Republic of the Philippines
Bouse of Representatives
Batasan Bills, Queson City

Seventeenth Congress
Second Regular Session

House Bill No._'7052

Introduced by Representative Rodante D. Marcoleta

EXPLANATORY NOTE

Section 13, Article XII (National Economy and Patrimony) of the 1987
Constitution of the Philippines provides that “The State shall pursue a trade
policy that serves the general welfare and utilizes all forms and arrangements
of exchange on the basis of equality and reciprocity”. Moreover, Republic Act
No. 10863, otherwise known as the “Customs Modernization and Tariff Act,”
declares as a State policy the protection and enhancement of government
revenue and the institution of fair and transparent customs and tariff
management to efficiently facilitate international trade, prevent and curtail any
form of customs fraud and illegal acts, and modernize customs and tariff
administration.

Despite the procedures and requirements laid down by the law, illegal
importation activities still abound in the Philippine ports. Many smuggled and
prohibited items get through customs scrutiny using spurious commercial and
shipping documents. The fraud is perpetuated by the fact that cargo manifests of
vessels from a foreign port, airway bills and bills of lading do not indicate the
value of the goods and articles being imported. Actual purchase and customs
fees that need to be collected are not required to be declared in these
commercial documents: thus, giving the importer and consignee the opportunity
to misdeclare, undervalue and misclassify the goods and articles.

With this bill, I seek to address these illicit trading practices. By requiring
common to declare the value of the goods and articles in the cargo manifest of
vessels from a foreign port, bill of lading and airway bill as it appears in the
commercial invoice and letters of credit, authorities can have adequate basis in
assessing and collecting correct taxes, duties and charges.


This bill also prohibits making any changes in the electronic cargo
manifest already transmitted electronically to the Bureau of Customs computer
system. To ensure consistency of commercial documents transmitted and
presented to Philippine authorities, the Pier Inspection Division or the Aircraft
Operations Division, as the case may be, are tasked to reconcile the hard copy
of the cargo manifest with the electronic cargo manifest of a vessel from a
foreign port.

With these measures in place, we hope to significantly deter the use of
commercial and shipping documents in smuggling and illegal importation
activities,

In view of the foregoing, immediate passage of this bill is earnestly

requested.
ae D. MARCOLETA



Republic of the Philippines
Bouse of Representatives
Batasan Bills, Quezon City

Seventeenth Congress
Second Regular Session

House Bill No. 7052

Introduced by Representative Rodante D. Marcoleta

AN ACT
REQUIRING THE DECLARATION OF THE VALUE OF IMPORTED
GOODS IN COMMERCIAL DOCUMENTS AND PROHIBITING
FRAUDULENT ALTERATION OF CARGO MANIFEST, AMENDING
FOR THE PURPOSE REPUBLIC ACT NO. 10863, OTHERWISE
KNOWN AS THE “CUSTOMS MODERNIZATION AND TARIFF ACT”

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

SECTION 1. Section 1204 of Republic Act No. 10863 is hereby amended
to read as follows:

“SEC. 1204. Manifest Required of Vessel from Foreign Port.
— Every vessel from a foreign port must have on board a complete
manifest of all its cargoes.

“All cargoes intended to be landed at a port in the Philippines
must be described in separate manifests for each port of call. Each
manifest shall include the port of departure and the port of delivery

with the marks, numbers, quantity, and description of the packages


and the names of the consignees. Every vessel from a foreign port
must have on board complete manifests of passengers and baggage,
in the prescribed form, setting forth the destination and all
particulars required by immigration laws. Every vessel shall present
to the proper customs officers upon arrival in ports of the
Philippines a complete list of all sea stores then on board. If the
vessel does not carry cargo or passengers, the manifest must show
that no cargo or passenger is carried from the port of departure to the
port of destination in the Philippines.

“IN ADDITION, A VESSEL FROM A FOREIGN PORT
MUST DECLAREIN THE CARGO MANIFEST, BILL OF
LADING OR AIRWAY BILL THE VALUE OF THE ARTICLES
OR GOODS AS THEY APPEAR IN THE COMMERCIAL
INVOICE OR LETTER OF CREDIT, OR BOTH. THE VALUE
STATED IN THE CARGO MANIFEST, BILL OF LADING AND
AIRWAY BILL SHALL BE THE BASIS FOR ASCERTAINING
CORRECT DUTIES, TAXES AND OTHER CHARGES DUE.

“THE CARGO MANIFEST WITH CONSOLIDATED
CARGO AND THE NAMES OF THE CONSIGNEES COVERED
BY THE BILL OF LADING OR AIRWAY BILL SHALL BE
ENUMERATED UNDER THEIR RESPECTIVE MASTER BILL

OF LADING OR AIRWAY BILL.


“A true and complete copy of the cargo manifest shall be
electronically sent in advance by the shipping company, NON-
VESSEL OPERATING COMMON CARRIER (NVOCC), freight
forwarder, cargo consolidators, or their agents within the cut-off
period as may be determined by the Bureau before the arrival of the
carrying vessel at the port of entry. Upon arrival of the carrying
vessel, the shipping company, NVOCC, freight forwarder, cargo
consolidator, or their agents shall provide two (2) hard copies of the
cargo manifest to the Bureau in case the port of entry is either the
Port of Manila (PoM) or the Manila International Container Port
(MICP), and one (1) copy only in the case of the other ports of entry.
THE PIER INSPECTION DIVISION (PID) OR AIRCRAFT
OPERATION DIVISION (AOD) SHALL RECONCILE HARD
COPIES OF THE CARGO MANIFEST AGAINST THE
ELECTRONIC CARGO MANIFEST. ALL UNMANIFESTED
CARGOES SHALL BE REPORTED IMMEDIATELY TO THE
DISTRICT COLLECTOR OF THE PORT TO INSTITUTE
SEIZURE AND FORFEITURE PROCEEDINGS PURSUANT TO
SECTION 113 OF THIS ACT.

UPON TRANSMITTAL OF THE ELECTRONIC CARGO
MANIFEST TO THE BUREAU OF CUSTOMS COMPUTER

SYSTEM, AND AFTER THE SUBMISSION OF THE HARD


COPY OF THE CARGO MANIFEST UPON ENTRY OF THE
VESSEL, NO CHANGE OR ALTERATION SHALL BE
ALLOWED, except by means of an amendment, under oath, by the
master, consignee or agent thereof, which shall be attached to the
original manifest: Provided, That after the invoice and/or goods
declaration covering an importation have been received and
recorded in the office of the appraiser, 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, the discovery of
which would not have been made until after examination of the
importation has been completed. AFTER THE ARRIVAL OF THE
CARRYING VESSEL OR AIRCRAFT, THE DEPUTY
COLLECTORS AND THE MANAGEMENT INFORMATION
SYSTEM AND TECHNOLOGY GROUP SHALL NOT ACCEPT
ANY COMPACT DISK, DISKETTE, FLASH DRIVE, MEMORY
CARD OR OTHER FORMS OF DATA STORAGE DEVICE
FROM SHIPPING OR AIRLINE AGENTS FOR OPERATIONS
TO INCORPORATE A CHANGE OR ALTERATION IN THE
ELECTRONIC CARGO MANIFEST. UNLESS WITH PRIOR
APPROVAL OF THE MANAGEMENT INFORMATION

SYSTEM AND TECHNOLOGY GROUP,CUSTOMS OFFICERS


AND EMPLOYEES WITH SUPERVISORS’ PASS AND
SYSTEMS ADMINISTRATORS SHALL LIKEWISE REFRAIN
FROM ENCODING ANY DATA INTO THE COMPUTER
SYSTEM.”

SEC. 2. Implementing Rules and Regulations. — Within ninety (90) days
from the approval of this Act, upon the recommendation of the Commissioner
of Customs, the Secretary of Finance shall promulgate the necessary rules and
regulations for the effective implementation of this Act.

SEC. 3. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,