FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 728 
" 
, ',"t 
{)I'I'!CE '/ ", 
~:" r :\[ '1· ;.\,RY 
10 
jiJ!.. -7 Pi!:13 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
This bill amends certain provIsions of Presidential Decree No. 1464, 
otherwise known as the Tariff and Customs Code of the Philippines, as 
amended. 
Govemment transparency is crucial to gain the public's trust, and to bring 
investors into the country. In trade, this entails availability and accessibility of 
shipping documents, as well as visibility at all times in the transporting of goods. 
Under the proposed bill, an Audit and Transparency Group under the 
Bureau of Customs, headed by a Deputy Commissioner, would regularly inspect 
and report on the bureau's operational processes, collection and financial 
reporting, fiscal and personnel performance, system efficiency, internal control, 
information and communication flow, fraudulent and illegal practices and other 
related areas. On the basis of these inspections and reports, the Audit and 
Transparency Deputy Commissioner can initiate investigations of fraud and other 
graft and corrupt practices in the bureau, and shall recommend to the Office of 
the Ombudsman the filing of any cases against personnel and officers involved. 
Aside from this, each vessel engaged in foreign trade shall need an 
electronic copy of its cargo and passenger manifest transmitted to the Bureau of 
Customs at least six hours prior to the vessel's arrival in the port of entry; for 
aircraft, the electronic copy must be submitted an hour before arrival. 
In addition, a valuation library comprising Customs records shall be made 
readily available to the public. These, and other amendments, which among 
others raises penalties, will lift the standards of Customs inspection of port 
arrivals. 
There must be increased vigilance against smuggling, which deprives the 
government of billions annually, without unnecessarily shunning traders through 
bureaucratic red tape. This bill strikes a fair balance. In view of the foregoing, 
immediate approval of this bill is earnestly sought. 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 728 
Hl 
.JUL -7 P <4 :13 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
, AN ACT 
AMENDING CERTAIN PROVISlbNS OF PRESIDENTIAL DECREE NO. 1464, 
OTHERWISE KNOWN AS THE TARIFF AND CUSTOMS CODE OF THE 
PHILIPPINES, AS AMENDED, AND FOR OTHER PURPOSE 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1 . Short Title. - This Act shall be known and cited as the 
"Anti-Smuggling Act of 2010." 
SEC. 2. Section 601 of the Tariff and Customs Code of the Philippines 
(TCCP), as amended, is hereby further amended to read as follows: 
"SEC. 601. Chief Officials of the Bureau of Customs. - The Bureau of 
Customs shall have one chief and FIVE [four] assistance chiefs, to be 
known respectively as the Commissioner of Customs (hereinafter known 
as the Commissioner) and FIVE (5) Deputy Commissioners of Customs, 
each one to head (a) Customs Revenue and Collection Monitoring Group; 
(b) Customs Assessment and Operations Coordinating Group; (c) 
Intelligence and Enforcement Group; (d) Internal Administration Group; 
AND (5) AUDIT AND TRANSPARENCY GROUP, who shall each receive 
an annual compensation in accordance with the rates prescribed by 
existing law. The Commissioner AND DEPUTY COMMISSIONER FOR 
AUDIT AND TRANSPARENCY SHALL BE DIRECTLY APPOINTED BY 
THE PRESIDENT. 
THE OTHER DEPUTY COMMISSIONERS SHALL BE APPOINTED BY 
THE 
PRESIDENT 
OF 
THE 
PHILIPPINES 
BASED 
ON 
THE 
RECOMMENDATION OF THE COMMISSION. 
"In case of temporary and permanent vacancy, one of the Deputy 
Commissioners shall be designated by the Secretary of Finance to act as 
a Commissioner of Customs, until the incumbent Commissioner 
reassumes his duties or ttie position is filled by appointment." 
SEC. 3. Section 607 of the Tariff and Customs Code of the Philippines 
(TCCP), as amended, is hereby further amended to read as follow: 
"SEC. 607. Annual Report of Commissioner. - The annual report of the 
Commissioner to the President shall, among other things, contain a 
compilation of the (a) quantity and value of the articles imported into the 
Philippines and the corresponding amount of customs duties, taxes and 


other charges assessed a,nd collected on imported articles itemized in 
accordance with the tariff headings and subheadings as appearing in the 
liquidated customs entries provided for in this Code, (b) percentage 
collection of the peso value of imports, (c) quantity and value of 
conditionally-free importations, (d) customs valuation over and above 
letters of credit opened, (e) quantity and value tax-free imports, and (0 the 
quantity and value of articles exported from the Philippines as well as the 
taxes and other charges assessed and collected on them for the 
preceeding year, THE DEPUTY COMMISSIONER FOR AUDIT AND 
TRANSPARENCY SHALL REGULARLY FURNISH [C] copies of such 
annual report [shall be furnished regularly] to the Department of Finance, 
Tariff Commission, NEDA, Central Bank of the Philippines, Board of 
Investments, Department of Budget, and other economic agencies of the 
government, on or before December 30, of each year. 
"For more scientific preparation of the annual report, the Commissioner 
shall cause the computerization of the data contained in the liquidated 
entries filed with the Bureau of Customs," 
follows: 
SEC. 4. Sec, 609 of the TCCP, as amended, is hereby further amended to 
read as follows: 
"SEC. 
609. 
Commissioner to Furnish Copies of Collectors' 
Liquidated Duplicates. - The Commissioner shall regularly furnish the 
NEDA, the Central Bank of the Philippines, the Tariff Commission, AND 
THE NATIONAL STATISTICS OFFICE (NSO), BOTH ELECTRONIC AND 
PAPER COPIES of each of all customs import! export entries as filed with 
the Bureau of Customs, The Tariff Commission or its duly authorized 
agents shall have access to and the right to copy all the customs 
liquidated import entries and other documents appended thereto as finally 
filed in the Commission on Audit. COPIES OF THE FOREGOING 
DOCUMENTS SHALL BE MADE ACCESSIBLE AND AVAILABLE TO 
THE DEPUTY COMMISSIONER FOR AUDIT AND TRANSPARENCY AT 
ALL TIMES," 
SEC. 5, Section 709 of the TCCP, as amended, is hereby further 
amended to read as follows: 
SEC. 709. Authority of the Collector to Remit Duties. - A Collector shall 
have discretionary authority to remit the assessment and collection of 
customs duties, taxes and other charges when the aggregate amount of 
such duties, fees, taxes, and other charges is less than FIVE THOUSAND 
PESOS, and he may dispense with the seizure of articles of less than 
FIVE THOUSAND PESOS in value except in cases of prohibited 
importations of the habitual or the intentional violation of the tariff and 
customs laws," 
SEC, 6. A new part shall be inserted starting with Section 713, after 
Section 712 of the TCCP, as amended, which shall read as follows: 
"PART 3. -AUDIT, TRANSPARENCY AND ACCOUNTABILITY 
"SEC. 713. THE 
DEPUTY COMMISSIONER FOR AUDIT AND 
TRANSPARENCY SHALL CONDUCT, IN COORDINATION WITH THE 
COMMISSION 
ON 
AUDIT, 
A BUREAU-WIDE 
AUDIT 
ON 
THE 
OPERATIONAL 
PROCESSES, 
COLLECTION 
AND 
FINANCIAL 


REPORTING, FISCAL AND PERSONNEL PERFORMANCE, SYSTEM 
EFFICIENCY, 
INTERNAL 
CONTROL, 
INFORMATION 
AND 
COMMUNICATION FLOW, FRAUDULENT AND ILLEGAL PRACTICES, 
AND SUCH OTHER AREAS AS MAY BE NECESSARY FOR THE 
EFFECTIVE OPERATIONS OF THE BUREAU AND ITS ATTACHED 
AGENCIES. 
"SEC. 714. THE APPROPRIATIONS FOR THE BUREAU OF CUSTOMS 
SHALL 
PROVIDE AN' ITEM 
OF 
EXPENSE 
FOR 
AUDIT 
AS 
CONTEMPLATED UNDER THIS ACT, INCLUDING A PROVISION FOR 
AN INDEPENDENT AUDIT OF THE BUREAU BY A QUALIFIED 
PRIVATE 
COMPANY 
OR 
INSTITUTION, 
WHICH 
SHALL 
BE 
CONDUCTED ANNUALLY, OR IN SUCH FREQUENCY AS MAY BE 
DETERMINED BY THE DEPUTY COMMISSIONER FOR AUDIT AND 
TRANSPARENCY UPON APPROVAL FO THE COMMISSIONER. 
"SEC. 715 .. ON THE BASIS OF THE AUDIT CONDUCTED PURSUANT 
TO THE PRECEDING SECTIONS, THE DEPUTY COMMISSIONER FOR 
AUDIT AND TRANSPARENCY SHALL HAVE THE AUTHORITY TO 
FORMULATE AND RECOMMEND POLICIES TO THE COMMISSIONER 
TO ADDRESS THE IDENTIFIED PROBLEMS AND DEFICIENCIES. 
UNLESS THERE IS REASONABLE DOUBT ON THE VALIDITY OF THE 
SAID AUDIT, THE RECOMMENDATIONS SHALL HAVE PERSUASIVE 
WEIGHT AND SHALL BE PROMPTLY ACTED UPON BY THE 
COMMISSIONER. 
"THE 
DEPUTY COMMISSIONER SHALL LIKEWISE HAVE THE 
AUTHORITY TO CONDUCT INVESTIGATIONS FOR THE PURPOSE OF 
INITIATING PROSECUTION OF FRAUD AND OTHER GRAFT AND 
CORRUPT PRACTICES IN THE BUREAU, AND SHALL RECOMMEND 
TO THE OMBUDSMAN THE FILING OF APPROPRIATE CRIMINAL 
CASES 
AGAINST THE 
ERRING 
PERSONNEL, 
AND 
TO 
THE 
COMMISSIONER 
THE 
IMPOSITION 
OF 
ADMINISTRATIVE 
SANCTIONS. 
"SEC. 716. IN THE CONDUCT OF ITS AUDIT AND INVESTIGATIONS, 
THE DEPUTY COMMISSIONER OF THE PRIVATE AUDITOR SHALL 
HAVE THE AUTHORITY TO REQUIRE THE PRODUCTION OF 
DOCUMENTS AND REQUIRE BUREAU PERSONNEL TO RESPOND 
TO ITS INQUIRIES. FOR THIS PURPOSE, IT MAY ISSUE SUBPOENA 
DUCES TECUM AND AD TESTIFICANDUM. ANY PERSON WHO 
SHALL REFUSE TO ABIDE BY THE SUBPOENA SO ISSUED MAY BE 
HELD LIABLE FOR CONTEMPT. 
"SEC. 
717. 
THE 
DEPUTY COMMISSIONER FOR AUDIT AND 
TRANSPARENCY SHALL SUBMIT AN ANNUAL REPORT TO THE 
COMMISSIONER, THE SECRETARY OF FINANCE, THE OFFICE OF 
THE PRESIDENT, AND THE CONGRESS, STATING THE RESULT OF 
ITS INSPECTIONS AND AUDITS. THE REPORT SHALL CONTAIN ALL 
THE NECESSARY DATA WHICH LED TO ITS RECOMMENDATIONS 
AND FINDINGS. AND SHALL BE MADE AVAILABLE TO THE PUBLIC 
THROUGH ELECTRONIC AND NON-ELECTRONIC MEANS, UNLESS 
NON-DISCLOSURE IS WARRANTED BY NATIONAL SECURITY. 
SEC. 7. A new section to be known as SECTION 1001-A is hereby 
inserted after Section 1001 of t,he TCCP, as amended, which shall read as 
follows: 


"SEC. 1001-A. TRANSMISSION OF ELECTRONIC COpy OF MANIFEST 
PRIOR TO ARRIVAL. - AN ELECTRONIC COpy OF THE CARGO AND 
PASSENGER MANIFEST OF THE VESSEL, ENGAGED IN FOREIGN 
TRADE SHALL BE TRANSMITTED TO THE BUREAU OF CUSTOMS AT 
LEAST SIX (6) HOURS PRIOR TO THE VESSEL'S ARRIVAL IN THE 
PORT OF ENTRY, PROVIDED, THAT IF THE VESSEL IS AN 
AIRCRAFT, THE MANIFEST SHALL BE TRANSMITTED TO THE 
BUREAU OF CUSTOMS AT LEAST ONE (1) HOUR PRIOR TO THE 
AIRCRAFTS ARRIVAL IN THE PORT OF ENTRY." 
SEC. 8. Section 1007 of the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 1007. Manifest for Commission on Audit and Col/ector. -
Papers to be Deposited with Consul. - Immediately after the arrival of a 
vessel from a foreign port, the master shall deliver or mail the Chairman, 
Commission on Audit, Manila and the DEPUTY COMMISSIONER FOR 
AUDIT AND TRANSPARENCY, a copy of the cargo manifests properly 
endorsed by the boarding officer and the master shall immediately present 
to the Collector the original copy of the cargo manifests properly endorsed 
by the boarding officer and, for inspection, the ship's register or other 
documents in lieu thereof, together with the clearance and other papers 
granted to the vessel at the port of departure for the Philippines." 
SEC. 9. Section 1210 af the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 1210. Disposition of Imported Articles Remaining on Vessel 
After Time for Unlading. - Imported articles remaining on board any 
vessel after the expiration of the said period for discharge and not 
reported for transshipment to another port, may be unladed by customs 
authorities and stored at the vessel's expense . 
.. 
"Unless prevented by causes beyond the vessel's control, such as port 
congestion, strikes, riots, or civil commotions, failure of vessel's gear, bad 
weather, and similar causes, articles so stored shall be entered within 
FIFTEEN (15) DAYS, which shall not be extendible, from the date of 
discharge of the last package from the vessel or aircraft and shall be 
claimed within fifteen (15) days, which shall likewise not be extendible 
from the date of posting of the notice to claim in conspicuous places in the 
Bureau of Customs. If no entered or not claimed, it shall be disposed of in 
accordance with the provisions of this Code." 
SEC. 10. A new section to be known as Section 1401-A is hereby inserted 
after Section 1401 of the TCCP, as amended, which shall read as follows: 
SEC. 1401-A. VALUATION LIBRARY. - THE COMMISSION SHALL 
ENSURE THAT THERE SHALL BE A VALUATION LIBRARY, WHICH 
SHALL BE KEPT UP TO DATE AND MAINTAINED USING THE BEST 
AVAILABLE TECHNOLOGY. THE VALUATION LIBRARY SHALL BE 
MADE READILY AVAILABLE TO THE PUBLIC. 
SEC. 11. Section 1403 of the TCCP, as amended, is hereby further 
amended to read as follows: 


"SEC. 1403. Duties of Customs Officer Tasked to Examine, Classic, 
and Appraise Imported Articles. - The customs officer tasked to 
examine, classify, and appraise imported articles shall determine whether 
the packages designated for examination and their contents are in 
accordance with the declaration in the entry, invoice, and other pertinent 
documents and shall make a return in such a manner to indicate whether 
the articles have been truly and correctly declared in the entry as regard 
their quantity, measurement, weight, and tariff classification and not 
imported contrary to law. THE CUSTOMS SHALL LIKEWISE CERTIFY 
UNDER OATH IN THE RETURN THAT HE USED THE VALUATION 
LIBRARY IN 
CLASSIFYING AND APPRAISING THE IMPORTED 
ARTICLES. He shall ALSQ submit a sample to the laboratory for analysis 
when feasible to do so and when such analysis is necessary for the proper 
classification, appraisal, and/or admission into the Philippines of imported 
articles." 
"Likewise, the customs officer shall determine the unit of quantity in which 
they are usually bought and sold and appraise the imported articles in 
accordance with Section 201 of this Code. 
"Failure on the part of the customs officer to comply with his duties shall 
subject him to the penalties prescribed under 3604 of this Code." 
SEC. 12. Section 1801 of the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 1801. Abandonment, Ends and Effects of - An imported article is 
deemed abandoned under any of the following circumstances: 
a. When the owner, importer, consignee of the imported article expressly 
signifies in writing to the Collector of Customs his intention to abandon: 
b. When the owner, importer, consignee, or interested party after due 
notice, fails to file an entry within thirty 9300 days, which shall not be 
extendible, form the date of discharge of the last package from the vessel 
or aircraft, or having filed such entry, fails to claim his importation within 
fifteen (15) days, which shall not likewise be extendible, from the date of 
posting of the notice to claim such importation; OR WHEN THERE IS A 
WRITTEN DENIAL OF OWNERSHIP FROM THE PERSON INDICATED 
ON THE MANIFEST OR BILL OF LADING AS THE OWNER, 
IMPORTER, OR CONSIGNEE OF THE IMPORTED ARTICLE. 
"Any person who abandons an article or who fails to claim his importation 
as provided for in the preceding paragraph shall be deemed to have 
renounced all his interests and property rights therein." 
SEC. 13. Section 1802 of the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 1802. Abandonment of Imported Articles - An abandoned article 
shall ipso facto be deemed the property of the Government. ALL 
ABANDONED 10 ARTICLES SHALL BE AUTOMATICALLY SUBJECT 
TO 
AUCTION 
AND 
SHALL 
IN 
NO 
CASE 
BE 
SUBJECT TO 
SETTLEMENT OR COMPROMISE. 
"AN 
UPDATED 
LISTING 
OF 
ALL 
ABANDONED 
SHIPMENTS 
SCHEDULED FOR AUCTION SHALL BE POSTED ON THE OFFICIAL 


WEBSITE OF THE BUREAU OF CUSTOMS AND AT THE MAIN 
ENTRANCE OF CUSTOMS HOUSES. 
"Nothing in this section shall be construed as relieving the owner or 
importer from any criminal liability which may arise from any violation of 
law committed in connection with the importation of the abandoned article. 
"Any official or employee of the Bureau of Customs or of other government 
agencies who, having knowledge of the existence of an abandoned article 
or having control or custody of such abandoned article, fails to report to 
the Collector within twenty-four (24) hours from the time the article is 
deemed abandoned shall be punished with the penalties prescribed in 
Paragraph 1, Section 3604 of this Code (RA 7651,June 4,1993)." 
SEC. 14. Section 1901 of the TCCP, as amended, is hereby further 
amended to read as follows: 
. 
SEC. 1901. Establishment and Supervision of Warehouses. - When 
the business of the port r~quires such facilities, the Collector, subject to 
the approval of the Commissioner, shall designate and establish 
INDUSTRY - SPECIFIC warehouses for use as a public and private 
bonded warehouses, sheds or yards, or for other special 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. 
SEC. 15. Section 1902 of the TCCP, as amended, is hereby further 
amended to read as follows: 
SEC. 1902. Responsibility of Operators. - The operators of bonded 
warehouses in case of loss of the imported articles stored shall be liable 
for the payment of duties and taxes due thereon. 
"The government assumes no legal responsibility in respect to the 
safekeeping of articles stored in any customs warehouse, sheds, yards, or 
premises. 
"THE OPERATORS OF THE BONDED WAREHOUSES SHALL, FOR 
LEGITIMATE PURPOSES, MAKE AVAILABLE TO THE PUBLIC AN 
INVENTORY OF ALL ARTICLES STORED THEREIN. FAILURE TO DO 
SO IS A MANDATORY GROUND FOR THE REVOCATION OF LICENSE 
TO OPERATE A BONDED WAREHOUSE." 
SEC. 16. Section 1903 of the TCCP, as amended, is hereby further 
amended to read as follows: 
SEC. 1903. Bonded Warehouses. - Application for the establishment of 
bonded warehouses must be made in writing and filed with the Collector, 
describing 25 the premises, the location, and capacity of the same, the 
purpose for which the building is to be used, AND THE INDUSTRY TO 
WHICH IT BELONGS. THE APPLICATION SHALL LIKEWISE BE 
ACCOMPANIED BY VERIFIED COPIES OF DOCUMENTS INDICATING 
THE OWNERSHIP AND THE FINANCIAL CAPACITY OF THE BONDED 
WAREHOUSE. 


"Upon receipt of such application, the Collector shall cause an 
examination of the premises, with reference particularly to its location, 
construction and means provided for the safekeeping of articles. THE 
COLLECTOR SHALL LIKEWISE DETERMINE THE OWNERSHIP OF 
THE APPLICANT BONDED WAREHOUSE TO VERIFY OWNERS OF A 
BONDED WAREHOUSE WHICH HAD BEEN CLOSED DUE TO ITS 
NONCOMPLIANCE WITH 'CUSTOMSLAWS AND REGULATIONS HAS 
ANY INTEREST THEREIN. IF THE APPLICATION IS found satisfactory, 
THE COLLECTOR may authorize its establishment, and accept a bond for 
its operation and maintenance. The operator of such bonded warehouse 
shall pay an annual supervision fee in an amount to be fixed by the 
Commissioner. The bonded warehouse officers and other employees 
thereof shall be regular customs employees who shall be appointed in 
accordance with the Civil Service Law, rules and regulations. 
"THE PAID-UP CAPITAL AND NET ASSETS OF THE BONDED 
WAREHOUSE SHALL BE SET AT AN AMOUNT DETERMINED BY THE 
COMMISSIONER AS SUFFICIENT TO COVER THE VALUE OF GOODS 
OF UNLIQUIDATED ENTRIES WHICH SHAL BE STORED THEREIN AT 
ANY GIVEN TIME. OTHERWISE, THE APPLICATION SHALL NOT BE 
GRANTED, AND AN AUTHORITY ALREADY GRANTED SHALL BE 
REVOKED. 
"THESE 
REQUIREMENTS 
SHALL 
LIKEWISE 
EXTEND 
TO 
REGISTERED LOCATORS OPERATING UNDER THE CHARTERS OF 
THE PHILIPPINE ECONOMIC ZONE AUTHORITY, THE SUBIC BAY 
METROPOLITAN 
AUTHORITY, 
AND 
OTHER 
FREEPORTS 
AND 
ECOZONES." 
SEC. 17. A new section to be known as SECTION 1903-A is hereby 4 
inserted after Section 1903 of the TCCP, as amended, which shall read as 
follows: 
"SEC. 1903-A. REGULAR AUDIT OF BONDED WAREHOUSE. A 
REGULAR AUDIT OF ALL BONDED WAREHOUSES SHALL BE 
CONDUCTED BY THE' COLLECTOR, WHICH AUDIT SHALL BE 
SUBJECT 
TO 
AUTOMATIC 
REVIEW 
BY 
THE 
DEPUTY 
COMMISSIONER FOR AUDIT AND TRANSPARENCY. UPON PETITION 
OF 
AN 
INTERESTED 
PARTY, 
A 
SECOND 
AUDIT 
MAY 
BE 
CONDUCTED 
BY 
THE 
DEPUTY 
COMMISSIONER 
OR 
AN 
INDEPENDENT AUDIT MAY BE MADE UPON THE INSTANCE OF THE 
PETITIONING 
PARTY 
IN 
COORDINATION WITH THE 
DEPUTY 
COMMISSIONER. 
SEC. 18. Section 1904 of the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 1904. Irrevocable Domestic Letter of Credit or Bank Guarantee 
or Warehousing Bond: -
After articles declared in the entry for 
warehousing shall have been examined and the duties, taxes, and other 
charges shall have been determined, the Collector shall require from the 
importer an irrevocable domestic letter of credit, bank guarantee, or CASH 
bond equivalent to the amount of such duties, taxes and other charges 
conditioned upon the withdrawal of articles within the period prescribed in 
section nineteen hundred and eight of this Code and for the payment of 
any duties, taxes and other charges to which the articles shall be then 


subject and upon compliance with all legal requirements regarding their 
importation." 
SEC. 19. Section 1905 of the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 1905. Discontinuance of Warehouses. - The use of any 
warehouse may be discontinued by the Collector at any time when 
conditions so warrant, or in the case of a private warehouse, upon receipt 
of written request to that effect from the operator thereof of the premises, 
provided all the requirements of the law and regulations have been 
complied with by said operator. A LEGITIMATE INDUSTRY GROUP MAY 
LIKEWISE 
RECOMMEND 
TO 
THE 
COLLECTOR 
THE 
DISCONTINUANCE OF "FHE BONDED WAREHOUSE ON GROUNDS 
OF NON-COMPLIANCE WITH THE REQUIREMENTS OF LAW AND 
REGULATIONS. Where the dutiable article is stored in such premises, the 
same must be removed at the risk and expense of the operator and the 
premises· shall not be relinquished, nor discontinuance of its use 
authorized, until a careful examination of the account of the warehouse 
shall have been made. Discontinuance of any warehouse shall be 
effective upon official notice and approval thereof by the Collector." 
SEC. 20. Section 1906 of the TCCP, as amended, is hereby further 
amended to read 
"SEC. 1906. Entry of Articles for Warehousing. - The entry of articles 
for warehousing shall be in the required number of copies in the 
prescribed form, and shall be verified as in the entry of the articles for 
consumption. No warehousing entry shall be accepted for any article if 
from the entry, supporting documents and/or information such article is 
imported contrary to any law. THE CUSTOMS OFFICER MAKING THE 
ENTRY SHALL BE RESPONSIBLE FOR TRANSMITTING A COPY OF 
THE SAME TO THE DEPUTY COMMISSIONER FOR AUDIT AND 
TRANSPARENCY." 
SEC. 21. Section 1907 of the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 1907. Withdrawal of Articles from Bonded Warehouse. - Articles 
entered under irrevocable domestic letter of credit, or CASH bond may be 
withdrawn at any time for re- exportation; PROVIDED THAT PROOF IS 
SHOWN THAT THE ORDER TO IMPORT THE SUBJECT ARTICLES 
HAS BEEN CANCELLED; PROVIDED FURTHER THAT THE ARTICLES 
TO BE WITHDRAWN DO NOT AMOUNT TO MORE THAN FIFTY 
PERCENT (50%) OF THE TOTAL INVENTORY OF THE BONDED 
WAREHOUSE. 
"The withdrawal must be made ONLY BY THE IMPORTER OF THE 
ARTICLES BEING WITH·DRAWN OR BY A REPRESENTATIVE whose 
authority must appear in writing upon the face of the withdrawal entry." 
SEC. 22. Section 1908 ,of the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 1908. Limit to Period of Storage in Bonded Warehouse. Articles 
duly entered for warehousing may remain in bonded warehouses for a 
maximum period of THIRTY (30) DAYS from the time of RECEIPT OF 


THE WAREHOUSE. Artioles not withdrawn at the expiration of the 
prescribed period shall be DEEMED ABANDONED AND SUBJECT TO 
DISPOSITION IN ACCORDANCE WITH THE PROVISIONS OF THIS 
CODE." 
SEC. 23. A new section to be known as Section 1908-A is hereby inserted 
after Section 1908 of the TCCP, as amended, which shall read as follows: 
"SEC. 1908-A. 
LIQUIDATION OF WAREHOUSING ENTRIES -
THE 
LIQUIDATION OF WAREHOUSING ENTRIES SHALL BE MADE NOT 
MORE THAN THREE (3) MONTHS FROM THE TIME OF RECEIPT OF 
THE WAREHOUSE. "A DAILY RECORD OF ALL ENTRIES LIQUIDATED 
SHALL BE POSTED ON A CONSPICUOUS PLACE IN THE MAIN 
ENTRANCE OF THE CUSTOMS HOUSE, STATING THE NAME OF THE 
VESSEL OR AIRCRAFT, THE PORT FROM WHICH SHE ARRIVED, 
THE DATE OF HER ARRIVAL, THE NAME OF THE IMPORTER, AND 
THE SERIAL NUMBER AND THE DATE OF ENTRY. THE COLLECTOR 
MUST ALSO KEEP A DAILY RECORD OF ALL ADDITIONAL DUTIES, 
TAXES AND OTHER CHARGES FOUND UPON LIQUIDATION, AND 
NOTICE SHALL PROMPTLY BE SENT TO THE INTERESTED 
PARTIES." 
SEC. 24. Section 2001 of the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 2001. Establishment of Bonded Manufacturing Warehouses. -
All articles manufactured in whole or in part of imported materials, and 
intended for exportation without being charged with duty, shall, in order to 
be so manufactured and exported, be made and manufactured in 
manufacturing warehouses under such rules and regulations as the 
Commissioner of Customs with the approval of the Secretariat of Finance, 
shall prescribe: Provided, That the manufacturer of such articles shall first 
file a satisfactory bond for the faithful observance of all laws, rules and 
regulations 
applicable 
thereto; 
PROVIDED 
FURTHER, 
BONDED 
MANUFACTURING WAREHOUSES SHALL LIKEWISE BE SUBJECT TO 
THE PROVISIONS UNDER TITLE V, PART 1 OF THIS CODE, AS 
AMENDED; PROVIDED FINALLY, THAT THESE REQUIREMENTS 
SHALL EXTEND TO REGISTERED LOCATORS OPERATING UNDER 
THE CHARTERS OF THE PHILIPPINE ECONOMIC ZONE AUTHORITY, 
THE 
SUBIC 
BAY 
METROPOLITAN 
AUTHORITY, 
AND 
OTHER 
FREEPORTS AND ECOZONES." 
SEC. 25. Section 2002 of the TCCP, as amended, is hereby further 
amended to read as follows: 
" SEC. 2002. Exemption Duty-
a. xxx 
b. Any imported material used in the manufacture of such articles, and any 
package, covering, brand and label used in putting up the same may, 
under the regulation prescribed by the Commissioner, with the approval of 
the Secretary of Finance, be oonveyed without the payment of duty into 
any bonded manufacturing warehouse, and imported articles may, under 
the aforesaid regulations, be transferred without the payment of duty from 
any bonded warehouse into any bonded manufacturing warehouse, or to 
duly accredited sub-contractors of manufacturers who shall process the 


same into finished products for exports and deliver such finished products 
back to the bonded manufacturing warehouse, therefrom to be exported; 
but this privilege shall not be held to apply to implements, machinery or 
apparatus to be used in the construction or repair of any bonded 
manufacturing warehouse: 
Provided, however, That the materials 
transferred or conveyed into any bonded manufacturing warehouse shall 
be used in the manufacture of articles for exportation within a period of 
THIRTY (30) DAYS from date of such transfer or conveyance into the 
bonded manufacturing warehouse, which period may for sufficient reasons 
be further extended for not more than THIRTY (30) DAYS by the 
Commissioner. Materials not used in the manufacture of articles for 
exportation within the prescribed period shall pay the corresponding 
duties: Provided, further, That the operation of embroidery and apparel 
firms shall continue to be governed by Republic Act Numbered Thirty One 
hundred and thirty-seven." 
SEC. 26. Section 2005 of the TCCP, as amended, is hereby further 
amended to read as follows: 
SEC. 
2005. 
Bonded Smelting 
Warehouses. 
-
The 
plants 
of 
manufacturers engaged in smelting or refining, or both, of ores and crude 
metals, may, upon the filing of CASH bonds, be designated as bonded 
smelting warehouses. Ores or crude metals may be removed from the 
vessel or aircraft in which imported, or from a bonded warehouse, into a 
bonded smelting warehouse without the payment of duties thereon, and 
there smelted or refined, or both, together with ores or crude metals of 
home or foreign productions: Provided, That the CASH BOND SHALL BE 
IN a sum equal in amount to the regular duties which would have been 
payable on such ores and crude metals if entered for consumption at the 
time of their importation, and the several charges against such bond shall 
be cancelled upon the exportation or delivery to a bonded manufacturing 
warehouse established under section twenty hundred and one hereof of a 
quantity of the same kind of metal equal to the quantity of metal producible 
from the smelting or refining, or both, of the dutiable metal contained in 
such ores or crude metals, due allowance being made of the smelter 
wastage as ascertained from time to time by the Commissioner: Provided, 
further, That the said metals so producible or any portion thereof, may be 
withdrawn for RE-EXPORTATION UPON PROOF THAT THE ORDER TO 
IMPORT THE SUBJECT METALS HAS BEEN CANCELLED AND THAT 
THE METALS TO BE WITHDRAWN DO NOT AMOUNT TO MORE THAN 
FIFTY PERCENT (50%) OF THE TOTAL INVENTORY OF THE BONDED 
SMELTING WAREHOUSE: Provided, further, That on the arrival of the 
ores or crude metals at such establishments they shall be sampled and 
assayed according to commercial methods under the supervision of 
proper government officials: Provided, further, That all labor performed 
and services rendered pursuant to this section shall be under the 
supervision of the proper. customs official and at the expenses of the 
manufacturer: Provided, further, That all regulations for carrying out the 
provisions of this section shall be prescribed by the Commissioner with the 
approval of the department head: Provided, FURTHER, That the several 
charges against the bond of any smelting warehouse established under 
the provisions of this section may be cancelled upon the exportation or 
transfer to a bonded manufacturing warehouse from any other bonded 
smelting warehouse established under this section of a quantity of the 
same kind of metal, in excess of that covered by open bonds, equal to the 
amount of metal producible from the smelting or 'refining, or both, of the 
dutiable metal contained 'in the imported ores or crude metals, due 


allowance being made of the smelter wastage as ascertained from time to 
time by the Commissioner with the approval of the department head 
PROVIDED FINALLY: THAT BONDED SMELTING WAREHOUSES 
SHALL LIKEWISE BE SUBJECT TO THE PROVISIONS UNDER TITLE 
V, PART 1 OF THIS CODE, AS AMENDED." 
SEC. 27. Section 2503 of the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 2503. Undervaluation, Misclassification, and Misdeclaration in 
Entry. When the dutiable value of the imported articles shall be sol 
declared and entered that the duties based on the declaration of the 
importer on the face of the entry would be less by ten percent (10%) than 
should be legally collected, or when the imported articles shall be so 
described and entered that the duties based on the importer's description 
on the face of the entry would be less by ten percent (10%) than should be 
legally collected based on the tariff classification, of when the dutiable 
weight, measurement or quantity of imported articles is found upon 
examination to exceed by ten percent (10%) or more than the entered 
weight, measurement or quantity, a surcharge shall be collected from the 
importer in an amount of not less than the difference between the full duty 
and the estimated duty based upon the declaration of the importer, nor 
more than twice of such difference: Provided, That an undervaluation, 
misdeclaration in weight, measurement or quantity of more than thirty 
percent (30%) between .the value, weight, measurement or quantity 
declared in the entry, ,and the actual value, weight, quantity, or 
measurement shall constitute a prima facie evidence of fraud penalized 
under Sections 2530 AND 3602 of this Code: Provided, further, That any 
misdeclared or undeclared imported article/ items found upon examination 
shall ipso facto be forfeited in favor of the Government to be disposed of 
pursuant to the provisions of this Code." 
SEC. 28. Section 2603 of the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 2603. Mode of Sale. - In the absence of any special provision, 
subject to the provisions of Section 2601 above provided, property subject 
to sale by the customs authorities shall be sold at public auction within 
FIFTEEN (15) DAYS after ten (10) days notice of such sale shall have 
been PUBLISHED IN AT LEAST (2) NEWSPAPERS OF GENERAL 
CIRCULATION, POSTED ON THE OFFICIAL WEBSITE OF THE 
BUREAU OF CUSTOMS, AND conspicuously posted at the FRONT 
ENTRANCE OF THE CUSTOMS HOUSE. " 
SEC. 29. Section 3601 of the TCCP, 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 receive, conceal, buy, sell, or in any way 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 IN AN AMOUNT EQUAL TO THE APPRAISED VALUE PLUS 
FIFTY PERCENT THEREOF and imprisonment of not less than six 
months and one day nor more than four years, if the appraised value, to 


be determined in the manner prescribed under this Code, including duties 
and taxes, of the article unlawfully imported exceeds FIVE THOUSAND 
PESOS but does not exceed fifty thousand pesos; 
2. A fine IN AN AMOUNT EQUAL TO THE APPRAISED VALUE PLUS 
FIFTY PERCENT THEREOF and imprisonment of not less than FOUR 
YEARS and one day nor more than eight years, if the appraised value, to 
be determined in the manner prescribed under this Code, including duties 
and taxes, of the article unlawfully imported is more than FIFTY thousand 
pesos but does not exceed one hundred fifty thousand pesos; 
3. A FINE IN THE AMOUNT EQUAL TO THE APPRAISED VALUE PLUS 
FIFTY PERCENT THERE:OF AND IMPRISONMENT OF NOT LESS 
THAN EIGHT YEARS AND ONE DAY NOR MORE THAN TWELVE 
YEARS, IF THE APPRAISED VALUE, TO BE DETERMINED IN THE 
MANNER PRESCRIBED UNDER THIS CODE, INCLUDING DUTIES 
AND TAXES, OF THE ARTICLE UNLAWFULLY IMPORTED EXCEEDS 
ONE HUNDRED FIFTY THOUSAND PESOS BUT DOES NOT EXCEED 
TWO HUNDRED FIFTY THOUSAND PESOS; 
4. A FINE IN THE AMOUNT EQUAL TO THE APPRAISED VALUE PLUS 
FIFTY PERCENT THEREOF AND IMPRISONMENT OF NOT LESS 
THAN TWELVE YEARS AND ONE DAY NOR MORE THAN FIFTEEN 
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 
TWO HUNDRED FIFTY THOUSAND PESOS BUT DOES NOT EXCEED 
FIVE HUNDRED THOUSAND PESOS; 
5. A FINE IN THE AMOUNT EQUAL TO THE APPRAISED VALUE PLUS 
FIFTY PERCENT THEREOF AND IMPRISONMENT OF NOT LESS 
THAN FIFTEEN YEARS AND ONE DAY NOR MORE THAN TWENTY 
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 
FIVE HUNDRED THOUSAND PESOS BUT DOES NOT EXCEED ONE 
MILLION PESOS; 
6. A FINE IN THE AMOUNT EQUAL TO THE APPRAISED VALUE PLUS 
FIFTY PERCENT THEREOF AND LIFE IMPRISONMENT, 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 MILLION 
PESOS. 
The penalty of prison mayor TO RECLUSION TEMPORAL shall be 
imposed when the crime of serious physical injuries shall have been 
committed and the penalty of reclusion perpetua to death shall be 
imposed when the crime of homicide shall have been committed by 
reason or on the occasion of the unlawful importation . 
.. 
"In applying the above scale of penalties, if the offender is an alien and the 
prescribed penalty is not death, he shall be deported after serving the 
sentence without further proceedings of 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 participate in 
any public election. 
. 
"When, upon trial for violation of this section, the defendant is shown to 
have had possession of the article in question, possession shall be 
deemed sufficient evidence to authorize conviction unless the defendant 
shall explain the possession to the satisfaction of the court: Provided, 
however, That 
payment of the tax due after apprehension shall not 
constitute a valid defence in any prosecution under this section." 
SEC. 30. Section 3603 of the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 3603. Failure to Report Fraud. - Any master, pilot in command or 
other officer, owner or agent of any vessel or aircraft trading with or within 
the Philippines and any employee of the Bureau of Customs who, having 
cognizance of any fraud on the customs revenue, shall fail to report all 
information relative thereto to the Collector as by law required shall be 
punished by a fine of not LESS THAN ONE HUNDRED THOUSAND 
PESOS 
BUT NOT MORE THAN 
ONE 
MILLION 
PESOS AND 
IMPRISONMENT OF NOT LESS THAN EIGHT YEARS BUT NOT MORE 
THAN TWELVE YEARS. 
If the offender is an alien, he shall be deported after serving the 
sentence. If the offender is a public official or employee, he shall suffer 
additional penalty of perpetual disqualification to hold public office, to vote 
and to participate in any election." 
SEC. 31. Section 3604 of the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 3604. Statutory Offenses of Officials and Employees. - Every 
official, agent or employee of the Bureau or of any other agency of the 
government charged with the enforcement of the provisions of this Code, 
who is guilty of any delinquency herein below indicated shall be punished 
with a fine of not LESS THAN ONE HUNDRED THOUSAND PESOS BUT 
NOT MORE THAN ONE MILLION PESOS AND IMPRISONMENT OF 
NOT LESS THAN EIGHT YEARS BUT NOT MORE THAN TWELVE 
YEARS and perpetual disqualification to hold public office, to vote and to 
participate in any public office election: 
xxx 
SEC. 32. Section 3605 of the TCCP, as amended, is hereby further 
amended to read as follows: 
SEC. 3605. Concealment or Destruction of Evidence of Fraud. - Any 
person who willfully conceals or destroys, any invoice, book or paper 
relating to any article liable to duty after an inspection thereof has been 
demanded by the Collector of any collection district or at anytime conceals 
or destroys any such invoice, book, or paper for the purpose of 
suppressing any evidence of fraud therein contained, shall be punished 
with a fine of not LESS THAN ONE HUNDRED THOUSAND PESOS BUT 
NOT MORE THAN ONE MILLION PESOS AND IMPRISONMENT OF 
NOT LESS THAN EIGHT YEARS BUT NOT MORE THAN TWELVE 
YEARS." 


• 
SEC. 33. Section 3606 of the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 3606. Affixing Seals. - Any person who, without authority affixes or 
attaches a customs seal, fastening, or mark or any seal, fastening or mark 
purporting to be a customs seal, fastening or mark to any vessel, vehicle 
on land, sea or air, warehouse, or package, shall be punished with a fine 
of not LESS THAN ONE HUNDRED THOUSAND PESOS BUT NOT 
MORE THAN ONE MILLION PESOS AND IMPRISONMENT OF NOT 
LESS THAN EIGHT YEARS BUT NOT MORE THAN TWELVE YEARS. If 
the offender is an alien, he'shall be deported after serving the sentence, If 
the offender is a public official or employee, he shall suffer an additional 
penalty of perpetual disqualification to hold public office, to vote and to 
participate in any election." 
SEC. 34. Separability Clause. - Any portion or provisions of this Act that 
may be declared unconstitutional 'or invalid shall not have the effect of nullifying 
other portions and 
provisions hereof as long as such remaining portion or 
provision can still subsist and be given effect in their entirety. 
SEC. 35. Repealing Clause. - All other laws, decrees, executive orders, 
proclamations and administrative regulations, or parts thereof consistent herewith 
are hereby repealed or modified accordingly. 
SEC. 36. Effectivity Clause. - This Act shall take effect fifteen (15) days 
after its publication in at least two (2) national papers of general circulation. 
Approved,