A duly accomplished application for accreditation signed by the corporation’s president or any corporate officer authorized under a board resolution as certified by the corporate secretary, under oath in three (3) copies shall be filed with I-CARE upon payment of accreditation fee of Five Thousand Pesos (P5,000.00), the official receipts of which shall be attached to the application.

The application shall be accompanied with verified photocopies of the following:

a. SEC Registration and By-Laws;b. Latest General Information Sheet (GIS);c. Duly notarized contract with Customs Broker who is hired or

engaged in professional capacity and not as employee;d. COA of hired or engaged Customs Broker who must be BOC

accredited.

4.2 Suspension of Certificate of Accreditation issued to corporations

The certificate of accreditation issued by CARE to corporations shall be deemed suspended if the accredited customs broker with whom it has entered professional service contract is suspended by I-CARE or the Customs Broker’s COA has been suspended/cancelled or revoked.

4.3 Annual Reportorial Requirements

An accredited corporation interested to continue their accreditation privileges, is enjoined to submit the following verified supporting documents, within

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fifteen (15) days before the lapse of one (1) year from date of CAO issuance and every year thereafter, viz:

a. Valid Mayor’s Permit;b. Latest General Information Sheet;c. Notarized copy of contract with hired or engaged customs broker;d. COA of hired or engaged customs broker.

5. Duties and Responsibilities of Customs Brokers

5.1 Record-keeping

Customs Brokers shall keep and maintain, in a correct, orderly, and itemized manner, complete records and file copies of all his correspondence and other records relative to the conduct of his profession as provided for in Section 3514 of the TCCP.5.1.1 Retention of Records

Customs brokers shall keep at their stated office address copies of importation records in whatever form covering their professional practice including records enumerated therein for a period of three (3) years from the date of import entry filing.

For Corporations, they shall keep and maintain, in a correct, orderly, and itemized manner, complete records for a period of three (3) years.

5.1.2 The records referred to above all be considered confidential and shall not be disclosed to any person other than his clients by the broker nor the Commissioner or his authorized representative, except by subpoena duces tecum issued by a duly authorized customs official or a court of competent jurisdiction.

5.1.3 During the period of retention, Customs Brokers shall maintain his records in such manner that they may readily be examined and made available upon demand for inspection, copying, reproduction, or other official use by the Commissioner for his authorized representative in the conduct of compliance audit. 5.1.4 Interference with examination of records

A Customs Broker shall not refuse access to conceal, remove, or destroy the whole or any part of his records related to the practice of his professions as a customs broker which is being sought, or which the broker has reasonable grounds to believe may be sought, by the Commissioner or his authorized representative; nor shall a broker otherwise interfere, or attempt to interfere, with any proper and lawful order to procure or produce relevant information contained in such records required to be retained in the course of compliance audit. 5.2 Responsible supervision and control over their representatives

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Customs Brokers shall exercise strict supervision and control over their representatives when following up transactions related to their customs practice. They shall be held strictly responsible and solidarily liable for acts or commissions of their representative which, in the exercise of due and reasonable care and diligence, would have been prevented.

5.3 Diligence in correspondence paying monies 5.3.1. Customs Brokers shall exercise due diligence in handing financial settlements, in answering correspondence, and in the preparation in filing of documents relating to the practice of his profession and other customs matters handled by him.

5.3.2. Funds received by a broker from a client for payment of duties, taxes other charges or other debts or obligation to the Bureau of Customs shall be paid within in five (5) days from date of receipt of such funds or date due. Likewise customs brokers shall within ten (10) days account to their clients the funds or other charges received by them from the government or properly payable on account their client’s business.

5.4 Conflicts of interest A Customs Broker who is an importer himself shall not act as such for another importer who imports goods and merchandise of the same general character as that imported by the broker unless the client has full knowledge of the matter. 5.5 False information A Customs Broker or his representative shall not file procure or assist the filing of any claim, or of any document, affidavit, or other paper known by him to be false and fraudulent, nor shall knowingly give, or solicit or procure the giving of, any false or misleading information or testimony in any matter pending before the Bureau of Customs or official representative thereof.

5.6 Undue influence upon government official and employees

A customs Broker or his representative shall not influence or attempt to the influence the conduct of any BOC official or employee of the BOC in any matter pending before it or any official representative thereof, by the use of a threat, false accusation, duress, or the offer of any special inducement or promise of advantage, or by bestowing any girt of favor or other thing value. 5.7 Misuse of accreditation privilege A customs broker shall not permit this accreditation or his name to be used, directly or indirectly, by or for any non-registered customs broker or other person, other than his own representative(s).

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5.8 Relations with a broker whose accreditation has been suspended or revoked. A customs broker shall not directly or indirectly:

a. Accept employment or use his service to effect a customs transaction as an agent or surrogate of a Customs Broker whose accreditation has been revoked, suspended or cancelled, and could no longer practice his profession;

b. Assist in the furtherance of any customs transaction of such person’s; and

c. Permit any such person directly or indirectly to participate any manner in the promotion, control or direction of his customs practice. Nothing herein shall be deemed prohibit any customs broker from acting as a broker or any bona fide importer or exporter, notwithstanding if such importer or exporter is also Custom Broker whose accreditation has been suspended, revoked, or cancelled.

5.9 Advise to clients 5.9.1 Withholding of false information. – A customs broker shall not withhold information relative to any customs practice from a client/customer who is entitled to the information. He shall exercise due diligence to a certain the correctness of any information and shall not knowingly impart to a client any false information relative to his practice.

5.9.2 Error or omission by clients - A Customs Broker who knows that a client/customer has not complied with the law or regulation or has made an error on omission on, any document affidavit, of other paper which the law of regulation require such client to execute, shall advice his client/customer promptly of such fact.

5.9.3 Illegal schemes. – A Customs Broker shall not suggest to a client/customer or a prospective client any scheme or plan known to be illegal or irregular designed to evade payment of any duty, tax or charge or other debt or obligation owing to government or any scheme aimed putting the BOC or any official representative thereof in disrepute.

5.10 Withdrawal of services as Customs Broker The right of a Customs Broker to withdraw his services, once assumed must arise only from justifiable cause. A broker should not abandon the unfinished task to the detriment of his client when the client insists upon unlawful course in conduct of custom practice or transactions, or if the client deliberately and with malicious intent disregards and agreement or obligation as to fees or expenses, in which case the broker maybe justified in withdrawing after submission of written notice of withdrawal which must be confirmed by the client and the Collector of Customs of the port concerned thereby allowing the client sufficient time to employ the services of another customs broker provided, that the client may discharge the services of the broker for cause or

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loss of confidence with Notice to the CARE and Collector of Customs concerned. Upon withdrawal, if services after a retainer or advance fees have been paid, the Customs Broker shall refund to the client such unearned potion. 5.11 Limitation of Liability A Customs Broker shall not evade liability with respect to a just claim by the client arising out of the wrongful act or negligence of the broker or his customs representatives in connection with a matter handled by him nor shall enter into a contract which purports to evade his liability. 5.12 Display of Certificate A Customs Broker must have an office for business where he shall display his Certificate of Accreditation as Customs Broker or photocopy thereof conspicuously in his office so that it may be seen by anyone transacting business in his office. 5.13 Change of Business Address A Customs Broker shall immediately notify his client of any change of office address and give written notice of his new address to the BOC copy furnished I-CARE and the Collector of the Port(s) where he is regularly practicing the profession, within ten (10) after moving the new address.

5.14 Seizure and Protest Cases A Customs Broker may represent by written consent, his clients in seizure and protest cases involving valuation or classification issues.

6. Cancellation, suspension or revocation of accreditation6.1 Grounds for suspension or revocation of accreditation The grounds for suspension or revocation of accreditation as customs broker, GPP and accreditation of a corporation shall include, but not limited to, the following:

a. Deliberate failure or refusal without justifiable reason to comply with the duties and responsibilities of Customs Broker or an accredited corporation prescribed in this regulation.

“Justifiable reasons” as contemplated herein shall mean any and all acts the commission of which shall not render him liable either administratively or criminally under existing laws, rules or regulations.

b. Misdeclaration or undervaluation of imported or exported articles that resulted or would have resulted in the loss of government revenues, or in evasion of any control regulation of the government.

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c. Failure to report the proper customs authority any fraud upon the customs revenue which has come to his knowledge or cognizance, or shall knowingly assist or abet the importation or exportation or entry of prohibited or any article which importation is contrary to law.

d. Misappropriation of the funds entrusted to a customs broker or corporation by a client for payment of duties, taxes and other charges and other accounts or obligation owing to the Bureau of Customs and order authorized agencies of the Government.

e. Conviction of the customs broker or any board of directors or officers of the corporation, at any time after filing of an application for accreditation, of a crime involving moral turpitude.

f. Continued neglect of duty or incompetency.g. Lack of proper supervision and control over their customs

representatives authorized to act on their behalf in connection with practice of the professions in the case of customs broker and as an employer in case of a corporation.

h. Discovery of false or misleading information in his application for accreditation with respect to any material fact.

i. Failure to submit the annual reportorial requirements within the period prescribed as mentioned in the herein regulation.

j. Violation of these rules and regulation.

7. Administrative Proceedings 7.1 Investigation of complaint or charge 7.1.1 Every complaint or charge against a Customs Broker, a GPP, or a Customs Brokerage, herein referred to as respondent, which may be the basis for disciplinary action, may be lodged with the Director, Legal Service (LS) who shall then refer the same to the Prosecution and Litigation Division (PLD), to determine if there is sufficient basis to recommend filing of charges against the respondent.

7.1.2 If the act complained of is serious and prima facie evidence is shown to support the complaint or charge, the Director, Legal service may motu propio issue an order of preventive suspension of the respondent’s accreditation for a period of 30 days.

7.2 Contents of statement/notice of charges 7.2.1. The statement of charges shall give a plain and concise, description and summation of the facts claimed to constitute grounds for suspension or revocation of the accreditation. A statement of charges which fairly informs the respondent of the charges against him so that they is able to prepare his answer, shall be deemed sufficient.

7.2.2. The notice of charges shall inform the respondent that:

a. He may be represented by counsel of his choice.b. He will have the right to cross-examine witnesses.

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c. He shall file in duplicate a verified answer to the charges within a period of ten (10) working days after receipt thereof.

7.3 Commencement of formal proceedings 7.3.1. Within fifteen (15) days from the date of receipt of the verified answer submitted by the respondent, the Hearing Officer shall recommend any of the following:

a. Deletion form the statement of charges those which he deems to have been satisfactorily answered by the broker, or

b. Dismissal of the charges altogether if he deems it to have been satisfactorily answered by the broker.

7.3.2 Upon receipt of the recommendation of the Hearing Officer, the Director, LS shall determine and direct whatever course of action shall be taken. If based on (a) above, shall order the Hearing Officer to set the date and time of the hearing; if based on (b) above, shall so notify the broker accordingly. However, any decision to dismiss the charges is without prejudice to the filing of another charge based on other grounds as may be warranted. 7.3.3 Service of notice and statement of charges 7.3.3.1 The statement/notice of charges shall be delivered to the broker personally or by registered mail. If attempts to serve the same are unsuccessful, the notice and statement of charges shall be left with the contact person or the person in charge of the broker’s office, properly acknowledged.

7.3.3.2 The APO and PRBCB shall be furnished copy of the statement of charges or notice of hearing to enable them to conduct their investigation on the matter and for appropriate disciplinary action on the broker as may be warranted.

7.3.4 Failure to Appear When a respondent broker or his counsel of record fails to appear on the date and time of a scheduled hearing, the Hearing Office shall proceed with the hearing ex parte as a scheduled and shall hear and receive evidence submitted in behalf of the Government, unless a timely motion for postponement for justifiable cause is made. 7.3.5 Hearing 7.3.5.1 The Director, Legal Service shall designate/assign a hearing officer as well as a government prosecutor from among the lawyers of the Legal Service.

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7.3.5.2 Rights of respondent broker/corporation. – The broker/corporation shall be given full opportunity to defend himself or through his counsel of records, to testify as witness or to present witnesses in his behalf who shall be subjected to cross-examination by the prosecutor, and shall have the right to examine all exhibits offered at the hearing and to cross-examine witnesses against him.

7.3.5.3 Interrogatories.- Upon written request of either party, the Hearing Officer may permit the position upon oral or written interrogatories to be taken before any officer duly authorized to administer oath. The other party shall be given a reasonable time in which to prepare cross-interrogatories and, if the deposition is oral, shall be permitted to cross-examined the witness. The deposition shall become part of the record of the case. 7.3.6 Order of hearingUnless the Hearing Officer directs otherwise for special reasons, the order of hearing shall be as follows:

a. The prosecutor shall produce evidence in support of the charges prepared against the broker.

b. The respondent broker or counsel shall then offer evidence in support of his defense. Counsels may be heard from each side in the order herein prescribed but, in event, the prosecutor is entitled to the opening and closing examination.

7.3.7 Evidence The rules of evidence shall be substantially followed in the reception of evidence, but technical errors in the admission of evidence which do not prejudice the substantial rights of any of the parties shall not vitiate the proceedings. 7.3.8 Postponements Hearings shall be conducted expeditiously and shall not exceed three (3) months from date of the first scheduled hearing. Postponements of the hearing may be granted to either party not more than two (2) times and not exceeding two (2) weeks for each postponement except when there are special circumstances or justifiable reasons which, in the opinion of the Hearing Officer, warrant the grant of the request for further postponement. If prosecutor request for more than two (2) postponements or more than one month postponement after the case has been set for hearing, the charge shall be dismissed. If the respondent broker request more than two (2) postponement or more than one month postponement, he may be considered in default and the Hearing Officer shall thereupon proceed to hear the testimony of the witnesses of the government and/or received documentary evidence, and shall draft the decision in the case for review and approval of the Commissioner, thru the Director, Legal Service. 7.3.9 Submission of Memorandum

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The Hearing Officer may, in his discretion require the prosecutor or respondent broker or both to submit a memorandum to support of their respective sides as may be warranted by the situation, with respect to their arguments relative to the facts in issue.

7.3.10 Contents of Decision The decision determining the merits of the case shall state clearly and distinctly the facts and the law or regulation on which it is based and signed by the Director, Legal Service and duly noted by the Deputy Commissioner, RCMG. If the charge is based on breach of these rules and regulations and/or the Code of Ethics of the customs broker profession, the same shall also be stated in the decision, copy of which shall be furnished the PRBCB in case if breach of the latter. 7.3.11 Partial proof of charges If the Director finds that one or more of the charges is not sufficiently proven, he may base his decision on any remaining charge(s) if the facts alleged are sufficiently established by preponderance of evidence.

7.3.12 Order of suspension or revocation of accreditation If one or more of the charges are sufficiently established by the evidence presented at the hearing, the decision of the Director shall contain an order of suspension or revocation of the broker’s accreditation.

To prevent the Customs Broker from transacting with the Bureau of Customs during the period of suspension of accreditation or when accreditation is revoked the Deputy Commissioner, MISTG shall be furnished copy of the decision for purposes of blocking the CPRS registration of the broker in the e2m Customs System. Likewise the Deputy Commissioner, EG, shall be furnished copy of the decision for purposes of making demand to the broker to surrender the Customs Passes issued to the broker’s representatives.

At the same time the Deputy Commissioner, RCMG may recommend the revocation of the license to the PRBCB if warranted and shall issue a Customs Memorandum Circular apprising all customs officials and employees if such recommendation is adopted.

7.3.13 Petition for reconsideration or re- hearing A customs broker whose accreditation has been suspended or revoked may within the period for perfecting an appeal as provided in Sec. 19 hereof file a verified petition with the Commissioner to have the order of suspension or revocation set aside or modified, or to grant a re-hearing of the case. No more than one petition for reconsideration or re-hearing shall be allowed.

7.3.14 Grounds for reconsideration or re-hearing

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No petition for reconsideration or re-hearing shall be entertained unless it is for any of the following causes:

a. The decision is manifestly not in conformity with the evidence and/or facts presented; or

b. Newly discovered evidence which could not have been discovered and produced during the hearing by the exercise of due diligence and which is of such character as would probably warrant the modification and/or reversion of the decision.

7.3.15 Action and procedure on petition 7.3.15.1 The Commissioner may, upon receipt of the petition, deny the same if he deems it devoid of merit or set aside the order of suspension or revocation and grant a re- hearing, when necessary. If the petition is based upon the cause mentioned in sub-section 15, a hereof and the Commissioner finds his decision to be not in conformity with the evidence and/or facts presented, he may amend his decision accordingly without necessary granting a re-hearing unless he deems the introduction of additional or new evidence if advisable. 7.3.15.2 If the Commissioner finds the Petition meritorious, he shall refer the petition to the Deputy Commissioner, RCMG, with instruction to re hear the case and take additional or new testimony or evidence. The Hearing Officer shall, within five (5) days from receipt of such referral, set the date and time for the re-hearing with due notice given to the petitioner-broker and the prosecutor at least ten (10) working days prior to the scheduled hearing. The procedure governing the re-hearing and the contents of the new decision shall be the same as that governing the original proceedings.

7.3.16 Effects of granting the petition 7.3.16.1 A petition for reconsideration and re-hearing given due course shall vacate the decision rendered and the case shall be heard de novo but the recorded evidenced taken during the course of the original proceedings so far as the same is material and competent to resolve the issues shall be reincorporated at the re-hearing without retaking the same.

7.3.16.2 A petition for reconsideration or re-hearing filed in time suspends the running of the period of appeal, and the time during which the petition has been pending shall be deducted from the period for perfecting an appeal.

7.3.17 Appeal to the secretary of finance; effect of 7.3.17.1 A decision of the Commissioner of Customs ordering the suspension of revocation of the accreditation of a customs broker or corporation may be appealed to the Secretary of Finance by filing with the Office of the Commissioner a notice of appeal and payment of the amount of Two Thousand (PhP2,000.00) Pesos as docket fee within fifteen (15) days

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after receipt of copy of the decision by the broker or counsel of record. If the notice appeal has been timely filed and the required amount of docket fee is paid, the appeal is deemed perfected. If no appeal is perfected within the period herein fixed, the decision of the Commissioner shall become final and executory. The order of suspension or revocation of the accreditation of customs broker or corporation shall not be stayed during the pendency of the appeal unless the Commissioner, on motion and after hearing as he may deem fair and just, should direct otherwise. 7.3.17.2 An appeal perfected while a petition for reconsideration or re-hearing is pending with the Commissioner constitute an abandonment of the petition and renders the same moot and academic 7.3.18 Action and procedure on appeal 7.3.18.1 Within five (5) working days after an appeal is perfected, the entire records of the case shall be transmitted by the Commissioner to the Secretary of Finance with each and every page duly numbered in consecutive manner. 7.3.18.2 Upon receipt of the records, the Secretary of Finance shall decide the case on the basis of evidence and records transmitted, aided by any memorandum and/or brief which the broker and/or prosecutor may submit. On the other hand, Secretary of Finance may dismiss the appeal on the grounds that the appeal is without merit or is made manifestly to delay, in which case the decision shall be deem revived and the case remanded to the Commissioner of Customs for execution. 7.3.18.3 The decision of the Secretary of Finance may be appealed to the President of the Philippines within fifteen (15) days from receipt of the decision thereof, otherwise, the same shall be considered final and executory.7.3.19 Notice of reinstatement If the Commissioner of Customs or the Secretary of Finance on appeal after reviewing the records and the evidence adduced in the hearing finds that the charges or remaining charges, does not warrant suspension or revocation of the accreditation, he may render a decision ordering the lifting of suspension or revocation and serve the broker or corporation with Notice of Reinstatement. 7.3.20 Reprimand and/or fine 7.3.20.1 If the Commissioner of Customs, or the Secretary of Finance on appeal, after reviewing the records and evidence adduced in the hearing finds that the charges or remaining charges, even if duly established, is not sufficiently serious to warrant suspension or revocation of the accreditation, he may serve the broker with a written reprimand. Such reprimand and the facts on which it is based may be considered in connection with any disciplinary proceeding that may be instituted against the broker.

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7.3.20.2 If a reprimand is deemed not adequate enough to deter the customs broker from committing the same of any other offence which would warrant a suspension of revocation of his accreditation, the Commissioner or the Secretary of Finance on appeal, may in addition to the reprimand may impose an administrative fine on the broker in the amount of One Thousand (PhP1,000.00) Pesos but not exceeding five thousand (PhP5,000.00) depending on the gravity of the case. 7.3.21 Report to the professional regulatory board for customs brokers and accredited professional organization The Commissioner of Customs shall, in the event a decision adverse to a respondent broker has become final and executory, furnish a copy of the decision to the APO and PRBCB for whatever action it may deem proper and appropriate to take under the premises.

7.3.22 Reapplication for accreditation One (1) year after the date of revocation or cancellation of registration “with prejudice”, a customs broker or corporation may petition the Commissioner for reaccreditation and registration as customs broker. Such petition shall not be favorably considered unless the Commissioner after considering the gravity of the offence or misconduct which gave rise to the petitioners disability is satisfied that the petitioner has refrained from all activities violative of the relevant provision of part 4 hereof and that petitioners conduct has been exemplary during the period of his disability. In any case, the Commissioner shall also take into account whether the petitioner has made reimbursement for the laws incurred on part of the government.

8. Representatives of customs brokers and corporations

8.1 Authority and qualifications of representatives of customs brokers Customs representatives of Customs Brokers must be full- time regular employees of the broker authorized to for and in his behalf in following up the processing of entries, permits and other customs documents related to the practice of the customs broker of his profession in so far as the mechanical aspect of the practice is concerned. Customs Representatives are not expected to delve on substantive aspect of the practice of the profession like customs valuation, tariff classification, rules of origin, requirements of regulatory agencies of government and similar aspects.

8.2 No person shall be employed as a customs representative unless he possess the following qualifications:

a. Must be a Filipino citizen of legal age;b. Must be a college graduate;

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c. Has completed a training program or seminar of at least four hours for the currents year conducted by the APO or by any PRC Accredited CPE Service Provider with certificate of attendance.

d. Current NBI Clearance

8.3 Authority and qualifications of representatives of corporations 8.3.1 Customs representatives of Corporations must be full- time regular employees of the Corporation authorized to for and in his behalf performing functions outside the scope of customs broker professional practice as defined in Section 6, RA 9280 and its implementing rules.

8.3.2 No person shall be employed as a customs representative unless he possesses the following qualifications:

a. Must be a Filipino citizen of legal age;b. Must submit company-issued ID, SSS and TIN;c. Certificate of Employment;d. Current NBI Clearance

8.4 Action on unqualified customs representatives Any customs representative of broker found not to possess the required qualification shall be deleted from the certified list of representatives submitted by the broker. If a disqualification is found in the course of the processing of his application registration, his Customs Pass if already issued shall be confiscated by the ESS upon discovery of his disqualification. 8.5 Disciplinary action against errant customs representatives The following grounds shall be considered as sufficient basis for confiscation or denial of the Customs Pass issued:

a. Discovery of criminal record or conviction of a crime involving moral turpitude;

b. Submission of a fake, spurious or forged document in the course of acting or working on behalf of his employer or other persons doing business with BOC;

c. Disorderly conduct while in the customs zone or premises, such as selling of goods or merchandize and other forms of gross misbehavior towards customs personnel and other customs broker or their representatives.

d. Complaint or charge under oath imputing to the customs representatives any inimical, dishonest or unethical conduct in the performance of his assigned tasks;

e. Habitual delinquency in the commission of offences or violation of rules and regulations promulgated by the Bureau of Customs;

f. “Moonlighting” or extending services on behalf of other brokers or other corporations; and

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g. Any order acts prejudicial to the interest of the government and its revenues.

8.5.1 In addition to the confiscation or denial of his Custom Pass, the broker’s representative shall be barred from entering the customs zone or premises pursuant to Opinion No. 195, series of 1956, of the Secretary of Justice published in BOC Circular Letter No.2917 dated 16 September 1958, which shall likewise be ordered by the Commissioner against customs broker whose accreditation has been suspended or revoked. 8.5.2 At the instance of broker of representative concerned or if the ground for the initial action taken as stated above is sufficiently serious or grave, I-CARE shall direct that an investigation be conducted on the matter. If prima facie evidence is found to support such initial action, the Commissioner shall issue a definitive ban against the representative concern; otherwise, the matter shall be considered closed and the Customs Pass already confiscated shall be returned. If the evidence adduced during the investigation so warrants, the proper criminal action shall be instituted against the broker’s or corporation’s representative. 8.5.3 Notice of separation form or termination of service A customs broker shall, within five (5) working days from date of separation or termination of employment of its representative, give written notice thereof to the District Collector of the Port were said representative is assigned, copy furnished the Commissioner (Attn: CARE, ESS) containing the name of representative, the date the separation or termination became effective, and the number of the Customs Pass issued to him. If the said Customs Pass could not be returned, the reasons for the failure to return the same shall be stated in the notice. 8.5.3.1 Effect of failure to give timely notice The customs broker concerned shall be held responsible and liable for any violation of the rules and regulations or any irregularity that may be committed by his representatives, if no notice was sent as required in Sec.4 hereof.

9. Termination of employment of a broker by client A client importer/exporter may, at any time and for goods cause, terminate the services of his customs broker. Such termination, however, shall not bind the BOC or any representative thereof until written notice of such termination is filed with the CARE and the District Collector of the Port(s) concerned and after it has been circularize for the information and guidance of all concerned. The written notice to be filed shall expressly contain the written conformity (conforme) of the replacement broker whose service shall be acknowledge by the BOC or any representative thereof on the date of circularization of the written notice of charge.

10.Stationery the billing form statements

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10.1 Stationery. The name and accreditation certificate number of customs brokers shall be printed and the brokers stationery and billing forms. Use of rubber-stamp imprint in said documents is prohibited Brokers shall desist from using in their official correspondence with the BOC or any representative thereof different or various kind of stationery.

10.2 Billing statements. All billing statements prepared by customs broker shall indicate, among others, the amount charged as professional fee which may or may be subject to valued added tax (VAT) as may be required pursuant to existing law, rules or regulations.

11.Signing of entries and other customs documents Customs broker shall, when signing entries and other customs documents, indicate/state his PRC ID NO., certificate of accreditation number and date of issuance below his printed name. Example : JUAN A. DELA CRUZ PRC ID NO. 1234 CA NO. 000-2005 ISSUED ON: MARCH 15, 2010

12.Roster of customs brokers

The APO/PRBCB, within three (3) months after the date of effectivity of this Section, shall submit a list of all customs brokers with their respective office address and telephone number(s), to BOC thru the ICARE. The list shall be updated every end of April, August and December of each year.

13.Special provisions relative to general professional partnerships of customs brokers

13.1 Recognition by the Bureau of customs

Customs Brokers who have pooled their professional expertise, talents and resources to form a general professional partnership (GPP) pursuant to the provisions on PARTNERSHIP (Title IX of Book IV or RA 386 (Civil Code of the Philippines may, at any time, file an application for official recognition of its juridical personality with the BOC which shall be separate and distinct from the personality of each of the partners, who must be customs brokers as defined under this Section..

13.2 Liability of signing partner and GPP.

A Signing Partner filing or lodging or signing an import entry and other customs declaration for his personal account shall be personally liable therein and that the accredited GPP shall not be bound by such declarations. A Signing Partner signing for the accredited GPP shall indicate on the import

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entry and other customs declarations under his name the name of the GPP, in which case, the GPP shall be solidarily liable with the Signing Partner.

13.3 Procedure to obtain official recognition13.3.1 Initially, a duly accomplished application for recognition in three (3) typewritten copies shall be submitted to the ICARE after payment of the non-refundable amount of three thousand pesos (P 3,000.00) per GPP as accreditation fee. The application, which must be under oath, shall be filed together with verified photocopies of the following supporting documents:

a. Articles of General Partnership with the corresponding Certificate of Registration issued by the SEC attached thereto;

b. Certified list of the firm’s bona fide customs representatives signed by the Managing Partner together with their corresponding valid NBI clearance and SSS ID card;

c. Certification of Accreditation by at least one (1) partner; d. Certificate of good standing from APO for non-accredited

partners; e. Certificate of completion of twenty (20) credit CPE units issued by

a PRC accredited service provider for the year preceding application for GPP recognition for non-accredited partners;

f. Valid PRC Certificate of Registration for non-accredited partners; g. Valid PRC ID as Customs Broker for non-accredited partners.

13.5 Issuance, form, validity and effect of certificate of recognition

13.5.1 If CARE finds the application in order and complete with all the required documents, it shall issue a Certificate of Recognition of the GPP under its official seal upon payment of the required documentary stamp tax, the official receipt number of which shall be properly indicated.

13.5.2 The certificate of recognition shall have a serial number to be given sequentially and followed by the year of its validity (Example: No. 0000-2006). The serial number shall be permanently assigned to the GPP concerned as its permanent identification number and only the year of its validity shall be changed when a new certificate is issued upon renewal by said GPP.

13.5.3 Official correspondence addressed to the BOC or any representative thereof on matters relative to the practice of the customs broker profession of a GPP or for and in behalf of any of its partners shall be given due course only if the GPP has been officially recognized, except those pertaining to the personal concerns of any of its partner-signatories or any representative thereof, which shall be signed by such partner-signatory.

13.6 Condition of recognized GPP

13.6.1 A GPP firm shall have a Managing Partner who shall be the chief operating officer (COO) whose main task is to manage the GPP’s practice of the customs broker profession and shall be the one shown on its

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Articles of General Partnership or the one chosen by the partners pursuant to a resolution of the partners.

13.6.2 A GPP firm must have two (2) or more partner-signatories if the scope of its practice extends to collection districts outside of Metro Manila.

13.6.3 Applications for accreditation by customs brokers who are partners in a GPP and application for recognition of the GPP may be made simultaneously. In such cases, the partners shall submit consolidated certified list of its customs representatives, which shall be attached to the application of recognition, to be signed by the Managing Partner.

13.6.4 The Certificate of Recognition shall be valid and subsisting but subject to annual submission of documents hereunder together with BOC Official Receipt:

a. Valid Certificate of Accreditation of at least one partner;b. Valid PRC ID of non-accredited partners;c. APO certificate of good standing for non-accredited partners;d. Certificate of completion of twenty (20) CPE units of non-

accredited partners issued by PRC accredited CPE service provider for the preceding year;

e. Certified list of GPP’s customs representatives who must be its full-time employees.

13.6.5 Unless allowed in writing by all partners no partner shall “moonlight” or surreptitiously offer and/or use his professional services solely in his own account and for his personal gain and benefit while still a member of the GPP firm. However, no partner shall allow himself to be a partner of another GPP, directly or indirectly, to avoid conflict of interests.

13.6.6 The resignation, retirement, separation or death of one of the partners of a recognized GPP shall not result in the cancellation of the certificate of recognition granted by the BOC but only the cancellation of the certificate of accreditation of the partner concerned. In any such event, the Managing Partner of the GPP firm shall notify the CAS within ten (10) days after effectivity of the resignation, retirement or separation date of the partner’s demise.

13.6.7 Any customs broker subsequently admitted as a regular partner into an existing recognized GPP shall be acknowledged as such upon proper notification to the CAS, which notice shall be accompanied with a photocopy of its amended Article of General Partnership duly filed with the SEC.

13.6.8 The obligations of GPP partners among themselves and with third parties as well as the dissolution of the partnership shall be governed by the rules on GPP. In case of dissolution, the Managing Partner shall officially notify the CAS in writing of the date the winding up of its customs business will be completed for purposes of record. For the information of their clients

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and the transacting public, the Commissioner shall issue a circular stating when the existence of the GPP has been terminated

SECTION 3 – VALUE-ADDED SERVICE PROVIDERS (VASP)

3.1 Definition of Term

3.1.1 Value Added Service Provider (VASP)

A third party service provider of the interface between the e2m Customs System clients and BOC Gateway.


3.2.1 VASP Accreditation Committee (VAC) (Note: Who are members? Or shall this Section add “The Commissioner through a Customs Special Order shall create the VAS Accreditation Committee (VAC)”?) The VASP Accreditation Committee created by the BOC to ensure the successful implementation of e-Customs Project, shall perform the following:

a. Facilitate and fast-track the accreditation process to effect the transition of service offered by the current Entry Encoding center to the VASPs.

b. Recommend relevant policies, responsibilities and liabilities of VASPs, rules and processes related to all issues surrounding the accreditation of VASPs.

c. Recommend evaluation criteria, business model and timeframes for accreditation of VASPs for approval of the Commissioner of Customs.

d. Publish and hold informational campaigns to ensure widest circulation of the VASP program in partnership with the accredited VASPs.

3.2.2 Accreditation Criteria The VASP Accreditation Committee shall observe the published accreditation criteria and shall recommend any amendments thereto to the Commissioner for approval. 3.2.3 Conditions for Accreditation 3.2.3.1 Service Level Undertaking (SLU) and Non-Disclosure Undertaking (NDU) The selected VASPs shall sign a Service Level Undertaking (SLU) and a Non-Disclosure Undertaking (NDU).

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(Note: Should there not be a standard format?)3.2.3.2 Accreditation Fees A one-time accreditation fee of PhP 200,000.00 (first year) and an annual fee of PhP 50,000.00 (second year onwards) shall be imposed. 3.2.3.3 Performance Bonds The accredited VASPs shall post a Performance Bond, issued by a BOC-accredited surety company, amounting to Five Million Pesos (PhP 5M), which shall be forfeited in favor of BOC in the event it is established that the selected VASP is in default in any of its obligations. 3.2.3.4 Probationary period The accredited VASPs shall undergo a six (6)-month probationary period (technical evaluation) after which the BOC shall decide whether or not it will grant full accreditation status to the VASP. 3.2.3.5 Period and Renewal of Accreditation The selected VASPs shall be given accreditation status for a period of three (3) years, inclusive of the probationary period, and will be renewable yearly thereafter subject to the evaluation of the quality of their performance as measured by the Service Level Undertaking (SLU), and compliance to Eligibility requirements. 3.2.3.6 Other Conditions

a) BOC may re-conduct the accreditation process if there is only one (1) company accredited within subject period.

b) BOC may carry out further accreditation processes after three (3) years of operation of the initially accredited VASPs.

c) After the six-month probationary period (where a minimum of PhP 5 Million paid up capital was required upon submission of application), the minimum paid up capital shall be increased to PhP 10 Million.

d) VASPs must successfully pass the technical acceptance tests (including systems integration, data security and integrity, communications, and performance) that will be conducted by the Management Information Systems and Technology Group of the BOC for the initial, the post probationary and the yearly

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technical evaluation and validation, to qualify for continuous accreditation.

3.2.4 Pre-Termination BOC reserves the right to pre-terminate the accreditation of a selected VASP for any of the following:

a) Violation of the provisions of this Order and related rules and regulations, including SLU and NDU.

b) Violation of the Tariff and Customs Code of the Philippines, e-Commerce Act and other related laws.

c) Actions inimical to the security and integrity of the BOC e-Customs operations.

d) Other violations as may be determined by the Commissioner of BOC.

3.2.5 Schedule of Fees Payable to VASP by the Transacting Public The VASPs will determine their respective fee structures based on several factors such as market conditions and systems sustainability requirements, among others. The BOC shall not collect those fees in behalf of the VASPs.

3.2.6 Systems for Import and Export Entries through VASPs

The accredited VASPs, under existing agreements and/or regulations, shall develop the VASP front-end ICT system and establish necessary infrastructure and telecommunications facilities to allow electronic transactions. The BOC-VASP Gateway (operated by the BOC) shall be the sole connectivity of VASPs to the BOC e-Customs System for this purpose. The BOC clients shall be connected to the BOC-VASP Gateway via accredited VASP of their choice, which has the facility for the processing of import and export entries. The VASP facility shall be available to duly registered importers, exporters and their designated brokers.

3.2.7 VASP Implementation

The BOC shall implement the VASP in phases in order to effectively manage the technical requirements and cushion the impact for change particularly among the external and internal stakeholders. BOC shall define the schedule, ports, and types of transactions that will be covered in each phase.

3.3 Operational Provisions of Accreditation Process

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a. Through the VAC, BOC issues invitation for a Letter of Intent from

select ICT companies in the Philippines. This also includes the Eligibility Requirements that interested candidates must meet in order to be eligible for participating the accreditations process.

b. The VAC reviews the documents submitted by the candidate companies that pass the eligibility requirements and qualified to proceed to the next stage.

c. BOC releases the Term of Reference, along with the Non Disclosure Understanding to be signed by the candidate VASP. The Terms of Reference includes the system and other critical requirements (for technical proposal) and financial requirements (for financial proposal). d. Candidate VASPs prepare and submit their technical and financial proposals. e. Candidate VASPs shall also start with the development of the VASP system based on the system requirements issued by BOC. At this point, BOC releases its Testing Criteria that will be used as guide for testing the VASP System of the candidate companies. f. Using the agreed Testing Criteria as reference, BOC organizes a Quality Assurance Team, composed of technical experts from MISTG which will determine the compliance of the candidate company to the system requirements. The testing shall also include, among others, checks for user-friendliness of the system. g. After the conduct of test and site visits, BOC shall now identify successful candidates that will be accredited to become VASP/s. h. BOC shall pre-qualify VASP Candidates. i. BOC shall release terms of reference. j. VASPs shall submit technical and financial proposal. k. VASP shall develop the System Application. l. BOC shall test for quality assurance the VASP System Application. m. BOC shall select and accredit the VASP.

SECTION 4 – CARGO SURVEYORS

4.1Definition of Terms

4.1.1 Surveying Company.

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Refers to a reputable company with an international office network in all countries supplying imported articles to the Philippines and engaged in the business of cargo surveying of shipments.

4.1.2 Accredited Cargo Surveying Company.

A surveying company processing a duly approved accreditation issued by the Committee for Accreditation of Cargo Surveying Companies (CACSC).

4.1.3 Committee for Accreditation of Cargo Surveying Companies (CACSC).

The accreditation committee created under AO 24, as amended directly under the supervision and control of the Office of the President tasked and authorized to grant and approve accreditation of cargo surveying companies and periodically review the performance thereof The CACSC may also investigate violations of the provisions of this Order and thereafter suspend and/or revoke the accreditation given to a cargo surveying company.

4.1.4 Bulk Cargo

Refers to cargoes in a mass of one commodity not packaged, bundled, bottled or otherwise packed.

4.1.5 Break-Bulk Cargo

Refers to non-containerized general cargo stored in boxes, bales, pallet or other individuals units to be loaded onto or discharged from vessels. Not shipped in containers or bulk.

4.1.6 Bulk/Break-Bulk Cargo Surveying.

Refers to the inspection, analysis and/or computation of bulk or break-bulk cargo for the purpose of determining the correct dutiable weight, quantity, description of goods in tariff terms, and/or cargo make or quality.

4.1.7 Customs Survey Inspectors (CSI).Organic employees and officers of the Bureau of Customs with special qualifications and technical training in cargo inspection and surveying and capable of rendering reliable and efficient survey reports relative to the same.

4.1.8 IFIA

Shall refer to the International Federation of Inspection Agencies.

4.1.9 Load Port Survey Report,

A report issued by an ACSC for Bulk/Break-Bulk cargo to be imported into the Philippines. The report shall be submitted to the BOC directly from the ASCS in a secure electronic format.

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4.1.9.10 Discharge Port Survey (DPS) Report.

A report issued by an ACSC for Bulk/Break-Bulk Cargo after the conduct of a survey at the port of discharge.

4.1.9.11 One Stop Shop (OSS).

Shall mean the composite limit headed by the Deputy Commissioner for assessment and Operations A Group (AOCG) and composed of representatives from the Office of the Commissioner (OCOM), Management Information System and Technology Group (MISTG), Group (Enforcement Group (EG), Post Entry Audit PEAG), Risk Management Office (RMO), representatives of the Department of Trade and Industry (DTI) and Private Sector who are also members of the CACSC, and representative of the Office of the Presidential Adviser of Revenue Enhancement (OPARE).

The OSS shall be responsible for confirming/approving requests for DPS made by importers of shipments not covered by the required LPS Reports

4.1.9.12 Motor Vehicles for Special Purposes.

Those motor vehicles equipped to functions for a special purpose, e.g. cranes, backhoes, bulldozers, ambulances, buses, funeral hearse and the like.


4.2.1 Composition of the Committee for Accreditation of Cargo Surveying Companies (CACSC) (Ref: CAO 6-2008)

a. Deputy Commissioner for Assessment and Operations Coordinating Group (AOCG) –Chairman

b. Deputy Commissioner for Management Information System and Technology Group (MISTG) -Vice Chairman

c. Deputy Commissioner for Intelligence and Enforcement Group (IEG)- Member

d. Deputy Commissioner for Revenue Collection Monitoring Group (RCMG) –Member

e. Deputy Collector for Operations, POM –Member

f. Deputy Collector for Operations, MICP –Member

g. Deputy Collector for Operations, Batangas –Member

h. Representative from the Office of the Commissioner –Member

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i. Port Operations Service (POS) Director, Member

4.2.2 Functions

a. To grant and approve the accreditation of Cargo Surveying Companies/Surveyors and the renewal of the same upon its expiration upon application;

b. To monitor and periodically review the performance of Accredited Surveying Companies/Surveyors through the POS;

c. To recommend the suspension or revocation of accreditations to the Commissioner of Customs.

d. To perform such other functions relative to its creation and in accordance with the provisions of this Section.

e. To consult with the private sector on a regular basis.

4.2.3 Administrative Support.

The CACSC shall be assisted and supportes1 by the Port Operations Service (POS) which shall receive, process, and recommend all applications for accreditation and renewal of accreditation of surveying companies for consideration and approval by the Committee. 4.2.4 Period to Approve Application.

The CACSC shall grant or approve all applications for accreditation within fifteen (15) days from receipt of said application with complete supporting documents from the POS Secretariat. 4.2.5 Port Operation Service (POS) Allied Functions

The POS shall likewise be responsible for the following matters for and in behalf of the CACSC:

a. To monitor and periodically review the performance of Accredited Surveying Companies/Surveyors and recommend the suspension or revocation of the same to the CACSC after due notice and hearing;

b. To keep an updated record of all accredited Surveying Companies including the pertinent documents required by the grant of accreditation;

c. To have custody, storage and maintenance of all data/survey reports;

d. To maintain a priority or rotation list of members of the CSI for assignment on a per mission order basis, whenever necessary;

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e. To perform such other functions as provided by the CACSC and in accordance with the provisions of this Order.

4.2.6 Accreditation of Surveying Companies

All cargo surveying companies engaged in the business of cargo surveying who wish to be accredited must apply for and receive accreditation from the Committee for Accreditation of Cargo Surveying Companies (CACSC).

4.2.7 Criteria for Surveying Companies

Applicants for accreditation must have the following basic qualifications:

a. Minimum track record of ten (10) continuous years in international bulk and break-bulk cargo surveying.

b. Member in good and reputable standing of the International Federation of Inspection Agencies (IFIA).

c. International office network in all countries of supply to the Philippines as shown in the updated company profile and organizational structure.

d. Must possess and maintain the basic tools and implements needed in bulk and break-bulk cargo surveying and must have the competence and capability to conduct laboratory testing of cargoes for qualitative analysis either using its own or accredited laboratories.

e. Must be capable of receiving and transmitting electronic instructions from authorized ship agents, importers or responsible customs officials.

f. Must be able to issue reports and certificates in a secure electronic format.

g. Must not have been blacklisted or its services terminated by any Government or international entity by final and executory judgement/order in the immediately preceding three (3) years, on the grounds of poor performance and/or irregularity in dealings, unless proven otherwise by competent and verifiable evidence as considered by the CACSC and duly approved by the Commissioner of Customs.

h. Must be able submit a comprehensive Capacity Building Program for the Bureau of Customs' officials and personnel who will be directly involved in the implementation of this program.

4.2.8 Accreditation Procedure

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4.2.8.1 Application.

A surveying company wishing to apply for accreditation shall accomplish the Application Form, marked ANNEX “A”. A Service Level Undertaking/Non-Disclosure Agreement, marked ANNEX “B” shall be submitted by the Surveying Company as part of the requirements for the approval of the application. The complete application together with all the documentary requirements including a non-refundable application fee of PHP50,000.00 shall be submitted to the CACSC through the Port Operation Service (POS).4.2.8.2 Acceptance.

The POS shall then make a preliminary determination as to the completeness of the application and the full payment of the application fee. 4.2.8.3 Physical Evaluation.

The POS may conduct a physical inspection of the assets and an actual evaluation of the operations of the applicant if it deems it necessary before submitting its recommendation to CACSC. 4.2.8.4 Calendar.

Upon the direction of the Chairman of the CACSC, the POS Secretariat shall calendar the meeting and issue the necessary notices to all members and interested parties. The CACSC shall evaluate and deliberate on the application and shall issue a Decision in writing approving or denying the application, stating the reason and area of non-compliance in case of denial. 4.2.8.5 Decision.

The Committee shall inform the applicant in writing of the approval of its application and shall require the applicant to pay the necessary one time accreditation fee of PHP200,000.00 within fifteen (15) days from the receipt of such approval together with a Cash Bond in an amount of PHP1,000,000.00 in accordance with the attached form. Applicants may re-submit denied applications which shall be treated as a new application subject to the payment of the processing fee. 4.2.8.6 Right of Appeal.

Any surveyor which having completed an application to be accredited as a bulk or break bulk cargo surveying company and whose application for accreditation is rejected by the CACSC shall have the right of appeal to the Secretary of Finance within fifteen (15) days from receipt of the notice. It shall be fundamental to such appeal and the burden of the surveyor to demonstrate that it has satisfied the criteria for accreditation 4.2.8.7 Accreditation Certificate.

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Upon payment of the accreditation fee, the applicant shall be issued an Accreditation Certificate, indicating therein the Official Receipt Number and the period of validity of such accreditation. The CACSC shall meet as necessary when there are applications submitted for evaluation or when the Chairman or Commissioner of Customs require such to meet to deliberate on issues concerning the Bulk and Break-Bulk Cargo Clearance Enhancement Program. In any event, it shall be the responsibility of the POS Secretariat to issue notices of meetings and prepare the agenda therefore.

4.2.8.8 Annual Bond Requirement.

All accredited cargo surveying companies shall be required to post an annual cash bond of One Million Pesos (PhP1,000,000.00) which shall stand as guarantee/security for any or all violations of the provisions of this Order and the undertakings as provided herein. The bond shall be constantly maintained at above-stated amount at any given time during the accreditation period. In cases where amounts are credited against the bond, it shall be the responsibility of the accredited surveyor to replenish the same within (ten) 10 days from date of transaction. 4.2.8.9 Effectivity of Accreditation.

The accreditation of Surveying Companies/Surveyors shall be effective for a period of three (3) consecutive years, unless sooner revoked for cause. 4.3 Renewal of Accreditation.

Applications for renewal of accreditation shall be filed not earlier than ninety (90) calendar days but not later than thirty (30) calendar days prior to the date of expiration of accreditation. A late filing fee of ten (10%) percent of the accreditation fee shall be imposed on applications received out of the prescribed period. 4.4 Non-renewal of Suspended/Revoked Accreditations. No application for renewal of accreditation shall be accepted in cases where the Certificate of Accreditation has been suspended or revoked for cause during the time it was subsisting, unless subsequently lifted by the Commissioner of Customs upon the favorable recommendation of the CACSC. 4.5 Binding Effect.

All accredited surveying companies and its surveyors are bound by the provisions of this Section and all other rules and regulations that may be issued by the Commissioner of Customs. 4.6 Confidentiality Clause.

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All accredited surveying companies shall submit a Service Level Undertaking and execute a Non-Disclosure Agreement in favour of and in such form as required by the Bureau of Customs. All information and/or data obtained by the accredited surveying company and any of its officers and employees in the performance of their surveying or any other activity incidental thereto shall be treated with utmost confidentiality, the unauthorized disclosure of which shall be subject to penalties and sanctions as determined by the CACSC in accordance with existing laws. This Section shall likewise apply to any BOC official or employee who obtains any information and/or data by virtue of this regulation. 4.7 Violation/Penalties.

Any violation of any of the provisions of this Order shall cause the suspension or revocation of the accreditation of the surveying company as the case may be after due administrative notice and hearing without prejudice to the filing thereafter of appropriate administrative, civil or criminal charges against erring cargo surveying companies/surveyors. 4.8 Sanctions for Bureau of Customs Personnel.

In addition to the sanctions imposed under the TCCP I as amended, and Civil Service laws, rules and regulations, any Bureau of Customs official and/or employee found to have violated any of the provisions of this regulation shall be immediately relieved and if warranted after due administrative notice and hearing, be transferred to another office or assigned to a less sensitive position in the Bureau.

4.9 Capacity Building Programs for BOC Personnel

Capacity Building programs for BOC personnel in the form of technical training and continuing education in cargo surveying techniques shall be provided by the ACSC either in a Philippine or international forum. To declare the commitment of ACSCs to the Capacity Building Program for cargo survey Capacity Building Undertaking Form is hereby required from all ACSCs.4.10 Schedule of Charges and Fees.

The service of the ACSCs pursuant to this order shall entail no cost or charge for the government of the Republic of the Philippines.

For additional services to the BOC, the ACSC shall be allowed to charge a fee in accordance with international standards and practices but in no case to exceed one-half of one percent (0.5%) of the FOB value of the cargo. This fee shall be payable by the exporter, unless otherwise agreed upon by and between the importer and exporter.

SECTION 5 – OFF-DOCK CONTAINER YARD/CONTAINER FREIGHT STATION (OD-CY/CFS)

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Note: References: CAO 6-96, CAO 5-94 and CMO 24-01. In bold letters are amendments)

5.1 Definition of Term5.1 Off-Dock Container Yard/Container Freight Station (OD-CY/CFS) refers to a Container Freight Station (CFS) outside of customs zone accredited by the Bureau of Customs to break-bulk consolidated Less than Container Load (LCL) shipments by international freight forwarders and accept stuffing of LCL export shipments.


5.2.1 Services Rendered by OD-CY/CFS

OD-CY/CFS may offer following services:

a. Break-bulking of LCL import shipments;b. Stuffing of LCL export shipments.

5.2.2 Standard Charges

OD-CY/CFSs are mandated to charge a standard fee as promulgated by the Bureau of Customs. See Chapter 2, Book 7.

5.2.3 Procedures and Penalties for Violations of Section 2.2

5.2.3.1 Upon presentation of a complaint showing official receipts of payment made to OD-CY/CFS Operators by consignee or their authorized customs representatives/brokers of the Port users Confederation which indicate a violation of this order, the District Collector shall immediately conduct a summary investigation following herein procedure:

5.2.3.1.1 A notice of investigation shall be given to the outside OD-CY/CF Operator being complained of with an order to present evidence that actual charges were made in accordance with this regulation. A copy of the notice shall be given to ACOP for information.5.2.3.1.2 If the District collector finds a deliberate violation of this order, the following penalties and sanctions shall be imposed:

a. For the first offense, a penalty of fifty thousand pesos (Php 50,000) payable to the Bureau of Customs, and refund to the consignee of 100% of the overcharge. Non-payment of the penalty shall cause the suspension to transfer to the concerned CY/CFS-OCZ Operator.

b. For the second offense, the District Collector shall order the immediate suspension of transfers of containers to the erring CY/CFS-OCZ Operator for a period of one (1) month.

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c. For the third offense, the District Collector shall order the immediate suspension of transfers of containers to the erring CY/CFS-OCZ Operator and the District Collector shall initiate proceeding for the revocation of the permit to operate against the erring operator.

5.2.3.1.3 The Office of the Commissioner shall be furnished a copy of the findings and the penalty or sanctions imposed by the District Collector. Any appeal of said findings and order shall be made to the Commissioner. Any sanction such as, suspension or revocation of the permit to operate shall be applicable in both the Port of Manila and MICP.

5.2.4 Requirements for Accredited OD-CY/CFS

5.2.4.1 Provide for sufficient security to cover any loses on good transferred to the CY/CFS-OCZ.

a. Accredited OD-CY/CFS operators must form an Association of off dock CFS's and shall put up an interest bearing account with the any government bank with branch inside POM or MICP (under CAO 5-94 it is with PNB Branch at Port Are that the account be opened.) the outstanding balance of which must not be allowed to go lower than two million pesos (one million pesos under CAO 5-94) to answer for duties and taxes due on lost or damaged shipments.

If after three (3) working days from receipt of the demand letter the amount demanded is not paid by the erring OD-CY/CFS Operator, the Commissioner of Customs shall then send demand letter to the off dock CFS Association demanding payment within three (3) working days from receipt thereof, of the duties and taxes not paid by the erring CY/CFS-OCZ operator. Failure of the association to pay the amount within the prescribed period shall authorize the bank to automatically transfer the amount stated in the demand letter from the interest bearing account to the account of the Bureau of Customs. The bank shall issue to the Commissioner of Customs a confirmation letter stating that the transfer has been effected.

The bank shall automatically transfer the amount demanded upon presentation transfer the amount demanded upon presentation by the Bureau of Customs of the following documents:

a. Copy of Demand Letter sent to the off dock CFS Operators Association;

b. Copy of Demand Letter to the erring CY/CFS-OCZ operator for the payment of duties and taxes on goods entered in the CY/CFS-OCZ;

c. Copy of the Customs Appraiser's computation of duties and taxes that may be based on Clean Repot of Findings covering the shipment or other available value information on file;

d. Approved CY/CFS-OCZ Transfer documents.

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CY/CFS-OCZ operators who are not members of the Association shall put up its own bank deposit equivalent to P 1.0 million under the same terms and conditions.

The off dock CFS Operators Association must replenish the interest bearing account to meet the balance of P2.0 million within five (5) working days from the time of withdrawal from the account. In case of failure of the Association to replenish the account within the prescribed period, the Commissioner of Customs shall temporarily suspended all transfer of shipments destined to all members of the Association until the account has been replenished.

b. Each OD-CY/CFS operator shall submit proof to Customs Bonded Warehouse Committee latest 15 January of every year of annual one-year insurance bond at P5.0 million (P1.0 million under CAO 5-94) against fire/accident/pilferage at the OD-CY/CFS renewable every year for articles stored or to be stored at the OD-CY/CFS.

5.2.4.2 Operate a computerized warehouse inventory and audit system

To enable the Bureau of Customs to conduct audit on the integrity of the operations of accredited OD-CY/CFS operator the system must have connectivity with e2m Customs System. Of particular interest to the Bureau of Customs are articles stored considered as overstaying which ipso facto are deemed forfeited in favor of the government.

5.2.4.3 On Prevention of the Entry of Drugs and other Anti-social Goods

Accredited OD-CY/CFS operators are required to install in their warehouses drug detection equipment as well as other equipment that can detect articles like arms, munitions, explosives or other anti-social goods.

5.2.5 Authority to Check Compliance and Conduct Audit on Operations of OD-CY/CFS

WAMU through formal request from the Customs Bonded Warehouse Committee (CBWC) or in its own initiative conduct compliance and conduct audit on the operations of OD-CY/CFS with emphasis on the maintenance of automated inventory management system.

5.2.6 Detail of Customs Officials/Employees to OD-CY/CFS and Supervision Fees

The Bureau of Customs shall assign customs officials/employees to OD-CY/CFS for the purpose of protecting government lawful revenues and ensuring that said operators provide good service to their clients.

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The annual supervision fee shall be equivalent to the assigned employees’ salaries, allowances, employees’ share of GSIS premium, employees’ share of Pag-Ibig Fund, employees’ Philhealth premium and similar expenses. After due consultation with the OD-CT/CFS association the BWC shall have the responsibility of computing andrecommending to the Commissioner of Customs the amount of annual supervision fees to be paid by the accredited OD-DY/CFS.

For 2012 the annual Supervision Fee shall be ____________ which shall be payable in advance beginning of each quarter. Adjustments to the annual Supervision Fee

Note: BWC will compute the annual Supervision Fee.

5.3 Guidelines in the Approval of Applications to Operate OD-CY/CFS

5.3.1 Capacity Utilization

No new applications for a license to operate an OD-CY/CFS shall be given due course unless the Aggregate Capacity Utilization (ACU) of the existing ODCY/CFS for the immediately preceding 12 month period is in excess of 50%.

ACU shall be computed as follows:

For purpose of estimating the capacity of an ODCY/CFS, the CFS capacity shall be the basis and be calculated as follows:

Where:

A = Aggregate floor area in square metersB = Allowance for mobility (35%)C = Average stacking height (1.5 mtrs)D = Average CBM per TEU (25 CBM)E = Average number of days storage (5 days)F = No. of working days in one year, i.e 248 days

5.3.2 An application to operate an ODCY/CFS must be supported by figures showing the following:

a. The volume of consolidated container inbound traffic over the last 24 months which shows a definite upward trend.

b. The ACU based on the last 12 months figure has broken the 50% barrier.

c. A public hearing must be undertaken where the existing ODCY/CFS operators may present their position on whether or not to license new operators and the additional capacity required.

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c.1 For purposes of 2.6 Additional Capacity Required (ACR) or to be filled shall be computed as follows:

ACR% = ACU% - 50%

c.2 The smallest capacity to be filled must be the TEU requirements of 2000 sq. meters of CFS or 3868.8 TEU’s.

d. In case the number of applicants exceeded the capacity to be filled, the award shall be given according to the following prioritization:

Priority 1: Existing ODCY/CFS operators with room for expansion in their present location and whose capacity utilization is in excess of 50%.

Priority 2: New entrants with a proposed facility better than or equal to the best existing ODCY/CFS in terms of location, equipment and management team.)

SECTION 6 – GPS SERVICE PROVIDERS


6.1.1 Customs Barcoded Seal.

An optical machine-readable representation of transit data that is incorporated in the sealing tape used for breakbulk cargo.

6.1.2 Breakbulk Cargo.

A non-containerized cargo which is grouped or consolidated for shipment and broken down or sub-divided into unitized cargo, such as in pallets or packed in bags or boxes.

6.1.3 Containerized Cargo.

A cargo that uses standard intermodal containers that are standardized by the International Organization for Standardization (ISO) and can be loaded and sealed intact onto container ships, railroad cars, planes and trucks.

6.1.4 Electronic GPS-equipped Barrier Seal (EGBS)

A reusable electronic device equipped with GPS that serves as barrier seal to the container door to ensure that the cargo is not tampered with while in transit.

6.1.5 Electronic GPS-equipped Barrier Seal Service Provider (EGBSSP)

BOC accredited company that provides EGBS

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6.1.6 GPS

Is a system satellites, computers, and receivers that is able to calculate the location of the user on a digital map.6.1.7 Tracking and Monitoring System

Secure and interactive web-based system used to provide the location and condition of transit cargo using GPS.

6.1.8 Transit

Means the customs procedure under which goods are transported under customs control from one customs office to another as further specified hereof.

6.1.9 Transit Permit – clearance issued by Customs to allow the transit of goods

6.1.10 Transshipment

Means the customs procedure under which goods are transferred under customs control from the importing means of transport to the exporting means of transport within the area of one customs office which is the office of both importation and exportation

6.1.11 SAD

Single Administrative Document is an aligned trade and customs document adhering to international documentary requirements and best business practices conforming to the UN Layout Key.

6.2 Administrative Provisions 6.2.1 Accreditation of Service Providers of Electronic GPS-equipped Barrier Seals

The Committee on Accreditation of Service Providers(henceforth called CASP) headed by the Deputy Commissioner for AOCG shall accredit qualified private sector providers that would be allowed to supply the required CEGBS and the accompanying monitoring system. 6.2.2 The Committee on Accreditation of Service Providers (CASP) shall be composed of the following:

Chairman – Deputy Commissioner for AOCGMembers – Representatives from:

a. The Legal Serviceb. The Intelligence Servicec. Port Operations Service

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d. Administration Officee. MISTGf. Deputy Collector for Operations from 3 major ports (POM, MICP, NAIA)

6.2.3 Accreditation Process6.2.3.1 Pre-Qualification

6.2.3.1.1. Through the Committee on the Accreditation of Service Providers (henceforth called CASP), BOC shall publish in two (2) newspapers of general circulation and the BOC website, an invitation for qualified private entities to apply for accreditation as Service Provider of Electronic GPS-equipped barrier seals, including the hardware and software required for the operation of the system. The publication shall include the Eligibility Requirements which applicants shall be asked to submit together with their application and proof of payment for the non-refundable processing fee in the amount Fifty Thousand Pesos (P50, 000,00).

6.2.3.1.2 The application together with the Eligibility Requirements shall be submitted to the Secretariat seven (7) days after the publication. Upon verification by the Secretariat that the submitted documents in compliance with the Eligibility Requirements are complete, the applicant shall be given a copy of the Terms of Reference (TOR) upon presentation of the Secretariat to the BOC Official Receipt representing the non-refundable payment of the processing fee in the amount of Fifty Thousand Pesos (P50,000.00).

6.2.3.1.3 The CASP shall proceed to shortlist eligible applicants by assessing the capability of each according to the following (numbers in parenthesis represent the maximum score that may be given to an applicant for each criterion, for the purpose of ranking applicants):

i. Relevant experience (65);ii. Financial Capability (25);iii. Company Profile (10)

6.2.3.1.4 Upon instruction from the CASP, the Quality Assurance Team (henceforth called QAT shall conduct site visits to the office premises of each applicant for the purpose of short listing applicants. The QAT shall submit its findings and recommendations to the CASP, which shall serve as inputs to the pre-qualification process.

6.2.3.1.5 The CASP shall shortlist the top three (3) service providers from those who have submitted their applications and have been determined as eligible. The Committee shall issue a Decision in approving or denying the application.

6.2.3.1.6 The Secretariat shall notify in writing the applicants whose application have been denied attaching the corresponding Decision with the information that subject Decision can be appealed by filling a motion for reconsideration within three (3) days from receipt of the customs decision.

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CASP shall resolve such motion within forty-eight (48) hours from receipt of said motion.

6.2.3.1.7 Shortlisted applicants shall likewise be informed in writing of the Decision and shall be invited to a conference with the CASP to discuss the technical and financial proposals required by the accreditation process and to answer questions on the TOR.

6.2.3.2 Qualification

6.2.3.2.1 Shortlisted applicants shall be required to submit their technical and financial proposals to the Secretariat on or before the date to be announced during the abovementioned conference.

6.2.3.2.2 The technical proposal shall include the following:

i. Authority of the signatory.

ii. The proposed CASP organizational chart. If the applicant is a consortium of firms, the relationship between the firms in the consortium should be shown and the roles and responsibilities of each should be clearly described. The chart should also show how the organization will link with collaborating units of the BOC.

iii. Approach and methodology, work plan, and schedule of implementation including pilot and role-out strategies. The section should describe how the GPS-equipped transit system will be put in place, including the phasing of implementation. The roles of the relevant units of the BOC in this effort should also be described.

iv. Technical specifications of the required hardware and software, including the following:

• The electronic GPS-equipped barrier seal, including the GPS system that supports it;• The hardware and software of the monitoring system;• The communications system. v. List of key personnel to be assigned to the CASP organization, their complete qualification and experience data;

vi. Certificate under oath of compliance with existing labor laws and standards.

vii. A sworn affidavit of compliance with the Disclosure Provision under Section 47 of R.A. 9184 (An Act Providing for the Modernization, Standardization and Regulation of the Procurement Activities of the Government, and for Other Purposes) in relation to other provisions of R.A. 3019;

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6.2.3.2.3 The financial proposal shall layout the price schedule of goods and services offered by the proponent Service Provider to include prices for one-time use of the electronic GPS-equipped barrier seal. The proposal shall also declare in sufficient detail the costs that underlie the price schedule, giving a clear picture as to how the prices were arrived at. It should also show how financial sustainability of operations is projected to be attained. Financing sources should be declared as well.

6.2.3.2.4 The technical and financial proposals shall be submitted to the Secretariat.(i) on or before the specified deadline, and (ii) in two (2) separate sealed envelopes, the first containing the financial proposal with the label “Technical (or Financial) Proposal, Customs Electronic GPS-Equipped Barrier Seal Service Provider Accreditation” and the name of the applicant in capital letters, addressed to the CASP. The two envelopes shall be further labeled: “Do not open before (the date and time of opening of proposals)”. Both envelopes shall then be sealed in an outer envelope which shall be addressed to the Committee on the Accreditation of Service Providers of Customs Electronic GPS-Equipped Barrier Seals, Bureau of Customs.

6.2.3.2.5 The CASP shall open the proposals at the time, date and place specified in the Invitation to Apply for Eligibility and Accreditation. The applicants or their duly authorized representatives may attend the opening of proposals. All members of the CASP or their duly authorized representatives during proposal opening, shall initial every page of the original copies of all proposals received and opened. The minutes of the proposals opening shall be made available to the public upon written request.

6.2.3.2.6 Upon instruction from the CASP, the QAT shall conduct site visits and records verification to available information declared by applicants in the technical and financial proposals. The QAT shall conduct a testing and determination of the system requirements to be provided by the Service Provider. The QAT shall render a report of findings to the CASP.

6.2.3.2.7 The CASP shall evaluate applications using the Quality-Cost Based Evaluation (QCBE) Method, applying following criteria:

i. Ability to supply the required number of CEGBS units with the proper specifications, including the approach to deploying them (e.g., pilot and roll-out- strategies) (20%);

ii. Tracking and monitoring system (20%);

iii. Communications system (10%);

iv. Organization and management, to distribute, manage, secure and the CEGBS units deployed in the field (20%);

v. Price level fees and charges (should be compared with fees and charges under the old transit system (20%);

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vi. Financial capability (10%).

6.2.3.2.8 The CASP shall issue a Decision in writing approving or denying the application for accreditation, stating the reason and area of non-compliance in case of denial.

6.2.3.2.9 BOC through the CASP shall select and accredit not more than three (3) Service Providers.

6.2.3.2.10 The CASP shall notify the pre-qualified Service Providers whose applications have been denied attaching the corresponding Decision with the information that subject Decision can be appealed by filing a motion for reconsideration within three (3) days from receipt of the customs decision. CASP shall resolve such motion within forty-eight (48) hours from receipt of the said motion.

6.2.3.2.11 In case of approval and upon payment of an initial accreditation fee in the amount of Php 50,000.00 (for the probationary accreditation), a Certificate of Probationary Accreditation shall be issued by the CASP to the Service Providers, indicating the Official Receipt Number probationary status for six (6) months of such accreditation.

6.2.3.2.12 After issuance of the Certificate of Probationary Accreditation, the CASP shall make an official announcement and/or publish the names of the accredited Service Providers for the information of the stakeholders.

6.2.3.2.13 The accredited Service Provider shall undergo the aforesaid six (6) month probationary period (technical evaluation) on the date effective on the date stated in the probationary certificate of accreditation after which the BOC through the CASP shall decide whether or not full accreditation status shall be granted.

6.2.3.2.14 Upon granting of full accreditation status and payment of the remaining accreditation fee in the amount Php250, 000.00 the applicant shall be issued an accreditation Certificate, indicating therein the Official Receipt Number and the period of validity of such accreditation.6.2.4 Conditions for Accreditation6.2.4.1. The selected Service Provider shall sign a Service Level Agreement (SLA) and a Non-Disclosure Undertaking (NDU).

6.2.4.2. Performance Bonds.

The accredited Service Provider shall post a Performance Bond issued by a BOC-accredited surety company in the amount of Ten Million Pesos (Php10M) in favor of the Bureau of Customs, conditioned upon the Service Providers strict compliance with all the requirements for its accreditation, which bond shall automatically be forfeited in favor of the Bureau of Customs in case of breach thereof.6.2.4.3 Technical Acceptance Tests.

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The accredited Service Provider must successfully pass the technical acceptance tests that will be conducted by the QAT for the initial, the post probationary and the yearly evaluation perform evaluation, to qualify for continuous accreditation.

6.2.4.4 Reservation to Change Accreditation Criteria.

BOC reserves the right to change any of the accreditation criteria as may be deemed necessary by the Commissioner upon the recommendation of the CASP.

6.2.5 Period and Renewal of Accreditation

6.2.5.1 The selected Service Provider shall be given accreditation status for- the period of three (3) consecutive years, inclusive of the probationary period, and will be subject to renewal yearly thereafter.

6.2.5.2 An accredited Service Provider desiring to continue his services with the BOC is enjoined to file his accreditation renewal application with CASP at least sixty (60) days before the expiration of its three-year accreditation or one-year accreditation, as the case maybe, subject to the evaluation of the quality of their performance as measured by the Service Level Agreement (SLA), and compliance to Eligibility requirements.

6.2.5.3 No application for renewal of accreditation shall be accepted if the Certificate of Accreditation has been suspended or revoked during the time of unless subsequent subsistence, unless subsequently lifted by the CASP.

6.2.5.4 An application for renewal tiled beyond the prescribed period for application for renewal shall be considered a new application for the purpose only of charging the appropriate processing fee mentioned above.

6.2.6 Schedule of Fees

6.2.6.1 Accreditation and Renewal Fees Payable to BOC by the Service Provider. A one time accreditation fee of Php300,000.00 (Php50,000.00 for probationary accreditation and fee of Php250,000.00 upon approval of full accreditation status) good for three (3) years and a yearly renewal fee of Phpl.00,000.00 thereafter, shall be imposed.

6.2.6.2 Fees Payable to Service Provider by the transacting public. The Service Provider will determine its respective fee structures based on several factors such as market conditions and system sustainability requirements, among others, which shall be submitted in the financial proposal. The schedule of fees as proposed shall be one of the bases for accreditation and shall not increased without the prior approval by the BOC and the Department of The BOC shall not collect those fees in behalf of the Service Provider.6.2.7 Pre-Termination of Agreement or Cancellation of Accreditation

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6.2.8 BOC, through the CASP, may pre-terminate its Agreement with the accredited Service Providers or cancel Service Provider’s accreditation for any of the following:

a. Violation of the provisions of this Order and related rules and regulations including SLA and NDU.

b. Violation of the Tariff and Customs Code of the Philippines, e-Commerce Act and other related laws.

c. Actions inimical to the security and integrity of BOC operations.

d. Other violations as maybe determined by the Commissioner of BOC

SECTION 7 – ACCREDITATION OF SURETY COMPANIES


7.1.1 Accreditation of surety or bonding companies shall be centralized to the Bonds Audit Division (BAD), Collection Service, RCMG.

7.1.2 Only surety companies in good standing with the BOC shall qualify for accreditation. (Sec. 2, CMO 22-03)

To be in good standing a surety company:

a. must have an authority from the Office of the President to engage in surety business;

b. must be a holder of a Certificate of Authority duly issued by the Insurance Commission, which must be valid and effective at the time of application renewal and for the duration of the period applied for;

c. must not have, as entity by itself, any due and demandable liabilities with the BOC at the time of the application of renewal;

d. must have settled at least 70% of its outstanding obligations as a surety company of person/persons having transactions with BOC, if any, as of the first day of the immediately preceding quarter (e.g., as of July 1 for application for accreditation for the 4th Quarter). (Sec. 3.2, CMO 22-03)

7.1.3 Validity of accreditation.

Accreditation shall be good and effective for a period of one quarter, renewable every quarter thereafter. For this purpose, a calendar year is divided as follows: 1st Quarter, January to March; 2nd Quarter, April to June; 3rd Quarter, July to September; 4th Quarter, October to December. (Sec. 3.3, CMO 22-03.)

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7.1.4 For surety companies whose principal offices are located in Metro Manila, their applications for accreditation shall be filed with the BAD for approval of the Deputy Commissioner, RCMG upon the proper recommendation of the Chief, BAD and Director, Collection Service.

For surety companies whose principal offices are located outside of Metro Manila, the applications shall be coursed through District Collectors who will transmit the applications to BAD together with clearance from the Bonds Division of the Collection District after checking for completeness and accuracy of supporting documents to the applications.

The accreditation to be issued by RCMG shall be valid for the ports where the surety company intends to transact as indicated in their application for accreditation.

7.1.5 Requirements for Accreditation

The surety company shall submit a written application for accreditation or renewal not later than fifteen (15) days prior to the onset of the quarter applied for which must be accompanied and supported by, in the original or duly authenticated copy, of the following:

a. Administrative Order issued by the Office of the President granting authority to the firm to engage in surety business;

b. Certificate of Authority issued by the Insurance Commission, indicating among others, its validity at the time of the application/renewal and for the duration of the quarter being applied for;

c. Copy of the latest audited annual financial statement of the surety company, but not exceeding one (1) year at the time of the application/renewal;

d. Certification of the Corporate Secretary of the surety firm indicating and attesting to the authority of the officer authorized to sign the bond, and exhibiting the authorized official’s three (3) specimen signatures, initials and impression on the right and left hands thumbprints;

e. Statement under oath by the Corporate Secretary stating that as an entity by itself, it has no outstanding obligations with BOC, and that as a surety company, out of its total outstanding obligations in terms of the amount of the bonds issued in the past to BOC, the remaining unsettled obligations falls within the 30% threshold, as of the immediately preceding quarter. (Sec. 4, CMO 22-03))

The thirty (30%) rule shall apply only to the current matured accounts of not more than one (1) year older excluding at the time of filing such application of the preceding quarter, pending requests for abatement as certified by the Chief, Operating Division concerned. (Sec. I, CMO 7-07)

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f. Outstanding Account Worksheet, showing the current accountability of the applicant surety company that the same is within the 30% threshold.

In the computation of the 30% threshold of unsettled obligation, all accounts of surety firm shall be considered up to the extent of the amount unpaid or unsettled, including but not limited to accounts on bonds:

• That are subject of pending court litigation;• That have been sequestered from bond principals, importers or consignees;• That have been issued involving valuation or classification issues/cases

For purposes of computing the 30% threshold the Bonds Division shall prepare the Outstanding Account Worksheet which shall disclose the following information about outstanding accounts of the applicant surety company as of the first day of the immediately preceding quarter:

• Kind of Bond • Bond Number• Amount of Bond• Name of Principal/Importer/Consignee• Amount of Charges

The Outstanding Account Worksheet shall be certified true and correct by the Chief, Bonds Division and a copy thereof shall be furnished to the applicant surety company, Chief, LBD, concerned warehouse operating division and other concerned offices.

7.2 Timetable and Procedure in Processing Applications for Accreditation

7.2.1 Upon receipt of the application with complete documentary requirements, the BAD shall review the same, particularly with respect to the authenticity and veracity of the documents submitted and the compliance with the 30% threshold rule.

The review process shall be completed within seven (7) days.

7.2.2 In the conduct of the review, the BAD may verify with the concerned offices, such as, the Liquidation and Billing Division, Tax Exempt Division, Warehousing Operations Division or equivalent divisions, as well as with other various ports to ensure that all outstanding obligations of the applicant surety company are taken into account.

7.2.3 As part of the review process, the Chief, BAD, may recommend a course of action that would achieve a balanced liquidation of the outstanding accounts from previous years accountabilities with the more recent ones.

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7.2.4 If in order, the Chief, BAD, shall forward the application/renewal to the Director, Collection Service for transmittal to the Deputy Commissioner, RCMG, for final approval, otherwise, it shall advise the applicant surety company of its action on the matter accordingly,

7.3 Renewal of Accreditation

7.3.1 No renewal of accreditation shall be effected unless the 30% threshold requirement as year old accounts as the duly approved payment scheme as old accounts are fully satisfied/implemented.

7.3.2 Default of two (2) consecutive monthly settlements shall be treated as a breach of agreement and shall cause the recession of such agreement and the immediate suspension of its accreditation. The suspension shall only be lifted upon a new approved payment scheme duly approved by the Commissioner. (Sec. III, CMO 7-07)

SECTION 8 – CUSTOMS AUDITORS

8.1 Customs Auditors

Refers to persons who are BOC accredited authorized to represent before the Bureau importers undergoing compliance audit or present before it a Compliance Program for an importer.

8.2 Persons Qualified to be Accredited as Customs Auditors

Only lawyers and Customs Brokers are qualified to be accredited as Customs Auditors.

8.3 Office to Accredit Customs Auditors

PEAG shall be responsible in accrediting and maintaining the roster of Customs Auditors.

8.4 Accreditation Procedures

8.3.1 Customs Brokers who are already BOC accredited may express their intention in writing addressed to Assistant Commissioner, PEAG to be accredited as Customs Auditors. No accreditation fee is required.

8.3.1.1 The Certificate of Accreditation as Customs Auditor to be issued by PEAG shall have the same expiration date as that of the Certificate of Accreditation as Customs Broker of the applicant customs broker.

8.3.2 Members of the bar who intends to be accredited as Customs Lawyers may apply in writing with PEAG with following supporting documents:

a. BOC OR evidencing payment of accreditation fee of P1,000.00;b. Current IBP Identification Card;

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c. Evidence of MCLE compliance;d. Current BIR Certificate of Registration.

8.3.2.1 PEAG shall accept applications and issue a Certificate of Accreditation as Customs Auditors within ten (10) working days from receipt of application after diligently checking the completeness and accuracy of supporting documents.

8.3.2.2 The Certificate of Accreditation shall be valid up to 31 January of the following year and applications for renewal must be submitted latest ten (10) working days Certificate expiration day. Supporting documents to the application for renewal shall be the same as that for original applications.

SECTION 9 – SUPER GREEN LANE ACCREDITATION(Ref: CMO 28-2003)

9.1 Super Green Lane

Refers to a trade facilitation initiative by the Bureau of Customs where accredited importers are given the privilege of a fast tracked customs clearance of pre-qualified articles without being subjected to the Selectivity Module.


9.2.1 Qualifications for Accreditation.

An importer may be accredited as an SGL user, provided he/she meets the following qualifications:

a. The importer is accredited by the Bureau of Customs:b. The importer has been actively engaged in the import business for

at least one year at the time of filing his/her application for SGL accreditation;

c. The importer is a regular importer of the same type of articles;

d. The importer is a BOC-registered user of remote lodgment facilities and a holder of Certificate of Registration for that purpose; and

e. The importer is willing to undergo Voluntary Audit

9.2.2 Qualifications of SGL Shipments

Shipments shall qualify for SGL treatment only when:9.2.2.1 They are in the list of importables in the concerned SGL user’s accreditation or in the duly approved amendments to the list of importables;

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9.2.2.2 They are either freely importable commodities; or if regulated, covered by a continuing Import Authority issued by the concerned/proper government agencies;

9.2.2.3 They are declared under consumption entries, thus subject to taxes and duties

9.2.3 The Super Green Lane (SGL) Committee is the accrediting body.

9.2.3.1 Composition.

The SGL Committee shall be headed by the Deputy Commissioner for Assessment and Operations Coordinating Group (AOCG) as chairman.

It shall be composed of two sub-committees, namely, the Accreditation Sub-Committee (AS) and the Import Compliance Sub-Committee (ICS); and it shall be supported by the SGL Committee Secretariat created under Customs Special Order.

9.2.3.2 Functions.

The Committee shall meet regularly or as often as may be necessary to carry out its functions, namely:

a. Evaluate the findings/recommendations of the AS and ICS with respect to the qualification of the applicant under the SGL Program and the acceptability of the list of importables, or amendments thereto, if any, as provided herein;

b. Based on its own evaluation of AS/ICS findings/recommendations, undertake any appropriate measure it deems necessary towards the approval or disapproval of the application.

c. Handle and resolve all issues arising from or in connection with SGL accreditation and operation, including issues coming from SGL accredited importers;

d. Develop/formulate and recommend to the Commissioner of Customs new policies or policy changes relating to the implementation/enhancement of the SGL;

e. Submit to the Commissioner of Customs a report on the progress of the SGL program monthly or as often as may be required; and

f. Perform such other functions as may be assigned to it by higher authorities.

9.2.3.3 The Accreditation Sub-Committee (AS)

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9.2.3.3.1 Composition.

The AS shall be headed by the Director, Customs Intelligence and Investigation Service (CIIS).

It shall have as members, the Head of SGL Secretariat, the Heads of the ICSs in the three major ports of entry, a representative from the Post Entry Audit Group Trade Information and Risk Analysis Office (PEAG-TIRAO), a CIIS representative, and others assigned by the Committee Chair to serve as members.

9.2.3.3.2 Functions.

It shall meet regularly or as often as may be necessary to perform the following tasks:

a. Evaluate SGL applications and, for this purpose, conduct standard background checks on SGL applicants to determine their qualifications, taking into account the following:

• Applicant is accredited with BOC as Importer;

• Applicant has been actively engaged in the Import business for at least one year at the time of the filing of his/her application for SGL accreditation, with good track record of compliance with Customs laws, rules and regulations;

• Applicant is willing to be audited under the customs voluntary audit system;• Information provided by Applicant in the SGL Application Form (Annex “A”) is complete as required;

• Applicant’s list of importables do not include/involved prohibited articles;• If applicant’s list of importables include regulated articles, such importables are covered by the appropriate clearance or Import Authority from the concerned government agency;

• The value declaration and tariff classification of the importables listed in the Application Form meet the minimum standard of (“initial”) acceptability for purposes of accreditation;

• Applicant has money accountability clearance from the concerned BOC offices;

• Other criteria that may be set by the BOC at a later time;b. Assist the applicant through an interactive process (face-to-face

or telephone interview, internet exchange, etc) in clarifying issues found/raised during the evaluation and, if necessary, in fully understanding the import of his/her answers. For this

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purpose, the AS shall develop a standardized interview system to ensure productivity and to facilitate the entire process;

c. Evaluate the list of importables as to the initial acceptability of

their declared value and tariff classification; and identify any value or tariff declaration in said list that may be recommended for compliance audit;

d. On the basis of evaluation, submit its findings/recommendations to the SGL Committee for final/appropriate action;

e. Prepare an accreditation plan identifying priorities for SGL accreditation based on data provided by MISTG; and

f. Perform such other functions as may be assigned to it by the SGL Committee

9.2.3.4 The Import Compliance Sub-Committee (ICS)

9.2.3.4.1 Composition.

The ICS shall be headed by the Director, Import and Assessment Service (IAS) or his duly designated representative.

It shall have as members the heads of the ICSGs in the Port of Manila, Manila (POM), Manila International Container Port (MICP) and NAIA Customs house, the Chief Valuation and Classification Division, and by other persons designated by the Committee Chair.

9.2.3.4.2 Functions.

The ICS shall meet regularly or as often as may be necessary to do the following:

a. Review the findings and recommendations of the ICS units in the POM, MICP and NAIA with respect to an SGL user’s importations as against his/her list of importable commodities, as approved by the SGL Committee;

b. Resolve the differences among the ICS units of the concerned Ports and come up with a common approved list (Annex A-5) and/or list of issues/questions to be raised during the meeting with the Applicant/SGL user;

c. Participate in the deliberations of the AS with respect to the valuation and classification or articles in SGL applicant’s list of importables or amendments, if any, to said list; and the initial acceptability of such valuation under the Transaction Value System;

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d. Validate the compliance issues identified in the post-release validation of the entry declaration as against the information and/or amendments thereto, if any, as provided by the SGL user to BOC in the Application Form/amendments and recommend to the SGL Committee such appropriate measures as it may deem necessary;

e. When appropriate, recommend that as SGL user/shipment be subjected to compliance audit; and

f. Perform such other functions as may be assigned to it by the SGL Committee.

9.2.3.5 SGL Secretariat

The SGL Secretariat, which shall be composed as provided for in a CSO shall keep an efficient reporting and monitoring system. For this purpose it shall:

a. Provide administrative support to the SGL Committee;b. Provide invitees/applicants to the SGL Program with SGL

application form and list of requirements;c. Receive and review completeness of submitted documents from

SGL applicants;d. Schedule the meeting of a SGL applicant with the AS and ICS;e. Monitor the timely submission of the required reports, as follows:

• MISTG: Form 2 (Annex ‘D’) Entry Statistics

• Form 4 (Annex ‘F’) Detailed SGL Entries Weekly Report Summary of Transactions per SGL user,

• By ICS Form 3 (Annex ‘E’), Operational Issues and Problems Report;

f. Submit membership status report (Form 1, Annex ‘C’) to the SGL Committee; and

g. Keep and secure all pertinent documents handled by the SGL Committee and its Sub-Committees.

9.2.4 Support Structure

Management Information System and Technology Group (MISTG) In support of the SGL Program, the MISTG shall:

a. Provide the necessary infrastructure to enable the electronic lodgment of SGL entries, including provisions to allow accredited service providers to charge fees for electronic lodgment/SGL registration;

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b. Develop/install the necessary computer system/facilities to support the SGL Program;

c. Within the first month of every calendar year, submit to the AS, copy furnished the SGL secretariat, a list of the top 1,000 importers in terms of taxes and duties paid during the previous year, arranged from the highest to the lowest;

d. Through the Systems Development Division (SDD), submit to the SGL Secretariat, for dissemination to the concerned ICS units, Entry Statistics (Form 2, Annex ‘D’) on a monthly basis;

e. Through the SDD, submit a detailed SGL Entries Weekly Report to the SGL Secretariat, for dissemination to the concerned ICS Units, copy furnished the concerned the SGL member company; and

f. Prepare a monthly summary of transactions, per SGL-accredited importer/user, in a form similar to Form 4 (Annex ‘F’), and provide each SGL user with his/her respective copy thereof;

9.2.5 Certificate of Accreditation

9.2.5.1 The Certificate of Accreditation (CA) issued shall be subject to periodic review by the SGL Committee through the respective ICS units. The SGL Committee shall develop an account based monitoring of the import activities of all the members, as well as the over-all performance of the SGL system as a whole.

9.2.5.2 A CA shall remain valid until suspended, cancelled, or revoked by the Commissioner of Customs upon the recommendation of the SGL Committee, after due notice and hearing, on any of the following grounds:

a. When the accredited importer fails or refuses, without justifiable reason, to submit the hard copies of import entries filed through the SGL facility, or any supporting import documents, within the prescribed period.

b. When the SGL application or importation itself is tainted with fraud or willful misrepresentation.

c. Submission of any fake document during accreditation or in the importation process.

d. Failure or refusal, without justifiable cause, to pay additional duties and taxes lawfully demanded after post entry (release) verification by ICS within the prescribed period.

e. When the SGL user utilizes the SGL facility to process and clear a shipment not included in the approved list of importable commodities.

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f. Violation of any of the express or implied terms and conditions of the accreditation, e.g., failure to promptly update or inform the SGL Committee of any changes in the commodities being imported, as well as in their description, unit values and the like.

g. Failure or refusal, without any valid ground, to comply with any lawful order or directive issued officially by the SGL Committee or any of its sub-committees, or by any other higher authority.

9.3 Accreditation Procedures for SGL Accreditation

SGL accreditation can either be by invitation or by application.

9.3.1 By Invitation:

9.3.1.1 MISTG shall, within the first month of every calendar year, generate the list of top 1,000 importers in terms of duties and taxes paid during the previous year, arranged from the highest to the lowest.

9.3.1.2 MISTG shall submit the list to the AS, copy furnished the SGL Secretariat.

9.3.1.3 On the basis of that list, AS shall recommend to the SGL Committee the importers to be invited into the SGL Program, taking into account the requirements to qualify as SGL users.

9.3.1.4 The SGL Committee shall act on recommendation, either by nixing it or by sending an invitation, together with the SGL application form and a list of other documentary requirements to be submitted to the SGL Secretariat.

9.3.2 By Application:

9.3.2.1 Any importer who meets the qualification requirements per this regulation may apply for SGL accreditation.

9.3.2.2 Those recommended for invitation but subsequently were not invited may also apply by securing /accomplishing/submitting the SGL application form and list of documentary requirements from the SGL Secretariat.

9.3.3 Common Provisions for Both Manner of Application

9.3.3.1 The SGL Secretariat shall make available the application form to invitees/applicants to/for SGL Program/accreditation and the list of documentary requirements.

9.3.3.2 Invitees/applicants shall submit to the SGL Secretariat the duly accomplished application form and all Annex “A” (1-5) and soft copy, in MS Excel format of Annex ‘A-5’ in addition to the hard copy.

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9.3.3.3 Attached to the application form and annexes shall be the following documents:

a. Import Permit/License (with respect to regulated articles, duly issued by the appropriate regulatory agency of the government; otherwise, regulated articles shall not be included in the list of allowable importations by the concerned SGL user);

b. Duly sworn affidavit that the applicant’s imports are not prohibited;

c. Clearance from the Chiefs of Collection Service, Collection Division, Bonds Division, Liquidation and Billing Division in the Port of Manila, Manila International Container Port and NAIA Customs house, attesting that the applicant has no outstanding obligation/accountability with BOC; and

d. BOC Certificate of Registration as an Importer.

9.3.3.4 The SGL Secretariat shall check the completeness of the submitted documents and, if lacking, requires the needed additional documents; otherwise, it shall forward the submissions to the AS for review/appropriate action, except Annex A-5, which shall be forwarded to the ICS.

9.3.3.5 The SGL Secretariat shall schedule a meeting with the applicant, AS and ICS, not later than ten (10) working days from receipt of all required submissions, for purposes of validating and clarifying information thereon.

9.3.3.6 Within five (5) days from such meeting, the AS shall deliberate on the application and submit its recommendations to the SGL Committee.

9.3.3.7 The SGL Committee shall review the recommendations of the AS and shall, after deliberation, undertake as may be appropriate one of the following measures: (a) notify the applicant of outstanding issues and additional documents and information required, if any; (b) inform the applicant that his application has been denied, and the reason(s) therefore; or (c) recommend the applicant’s accreditation for the approval of the Commissioner.

9.3.3.8 If for approval, the SGL Committee shall prepare the Certificate of Accreditation for signature of the Commissioner.

SECTION 10 – REGISTRATION OF ONCE-A-YEAR IMPORTER(Ref: CMO 44-2009)

10.1 Once-A –Year Importer.

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An individual, company, corporation or partnership who has a single shipment covered by one Bill of Lading and one import entry declaration for a given calendar year.

10.2 – Administrative Provisions

10.2.1 The Once-A-Year importation shall be evaluated and recommended for approval by the CIIS Officer-in-Charge (OIC in every port and approved by the District Collector of the port.

10.2.2 An importer previously accredited as regular importer cannot avail of the provisions of this regulatin.

10.2.3 The payment of duties and taxes of a Once -A-Year importation shall follow the provisions regarding PASS5.

10.2.4 Once-A-Year importations shall be processed under the Formal Entry (Consumption) or Informal Entry Declarations, as appropriate.

10.2.5 The application for CPRS Registration of a Once-A-Year Importer shall be filled with the Value Added Service Providers (VASPs). The Once-A-Year Importer CPRS Registration Form is in Annex A

10.3 – Operational Provisions

10.3.1. The Once-A-Year Importer applies for his CPRS registration through VASP using the form in Annex A.

10.3.2 The applicant presents his supporting documents to the CIIS OIC in the concerned collection district port10.3.3 The following are the required supporting documents

10.3.3.1 Corporation/Company

a. TIN of Company;b. SEC Registration Number/DTI Registration;c. Bill of Lading/Air Waybill of Lading;d. IEIRD or Informal Entry as the case may be;e. Notarized e2M CPRS Application Form

10.3.3.2 Individual

a. TIN of Applicant;b. Bill of Lading/Air Waybill of Lading;c. IEIRD or Informal Entry as the case may be;d. Notarized e2m CPRS Application Form

10.3.4 Evaluation and Approval Process.

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10.3.4.1 The CIIS OIC shall evaluate the application form and the required supporting documents and accordingly recommend the approval or disapproval of the application.

10.3.4.2 The District Collector shall approve/disapprove the application, which shall be tagged in CPRS.

10.3.4.3 MISTG shall activate the approved registration

10.3.4.4 Client Receipt of the CPRS Feedback

10.3.4.4.1 Upon approval of the CPRS Registration, the Once-A-Year Importer shall automatically receive an e-mail notification from the e2m Customs System with the Certificate of Registration (COR) as attachment in the e-mail address that he indicated in his application for CPRS Registration.

10.3.4.4.2 If the Once-A-Year Importer fails to get his copy of the COR in the e-mail, he forwards his notification e-mail of approval to the MISTG e-mail address ([email protected]) and request for a copy of his COR. The COR shall be re-sent to the Once-A-Year Importer’s e-mail address. (Some e-mail providers and corporate e-mail accounts do not accept e-mail attachments. The applicant should indicate an e-mail address in his CPRS application that will not reject an e-mail attachment).

10.3.4.4.3 If the Once-A-Year Importer fails to get an e-mail notifying him of the approval of his CPRS Registration, but his name is listed in the Approval List of Once-A-Year Importers in the BOC website (www.customs.gov.ph), he corrects or replaces the e-mail address in his CPRS record to where the e-mail notification and COR will be sent. (This happens when the e-mail address provided is erroneous, non-existent or inactive)

10.3.4.5 The List of Approved Once-A-Year Importers shall be published in the Customs website.

10.3.4.6 Disapproved applications for CPRS Registration may be corrected and re-lodged at the VASP by repeating registration steps.

10.3.4.7 Enrollment with Authorized Agent Bank (AAB)

10.3.4.7.1 The Once-A-Year Importer submits his COR to any of the AABs to enroll his bank account existing or new, from where his Customs duties and taxes shall be debited. The list of AABs is available in the BOC website.

10.3.4.7.2 The AAB completes the enrollment process and provides the Once-A-Year Importer with his Bank Reference Number and electronically transmits the same to e2m Customs System through the BOC-Bankers Association of the Philippines-Philippine Clearing House Corporation (BOC-BAP/PCHC) internet portal.

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10.3.4.7.3 The Once-A-Year importer shall indicate the Bank Reference Number in his Once-A-Year importation declaration.

CHAPTER 2 – LIQUIDATION SYSTEM


2.1.1 Liquidation is a post clearance control on per import entry basis for ascertainment on whether duties and taxes were correctly assessed/paid and determination whether customs law, rules and regulations and other applicable laws were complied with:

Liquidation of an import entry involves the determination of following but not limited to:

a. Accuracy/correctness of entered value, valuation method used, tariff classification, quantity or volume;b. Correct payment of special duties or safeguard duty; c. Correct payment of excise tax; d. Compliance with laws, rules and regulations pertaining to the importation of regulated articles (e.g. License to Operate (LTO) and Certificate of Product Registration (CPR) in case of articles subject to Food and Drug Administration (FDA) rules and regulations);e. Compliance with the pertinent Rules of Origin, if preferential tariff rate is availed of; and f. Authenticity of required documents attached to the entry.

2.1.2 Discrepancy Report (DR) is a statement of result of the liquidation of entry/entries with discrepancies.(Discrepancy Report Form is attached and marked as ANNEX “A”).

2.1.3 Final Assessment for the purpose of this Order shall be defined as assessment made by the FED.


2.2.1 All formal entries for immediate consumption shall be subject to post liquidation.

2.2.2 The Chief, FED or equivalent unit shall transmit to the LBD or equivalent unit and LAAD all import entries with the attached documents within two (2) working days from final assessment.

2.2.3 Liquidation and Billing division (LBD) under the supervision of the Deputy Collector for Assessment shall have following functions:

a. Liquidate entries in ascending order and date of lodgment within thirty (30) days from receipt of entries together with the

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requirements attached thereto from the Formal Entry Division (FED) or equivalent unit.

b. Liquidated entries must be posted within seven (7) days from actual liquidation and posted in a conspicuous place within the concerned ports for three (3) consecutive weeks.

c. Transmit liquidated entries to the LAAD five (5) days from actual liquidation of entries.

d. Transmit unliquidated entries to the LAAD, upon written request.

2.2.4 Liquidation and Assessment Audit Division (LAAD) of Collection Service shall have following functions:

a. Conduct audit on liquidation and assessment;

b. Conduct audit on the entries filed and transmitted by the FED to the LBD through the E2M System;

c. Any discrepancy found in the conduct of audit, the LAAD shall notify concerned importer/s on the additional duties and taxes assessed, copy furnished the DC concerned;

d. For the purpose of exercising its assessment audit function, the LAAD may request at random from LBDs or equivalent units copies of unliquidated entries together with supporting documents;

e. Conduct audit on the proper maintenance of required logbooks by LBD;

f. Require LBD to submit weekly Status Report on DRs sent to concerned importers;

g. Recommend to DC to exercise authority to hold delivery under Section 1508 of the TCCP of delinquent importers through the Director, Collection Service and Deputy Commissioner, RCMG copy furnish the Commissioner;

h. Recommend to the Commissioner through the Director, Collection Service and Deputy Commissioner, RCMG the filing of appropriate criminal, civil and administrative charges against erring importers/brokers including but not limited to suspension/revocation of accreditation.


2.3.1 Import Entry and Internal Revenue Declaration (IEIRD) or Single Administrative Documents (SAD) together with required attached documents routed to the Yellow and Red Lanes shall be entered in the logbook and forwarded by the FED to the LBD or its equivalent unit within two (2) working days from final assessment. For purposes of IEIRD or SAD routed to the Green Lane or Super Green Lane (SGL) the same shall be entered in the

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logbook and forwarded by the FED to the LBD or its equivalent unit within two (2) working days from receipt thereof.

2.3.2 FED and LBD shall maintain records of daily transmittal/receipt of IEIRD and SAD through the use of logbook system and shall be held accountable for its safekeeping. The said logbook shall have format and information and must contain (a) date entry filed; (b) import entry number; (c) customs broker; (d) documents attached to the entry and (e) date received by LBD.

Likewise, an “LBD Control Logbook”, shall be maintained, which shall serve as “Record of Liquidation” with the following information:

a. Import Entry Number;b. Consignee’s Name;c. Customs Broker;d. Documents attached to the entry;e. Date received from FED;f. Assigned Liquidator;g. Date Liquidated;h. Discrepancy Report (DR) Control Number;i. Amount of discrepancy;j. DR received by importer or broker;k. 2nd notice received by importer or broker;l. Date hold delivery under Section 1508, TCCP issued;m. Date transmitted and received by COA.

2.3.3 The LAAD shall audit the completeness of import entries transmitted to LBD by the FED as against the import entries filed daily through e2m Customs System access provided by MISTG.

2.3.4 The following shall be performed by the LBD in liquidating an entry:

a. In liquidating an entry a liquidator (Customs Operations Officer or Assessor) must consider the provisions of Section 2.3.2;

b. Liquidators are required to use red ball pens or sign pens in making liquidations for easy reference when audits or liquidations are made;

c. Sign import entry and LBD Control Logbook;d. If discrepancy on an entry is discovered prepares DR for signature

of the Assistant Chief and Chief, LBD.

2.3.4.1 In case of final liquidation:

2.3.4.1.1 Prepare summary of entries liquidated with no discrepancies noted and forward the same for approval by the Chief, LBD or designated subordinate employee and post the same in the LBD Bulletin Board latest 10:00 am the following day;

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2.3.4.1.2 Prepare summary of entries liquidated for the day with discrepancies noted and approved by the Chief, LBD or designated subordinate employee and post the same in the LBD Bulletin Board latest 10:00 am the following day;

2.3.4.1.3 The posted daily summary of entries per Sections 2.3.4.1.1 and 2.3.4.1.2 shall contain the name of importer, import entry number, date of filed, vessel or aircraft’s name, port of arrival, date of arrival and amount of discrepancy and shall be posted for two (2) consecutive weeks.

2.3.4.1.4 Importers with liquidated entries shall be notified through e-mail or the Customs Broker who signed the covering entry notified through e-mail or copy of the DR sent to importer through the Customs Broker who signed the covering import entry or DR sent directly to importer by mail or personal service.

2.3.4.1.5 A second notice shall be given to the importer through any of the means under the preceding Section two (2) weeks after first notice. Failure on the part of the importer to settle the outstanding amount indicated in the DR within two (2) weeks from sending of second notice shall result to suspension of the importer’s registration with the Bureau of Customs.

To this effect LBD shall make a formal recommendation to the District Collector for the suspension of the importer’s registration. The District Collector as a matter of course shall indorse the same to MISTG for implementation.

2.3.4.2 In case of tentative liquidation.

2.3.4.2.1 LBD shall maintain a logbook of entries tentatively liquidated a summary report of which shall be submitted to the District Collector and Chief, LAAD every 17th and 3rd of the month. The report shall contain among others following:

a. Name of importer;b. Import entry number;c. Date import entry filed;d. Circumstances why entry was tentatively liquidated; ande. Date final liquidation is scheduled.

2.3.4.2.2 MISTG shall develop an automated system of monitoring tentative liquidations in the e2m Customs System which shall be made available to the District Collector, LBD and LAAD.

2.3.5 Daily liquidated entries together with attached documents and summary of final and tentative liquidation shall be forwarded by LBD or equivalent unit to the LAAD within two (2) days from liquidation.

2.3.5.1 LAAD shall perform audit on liquidated entries using risk management tools and sampling techniques and shall transmit to the Office of

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the Resident COA copy of liquidated entries received from LBD within thirty (30) days from receipt.

2.3.6 Remedies Available to Importers Receiving DRs.

Following remedies may be availed of by importers receiving DR’s:

a. In cases of valuation, classification or preferential tariff issues contest the DR before the VCRC; or

b. Pay under protest.

2.4 Transitory Provisions

DCs through LBDs and equivalent units are required to submit to the Deputy Commissioner, RCMG Attention: Chief, LAAD within fifteen (15) working days from effectivity of this regulation a report which shall contain following information:

a. Entries received from FEDs which have not been liquidated; andb. List and ageing of outstanding Discrepancy Reports issued.

CHAPTER 3 – RECORDS KEEPING


1.1 Recordskeeping Requirement

A requirement (an imposition) of law requiring certain persons to keep all the records of their importations and/or books of accounts, business and/or computer systems and all other customs commercial data, in whatever form, including payment records relevant for the verification of the accuracy of the transaction value declared by the importers/customs brokers on the import entry. (Adopted from Section A.1.a, CAO 4-2004)

1.2 Importer

The term "importer" shall include the importer of record/consignee, beneficial owner, agent of the persons effecting the importation in question or any other person or entity who knowingly causes the goods to be imported. The phrase "knowingly causes the goods to be imported" covers domestic transactions where:

1. The terms and conditions of importation are controlled by the person placing the order with the importer (for example, the importer is not on independent contractor but rather is the agent of the person placing the order; whereas a consumer who purchases an imported automobile from a domestic dealer would not be required to maintain records, a transit authority that prepared detailed specifications from which imported subway cars or buses were manufactured would be required to maintain records); or

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2. Technical data, molds, equipment, other production assistance, material, components, or parts are furnished by the person placing the order with the importer with knowledge that they will be used in the manufacture or production of imported goods. (Sec. IV. A.1. b, CAO 4-2004)


2.1 Rationale Behind the Recordskeeping Requirement

To enable fast releases at the border, importers and customs brokers shall assure Customs that their entry declarations are in accordance with the customs laws, rules and regulations, accordance with respect to tariff classification, customs value, quantity and country of origin. For the purpose, the law requires them to keep at their respective places of business, for the period specified above, certain records of identified, to be used in conducting the compliance (verification) audit. (Sec. II.B, CMO 2-2002)

Note: Please take note that Section 3514, TCCP provides that “All importers are required to keep at their principal place of business, in the manner prescribed by regulations to be issued by the Commissioner of Customs and for a period of three (3) years from the date of importation, all the records of their importations and/or books of accounts, business and computer systems and all customs commercial data including payment records relevant for the verification of the accuracy of the transaction value declared by the importers/customs brokers on the import entry.”

The law is clear that the purpose of maintaining records is for purposes of verifying the “accuracy of the transaction value declared by the importers/customs brokers in the import entry.” In practice PEAG conducts audit which extends to tariff classification and country of origin which is beyond what the law provides.

Therefore there is need to amend the law to expand the scope of post entry audit which somehow the BOC may have realized. Thus its proposed amendment to the TCCP to expand scope of post entry audit is expressed in paragraph 1, Section 1100 of CMTA which provides that “for this purpose, a duly authorized officer shall have full and free access to all records…FOR THE PURPOSE OF ASCERTAINING THE CORRECTNESS OF THE DECLARATION IN THE IMPORT ENTRY AND DETERMINING THE LIABILITY OF THE IMPORTER FOR DUTIES AND TAXES…” However paragraph of same section limits the scope of post entry audit to entered transaction value thus it provides that”…in addition, THE FACT THAT THE IMPORTER AND/OR CUSTOMS BROKER DENIES THE AUTHORIZED CUSTOMS OFFICER FULL AND FREE ACCESS TO IMPORTATION RECORDS DURING THE CONDUCT OF A POST ENTRY AUDIT SHALL CREATE A PRESUMPTION OF INACCURACY IN THE TRANSACTION VALUE DECLARED FOR THE IMPORTED GOODS and constitute grounds for the Bureau to conduct a re-assessment of such goods.”

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2.2 Persons Required to Keep Records

The law requires importers and customs brokers to keep records.

2.3 Period to Keep Records

Records shall be kept for a period of three (3) years from date of filing of the import entry.

2.4 Place to Keep Records

Records shall be kept at the principal office of importers and customs brokers

2.5 Documents in Foreign Language

Where a document in a foreign language is presented to a customs officer in relation to the carrying out of any duty or the exercise of any power of the Bureau of Customs, said documents in foreign language must be accompanied with the translation in the official language of the Philippines. (See Sec. 3517, TCCP)


3.1 Records to be kept by importers.The following records are required to be kept by importers:

a. Company or entity structure including the following to the extent that they are relevant for the verification of the accuracy of the transaction value declared oil the import entry and necessary for the purpose of collecting the proper duties and taxes on imports, as the case may be:

1) Articles of Incorporation, articles of partnership, registration certificate with the Bureau of Domestic Trade and the like;

2) List of incorporators, stockholders, partners, board of directors, owner-,3) Organizational structure;

4) Management and key personnel involved in the import processing including authorized declarants and their specimen signatures;

5) Capital composition; stock and transfer book;

6) Principals and/or subsidiaries and their capital composition, if applicable;

7) List of exporter/suppliers to which the importer is related pursuant to definition under the WTO Valuation Agreement.

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b. Ordering and purchase documentation to the extent that they are relevant for the verification of the accuracy of the transaction value declared on the import entry and necessary for the purpose of collecting the proper duties and taxes on imports, including the following:

1) Sales and other related agreements, in whatever form; including, whenever applicable, those covering distribution, royalty, agency, warranty, terms of payment, and the like;

2) Correspondence or communication relating to the import transaction, in whatever form, including, whenever applicable, purchase orders, vouchers, confirmations, proforma invoice, acknowledgment receipts, notices, advisories, and the like;

3) Product description or specifications, brochures, manual, catalogue, pamphlet, flier, literature, if applicable;

c. Shipping, importation, exportation, and transportation documentation including the following to the extent that they are relevant for the verification of the accuracy of the transaction value declared an the import entry and necessary for the purpose of collecting the proper duties and taxes on imports, as the case may be:

1) Import and/or export entry;

2) Invoice and/or consignment notes;

3) Import and export licenses/permits;

4) Ocean bill of lading, and/or master air waybill, and/or house air waybill, and/or consolidator bill of lading;

5) Shipping instructions, and/or freight forwarders instructions;

6) Certificates of Origin, and/or Certificates of Eligibility, and/or Certificate of Inspection and/or Loading;

7) Freight and insurance contracts;8) Packing Lists;

9) Transshipment permits, and/or boatnotes, and/or special permits to transfer;

10) Quota Allocation and/or Certificates;

11) Customs brokerage agreements, and/or billings, and/or statement of accounts, and/or receipts;

12) Receipts for arrastre charges, cargo handling and storage fees;

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13) Short shipped/bad order reports, if applicable;

14) Goods tally records, if applicable;

15) Letters of credit, application for letter of credit, bank details;

16) Remittance advice;

17) Credit card transactions;

18) Telegraphic money transfers;

19) Offshore monetary transactions; and

20) Evidence of payments by any other means, including information detailing non-cash compensation transactions.

d. Manufacturing, stock, and resale documentation including the following to the extent that they are relevant for the verification of the accuracy of the transaction value declared on the import entry and necessary for the purpose of collecting the proper duties and taxes on imports:

1) Inward goods register/receipts journal;

2) Stock register/inventory records;

3) Production records;

4) Costing records;

5) Sales records;

e. The following bank documents, financial statements and other accounting information to the extent that they are relevant for the verification of the accuracy of the transaction value declared on the import entry and necessary for the purpose of collecting the proper duties and taxes on imports:

1) Receipts, cashbooks;2) Schedules of accounts payables and accounts receivables; and

3) Cheque records.

f. To the extent that they are relevant for the verification of the accuracy of the transaction value declared on the import entry and necessary for the purpose of collecting the proper duties and taxes on imports, and if applicable charts and codes of accounts, ledgers, financial statements, accounting instruction manuals, and systems and program documentation that describes the accounting system used by the importer.

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g. Whenever applicable, papers, books, registers, discs, films, tapes, sound tracks, and other devices or things in or on which information contained in the records described in paragraphs (a) to (f) of this regulation are recorded or stored. (Sec. A.2, CAO 4-2004)

3.2 Records to be kept by customs brokers

All Bureau of Customs accredited customs brokers are required to keep at their principal place of business, for a period of three (3) years from the date of importation copies of the importation records in whatever form covering transactions that they handle including records enumerated in preceding Section 3.1(c) from items 1 to 13. (Sec. A.2(g), CAO 4-04).3.3 Records to be kept by Bureau of Customs

The Bureau of Customs shall likewise keep a record of audit results in a database of importer and broker profiles, to include but not limited to:

a. Articles of Incorporation;

b. The company structure, wbich shall include but not be limited to:

1) Incorporators and Board of Directors;

2) Key officers; and

3) Organizational structure

c. Key importations;

d. Privileges enjoyed;

e. Penalties; and

f. Risk category (ies).

Section 4 – Penalties for Failure to keep Records

Any person who fails to keep and maintain all the records required to be kept and maintained under Section IV.A of this Order shall be subject to the following:

1. Administrative fine equivalent to twenty percent (20%) ad valorem on the article/s subject of the importations for which no records were kept and maintained as prescribed in Section 2504 of the Customs Code.

2. Hold delivery or release of subsequent imported articles to answer for the fine, any revised assessment, and/or as a penalty for failure to keep records. The Commissioner shall sign the Order after proper hearing.

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3. Criminal prosecution punishable with a fine of not less than one hundred thousand pesos (PhP100,000) but not more than two hundred thousand pesos (PhP200,000) and/or imprisonment of not less two (2) years and one (1) day but not more than six (6) years.

Section 5 – Failure and/or Refusal to give full and free access

Any importer and/or broker who denies an authorized officer full and free access under Section IV.B hereof to the records required to be kept and maintained as specified in Section IV.A of this Order shall be subject to the following:

1. Punishment for contempt, for contumacy or refusal from the proper court having criminal jurisdiction.

2. Re-assessment of the importations subject to audit applying the correct valuation method based on available data, the declared transaction value being presumed inaccurate.

3. Administrative fine equivalent to twenty percent (20%) ad valorem on the articles subject of the importations for which na records were kept and maintained as prescribed in Section 2504 of the Customs Code.

4. Hold delivery or release of subsequent imported articles to answer for the fine, any revised assessment, and/or as a penalty for failure or refusal to give full and free access. The Commissioner shall sign the Order after proper hearing.

5. Criminal prosecution punishable with a fine of not less than one hundred thousand pesos (PhP100,000) but not more than two hundred thousand pesos (PhP200,000) and/or imprisonment of not less than two (2) years and one (1) day but not more than six (6) years.

CHAPTER 4 – POST ENTRY AUDIT

Section 1. Definition of Terms

1.1 Post Entry Audit

Post Entry Audit is synonymous with compliance audit. Compliance Audit is essentially a control mechanism done at the back-end of cargo clearance. It aims to facilitate trade by allowing release of low risk imports with minimum customs intervention at the border. Customs, however, retains an option to verify the truthfulness and accuracy of import entry declarations within three years from date of filing of the import entry, by looking at the pertinent records of the importer-auditee as well as those of their customs brokers, as defined in this Code. (Adopted from Sec. II.A,CMO 2-2002).

1.2 Types of Post Entry Audit

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1.2.1 Voluntary Compliance Audit

These audits shall be conducted under the BOC’s Compliance Program which shall be developed to make compliant those firms that contribute up to 80% of customs revenue. The program shall be voluntary. Successful applicants firms shall be chosen using criteria that determine their respective risk levels. The Voluntary Compliance Audit shall focus on determining whether the firm’s systems and procedures, particularly its inventory, financial and record-keeping systems, all lead to the generation of compliant customs declarations. The objective of the audit shall be to assist the firm in becoming compliant. Part of the audit results shall therefore be a set of recommendations that would lead to higher compliance levels for the firm, as well as a time frame for acting on these recommendations. The audit shall also result in a risk rating for each firm, with the most compliant receiving the lowest risk rating. Those firms found to be highly compliant shall be given SGL (Super Green Lane) treatment and such other facility benefits to be provided in the Compliance Program. (Sec. IV.A, CMO 2-2002)

1.2.2 Enforced Compliance Audit

These audits shall be conducted on firms that are not included in the Compliance Program and have been found to have compliance issues. (Sec. IV.A.2, CMO 2-2002)

Section 2 – Administrative Audit Provisions

2.1 When Audit of Importers Shall be Undertaken

2.1.1 When firms are selected by a computer-aided risk management system, the parameters of which are to be based on objective and quantifiable data which shall include, but not be limited to, the following:

1) Relative magnitude of customs revenue from the firm;

2) The rates of duties of the firm's imports;

3) The compliance track record of the firm; and4) An assessment of the risk to revenue of the firm's import activities.

2.1.2 Detection of errors in import declarations which, if uncorrected, would result in substantial revenue loss or grave distortion of relevant statistical data.

2.1.3 When firms voluntarily request to be audited, subject to the approval of the Commissioner of Customs or importers apply for Voluntary Disclosure Payment (VDP).

2.1.4 When there is an industry complaint, derogatory information, or directives from other government agencies. (Page 27, PEA Primer)

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2.2 When Customs Broker Shall be Audited

Bureau of Customs accredited Customs Brokers shall be audited to validate the information provided by their client importers and/or fill information gaps discovered during the course of a compliance audit. (Page 26, PEA Primer in relation to Section 3516(b) , TCCP))

2.3Timetable to Finish Audit

Ideally, the audit should be finished within one hundred twenty (120) days from receipt of all requested documents. (Page 27, PEA Primer)

2.4Confidentiality Clause

All information which is by nature confidential, or which is provided on a confidential basis for the purposes of Customs valuation, or which was confidentially obtained in the course of the conduct of compliance audit, shall be treated as strictly confidential by the authorities concerned who shall not disclose it without the specific permission of the persons or government providing such information, except to the extent that it may be required to be disclosed in the context of judicial proceedings, and violation of such confidentiality shall be prosecuted under subsection (j) of Section 3604 of the Customs Code. (Sec. VI.D, CAO 4-2004)2.5Assistance of Proper Regional Trial Court in the Conduct of Post Entry

Audit

Unless otherwise provided herein or in other provisions of law, the Bureau of Customs may, in case of disobedience, invoke the aid of the proper regional trial court within whose jurisdiction the matter falls. The court may punish contumacy or refusal as contempt. In addition, the fact that the importer/broker denies the authorized customs officer full and free access to importation records during the conduct of a post-entry audit shall create a presumption of inaccuracy in the transaction value declared for their imported goods and constitute grounds for the Bureau of Customs to conduct a re-assessment of such goods using the alternate methods of valuation as applicable. (Sec. IV.B.6, CAO 4-04)

2.6Certified Copies of Documents Admissible in Evidence in All Courts as it Were the Original

In the conduct of post entry audit an authorized Customs officer may require the importer and/or broker to make certified copies of any such documents or extracts thereof. A copy of any such document certified by or on behalf of the importer/broker is admissible in evidence in all courts as if it were the original. (Sec. IV.B.2-3, CAO 4-2004)

2.7 Authorized Customs Official Shall Only Enter any Premises to be Audited Unless an Audit Notification Letter (ANL) is Produced

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An authorized customs officer shall not enter any premises under this Section unless, before so doing, the officer produces to the person in charge of the premises the following: 1) duplicate original of the AUDIT NOTIFICATION LETTER (ANL) issued by the Commissioner of Customs addressed to the importer/broker, and 2) official Customs identification card. The person in charge of the promises entered by an officer shall provide the officer with all reasonable facilities and assistance for the effective exercise of powers to conduct post entry audit. (Sec. IV.B.4, CAO 4-04)

2.8 Commencement of Post Entry Audit

No audit shall commence without the issuance by the Commissioner of Customs of an ANL. (Sec. IV.B.5, CAO 4-04)

Section 3 – Procedures in the Conduct of Post Entry Audit

3.1 Profiling and Information Analysis

This involves the process of (a) gathering information by downloading customs data on the targeted importer and collating information from other sources both internally and externally; (b) profiling the company’s activities on the basis of the captured data; (c) identifying risk shipments according the issues involved for verification purposes; (d) sampling of exception reports according to nature of variances, e.g. unit FOB value, tariff heading, freight and the like, (e) reviewing of past decisions of BOC vis-à-vis the selected shipments; and (f) preparing a report for the Commissioner to serve as basis for the grant of authority to conduct field audit; and other similar activities.

3.2 Audit Notification

Upon approval of Commissioner to commence audit, an Audit Notification Letter (ANL), specimen marked ANNEX “A”, shall be issued and sent to the company identified for audit. The ANL shall state the following:

3.2.1 Statutory basis and purpose of the audit;3.2.2 Date and time of pre-audit conference and commencement of audit;3.2.3 Members of the customs audit team;3.2.4 Documents or records to be readied for audit verification3.2.5 Request for company tour or walk-through to familiarize the audit team with the company’s operations (e.g., warehousing, manufacturing involving imported articles).

To be attached to the ANL are a General Customs Questionnaire, specimen marked ANNEX “B”, and a form requiring a brief description of the processes relating to the company’s import purchasing (ordering) payment, and inventory systems to be filled out and sent back to BOC prior to the pre-audit conference.3.3 Audit Preparation/Audit Proper

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Upon receipt of additional information, the Post Entry Audit Group will make the necessary customization of a general audit plan to fit the circumstances of the auditee company with the end view of achieving the specific audit objectives in the most expeditious and transparent manner. In particular, the Audit plan will aim at (a) getting information on goods flow, financial flow, order process flow and tracing, testing of sample entries to ensure that such flows operate as explained; and (b) validating the completeness and correctness of the information provided by the importer in the import entry declaration relative to the risk or issues identified in the profiling stage.

3.4 Pre-Audit Conference with Auditee

In the pre-audit conference, the customs audit team will formally introduce themselves to the receiving officers of the auditee-company their written authority to conduct the audit. The audit team shall brief the company personnel on, among others, the purposes of audit, the specified date of audit commencement, the estimated length of time of perform and complete the audit, the types of documentation for review and examination, and to identify individual(s) in the company to serve as liaison for the audit team and those to be interviewed in the course of the audit. The conference shall include the factory/office as may be requested by BOC.

3.5 Conduct of Audit Proper – Field Audit

3.5.1 A field audit involves the examination and review of the auditees’ records and documents based on the audit plan, It also includes interviewing of responsible personnel in order for auditors to gain an understanding of the firm’s activities which impact on the information provided in the import entry declaration.

3.5.2 The extent of field audit will depend on the nature of the company’s operations and the level of reliance auditors will have on the internal controls of the company relative to the storage and retrieval of information needed by the auditors in attaining their specific audit objectives.

3.5.3 The field audit will aim to verify, among others, that in all the firm’s import transaction-

3.5.3.1 Imported are valued using the appropriate customs valuation method;3.5.3.2 Such values are correct and complete as to the price paid or payable and the dutiable adjustments thereto;3.5.3.3 Goods are property described and the correct tariff classifications are used;3.5.3.4 Quantity of goods, as reported are correct;3.5.3.5 Declarations are correct as to country of origin;3.5.3.6 Special or preferential tariff rates are correctly applied and importer is qualified to avail of special/preferential rates.

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3.5.4 The company’s brokers may be subject to a verification exercise to validate audit findings on the auditee.

3.5.5 The auditee shall extend necessary assistance to the audit team and the audit team shall exert every effort to complete the task without unnecessary disrupting the daily operations of the company. PEAG shall, with the approval of the Commission of Customs, draw up an audit manual to serve as internal guidelines in the conduct of field audit. The manual shall include audit techniques, handling of information obtained, auditor’s decorum, and their general conduct.3.6 Exit Conference

Prior to issuing a final report, auditors will meet with company representatives to discuss the following:

3.6.1 Audit findings where the company will be provided the chance to check accuracy of facts as established.3.6.2 Areas identified by the audit team as needing improvement to make the company more compliant with Customs regulations.3.6.3 A calculation of underpayment of duties and taxes, plus possible administrative penalties, if any.3.6.4 Any comment or observation by the company on audit conduct and audit findings which shall be incorporated in the audit report.3.7 Audit Reporting

Upon completion of the audit and the Exit Conference, the PEAG will prepare a Final Audit Report and Recommendation (FARR) to be submitted to the Commissioner of Customs for approval and/or appropriate action/instruction. Once the FARR is approved, the BOC shall furnish the auditee(s) with an official copy thereof.

3.8 Audit Monitoring and Implementation

3.8.1 The PEAG shall come up with a secure system of maintaining audit reports and records including internal and external communications.

3.8.2 The PEAG shall develop an internal audit system to ensure that all tasks to audit operations are completed and on time and that approved audit recommendation are properly implemented.Section 4 – Procedures in Filing Administrative Complaint

4.1. The PEAG shall prepare the administrative compliant to be signed under oath by the auditor or auditors concerned and approved by the Section Head and the Unit Head. The compliant shall state clearly the basis thereof and shall attach thereto all pertinent documents and records in support thereof. In case the compliant proceeds from the audit findings, the audit report shall be attached.

4.2 Once accomplished, the complaint, including all enclosures, shall be forwarded to the Commissioner of Customs for approval of the filing of the

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complaint. After approval of the filing, the same shall be forwarded to the Legal Service which shall assign an individual docket number for all the complaints lodged under this Order (CMO 1-2002).

4.3 Upon receipt of the complaint, the Legal Service shall immediately send a copy of the complaint, including attachments pertinent to the complaint, to the importer and/or customs broker, as the case may be, who shall be given a period of fifteen (15) days from the receipt of the complaint, to answer said complaint. Upon receipt of the answer, the complainant office shall be given a period of five (5) days to make an optional reply copy-furnished the respondents, after which the case shall be scheduled for hearing with notice to all concerned parties.

4.4 The proceedings at the Legal Service shall be summary in character. To expedite the hearing, unnecessary postponements are discouraged, while marathon hearings are enjoined.

4.5 In lieu of the formal hearing, the parties may opt for the submission of memoranda with optional time to file rebuttal and sur-rebuttal, after which the case shall be deemed submitted for resolution.

4.6 When the case is submitted for resolution after hearing or through the filing of memoranda, the Legal Service shall, within fifteen (15) days thereafter, prepare a decision for the signature of the Commissioner of Customs. The decision shall be without prejudice to the criminal or any other administrative action the Bureau may take against the erring respondent/s.

4.7 If the Commissioner of Customs does not agree with the proposed decision or needs further information to act thereon, he may remand the case to the Legal Service stating the matter of issues that still have to be clarified, or may come up with his own decision on the basis of the arguments and evidence presented and forming part of the record.

4.8 Within thirty (30) days from receipt of the decision of the Commissioner of Customs, the respondents may appeal the same to the Court of Tax Appeals in the manner prescribed by law and existing rules and regulation.

Section 5 – Penalty for Failure to Pay Correct Duties and Taxes on Imported Goods Discovered After Post Entry Audit

5.1 Any person who, after being subjected to post-entry audit and examination as provided in Sections IV B and C of Customs Administrative Order No. 5-2001, is found to have incurred deficiencies in duties and taxes paid for imported goods, shall be penalized according to three (3) degrees of culpability subject to any mitigating, aggravating or extraordinary factors that are clearly established by the available evidence:

5.1.1 Negligence. When a deficiency results from an offender’s failure, through an act or acts of omission or commission, to exercise reasonable care and competence to ensure that a statement made is correct, it shall be

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determined to be negligent and punishable by an administrative fine equivalent to not less than one-half (1/2) but not more than two (2) times the revenue loss.

5.1.2 Gross Negligence. When a deficiency results from an act or acts of omission or commission done with actual knowledge or wanton disregard for the relevant facts and with indifference to or disregard for the offender’s obligation under these rules or the Customs Code, it shall be determined to be grossly negligent and punishable by an administrative fine equivalent to not less than two and a half (2-1/2) but not more than four (4) times the revenue loss.

5.1.3 Fraud. When the material false statement or act in connection with the transaction was committed or omitted knowingly, voluntarily and intentionally, as established by clear and convincing evidence , it shall be determined to be fraudulent and be punishable by an administrative fine equivalent to not less than eight (8) times the revenue loss.

5.1.4 Criminal prosecution under Section 3611 of the TCCP.


The Assistant Commissioner, PEAG is required to submit every 17th and 3rd of the month status report of importers and customs being audited. Such status report shall include date ANL is issued, stage of audit and completed audit.

CHAPTER 5 – VOLUNTARY DISCLOSURE PAYMENT


1.1 Voluntary Disclosure Payment (VDP)

Voluntary Disclosure Payment (VDP) provides importers the remedy to correct under certain conditions any erroneous, inaccurate or insufficient information declared to customs arising from sheer mistakes, inadvertence, or negligence without the imposition of any fine or penalty in appropriate cases. It shall not apply when the wrong entry declaration was attended with fraud, as defined in Section 3611 of the TCCP, as amended. (Sec. II.B, CAO 5-07)


2.1 When VDP is available

The program shall only available (a) prior to the receipt of an Audit Notification Letter (ANL) or (b) upon receipt of an ANL but prior to the scheduled date of field audit. (Sec. II.C, CAO 5-2007)

2.2 Benefits of Valid Voluntary Disclosure.

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2.2.1 No fine or penalty shall be imposed on the deficiency in duties and taxes but only to the extent of the amount and the issues disclosed.

2.2.2 The applicant shall earn a “least priority status” in the annual audit selection process for all its auditable importations, subject to the following conditions:

2.2.3 Submission by the applicant of a customs compliance program designed specifically to address the cause or causes of the errors or mistakes made in the entry declarations as disclosed and generally to enhance the level of competence of its personnel, agents, or officers in charge of its import clearance operations.

2.2.4 Compliant behavior established through random sampling and review of future import activities showing faithful and serious implementation of its customs compliance program.

2.2.5. Amount of voluntary disclosure payment is not less than One Million (PHP1,000,000.00) Pesos per application.

“Least priority status” shall mean that the importer may not be considered for audit selection for the next two years from the date of application. (Sec. IV, CMO 18-07)

2.3 Requirement When an Applicant is a Corporation

When the applicant is a corporation, the application shall be supported by a Company board Resolution authorizing the signatory in the application form to make the disclosure and to bind the company thereto.

2.4. Special Verification Unit (SVU)

The SVU, an office within PEAG, shall keep and maintain all records pertaining to all applications for voluntary disclosure, including the amount of duties and taxes collected, in a manner that would enable easy identification, allow authorized access to, and cause prompt retrieval of the case folder/or specific documents pertaining thereto.Section 3 – Operational Provisions

3.1. Step One

3.1.1 The importer shall accomplish Form B to be signed by a duly authorized and responsible officer of the disclosing company, business entity or natural person, as the case may be.

3.1.2 The importer shall pay the amount of duties and taxes based on the disclosed deficiency to the Collection Division of the Port of Manila, which shall issue an Official Receipt therefore. The Collection Division shall credit the collected amount to the respective Collection District(s) where the import entry involved in the voluntary disclosure was filed in accordance with existing

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accounting and auditing rules and regulations or policies applicable in the premises. Upon acceptance of the payment and issuance of the Official Receipt, the Chief, Collection Division, POM, shall provide the PEAG Office, Attention: SVU, with a copy of the Official Receipt through an appropriate inter-office endorsement stating the name of the applicant and the amount of duties and taxes paid as disclosed. Format of the Endorsement is hereto attached as Annex “C”.

3.1.3 The duly accomplished Form B, together with the required documentary attachments which shall all be properly marked and certified by the applicant, as well as the original copy of the Official Receipt of payment, shall be filed with the Office of the Assistant Commissioner of the Post Entry Audit Group. The original Official Receipt shall be returned to the applicant after the same has been viewed and examined by the responsible evaluating officer at the Office of the Assistant Commissioner for PEAG.

3.2 Step two - The duly accomplished Form B shall be processed and evaluated by the designated officer of the SVU, who shall perform the following functions:

3.2.1 Verify the completeness of the information provided by the applicant in the accomplished Form B.

3.2.2. Check the sufficiency of the documents attached, including the payment of duties and taxes as disclosed, and/or the information provided to support the voluntary disclosure and necessary to conduct effective disclosure verification.

3.2.3 Ensure that the application form is accompanied by a comparative computation table showing (a) tariff classification or customs unit value, etc. originally declared as against the tariff classification or customs unit value, etc., as disclosed and (b) the duties and taxes originally paid and those resulting from the voluntary disclosure.

3.2.4 Determine whether the applicant is qualified under the coverage and exclusionary clauses of the VDP program.

3.2.5 When the formal requirements are incomplete or otherwise not complied with, when the applicant is not qualified under Section 4.3, he evaluating officer shall advise the applicant in writing of such fact and provide him with a period of fifteen (15) working days within which to complete or comply with the formal requirements. If after the lapse of the period given, the applicant remains non-compliant, the voluntary disclosure application shall be denied by the Assistant Commissioner, PEAG with formal notice to the applicant.

3.2.6 Once the completeness and validity as t form of the duly accomplished Form B has been established, the assigned officer shall conduct a disclosure verification, in coordination with the Trade Information Risk Analysis Office (TIRAO), on the disclosed customs issues, product lines, tariff headings;

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customs value, number of import entries, and the like, using the standard operating procedure to be established for the purpose. When necessary, the evaluating officer may request the applicant to appear before the office or to submit further information/document to clarify any matter which is the subject of the voluntary disclosure made.

3.2.7 Review the basis and accuracy of the computation made by the disclosing party with respect to the disclosed declaration errors or mistakes. When the disclosed deficiency is based on royalty or license fee payments conditioned on local, after-import sales, or on proceeds from subsequent resale of the imported goods, the evaluating officer shall recommend a formula of computation t ensure a fair and reasonable accounting of such deficiencies using the generally-accepted accounting and auditing principles (GAAP) and methods.

3.2.8 While the coverage of the verification shall be limited to the matters as disclosed, the evaluating officer may recommend the conduct of a full audit when fraud is uncovered or evident bad faith in the disclosure made is established at any stage of the evaluation process.

3.2.9 Prepare and submit a brief summary of findings and recommendations, through the Director, Compliance Audit Office, to the Assistant Commissioner, PEAG for office approval.

3.3 Step three - The Assistant Commissioner, PEAG, shall evaluate the findings and recommendations of the SVU and direct such actions as may be necessary to complete staff action on the matter.

3.3.1 When the recommendation is for the acceptance of the application on the ground that the deficiency in duties and taxes proceeded from innocent error or plain negligence, he shall require the applicant to submit a Customs Compliance Improvement Plan (CCIP). The CCIP format is hereto attached as ANNEX “ A ” of this Chapter .

3.3.2 When the recommendation is for the denial of the voluntary disclosure application on account of the existence of fraud as uncovered, or of bad faith ( as when material information available to the applicant is knowingly withheld to intentionally mislead customs) in the disclosure itself as established during the verification process, the PEAG shall, after due notice, initiate action leading to the conduct of full audit of the applicant firm following the existing procedure without prejudice to the institution of an enforcement investigation as the Commissioner of Customs may direct.

3.3.3 The recommended action to be taken on the voluntary disclosure application shall be forwarded to the Commissioner of Customs for final approval.

3.4 Step Four - The approved action shall be returned to the Assistant Commissioner, PEAG, for implementation with notice to the applicant.

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The Assistant Commissioner, PEAG shall submit to the Commissioner a weekly report status of pending VDP applications.

BOOK IV – INTELLIGENCE AND ENFORCEMENT

TITLE ONE – INTELLIGENCE AND ENFORCEMENT

CHAPTER 1 – HOLD ORDER SYSTEM


(a) “Hold Order” shall refer to an order duly issued by any of the Holding Authority authorized in this order for the purpose of suspending the release of a shipment or part of a shipment suspected or confirmed to be in violation of the TCCP or any of the laws or rules it is mandated to implement from the jurisdiction of the Bureau of Customs. For a hold order to be valid, the order must, as far as practicable, contain information sufficient to identify the violation/s committed.

(b) “Holding Authority” shall refer to the offices enumerated under these rules which are allowed to issue or approve Hold Orders.

(c) “Requesting Office/Party” shall refer to lawfully existing offices recognized by the Holding Authority. For this purpose however, the Hold Order shall be signed by the Holding Authority. (d) “Action Officer/Officer-on-Case” shall refer to the person or persons specified in the Hold Order who is mandated to witness the examination of shipment subject of a hold order or, under exceptional circumstances to be stated hereinafter, conduct the examination of a held shipment.

(e) “Duty Officer” shall refer to the person designated by the Commissioner of Customs who is responsible in receiving duly issued Hold Orders and in assigning the corresponding number of a given Hold Order. (f) “Examination” as used in these rules shall refer to the physical inspection of the held shipment by the examiner in the presence of the officer on case for purposes of verifying the suspected or unconfirmed violations.

(g) “Officer-On-Case Report” shall refer to the written report prepared by the Officer/s-On-Case as a result of the actions taken to validate the imputed violation as stated in the hold order with the corresponding recommendation.

(h) “Warrant of Seizure and Detention” shall refer to the order issued by the District Collector authorizing seizure and detention of articles suspected of violating customs and tariff laws pursuant to Section 2301 of the TCCP.

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(i) “Order of Lifting of Hold Order” shall refer to the order directing the lifting of hold order issued against the subject shipment after compliance with the recommendation contained in the officer-on-case report, or such other recommendations made in the course of the lifting of the said hold order.

(j) “Cargo Requiring Special Handling” shall refer to items which may be spoiled or lose its potency and thus cannot be used for the purpose for which the item was originally intended, or items which by their nature and character requires a special manner of handling or disposal.


2.1 Designation of Officer-On-Case. For Hold Orders issued by the Holding Authority itself, the Holding Authority shall be responsible in designating the officer on case tasked to carry out the Order. For Hold Orders emanating or requested by an office recognized by the Holding Authority, the chief/head of the requesting office shall designate the officer on case tasked to carry out the Order.

2.1.1 To carry out this task, an officer on case shall not be given additional assignment until the Order is lifted or until said officer on case renders a final report on the implementation of the said Order.

2.2 Duty and Responsibility of the Officer-on-Case/Requesting Office/Holding Authority. A designated officer on case shall endeavor to carry out the order within the five (5) working days from issuance of the Hold order. For this purpose, the officer on case shall personally notify the named consignee or his representative within 24 hours from the issuance of the order and, in case of failure to personally notify, cause the publication of the said order in any conspicuous place at the port of discharge.

2.2.1 On the other hand, the Chief/Head of the requesting office shall be responsible in monitoring the progress of the implementation made by the officer on case and shall insure that the officer on case complies with the applicable provisions of this and other related rules.

2.3 Held Shipment to be Prioritized. A Holding Authority shall give priority to any held shipment. Unless the delay is due to fortuitous event or due to the fault of the consignee or his representative, any undue delay in the implementation of a Hold Order shall be a ground for administrative action against the officer on case and/or the requesting and/or approving authority. 2.4 Miscellaneous provisions

2.4.1 No customs employee shall be assigned or designated as officer on case without the consent of his/her chief or head of office. In case of conflict due to a violation of this provision, the office assigning the officer on case as such shall be liable for any incident accruing from the non-implementation of the hold order.

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2.4.2 A shipment or any part thereof already placed on Hold and examined according to the provisions of this rule shall not be the subject of a subsequent Hold Order or examination.

2.4.3 In shipments placed on Hold and found to be in order as declared by the consignee, the cost of stripping and stuffing of the contents thereof shall be borne by the office so issuing the Hold Order.

2.4.4 In cases where the shipment or part thereof is prohibited, any of the offices allowed under this rule to issue a hold order may hold the shipment prior to arrival of the shipment or before the filing of an import entry.


3.1 Offices Authorized to Issue Hold Orders. – The Offices authorized to issue Hold Orders are the Office of the Commissioner, the Deputy Commissioner for Intelligence, the Deputy Commissioner for Enforcement, the Deputy Commissioner for RCMG as head of the Run After The Smugglers program, the Director of the Customs Enforcement and Security Service, the Director of the Customs Intelligence and Investigation Service, the District Collectors, and the Chief, Intellectual Property Rights Division.

3.2 Justification For Hold Orders. – All Hold Orders shall be accompanied by a written justification specifying, as far as can be ascertained, the particular violation of the shipment to be held. Whenever possible, the justification shall state therein, the following, to wit:

(a) If the Hold Order is based on non-declaration/misdeclaration on description, weight, quantity or measurement, the percentage difference thereof may be indicated;

(b) If the Hold is based on classification, the recommended classification and the higher rate of duty including its percentage difference shall be stated, provided, that in Hold Orders issued under this subsection, the Hold shall be made after final assessment by the concerned section has been completed; and (c) If the Hold Order is based on other grounds, the justification may categorically state the violation with a citation of the law, rules or regulations.The justification sheet shall be in the format provided in this Order, which shall be CMO ___ Form “A-1.”

3.3 Strict Compliance to Hold Order Form. – Hold Orders in whatever form inconsistent with this Order shall be deemed null and void, and any person or office found to have violated this order shall be held administratively and/or criminally accountable. 3.4 Presentation of Hold Order for Recordation. – Hold Order issued by the offices enumerated herein must be presented to the duty officer designated for that purpose at the Office of the Commissioner for recording and

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monitoring purposes. The duty officer shall be responsible in assigning the corresponding number of the Hold Order and in affixing the seal of the Commissioner of Customs.

3.5 Routing of Hold Order. – Immediately after the seal of the Commissioner is affixed on the duly accomplished Hold Order, the order shall be brought by the officer on case to the District Collector and the Chief, Piers and Inspection Division or its equivalent at the port of discharge and to the concerned arrastre operator, which must be received thereat. The District Collector shall forward the Hold Order to the chief of the concerned assessment division, who in turn shall assign a corresponding examiner. In all cases, the receiving office shall indicate in the Hold Order the exact date and time the Hold Order was received by the concerned office.

3.6 Personal Service, Posting of Holder Order, and Examination. – The officer on case shall personally serve to the consignee or his authorized representative a copy of the Hold Order within 24 hours from the issuance thereof. In case personal service cannot be made to the consignee or his authorized representative, the officer on case shall cause the posting of the Hold Order at official bulletin board or at a conspicuous place within the port of discharge for three (3) consecutive days. If after the lapse of the three-day-period from the first day of posting, the consignee or his representative fails to coordinate with the officer on case or the requesting office, the officer on case shall cause the conduct of the examination of the shipment, with or without the consignee or his representative.

3.7 One Hundred Percent Examination. – A shipment on Hold shall be subject to One Hundred Percent (100%) examination. The examination shall be conducted by the examiner in the presence of the officer on case within three (3) working days from the issuance of the Hold Order. In case where posting is necessary to inform the consignee or his representative of the Hold Order, the examination shall be conducted within 6 working days from the issuance of the Hold Order. In the event the examination/verification is not conducted or concluded within the said period, a report to the issuing authority explaining said incident shall be submitted stating the reason for non-compliance thereto.

3.8 Report of Officer On Case. – Upon completion of the examination/verification by the officer on case, a report shall be submitted by the officer on case to the issuing authority within two (2) working days from completion of examination. In cases where the Hold Order was issued upon the request of subordinate office, the report shall be submitted by the officer on case to the chief/head of the requesting office, also within two (2) working days. Regardless of the disposition made by the requesting authority on the report, the report shall be submitted to the issuing authority within the given period allowed by this rule.

3.9 Recommendation of Officer On Case. – In the report to be submitted, the officer on case shall choose from any of the following courses of action, to wit:

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(a) Recommendation for ipso facto forfeiture due to non-declaration or misdeclaration on account of misdescription pursuant to Section 2503;

(b) Recommendation for the issuance of Warrant of Seizure and Detention (WSD);

(c) Recommendation for additional payment of duties and taxes, fine or surcharge;

(d) Recommendation for submission of required documents, such as but not limited to import permits or licenses; (e) Recommendation for segregation, as the case may be; or

(f) Recommendation to lift hold order to pave the way for the release of the held shipment.

The report shall be in the format provided in this order, which shall be CMO ___Form “B”.

3.10 Manner of Examination. – In the conduct of examination, the officer on case shall be responsible in insuring that the items examined are properly identified and returned to the container. For evidentiary purposes, he shall take still photos of the container, the packages and the item/s itself. He shall likewise accomplish the minutes of the proceeding, to be signed by the examiner and the consignee or his representative, whenever applicable. The form of the minutes of the examination is attached hereto as CMO ___ Form “C”.

3.11 Shipments Requiring Special Handling. – In cases of shipments requiring special handling and storage, such as but not limited to, perishable articles or provisions, the examination may be conducted at the premises of the consignee or at a designated place for such purpose. In such case, the hold order shall be temporarily lifted to allow the transfer of the shipment to the designated area where the examination shall be conducted. In no case shall temporary lifting be allowed without the express consent of the holding authority and without prior X-Ray inspection conducted on the shipment.

3.12 Unlawful Importation. – If the importation of the said shipment in the immediately preceding paragraph is found to be unlawful and the issuance of WSD is sought, the officer on case shall make his report with his corresponding recommendation, appending therein the X-Ray image of the shipment and such other document required under the premises, and the shipment shall be returned to customs upon issuance of WSD. In such case, the District Collector concerned shall act on the recommendation within two (2) working days from receipt of the report.

3.13 Taking of Samples. – Sample of items from the Held shipment shall be allowed to be taken provided the same is properly receipted and is physically required to be taken out of the container for examination or as evidence or, in

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the case of Intellectual Property Rights violation, for identification purposes. In all cases, only one sample of each kind shall be allowed to be taken from the held shipment. The sampling shall likewise be reflected in the minutes and the officer on case and the consignee shall put a mark on the sample sufficient to distinguish the goods. For samples not susceptible of marking, the sample shall be placed in a canister/container, which shall be marked by the examiner, consignee and officer on case. The mark shall be in the form of thumb mark or specimen signature, whichever is preferred.

3.14 Custody of Samples. – The officer on case shall submit the samples taken from the held shipment to the head/chief of the holding authority or requesting office, as the case may be, who shall keep the sample in custody and who shall be responsible for the safekeeping of the said sample. The samples shall be made available as evidence in the seizure proceeding or in such other proceeding relative to the seizure, subject to the rules on evidence custody.

CHAPTER 2 – VISITORIAL POWER

Section 1 – Visitorial Power, Definition. Visitorial power shall refer to the power of the Commissioner, the Collector of Customs, and of any other customs officer duly authorized by the Commissioner of Customs, to demand evidence of payment of duties and taxes on foreign articles openly offered for sale or kept in storage, and if no such evidence can be produced, such articles may be seized and subjected to forfeiture proceedings.


2.1. Persons Authorized to Exercise Visitorial Power. The following may exercise or carry out the visitorial power, thus:

(a) The Commissioner of Customs;(b) The District Collectors of Customs within their territorial jurisdiction; and(c) Any other customs officer with prior written authorization issued by the Commissioner of Customs.

2.2. Places Where Visitorial Power May Be Exercised. The visitorial power may be exercised:

(a) Any place where foreign articles are openly offered for sale; or(b) Any place where foreign articles are kept in storage, provided, however, that in cases where these foreign articles are inside a dwelling house, the visitorial power shall be carried out only the strength of a valid search warrant.

2.3 Letter of Authority. Whenever visitorial power is exercised by a duly authorized customs officer or officers other than the Commissioner of Customs or the District Collector of Customs, a written authorization in the form of a Letter of Authority (LOA) shall be shown or exhibited whenever demanded by the owner or representative of the owner of the store or place

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visited. The Letter of Authority shall be duly signed by the Commissioner, identifying the authorized customs officer or officers, the store, stall, place of exhibition, warehouse, or any enclosure where the foreign articles are openly offered for sale or kept in storage, shall be shown or exhibited. This Letter of Authority shall not apply when the Commissioner of Customs or the District Collector of Customs himself exercises such visitorial power.

2.4 Safeguards. The following safeguards and other measures are hereby ordered:

(a) Only authorized customs officers shall participate or be allowed to participate in the implementation and/or execution of the visitorial power;

(b) In the implementation of the Letter of Authority, save in cases where violence is committed against the persons or properties of the customs officers implementing the same, no warrantless arrests on the persons found in custody of the smuggled goods shall be made.

Section 3- Operational Provisions

3.1 Duties of Visiting Officer. In the exercise of the visitorial power, the customs official or officer otherwise known as the visiting officer, shall:

(a) Enter the premises where smuggled goods are suspected to be openly sold or stored in the presence of the lawful occupant or any person in possession of the premises or in their absence, in the presence of any two witnesses who are residents or official of the same barangay, or representatives or occupants of the building or place where the goods are sold or stored.

(b) Conduct an inventory of the foreign articles, if upon demand, the owner, occupant or person in possession of the premises cannot show evidence of payment of duties and taxes.

(c) Issue an Inventory Receipt to the owner, his representative, the lawful occupant, or in their absence, to the building administrator or to the barangay official having jurisdiction over the premises. The Inventory Receipt shall contain a detailed description of the things and goods seized from the place where the goods are openly sold or stored.

(d) Forward the Inventory Report to the Collector, through the Law Division for the issuance of Warrant of Seizure and Detention and for other appropriate actions, retaining a photocopy for the examiner/appraiser for the computation of duties and taxes and other charges and/or surcharge and penalties, if any.

3.2 Transport, Custody of, and Responsibility Over the Goods/Articles Seized. The Commissioner of Customs or any officer exercising visitorial power may tap, harness or utilize transport facilities for the transport of the seized goods/articles and suitable warehouse or storage areas, constituting the same as virtual customs warehouses for this purpose. The renumeration

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and other charges appurtenant thereto shall constitute as liens over the goods when sold at public auction or disposed of in accordance with the provisions of the TCCP, as amended.

3.3 Special Customs Area. For reasons of security, safety, and economy, the Commissioner may constitute the premises upon which foreign goods/articles are openly offered for sale, or kept in storage, as a Special Customs Area for the duration of the exercise of the visitorial power or other proceedings related thereto. The Bureau of Customs may conduct the inventory, examination, appraisal, assessment and/or collection of duties and taxes due the foreign goods in such special customs area. The seized goods or articles are deemed, for all intents and purposes, in customs custody.

3.4 One-Stop Shop. The Commissioner may issue an Order establishing a One-Stop-Shop (OSS) in the Special Customs Area or premises where the visitorial power is being exercised with the appointment of a Special Customs Area Collector by the Commissioner. The OSS, the composition of which shall be determined by the Commissioner, shall endeavor to resolve with finality all issues and matters thereat, including the payment of duties and taxes within the premises.

3.5 Summary Rules for Processing Goods/Articles Seized. To expedite proceedings in accordance with law, the following summary rules shall be observed:

(a) For goods where Warrant of Seizure and Detention has not been issued on account of the offer of the owner to pay duties and taxes thereon, the Special Customs Area Collector shall, upon receipt of the Inventory Report on the goods/articles seized or deemed in customs custody, when no evidence of payment of duties and taxes has been produced, cause the verification of the following facts:

(1) Proof of payment of duties and taxes; (2) Good faith of the claimant; (3) Whether or not the goods were locally manufactured; (4) Whether or not the goods were imported without violating the TCCP, other related laws, as well as relevant rules and regulations.(b) Upon verification of the foregoing facts and finding sufficient justification to release the goods to the claimant, the Special Customs Area Collector shall, subject to the approval of the Commissioner or his duly authorized representative, issue an Order allowing the payment of duties, taxes and/or fines, and forthwith release the goods.

(c) In case where WSD has been issued against the shipment, the seizure and forfeiture proceedings shall be held in accordance with law.

(d) If the facts and circumstances so warrant, the District Collector, through the Law Division, shall issue an Order or Decision allowing the release upon payment of duties and taxes thereon by recalling the WSD duly issued, or settlement of the case pursuant to Section 2307, of the TCCP, as amended.

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For this purpose, the approval of settlement by the port/special collector shall carry with it the approval of the Commissioner unless otherwise directed or reprobated.

(e) For compelling reasons as may be determined by the Commissioner, the resolution of the forfeiture proceedings at the One-Stop-Shop, involving shipments that have already been transported to a customs special warehouse may still be allowed.

3.6 Use of BC Form 177. To facilitate the assessment and collection of duties and taxes, penalties and other charges accruing on the seized articles, BC Form 177 (Informal Entry) is hereby adopted, provided, that the normal documentary requirements such as bill of lading, commercial invoice and packing list, among others, are dispensed with. In lieu thereof, the said entry shall be supported by the LOA, WSD, Inventory Receipt, Summary Decision, and such other documents as may be deemed required. Provided further, that the cost of the aforesaid form is for the account of the owner, his/her representative or agent.

Section 4 – Reportorial Requirements. The officer-on-case or head of the team conducting the visitorial power shall render progress reports during and after the actual visit, and shall submit the same to the Commissioner within 24 hours from the conclusion thereof.

Section 5 – Specimen Forms. To serve as guide in the implementation of this Order, the attached annexes shall from integral part hereof.

Section 6 – Right of Owner of Goods. During the seizure and forfeiture proceedings, the person or entity for whom such articles have been seized shall be given the opportunity to prove or show the source of such articles and the payment of duties and taxes thereon.

CHAPTER 3 – SYSTEM IN THE ISSUANCE OF MISSION ORDER

Section 1 – Mission Order, Definition. A mission order is a written order signed by a competent official giving authority to a customs personnel with police authority to conduct law enforcement.

Section 2 – When Mission Order is Required. A mission order is a requirement for all law enforcement activities undertaken solely or participated by the Bureau of Customs personnel and conducted outside of the ports of entry, customs bonded warehouses, other areas considered as customs zone, and such places indicated in the law enforcement operations, which activities include:

(a) Application for and/or implementation of judicial search warrants;

(b) Execution of Warrants of Seizure and Detention Outside Customs Areas/Zones;

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(c) Conduct of visitorial powers of the Commissioner of Customs pursuant to Section 2536 of the Tariff and Customs Code of the Philippines (TCCP), as amended;

(d) Responding to the request for assistance from other government agencies in the application for and implementation of judicial search warrants and in general the conduct of anti-smuggling operations; and

(e) Other data gathering, information verification, profiling activities, and surveillance operations relative to the law enforcement activities of the unit concerned.

2.1 No customs personnel shall engage in any of the law enforcement activities referred above without a Mission Order.

Section 3. Authority to Issue Mission Orders for the Conduct of Law Enforcement Operations. — Only the following officials of this Bureau are authorized to approve applications for the conduct of operations as provided in Section 2 hereof:

(a) The Commissioner of Customs;

(b) The Deputy Commissioner, Intelligence Group;

(c) The Deputy Commissioner, Enforcement Group;

(d) The Deputy Commissioner, RCMG as head of the Run After Smugglers program;

(e) The Service Chiefs of CIIS and ESS; and

(f) The District Collector of Customs.

3.1 Requests from other Bureau offices and other government agencies must be coursed thru the foregoing officials accordingly.

Section 4. Application for the Issuance of a Mission Order. – Applications for the issuance of Mission Order shall be filed with any of the officials mentioned in Section 3 hereof. If the application is in response to the request of another government agency, it must be accompanied by a written request from the head of the agency or his duly authorized representative. The application must not be general in nature but must contain specific acts which constitute violation of the TCCP.

Section 5. Evaluation of the Application. – Only operations which are likely to succeed in the sense that the evidences for the violation/s imputed are obtainable and there are no alibis or defenses which cannot be overcome shall be approved.

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Section 6. Authentication and Recording. – The duly signed Mission Order shall be presented to a duly designated Duty Officer at the Office of the Commissioner for the necessary Customs Seal and for logging in at the computer set up for the purpose. The Duty Officer shall make himself available to affected entities and others concerned regarding query on the authenticity of any Mission Order.

Section 7. Format of Mission Order and Computer File. – To the extent possible, the Mission Order must conform in text and substance to the format of Annex "A" hereof. Accordingly, the computer file must contain the following fields:

(a) Date of the Mission Oder;(b) Requesting Office;(c) Date and Number and Issuing Judge of a Judicial Search Warrant, if any;(d) Name of firm mentioned in the approved Mission Order;(e) Address;(f) Contact Person;(g) Granting Authority; and(h) Objectives of the Mission Order.

Section 8. Team Composition. – To facilitate the conduct of the inventory and to ensure unity of efforts, the team of the requesting unit shall be accompanied by a representative from the Formal Entry Division/Warehousing Assessment Division.

Section 9. Period to Complete the Mission Order. – The duly issued Mission Order shall be valid for a period of fifteen (15) days unless a shorter period is specified. The Team must complete the mission within the validity date of the Mission Order. In the event the mission cannot be completed in time, a report must be rendered to the official who issued the Mission Order explaining the reason for the non-completion of the task and requesting for extension of the validity of the Mission Order stating the new date within which the mission can be finally completed. In cases of missions undertaken pursuant to a judicial search warrant, the lifetime of the Mission Order must be within the validity date of the approved search warrant.

Section 10. Submission of Report. – The team must submit a report to the issuing official within five (5) days from the completion of the mission. A copy of the report duly received by the issuing official must be presented to the Duty Officer for recording.

Section 11. Progress and Final Report. — The official who issued the Mission Order shall submit a weekly progress report to the Office of the Commissioner on the action taken on the Mission Order until a final report is rendered.

CHAPTER 4 – INTELLECTUAL PROPERTY RIGHT PROTECTION


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(a) "Intellectual Property Rights" shall consist of – (1) Copyright and Related rights; (2) Trademarks and Service Marks; (3) Geographic Indication; (4) Patents for invention, utility model and industrial design; (5) Lay-out Design (Topographies) of Integrated Circuits; and (6) Protection of Undisclosed Information – and shall hereafter to be referred to singly or collectively as "IPR

".(b) "Infringing Goods' as used in this Order means articles imported in violation of the IP Code and other related laws.

(c) "Mark" means any visible sign capable of distinguishing the goods (trademarks) or services (service marks) of an enterprise and shall include a stamped or marked container of good.

(d) "Collective Mark" means any visible sign designated as such in the application for registration and capable of distinguishing the origin or any other common characteristics, including the quality of goods or services of different enterprises which use the sing under the control of the registered owner of the collective mark.

(e) “Trade Name" means the name or designation identifying or distinguishing an enterprise.

(f) "Copyrighted Work" refers to any of those works whether published or unpublished, mentioned under Sections 172 and 173 of the IP Code.

(g) "Patented Invention' refers to any technical solution of a problem in any field of human activity which is new, involves an inventive step, and is industrially applicable. It may be or may relate to a product, a process, or an improvement of any of the foregoing, including microorganism, non-biological and micro- biological processes for which a patent has been duly issued by the Intellectual Property Office.

(h) "Utility Model" refers to any new model of implements or tools or of any industrial product or of part of the same, which does not possess the quality of invention but which is of practical utility by reason of its form, configuration, construction or composition.

(i) "Industrial Design" refers to any composition of lines or colors or any three-dimensional form, whether or not associated with lines or colors; provided that such composition or form gives a special appearance to and can serve as a pattern for an industrial product or handicraft.

(j) "Lay-out Design", which is synonymous with "Topography", means the three-dimensional disposition, however expressed, of the elements, at least one of which is an active element, and of some or all of the interconnections of an integrated circuit, or such a three-dimensional disposition prepared for an integrated circuit intended for manufacture

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(k) "Geographical Indication" are indications which identify a good as originating in the territory of a country, or a region or locality in the territory, where a given quality, reputation, or other characteristics of the good are essentially attributable to its geographical origin.


2.1 What Are Prohibited. The following are prohibited:

(a) Those which shall copy or simulate any mark or trade name registered with the Intellectual property office (IPO) in accordance with the IP Code, without the authorization or consent of the registrant or its duly authorized agent.

(b) Those which shall copy or simulate any well-known mark as determined by competent authority, without the authorization or consent of the owner or its duly authorized agent.

(c) Those which are judicially determined to be unfairly competing with the products bearing marks whether registered or not.

(d) Those which constitute as a piratical copy or likeness of any work, whether published or unpublished, on which a copyright subsists.

(e) Those which present themselves as substantial simulation of any machine, article, product, or substance duly patented under the IP Code, without the authorization or consent of the patentee or its duly authorized agent.

(f) Those which use false or misleading description, symbol, or label that is likely to cause confusion, mistake, or deception as to the affiliation, connection; or association of the imported goods with another person's goods; or those which misrepresent their nature, characteristics, qualities, or geographic origin.

2.2 Who May Request for Suspension of Release

2.2.1. IPR Recorded with BOC. The Bureau shall maintain an IPR Registry where IP Holders may record their IPR, together with other relevant information that the Bureau may use for the effective implementation and enforcement of this Order.

2.2.1.1 An IPR Holder/Owner, or his agent, may apply with the Commissioner of Customs for the recording of his IPR and the product/s covered by such right/s upon the submission of the following requirement:

2.2.1.2 An affidavit attesting that the applicant is the rightful owner of the IPR sought to be recorded, or in case of a representative or an agent, that he is duly authorized by the IPR Holder/Owner to make the application, and that the person or other entitles in the submitted list, if any, are so authorized or not

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distribution of such products covered by the IPR, together with a sufficient description of the products covered by the IPR sought to be recorded, together with samples thereof, if possible, to aid the Bureau in implementing this regulation.

2.2.2 IPR not Recorded with BOC

2.2.2.1 The IPR Holder/Owner, or his duly designated agent, who has not recorded in accordance with Section II.C.! of this order his IPR and the product or products protected thereunder, may request either the Commissioner of Customs, Director, CIIS, Chief IPRD or the District Collector of Customs concerned in case of ports of entry outside of Metro Manila (outports) to issue an alert or hold order against any importation suspected to contain infringing goods upon submission of the documents enumerated in Section II.C.l.l. to 2.

2.2.2.2 In meritorious cases, the Commissioner of Customs, CIIS Director, Chief IPRD or the District Collector of Customs concerned in case of ports of entry outside of Metro Manila (outports) shall issue the alert or hold order; the goods shall be examined in the presence of the IPR I Holder/Owner or his duly authorized agent who shall be accordingly notified of the time and place of the examination. Notwithstanding the absence of the IPR Holder/Owner or his agent who has been notified of the scheduled date and time of examination, the inspection shall proceed and the examining official shall, through proper channel, make his findings and recommendation to the Commissioner, Director CIIS, Chief IPRD or District Collector of Customs, as the case may be.

2.3 Documentary Requirements

2.3.1 In the case of IPR registered with the IPO, three (3) certified true copies of the Certificate of Registration issued by the said office

2.3.2 In the case of IPR not registered with the IPO, three (3) certified true copies of a decision or resolution of a court or other competent authority declaring or recognizing the claim to an IPR

2.3.3 In the case of copyright and related rights, an Affidavit executed by the IPR Holder/Owner or his duly authorized representative stating that:

(a) At the time specified therein, copyright subsists in the work or other subject matter;

(b) He or the person named therein is the owner of the copyright; and

(c) The copy of the work or other subject matter annexed thereto is a true copy thereof.

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2.3.4 Payment of recordation fee of Two Thousand Pesos (P 2,000.00) per product but in no case to exceed Twenty Thousand Pesos (P 20,000.00) per IPR Holder/Owner.

2.4 Purpose of Documentary Requirements. The foregoing documentary requirements are solely for the purpose of identifying the IPR Holder/Owner and providing the Bureau with minimum information that will help its officers in effectively monitoring and evaluating infringing goods at the border. Such requirements therefore may in certain meritorious circumstances be liberalized for as long as the basic purposes for which the above requirements are imposed are achieve. The IPR Holder/Owner or his representative shall be notified of the time and place of examination.

2.5 Validity of Recordation. The recordation of IPRs and product or products covered therein shall be valid for two (2) year from date of the recording and renewable every two years thereafter.

2.6 Random Checks. The Bureau reserves the right to conduct, on its own initiative, random inspection of goods/shipments under existing regulations on the issuance of alert or hold orders, in connection with the discharge of its police functions over imports and exports.

2.7 Intellectual Property Rights Risk Management and Database Support System. The Bureau of Customs shall establish a risk assessment program and a management information system where all relevant data for the effective enforcement of the IP Code shall be gathered, stored and utilized to monitor, screen out, and interdict infringing goods at the border and on a post entry basis. For the purpose, it shall establish appropriate linkages with the Intellectual Property Office, other concerned law enforcement agencies, and the private sector.


3.1 Procedure in IPR Recordation. For purposes of IPR recordation, the following procedure shall be followed:(a) Applicant shall accomplish the prescribed application form before the Intellectual property Rights Division.

(b) The application shall be accompanied by the Affidavit referred to in Section 2 hereof, and provide such other relevant information, as required in the same section.

(c) Applicant shall pay the recordation fee.

(d) Upon compliance with the above requirements, the IPU shall prepare for the Commissioner's signature a Customs Memorandum Circular addressed to all Collector of Customs setting forth the fact of recordation together with a description or model of the registered product of products.

(e) After receipt of the Circular, the Collector of Customs concerned shall distribute copy or copies of documents containing relevant data on the IPR

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and covered product or products among the front-line customs assessment officers, and to direct them to monitor imports accordingly.

3.2 Procedure on the Request for the Issuance of Hold Order. For purposes of requesting for the issuance of a hold order, the following procedure shall be followed:

(a) The IPR Holder/Owner or his agent shall request in writing the Commissioner of Customs, Director OIS, Chief IPRD or the District Collector of Customs in the case of outports, for the issuance of an alert or hold order on goods suspected to be infringing and

(b) The applicant shall attach all documentary requirements and other relevant information about his IPR and the product or products covered therein, as provided in Section 2, hereof.

3.3 Seizure Proceedings Involving Infringing Goods.

3.3.1 Upon seizure, the Collector shall, within five (5) working days from date of seizure, give the claimant, importer or the owner of the seized article or his agent a written notice of the seizure and shall give him the opportunity to be heard. For the purpose of giving such notice, the importer, consignee, or person holding the bill of lading shall be deemed the owner of the seized property described in the bill of lading. For the same purpose "agent" shall be deemed to include not only the agent in fact of the owner of the seized property but also any person having legal possession of the property at the time of the seizure, if the owner or his agent in fact is unknown or cannot be reached.

3.3.2. In case of an unknown owner or claimant, the notice shall be effected posting for five (5) days in public corridor of the customhouse of the district in which the seizure is made, and in the discretion of the Commissioner, by publication in a newspaper, or by such other means as he shall deem desirable.

3.4 Disposition of Forfeited Goods.

3.4.1. If within ten (10) days after due notification prescribe in the preceding paragraph, no claimant, owner or agent appears or can be found, the Collector shall declare the property forfeited in favor of the government

3.4.2 After due notice is served, the Collector shall immediately set the case for hearing. The case shall be decided within Twenty (20) working days from the date the case is set for hearing.

3.4.3. After due notice is served, the Collector shall immediately set the case for hearing. The case shall be decided within Twenty (20) working days from the date the case is set for hearing.

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3.4.4. The disposition of goods forfeited by final decree shall be governed by existing laws and regulations applicable in the premises with due regard to the statutory policy on IPR protection. To expedite action on the disposition of forfeited articles, the Bureau, through the IPRD, shall within 30 days from creation issue supplemental guidelines relating to the handling and safekeeping of these goods, including provision for internal and external coordination, and logistical support.

CHAPTER 5 – INTERNAL INVESTIGATION AND PROSECUTION

Section 1 – Definition of terms

(a) “Complaint’ shall refer to such acts or omissions leveled against a customs employee which constitutes a wrongdoing or a violation of the terms of his employment as provided for under existing laws, civil service rules, as well as other rules and regulations.

(b) “Preliminary Investigation” shall refer to that stage where the investigating officer conducts examination of records and documents submitted by the complainant and the customs employee, including other documents readily available from the Bureau of Customs and from other government offices. During the said investigation, the parties are given the opportunity to submit affidavits and counter-affidavits.

(c) “Formal Charge” shall refer to the document signed by the Commissioner setting forth the acts or omissions of the customs employee which constitute the wrongdoing or the violation for which he is being charged.

(d) “Preventive Suspension” shall refer to such order issued by the Commissioner suspending the employment of the customs employee during the pendency of the proceedings, effective immediately upon the filing of a formal charge and after service or such order to said employee.

(e) “Decision” shall refer to the final disposition of the complaint against the customs employee as approved by the Commissioner of Customs, whether in the form of a dismissal of the complaint, finding the customs employee liable as charged, or otherwise finding him liable for a lesser offense.

Section 2 – Proceedings before the Internal Investigation and Prosecution Division

2.2 Complaint

2.1.1 Form of Complaint - A complaint against a customs employee shall be in writing subscribed and sworn to by the complainant. Complaints initiated by the disciplining authority, however, need not be under oath. Requests for investigations shall be treated as complaints only when ordered by the

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Commissioner, his Deputies, District Collectors, Directors or the Central Grievance Committee.

2.1.2 Contents of Complaint. The complaint shall contain the following:

(a) full name and address of the complainant;

(b) full name and address of the person complained of, as well as the latter’s position and office of employment;

(c) a narration of the relevant and material facts which shows the acts or omissions allegedly committed by the employee complained of;

(d) certified true copies of documentary evidence and affidavits of the complainant’s witnesses, if any and;

(e) certification and statement of non-forum shopping.

Failure to comply with any of foregoing requirements will result in the dismissal of the complaint

2.1.3 Complaint, Where Filed. A complaint shall be filed, at any time, before the Internal Inquiry and Prosecution Division (IIPD) of the Customs Intelligence and Investigation Service.

2.1.4 Action on the Complaint. Upon receipt of the complaint, the IIPD office clerk shall, within twenty-four (24) hours from receipt thereof, make a case folder and assign a docket number therein, clearly indicating the name(s) of the Customs personnel complained of or subject of investigation and the complainant(s), if any. Within the twenty-four (24) hour period, he shall forward the case folder to the Chief IIPD who, in turn, shall, within forty-eight (48) hours from receipt, assign the same to an investigator.

2.2 Complaint against IIPD personnel. A complaint against IIPD personnel shall be in the same form addressed directly to the Commissioner. The latter, within five (5) days from receipt thereof shall constitute an independent body to conduct the requisite preliminary investigation. The preliminary investigation shall be conducted in the same manner as provided herein.

2.3 Anonymous Complaints. No anonymous complaint shall be entertained unless verifiable by sufficient means through documentary, object or direct evidence. In the absence of supporting evidence, the anonymous complaint shall be dismissed outright.

2.4 Preliminary Investigation, Procedure. The preliminary investigation shall be conducted in the following manner:

(a) Within five (5) days from receipt of the case folder from the Chief, IIPD, the Investigating Officer shall evaluate the same. If he finds no ground to continue with the investigation, he shall recommend the dismissal of the complaint,

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otherwise he shall issue a subpoena, attaching therein a copy of the complaint and the supporting affidavits and documents, if any, to the respondent, directing him to file his Counter-Affidavit.

(b) Within ten (10) days from receipt of the subpoena, the respondent shall submit his Counter-Affidavit and that of his witnesses and other supporting documents relied upon for his defense, copy furnished the complainant. The respondent shall not be allowed to file a Motion to Dismiss the complaint in lieu of his Counter-Affidavit.

(c) If the respondent cannot be subpoenaed, or if subpoenaed, does not submit his Counter-Affidavit within the ten (10) day period, the investigating officer shall resolve the complaint based on the evidence presented by the complainant.

(d) The investigating officer may set clarificatory hearings if there are facts and issues that need to be clarified from any of the parties or their witnesses. Any of the parties may be present at the clarificatory hearings but may not cross-examine the other party or his witnesses. Any party may, however, submit to the investigating officer questions which may be asked to the other party or to the witness concerned.

(e) Clarificatory hearings shall be held and terminated within fifteen (15) days from submission of the respondent’s counter-affidavit or from the expiration of the period for the submission of such counter-affidavit.

(f) The Preliminary Investigation shall not exceed forty five (45) days from receipt of complaint; Provided, that the forty five-day-period may be extended only for valid and compelling reasons.

2.4.1 Failure of respondent or of the complainant to appear in the Preliminary Investigation or to submit his counter-affidavit shall be considered as waiver of his right thereof.

2.5 Resolution of Cases and Quantum of Evidence. Within fifteen (15) days from termination of the Preliminary Investigation or after the expiration of the period to file counter-affidavit and no counter-affidavit was filed, the Investigating Officer shall submit an Investigation Report to the Chief, IIPD for his concurrence, containing therein his findings which constitute a prima facie case against the respondent that would warrant the issuance of a Formal Charge; provided, however, that if no prima facie case is found, the Investigating Officer shall recommend, with concurrence of the Chief IIPD, for the dismissal of the complaint. Such recommendation for the dismissal of the complaint, shall be immediately forwarded to the Commisisioner for his approval.

2.6 Formal Charge. Upon finding of a prima facie case, a Memorandum shall be prepared, signed by the Investigating Officer duly concurred by the Chief IIPD, recommending that a Formal Charge be issued against the erring customs employee. The Memorandum and the Formal Charge, together with

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the entire case folder shall be forwarded to the Director, CIIS. The latter, if he concurs with the finding(s), shall, within ten (10) days from receipt thereof forward the same to the Deputy Commissioner, Intelligence Group. Otherwise, the Director, CIIS may return the same to the IIPD for further investigation. Such reinvestigation shall not exceed fifteen (15) days from receipt of the case folder by the IIPD. The Deputy Commissioner, Intelligence Group, may also order a reinvestigation within the same period, if he is not satisfied with the findings submitted to him, otherwise, he shall, within ten (10) days from receipt thereof, forward the Formal Charge, together with the case folder, to the Commissioner of Customs for his appropriate action.

2.6.1 Whenever warranted, the Formal Charge shall include the issuance of a Preventive Suspension against the customs employee

2.7. Preventive Suspension. The Commissioner may issue motu propio an order of preventive suspension, or upon petition of the complainant or as recommended by the IIPD, if there are reasonable grounds to believe that:

(a) the respondent is guilty of charges against him which would warrant removal from the service;

(b) if the respondent's continued stay in office may prejudice the just, fair and independent disposition of the case filed against him; or

(c) if the charge against respondent involves (a) dishonesty, (b) oppression, (c) grave misconduct; or (e) neglect in the performance of duty.

2.7.1 Effectivity. Such preventive suspension shall take effect immediately upon the filing of the Formal Charge and upon service of the Formal Charge to the respondent.

2.7.2 Reassignment In Lieu of Preventive Suspension. In lieu of preventive suspension, the Commissioner may reassign respondent to other units of the Bureau during the formal proceedings.

2.7.3. Duration. The preventive suspension shall continue until the case is terminated, however, in no case shall the total period of preventive suspension exceed ninety (90) days.

2.7.4 Automatic Reinstatement. Unless charged with other violations and a separate and distinct preventive suspension has been issued, the respondent shall be automatically reinstated upon expiration of the period of preventive suspension. The Directors of the Legal Service and of the Administration Office, are tasked to monitor the service/compliance of the preventive suspension.

2.7.5 Issuance of Personnel Order. The Commissioner or the Deputy Commissioner, Internal Administration Group, pursuant to existing laws rules and regulations, for purposes of clarifying/determining if the respondent is reinstated to his previous position or to a new position, and to determine the

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date of effectivity of the reinstatement, shall issue a Personnel Order to that effect. The same shall be served to the parties and the Directors of the Legal Service and the Administration Office, for information and their appropriate action.

Section 3. Proceedings Before the Legal Service.

3.1. Formal Proceedings

3.1.1. Transmittal of the Case Folder to the Legal Service. Within ten (10) days from receipt of the Formal Charge and the case folder, and immediately upon his approval of the Formal Charge, the Commissioner shall forward the same to the Legal Service through the Deputy Commissioner, Revenue and Collection Monitoring Group.

3.1.2. Routing of the Case Folder to the Chief, Prosecution and Legal Division. Within five (5) days from receipt of the Formal Charge and the case folder, the Deputy Commissioner, Revenue and Collection Monitoring Group shall forward the same to the Director, Legal Service who shall immediately forward the Chief, Prosecution and Litigation Division (PLD).

3.1.3. Action of the Chief, Prosecution and Legal Division. Within ten (10) days from receipt of the case folder, if the Chief, PLD finds no sufficient cause to warrant further proceedings on the basis of the Formal Charge and the documents attached thereto, he shall recommend to the Director of the Legal Service the outright dismissal of the case, otherwise, he shall immediately assign a Hearing Officer and a Prosecutor for the conduct of formal proceedings.

3.1.4 Issuance of Summons. The Hearing Officer shall, within five (5) days from receipt of the Formal Charge, issue summons requiring the respondent to file his Answer to the Formal Charge.

3.1.5 Answer. Within ten (10) days from service of summons, the respondent shall file his Answer to the complaint and serve a copy thereof to the complainant and the IIPD.

3.1.6 Effect of Failure to Answer. Should the respondent fail to file his Answer to the Formal Charge within the period prescribed above, he shall be considered to have waived his right to file the same. The Hearing Officer shall then proceed to decide on the case on the basis of the Formal Charge and the documents attached thereto. Should the Hearing Officer need to clarify some facts or findings from the complainant or from the IIPD, he shall set clarificatory hearings to aid him in deciding the case.

3.1.7 Hearing. Within three (3) days from receipt of respondent’s Answer or after the lapse of the period given to respondent within which to submit his answer, the Hearing Officer shall set the same for formal hearing requiring the parties and their witnesses to appear on the date, time and place indicated in the notice of hearing.

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3.1.7.1 In the course of the hearings, respondent may be represented by counsel if he so desires.

3.1.7.2 No motion for postponement or continuance shall be allowed by the Hearing Officer except upon meritorious grounds and subject to the requirement of expeditious disposition of cases. In any case, formal hearings, including clarificatory hearings, shall be terminated within thirty (30) days from the submission of respondent’s Answer or after the lapse of the period given to respondent within which to submit his Answer.

3.1.7.3 The conduct of formal hearing by the PLD shall be summary in nature. Subject to the requirements of due process in administrative cases, the technicalities of law, procedure and evidence shall not strictly apply thereto. The Hearing Officer may avail himself of all reasonable means to ascertain speedily the facts of the case. He shall take full control of the proceedings, with proper regard to the right of the parties to due process, and shall limit the presentation of evidence to matters relevant to the issues before him and necessary for a just and speedy disposition of the case.

3.1.8. Submission of Position Papers. Within fifteen (15) days from the termination of the formal hearings, the parties shall submit their respective Position Papers. After the lapse of said period, with or without the parties’ submission of their respective position papers, the case shall be deemed submitted for decision.

3.2. Decision

3.2.1. Rendition of Decision. Not later than fifteen (15) days after the case is deemed submitted for decision, the Hearing Officer shall submit a proposed decision containing his findings and recommendations to the Director of the Legal Service. The Director of the Legal Service shall, within fifteen (15) days indicate his concurrence and forward the same for the approval of the Deputy Commissioner for Revenue Collection and Monitoring Group (RCMG). The latter shall likewise have the same period of fifteen (15) days within which to approve or disapprove the findings of the Director of the Legal Service. Except for valid and compelling reasons, the period for review by the Director, Legal Service and the Deputy Commissioner, RCMG shall not exceed thirty (30) days. The Deputy Commissioner, RCMG shall thereafter immediately forward his findings to the Commissioner for the latter’s final approval.

3.2.2 Contents of Decision. The decision shall be signed by Commissioner and shall contain a clear and concise statement of the (a) facts of the case, (b) the issues involved (c) the applicable laws, rules, and jurisprudence, and (d) the conclusions and the reasons thereof.

3.2.3. Service of the Decision. The Decision as approved by the Commissioner of Customs shall be served personally or by registered mail to the respondent or to his counsel, if respondent is represented by counsel.

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3.2.4. Finality of the Decision. The Decision becomes final and executory after the lapse of fifteen (15) days from receipt of the Decision by respondent or his counsel, unless a Motion for Reconsideration or Reinvestigation has been timely filed.

3.2.5 Motion for Reconsideration or Reinvestigation. A motion for reconsideration or reinvestigation may only be entertained if filed within fifteen (15) days from receipt of the decision and based only on the following grounds:

(a) Grave errors of facts or laws or serious irregularities have been committed prejudicial to the interest of the respondent; or

(b) New evidence had been discovered which materially affects the order, directive or decision.

3.2.5.1 Only one motion for reconsideration or reinvestigation shall be allowed.

3.2.6 Routing of Motion for Reconsideration or Reinvestigation. Immediately upon receipt of any motion for reconsideration or reinvestigation, the Commissioner shall send the same together with the case folder to the Deputy Commissioner, RCMG who shall forward the same to the Chief, PLD through the Director, Legal Service, who shall resolve the same within fifteen (15) days from the date of receipt of the said motion and case folder.

3.2.7 Reinvestigation Proceedings. If a reinvestigation is in order, the Chief, PLD shall send a notice of hearing and shall conduct the reinvestigation proceedings in same the manner as how hearings are conducted and thereafter render his decision based on the evidence presented. Likewise, if the motion for reconsideration is meritorious, the Chief, PLD shall make the proper recommendation in the same manner as how a decision is rendered. However, if the Chief, PLD denies the motion for recommendation or reinvestigation, he shall immediately forward his recommendation to the Commissioner, through and after the review of the Director, Legal Service and the Deputy Commissioner, RCMG. The decision shall become final and executory after the lapse of fifteen (15) days from receipt of the respondent or his counsel.

3.2.8. Execution of the Decision. Upon finality of the Decision, the Office of the Commissioner shall indorse the same to the Internal Administration Group, who shall forward a copy of the Decision to the Human Resource Management Division for implementation. The Central Records Management Division, the Legal Service, and the IIPD shall each be furnished copies of the Decision.

3.2.9 Case Folders to RIPS in Case of Dismissal. In case of graft-related administrative cases involving Customs personnel, including, but not limited to offenses under Republic Act Nos. 3019 and 6713, offenses classified as grave offenses under Civil Service Rules and Regulations, and other similar

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offenses, where the decision against any or all of the respondents is for dismissal of the formal charge, the IAG shall furnish the Revenue Integrity Protection Service (RIPS) of the Department of Finance certified true copies of the entire case folder within five (5) days from receipt thereof.

3.3 Execution Pending Appeal. The respondent may appeal the decision of the Commissioner to the Civil Service Commission, however, such appeal shall not stay the execution of the decision.

3.4. Motion to Dismiss Based on Unreasonable Length of Time to Resolve. Upon motion of the respondent, any complaint against him pending investigation before the IIPD or pending hearing before the Legal Service and not resolved for more than one (1) year from the time the complaint is filed may be ordered dismissed, unless the delay in the proceedings is attributable to respondent’s own acts or are due to fortuitous events or force majeure. The customs official or employee responsible for such unreasonable delay shall be dealt with accordingly in accordance with applicable laws and regulations.

Section 4. Miscellaneous Provisions

4.1 Prohibited Pleadings. Other than those pleadings mentioned above, no other pleadings may be allowed before the IIPD or the Legal Service. Motions like motion to dismiss, motion to inhibit, motion to transfer hearings, motion for clarification, motion for bills of particular and other similar pleadings which would cause unncessary to delay the conduct of administrative proceedings shall not be allowed.

4.2 Confidentiality of Investigations and Hearings. All investigations and hearings of cases shall be strictly confidential. Any person who, without the authority of law, shall deliberately disclose confidential information gained during such investigation or hearing shall be dealt with in accordance with Section 3604 of the Tariff and Customs Code and this Code.

4.3 Rules of Court, Application. In all matters not provided in these rules, the Rules of Court and/or Uniform Rules on Administrative Cases shall apply, only in a supplementary character or by analogy, whenever practicable and convenient.

BOOK V – INFORMATION AND COMMUNICATIONS TECHNOLOGY

TITLE 1 – CLIENT PROFILE REGISTRATION SYSTEM (CPRS)

(Ref:CMO 39-2008)


1.1Client Profile Registration System (CPRS) is a process where stakeholders are registered with the e2m Customs System for purposes of transacting BOC.

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2.1The below stakeholders shall continue to comply with accreditation/registration/licensing/clearance requirements of government agencies regulating or exercising supervision over their operations, as follows:

Stakeholders Accredited by Accrediting AgencyOther GovernmentAgencies (OGA)

Value-Added Service Provider BOC VASP Accreditation Committee

Airlines Civil Aeronautics BoardShipping Lines Maritime Industry AuthorityExporters Registered with •Board of InvestmentsInvestment Promotions •Philippine Economic Zone Agencies Authority

•Clark Development Corporation

•Subic Bay Metropolitan Authority

•Cagayan Special Economic Zone

Authority•Zamboanga City Special

Economic Zone Authority

Other Exporters Philippine Exporters Confederation,

IncArrastre Operators Philippine Ports AuthorityAuthorized Agent Bank Bangko Sentral ng Pilipinas

(Bankers Association of thePhilippines)

Forwarders/Consolidators Philippine Shippers Bureau(NVOCCs) (Sea Freight)

Civil Aeronautics Board (Air Freight)

Above-listed stakeholders shall be registered in CPRS by their respective accrediting agencies using the Other Government Agency (OGA) gateway of e2m Customs. In this Order, the above stakeholders shall be referred to as OGA-Registrants.

2.2 Clients and Stakeholders (referred to as Registrants for brevity), whether filing/submitting e-documents under e2m Customs or just entities to be referred to in e2m Customs transactions shall apply for e2m Customs registration by electronically submitting the data and information listed in

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Annex A. The e2m Customs shall utilize these data to properly identify clients and stakeholders and ensure that they are extended the appropriate access levels and treated in accordance with their respective client types.

2.3Registrants shall register in CPRS for every role they will assume in their transactions with e2m Customs. As an example, if an exporter is also an importer, this stakeholder must register twice. As an importer, he applies for CPRS registration with Customs using a VASP. As an exporter, he will be registered by the accrediting agency.

2.4Only VASP-Registrants with valid and existing BOC accreditation obtained pursuant to existing Orders such as those listed in Sections 2.3, shall apply for Client Profile Registration. Where a Registrant is proven to have violated this provision, the BOC registering office shall immediately de-activate the CPRS registration of the registrant, without prejudice to the filing of an administrative case against him. De-activation of OGA-Registrant shall be made after official notification to the accrediting agency concerned stating the reason for the de-activation.

2.5An advisory shall be posted in the Customs website www.customs.gov.ph that registration approval for the data build-up shall be based solely on a valid and existing accreditation under the Customs Accreditation Secretariat (CAS) for importers and brokers and under other BOC units who are in charge of accreditation of remaining stakeholders covered by Section 2.1.

The list of brokers and importers accredited by CAS and the list of stakeholders accredited by other BOC offices shall be published in the Customs website for the guidance of all concerned.

OGAs are enjoined to similarly publish in their respective websites the list of their accredited stakeholders.

2.6For the initial registration of stakeholders covered by this Order, the validity of the registration is three hundred sixty five (365) days reckoned from the date of approval of the registration.

2.7BOC shall accredited the VASP's CPRS program for Phase 2 acceptance of CPRS Applications from clients.

2.8VASP-Registrants shall use the services of VASPs accredited for Phase 2 e2m Customs implementation to electronically submit, via the Internet, their applications for registration in CPRS.

2.9OGA-Registrants (stakeholders listed in Provision 2.1) must submit the data requirements in Annex A to their respective accrediting agencies. The OGAs shall register their stakeholders in CPRS using the e2m Customs National Single Window (NSW) gateway.

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2.10 Stakeholders who are successfully registered in CPRS shall be issued the following electronic identification:

2.10.1. A Customs Client Number. The Customs Client Number (CCN) is the stakeholder's unique identifier in the CPRS for every role that the stakeholder acquires in the CPRS registration.

The CCN is issued to the stakeholder by way of a Certificate of Registration (CoR). (Annex B).

2.10.2. A Digital Signature. All transactions in e2m Customs are required to be electronically signed by the entity submitting the transaction. e2m Customs shall issue a digital signature to each stakeholder who will be directly transacting with e2m Customs.

2.11 CPRS requires importers to nominate at least one e2m Customs-registered broker in their CPRS applications. In view of this, Customs brokers must endeavor to register at the earliest possible time, get their Customs Client Number and supply this to their importer-clients. After registration, however, importers may avail of the services of registered brokers other than the one they nominated in their CPRS registration.

2.12 Stakeholders who are operating a Customs Bonded Warehouse (CBW) for imports, shall register in CPRS as warehouse operators. After a successful CPRS registration, the CBW operator shall be issued an e2m warehouse code. Importers availing of the warehousing services of a CBW shall indicate the CBW warehouse code in the importer's CPRS registration. In view of this, a CBW operator must endeavor to register as early as possible so that it can provide importers using its CBW with the aforementioned warehouse code.

2.13 To facilitate their e2m Customs registration, it is recommended that importers and other VASP-registrants use the services of customs brokers who have already been registered in CPRS because 1) these brokers are already enrolled with VASPs and 2) they have been trained in using the CPRS for e2m Customs registration. On the other hand, importers and other clients who are considering applying for Client Profile registration on their own would still have to first enroll with a VASP and undergo training on using the CPRS for e2m registration.

2.14 Photographs and specimen signatures required should be digitized so these can be electronically submitted with the registration applications. Digitized documents should comply with technical requirements in Annex A.

2.15 Stakeholders are informed, through e-mail messages sent to addresses designated in their applications, of the status of their application at every stage of the approval process.

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2.16 Importers shall use their COR to enroll their bank accounts with Authorized Agent Banks as debit accounts for payment of duties and taxes.

2.17 The Deputy Commissioner, MISTG, shall have over-all responsibility for the implementation of this Order, provided that the Customs Accreditation Secretariat under the supervision of the Deputy Commissioner, AOCG, shall have the approving authority for stakeholders’ applications for e2m Customs registration under pertinent Customs regulations.

2.18 The Deputy Commissioner for MISTG and AOCG shall constitute a Task Force on the Integration of BOC Registration Requirements which shall, in consultation with representatives of stakeholders-group, review registration requirements and procedure provided under existing Orders towards integrating data and documentary requirements, as well as procedures, for all stakeholders, which will meet/satisfy the needs of all BOC Offices.


3.1MISTG

3.1.1. MISTG shall activate the VASP gateway and the NSW gateway to enable the internet lodgment of stakeholders' CPRS applications.

3.1.2. MISTG shall publish in the BOC website the CPRS application forms for each of the registrant types. The application form shall be downloadable from the BOC website. When printed and filled out, the application form may function as a source document for the data entry of the electronic CPRS application. Accredited VASPs must likewise make said form available in their websites for the convenience of registrants.

3.1.3. The Deputy Commissioner, MISTG, shall recommend to the undersigned, entities and processes for the convenient and secure generation and distribution of the digital certificates to the stakeholders after the approval of their CPRS application

3.1.4. MISTG shall provide the accrediting agencies with user manuals and instructions in the use of CPRS. The accrediting agency shall have the responsibility to transfer this knowledge to their respective stakeholders.

3.1.5. MISTG shall issue a digital certificate to the accredited VASPs. The VASPs shall use this digital certificate to sign CPRS applications that are lodged by the VASP-Registrants.

3.1.6. MISTG shall issue user names and digital certificates to each of the Accrediting Agencies (hereafter to be referred to as "Agency") as follows

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3.1.6.1. The is issued a user name and digital certificate to be used by the "supervisor", a responsible officer in the Agency who will be tasked to retrieve the electronic CPRS applications of the Agency's stakeholders for review prior to submission to CPRS. As an accrediting entity, the Agency can verify the data presented by the stakeholder in the electronic CPRS application against its own accreditation database3.1.6.2. Only the "supervisor" has CPRS access for submission of the stakeholder's application to e2m Customs.

3.1.6.3. MISTG shall issue a user name and digital certificate to a "clerk", an Agency's employee who shall encode the stakeholder's paper application forms submitted to the Agency for CPRS. The encoded CPRS applications are to be retrieved from the CPRS database by the 'supervisor' and reviewed before the official electronic submission to CPRS. When submitted to CPRS, these records shall have the status of 'ACCREDITED'.

3.1.6.4. The issuance of the user names and digital certificates shall follow the procedure to be implemented based on Provision 3.1.3. 3.1.6.5. For the limited period of CPRS data build-up, MISTG shall issue temporary 'clerk' user names and digital certificates to Agencies. These user names and digital certificates shall be distributed by the OGAs to their stakeholders to enable the stakeholders themselves to encode their CPRS applications using the BOC's NSW gateway. The temporary user names and digital certificates shall be invalidated at the end of the data build-up phase of CPRS.

3.2VASP Registrants

3.2.1 Prior to applying for e2m Customs registration, stakeholders should verify the remaining validity periods of their registrations with designated. BOC offices pursuant to existing CMOs/CAOs indicated in Provision 2.3. Where the remaining validity period of a stakeholder's accreditation is already short, it is recommended that the stakeholder renew his accreditation before applying for e2m Customs registration to avoid any possibility that his e2m Customs registration will be de-activated due to his having violated Provision 2.4.

3.2.2 Stakeholders shall file their applications for e2m Customs registration through Phase 2-accredited VASPs, as provided in Section 2.8, using their own e2m Customs-enabled computer facilities or e2m Customs-enabled computer facilities in business centers and internet cafes.

3.2.3 Stakeholders and their VASPs, through which the stakeholders lodged their applications for e2m registration, shall receive e-mail messages indicating either "Error" or successful progress in the processing of applications by the CPRS, as follows:

3.2.3.1. Stored – the electronic application is officially accepted by CPRS.

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3.2.3.2. Approved - the CPRS application has undergone verification and is approved.

3.2.4 Stakeholders who receive "Error" messages should resolve the errors through their VASPs and re-file their applications as soon as the errors are resolved.

3.2.5 Upon approval of the stakeholder's CPRS application, the stakeholder shall receive an e-mail message with the CoR attached. The e-mail and the attachment are automatically generated by CPRS. The stakeholder shall receive this e-mail and attachment in the e-mail address declared in his application. The CoR can be printed by the stakeholder using his own PC. The stakeholder's VASP shall also be provided a copy of the e-mail and the CoR attachment.

3.2.6 The stakeholder shall get his digital certificate through a process to be identified by the Deputy Commissioner, MISTG as stated in Provision 3.1.3.

3.2.7 Once the stakeholder gets possession of the digital certificate, the safekeeping of the digital certificate and the password becomes the stakeholder's responsibility. If the password is compromised, the stakeholder can request for a replacement digital certificate. This process for acquiring a replacement digital certificate shall likewise be described in the process to be implemented from Provision 3.1.3.

3.2.8 Importers shall present their CoR to Authorized Agent Banks and enroll the bank accounts which they will use for the automatic debit payments of duties and taxes of their importations. AABs shall issue Bank Reference Numbers for enrolled bank accounts to importers and electronically transmit the same to the e2m Customs System using their Bank Payment Gateways. The procedure for the application for and issuance of the Bank Reference Numbers is explained in the CAO entitled "Payment Application Secure System version 5.0".

3.2.9 Stakeholders shall be advised by their VASP on how to use the digital certificate for signing their electronic documents for submission to e2m Customs.

3.3OGA-Registrants

3.3.1 OGA Registrants shall be informed by their accrediting agencies on what mode to follow in the submission of the CPRS application to the OGA gateway.

3.3.1.1 OGA Registrants advised to encode their CPRS applications directly into CPRS using the OGA gateway shall immediately acquire a temporary user name, password and digital certificate from his accrediting agency.

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3.3.1.1.1. OGA Registrants uses an Internet browser to go to the URL www.customs.gov.ph/nsw.

3.3.1.1.2. OGA Registrant logs in, using the temporary user name and password provided him by his accrediting agency. OGA Registrant follows the steps in the CPRS User Manual for the functions that he will perform.

3.3.1.1.3. OGA Registrant encodes his CPRS application on-line and "STORES" his application. The OGA Registrant electronically signs his application using his temporary digital certificate. The STORED application shall automatically appear in the "supervisor's" list of applications needing review and submission to the OGA gateway.

3.3.1.1.4. OGA Registrant may inform the OGA 'supervisor' that he has 'STORED' his CPRS application as a secondary-notice

3.3.1.2 OGA Registrants advised to submit paper application forms shall submit the manually filled-in forms to the OGA. The OGA "clerk" shall encode the application form in CPRS.

3.3.2 The OGA Registrant waits for the e-mail notification from CPRS on the status of his CPRS application:

3.3.2.1. Accredited – this e-mail notification is sent when the OGA "supervisor" successfully submits the application record to CPRS.

3.3.2.2. Approved – this e-mail notification is sent, together with the COR attachment, when the CPRS application is approved.

3.3.2.3. E-mail notifications and the COR attachment are system-generated. 3.4Value Added Service Provider

3.4.1 VASPs shall develop their own CPRS data capture Internet program that will allow VASP-Registrants to encode their CPRS application forms for submission to e2m Customs. The CPRS programs must be accredited by BOC specifically for the Phase 2 Data Build-Up.

3.4.2 VASPs shall enable their clients to file their applications for e2m Customs registration online. When necessary, the VASP shall be provided by MISTG with temporary digital certificates for limited periods to be used solely for e2m Customs CPRS Data Build-up.

3.4.3 VASPs are responsible for training the VASP-Registrants enrolled with them.

3.4.4 VASPs shall immediately inform their clients of the data, photo and

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

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3.4.5 VASPs shall resolve error messages with the designated BOC officers, in behalf of their clients, and advise their clients on the appropriate resolution of the errors.

3.4.6 It shall be the responsibility of the VASPs to verify the completeness of data, photos and signatures of their clients before the Application for Registration is lodged with CPRS.

3.5Other Accrediting Agencies

3.5.1 Agencies must exercise due diligence in accrediting their respective stakeholders before effecting their Client Profile Registration.

3.5.2 Agencies shall assign the "clerk" and "supervisor" user names and digital certificates issued by MISTG to the appropriate Agency staff.

3.5.3 The Agency shall inform the BOC of the mode of submission to be followed by the Agency for the data build-up phase.

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

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

3.5.4 The "clerk" and the "supervisor" shall use an Internet browser to reach the OGA Gateway of URL www.customs.gov.ph/nsw. After successful log-in, the users follow the instructions set forth in the User Manual.

3.5.5 Accrediting agencies shall set up their own stakeholder support systems for the following activities:

3.5.5.1 Accrediting agencies shall inform their stakeholders on the need for registration in CPRS, the procedure to follow and other information necessary for the clients' compliance with CPRS registration.

3.5.5.2 Distribution of temporary user names and digital certificates to be issued by MISTG, for the use of their stakeholders in initially applying for registration in CPRS, if the Agency opts to allow its stakeholders to encode their own CPRS application on-line.

3.5.5.3 Training of their stakeholders in the fill-up of the screen form or the paper data sheet to use in the OGA CPRS.

3.5.5.4 Establishment of Help Desks and Customer Support Units to assist their stakeholders in using CPRS.

3.6Bureau of Customs I-CARE

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3.6.1 VASP-Registrants

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

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

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

3.6.2 OGA-Registrants

3.6.2.1 Upon its receipt of the CPRS application, CPRS shall automatically send OGA-Registrants the "ACCREDITED" e-mail message.

3.6.2.2 Approval of the Application for Registration of stakeholders from OGA shall be approved forthwith unless there is a valid and subsisting Suspension Order to hold the processing of all transactions of the registrant issued by the Commissioner of Customs or office duly authorized by him.

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

3.6.3 The approving BOC office shall endeavor to complete the approval of registration applications on the same day that the same is received at e2m Customs. The approving office may set a cut-off time of two (2) hours before end of working hours after which applications received will be considered as next-day submissions.

BOOK VI – GENERAL ADMINISTRATION

TITLE 1 – RECONSTRUCTION OF LOST DOCUMENTS

TITLE 2 – FEES AND CHARGES

CHAPTER 1 – IMPORT PROCESSING AND TRANSIT DECLARATION FEE (IPF)

1.1 Informal Entry P250.00

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1.2 Import Entry for Immediate Consumption

Dutiable Value of Shipment

Up to P 250,000 500.00Over P 250,000 to 500,000 1,000.00Over P 500,000 to 750,000 1,500.00Over P 750,000 2,000.00

1.2 Warehousing Entry 500.00

1.3 Transit Declaration 500.00

CHAPTER 2 – REFUND PROCESSING FEE AND DOCKET FEE

On ordinary claims for refund of tax and duty payments, including cash bonds; and for each formal protest/appeal from the decision of the District Collector/Valuation & Classification Review Committee (VCRC)

Amount of Claim/ Protested Amount Processing Fee/Docket FeeUp to P 50,000Over P 50,000 to 100,000 1,200Over P 100,000 to 200,000 1,400Over P 200,000 to 300,000 1,600Over P 300,000 to 400,000 1,800Over P 400,000 to 500,000 2,000Over P 500,000 to 750,000 3,000Over P 750,000 to 1,000,000 4,000Over P1,000,000 6,000

CHAPTER 3 – ADMINISTRATIVE FEES

3.1. Issuance of Certificates

3.1.1. Certificate of Payment P 200

3.1.2. Tax Credit Certificate P 200

3.1.3. Certificate of Clearance from Outstanding Account, Tax Credit, Tax Debit, and related matters P 200

3.1.4. Other certificates not herein specified, if such are issued in the course of routine administration and do not subserve any special pecuniary interest of the party concerned therein P 200

3.2. Issuance of Permits

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3.2.1To render overtime services for processing / releasing imported goods P 800

3.2.2 To take cigars aboard ship, per thousand cigars (secured by/given topersons, other than the passengers) P 200

3.2.3 To take cigarettes aboard ship, per thousand cigarettes, (secured by/

given to persons other than the passengers) P 200

3.2.4 Transshipment of cigar and / or cigarettes from one foreign vessel to another peso equivalent

of four US Dollars ($4.00) per cartons of fifty reams

3.3. Registration Fees

3.3.1. To participate in public auction sale, per auction P 4,000 plus ¼ of 1%

of the floor price

3.3.2. For importers to transact Business with the Bureau P 2,000

3.3.3. For renewal/updates of the registration of importers, per year P 1,000

3.4. Accreditation Fees

3.4.1. To practice Customs Broker Profession and brokerage business:

• Individual Broker P1,000• Brokerage firms and General Professional Partnership P2,000

3.4.2. Annual Supervision Fee, per year for Customs Broker and brokerage business

• Individual P600• Brokerage Firms P1,000

3.4.3. For Commercial Banks and Surety Companies to transact business

with the Bureau, per quarter P1,000

CHAPTER 4 - CUSTOMS DOCUMENTARY STAMP

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For each entry for immediate transportation in bond P 200

For each bond accepted or renewed P 400

For each approval of application in respect to transaction covered by general bond P400

For each amendment allowed to a foreign Inward Manifest P200

For every formal protest filed before the Collector of Customs P400

For each appeal in protest and seizure cases P400

For each set of IEIRD P530

For each CEWE P530

For each Transshipment Permit P230

For each Permit to Transfer Outside CY-CFS P230

For each Informal Entry Declaration P265

CHAPTER 5 – ACCOUNTABLE FORMS

(Ref: CMO 12-2001 INCREASED BY 25%)

BC Form Description Selling Price/pad

41 Special Permit to Transfer P 1,000.00177 Informal Import Declaration and Entry P 1,000.00190 Request for Value Classification /InformationP 1,000.00194 Permit to Deliver Imported Goods P 1,000.00197 Withdrawal Permit P 1,000.00198 Warehousing Permit P 1,000.00199 Transshipment Permit P 1,000.00201 NAIA- Gatepass P 1,000.00218 Certificate of Identification P 1,000.00219 Certificate of Inspection P 1,000.00236 Import Entry and Internal Revenue Declaration P1,250.00237 Entry Rider P 1,000.00242 Warehousing Entry CEWE PEZA P1,250.00Form A Certificate of Origin – GSP P 1,000.00Form D Certificate of Origin – ATIGA P 1,000.00

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Form AK Certificate of Origin – ASEAN-Korea FTAForm E Certificate of Origin – ASEAN-China FTAForm JP Certificate of Origin - JPEPAForm AJP Certificate of Origin – ASEAN-Japan Economic Partnership Form AANZForm AI Certificate of Origin – ASEAN-India FTAIED Import Entry Declaration Form P 1,000.00

CHAPTER 6 – WAREHOUSING SUPERVISION FEES

(Ref: CMO 95-90, increased by 50%)

There shall be collected from the owner/operator, annual supervision fees at the following rates:

1. For a small industry/enterprises P 100,000.00

2. For a medium industry/enterprises P 200,000.00

3. For a large industry /enterprise and a CBW operating, regardless of total assets, as a common or trading warehouse P 500,000.00

For this purpose, the classification shall be in accordance with the NEDA classification of industries and which is currently as follows;

1. Small Industries - Enterprises, excluding agriculture, with total assets of P 500,000.00 but less than P 5 million.

2. Medium Industries - Enterprises, excluding agriculture, with total assets of P 5 million but less than P 10 million.

3. Large Industries - Enterprises, excluding agriculture, with total assets of over P 10 million.

TITLE 3 – OVERTIME PAY

CHAPTER 1: RULES AND REGULATIONS GOVERNING THE OVERTIME SERVICES AND PAY; TRAVELING, BOARD AND LODGING EXPENSES

AND / OR MEAL ALLOWANCE AT ALL SEAPORTS OF ENTRY Section I - AUTHORITY TO ALLOW RENDITION OF OVERTIME SERVICES

(CAO 2-82) 1. The District Collector of Customs may authorize customs official and

employees of the district to render overtime services when the interest of the service requires, and the services so rendered are to be paid by shipping companies, ship owners/operators, importers, exporters, customs

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brokers or other parties served; Provided, however, that no casual employees shall be authorized to render overtime work.

2. When there is a shortage of regularly appointed personnel to meet the

requirements or exigencies of the service, the District Collector may designate and assign any competent and regularly appointed personnel of the district to render overtime services in an acting capacity;

Provided, however, that such designations and assignments shall be made only upon the recommendation of the chief of division to which the personnel belongs, who shall certify that the working efficiency of his division will not be hampered or in any way be adversely affected by such designation and assignment, which recommendation shall be favorably indorsed by the Deputy Collector concerned who has authority over the personnel concerned;

Provided, further, that the personnel concerned shall first be given a thorough briefing as to the nature of his duties and responsibilities to be certified to by the briefing official concerned before the personnel is authorized to render actual over time services;

Provided, furthermore, that the deputy Collector concerned may, upon advice by the Chief of the Division concerned, request for the revocation of the designation/assignment when the rendition of overtime service of the personnel concerned is working to the prejudice of the efficiency of the service, in the division/Section/Unit affected, and

Provided, finally, that all designations in an acting capacity shall be reviewed by the District Collector before the end of each month to determine whether the requirements or the exigencies of the service or the personal conduct or activities of the personnel concerned in his area of assignment warrant or justify extension of his designation. In no case shall designations in an acting capacity for purposes of rendering overtime service exceed ninety (90) days; Provided however, that any such designation which is not extended and renewed by the District Collector at the end of each month shall be deemed automatically revoked after the last day of the month preceding.

3. The Commissioner of Customs may issue designation of personnel in an

acting capacity for overtime purpose to such positions as may be required in the exigencies of the service if the duration of such designations is for a period of more than ninety (90) days; Provided, however, that such personnel so designated shall have passed the screening process conducted for such purpose and have been found to be competent and qualified by the District Collector; Provided, however, that only personnel holding an item of Customs Guard shall be designated in an acting capacity as Customs Inspector; Provided, furthermore, that those who have already been so designated by the District Collector prior to the effectivity of this Order shall not be affected until such designation is

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revoked and; Provided, finally, that only personnel from the Piers and Inspection Division, whose appointment is a regular Customs Inspector or higher shall be designated as Acting Senior Customs Inspector.

4. In case an emergency situation arises at any given time and there is a shortage or absence of regularly appointed or assigned personnel, the District Collector or his authorized representative may designate other regularly appointed personnel to render overtime services in an acting capacity, in order to cope with the emergency; Provided, however, that such emergency designation shall last only during the duration thereof.

SECTION II - RATES OF OVERTIME PAY (CAO 2-2004) The following rates of compensation for overtime services rendered by Customs officials and employees on board vessel at all ports of entry shall be as follows:

1. On Board Vessel

1.1. For Boarding Formalities P1,500.00/vessel

1.2. For Entrance and Clearance P 725.00/vessel

1.3. For supervision of vessel during the loading and unloading of cargoes P3,000.00/day

1.4. For supervision of vessel other than no. 3, such as bunkering and other emergency purposes like medical, sheltering, repair, Marine accidents, dockyardlay up and others P1,500.00/day

2. At the Pier/Ship side

2.1. For cargo control supervision and examination rendered by the following Customs Officers:

2.1.1. COO III & COO II P67.00/hour

2.1.2. COO I P60.00/hour

2.1.3. Asst. COO P53.00/hour

2.2. For cargo control supervision by the Customs Container Control Division P2,500/day

3. Terms and Conditions (1 and 2)

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3.1. The flat rates or lump sum fees provided above, are inclusive of overtime and holiday fees, meals and transportation allowances. For the lump sum fee provided in 1.3 & 1.4 and 2.2, the same shall be distributed among the concerned personnel in accordance with the sharing prescribed in Section II.4 of this order.

3.2. Rates per day means per day of 24 hour continuous service commencing from the time of boarding and ending at the time of disembarkation from the vessel, except that, when the vessel stayed for less than one day for loading/unloading of cargoes, this will be considered as one (1) whole day.

3.3. After the first 24 hours, any succeeding service rendered over 12 hours is considered one full day while any succeeding service rendered under 12 hours is considered one half day.

3.4. In the case or co loaders, only the principal agent or vessel operator shall be billed for overtime services.

4. Overtime Pay in All Seaports of Entry Under the East Asia Growth Areas (EAGA) for Vessels Including Cargoes Coming from Member Countries of the "Brunei, Indonesia, Malaysia, Philippines — East Asia Growth Areas" (BIMP-EAGA) (CAO 6-2006)

4.1. On-Board Vessel

4.1.1. Boarding Formalities — P750.00/vessel

4.1.2. Entrance and Clearance — P362.50/vessel

4.1.3. Supervision over Loading and — P1,500.00/dayUnloading of Cargoes

4.1.4. Supervision of Vessel for emergency — P750.00/daycall such as bunkering, dischargingpatient, sheltering, repair, stress of weather, marine accident, dockyardlay up and others

4.2. At the Pier/Ship-side

Cargo Control Supervision and Examination rendered by the following customs officers and employees:

4.2.1. COO III and COO II — P33.50/hr.

4.2.2. COO I — P30.00/hr.

4.2.3. Asst. COO — P26.50/hr.

4.2.4. Customs Container Control Division/

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or equivalent unit — P1,250.00/day

5. Standard for the Disbursement of Flat Rate Compensation for Overtime Services and Allowances (CMO 35-93)

5.1. The distribution and sharing of flat rates of compensation shall be based on the ratios of the salaries of the personnel assigned to the total collected, as hereunder demonstrated;

CUSTOMS INSPECTOR CUSTOMS GUARDSalary P 3,309.00 P 2,355.00% Share 58% 42% Share in P P1,160.00 P840.00

CUSTOMS INSPECTOR CUSTOMS GUARD CUSTOMS GUARDSalary P 3,309.00 P 2,355.00 P 2,355.00% Share 42% 29% 29%Share in P P840.00 P580.00 P580.00

5.2. The salaries of the personnel concerned, used without deduction as base figures, shall be taken from the payroll of the previous month; and

5.3. Any excess in decimal points shall be computed in favor of the Customs Inspector or other supervisory officer.

SECTION III – OVERTIME PERIOD FOR OFF-SHORE/PIER CUSTOMS PERSONNEL (CAO2-82)

1. On regular working days, overtime period shall commence at the close of

the prescribed regular office hours and shall terminate not later than the start of the prescribed regular office hours of the next working day; Provided, however, that the interval between 12:00 noon and 1:00 P.M. of a working day shall also be considered an overtime period.

2. On Saturdays and Sundays, overtime period shall commence at the

prescribed regular office hours on Friday or the last working day of the week and shall terminate not later than the start of the prescribed regular office hours on the following Monday or next working day, unless the service is sooner terminated.

3. On legal holidays, overtime period shall commence at the close of the

prescribed regular office hours of the working day immediately preceding and shall terminate not later than the start of the prescribed regular office hours of the following working day, unless the service is sooner terminated.

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SECTION IV – NUMBER OF CUSTOMS PERSONNEL TO BE ASSIGNED ON BOARD EACH VESSEL AND IN THE PIER / OUTPORT FOR OVERTIME PURPOSES (CAO 2-82)

1. For the purposes of assignment of Customs Personnel, the following rules shall be observed, to wit:

1.1. On Board Vessel

1.1.1. On vessel that is not working cargo anchored in the stream or tied up alongside the pier, whether in the port of entry or outport, there shall be assigned on board one (1) Customs Inspector and one (1) Customs Guard for customs surveillance and supervision, and in case the vessel is working cargo that is loading and/or unloading general cargo of various kinds and different marks, one (1) additional Customs Guard shall be assigned for each hatch to be worked but not to exceed three (3) guards for all such hatched.

1.1.2. If the cargo to be loaded or unloaded is in bulk such as, but not limited to fertilizer, chemicals, molasses, oil, sugar, logs, copra and rice, there shall be assigned only one (1) Customs Guard to supervise such operations irrespective of the number of working hatches, in addition to one (1) Customs Inspector and one (1) Customs Guard assigned on board the vessel for customs surveillance and supervision.

1.1.3. In the case of containerized vessel, whether working cargo or not, only one (1) Customs Inspector and one (1) Customs Guard shall be assigned on board for customs surveillance and supervision.

1.1.4. When a foreign vessel proceeds to an outport to discharge or loaded cargo, one (1) Customs Inspector and one (1) Customs Guard only shall be assigned to accompany the vessel and they shall be entitled to overtime pay.

1.1.5. On board a purely passenger vessel, there shall be assigned one (1) Customs Inspector and one (1) Customs Guard for customs surveillance and supervision and one (1) additional Customs Guard for each accommodation ladder in use.

1.1.6. In the case of mix cargo and passenger vessel, there shall be assigned on board one (1) Customs Inspector and one (1) Customs Guard for customs surveillance and supervision, and one (1) additional Customs Guard shall also be assigned, if the vessel is loading and/or unloading general cargo of various kinds and marks for each hatch being worked but not to exceed three (3) guards for all hatches, or if the vessel is loading or unloading bulk cargo such as but not limited to fertilizer, chemicals, molasses oil, sugar, logs, copra, and rice, only one (1) Customs Guard shall be assigned to supervise, the operations, regardless of the number of hatches being worked; and another

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additional Customs Guard for each accommodation ladder in use by passengers.

1.1.7. At the piers/off-shore, Customs officials and employees for cargo control, supervision and examination;

1.1.7.1. When a vessel is arriving or departing, one (1) Wharfinger and one (1) Shed Customs Guard shall work overtime at the assigned berth or cargo shed in the pier to perform all necessary customs functions until said vessel is either properly secured or, in case of departure, until cleared at the pier. However, in case of passenger liner one (1) Wharfinger, and one (1) Gatekeeper at the main gate of the pier shall be on duty while the vessel is in port tied up alongside the pier and they shall be entitled to overtime outside the official working hours. The shipping company, firm or person who made the request for the overtime services of said customs personnel shall pay such services.

1.1.7.2. When the vessel is discharging or loading cargo at the pier, there shall be assigned one (1) Wharfinger and one (1) Shed Customs Guard at the corresponding cargo shed and one (1) Gatekeeper at the main gate of the pier, who shall work overtime. The shipping company, firm or person who made the request for the rendition of overtime services by said customs personnel shall pay such services.

1.1.7.3. In case of containerized vessel discharging or loading cargo, there shall be assigned one (1) Wharfinger and one (1) Customs Guard at the Container Terminal Area who shall work overtime. Their overtime services shall be paid by the shipping company or party that requested for the rendition of such overtime service.

1.1.7.4. In case of delivery from pier, one (1) Wharfinger shall take care of the delivery of the cargoes from each shed in the pier, with one (1) delivery Customs Guard for each truck loading but not to exceed two (2) guards for each importer or broker, and one (1) Gtaekeeper (Customs Guard) for each lane of the trucks, passing out of the gate. Their overtime service shall be paid pro rata or share and share alike by importers or brokers.

1.1.7.5. In case of transit of transit cargo being received and handled at coastwise pier from transhipment on board an inter-island vessel to the port of destination, one (1) Customs Guard and one (1) Wharfinger who jointly receive the cargo shall be entitled to render overtime services until said cargo is loaded and receipted for by the master of the vessel. The shipping company or broker acting as agent of the consignee or importer shall be liable for such overtime services.

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1.1.7.6. In case of oil shipment being pumped through a submarine pipeline from the carrying vessel to the shore tank, one (1) Customs Guard shall be assigned to this tank. The overtime service shall be paid by the shipping company.

1.1.7.7. At other piers or places where a vessel loads or unloads cargo, one (1) Wharfinger shall be assigned to render overtime service where he is called upon to receive and/or take inventory of the cargo. Likewise, one (1) Customs Guard may also be assigned thereat where he is called upon to underguard the cargo. Their overtime services shall be for the account of the shipping company concerned.

2. For Underguuarding Services:

2.1. Customs Guard shall be assigned for conduction or underguarding of cargoes from vessel to the Baggage Inspection Room or Customhouse. Overtime services shall be paid when such services are requested or rendered after regular office hours.

2.2. There shall be assigned one (1) Custom Guard for each lighter on board LASH (Lighter Aboard Ship) containerized vessel when said lighter conveys the cargo on board thereof to the place of delivery. Overtime services are for the ship’s account.

2.3. Where cargoes have to be shifted from the ship to the pier; from ship to lighter; from one vessel to another vessel or from one pier to another pier, one (1) Customs Guard shall be assigned to oversee the operations. His overtime services shall be paid by the shipping company or its agent.

2.4. In the case of conduction or underguard services, there shall be one (1) Customs Guard for each lighter, truck or other means of transportation for each trip and shall remain on duty until the cargoes being underguarded have been signed for by the guard-in-charge or other responsible customs personnel, and if the merchandise being underguarded is taken to a warehouse, one(1) Customs Guard shall remain in-charge thereat until he is released by the Customs Bonded Warehouse Storekeepers.

2.5. With regards to gasoline, kerosene and other fuel in bulk or in any form transferred from Manila Bay to Pandacan Wharf or any other similar place in the case of Port of Manila and from the pier to any other place in the case of ports outside of Manila, there shall be one (1) conducting guard for one to four lighters; however, if there are more than four (4) lighters at any time, an additional guard shall be assigned, provided, finally, that for every excess of four (4) lighters; a Custom Guard shall be assigned for underguarding purposes. The Custom Guard assigned at the pier/off-shore to underguard said lighter shall only be released thereat after proper turnover shall have been made and the goods are

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duly receipted for by the Guard-in-charge. There shall be one (1) Guard for each working pump on the jetty or wharf and another guard on each tank. The Customs Examiner assigned to examine the goods shall release the guard on the jetty or wharf after the lighters have been emptied, and shall also release the guard on the shore tank after the reading of the meter of the tank, the time and date of release to be noted on the guard’s botenote.

2.6. In case of export cargoes from Customs Bonded Manufacturing Warehouse are loaded on truck, lighter or other means of transportation for subsequent loading on board vessel, one (1) conducting Customs Bonded Warehouse Guard shall be assigned to underguard said cargoes, who shall be relieved only after subject exportation has been duly receipted for by the Customs Inspector / Shed Supervisor. Overtime services are for the shipper’s account.

2.7. For customs entrance formalities and clearance of vessel; there shall be assigned only one (1) Senior Boarding Officer and one (1) Entrance and Clearance Officer to a vessel. In the South Harbor, Port of Manila, the Assistant Entrance and Clearance Officer shall be authorized to render overtime services at the rates specified above. Their overtime services shall be paid by the shipping company concerned.

SECTION V - LIMITATIONS ON CONTINOUS OVERTIME SERVICES

ANDOVERTIME ALLOWANCE (CAO 2-82) 1. No customs official or employees shall be allowed to render continuous

overtime services at one time for more than eighteen (18) hours, including regular office and overtime hours. He shall work eight (8) hours regular time and ten (10) hours straight overtime on Sundays and Holidays, which shall be followed by a relief interval of six (6) hours rest for which no overtime pay shall be collectible, except in the following cases:

1.1. When the personnel concerned is assigned at an outport and no substitute is available;

1.2. When an vessel is scheduled to sail but does not sail on the scheduled time, the overtime services of Customs personnel on duty may be extended;

1.3. When an employee is waiting for a relief but no relief is available;

1.4. When relief is not possible because of continuous assumption of responsibility until completion of the particular assignment involved.

SECTION VI – ASSIGNEMENT OF CUSTOMS INSPECTORS, GUARDS, AND OTHER CUSTOMS PERSONNEL FOR OVERTIME SERVICES AND THE DISTRIBUTION OF MONTHLY OVERTIME PAY (CAO 2-82)

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1. The assignment of Customs Inspector, Customs Guard as well as other authorized Customs personnel for overtime services at the Port of Manila, shall be made strictly on a rotation basis in accordance with the list of priority of assignments prepared and submitted to the Piers and Inspection Division (PID) by the Bureau of Customs Computer Center (BCCC).

2. The BCCC shall submit in advance every fifteen (15) days a list of priority of assignments for overtime services to the PID for implementation within the week. The Chief of the PID shall submit to the Collector, Port of Manila, thru the Administrative Branch, the list of assignment of Customs personnel for overtime services made within the month as per priority listing of the BCCC to assure compliance by the PID. The Collector of the Port of Manila shall submit every fifteen (15) days thru the Administrative Branch, a report of the number of hours served (regular and overtime) by the Customs personnel; including the report on any change, deletion and/or addition to the list of Inspector, Guards and other Customs personnel.

3. In ports and subports other than the Port of Manila, assignment of Customs Inspectors, Guards and other Customs personnel for overtime services shall also be effected strictly on a rotation basis. For this purpose, every port is required to submit a list of Customs personnel who are authorized to render overtime services to the BCCC. The BCCC shall furnish the ports concerned with the list of priority of assignment for overtime services to the Collector of Customs concerned every month, which shall be followed by him or his duly authorized representative at the end of every each month, the Port Collector shall submit a monthly list of assignment of their respective personnel who have rendered overtime services for the said month in order to ensure compliance with the list of priority assignment by BCCC.

4. The Collector of Customs or his duly authorized representative shall as much as possible strictly follow the list of priority assignment of Customs personnel for overtime services, provided, however, in the exigencies of the service he may deviate from the same as the need arises. In no case shall the assignment for overtime services of Acting Inspector or Acting Customs Guard be made if there are available regular Inspectors and Guards for the assignment; provided further, that the Customs employees designated as Acting Customs Guards are prohibited to perform the duties of Acting Inspector at the same time and vice-versa; and provided finally, that the designation of Acting Inspector shall first be made from among qualified regular Customs Guards.

5. Assignment of Acting Customs Guard shall be in accordance with the rotation policy which shall be prepared by BCCC. The Chief, PID shall submit to the BCCC copies of the designation of Customs personnel authorized to render overtime services.

6. All assignments for overtime services shall be strictly complied with and failure to do so by the employee concerned without any valid justification

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and notice in advance shall constitute a sufficient cause for appropriate administrative disciplinary action against him.

SECTION VII - MEAL ALLOWANCE AND OTHER EXPENSES (CAO 02-2004) 1. When customs personnel are required to travel outside of their official

stations in order to render above services, in addition to the flat rates or lump sum fees provided for in 1.A. and B above, the transportation, meal and lodging allowances incurred during the travel shall be reimbursed according to the following rates:

1.1 Meal allowance P50.00/meal1.2 Transportation Allowance P50.00/way1.3 Lodging Allowance P150.00/day

2. Terms and Conditions:

2.1 Customs personnel shall be entitled to reimbursable expenses enumerated above only during their travel commencing from the time they leave their official station and ending upon boarding the vessel and/or commencing from the time of disembarkation and ending upon reaching their official station.

2.2 Meal allowance shall be paid only if the travel time embrace any part of the following periods:

Breakfast 6:00 AM to 8:00 AMLunch 12:00 Noon to 1:00 PMSupper 6:00 PM to 8:00 PMMidnight Repast 11:00 PM to 1:00 AM

2.3 Land transportation each way shall be within the 8 km radius from official station to pier terminal or vice versa. For over 8 km distance, the existing published fare or current market rate for the fastest means of public transport such as airline economy fare, deluxe class boat ticket and air conditioned bus shall apply. Transportation allowance for any category shall not be reimbursed if the tickets are provided free by the shipping line/requesting party.

2.4 Hotel or lodging accommodation shall also be provided by the shipping line/requesting party. Otherwise, claims for reimbursement shall not exceed the rate provided in Sec. II.1.4 above.

SECTION VIII –DEPOSIT REQUIREMENT FOR OTHER EXPENSES IN CONNECTION WITH OVERTIME SERVICES (CAO 2-82)

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1. Any person or firm who, in compliance with Custom rules and regulations or on his own initiative, requests for the overtime services of Customs officials and for employees whereby transportation and other necessary expenses shall be incurred, will be required before such services are rendered to deposit the total estimated expenses with the Customs Cashier. The cashier or the duly authorized Disbursing Officer shall then make the necessary advances from said deposit to the Customs personnel who will render such services only upon written proof of his/her assignment order. No further advances shall be authorized until the previous account shall have been duly liquidated.

2. Immediately after the return of the Customs personnel to his/her official station, he/she shall liquidate such advance by submitting duly accomplished vouchers and receipts to the Accounting Officer concerned and shall refund the unexpended amount, if there is any, with the Customs Cashier.

SECTION IX – CLAIMS FOR OVERTIME PAY, TRAVELING AND OTHER EXPENSES

(CAO 2-82) 1. Payment of overtime pay, traveling expenses and meal allowance shall be

effected in accordance with the following procedures:

1.1 The Customs personnel shall prepare the necessary vouchers supported by statements of overtime services render duly accomplished in BC Forms Nos. 35 and 35-A upon the completion of their overtime assignment and submit the same to the Administrative Unit of the port.

1.2 The Administrative Unit of the port in turn shall check the vouchers, certifies to their correctness, approve the same for payment and shall forward the billing to the shipping companies concerned or other entities who shall make payment thereof within seven (7) days from receipt of the statement of account.

1.3 Such companies or entities shall send payment as per statement to the Administrative Unit of the port in the account of the Collector of Customs who shall deposit said amount in the general fund of agency concerned.

2. Port Collectors shall submit to the Accounting Division, office of the Commissioner, BOC, copy furnish the AISL/PSAA within five (5) days after the end of each month, an itemized report of collections and disbursement of payment services rendered by Customs personnel. (CAO 3-91)

3. In cases where Customs personnel render overtime services in favor of two or more parties or entities at the same time, payment of such services shall be made on a pro rata basis in accordance with the rate of overtime pay prescribed in Section II.2.1, hereof.

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SECTION X – PROHIBITED ACTS OF CUSTOMS PERSONNEL (CAO 2-82) 1. In order to maintain the faith and confidence of the general public, all

Customs officials and employees, except Cashiers or Collecting Officers of the Bureau, are prohibited from receiving cash under any circumstances as payment for overtime services rendered.

2. No substitution and/or replacement of any assigned personnel shall be made except upon the authority issued by the Chief, Piers and Inspection Division or the Collector of Customs, in the case of ports other than the Port of Manila, unless such authority has been delegated to any other subordinate Customs official.

SECTION XI – PENAL PROVISIONS (CAO 2-82) 1. Any Customs official or employee who violates any provision of this order

shall be subject to disciplinary action and any shipping company or other private person or firm who violate any provisions of this order shall be subject to penalties provided for by law.

CHAPTER 2: RULES AND REGULATIONS GOVERNING THE OVERTIME SERVICES AND PAY TRAVELING, BOARD AND LODGING EXPENSES AND/OR MEAL ALLOWANCE AT THE NINOY AQUINO INTERNATIONAL AIRPORT Section I - AUTHORITY TO ALLOW RENDITION OF OVERTIME SERVICES 1. The District Collector of Customs may authorize customs official and

employees of the district to render overtime services when the interest of the service requires, and the services so rendered are to be paid by airline companies, aircraft owners/operators, importers, exporters, customs brokers or other parties served; Provided, however, that no casual employees shall be authorized to render overtime work. (CAO 7-92)

2. When there is a shortage of regularly appointed personnel to meet the

requirements or exigencies of the service, the District Collector may designate and assign any competent and regularly appointed personnel of the district to render overtime services in an acting capacity subject to the following limitations/conditions:

2.1 The chief of the division where the overtime services are to be rendered shall first advise the District Collector of Customs that the division needs the services of additional personnel for overtime purposes;

2.2 The chief of the division where the customs personnel proposed to be designated in an acting capacity is regularly assigned shall likewise certify that the working efficiency of his division will not be hampered or in any manner affected by the proposed designation or assignment;

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2.3 No customs personnel shall be designated or assigned in an acting capacity for overtime purposes unless he/she possesses the minimum qualifications required for the position under the civil service regulations;

2.4 The personnel designated or assigned in an acting capacity shall undergo at least ONE (1) month on-the-job training. The chief of the division shall determine if the personnel concerned is ready to perform the duties and assume the responsibilities of the position to which he/she is designated or assigned.

2.5 The chief of the division shall conduct a monthly evaluation of the performance of customs personnel designated or assigned to the division for overtime purposes. The performance evaluation report shall be submitted to the Deputy Collector of Customs exercising jurisdiction over the division. The Deputy Collector shall base on the report his recommendation to the District Collector whether the privilege of the concerned personnel to render overtime service in an acting capacity should be renewed or cancelled." (CAO 1-2005)

3. The Commissioner of Customs may issue designation of personnel in an

acting capacity for overtime purpose to such positions as may be required in the exigencies of the service if the duration of such designations is for a period of more than ninety (90) days; Provided, however, that such personnel so designated shall have been found to be competent and qualified by the District Collector; Provided, however, that no personnel holding an item lower than Clerk II or a position of equivalent range shall be designated in an acting capacity as customs examiner in the Passenger Departure Area; Provided, that those who have already been so designated by the District Collector prior to the effectivity of this Order shall not be affected until such designation is revoked and; Provided Customs Operation Officer I or a position of equivalent salary grade shall be designated in an acting capacity as Customs Operation Officer III and authorized to render over time services in the Passenger Arrival Area. (CAO 7-92)

4. In case an emergency situation arises at any given time and there is a

shortage or absence of regularly appointed or assigned personnel, the District Collector or his authorized representative may designate on the spot other regularly appointed personnel to render overtime services in an acting capacity in order to cope with the emergency; Provided, however, that such emergency designation shall last only during the duration thereof. (CAO 7-92)

SECTION II - RATES OF OVERTIME PAY (CAO 1-2005) 1. The following rates of compensation per hour of overtime services

rendered by customs officials and employees at the NAIA shall be as follows:

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1.1 Collector of Customs — P 83.00

1.2 Supervisors/Customs OperationOfficer V/Boarding Officers — P74.00

1.3 Customs Inspectors/Customs Operation Officer III/Cashiers/Document Processors/Warehousemen/storekeepers — P70.00 1.4 Clerks/Customs Guards/Gatekeepers — P66.00

2. Rates of Overtime Pay in All Airports of Entry Under the East Asia Growth Areas (EAGA) for Aircrafts Including Cargoes Coming from Member Countries of the "Brunei, Indonesia, Malaysia, Philippines — East Asia Growth Areas" (BIMP-EAGA) (CAO 6-2006)

2.1 Collector of Customs — P41.50/hr.

2.2 Supervisor/COO V/Boarding Officer — P37.00/hr.

2.3 COO III/Inspector/Cashier/Document — P35.00/hr.Processor/Warehouseman/Storekeeper

2.4 Clerk/Customs Guard/Gatekeeper — P33.00/hr.

SECTION III - OVERTIME PER PERIOD (CAO 7-92) 1. On regular working days, overtime period shall commence at the close of

the prescribed regular office hours and shall terminate not later than the start of the prescribed regular office hours of the next working days; Provided, however, that the interval between 12:00 noon and 1:00 P.M. of a working day shall also be considered an overtime period.

2. On Saturdays and Sundays, overtime period shall commence at the

prescribed regular office hours on Friday or the last working day of the week and shall terminate not later than the start of the prescribed regular office hours on the following Monday or next working day, unless the service is sooner terminated.

3. On legal holidays, overtime period shall commence at the close of the

prescribed regular office hours of the working day immediately preceding and shall terminate not later than the start of the prescribed regular office hours of the following working day, unless the service is sooner terminated.

SECTION IV - COMMENCEMENT AND TERMINATION OF OVERTIME SERVICES (CAO 7-92)

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1. In case of aircraft arrivals, overtime services shall commence one (1) hour prior to the scheduled time of arrival and shall terminate two (2) hours after actual flight arrival.

2. In case of aircraft departure, overtime shall commence two and one-half (2

1/2) hours before the scheduled time of departure and shall terminate one-half (1/2) hour after the actual departure of the aircraft unless a longer check-in period is requested on a case-to-case basis.

3. In case of delays, changes or cancellation of a scheduled arrival or departure of an aircraft, proper CIQ notices thereof shall be presented at least three (3) hours before the scheduled time of arrival or departure, otherwise the customs personnel concerned shall be entitled to overtime pay for the waiting period caused by the failure to give the proper CIQ notices as required heretofore; Provide, however, that the waiting period falls within the overtime period prescribed under Section III above.

4. In case of failure to present the proper CIQ notices required in the

preceding paragraph, a waiting period from the scheduled time of arrival or departure lasting a fraction of an hour or less than thirty (30) minutes shall be disregarded, and awaiting period lasting (30) minutes of an hour or more shall be considered as one (1) hour.

5. Actual time of arrival of an aircraft shall be the time when the aircraft is on

block, and actual time of departure shall be the time when the aircraft is off the block as recorded by the Aircraft Operations Division.

SECTION V - PERSONNEL COMPLEMENT FOR ARRIVAL AND DEPARTURE

(CAO 7-92) 1. For technical flight were no passenger or cargo is enplaned or deplaned,

or where passengers or crew are permitted to remain only on the transit lounge, one (1) Boarding Officer and one (1) Guard shall be required to service the flight; Provided, however, that one (1) Examiner shall be included if a crew rest is involved whereby the crew is permitted to leave the airport premises.

2. For pure cargo flights and no crew rest is involved, the required

complement to service the arrival shall be one (1)Boarding Officer and not less than two (2) Guards.

3. For inbound commercial flights, or diverted flights where hotel

accommodations provided the passengers, the required complement to service the aircraft shall be as follows:

Collector of Customs — one (1) Boarding Officer — one (1)

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Inspector (Supervisor) — one (1) Guards — not less than two (2) Customs Operations Officer V — one (1) Customs Operations Officer III — one (1) per fifteen (15) passengers

Customs Operations Officer III,Document Processor, Cashier,Storekeeper, Clerk — one (1) each

4. For outbound commercial flights or diverted flights where hotel

accommodations have been provided the passengers, the required complement to service the aircraft shall be as follows:

Customs Operations Officer V — one (1) Customs Operations Officer III — one (1)Per twenty-five passengers Inspectors — one (1) Guards — not less than two (2)

5. The airline companies shall inform the District Collector in writing at least

(5) days before the end of each month the number of examiners and guards to service their flights (arrival and departure) based on the ratio of one (1) Examiner for every fifteen (15) deplaning or twenty-five (25) enplaning passengers for his guidance in the assignment of such personnel, but without prejudice to the authority of the District Collector to assign more customs personnel to a specific flight if and when the interest of the service so requires; Provided, however, that the same guards shall service both arrival and departure in case of a turn-around flight; Provided, finally that the number of guards to service purely terminating flight shall not be less than two (2), for purely departing flights not less than two (2),and for turn-around flights not less than four(4).

6. All assignments for overtime services shall be strictly complied with. The

failure to do so without valid justification and notice in advance by the personnel concerned shall continue sufficient cause for appropriate administrative disciplinary action.

SECTION VI - LIMITATIONS ON CONTINOUS OVERTIME SERVICES

ANDOVERTIME ALLOWANCE(CAO 7-92)

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1. No customs official or employees shall be allowed to render continuous overtime services at any one time for more than eighteen (18) hours, including regular office and overtime hours.

2. Customs personnel may work eight (8) hours regular time and ten (10)

hours straight overtime on Saturdays, Sundays and legal holidays which shall be followed by a relief interval of six (6) hours rest for which no overtime pay shall be collectible, except in the following instances:

a. When the personnel concerned is assigned outside of the NAIA and no

substitute is available; b. When an aircraft is scheduled to depart but does not depart on the

scheduled time of departure; c. When a personnel concerned is waiting for a relief but no relief is

available; d. When relief is not possible because of continuous assumption of

responsibility until termination or completion of the particular assignment involved.

SECTION VII - TRAVELLING ALLOWANCE 1. Customs officials and employees assigned to render overtime services in

connection with the arrivals and departures of aircraft shall be entitled to a flat rate ONE HUNDRED TEN PESOS (P110.00) transportation allowance for each way from residence to NAIA and vice-versa; Provided, however, that no transportation allowance shall be charged on regular working day if the overtime services terminate within THREE (3) hours from the close of the prescribed regular office hours or commence within THREE (3) hours before the start of the prescribed regular office hours.(CAO 1-2005)

2. However, on a regular working day, two-way transportation allowance

shall be charged if the overtime services commence three (3) hours after the close of the prescribed regular office hours or terminate three (3) hours before the start of the prescribed regular office hours, and also during Saturdays, Sundays and legal holidays. (CAO 7-92)

3. To prevent any overlapping of claims, two-way transportation allowance

prescribed under the preceding paragraph shall be charged only in cases where the time gap from the time that an overtime service terminates to the time when the next overtime service commence is more than three (3) hours, two flight assignments is less than three (3) hours, one-way transportation allowance (residence to NAIA) shall be charged to the first assigned flight and one-way transportation allowance (NAIA to residence) shall be charged to the next flight. (CAO 7-92)

4. Customs personnel travelling on official business at the request of an

aircraft owner/operator or other interested party shall not be entitled to

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travelling allowance; Provided, however, that the party concerned shall provide for the necessary transportation. (CAO 7-92)

5. In cases where the party requesting for overtime services cannot provide

the necessary transportation the customs personnel concerned shall be provided by the requesting party suitable, actual and necessary transportation allowance depending not only on the class and type of transportation used but also on the circumstances of time and place; Provided, however, that the customs personnel concerned shall use the most reasonable and expeditious means of transportation available, whether by land, water or air, to and from his destination. The hire of special conveyance shall be allowed only in cases where regularly scheduled common carrier transportation service is not available; and provided, finally, that only one conveyance shall be hired by a group of customs personnel for the same purposes. (CAO 7-92)

SECTION VIII - MEAL ALLOWANCE AND OTHER EXPENSES 1. Customs personnel assigned to render overtime services in connection,

with the arrivals and departures of aircraft shall be entitled to meal allowance, including midnight repast at a flat rate of ONE HUNDRED TEN PESOS (P110.00) per meal; Provided, however, that the overtime service rendered embrace any part of the following periods:

Breakfast................ from 6:00 a.m. to 8:00 a.m. Lunch.................... from 12:00 noon to 1:00 p.m. Supper................... from 6:00 p.m. to 8:00 p.m. Midnight Repast....from 11:00 p.m. to 1:00 a.m.

Provided, further, that no meal allowance for lunch shall be charged during regular working days; Provided, finally that no customs personnel shall charge more than one meal allowance for any meal period authorized under this paragraph irrespective of the number of flights/aircraft to which he/she is assigned or airline companies served. (CAO 1-2005)

2. Customs personnel assigned to continuous underguarding duty outside

NAIA shall be provided by the requesting party with free board and lodging or reimbursement for all reasonable and necessary expenses incurred for board and lodging duly covered by official receipts; Provided, that claims and payment for reimbursement of such expenses shall be coursed through the District Collector of Customs-NAIA who may approved, modify or deny payment of an expense. (CAO 1-2005)

SECTION IX - BILLING AND PAYMENT OF OVERTIME SERVICES (CAO 7-92)

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1. The billing or statement shall be signed and sent by the District Collector to the airline concerned for payment every fifteenth and thirtieth day of the month. Each airline shall pay promptly the amount charged through the District Collector who shall issue a receipt for such payment.

2. The billing for overtime services shall be accompanied by daily and 15-day

summaries, with supporting documents, of overtime services rendered which shall contain the following information:

1.1. Customs department or division rendering overtime, the number of

hours rendered by customs personnel in such division and the amount of charges accruing to each division such as (1) overtime charges, (2) meals and (3) transportation allowances; and

1.2. Name(s) of airline services, their flight numbers and actual time of arrival and departure, and the number of passengers arriving or departing per airline.

SECTION X - OPERATIONAL PROCEDURE IN BILLING AND PAYMENT

OF OVERTIME SERVICES (CAO 7-92) 1. The Division concerned - shall prepare and submit claims for payment of

overtime services rendered by customs personnel to the Deputy Collectors concerned. In this connection, the division concerned shall:

1.1. Keep and maintain updated ledger/record of customs personnel

authorized to render overtime services; 1.2. Check flight attendance report of overtime services rendered by

customs personnel in their respective divisions; 1.3. Assess the amount of claim for overtime, meals and transportation

allowances; 1.4. Verify from ledger/records to ensure that there will be no over lapping

of billing; 1.5. Forwarded to the Deputy Collector concerned for review claims for

overtime services; 2. The Deputy Collectors - shall counter-check bills/statements submitted by

the divisions concerned so that overtime charges shall in no case overlap, recommend payment of claims for overtime services to the District Collector.

3. The District Collector - shall approve claim for payment of overtime; send

the bill to the airline concerned every thirtieth day of the month.

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4. Airline Concerned - shall pay overtime services rendered by customs personnel to the District Collector, NAIA, based on the approved bill submitted by the District Collector.

5. Payroll & Disbursement Section, Administrative Division – shall receive

payments from airlines addressed to the District Collector; prepare overtime payroll for payment of overtime.

SECTION XI - DEPOSIT REQUIREMENT FOR OTHER EXPENSES IN CONNECTION WITH OVERTIME SERVICES (CAO 7-92)

1. Any person or firm who, in complying with customs rules and regulations

or on his own initiative, requests for the overtime services of customs officials and/or employees whereby transportation and other necessary expenses will be incurred shall be required, before such services are rendered, to deposit the total estimated expenses with the customs cashier.

CHAPTER 3: RULES AND REGULATIONS GOVERNING OVERTIME SERVICES AND PAYMENT OF CORRESPONDING OFFSHORE DUTY PAY AND OVERTIME SERVICE PAY APPLICABLE TO THE OFFSHORE OPERATIONS OF THE OPERATOR OF THE OIL DRILLING AND EXPLORATION UNDER SERVICE CONTRACT NO. 56 IN THE SOUTH SULU SEA. (CAO 2-2009)

I. TO ALLOW RENDITION OF OVERTIME SERVICES

1. The District Collector of the Port of Zamboanga shall assign and deploy customs officials, employees, and/or deputies to render overtime services in connection with the Off-shore Operations of the OPERATOR in the South Sulu Sea under Service Contract No. 56. Such assignment shall be covered by the appropriate Customs Personnel Order setting forth the duration of the assignment and other relevant terms and conditions as well as any limitation on the power and functions of the employees assigned;

2. The assignment of customs officials, employees, and/or deputies shall be made strictly on rotation basis. Provided, however, that in no instance shall the duratio1i of an assignment exceed twenty-eight (28) consecutive days at any given time.

II. OFFSHORE DUTY PAY AND OVERTIME SERVICES PAY:

Taking into consideration the unique circumstances attendant in the subject Offshore Operations, including concomitant hardship and inconvenience of affected customs officials, employees, and/or deputies who will be required to stay on the drill vessel “West Aquarius” with Panamanian Registry No, 34821-09 (herein after referred to as the DRILL VESSEL’) under on-call status, the following rates are hereby prescribed:

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1. OFFSHORE DUTY PAY

A offshore duty pay of Eight Thousand Five Hundred Pesos (Php8,500.00) per day separate from the overtime service pay, shall be paid to the customs officials, employees and/or deputies, counted from day of their arrival at the rig but excluding the day of their departure from the DRLLL VESSEL;

2. OVERTIME SERVICE PAY

2.1 Boarding Formalities - Php11,800 per Clearance

2.2 Cargo Examination (if required - Php11,800 per vessel/aircraft

2.3 Underground (if required) - Php11,800 per vessel/aircraft

2.4 Inspection/Supervision (if required - Php11,800 per vessel/aircraft

The foregoing lump sum rates shall be applicable only for the duration of the exploration phase of Service Contract No. 56 and do not include the provision or reimbursement of travel- related and other necessary expenses of customs officials, employees, and/or deputies;

The OPERATOR shall be responsible for withholding the appropriate amount of tax on payments of the OFFSHORE DUTY RATE and remitting such withheld amounts to the Bureau of Internal Revenue. The Administrative Unit of the Port of Zamboanga shall provide the OPERATOR with the information necessary to remit such withholding and OPERATOR shall submit to the Administrative Unit of the Port of Zamboanga evidence of such payments. The Port of Zamboanga shall be responsible for withholding the appropriate amount of tax on all other payments made to customs officials, employees and/or other authorized government personnel, and remitting and reporting such withheld amounts to the Bureau of Internal Revenue. The duration of the assignment of Customs officials, employees and/or deputies for off-shore duties shall be for a minimum period of fifteen (15) calendar days but in no way shall it exceed twenty eight (28) days. The minimum period of assignment to offshore duty may be reduced for valid reasons provided however that the District Collector shall immediately assign a replacement so as not to hamper the operations of the drill vessel.III. INVOICING AND PAYMENT FOR SERVICES

1. After completion of the assignment of each customs officials, employees, and/or deputies, he or she shall prepare and submit the necessary voucher supported by detailed statement of all the services rendered within the duration of his or her assignment duly accomplished in BC Form Nos. 35 and 35-A to the Administrative Unit of the Port of Zamboanga;

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2. In turn, the Administrative Unit of the Port of Zamboanga shall check the vouchers, certify their correctness, approve the same for payment, and forward the corresponding Billing Statement to the OPERATOR or its authorized representative for payment;

3. All Billing Statements must be paid in full within ten (10) days from receipt thereof, unless prior thereto a written notice disputing the amounts in the Billing Statement is sent to the Administrative Unit of the Port of Zamboanga. Where written notice of a disputed amount is submitted, all undisputed amounts must be paid within ten (10) days from receipt of the Billing Statement;

4. Payments shall be made in cash or check to the official cashier of the Port of Zamboanga for deposit into an official bank account of the Port of Zamboanga established in a duly authorized depository bank for government funds and subject to disbursement and audit requirements as prescribed for such accounts under applicable laws and regulations, After payment, an official receipt covering said payment shall be issued by the Administrative Unit of the Port of Zamboanga to the OPERATOR or its authorized representative to acknowledge receipt of payment;

5. Upon payment of the full invoiced amounts, the OPERATOR shall have no further payment obligations relative to the services which are the subject of the invoice;

6. All customs officials, employees, and/or deputies assigned/deployed to render offshore overtime services are prohibited from receiving payment of offshore duty pay and overtime pay for services rendered directly from OPERATOR or its representatives for services rendered;

7. Any customs officials, employees, and/or deputies who shall violate any provision of this Administrative Order shall be subject to disciplinary action. Violation by the OPERATOR or its representative of any provision of this Administrative Order shall be subject to the imposition of the penalties provided for by law.

IV. TRAVEL, INSURANCE AND RELATED EXPENSES

1. The OPERATOR shall be responsible for all reasonable traveling, board and lodging, and other necessary incidental expenses of customs officials, employees, and/or deputies performing work in connection with Offshore Operations in the South Sulu Sea under Service Contract No. 56;

2. Prior to the deployment of customs officials, employees, and/or deputies to their Offshore work station, the District Collector of the Port of Zamboanga shall notify the OPERATOR or its authorized agent of the projected travel schedules of concerned customs officials, employees, and/or deputies;

3. The OPERATOR shall secure individual personal insurance policy in favor of deployed customs officials, employees, and/or deputies covering all

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risks or injuries during their travel to and from their designated offshore work station as well as during their stay thereat;

4. The OPERATOR shall provide airline tickets, hotel vouchers, meal tickets or the like, or provide cash advances for reasonable airfare, accommodations, meals and other necessary incidental expenses for the projected travel. Such cash advances shall be covered by a receipt and shall be subject to liquidation. All tickets, vouchers and cash advances shall be returned to the OPERATOR or its authorized agent, if the travel is cancelled for any reason;

5. Nothing herein shall diminish the authority or responsibility of customs officials, employees and/or other authorized government personnel under applicable laws and regulations. They shall retain full discretion to grant or deny clearances, certifications, permits and licenses and take such other actions within their regulatory mandate as is permitted or required under applicable laws and regulations.

V. PAYMENT OF OTHER OVERTIME SERVICES

Payment of overtime for other boarding formalities and customs services rendered not connected to offshore duty assignments shall be billed in accordance with the prescribed rates under existing customs administrative orders.

CHAPTER 4: RULES AND REGULATIONS GOVERNING THE RENDITION OF OVERTIME SERVICES AND THE PAYMENT OF CORRESPONDING OVERTIME SERVICE PAY APPLICABLE TO SERVICE CONTRACT NO. 59 LOCATED OFF THE SOUTHWEST TIP OF PALAWAN ISLAND IN THE SOUTH CHINA SEA. (CAO 6-2010) 1. DEFINITION OF TERMS For purposes of this Administrative Order, the following terms shall have the following meanings as herein defined. 1.1 “Boarding Formalities” refers to the boarding formalities conducted

onboard the foreign vessel by government officials composed of Customs, Immigration and Quarantine Officials (CIQ) upon her arrival from foreign port at any port of entry in the Philippines for purposes of inspection by the Quarantine and Customs Officers and the presentation by the vessel master/captain of the vessel documents mentioned in Section 1004 of the TCCP, as amended. However, pay for boarding formalities as mentioned herein is exclusive of the fees to be collected by the Immigration and Quarantine Official, which shall be billed separately by their respective agencies.

1.2 “Cargo Examination” refers to the conduct of examination by the

Customs Officers to determine that the exact contents, invoice and

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other pertinent documents declared by the declarant in the entry filed with the Bureau are correct.

1.3 “Exploration Period” means the seven (7) year period, or any extension

thereof, referred to in Section 4.01 of Service Contract 59, during which the OPERATOR is allowed to perform Exploration Operations in the Contract Area.

1.4 “Inspection/Supervision” refers to the supervision and control by the

customs inspector/s and/or guards assigned on board the foreign vessel while within the jurisdiction of the collection district of the port, for purposes of monitoring the activities conducted on board and thus ensure that Customs laws and regulations are complied with, which shall be required only when Customs official have probable cause to believe based on personal knowledge of facts or circumstances that customs laws or regulations are being violated.

1.5 “Offshore duty” refers to the time spent by a customs employee

required to stay on board a vessel located at sea a considerable distance from shore for the purpose of performing official functions such as, but not limited to, monitoring the entry of foreign articles, and such other functions by a customs employee as may be necessary for enforcing customs laws and regulations.

Any capitalized term used herein and not specifically defined shall have same meaning as defined in Service Contract 59.

2. AUTHORITY TO ALLOW RENDITION OF OVERTIME SERVICES

2.1 The District Collector of the Port of Batangas shall assign and deploy customs officials, employees and/or deputies to render overtime services in connection with the Offshore Operations of the OPERATOR in offshore areas of the South China Sea under Service Contract No. 59 (hereinafter referred to as SC 59). Such assignment shall be covered by the appropriate. Customs Personnel Order setting forth the duration of the assignment and other relevant terms and conditions as well as any limitation on the power and functions of the employees assigned.

2.2 In the deployment of customs officials, employees and/or deputies to the site of the Offshore Operations the District Collector shall deploy only customs officials, employees and/or deputies of the Port of Puerto Princesa, unless exceptional circumstances do not permit the deployment of such customs officials, employees of and/or deputies, in which case personnel to be assigned shall be from the Collection District.

3. OVERTIME SERVICES PAY AND OFF SHORE DUTY PAY

3.1 OVERTIME SERVICES PAY

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3.1.1 BoardingForma1ities - Php11,800.00 per Clearance

3.1.2 Cargo Examination - Php11,800.00 per vessel/aircraft

3.1.3 Under guarding (if required) - Php11,800,00 per vessel/aircraft

3.1.4 Inspection/Supervision - Php11,800.00 per vessel/aircraft(if required)

3.2 The OPERATOR shall inform the Port of Batangas at least five (5) days from the expected arrival of each vessel arriving from a foreign port to perform Exploration Operations in the Contract Area or perform support or supply operations as may be necessary under Service Contract 59.

3.3 The Collector of the Port of Batangas shall assign boarding officers, inspectors and examiners in accordance with Part II hereof, who shall perform Exploration Operations in the Contract Area in Accordance with their rates provided herein.

3.4 Prior to or upon arrival of the vessel/s, the CONTRACTOR shall file the corresponding Consumption Entry to effect the release of the shipment Customs Custody, attaching thereto the Tax Exemption Certificate from the Department of Finance favorably indorsing the Exemption Certificate issued by the Department of Energy in accordance with Presidential Decree No. 87, also known as the Oil Exploration and Development Act of 1972.

4. OFFSHORE DUTY PAY

4.1 Taking into consideration the unique circumstances attendant in the subject Offshore Operations, including the concomitant hardship and inconvenience of affected customs officials, employees and/or deputies who may be required to stay on a Vessel under on-call status, an Offshore Duty Pay of EIGHT THOUSAND FIVE HUNDRED PESOS (Php 8,500.00) per day, computed as 24 continuous hours or a fraction thereof separate from the overtime service pay, shall be payable for the services of each customs officials, employees and/or deputies required to remain on board a Vessel after the first twenty four (24) hours upon arrival. No Offshore Duty Pay shall be payable for services rendered by any customs officials, employees and/or deputy required to remain onboard a vessel for a period of less than twenty-four (24) hours.

4.2 The foregoing lump sum rates shall be applicable only for the duration of the Exploration Period of SC 59.

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5. TAXES ON OVERTIME SERVICE PAY OFFSHORE DUTY PAY

5.1 Offshore Duty Pay

The OPERATOR shall be responsible for withhold the appropriate amount of tax on payments of a Offshore Duty Pay and remitting such withheld amount to the Bureau of Internal Revenue (BIR) in accord with applicable laws, rules and regulations. The Administrative Unit of the Port of Batangas shall provide the OPERATOR with the information necessary to remit the amount withheld and the OPERATOR submit to the Administrative Unit of the Port of Batangas appropriate documentary evidence of payments.

5.2 The Port of Batangas shall be responsible withholding the appropriate amount of tax on payment made to customs officials and employees, including payment of the Overtime Service Pay and remitting and reporting such withheld amounts to the BIR.

6. INVOICING AND PAYMENTS FOR SERVICES

6.1 After completion of the assignment of each customs officials, employees, and/or deputies, he or shall prepare and submit the necessary voucher supported by a detailed statement of all the services rendered within the duration of his or her assignment duly accomplished (hereinafter referred to as the “Billing Statement") in BC Form Nos. 35 and 35-A to the Administrative Unit of the Port of Batangas.

6.2 In turn, the Administrative Unit of the Port shall cheek the vouchers, certify their correctness, approves the same for payment, and forward the corresponding Billing Statement to the OPERATOR or its authorized representative for payment.

6.3 All Billing Statement must be paid in full within thirty (30) calendar days from receipt thereof. Any dispute in the Billing Statement must be made in writing and submitted to the Administrative Unit of the Port within five (5) days from receipt of said Billing Statement. Any amount payable not subject of the written dispute must be paid within the Thirty (30) day period.

6.4 Payments shall be made by the OPERATOR or its authorized representative, by check, to the cashier of the Bureau of Customs, Port of Batangas, for deposit into an official bank account established in a duly authorized depository bank for government funds and subject to disbursement and audit requirements as prescribed for such accounts under applicable laws and regulations. An official’s receipt covering said payment shall be issued by the Administrative Unit of the Port of Batangas, through its Cashier to the OPERATOR or its authorized representative to acknowledge receipt of payment.

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6.5 Upon payment of the full invoiced amounts, the OPERATOR shall be relieved from further payment obligations relative to the services, which are the subject of the Billing Statement.

6.6 All Customs officials, employees, and/or deputies assigned/deployed to render offshore overtime services are prohibited from receiving directly from the OPERATOR or any of its representative’s payment for offshore duty pay and overtime pay for services rendered.

6.7 Any customs officials, employees, and/or deputies who shall violate any provision of this Administrative shall be subject to disciplinary action. Violation by Operator or its representatives of any provision of Administrative Order shall be subject to the imposition of the penalties provided for by law.

7. TRAVEL AND RELATED EXPENSES

7.1 In exceptional cases where the Bureau of Customs shall, deploy customs officials, employees, and/or deputies from offices other than OPERATOR shall be responsible for all reasonable traveling, board and lodging and other incidental expenses of customs officials, employees, and/or deputies to the site of the Offshore Operations or other site as may be requested by the Operator in connection with rendering services for Offshore Operations under SC 59.

7.2 Prior to the deployment of customs officials, employee and/or deputies to their Offshore Operations work station or other site as requested by the OPERATOR, of the District Collector of the Port of Batangas shall notify the OPERATOR or its authorized representative of the projected travel schedules of concerned customs officials, employees, and/or deputies.

7.3 Following receipt of schedules per Paragraph V.B above, the OPERATOR shall make the necessary arrangements for reasonable transportation, accommodation and meals, as well as for other necessary incidental expenses, for the projected travel arrangements may include issuance of tickets or, which shall be covered by an acknowledgement receipt duly signed by the Customs personnel concerned. Any ticket or voucher not utilized due to travel cancellation for whatever reason shall be returned to the OPERATOR or its authorized representative and duly acknowledged.

8. PAYMENT FOR OTHER OVERTIME SERVICES

8.1 Payments for overtime for boarding formalities and customs services rendered not connected to offshore duty assignments shall be billed in accordance with the prescribed rates under existing Customs Administrative Orders.

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9. AUTHORITY OF CUSTOMS OFFICIALS

9.1 Nothing herein shall diminish the authority responsibility of customs officials, employees and/or other authorized government personnel under applicable laws and regulations. They shall retain full discretion to grant or deny clearances, certifications, permits and licenses and take such other actions within their regulatory mandate as permitted or required under applicable laws and regulations.

TITLE 4 – WAREHOUSING CHARGES

CHAPTER 1 – AIRPORT WAREHOUSE FEES

Ref:CAO 7-2007

Chapter 1 – Airport Warehouse Operations


1.1 General Cargo

All cargoes not included in the above enumeration for special cargo, each kind, class or nature is described herein below.

1.2 Special Cargo

1.2.1 Baggage and personal effects – shipments that are handled with special care and provided special storage locations.

1.2.2 Perishables – shipments shown as such in the Cargo Manifest (CM) and Airway bill (AWB) or labeled/identified on the package/s as such, hence requiring storage under specified temperatures. (All aquatic products fall under this classification).

1.2.3 Valuable Cargo – shipments shown in the CM and/or AWB as such or so labeled/identified on the package/s pursuant to IATA regulations.


2.1 The standardized service charges shall apply to Philippine Skylanders, Inc., Philippine airlines, People’s Aircargo& Warehousing Co. Inc., Delbros Inc., Cargohaus Inc. (formerly U-Warehouse), DHL Express Philippines Inc., Miascor Cargo Logistics, and TMW Worldwide Express, all Customs Bonded Warehouses within the NAIA Complex.

2.2 The standardized rates apply until such time that a new order is issued to change the rates.

Section 3 – Standardized Rates

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3.1 Schedule of fees are as follows

3.3.1 Basic Storage Rates

Rate PHP 1.76/kg/dayMinimum Charge 101.27/day

Exception: Documents and Diplomatic Pouches

3.3.2 Special Cargo Rates

3.3.2.1 Minimum Charge PHP 201.75/day3.3.2.2 Baggage and Personal Effects 1.76/kg/day3.3.2.3 Perishables 3.53/kg/day3.3.2.4 Valuable Cargo 3.53/kg/day3.3.2.5 Dangerous Drugs &Restricted Articles 3.53/kg/day3.3.2.6 Live Animals, Fowls Plan 3.53/kg/day3.3.2.7 Human Remains 3.53/kg/day

3.3.3 Service Charges

3.3.3.1 For shipment whose weight per AWB isless than one hundred (100) kilograms PHP 0.69/kg/day

3.3.3.2For shipment whose weight per AWB is one hundred (100) kilograms or more 1.02/kg/day

3.3.4 Ancillary Charges

3.3.4.1 Backdoor Release Rate PHP 5.63/kgMinimum Charge 336.75/kgMaximum Charge 562.00/AWB

3.3.4.2 Deconsolidation Fees PHP 283.00/HAWB

3.3.4.3 Returned Shipment Rate PHP 56.27/kgMinimum Charge 337.50Maximum Charge 562.50

Note: Source: CAO 7-07CHAPTER 2 – OFF-DOCK CONTAINER YARD (CY) AND CONTAINER FREIGHT STATION (CFS)


1.1 Standardized charges and fees

Off-dock CY-CFS are mandated to charge standard charges and fees as provided for in this regulation.

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1.2 Measurement and weight

Rates based on Revenue Tons (measurement/weight) shall be based on measurements/weights declared in the manifest/bill of lading unless a discrepancy in weight or measurement of more than 12% is officially reported to the Bureau of Customs by the operator and wharfinger, in which case the actual measurement or weight shall be the basis for applying the approved rates.

1.3 Penalties and Sanctions for violations

See Book 4.


2.1 Standardized rates

The rates to be charged by outside CY/CFS-OCZ operators for consolidated import cargo shall exceed the following:

2.1.1 Storage Php 20.00/Revenue Ton (RT)/ day counted from the date of stripping

2.1.2 Arrastre&WharfagePhp 157.00/Revenue Ton (Note 1)

2.1.3 Documentation Php 500.00/Bill of Lading

2.1.4 Stripping & Cargo Out Handling Php 500.00/Revenue Ton

2.1.5 OLRS Php 100.00/Bill of Lading

2.1.6 Insurance Min. Php 500.00/Bill of Lading or 1/8 of cargo value whichever is higher (Note 2)

2.1.7 Heavy Lift/ Oversize over Three RevenueTon single Unit Cargo Php 1,200.00/Revenue Ton

2.1.8 Dangerous Cargo 100% Surcharge on Storage, Stripping and handling

Note

1. Arrastre and Wharfage rates shall be adjusted proportionally in case of any increase in arrastre and wharfage rates as promulgated by the Philippine Port Authority.

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2. Insurance charge shall be waived by CY/CFS-OCZ operator if cargo owner/consignee presents a general and continuing waiver of cargo claims against the warehouse operator making the warehouse operator a co-insured party in the marine insurance.

3. Value-added Tax shall be subject to BIR.

4. The standardized schedule of rates must be posted on a conspicuous place in the OD-CY/CFS to enable transacting public to compare actual charges with prescribed rates.

Reference: CMO 24-2001

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Final Draft BOC Code of Regulations Jan 17 2012

Documents

Transcript of Final Draft BOC Code of Regulations Jan 17 2012