Republic Act No. 10863 of 2016 Modernizing the Customs and Tariff Administration

Meta Data

Draft:

Revision of previous policy?:

Effective Start Year:

2015

Scope:

National

Document Type:

Act

Economic Sector:

Energy, Power, Multi-Sector

Energy Types:

Oil, Power, Gas

Issued by:

Republic of the Philippines,Congress of the Philippines

Notes:

Unofficial source

Source:

Chan Robles Virtual Law Library

File:

Republic Act No. 10863 Modernizing the Customs and Tariff Administration

Overall Summary:

This Act is aimed to modernizing the customs and tariff administration. In particular, the policy of the State to protect and enhance government revenue, institute fair and transparent customs and tariff management that will efficiently facilitate international trade, prevent and curtail any form of customs fraud and illegal acts, and modernize customs and tariff administration.

Environment

Pollution control action plans:

The owner or operator of a vessel, aircraft or train shall be liable for a fine for the following acts: [...] For dumping or causing to spread crude oil, kerosene, or gasoline in the bay or at the piers within three (3) miles from the nearest coastline, a fine of not less than one million pesos (Pl,000,000.00) but not more than ten million pesos (Pl0,000,000.00) for each offense; [...]For causing the emission and spread of harmful gas, fumes and chemicals, a fine of not less than one million pesos (Pl,000,000.00) but not more than ten million pesos (Pl0,000,000.00) for each offense.

Pricing

Fossil fuel subsidies:

On petroleum oils and oils obtained from bituminous materials, crude oil imported by nonelectric utilities, sold directly or indirectly, in the same form or after processing, to electric utilities for the generation of electric power and for the manufacture of city gas, a refund or tax credit shall be allowed not exceeding fifty percent (50%) of the duty imposed by law upon such oils, which shall be paid or credited under such rules and regulations as may be prescribed by the Commissioner with the approval of the Secretary of Finance.

Trade

Import taxes and fee exemptions:

The following goods shall be exempt from the payment of import duties: [...] aviation gas, fuel and oil, whether crude or refined except when directly or indirectly used for domestic operations, [...]: Provided, That such goods or supplies are not locally available in reasonable quantity, quality and price and are necessary or incidental to the proper operation of the scheduled airline importing the same.---On Fuel Used for Propulsion of Vessels. - On all fuel imported into the Philippines used for propulsion of vessels engaged in trade with foreign countries, or in the coastwise trade, a refund or tax credit shall be allowed not exceeding ninety-nine percent (99%) of the duty imposed by law upon such fuel, which shall be paid or credited under such rules and regulations as may be prescribed by the Commissioner with the approval of the Secretary of Finance.---On petroleum oils and oils obtained from bituminous materials, crude oil imported by nonelectric utilities, sold directly or indirectly, in the same form or after processing, to electric utilities for the generation of electric power and for the manufacture of city gas, a refund or tax credit shall be allowed not exceeding fifty percent (50%) of the duty imposed by law upon such oils, which shall be paid or credited under such rules and regulations as may be prescribed by the Commissioner with the approval of the Secretary of Finance.

Advance rulings:

Imported goods shall be subject to the import duty rates under the applicable tariff heading that are effective at the date of importation or upon withdrawal from the warehouse for consumption.---All goods, including means of transport, entering. or leaving. the customs territory, regardless of whether they are liable to duties and taxes, shall be subject to customs control to ensure compliance with this Act.---All goods exported from the Philippines, whether subject to export duty or not, shall be declared through a competent customs office through an export declaration [...].---The following goods shall be exempt from the payment ofimport duties: [...] aviation gas, fuel and oil, whether crude or refined except when directly or indirectly used for domestic operations, [...]: Provided, That such goods or supplies are not locally available in reasonable quantity, quality and price and are necessary or incidental to the proper operation of the scheduled airline importing the same.

Full Document Text

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Begun and held in Metro Manila, on Monday, the twenty-seventh day of July, two thousand fifteen.

[ REPUBLIC ACT NO. 108 63]

AN ACT MODERNIZING THE CUSTOMS AND TARIFF ADMINISTRATION

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

TITLE I

PRELIMINARY PROVISIONS CHAPTER I SHORT TITLE

SECTION 100. Short Title. - This Act shall be known as the "Customs Modernization and Tariff Act (CMTA)".

CHAPTER 2

GENERAL AND CO:MMON PROVISIONS

SEC. 101. Declaration of Policy. - It is hereby declared the policy of the State to protect and enhance government revenue, institute fair and transparent customs and tariff management that will efficiently facilitate international trade, prevent and curtail any form of customs fraud and illegal acts, and modernize customs and tariff administration. Towards this end, the State shall:

(a) Develop and implement programs for the continuous enhancement of customs systems and processes that will harmonize customs procedures;

(b) Adopt clear and transparent customs rules, regulations, policies andprocedures, consistent with international standards and customs best practices;

(c) Establish a regime of transparency of and accessibility to customs information, customs laws, rules, regulations, administrative policies, procedures and practices, in order to ensure informed and diligent compliance with customs practices andprocedures by stakeholders;

(d) Consult, coordinate andcooperate withother government agencies and the private sector in implementing and developing customs policy;

(e) Provide a fair and expeditious administrative and judicial appellate remedy for customs related grievances and matters;

(f} Employ modern practices in customs administration and utilize information and communications technology in the implementation of customs functions; and

(g) Institute professionalism and meritocracy incustoms tax administration by attracting and retaining competent and capable customs officers and personnel to enforce the provisions of this Act.

SEC. 102. Definition of Terms. - As used in this Act:

(a) Abatement refers to the reduction or diminution, in whole or inpart, of duties and taxes where payment has not been made;

(b) Actual or Outright Exportation refers to the customs procedure applicable to goods which, being in free circulation, leave the Philippine territory and are intended to remain permanently outside it;

(d) Airway Bill (AWB)refers to a transport document for airfreight used by airlines and international freight forwarders which specify the holder or consignee of thebillwho has the right to claim delivery of the goods when they arrive at the port of destination. It is a contract of carriage that includes carrier conditions, such aslimits of liability and claims procedures. In addition, it contains transport instructions to airlines andcaniers, adescription of the goods, and applicable transportation charges;

(e) Appeal refers to the remedy by which aperson who is aggrieved or adversely affected by any action, decision, order, or omission of the Bureau, seeks redress before the Bureau, the Secretary of Finance, or competent court, asthe case may be;

(f) Assessment refers to the process of determining the amount of duties and taxes and other charges due on imported andexported goods;

(g) Authorized Economic Operator (AEO) refers to the importer, exporter, customs bro.ker, forwarder, freightfoxwarder, transport provider, and any other entity duly accredited by the Bureau based on the Wodd Customs Organization (WCO) Framework ofStandards to Secure and Facilitate Global Trade, the Revised Kyoto Convention (RKC), the WCO Supply Chain Management Guidelines and the various national best practices to promote trade facilitation and to provide aseamless movement of goods acrossborders through secure international ade supply chains with the use ofrisk management and modern technology;

(h) Bill of Lading (BIL) refers to a transport document issued by shipping lines, carriers and international freight forwarders or non-vessel operating commo:o_ G;;:t.rrier for water-borne freight. The holder or consignee of the bill has the right to clalm delivery of the goods atthe port of destination. It is a contract of carriage that includes carrier conditions, such aslimits of liability and claims procedures. In addition, it contains transport instructions to shipping lines and carriers, a description of the goods, and applicable transportation charges;

(i) Bureau refers to the Bureau of Customs;

(D Carrier refers to the person actually transporting goods or in charge of or responsible for the operation of the means of transport suchas airlines, shipping lines, freight forwarders, cargo consolidators, non-vessel operating common carriers and other international transport operators;

(k) Clearance refers tothe completion of customs andother government formalities necessary to allow goods to enter for consumption, warehousing, transit or transshipment, or to be exported or placed under another customs procedure;

(1) Commission refers to the Tariff Commission;

(m) Conditional Importation refers to the customs procedure known under the RKC as temporary admission in which certain goods can be brought into a customs tenitory conditionally relieved, totally or partially, from payment of import duties and taxes; such goods must be imported for a specific purpose and must be intended for 1•eexportation with a specified period and without having undergone any substantial change except due to normal depreciation;

(n) Customs Broker refers to any person who is a bona fide holder of a valid Certificate of Registration/Professional Identification Card issued by the Professional Regulatory Board and Professional Regulation Commission pursuant to Republic Act No. 9280, as amended, otherwise known as the "Customs Brokers Act of 2004";

(o) Customs Office refers to any customs administrative unit that is competent and authorized to perform allor any of the functions enumerated under customs and tariff laws;

(p) Customs Officer, as distinguished from a clerk or employee, refers to a person whose duty, not being clerical or manual in nature, involves the exerciseof discretion inperforming the function of the Bureau. It may also refer to an employee authorized to perform a specificfunction ofthe Bureau asprovided in this Act;

(q) Customs Territory refers to areas in the Philippines where customs and tariff laws may be enforced;

(r) Entry refers to the act, documentation and process of bringing imported goods into the customs territory, including goods coming from free zones;

(s) Exportation refers to the act, documentation, and process of bringing goods out of Philippine territory;

(t) Export Declaration refers to a statement made inthe manner prescribed by the Bureau andother appropriate agencies, by which the persons concerned indicate the procedure to be observed for taltlng out or causing to be talcen out any exported goods and the particulars of which the customs administration shall require;

(u) Flexible Clause refer tothe power of the President upon recommendation of the National Economic and Development Authority (NEDA): (1) to increase, reduce or remove existing protective tariff rates of import duty, but in no case shallbe higher than one hundred percent (100%) ad ualorem; (2) to establish impo1•t quota or to ban importation of any commodity as may be necessary; and (3) to impose additional duty on all import not exceeding ten percent (10%) ad ualorem, whenever necessary;

(v) Foreign Exporter refers to one whose name appears on documentation attesting to the export of the product to the Philippines regardless of the manufacturer's name inthe invoice;

(w) Free Zone refers to special economic zones registered with the Philippine Economic Zone Authority (P-EZA) under Republic Act No. 7916, as amended, duly charte1:ed or legislated special economic zones andfreeports such as Clark Freeport Zone; Poro Point Freeport Zone; John Hay Special Economic Zone and SubicBay Freeport Zone under Republic Act No. 7227, as amended by Republic Act No. 9400; the Aurora Special Economic Zone under Republic Act No. 9490, as amended; the Cagayan Special Economic Zone and Freeport under Republic Act No. 7922; the Zamboanga City Special Economic Zone under Republic Act No. 7903; the Freeport Area of Bataan under Republic Act No. 9728;and suchother freeports asestablished or may be created

by law;

(x) Goods refer to articles, wares, merchandise nd any other items which are subject of importation or exportation;

(y) Goods Declaration refers to a statemen made in he manner prescribed by the Bureau and other appropriate agencies, by which the persons concerned indicate the procedure to be observed in the application for the entry or admission of imported goods and the particularn of which the customs administration

shall require;

(z) Importation refers to the act of bringing in of goods from a foreign territory into Philippine territory, whether for consumption, warehousing, or admission as defined in this Act;

(aa) Freight Forwarder refers to a local entity that acts as acargo intermediary andfacilitates transpmt of goods onbehalf of its client without assuming the role of a carrier, which can also perform other forwarding services, such as booking cargo space, negotiating freight rates, preparing documents, advancing freight payments, providing packing/crating, trucking and warehousing, engaging as an agent/representative of a foreign non-vessel operating as a common carrier/cargo consolidator named in a master bill oflading as consignee of a consolidated shipment, and other related undertakings;

(bb) International Freight Forwarder refers to persons responsible for the assembly and consolidation of shipments into singlelot, and assuming, iri most cases, the fullrespnsibility or theinternational transport of such shipment from pomt ofreceipt to the point of destination;

(cc) Jurisdictional Control refers to the power andrights of the Bureau in exercising supervision and police authority over all seas within the jurisdiction of the Philippine territory and over all coasts, ports, airpo1ts, harbors, bays, rivers and :inland waters whether navigable or not from the sea;

(dd) Lodgement refers to the registration of a goods declaration with the Bureau;

(ee) Non- Vessel Operating Common Carrier (NVOCC) refers to an entity, which may or may not own or operate avessel that p1•ovides a point-to-point service which may include several

1 modes of transport and/or undertakes group age ofless container load (LCL) Bhipments and issues the corresponding transport document;

(ff) Outright Smuggling refers to an act of imp01ting goods

into the country without complete customs prescribed importation documents, or without being cleared by customs or other regulatory government agencies, for the purpose of evading

l payment of prescribed ta.,::es, duties and other government charges;

(gg) Perishable Good refers to goods liable to perish or I goods that depreciate greatly invalue while stored or which cannot be kept without great disproportionate expense, which may be proceeded to, advertised and sold at auction upon notice .ifdeemed reasonable;

(hh) Port of Entry refers to a domestic port open to both 1 domestic and international trade, including principal po1ts ofentry and subports of entry. A principal port of entryis the chief port of entry of the Customs District wherein it is situated and is the permanent station of the District Collector of such port.

1 Subparts of entry are under the administrative jurisdiction of the District Collector of the principal port of entry of the Customs District. Port of entry as used inthis Act shall include airport of entry;

(ii) Port of Discharge, also called Port of Unloading, refers to a place where a vessel, ship, aircraft or train unloads its shipments, from where they vr.ill be dispatched to their respective consignees;

(ij) Reexportation means exportation of goods which have been imported;

(kk) Release of Goods refers to the action by the Bureau to perm.it goods undergoing clearance to be placed atthe disposal of the party concerned;

(ll) Refund refers to the return, in whole or in part, of duties and taxes paid on goods;

(mm) Security refers to any form of guaranty, such as a surety bond, cash bond, standby letter of credit or irrevocable letter of credit, which ensures the satisfaction of an obligation to the Bureau;

(rm) Smuggling refers to the fraudulent act of importing any goods into the Philippines, or the act of assisting in receiving, concealing, buying, selling, disposing or transporting such goods, with fullknowledge that the samehas been fraudulently imported, or the fraudulent exportation of goods. Goods referred to under this definition shall be known as smuggled goods;

(oo) Taxes refer to all taxes, fees and charges imposed under this Act andthe National Internal Revenue Code (NIRC) of 1997, as amended, and collected by the Bureau;

(pp) Technical Smuggling refers to the act of importing goods into the country by means of fraudulent, falsified or erroneous declaration of the goods to its nature, kind, quality, quantity or weight, for thepurpose ofreducing or avoiding payment of prescribed taxes, duties and other charges;

(qq) Tentative Release refers to a case where the assessment is disputed andpending review, animporter may put up a cash bond equivalent to the duties and taxes due on goods before the importer can obtain the release of said goods;

(rr) Transit refers to the customs procedure under which goods, in its original form, are transported under customs control from one customs office to another, or to a free zone;

(ss) Transshipment refers to 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;

(tt) Traveler refers to any person who temporarily enters the territory of a country in which he or she does not normally resides (non-resident), orwho leaves that territocy, and anyperson who leaves the territory of a country in which he or she normally resides (departing resident) or who returns to that territory (returning resident); and

(uu) Third Party refers to any person who deals directly with the Bureau, for and on behalf of another person, relating to the importation, exportation, movement or storage of goods.

SEC.103. When Importation Begins and Deemed Terminated .-Importation begins when the carrying vessel or aircraft enters the Philippine territory with the intention to unload therein. Importation is deemed terminated when:

(a) The duties, taxes andpther charges due upon the goods have been paid or secured to be paid at the port of entry unless the goods are free from duties, taxes and other charges and legal permit for withdrawal has been granted; or

(b) In case the goods are deemed free of duties, taxes and other charges, the goods have legally left the jurisdiction of the Bureau.

SEC. 104. When Duty and Tax are Due on Imported Goods. - Except as otherwise provided for in this Act or inother laws, all goods, when imported into the Philippines, shallbe subject to duty upon importation, including goods previous-ly exported from the Philippines.

Unpaid duties, taxes and other charges, shall incur legal interest of twenty percent (20%) per annum computed from the date of final assessment under Section 429 of this Act, when payment becomes due and demandable. The legal interest shall likewise accrue on any fine or penalty imposed.

Upon payment of the duties, taxes and other charges, the Bureau shallissue the necessary receipt or document as proof of such payment.

SEC. 105. Ef fective Date of Rate of Import Duty. - Imported goods shall be subject to the import duty rates under the applicable tariff heading that are effective at the date of importation or upon withdrawal from the warehouse for consumption. In case of withdrawal from free zones for introduction to the customs territory, the duty rate at the time of withdrawal shallbe applicable on the goods originally admitted, whether withdrawn in its original or advanced form.

In case of goods sold at customs public auction, the duty rates at the date of the auction shall apply for purposes of implementing Section l143(a) of this Act.

SEC. 106. Declarant. - A declarant may be a consignee or aperson who has the right to dispose of the goods. The declarant shall lodge a goods declaration with the Bureau and may be:

(a) The importer, being the holder of the bill oflading; or

('o) The exporter, being the owner of the goods to be shipped out;or

(d) A person duly• empowered to act as agent or attorney-in-fact for eachholder.

In case the consignee or the person who has the right to dispose of the goods is a juridical person, it may authorize a responsible officer of the company to sign the goods declaration as declarant on itsbehalf.

The goods declaration submitted to the Bureau shall be processed by the declarant or by a licensed customs broker: Provided, That for importations, a transition period of two (2) years from the effectivity of this Act is hereby provided during which subparagraph (d) of this section shall not be implemented by the Bureau: Provided, further, That after two (2) yeal'S from the effectivity of this Act, subparagraph (d) of this section shall take into effect consistent with international standards and ustoms best practices.

SEC. 107. Rights and Responsibilities of the Declarant.

- The declarant shall be responsible for the accuracy of the goods declaration and for the payment of all duties, taxes and other charges due on the imported goods. The licensed customs broker shall likewise be responsible for the accuracy of the goods declaration but shall not be responsible for the payment of duties, taxes and other charges due on the imported goods.

The declarant shall sign the goods declaration, even when assisted by a licensed customs broker, who shall likewise sign the goods declaration.

SEC. 108. Penalties /01 Errors in Goods Declaration. - The Bureau shall not impose substantial penalties for errors when such errors are inadvertent and there was no fraudulent intent or gross negligence in the commission thereof: Provided, That in order to discourage repetition of such errors, a penalty may be imposed but shall not be excessive.

SEC. 109. Appl ication of I nfor mation and Communz'.cations Techrwlagy. In accordance with ilitemational standards, the Bureau shall utilize information and communications technology to enhance customs control and to support a cost-effective and efficient customs operations geared towards a paperless customs environment.

The Bureau shall communicate, exchange and process trade- andlogistics-related information inthe national andregional level for the efficient and prompt clearance of goods and commodities in a technology-neutral and secured infrastructure for business, industries, and government.

The security of data and communication shall be in a manner that isconsistent with applicable local andinternationally accepted standards on information security.

The Bureau shall likewise include as part of its systems andprocesses, adisaster preparedness andrecovery plan to ensure business continuity by maintaining itsuptime goalfor itselectronic and online services.

For purposes of customs procedures, electronic documents, permits, licenses or certificates shall be acceptable and shall have the legal effect, validity or enforceability as any other document or legal writing: Provided , That when the prescribed requirements are duly complied with, the Bureau shall:

(a) Recognize the authenticity and reliability of electronic documents;

(b) Transmit approval in the form of electronic data messages or electronic documents; and

(c) Require and/or accept payments and issue receipts acknowledging such payments through systems using electronic data messages or electronic documents.

The introduction and implementation of information and communications technology shall be undertaken with due consultation with directly affected parties and stakeholders.

SEC. 110. Relationship Between the Bureau and Third Parties. - Parties may transact business with the Bureau either directly or through a designated third party to act on their behalf.

The customs transactions directly transacted by a party shall not be treated less favorably or be subject to more stringent requirements than those transacted through a designated third party.

A designated third party shall have the same rights and obligations asthe designating party when transacting business with the Bureau.

Subject to the provisions of existing laws, treaties, convention andinternational agreements, the Secretary of Finance shall make the necessary guidelines for the defined relationship of the Bureau and third parties.

SEC. 111. Information of Genera/ Application. - Alllaws, decisions, rulings, cil.'culars, memoranda and orders of the Bureau shall be published in accordance with law.

To foster an informed compliance regime, the Bureau shall ensure that all relevant and available information of general application pertaining to customs operations and procedures which are not confidential or intended for the Blll.'eau's internal use only, shall be readily accessible to any interested person.

Any new information, amendment or changes in customs law, administrative procedures or requirements, shall, as far as practicable, be made readily available prior to its effective date of implementation unless advanc1notice is precluded.

SEC. 112. lnformationo fa Specific Nature. - The Bureau shall provide information, not otherwise confidential or for the Blll.'eau's internal use only, relating to a specific matter as may be requested by an interested party for legitimate use.

The Bureau may require the payment of a reasonable fee in providing such information. The requested information shall be released within reasonable time from the filing of the request and payment of the required fee.

SEC. 113. Decision and Ruling. - The Bureau shall, consistent with Section 1502 of this Act, issue binding and advance decision andruling atthe request of aninterested party onmatters pertaining to importation or exportation of goods.

Upon written request of the interested party, the Bureau shall notify the party ofits decision inwriting within the period specified in th.is Act or by regulation. Should the decision be adverse to the requesting interested party, the reasons thereof shallbe indicated and the party shall be advised of the party's right of appeal.

The ruling anddecision shallbe issuedby the Bureau within thirty (30) days from the submission of the necessary documents and information.

SEC. 114. Right of Appeal, Forms and Ground. - Any party adversely affected by a decision or omission of the Bureau pertaining to animportation, exportation, or any other legal claim shallhave the right to appealwithin fifteen (15) days from receipt of the questioned decision or order.

An appeal in writing shall be filed within the period prescribed inthis Act or by regulation and shall specify the grounds thereof.

The Bureau may allow areasonable time forthe submission of supporting evidence to the appeal.

CHAPTER S

TYPES OF IMPORTATION

SEC. 115. Treatment of Importation. -Imported goods shallbe deemed "entered" in the Philippines for consumption when the goods declaration iselectronically lodged, together with any required supporting documents, with the pertinent customs office.

SEC. 116. Free Importation and Exportation. - Unless otherwise provided by law or regulation, allgoods may be freely imported into and exported from the Philippines without need for import and export permits, clearances or licenses.

SEC. 117. Regulated Importation and Exportation. - Goods which aresubject to regulation shallbeimported orexported only after securing the necessary goods declaration or export declaration, clearances, licenses, and any other requirements, prior to importation or exportation. In case of importation, submission of requirements after arrival of the goods but prior to release from customs custody shall be allowed but only incases provided for by governing laws or regulations.

SEC.118. Prohibited lmportation and Exportation. - The importati.onand exportation of the following goods arepmhibited:

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

(b) Goods, instruments, drugs and substances designed, intended or adapted forproducing unlawfulabortion, or anyprinted matter which advertises, describes or gives direct or indirect information where, how or b;y whom unlawful abortion is committed;

(c) Written or printed goods, negatives or cinematographic films, photographs, engravings, lithographs, objects, paintings, drawings or other representation of an obscene or immoral character;

(d) Any goods manufactured in whole or in pa'rt of gold, silver or other precious metals or alloys and the stamp, brand or

; mark does not indicate the actual fineness of quality of the metals or alloys;

..,.,.,,

(e) Any adulternted or misbranded food or goods for human

J consumption or any adulterated or misbranded drugin violation of relevant laws andregulations;

(f) Infringing goods as defined under the Intellectual Property Code and related laws; and

(g) All other goods or parts thereof: whichimportation and export ation are explicitly prohibited by law or rules and regulations issued by the competent authority.

SEC. 119. Rest ricted Importation and Exportation.

Except when authorized by law or regulation, the impottion and exportation of thefollowing restricted goods areprohibited:

(a) Dynamite, gunpowder, ammunitions and other explosives, firearms and weapons of war, or parts thereof;

(b) Roulette wheels, gambling outfits, loaded dice, marked cards, machines, apparatus or mechanical devices used in gambling or the distribution of money, cigars, cigarette or oter goods when such distribution is dependent on chance, mcluding jackpot and pinball machines or similar contrivances, or pal'ts thereof;

(d) Marijuana, opium, poppies, cocaleaves, heroin or other narcotics or synthetic c.frugs which are or may hereafter be declared habit forming by the President of the Philippines, or any compound, manufactured salt, derivative, or preparao.n t 1ereof, except when imported by the government of the Philippmes or any person duly authorized by the Dangerous Drugs Board, for medicinal pmposes;

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

and

(f) Any other goods whose importation and exportation are restricted.

The restriction to import or export the above stated goods shall include the restriction on their transit.

CHAPTER 4

REIJEF CONSIGNMENT

SEC. 120. Relief Consignment. - Goods such as food, medicine, equipment and materials for shelter, donated or leased to government institutions and accredited private entities for free distribution to or use of victims of calamities shallbe treated and entered as relief consignment.

Upon declaration of a state of calamity, clearance ofrelief consignment shall be a matter of priority and subject to a simplified customs procedure. The Bureau shall provide for:

(a) Lodging of a simplified goods declaration or of a provisional or incomplete goods declaration subject to completion of the declaration within a specified period;

(b) Lodging, registering and checking of the goods declaration and supporting documents p1-i.or to the arrival of the goods, and their release upon arrival;

(c) Clearance beyond the designated hours of business or away from customs offices and waiver of any corresponding charges; and

(d) Examination and/or sampling of goods only in exceptional circumstances.

The Department of Finance (DOF) and the Department of Social Welfare and Development (DSWD) shalljointly issue the rules and regulations for the implementation of tru;provision.

SEC. 121. Duty and Tax Treatment. - Relief consignment, as defined in Section 120, imported during a state of calamity andintended for aspecific calamity area for the use of the calamity victims therein, shall be exempt from duties and taxes.

TITLE II

BUREAU OF CUSTOMS

CHAPTER !

GENERAL ADMINISTRATION

SEC. 200. Chief Officials of the Bureau. - The Bureau shall be headed by a Commissioner and shall be assisted by at least four (4) but not more than six (6) Deputy Commissioners.

The Commissioner shallbe appointed by the President of the Philippines.

The Deputy Commissioners shall also be appointed by the President and at least majority of whom shall come from the ranks of the Bureau.

SEC. 201. Powers and Functions of the Commissioner. - The Commissioner shallhave the following powers andfunctions:

(a) Exclusive and original jurisdiction to interpret the provisions of this Act, in collaboration with other relevant government agencies, subject to reviewbythe Secretary of Finance;

(b) Exercise any customs power, duties and functions, directly or indirectly;

(d) Review and decide disputed assessments and other matters related thereto, subject to review by the Secretary of Finance and exclusive appellate jurisdiction of the Court of Tax Appeals (CTA);

(e) Delegate the powers vested under this Act to any customs officer with the rank equivalent to division chief orhigher, except for the following powers and functions:

(1) Promulgation of rules and regulations;

(2) Issuance, revocation or modmcation of rulings; and

(3) Compromise or abate of customs obligations.

(i) Assignment or reassignment of any customs officer subject to the approval of the Secretary of Finance: Provided, That District Collectors and other customs officers that perform assessment functions shall not remain in the same area of assignment for more than three (3) years; and

(g) Perform all other duties and functions as may be necessary for the effective implementation of this Act and other customs related laws.

SEC. 202. Functions of the Bureau. -The Bureau shall exercise the following duties and functions:

(a) Assessment and collection of customs revenues from imported goods and other dues, fees, charges, fines and penalties accruing under this Act;

(b) Simplification andharmonization of customs procedures to facilitate movement of goods ininternational trade;

(d) Prevention and suppression of smuggling and other customs fraud; '

(e) Facilitation and security of international trade and commerce through an informed compliance program;

(f) Supervision and control over the entrance andclearance of vessels and aircraft engaged in foreign commerce;

(g) Supervision and control over the handling of foreign mails arriving in the Philippines for the purpose of collecting revenues and preventing the entry of contraband;

(h) Supervision and control on all impot and p.ort cargoes, landed or stored in piers, airports, terminal facilihes, including container yards and freight stations for the protection of government revenue andprevention of entry of contraband;

(i) Conduct a compensation study ':ith the end vi"'. of developing and recommending to the President a competitive compensation and remuneration system to attract and retam highly qualified personnel, while ensuring that the Bureau remains financially sound and sustainable;

(j) Exercise of exclusive originaljurisdiction over forfeiture cases under this Act; and

(k) Enforcement of this Act and all other laws, rules and regulations related to customs administration.

SEC. 203. Annual Report of the Commissioner. - The Commissioner shall submit to the President, the Congress of the Philippines and the NEDA anannual report onthe performance of the Bureau, on or before March 31of the following year.

SEC. 204. Promulgation of Rules and Regulations. - The Commissioner, subject to the approval of the Secretary of Finance, shall promulgate rules and regulations for the enforcement of this Act. The Commissioner shallregularly prepare and publish an updated customs manual, and the rules, regulations and decisions of the Bureau. The Commissioner shall furmsh the Congress of the Philippines, the NEDA andthe Commission with electronic copies of department orders, administrativeorders, circulars, and rules and regulations promulgated pursuant to this Act.

SEC. 205. Copies of Goods Declaration. - The Commissioner shall regularly furnish the NEDA, the Philippine Statistics Authority (PSA), the Bureau oflnternal Revenue (BIR) and the Tariff Commission electronic copiesof allcustoms goods declaration processed and cleared by the Bureau.

Upon request, the Tariff Commission shall have access to, and the right to be furnished with copies of liquidated goods declaration and other documents supporting the goods declaration as finally filed in the Commission on Audit (COA).

For this purpose, the Bureau shall maintain electronic records of goods declaration and other documents supporting the declaration.

CHAPTER 2

CUSTOMS DISTRICTS AND PORTS OF ENTRY

SEC. 206. Customs Districts. - For administrative purposes, the Philippines shall be divided into as many Customs Districts as necessary, the respective limits of which may be changed from time to time by the Commissioner, with the approval of the Secretary of Finance.

Each Customs District shall be supervised by one (1) District Collector, assisted by asmany Deputy District Collectors as may be necessary. The choice of the location of a District Office, its business hours and the staffing pattern thereof, shall be based on the particular requirements of each district.

SEC. 207. Ports of Entry. - All ports of entry shall be under the supervision and control of a Customs District. A District Collector shall be assigned in the principal ports of entry while a Deputy District Collector may be assigned to other types of ports of entry.

The principal ports of entry shallbe located in Aparri, San Fernando, Manila, Manila International Container Port, Ninoy Aquino International Airport, Subic, Clark, Batangas, Legaspi,

j Iloilo, Cebu, Tacloban, Surigao, Cagayan de Oro';'Zamboanga,

Davao, Limay and such other ports that may be created pursuant to this Act.

For the effective enforcement of the Bureau's functions and without hampering business and commercial operations of the ports, sea ports and airport authorities and private ports and airport operators shallprovide suitable are fo examintion 3:11d for other customs equipment freeof charge witlrin adefinite penod of time, as agreed with private port and airport operations, if any.

SEC. 208. Power of the President to Open and Close Any Port. -Upon the recommendation of the Secretary of Finance,

•the President may open or close any port of entry. Upon closure of a port of entry, the existing personnel shall be reassigned by the Commissioner, subject to the approval of the Secretary of

Finance.

SEC. 209. Assignment of Customs Officers and Employees to Other Duties. - The Commissioner, with the approval of the Secretary of Finance, may assign any employee of the Bu_reu to any port, service, division or office of the Bureau within the Bureau's staffing pattern or organizational structure, or may assign any employee other duties: Provided, That such assignment shall not affect the employee's tenure of office nor result in a change of status, demotion in rank and/or salary

deduction.

SEC. 210. Duties of the District Collector. -The District Collector shallhave the following dutiesintheir assigned Customs District:

(1) Ensure entry of allimported goods at the customs office;

(2) Prevent importation and exportation of prohibited goods;

(3) Ensurelegalcompliance of regulated goods andfacilitate the flow oflegitimate trade;

(4) Examine, classify and value imported goods;

(5) Assess and collect duties, taxes and other charges on imported goods;

(6) Hold and dispose imported goods in accordance with this Act;

(7) Prevent smuggling and other customs fraud; and

(8) Perform other necessary duties that may be assigned by the Commissioner for the effective implementation of this Act.

Subject to the supervision and control of the District Collector, the duties and functions of the District Collector may be delegated to the Deputy District Collector. The Deputy District Collector assigned to a sub-port shall be under the supervision and control of the District Collector of the corresponding principal port.

SEC. 211. Temporary Succession of Deputy District Collector to Position of Acting District Collector. - In the absence or disability of a District Collector or, in case of vacancy, the Deputy District Collector shall temporarily discharge the duties of the District Collector. Should there be no Deputy District Collector, the District Collector shall designate, in writing, a senior ranking customs officer to temporarily perform the duties of the District Collector. In case there are two (2) or more senior ranking customs officers with equal length of service, a drawing of lots shall be undertaken. The District Collector shall report the designation to the Commissioner within twenty-fom (24) hours after the designation.

SEC. 212. Records to be Kept by Customs Of ficers. - District Collectors, Deputy District Collectors, and customs officers acting in such capacities must maintain permanent records of official transactions and turn-over all records and official papers to their respective successors or other authorized officials. The records shall be made available for inspection by other authorized officials of the Bureau.

If required, the District Collector shall affix the official dry seal of the Bureau on all documents and reco,i,:d§ requiring authentication. • '

SEC. 213. Reports of the Di st rict Collector to the Commissioner. - The District Collector shall report to the Commissioner any probable or initiated litigation within the Customs District and shall submit regular monthly reports on alldistrict transactions.

CHAPTER S

EXERCISE OF POLICE AUTHORITY

SEC. 214. Persons Exercising Police Autlwrity. - For the effective implementation of this Act, the following persons are authorized to effect search, seizure, and arrest:

(a) Officials of the Bureau, District Collectors, Deputy District Collectors, police officers, agents, inspectors and guards of the Bureau;

(b) Upon authorization of the Commissioner, officers and members of the Armed Forces of the Philippines (AFP) and national law enforcement agencies; and

(c) Officials of the BIR on all cases fallingwithin the regular performance of their duties, when payment ofinternal revenue taxes is involved.

All officers authorized by the Commissioner to exercise police authority shall at all times coordinate with the Commissioner.

Goods seized by deputized officers pursuant to this section shallbe physically turned-over immediately to the Bureau, unless provided under existing laws, rules and regulations.

For this purpose, mission orders shall clearly indicate the specific name carrying out the mission and the tasks to be carried out.

Subject to the approval of the Secretary of Finance, the Commissioner shall define the scope, areas covered, P+Ocedures

•and conditions governing the exercise of such police authority including custody and responsibility for the seized goods. The rules and regulations to this effect shallbe furnished to the concerned government agencies and personnel for guidance and compliance.

All seizures pursuant to this section must be effected in accordance with the provisions on the conduct of seizure proceedings provided for in Chapters 3 and 4 of Title XI of this Act.

SEC. 215. Place Hlltere Authority May be Exercised . -All pers.ons exercising police authority asdescribed inthe preceding section shaU only exercisepowers within customs premises as provided for in Section 303 of this Act, and within the limits of the authority granted by the Commissioner.

Port and airport authorities inallports of entry shallprovide authorized customs officers with unhampered access to all premises within their administrative jurisdiction.

SEC. 216. Exercise of Power of Seizure. - Any person exerising police authrity under this Act has the power and duty to•seize any vessel, au•craft, cargo, goods, animal or any other movable property when the same issubject to forfeiture or when they are subject of a fine impos1ed under this Act.

SEC. 217. Duty of Officer to Disclose Official Character. For the proper exercise of police authority, any authorized person shall disclose the nature of the authority upon being questioned at the time of exercise thereof and shall exhibit the

corresponding written authority issued by the Commissioner.

SEC. 218. Aut hority to Require Assist nce and Information. - Any person exercising police authority may demand the assistance of and request information from the Philippine National Police (PNP), the AFP and other national la enforcement agencies, when necessary, to effeg.t.a,ny search, seizure or arrest. It shall be the duty of any police officer and other national law enforcers to give such lawful assistance.

SEC. 219. Authority to Enter Properties. - Any person exercising police authority may, at any time, enter, pass through, and search any land, enclosure, warehouse, store, building or structure not principally used as a dwelling house.

When a security personnel or any other employee lives in the warehouse, store, or any building, structure or enclosure that isused for storage of goods, it shall not be considered as adwelling house for purposes of this Act.

SEC. 220. Authority to Search Dwelling House. - A dwelling house may be entexed and searched only upon warxant issued by a Judge of a competent cour't, the sworn application thereon showing probable cause and particularly describing the place to be searched and the goods to be seized.

SEC. 221. Authority to Search Vessels or Aircrafts and Persons or Goods Conveyed Therein. - Any person exercising police authority under this Act may board, inspect, search and examine a vessel or aircraft and any container, trunk, package, box or envelope found on boaxd, and physically search and examine any person thereon. In case of any probable violation of this Act, the person exercising police authority may seize the goods, vessel, aircraft, or any part thereof.

Suchpower to search includes removal of any false bottom, partition, bulkhead, or any other obstruction for the purpose of uncovering any concealed dutiable or forfeitable goods.

The proceeding herein authorized shall not give rise to any claim for damage caused to the goods, vessel or aircraft, unless there is gross negligence or abuse of authority in the exercise thereof:

SEC. 222. Authority to Search Vehicles, Other Ca7'riers, Persons and Animals. - Upon reasonable cause, any person exercising police authority may open and examine any box, trunk, envelope, or other container for purposes of determining the presence of dutiable or prohibited goods. This authority includes the search of receptacles used for thetransport of human remains and dead animals. Such authority likewise includes the power to stop, search, and examine any vehicle or carrier, person or animal suspected of holding or conveying dutiable or prohibited goods.

SEC. 223. Authority to Sea,rch Persons Arriving From Foreign Countries. -Upon reasonable cause, travelers arriving from foreign countries may be subjected to search and detention by the customs officers. The dignity of the person under search and detention shall be respected at all times. Female inspectors

may be employed for the examination and search of persons of their own sex.

SEC. 224. Po wer to Inspect and Visit. - The Commissioner or any customs officer who is authorized in writing by the Commissioner, may demand evidence of payment of duties and taxes on imported goods openly for sale or kept in storage. In the event that the interested party fails to produce such evidence within fifteen (15) days, the goods may be seized and subjected to forfeiture proceedings: Provided, That during the proceedings, the interested party shallbe given the opportunity to prove or show the souxce of the goods and the payment of duties and taxes thereon: Provided , further, That when the warrant of seizure has been issued but subsequent documents presented evidencing proper payment are found to be authentic and in order, the District Collector shall, witlrin fifteen (15}days from the receipt of the motion to quash or recall the warrant, cause the immediate release of the goods seized, subject to clearance by the

Commissioner: Provided, finally, That the release thereof shall not be contrary to law.

TITLE III

CUSTOMS JURISDICTION AND CUSTOMS CONTROL

CHAPTER l

CUSTOMS JURISDICTION

SEC. 300. Customs Jurisdiction. - For the effective implementation of this Act, the Burnau shall exercise jurisdiction over all seas within Philippine territory and all coasts, ports, airports, harbors, bays, rivers and inland waters whether navigable or not from the sea and any means of conveyance.

The Bureau shallpursue imported goods subject to see during its transport by land, water and air and shall exercise jurisdiction as may be necessary for the effecti':e enforc:ment of this Act. When avessel or aircraft becomes sub3ect _to seizure or violation of this Act, a pursuit of such vessel or aircraft wch began within the territorial waters or air space ma con_tmue beyond the same, and the vessel or aircraft may be seized m the high seas or international air space.

CHAPTER 2

CUSTOMS CONTROL

SEC. 301. Customs Control Over Goods. - All goods, including means of transport, entering or leaving the customs territory, regardless of whether they areliable to dutie and es, shall be subject to customs control to ensure compliance with

this Act.

In the application of customs control, the Bureau shall employ audit-based controls and risk management system, use automation to the fullest extent possible, and adopt a compliance measurement strategy to support risk management.

The Bureau shall seek to cooperate and conclude mutual administrative assistance agreements with other customs administrations to enhance customs control. The Bureau shall consult coordinate, and cooperate with other government regulatry agencies, free zones authorities, and the customs stakeholders, in general, to enhance customs control.

SEC. 302. Enforcement of Port Regulation of the Bureau of Quarantine. - Customs officials and employees shallcooperate with the quarantine authorities in the enforcement of the P?rt quarantine regulations promulgated by the Bureau of uarantme and shall give effect to the same insofar as connected with matters of shipping and navigation.

SEC. 303. Control Ouer Premises Used for Customs Purposes. - The Bureau shall, for customs purposes, have exclusive control, direction and management of customs offices, facilities, warehouses, ports, airports, wharves, infrastructure and other premises in the Customs Districts, in all cases without prejudice to the general police powers of the local government units (LGUs), the Philippine Coast Guard and oflaw enforcement agencies in the exercise of their respective functions.

SEC. 304. Power of the President to Subject Premwes to Customs Jurisdiction. - When public interest requires, the President may, by executive order, declare any public wharf, landing place, infrastructure, street or land, inany port of entry under the jui-isdiction of the Bureau as may be necessary, for customs purposes and/or to authorize a port or terminal operator to transfer overstaying cargoes in an inland depot or terminal.

SEC. 305. Trespass or Obstruction of Customs Premises.

- No person shall enter or obstruct a customs office, warehouse, port, airport, wharf, or other premises under the control of the Bureau without prior authority, including the streets or alleys where these facilities are located.

SEC. 306. Special Surveillance for the Protection of Customs Revenue and Prevention of Smuggling. - The Bureau

shall conduct surveillance on vessels or aircrafts entering Philippine territory and on imported goods entering the customs office: Provided, That the function of the Philippine Coast Guard to prevent and suppress the illegal entry of these goods, smuggling and other forms of customs fraud and violations of maritime law and its proper surveillance of vessels entering and/or leaving Philippine tenito1y asprovided in Republic Act No. 9993, otherwise known as the "Philippine Coast Guard Law of 2009", shallcontinue

' to be in force.

SEC. 307. Temporary Storage of Goods. - Subject to the J rules and regulations to be issued by the Secretary of Finance, the Commissioner shall establish a system for temporaiy storage;of imports prior to goods declaration in case of abandoned or overstaying goods.

TITLE N

IMPORT CLEARANCE AND FORMALITIES

CHAPTER I

GOODS DECLARATION

SEC. 400. Goods to be Imported through Customs Office.

- All goods imported into the Philippines shallbe entered through a customs office at a port of entry, or may be admitted to or removed from a free zone as defined inthis Act, as the case may be.

SEC. 401. Importations Subject to Goods Declaration. - Unless otherwise provided for inthis Act, allimported goods shall be subject to the lodgement of a goods declaration. A goods declaration may be for consumption, for customs bonded warehousing, for admission, for conditional importation, or for customs transit.

SEC. 402. Goods Declaration for Consumption. - All goods declaration for consumption shall be cleared through a formal entry process except for the following goods which shall be cleared through aninformal entry process:

(a) Goods of acommercial natuxe with Free on Board (FOB) or Free Carrier At (FCA) value of less than fifty thousand pesos (P50,000.00). Every three (3) years after the effectivity of this Act, the Secretary of Finance shall adjust this amount asprovided herein to itspresent value, using the Consumer Price Index (CPI) as published by the PSA; and

(b) Personal and household effects or goods, not in commercial quantity, imported in a passenger's baggage or mail.

The Commissioner may adjust the value of goods of commercial nature that shall be cleared through an informal entry process without prejudice to theperiodicadjustment period insubparagraph (a) of this section.

All importations entered through a formal entry process shallbe covered by aletter of credit or any verifiable commercial document evidencing payment or incases where there is no sale for export, by anycommercial document indicating the commercial value of the goods.

SEC. 403. Provisional Goods Declaration. -Where the declarant does not have all the information or supporting documens equired to complete the goods declaration, the lodging of a proV1S10nal goods declaration may be allowed: Provided, That itsubstantially contains the necessary information required by te Bureu and the declarant undertakes to complete the mformation or submit the supporting documents within forty-five (45) days from the filing of the provisional goods declaration, which period may be extended by the Bureau for another forty.five (45) days for valid reasons.

If the Bureau accepts a provisional goods declaration, the duty treatment of the goods shall not be different from that of goods with complete declaration.

Goods under aprovisional goods declaration may be released upon posting of any required s.ecurity equivalent to the amount • ascertained to be the applicabl duties and taxes.

SEC. 404. Owner oflmported Goods. - All goods imported into the Philippines shall be deemed to be the property of the consignee or the holder of the bill oflading, airway bill or other equivalent transport document if duly endorsed by the consignee therein, or, if consigned to order, duly endorsed by the consignor. The undervvriters of abandoned goods and the salvrs of goods saved from wreck at sea, coast, or in any ai-ea of the Philippines, may be regarded as the consignees.

SEC. 405. Liability of Importer for Duties and Taxes. - Unless relieved by laws or regulations, the liabilit/for duties, taxes, fees, and othercharges attached to importation constitutes apersonal debt due and demandable against the importer infavor of the government and shallbe discharged only upon payment of duties, taxes, fees and other charges. It also constitutes alien on the imported goods which may be enforced while such goods are under customs' custody.

SEC. 406. Importations by the Government. - Except those provided for in Section 800 of this Act, allimportations by the government for itsownuse or that ofitssubordinate branches or instrumentalities, or corporations, agencies orinstrumentalities owned or controlled by the government, shall be subject to the duties, taxes, fees and other charges under this Act.

SEC. 407. Goods Declaration and Period of Filing. -As fur aspracticable, the format of the goods declaration shall conform with international standards. The data required in the goods declaration shall be limited to such particulars that are deemed necessary for the assessment and collection of duties and taxes, the compilation of statistics and compliance with this Act. The Bureau shall require the electronic lodgement of the goods declaration.

The Bureau shall only require supporting documents necessary for customs controlto ensure that allrequirements of the law have been complied with. Translation of supporting documents shallnot be required except when necessary.

Goods declaration must be lodgedwithin fifteen (15) days from the date of discharge of the last package from the vessel or aircraft. The period to file the goods declaration may, upon request, be extended on valid grounds for another fifteen (15) days: Provided, That the request is made before the expiration of the original period within which to file the goods declaration: Provided, however, That the periodof the lodgement of the goods declaration may be adjusted by the Commissioner.

SEC. 408. Lod gement and Amend ment of Goods Declaration. - The Bureau shallpermit the electronic lodgement of the goods declaration at any designated customs office. The Bureau shall, for valid reason and under terms and conditions provided by regulation, permit the declarant to amend the goods declaration that has already been lodged: Provided, That the request to amend the goods declaration, together with theintended amendments, must be received prior to final assessment or examination of the goods.

SEC. 409. Advance Lodgement and Clearance. - The Bureau may provide for the lodgement and clearance of goods declaration and supporting documents prior to the arrival of the goods under such terms and conditions as may be provided by rules and regulations to be promulgated under this Act.

SEC. 410. Entry of Goods in Part for Consumption and inPart for Warehousing. - Goods declaration covered by one bill oflading or airway bill over goods which are meant in part for consumption and in part for warehousing may be both entered simultaneouslyfor release at the port of entry.

SEC. 411. Contents of Goods Declaration. - Goods declaration shallcontain the names of the consignee, importing vessel or aircraft, port of departtu•e, port of destination and date of arrival, the number and marks of packages, or the quantity, if inbulk, the nature and con-ect commodity description of the goods contained therein, itsvalue as set forth in a proper invoice, and such other information as may be required by rules and regulations. Where the declara.pt does not have allthe information required to make the goods declaration, aprovisional or incomplete goods declaration shall, for certain cases and for reasons deemed valid by the Bureau, be allowed to be lodged: Provided, That it contains the particulars deemed necessary by the Bureau for the acceptance of the entry filed and that the declarant undertakes to complete it within forty-five (45) days from the filing of the provisional goods declaration in accordance with Section 403 of this Act.

SEC. 412. Statements to be Provided in the Goods Declaration. - No entry of imported goods shall be allowed unless the goods declaration has been lodd with the Bureau. The goods declaration shall, under penalties of falsification or perjury, contain the following statements:

(a) The invoice and goods declaration contain an accurate and faithful account of the prices paid or payable for the goods, and other adjustments to the price actually paid or payable, and that nothing has been omitted therefrom or naled w:hereby the government of the Republic of the Philippmes might be defrauded of any part of the duties andtaxes lawfully due onthe goods; and

(b) To the best of the darant'.s infoation ad belief, alltheinvoices andbills oflading or rurway bills elating te goods are the only onesinexistence relating to the llllportati.onm question, and that these documents areinthe same ste aswhen they were received by the declarant, and the declaration thereon are in allrespects genuine andtrue.

Goods declaration shallbesubmitted electronicallypursuat to Republic Act No. 8792, otherwise known as the "Electromc Commerce Act of 2000". Such declarations when printed and certifiedby acompetent customs officer as a aithful reprouction of the electronic submission shall be considered as acb.o.nable documents for purposes of prosecuting a declarant if the declarations are found to be fraudulent.

SEC. 413. Description of Goods. - Under such t?rms and conditions prescribed under the rules ad regulations, _the description of the good.sin the goods declaration must be sufficient and specific in detail to enable the goods to be idntifid for customs valuation, statistical purposes, ad cass1fication to the appropriate tariff heading and subhe:iding m the currency of the invoice, and in such other particulars.necessary for the proper assessment and collection of duties and taxes. The quantity and value of each of the several clsses of gds shall be separately declared according to their respctive headings or subheadings and the totals of each heading or subheading shallbe duly shown.

SEC. 414. Commercial and Noncommercial Invoice: -

Commercial invoice of imported goods shallcontain thefollowmg:

(a) The agreed price paid or to be paid for the goods;

(b) The adjustments tothepricepaid orto epaias ed in Section 701(1) of this Act, if not yet included mthe 1nvo1ce, as may be applicable;

(d) The port of entry;

(e) A sufficient description to enable the accurate identification of goods for tariff classification, customs valuation, and statistical purposes, indicating the correct commodity description, in customary term or commercial designation, the grade or quality, numbers, marks or symbols under which they are sold by the seller or manufacturer, together with the marks andnumber of packages inwhich the goods are packed;

(f) The quantitiesinthe weights or measures of the goods shipped; and

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

To the extent possible, the above requirements shall also apply to goods imported but not covered by sale, such as goods on consignment or lease, samples, or donations, covered by a consignment, pro forma invoice, orother noncommercial invoice.

SEC. 415. Mode of Payment and Terms of Trade. - Subject to existing laws and rules on foreign currency exchange, the internationally accepted standards andpractices on the mode of payment or remittance covering import andexport transactions, incl1idingstandards developed by international trading bodies such asthe International Chamber of Commerce (ICC) ontrading terms (incoterms) and on international letters of credit such as the Uniform Customs and Practice for Documentary Credits

(UCPDC), shallbe recognized.

SEC. 416. Examination of Samples. - Customs officers shall see to it that representative samples taken during examination shallbe properly receipted for and retained within a reasonable period of time. The quantity andvalue of the samples taken shallbe noted inthe specified box of goods declaration or electronic form. Such samples shall be duly labeled as will definitely identify them with the importation for which they are taken.

SEC. 417. Forwarding of Cargo and Remains of Wrecked Vessel or Aircraft. - When vessels or aircrafts are wrecked within the Philippines, the original owners or consignees of the cargo, or by itsunderwriters, in case of abandonment, may seek approval from the Bureau to forward the goods saved from the wreck to the ports of destination without going through the customs office inthe district inwhich the goods were cast ashore or unloaded. Upon approval, the goods may be forwarded with particular manifests and duly certified by a customs officer in charge of the goods.

The owner of the vessel or aircraft may be permitted to export the remains of the wreck upon proper examination and inspection. The remains of a wrecked vessel shall include not only its hull and rigging, but also all sea stores, goods and equipment, such as sails, ropes and chain anchors.

SEC. 418. Derelicts and Goods from Abandoned Wrecks.

- Derelicts and all goods recovered from sea or from abandoned wrecks shallbe under the jurisdiction of the port where the goods arrive, and shallbe retained in the custody of the Bureau. Ifnot claimed by the owner, underwriter or salvor, the same shall be deemed as property of the government.

When such goods are brought intoport by lighters or other craft, eachvessel shall submit a manifest of their respective cargo.

The customs officer nearest the scene of the wreck shall take charge of the goods saved and shall giveimmediate notice to the District Collector or the nearest customs office.

In order top1•event any attempt to commit fraud, the Di.strict Collector shallberepresented atthe salvage ofthe cargo by customs officers who shallexamine and receive the inventory made onthe cargo.

Derelicts and goods salvaged fromforeign vessels or aircrafts recovered from sea or wreck areprima facie dutiable and may be entered for consumption or warehousing. If claimed to be of Philippine production, and consequently conditionally duty-free, proof must esubmitted asinordinary cases of reimportation of goods. Foreign goods landed from a vessel or aircraft in distress is dutiable if sold or disposed of in the Philippines.

Before any goods taken from a recent wreck are admitted to the customs territory, the same shall be appraised, and the ow1:er or_ importe.r shall have the same right to appeal as in ordinary rmportat1on.

No art of a Philippine vessel or aircraft or its equipment, wrecked either in Philippine or fornign waters, shall be subject to duty.

CHAPTER 2

EXAMINATION OF GOODS

SEC. _419. Examination of Goods.- Examination of goods, when reqmred by the Bureau, shall be conducted immediately after _the .goods decla1•ation has been lodged. Priority in the exammation shall be given to live animals, perishable goods and other goods requiring immediate examination.

Whenever necessary, a system of coordination and joint exammation of goods shallbe established by the Bureau and other regulatory agencies under existing laws and 1•egulations.

As a general rule, the Bureau may examine the goods in the pr:se1:ce of the declarant or an authorized representative. Exammat10n of the goods in the absence of the declarant or a_uthorized representative may be allowed••exceptional circumstance and for valid and justifiable grounds, as may be defined by regulations promulgated by the Secretary of Finance, upo recommendation of the Commissioner. The Bureau may requu:e the declarant to be present or to be represented at the examination of the goods or to render any assistance necessary to facilitate the examination.

The Bureau shall take samples of the goods only when needed to establish the tariff description and value of goods declared, or to ensure compliance with this Act. Samples drawn shallbe as minimal aspossible.

SEC. 420. Conditions for Examination. - Pursuant to internationally accepted standards, the Bureau may adopt nonintrusive examination of goods, such as the use of x-ray machines.

Physical examination of the goods shallbe conducted when:

(a) It is directed by the Commissioner on account of a derogatory information;

(b) The goods are subject to an Alert Order issued by competent authority;

(d) There are issues and controversies surrounding the goods declaration and the import clearance process; or

(e) Theimporter or declarant requests for the examination of the goods.

SEC. 421. Duties of Customs Officer Tasked to Examine the Imported Goods. -In the examination, classification, and valuation of the goods, the-customs officer shall:

(a) Determine whether the packages for examination and their contents areinaccordance with the goods declaration, invoice and other pertinent documents;

(b) Take samples of the imported goods for examination or laboratory analysis when necessary;

(d) Report whether the goods have been correctly declared asto value, quantity, measurement, weight, tariff classification and not imported contrary to law.

Failure on the part of the customs officer to perform the above duties shallbe penalized according to Section 1431of Title XIV of this Act.

SEC. 422. Customs Expenses Constituting Charges on Goods. -The cost of examination shall be for the account of the importer or exporter, subject to proper accounting and documentation. All expenses incurred by the Bureau for the handling or storage of goods and other necessary operations shall be chargeable against the goods, and shall constitute a lien thel'€on.

The Commissioner may exempt from physical examination the goods of authorized economic operators or of those provided for under any existing trade facilitation program of the Bureau.

CHAPTER 3

AsSESSMENT AND RELEASE

Physical examination, when required, shallbe conducted

in an expeditious manner.

SEC. 423. Determination of the De Minimis Value. -No duties and taxes shall be collected on goods with an FOB or FCA value of ten thousand pesos (Pl0,000.00) or below. The Secretary of Finance shall adjust the de minimis value as provided herein, every three (3) years after the effectivity of this Act. The value herein stated shallbe adjusted to itspresent value using the CPI, as published by the PSA.

SEC. 424. Duty of Customs Of ficer Tasked to Assess Imported Goods. - For purposes ofassessing duties and taxes onimported goods, the customs officer shallclassify, value, and determine the duties and taxes to be paid. The customs officer shall prepare and submit an assessment report as established under this Act.

SEC. 425. Tentative Assessment of Goods Subject to Dispute Settlement. -Assessment shall be deemed tentative if the dutiesandtruces initially assessed aredisputedby theimporter. The assessment shallbe completed upon finalreadjustment based on the tariff ruling in case of classification dispute, or the final resolution of the protest case involvingvaluation, rules of origin, and other customs issues.

The District Collect.or may allow the release of theimported goods under tentative assessment upon the posting of sufficient security to cover the applicable duties andtaxes equivalent to the amount that is disputed.

SEC. 426. Tentative Assessment of Provisional Goods Declaration. - Assessment of a provisional goods declaration shallbe deemed tentative and such assessment shallbe completed upon final readjustment and submission by the declarant of the additionalinformation or documentation required tocomplete the declaration within the period provided in Section 403 of thisAct.

SEC. 427. Readjustment of Appraisal, Classification or Return. - Such appraisal, classification or return, asfinally passed upon and approved or modified by the District Collector, shallnot be altered or modified in any manner, except:

(1) Within one (1) year after payment of the duties, upon statement of error in conformity with Section 912 of this Act, as approved by the District Collector;

(2) Within fifteen (15) days after such payment, upon request for reappraisal or reclassification addressed to the Commissioner by the District Collector, if the appraisal or classification is deemed to be low;

(3) Upon request for reappraisal and/or reclassification, in the form of a timely protest addressed to the District Collector by the interested party ifthe latter should be dissatisfied with the appraisal orreturn; or

(4) Upon demandby the Commissioner after the completion of compliance audit inaccordance with the provisions of thisAct.

SEC. 428. Assessment of Duty on Less Than Entered Value.-Duty shall not be assessed inany case upon an amount less than theenteredvalue, unless by direction of the Commissioner incases when the importer certifies at the time of entry that the entered value ishigher than the dutiablevalue and that the goods are so entered in order to meet increases made by the appraiser insimilar cases then pending re-appraisement; and the lower assessment shallbe allowed only when the importer's contention issustained by a finaldecision, and shall appear that such action

of the importer was taken in good faith after due diligence and inquiry.

SEC. 429. Final Assessment. - Assessment shall be deemed final fifteen (15) days after receipt of the notice of assessment by the importer pr consignee.

SEC. 430. Period of Limitation. - In the absence of fraud andwhen the goods have been finally assessed and released, the assessment shall be conclusive upon all parties three (3) years from the date of final payment of duties and taxes, or upon completion of the post clearance audit.

SEC. 431. Release of Goods after Payment o'f Duties and Taxes. - Goods declared shallbe releasedwhen duties and taxes and other lawful charges have been paid or secured and all the pertinent laws, rules and regulations have been complied with.

When the Bureau requires laboratory analysisof samples, detailed technical documents or expert advice, it may release the goods before the results of such examination are known after posting of sufficient security by the declarant.

SEC. 432. Release of Goods t-0 the Holder of Bill of Lading or Airway Bill. -Any customs officer who releases goods to the consignee or lawful holder of the bill oflacling or airway bill shall not be liable for any defect or:irregularityinits negotiation unless the customs officer has notice of the defect or irregularity.

SEC. 433. Release of Goods Without Prod uction of Bill of Lading or Airway Bill. - No customs officer shallrelease goods to any person without the submission of the bill of lading or airway bill covering the goods, except on written order of the carrier or agent of the vessel or aircraft, in which case neither the government nor the customs officer shall be held liable for any damage arising from wrongful release of the goods: Provided, That when the release of goods is made against such written order, the customs officer shallrequire the submission of a copy of the bill.

SEC. 434. Release of Goods Upon Order of Importer.

An importer may issue a written authorization for the release of goods stored in a bonded warehouse to another person. Such authorization shall not relieve the importer from liability for the duties, taxes andother charges due onthe goods unless the person to whom the release was authorized assumes such liability.

SEC. 435. Withholding Release Pending Satisfaction of Lien. -When the District Collector is duly notified through a lawful order of a competent court of a lien for freight, lighterage or general average upon anyimported goods, the District Collector shall withhold the release of the goods unless the claim has been paid or secured. In case of disagreement, the District Collector may release the goods after payment of the freight andlighterage due on the quantity or weight landed as actually determined.

SEC. 436. Fine or Surcharge on Goods. - Goods subject to any fine or surcharge shall be released only after the payment of the fine or surcharge.

CHAPTER 4 SPECIAL PROCEDURES

SEC. 437. Traveler and Passenger Baggage. - The Bureau shall provide simplified customs procedure for traveler and baggage processing based on international agreements and customs best practices.

Travelers shallbe permitted to export goods for commercial purpos_es, subject to compliance with the necessary export formalities and payment of export duties, taxes and charges, if

any.

SEC. 438. Postal Item or Mail. - Postal item or mail shallinclude letter-post and parcels, as described ininternational practices and agreements, such asthe Acts of the Universal Postal Union (AUPU), currently in force.

A simplified procedure shall be used in the clearance of postal item or mail, including the collection of the applicable duties and taxes on such items or goods.

When all the information required by the customs are available in the special declaration form for postal items as provided in the AUPU or similar international agreements the special declaration form and supporting documents shall be the goods declaration. However, a separate goods declaration shall be required for the following:

(a) Goods whose value fall within the level that the Commissioner has determined to be taxable and thus must be covered by a goods declaration;

(b) Prohibited and regulated goods;

(d) Imported goods under a customs procedure other than for consumption.

SEC. 439. Express Shipment. - The Bureau shallprovide simplified customs procedures based on international tandards and customs best practices for air shipments considered as time-sensitive and requiring pre-arrival clearance. Express shipments of accredited air express cargo operators may be released prior to the payment of the duty, tax and other charges upon posting of a sufficient security.

related laws and regulations. Export declaration may not be granted for goods violating the aforementioned requirements.

SEC. 502. Lodge ment and Proce ssi ng of Export Declaration. - The Bureau shall promulgate rules and regulations to allow manual and electronic lodgement and processing of the export declaration.

SEC. 440. Establishment of Advance Customs Clearance and Control Program. - The Bureau may establish and implement a voluntary program on advance ustoms clearance and control on containerized cargoes. The details of the voluntary advance customs clearance shall be subject to the rules and regulations to be issued by the Bureau after conducting the necessary public hearings and consultations ,vith the concerned

sectors.

TITLE V

EXPORT CLEARANCE AND FORMALITIBS CHAPTER l

EXPORT CLEARANCE AND DECLARATION

SEC. 500. Export Declaration. -All goods exported from the Philippines, whether subject to export duty or not, shallbe declared through a competent customs office through an export declaration, duly signed electronica!lY or otherwise by the party making the declaration.

The description of the goods inthe export declaration must contain sufficient and specificinformation for statistical purposes aswell as for the proper valuation and classification of the goods.

SEC. 501. Export Prod uct to Conform to Standard Grades. - If applicable, products shall conform to export standard grades established by the government. The pckaging of the said goods shall likewise be labeled and marked m accordance with

SEC. 503. Rules of Origin. - Pursuant to the applicable rules of origin, the Bureau or any other designated government agency may determine the origin of goods for export and, if appropriate, issue the corresponding certificates of origin. However, the exporter may adopt a self-certification system: Provided, That it is duly accredited by the Bureau or any other authorized government agencies.

TITLE VI

CUSTOMS TRANSIT AND TRANSSIDPMENT CHAPTER !

CUSTOMS TRANSIT

SEC. 600. Customs Transit in the Customs Territory. - Customs transit within the customs territory shall be allowed for goods except those intended for consumption, to be transported as follows:

(a) From port of entry to another port of entcy as exit point for outright exportation;

(b) From port of entry to another port of entry or inland

customs office;

(d) From one port of entry or inland customs office to another port of entry or inland customs office.

A transit permit is required for goods transported under customs transit. However, transfer of goods in customs transit from one means of transport to another shall be allowed: Provided, That any customs seal or fastening isnot broken or tampered.

The party responsible forthe compliance of the obligations imposed on customs transit shall ensure that the goods are presented intact and in due course at the customs office of destination. Failure tocomplywith the aforementionedobligations or likewise failure to follow aprescribed itinerary orperiod for delivery of the goods may immediately subject the goods to the corresponding duties, truces and other applicable fines, penalties, and surcharges.

SEC. 601. Duty and Tax on Goods Intended for Transit. Transit goods admitted for storage in a customs bonded warehouse, or for outright exportation at the port of destination or inland customs office, and goods intended for transit covered by Republic Act No. 10668, otherwise known as"AnAct Allowing Foreign Vessels to Ti•ansport and Co-Load F01•eign Cargoes for Domestic Transshipment and for Other Purposes", shall not be subject to the payment of duties and truces at the port of entry: Provided, That any conditions and security required by the

Bureau are complied with.

Goods for consumption andother goodsint.ended forcustoms transitnot covered by the immediately preceding paragraph shall be subject to the payment of duties and taxes at the port of discharge.

SEC. 602. Carrier's Security. - Carriers that transport imported goods that shallbeplaced under customstransit from a port of entry to other ports, shallpost a general transportation security amounting to atleast fifty thousand pesos (P50,000.00). Suchsecurity shall ensure the complete and immecliate delivery of goods to the customs officer at the port of destination andthe payment of pertinent customs charges and expenses and other transfer costs. The amount of the security may be adjusted by the Commissioner, upon approval of the Secretary of Finance.

CHAPTER 2

CUSTOMS TRANSSHIPMENT

SEC. ?03. Customs Transshipment. - Goods admitted for transshipmet shall not be subject to the payment of duties and taxes: Provided, That the goods declaration for customs transshipment particularly indicates such nature of the goods duly suported by commercial ortransport documents or evidenc

asrequired by the Bureau.

Goods for transshipment must be exported from the Phihpms within thirty (30) days from arrival thereof. The Co1ss1oner may allow an extension of such period after the establishment of valid reasons.

SEc..604. Goods Entered for Immediate Reexportation. - Wher an tet ofreexportation of the goods isshown by the bill of lading, mvo1ce, manifest, or other satisfactory evidence, the whole or a part of a coprising not less than one package may b etered for immediate reexportation under security. Th D1Stnct Collector shall designate the vessel or aircraft in wh the goods are loaded constructively as a warehouse to

cilitate the direct transfer of the goods to the exporting vessel or rurcraft.

. . Unless _it shall appear in the bill of lading, airway bill, mv?1e, anifest,. r ther satisfactory evidence, that goods arnvmg the Philipmes are destined for transshipment, no xporttion thereof ill be permitted except under entry for immediate reexportation under sufficient security in anamount equal to the ascertained duties, taxes and other charges.

Upon he reexportation of the goods, and the production of proof of landing beyond the limits of the Philipi;ttfies, the security shallbe released.

TITLE VII

IMPORT DUTY AND TAX

CHAPTER I

BASIS OF VALUATION

SEC. 700. Sequential Application of Valuation Methods.

- Imported goods shallbe valued inaccordance with the provisions of Section 701 of this Act whenever the conditions prescribed therein are fuJJilled.

Where the customs value cannot be determined under the provisions of Section 701 of this Act, it is to be determined by proceeding sequentially through the succeeding sections hereof to the first such section under which the customs value can be

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

(ii) Limit the geographical area in which the goods may be

resold; or

(iii) Do not substantially affect the value of the goods;

(b) The sale or price is not subject to some condition or consideration for which avalue cannot be determined with respect to the goodsbeing valued; and

(c) The buyer and the seller are not related, or where the buyer and the seller are related, that the transaction value is acceptable for customs purposes under the provisions hereof.

determined. Except as provided in Section 704 of this Act, it is only when the customs value cannot be determined under the provisions of aparticular section that the provisions of the next section in the sequence can be used.

only

For purposes of this Act, persons shall be deemed related if:

(i) They are officers or directors of one another's business;

If the importer does not request that the order of Sections 704 and 705 of this Act be reversed, the normal order of the sequence is to be followed. Ifthe importer so requests but it is impossible to determine the customs value under Section 705 of this Act, the customs value shall be determined under Section 704.

them;

(ii) They are legally recognized partners in business;

(iii) Thereexists an employer-employee relationship between

(iv) Any person cfu-ectly or indirectly owns, controls or holds

"When the customs value cannot be determined under Sections 701 through 705, it may be determined under Section 706 of this Act.

SEC. 701. Transaction Value System -Method One. - The transaction value shallbe the price actually paid or payable for the goods when sold for export to the Philippines adjusted in accordance with the provisions of this section: Provided, That:

(a) There are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which:

fivepercent (5%) or more of the outstanding voting stocks or shares of both seller and buyer;

(v) One of them directly or indirectly controls the other;

(vi) Both of them are directly or indirectly controlled by a third person; ""''>

(vii) Together they directly or indirectly control a third

person; or

(viii) They are members of the samefamily, including those related by affuri.ty or consanguinity up to the fourth civil degree.

Persons who are associated in business with one another inthat one is the sole agent, sole distributor or sole concessionaire however described, of the other shall be deemed to be related the purposes of this Act if they fall within any of the eight (8) cases cited inthe preceding paragraph.

In a sale between related persons, the transaction value shall be accepted as basis for customs valuation whenever the importer demonstrates that suchvalue closely approximates one of the following occurring at or about the same time:

(a) The transaction value in sales to unrelated buyers of identical or similar goods for export to the same country of importation;

(b) The customs value of identical or similar goods as determined under the provisions of Section 704 of this Act; or

In determining the transaction value, the following shall be added to the price actually paid or payable for the imported goods:

(1) To the extent that they are incurred by the buyer but are not included in the price actually paid or payable for the imported goods:

(a) Commissions and brokerage fees except buying commissions;

(b) Cost of containers;

(d) Value, apportioned asappropriate, of the following goods and services: materials, components, parts and similar items incorporated inthe imported goods; tools; dies; moulds and similar

items used in the production of imported goods; materials con.sumed:in the production of the imported goods; and engineering, development, artwork, design work and plans and sketches undertaken elsewhere than in the Philippines and necessary for the production of imported goods, where such goods andservices are supplied directly or indirectly by the buyer free of charge or at areduced cost for use in connection with the production and sale for export of the imported goods; and

(e) Amount ofroyalties andlicen.se fees related to the goods being valued that the buyer must pay either directly orindirectly, as a condition of sale of the goods to the buyer.

(2) 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;

(3) Cost of transport of the imported goods from the port of exportation to the port of entry in the Philippines;

(4) Loading, unloading and handling charges associated with the transport of the imported goods from the country of exportation to the port of entry in the Philippines; and

(5) Cost of insurance.

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

SEC. 702. Transaction Valueof Identical Goods - Method Two. - Where the dutiable value cannot be determined under method one, the dutiable value shall be the transaction value of identical goods sold for export to the Philippines and exported at or about the same time as the goods being valued. For purposes of this section, "Identical goods" refer to goods which are the same in all respects, including physical characteris,.ttc,, quality and reputation. Minor differences in appearances s1Mll•not preclude goods otherwise conforming to the definition from being regarded as identical.

If,in applying this section, more than one transaction value ofidentical goods are found, the lowest value shall be used to determine the customs value.

SEC. 703. Transaction Value of Similar Goods -Method Three.- Where the dutiable value cannot be determined under thepreceding method, the dutiable value shallbe the transaction value of similar goods sold for export to the Philippines and exported ator about the sametime asthe goods being valued. or purposes of this section, "Similar goods" refer to goods which, although not alike in all respects, have like characteristics and similar component materials which enable them to perform the same functions and to be commercially interchangeable. The quality of the goods, its reputation and the existence of a trademark shall be among the factors to be considered in determining whether goods are similar.

If,in applying this section, more than one transaction value of identical goods are found, the lowest suchvalue shall be used to determine the customs value.

SEC. 704. Deductive Value -Method Four. -Where the dutiable value cannot be determined under the preceding method, the dutiable value shallbe the deductive value unless otherwise requested by the importer as provided in Section 700 hereof. Tbe deductive value which shall be based on the unit price at which the imported goods or identical or similar imported goods are sold in the Philippines, in the same condition as when imported, in the greatest aggregate quantity, at or about the time of the importation of the goods being valued, to persons not related to the persons from whom they buy such goods, subject to deductions for the following:

(1) Either the commissions usually paid or agreed to be paid or the additions usually made for profit and general expenses in connection with salesin such country ofimported goods of the same class or kind;

(2) The usual costs of transport and insurance and associated costs incurred within the Philippines;

(3) Where appropriate, the costs of: (i) transport of the imported goods from the port of exportation to the port of entry in the Philippines; (ii) loading, unloading and handling charges associated with the transport of the imported goods from the country of exportation to the port of entry in the Philippines; and

(iii) insurance; and

(4) The customs duties and other national taxes payable in the Philippines by reason of the importation or sale of the goods.

If neither the imported goods nor identical nor similar imported goods are sold at or about the time of importation of the goods being valued in the Philippines in the conditions they were imported, the customs value shall, subject to the conditions set forth in the preceding paragraph, be based on the unit price at which the imported goods or identical or similar imported goods sold in the Philippines in the condition theywere imported and at the earliest date after the importation of the goods being valued, but before the expirationof ninety (90) days after suchimportation.

If neither the imported goods nor identical nor similar imported goods are sold in the Philippines in the condition as imported, then, if the importer so requests, the dutiable value shall be based on the unit price at which the imported goods, after furtherprocessing, aresold inthe greatest aggregate quantity to persons in the Philippines who are not related to the persons from whom they buy such goods, subject to allowance for the value added by such processing and deductions provided under subsections (1), (2), (3) and (4) hereof.

SEC. 705. Computed Value - Method Five. - Where the dutiable value cannot be determined under the preceding method, the dutiable value shallbe the computed value of the sum of:

1"1

(1) The cost or the value of materials and fabrication or other processing employed in producing the imported goods;

(2) The amount for profit and general expenses equal to that usually reflected in the sale of goods of the same class or

kindas the goods being valued which aremade by producers in the country of exportation for export to the Philippines;

(3) The freight, insurance fees and other transportation expenses for theimportation of the goods;

(4) Any assist, if itsvalue is not included under paragraph

(1) hereof; and

(5) The cost of containers and packing, if their values are not included under paragraph (1) hereof.

The Bureau shall not require or compel any person not residing inthe Philippines to produce for examination, or to allow access to, any account or other record for the purpose of determining a computed value. However, information supplied by the producer of the goods for thepurposes of determining the customs value may be verified in another country with the agreement of the producer and provided that said producer will give sufficient advancenotice to the government of the country in question and that the latter does not object to the investigation.

SEC. 706. Fallback Value-Method Six. - Ifthe dutiable value cannot be determined under the preceding methods described above, it shall be determined by using other reasonable means and on the basis of data available in the Philippines. Ifthe importer so requests, the importer shall be informed inwriting of the dutiablevalue det.ernrined under method six and the method used to determine suchvalue.

No dutiable value shallbe determined under method sixon the basis of:

(1) The selling price inthe Philippines of goods p1•oducedin the Philippines;

(2) A system that provides for the acceptance for customs purposes of the higher of two (2) alternative values;

(3) Theprice of goods inthe domestic market of the country of exportation;

(4) The cost of production, other than computed values, that have been determined for identical or similar goods in accordance with method five hereof;

(5) The price of goods for export to a country other than the Philippines;

(6) :Minimum customs values; or

(7) Arbitrary or fictitious values.

SEC. 707. Ascertainment of the Accuracy of the Declared Value.- Nothing inthis section shallbe construed as restricting or calling into question the right of the Bureau to ascertain the truth or accuracy of any statement, document or declaration presented for customs valuation purposes. When a declaration has been presented andwhen the Bureau has reason to doubt the truth or accuracy of the particulars or of documents produced in support of such declaration, it may ask the importer to provide further explanation, including documents or other evidence, that the declared value represents the total amount actually paid or payable for the imported goods, adjusted inaccordance with the provisions of Section 701 of this Act.

Ifinthe course of determining the dutiable value of imported goods, it becomes necessary to delay the final determination of such dutiable value, the importer shallnevertheless be able to secure the release of the imported goods upon posting of asufficient secmityin anamount equivalent to the duties and taxes indispute conditioned on the payment of additional duties and taxes, if any, as may be determined: Provided, That prohibited goods shall not be released under any circumstance. .•"f

If, after receiving further information, or inthe absence of a response, the Bureau stillhas reasonable doubts on the truth or accuracy of the declared value, it may deem that the customs value of the imported goods cannotbe determined under method

one, without prejudice to animporter'sright to appeal pursuant to Section 1104 of this Act. Before talting a finaldecision, the District Collector shallcommunicate to the importer, in writing if requested, the grounds for doubting the truth or accuracy of theparticulars or documents produced and give the importer a reasonable opportunity torespond. When afinaldecision ismade, the Bureau shall communicate its decision and the grounds therefor inwriting.

SEC. 708. Exchange Rate. - For the assessment and collection of import duty upon imported goods and for other purposes, the value andprices thereof quoted inforeign currency shall be converted into the currency of the Philippines at the current rate of exchange or value specified or published, from time to time, by the Bangko Sentralng Pilipinas (BSP).

CHAPTER 2

SPECIAL DUTIES AND TRADE REMEDY MEASURES

SEC. 709. Government's Right of Compulsory Acquisition. - In order to protect government revenues against undervaluation of goods, the Commissioner may, motuproprio or upon the rncommendation of the District Collector, acquire imported goods under question for aprice equal to their declared customs value plus any duties already paid onthe goods, payment for which shall be made within ten (10) working days from issuance of a warrant signed by the Commissioner for the acquisition of such goods.

An importer who is dissatisfied with a decision of the Commissioner pertaining to this section may, within twenty (20) working days after the date on which notice of the decision is given, appeal to the Secretary of Finance, and thereafter if still dissatisfied, to the CTA as provided for in Section 1136 of this Act.

Where no appeal is made by the importer, or upon reaffirmation of the Commissioner's decision during the appeals

process, the Bureau or its agents shall sell the acquired goods pursuant to existing laws and regulations.

Nothing in this section limits or affects any other powers of the Bureau with respect to the disposition of the goods or any liability of the importer or any other person with respect to an offense committed in theimportation of the goods.

SEC. 710. Marking of Imported Goodsand Containers. -

(A) Marking of Goods. -Except ashereinafter provided, allgoods offureign origin imported into the Philippines or their containers, asprovided insubsection (B) hereof shallbe conspicuously marked in any official language of the Philippines as legibly, indelibly and permanently as the nature of the goods or container will permit andinsuchmanner asto .indicate to an ultimate purchaser in the Philippines the name of the country of origin of the goods.

Pursuant thereto, the Commissioner shall, with the approval of the Secretary of Finance:

(1) Determine the character of words and phrases or

abb1•eviation thereof which shallbe acceptable asindicating the I

country of origin andprescribe anyreasonable method ofmarking, whether by printing, stenciling, stamping, branding, labeling or by any other reasonable method, and in a conspicuous place on the goods or container where the marking shall appear;

{2) Require the addition of other words or symbolswhich I

may be appropriate to prevent deception or mistake as to the I.

origin of the goods or as to the origin of any other goods with I'

which such imported goods is usually combined subsequent to importation but before delivery to an ultimate purchaser; and

(8) Authorize the exception of any goods from the requirements of marking if:

(i) Such goods are incapable of being marked;

(ii) Such goods cannot be marked prior to shipment to the Philippines without injury;

(iii) Such goods cannot be marked prior to shipment to the Philippines, except at an expense economically prohibitive of their importation;

(iv) The marking of a container of such goods will reasonably indicate the origin of such goods;

(v) Such goods are crude substances;

(vi) Suchgoods are imported for use by the importer and not intended for sale in their imported or any other form;

(vii) Such goods are to be processed in the Philippines by the importer or for the importer's account other than for the purpose of concealing the origin of such goods and insuchmanner that any mark contemplated by this section would necessarily be obliterated, destroyed, or permanently concealed;

(viii) An ultimate purchaser, by 1•eason of the character of such goods or by reason of the circumstances of their importation, must necessarily know the country of origin of such goods even though they are not marked to indicate their origin;

(ix) Such goods were produced more thantwenty (20) years prior to their importation into the Philippines; or

(x) Such goods cannotbe marked after importation except at an expense which is economically prohibitive, and the failure to mark the goods 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 goods areexempt under paragraph (3) of subsection (A) of this section from the requirements of marking, the immediate container, if any, of such goods, or such other container or containers of such goods, 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 goods in any official language of the Philippines, subject to allprovisions of this section, including the same exceptions as are applicable to goods under paragraph (3) of subsection (A).

(C) Fine for Failure to Mark. - atthe time ofimportation any good or its container, as provided insubsection (B) hereof, is not marked inaccordance with the requirements of this section, there shallbe levied, collected, and paid upon such good a marking duty of five percent (5%) of dutiable value, which shallhe deemed to have accrued at the time of importation.

(D) Release Withheld Until Marked. -No imported goods held in customs custody for inspection, examination, or assessment shallbe released until such goods or their containers 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 shallhave been deposited.

(E) The failure or refusal of the owner or importer to mark the goods asherein required within a period of thirty (30) days after due notice shall constitute as an act of abandonment of said goods and their disposition shallbe governed by the provisions of this Act relative to abandonment of imported goods.

SEC. 711. Dumping Duty. -

Theprovisions of Republic Act No. 8752, otherwise known as the "Anti-Dumping Act of 1999", arehereby adopted.

SEC. 712. Safeguard Duty. -

...

The provisions of Republic Act No. 8800, otherwise known as the "Safeguard Measures Act", are hereby adopted.

SEC. 713. Countervailing Duty. -

The provisions of RepublicAct No. 8751, otherwise known as "AnAct Strengthening the Mechanisms for the Imposition of Countervailing Duties on Imported Subsidized Products, Commodities orArticles of Commerce inOrder to Protect Domestic Industries from Unfair Trade Competition, Amending fo1•the

Purpose Section 302, Part 2, Title II, Book Iof Presidential Decree No. 1464", otherwise known as the"Tariff and Customs Code of the Philippines, asAmended'', are hereby adopted.

SEC. 714. Discrimination by Foreign Countries. - Without prejudice to the Philippine commitment in any ratified international agreements or treaty, the following recourse shall be applicable in case of discrimination by foreign countries:

(a) When the President finds that the publicinterest will be served thereby, the President shall, by proclamation, specify and declare new or additional duties in an amount not exceeding one hundred percent {100%) ad valorem upon goods wholly or in part the growth or product of, or imported in a vessel of any foreign country whenever the President shallfind as afact that such country:

(1) Imposes, directly or indirectly, upon the disposition or transportation in transit or through reexportation from such country of any goods wholly or in part the growth or product of the Philippines, any unreasonable charge, exaction, regulation or limitation which is not equally enforced upon the like goods of every foreign country; or

(2) Discriminates in fact against the commerce of the Philippines, directly or indirectly, by law or administrative regulation or practice, by or inrespect to any customs, tonnage, or port duty, fee, charge, exaction, classification, regulation, condition, restriction or prohibition, in such manner astoplace thecommerce of the Philippines at a disadvantage compared with the commerce of anyforeign country.

{b) If at any time the President shall find it to be a fact that any foreign country has not only discriminated against the commerce of the Philippines, as aforesaid, but has, after the issuance of a proclamation asauthorized insubsection (a) of this section, maintained or increased its said discrimination against the commerce of the Philippines, the President is hereby authorized, if deemed consistent with the interests of the Philippines and of public interest, toissue afurtherproclamation directing that suchproduct of said country or such goods imported in their vessels be excluded from importation into the Philippines.

(c) Any proclamation issued by the President under this section shall, if the President deems itconsistent with the interest of the Philippines, extend to the whole of any foreign country or may be confined to any subdivision or subdivisions thereof: Provided, That the President may, whenever thepublic interest requires, suspend, revoke, supplement or amend any such proclamation.

(d) All goods imported contrary to the provisions of this section shallbe forfeited to the government of the Philippines and shall be liable to be seized, prosecuted and condemned inlike manner and under the same regulations, restrictions, and provisions asmayfrom time to time be established for the recovery, collection, distribution, and remission or forfeiture to the government by the tariff and customs laws. Whenever the provision of this section shall be applicable to importations into the Philippines of goods wholly or inpart the growth or product of any foreign country, it shallbe applicable thereto, whether such goods are imported directly or indirectly.

(e) Itshall be the duty of the Commission to ascertain and at all times be informed whether any of the discriminations against the commerce of the Philippines enumerated in subsections (a) and (b) of this section arepracticedby any country; and if and when such discriminatory acts aredisclosed, it shall be the duty ofthe Commission tobring the matter to the attention

of the President, and to recommend measures to address such discriminatory acts. '

(f) The Secretary of Finance shall make such rules and regulations as are necessary for the execution of aproclamation that the President may issuein accordance wit provisions of this section.

TITLE VIII

TAX AND DUTY DEFERMENT, PREFERENCE AND EXEMPTION

CHAPTER I

CONDITIONALLY TAX AND/OR DUTY-EXEMPT IMPORTATION

SEC. 800. Conditionally Tax and / or Duty -Exempt Importation. - The following goods shall be exempt from the payment ofimport duties upon compliance with the formalities prescribed in the regulations which shallbe promulgated by the Commissioner with the approval of the Secretary of Finance: Provided, That goods sold, bartered, hired or used for purposes other than what theywere intended for andwithout prior payment of the duty, tax or other charges which would have been due and payable at the time ofentry if the goods had been entered without the benefit of this section, shall be subject to forfeiture and the importation shall constitute afraudulent practice against customs laws: Provided, however, That a salepursuant to ajudicial order or in liquidation of the estate of a deceased person shall not be subject to the preceding proviso, without prejudice to the payment of duties, taxes and other charges: Provided, further, That the President may, upon the recommendation of the Secretary of Finance, suspend, disallow or completely withdraw, in whole or in part, any conditionally free importation under this section:

(a) Aquatic products such as fishes, crustaceans, mollusks, marine animals, seaweeds, fish oil, roe, caught or gathered by fishing vessels of Philippine registry: Provided, That they are imported in such vessels or in crafts attached thereto: Provided, however, That they have not been landed in any foreign territory or, if so landed, that they have been landed solely for transshipment without ha'{ing been advanced in condition;

(b) Equipment for use in the salvage of vessels or aircrafts, not available locally, upon identification and the giving of a security in an amount equalto one hundred percent (100%) of the ascertained duties, taxes and other charges thereon, conditioned for the exportation thereof orpayment of corresponding duties, taxes and other charges within six (6) months from the date of acceptance of the goods declaration: Provided, That the Bureau may extend the time for exportation or payment of duties, taxes and other char ges for a term not exceeding six (6) months from the expiration of the original period;

(c) Cost ofrepairs, excluding the value of the goods used, made in foreign countries upon vessels or aircraft documented, registered orlicensed in the Philippines, upon proof satisfactory to the Bureau: (1) that adequate facilities for suchrepairs are not afforded in the Philippines; or (2) that such vessels or aircrafts, while in the regular course of their voyage or flight, were 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 vessels or aircrafts to enable them to reach their port of destination;

(d) Goods brought into the Philippines for repair, processing or reconditioning to be reexported upon completion of the repair, processing or reconditioning: Provided , That the Bureau shall require security equal to one hundred percent (100%) of the duties, taxes and other charges thereon, 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 goods declaration;

(e) Medals, badges, cups, and other small goods bestowed as trophies or prizes, or those received or accepted as honorai'Y distinction;

(f) Personal and household effects belongin'g to returning residents including household appliances, jewelry, precious stones, and other goods ofluxury which were formally declared andlisted before departure and identified under oath before the District

Collector when exported from the Philippines RX such returning

residents upon their departure therefrom or duiing their stay abroad; personal and household effects including wearing apparel, goods of personal adornment, toilet goods, instruments related to one's profession and analogous personal or household effects, excluding luxury items, vehicles, watercrafts, aircrafts and animals purchased in foreign countries by residents of the Philippines which were necessary, appropriate, andnormally used for their comfort and convenience during their stay abroad, accompanying them on their return, or arriving within a reasonable time which, barring unforeseen and fortuitous events, in no case shall exceed sixty (60) days after the owner's return.

For purposes of this section, the phrase "returningresidents" shallrefer to nationals who have stayed ina foreign country for a period of atleast six (6) months. Returning residents shall have tax and duty exemption on personal and household effects:

Provided, That:

(1) It shall not be in commercial quantities;

(2) It is not intended for barter, sale or for hire; and

(3) Limited to the FCA or FOB value of:

(i) Three hundred fifty thousand pesos (P350,000.00) for those who have stayed in a foreign country for at least ten (10) years and have not availed of this privilege within ten (10) years

prior to returning resident'sarrival;

(Ii) Two hundred fifty thousand pesos (P250,000.00) for those who have stayed in aforeign country for aperiod of at least five (5) but not more than ten (10) years and have not availed of this privilege within five (5) years prior to returning resident's

arrival; or

(iii) One hundred fifty thousand pesos (Pl50,000.00) for those who have stayed in a foreign country for a period of less than five (5) years and have not availed of this privilege within six (6) months prior to returning resident's arrival.

In addition to the privileges granted under the immediately preceding paragraph, returning Overseas Filipino Workers (OFWs) shall have the privilege to bring in, tax and duty-free, home appliances and other durables, limited to one of every kind once in a given calendar year accompanying them on their return, or arriving within areasonable time which, barring unforeseen and fortuitous events, in no case shallexceed sixty (60) days after every returning OFW's return upon presentation of their original passport at the port of entry: Provided, That any amount in excess of FCA value of one hundred fifty thousand pesos (Pl50,000.0.0) for personal and household effects or of the number of duty-free appliances asprovided for under this section, shallbe subject to the corresponding taxes and duties: Provided, furth er, That every three (3) years after the effectivity of this Act, the Secretary of Finance shall adjust the amount herein stated to its present value using the CPI as published by the PSA;

(g) Residents of the Philippines, OFWs or other Filipinos while residing abroad or upon their return to the Philippines shall be allowed to bring in or send to their families or relatives in the Philippines balikbayan boxes which shall be exempt from applicable duties and taxes imposed under the NIRC of 1997, as amended: Provided, That balikbayan boxes shall containpersonal and household effects only and shall neither be in commercial quantities nor intended for barter, sale or for hire and that the FCA value of which shall not exceed one hundred fifty thousand pesos (P150,000.00): Provided, further, That every three (3) years after the effectivity of this Act, the Secretary of Finance shall adjust the amount herein stated to its present value using the CPI as published by the PSA: Provided, finally, That residents 9f the Philippines, OFWsor other Filipinos can only avail of this privilege up to three (3) times in a calendar year. Any amount in excess of the allowable non-dutiable value shall be subject to the applicable duties and taxes;

(1) For purposes of this Act, OFWs refet

' ll.o ders of valid

Any amount in excess of the above-stated threshold shall

be subject to the corresponding duties and taxes under this Act.

Every three (3) years after the effectivity of this Act, the Secretary of Finance shall adjust the amount herein stated to its present value using the CPI as published by the PSA.

passports duly issued by the Department of Foreign Affairs (DFA) and certified by the Department of Labor and Employment (DOLE) or the Philippine Overseas Employment Administration (POEA) for overseas employment purposes. They cover all Filipinos, working in a foreign country under employment contracts,

regardless of their professions, skills or employment sttus in a foreign country; and (2) Calendar Year refers to the penod from January 1to December 31.

(h) Wearing apparel, goods of personal :'dornment, toilet goods, portable tools and instruments, theatn costume nd similar effects accompanying travelers1 or tourists, or arnving within a reasonable time before or after their arrival in the Philippines, which are necessary and appropriate for t.he wear and use of such persons according to the nature of the Journy, their comfort and convenience: Provided, That this exemption shallnot apply to goods intended for other persons or for barter, sale or hire: Provided, however, That the Bureau may reqmre either a written commitment or a security in anamount equal to one hundred percent (100%) of the ascertained dutes, taxes and other charges thereon, conditioned for the exportat10n thereof or payment of the corresponding duties, taxes and other charges within three (3) months from the date ofacceptance of the goods declaration: Provided, further, That the Bureau may extend the time for exportation or payment of duties, taxes and othecharges for a term not exceeding three (3) months from the expirat10nof the original period.

Personal and household effects and vehicles belonging to foreign consultants and experts hired by, or rendering servke .to, the government, and their staff or personnel and families accompanying them or arriving within a reasona?l.e tnne before or after their arrival in the Philippines, in quantities an ?f the kind necessary and suitable to the profession, rank or posit10n of the person importing said items, for their own use and not or barter, sale or hire: Provided, That the Bureau may require either a written commitment or a security in an amount equal to one hundred percent (100%) of the ascertained duties, taxes lill:d other charges thereon, upon the goods classified under this subsection; conditioned for the exportation thereof or J?ament of the corresponding duties, taxes and other charges w1thm t'."'ee

(3) months after the expiration of their term or contract: Provided, however, That the Bureau may extend the time for exportation or payment of duties, taxes and other charges for a term.not exceeding three (3) months from the expiration of the ong,nal period;

(i) Professional instruments and implements, tools of trade, occupation or employment, wearing apparel, domestic animals, and personal and household effects belonging to persons coming to settle in the Philippines or Filipinos or their families and descendants who are now residents or citizens of other countries, such parties hereinafter referred to as overseas Filipinos, in quantities and of the class suitable to the profession, rank or position of the persons importing said items, for their own use and not for barter or sale, accompanying such persons, or arriving within a reasonable time: Provirled, That the Bureau may, upon the production of satisfactory evidence that such persons areactually coming to settle in the Philippines and that the goods are brought from their former place of abode, exempt such goods from the payment of duties and taxes: Provided , further, That vehicles, vessels, aircrafts, machineries and other similar goods for use in manufacture, shall not fall within this

classification and shall therefore be subject to duiies, taxes and other charges;

(j) Goods 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, upon identification, ex\mination, and appraisal and the giving of a security in an amount equal to one hundred percent (100%) of the ascertained duties, taxes andother charges thereon, conditioned for exportation thereof or payment of the corresponding duties, taxes and other charges within three

(3) months from the date of acceptance of the goods declaration: Provided, That the Bureau may extend the time for exportation or payment of duties, taxes and other charges for a term not exceeding three (3) months from the expiration of the original

•period; and technical and scientific films when imported by technical, cultural and scientific institutions, and not to be exhibited for profit: Provided, further, That if any of the fihns is exhibited for profit, the proceeds therefrom shall be subject to confiscation, in addition to the penalty provide<i,under this Act;

(k) Goods brought by foreign fihn producers directly and exclusively used for making orrecording motion picture fihns on location in the Philippines, upon their identification, examination and appraisal and the giving ofa security in an amount equal to one hundred percent (100%) of the ascertained duties, taxes and other charges thereon, conditioned for exportation thereof or payment of the corresponding duties, taxes and other charges within three (3) months from the date of acceptance of the goods declaration, unless extended by the District Collector for another three (3) months; photographic and cinematographic films, underdeveloped, exposed outside the Philippines by resident Filipino citizens or by producing companies of Philippine registry where the principal actors and artists employed for the production are Filipinos, upon affidavit by the importer and identification that such exposed films are the same films previously exported from the Philippines. As used inthisparagraph, the terms"actors" and "artists" include the persons operating the photographic camera or other photographic and sound recording apparatus by which the film ismade;

(1) Importations for the official use of foreign embassies, legations and other agencies of foreign governments: Provided, That those foreign countries accord like privileges to corresponding agencies of the Philippines. Goods imported for the personal or family use of members and attaches of foreign embassies, legations, consular officers and other representatives of foreign governments: Provided, however, That such privilege shall be accorded under special agreements between the Philippines and the countries which they represent: Provided, further, That the privilege may be granted only upon specific instructions of the Secretary of Finance pursuant to an official request of the DFA on behalf of members or attaches of foreign embassies, legations, consular officers and other representatives of foreign govermnents.

(m) Imported goods donated to or, for the account of the Philippine government or any duly registered relief organization, not operated for profit, for free distribution among the needy, upon certification by the DSWD or the Department of Education (DepED), or the Department of Health (DOH), as the case may be•

(n) Containers, holders and other similar receptacles of any material including kraft paper bags for locally manufactured cement for export, including corrugated boxes for bananas, mangoes,pineapples and other fresh fruits for export, except other containers made of paper, paperboard and textile fabrics, which are of such character as to be readily identifiable and/or reusable for shipment or transportation of goods shall be delivered to the importer thereof upon identification, examination and appraisal and the giving of a security in an amount equal to one hundred percent (100%) of the ascertained duties, taxes and other charges

thereon, within six (6) months from the date ofacceptance of the goods declaration;

(o) Supplies which are necessary for the reasonable requirements of the vessel or aircraft initsvoyage or flight outside the Philippines, including goods transferred from a bonded warehouse in any Customs District to any vessel or aircraft engaged in foreign trade, for use or consumption of the passengers or its crew on board such vessel or aircraft as sea or air stores• or goods purchased abroad for sale on board a vessel or aircraft as saloon stores or air store supplies: Provided, That any surplus or excess of suchvessel or aircraft supplies arriving from foreign ports or airports shall be dutiable;

(p) Goods sndsalvage from vessels recovered after a period of two (2) years from the date of filing the marine protest or the time when the vessel was wrecked or abandond, or parts of a foreign vessel or its equipment, wrecked or abandoned in Philippine waters or elsewhere: Provided, That goods andsalvage recovered within the said period of two (2) years shallbe dutiable;

(ci) Coffins or urns containing human remains, bones or ashes, used personal and household effects (not merchandise) of the deceased person, except vehicles, the FCA value of which does not exceed one hundred fifty thousand pesos (P150,000.00), upon identification as such: Provided, That every tlu•ee (3) years after the effectivity of this Act, the value herein stated shall be adjusted to its present value using the CPI as published by the PSA;

(r) Samples of the kind, in such quantity and of such dimension or construction as to render them unsaleable or of no commercial value; models not adapted for practical use; and samples of medicines, properly marked "sample-sale punishable by law", for thepurpose of introducing new goods in the Philippine market and imported only once in a quantity sufficient for such purpose by a person duly registered and identified to be engaged in that trade: Provided, That importations under this subsection shall be previously authorized by the Secretary of Finance: Provided, however, That importation of sample medicines shall have been previously authorized by the Secretary of Health, and that such samples are new medicines not available in the Philippines: Provided, further, That samples not previously authorized orproperly marked in accordance with this section shallbe levied the corresponding tariff duty.

Commercial samples, except those that are not readily and easily identifiable as in the case of precious and semi-precious stones, cut oruncut, andjewelry set with precious or semi-precious stones, thevalue of any singleimportation of which does not exceed FCA value of fifty thousand pesos (P50,000.00) upon the giving of a security in an amount equal to the ascertained duties, taxes and other charges thereon, conditioned for the exportation of said samples within three (3) months from the date of the acceptance of the goods declaration or in default thereof, the payment of the corresponding duties, taxes and other charges: Provided, That if the FCA value of any single consignment of such commercial samples exceeds fifty thousand pesos (P50,000.00), the importer thereof may select any portion of the same not exceeding the FCA value of fifty thousand pesos (P50,000.00) for entry under the provision of this subsection, andthe excess of the consignment may be entered in bond, or for consumption, asthe importer may elect: Provided, further, That every three (3) years after the effectivity of this Act, the Secretary of Finance shall adjust the amount herein stated to its present value using the CPI as published by the PSA.

(s) Animals, except race horses, and plants for scientific, experimental propagation or breeding, and for other botanical, zoological and national defense purposes: Provided, That no live trees, shoots, plants, moss and bulbs, tubers and seeds for propagation purposes may be imported under this section, except by order of the government or other duly authorized institutions: Provided, however, That the free entry of animals for breeding purposes shallbe restricted to animals ofrecognized breed, duly registered in the record or registry established for that breed, and certified as such by the Bureau of Animal Industry (BAI):

Provided, further, That the certification of such record, and pedigree of suchanimal du]y authenticated by theproper custodian of such record or registry, shall be submitted to the District Collector, together with the affidavit of the owner or importer that such animal is the animal described in said certificate of record and pedigree: Provided, finall y, That the animals and plants are certified by the NEDA as necessary for economic development;

(t) Economic, technical, vocational, scientific, philosophical, historical and cultural books or publications, and religious books like Bibles, missals, prayer books, the Koran, Ahadith and other religious books of similar nature and extracts therefrom, hymnal and hymns for religious uses: Provided, That those which may have already been imported but are yet to be released by the Bureau at the effectivity of this Act may still enjoy the privilege herein provided upon certification by the DepED that such imported books and/or publications are for economic, technical, vocational, scientific, philosophical, historical or cultural purposes or that the same are educational, scientific or cultural materials covered by the International Agreement on Importation of Educational Scientific and Cultural Materials (IAESCM) signed by the President of the :Philippines on August 2, 1952, or other agreements binding upon the Philippines. Educational, scientific and cultural materials covered by international agreements or commitments binding upon the Philippine govermnent so certified by the DepED.

(u) Philippine goods previously exported from the Philippines and returned without havingbeen advanced invalue

.or improved in condition by anyprocess of manufacturing or other means, and upon which no drawback or bounty has been allowed, including instrmnents and implements, tools of trade, machinery and equipment, used abroad by Filipino citizens in the pursuit of their business, occupation or profession; ar\d foreign goods previously imported when returned after haiJfi'lg' been exported andloaned for use temporarily abroad solely for exhibition, testing and experimentation, for scientific or educational purposes; and foreign containers previously imported which have been used in packing exported Philippine goods andreturned empty ifimported by or for the account of the person or institution who exported them from the Philippines and not for sale, barter or hlre subject to identification: Provided, That Philippine goods falling under this subsection upon which drawback or bounty have been allowed shall, upon reimportation thereof, be subject to a duty under this subsection equal to the amount of such drawback or bounty;

(v) Aircraft, equipment and machinery, spare parts, commissary and catering supplies, aviation gas, fuel and oil, whether crude or refined except when directly or indirectly used for domestic operations, and such other goods or suppliesimported by and for the use of scheduled airlines operating under congressional franchise: Provided, That such goods or supplies are not locally available in reasonable quantity, quality and price and are necessary or incidental to the proper operation of the scheduled airline importing the same;

(w) Machineries, equipment, tools for production, plans to convert mineral ores into saleable form, spare parts, supplies, materials, accessories, explosives, chemicals, andtransportation and communications facilities imported by and for the use of new mines and old mines which resume operations, when certified to as such by the Secretary of the Department of Environment and Natural Resources (DENR), upon the recommendation of the Director of Mines and Geosciences Bureau, for a period ending five (5) years from the first date of actual commercial production of saleable mineral products: Provided, That such goods are not locally available in reasonable quantity, quality and price and are necessary or incidental inthe proper operation of the mine; and aircrafts imported by agro-industrial companies to be used by them intheir agriculture andindustrial operations or activities, spare parts and accessories thereof, when certified to as such by the Secretary of the Department of Agriculture (DA) or the Secretary of the Department of Trade and Industry (DTl), asthe case may be;

(x) Spare parts of vessels or aircraft of foreign registry engaged in foreign trade when brought into the Philippines exclusively as replacements or for the emergency repair thereof, upon proof satisfactory to the District Collector that such spare parts shall be utilized to secure the safety, seaworthiness or airworthiness of the vessel or aircraft, to enable it to continue its voyage or flight;

(y) Goods exported from the Philippines for repair, processing or reconditioning without having been substantially advanced invalue, and subsequently reimported in its original form and inthe same state: Provided, That in case the reimported goods advanced in value, whether or not in their original state, the value added shall be subject to the applicable duty rate of the tariff heading of the reimported goods; and

(z) Trailer chassis when imported by shipping companies for their exclusive use in handling containerized cargo, upon posting a security in an amount equal to one hundred percent (100%) of the ascertained duties, taxes and other charges due thereon, to cover aperiod ofone (1) year from the date ofacceptance of the entry, which period, for meritorious reasons, may be extended by the Commissioner from year to year, subject to the following conditions:

(1) That they shall be properly identified and registered with the Land Transportation Office (LTO); ,

(2) That they shall be subject to customs supervision fee to be fixed by the District Collector and subject to the approval of the Commissioner;

(3) That they shall be deposited in the customs territory

when not in use; and

(4) That upon the expiration of the period prescribed above, duties and taxes shall be paid unless otherwise reexported.

(aa) Any officer or employee of the including any attache, civil or military or member of the staff assigned to a Philippine diplomatic mission abroad by the Department or any similar officer or employee of other departments assigned to any Philippine consular office abroad, or any AFP military personnel accorded assimilated diplomatic rank or on duty abroad who is returning from a regular assignment abroad, for reassignment to the home office, or who dies, resigns, or is retired from the service, after the approval of this Act, shall be exempt from the payment of allduties andtaxes on personal and household effects, including one (1) motor car which must have been ordered or purchased prior to the receipt by the mission or consulate of the order ofrecall, and which must be registered inthe name of the officer or employee: Provided, That this exemption shall apply only to the value of the motor car and to the aggregate assessed value of the personal andhousehold effects, the latter not to exceed thirtypercent (30%) of the total amount received by the officer or employee in salary and allowances during the latest assignment abroad, but not to exceed four (4) years: Provided, however, '.I'hat this exemption shall not be availed of more than once every four (4) years: Provided, further, That the officer or employee concerned must have served abroad for not less than two (2) years.

The provisions of general and speciallaws, to the contrary notwithstanding,including those granting franchises, there shall be no exemption whatsoever from the payment of duties except as provided for in this Act; those granted to government agencies, instrumentalities or government-owned or -controlled corporations (GOCCs) with existing contracts, commitments, agreements, or obligations with foreign countries requjring such exemption; those granted to international institutions, associations or organizations entitled to exemption pursuant to agreements or special laws; and those that may be granted by the President upon prior recommendation of the NEDA inthe interest of national economic development.

CHAPTER 2

CUSTOMS WAREHOUSES

SEC. 801. Establishment and Supervision of Customs Bonded Warehouses. -When the business of the port requires such facilities, the District Collector, subject to the approval of the Commissioner, shall designate and establish warehouses for use as public and private bonded warehouses, yards, or for other special purposes. All such warehouses and premises shall be subject to the supervision of the District Collector who shall impose such conditions as may be deemed necessary for the protection of the revenue, and of the goods stored therein. In the exercise of the District Collector's supervisory functions herein and in the Bureau's implementation of this chapter, existing contracts of private operators with appropriate government agency or regulator, such as, but not limited to, the Philippine Ports Authority (PPA), Subic Bay Metropolitan Authority (SBMA) and Phividec Industrial Authority (PIA) and their respective authorities and powers already granted bylaw pertinent to such contracts, shall not be impaired or adversely affected.

Goods manufactured in whole or in part of imported materials, and intended for exportation, may be made and manufactured in a bonded manufacturing warehouse subject to the following conditions:

(1) The manufacturer shall file sufficient security for the faithful observance of all laws, rules and regulations applicable thereto;

(2) The application for the establishment of bonded warehouses must be made in writing and filed with the customs officer, describing the premises, the location, and capacity of the same, and the purpose for which the building is to be used, pursuant to Section 804 of this Act;

(3) From the receipt of the application,.the customs officer shall examine the premises, evaluate its location, construction, and means provided for the safekeeping of the goods;

(4) The customs officer may authorize the establishment of the customs bonded warehouse, andaccept a bond for itsoperation and maintenance if the applicant was compliant with the prescribed 1•equirements; and

(5) The operator of the bonded warehlW.$\l shall pay an

annual supervision fee in an amount to be fixed by the

Commissioner.

SEC. 802. Types of Customs Bonded Warehouses (CBWs).

- Customs bonded warehouses may be classified as either manufacturing or nonmanufacturing.

Manufacturing customs bonded warehouse may be of the following types: (a) miscellaneous customs bonded warehouse; (b) customs common bonded warehouse; or (c) industry-specific bonded warehouse.

Nonmanufacturing customs bonded warehouse include: (a) public bonded warehouse; (b) private bonded warehouse; or (c) other customs facilities.

SEC. 803. Types of Customs Facilities and Warehouses (CFWs).- Customs facilities and warehouses shallinclude:

(a) Container yard;

(b) Container freight station;

(d) Airport warehouses.

Subject to consultation with the NEDA and the DTI, and based on prevailing economic circumstances, the Secretary of Finance may, upon the recommendation of the Commissioner, create or dissolve certain types of warehouses.

SEC. 804. Application for Operatio n of a Customs Warehouse. - Application for the establishment of CBW and CFW shall be filed with the District Collector where the CBW or CFW is located, describing the premises, location, capacity and purpose thereof.

Upon receipt of such application, the District Collector shall examine the premises of such proposed warehouse, particularly its location, construction and storage facilities. The District Collector, with the approval of the Commissioner, may authorize the establishment of customs warehouses, andaccept the required security for its operation and maintenance. The operator of such CBW and CFW shallpay an annual supervisionfee, asdetermined by the Commissioner.

SEC. 805. Responsibility of Operato,•s. - The operator of a CBW or CFW shallcomply with the customs requirements on establishment, security, suitability and management, including stock-keeping and accounting of the goods, of the CBW or CFW.

Upon lawful demand, the operator of a CBW or CFW shall allow authorized representatives of the Bureau access to the premises at a reasonable time, and to all documents, books and records of accounts pertaining to the operations of the CBW or CFW.

In case ofloss of the goods stored in a CBW or CFW due to operator's gross negligence or willful misconduct, the operator shall be liable for the payment of duties and taxes due thereof. The government assumes no legal responsibility over the safekeeping of goods stored in any customs warehouse, yard or premises.

SEC. 806. Customs Control Over CBWs and CFWs. - The Bureau shall, for customs purposes, exercise control over, direct and manage CBWs and CFWs pursuant to Section 303 of this Act and likewise over the goods thereat pursuant to Section 301 of this Act: Provided, That the Bureau shall not be liable for any loss or damage of the goods stored for safekeeping in any CBW, CFW, yard or premises.

SEC. 807. Discontinuance of CBW and CFW. - The use of any CBW and CFW may be discontinued by the District Collector when conditions sowarrant, or upon receipt of a written request from the operator thereof: Provided, That all the requirements of the laws and regulations have been complied with by said operator. Where dutiable goods are stored in such premises, the same must be removed at the risk and expense of the operator: Proviikd , however, That the premises shall not be relinquished, and its use shall ,pe discontinued until after a careful examination of the account of the warehouse shall have been made. Discontinuance of the use of any warehouse shall be effective upon approval thereof by the District Collector who shall, within ten (10) days, inform the Commissioner of such action in writing.

Notice of discontinuance made by the operator shall not result in the discharge from any duties, taxes, fees and other charges imposed on dutiable goods in saidwarehouse.

SEC. 808. Warehousing Security on Goods Stored in CBWs.-For goods declared inthe entry for warehousing in CBWs, the District Collector shallrequire the importer topost a sufficient security equivalent to the computed duties, taxes and other charges, conditioned upon the withdrawal of the goods within the period prescribed by Section 8ll of this Act or the payment of duties, taxes and other charges and compliance with all importation requirements.

SEC. 809. Withdrawal of Goodsfrom CBWs. - Imported goods shall be withdrawn from the CBWswhen the necessary withdrawal permit has been filed, together with any related document required by any provision of this Act and other regulations.

Goods entered under sufficient security as provided in Section 1507 of this Act may be withdrawn at any time for consumption, transit, or exportation. The withdrawal must be made by the CBW operator orits duly authorized representative.

SEC. 810. Release of Goods from CFWs.-Imported goods shall be released when the goods declaration is electronically lodged, together with any related document required by any provision of this Act andother regulations. All goods entered into the CFWs shall be subject to the filing of a goods declaration within the period specified under Section 407 of this Act.

SEC. 811. Period of Storage in CBWs. -Goods entered for warehousing may remain in a CBW for a maximtun period of one (1) year from the time of its arrival thereat. For perishable goods, the storage period shallbe three (3) months from the date of arrival, extendible for valid reasons, and upon written request, to another three (3) months. Goods not withdrawn after the expiration of the prescribed period shallbe deemed as abandoned, as provided under Section 1129 of this Act.

The Commissioner shall, in consultation with the Secretary of Trade and Industry, establish areasonable storage period limit beyond one (1) year forbonded goods for manufacturing and intended for export, the processing into finished products of which requires a longer period based on industry standard and practice, subject to the approval of the Secretary of Finance.

SEC. 812. Exemption from Duty of Goods in CBWs.-Goods duly entered for warehousing in CBWs shallbe exempt from duty and tax within the allowed period for storage unless withdrawn for consumption, exportation or transit to a free zone or another CBW, in which case, such withdrawal will be subject to the

applicable rules and regulations on the liquidation of the warehousing entry.

SEC. 813. Records to be Kept by CBW Operators. - An account shall be kept by the Bureau of all goods delivered to a CBW, and areport shallbe made by the CBW operator containing a detailed statement of allimported goods entered andwithdrawn from the CBW. The Bureau shall specify the format of the report and may require electronic submission.

All documents, books, and records of accounts concerning the operation of any CBW shall, upon demand, be made available to the District Collector or the representative of the District Collector for examination or audit. For record purposes, all documents shallbe kept for three (3) years.

CHAPTER S FREE ZONES

SEC. 814. When Goods are Admitted and Withdrawn.

Imported goods shallbe admitted into a free ZO!Je when the goods declaration, together with required documentsi as required by existing laws and regulations, are electronically lodged with the Bureau and other relevant government authorities atthe time of admission.

Imported goods shall be withdrawn from the free zone for entry to the customs territory when the goods declaration is electronically lodged, together with required documents at the time of the withdrawal from the free zone.

SEC. 815. Exemption from Duty and Taxof Goods inFree Zones. -Unless otherwise provided by law and in accordance with the respective laws, rules and regulations of the free zone authorities, goods admitted into afree zone shall not be subject to duty and tax.

SEC. 816. Movement of Goods into and from Free Zones.

- The entry of goods into afree zone, whether directly or through the customs territory, shall be covered by the necessary goods declaration for admission or transit. Withdrawal from the free zone into the customs territory shall be covered by the necessary goods declaration for consumption or warehousing.

Transfer of goods from one free zone into another free zone shalllikewise be covered by the necessary transit permit.

The implementing rules and regulations on the transit of goods admitted into, exported from, withdrawn into the customs territory, and moved between free zones shallbe formulated and issued jointly by the Bureau and the free zone authorities.

SEC. 817. Coordination WithFree Zone Authority. - To ensure compliance with customs laws and regulations, the Bureau shall coordinate with the governing authority of the free zone.

CHAPTER 4 STORES

(b) Goods necessary for the operation and maintenance of vessels, aircrafts, or trains including fuel and lubricants but excluding spare parts and equipment which are either on board

,. upon arrivalor are taken on board during the stayinthe customs territory of vessels, aircrafts, or trains used, or intended to be

used, in international traffic for the transport of persons for remuneration or for the industrial or commercial transport of goods, whether or not for remuneration.

SEC. 819. Stores to be Taken Away. - For purposes of this chapter, "stores to be taken away" means goods for sale to the passengers and the crew of vessels, aircrafts, or trains with a view to being landed, which are either on board upon an-ival or are taken on board during the stay in the customs territory of vessels, aircrafts, or trains used, or intended to be used, in international traffic for the transport of persons for remuneration or for the industrial or commercial transport of goods, whether or not for remuneration.

SEC. 820. Exemption from Duties and Taxes of Stores. - Customs treatment of stores should apply uniformly, regardless of the country ofregistration or ownership of vessels, aircraft, or trains. Stores which are carried in a vessel, aircraft, or train arriving in the customs territory shall be exempted from import duties and taxes provided that they remain on board. Stores for consumption by the passengers and the crew imported as provisions on international express vessels aircrafts, or trains shallbe exempted from import duties and taxes: Provided, That:

(a) Such goods are purchased only in the countries crossed by the international vessels and aircrafts in qu;stion; and

(b) Any duties and taxes chargeable on such goods inthe country where they were purchased are paid.

SEC. 818. Stores for Consumption. - Stores for "I

consumption shall include:

(a) Goods intended for use by the passengers and the crew on board vessels, aircrafts, or trains, whether or not sold; and

Stores necessary for the operation and maintenance

of vessels, aircrafts, or trains which are on board these means of transport shall be exempted from import duties and taxes: Provided, fu,-ther, That they remain on board while these means of transport are in the customs territory. The Bureau shall allow the issue of stores for use on board during the stay of a vessel

in the customs territory in such quantities as the customs authority deems reasonable with due regard to the number of the passengers andthe crew and to the length of the stay of the vessel in the customs territory. The Bureau should allow the issue of stores for use on board by the crew while the vessel isundergoing repairs in adock or shipyard: Provided, finally, That the duration of stay in a dock or shipyard is considered to be reasonable.

When an aircraft is to land at one or more airports in the customs territory, the Bureau should allow the issuance ofstores for consumption on board both during the stay of the aircraft at such intermediate airports and during its flight between such airports.

The Bureau shall require a carrier to take appropriate measures to prevent any unauthorized use of the storesincluding sealing of the stores, when necessary. It shall require the removal of stores from the vessel, aircraft, or trains for storage elsewhere during its stay in the customs territory only when the Bureau considers it necessary.

Vessels, aircrafts, or trains which depart for an ultimate foreign destination shall be entitled to take on board, exempted from duties and taxes, the following:

(1) Stoi-es in such quantities as the Bureau deems reasonable with due regard to the number of the passengers and the crew, to the length of the voyage or flight, and to anyquantity of such stores already on board; and

(2) Stores necessary for the operation and maintenance of a vessel, aircraft, or train, in such quantities as are deemed reasonable for operation and maintenance during the voyage or flight, after due regard of the quantity of such stores already on board.

Replenishment of stores that are exempted from duties and taxes shall be allowed for vessels, aircrafts, or trains which have arrived in the customs territory, and which need to replenish their stores for thejourney to their final destination in the customs territory, subject to the same conditions provided in this Chapter.

; SEC. 821. Goods Declaration for Stores. - When a declaration concerning stores on board vessels arriving in the customs territory is required by the Bureau, the information required shallbe kept to the minimum and as may be necessary for customs control.

The quantities of storeswhich aresupplied to vessels during its stayinthe customs territory should be recorded on the required goods declaration concerning stores.

The Bureau shall not require the presentation of aseparate declaration of remaining stores on board a vessel, an aircraft or a train. No sepamte declaration concerning stores should be required upon departure of vessels from the customs territory. When a declaration is required concerning stores taken on board the vessels or aircrafts upon departure from the customs territory, the information required shall be kept to the minimum as may be necessary for customs control.

When a vessel, aircraft, or train arrives in the customs

territory, stores on board shall:

(a) Be cleared for consumption or placed under another customs procedure, subject to compliance with the conditions and formalities applicable in each case; or

(b) Subject to prior authorization by• the Bureau, be transferred respectively to another vessel, aircraft, or train assigned to aninternational route.

TITLE IX

DUTY DRAWBACK AND REFUND CHAPTER l

DUTY DRAWBACK

quantity, value, and amount of duties paid thereon, should be established satisfactorily;

(2) The duties refunded or credited shall not exceed one hundred percent (100%) of duties paid on the imported materials used;

SEC. 900. Basis of Duty Drawback. - (A) On Fuel Used for Propulsion of Vessels. - On all fuel imported into the Philippines used for propulsion of vessels engaged in trade with foreign countries, or in the coastwise trade, a refund or tax credit shallbe allowed not exceeding ninety-nine percent (99%) of the dutyimposed by lawupon suchfuel, which shallbepaid or credited under such rules and regulations as may be prescribed by the Commissioner with the approval of the Secretary of Finance.

(B) On Petroleum Oils and Oils Obtained from Bituminous Minerals, Crude, Eventually Used for Generation of Electric Power and for the Manufacture of City Gas. - On petroleum oils and oils obtained from bituminous materials, crude oilimported by nonelectric utilities, sold directly or indirectly, in the same form or after pmcessing, to electricutilities for the generation of electric power and for the manufacture of city gas, a refund or tax credit shallbe allowed not exceeding fifty percent (50%) of the dutyimposed by lawupon suchoils, which shallbe paid or credited under such rules and regulations as may be prescribed by the Commissioner with the approval of the Secretary of Finance.

(C) On Goods Made from Imported Materials. - Upon expo1tation of goods manufactured or produced in the Philippines, including the packing, covering, putting up, marking orlabeling thereof either in whole or.in part of the imported materials for which duties have been paid, arefund or tax credit shallbe allowed for the duties paid on the imported materials so used including the packing, covering, putting up, marking or labeling thereof, subject to the following conditions:

(1) The actual use of the imported materials in the production or manufacture of the goods exported with their

(3) There is no determination by the NEDA of the requirement for certification on nonavailability oflocally-produced or manufactured competitive substitutes for the imported materials used at the time of importation;

(4) The exportation shallbe made within one (1) year after the importation of materials used and claim of refund or tax credit shallbe filed within six (6) months from the date of exportation; and

(5) When two or more products result from the use of the same imported materials, an apportionment shall be made on its equitable basis.

SEC. 901. Payment of Drawback s. -Eligible claims for refund or tax credit shall be paid or granted by the Bureau to claimants within sixty (60) days after receipt of properly accomplished claims: Provided, That a registered enterprise under Republic Act No. 5186, otherwise known asthe "Investment Incentives Act", or Republic Act No. 6135, otherwise known as the "Export Incentives Act of 1970", which has previously enjoyed tax credits based oncustoms duties paid onimpo1ted raw materials and supplies, shall not be entitled to adrawback 1jllder this section with respect to the sameimportation subsequently processed and reexported.

The Secretary of Finance may, upon the recommendation of the Commissioner, promulgate rules and ations allowing partial payments of drawbacks pursuant to this section.

SEC. 902. Prescription of Drawback Claim. - A claim and application for a drawback shall prescribe if it is not filed

,vithin one (1) year from the date of importation in case of Section 900, paragraphs (A) and (B) and within one (1) year from the date of exportation in the case of Section 900, paragraph (C), subject to such rules and regulations as may be issued by the Commissioner, upon approval of the Secretary of Finance.

CHAPTER 2

REFUND AND ABATEMENT

SEC. 903. Refund of Duties and Taxes. -Refund shallbe granted where it is established that duties and taxes have been overcharged as a result of an error in the assessment or goods declaration.

Where permission is given by the Bureau for goods originally declared for a customs procedure with payment of duties and taxes to be placed under another customs procedure, a refund shall be made of any duties and taxes charged in excess of the amount due under the new procedure, subject to such regulation issued for the purpose.

A refund shall not be granted if the amount of duties and taxes involved is less than five thousand pesos (P5,000.00): Provided, That the Secretary of Finance, in consultation with the Commissioner, may adjust the minimum amount specified in this Act, taking into account the CPI as published by the PSA.

SEC. 904. Aba.tement of Duties and Ta.x:es. - When goods have not yet been released for consumption or have been placed under another customs procedure, provided that no other offense or violation has been committed, the declarant shall neither be required to pay the duties and taxes nor be entitled to refund thereof in any of the following cases:

(a) When, at the request of the declarant, the goods are abandoned, or as determined by the Bureau, the goods are destroyed or rendered commercially valueless while under customs control. Any cost herein incurred shallbe borne by the declarant;

• (b) When goos are destroyed or irrecoverably lost by accident or force ma1eure} the remaining waste or scrap after desruction, iftaken into consumption, shall be subject to the duties and taxes that would be applicable on suchwaste or scrap

J if imported in same state; and,

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

SEC. 905. Abatement for Damage Incurred During Voyage.

- Except asotherwise provided, no abatement of duties shall be made on account of damage incurred or deterioration suffered during the voyage of importation; and duties will be assessed on

the actual quantity imported asdetermined by the customs officers concerned.

SEC. 906. Abatement or Refund of Duty on Missing Package. - When any package appearing on the manifest or bill oflading or airway bill ismissing, an abatement or refund of the duty shabe made ifit is certified by the importer or consignee, under !'.'.am of penalty for falsification or perjury, and upon production of proof satisfactory to the Collector concerned, that

the package in question has not been unlawfully imported into the Philippines.

SEC. 907. Abatement or Refund for Deficiency in Contents of Packages. - If, upon opening of any package, a deficiency in the quantity of the goods isfound to exist based upon the invoice such deficiency shall be certified, under pain of penalty fo; falsification or perjury, by the customs officers concerned and upon the production of proof showing that the shortage occurred before the arrival of the goods in the Philippines. Upon sufficient proof thereof, the proper abatement or refund of the duty shall be made.

SEC. 908. Abatement or Refund of Dtt.hes on Goods Lost or Destroyed After Arrival. -The Bureau may abate or refund the amount of duties accruing or paid on any goods that have been lost due to injury, theft, destruction through fire or through any other causes, upon satisfactory proofof the same, under any of the following circumstances:

(a) While within the territory of any port of entry, prior to unloading under the Bureau's supervision;

(b) While remaining in customs custody after unloading;

(d) While released under sufficient security for export except in case ofloss by theft.

SEC. 909. Abatement and Refund of Defective Goods.

- Under conditions to be set by the Commissioner, and with the approval of the Secretary of Finance, an abatement and refund shall be granted onimported or exported goods which are found defective or otherwise not in accordance with the agreed specifications at the time of importation or exportation and are returned either to the supplier or to another person designated by the supplier, subject to the following conditions:

(a) The goods have not been worked, repaired, or used in the country of importation, and are ree:i-1.. )ortedwithin areasonable time; and

(b) The goods have not been worked, repaired, or used in the country to which they were exported, and are reimported within a reasonable time.

Use of the goods shall, however, not hinder the refund if such use was indispensable to discover the defects or other circumstances which caused the reexportation or reimportation of the goods.

As an alternative to reexportation or reimportation, the goods may be expressly abandoned or destroyed or rendered commercially valueless under customs control asthe Bureau may decide. In such case, the importer shall not be entitled to an abatement or a refund if it does not defray the costs of such abandonment, destruction, or rendition.

SEC. 910. Abatement of Duty on Dead orinjured Animals.

- Where it is certified, under pain of penalty for falsification or perjury, and upon production of proof satisfactory to the Bureau that an animal subject ofimportation dies or suffersinjury before arrival, or while in customs custody, the duty due thereon shall be abated provided that its carcass on board orin customs custody is removed in the manner required by the Bureau and at the expense of the importer.

SEC. 911. Investigation Required in Ca.se of Abatements and Re/und,s. - The Customs Officer concerned shall, in all cases of abatement or refund of duties, submit an examination report as to any fact discovered which indicates any discrepancy and cause the corresponding adjustment on the goods declaration.

SEC. 912. Refund Arising from Correction of Errors.

- Manifest clerical errors made on an invoice or entry, errors in return of weight, measure and gauge, when duly certified under penalties offalsification or perjury by the surveyor or examining officer when there are such officers at the port, and errors in the distribution of charges on invoices not involving any question of law and certified under penalties of falsification or perjury by the examining customs officer, may be corrected in the computation of duties, if such errors are discovered before the payments of duties, or if discovered within one (1) year after release from customs custody of imported goods upon written request and notice of error from the importer, or upon statement of error certified by the District Collector.

For the purpose of correcting errors specified in the next preceding paragraph, the Bureau is authorized to make refunds within the statutory time limit.

SEC. 913. Claimsfor Refund. -All claims and application for refund of duties and taxes shall be made Jwriting and filed with the Bureau within twelve (12) months from the date of payment of duties and taxes.

I±: as a result of the refund of duties, a corresponding refund of internal revenue taxes on the same importation becomes due, the Bureau shall cause the refund of internal revenue taxes in favor of the importer after issuance of a certification from the Commissioner of Internal Revenue, when applicable.

The importer may file an appeal of a denial of a claim for refund or abatement, whether it isa full or partial denial, with the Commissioner within thirty (30) days from the date of the receipt of the denial. The Commissioner shall render a decision within thirty (30) days from the receipt of all the necessary documents supporting the application. Within thirty (30) days from receipt of the decision of the Commissioner, the case may also be appealed to the CTA

Notwithstanding the provisions in the preceding paragraphs, the filing of claims for refund of national internal revenue taxes shallbe governed by theprovisionsprovided under the NIRC of 1997, as amended.

TITLE X

POST CLEARANCE AUDIT

SEC. 1000. Audit and Examination of Records. - Within three (3) years from the date of final payment ofduties andtaxes or customs clearance, asthe casemay be, the Bureau may conduct anaudit examination, inspection, verification, and investigation of records pertaining to any goods declaration, which shallinclude statements, declarations, documents, andelectronically generated or machine readable data, for the purpose of ascertaining the correctness of the goods declaration and determining the liability of theimporter for duties, taxes and other charges, including any fine or penalty, to ensure compliance with this Act.

SEC. 1001. Scope of the Audit. -The audit of importers shall be conducted when firms are selected by a computer-aided risk management system, theparameters of which are tobebased . on objective and quantifiable data, subject to the approval • of the Secretary of Finance upon recommendation of the Commissioner. The criteria for selecting firms to be audited shallinclude:

(a) Relative magnitude of customs revenue tobe generated from the firm;

(b) The rates of duties of the firm'simports;

(d) Anassessment of therisk to revenue of the firm'simport activities.

SEC.'1002. Access to Records. - Any authorized officer ofthe Bureau shallbe given by theimporter and customs broker full and free access to the premises where the records are kept, to conduct audit examination, inspection, verification, and investigation of those records relevant to such investigation or inquiry.

A copy of any document certified by or on behalf of the importer is admissiblein evidence in all courts asif it were the originalcopy.

Acustoms officer isnot entitled to enter the premises under this section unless, before so doing, the officer produces to the person occupying or apparently incharge of the premises wii.tten evidence of the fact of being duly authorized. Theperson occupying or apparently incharge of the premises entered by anofficer shall provide the officer withallreasonable facilities and assistance for the effective exercise of theofficer's authority under this section.

Unless otherwise provided herein or in other provisions of law, the Bureau may, in case of disobedience, invoke the aid of theproper regional trialcourt within whose jurisdiction the matter falls. The court may punish contumacy or refusal ascontempt. In addition, the fact that the importer or cs broker dees the authorized customs officer fulland free access to importation records during the conduct of a post clearance audit shall create a presumption of inaccuracy inthe transaction value declared for their imported goods and constitute grounds for the Bureau to conduct areassessment of such goods.

In addition, the imposition of the appropriate criminal sanctions provided under this Act and other administrative sanctions may be concurrently invoked against contumacious importers, including the suspension of the delivery or release of their imported goods.

SEC. 1003. Requirement to Keep Record s. - (a) All importers are required tokeep attheir principal place of business, in the manner prescribed by regulations to be issued by the Commissioner and for aperiod of three (3) years from the date of final payment of duties and truces or customs clearance, as the case may be, all records pertaining to the ordinary course of business andto anyactivity or information contained in therecords required by this title in connection with any such activity.

For purposes of the post clearance audit and Section 1005 of this Act, the term importer shallinclude the following:

(1) Importer-of-record orconsignee, owner or declarant, or a party who:

(i) Imports goods into the Philippines or •withdraws such goods into the Philippine customs territory for consumption or warehousing; files a claim for refund or drawback; or transports or storessuch goods carried orheld under security; or

(ii) Knowingly causes theimportation or transportation or storage ofimported goods referred to above, or thefiling ofrefund or drawback claim.

(2) .Anagent of any party described in paragraph (1);or

(3) A person whose activities require the filing of a goods declaration.

A person orderingimported goods from a local importer or supplier ina domestic transaction shallbe exempted from the requirements imposed by this section unless:

(1) The terms and conditions of the importation are controlled by the person placing the order; or

(2) The circumstances and nature of the relationship between the person placingthe order and theimporter or supplier are such that the former may be considered as the beneficial or true owner of the imported goods; or

(3) Theperson placing the order had prior knowledge that they will be used inthe manufacture orproduction of the imported goods.

(b) Allpartiesengaged incustoms clearance andprocessing are required to keep at their principal place of business, in the manner prescribed by regulations to be issued by the Commissioner andfor aperiod of three (3) years from the date of filing ofthe goods declaration, copies of the abovementioned records covering the transactions handled.

(c) Locators orpersons authorized tobring imported goods into free zones, such asthe specialeconomic zones andfree ports, are required to keep subject-records of allits activities, including inwhole or in p, records on imported goods withdrawn from said zones into the customs territory for aperiod of three (3) years from the date of filing of the goods declaration.

Failure to keep the records required by this Act shall constitute a waiver of this 1"ight to contest the results of the audit based onrecords kept by the Bureau.

SEC. 1004. Power of the Commissioner to Obtain Information and Issue Summons. - For the effective implementation of the post clearance audit functions of the Bureau, the Commissioner ishereby authorizd to:

(a) Obtain on aregular basis from any person, in addition to the person who is the subject of a post clearance audit or investigation, or from any office or officer of the national and local governments, government agencies and instrumentalities, including the BSP and GOCCs, any information such as costs and volume of production, receipts or sales and gross income of taxpayers, and the names, addresses, and financial statements of corporations, regional operating headquarters of multinational companies,joint accounts, associations, joint ventures or consortia andregistered partnerships, and their members, whose business operations or activities are cfu:ectly or indirectly involved inthe impo1•tation or exportation of imported goods or products manufactured from imported component materials;

(b) Summon the person liable for duties and taxes or required to file goods declaration, or any officer or employee of such person, or any person having possession, custody, or care of the books of accounts and other accounting records containing entries relating to the business of the person liable for duties and taxes, or any other person, to appear before the Commissioner or the duly authorized representative at a time and place specified in the summons and to produce such books, papers, records, or other data, and to give testimony;

(d) Obtain information from banks or other financial institutions on commercial documents and records pertaining specifically to payments relevant to import transaction.

Theprovisions of thefo1•egoing paragraphs notwithstanding, nothing in this section shall be construed as granting the Commissioner the authority to inquire into bank deposits of persons or entities mentioned inthis Title.

SEC.1005. Failure to Pay Correct Duties and Taxes on Imported Goods. -Anyperson who, after being subjected to post clearance audit and examination asprovided in Section 1000 of this Act, isfound tohave incun-ed deficiencies induties and taxes paid for imported goods, shallbe penalized according to two (2): degrees of culpability subject to any mitigating, aggravating, or extraordinary factors that are clearly established by available evidence as described hereunder:

(a) Negligence. - When a deficiency results from an offender's failure, through an act or acts of omission or comssion, to exercise reasonable care and competence in ensurmg that a statement made is correct, the offender shall be charg?d for committing negligence, and, if found guilty shall be penalized with a fine equivalent to one hundred twenty-five perc?nt (125%) of the revenue loss: Provided, That subject to Sectrn 108 of this Act, no substantial penalty shall be imposed on anmadvertent error amounting tosimple negligence, asdefined by rules proulgated by the Secretary of Finance, upon recommendation of the Commissioner

(b) Fraud. -When the material false statement or act in connection with the transaction was committed or omitted knowing! , vluntay and intentionally, asestablished by clear and c?n:71ncmg ev1dnce, the offender who is charged for cmnntting fraud and lS found guilty thereof, shallbe penalized 1th fine equivalent to six (6) times of the revenue loss and/or prrsonment of not less than two (2) years, but not more than

eight (8) years.

. The desion of the Commissioner, upon proper hearing, to impose penalties asprescribed in this sectionmay be appealed in accordance with Section 1104of this Act.

SEC. 1006. Record s to be Kept by the Bureau. - The Bu:eau sha keep a database of importer and broker profiles which shall mclude a record of audit results and the following mformation andpapers:

(a) Articles of Incorporation;

. . (b) Te company structure, which shall include, but not limited to, mcorporators and board of directors key officers and organizational structure; '

(d) Privileges enjoyed;

(e) Penalties;and

(f) Risk categories.

When the valuation method of goods not subject of an application for advance valuation ruling or the declared customs value is in dispute, the matter shall be resolved in accordance

l with Section 1106of this Act on "protest".

The Bureau shall furnish the BIR and the DOF a copy of the final audit resultswithln thirty (30) days from the issuance I thereof.

TITLEXI

ADMINISTRATIVE AND JUDICIAL PROCEDURES i

CHAPTER 1

ADVANCE RULING AND DISPUTE SETI'LEMENT

SEC. 1100. Classification Ruling. - An importer or exporter may file a w1-itten application for an advance ruling on the tariff classification of goods with the Commission. The Commission sl1allrender a ruling within thirty (30) days from receipt of a properly documented application.

When adeclared tariff classification of goods, not subject of a pending application for advance ruling, is in dispute, the importer, exporter, or the Bureau shall submit the matter to the Commission for a ruling, without prejudice to the application of Section 1106 of this Act on "protest":Provided, That suchrulings of the Commission on commodity classification shallbe binding upon the Bureau, unless the Secretary of Finance shall rule otherwise.

SEC.1101. Valuation Ruling. - An importer or exporter may file a written application for anadvance valuation ruling on the proper application of aspecific method on customs valuation of specific goods asp1-escribed in Title VII, Chapter 1of this Act..

The application for a valuation ruling shallbe filed with the Commissioner who shall issue a ruling within thirty (30) days from submission of the application form and supporting documents asmay be required by rules and regulations.

SEC. 1102. Ruling on the Rules of Origin. - Animporter or exporter may file awritten application for aruling onwhether the goods qualify as originating under the rules of origin of the applicable preferential trade agreement. The application for an advance ruling on origin shall be filed with the Commissioner who.shall !let on the application within thirty (30) days from rept of the application and supporting documents as may be reqwred by rules and regulations.

When the declared origin of the gocids, not subject of a request for advance ruling on origin, is in dispute, the matter shallbe resolved in accordance with Section 1106 of this Act on "protest".

SEc.11 3. Conditions for Application and Effect of Advance Ruling. -An application for an advance ruling shall coer only one (1) product or item. The applicay.on for advance rulingshallbe filed atleast ninety (90) days before the importation or exportation of the product or item, as the case may be.

. SEC. 1104. Administrative and Judicial Appeals. - An aggneved party may, within thirty (30) days from receipt of an adverse ruling or decision, appeal the same to the CTA without prejudice to the authority of the Secretary of Finance to review decisions adverse to the government in accordanc with Sections 1127 and 1128 of this Act, asthe case may be.

SEC. 1105. Implementing Rules and Regulations. - The Secretary of Finance, upon the recommendation of the Bureau nd the Commission, shallpromulgate rules atidtregulations to implement the preceding provisions on advance ruling.

CHAPTER 2

PROTEST

SEC. 1106. Protest. -When a ruling or decision of the District Collector or customs officer involving goods withvaluation, rules of origin, andother customs issues ismade, except the fix. :i.ng of fines in seizure cases, the party adversely affected may appeal by way of protest against suchruling or decision by pl'esenting to the Commissioner atthe time when payment ofthe amount claimed to be due the government is made, or within fifteen (15) days thereafter, a written protest setting forth the objection to the ruling or decision in question and the reasons therefol'e.

Subject to the approval of the Secretary of Finance, the Commissioner shall provide such rules and regulations asto the requirement for payment or nonpayment of the disputed amount and in case of nonpayment, the release of the importation under protest upon posting of sufficient security.

SEC. 1107. Protest Exclusive Remed y in Protestable Case. -In all cases subject to protest, the interested party who desires tohave the action of the District Collector reviewed, shall file a protest as provided in Section 1106 of this Act, otherwise the action of the District Collector shallbe final and conclusive.

SEC. 1108. Form and Scope of Protest. -A protest shall be filed in accordance with the prescribed rules and regulations promulgated under this section. It shall specify the particular decision or ruling of the District Collector for which protest is being made, and shall indicate the pal'ticular ground or grounds upon which the protesting party bases the claim for relief. The scope of aprotest shallbe limited to the particular goods subject of a goods declaration, but any number ofissues may be raised in a protest with reference to the goods declaration constituting the subject matter of the protest.

SEC. 1109. Samples to be Furnished by Protesting Parties. - If the natme of the goods permit, importers filing protests involving questions of fact must, upon demand, present to the Commissioner samples of the goods which are the subject matter of the protest. The samples of the goods shall be verified by the customs officer who made the classification against which the protests are filed.

SEC. 1110. Decision in Protest. -When aprotest is filed in proper form, the Commissioner shall render a decision within tlmty (30) days from receipt of the protest. In case the protest is sustained, in whole or inpart, the appropriate order shall be made, and the entry reassessed, if necessary.

CHAPTER S

ALERT ORDERS

SEC. 1111. Alert Orders. - Alert orders ru:ewritten orders issued by customs officel's as authorized by the Commissioner on the basis of derogatory information regarding possible noncompliance with this Act. An alert order will result inthe suspension of the processing of the goods declaration and the conduct of physical or nonintrusive inspection of the goods within forty-eight (48) hours from issuance of tlre order. Within forty-eight (48) hours or, in the case of perishable goods, within twenty-four (24) hours from inspection, the alerting officer shall recommend the continuance of processing of goods in case of a negative finding, or issuance of a warrant of seizure and detention if a discrepancy between the declaration andactual goods isfound. The Bmeau's information system shallimmediately reflect the imposition or lifting of an alert order.

Derogatory information shall indicate the violations and other necessary specifics thereof. For this purpose, the following shall not be considered derogatory information:

(a) General allegati.ons of lmdervaluatie'"1

(b) General allegations of misclassification without providing the appropriate tariff heading and duty of the shipment to be alerted;

(d) General allegations of misdeclaration in the entry without indicating the suspected actual contents thereof; and

(e) General allegations of importations contrary to law without indicating the specific law or rule to be violated.

No alert order shall be issued on account of allegations of undervaluation unless said undervaluation is caused by the submission to customs of forged or spurious invoice or other commercial documents.

An alert order may be issued only after lodgement of the goods declaration and prior to the release of goods from customs custody. Under no circumstances shall the suspension of the processing of goods declaration be allowed except through analert order issued by anauthorized customs officer.

The costs of the physical inspection shallbe borne by the Bureau: Provided , That such cost shall be reimbursed by the owner prior to the release of the goods ifthe physical inspection results in the assessment of additional duties or taxes or the issuance of a warrant of seizure.

The Commissioner shallbe notified of the recommendation by the alerting officer witlri.n twenty-four (24) hours from the i8Suance of the alert order. Alert orders shallbe dated and assigned a unique reference number in series which shall be the basis for reporting to and monitoring by the Commissioner and the Secretary of Finance.

The Bureau shall create a central clearing house for alert orders and shall submit reports quarterly on the status thereof.

SEC. 1112. Alert Orders on Perishable Goods. - When the subject of the alert order are perishable goods, the Bureau shall attachto the recommendation acertificate stating that the goods are perishable.

CHAPTER 4

SEIZURE AND FORFEITURE

SEC. 1113. Property Subject to Seizure and Forfeiture. -

Property that shall be subject to seizure and forfeiture include:

(a) Any vehicle, vessel or aircraft, including cargo, which shall be used unlawfullyinthe importation or exportation ofgoods or in conveying or transporting smuggled goods in commercial quantities into or from any Philippine port or place. The mere carrying or holding on board of smuggled goods in commercial quantities shall subject suchvehicle, vessel, aircraft, or any other craft to forfeiture: Provided, That the vehicle, vessel, aircraft or any other craft is not used as a common carrier which has been chartered or leased for purposes of conveying or transporting persons or cargo;

(b) Any vessel engaging in the coastwise trade which shall have on board goods of foreign growth, produce, or manufacture in excess of the amount necessary for sea stores, without such goods having been properly entered or legally imorted;

(c) Any vessel or aircraft into which shall be transferred cargo unloaded contrary to law prior to the arrivalof the importing vessel or aircraft at the po1•t of destination;

(d) Any part of the cargo, stores, or supplies of avessel or aircraft arriving from a foreign port which is unloaded before arrival at the vessel's or aircraft's port of destination and without authority from the customs officer; but such cargo, ship, or aircraft stores and supplies shall not be forfeited ifsuch unloading was due to accident, stress of weather, or other necessity and is subsequently approved by the District Collector

(e) Goods which are fraudulently concealed in or removed contrary to law from any public or private warehouse, container yard, or container freight station under customs supervision;

(f) Goods, the importation or exportation of which are effected or attempted contrary to law, or any goods of prohibited importation or exportation, and all other goods which, in the opinion of the District Collector, have been used, are or were entered to be used as instruments in the importation or the exportation of the former;

(g) Unmanifested goods found on any vessel or aircraft if manifest therefor isrequired;

(h) Sea stores or aircraft stores adjudged by the District Collector to be excessive, when the duties and taxes assessed by the District Collector thereon are not paid or secured forthwith upon assessment of the same;

(i) Any package of imported goods which is found upon examination to contain goods not specified in the invoice or goods declaration including allother packages purportedly containing imported goods similar to those declared in the invoice or goods declaxation tobe the contents of the misdeclared package;

6) Boxes, cases, t1•unJ,;s, envelopes, and other containers of whatever character used as receptacle or as device to conceal goods which are subject to forfeiture under this Act or which are so designed asto conceal the character of such goods;

(k) Any conveyance actually used for the transport of goods subject to forfeitureunder thisAct, with itsequipage or trappings, and any vehicle similarly used, together with itsequipment and appurtenances. The mere conveyance of smuggled goods by such transport vehicle shallbe sufficient causefor the outright seizure and confiscation of such transport vehicle but the forfeittu•e shall not be effected ifit is established that the owner of the means of conveyance used as aforesaid, is engaged as common carrier and not chartered or leased, or that the agent in charge thereof at the time, has no knowledge of the unlawful act; and

(l) Goods sought to be imported or exported:

(1) Without going through a customs office, whether the act was consummated, frustrated, or attempted;

(2) Found in the baggage of aperson arriving from abroad and undeclared by such person;

(3) Through a false declaration or affidavit executed by the owner, importer, exporter, or consignee concerning the importation of such goods;

(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 goods; or

(5) Through any other practice or device contrary to law by means of which such goods entered through a customs office to the prejudice of the government.

SEC.1114. Properties not Subject to Forfeiture in the Absence of Prima Facie Evidence. - The forfeiture of the vehicle, vessel, or aircraft shallnot be effected ifit isestablished that the owner thereof or the agent in charge of the meads of conveyance used as aforesaid has no knowledge of or participation in the unlawful act: Provided, That a prima facie presumption shall exist against the vehicle, vessel, or aircraft under any of the following circumstances:

(a) Ifthe conveyance has been used for smuggling before;

(b) If the owner is not in the business for which the conveyance is generally used; and

SEC.1115. Conditions Affecting Forfeiture of Goods.

The forfeiture shallbe effected only when and while the goods are in the custody or within the jurisdiction of customs officers, or in the possession or custody of or subject to the control of the importer, exporter, original owner, consignee, agent of another person effecting the :importation, entry orexportation :inquestion, or :inthe possession orcustody of or subject to the control of persons who shallreceive, conceal, buy, sell, or transport the same, or aid in any of such acts, with knowledge that the goods were imported, or were the subject of an attempt at importation or exportation contrary to law.

SEC. 1116. Seizure or Release of Goods. - The District Collector shall issue an order ofrelease or a warrant of seizure within five (5) days, or two (2) days in case of perishable goods, upon the recommendation of the alerting officer or any other customs officer. The District Collector shallimmediately make a report of such seizure or release to the Commissioner.

SEC. 1117. Warrant of Seizure or Order of Release. -The District Collector shall have the authority to issue a warrant of seizure of the goods upon determination of the existence ofprobable cause and in case of nonexistence thereof, the issuance of order of release. In case the District Collector issued an order ofrelease, the District Collector shallimmediately transmit all the records to the Commissioner who shall automatically review within forty-eight (48) hours, or within twenty-four (24) hours in case of perishable goods. When no decision is made by the Commissioner within the prescribed period, the imported goods shallbe deemed released.

The lifting of the alert order shall be issued by the District Collector only upon the affirmation of the decision of the District Collector by the Commissioner, or after the lapse of the period of review by the Commissioner, whichever is earlier.

SEC. 1118. Sale of Perishable Goods During Forfeiture Proceedings. -Upon motion of the importer of the perishable goods, the goods may be soldat apublic auction during thependency of the fmfeiture proceedings. The proceeds ofthe auction shallbe held in escrow until the final resolution of the proceedings.

SEC. 1119. Service of Warrant of Seizure. - The District Collector shall cause the service of warrant of seizure to the owner or importer of the goods or the authorized representative thereof. The owner or importer shall be given an opportunity to be heard during the forfeiture proceedings.

For the purpose of serving the warrant, the importer, consignee, or person holding the bill oflading or airway bill shall be deemed the "owner" of the goods. For the same purpose, "authorized representative" shall include any agent of the owner and if the owner or the agent is unknown, any person having possession of the goods at the time of the seizure.

Service of warrant to an unknown owner shall be effected by posting the warrant for fifteen (15) days in a public place at the concerned district, and by electronic or printed publication.

SEC. 1120. Description, Classification and Valuation of Seized Goods. - The District Collector shallcause the preparation of a list and paiticular description, classification, and valuation of the goods seized and valuation of identical or similar goods.

SEC. 1121. Proceedings in Case of Property Belonging to Unhnown Parties. - If,within fifteen (15) days after service of warrant, no owner or agent can be found or appears before the District Collector, the seized goods shall be forfeited ipso facto in favor of the government to be disposed ofin accordance with this Act.

SEC. 1122. Seizure of Vessel or Aircraft for Delinquency of Owner or Officer. - When the owner, agent, master, pilot in command or other responsible officer of any vessel or aircraft becomes liable for any violation of this Act, the vessel or aircraft may be seized and be subjected to forfeiture proceedings for the settlement of any fine or penalty for which such person is liable. In determining whether or not to seize a vessel or aircraft, the Bureau shall take into account the amount of fine or penalty in relation to the commercial impact that lf be caused to international trade by the seizure or detention as well as the value of the vessel or aircraft.

SEC. 1123. Burden of Proof in Forfeiture Proceedings. - In all proceedings forthe forfeiture of any vehicle, vessel, aircraft, or goods under this Act, the bmden of proof shall be borne by the claimant.

SEC. 1124. Settlement of Pend ing Seizure Case by Payment of Fine or Redemption of Forfeited Goods. - Subject to the approval of the Commissioner, the District Collector may allow the settlement by payment of fine or the redemption of forfeited goods, during the course of the forfeiture proceeding. However, the Commissioner may accept the settlement by redemption of any forfeiture case on appeal. No settlement by payment offine shallbe allowed when there is fraud or when the discrepancy in duties and taxes to be paid between what is determined and what is declared amounts to more than thfrty percent (30%).

In case of settlement by payment of fine, the owner, importer, exporter, or consignee or agent shall offer to pay afine equivalent to thirty percent (30%) of the landed cost of the seized goods. In case of settlement by redemption, the owner, importer, exporter, or consignee or agent shall offer to pay the redeemed value equivalent to one hundred percent (100%) of the landed cost.

Upon payment ofthe fine or payment of the redeemed value, the goods shallbe released and allliabilities which may attach to the goods shall be discharged without prejudice to the filing of administrative or criminal case.

Settlement of any seizure case by payment of the fine or redemption of forfeited goods shall not be allowed when there is fraud, or where the importation isprohibited or the release of the goods is contrary to law.

SEC. 1125. Decision in Forfeiture Cases. - In forfeiture cases, the District Collector shallissue anorder for hearing within fifteen (15) days, or five (5) days incase of perishable goods, from issuance of the warrant. The District Collector shall render a decision within trurty (30) days upon termination of the hearing, or within ten (10) daysin case of perishable goods. The decision shallinclude adeclaration of forfeiture, the imposition of afine or such other action asmay be proper.

CHAPTER 5

APPEAL IN PROTEST AND FORFEITURE CASES

SEC. 1126. Appeal to the Commissioner. - In forfeiture cases, the person aggrieved by the decision of a District Collector may, within fifteen (15) days or five (5) days incase of perishable goods, from receipt of the decision, file awritten notice of appeal, together with the required appeal fee to the District Collector furnishing a copy to the Commissioner. The District Collecto; shallimmditely transmit allthe records of the proceedings to te om1:11ss1oner, who shall review and decide on the appeal wit thirty (30) days from receipt of the records, orfifteen (15) days m the case of perishable goods: Provided, That if within thirty (30) days, no decision isrendered, the decision of the District Collector under appeal shallbe deemed affirmed. An appeal filed beyond the period herein prescribed shall be dismissed.

Appeals to protest cases shallbe governed by Section 114 of this Act.

The ecision of the Commissioner may be served through the recogmzed modes of ser..vice under existing law.

SEC.1127. Automatic Review inForfeiture Cases. - The C?mz 1issioner shall automatically review any decision by the District Collector adverse to the government. The entire records of the case shall be elevated within five (5) days from the promulgation of the decision. The Commissioner shall decide on the atomatic review within thirty (30) days, or within ten (IO) daysm the case of perishable goods, from receipt of the records. When no decision isrendered within the prescribed period or when a decision adverse to the government is rendered by the Commissioner involving goods with FOB or FCA value of ten million pesos (PI0,000,000.00) or more,e records of the decision of the Commissioner, or of the District Collector under review, asthe case may be, shallbe automatically elevated within five (5) daysfor review by the Secretary of Finance. The decision issued by the Secretary of Finance, whether or not a decision was rendered by the Commissioner within thirty (30) days, or within ten (10) days in the case of perishable goods, from receipt of the records, shall be final upon the Bureau.

SEC. 1128. Automatic Review by the Secretary of Finance in Other Cases. - In cases not involving protest or forfeiture, the Commissioner shall automatically review any decision by the District Collector that is adverse to the government. The records of the case shall be elevated to the Commissioner within five (5) days from the promulgation of the decision. The Commissioner shall decide on the automatic review within thirty (30) days from receipt of the records, or within ten (10) days in the case of perishable goods. When no decision is rendered within the prescribed period or when any decision rendered by the Commissioner is adverse to the government, the records of the case under review shall be automatically elevated within five (5) days for thereview of the Secretary of Finance. Thedecision issued by the Secretary of Finance, whether or not adecision was rendered by the Commissioner within thirty (30) days from receipt of the records, or within ten (10) days in the case of perishable goods, shallbe final upon the Bureau.

CHAPTER 6

ABANDONMENT

SEC. 1129. Aband onment, Kind s and Ef fects of.

Imported goods are deemed abandoned under any of the following circumstances:

(a) When the owner, importer, orconsignee of the imported goods expressly signifies in writing to the District Collector the intention to abandon the same; or

(b) When the owner, importer, consignee, or interested party after due notice, fails to file the goods declaration \vithin the prescribed period in Section 407 of this Act: Provided , That the term goods declaration shallinclude provisional orincomplete goods declaration deemed valid by the Bureau as provided in Section 403 of this Act. For this purpose, it is the duty of the District Collector to post a list of all packages discharged and their consignees, whether electronically or physically in the District Office, or send a notice to the consignee within five (5} days from the date of discharge; or

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(c) Having filed such goods declaration the owner importer, consignee or interested party after due otice, fails t pay the assessed duties, taxes and other charges thereon, or, if the regulated goods failed to comply with Section 117 of this Act wit fifteen (15) days from the date of final assessment; Provided, That if such regulated goods are subject of an alert order and the assessed duties, taxes and other charges thereof are not paid within fifteen (15) days from notification by the

Bureau of the resolution of the alert order, the same shall also be deemed abandoned; or

(d) Having paid the assessed duties, taxes and other charges, the owner, importer or consignee or interested party after due notice, fails to claim the goods within thirty (30) days from payment. For this purpose, the arrastre or warehouse operator shall repoit the unclaimed goods to the District Collector for disposition pursuant to the provisions of this Act; or

(e) When the owner or importer fails to claim goods in customs bonded warehouses within the prescribed period.

. The due notice requirement under this section may be provided by the Bureau through electronic notice or personal service: Provided, That for non-regular importers, notification shall be by registered mail or personal service. For thispurpose the accreditation of importers, exporters, and other third partie shallinclude provision for mandatory receipt of electronic notices.

SEC. 1130. Treatment and Disposition of Abandoned Goods. - Expressly abandoned goods under paragraph (a) of Section 1129•of this Act shall ipso facto be deemed the property of the government and shall be disposed of in accordance with the provisions of this Act.

If the Bureau has not disposed of the a4oned goods, the owner or importer of goods impliedly abandoned may atany time within thirty (30) days after the lapse of the prescribed period to file te declaration, reclaim the goods provided that all legal reqements have been complied with and the corresponding duties, taxes and other chaxges,without prejudice tocharges and fees due to the port or terminal operntor, as well as expenses custody.

and rights to personal property, and by levy upon real property incurred have been paid before the release of the goods from customs

When the Bureau sells goods which have been impliedly abandoned, although no offense has been discovered, the proceeds of the sale, after deduction of any duty and tax and all other charges and expenses incurred as provided in Section 1143 of this Act, shallbe turned over to those persons entitled to receive them or, when this is not possible, held at their disposal for a specified period. After the lapse of the specified period, the balance shallbe transferred to the forfeiture fund asprovided in Section 1151 of

this Act.

CHAPTER 7

OTHER AD11INISTRATrvE PROCEEDINGS

SEC. 1131. Autho rity of the Commissione r to Mahe Compromise. -Subject to the approval of the Secretary of Finance, the Commissioner may compromise any administrative case arising under this Act involving the imposition of fines and surcharges, including those arising from the conduct of a post clearance audit, unless otherwise specified by law.

Cases involving forfeiture proceedings shall however not be subject to any compromise.

CHAPTER S

CIVIL REMEDIES FOR THE COLLECTION OF DUTIES AND TAXES

SEC. 1132. Remedies for the Collection of Duties, Taxes, Fines, Surcharges, Interests, and Otlwr Charges. - The civil and interest inrights to real property; and

(b) Civil or criminal action.

_Eithr or both of these remedies may be pursued at the discretion of the Bureau: Provided, That the remedies of distraint and levy shall not be allowed when the amount of

duties and taxes involved is not more than ten thousand 1

pesos (Pl0,000.00).

The Burau shall advance the amounts needed to defray costs of collection by means of civil or criminal action, including the preservation or transportation of personal property distrained and he advertisement and sale thereof, as well as ofreal property and improvements thereon.

SEC. 1133. Constructive Distraint of the Property. - To safeguard the interest of the government, the Commissioner may

?lace under constructive distraint the property of a delinquent importer who:in the oinion of the Commissioner, is retiring from any busmess subJect to duty and tax, or is intending to le.ave the Philippines, or to remove the property therefrom, or to hide or conceal the property, or to perform any act tending to obstruct the proceedings for collecting the duty and tax due or which may be due. '

The constructive distraint of personal property shall be effected by requiring the importer or any person in possession or control of sch property to sign a receipt covering the property, to obligate to preserve the distrained property on the state and condition at the time of the government's seizure of the same, and not to dispose of the same in any manner whatsoever, without the express au th ority of the

remedies for the collection of import duties, taxes, fees, or chai•ges

resulting from the conduct of a post clearance audit shall be obtained by

(a) Distraint of goods, chattels, or effects, and other personal property of whatever character, including stocks and other securities, debts, credits, bank accounts, and interest

In case the importer or the person inpossession and control of the property sought to be placed under constructive distraint refuses or fails to sign the receipt herein referred to, the customs officer effecting the constructive distraint shall proceed to prepare a list of such property and, in the presence of two (2) tnees, leave a copythereof inthe premises where the property distributed islocated, after which the saidproperty shallbe deemed to have been placed under constructive distraint.

SEC. 1134. Summary Remedies. - (A) Distraint of Personal Property. - Upon failure of the person owing any delinquent duty, taxand other charges topayatthe time required, the Commissioner shallseize and distrain.t the goods, chattels or effects, and the personal property, including s.tocks an othei• securities, debts, credits, bank accounts, and mterests m ad rightsto personal property of such persons, in sufficient quantity to satisfy the duty, tax. or other charge and the expenses of the distraint and the cost of the subsequent sale.

The officer serving the watTant of distraint shallmake or cause to be made an account of the goods, chattels, effects, or other personal property distrained, acopy of which, signed by the said officer, shall be left either with the owner or person from whose possession suchgoods, chattels, or effects or other penal property were taken, or at the dwelling_ or other place obusuess of such person and with someone of suitable age anddiscretron, to which list shall be added a statement of the sum demanded and note of the time andplace of sale.

Stocks and other securities shallbe distrained. by serving a copy of the warrant ofdistraint upon the importer and upon the president, manager, treasure, - other esonsible offic_er of the corporation, company ot association, wbich1Ssued the said stocks

or securities.

Debts and credits shall be distrained by leaving with the person owing the debts or paving in his/her possession or under his/her control such credits, or with his/her agent, a copy othe warrant of clistraint. The warrant of distraint shall be sufficient authority to theperson owmgthe debts rhaving bispossession or under his control any credits belonging to thellllporter topay to the Commissioner the amount of such debts of credits.

Bank accounts shall be garnished by serving a warrant of garnislunent upon the importer and upon thepresident, manager, treasurer, orother responsible officer of the bank. Upon the rece.ipt of the warrant of garnishment, the bank shall turn over to the Commissioner so much of the bank accounts asmay be sufficient to satisfy the claim of the government.

Areport on the distraint shall, within ten (10) days from receipt of the warrant, be submitted by the Commissioner to the Secretary of Finance: Provided, That the Commissioner shallhave the power to lift such order of distraint subject to the rules and regulations promulgated pursuant to thisAct.

(B) Levy on Real Property. - After the expiration of the period within which to pay the duty, tax and other charges asprescribed in this section, real property may be levied upon, before, simultaneously, or after the distraint of personal property belonging to the importer. To this end, the Commissioner or the duly authorized representative shallprepare adulyauthenticated certificate showing the name of the importer and the amounts of the duty and tax and penalty due. The certificate shall operate with the force of a legal execution throughout the Philippines.

Thelevy shall be effected by writing upon the certificate a description of the property on which levy is made. At the same time, written notice of the levy shallbe mailed to or served upon the register of deeds of the province orcity where the property is located and upon the importer, or if the latter is not in the Philippines, upon the agent or the manager of the business from which the liability arose, or if there be none, to the occupant of the property in question.

In case the warrant oflevy on real property is not issued before orsimultaneously with the warrant of distraint on personal property, andthepersonal property oftheimporter isnot sufficient to satisfy the duty and tax due, the Commissioner or a duly authorized representative shall, within thi,430) days after execution of the d.istraint, proceed with the levy on the real property of the importer.

Within ten (10) days after receipt of the warrant, a report on any levy shall be submitted by the levying officer to the Commissioner: Provided , That the Commissioner may lift such warrants of levy issued, subject to the rules and regulations promulgated pursuant to this Act.

CHAPTER 9

JUDICIAL PROCEEDINGS

SEC. 1135. Supervision and Control over Criminal and Civil Proceedings. - Civil and criminal actions and proceedings instituted on behalf of the Government under the authority of this Act or other laws enforced by the Bureau shall be brought in the name of the government of the Philippines and shall be prosecuted and handled by the Bureau with the assistance• of the Department of Justice (DOJ): Provided , That the determination of the existence of probable cause and the subsequent filing of any criminal or civil case with the proper court against violators of this Act shall exclusively belong to the DOJ: Provided, however, That no civil or criminal action for the recovery of duties or the enforcement of any fine, penalty or forfeiture under this Act shall be filed in court without the approval of the Commissioner.

SEC.1136. Review by the CTA. - Unless otherwise provided inthis Act or by any other law, the party aggrieved by the ruling or decisions of the Commissioner may appeal to the CTA, in the manner and within the period prescribed by law and regulations. Decisions of the Secretary of Finance when required by this Act, may likewise be appealed to the CTA.

Unless an appeal is made to the CTA in the manner and within the period prescribed by law and regulations, the ruling or decision of the Commissioner or the Secretary of Finance shall be final and executory.

SEC. 1137. Exclusive Juri sdiction of the Bureau. - Jurisdiction over imported goods and goods for exportation shall be exclusive to the Bureau, or the Secretary of Finance, when under review by the latter, subject to the proceedings described in this title.

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Except for the CT.A, no court may issue anyorder or decision until all the remedies for administrative appeal have been exhausted.

SEC. 1138. Fraud Investigation and Prosecution. - No criminal case for violation of this title shallbe instituted without the approval of the Commissioner pursuant to the provisions of this Act.

The Bureau shall have the power to investigate andinstitute smuggling •cases committed within its jurisdiction: Provided, That in case of inquest, the same may be instituted by the apprehending customs officer.

CHAPTER IO

DISPOSITION OF PROPERTY IN CUSTOMS CUSTODY

SEC. 1139. Goods Subject to Disposition. - Goods in customs custody that are in the following conditions and status shall be subject to disposition:

(a) Abandoned goods;

(b) Goods entered under warehousing entry but not withdrawn, or those whose duties and taxes have not been paid within the period prescribed under Section 811of this Act;

(c) Forfeited goods, other than prohibited, restricted and regulated goods; after liability have been established by the proper administrative or judicial proceedings in conformity with the provisions of this Act; and

(d) Goods subject to a valid lien for c\W1s duties, taxes and other charges collectible by the Blll'eau, after the expiration of the period allowed for payment thereof.

SEC. 1140. Pla.ce of Disposition of Goods. -Upon the order of the District Collector, goods may be sold or otherwise disposed of attheport where the goods arelocated, unless the Commissioner shall direct its transfer to another port.

SEC. 1141. Mode of Disposition. - The goods subject to disposition may be donated to another government agency or declared for official use of the Bureau, after approval of the Secretary of Finance, or sold at a public auction within thirty

(30) days after aten (10)-day notice posted at apublic place atthe port where the goods are located and published electronically or

ina newspaper of general circt;Iation.

For purposes of donating the goods as above described, goods suitable for shelter or consisting of foodstuffs, clothing materials or medicines may be donated to the DSWD.

SEC. 1142. Disqualification to Participate inAuction Sale.

- No customs officer or employee, the:ir spouses and relatives within the fourth degree of consanguinity or affinity shall be allowed tobid directly or indirectly, in any customs auction.

SEC. 1143. Disposition of Proceed s. - The following expenses and obligations shallbe paid from the proceeds of the sale inthe order provided:

(a) Customs duties, except in the case of forfeited goods;

(b) Taxes and other charges due the government;

(d) Expenses for the appraisal, advertisement, and sale of auctioned goods;

(e) Arrastre and private storage charges and demurrage charges; and

(f) Freight, lighterage or general average, on the voyage of importation, of which due notice shallhave been given to the District Collector.

The Commissioner is authorized to determine the maximum charges. to be recovered by private entities concerned under subsections (e) and (f) of this section.

SEC. 1144. Disposition of Perishable Goods. - Perishable goods as defined under this Act when certified as such by the Bureau, may be sold at apublic auction within five (5) days after athree (3)-day notice. '

or thispurpose, perishable goods shallinclude goods liable to p_errsh or be wasted, or those that depreciate greatly invalue w_h1le sto.red, or which cannot be kept without great disproportionate expense. The Bureau shallproceed to advertise and sellthe same at auction upon notice as shallbe deemed tobe reasonable.

SEC. 1145. Disposition of Goods Injurious to Pitblic Health. - Goods in the custody of the Bureau which in the opinion of the District Collector are injurious to public health sall be seized. The District Collector shall, if the matter is not disposable under the provisions relating tofood and drugs, appoint three (3) members to constitute a Board to examine the goods. The Board shallbe composed of one (1)representative from either the DOH or other appropriate government agency or the local government unit (LGU) concerned, and two (2) representatives from the Bureau. If the goods are found to be injurious to public health, the Board shallreport this to the District Collector, who shallorder its destruction in an appropriate manner or order its reexportation in accordance with this Act.

The District Collector shallimmediately coordinate with te heth and quarantine officers at the port of entry for the disposition of goods injmious to public health.

SEC. 11 6. IJ_isposition of Prohibited G9f}.<J,f . - Prohibited goods, asprovided m Section 118of this Act, shall be destroyed, except paragraph (d) thereof which shall be turned over to the

BSP. A?.goods suitable for shelter, foodstuffs, clothing materials

or medicmes may be disposed in accordance with Section 1141of

this Act.

SEC. 1147. Disposition of Restricted Goods. - Restricted goods asdescribed in Section 119 of this Act shallbe disposed as follows:

(a} Dynamite, gunpowder, ammunitions and other explosives, firearms and weapons of war, and parts thereof shall be turned over to the AFP;

(b) Roulette wheels, gambling outfits, loaded dice, marked cards, machines, apparatus or mechanical devices used in gambling or the distribution of money, cigars, cigarettes, or other goods when such distribution is dependent on chance, including jackpot and pinball machines or similar contrivances, or parts thereof shallbe turned over to the appropriate government body or agency;

(c) Lottery and sweepstakes tickets, except advertisements thereof, and lists of drawings therein shallbe turned over to the appropriate government body or agency;

(d) Marijuana, opium, poppies, coca leaves, heroin, or other narcotics or synthetic drugs which areor may hereafter bedeclared habit forming by the President of the Philippines, or any compound, manufactured salt, derivative, or preparation thereof, shall be turned over to the Dangerous Drugs Board;

(e) Opium pipes and parts thereof'., of whatever material, shall be turned over to the Dangerous Drugs Board; and

(:ij All other restricted goods which arehighly dangerous to be kept or handled shallbe destroyed inamanner asthe District Collector deems appropriate. Otherwise, the restricted goods shall be turned over to the proper government agency for appropriate handling.

SEC. 1148. Disposition of Regulated Goods. - Regulated goods shall be disposed of in a manner to be determined by the approp:riate regulatory agency. In the event that the regulatory agency allows the disposition of the regulated goods with commercial value and capable oflegitimate use, these shall be disposed of in accordance with Section 1141of this Act.

SEC. 1149. Disposition of Unsold Goods for Want of Bidders. - Goods subject to sale atpublic auctionbytheBureau shall be sold at a price not less than the landed cost of the goods adjusted for normal depreciation.

Goods which remain unsold after at least two (2) public biddings either due to the lack of bidders or for the lack of an acceptable bid, may be donated to another government agency or declared for official use of the Bureau. If the goods are not suitable either for officialuse or donation, these may be subject to reexport as government property or sold through a negotiated sale. In case of negotiated sale, the same shall be subject to the approval of the Secretary of Finance and executed in the presence of a representative of the COA. For purposes of donating the goods asabove described, goods suitable for shelter or consisting of foodstuffs, clothing materials or medicines may be donated to the DSWD.

SEC. 1150. Disposition of Smuggled Goods. - Smuggled goods, when forfeited, shallbe disposed of asprovided in Section 1148 of this Act.

SEC. 1151. Fo1feiture Fund. - All proceeds from public auction sales after deduction of the charges as provided in Section 1143 of this Act and subject to the claim of the owner or importer of animpliedly abandoned goods asprovided in Section 1130 of this Act, shallbe deposited in an account to be known as Forfeiture Fund.

The Fund shall be inthe name of and shallbe managed by the Bureau which is hereby authorized, subjErct to the usual government accounting rules and regulations, eitfor the following purposes:

(a) To outsource, subject to the rules on government procurement established by law, the management of the inventory, safekeeping, maintenance and sale of goods enumerated in Section 1189 of this Act to private service providers: Provided, That the Bureau shallretain jurisdictional control and supervision over these goods as well asthe operations of the service provider so contracted;

(b) To facilitate customs seizure, abandonment and forfeiture proceedings and the disposition of goods under Section 1139of this Act, particularly those to be disposed ofother than through public sale;

(d To support the modernization program and other operational efficiency and trade facilitation initiatives of the Bureau.

The DOF and the Department of Budget and Management (DBM) shall, upon the recommendation of the Bureau, issue a joint regulation to implement the provisions of this section.

TITLE XII

THIRD PARTIES

CHAPTER l

CUSTOMS SERVICE PROVIDERS

SEC. 1200. Customs Broil ers and Other Service Providers. - Upon the recommendation of the Commissioner, the Secretary of Finance shall issue the necessary rules and regulations for the registration of customs brokers and the accreditation of other customs service providers to ensure compliance with this Act and the rules and regulations that shall be promulgated to implement it.

CHAPTER 2

CARRIERS, VESSELS, AND AIRCRAFTS

SEC. 1201. Ports Open to Vesselsand Aircrafts Engaged in Foreign Trade. - Vessels and aircrafts engaged in foreign trade shall visit designated ports of entry only except as otherwise especially allowed by law: Provided, That no existing and valid government contract covering the handling of import and export cargo shall be diminished orimpaired. Every vessel or aircraft arriving within a Customs District of the Philippines from a foreign port shall dock at the designated port of entry and shall be subject to the authority of the District Collector of the port while within itsjurisdiction.

SEC. 1202. Control of Customs Officer Over Boarding or Leaving of Incoming Vessel and Over Other VesselApproaching

the Former. - Upon the arrival in port of any vessel engaged in foreign trade, it shall be unlawful for any person, except the pilot, consul, quarantine officers, customs officers, or other duly authorized persons, to board or leave the vessel without permission of the customs officer concerned. It shall likewise be alongside such vessel and for any person so authorized to board the vessel to take any unauthorized person to board the same, or allow loitering near or alongside such vessel. Unauthorized tugboats and other vessels shall keep away from such vessel !

engaged in foreign trade at a distance of not less than fifty (50) meters.

SEC. 1203. Documents to be Produced by the Master Upon !

Entry of Vessel. - Upon entry of a vessel engaged in foreign trade, the master thereof shall present the follovn.ng certified documents to the customs boarding officers: (a) The vessel's general declaration; (b) The original manifest of all cargoes destined for the port, to be returned with the endorsement of the boarding officers;

(c) Three (3) copies of the original manifest, one of which, upon certification by the boarding officer asto the correctness of the copy, shallbe returned to the master;

(d) Acopy of the cargo stowage plan;

(e) Two (2) copies of the store list;

(f) One (1) copy of the passengers list;

(g) One (1) copy of the crew list;

(h) The original copy of all through cargo manifest, for deposit with the customs officer who has juxisdiction over the vessel while inport;

(i) The passengers manifest containing the names of all foreigners, in conformity with the requirements of the immigration laws inforce inthe Philippines;

G) One (1) copy of the original duplicate of fully accomplished bill oflading;

(k) The shipping goods and register of the vessel of Philippine registry; and

(1) Such other related documents.

SEC. 1204. Manifest Required of Vessel from Foreign Port. -Every vessel from a foreign port must have on board a complete manifest of allits cargoes.

All cargoes intended tobe landed at aport inthe Philippines must be described in separate manifests for each port of call. Each manifest shall include the port of departure and the port of delivery with the marks, numbers, quantity, and description of the packages andthe names ofthe consignees. Every vessel from aforeign port must have on board complete manifests of passengers and baggage, in the prescribed form, setting forth the destination and all particulars required by immigration laws. Every vessel shall present to the proper customs officers upon arrival inpoxts of the Philippines a complete list of allsea stores then on board. If the vessel does not carry cargo or passengers, the manifest must show that no cargo or passenger is carried from the port of departure to the port of destination in the Philippines.

A true and complete copy of the cargo manifest shall be electronically sentinadvance by the shipping company, NVOCC, freight forwarder, cargo consolidator, or their agentswithin the cut-off period as may be determined by the Bureau before the arrival of the carrying vessel atthe port of entry. Upon arrivalof the carrying vessel, the shipping company, NVOCC, freight forwarder, cargo consolidator, or their agents shall provide two

(2) hard copies of the cargo manifest to the Bureau in case the port of entry is either the Port of Manila (PoM) or the Manila International Container Port (MICP), and one (1) copyonly inthe case of the other ports of entry.

A cargo manifest shall in no case be changed or altered after entzy of vessel, except by means of an amendment, under oath, by the master, consignee or agent thereof, which shall be attached to the original manifest: Provided, That after the invoice and/or goods declaration covering an importation have been received andrecorded inthe office of the appraiser, no amendment of the manifest shall be allowed, except whenit is obvious that a clerical error or any other discrepancy has been committed inthe preparation of the manifest, without any fraudulent intent, the discovery of which would not have been made until after examination of the importation has been completed.

SEC. 1205. Translationof Manifest. - The cargo manifest and each copy thereof shallbe accompanied by a translation in English, if originally written in another Ian.

SEC. 1206. Manifests for the Commission on Audit and District Collector. -Upon arrival of avessel from a foreign port, the Bureau shallprovide electronic copies of the manifest to the Chairperson of the COA. The master shall immediately present to the District Collector the original copy of the cargo manifest properly endorsed by the boarding officer, and for inspection, the ship's register, or other documents inlieu thereof, together with the clearance and other papers granted to the vessel atthe port of departure for the Philippines.

SEC. 1207. Production of Philippine Crew. - The master of a Philippine vessel returning from abroad shall produce the entire crew listed in the vessel's shipping crew manifest. If any member is missing, the master shall produce proof satisfactory to the District Collector that the member has died, or absconded, has been forcibly impressed into another service, or has been discharged. In case of discharge in a foreign country, the master shall produce a certificate from the consul, vice consul, or consular agent of the Philippines there residing, showing that such discharge was effected with the consent of the aforesaid representative of the Philippines.

SEC. 1208. Record of Arrival and Entry of Vessels and Aircraft. - A record shall be made and kept open to public inspection in every Customs District of the date of arrival and entry of all vessels and aircraft.

SEC. 1209. Arrest of Vessel or Aircraft Departing Before Entry Made. - When a vessel or aircraft arriving within the limits of a Customs District from a foreign port departs or attempts to depart before entry shall have been made, not being thereunto compelled by stress of weather, duress of enemies, or other necessity, the District Collector of the port may cause the arrest and bring back such vessel or aircraft to the most convenient port with the assistance of other concerned agencies.

SEC. 1210. Discharge of Ballast. -When not brought to port as goods, ballast of no commercial value may be discharged upon permit granted by the District Collector for the purpose.

SEC. 1211. Time of Unloading Cargo. - Unloading of cargo from a vessel or aircraft from a foreign port during official nonworking hours shallbe allowed subject to payment of service feesby shipping lines, airlines, or other interested parties at rates prescribed by the Commissioner.

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SEC. 1212. Entrance of Vessel through Necessity. -When a vessel from a foreign port is compelled, by stress of weather or other necessity to put into any other port than that of its destination, the master within twenty-four (24) hours after its arrival, shall make a protest under oath setting forth the causes or circumstances of such necessity. This protest, if not made before the District Collector, must be produced and lodged with the District Collector.

Within the same time, the master shall make a report to the District !Jollector if any part of the cargo was unloaded from necessity or lost by casualty before arrival, and produce sufficient proof to the District Collector of such necessity or casualty before the latter who shall give the approval thereto and the unloading shallbe deemed to have been lawfully effected.

SEC. 1213. Unloading of Vessel in Port from Necessity.

If a situation arises where the unloading of the vessel is required pending sojourn in port, the District Collector shall, upon sufficient proof of the necessity, grant a permit therefore, and the goods shallbe unloaded and stored under the supervision of customs officers.

At the request of the master of the vessel or the owner thereof, the District Collector may grant permission to enter the port and pay duties, ta.,:es and other charges on, and dispose of, such part of the cargo as may be perishable in nature or as may be necessary to defray the expenses attending the vessel.

Upon departure, the cargo, or a part thereof, may be reloaded on board the vessel, and the vessel may proceed with the same to its destination, subject only to the charge for storing and safekeeping of the goods and the fees for entrance andclearance. No port charges shall be collected on vessels entering through stress of weather, duress or other urgent necess.

SEC. 1214. Entry and Clearance of Vessels of a Foreign Gouernment. - The entry and clearance of transpo1•t or supply ship of a foreign government shall be in accordance with the agreement by and between the Philippines and the foreign government.

SEC. 1215. Clearance of Vesselfor Foreign Port. - Before a clearance shall be granted to any vessel bound to a foreign port, the master or the agent thereof shall present to the District Collector the following properly authenticated documents:

(a) A bill of health from the quarantine officer or officer of the public health service in the port;

(b) Three (3) copies of the manifest of export cargo, one of which, upon certification by the customs officer as to the correctness of the copy, shall be returned to the master;

(d) The• register and shipping goods, if the vessel is of Pbilippine 1•egistry;

(e) Clearance issued by the last p01't of entry; and

(f) A certificate from the Philippine Postal Corporation to the effect that itreceived timely notice of the sailing of the vessel: Provided, That the District Collector shall not permit any vessel to sail for a foreign port if the master or agent thereofrefuses to receive bags of mail delivered to the same by the Pbilippine Postal Corporation for transport upon reasonable compensation. In case the Postmaster General and the master or agent do not come to an agreement concerning the amount of the compensation to be paid for the carriage of the mail, the matter shall be submitted for decision to a Board of Referees to be composed of three (3) members appointed, respectively, by the Philippine Postal Corporation, the agency of the company to which the vessel concerned belongs, and the Bureau, who shall fix a reasonable rate of compensation.

SEC.1216. DeteTLtion of Warlike Vessel Co,itainingArms and Munitions. - District Collectors shallreport to the proper authorities or detain anyvessel of commercial registry manifestly built for wai•like purposes and about to depai't from the Philippines with a cargo consisting principally of arms and munitions of wal',

when the nuniber of men shipped onboard or other circumstances render it probable that such vessel is intended to be employed by the owner or owners to cruise or commit hostilities upon the subjects, citizens, or property of any foreign principality or state, or of any colony, district, or people with whom the Philippines is at peace, until the decision of the President of the Philippines is rendered thereon, or until the owner or owners shall give a se.curity, in double the value of the vessel and cargo, that it willnot be so employed, if in the discretion of the District Collector such security will prevent the violation of the provisions of this section.

SEC. 1217. Oath of Master of Departing Vessel. - The master of a departing vessel shall state under oath that:

(a) All cargoes conveyed on the vessel, destined for the Philippines, have been duly discharged or accounted for;

(b) A true copy of the outgoing cargo manifest has been furnished to the Bureau;

(c) No letters or packets, not enclosed in properly stamped envelope sufficient to cover postage, have been received or willbe conveyed, except those relating to the vessel;and that allmails placed on board the vessel before its last clearance from the Philippines have been delivered at the proper foreign port; and

(d) If clearing without passenger, the vessel will not carry upon the instant voyage, from the Philippine port; anypassenger of any class, or other person not entered upon the ship's declaration.

SEC. 1218. Extension of Time for Clearance. - At the time of clearance, the master of a departissel shall be required to indicate the time of intended departure, and if the vessel should remain in port forty-eight (48) hours after the time indicated, the master shall report to the District Collector for an extension of time of departure, and without such extension the originalclearance shall be nullified.

SEC. 1219. Advance Notice of Aircraft Arrival. - (A) Nonscheduled Arrivals. - Before anaircraft comes into any area in the Philippines from anyplace outside thereof, a timely notice of the intended flight shallbe furnished to the District Collector or other customs officer-in-charge at or nearest the intended place of first landing, and to the quarantine and immigration officers-in-charge at or nearest suchplace of landing. If dependable facilities for giving notice are not available before departure, the use of any radio equipment shallbe appropriate aslong as it will result in the giving of adequate andtimely notice of the aircraft's approach, otherwise landing shallbe made at a place equipped with navigational facilities. If, upon landing in any area, the government officers have not arrived, the pilot-in-command shall hold the aircraft and any baggage and goods thereon intact and keep the passengers and crew members in a segregated place until the inspecting officers arrive.

(B) ScheduledArrivals. - Such advance notice will not be required in the case of an airline arriving in accordance with the regular schedule filed with the District Collector for the Customs District in which the place of first landing area is situated, and also with the quarantine and immigration officers-in-charge of such place.

SEC. 1220. Landing at International Airport of Entry. - Except incase of emergency or forced landings, aircraft arriving in the Philippines from any foreign port or place shall make the first landing ataninternational airport of entry, unless permission to land elsewhere other than at aninternational airport of entry isfirst obtained from the Commissioner. In suchcases, the owner, operator, orperson incharge of the aircraft shallpay the expenses incurred ininspecting the aircraft, goods, passengers, and baggage carried thereon, and such aircraft shallbe subject to the authority of the District Collector atthe airport while within itsjurisdiction.

Should an emergency or forced landing be made by an aircraft coming into the Philippines at a place outside the jurisdiction of the latter, the pilot-in-command shall not allow goods, baggage, passenger, or crew member to be removed or to depart from the landing place without permission of a customs officer, unless suchremoval or departure is necessacy for purposes of safety, communication with customs officers, or preservation of life, health, or property. As soon as practicable, the pilot,in command, or a member of the crew-in-charge, or the owner of the aircraft, shall communicate with the customs officer at the intended place of first landing or at the nearest international airport or other customs port of entry inthe area and make a full

report of the circumstances of the flight and of the emergency or forced landing.

SEC. 1221. Report of Arrival and Entry of Aircraft. - The pilot-in"'.,Command of any aircraft arriving from aforeign port or place shall immediately report its arrival to the District Collector at the airport of entry or to the customs officer detailed to meet the aircraft at the place of first landing. Upon arrival, such aircraft shallbe boarded by a quarantine officer, and after pratique or health clearance is granted, shall be boarded by a customs officer; subsequently no person shallbe permitted toboard orleave the aircraft without thepermission of the customs officer. The pilot-in-command or any other authorized agent of the owner or operator of the aircraft shall make the necessary entry. No such aircraft shall, without previous permission from the District Collector, depart from the place of first landing or discharge goods, passengers, or baggage.

SEC. 1222. Documents Required in Mahing Entry for Aircraft. -(a) For the purpose of making entry, there shall be presented to the boarding customs officer four (4) copies of ageneral declaration which shallcontain the following data, unless any of such data is otherwise presented on a separate official form.:

(1) Name of owner or operator of aircraft, registration marks and nationality of aircraft, and flight number of identification;

(2) Points of clearance and entry, and dVf arrival;

(3) Health and customs clearance at the last airport of departure;

(4) Itinerary of aircraft, including information asto airport of origin and departure dates;

(5) Names and nationality of crew members;

(6) Passengers manifest showingplaces ofembarkation and destination;

(7) Cargo manifest showing information asto airway bill number, the number of packages related to each airway bill number, nature of goods, destination, and gross weight, together with a copy of each airway bill securely attached thereto;

(8) Storelist; and

(9) Such other documents as may be required by the Bureau.

(b) The general declaration shallbe written in English and duly signed by the pilot-in-command or operator of the aircraft, or the authorized agent. The section on health, and customs clearances, however, shallbe signed onlyby the pilot-in-command or when necessary, by a crew member when the general declaration itself has been signed by anon-crew member. If the aircraft does not carry cargoes or passengers, suchfacts must be shown inthe manifest.

(c) A cargo manifest shallinno case be changed or altered after entry of the aircraft, except by means of an amendment by the pilot-in-command or authorized agent thereof, under oath, and attached to the original manifest: Provided, That after the invoice and/or goods declaration covering an importation have been received and recorded in the office of the appraiser, no amendment shall be allowed except when it is obvious that a clericalerror or any other discrepancy hasbeen committed without any fraudulent intent inthe preparation of the manifest, the discovery of which could not have been made until after complete examination of the importation.

SEC. 1223. Manifests for the CommissiononAudit (GOA) and District Collector. - Upon arrival of an aircraft from a foreign port, the Bureau shall provide electronic copies of the manifest to the Chairperson of the COA. The master shall immediately present to the District Collector theoriginal copy of the cargo mamfest properlyendorsed by the boarding officer, and forinspection, the aircraft'sregister or other documents inlieu thereof: together withthe clearance and other papers granted to the aircraft at the port of departure for the Philippines.

SEC. 1,224. Clearance of Aircraft for Foreign Port. -(a) Any aircraft bound to aforeign port shall, before departure, be granted clearance by the Commissioner at an airport of entry where such aircraft has been authorized to make itslanding; and

(b) Before clearance shallbe granted to an aircraft bound to aforeign port, there shall bepresented to the District Collector or to the customs officer detailed at theplace of departure four (4) copies of a general declaration signed by thepilot-in-command or authorized agent of anaircraft which shallcontain the following data:

(1) Name of owner or operator of aircraft, registration marks and nationality of aircraft, and flight number of identification;

(2) Port ofclearance, data thereof and destination;

(3) Health and customs clearance;

(4) Itinerazy of aircraft, including information asto airport of destination and departure date;

(5) Names andnationality ofcrew members;

(6) Passengers manifest showing places of destination;

(l) Export cargomanifest showinginformation asto airway bill number, the number of packages related to each airway bill

-- -•:.i,....,...4"-

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number, nature of goods, destination, and gross weight, together with a copy of each airway bill securely attached thereto; and

(8) Storelistshowing storesloaded.

SEC. 1225. Oath of Person-in-Charge of Departing Aircraft. -The pilot-in-command or authorized agent of such departing aircraft shall also state under oath to the effect that:

(a) All cargoes conveyed on the aircraft destined to the Philippines have been duly discharged and accounted for; and

(b) The aircraft has not received nor will convey any letter or packet not enclosed inproperly stamped envelope sufficient to cover postage, except those relating to the cru•.go of the aircraft, and that there was delivery tothe proper foreign port of allmails placed on boardsaidaircraft before clearance from the Philippines.

If an aitcraft is cleared to depart without passengers, the aircraft shall not carry anypassenger thereon.

A record shallbe made and kept open to public inspection inevery customs office at anairport of entry of the dates of arrival and entry of all aircraft.

CHAPTER 3

OTHER THIRD PARTIES

SEC. 1226. Supervision and Regulation of Third Parties.

-Third parties transacting withthe Bureau onbehalf ofimporters and consignees shall be treated equally as true importers or consignees.

Third parties transacting with the Bureau shall be liable for acts committed inviolation of this Act and related laws.

Upon the recommendation of the Commissioner, the Secretary of Finance shallissue rules and regulations to govern and regulate the conduct ofall thttd parties dealing directly with the Bureau inrelation to theimportation, exportation, movement, storage andclearance of goods for andonbehalf of another person. The rules and regulations shall provide for specific conditions when third parties may or may not directly transact with the Bureau andshallprovide awritten notice incase such third.parties are, for valid reasons, barred from transacting with the Bureau. Third party is defined under Section 102(uu) of this Act. For purposes of this section, thirdparties may also refer to logistics providers, importers, exporters, carriers, airlines, shippinglines, shipping agents, forwarders, consolidators, port and terminal operators, and warehouse operators, if such persons or entities transacted with the Bureau.

CHAPTER 4

AUTHORIZED ECONOMIC OPERATORS (AEOs)

SEC. 1227. Treatment of Authorized Economic Operators (AEOs). - The Bureau shall promulgate the necessary procedures and requirements for the compliance of Authorized Economic Operators (AEOs). For AEOs who have displayed diligence in complying with the rules and the submission of official customs requirements, and have satisfactorily managed their commercial records, the Bureau shallextend the following incentives:

(a) Release of the goods upon provision of the minimum information necessary to identify the goods and permit the subsequent completion of the final goods declaration;

(b) Grant of clearance of the goods at the declarant's premises or another place authorized by the Bureau; and

(1) Allowing a single goods declaration for allimports or exports ina given pe1'iod where goods are imported or exported frequently by the same person;

(ii) Use of commercial records to self-assess their duty and tax liability and, where appropriate, to ensure compliance with other customs requirements; and

(iii) Allowing the lodgement of goods declaration by means of anentry in the records by the authorized person to be supported subsequently by a supplementary goods declaration.

SEC. 1228. Trade Facility for AEO. - The Secretary of Finance shall, upon the recommendation of the Commissioner, issue the necessru:y rules:

(a) To supervise andregulate the conduct and operations of the AEOs, consistent with international best practices, the World Customs Organization (WCO) framework of standards to secure and facilitate global trade, and other international conventions and agreements;

(b) To develop a trade facilitation program for AEOs and other authorized persons consistent with international best practices and international conventions and agreements; and

(c) To recognize existing facilities where the authority or right to operateAEOs has been granted by the relevant goverrunent agency or regulator through a contract, where the Bureau shall:

(i) Only require an endorsement by the relevant agency or regulator;

in customs territory and/or in airports and seaports. The Bureau shall likewise ensure that any subsequent rules, regulations, orders or memoranda issued inrelation t:oAEOs shallbe consistent with the appropriate government agency's orregulat:or's prevailing operating procedures and international best practices.

Existing contracts of private operators with appropriate government agency or regulator, such as, but not limited to, the PPA, SBMA and PIA and their respective authorities and powers already granted by law pertinent to such contract, shall not be impaired or adversely affected with the Bureau's implementing rules and regulations on AEOs.

TITLE XIII

CUSTOMS FEES AND CHARGES

SEC. 1300. Customs Dues, Fees and Charges. - For services rendered and documents issued by the Bureau, dues, fees and charges shall be collected as may be provided under existing regulations issued by the Secretary of Finance, upon the recommendation of the Commissioner.

SEC. 1301. General Provision on the Authority to Increase or Decrease Dues, Fees and Charges. - The Secretary of Finance may, upon the recommendation of the Commissioner, increase or decrease the dues, fees and charges collectible by the Bureau to protect the interest of the government.

and

(ii) Issue a certificate of authority as a matter of course;

(ili) Ensure that the term of the certificate of authority shall be coterminous with the applicable government contract or any extension thereof.

TITLE XIV

OFFENSES AND PENALTIES

The Bureau shall implement the provisions of this chapter without interfering, or impeding AEO operations as well as existing operations of wharves, container yards, container freight stations, warehouses, examination areas andother facilities located

CHAPTER l

CRIMES AND OTHER OFFENSES

SEC. 1400. M isd eclaration, Misclassification, Undervaluation in Goods Declaration. -Misdeclaration as to quantity, quality, description, weight, or measurement of the goods, or misclassification through insufficient or wrong description of the goods or use of wrong tariff heading resulting to a discrepancy in duty and tax to be paid between what islegally determined upon assessment andwhat isdeclared, shallbesubject to a surcharge equivalent to two hundred fiftypercent (250%) of the duty and tax due. No surcharge shallbe imposed when the discrepancy in duty isless than ten percent (10%), orwhen the declared tariff heading is rejected in a formal customs dispute settlement process involvingdifficult or highly technical question of tariff classification, or when the tariff classification declaration relied on an official government ruling.

There is unde1'Valuation when: (a) the declared value fails to disclose infulltheprice actually paid orpayable or any dutiable adjustment to the price actually paid orpayable; or (b) when an incorrect valuation method isused or the valuation rules are not properly observed, resulting in a discrepancy induty and tax to be paid between what islegally determined asthe correct value against the declared value. When the undervaluation is established without the need to go through the formal dispute settlement process provided for in this Act, a surcharge shallbe imposed equivalent to two hundred fifty percent (250%) of the duty and tax due. No surcharge shall be imposed when the discrepancy indutyislessthan tenpercent (10%), orthe declared value isrejected asa result of anofficial ruling or decision under the customs dispute settlement process involving d:i:fficult orhighly technical question relating to the application of customs valuation rules.

A discrepancy in duty and tax to be paid between what is legally determined andwhat isdeclared amounting to more than thirty percent (30%) shall constitute a prima facie evidence of fraud.

When the misdeclaration, misclassification or undervaluation isintentional or fraudulent, such aswhen a false or altered document is submitted or when false statements or information areknowingly made, a surcharge shallbe imposed equivalent to five hundred percent (500%) of the duty andtax due and that the goods shall be subject to seizure regardless of the amount of the discrepancy without prejudice to the application of fines orpenalties provided under Section 1401of thisAct against theimport.er andother person orpersons who willfullyparticipated inthe fraudulent act.

SEC. 1401. Unlawful Importation. or Exportation. -Any person who shallfraudulently import or export or bring into or outside of the Philippines any goods, orassistinsodoing, contrary to law, or shall receive, conceal, buy, sell, or in any manner facilitate the transportation, concealment, or sale of such goods afterimportation, or shallcommit technical smuggling as defined in this Act shallbe penalized by:

(a) Imprisonment of not less than thirty (30) days and one (1) day but not more than six (6) months, or afine of not less than twenty-five thousand pesos (P25,000.00}but not more than seventy-five thousand pesos (P75,000.00), or both, if the appraised value of the goods unlawfully imported, to be determined in the manner prescribed under this Act, including duties and taxes, of the goods unlawfully imported does not exceed two hundred fifty thousand pesos (P250,000.00);

(b) Imprisonment of not less than six (6) months and one (1) day but not more than one (1) year, or a fine of not less than seventy-five thousand pesos (P75,000.00) but not more than one hundred fifty thousand pesos (P150,000.00), or both, ifthe appraised value of the goods unlawfully imported, to be determined in the manner prescribed under this Act, including duties and taxes, exceeds two hundred fifty thousand pesos

(P250,000.00) but not more than five hundred thousand pesos (P500,000.00);

(c) Imprisonment of not less than one (1)year andone (1) day but not more than three (3) years, or a fine of not less than one hundred fifty thousand pesos (Pl50,000.00) but not more than three hundred thousand pesos (P300,000.00)l!<I both, if the appraised value ofthe goods unlawfully imported, tobe determined in the manner prescribed under this Act, including duties and taxes, exceeds five hundred thousand pesos (P500,000.00) but not more than one million pesos (Pl,000,000.00);

(d) Imprisonment of not less than three (3) years andone (1) day but not more than six (6) years, or a fine of not less than three hundred thousand pesos (P300,000.00) but not more than one million fivehundred thousand pesos (Pl,500,000.00), orboth, if the appraised value of the goods unlawfully imported, to be determined inthe manner prescribed under this Act, including duties and taxes, exceeds one million pesos (Pl,000,000.00) but not more than five million pesos (P5,000,000.00);

(e) Imprisonment of not less than six (6) years and one (1) day but not more than twelve (12) years, or afine of not lessthan one million five hundi•ed thousand pesos (P1,500,000.00) but not more than fifteen million pesos (Pl5,000,000.00), or both, ifthe appraised value of the goodsunlawfully imported, tobe determined in the manner prescribed under this Act, including duties and taxes, exceeds five million pesos (P5,000,000.00) but not more than fifty million pesos (P50,000,000.00);

(f) Imprisonment of not less than twelve (12) years and one (1) day but not more than twenty (20) years, or a fine of not less than fifteenmillion pesos (Pl5,000,000.00) but not more than fifty million pesos (P50,000,000.00), or both, ifthe appraisedvalue of the goods unlawfullyimported, to be determined inthe manner prescribed under this Act, including duties and taxes, exceeds fifty million pesos (P50,000,000.00) but not more thantwo hunched mill.ion pesos (P200,000,000.00);

(g) If the appraised value of the goods unlawfully imported to be determined in the manner prescribed under this Act, including duties and taxes, exceeds two hundred million pesos (P200,000,000.00) or if the aggregate amount of the appraised value of the goods which are the subject of unlawful importation committed inmore than one instance, including duties andtaxes, exceeds two hundred million pesos (P200,000,000.00), the same shallbe deemed as aheinous crime and shall be punishable with a penalty of reclusion perpetua and a fine•of not less than fifty million pesos (P50,000,000.00); and

(h) The penalty of prision mayor shall be imposed when the crime of serious physical injuries shall have been committed, and thepenalty ofreclusion perpetua shall be imposed when the crime of homicide shallhave been committed by reason or onthe occasion of the unlawful importation.

Inapplying the above scale of penalties, an offender who is a foeigner shall be deported without further proceedings after servmgthe sennc.If the offender isapublic officer oremployee, the penalty which 1s the next higher indegree shallbe imposed in addition to the penalty of perpetual disqualification from pubcoffice,.and disqualification to vote and to participate inany public election. If the offender fails to pay the fine subsidiary imprisonm1:nt shallbe served. '

When, upon trial for violation of tbis section, the defendant is shown tohave had possession of the goodsinquestion, possession shallbe deemed sufficient evidence to authorize conviction unless the defendant shallexplain the possession to the satisfaction of the court: Provided, That each act of unlawful importation or exportation shall be deemed as a separate offense: Provided, however, That payment of the tax due after apprehension shall not constitute avalid defense inanyprosecution under thissection: Provid ed, further, That outright smuggling shall also be punishable under this section: Provided, finally, That the rights andprivileges provided in this Act for the importers, consignees, exporters, service providers, thlrd parties and other third parties who committed this offense shallbe revoked.

SEC. 1402. Failure or Refusal of Party to Give Evidence or Submit Documents for Assessment. - When the owner porter or consignee of anyimported goods, orthe agent of either'. fails or refuses, upon lawful demand in writing by any customs officer to appear, lawfully depose, or submit to examination or to

answer any material question or refuses to produce records accounts or invoices in possession pertaining to the value' classification or disposition of the goods inquestion and deemed material inassessing the same, the District Collettor shall assess a surcharge of twenty percent (20%) onthe dut!M:ffle value of the goods which isthe subject of the importation.

SEC. 1403. Other Fraudulent Practices Against Customs Revenue. - Any person who makes or attempts to make any entry of imported or exported goods by means of any false or fraudulent statement, document or practice or knowingly and willfully files any false or fraudulent claim for payment of drawback or refund of duties shall, for each act, be punished in accordance with the penalties prescribed in Section 1401 of this Act.

SEC.1404. Failure to Declare Baggage. - Whenever dutiable goods are not declared by any person arrivingwithin the Philippines, such goods shallbe seized and the person may obtain release of such goods, if not imported contrary to any law, upon payment of a surcharge equivalent to thirty percent (30%) of the landed cost of such goods, in addition to all duties, truces and other charges due. Nothing in this section shall preclude the filing of criminal action against the offender.

SEC. 1405. Vessel, Seacraft, or Aircraft Departing Before Undergoing Customs Formalities. - Any vessel, seacraft, or aircraft arriving within the limits of a Customs District from a foreign port which departs before undergoing customs formalities, without being compelled to do so by stressof weathe1•, pursuit or duress of enemies, or other necessity, shall be liable for a fine of not less than onehundred thousand pesos (PI00,000.00) but not more than three hundred thousand pesos (PS00,000.00).

SEC.1406. Obstruction to Boarding Of ficer. - If the master or pilot-in-command or any member of the complement of any vessel or aircraft arriving at the Philippine port obstructs or hinders any officer from lawfully going on board such vessel or aircraft for the purpose of enforcing this Act, or intentionally causes any officer to be so obstructed or hindered, the vessel or aircraft shall be liable to a fine of not less than one hundred thousand pesos (Pl00,000.00) but not more than three hundred thousand pesos (PS00,000.00).

SEC.1407. Unlawful Boarding or Leaving of Vessel or Aircraft. - If, upon arrival at the Philippine port, any master of a vessel or pilot-in-command of an aircraft engaged in a foreign trade permits any person to board or leave thevessel or aircraft without the permissionof the customs officer-in-charge, the owner or operator of suchvessel or aircraft shall be liable for a fine of not less than one hundred thousand pesos (Pl0,000.00) but not more than three hundred thousand pesos (P300,000.00).

SEC. 1408. Unloading of Cargo Before Arrival at Port of Entry. - If,upon the arrival within the limits of any Customs District of the Philippines of any vessel or aircraft engaged in foreign trade, the master or pilot-in-command thereof permits any part of the cargo to be unloaded before arrival atthe port of entry, and without authority from a proper customs officer, the owner, operator, or agent of suchvessel or aircraft shallbe liable for a fine of not less five hundred thousand pesos (P500,000.00) but not more than two million pesos (P2,000,000.00): Provided, That no fine shall accrue upon satisfactory proof to the proper District Collector that the unloading was rendered necessary by stressof weather, accident or other necessity: Provided, however, That the fine imposed herein shall be without prejudice to the application of fines or penalties provided under Section 1401 of this Act.

SEC. 1409. Unloading of Cargoat Improper Timeor Place After Arrival. -The owner or operator of any vessel or aircraft from which cargo is discharged upon arrivalinthe Philippines at a time orplace other than that designated by the District Collector, shallbe fined not less one hundred thousand pesos (PlOO,000.00) but not more than three hundred thousand pesos (P300,000.00): Provided, That no fine shall accrue upon satisfactory proof to the

•proper District Collector that the unloading was rendered necessary by stress of weather, accident or other necessity.

SEC.1410. Failure to Exhibit or Deposit Documents. - When the master of a vessel or pilot-in-command of an aircraft engaged in foreign trade fails to submit to the District Collector at the time of entry of the vessel or aircraft the register or other documents inlieu thereof, together with the clearance and other documents granted by the customs officers to tutyessel or aircraft at the last foreign port of departure, or fails•to exhibit any certificate or other documents required to be then exhibited, the owner or operator of such vessel or aircraft shall be liable for a fine of not less than one hundred thousand pesos (Pl00,000.00) but not more than three hundred thousand pesos (P300,000.00).

SEC.1411. Bringing of Un.manifested Arms. Explosives or War Equipment. - The owner, operator, or agent of avessel or aircraft arriving at a port in the Philippines bearing cargo consisting of :firearms, gunpowder, cartridges, dynamite or any other explosives, munitions orequipment ofwar not contained in the manifest of the vessel or aircraft, or which are concealed on board, shall be liable for a fine of not less than five hundred thousand pesos (PS00,000.00) but not more than onemillion pesos

(Pl,000,000.00).

SEC. 1412. Failure to Supply Advance and Requisite Manifests. - Failure to transmit the electronic manifest within the required time as may be prescribed by the Bureau, prior to arrival of the carrying vessel or aircraft at the port of entry shall make the owner, operator, or agent of the vessel or aircraft liable for a fine of not less than one hundred thousand pesos (Pl00,000.00) but not more than three hundred thousand pesos (P300,000.00).

If the transit time from port of origin to port of entry is at least seventy-two (72) hours, the shipping or forwarding agent of the carrier or the vessel who fails to submit the manifest at least twenty-four (24) hours before entry shall likewise be liable for a fine of not less than one hundred thousand pesos (Pl00,000.00) but not more than three hundred thousand pesos (P300,000.00).

SEC. 1413. Disappearance of Manifested Goods. -When any package or goods mentioned in the manifest meant to be unloaded atthepo1tof destination isnot unloadedupon the am.val of the vessel or aircraft, itsagent shallbe liable for a fine of not lessthanone hundred thousand pesos (Pl00,000.00) but not more than three hundred thousand pesos (P300,000.00) unless the disappearance of the package orthe goods inquestion was not due to the negligence of the master of the vessel or pilot-in-command of anab:craft, andisexplained tothesatisfaction of the District Collector.

The owner, operator, or agent of a vessel or aircraft shall be liable for the payment of the same fine when a package or goods listed in the manifest does not tally materially incharacter or otherwise with the description thereof in the manifest.

SEC. 1414. Discrepancy Between Actual and Declared Weightof Manifested Goods. - If the grossweight of goods or package described in the manifest or bill of lading exceeds the declared weight by more than ten percent (10%), and such discrepancy was due to the negligence of the master or pilot-in command, the owner.employee, operator oragent oftheimporting vessel or aircraft shallbeliable for afine ofnot more than twenty percent (201}6) of the value of the package or goods in respect to which the deficiency exists.

SEC.1415. Discrepancy With the Master's or Pilot's-in Command Report. - When a vessel 01•aiJ:craft arriving from a foreign port is compelled by necessity to unload in another port other than the port of entry and permission is granted by the District Collector for the unloading of thevessel or airc1•aft or the delivery of anypart of the cargo andit shallbe found that there is discrepancy between the cargo unloaded and the report of the master or the pilot-in-command and.such disc1•epancy is not satisfactorily explamed, theowner, operator or agent of the vessel oraircraft shall be liable for a fine of not lessthan one hundred thousand pesos (PI00,000.00) but not more than three hundred thousand pesos (P300,000.00).

SEC. 1416. Failure to Report Fraud. - A master, pilot in-eommandorotherofficer, owneror agent ofanyvessel or aircraft trading with or withinthe Philippines who has knowledge of the commission of fraud that shallresult intheloss or diminution of customs revenue but fails to report all.informationrelative thereto to the District Collector shallbe penalized with imprisonment of not less than six (6) months and one (1) day but not more than one (1) year and shall be liable for a fine of not less than one hundred thousand pesos (Pl00,000.00) but not than three hundred thousand pesos (P800,000.00). If the offender is a foreigner,the offender shallbe deported after serving the sentence. If the offender isa public officer or employee, the offender shall• sufferadditional penalty ofperpetual disqualificationto hold public office, to vote and to participate in any election. All the benefits due from service in the government, including the separation and retirement benefits, shall be forfeited.

SEC. 1417. False Statement of Vessel's or Aircraft's Destination. -When the master or pilot-in-command of avessel or aircraft loaded with goods shall make a false statement as to the next destination of such vessel or aircraft when that information isrequired by a customs officer, the owner or operator of such vessel or aircraft shallbe liable for a fine of not less than one hundred thousand pesos (P100,000.00) but not more than three hundred thousand pesos (P300,000.00). The arrival of a vessel or aircraft at adifferent port other than the one it had been originally authorized and cleared for without having been impelled to do so by necessity, shall be prima fa-cie proof tl1at the original statement of the actual destination of the vessel or aircraft was false.

SEC.1418. Af fixing Seals. - Any person who, without authority, affixes or attaches a customs seal, fastening, or any mark, or fastening purporting to be a customs seal, to any vessel, aircraft, vehicle, warehouse, or package, shallbe penalized with imprisonment of not less than si.x. (6) months and one (1) day but not more than one (1) year, and shallbe liable for a fine ofnot less than one hundred thousand pesos (PI00,000.00) but not more than three hunch•ed thousand pesos (P300,000.00). Ifthe offender is a foreigner, the offender shall be deported after serving the sentence. Ifthe offender isapublic officer or employee, the offender shallsuffer anadditional penalty of perpetual disqualification to hold public office and disqualification from exercising theright to vote and to participate in any election.

SEC. 1419. Brea.Jling of Seal Placed by Customs Officers. If any seal placed by a customs officer upon any vessel or aircraft or compartment thereof, or upon any box, trunk or other package of goods on board is broken, the owner, operator, or agent of thevessel or aircraft shall be liable for afine of not less than one hundred thousand pesos (Pl00,000.00) but not more than three hundred thousand pesos (P300,000.00) for eachbroken

or destroyed seal.

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SEC. 1420. Breaking of Lock or Fastening Placed by Customs Officers. - H any lock or other fastening device placed by a customs officer upon any hatch door, or other means of communication in the hold of a vessel or aircraft, or other part thereof for the security of the same during the night time, is unlawfully opened, broken or removed, or if any of the goods contained in the hold or in the other compartments so secured is clandestinely abstracted andlanded, the owner, operator, or agent of the vessel or aircraft shall be liable for a fine of not less than one hundred thousand pesos (Pl00,000.00) but not more than three hundred thousand pesos (P300,000.00).

SEC.1421. Removal,Breakage, and Alteration of Marks.

- Any person who, without authority, willfullyremoves, breaks, injures, defaces or alters any customs seal or other fastening or mark placed upon any vessel, vehicle, on land sea or air warehouse or package containing merchandise o;baggage bond or incustoms custody, shall be punished with the penalty prescribed in Section 1420 hereof.

SEC. 1422. Unauthorized Withdrawal of Imported Goods from Bonded Warehouse. - Any person who causes the unauthorized withdrawal of imported goods stored from a CBW shallbe liable for payment of a surcharge of fiftypercent (50%) of duties, taxes, customs fees, and charges, found to be due and unpaid. The amount of surcharge shall be added to the duties, taxes and charges due on the goods withdrawn. If the delinquency lasts for more than one (1)year, the surcharge shall be increased by twenty-five percent (25%) of the unpaid duties and taxes annually: Provided, That where the withdrawal is attended with fraud, such as when a fake or altered withdrawal permit is submitted, the warehouse operator shallbe held liable under the pertinent provisions ofthisAct, without prejudice to the suspension or revocation of the warehousing privileges granted by the Bureau pursuant to this Act. ,

SEC. 1423. Removing or Repacking Goods in Warehouse.

- Any person who fraudulently conceals, removes, or repacks mechandise inany warehouse orfraudulently alters, defaces, or obliterates any mark or numbers placed upon packages deposited in such warehouse, or shall aid or abet any such acts, shall be punished with the penalties prescribed in Section 1418hereof.

Merchandise so concealed, 1•emoved, or repacked, or packages upon which marks, numbers or the values thereof have been so altered, defaced, or obliterated shallbe forfeited infavor of the government.

SEC. 1424. Removing Goods from Customs Custody.

Anyperson who enters any warehouse, or anyvehicle loaded with or containing merchandise with intent to unlawfully remove therefrom any merchandise or baggage in such vessel, 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 1401 hereof.

SEC. 1425. Failure to Pay Duties, Taxes and Other Charges. -For failure to pay the duties, taxes and other charges of an assessment within fifteen (15) days from the date of final assessment, asurcharge of ten percent (10%) of the total assessed amount or balance thereon shall be added and collected, which surcharge shallbe increased to twenty-five percent (25%) if the delinquency lasts for more than one (1) year.

SEC.1426. Breach of Security. -Upon breach of security required to be filed under this Act, the District Collector, subject to the approval of the Commissioner, may accept in satisfaction thereof a smaller sum than that mentioned in the penalty clause of the security, but in no case less than the amount necessary to indemnify the government for the damage occasioned by such breach.

SEC. 1427. Failure to Keep Importation Records and Full Access to Customs Officers. - Any person who fails to keep all the records of importations or books of accounts, business and computer systems and allcustoms commercial datainthe manner prescribed under this Act, shallbe punished with imprisonment of not less than three (3) years and one (1) day but not more than six (6) years and/or a fine of one million pesos (Pl,000,000.00). This penalty shall likewise be imposed against importers and brokers who deny anauthorized customs officer fullandfree access to such records, books of accounts, business and computer systems, and all customs commercial data including payment records, without prejudice tothe imposition of the administrative sanctions by the Bureau against contumacious importers, including the authority tohold delivery orrelease of their imported goods.

SEC. 1428. Concealment or Destruction of Evidence of Fraud. - Any person who willfully conceals or destroys any invoice, book, or document relating to any goods liable to duty after an inspection thereof has been demanded by the District Collector or at any time conceals or destroys any such invoice, book, or document for the purpose of suppressingany evidence of fraud therein contained, shall be penalized with imprisonment of not less than three (3) years and one (1) day but not more than six (6) years and shall be liable for a fine of not less than three hundred thousand pesos (P300,000.00) but not more than one million pesos (Pl,000,000.00). •

SEC. 1429. Other Offenses. -The owner or operator of a vessel, aircraft or train shallbe liable for afinefor the following acts:

(a) Fm•anchoring at any dock, pier, wharf, quay, or bulkhead other than a port of entry, a fine of not less than five hundred thousand pesos (P500,000.00) but not more than one million pesos (Pl,000,000.00) for overseas vessels;

(b) For dumping of garbage or slops over the sides of the vessel within three (3) miles from the nearest coastline, afine of not less than one million pesos (Pl,000,000.00) 1Mt110t more than ten million pesos (Pl0,000,000.00);

(c) For dumping or causing to spread crude oil, kerosene, or gasoline in the bay or at the piers within three (3) miles from the nearest coastline, a fine of not less than one million pesos (Pl,000,000.00) but not more than ten million pesos (Pl0,000,000.00) for each offense;

(d) For loading gasoline or any other petroleum products at aplace other than that designated by the regulations, a fine of not less than five hundred thousand pesos (P500,000.00) but not more than one million pesos {Pl,000,000.00) for each offense;

(e) For causing the emission and spread of harmful gas, fumes and chemicals, a fine of not less than one million pesos (Pl,000,000.00) but no t more than ten million pesos (Pl0,000,000.00) for each offense; and

(f) For transporting hazardous waste, radioactive waste andother toxic substances asprovided under the Basel Convention and Republic Act No. 6969, otherwise known as the "Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990", the penalty shallbe forfeiture of the vessel infavor of the government.

The fines imposed herein shallbe without prejudice to the application of fines or penalties provided under special laws and regulations.

SEC.1430. Violations of this Act and Rules and Regulations in General. -Any person who violates any other provision of this Act or the rules and regulations issuedpursuant thereto, shall be penalized with imprisonment of not less than thirty (30) days and one (1) day but not more than one (1) year, or be liable for a fine of not less than one hundred thousand pesos (Pl00,000.00) but not more than three hundred thousand pesos (P300,000.00), or both. ff the offender is a foreigner, the offender shallbe deported after serving the sentence. If the offender is a publicofficer or employee, •the offender shall be disqualified from holding public office, from exercising the right to vote and to participate in any public election for ten (10) years.

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CHAPTER 2

PENALTIES IMPOSED UPON BUREAU EMPLOYEES

SEC. 1431. Statutory Offenses of Officers and Employees. Every officer, agent, or employee of the Bureau or of any other agency of the government charged with the enforcement of the.provisions of this ct, who shall be found guilty of any delmquency as described below shall be penalized with imprisonment of not less than six (6) years and one (I} day but not more ttwelve (12) years, and perpetual disqualification to hold public office, from exercising the right to vote and to participate in any public election and a fine of not less than five hundred thousand pesos (P500,000.00), but not more than one

million pesos (Pl,000,000.00):

(a) Extortion or willful oppression under color oflaw;

(b) Knowingly demanding other or greater sums that are authorized by law or receive any fee, compensation, or reward except asby lawprescribed, for the performance of any duty;

(c) Willfully neglecting to give receipts, as required bylaw, for any sum collected intheperformance of duty, or who willfully neglect toperform any of the duties enjoined by law;

(d) Conspiring or colluding with another or others to defraud the customs revenue or otherwise violate the law;

(e) Providing an opportunity for anyperson to defraud the overnment of customs revenue or failing to do any act with the

mtent to enable anyperson to defraud the government ofcustoms revenue;

A,,1

(.f) Negligently or designedly permitting the violation of the law by any other person;

(g) 1f: aking r sgning for any false entry or entries in any book, making or s1gmng any false certificate or return in any case where the law requires the making by them of such entry certificate or return;

(h) Failing to report knowledge or information to their superior officer about an act or acts of fraud committed inrevenue collection as required by law;

(i) Demanding or accepting or attempting, without authority, to collect directly or indirectly as payment or 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 oflaw;

G) Unlawfully disclosing confidential information gained during any investigation or audit, or using such information for personal gain or to the detriment of the government, the Bureau, or third parties.

All the benefits due from service in the government, including separation and retirement benefits, of an officer, agent, or employee of the Bureau or of any other agency of the government charged with the enforcement of the provisions of this Act found guilty of the foregoing violations shall be forfeited.

SEC. 1432. Failure to Report Fraud. -Any employee of the Bureau who has knowledge of any fraud committed against the government pertaining to customs revenue, and who fails to report allinformation relative thereto to the District Collector, shall be penalized with imprisonment of not less than six (6) years and one (1) day but not more than twelve (12) years and a fine ofnot less than five hundred thousand pesos (P500,000.00) but not more than one million pesos (Pl,000,000.00). The offender shall suffer the additional penalty of perpetual disqualification to hold public office, to vote and to participate inany election. All the benefits of the offender due from service in the government, including separation andretirement benefits, shall be forfeited.

SEC. 1433. Liability for Other Offenses. - The fines and penalties imposed in this chapter shall be without prejudice to the aplication of nes or penalties provided under Chapter 1 of this title and special laws and regulations.

TITLE XV

MISCELLANEOUS PROVISIONS

SEC. 1500. Information, Decisions, and Rulings. - The Bure shall ensure t!1at allinformation of general application

pertainmg to customs,mcluding revisions or amendments thereto shall be available to the general public. '

SEC. 1501. Period to Issue Ruling. - Unless otherwise provided in this Act, the issuing authority shall act on the application for ruling within thirty (30) days from receipt of the applicaon ad upporting documents as may be required by

7eation. Within three (3) days from issuance of a ruling, the rnsumg authonty shall notify the requesting party of suchruling.

SE. 102. P.ublication and Confidentiality of Certain Information inRuling. -The Bureau and the Commission shall reg,.tllypublish itsrulings in a manner accessible to the public. Fo this purpoe, each application for ruling shall be assigned a tite nd umque ruling number for easy reference. The publicat10n shall contain information on the goods involved the body or summary of the ruling, particularly the grounds rlied upon to support the ruling, but shall exclude the name of the requesting party a':'d oth:'r information which by their very ature areconfidential, mluding those which the requesting party dicated m its application as confidential in nature. Except m the cntxt of Ju.d1cial proceedings, any disclosure of confidential informatrnn under this section shall not be made except upon the written consent of the beneficiary of the advance ruling.

SEC. 1503. Duty of District Collector to• Report Rulings to the Commiss_ioner. -When any new or unsettled question shall be deermmed by a District Collector, and if the matter is not otherwise appealed for review in the ordinary course, the District Collector shall notify the Commissioner of the decision and submit an adequate statement of the facts involved.

SEC. 1504. Application of Established Ruling or Decision.

-A ruling or decision of the Commissioner which determines the construction or application of any provision of law imposing customs duties and taxes, and which changes any existing established valuation, classification, rules of origin and other customs rules, interpretation orpractice shall not take effect until thirty (30) days after public notice shallhave been given in the form of a published decision. When the ruling or decision favors the taxpayers, it shall become effective immediately.

SEC. 1505. Authority of Official to Administer Oaths and Take Testimony. - The Commissioner, District Collectors and their deputies, and other customs officers especially deputized by the District Collector shall have authority to administer oaths and take testimony in connection with any matter within the jurisdiction of the Bureau and, in connection therewith, may require the production ofrelevant papers, documents, books and records in accordance with law.

SEC. 1506. General Security. - In cases where securities are required to be given under the provisions of this Act and related customs laws, the District Collector, instead ofrequiring separate specialsecurity where transactions of a particular party are numerous, may accept general security extending over such periods of time and covering such transactions of the party in question as may be satisfactory to the District Collector.

SEC. 1507. Security. - The Bureau shall prescribe the forms and amount of security required to guarantee thepayment of duties and taxes and other obligations provided for in this Act.

Aoy party required to provide security shallhave the option to choose from any form of security prescribed by the Bureau. The Bureau may not require security if satisfied that an obligation to the Bureau will be fulfilled, but shall require and accept a general security from declarants who regularly declare goods at different offices in customs territory under such terms and conditions as may be determined by the Commissioner.

153

The required amount of security shall be the lowest possible and shall not exceed the amount ofimposable duties, taxes and other charges.

When the obligation under which the security was required has been satisfied, the security shall be discharged immediately.

SEC. 1508. Customs Service Fees. - Customs personnel may be assigned by a District Collector to render overtime work and other customs services and shallbe paid for such services by the Bureau according to service fees fixed by the Commissioner and approved by the Secretary of Finance. The Bureau may charge additional customs service fees when applicable, subject to the rates prescribed under existing rules and regulations.

SEC. 1509. Testimony in Writing. - When testimony is taken in any proceeding or matter under the authority of the Bureau, either party may require that the testimony shall be made in writing, and when so taken, the written testimony shall be filed with the Office of the District Collector and to be preserved for use or reference until the final decision has been reached.

SEC. 1510. District Collector Not Liable in Respect to Ruling in Customs Cases.- Every District Collector or other officials of the Bureau shallnot be in any way personally liable on account of any official ruling or decision asto which the person claiming to be aggrieved has the right to obtain either an a trative orjudicial review. Except for misdelivery of goods, a D:stnct Collector may not, in the absence ofabuse ofauthoriiy, be liable to anyperson for any loss occasioned either by the official act or the acts of the subordinates.

SEC. 1511. Interest Prohibited to be Held by Customs Employees. - Any person employed under the authority of the government in the assessment of duties, tax es and other charges in connection with imports or exports shall not own either in whole or inpart, anyvessel or aircraft o;act as attorney'. agent or consignee for the owner of anyvessel or aircraft or of any cargo oaded onb_oard the vessel or aircraft; and shall not import or be mvolved, directly or indirectly, in the importation of any goods for sale into the Philippines.

SEC. 1512. Reward to Persons Instrumental in the Actual Collection of Additional Revenues Arising from the Discovery of Violations of thisAct. - A cash reward equivalent to twenty percent (20%) of the actual proceeds from the sale of smuggled goods and confiscated goods or actual collection of additionalrevenues shallbe given tothecustoms andnon-customs informers orwhlstleblowers who areinstrumentalinthe collection of additional revenues arising from the discovery of violations of this Act inaccordance with the rules and regulations to be issued by the Secretary of Finance.

SEC. 1513. Outsourcing of Non-Sove reign Customs Functions to Private Entities. - Subject to the approval of the Secretary of Finance, the Bureau may outsource any of itsnon sovereign and ancillary function to a qualified and competent private entity in accordance with government rules on service procurement.

SEC. 1514. International Standards and Best Practices.

- The Bureau may adopt international standards and best practices in customs administration laid down by international agreement or convention pertaining to trade facilitation, supply chain security, and related matters, whether or not the Philippines is a signatory to such international agreement or convention.

TITLE XVI

expriene and 8:cdemic training possess the necessary qualifications reqU1S1te fordeveloping expert knowledge of tariff and trade related matters. During their terms of office the Chairperson and the Commissioners shall not engage i the practice of any profession, or intervene directly or indirectly in emanagement or control of any private enterprise which may, m anyw, be affct:d by the functions of their office. They shall ntbe, directly ormdirect)y, financially interested in anycontract with the government, or any subdivision or instrumentality

thereof

SEC. 1601. Appointment and Compensation of Officials and Employees. -All employees of the Commission shall be appointed by the Chairperson inaccordance with the Civil Service Law except as the private secretaries to the offices of the Chairperson, Commissioners and Executive Director.

SEC. 1602. Official Seal. - The Commission isauthorized to adopt an official seal.

SEC.1603. Functions of the Commission. The Commission shall have the following functions:

(a) Adjudicate cases on the application of trade remedies against imports pursuant to Sections 711, 712 and 713 of this

. Act;

TARIFF ADMINISTRATION AND POLICY

CHAPTER I

TARIFF COMMISSION

(b) Study the impact of tariff policies and programs on national competitiveness and consumer welfare inline with the economic objectives of the government;

SEC. 1600. Chief Officials of the Tariff Commission and Qualifications. - The officials of the Tariff Commission shall consist of a Chairperson andtwo (2) Commissioners tobe appointed by the President of the Philippines. The Chairperson and the Commissioners shall be natural-born citizens of the Philippines, of good moral character and proven integrity, and who, by

(d) Issueadvance rulings ontariff classifition ofimported goods and render rulings on disputes over tariff classification of goodspursut to Section l!O? of thisAct, except in casesinvolving godson w:mch the Comwss1on has provided advance ruling on tariff classification;

(e) Provide the President and Congress with independent analysis, information and technical support on matters related to tariff and nontariff measures affecting Philippine industries and exports for policy guidance;

(fJ Analyze the nature and composition, and the classification of goods according to tariff commodity classification and heading number for customs and other related purposes, which information shall be furnished the NEDA, DTI, DA, DOF, DENR, and BSP;

(g) Review the trade agreements for negotiation and trade agreements entered into by the Philippines and make recommendations, if necessary, on the consistency of the terms of the agreements with the national policy objectives;

(b) Conduct public consultations and public hearings pursuant to its functions; and

(i) Deputize or delegate, to appropriate government agency its function of rendering rulings on disputes over tariff classification of goods, until the plantilla positions necessary for undertaking such function have been approved and filled-up: Provided, That such delegation of function shallnot extend beyond three (3) years from the effectivity of this Act.

SEC. 1604. Reparts of the Commission. -The Commission shall place at the disposal of the President and any Member of the Congress of the Philippines allinformation at its command. It shall conduct such investigation and submit reports as may be required by the President and the Congress of the Philippines. It shalllikewise report to the President and Congress on the first Monday of December of each year and hereafter, a statement of methods adopted and a summary of all reports made duringthe year.

SEC. 1605. Access to Documents and Assistance ta the Commission. - The Commission or its duly authorized representative shallhave access to any document, paper orrecord pertinent to the subject matter under investigation, in the possession of any person, firm, copartnership, corporation or association engaged in the production, importation, or distribution of goods under investigation, and shall have power to summon witnesses, take testimony, administer oaths, and to issue subpoena duces tecum requiring the production of books papers, or documents relating to the matter under investigation'. The Commission may also request the views, recommendations, and assistance of any government office, agency or instrumentality who shall be expected to cooperate fully with the Commission.

SEC. 1606. Sworn and Verified Statements. - The Commission may order the taking of sworn statements at any stage of any proceeding or investigation before it. The sworn statements must be made before a person duly authorized to administer oaths.

The Commission is authorized to require any importer, grower, producer, manufacturer or seller to file with the Commission a statement, under oath, giving the sellingprices in the Philippines of goods imported, grown, produced, fabricated or manufactured by such person.

SEC. 1607. Implementing Rules and Regulations. - The Commission shall promulgate and adopt such rules and

regulations as may be necessary to carry out the provisions of this Act.

CHAPTER 2 FLEXIBLE TARIFF

SEC. 1608. Flexible Clause. - (a) In the interest of the eeral welfare and national security, and subject to the limitations pescribed under this Act, the Priitrclent, upon the

recommendation of the NEDA, is hereby empowered to:

.(1) I.ncrease, reduce, or remove existing rates of import dutymcludin? any necessary changeinclassification. The existing rates may be increased or decreased to any level, in one or several stages but in no case shall the increased rate of import duty be highe; than a maximum of one hundred percent (100%) ad

valorem;

(2) Establish import quotas or ban imports of any

commodity, as may be necessary; and

(3) Impose anadditional duty on all imports not exceding ten percent (10%) ad valorem whenever necessary:. Pr_ov,ded, That upon periodic investigations by the Commission and recommendation of the NEDA, the President may cause a gradual reduction of rates of import duty granted in Section 1611 of this Act, including those subsequently granted pursuant to this section.

(b) Before any recommendation is submitted to the President by the NEDA pursuant to the provisions of this section, except in the imposition of an additional duty not exceeding ten percent (10%) ad valoreni, the ?ommission sh cnduct an investigation and shall hold public hearings wherem mterested parties shallbe afforded reasonable opportunity.to be present, to produce evidence and to be heard. The Comm1ss1on shall also hear the views and recommendations of any government office, agency, or instrumentality. The Commission hall su?mit its findings and recommendations to the NEDA within thirty (30) days after the termination of the public hearings.

(c) The power of the President to increase or decrease rates of import duty within the limits fixed in subsection (a) hereof shall include the authority to modify the form of duty. In modifying the form of duty, the corresponding ad valorem or specific equivalents of the duty with respect to imports from the principal competing foreign country for the most recent representative period shallbe used as basis.

(d) Any order issued by the President pursuant to the provisions of this section shalltake effect thirty (30) days after promulgation, except in the imposition of additional duty not exceeding ten percent (10%) ad valorem which shall take effect at the discretion of the President.

(e) The power delegated to the President asprovided for in this section shall be exercised only when Congressisnot insession.

(f) The power herein delegated may be withdrawn or terminated by Congress through ajoint resolution.

The NEDA shall promulgate rules and regulations necessary to carry out the provisions of this section.

SEC. 1609. Promotion of Foreign Trade. - (a) For the purpose of expanding foreign markets for Philippine products as a means ofassistingin the economic development of the country, in overcoming domestic unemployment, in increasing the purchasing power of the Philippine peso, andin establishing and maintaining better relations between the Philippines and other countries, the President, shall, from time to time:

(1) Enterinto trade agreements with foreign governments or instrumentalities thereof; and

(2) Modify import duties, including any necessary change in classification and other import restrictions asare required or appropriate to carry out and promote foreign trade with other countries: Provided, That in modifying import duties or fixing import quota, the requirements prescribed in subsection (a) of Section 1608 of this Act shall be observed: Provided, however, That any modification in import duties and the fixing of import quotas pursuant to the various trade agreements the Philippines has entered into, shall not be subject to thelimitations of aforesaid subsection (a) of Section 1608.

(b) The duties and other import restrictions as modified in subsection (a) of this section, shall apply to goods :whicl1are the growth, produce, or manufacture of the specifiC 1Jlitry, whether imported directly or indirectly, with which the Philippines has entered into a trade agreement: Provided, That the President may suspend the application of any concession to goods whicl, are the growth, produce, or manufactured product of the specific country because of acts orpolicies which tend to defeat the purposes set in this section, including the operations ofinternational cartels; and the duties and other import restrictions asnegotiated shall be inforce and effect from and after such time as specified inthe order, without prejudice to the Philippine commitments inany ratified international agreement ortreaty.

(c) Nothing inthis section shallbe construed to give any authority to cancel orreduce in any manner the indebtedness of any foreign country to the Philippines or any claim of the Philippines against anyforeign country.

(cl) Before any trade agreement is concluded with any foreign government or instnunentality thereof, reasonable public notice of the intention to negotiate an agreement with such government or instrumentality shall be given in order that interested persons may have an opportunity to present their views to the Commission. The Commission shallseekinformation and advice from the DTI, DA, DOF, DENR, DFA and BSP, and from such other sources asit may deem appropriate.

(e) Inadvising the Pxesident, ona trade agreement entered into by the Philippines, thefollowing shall be observed:

(1) The Commission shall determine whether or not the domestic industry has suffered orisbeing threatened withinjury and whether or not the wholesale prices at which the domestic products are sold arereasonable, taking into account the cost of raw materials, labor, overhead, afairreturn oninvestment, and the overall efficiency of the industry.

(2) The NEDA shallevaluate thereport of the Commission and submit recommendations to the President.

(3) Upon receipt of the report of the findings and recommendations of the NEDA, the President may prescribe adjustments in the rates of import duties, withdraw, modify or suspend, in whole or in part, any concession under any trade agreement, establish import quota, or institute suchother import restrictions, as the NEDA recommends to be necessary in order to fully protect domestic industry and the consumers, subject to the condition that the wholesale prices of the domestic products shallbe reduced to, ormaintained at, thelevel recommended by the NEDA unless, for good cause shown, anincrease thereof, as recommended by the NEDA, is authorized by the President. Should increases be made without such authority, the NEDA shall immediately notify the President who shall allow the importation of competingproducts insuch quantities asto protect thepublic from the unauthorized increase in wholesale prices.

(f) This section shall not prevent the effectivity of any executive agreement or any future preferential trade agreement with any foreign country.

(g} The NEDA and the Commission shallpromulgate such reasonable procedures, rules andregulations asthey may deem necessazy to execute their respective functions under this section.

CHAPTER 5

TARIFF NOMENCLATURE AND RATE OF DUTY

SEC.1610. General Rules for the Interpretation (GR!).

The classification of goods anditstariff nomenclature asprovided pursuant to this Act shall be governed by the following principles:

(1) The titles of sections, chapters and subchapters are provided for easy reference only. Forlegalpurposes, classification shallbe determined according to the terms of the headings and anyrelative section or chapter notes and, provided such headingsor notes do not otherwise require, according to the following provisions:

(2)(a) Any reference in a heading to the .Jleods shall be taken to include a reference to the same in their lricomplete or unfinished form or state: Provided, That the incomplete or unfinished goods have the essential character, as presented, of the complete or :finished goods. It shall also be taken to include a reference to the same,in their complete or finished form or state (or falling tobe classified ascomplete orfurished byvirtue of this Rule), presented unassembled or disassembled.

(b) Any reference in aheading to a material or substance shallbe 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 shallbe taken to include areference 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.

(3) Wben by application of Rule 2(b) or for any other reason, goods are, prima facie, classifiable under two (2) 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 (2) 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 insets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of their essential character, insofar as this criterion is applicable.

(c) Wben goods cannot be classified by reference to 3(a) or 3(b), they shallbe classified under the heading which occurs last in numerical order among those which equally merit consideration;

(4) Goods which cannot be classified in accordance with the above Rules shallbe classified under the heading appropriate to the goods to which they are most akin.

(5) In addition to the foregoing provisions, the following Rules shall apply with respect to 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 specific goods or set of goods'. suitable for long-term use and presented with the goods for which they are intended, shall be classified with such goods when of a kind normally sold therewith. The Rule does not, however, apply to containers which give the whole its essential character- and

(b) Subject to the provisions of Rule 5(a), packing materials andpacking containers presented with the goods therein shall be classified with the goods if they are of akind normally used for packing such goods. However, this provision does not apply when such packing materials or packing containers are clearly suitable for repetitive use.

(6) 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 atthe same level are comparable. For the purposes of the Rule, the relative section and Chapter Notes also apply, unless the context otherwise requires.

SEC. 1611. Tariff Nomenclature and Rates of Import Duty.

- The provisions of Section 104 on Rates of Import Duty of Presidential Decree No. 1464, otherwise known as the Tariff and Customs Code of the Philippines ofl978, as amended, specifically providing for the tariff sections, chapters, headings and subheadings and the rates of import duty, shall still apply and shall supplement this Act. There shall be levied, collected and paid upon all imported goods the rates of duty indicated thereon except as otherwise specifically provided for inthis Act: Provided, That the maximum rate shall not exceed one hundred percent (100%) ad valorem.

,ii,,

The rates of dutyprovided or subsequently fixed pursuant to Sections 1608 and 1609of this Act shallbe subject to periodic investigation by the Tariff Commission and may be revised by the President, upon the recommendation of the NEDA

It shall also applyto allproducts, whether imported directly or indirectly, of allforeign countries, which do not discriminate against Philippine export products..Anadditional one hundred percent (100%) across-the-board duty shall be levied on the products of any foreign country which discriminates against Philippine exportproducts.

SEC.1612. Tarif{Nomenclature and Rates of Export Duty.

-The provisions of Section 514 on Export Products Subject to Duty and Rates of Presidential Decree No. 1464,otherwise known asthe Tariff and Customs Code of 1978, asamended, specifically providing forthe export products subject to duty andrates, shall still apply and shall supplement this Act.

TITLE XVII

CONGRESSIONAL OVERSIGHT COM:MITTEE

SEC. 1700. Congressional Oversight Committee. - The Congressional Customs and Tariff Oversight Committee, herein referred to asthe Committee, ishereby constituted in accordance with the provisions of this Act. The Committee shallbe composed of the Chairpersons of the Committee on Ways and Means of the Senate and House of Representatives and four (4) additional members from each House, to be designated by the Senate President and the Speaker of the House of Representatives, respectively. The Committee shall, among others, in aid of legislation:

(a) Monitor andensure the proper :implementation of this

Act;

(b) Review the collection performance of the Bureau; and

In furtherance of the hereinabove cited objectives, the Committee shall require the Bureau to submit all pertinent information which includes:

(1) Industry audits;

(2) Collection performance data; and

(3) Status report on administrative, civil and criminal actions initiated against persons.

TITLEXVIII

FINAL PROVISIONS

SEC. 1800.Implementing Rules and Regulations. - The Secretary of Finance shall, upon the recommendation of the Commissioner, promulgate the necessary rules andregulations for the effective implementation of this Act.

SEC.1801. Transitory Provisions. - Allsuits, proceedings, or prosecutions whether civil or criminal, for causes arising or acts done or committed prior to the effectivity of thisAct, shallbe commenced and prosecuted within the same time in the same manner and with the same effect as if this Act had not been enacted and.all rights acquired, offenses committed, and penalties or forfeitures or liabilities waived prior to the said effectivity shall not be affected thereby.

SEC. 1802. Saving Clause.-Allotherlaws, acts, executive orders, and Customs Administrative Orders (CAOs), Customs Memorandum Orders (CMOs), orders, memoranda, ,circulars, rules andregulations issued by the Bureau, under the provisions of Presidential Decree No. 1464, otherwise known as the Tariff and Customs Code of the Philippines of 1978, as amended, not inconsistent with the provisions of this Act, shall remain valid unless the samewillbe repealed or amended accordingly, pursuant to the provisions of this Act.

SEC. 1803. Repealing Clause. Presidential Decree No. 1464, otherwise known asthe Tariff and Customs Code of

the Philippines of 1978, as amended, and Presidential Decree No. 1853 which require any applicant for letter of credit covering imports to deposit the full amount of duties due onthe

This Act which is a consolidation of House Bill No. 5525 and Senate Bill No. 2968 was finally passed by the House of Representatives and the Senate on February 2, 2016.

Secretary of the Senate

Secretary General House o/ Representatives