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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

* PECENVED
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SIXTEENTH CONGRESS

First Regular Session,

oO 1461

HOUSE BILL NO.

INTRODUCED BY REPRESENTATIVE XAVIER JESUS “XJ” D. ROMUALDO

EXPLANATORY NOTE,

The late Representative Pedro P, Romualdo originally filed this proposed measure in the 14" and
15!" Congresses. It was deliberated upon and discussed extensively by the Committee on Ways and
Means in the 14" Congress and some of the provisions introduced here were culled from the
output of the deliberations of the Committee on Good Government and Public Accountability on
various issues involving smuggling, the role of importers and brokers, a review of existing policies
of the Bureau of Customs, the commitments of the Philippine government with the World Trade
Organization, a8 well asthe rights of purchasers in good falth partculasty with regard to motor
vehicles,

‘The public has always expected that the government should have the political will to eradicate
graft and corruption, technical smuggling and other smuggling activities, and the
mismanagement of public funds. If duties and taxes are properly assessed, collected and paid, the
government will be able to have enough revenues to support vital infrastructure and social
development expenditures, ‘The government, in turn, recognizes the vital role of domestic
industries on our economy and such need the protection against unfair competition brought
about by the entry of undeclared or undervalued imported goods.

It is the purpose of this propose measure to promote good governance, public accountability and.
transparency in the operations and workings of the Bureau of Customs and its personnel as well
as strengthen policies that will eradicate or minimize all types of smuggling, improve processes in
the Bureau, and institute vital reforms to reinvigorate the trust of the public on the revenue-
collecting government institution. This measure also seeks to upgrade the antiquated penal
provisions of the Tariff and Customs Code, to discourage those who violate the law from
continuing their unlawful activities and schemes.

The early passage of this measure is earnestly sought in response to the strong clamor of the

people to institute appropriate reforms and strengthen structural processes that will curb
smuggling, cleanse the Bureau of Customs of its scalawags, and promote efficiency as well as

transparency in government transactions.

XAVIER JESUS “XJ” D. ROMUALDO.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

ut 1461

House Bill No.

INTRODUCED BY REPRESENTATIVE XAVIER JESUS “XJ” D. ROMUALDO

AN ACT
FURTHER STRENGTHENING THE ANTI-SMUGGLING MECHANISM, AMENDING FOR THE
PURPOSE CERTAIN PROVISIONS OF PRESIDENTIAL DECREE NO. 1464, OTHERWISE KNOWN

AS THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED, AND FOR OTHER

PURPOS!

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

Section |. Short Title, ~ This Act shall be known and cited as the “Anti-Smuggling Act of 2013”.

Section 2. Section 201, Title Il, Part 1 of the Tariff and Customs Code of the Philippines, as amended, is
hereby further amended by amending the third and second to the last paragraphs and the last paragraph
thereof to read as follows:

. 201. Basis of Dutiable Value. ~ x x x
XXX

If in the course of determining the dutiable value of imported goods, it becomes
necessary to delay the final determination of such dutiable value, the importer shall nevertheless
be able to secure the release of the imported goods upon the filing of a sufficient guarantee in the
form of a LETTER OF CREDIT, surety bond, a deposit, cash or some other appropriate
instrument in an amount equivalent to the imposable duties and taxes [on] FOR WHICH the
imported goods [in question conditioned upon the payment of customs duties and taxes for which
the imported goods} may be liable: Provided, however, That goods, the importation of which is
prohibited by law shall not be released under any circumstance whatsoever{.]: PROVIDED,
FURTHER, THAT, REFERENCE INFORMATION OBTAINED FROM A VALUE DATA
BASE APPROVED BY THE COMMISSIONER, INCLUDING REVISION ORDERS, SHALL
BE USED TO TEST THE TRUTHFULNESS AND ACCURACY OF A GIVEN VALUE.
DECLARATION. A VALUE DECLARATION WHICH FALLS OUTSIDE OF THE VALUE
RANGE OF REVISION ORDERS SHALL TRIGGER A VALUATION QUERY ON THE
APPLICABILITY OF THE METHOD OF VALUATION USED BY THE IMPORTER, IN
WHICH CASE THE APPLICABILITY AND APPROPRIATENESS OF THE METHOD OF
VALUATION EMPLOYED BY THE IMPORTER SHALL BE REVIEWED BY THE
VALUATION AND. CLASSIFICATION REVIEW COMMITTEE (VCRC) WHICH,
THEREAFTER, SHALL ENDORSE ITS FINDINGS AND RECOMMENDATIONS TO THE
COMMISSIONER OF CUSTOMS. FOR PURPOSES OF THIS SECTION, A REVISION
ORDER, WHICH SHALL BE PUBLISHED IN A NEWSPAPER OF GENERAL
CIRCULATION AND PERIODICALLY UPDATED IN THE BUREAU OF CUSTOMS
WEBSITE AND POSTED IN THE BULLETIN BOARD OF THE BUREAU, SHALL REFER
TO THE DOCUMENT WHICH INDICATES THE LATEST VALUE(S) OF PRODUCT(S)
APPLICABLE AND EFFECTIVE WITHIN THE PERIOD OF NINETY (90) DAYS FROM
DATE OF ITS ISSUANCE BY THE BUREAU OF CUSTOMS, AFTER CONSULTATION
WITH INDUSTRY REPRESENTATIVES.

Nothing in this Section shall be construed as restricting or calling into question the right
of the Collector of Customs to satisfy himself as to the truth or accuracy of any statement,
document or declaration presented for customs valuation purposes. When a declaration has been
presented and where the [customs administration} VCRC has reason to doubt the truth or accuracy
of the particulars or of documents produced in support of this declaration, the [customs
administration] VCRC 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 in accordance with the provisions of Subsection (A) hereof.



If, after receiving further information, or in the absence of a response, the [customs
administration] VCRC still has reasonable doubts about the truth or accuracy of the declared
value, it may, without prejudice to an importer’s right to appeal pursuant to Article 11 of the
World Trade Organization Agreement on customs valuation, be deemed that the customs value of
the imported goods cannot be determined under Method One. Before taking a final decision, the
Collector of Customs shall communicate to the importer, in writing if requested, his grounds for
doubting the truth or accuracy of the particulars or documents produced and give the importer a
reasonable opportunity to respond. When a final decision is made, the {customs administration]
DISTRICT COLLECTOR shall communicate to the importer in writing, COPY FURNISHED
THE MEMBERS OF THE VCRC, [its] THE decision and the grounds therefor.”

Section 3, Section 607 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“See, 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 custom
duties, taxes and other charges assessed and collected on imported articles itemized in accordane
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 eredit opened, (¢)
quantity and value of tax-free imports, and (f) 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
preceding year, Copies of such annual report shall be furnished regularly to the Department of
Finance, Tariff Commission, NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY
(NEDA), (Central Bank of the Philippines] BANGKO SENTRAL NG PILIPINAS (BSP), Board
of Investments, Department of Budget AND MANAGEMENT, and other economic agencies of
the government, on or before December 30, of each year.

aeniser
Section 4. Section 609 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Seo. 609. Commissioner to Furnish Copies of Collectors’ Liquidated Duplicates.
~The Commissioner shall regularly furnish the NEDA, the [Central Bank of the Philippines] BSP,
the Tariff Commission, AND THE NATIONAL STATISTICS OFFICE (NSO) [a copy] 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 £0 copy all the customs liquidated import entries and other documents appended
thereto as finally filed in the Commission on Audit.”

Section 5, Section 701 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 701 Collection Districts and Ports of Entry Thereof. ~ For administrative
purposes, the Philippines shall be divided into as many collection districts as necessary, the
respective limits of which may be changed from time to time by the Commissioner of Customs
upon approval of the Secretary of Finance,

‘The principal ports of entry for the respective collection districts shall be Manila, Ninoy
Aquino Intemational Airport, Cebu, Moilo, Davao, Tacloban, Zamboanga, Cagayan de Oro,
Surigao, Legaspi, Batangas, San Fernando, Subic, CLARK INTERNATIONAL AIRPORT, [and]
Manila International Container Port[.], AND SUCH OTHER PORTS THAT MAY BE
CREATED PURSUANT TO THIS CODE.”

Section 6, A new Part 3 shall be inserted under Title I, Book I - Customs Law, of the Tariff’ and Customs
Code of the Philippines, as amended, and under which new Sections 801, 802, 803 and 804 are further
inserted, which shall read as follows:

“PART 3
AUDIT, TRANSPARENCY AND ACCOUNTABILITY

Sec, 801. IN ORDER TO _INSTILL TRANSPARENCY = AND
ACCOUNTABILITY IN THE OPERATIONS OF THE BUREAU OF CUSTOMS, THE.
COMMISSIONER OF CUSTOMS SHALL CONDUCT, ON AN ANNUAL BASIS, A
BUREAU-WIDE AUDIT WHICH AIMS TO EXAMINE AND EVALUATE THE ADEQUACY
AND EFFECTIVENESS OF INTERNAL CONTROL AND THE QUALITY OF
PERFORMANCE IN THE BUREAU OF CUSTOMS.


THE BUREAU-WIDE AUDIT SHALL COVER, AMONG OTHERS, 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 OPERATION OF THE ENTIRE BUREAU.

Sec. 802 AN INTERNAL CONTROL OFFICE, WHICH SHALL BE
ATTACHED TO THE OFFICE OF THE COMMISSIONER OF CUSTOMS, IS HEREIN
CREATED TO ASSIST THE COMMISSIONER IN THE CONDUCT OF A BUREAU-WIDE.
AUDIT PURSUANT TO REPUBLIC ACT NO. 3456, REPUBLIC ACT NO. 4177,
ADMINISTRATIVE ORDER NO. 278 AND ADMINISTRATIVE ORDER NO. 70.

THE ANNUAL APPROPRIATIONS FOR THE BUREAU OF CUSTOMS SHALL
PROVIDE AN ITEM OF EXPENSE FOR THE BUREAU-WIDE AUDIT AS
CONTEMPLATED IN THIS ACT.

Sec. 803. ON THE BASIS OF THE INTERNAL AUDIT ACTIVITIES
CONDUCTED, THE INTERNAL CONTROL OFFICE SHALL SUBMIT TO THE:
COMMISSIONER A WRITTEN REPORT CONTAINING THE IDENTIFIED PROBLEMS
AND DEFICIENCIES IN THE BUREAU AS WELL AS ITS RECOMMENDED
POLICIES/CORRECTIVE MEASURES. SUCH REPORT SHALL BE PROMPTLY ACTED
UPON BY THE COMMISSIONER WHO SHALL INSTITUTE THE NECESSARY
IMPROVEMENT TO ADDRESS PERFORMANCE AND OPERATIONAL GAPS, UNLESS
THERE IS REASONABLE DOUBT ON ITS VALIDITY,

Sec. 804. ‘THE COMMISSIONER SHALL FURNISH THE SECRETARY OF
FINANCE, THRU THE INTERNAL AUDIT OFFICE IN THE DEPARTMENT OF FINANCE,
‘A COPY OF THE INTERNAL AUDIT REPORT AND ACTIONS TAKEN.”

Section 7, Section 1005 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“See. 1005. Manifest Requited of Vessel From Foreign Port. ~ x x x.
XXX

A TRUE AND COMPLETE COPY OF THE CARGO MANIFEST AND BILL OF
LADING, TOGETHER WITH THE STOWAGE PLAN OF THE VESSEL ENGAGED IN
FOREIGN TRADE, SHALL BE ELECTRONICALLY SENT IN ADVANCE BY THE VESSEL
‘TO THE BUREAU OF CUSTOMS AND THE PHILIPPINE PORTS AUTHORITY AT LEAST
TWELVE (12) HOURS FOR OCEAN GOING VESSELS AND TWO (2) HOURS FOR
AIRLINES FROM DEPARTURE PRIOR TO THEIR ARRIVAL IN THE PORT OF ENTRY:
PROVIDED, THAT IF THE VESSEL IS AN AIRCRAFT THE MANIFEST SHALL BE.
ELECTRONICALLY TRANSMITTED TO THE BUREAU OF CUSTOMS AT LEAST ONE (1)
HOUR PRIOR TO THE AIRCRAFT’S ARRIVAL IN THE PORT OF ENTRY: PROVIDED,
FURTHER, THAT, THE BUREAU OF CUSTOMS SHALL FURNISH WITH THE
ELECTRONICALLY SENT CARGO MANIFEST AND BILL OF LADING UPON RECEIPT
THEREOF TO THE: (1) DEPARTMENT OF AGRICULTURE IN THE CASE OF
AGRICULTURAL IMPORTATIONS; (2) THE CHIEF, PHILIPPINE NATIONAL POLICE, IN
THE CASE OF FIREARM IMPORTATIONS; (3) THE SECRETARY, DEPARTMENT OF
HEALTH, IN THE CASE OF IMPORTATIONS OF MEDICINES; (4) THE C! LAND
TRANSPORTATION AND OFFICE, IN THE CASE OF BRAND NEW OR SECOND HAND
VEHICLES.

THESE AGENCIES WILL COORDINATE CLOSELY WITH THE BUREAU OF
CUSTOMS IN MONITORING THE ENTRY OF THESE IMPORTATIONS. IT SHALL
RECOMMEND TO THE COMMISSIONER OF THE BUREAU OF CUSTOMS THE SEIZURE.
AND APPREHENSION OF THESE IMPORTATIONS IF FOUND TO HAVE VIOLATE ANY
PROVISIONS OF THIS ACT.

‘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 and/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 other 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 of the importation has been completed. PRIOR TO RELEASE.
OF THE CARGO, THE VERACITY OF THE AMENDMENT SHALL BE EXAMINED BY



THE COMMISSIONER OF CUSTOMS FOR THE PURPOSE OF INVOKING PENAL
PROVISION UNDER SECTIONS 2503 AND 3602 OF THIS CODE.”

Section 8. Section 1007 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“See, 1007. Manifests 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 t0 the Chairman, Commission on Audit, [Manila] CENTRAL OFFICE, a
copy of the cargo manifests properly endorsed by the boarding officer, and {the master shall
immediately} WITHIN TWENTY-FOUR (24) HOURS AFTER ARRIVAL, HE SHALL 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.

WITHIN THREE (3) DAYS FROM RECEIPT THE!
PUBLISH IN THE BUREAU OF CUSTOMS WEBSITE THE
(2) CONSECUTIVE WEEKS.”

EOF, THE COLLEC
GO MANIFI

rOR SHALL
FOR TWO

Section 9, Section 1008 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“See, 1008, Transit Cargo AND FOREIGN TRANSHIPMENT OF GOODS. -
When transit cargo from a foreign port or other local ports is forwarded from the port of
importation, separate manifest, in triplicate, shall be presented by each carrier.

TRANSHIPPED GOODS MUST REMAIN AT ALL TIME IN THE PORT OF
ARRIVAL AND SHALL NOT BE TRANSFERRED OR TRANSPORTED TO ANY OTHER.
PHILIPPINE PORT OF ENTRY PRIOR TO THE TRANSPORT THEREOF TO THE FOREIGN
PORT OF DESTINATION AS INDICATED IN THE CARGO MANIFEST. WHEN THE.
SHIPMENT IS UNLOADED IN OR TRANSFERRED TO ANY OTHER PORT OF ENTRY
OTHER THAN IN THE PORT OF ARRIVAL BEFORE TRANSPORTING THE SAME TO
‘THE FOREIGN PORT OF DESTINATION, IT SHALL BE CONSIDERED AS HAVING BEEN
INTRODUCED INTO THE PHILIPPINE CUSTOMS TERRITORY SUBJECT TO
APPLICABLE DUTIES AND TAXES.

THE PARTY WHO APPLIED FOR FOREIGN TRANSHIPMENT SUCH AS THE.
SHIPPING COMPANY OR AGENT, TRANSHIPMENT OPERATOR OR THE OWNER OF
THE GOODS SHALL SUBMIT TO THE BUREAU OF CUSTOMS AND/OR TO THE
BUREAU OF INTERNAL REVENUE WITHIN THE PRESCRIBED PERIOD OF SIX (6)
MONTHS ANY OFFICIAL DOCUMENT SATISFACTORILY SHOWING THAT THE
TRANSHIPPED GOODS HAD ACTUALLY ARRIVED AND HAD BEEN UNLOADED IN
THE FOREIGN PORT OF DESTINATION AND THAT THE SAME HAD BEEN RECEIVED.
BY THE CONSIGNEE NAMED IN THE MANIPEST: PROVIDED, THAT IF THE SAID
OFFICIAL DOCUMENT IS IN A FOREIGN LANGUAGE OTHER THAN ENGLISH, IT
SHALL BE ACCOMPANIED BY AN ENGLISH TRANSLATION DULY AUTHENTICATED
BY A PHILIPPINE COMMERCIAL OR TRADE ATTACHE’ OR APPROPRIATE.
CONSULAR OFFICER.

FAILURE TO SUBMIT THE OFFICIAL DOCUMENT AS REQUIRED HEREIN
ABOVE SHALL CONSTITUTE PRIMA FACIE PROOF THAT THE GOODS ALLEGEDLY
‘TRANSHIPPED WERE IN FACT DIVERTED TO THE PHILIPPINES, WITHOUT THE
CORRESPONDING PAYMENT OF DUTIES AND TAXES WHICH SHALL BE
IMMEDIATELY COLLECTED AND PAID BY THE PARTY(ES) WHICH FAILED TO
SUBMIT THE REQUIRED OFFICIAL DOCUMENT. THEREAFTER AND UNTIL THE
REQUIRED OFFICIAL DOCUMENT SHALL HAVE BEEN SUBMITTED, ALL
SUBSEQUENT TRANSHIPMENT OF GOODS TO AND FROM THE PHILIPPINES BY THE
SAID PARTY(IES) WITHOUT THE PAYMENT OF DUTIES AND TAXES SHALL BE
DISALLOWED.

Section 10, Section 1025 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 1025. Export Product to Conform to Standard Grades AND MARKING OF
PACKAGES FOR EXPORT, — A Collector shall not permit products for which standard grades
have been established by the government to be laden aboard a vessel clearing for a foreign port,
unless the shipment conforms to the requirements of law relative to the shipment of such products.

PACKAGES CONTAINING GOODS FOR EXPORT SHALL BE LABELED IN
ACCORDANCE WITH LAWS AND REGULATIONS. PACKAGES THAT DO NOT
COMPLY WITH THE REQUIRED MARKINGS MAY BE DENIED EXPORT PERMITS.”


Section 11. A new section to be known as Section 1203-A is hereby inserted after Section 1203 of the
‘Tariff and Customs Code of the Philippines, as amended, to read as follows:

“See, 1203-A, PUBLICATION OF ACCREDITED IMPORTERS AND BROKERS.

ANY PROVISION OF LAW TO THE CONTRARY NOTWITHSTANDING, THE.
SECRETARY OF FINANCE, THROUGH THE COMMISSIONER OF CUSTOMS, IS HEREBY
MANDATED TO CAUSE THE PUBLICATION OF THE LIST OF IMPORTERS AND
BROKERS ACCREDITED BY THE BUREAU OF CUSTOMS WITHIN NINETY (90) DAYS
FROM THE DAY OF APPROVAL OF THE APPLICATION FOR ACCREDITATION OR
RENEWAL OF THE ACCREDITATION, AS THE CASE MAY BE: PROVIDED, THAT THE
BUREAU OF CUSTOMS SHALL POST THE LIST OF ACCREDITED IMPORTERS AND
BROKERS IN ITS WEBSITE ANNUALLY AND SHALL REGULARLY UPDATE SAID
LIST; PROVIDED, FURTHER, THAT OTHER INFORMATION ON THE ACCREDITED
IMPORTERS AND BROKERS, OTHER THAN THOSE PUBLISHED IN THE WEBSITE AND
NOT OTHERWISE CONFIDENTIAL, MAY BE MADE AVAILABLE UPON OFFICIAL
REQUEST FROM THE COMMISSIONER OF CUSTOMS.

THE AMOUNT NECESSARY FOR THE PUBLICATION OF THE LIST OF
IMPORTERS AND BROKERS SHALL BE CHARGED TO THE APPROPRIATIONS OF THE
BUREAU OF CUSTOMS UNDER THE CURRENT GENERAL APPROPRIATIONS ACT,
THEREAFTER, SUCH SUM AS MAY BE NEEDED FOR ITS CONTINUED
IMPLEMENTATION SHALL BE CHARGEABLE TO THE FUND COLLECTED BY THE
BUREAU FROM THE APPLICATION AND RENEWAL FEES OF THE IMPORTERS AND
BROKERS.”

Section 12, Section 1204 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 1204, Liability of Importer for Duties, — Unless relieved by laws or
regulations, the liability for duties, taxes, fees and other charges attaching on importation
constitutes a personal debt due [from] AND DEMANDABLE AGAINST the importer [to] IN
FAVOR OF the government which can be discharged only by payment in full of all duties, taxes,
fees and other charges legally accruing. It also constitutes a lien upon the articles imported which
may be enforced while such articles are in custody or subject to the control of the government.

IN CASE THE IMPORTED ARTICLE IS FOUND IN THE CUSTODY OR
POSSESSION OF A TRANSFEREE OR BUYER IN GOOD FAITH, THE GUARANTEE IN
THE FORM OF A LETTER OF CREDIT, SURETY BOND, A DEPOSIT, CASH, OR SOME
OTHER APPROPRIATE INSTRUMENT IN AN AMOUNT EQUIVALENT TO THE:
IMPOSABLE DUTIES AND TAXES OF THE IMPORTED ARTICLES AS MENTIONED IN
SECTION 201 OF THIS CODE, FILED BY THE IMPORTER SHALL BE APPLIED FOR ANY
TAX DEFICIENCY, DUTIES, FEES, INTEREST AND OTHER CHARGES THAT MAY BE
FINALLY DETERMINED BY THE BUREAU AGAINST THE IMPORTED ARTICLE.”

Section 13. Section 1210 of the Tariff and Customs Code of the Phil
amended to read as follows

pines, as amended, is hereby further

“Sec. 1210. Disposition of Imported Articles Remaining on Vessel After Time for
Unlading. ~ x x x

Unless prevented by causes beyond the vessel’s control, such as port congestion, strikes,
riots or civil commotions, failures of vessel’s gear, bad weather, and similar causes, articles so
stored shall be entered within [thirty (30)] FIFTEEN (15) days, which shall not be extendible,
from the date of discharge of the last package from the vessel or aireraft and shall be claimed
within fifteen (15) days, which shall not likewise be extendible from the date of posting of the
notice to claim in conspicuous places in the Bureau of Customs. If not entered or not claimed, it
shall be disposed of in accordance with the provisions of this Code.”

Section 14, A new section to be known as Section 1212 is hereby inserted in the Tariff and Customs Code
of the Philippines, as amended, to read as follows:

“See, 1212, IMPORT PERMIT/IMPORT AUTHORITY FOR AGRICULTURAL
PRODUCTS, — IMPORTED AGRICULTURAL PRODUCTS MUST BE COVERED BY A
VALID IMPORT OR QUARANTINE PERMIT ISSUED BY THE DEPARTMENT OF
AGRICULTURE (DA) OR ITS CONCERNED BUREAU PRIOR TO IMPORTATION INTO
THE PHILIPPINES. NO AGRICULTURAL PRODUCTS MUST BE ACCEPTED FOR
LOADING AND/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 DA OR ITS CONCERNED
AGENCIES PRIOR TO SHIPMENT. IF AND WHEN AGRICULTURAL PRODUCTS WEI
LOADED, TRANSPORTED AND BROUGHT INTO THE COUNTRY WITHOUT THE
PRIORLY ISSUED IMPORT OR QUARANTINE PERMIT, THE SAME MUST NOT BE
UNLOADED FROM THE VESSEL OR AIRCRAFT TO ANY PHILIPPINE PORT OF ENTRY



AND MUST BE SHIPPED BACK TO THE COUNTRY OF ORIGIN BY THE
IMPORTER/CONSIGNEE THROUGH THE — SAME CARRIER THAT
LOADED/TRANSPORTED, BROUGHT IN THE PRODUCTS: PROVIDED, THAT, ANY
IMPORTER WHO IMPORTED ANY AGRICULTURAL PRODUCT WITHOUT ANY
PRIORLY ISSUED IMPORT OR QUARANTINE PERMIT FOR THE PURPOSE SHALL BE.
PUNISHABLE AS PROVIDED FOR UNDER SECTION 3601 OF THIS CODE.”

Section 15, Section 1302 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“See, 1302 Import Entties, — xxx.

The Commissior

st May, X X X

‘A formal entry may be x x x:

(a) Xxx

(b) x xx; oF

(XXX

FOR PURPOSES HERETO, ALL IMPORT ENTRIES SHALL EXPLICITLY AND
CLEARLY INDICATE THE NAME, ADDRESS AND OTHER CONTACT DETAILS OF THE
CUSTOMS BONDED WAREHOUSE WHERE THE IMPORTED ARTICLES WILL BE

PLACED OR DEPOSITED, AND THE NAME, ADDRESS AND OTHER CONTACT
DETAILS OF THE IMPORTER, BROKER OR CONSIGNEE.

Import entries under irrevocable x x x.

All importations entered under formal entry shall be covered by a letter of credit or any
‘other verifiable document evidencing payment OF THE DUTIES, TAXES AND OTHER
‘CHARGES DUE THEREON.”

Section 16. A new section to be known as Section 1401-A is hereby inserted after Section 1401 of the
‘Tariff and Customs Code of the Philippines, as amended, to read as follows:

“See. 1401-A, VALUATION LIBRARY. ~ THE COMMISSIONER SHALL ENSURE
‘THAT THERE SHALL BE A VALUATION LIBRARY WHICH SHALL PRIMARILY SERVE
AS REFERENCE AND SOURCE OF INFORMATION IN THE VALUATION AND
APPRAISAL OF IMPORTED ARTICLES. THE VALUATION LIBRARY SHALL BE KEPT
UPDATED WITH THE VALUES OF IMPORTED PRODUCTS AS CONTAINED IN THE,
LATEST REVISION ORDERS AND MAINTAINED USING THE BEST AVAILABLE,
TECHNOLOGY AND SHALL BE MADE READILY AVAILABLE TO THE PUBLIC.
VIOLATION HEREOF SHALL BE PUNISHABLE AS PROVIDED UNDER SECTION 3612
OF THIS CODE.”

Section 17, Section 1403 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 1403, Duties of Customs Officer Tasked to Examine, Classify, 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
return in such a manner as to indicate whether the articles have been truly and correctly declared
the entry as regard their quantity, measurement, weight, and tariff classification and not
jported contrary to law. SUBJECT TO THE GUIDELINES TO BE ISSUED BY THE
COMMISSIONER WITH THE APPROVAL OF THE SECRETARY OF FINANCE, THE
CUSTOMS OFFICER [He] shall TAKE A REPRESENTATIVE [submit] samples OF THE
IMPORTED ARTICLE IN THE PRESENCE OF THE IMPORTER, CONSIGNEE OR THEIR
REPRESENTATIVES to SUBMIT to [the] CUSTOMS laboratory OR TO THE LABORATORY
OF THE APPROPRIATE GOVERNMENT REGULATORY AGENCY 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. THE LABORATORY RESULTS
MUST BE AVAILABLE AFTER THREE WORKING DAYS FROM RECEIPT OF THE:
ARTICLE BY THE APPROPRIATE LABORATORY AGENCY. THE CUSTOMS OFFICER
SHALL TAKE INTO ACCOUNT THE RESULT OF THE ANALYSIS IN THE
CLASSIFICATION, APPRAISAL AND/OR ADMISSION INTO THE PHILIPPINES OF THE
IMPORTED ARTICLE.

THE CUSTOMS OFFICER SHALL CERTIFY UNDER OATH IN THE RETURN
THAT HE USED THE VALUATION LIBRARY IN THE VALUATION AND APPRAISAL OF
‘THE IMPORTED ARTICLES,


xxx”
Section 18. Section 1409 of the Tariff and Customs Code of the Philippines, 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.| VALUATION AND CLASSIFICATION REVIEW COMMITTEE,
(VCRC). ~ [When necessary, the Collector may request two disinterested persons versed in the
matter to assist the appraiser in appraising or ascertaining the value of any article. Persons so
‘employed shall be paid compensation in an amount, to be determined by the Commissioner, not
exceeding fifty pesos for each day of such service.] VALUATION AND CLASSIFICATION
ISSUES SHALL BE COURSED THROUGH A VALUATION AND CLASSIFICATION
REVIEW COMMITTEE (VCRC) DIRECTLY UNDER THE CHAIRMANSHIP OF THE
RESPECTIVE DISTRICT COLLECTOR OF CUSTOMS.

FROM AMONG THE MEMBERS OF THE VCRC, ONE (1) MEMBER SHALL
COME FROM THE TARIFF COMMISSION WHO SHALL BE A PERMANENT MEMBER,
ONE (1) MEMBER FROM AMONG THE RECOMMENDEES OF THE DEPARTMENT OF
TRADE AND INDUSTRY AND THE DEPARTMENT OF AGRICULTURE, AS THE CASE.
MAY BE, AND ANOTHER ONE (1) MEMBER SHALL COME FROM THE PRIVATE
SECTOR REPRESENTING THE INDUSTRY SECTOR AFFFCTED.

SUBJECT TO THE GUIDELINES TO BE ISSUED BY THE COMMISSIONER DULY
APPROVED BY THE SECRETARY OF FINANCE, THE VCRC SHALL REQUEST
CONCERNED INDUSTRY ASSOCIATIONS TO NOMINATE AN INDUSTRY COMMODITY
EXPERT WHO WILL ASSIST THE VCRC IN CLASSIFYING, APPRAISING OR
ASCERTAINING THE VALUE OF AN IMPORTED ARTICLE AT NO COST TO THE
BUREAU. IN ORDER FOR SUCH PERSONS TO EFFECTIVELY ASSIST THE VCRC, THE.
INDUSTRY COMMODITY EXPERT SHALL BE FURNISHED DURING THE
IMPORTATION OF A PARTICULAR ARTICLE WITH A COPY OF THE IMPORT ENTRY.
AND DECLARATION AND HE SHALL BE ALLOWED TO OBSERVE THE PHYSICAL
EXAMINATION AND THE TAKING OF SAMPLE OF THE IMPORTED ARTICLE.”

PROVIDED, THAT, THE MEMBERS OF THE VCRC AND INDUSTRY
COMMODITY EXPERT SHALL BE ENTITLED TO PER DIEM SUBJECT TO EXISTING
ACCCOUNTING AND AUDITING POLICIES, RULES AND REGULATIONS.”

Section 19. A new section shall be added in the Tariff and Customs Code of the Philippines, as amended, to
bbe designated as Section 1410, to read as follows:

“Sec. 1410. AUTHORITY OF THE BUREAU TO EXAMINE THE ENTRY AND EXIT
OF IMPORTED ARTICLES IN THE FREEPORTS. ~ THE BUREAU, IN COORDINATION
WITH THE APPROPRIATE GOVERNMENT AGENCIES SUCH AS, BUT NOT LIMITED.
TO, THE DEPARTMENTS OF TRADE AND INDUSTRY, AGRICULTURE,
TRANSPORTATION AND COMMUNICATIONS, HEALTH AND PHILIPPINE NATIONAL
POLICE 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; (B) THE
COMPLIANCE WITH THE SANITARY AND AGRICULTURAL REQUIREMENTS; AND (C)
COMPLIANCE WITH EXISTING DEPARTMENT POLICIES, RULES AND
REGULATIONS.”

Section 20. Section 1603 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 1603. __Finality of Liquidation. ~ When articles have been entered and passed
free of duty or final adjustments of duties made, with subsequent delivery, such entry and passage
free of duty or settlements of duties will, after the expiration of {three (3) years] ONE (1) YEAR
from the date of the final payment of duties, in the absence of fraud or protest or compliance audit
pursuant to the provisions of this Code, be final and conclusive upon all parties, unless the
liquidation of the import entry was merely tentative.”

Section 21. Section 1801 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 1801. Abandonment, Kinds and Effects of. — An imported article is deemed
abandoned under any of the following circumstances:

Xxx

(b) __ When the owner, importer, consignee or interested party after due notice, fails to
file an entry within thirty (30) days, which shall not be extendible, from the date of discharge of


the last package from the vessel or aircraft, or 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, ALL SHIPPING LINES, SHIPPING
COMPANIES, FREIGHT FORWARDERS, CONSOLIDATORS, BREAK BULK AGENTS
AND THEIR AGENTS AND SUBAGENTS AND ARRASTRE CONTRACTORS ARI
REQUIRED TO STATE IN BOLD, PROMINENT AND COMPREHENSIBLE CHARACTI
THE PHRASE ‘CUSTOMS LAW REQUIRES THE FILING OF ENTRY WITHIN THIRTY (30)
DAYS, WHICH SHALL NOT BE EXTENDIBLE, FROM THE DATE OF DISCHARGE OF
THE LAST PACKAGE FROM THE VESSEL, OTHERWISE, THE CARGO MAY BE
DEEMED ABANDONED AND TO BE FORFEITED IN FAVOR OF THE GOVERNMENT
AND SHALL BE DISPOSED OF IN ACCORDANCE WITH THIS CODE’ IN EACH AND
EVERY NOTICE OF ARRIVAL TO THE OWNERS, IMPORTERS, CONSIGNEES OR
OTHER INTERESTED PARTIES, THE SAME SHALL SERVE TO SATISFY THE DUE
NOTICE REQUIREMENT REFERRED TO IN PARAGRAPH (B) HEREOF, IN WHICH CAS!
THE OWNER, IMPORTER OR CONSIGNER OF THE IMPORTATION SHALL HAVE A
PERIOD OF THIRTY (30) DAYS, WHICH SHALL NOT BE EXTENDIBLE, FROM RECEIPT
OF THE NOTICE OF ARRIVAL WITHIN WHICH TO FILE THE APPROPRIATE ENTRY.
FAILURE ON THE PART OF THE SHIPPING LINES, SHIPPING COMPANIES, FREIGHT
FORWARDERS, CONSOLIDATORS, BREAK BULK AGENTS AND THEIR AGENTS AND
SUBAGENTS AND ARRASTRE CONTRACTORS TO COMPLY HEREWITH SHALL
CONSTITUTE A GROUND FOR THE SUSPENSION OF THEIR LICENSES OR
AUTHORITY TO ENGAGE IN THEIR RESPECTIVE LINE OF ACTIVITIES IN THE
IMPORTATION OPERATIONS,

XXX,

Section 22. Section 1802 of the Tariff and Customs Code of the Philippi
amended to read as follows:

s, as amended, is hereby further

“Sec. 1802. Abandonment of Imported Articles, — An abandoned article shall ipso
facto be deemed the property of the Government and shall be disposed of in accordance with the
provisions of this Code. AN UPDATED LISTING OF ALL ABANDONED SHIPMENTS
SHALL BE POSTED ON THE OFFICIAL WEBSITE OF THE BUREAU.

Serge

Section 23. Section 1901 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 1901 Establishment, [and] Supervision AND ACCREDITATION 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 special purposes. ALL SUCH
WAREHOUSES SHALL BE ACCREDITED BY AN ACCREDITATION COMMIT
WHICH SHALL BE CHAIRED BY THE SECRETARY OF TRADE AND INDUSTRY AND
CO-CHAIRED BY THE SECRETARY OF FINANCE, AND TO BE COMPOSED OF THE.
COMMISSIONER OF CUSTOMS, THE GOVERNOR OF THE BANGKO SENTRAL NG
PILIPINAS, THE COMMISSIONER OF THE INSURANCE COMMISSION, OR THEIR DULY
DESIGNATED REPRESENTATIVES, AS MEMBERS THEREOF.

REPRESENTATIVES FROM OTHER CONCERNED GOVERNMENT AGENCII
AND THE AFFECTED INDUSTRY ASSOCIATIONS OR SECTORS SHALL BE INVITED
THE COMMITTEE DEEMS NECESSARY TO ASSIST IT IN ITS DELIBERATIONS.

All such warehouses and preinises 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 CUSTOMS COLLECTOR SHALL CONDUCT SPOT
CHECKS AND PERIODIC AUDITS TO ENSURE THAT APPLICABLE CUSTOMS LAWS
AND REGULATIONS ARE FOLLOWED BY BONDED FACILITIES AND SUBMIT A
REPORT TO THE COMMISSIONER WITHIN FIVE (8) DAYS FROM OCULAR
INSPECTION.”

Section 24. A new section to be known as Section 1901-A is hereby inserted after Section 1901 of the
Tariff and Customs Code of the Philippines, as amended, to read as follows:

“Sec, 1901-A, CLASSIFICATION OF CUSTOMS BONDED WAREHOUSES. ~
CUSTOMS BONDED WAREHOUSES SHALL BE CLASSIFIED AS FOLLOWS:

(A) CUSTOMS BONDED MANUFACTURING WAREHOUSE ~

(1) GARMENT TEXTILE BONDED MANUFACTURING WAREHOUSE ~ A
BONDED WAREHOUSE WHICH IS AUTHORIZED TO RECEIVE AND STORE WITHOUT
PAYMENT OF DUTIES AND TAXES FOR IMPORTED GARMENTS AND TEXTILES, RAW


MATERIALS INCLUDING PACKING AND ACCESSORIES FOR PROCESSING INTO.
FINISHED PRODUCTS FOR EXPORTATION WITHIN SPECIFIED PERIOD.

@) MISCELLANEOUS BONDED MANUFACTURING WAREHOUSE ~ A
BONDED WAREHOUSE WHICH IS AUTHORIZED TO RECEIVE AND STORE WITHOUT.
'T OF DUTIES AND TAXES FOR IMPORTED MATERIALS, EXCEPT
1S AND TEXTILES, INCLUDING PACKING/PACKAGING ACCESSORIES, AND
INTERMEDIATE PRODUCTS FOR THE PURPOSE OF PROCESSING INTO FINISHED
PRODUCTS FOR EXPORTATION WITHIN SPECIFIED PERIOD.

(3) COMMON BONDED MANUFACTURING WAREHOUSE ~ A BONDED
WAREHOUSE WHICH IS AUTHORIZED TO IMPORT, RECEIVE AND STORE IMPORTED
MATERIALS, ACCESSORIES, AND INTERMEDIATE PRODUCTS, INCLUDING
PACKING/PACKAGING, FOR THE ACCOUNT OF THE EXPORTING MEMBERS,
WITHOUT PAYMENT OF DUTIES AND TAXES ON THE CONDITION THAT THESE
MATERIALS, ACCESSORIES AND INTERMEDIATE PRODUCTS SHALL BE
MANUFACTURED INTO FINISHED PRODUCTS FOR EXPORTATION WITHIN
SPECIFIED PERIOD.

(B) CUSTOMS BONDED INDUSTRY-SPECIFIC WAREHOUSE ~ A BONDED.
WAREHOUSE WHICH IS AUTHORIZED TO IMPORT UNDER ITS NAME AND
ACCOUNT, DIRECTLY OR INDIRECTLY, UNDER BOND, BY DIRECT PURCHASE, OR,
ON CONSIGNMENT BASIS, FOR SALE OR TRANSFER TO [TS CUSTOMERS IN THE.
INDUSTRY, SUCH MATERIALS AND SUPPLIES, AS MAY BE REQUIRED IN THE
MANUFACTURE, ASSEMBLY, TESTING, OR PACKAGING OF GOODS INTENDED FOR
EXPORT OR FOR REPACKING AND DISTRIBUTION TO FOREIGN MARKET.

(©) MULTINATIONAL REGIONAL BONDED WAREHOUSE — A BONDED
WAREHOUSE OPERATED BY A MULTINATIONAL COMPANY HAVING I'S REGIONAL,
OR AREA HEADQUARTERS IN THE PHILIPPINES PURSUANT TO EXECUTIVE ORDER
NO, 226. IT IS LICENSED BY THE BOARD OF INVESTMENTS AND ACCREDITED BY
THE ACCREDITATION COMMITTEE AS PROVIDED IN SECTION 1901 OF THIS CODE
TO SERVE AS SUPPLY DEPOT FOR THE STORAGE, DEPOSIT, AND SAFEKEEPING OF
SPARE PARTS OR MANUFACTURED COMPONENTS, AND RAW MATERIALS,
INCLUDING ANY PACKAGES, COVERING, BRANDS AND LABELS, AND WAREHOUSE,
EQUIPMENT AS MAY BE ALLOWED BY THE DEPARTMENT OF TRADE AND
INDUSTRY FOR USE EXCLUSIVELY ON THE STORED GOODS WHICH ARE TO BE RE-
EXPORTED DIRECTLY THEREFROM UNDER THE SUPERVISION OF THE CUSTOMS
COLLECTOR FOR DISTRIBUTION TO ITS ASIA-PACIFIC MARKETS.”

Section 25, Section 1902 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 1902, Responsibility of Operators, ~ The operators of bonded warehouse 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
‘any customs warehouse, sheds, yards or premises.

‘THE OPERATORS OF THE BONDED WAREHOUSES SHALL MAKE AVAILABLE
TO THE CONCERNED GOVERNMENT REGULATORY AGENCIES AN INVENTORY OF.
ALL ARTICLES STORED THEREIN DURING AUTHORIZED OCULAR INSPECTIONS OR
UPON THE WRITTEN REQUEST OF THE CUSTOMS COLLECTOR OR THE
COMMISSIONER OR HIS DULY AUTHORIZED REPRESENTATIVE. IT SHALL FURNISH
‘THE LIST OF INVENTORY WITHIN TWENTY-FOUR (24) HOURS AFTER THE OCULAR
INSPECTION AND THREE (3) DAYS FROM RECEIPT OP THE WRITTEN REQUE'
FAILURE TO DO SO IS A MANDATORY GROUND FOR THE REVOCATION OF LICENS!
‘TO OPERATE A BONDED WAREHOUSE.”

Section 26. Section 1903 of the Tariff and Customs Code of the Philippines, 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] ACCREDITATION
COMMITTEE AS PROVIDED IN SECTION 1901 HEREOF, describing the premises, the
location, and capacity of the same, [and] the purpose for which the building is to be used{.], AND
‘THE INDUSTRY THAT IT SERVES.

Upon receipt of such application, the {Collector] ACCREDITATION COMMITTEE,
shall cause an examination of the premises, with reference particularly to its location, construction
and means provided for the safekeeping of articles. THE COMMITTEE SHALL LIKEWISE
DETERMINE THE OWNERSHIP OF THE APPLICANT BONDED WAREHOUSE TO



VERIFY IF ANY OWNER OR OWNERS OF A BONDED WAREHOUSE WHICH HAD BEEN
CLOSED DUE TO ITS NONCOMPLIANCE WITH CUSTOMS LAWS AND REGULATIONS
HAVE ANY INTEREST THEREIN. [and if] IF THE APPLICATION IS found satisfactory, [he]
‘THE COMMITTEE may authorize its establishment, and [accept] CAUSE THE ACCEPTANCE
OF a bond for its operation and maintenance. The operator of such bonded warehouse shall pay
aan 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 NETWORTH OF THE BONDED WAREHOUSE
SHALL BE SET AT AN AMOUNT AS DETERMINED BY THE COMMITTEE AS
SUFFICIENT TO COVER THE TAXES AND DUTIES OF UNLIQUIDATED ENTRIES
WHICH SHALL 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 (PEZA), THE SUBIC BAY METROPOLITAN AUTHORITY (SBMA),
AND OTHER FREEPORTS AND ECONOMIC ZONES

Section 27. Section 1905 of the Tariff and Customs Code of the Philippines, 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] ACCREDITATION COMMITTEE AS PROVIDED FOR IN
SECTION 1901 HEREOF at any time when conditions so warrant, or, in 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
COMMITTEE THE DISCONTINUANCE OF THE BONDED WAREHOUSE ON GROUNDS
OF NONCOMPLIANCE WITH THE REQUIREMENTS OF LAW AND REGULATIONS. THE
ACCREDITATION COMMITTEE SHALL ALSO SET APPROPRIATE GUIDELINES FOR
COMPLIANCE OF WAREHOUSE OWNERS, OPERATORS, LESSORS AND REGISTERED
USERS. 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] ACCREDITATION COMMITTEE.”

Section 28. Section 1906 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“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 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 RECEIVING THE ENTRY SHALL BE RESPONSIBLE
FOR TRANSMITTING A COPY OF THE SAME TO THE DEPUTY COMMISSIONER FOR
AUDIT AND TRANSPARENCY.”

Section 29. Section 1907 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 1907. Withdrawal of Articles from Bonded Warehouse. — Articles entered under
revocable domestic letter of credit [,JOR bank guarantee or bond may be withdrawn at any time for
‘consumption, for transportation to another port, for exportation or for delivery on board a vessel or aircraft
engaged in foreign trade for use on board such vessel or aircraft as sea stores or aircraft stores after
liquidation of the entry. ‘The withdrawal must be made (by a person or firm duly authorized by the former,]
ONLY BY THE IMPORTER OF THE ARTICLES TO BE WITHDRAWN OR BY A DULY
AUTHORIZED REPRESENTATIVE whose authority must appear in writing upon the face of the
withdrawal entry.”

Section 30. Section 1908 of the Tariff and Customs Code of the Philippines, 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 [one year]
SIX (6) MONTHS AND EXTENDIBLE FOR ANOTHER THREE (3) MONTHS from the time
of [arrival at the port of entry] RECEIPT OF THE WAREHOUSE. Articles not withdrawn at the
expiration of the prescribed period shall be [sold at public auction by the Collector.) DEEMED
ABANDONED AND SUBJECT TO DISPOSITION IN ACCORDANCE WITH SECTION 2602
OF THIS CODE: PROVIDED, HOWEVER. THAT EMBROIDERY AND SHIPBUILDING


INDUSTRIES MAY STORE THEIR IMPORTS IN THE CUSTOMS BONDED WAREHOUSE,
FOR A PERIOD OF TWENTY-FOUR (24) MONTHS.”

Section 31. A new section to be known as Section 1910 is hereby inserted in Part 1, Title V, Book Il of the
‘Tariff and Customs Code of the Philippines, as amended, to read as follows:

“See. 1910. VERIFICATION OF RECORDS KEPT IN CUSTOMS BONDED
WAREHOUSES. ~ A CAREFUL ACCOUNT SHALL BE KEPT BY THE COLLECTOR OF
ALL ARTICLES DELIVERED TO ANY BONDED WAREHOUSE, AND A SWORN
MONTHLY RETURN, DULY VERIFIED BY THE CUSTOMS OFFICIAL IN CHARGE,
SHALL BE MADE BY THE BONDED WAREHOUSE CONTAINING A DETAILED
STATEMENT OF ALL IMPORTED ARTICLES STORED THEREIN.

ALL DOCUMENTS, BOOKS AND RECORDS OF ACCOUNTS CONCERNING THE
OPERATION OF ANY BONDED WAREHOUSE SHALL, UPON DEMAND BY THE
SECRETARY OF TRADE AND INDUSTRY OR THE SECRETARY OF FINANCE, BE
MADE AVAILABLE TO THE COLLECTOR OR HIS/HER REPRESENTATIVE OR TO ANY
LEGITIMATE INDUSTRY ASSOCIATION OR INDUSTRY SECTOR AFFECTED AND THE,
INDUSTRY SECTOR SOUGHT TO BE SERVICED BY THE BONDED WAREHOUSE, FOR
PURPOSES OF EXAMINATION AND/OR AUDIT.”

Section 32. Section 2001 of the Tariff and Customs Code of the Philippines, 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 bonded manufacturing warehouses under such rules and regulations as the
Commissioner of Customs, with the approval of the Secretary 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,
THAT BONDED MANUFACTURING WAREHOUSES SHALL LIKEWISE BE SUBJECT TO
THE PROVISIONS UNDER TITLE V, BOOK Il OF THIS CODE: PROVIDED, FINALLY,
THAT THESE REQUIREMENTS SHALL EXTEND TO REGISTERED LOCATORS
OPERATING UNDER THE CHARTERS OF THE PEZA, THE SBMA, AND OTHER
FREEPORTS AND ECONOMIC ZONES.”

Section 33. Section 2002 of the Tariff and Customs Code of the Phiti
amended to read as follows:

ines, as amended, is hereby further

“Sec. 2002. Exemption from Duty. ~
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 conveyed
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 {nine (9) months} 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 {three (3) months] 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.”

Section 34. Section 2003 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 2003. Procedure for Withdrawal. — Articles received into such bonded
manufacturing warehouse or articles manufactured therein may be withdrawn or removed
therefrom for direct shipment and for immediate exportation in bond under the supervision of the
proper customs officer, who shall certify to such shipment and exportation, or lading for
immediate exportation as the case may be, describing the articles by their mark or otherwise, the
‘quantity, the date of exportation, in the name of the vessel or aircraft: Provided, That the waste
and by-products incident to the process of manufacture in said bonded warchouse may be


withdrawn for domestic consumption upon payment of duty equal to the duty which would be
assessed and collected pursuant to law as if such waste or by-products were imported from a
foreign country: Provided, further, That all waste materials may be disposed under government
supervision. All labor performed and services rendered under these provisions shall be under the
supervision of the proper customs officer and at the expense of the manufacturer.

VIOLATION OF THE FOREGOING PROVISION SHALL BE DEEMED AS
SMUGGLING WHICH SHALL BE PUNISHABLE UNDER SECTIONS 3601 AND 3602 OF
THIS CODE.

THE ARTICLES SUBJECT OF THE VIOLATION SHALL IPSO FACTO BE
FORFEITED IN FAVOR OF THE GOVERNMENT TO BE DISPOSED OF PURSUANT TO
SECTION 2602 OF THIS CODE.”

Section 35, Section 2307 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“See.2307. [Settlement of Case by Payment of Fine or Redemption of Forfeited
Property.] SETTLEMENT OF SEIZURE CASE BY PAYMENT OF FINE AND THE LOCAL
INDUSTRY MARKET VALUE OF THE SEIZED ARTICLE. — [Subject to approval of the
‘Commissioner, the district collector may, while the case is still pending, except when there is
fraud, accept the settlement of any seizure case provided that the owner, importer, exporter, oF
consignee or his agent shall offer to pay to the collector a fine imposed by him upon the property,
‘or in case of forfeiture, the owner, exporter, importer or consignee or his agent shall offer to pay
for the domestic market value of the seized article. The Commissioner may accept the settlement
of any seizure case on appeal in the same manner.]

{Upon payment of the fine as determined by the district collector which shall be in
‘amount not less than twenty percentum (20%) nor more than eighty percentum (80%) of the
landed cost of the seized imported article or the F.0.B. value of the seized article for export, or
payment of the domestic market value, the property shall be forthwith released and all liabilities
which may or might attach to the property by virtue of the offence which was the occasion of the
seizure and all liability which might have been incurred under any cash deposit or bond given by
the owner or agent in respect to such property shall thereupon be deemed to be discharged.]

[Settlement of any seizure case by payment of the fine or redemption of forfeited
property shall not be allowed in any case where the importation is absolutely prohibited or where
the release of the property would be contrary to law.] SUBJECT TO APPROVAL OF THE
COMMISSIONER, THE DISTRICT COLLECTOR MAY, AFTER THE IMPLEMENTATION
OF THE WARRANT OF SEIZURE BUT PRIOR TO THE FINAL JUDGMENT ON THE,
FORFEITURE CASE, EXCEPT WHEN THERE IS FRAUD, ACCEPT THE SETTLEMENT OF
ANY SEIZURE CASE: PROVIDED, THAT THE OWNER, IMPORTER, EXPORTER,
BROKER, OR CONSIGNEE OR HIS/HER AGENT SHALL OFFER TO PAY TO THE
DISTRICT COLLECTOR A FINE IMPOSED BY HIM/HER UPON THE PROPERTY AND
‘THE LOCAL INDUSTRY MARKET VALUE OF THE SEIZED ARTICLE.

UPON PAYMENT OF THE LOCAL INDUSTRY MARKET VALUE AND THE FINE
AS DETERMINED BY THE DISTRICT COLLECTOR WHICH SHALL BE IN AMOUNT
NOT LESS THAN TWENTY PER CENTUM (20%) NOR MORE THAN EIGHTY PER
CENTUM (80%) OF THE LANDED COST OF THE SEIZED ARTICLE, THE PROPERTY
SHALL BE FORTHWITH RELEASED AND ALL LIABILITIES WHICH MAY OR MIGHT
ATTACH TO THE PROPERTY BY VIRTUE OF THE OFFENSE WHICH WAS THE
OCCASION OF THE SEIZURE AND ALL LIABILITY WHICH MIGHT HAVE BEEN
INCURRED UNDER ANY CASH DEPOSIT OR BOND GIVEN BY THE OWNER OR
AGENT IN RESPECT TO SUCH PROPERTY SHALL THEREUPON BE DEEMED TO BE
DISCHARGED.

SETTLEMENT OF ANY SEIZURE CASE BY PAYMENT OF THE FINE AND THE
LOCAL INDUSTRY MARKET VALUE OF THE SEIZED ARTICLE SHALL NOT BE
ALLOWED IN ANY CASE WHERE THE IMPORTATION IS ABSOLUTELY PROHIBITED
OR WHERE THE RELEASE OF THE PROPERTY WOULD BE CONTRARY TO LAW.”

Section 36. Section 2308 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 2308. Protest and Payment Upon Protest in Civil Matters. — When a ruling or
decision of the Collector is made whereby liability for duties, taxes, fees or other charges are
determined, except the fixing of fines in seizure cases, the party adversely affected OR THE
INDUSTRY ASSOCIATION OR INDUSTRY SECTOR AFFECTED BY ADVERSE RULING
may protest such ruling or decision by presenting to the Collector at the time when payment of the
amount claimed to be due the government is made, or within [fifteen (15)] THIRTY (30) days
thereafter, a written protest setting forth his objection to the ruling or decision in question, together
with the reasons therefore. No protest shall be considered unless payment of the amount due after



final liquidation has first been made and the corresponding docket fee, as provided for in Section
3301. THE COLLECTOR SHALL RENDER HIS DECISION UPON THE PROTEST FILED
WITHIN A PERIOD OF SIXTY (60) DAYS FROM RECEIPT OF THE WRITTEN PROTEST:
PROVIDED, THAT, WHEN THE RULING OR DECISION OF THE COLLECTOR IS
ADVERSE TO THE PROTESTING PARTY, IT MAY FILE AN APPEAL WITHIN FIFTEEN
(15) DAYS UPON RECEIPT OF THE DECISION OR RULING OF THE COLLECTOR, WITH
THE COMMISSIONER WHO SHALL RENDER A DECISION ON THE APPEAL WITHIN
THIRTY (30) DAYS FROM RECEIPT OF THE APPEAL: PROVIDED, FURTHER, THAT,
WHEN THE COLLECTOR FAILS TO RENDER A RULING OR DECISION WITHIN THE
PRESCRIBED PERIOD, THE PROTEST SHALL AUTOMATICALLY BE ELEVATED TO
‘THE COMMISSIONER WHO SHALL RENDER A DECISION WITHIN SIXTY (60) DAYS
FROM THE DATE OF EXPIRATION OF THE PERIOD WITHIN WHICH THE COLLECTOR
SHOULD HAVE RENDERED HIS DECISION OR RULING: PROVIDED, FURTHERMORE,
THAT, WHEN THE RULING OR DECISION OF THE COLLECTOR IS ADVERSE TO THE
GOVERNMENT IT SHALL BE SUBJECT TO THE PROVISIONS OF SECTION 2313 OF
THIS CODE: PROVIDED, FINALLY, THAT FAILURE TO RENDER A DECISION OR
RULING WITHIN THE PRESCRIBED PERIOD SHALL BE LIABLE UNDER SECTION 3604
OF THIS CODE.”

Section 37, Section 23116 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 2316. Authority of Commissioner to make Compromise, ~ Subject to the
approval of the Secretary of Finance, the Commissioner of Customs may compromise any case
arising under this Code or other laws or part of laws enforced by the Bureau of Customs involving
the imposition of fines, surcharges and forfeitures unless otherwise specified by law(.)
PROVIDED, THAT THE COMMISSIONER SHALL NOT ALLOW ANY COMPROMISE
INVOLVING TAX DEFICIENCY FOR THOSE CASES FALLING UNDER SECTION 1603:
PROVIDED, FURTHER, THAT THE COMPROMISE MAY BE AVAILED PRIOR TO THE
RECEIPT OF THE AUDIT NOTIFICATION LETTER BY THE IMPORTER.”

Section 38. Section 2317 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 2317. Government’ Right of Compulsory Acquisition AND PRIVATE
SECTOR PARTICIPATION IN THE COMPULSORY ACQUISITION, — In order to protect
government revenues against the undervaluation of goods subject to ad valorem duty, the
Commissioner of Customs may acquire imported goods under question for a price equal to their
declared customs value plus any duties already paid on the goods, payment for which shall be
‘made within ten (10) working days from issuance of a warrant signed by the Commissioner of
‘Customs for the acquisition of such goods

“ANY INDUSTRY ASSOCIATION OR INDUSTRY SECTOR MAY LIKEWISE
POST A LETTER OF CREDIT, SURETY BOND OR SOME OTHER APPROPRIATE
INSTRUMENT IN FAVOR OF THE BUREAU IN THE AMOUNT EQUAL TO THE
DECLARED CUSTOMS VALUE OF THE IMPORTED ARTICLES PLUS ANY DUTIES,
TAXES, FEES OR OTHER CHARGES WHICH HAVE ALREADY BEEN PAID THEREON,
IN WHICH CASE THE COMMISSIONER OF CUSTOMS SHALL ACQUIRE SUCH
IMPORTED GOODS, PAYMENT FOR WHICH SHALL BE MADE WITHIN TEN (10)
WORKING DAYS FROM THE ISSUANCE OF A WARRANT SIGNED BY THE
COMMISSIONER OF CUSTOMS FOR THE ACQUISITION OF SUCH GOODS: PROVIDE!
THAT THE PROVISIONS OF SECTION 201 OF THIS CODE SHALL APPLY IN THE CA‘
OF SURETY BONDS AND SURETY COMPANIES.

XXX

“Where no appeal is made by the importer, or upon reaffirmation of the commissioner's
decision during the appeals process, the Bureau of Customs or its agent shall {sell] DISPOSE OF
the acquired goods [pursuant to existing laws and regulations.) IN THE MANNER AS
PROVIDED FOR IN THIS CODE: PROVIDED, THAT, IN CASES
ACQUISITION WAS INITIATED BY THE INDUSTRY ASSOCIATION OR INDUSTRY
SECTOR, THE COMMISSIONER SHALL CLAIM ON THE LETTER OF CREDIT, SURETY
BOND OR WHATEVER INSTRUMENT POSTED OR USED FOR THE PURPOSE, AND
THEREUPON RELEASE THE ACQUIRED ARTICLES TO THE INDUSTRY ASSOCIATION
OR INDUSTRY SECTOR WHICH POSTED THE INSTRUMENT.

Section 39. Section 2401 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 2401. Supervision and Control Over Criminal and Civil Proceedings. ~ Civil
and criminal actions and proceedings instituted in behalf of the government under the authority of


this Code or other law enforced by the Bureau shall be brought in the name of the government of
the Philippines and shall be [conducted] PROSECUTED AND HANDLED by customs [officers]
LAWYERS WITH THE ASSISTANCE OF THE DEPARTMENT OF JUSTICE: 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 CODE SHALL EXCLUSIVELY BELONG TO THE
DEPARTMENT OF JUSTICE: PROVIDED, FURTHER, THAT [but] no civil or criminal action
for the recovery of duties or the enforcement of any fine, penalty or forfeiture under this Code
shall be filed in court without the approval of the Commissioner.”

Section 40. Section 2503 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
‘amended to read as follows:

“Sec. 2503. [Undervaluation, Misclassification and Misdeclaration in Entry]
MISDECLARATION, MISCLASSIFICATION, AND UNDERVALUATION IN GOODS
DECLARATION. ~ [When the dutiable value of the imported articles shall be so 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 (102%) 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, or 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 undervalvation, 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 Section 2530 of this
Code: Provided, further, That any misdectared or undeclared imported articles/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.]

[When the undervaluation, misdescription, misclassification or misdeclaration in the
import entry is intentional, the importer shall be subject to the penal provision under Section 3602
of this Code.}

MISDECLARATION AS TO QUANTITY, OR WEIGHT, OR MEASUREMENT OF
‘THE IMPORTED ARTICLE OCCURS WHEN “THERE IS UNDERVALUATION WHEN: (A)
‘THE CUSTOMS VALUE DECLARATION IN THE IMPORT ENTRY FAILS TO DISCLOSE
IN FULL THE PRICE ACTUALLY PAID OR PAYABLE FOR THE IMPORTED ARTICLES;
OR, (B) WHEN IT USES AN INCORRECT VALUATION METHOD OR OTHERWISE HAS
NOT PROPERLY OBSERVED THE VALUATION RULES UNDER THE TRANSACTION
VALUE SYSTEM, RESULTING IN DISCREPANCY IN DUTY BETWEEN THE CORRECT
TRANSACTION VALUE UNDER THE APPLICABLE METHOD AND THAT AS
DECLARED.

WHEN THE UNDERVALUATION IS ESTABLISHED WITHOUT NEED TO GO
THROUGH THE FORMAL DISPUTE SETTLEMENT PROCESS REQUIRED UNDER THE,
TRANSACTION VALUE SYSTEM PROVIDED FOR IN THIS CODE, A SURCHARGE,
SHALL BE IMPOSED IN AN AMOUNT EQUAL TO TWO HUNDRED PERCENT (200%) OF
THE DIFFERENCE BETWEEN THE FULL DUTY AS ESTABLISHED AND THAT AS
DECLARED. NO SURCHARGE SHALL BE IMPOSED WHEN THE DISCREPANCY IN
DUTY IS LESS THAN TEN PERCENT (10%); OR WHEN THE DECLARED VALUE IS
REJECTED AS A RESULT OF AN OFFICIAL RULING OR DECISION UNDER THE
CUSTOMS DISPUTE SETTLEMENT PROCESS INVOLVING DIFFICULT OR HIGHLY
TECHNICAL QUESTION RELATING TO THE APPLICATION OF CUSTOMS VALUATION
RULES; OR THE VALUE DECLARATION RELIED UPON AN OFFICIAL GOVERNMENT
RULING OR INFORMATION.

WHEN THE UNDERVALUATION IS ATTENDED WITH FRAUD, SUCH AS WHEN
‘A FALSE INVOICE OR FAKE OR ALTERED DOCUMENT SUPPORTING THE DECLARED.
CUSTOMS VALUE IS Y
INFORMATION IS MADE AND IS UNCOVERED AT THE TIME CUSTOMS STILL HAS
PHYSICAL CUSTODY OF OR CONTROL OVER THE IMPORTED ARTICLES, THE SAME
SHALL FORTHWITH BE SUBJECT TO SEIZURE AND FORFEITURE PROCEEDINGS,
WITHOUT PREJUDICE TO THE APPLICATION OF THE PENAL PROVISIONS UNDER
SECTION 3602 OF THIS CODE AGAINST THE IMPORTER AND/OR OTHER PERSON OR,
PERSONS WHO PARTICIPATED IN THE FRAUDULENT ACT.”

Section 41. A new section to be known as Section 2503-A is hereby inserted in Part 4, Title VI, Book II of
the Tariff and Customs Code of the Philippines, as amended, to read as follows:


“sec, 2503-A.__ NON-IMPOSITION OF SURCHARGE. ~ EXEMPTION FROM THE.
SURCHARGE SHALL BE ALLOWED ONLY IN CASES WHEN THE DECLARED OR
ENTERED CLASSIFICATION IS BASED ON RULINGS BY THE TARIFF COMMISSION
PURSUANT TO SUBSECTION (A) OF SECTION 1313 OF THIS CODE: PROVIDED, THAT
THE DESCRIPTION OF THE ARTICLE IS FOUND CORRECT UPON EXAMINATION:
PROVIDED, FURTHER, THAT BASED ON THE RESULT OF THE EXAMINATION, THE
ARTICLE IS FOUND TO BE ESSENTIALLY THE SAME AS THAT DESCRIBED IN THE.
RULING.”

Section 42. Section 2601 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 2601. [Property Subject to Sale] PROPERTY UNDER CUSTOMS
CUSTODY SUBJECT TO DISPOSITION, ~ Property in customs custody THAT shall be subject
to [sale under the conditions hereinafter] THE MODES OF DISPOSITION AS provided FOR IN
SECTION 2602 HEREO!

Section 43. Section 2602 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec, 2602. [Place of Sale or Other Disposition of Property.] MODES OF
DISPOSITION OF PROPERTY UNDER CUSTOMS CUSTODY. Property within the
purview of this Part of this Code shall be [Sold, or otherwise disposed of, upon the order of the
Collector of the port where the property in question is found, unless the Commissioner shall direct
its conveyance for such purpose to some other port.] DISPOSED OF THROUGH THE
FOLLOWING MODES OF DISPOSITION:

(A) WHEN SUBJECT PROPERTY HAS EXPORT POTENTIAL, THE SAME
SHALL BE RE-EXPORTED THROUGH A GOVERNMENT ENTITY WHICH SHALL BE.
DESIGNATED TO PERFORM SAID TASK;

(B) WHEN THE PROPERTY IS NOT RE-EXPORTED, AND UPON
RECOMMENDATION OF THE COMMISSIONER OF CUSTOMS, THE SECRETARY OF
FINANCE MAY AUTHORIZE THE OFFICIAL USE OF THE ARTICLES TO PROMOTE THE
INTENSIVE COLLECTION OF TAXES AND/OR TO HELP PREVENT OR SUPPRESS
SMUGGLING AND OTHER FRAUDS UPON THE CUSTOMS;

(©) WHEN THE ARTICLE IS NOT SUITABLE FOR RE-EXPORTATION OR
FOR USE AGAINST SMUGGLING OR OTHER FRAUDS UPON CUSTOMS, THEN IT MAY
BE CHANNELED FOR THE OFFICIAL USE OF OTHER OFFICES OF THE NATIONAL,
GOVERNMENT;

(D) IF THE ARTICLE IS SUITABLE FOR SHELTER OR CONSISTS OF
FOODSTUFFS OR CLOTHING MATERIALS THEN THAT ARTICLE SHALL BE GIVEN TO
THE DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT, OR TO THE
DEPARTMENT OF HEALTH IN THE CASE OF MEDICINES; AND

(E) IF SUBJECT ARTICLE CANNOT BE RE-EXPORTED THROUGH ‘THE
GOVERNMENT ENTITY DESIGNATED FOR THE PURPOSE OR IS NOT SUITABLE,
EITHER FOR OFFICIAL USE OR CHARITY, THE SAME SHALL BB BURNED OR
DESTROYED IN SUCH MANNER AS THE CASE MAY REQUIRE AS TO RENDER IT
ABSOLUTELY WORTHLESS, IN THE PRESENCE OF REPRESENTATIVES FROM THE,
COMMISSION ON AUDIT, THE DEPARTMENT OF JUSTICE, THE BUREAU OF
CUSTOMS AND THE PRIVATE SECTOR.

THE COST OF RE-EXPORTATION OF SUBJECT PROPERTY UNDER THIS
SECTION, INCLUDING ALL ATTENDANT COSTS THERETO, SHALL BE SHOULDERED
BY THE IMPORTER/CONSIGNEE WHO UNLAWFULLY BROUGHT IN THE IMPORTED
ARTICLE, AND/OR THE BROKER THEREOF, AS THE CASE MAY BE; WHEN BOTH THE
IMPORTER/CONSIGNEE WHO UNLAWFULLY BROUGHT IN THE ARTICLE AND THE
BROKER COULD NOT BE LOCATED THEN THE GOVERNMENT ENTITY WHICH IS
DESIGNATED TO RE-EXPORT SUBJECT PROPERTY SHALL SHOULDER THE COST OF
RE-EXPORTATION: PROVIDED, THAT ARTICLES TO BE RE-EXPORTED UNDER THIS
SECTION SHALL BE TRANSFERRED BY THE BUREAU OF CUSTOMS TO THE
GOVERNMENT ENTITY THAT IS MANDATED TO RE-EXPORT THE ARTICLES WITHIN
FIFTEEN (15) DAYS FROM THE TIME THE FORFEITURE HAS BECOME FINAL AND
EXECUTORY: PROVIDED, FURTHER, THAT ARTICLES THAT ARE CHANNELED OR
AUTHORIZED FOR OFFICIAL USE OR FOR CHARITABLE PURPOSES BY
GOVERNMENT ENTITIES SHALL NOT BE SOLD NOR EXCHANGED IN ANY MANNER
WHATSOEVER FOR OTHER ARTICLES: PROVIDED, FURTHERMORE, THAT THE COST
OF HANDLING, STORAGE, TRANSPORTATION, AND OTHER CHARGES INCIDENTAL



TO THE UPKEEP AND TRANSPORTATION OF SUBJECT ARTICLE SHALL BE BORNE
BY THE RECIPIENT GOVERNMENT AGENCY.”

Section 44, Section 2603 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“See. 2603. [Mode of Sale] DISPOSITION OF PROCEEDS IN CASE OF RE-
EXPORTATION. [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 thirty (30) days after ten (10) days notice of such sale shall have been
conspicuously posted at the port and such other advertisement as may appear to the Collector to be
advisable in the particular case.] THE FOLLOWING CHARGES SHALL BE PAID FROM THE
PROCE E RE-EXPORTATION OF ARTICLES WITHIN THE PURVIEW OF THIS
CODE:

(A) __RE-EXPORTATION EXPENSES INCURRED BY THE GOVERNMENT
ENTITY DESIGNATED FOR THE PURPOSE;

(B) TAXES AND OTHER CHARGES DUE THE GOVERNMENT;
(C) STORAGE CHARGES;

(D) —_ ARRASTRE CHARGES;
(£)___ FREIGHT, LIGHTERAGE AND OTHER EXPENSES INCIDENTAL TO THE,
EXPORTATION; AND

(FP) ANY SURPLUS REMAINING AFTER THE SATISFACTION OF ALL.
LAWFUL CHARGES AS PROVIDED HEREIN SHALL BE DEPOSITED IN A
SPECIAL TRUST FUND WHICH SHALL BE USED SOLELY FOR THE PURPOSE
OF FINANCING THE COMPULSORY ACQUISITION OF IMPORTED GOODS BY
THE GOVERNMENT AS PROVIDED FOR IN SECTION 2317 OF THIS CODE.”

Section 45. Section 2612 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec, 2612. _ Disposition of Smuggled Articles. ~ Smugeled articles, after liability to
seizure or forfeiture shall have been established by proper administrative [or judicial] proceedings
in conformity with the provisions of this Code, shall be disposed of as provided for in [s]Section
{twenty-six hundred and two} 2602 HEREOF: Provided, That articles whose importation is
prohibited under Section One Hundred [Two] ONE sub-paragraphs b, c, d, e and j shall, upon
order to the Collector in writing, be burned or destroyed, in such manner as the case may require
as to render them absolutely worthless, in the presence of a representative each from the
Commission on Audit, [Ministry] DEPARTMENT of Justice, Bureau of Customs, and if possible,
any representative of the private sector.”

jon 46. A new section to be known as Section 3504-A is hereby inserted after Section 3504 of the
Tariff and Customs Code of the Philippines, as amended, to read as follows:

“See. 3504-A._ SURETY BONDS AND ELIGIBILITY OF SURETY COMPANIES.
SURETY BONDS FROM A SURETY COMPANY WHICH HAS AN OUTSTANDING
LIABILITY OF THIRTY PERCENT (30%) OR MORE OF THE TOTAL DUE AND.
DEMANDABLE BONDS ISSUED IN FAVOR OF THE BUREAU OF CUSTOMS, AT ANY
‘TIME, SHALL NOT BE ACCEPTABLE AS GUARANTEE FOR THI OF THE
IMPORTED GOODS: PROVIDED, THAT, PERMIT OR LICENS SURETY
COMPANY WHICH HAS AN OUTSTANDING LIABILITY OF THIRTY PERCENT (30%)
OR MORE OF THE TOTAL DUE AND DEMANDABLE BONDS, AT ANY TIME, WITH
THE BUREAU OF CUSTOMS, TO ISSUE CUSTOMS SURETY BOND FOR CUSTOMS
PURPOSES, SHALL BE CANCELLED: PROVIDED, FINALLY, THAT ANY SURETY
COMPANY SHALL BE ELIGIBLE TO ISSUE CUSTOMS SURETY BOND ONLY AFTER
DETERMINATION OF GOOD STANDING, WHICH SHALL BE BASED ON A
MEASURABLE PERFORMANCE RECORD IN THE CASE OF EXISTING SURETY
COMPANIES AND FINANCIAL CAPACITY IN THE CASE OF NEW SURETY
COMPANIES, BY THE INSURANCE COMMISSION IN CONSULTATION WITH THE
BUREAU OF CUSTOMS.”

Section 47, Section 3519 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“See. 3519. Words and Phrases Defined. ~ As used in this Code:

XXX


‘FOREIGN TRANSHIPMENT? SHALL REFER TO THE TRANSPORT OF GOODS
FROM A FOREIGN COUNTRY INTO ANY PORT OR PORTS OF THE PHILIPPINES FOR
SHIPMENT TO A FOREIGN DESTINATION WITHOUT INTRODUCING THE SAME INTO
THE PHILIPPINE CUSTOMS TERRITORY,

XXX

‘Smuggling’ is an act of 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, of sale of such article after importation,

knowing the same to have been imported contrary to law. It includes the exportation of articles in
4 manner contrary to law. Articles subject to this paragraph shall be known as smuggled
articles[.}: PROVIDED, HOWEVER, THAT THE ACT OF RECEIVING Al “LES THAT
ARE SUPPOSED TO BE EXPORTED BUT ARE SUBSEQUENTLY URNED AND
REJECTED BY THE IMPORTING COUNTRY SHALL NOT BE CONSIDERED
SMUGGLING,

XXX”

Section 48. Section 3601 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows

“Sec. 3601 Unlawfal Importation, ~ Any person who shall fraudulently import or
bring into the Philippines, or assist in so doing, any article, contrary to law, SHALL BE GUILTY
OF SMUGGLING AND SHALL BE PUNISHABLE AS HEREIN PROVIDED. ANY PERSON
or] WHO shall receive, conceal, buy, sell, or in any manner facilitate the transportation,
concealment, or sale of such UNLAWFULLY IMPORTED article [after importation, knowing the
same to have been imported contrary to law], shall be DEEMED guilty of smuggling and shall
LIKEWISE be [punished with] PUNISHABLE AS HEREIN PROVIDED:

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 AND ONE (1) DAY 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 FIFTY THOUSAND
pesos (P150,000.00) nor more than [five thousand} THREE HUNDRED THOUSAND pesos
(P300,000.00) and imprisonment of not less than [six months] SEVEN (7) YEARS and one (1)
day 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] FOUR HUNDRED thousand pesos (P400,000.00)
nor more than [eight thousand] SIX HUNDRED THOUSAND (P600,000.00) and imprisonment
Of not less than [five] ELEVEN (11) years and one (1) day nor more than (eight] FIFTEEN (15)
years, i 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 (600,000.00) but does not exceed fone hundred fifty thousand} ONE MILLION pesos
(P1,000,000.00);

4, A fine of not less than (eight thousand} EIGHT HUNDRED THOUSAND pesos
(P800,000.00) nor more than [ten thousand] TEN MILLION pesos (P10,000,000.00) and
imprisonment not less than [eight] SIXTEEN (16) years and one (1) day nor more than [twelve}
rWENTY (20) years, if the appraised value to be determined in the manner prescribed under this
including duties and taxes, of the article unlawfully imported exceeds fone hundred fifty
thousand pesos] ONE MILLION PESOS (P1,000,000.00) BUY NOT MORE THAN FIFTY
MILLION PESOS (P50,000,000.00);

5. If THE APPRAISED VALUE, TO BE DETERMINED IN THE MANNER
PRESCRIBED UNDER THIS CODE, OF THE ARTICLE UNLAWFULLY IMPORTED,
INCLUDING DUTIES AND TAXES, EXCEEDS FIFTY MILLION PESOS (P50,000,000.00)
OR, If THE AGGREGATE AMOUNT OF THE APPRAISED VALUES OF THE
UNLAWFULLY IMPORTED ARTICLES, INCLUDING DUTIES AND TAXES, RESULTING
FROM ACTS OF UNLAWFUL IMPORTATION COMMITTED IN MORE THAN ONE
INSTANCE, EXCEEDS FIFTY MILLION PESOS (P50,000,000.00), THE SAME SHALL BE
DEEMED AS HEINOUS CRIME AND SHALL BE PUNISHABLE WITH A PENALTY OF
RECLUSION PERPETUA 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 shall be imposed when the crime of serious physical
injuries shall have been committed and the penalty of reclusion perpetua {to death} shall be
imposed when the crime of homicide shall have been committed by reason or on the occasion of
the unlawful importation,

In applying the above scale of penalties, if the offender is an alien [and the prescribed
penalty is not death}, he shall be deported after serving the sentence without further proceedings
for deportation. If the offender is a govemment official or employee, the penalty [shall be the
maximum as hereinabove prescribed and the offender shall suffer an additional] WHICH IS THE
NEXT HIGHER IN DEGREE SHALL BE IMPOSED IN ADDITION TO THE penalty of
perpetual disqualification from public office, to vote and to participate in any public election. IF
THE OFFENDER FAILS TO PAY THE FINE, HE SHALL SUFFER SUBSIDIARY
IMPRISONMENT.

Section 49. Section 3602 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 3602. Various Fraudulent Practices Against Customs Revenue. — Any
person who makes or attempts to make any entry of imported or exported article by means of any
false or fraudulent invoice, declaration, affidavit, letter, paper or by any means of any false
statement, written or verbal, or by any means of any false or fraudulent practice whatsoever, or
[knowingly] effects any entry of goods, wares or merchandise, at less than the true weight or
measures thereof or upon a false classification as to quality or value, or by the payment of less
than the amount legally due, or [knowingly and willfully] files any false or fraudulent entry or
claim for the payment of drawback or refund of duties upon the exportation of merchandise, or
makes or files any affidavit abstract, record, certificate or other document, with a view to securing
the payment to himself or others of any drawback, allowance, or refund of duties on the
exportation of merchandise, greater than that legally due thereon, or who shall be guilty of any
[willful] act or omission shall, for each offence, BE GUILTY OF TECHNICAL SMUGGLING
AND SHALL be [punished in accordance with the penalties prescribed in the preceding section.)
PUNISHABLE AS FOLLOWS:

(A) ___A FINE OF NOT LESS THAN THREE HUNDRED THOUSAND PESOS
(P300,000.00) NOR MORE THAN FIVE HUNDRED THOUSAND PESOS (P500,000.00) AND
IMPRISONMENT OF PRISION CORRECCIONAL, IF THE DIFFERENCE BETWEEN THE
VALUE, WEIGHT, MEASUREMENT, OR QUANTITY DECLARED IN THE ENTRY AND
THE TRUE AND ACTUAL VALUE, WEIGHT, QUANTITY, OR MEASUREMENT OF THE
ARTICLE UNLAWFULLY IMPORTED DOES NOT EXCEED ONE HUNDRED THOUSAND
PESOS (P100,000.00);

(B) _A FINE OF NOT LESS THAN FIVE HUNDRED THOUSAND PESOS
(PS00,000.00) NOR MORE THAN EIGHT HUNDRED THOUSAND PESOS (P800,000.00)
AND IMPRISONMENT OF PRISION MAYOR, IF THE DIFFERENCE BETWEEN THE
VALUE, WEIGHT, MEASUREMENT, OR QUANTITY DECLARED IN THE ENTRY AND
THE TRUE AND ACTUAL VALUE, WEIGHT, QUANTITY, OR MEASUREMENT OF THE,
ARTICLE UNLAWFULLY IMPORTED EXCEEDS ONE HUNDRED THOUSAND PESOS
(P100,000.00) BUT DOES NOT EXCEED ONE MILLION PESOS (P1,000,000.00);

(©)__A FINE OF NOT LESS THAN EIGHT HUNDRED THOUSAND PESOS
(P800,000.00) NOR MORE THAN ONE MILLION PESOS (P1,000,000.00) AND.
IMPRISONMENT OF RECLUSION TEMPORAL, IF THE DIFFERENCE BETWEEN THE
VALUE, WEIGHT, MEASUREMENT, OR QUANTITY DECLARED IN THE ENTRY AND
THE TRUE AND ACTUAL VALUE, WEIGHT, QUANTITY, OR MEASUREMENT OF THE
ARTICLE UNLAWFULLY IMPORTED EXCEEDS ONE MILLION PESOS (P1,000,000.00)
BUT DOES NOT EXCEED FIVE MILLION PESOS (P5,000,000.00); AND

(D) __ A FINE OF NOT LESS THAN ONE MILLION PESOS (P1,000,000.00) NOR
MORE THAN TWO MILLION PESOS (P2,000,000.00) AND IMPRISONMENT OF
RECLUSION PERPETUA, IF THE DIFFERENCE BETWEEN THE VALUE, WEIGHT,
MEASUREMENT, OR QUANTITY DECLARED IN THE ENTRY AND THE TRUE AND.
ACTUAL VALUE, WEIGHT, QUANTITY. OR MEASUREMENT OF THE ARTICLE,
UNLAWFULLY IMPORTED EXCEEDS FIVE MILLION PESOS (P5,000,000.00).

IN APPLYING THE ABOVE SCALE OF PENALTIES, IF THE OFFENDER IS AN
ALIEN, HE SHALL BE DEPORTED AFTER SERVING THE SENTENCE WITHOUT
FURTHER PROCEEDINGS FOR DEPORTATION. IF THE OFFENDER IS A GOVERNMENT
OFFICIAL OR EMPLOYEE, THE PENALTY NEXT HIGHER IN DEGREE SHALL BE.
IMPOSED IN ADDITION TO THE PENALTY OF PERPETUAL DISQUALIFICATION FROM
PUBLIC OFFICE, TO VOTE AND TO PARTICIPATE IN ANY PUBLIC ELECTION. IF THE
OFFENDER FAILS TO PAY THE FINE, HE SHALL SUFFER SUBSIDIARY
IMPRISONMENT. HE SHALL ALSO LOSE ALL THE BENEFITS DUE HIM FOR HIS


SERVICE IN THE GOVERNMENT, INCLUDING THE FORFEITURE OF HIS SEPARATION
AND RETIREMENT BENEFITS.”

Section 50. A new section to be known as Section 3602-A is hereby inserted in Part 1, Title V, Book II of
the Tariff and Customs Code of the Philippines, as amended, to read as follows:

“Sec. 3602-A. WAREHOUSING ACTS DEEMED AS SMUGGLING PUNISHABLE
UNDER SECTIONS 3601 AND 3602 OF THIS CODE. — THE FOLLOWING SHALL BE
DEEMED AS ACTS OF SMUGGLING WHICH SHALL BE PUNISHABLE UNDER.
SECTIONS 3601 AND 3602 OF THIS CODE:

(A) BREAKING OF CUSTOMS SEALS OR UNAUTHORIZED REMOVAL OF
ARTICLES FROM BONDED WAREHOUSES;

(B) SUBMISSION OF INCORRECT OR FALSE INFORMATION BY THE
BONDED WAREHOUS!

(©) WAREHOUSING OF THE FOLLOWING SHIPMENTS:

(1) FINISHED ARTICLES, WITHOUT EXCEPTION. — FINISHED
ARTICLES, AS USED IN THIS SECTION, SHALL REFER TO SCIENTIFICALLY
OR TECHNOLOGICALLY PROCESSED ARTICLES IN FINAL STATE SUCH
‘THAT NO OTHER PRODUCT CAN BE MANUFACTURED THEREFROM UNLESS
ITS PRINCIPAL CHARACTER IS FIRST DESTROYED.

(2) __ ARTICLES NOT DECLARED IN THE IMPORT ENTRIES OR IN
EXCESS OF THE VOLUME AND QUANTITY ALLOWED UNDER THE LICENSE
OF THE CUSTOMS BONDED WAREHOUSE.

3) PROHIBITED ARTICLES, AND REGULATED ARTICLES
WITHOUT THE CORRESPONDING CLEARANCE AND/OR IMPORT AUTHORITY
DULY ISSUED BY A COMPETENT AUTHORITY.

(D) UNAUTHORIZED TRANSFERS FROM THE CUSTOMS ZONE OF
WAREHOUSING ARTICLES IMPORTED BY THE BONDED WAREHOUSE.

(E) UNAUTHORIZED WITHDRAWAL FROM A BONDED WAREHOUSE
WITHOUT PAYMENT OF DUTIES AND TAXES.

(F)__ FAILURE TO LIQUIDATE IMPORTED ARTICLES WHICH WERE
WITHDRAWN FROM THE BONDED WAREHOUSE WITHIN THIRTY (30) DAYS
FROM ISSUANCE BY THE BUREAU OF THE CERTIFICATE OF LOADING IN A
VESSEL DESTINED TO A FOREIGN PORT; AND

(G) FAILURE TO PAY DUTIES AND TAXES ON THE REMAINING IMPORTED
MATERIALS WHICH ARE NOT EXPORTED WITHIN THIRTY (30) DAY

IMPORTATIONS MADE IN VIOLATION OF THE ABOVE PROVISIONS IN THIS
SECTION SHALL /PSO FACTO BE FORFEITED IN FAVOR OF THE GOVERNMENT TO BE.
DISPOSED OF PURSUANT TO SECTION 2602 OF THIS CODE.”

Section 51. Section 3603 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 3603. Failure 10 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
of the Bureau of Customs who, having cognizance of any fraud on the customs revenue,
to report all information relative thereto to the Collector as by law required, shall be
punished by a fine of not LESS THAN FIFTY THOUSAND PESOS (P50,000.00) BUT NOT more
than [five] TWO HUNDRED thousand pesos (P200,000,00) and imprisonment for not LESS THAN
TWO (2) YEARS AND ONE (1) DAY BUT NOT more than [one year] FIVE (5) 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 publi
office, to vote and to participate in any election. HE SHALL ALSO LOSE ALL THE BENEFITS
DUE HIM FOR HIS SERVICE IN THE GOVERNMENT, INCLUDING THE FORFEITURE OF
HIS SEPARATION AND RETIREMENT BENEFITS.”

Section 52. Section 3604 of the Tariff and Customs Code of the Philippines, 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 [Five] ONE HUNDRED thousand pesos (P100,000.00) nor


‘more than [Fifty] FIVE HUNDRED thousand pesos (P500,000.00) and imprisonment for not less
than fone year] TEN (10) YEARS AND ONE (1) DAY nor more than [ten] FIFTEEN (15) years
and perpetual disqualification to hold public office, to vote and to participate in any public
elcetion{:}. HE SHALL ALSO LOSE ALL THE BENEFITS DUE HIM FOR HIS SERVICE IN
THE GOVERNMENT, INCLUDING THE FORFEITURE OF HIS SEPARATION AND
RETIREMENT BENEFITS:

Section 53, Section 3605 of the Tariff’ and Customs Code of the Philippines, 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
aan inspection thereof has been demanded by the Collector of any collection district or at any time
conceals or destroys any such invoice, book or paper for the purpose of suppressing any evidence of
fraud therein contained, shall be punished with a fine of NOT LESS THAN TWENTY
THOUSAND PESOS (P20,000.00) BUT not more than [five] ONE HUNDRED thousand pesos
(100,000.00) and imprisonment for NOT LESS THAN TWO (2) YEARS AND ONE (1) DAY
BUT not more than [two] FIVE (S) yea

Section $4, Section 3606 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows

“See, 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, warchouse, or package, shall be
punished with a fine of not LESS THAN TWENTY THOUSAND PESOS (P20,000.00) BUT NOT
‘more than {twenty} ONE HUNDRED thousand pesos (P100,000.00) [or] AND imprisonment of not
LESS THAN TWO (2) YEARS AND ONE (1) DAY BUT NOT more than [five] SEVEN (7)
years, or both]. If the offender is an alien, he shall be deported after serving the sentence; and if he
is a public official or employe ier an additional penalty of perpetual disqualification to
hold public office, to vote and part

Section 55, Section 3610 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows

‘ec, 3610. Failure 1o Keep Importation Records and Give Full Access to Customs Officers.

‘Any person who fails to keep all the records of importations and/or books of accounts, business
and computer systems and all customs commercial data in the manner prescribed in Part 2, Section
3514 of this Title shall be punished with a fine of not less than [One hundred thousand pesos
(P100,000.00)] TWO HUNDRED THOUSAND PESOS (P200,000.00) but not more than [Two
hundred thousand pesos (P200,000.00)] FIVE HUNDRED THOUSAND PESOS (P500,000.00)
[and/or] AND. imprisonment of not less than [two (2)] FOUR (4) years and one day but not more
than [six (6)] EIGHT (8) years. This penalty shall likewise be imposed against the
importers/brokers who deny an authorized customs officer full and free access to such records,
books of accounts, business and computer systems, and all customs commercial data including
payment records. This is without prejudice to the administrative sanctions that the Bureau of
Customs may impose against contumacious importers under existing laws and regulations including
the authority to hold delivery or release of their imported articles.”

Section 56. Section 3612 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 3612. Violations of Tariff and Customs Laws and Regulations in General. — Any
person who violates a provision of this Code or regulations pursuant thereto, for which delinquency
no specific penalty is provided, shall be punished by a fine of not LESS THAN TWENTY
THOUSAND PESOS (P20,000.00) BUT NOT more than One HUNDRED thousand pesos
(100,000.00) for] AND. by imprisonment for not LESS THAN TWO (2) YEARS AND ONE (1)
DAY BUT NOT more than [one year] FIVE (5) YEARS[, or both]. If the offender is an alien, he
shall be deported after serving the sentence and if the offender is a public official or employee, he
shall suffer disqualification to hold public office, to vote and participate in any public election for
ten years,

Section 57. A new section to be known as Section 3613 is hereby inserted to the Tariff and Customs Code
of the Philippines, as amended, to read as follows:

“Sec, 3613. SUMMARY PROCEDURE FOR SEIZURE AND FORFEITURE. ~
NOTWITHSTANDING THE PROVISIONS OF TITLE VI OF THIS CODE, ARTICLES WHICH
ARE FRAUDULENTLY IMPORTED OR BROUGHT INTO THE PHILIPPINES WITHOUT
BEING ENTERED THROUGH THE CUSTOMSHOUSE, OR WITHOUT PAYMENT OF THE
CORRECT AND APPLICABLE DUTIES, TAXES, FEES AND CHARGES SHALL BE
SUMMARILY SEIZED AND FORFEITED IN FAVOR OF THE GOVERNMENT WHEN
WARRANTED OR DETERMINED IN THE SEIZURE PROCEEDINGS. SUBJECT TO THI



PROVISIONS OF SECTION 2530 OF THIS CODE, ANY VESSEL OR AIRCRAFT WHICH IS
LEASED TO FRAUDULENTLY BRING IN SAID IMPORTED ARTICLES INTO THE
PHILIPPINES SHALL LIKEWISE BE SUBJECT TO SUMMARY SEIZURE AND
FORFEITURE.

THE DECISION OF THE SECRETARY OF FINANCE, UPON THE.
RECOMMENDATION OF THE COMMISSIONER OF CUSTOMS, UNDER THIS SECTION,
SHALL BE FINAL AND UNAPPEALABLE.

NO COURT, EXCEPT THE COURT OF TAX APPEALS AND THE SUPREME COURT,
SHALL ISSUE ANY TEMPORARY RESTRAINING ORDER OR ANY INJUNCTIVE RELIEF
AGAINST THE SEIZURE, FORFEITURE OR DISPOSITION OF THE SUBJECT ARTICLES
COVERED BY THIS SECTION.

THE OWNER OR OPERATOR OF ANY SEIZED VESSEL OR AIRCRAFT UNDER
THIS SECTION SHALL BE BLACKLISTED FROM OPERATING AND/OR FROM.
ENGAGING IN TRADE IN THE PHILIPPINES.”

Section 58. A new title to be known as Title VIII, with heading entitled “Ports Transparency Alliance”, and
under which Sections 3614, 3615, 3616, 3617, 3618, 3619 and 3620 are inserted in the Tariff and Customs
Code of the Philippines, as amended, to read as follows:

TLE VIL
PORTS TRANSPARENCY ALLIANCE,

Sec. 3614. PORTS TRANSPARENCY ALLIANCE, ~ PUBLIC-PRIVATE SECTOR
PARTNERSHIP FOR THE EFFICIENT CUSTOMS ADMINISTRATION IS HEREBY
INSTITUTIONALIZED THROUGH THE CREATION OF THE PORTS TRANSPARENCY
ALLIANCE OR ‘PORTAL’ UNDER THE DIRECTION AND LEADERSHIP OF THE.
SECRETARY OF FINANCE.

Sec. 3615. POWERS AND FUNCTIONS OF PORTAL. — THE PORTS
TRANSPARENCY ALLIANCE OR PORTAL SHALL HAVE THE FOLLOWING POWERS
AND FUNCTIONS:

(A) TO ENCOURAGE GREATER PRIVATE SECTOR PARTICIPATION IN THE
ADMINISTRATION OF CUSTOMS LAWS;

(B)_TO IMPROVE CUSTOMER SERVICE IN ORDER TO ENHANCE COMPLIANCE
‘TO TAX AND DUTY LAWS, RULES AND REGULATIONS;

AND ADDRESS LEAKAGES THAT IMPACT

(C) TO REMOVE BOTTLENEK
BUSINESS COMPETITIVENESS;

(D) TO PROTECT CONSUMER RIGHTS; AND.

(E) TO PERFORM SUCH OTHER FUNCTIONS AS MAY BE NECESSARY TO

CARRY OUT ITS MANDATE.

Sec. 3616. COMPOSITION OF THE PORTAL. ~ THE PORTAL SHALL BE CHAIRED BY
THE SECRETARY OF FINANCE OR BY AN UNDERSECRETARY WHO IS DULY
DESIGNATED TO REPRESENT THE SECRETARY WHEN HE IS UNAVAILABLE. IT
SHALL BE CO-CHAIRED BY THE COMMISSIONER OF CUSTOMS.

ITS MEMBERSHIP SHALL INCLUDE REPRESENTATIVES OF VARIOUS DOMESTIC
INDUSTRIES, INDUSTRY ASSOCIATIONS OR CHAMBERS, TAXPAYER ASSOCIATIONS
AND CONSUMER GROUPS, AS DETERMINED THROUGH A DEPARTMENT ORDER TO.
BE ISSUED BY THE SECRETARY OF FINANCE.

THE TWO (2) CO-CHAIRPERSONS OF THE CONGRESSIONAL OVERSIGHT
COMMITTEE ON THE TAX REFORM PROGRAM, OR THEIR DULY DESIGNATED
REPRESENTATIVES, SHALL ALSO BE MEMBERS OF THE PORTAL.

THE HEADS OF OTHER DEPARTMENTS OF THE GOVERNMENT MAY BE
INVITED IN THE PORTAL MEETINGS AS RESOURCE PERSONS ON ISSUES
CONCERNING THEIR RESPECTIVE OFFICES.

Sec. 3617. MEETINGS. — THE PORTAL SHALL MEET AT LEAST ONCE A MONTH,
OR AS OFTEN AS NECESSARY AT THE CALL OF THE CHAIRPERSON OR A MAJORITY
OF THE MEMBERS, IN ORDER TO THRESH OUT VARIOUS ISSUES, PROPOSALS AND
PROBLEMS CONCERNING CUSTOMS. A MAJORITY OF THE MEMBERS OF THE.
PORTAL SHALL CONSTITUTE A QUORUM TO DO BUSINESS. THE MEETING SHALL BE.
PRESIDED BY THE CHAIRPERSON, OR IN HIS ABSENCE, BY HIS/HER DULY


DESIGNATED UNDERSECRETARY.

See. 3618. FUNDING. ~ THE ANNUAL APPROPRIATIONS FOR THE
DEPARTMENT OF FINANCE AND THE BUREAU OF CUSTOMS SHALL PROVIDE
‘AN ITEM OF EXPENSE FOR THE INSTITUTIONALIZATION OF THE PORTAL.

See. 3619, ASSISTANCE FROM OTHER GOVERNMENT AGENCIES, — THE.
PORTAL MAY REQUEST ANY DEPARTMENT, BUREAU, OFFICE, AGENCY, OR
ANY INSTRUMENTALITY OF THE GOVERNMENT FOR SUCH ASSISTANCE AS
MAY BE NEEDED IN THE PERFORMANCE OF ITS FUNCTIONS.

See. 3620, ANNUAL REPORT. ~ THE PORTAL SHALL, WITHIN NINETY (90)
DAYS AFTER THE END OF EVERY FISCAL YEAR, SUBMIT TO RESIDENT
AND TO CONGRESS AN ANNUAL REPORT ON ITS COMPLIANCE WITH, OR
ACCOMPLISHMENTS OF, ITS POWERS, DUTIES AND FUNCTIONS, TOGETHER
WITH ITS PLANS AND RECOMMENDATIONS TO IMPROVE AND DEVELOP ITS
CAPABILITY TO ENFORCE ITS MANDATE,”

Section 59, Rules and Regulations. ~ The Secretary of Finance shall, upon the recommendation of the
Commissioner of Customs, promulgate the necessary rules and regulations for the effective implementation
of this Act.

Section 60. Separability Clause. ~ I any provision of this Act is subsequently declared unconstitutional,
the validity ofthe remaining provisions hereof shall remain in full force and effect.

Section 61. Repealing Clause, ~ Sections 2604, 2605, 2606, 2607, and 2610 of the Tariff and Customs
Code of the Philippines, as amended, are hereby repealed, All laws, decrees, executive orders, rules and
regulations and other issuances or parts thereof which are inconsistent with this Act are hereby repealed or
modified accordingly.

Section 62. Effectivity. ~ This Act shall take effect fifteen (15) days after its publication in any two (2)
newspapers of general circulation,

Approved,