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

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. paeisy

Introduced by Honorable 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.

This bill seeks to curb these illicit trading practices. By requiring common
carrier 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, and the
District Collector of the Port, 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.

This proposed measure is expected 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.



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

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILLNO.__5278

Introduced by Honorable Rodante D. Marcoleta

AN ACT
REQUIRING THE DECLARATION OF THE VALUE OF IMPORTED
GOODS IN SHIPPING AND AIRLINE DOCUMENTS AND
PROHIBITING FRAUDULENT ALTERATION OF CARGO
MANIFEST, BILL OF LADING, AND AIRWAY BILL 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 OR AIRCRAFT FROM A
FOREIGN PORT MUST DECLARE IN THE INWARD 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 THEREIN SHALL BE THE BASIS FOR
ASCERTAINING CORRECT DUTIES, TAXES AND OTHER
CHARGES DUE THEREON.

“THE MANIFEST SHALL CONTAIN INDIVIDUAL
NAMES OF THE CONSIGNEES COVERED BY THE BILL OF
LADING OR AIRWAY BILL.

“A true and complete copy of the inward foreign cargo

manifest shall be electronically sent in advance by the shipping or


airline company 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 vessel or aircraft, the master of the vessel
or aircraft shall provide two (2) hard copies of the cargo manifest the
port of discharge. THE PIER INSPECTION DIVISION (ND) OR
AIRCRAFT OPERATION DIVISION (AOD) SHALL
RECONCILE HARD COPIES OF THE CARGO MANIFEST
AGAINST THE ELECTRONIC CARGO MANIFEST AND THE
SAME SHALL FURNISH THE OFFICE OF THE BUREAU OF
CUSTOMS, INTELLIGENCE AND INVESTIGATION
AGENCIES, MANAGEMENT AND INFORMATION SYSTEMS,
TECHNICAL ASSESSMENT AND OPERATIONS GROUP AND
THE COMMISSION ON AUDIT. ALL UNMANIFESTED
CARGOES SHALL BE REPORTED TO THE DISTRICT
COLLECTOR OF THE PORT TO INSTITUTE SEIZURE AND
FORFEITURE PROCEEDINGS PURSUANT TO SECTION 113
OF THIS ACT.

AFTER THE ARRIVAL 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 NON-VESSEL
OPERATING COMMON CARRIER, FREIGHT FORWARDER
CARGO CONSOLIDATED OR THEIR AUTHORIZED AGENT
TO INCORPORATE A CHANGE OR ALTERATION IN THE
ELECTRONIC CARGO MANIFEST AT THE PORT OF ENTRY.”
SEC. 2. Penalties. - Any person who violates any of the provisions of

this Act shall be punished in accordance with the penalties prescribed in Section


1401 and 1412 of RA 10863.

SEC. 3. 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. 4. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,