Fifteenth Congress
First Regular Session

HOUSE BILL No. _8786

Introduced by Honorable Edgar S. San Luis

EXPLANATORY NOTE

This bill seeks to provide for stronger anti-smuggling strategies,
amending for the purpose Presidential Decree No. 1464, otherwise known
as the “Tariff and Customs Code of 1978.”

Smuggling or unlawful importation of goods into the country
remains to be a scourge to the government and local manufacturers and
traders today. Every year, the government is losing approximately $4
billion in revenues because of smuggling activities. These foregone
revenues could have been used for vital social and economic services.
The amount is enough to cover the budget deficit of the government.

Smuggling affects the local industries negatively. The
manufacturing companies lose profit and many small traders declare
bankruptcy. It destroys the livelihood of farmers and wipes out jobs in
the industrial sector. Further, it also endangers the health and welfare of
the public since smuggled agricultural products or goods do not undergo
the necessary quarantine procedures.

The enormous revenue loss due to uncollected taxes on smuggled
goods and negative effects on local industries should not be ignored.
Smuggling in the country must be stopped. Hence, this bill aims to
eliminate smuggling by ensuring transparency in import transactions.
This can be done by providing advance copies of cargo manifest to the
Bureau of Customs (BOC) and the Philippine Ports Authority. The
manifest shall also be made available to the Department of Agriculture
for their own monitoring and inspection. The cargo manifest is also
required to be posted in the bulletin board and website of the Bureau of
Customs.

This proposed measure also seeks to establish a Valuation and
Classification Review Coramittee in every Bureau of Customs District
Office which shall inciude representatives from the private sector to
minimize discretionary authority of BOC personnel when appraising
dutiable items or articles.


Further, under this bill, the customs collector is mandated to
conduct spot inspection and periodic audit to ensure that customs laws
and regulations are followed by bonded warehouse facilities.

In view of the foregoing, approval of this bill is highly
recommended.

‘LUIS


Fifteenth Congress
First Regular Session

HOUSE BILL NO.__ 8786

Introduced by Honorable Edgar S. San Luis

AN ACT
PROVIDING FOR STRONGER ANTI-SMUGGLING
STRATEGIES, AMENDING FOR THE PURPOSE
PRESIDENTIAL DECREE NO. 1464, OTHERWISE KNOWN AS
“THE TARIFF AND CUSTOMS CODE OF 1978”

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

SECTION I. Section 1005 of Presidential Decree No. 1464 is
hereby amended to read as follows:

“SEC. 1005. Manifest Required [of Vessel from
Foreign Port]. — Every vessel OR AIRCRAFT from a
foreign port OR AIRPORT must have on board a complete
manifest of all her cargo.

XXX XXX XXX

A TRUE AND COMPLETE COPY OF THE CARGO
MANIFEST AND BILL OF LADING, TOGETHER WITH
THE STOWAGE PLAN OF THE OCEAN-GOING
VESSEL ENGAGED IN FOREIGN TRADE, SHALL BE
TRANSMITTED ELECTRONICALLY TO THE BUREAU
OF CUSTOMS AND THE PHILIPPINE PORTS

AUTHORITY AT LEAST TWELVE (12) HOURS PRIOR


TO ITS ARRIVAL IN THE PORT OF ENTRY. IN CASE
OF AN AIRCRAFT, THE MANIFEST AND THE BILL OF
LADING SHALL BE ELECTRONICALLY
TRANSMITTED TO THE BUREAU OF CUSTOMS AT
LEAST ONE (i) HOUR PRIOR TO ITS ARRIVAL IN
THE AIRPORT OF ENTRY. IN CASE OF
AGRICULTURAL IMPORTATION THE BUREAU OF
CUSTOMS SHALL FURNISH THE DEPARTMENT OF
AGRICULTURE WITH THE ELECTRONICALLY SENT
CARGO MANIFEST AND BILL OF LADING UPON
RECEIPT THEREOF.

A cargo manifest shall in no case be changed or
altered after entry of the vessel, except by means of an
amendment by the master, consignee or agent thereof, under
oath, and attached to the original manifest: Provided,
however, That after the invoice or entry covering an
importation have been received and recorded [in the office of
the appraiser] © EITHER MANUALLY OR
ELECTRONICALLY IN THE BUREAU OF CUSTOMS
OR HAD BEEN LOGGED IN ITS COMPUTER SYSTEM,
no amendment of the manifest shall be allowed, except when

it is obvious that a clerical error or any discrepancy has been


committed in the preparation of the manifest, without any
fraudulent intent, discovery of which would not have been
made until after examination has been completed. PRIOR
TO THE RELEASE OF THE CARGO, THE
COMMISSIONER OF CUSTOMS SHALL EXAMINE
THE VERACITY OF THE AMENDMENT AND IN CASE
THERE IS PROOF OF FRAUD IN THE AMENDMENT
OF THE MANIFEST, THE COMMISSIONER SHALL
APPLY THE PENAL PROVISIONS UNDER SECTIONS
2503 AND 3602 OF THE TARIFF AND CUSTOMS
CODE.”

SEC. 2. Section 1007 of the same Act, as amended, is hereby

further amended to read as follows:

“SEC. 1007. Manifest for Commission on Audit and
Collector. — Papers to be deposited with Consul. —
Immediately after the arrival of a vessel from a foreign port,
the master shall deliver or mail to the Chairman,
Commission on Audit, Manila, a copy of the cargo manifest
properly indorsed by the boarding officer, and WITHIN
TWENTY-FOUR (24) HOURS AFTER ARRIVAL, he shall
present to the Collector the original copy of the cargo

manifest and, for inspection, the ship’s register or other


document in lieu thereof, together with the clearance and
other papers granted to the vessel at the port of departure for
the Philippines.

WITHIN THREE (3) DAYS FROM RECEIPT
THEREOF, THE COLLECTOR SHALL PUBLISH THE
CARGO MANIFEST FOR TWO (2) CONSECUTIVE

WEEKS IN THE WEBSITE OF THE BUREAU OF

CUSTOMS.
XXX XXX XXX
XXX XXX XXX

SEC. 3. A new section to be known as Section 1214 is hereby
inserted in the same Act, as amended, to read as follows:

“SEC. 1214. IMPORT OR QUARANTINE PERMIT
FOR AGRICULTURAL PRODUCTS. - IMPORTED
AGRICULTURAL PRODUCTS MUST BE COVERED BY
A VALID IMPORT OR QUARANTINE PERMIT ISSUED
BY THE DEPARTMENT OF AGRICULTURE PRIOR TO
IMPORTATION TO THE PHILIPPINES. NO
AGRICULTURAL PRODUCTS MUST BE ACCEPTED
FOR LOADING OR TRANSPORT BY A VESSEL OR
AIRCRAFT INTO THE COUNTRY IF THESE

AGRICULTURAL PRODUCTS HAVE NOT BEEN


AUTHORIZED THROUGH AN IMPORT OR
QUARANTINE PERMIT ISSUED BY THE
DEPARTMENT OF AGRICULTURE PRIOR TO
SHIPMENT. IF AND WHEN AGRICULTURAL
PRODUCTS WERE LOADED, TRANSPORTED AND
BROUGHT INTO THE COUNTRY WITHOUT THE
i PRIOR ISSUANCE OF IMPORT OR QUARANTINE
PERMIT, THE AGRICULTURAL PRODUCTS MUST
NOT BE UNLOADED FROM THE VESSEL OR
AIRCRAFT TO ANY PHILIPPINE PORT OR AIRPORT
OF ENTRY AND MUST BE SHIPPED BACK TO THE
COUNTRY OF ORIGIN BY THE CONSIGNEE
THROUGH THE SAME CARRIER THAT
TRANSPORTED OR BROUGHT IN THE PRODUCTS.
ANY IMPORTER WHO CAUSES THE ENTRY OF ANY
AGRICULTURAL PRODUCT WITHOUT PRIOR
IMPORT OR QUARANTINE PERMIT FOR THE
PURPOSE SHALL BE HELD LIABLE UNDER SECTION
3601 OF THIS CODE.”
SEC. 4. Section 1409 of the same Act, as amended, is hereby

further amended to read as follows:


“SEC. 1409. [Employment and Compensation of
Persons to Assist in Appraisal or Classification of Articles. —
When necessary, the collector may request two disinterested
persons versed in the matter to assist the appraiser in
appraising or ascertaining the dutiable value of any article.]
VALUATION, AND CLASSIFICATION REVIEW
COMMITTEE. = A VALUATION AND
CLASSIFICATION REVIEW COMMITTEE IS HEREBY
ESTABLISHED IN EVERY BUREAU OF CUSTOMS
DISTRICT OFFICE TO APPRAISE OR ASCERTAIN THE
DUTIABLE VALUE OF ANY ARTICLE. IT SHALL BE

# COMPOSED OF THE DISTRICT COLLECTOR OF
CUSTOMS, AS CHAIRMAN, TWO (2) MEMBERS
FROM THE DISTRICT OFFICE AND TWO (2)
MEMBERS FROM THE PRIVATE SECTOR, AS
MEMBERS.

Persons so employed shall be paid compensation in an
amount to be determined by the Commissioner, not
exceeding [Fifty pesos (PS0.00)] TWO THOUSAND
PESOS (P2,000.00) for each day of such service.”

SEC. 5. A new section to be designated as Section 1410 is hereby

inserted in the same Act, as amended, to read as follows:


“SEC. 1410. AUTHORITY OF THE BUREAU OF
CUSTOMS TO EXAMINE THE ENTRY AND EXIT OF
IMPORTED ARTICLES IN THE FREEPORTS. — THE
BUREAU OF CUSTOMS, IN COORDINATION WITH
THE APPROPRIATE GOVERNMENT AGENCIES SUCH
AS, BUT NOT LIMITED TO, THE DEPARTMENTS OF
TRADE AND INDUSTRY, TRANSPORTATION AND
COMMUNICATIONS, AGRICULTURE AND HEALTH
SHALL HAVE THE AUTHORITY TO EXAMINE THE
ENTRY AND EXIT OF IMPORTED ARTICLES IN THE
FREEPORTS FOR THE PURPOSE OF DETERMINING:
(A) THE QUANTITY AND DESCRIPTION OF SUBJECT
IMPORTED ARTICLES, AND (B) THE COMPLIANCE
WITH THE SANITARY AND AGRICULTURAL
REQUIREMENTS.”

SEC. 6. Section 1901 of the same Act, as amended, is hereby
further amended to read as follows:

“SEC. 1901. Establishment and Supervision of
Warehouses. — When the business of the port requires such
facilities, the collector subject to the approval of the

Commissioner shall designate and establish warehouses for


use as public and private bonded warehouses, sheds or yards,
or for other snecial purposes.

All such warehouses and premises shall be subject to
the supervision of the collector, who shall impose such
conditions as may be deemed necessary for the protection of
the revenue and of the articles stored therein. THE
COLLECTOR SHALL CONDUCT SPOT CHECK OR
INSPECTION AND PERIODIC AUDIT TO ENSURE
THAT APPLICABLE CUSTOMS LAWS AND
REGULATIONS ARE FOLLOWED BY THE BONDED
FACILITIES.”
SEC. 7. Section 3601 of the same Act, as amended, is hereby

further amended to read as follows:

“SEC. 3601. Unlawful Importation. — Any person
who shall fraudulently import or bring into the Philippines,
or assist in so doing, any article, contrary to law or shall
receive, conceal, buy, sell, or in any manner facilitate the
transportation, concealment, or sale of such article after
importation, knowing the same to have been imported
contrary to law, shall be guilty of smuggling and shall be

punished with:


1. A fine of not less than [fifty] TWENTY
THOUSAND pesos (P20,000.00) nor more than [two
hundred] ONE HUNDRED THOUSAND pesos
(P100,000.00) and imprisonment of not less than [five days]
TWO (2) YEARS nor more than [twenty days] SIX (6)
YEARS, if the appraised value, to be determined in the
manner prescribed under this Code, including duties and
taxes, of the article unlawfully imported does not exceed
[twenty-five] TWO HUNDRED THOUSAND pesos
(P200,000.00);

2. A fine of not less than [eight hundred] ONE
HUNDRED THOUSAND pesos (P100,000.00) nor more
than [five thousand] TWO HUNDRED THOUSAND pesos
(P200,000.00) and imprisonment of not less than [six months
and one day] SIX (6) YEARS nor more than [four] TEN (10)
YEARS, if the appraised value, to be determined in the
manner prescribed under this Code, including duties and
taxes, of the article unlawfully imported exceeds [twenty-
five] TWO HUNDRED THOUSAND pesos (P200,000.00)
but does not exceed [fifty] SIX HUNDRED thousand pesos

(P600,000.00);


3. A fine of not less than [six] TWO HUNDRED
thousand pesos (P200,000.00) nor more than [eight] SIX
HUNDRED thousand pesos_—- (P600,000.00) _ and
imprisonment of not less than [five] TEN (10) years [and
one day] nor more than [eight] FIFTEEN (15) YEARS, if the
appraised value, to be determined in the manner prescribed
under this Code, including duties and taxes, of the article
unlawfully imported is more than [fifty] SIX HUNDRED
thousand pesos (P600,000.00) but does not exceed [one
hundred fifty thousand} ONE MILLION PESOS
(P1,000,000.00);

4. A fine of not less than [eight] SIX HUNDRED
thousand pesos (P600,000.00) nor more than [ten thousand]
TEN MILLION pesos (P10,000,000.00) and imprisonment
of not less than [eight] FIFTEEN (15) years [and one day]
nor more than [twelve] TWENTY (20) years, if the
appraised value, to be determined in the manner prescribed
under this Code, including duties and taxes, of the article
unlawfully imported, exceeds [one hundred fifty thousand]
ONE MILLION pesos P1,000,000.00) BUT NOT MORE

THAN FIFTY MILLION PESOS (P50,000,000.00);


5, IF THE APPRAISED VALUE OF THE
UNLAWFULLY IMPORTED ARTICLE INCLUDING ITS
DUTIES AND TAXES, EXCEEDS FIFTY MILLION
PESOS (P50,000,000.00) OR IF THE AGGREGATE
AMOUNT OF THE APPRAISED VALUE OF THE
UNLAWFULLY IMPORTED ARTICLE INCLUDING
DUTIES AND TAXES, RESULTING FROM REPEATED
UNLAWFUL IMPORTATION EXCEEDS FIFTY
MILLION PESOS (P50,000,000.00), THE SAME SHALL
BE CONSIDERED AN OFFENSE INVOLVING
ECONOMIC SABOTAGE AND SHALL BE PUNISHED
WITH AN IMPRISONMENT OF NOT LESS THAN
TWENTY (20) YEARS BUT NOT MORE THAN THIRTY
(30) YEARS AND A FINE OF NOT LESS THAN
TWELVE MILLION PESOS (P12,000,000.00) BUT NOT
MORE THAN FIFTY MILLION PESOS (P50,000,000.00);
AND

[5] 6. [The penalty of —prision _ mayor]
IMPRISONMENT OF NOT LESS THAN SIX (6) YEARS
BUT NOT MORE THAN TWELVE (12) YEARS shall be
imposed when the crime of serious physical injuries shall

have been committed and the penalty of [reclusion perpetua


to death] IMPRISONMENT OF NOT LESS THAN
TWENTY (20) YEARS BUT NOT MORE THAN THIRTY
(30) YEARS shall be imposed when the crime of homicide
shall have been committed by reason or on the occasion of
the unlawful importation.
In applying the above scale of penalties, if the
offender is an alien [and the prescribed penalty is not death],
he shall be deported after serving the sentence without
° further proceedings for deportation. If the offender is a
government official or employee, the penalty shall be the
maximum as hereinabove prescribed and the offender shall
suffer an additional penalty of perpetual disqualification
from public office, to vote and to participate in any public
election.
XXX XXX XXX.”
SEC. 8. This Act shall take effect fifteen (15) days after
publication in the Official Gazette or in two (2) national newspapers of
general circulation.

Approved,