Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

16" CONGR)
First Regular Session

HOUSE BILLNO. 1583

Introduced by REP. EVELINA G,

EXPLANATORY NOTE

This bill principally seeks to address the recurrent problem of smuggling in the
Bureau of Customs (BOC) by amending the relevant provisions of the Tariff and
Customs Code or Presidential Decree No. 1464.

In this bill stipulates a new set of strict requirements for surety companies and
bonded warehouses doing business in the BOC. Surety companies can no longer issue
bonds in favor of the BOC and be subjected to cancellation of its permit or license and
are given only a limited amount of 30% of the total due and demandable bonds as the
minimum liability in the BOC with which it

In the case of bonded warehouses entities and locators, which include even those
operating under the charter of the Philippine Economic Zone Authority (PEZA), the
Subic Bay Metropolitan Authority (SBMA), and other freeports and ecozones, their
paid-up capital and net aisets are to be made equal to the value of goods of
unliquidated entries stored in their respective warehouses,

Customs officials who are tasked to examine and analyze the value of goods are
to,be mandated to certify such under oath. Moreover, a valuation library, updated at
most times, is to be used as reference and basis for examination and appraisal.

Lastly, smuggling is made a severe offense in this proposed legislation by
applying penalties depending on the form of smuggling that was committed and the
value of the goods concerned. It provides as maximum the penalty of life imprisonment
for smuggling if the value of the goods unlawfully imported exceeds Php1,000,000.00.

In the light of the foregoing, and if only to establish an effective system of
addressing smuggling and corruption in the BOC, immediate passage of this bill is
sincerely sought

-

EVELINA G. ESCUDERO,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

16" CONGRESS
First Regular Session

HOUSE BILL No,_1583

Introduced by REP, EVELINA G, ESCUDERO

AN ACT
AMENDING CERTAIN PROVISIONS OF PRESIDENTIAL DECREE NO, 1464,
OTHERWISE KNOWN AS THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES,
AS AMENDED

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

assembled,
1 SECTION 1. Short Title. - This Act shall be known and cited as the “Anti-Smuggling
2 Act.”
a SEC. 2. Section 201, Title II, Part 1 of the Tariff and Customs Code of the

4 Philippines, as amended, is hereby further amended to read as follows:

5 “Sec, 201. Basis of Dutiable Value. - (A) Method One. = Transaction Value. - The
6 dutiable value of an imported article subject to an ad valorem rate of duty shall be
7 the transaction value, which shall be the price actually paid or payable for the
8 goods when sold for export to the Philippines, adjusted by adding:
9 (1) The following to the extent that they are incurred by the buyer but are not
10 included in the price actually paid or payable for the imported goods:
i (a) Commissions and brokerage fees (except buying commissions);
12 (b) Cost of containers;

13 (©) The cost of packing, whether for labour or materials;


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(4) The value, apportioned as appropriate, of the following goods and
services: materials, components, parts and similar items incorporated in the
imported goods; tools; dies; moulds and similar items used in the production of
imported goods; materials consumed in the production of the imported goods;
and engineering, development, artwork, design work and plans and sketches
undertaken elsewhere than in the Philippines and necessary for the production
of imported goods, where such goods and services are supplied directly or
indirectly by the buyer free of charge or at a reduced cost for use in connection
with the production and sale for export of the imported goods;

(c) The amount of royalties and license fees related to the goods being valued
that the buyer must pay, either directly or indirectly, as a condition of sale of the
goods to the buyer.

(2) The value of any part of the proceeds of any subsequent resale, disposal or
use of the imported goods that accrues directly or indirectly to the seller;

(3) The cost of transport of the imported goods from the port of exportation.
to the port of entry in the Philippines;

(4) Loading, unloading and handling charges associated with the transport of
the imported goods from the country of exportation to the port of entry in the
Philippines; and

(5) The cost of insurance.

All additions to the price actually paid or payable shall be made only on the
basis of objective and quantifiable data.

No additions shall be made to the price actually paid or payable in

determining the customs value except as provided in this Section: Provided, That


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Method One shall not be used in determining the dutiable value of imported
goods if:

(a) There are restrictions as to the disposition or use of the goods by the buyer
other than restrictions which:

() Are imposed or required by law or by Philippine authorities;

(ii) Limit the geographical area in which the goods may be resold; or

(iii) Do not substantially affect the value of the goods.

(b) The sale or price is subject to some condition or consideration for which a
value cannot be determined with respect to the goods being valued;

(©) Part of the proceeds of any subsequent resale, disposal or use of the goods
by the buyer will accrue directly or indirectly to the seller, unless an appropriate
adjustment can be made in accordance with the provisions hereof; or

(a) The buyer and the seller are related to one another, and such relationship
influenced the price of the goods. Such persons shall be deemed related if:

(i) They are officers or directors of one another's businesses;

(ii) They are legally recognized partners in business;

(iii) There exists an employer-employce relationship between them;

(iv) Any person directly or indirectly owns, controls or holds five percent
(5%) or more of the outstanding voting stock or shares of both seller and buyer;

(v) One of them directly or indirectly controls the other;

(vi) Both of them are directly or indirectly controlled by a third person;

(vii) Together they directly or indirectly control a third person; or

(viii) They are members of the same family, including those related by

affinity or consanguinity up to the fourth civil degree.


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Persons who are associated in business with one another in that one is the
sole agent, sole distributor or sole concessionaire, however described, of the
other shall be deemed to be related for the purposes of this Act if they fall within
any of the eight (8) cases above.

(B) Method Two. - Transaction Value of Identical Goods. - Where the dutiable
value cannot be determined under method one, the dutiable value shall be the
transaction value of identical goods sold for export to the Philippines and
exported at or about the same time as the goods being valued. “Identical goods”
shall mean goods which are the same in all respects, including physical
characteristics, quality and reputation. Minor differences in appearances shall
not preclude goods otherwise conforming to the definition from being regarded
as identical.

(C) Method Three. - Transaction Value of Similar Goods. - Where the dutiable
value cannot be determined under the preceding method, the dutiable value
shall be the transaction value of similar goods sold for export to the Philippines
and exported at or about the same time as the goods being valued. “Similar
goods” shall mean goods which, although not alike in all respects, have like
characteristics and like component materials which enable them to perform the
same functions and to be commercially interchangeable. The quality of the
goods, their reputation andthe existence of a trademark shall be among the
factors to be considered in determining whether goods are similar.

If the dutiable value still cannot be determined through the successive
application of the two immediately preceding methods, the dutiable value shall
be determined under method four or, when the dutiable value still cannot be

determined under that method, under method five, except that, at the request of


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the importer, the order of application of methods four and five shall be reversed:
Provided, however, That if the Commissioner of Customs deems that he will
experience real difficulties in determining the dutiable value using method five,
the Commissioner of Customs may refuse such a request in which event the
dutiable value shall be determined under method four, if it can be so
determined.

(D) Method Four. - Deductive Value, - The dutiable value of the imported
goods under this method shall be the deductive value which shall be based on
the unit price at which the imported goods or identical or similar imported
goods are sold in the Philippines, in the same condition as when imported, in the
greatest aggregate quantity, at or about the time of the importation of the goods
being valued, to persons not related to the persons from whom they buy such
goods, subject to deductions for the following:

(1) Either the commissions usually paid or agreed to be paid or the additions
usually made for profit and general expenses in connection with sales in such
country of imported goods of the same class or kind;

(2) The usual costs of transport and insurance and associated costs incurred
within the Philippines; [and]

(3) Where appropriate, the costs and charges referred to in subsection (A) (3),
(4) and (5); and

(4) The customs duties and other national taxes payable in the Philippines by
reason of the importation or sale of the goods.

If neither the imported goods nor identical nor similar imported goods are
sold at or about the time of importation of the goods being valued in the

Philippines in the conditions as imported, the customs value shall, subject to the


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conditions set forth in the preceding paragraph hereof, be based on the unit price
at which the imported goods or identical or similar imported goods sold in the
Philippines in the condition as imported at the earliest date after the importation
of the goods being valued but before the expiration of ninety (90) days after such
importation.

If neither the imported goods nor identical nor similar imported goods are
sold in the Philippines in the condition as imported, then, if the importer so
requests, the dutiable value shall be based on the unit price at which the
imported goods, after further processing, are sold in the greatest aggregate
quantity to persons in the Philippines who are not related to the persons from
whom they buy such goods, subject to allowance for the value added by such
processing and deductions provided under Subsections (D)(1), (2), (3) and (4)
hereof.

(B) Method Five. - Computed Value. - The dutiable value under this method
shall be the computed value which shall be the sum of:

(1) The cost or the value of materials and fabrication or other processing
employed in producing the imported goods;

(2) The amount for profit and general expenses equal to that usually reflected
in the sale of goods of the same class or kind as the goods being valued which
are made by producers in the country of exportation for export to the
Philippines; ,

(3) The freight, insurance fees and other transportation expenses for the
importation of the goods;

(4) Any assist, if its value is not included under paragraph (1) hereof; and


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(6) The cost of containers and packing, if their values are not included under
paragraph (1) hereof.

The Bureau of Customs shall not require or compel any person not residing
in the Philippines to produce for examination, or to allow access to, any account
or other record for the purpose of determining a computed value, However,
information supplied by the producer of the goods for the purposes of
determining the customs value may be verified in another country with the
agreement of the producer and provided they will give sufficient advance notice
to the government of the country in question and the latter does not object to the
investigation.

(F) Method Six. - Fallback Value. - If the dutiable value cannot be determined
under the preceding methods described above, it shall be determined by using
other reasonable means and on the basis of data available in the Philippines.

If the importer so requests, the importer shall be informed in writing of the
dutiable value determined under Method Six and the method used to determine
such value.

No dutiable value shall be determined under Method Six on the basis of:

(1) The selling price in the Philippines of goods produced in the Philippines;

(2) A system that provides for the acceptance for customs purposes of the
higher of two alternative values;

(3) The price of goods in the domestic market of the country of exportation;

(4) The cost of production, other than computed values, that have been
determined for identical or similar goods in accordance with Method Five
hereof;

(8) The price of goods for export to a country other than the Philippines;


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(6) Minimum customs values; or

(7) Arbitrary or fictitious values,

“If in the course of determining the dutiable value of the 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 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] may be liable: Provided, however, That goods, the importation
of which is prohibited by law, shall not be released under any circumstances
whatsoever: PROVIDED, FURTHER, THAT 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 THE
RELEASE OF THE IMPORTED GOODS: PROVIDED, FURTHERMORE, THAT
THE PERMIT OR LICENSE OF THE 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 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 BY THE

INSURANCE COMMISSION.


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“THE BUREAU OF CUSTOMS SHALL ACCEPT GUARANTEES IN THE
FORM OF SURETY BONDS EXCLUSIVELY ISSUED BY SURETY COMPANIES,
INCLUDING THE GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS),
WHO ARE MEMBERS OF A BUREAU OF CUSTOMS’ APPROVED
CONSORTIUM.

“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 purpos

When a declaration has been presented and where the
customs administration has reason to doubt the truth or accuracy of the
particulars or of documents produced in support of this declaration, the customs
administration 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 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


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made, the customs administration shall communicate to the importer in writing

its decision and the grounds therefor.”

SEC. 3. Section 607 of the Tariff and Customs Code of the Philippines,

4 hereby further amended to read as follows:

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as amended, is

“SEC. 607. Annual Report of Commissioner, - The annual report of the

Commissioner to the President shall, among other things, contain a compilation

of the (a) quantity and value of the articles imported into the Philippines and the

corresponding amount of customs duties, taxes and other charges assessed and

collected on imported articles itemized in accordance with the tariff headings

and subheadings as appearing in the liquidated customs entries provided for in

this Code, (b) percentage collection of the peso value of imports, (c) quantity and

value of conditionally-free importations, (d) customs valuation over and above

letters of credit opened, (e) quantity and value 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, [Central Bank of the Philippines] BANGKO SENTRAL NG

PILIPINAS, Board of Investments,

Department

of

Budget

AND

MANAGEMENT, and other economic agencies of the government, on or before

December 30, of each year.

“For more scientific preparation of the annual report, the Commissioner shall

cause the computerization of the data contained in the liquidated entries filed

with the Bureau of Customs.”


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SEC. 4, Section 608 of the Tariff and Customs Code of the Philippines, as amended, is
hereby further amended to read as follows:

“SEC. 609. Commissioner to Furnish Copies of Collectors’ Liquidated Duplicates, ~
The Commissioner shall regularly furnish the NATIONAL ECONOMIC AND
DEVELOPMENT AUTHORITY, the [Central Bank of the Philippines] BANGKO
SENTRAL NG PILIPINAS, the Tariff Commission, AND THE NATIONAL
STATISTICS OFFICE, BOTH ELECTRONIC AND PAPER COPIES of each of all
customs import/export entries as filed with the Bureau of Customs, The Tariff
Commission or its duly authorized agents shall have access to and the right to
copy all the customs liquidated import entries and other documents appended
thereto as finally filed in the Commission on Audit. ”

SEC. 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 International Airport, Cebu, Iloilo, Davao, Tacloban,
GENERAL SANTOS, Zamboanga, Cagayan de Oro, Surigao, Legaspi, Batangas,

San Fernando, Subic and Manila International Container Port.”
SEC. 6. Section 709 of the Tariff and Customs Code of the Philippines, as amended, is
hereby further amended to read as follows:

"SEC. 709. Authority of the Collector to Remit Duties. - A Collector shall [have

discretionary authority to] remit the assessment and collection of customs duties,


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taxes and other charges when the aggregate amount of such duties, taxes, and

other charges is [less than ten] FIVE HUNDRED pesos (P500.00) OR MORE, and

he may dispense with the seizure of articles of less than [ten] FIVE HUNDRED

pesos (P500.00) in value except in cases of prohibited importations or the

habitual or the intentional violation of the tariff and customs laws.”

SEC. 7. A new section to be known as Section 1001-A is hereby inserted after Section
1001 of the Tariff and Customs Code of the Philippines, as amended, which shall read as
follows:

“SEC. 1001-A. TRANSMISSION OF ELECTRONIC COPY OF

MANIFEST/STOWAGE PLAN PRIOR TO ARRIVAL - AN ELECTRONIC COPY

OF THE CARGO AND PASSENGER MANIFEST AS WELL AS THE STOWAGE

PLAN OF THE VESSEL ENGAGED IN FOREIGN TRADE SHALL BE

TRANSMITTED TO THE BUREAU OF CUSTOMS AT LEAST TWELVE (12)

HOURS FOR OCEAN GOING VESSELS AND TWO (2) HOURS FROM

DEPARTURE FOR AIRLINES 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, DEPARTMENT OF TRADE AND INDUSTRY, AND

DEPARTMENT OF AGRICULTURE AT LEAST ONE (1) HOUR PRIOR TO THE

AIRCRAFT'S ARRIVAL IN THE PORT OF ENTRY.”

SEC. 8. Section 1005 of the Tariff and Customs Code of the Philippines, as amended, is
hereby further amended to read as follows:

“SEC. 1005. Manifest Required of Vessel from Foreign Port. - Every vessel froma

foreign port must have on board a complete manifest of all her cargo.


“All of the cargo intended to be landed at a port in the Philippines must be
described in separate manifests for each port of call therein. 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
thereof. Every vessel from a foreign port must have on board complete
manifests of passengers and their baggage, in the prescribed form, setting forth
their destination and all particulars required by immigration laws, and every
such vessel shall have prepared for presentation to the proper customs official
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, as the case may be, is carried from the port of

departure to the port of destination in the Philippines,

“A TRUE AND COMPLETE COPY OF THE CARGO MANIFEST AND BILL
OF LADING SHALL BE SENT IN ADVANCE TO THE BUREAU OF CUSTOMS
AND THE PHILIPPINE PORTS AUTHORITY WITHIN TWENTY-FOUR
HOURS (24) HOURS AFTER RECEIPT THEREOF BY THE MASTER OF ‘THE
VESSEL.

“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 discrepancy has


1 been committed in the preparation of the manifest, without any fraudulent

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intent, discovery of which would not have been made until after examination
3 has been completed.”

4 SEC. 9. Section 1007 of the Tariff and Customs Code of the Philippines, as
5 amended, is

6 hereby further amended to read as follows:

7 “SEC. 1007, Manifest for Commission on Audit and Collector. ~ Papers to be
8 Deposited with Consul. - Immediately after the arrival of a vessel from a foreign
9 port, the master shall deliver or mail to the Chairman, Commission on Audit,
10 Manila, a copy of the cargo manifest properly indorsed by the boarding officer,
i and UPON ARRIVAL, he shall present to the Collector the original copy of the
12 cargo manifest and, for inspection, the ship’s register or other document in lieu
13 thereof, together with ele eldarance and other papers granted to the vessel at the
14 port of departure for the Philippines

1s “WITHIN THREE DAYS FROM RECEIPT OF THE CARGO MANIFEST

16 FROM THE MASTER OF THE VESSEL, THE COLLECTOR SHALL POST

17 COPIES THEREOF AT A CUSTOMS BULLETIN BOARD FOR TWO

18 CONSECUTIVE WEEKS.”

19 SEC. 10. Section 1008 of the Tariff and Customs Code of the Philippines, as amended, is

20. hereby further amended to read as follows:

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


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“WITHIN FIVE DAYS FROM THE ACTUAL DISCHARGE OF A VESSEL,
BUT IN ANY CASE NOT LATER THAN FIFTEEN (15) DAYS FROM THE
DATE OF THE VESSEL’S DEPARTURE FROM THE PHILIPPINES, THE PARTY
WHO APPLIED FOR FOREIGN TRANSSHIPMENT OF GOODS SUBJECT TO
EXCISE TAX OR MORE THAN TWENTY PERCENT (20%), SUCH AS THE
SHIPPING COMPANY OR AGENT, TRANSSHIPMENT OPERATOR OR THE
OWNER OF THE GOODS SHALL SUBMIT TO THE BUREAU OF CUSTOMS.
AND/OR TO THE BUREAU OF INTERNAL REVENUE, A CERTIFICATE OF
DISCHARGE FROM THE FOREIGN PORT OF DISCHARGE OR
DESTINATION. THE CERTIFICATE OF DISCHARGE SHALL CERTIFY THAT
THE EXCISABLE GOODS TRANSSHIPPED FROM THE PHILIPPINES WERE
DISCHARGED AT THE PORT OF DESTINATION AND RECEIVED BY THE

CONSIGNEE NAMED IN THE MANIFEST. THE CERTIFICATE OF

DISCHARGE SHALL BE ISSUED BY THE CUSTOMS OR PORT OFFICIALS AT
THE FOREIGN PORT OF DESTINATION: PROVIDED, THAT IF THE SAID
CERTIFICATE IS IN A FOREIGN LANGUAGE OTHER THAN ENGLISH, IT
SHALL BE ACCOMPANIED BY AN ENGLISH TRANSLATION DULY
AUTHENTICATED BY A PHILIPPINE COMMERCIAL ATTACHE OR
CONSUL. THE CERTIFICATE OF DISCHARGE TO BE SUBMITTED TO THE
BUREAU OF CUSTOMS AND/OR BUREAU OF INTERNAL REVENUE
SHALL BE ACCOMPANIED BY A COPY OF THE INWARD FOREIGN
MANIFEST SUBMITTED TO, RECEIVED BY, AND PROPERLY STAMPED BY
THE CUSTOMS AUTHORITIES AT THE PORT OF DESTINATION.

“FAILURE TO SUBMIT THE CERTIFICATE OF DISCHARGE AND THE

INWARD FOREIGN MANIFEST AS REQUIRED HEREINABOVE SHALL


1 CONSTITUTE PRIMA FACIE PROOF THAT THE EXCISABLE GOODS AS
2 MENTIONED HEREIN THAT THE GOODS ALLEGEDLY TRANSSHIPPED
3 WERE IN FACT DIVERTED TO THE PHILIPPINES, WITHOUT THE
4 CORRESPONDING PAYMENT OF DUTIES AND TAXES WHICH SHALL BE
3 IMMEDIATELY COLLECTED AND PAID BY THE PARTY(IES) WHICH
6 FAILED TO SUBMIT THE CERTIFICATE OF DISCHARGE. THEREAFTER
7 AND UNTIL THE REQUIRED CERTIFICATE OF DISCHARGE AND THE
8 INWARD FOREIGN MANIFEST SHALL HAVE BEEN SUBMITTED, ALL
9 SUBSEQUENT TRANSSHIPMENT OF GOODS TO AND FROM THE
10 PHILIPPINES BY THE SAID PARTY(IES) WITHOUT THE PAYMENT OF
MW DUTIES AND TAXES SHALL BE DISALLOWED. THE SUBMISSION OF THE
12 CERTIFICATE OF DISCHARGE IS REQUIRED ONLY FOR TRANSSHIPPED
13 GOODS SUBJECT TO EXCISE TAX OF MORE THAN TWENTY PERCENT
14 (20%) IN ADDITION TO THE PAYMENT OF TAXES AND DUTIES IF SUCH
15 GOODS ENTER THE DOMESTIC MARKET.”

16 SEC. 11. Section 1204 of the Tariff and Customs Code of the Philippines, as amended,

17 is hereby further amended to read as follows:

18 “SEC 1204. Liability of Importer for Duties. "Unless relieved by laws or
19 regulations, the liability for duties, taxes, fees and other charges attaching on
20 importation constitutes a personal debt from the importer to the government
21 which can be discharged only by payment in full of all duties, taxes, fees and
22 other charges legally accruing. It constitutes a lien upon the articles imported
23 which may be enforced while such articles are in custody or subject to the
24 control of the government.”


1 SEC. 12. Section 1210 of the Tariff and Customs Code of the Philippines, as amended, is

2. hereby further amended to read as follows:

3 “SEC. 1210. Disposition of Imported Articles Remaining on Vessel After Time for
4 Unlading. - Imported articles remaining on board any vessel after the expiration
5 of the said period for discharge and not reported for transshipment to another
6 port, may be unladen by customs authorities and stored at the vessel’s expense.

7 “Unless prevented by causes beyond the vessel’s control, such as port
8 congestion, strikes, riots, or civil commotions, failure of vessel’s gear, bad
9 weather, and similar causes, articles so stored shall be entered within [thirty]
10 FORTY FIVE ([30]45) days, which shall not be extendible, from the date of

11 discharge of the last package from the vessel or aircraft and shall be claimed

12 within [fifteen] FORTY FIVE ({15]45) days, which shall likewise not be

13 extendible from the date of posting of the notice to claim in conspicuous places

14 in the Bureau of Customs. If not entered or not claimed, it shall be disposed of in

15 accordance with the provisions of this Code.”

16 SEC. 13. A new section, to be known as Section 1212 is hereby inserted in the Tariff and

17 Customs Code of the Philippines, as amended, to read as follows:
18 “SEC, 1212, IMPORT PERMITAMPORT AUTHORITY FOR
19 AGRICULTURAL PRODUCTS. - IMPORTED AGRICULTURAL PRODUCTS
20 MUST BE COVERED BY A VALID IMPORT OR QUARANTINE PERMIT
21 ISSUED BY THE DEPARTMENT OF AGRICULTURE OR ITS CONCERNED
22 BUREAU PRIOR TO IMPORTATION INTO THE PHILIPPINES, OTHERWISE,
23 THE SAME AGRICULTURAL PRODUCTS MUST BE SHIPPED BACK TO THE
24 COUTNRY OF ORIGIN BY THE IMPORTER OR CONSIGNEE THROUGH THE

25 SAME CARRIER THAT LOADED/TRANSPORTED OR BROUGHT IN THE


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PRODUCT THAT WAS ISSUED BY AN IMPORT ENTRY OR IMPORT
AUTHORITY AFTER ENTRY INTO THE PHILIPPINES WHEN SUCH IMPORT
PERMIT/ AUTHORITY IS REQUIRED PRIOR TO IMPORTATION OF SUBJECT
AGRICULTURAL PRODUCT, SHALL BE CONSIDERED AS SMUGGLED
ARTICLE AND SHALL BE DISPOSED OF IN THE MANNER PROVIDED FOR

IN SECTION 2602 OF THIS CODE.”

SEC. 14. Section 1302 of the Tariff and Customs Code of the Philippines, as amended, is

hereby further amended to iad as follows:

“SEC. 1302. Import Entries. - All imported articles, except importations
admitted free of duty under Subsection “k”, Section one hundred and five of this
Code, shall be subject to a formal or informal entry. Articles of a commercial
nature intended for sale, barter or hire, the dutiable value of which is Two
thousand pesos (P2,000.00) or less, and personal and household effects or
articles, not in commercial quantity, imported in passenger's baggage, mail or
otherwise, for personal use, shall be cleared on an informal entry whenever
duty, tax or other charges are collectible.

The Commissioner may, upon instruction of the Secretary of Finance, for the
protection of domestic industry or of the revenue, require a formal entry,
regardless of value, whatever be the purpose and nature of the importation.

“A formal entry may be for immediate consumption, or under irrevocable
domestic letter of credit, bank guarantee or bond for:

“(a) Placing the article in customs bonded warehouse;

“(b) Constructive warehousing and immediate transportation to other ports
of the Philippines upon proper examination and appraisal; or

“(©) Constructive warehousing and immediate exportation.


2

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“FOR PURPOSES HERETO, ALL WAREHOUSING ENTRIES SHALL
EXPLICITLY AND CLEARLY INDICATE THE NAME OF THE WAREHOUSE
WHERE THE IMPORTED ARTICLES WILL BE PLACED OR DEPOSITED, AND
THE NAME OF THE IMPORTER OR CONSIGNEE.

“Import entries under irrevocable domestic letter of credit, bank guarantee or
bond shalll be subject to the provisions of Title V, Book Il of this Code.

“All importations entered under formal entry shall be covered by a letter of
credit or any other verifiable document evidencing payment.” (R.A. 9135, April
27, 2001)

SEC, 15, Section 1313 of the Tariff and Customs Code of the Philippines, as amended, is
hereby further amended to read as follows:

“SEC. 13

Information Furnished on Classification and Value, ~

a. As to classification OF AN ARTICLE AND TRADE FACILITATION -
[When an article imported or intended to be imported is not specifically
classified in this Code, the interested party, importer or foreign exporter may
submit to the Tariff Commission a sample together with a full description of its
component materials and uses, and request it in writing to indicate the heading
under which the article is or shall be dutiable, and the Tariff Commission shall
comply with such requests within thirty days from receipt thereof if itis satisfied
that the application is made in good faith, in which case classification of the
article in question upon the particular importation involved shall be made
according to the heading indicated by the Tariff Commission: Provided, however,
‘That such rulings of the Tariff Commission on commodity classification, shall be
binding upon the Bureau of Customs, unless the Secretary shall rule otherwise]

IMPORTERS, EXPORTERS OR ANY INTERESTED PARTY SHALL REQUEST


THE TARIFF COMMISSION IN WRITING, BEFORE OR AFTER THE ARRIVAL
OF THE GOODS OR COMMODITY SUBJECT OF IMPORTATION FOR AN
OFFICIAL TARIFF CLASSIFICATION RULING UPON SUBMISSION OF A
SAMPLE TOGETHER WITH THE BROCHURE AND PERTINENT
TECHNICAL INFORMATION SHEETS/DATA, THE TARIFF COMMISSION
SHALL COMPLY WITH SUCH A REQUEST WITHIN THIRTY (30) DAYS
FROM RECEIPT HEREOF, THE RULING SHALL BE BINDING WITH THE
BUREAU OF CUSTOMS, UNLESS THE SECRETARY OF FINANCE SHALL
RULE OTHERWISE. ANY TARIFF CLASSIFICATION RULING/S AS MAY BE
ISSUED BY THE COMMISSION SHALL REMAIN VALID AND EFFECTIVE,
UNLESS SUCH TARIFF CLASSIFICATION RULING/S ARE AMENDED BY
THE COMMISSION SO AS TO CORRECT ERRORS IN THE CLASSIFICATION
OF AN ARTICLE OR IN CASES OF AMENDMENT TO THE ASEAN
HARMONIZED TARIFF NOMENCLATURE (AHTN), OR FOR ANY OTHER
REASON AS THE COMMISSION MAY SEE FIT.”

“ANY PETITIONING PARTY WHO IS AGGRIEVED BY, OR IS NOT
SATISFIED WITH THE RESULT ON ANY TARIFF CLASSIFICATUION
RULING AS ISSUED BY THE TARIFF COMMISSION, MAY FILE A VERIFIED
APPEAL WITHIN THIRTY (30) DAYS FROM RECEIPT OF SUCH TARIFF
CLASSIFICATION RULING OF THE TARIFF COMMISSION BASED ON THE
SOLE GROUND OF NEW OR ADDITIONAL INFORMATION OF THE
PRODUCT UNDER CONSIDERATION. AN APPEAL FEE OF ONE
THOUSAND PS0OS (P1,000.00) SHALL LIKEWISE BE REQUIRED TO BE PAID
BY THE APPEALING PARTY, WITHOUT THE PAYMENT OF WHICH HIS OR

HER APPEAI WOULD BE DISMISSED OUTRIGHT BY THE COMMISSION.”

20


1 SEC. 16. Section 1401 of the Tariff and Customs Code of the Philippines as amended, is

2 hereby further amended to read as follows:

3 “SEC. 1401. Conditions for Examination, — For the protection of government
4 revenue and public interest and to prevent the entry into the country of
ij smuggled or contraband goods, the Commissioner shall, in consultation with the
6 Oversight Committee and subject to the approval of the Secretary of Finance,
7 promulgate the rules and regulations that shall prescribe the procedure in
8 accordance with which examination shall be undertaken on the importation and
9 the required quantity or percentage thereof: Provided, That the imported articles
10 shall in any case be subject to the regular physical examination when:

mr “(1) The government surveyor's seal on the container has been tampered with

12 or broken or the container shows signs of having been opened or having its
13 identity changed;

14 “(2) The container is leaking or damaged;

15 “(3) The number, weight and nature of packages indicated in the customs
16 entry declaration and supporting documents differ from that in the manifest;

17 “(@) The shipment is covered by alert/hold orders issued pursuant to existing
18 orders;

19 “(8) The importer disagrees with the findings as contained in the government
20 surveyor's report; or

21 “(6) The articles are imported through air freight where the Commissioner or
2 Collector has knowledge that there is a variance between the declared and true
2B quantity, measurement, weight, and tariff classification.”

24 “(7) THE PRODUCT DESCRIPTION OF THE SHIPMENT IS NOT IN

25 ACCORDANCE WITHTHE EXISTING HARMONIZED SYSTEMS CODE.”

21


1

SEC. 17. A new section to be known as Section 1401-A is hereby inserted after Section

2 1401 of the Tariff and Customs Code of the Philippines, as amended, which shall read as

3 follows:

4
5
6
7
8
9

10

“SEC. 1401-A. VALUATION LIBRARY. - THE COMMISSIONER SHALL
ENSURE THAT THERE SHALL BE A VALUATION LIBRARY, WHICH SHALL
BE KEPT UP TO DATE AND MAINTAINED USING THE BEST AVAILABLE
TECHNOLOGY. THE VALUATION LIBRARY SHALL BE MADE READILY
AVAILABLE TO THE PUBLIC AS AUTHORIZED BY THE BUREAU OF
CUSTOMS.”

SEC. 18. Section 1403 of the Tariff and Customs Code of the Philippines, as amended, is

11_ hereby further amended to read as follows:

12

23

“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 a return in such a
‘manner to indicate whether the articles have been truly and correctly declared in
the entry as regard their quantity, measurement, weight, and tariff classification
and not imported contrary to law. THE CUSTOMS OFFICER SHALL USE THE
VALUATION LIBRARY AS A REFERENCE ONLY IN CLASSIFIYING AND.
APPRAISING THE IMPORTED ARTICLES.

“Likewise, the customs officer shall determine the unit of quantity in which
they are usually bought and sold and appraise the imported articles in

accordance with Section 201 of this Code.


5

“Failure on the part of the customs officer to comply with his duties shall
subject him to penalties prescribed under 3604 of this Code. (RA 7650, April 06,

1993,”

SEC. 19. Section 1704(d) of the Tariff and Customs Code of the Philippines, as amended,

is hereby further amended to read as follows:

“SEC. 1704. Abatement or Refund of Duties on Articles Lost or Destroyed After
Arrival, - A Collector may abate or refund the amount of duties accruing or paid,
and may likewise make a corresponding allowance on the irrevocable domestic
letter of credit, bank guarantee, or the entry bond or other document, upon
satisfactory proof of injury, destruction, or loss by theft, fire or other causes of
any article as follows:

“a. While within the limits of any port of entry prior to unlading under
customs supervisions;

“>. While remaining ore custody after unlading;

“c. While in transit under irrevocable domestic letter of credit, bank
guarantee or bond with formal entry in accordance with section one thousand
three hundred two from the port of entry to any port in the Philippines;

“d, While released under irrevocable domestic letter of credit, bank guarantee
or bond for export except in case of loss by theft: PROVIDED, THAT NO
ABATEMENT OR REFUND SHALL BE MADE WHEN THE THEFT. OCCURS

IN BONDED WAREHOUSES OU’ TSIDE OF THE CUSTOMS ZONE.”

SEC. 20. 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:

23


24

25

“a. When the owner, importer, consignee of the imported article expressly
signifies in writing to the Collector of Customs his intention to abandon; or

“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 SUB-AGENTS ARE REQUIRED TO STATE IN BOLD,
PROMINENT AND COMPREHENSIBLE CHARACTERS THE PHRASE
‘CUSTOMS LAW REQUIRES THE FILING OF ENTRY WITHIN THIRTY (30)
DAYS 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 CASE THE OWNER, IMPORTER OR CONSIGNEE OF THE
IMPORTATION SHALL HAVE A PERIOD OF THIRTY (30) DAYS, WHICH
SHALL NOT BE EXTENDIBLE, FROM THE DATE OF DISCHARGE OF THE
LAST PACKAGE FROM THE VESSEL WITHIN WHICH TO FILE THE

APPROPRIATE ENTRY. FAILURE ON THE PART OF THE SHIPPING LINES,

24


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4

SHIPPING COMPANIES, FREIGHT FORWARDERS, CONSOLIDATORS,
BREAK BULK AGENTS AND THEIR AGENTS AND SUB-AGENTS 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 OR
WHEN THERE IS A WRITTEN DENIAL OF OWNERSHIP FROM THE
PERSON INDICATED QN THE MANIFEST OR BILL OF LADING AS THE
OWNER, IMPORTER, OR CONSIGNEE OF THE IMPORTED ARTICLE.

“NON-COMPLIANCE WITH THE PROVISIONS OF THIS SECTION SHALL
CONSTITUTE A GROUND FOR THE IMPOSITION OF FINES IN
PROGRESSIVE SUCCESSION.

“Any person who abandons an article or who fails to claim his importation as
provided for in the preceding paragraph shall be deemed to have renounced all

his interests and property rights therein. (R.A. 7651, June 4, 1993).”

SEC. 21. Section 1802 of the Tariff and Customs Code of the Philippines, as amended, is

hereby further amended to read as follows:

“SEC. 1802. Abandonment of Imported Articles. - An abandoned article shall
ipso facto be deemed the property of the Government. ALL ABANDONED
ARTICLES SHALL BE AUTOMATICALLY SUBJECT TO AUCTION AND
SHALL IN NO CASE BE SUBJECT TO SETTLEMENT OR COMPROMISE.

“AN UPDATED LISTING OF ALL ABANDONED SHIPMENTS
SCHEDULED FOR AUCTION SHALL BE POSTED ON THE OFFICIAL
WEBSITE OF THE BUREAU OF CUSTOMS AND AT THE MAIN ENTRANCE

OF CUSTOMS HOUSES.


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13

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“Nothing in this section shall be construed as relieving the owner or importer
from any criminal liability which may arise from any violation of law committed
in connection with the importation of abandoned article,

“Any official or employee of the Bureau of Customs or of other government
agencies who, having knowledge of the existence of an abandoned article or
having control or custody of such abandoned article, fails to report to the
Collector within fowendy fur (24) hours from the time the article is deemed
abandoned shall be punished with the penalties prescribed in Paragraph 1,
Section 3604 of this Code.” (RA 7651, June 4, 1993)

SEC, 22. 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 of Warehouses. - When the business
of the port requires such facilities, the Collector, subject to the approval of the
Commissioner, shall designate and establish INDUSTRY SPECIFIC 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 COMMITTEE WHICH SHALL BE COMPOSED OF THE
SECRETARY OF TRADE AND INDUSTRY, AS CHAIR THEREOF, AND ONE
REPRESENTATIVE EACH FROM THE INDUSTRY ASSOCIATION OR
INDUSTRY SECTOR AFFECTED, AND THE INDUSTRY ASSOCIATION
SOUGHT TO BE SERVICED BY THE CUSTOMS BONDED WAREHOUSE,
SUBJECT TO THE FINAL APPROVAL OF THE BUREAU OF CUSTOMS,

“All such warehouses and premises shall be subject to the supervision of the
Collector, who shall impose such conditions as may be deemed necessary for the

protection of the revenue and of the articles stored therein. THE CUSTOMS


13

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COLLECTOR SHALL CONDUCT SPOT CHECKS AND PERIODIC AUDITS TO

ENSURE THAT APPLICABLE CUSTOMS LAWS AND REGULATIONS ARE

COMPLIED WITH BY BONDED FACILITIES.”

SEC, 23. 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
warehouses in case of loss of the imported articles stored shall be liable for the
payment of duties and taxes due thereon.

“The government assumes no legal responsibility in respect to the
safekeeping of articles stored in any customs warehouses, sheds, yards or
premises,

“THE OPERATORS OF THE BONDED WAREHOUSES SHALL, FOR
LEGITIMATE PURPOSES, MAKE AVAILABLE AN INVENTORY OF ALL
ARTICLES STORED THEREIN. FAILURE TO DO SO IS A MANDATORY
GROUND FOR THE REVOCATION OF LICENSE TO OPERATE A BONDED
WAREHOUSE.”

SEC. 24. 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, describing the
premises, the location, and capacity of the same, the purpose for which the
building is to be used, AND THE INDUSTRY TO WHICH IT BELONGS. THE
APPLICATION SHALL LIKEWISE BE ACCOMPANIED BY VERIFIED COPIES
OF DOCUMENTS INDICATING THE OWNERSHIP AND THE FINANCIAL

CAPACITY OF THE BONDED WAREHOUSE.

27


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“Upon receipt of such application, the Collector shall cause an examination of
the premises, with reference particularly to its location, construction and means
provided for the safekeeping of articles. THE COLLECTOR SHALL LIKEWISE
DETERMINE THE OWNERSHIP OF THE APPLICANT BONDED
WAREHOUSE OR TO VERIFY OWNERS OF A BONDED WAREHOUSE
WHICH HAD BEEN CLOSED DUE TO ITS NON-COMPLIANCE WITH
CUSTOMS LAWS and REGULATIONS WHICH HAS ANY INTEREST
THEREIN. — [iJIf THE APPLICATION IS found satisfactory, [he] THE
COLLECTOR may authorize its establishment, and accept a bond for its
operation and maintenance. The operator of such bonded warehouse shall pay
an annual supervision fee in an amount to be fixed by the Commissioner, The
bonded warehouse officers and other employees thereof shall be regular customs
employees who shall be appointed in accordance with the Civil Service Law,
rules and regulations.

“THE PAID-UP CAPITAL AND NET ASSETS OF THE BONDED
WAREHOUSE SHALL BE SET AT AN AMOUNT DETERMINED BY THE
COMMISSIONER AS SUFFICIENT TO COVER THE DUTIES AND TAXES OF
IMPORT ENTRIES ENTERED INTO THE BONDED WAREHOUSE THAT ARE
DUE AND DEMANDABLE, OTHERWISE, THE APPLICATION SHALL NOT
BE GRANTED.”

“SEC. 1903-A. REGULAR AUDIT OF BONDED WAREHOUSE. - A
REGULAR AUDIT OF ALL BONDED WAREHOUSES SHALL BE
CONDUCTED BY THE COLLECTOR, WHICH AUDIT SHALL BE SUBJECT
TO AUTOMATIC REVIEW BY THE COMMISSIONER, UPON PETITION OF

AN INTERESTED PARTY. A SECOND AUDIT MAY BE CONDUCTED BY


1 THE DEPUTY COMMISSIONER OR AN INDEPENDENT AUDIT MAY BE

8 MADE UPON INSPANCE OF THE PETITIONING PARTY IN

3 COORDINATION WITH THE COMMISSIONER.”

4 SEC. 25. Section 1905 of the Tariff and Customs Code of the Philippines, as amended, is

5 hereby further amended to read as follows:

6 “SEC, 1905. Discontinuance of Wareliouses. - The use of any warehouse may be
7 discontinued by the Collector at any time when conditions so warrant, or in the
8 case of a private warehouse, upon receipt of written request to that effect from
9 the operator thereof of the premises, provided all the requirements of the law
10 and regulations have been complied with by said operator. A LEGITIMATE
ul INDUSTRY GROUP MAY FILE A COMPLAINT IN WRITING WITH THE
12 COMMISSIONER OF CUSTOMS FOR THE COLLECTOR THE

13 DISCONTINUANCE OF THE BONDED WAREHOUSE ON GROUNDS OF

14 NON-COMPLIANCE WITH THE REQUIREMENTS OF LAW AND

15 REGULATIONS. When the dutiable article is stored in such premises, the same

16 must be removed at the risk and expense of the operator and the premises shall

17 not be relinquished, nor discontinuance of its use authorized, until a careful

18 examination of the account of the warehouse shall have been made.

19 Discontinuance of any warehouse shall be effective upon official notice and

20 approval thereof by the Collector.”

21 SEC. 26. Section 1907 of the Tariff and Customs Code of the Philippines, as amended, is

22 hereby further amended to read as follows:

23 “SEC. 1907, Withdrawal of Articles from Bonded Warehouse. - Articles entered
24 under irrevocable domestic letter of credit[] OR bank guarantee or bond may be
25 withdrawn at any time for consumption, for transportation to another port, for


6

7

19

20

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: PROVIDED, THAT PROOF IS SHOWN THAT THE
ORDER TO IMPORT THE SUBJECT ARTICLES HAS BEEN CANCELLED:
PROVIDED, FURTHER, THAT THE ARTICLES TO BE WITHDRAWN DO NOT
AMOUNT TO MORE THAN FIFTY PERCENT (50%) OF THE TOTAL
INVENTORY OF THE BONDED WAREHOUSE. The withdrawal must be made
ONLY BY THE IMPORTER OF THE ARTICLES BEING WITHDRAWN OR BY
A REPRESENTATIVE [by a person or firm duly authorized by the former]
whose authority must appear in writing upon the face of the withdrawal entry.”
SEC, 27. 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, EXTENDIBLE FOR ANOTHER THREE (3) MONTHS from
the time of [arrival] RECEIPT OF THE WAREHOUSE at the port of entry.

Articles not withdrawn at the expiration of the prescribed period shall be [sold at

public auction by the Collector] DI IED ABANDONED AND SUBJECT TO
DISPOSITION IN ACCORDANCE WITH THE PROVISIONS OF THIS CODE.
THE BUREAU OF CUSTOMS SHALL ACCREDIT SPECIFIC INDUSTRIES
REQUIRING LONGER PERIOD OF STORAGE.”

“A DAILY RECORD OF ALL ENTRIES LIQUIDATED SHALL BE POSTED
IN A CONSPICUOUS PLACE IN THE MAIN ENTRANCE OF THE CUSTOMS
HOUSE, STATING THE NAME OF THE VESSEL OR AIRCRAFT, THE PORT

FROM WHICH SHE ARRIVED, THE DATE OF HER ARRIVAL, THE NAME OF

30


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22

23

THE IMPORTER, AND THE SERIAL NUMBER OF THE DATE OF ENTRY.
THE COLLECTOR MUST ALSO KEEP A DAILY RECORD OF ALL
ADDITIONAL DUTIES, TAXES AND OTHER CHARGES FOUND UPON
LIQUIDATION, AND SHALL PROMPTLY SEND NOTICE TO THE
INTERESTED PARTIES.”

“THE LIQUIDATION OF WAREHOUSING ENTRIES SHALL BE MADE
NOT MORE THAN THREE (3) MONTHS FROM THE TIME OF RECEIPT OF

THE WAREHOUSE.”

SEC. 28. A new section to be known as Section 1910 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. 1910. 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 WAREHOUSE;

“(C) WAREHOUSING OF THE FOLLOWING SHIPMENTS:

“1, FINISHED ARTICLES. - 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.

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24

“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 PROVIDED THAT THE
RESTRICTION IN VOLUME AND QAUNTITY SHALL NOT APPLY TO
EXPORTERS OPERATING UNDER CUSTOMS BONDED MANUFACTURING
WAREHOUSES.

“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.

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

“(F) FAILURE TO LIQUIDATE IMPORTED ARTICLES WITHDRAWN
FROM THE BONDED WAREHOUSE WITHIN SIX (6) MONTHS, EXTENDIBLE
FOR ANOTHER THREE (3) MONTHS, FROM THE TIME OF RECEIPT OF THE
CUSTOMS BONDED WAREHOUSE.

“(G) FAILURE TO. PAY DUTIES AND TAXES ON THE REMAINING (NOT
EXPORTED) IMPORTED MATERIALS WITHIN THIRTY (30) DAYS FROM
LAPSE OF THE PERIOD FOR RE-EXPORTATION.

“IMPORTATIONS MADE IN VIOLATION OF THE ABOVE PROVISIONS
IN THIS SECTION SHALL IPSO FACTO BE FORFEITED IN FAVOR OF THE
GOVERNMENT TO BE DISPOSED OF PURSUANT TO THE PROVISIONS OF

THIS CODE PROVIDED DUE PROCESS IS FOLLOWED.

32


1 “THE BUREAU OF CUSTOMS SHALL APPROVE INDUSTRIES SEEKING

2 EXEMPTION FROM THE COVERAGE OF ANY OF THE ABOVE MENTIONED

z PROVISIONS.”

4 SEC, 29. A new section to be known as Section 1911 is hereby inserted in Part 1, Title V,
5 Book II of the Tariff and Customs Code of the Philippines, as amended, to read as follows:

6 “SEC. 1911, VERIFICATION OF RECORDS KEPT IN CUSTOMS BONDED

7 WAREHOUSES. - A CAREFUL ACCOUNT SHALL BE KEPT BY THE

8 COLLECTOR OF ALL ARTICLES DELIVERED TO ANY BONDED

9 WAREHOUSE, AND A SWORN MONTHLY RETURN, DULY VERIFIED BY
10 THE CUSTOMS OFFICIAL IN CHARGE, SHALL BE MADE BY THE BONDED.
i WAREHOUSE CONTAINING A DETAILED STATEMENT OF ALL IMPORTED
12 ARTICLES STORED THEREIN.
13 “ALL DOCUMENTS, BOOKS AND RECORDS OF ACCOUNTS
14 CONCERNING THE OPERATION OF ANY BONDED WAREHOUSE SHALL,
15 UPON DEMAND OF THE SECRETARY OF FINANCE, BE MADE AVAILABLE
16 TO THE COLLECTOR OR HIS REPRESENTATIVE, FOR PURPOSES OF
7 EXAMINATION AND/OR AUDIT.”
18 SEC. 30. Section 2001 of the Tariff and Customs Code of the Philippines, a s amended,

19 is hereby further amended to read as follows:

20 “SEC. 2001. Establishment of Bonded Manufiacturing Warehouses. - All articles
21 manufactured in whole or in part of imported materials, and intended for
22 exportation without being charged with DUTIES AND TAXES [duty], shall, in
23 order to be so manufactured and exported, be made and manufactured in
24 manufacturing warehouses under such rules and regulations as the

25 Commissioner of Customs with the approval of the Secretary of Finance, shall


21

22

23

24

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.” +

SEC, 31, Section 2002 of the Tariff and Customs Code of the Philippines, as amended, is

hereby further amended to read as follows:

“SEC. 2002. Exemption from Duty. ~

a. Whenever articles manufactured in any bonded manufacturing warehouse
established under the provisions of the preceding section shall be exported
directly therefrom or shall be duly laden for immediate exportation under the
supervision of the proper official, such articles shall be exempt from duty,

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 DUTIES AND TAXES [duty] into
any bonded manufacturing warehouse, and imported articles may, under the
aforesaid regulations, be transferred without the payment of [duty] DUTIES
AND TAXES 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 ke used in the construction or repair of any bonded
manufacturing warehouse: PROVIDED, HOWEVER, THAT THE IMPORTED
MATERIAL TRANSFERRED OR CONVEYED INTO ANY BONDED

WAREHOUSE Of DIRECTLY INTO ANY MANUFACTURING BONDED


WAREHOUSE, PRIOR TO ITS UNLOADING, SO AS NOT TO BE SUBJECT TO
THE PAYMENT OF DUTY, SHALL BE SO MARKED, INDICATED AND
IDENTIFIED WITH THE LETTERS “CBW” PRINTED BOLDLY, LEGIBLY,
INDELIBLY, AND PERMANENTLY ON THE COVERING OF THE PACKAGE
OR SACK OF THE IMPORTED MATERIAL, SUBJECT TO THE LIMITATIONS
MENTIONED IN SUBPARAGRAPHS A, B, C, D AND H OF PARAGRAPH 3,
SECTION 303 OF THIS CODE: Provided, [however] FURTHER, 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] FINALLY, That the operation of embroidery and apparel firms shall
continue to be governed by Republic Act Numbered Thirty-one hundred and

thirty-seven.”

SEC. 32. 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

we
&


2

3

5

13

14

15

16

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 warehouse
may be withdrawn for domestic consumption upon payment of duty equal to
the duty which would be assessed and collected pursuant to law if such waste or

by-products were imported from a foreign countr

Provided, further, That all
waste materials may be [disposed] DESTROYED under government supervision.
All labor performed and services rendered under these provisions shall be under
the supervision of a proper customs official 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 THE PROVISIONS OF THIS CODE.”

SEC. 33. Section 2005 of the Tariff and Customs Code of the Philippines, as amended,

17 is hereby further amended to read as follows:

“SEC, 2005. Bonded Smelting Warehouses. - The plants of manufacturers
engaged in smelting or refining, or both, of ores and crude metals, may, upon the
filing of CASH bonds, be designated as bonded smelting warehouses, Ores or
crude metals may be removed from the vessel or aircraft in which imported, or
from a bonded warehouse, into a bonded smelting warehouse without the
payment of duties thereon, and there smelted or refined, or both, together with
ores or crude metals of home or foreign productions: Provided, That THE CASH

BOND SHALL BE IN a sum equal in amount to the regular duties which would

36


20

al

22

24

25

have been payable on such ores and crude metals if entered for consumption at
the time of their importation, and the several charges against such bond shall be
cancelled upon the exportation or delivery to bonded manufacturing warehouse
established under section twenty hundred and one hereof of a quantity of the
same kind of metal equal to the quantity of metal contained in such ores or crude
metals, due allowance being made of the smelter wastage as ascertained from
time by the Commissioner: Provided, further, That the said metals so producible
or any portion thereof, may be withdrawn for RE-EXPORTATION UPON
PROOF THAT THE ORDER TO IMPORT THE SUBJECT METALS HAS BEEN,
CANCELLED AND THAT THE METALS TO BE WITHDRAWN DO NOT
AMOUNT TO MORE THAN FIFTY PERCENT (50%) OF THE TOTAL
INVENTORY OF THE BONDED SMELTING WAREHOUSE: Provided, further,
That on the arrival of the ores or crude metals at such establishments they shall
be sampled and assayed according to commercial methods under the
supervision of proper government officials: Provided, further, That all labor
performed and services rendered pursuant to this section shall be under the
supervision of the proper customs official and at the expenses of the
manufacturer: Provided, futher, That all regulations for carrying out the
provisions of this section shall be prescribed by the Commissioner with the
approval of the department head: Provided, FURTHER, That the several charges
against the bond of any smelting warehouse established under the provisions of
this section may be cancelled upon the exportation or transfer to a bonded
manufacturing varehouse from any bonded smelting warehouse established
under this secion of a quantity of the same kind of metal, in excess of that

covered by pen bonds, equal to the amount of metal producible from the


1 smelting or refining, or both, of the dutiable metal contained in the imported

) ores or crude metals, due allowance being made of the smelter wastage as

ascertained from time to time by the Commissioner with the approval of the

4 department head: PROVIDED, FINALLY, THAT BONDED SMELTING

WAREHOUSES SHALL LIKEWISE BE SUBJECT TO THE PROVISIONS UNDER
6 TITLE V, PART 1 OF THIS CODE, AS AMENDED.”
rf SEC. 34. A new section, to be known as Section 2006 is hereby inserted in the Tariff and

8 Customs Code of the Philippines, as amended, to read as follows:

9 “SEC, 2006. PRIOR APPROVAL OF THE BOARD OF INVESTMENT. -
10 NOTWITHSTANDING THE PROVISIONS CONTAINED IN SECTION 1901 TO
W 1909 AS WELL AS SECTION 2001 TO 2006, ALL. CUSTOMS BONDED.

12 WAREHOUSE SHALL BE MANUFACTURING AND INDUSTRY SPECIFIC.
13 THE BUREAU OF CUSTOMS SHALL SO DESIGNATE THE SAME ONLY
14 UPON THE PROPER RECOMMENDATION AND ENDORSEMENT BY THE
15 BOARD OF INVESTMENT: PROVIDED, FURTHER, THAT BEFORE THE
16 BOARD OF INVESTMENT ISSUES THE CORRESPONDING
17 RECOMMENDATION AND ENDORSEMENT, THE LOCAL INDUSTRY
18 CONCERNED SHALL BE PROPERLY CONSULTED: PROVIDED, FINALLY,
19 THAT FAILURE TO COMPLY WITH THE FOREGOING PROVISION SHALL.
20 CAUSE THE CANCELLATION OF THE ACCREDITATION OF THE SAID
21 CUSTOMS BONDED WAREHOUSE.”

22 SEC. 35. A new section to be known as Section 2007 is hereby inserted in the Tariff and
23 Customs Code of the Philippines, as amended, to read as follows:

24 “SEC, 3007, BUREAU OF CUSTOMS AND BUREAU OF INTERNAL

25 REVENUE DIRECT RECORD LINKAGE. - TO ASSURE THE PROPER


COORDINATION OF THEIR RESPECTIVE AUDIT AS WELL AS IN THE
INVESTIGATION AND PROSECUTION OF TAX AND DUTY RELATED
CASES, A REAL-TIME LINKAGE VIA COMPUTER OF THE RECORDS OF
BOTH THE BUREAU OF CUSTOMS AND THE BUREAU OF INTERNAL.

REVENUE SHALL BE IMMEDIATELY MADE.”

SEC. 36. Section 2317 of the Tariff and Customs Code of the Philippines, as amended,

is hereby further amended to read as follows:

"SEC. 2317. Government's Right of Compulsory Acquisition. - In order to
protect the 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 OF CUSTOMS IN
THE AMOUNT EQUAL TO TWO HUNDRED PERCENT (200%) OF THE
DECLARED CUSTOMS VALUE OF THE GOODS UNDER QUESTION, 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: PROVIDED, THAT

39


1 THE PROVISIONS OF SECTION 201 OF THIS CODE SHALL APPLY IN THE

CASE OF SURETY BONDS AND SURETY COMPANIES.

“An importer who is dissatisfied with a decision of the Commissioner of

4 Customs pertaining to this section may, within twenty (20) working days after
5 the date on which notice of the decision is given, appeal to the Secretary of
6 Finance and thereafter if still dissatisfied, to the Court of Tax Appeals as

7 provided for in Section 2402 of the Tariff and Customs Code of the Philippines,

8 as amended.
9 “Where no appeal is made by the importer, or upon reaffirmation of the
lo Commissioner’s decision during the appeals process, the Bureau of Customs or

ul its agent shalll sell the acquired goods pursuant to existing laws and regulations.
2 IN CASES WHERE COMPULSORY ACQUISITION WAS INITIATED BY THE
13 INDUSTRY ASSOCIATION OR INDUSTRY SECTOR, THE COMMISSIONER
14 SHALL CLAIM ON THE LETTER OF CREDIT, SURETY BOND OR
Is WHATEVER INSTRUMENT POSTED OR USED FOR THE PURPOSE AND
16 THEREUPON RELEASE THE ACQUIRED ARTICLES TO THE INDUSTRY
7 ASSOCIATION OR INDUSRY SECTOR WHICH POSTED THE

18 INSTRUMENT.

19 “Nothing in this Section limits or affects any other powers of the Bureau of

20 Customs with respect to the disposition of the goods or any liability of the

21 importer or any other person with respect to an offense committed in the

2 importation of the goods.”

23 SEC. 37. A new section to be known as Section 2401 is hereby inserted in the Tariff and

24 Customs Code of the Philippines, as amended, to read as follows:


1 “SEC. 2401. Supervision and Control Over Criminal and Civil Proceedings. - Civil

23 and criminal actions and proceedings instituted in behalf of the government
3 under the authority of this Code or other law enforced by the Bureau shall be
4 brought in the name of the government [of the Philippines] and shall be
5 [conducted] INVESTIGATED, PROSECUTED AND HANDLED EXCLUSIVELY
6 by [customs officers] LAWYERS OF THE BUREAU OF CUSTOMS, [but] AND
7 no civil or criminal action for the recovery of duties or the enforcement of any
8 fine, penalty or forfeiture under this Code shall be filed in court without the
9 approval of the Commissioner. FOR ‘THIS PURPOSE, THE BUREAU OF

10 CUSTOMS SHALL BE PRIMARILY AND EXCLUSIVELY RESPONSIBLE FOR,
I THE CONDUCT OF PRELIMINARY INVESTIGATION AND PROSECUTION

12 OF CUSTOMS-RELATED C, AS WELL AS THE PROSECUTION AND

13 DEFENSE OF CUSTOMS-RELATED CIVIL CASES, TO THE EXCLUSION OF

14 ALL OTHER GOVERNMENT AGENCIES INVOLVED THEREIN. THE.

15 BUREAU OF CUSTOMS SHALL HAVE EXCLUSIVE AUTHORITY TO FILE

16 ANY CRIMINAL OR CIVJL CASE DIRECTLY WITH THE PROPER COURT

17 FOR PROSECUTION OF VIOLATORS OF THE TARIFF AND CUSTOMS

18 CODE, AND THE COLLECTION, RECOVERY OR ENFORCEMENT OF ANY

19 FINE, PENALTY OR FORFEITURE UNDER THE CODE.”

20 SEC. 38. Section 2503 of the Tariff and Customs Code of the Philippines, as amended,

21 is hereby further amended to read as follows;

22 “SEC. 2503. Undervaluation, Misclassification and Misdeclaration in Entry. -
23 When the dutiable value of the imported articles shall be so declared and entered
24 that the duties, based on the declaration of the importer on the face of the entry
25 would be less by ten percent (10%) than should be legally collected, or when the

41


1 imported articles shall be so described and entered that the duties based on the

oi importer’s description on the face of the entry would be less by ten percent (10%)
3 than should be legally collected based on the tariff classification, or when the
4 dutiable weight, measurement or quantity of imported articles is found upon
5 examination to exceed by ten percent (10%) or more than the entered weight,
6 measurement or quantity, a surcharge shall be collected from the importer in an
7 amount of not less than the difference between the full duty and the estimated
8 duty based upon the declaration of the importer, nor more than twice of such
9 difference: Provided, ‘That an undervaluation, MISCLASSIFICATION,
10 misdeclaration in weight, measurement or quantity of more than thirty percent
mn (30%) between the value, weight, measurement or quantity declared in the entry,
12 and the actual value, weight, quantity, or measurement shall constitute a prima
13 facie evidence of fraud penalized under Section 2530 AND SECTION 3602 of this
14 Cod Provided, further, That any UNDERVALUED, — misdeclared,
15 MISCLASSIFIED or undeclared imported articles/items found upon
16 examination shall ipso facto be forfeited in favor of the Government to be
17 disposed of pursuant to the provisions of this Code: PROVIDED,
18 FURTHERMORE, THAT THE LICENSE, PERMIT AND THE BUSINESS NAME
19 OF THE SUBJECT IMPORTER MAY BE REVOKED AFTER DUE PROCESS.
20 “When the undervaluation, _misdescription, _misclassification or
21 misdeclaration in the import entry is intentional, the importer shall be subject to
2 penal provisions under Section 3602 of this Code.”
23 SEC. 39. A 1ew section to be known as Section 2503-A is hereby inserted in Part 4,

24 Title VI, Book II ef the Tariff and Customs Code of the Philippines, as amended, to read

25. as follows:

2


“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 AND THE BUREAU OF CUSTOMS AS
APPROVED BY THE’ DEPARTMENT OF FINANCE PURSUANT TO
SUBSECTION (A) OF SECTION 1313 OF THIS CODE: PROVIDED, THAT THE
DESCRIPTION OF THE ARTICLE IS FOUND CORRECT UPON
EXAMINATION: PROVIDED, FINALLY, THAT BASED ON THE RESULT OF
THE EXAMINATION, THE ARTICLE IS FOUND ESSENTIALLY THE SAME.

AS THAT DESCRIBED IN THE RULING.”

SEC, 40. 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] DISPOSITION. = Property in customs
custody shall be subject to [sale] DISPOSITION under the conditions hereinafter
provided

“a, Abandoned articles;

“b, Articles entered under warehousing entry not withdrawn nor the duties
and taxes paid thereon within the period prescribed under Sections 1908 of this
Code;

“c, Seized property, other than contraband, after liability to sale shall have
been established by proper administrative [or judicial] proceedings in
conformity with the provision of this Code; and

“d, Any article subject to a valid lien for customs duties, taxes or other
charges collectible by the Bureau of Customs, after the expiration of the period

allowed for the satisfaction of the same.”


3,

SEC, 41. 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 shalll be [sold, or otherwise disposed
of, upon the order of the Collector of the port where the property 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 EXPORTED THROUGH A GOVERNMENT ENTITY WHICH
SHALL BE DESIGNATED TO PERFORM SAID TASK;

“(B) WHEN THE PROPERTY IS NOT 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;

“(C) WHEN THE ARTICLE IS NOT SUITABLE FOR EXPORTATION OR
FOR USE AGAINST SMUGGLING OR OTHER FRAUDS UPON CUSTOMS,

THEN IT MAY BE CHANNELED TO THE OFFICIAL US

3 OF OTHER OFFICES
OF THE NATIONAL GOVERNMENT; AND

“D) JF THE ARTICLE IS SUITABLE FOR SHELTER OR CONSISTS OF
FOODSTUFB OR CLOTHING MATERIALS, THEN THAT ARTICLE MAY BE

GIVEN TO THE APPROPRIATE GOVERNMENT AGENCY: PROVIDED,

44


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20

21

22

THAT THIS AGENCY USES THIS ONLY FOR OFFICIAL PURPOSE , OR FOR
CHARITY.

“THE COST OF 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 IMPORTED ARTICLE AND THE BROKER,
CAN NOT BE LOCATED THEN THE GOVERNMENT ENTITY WHICH IS
DESIGNATED TO EXPORT SUBJECT PROPERTY SHALL SHOULDER THE
COST OF EXPORTATION: PROVIDED, THAT ARTICLES TO BE EXPORTED
UNDER THIS SECTION SHALL BE TRANSFERRED BY THE BUREAU OF
CUSTOMS TO THE GOVERNMENT ENTITY THAT IS MANDATED TO.
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: PROVIDED, FINALLY, THAT IF SUBJECT ARTICLE CANNOT BE
EXPORTED THROUGH THE GOVERNMENT ENTITY DESIGNATED FOR

THE PURPOSE OR IS NOT SUITABLE EITHER FOR OFFICIAL USE OR


20

21

22

4

CHARITY, THE SAME SHALL 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, THE DEPARTMENT OF

JUSTICE, THE BUREAU OF CUSTOMS, AND FROM THE PRIVATE SECTOR.”

SEC. 42. Section 2603 of the Tariff and Customs Code of the Philippines, as amended,

is hereby further amended to read as follows:

“SEC. 2603. [Mode of Sale] DISPOSITION OF PROCEEDS IN CASE OF
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 PROCEEDS OF THE EXPORTATION OF ARTICLES WITHIN THE
PURVIEW OF THIS PART OF THIS CODE:

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

“(B) TAXES AND OTHER CHARGES, AS THE CASE MAY BE, DUE THE
GOVERNMENT;

“(C) STORAGE CHARGES;

“(D) ARRASTRE CHARGES; AND

“(E) FRSIGHT, LIGHTERAGE AND OTHER EXPENSES INCIDENTAL TO

THE EXPORTATION.”

46


1 SEC, 43. Section 2604 of the Tariff and Customs Code of the Philippines, as
2 amended, is hereby further amended to read as follows:
3 “SEC, 2604, [Disqualification to Participate in Auction Sale] DISPOSITION OF

4 SURPLUS FROM THE PROCEEDS OF EXPORTATION OF PROPERTY WITHIN

5 THE PURVIEW OF THIS PART OF THIS CODE. = [No customs official or
6 employee shall be allowed to bid directly or indirectly, in any customs auction]
7 ANY SURPLUS REMAINING AFTER THE SATISFACTION OF ALL LAWFUL

8 CHARGES AS PROVIDED FOR IN SECTION 2603 OF THIS CODE SHALL BE

C4 DEPOSITED IN A SPECIAL TRUST FUND WHICH SHALL BE USED SOLELY
10 FOR THE PURPOSE OF FINANCING THE COMPULSORY ACQUISITION OF
i IMPORTED GOODS BY THE GOVERNMENT AS PROVIDED FOR IN

12 SECTION 2317 OF THIS CODE.”
13 SEC. 44. Section 2607 of the Tariff and Customs Code of the Philippines, as amended,

14 is hereby further amended to read as follows

15 “SEC. 2607. Disposition of Articles Liable to Deterioration, - Perishable articles
16 shall be deposited in any appropriate bonded warehouse; and, if not
17 immediately entered for export or for transportation from the vessel or aircraft in
18 which imported or entered for consumption and the duties and the taxes paid
19 thereon, such articles SHALL [may] be sold at auction [,after such public notice,
20 not exceeding three days | as the necessities of the case permit.

21 “When seizure shall be made of property which, in the opinion of the
2 Collector, is liable to perish or be wasted or to depreciate greatly in value by
23 keeping, or which cannot be kept without great disproportionate expense,
24 whether such property consists of live animals or of any article, the appraiser

47


shall so certify his appraisal, the Collector SHALL [may] proceed to advertise
and sell the same at auction, upon notice as he shall deem to be reasonable.

“The same disposition SHALL [may] be made of any warehoused article
when in the opinion of the Collector it is likely that the cost of depreciation,
damage, leakage or other causes, may so reduce its value as to be insufficient to
pay the duties, taxes and other charges thereon, if it should be permitted to be so
kept and be subjected to sale in the usual course,

“PROVIDED, THAT IN ALL CASES INVOLVING ARTICLES LIABLE TO
DETERIORATION, THE DETERMINATION THEREON SHALL BE
EXCLUSIVE TO THE COLLECTOR AND SHALL BE FINAL ON THE MATTER:
PROVIDED, FURTHER, THAT THE AUCTION SALE SHALL BE HELD NOT
LATER THAN TWO (2) DAYS AFTER THE PUBLIC NOTICE SET BY THE

COLLECTOR.”

SEC. 45. Section 2610 of the Tariff and Customs Code of the Philippines, as amended,

is hereby further amended to read as follows:

“SEC, 2610. Disposition of Unsold Articles for Want of Bidders. - Articles subject

s shall be sold at a price not less

to sale at public auction by customs authoriti
than the wholesale value price in the domestic market of these or similar articles
in the usual wholesale quantities and in the ordinary course of trade as
determined in accordance with section twenty-three hundred and five of this
code,

“When any article remains unsold in at least two public biddings for want of
bidders or for lack of an acceptable bid, and the article is perishable and/or
suitable for official use, then the Collector shall report the matter immediately to

the Commissioner of Customs who SHALL [may, subject to the approval of the

48


23

24

25

Secretary of Finance] authorize the official use of that article by the Bureau of
Customs to promote the intensive collection of taxes and/or to help prevent or
suppress smuggling and other frauds upon the Customs, and if the article is not
suitable for such use, then it may be channeled to the official use of other offices
of the National Government AS THE COMMISSIONER OF CUSTOMS MAY
DETERMINE. If the article is suitable for shelter or consists of foodstuffs,
clothing materials or medicines then that article shall be given to government
charitable institutions through the Department of Social WELFARE [Services]
and Development. AGRICULTURAL PRODUCTS SHALL BE GIVEN TO THE
DEPARTMENT OF AGRICULTURE FOR PROPER DISPOSITION.

“If the article offered for sale is not suitable either for official use or charity,
then the same may be re-exported as government property, through the
Department of Trade AND INDUSTRY or any other government entity through
barter or sale. If the article cannot be disposed of as provided above, the
Collector shall report the matter immediately to the Commissioner who SHALL
[may, subject to the approval of the Secretary of Finance] dispose of the article to
the best advantage of the government in a negotiated private sale which shall be
consummated in the presence of a representative of the Commission of Audit, in

the manner provide for by this Code.”

SEC. 46. Section 2612 of the Tariff and Customs Code of the Philippines, as amended,

is hereby further amended td read as follows:
“SEC. 2612. Disposition of Smuggled Articles.
“Smuggled 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 section

49


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20

21

22:

23

24

25

twenty-six hundred and ten: PROVIDED, THAT SENSITIVE ARTICLES SO
CONSIDERED BY THE PHILIPPINES UNDER LAWS, REGULATIONS OR
EXISTING INTERNATIONAL AGREEMENTS SHALL BE DISPOSED
ACCORDING TO THE RECOMMENDATIONS, RULES OR ORDERS SET BY
THE APPROPRIATE REGULATORY AGENCY: Provided, FURTHER, That
articles whose importation is prohibited under Section One hundred two 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 then
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.”

SEC. 47. Section 3513, Book II, Title VII, Part Il of the Tariff and Customs Code of

the Philippines, is hereby amended to read as follows:

“SEC. 3513. Reward to Persons Instrumental in the Discovery and Seizure of or
Recovery of Revenue on Smuggled Goods and Successful Prosecution of Offenders. -
The provisions of general and special laws to the contrary notwithstanding, a
cash reward equivalent to twenty per centum (20%) of the [fair market value of]
REVENUE RECOVERED FROM the [smuggled and] SEIZED OR confiscated
goods shall be given to the officers and men and informers who are instrumental
in the discovery and seizure of such goods [in accordance with the rules and
regulations to be issued by the Secretary of Finance.]: PROVIDED, THAT IN
CASE OF SUCCESSFUL PROSECUTION OF SMUGGLERS OR SEIZURE AND.
FORFEITURE CASES, THE AMOUNT EQUIVALENT TO TEN PER CENTUM
(10%) THEREOF SHALL BE GIVEN TO BUREAU OF CUSTOMS LAWYER/S

WHO ACTVELY PROSECUTED THE CASE THAT RESULTED IN THE


v

RECOVERY OF REVENUE, SURCHARGES, AND FI OR IMPOSITION OF

FINE OR PENALTY OR OFFER OF COMPROMISE BY THE OFFENDER, OR
CONVICTION OF THE OFFENDER: PROVIDED, FURTHER, THAT IN CASE
OF CONVICTION, WHERE THE PENALTY IS INCAPABLE OF PECUNIARY
ESTIMATION, THE AMOUNT OF REWARD SHALL BE EQUIVALENT TO.
TWENTY PER CEN’ TUM (20%) OF THE CIVIL LIABILITY INCLUDING FINES,
PENALTIES AND SURCHARGES IMPOSED BY THE COURT: PROVIDED,
FINALLY, THAT WHERE NO CIVIL LIABILITY IS AWARDED BY THE
COURT, THE SUM OF P250,000.00 OR P500,000.00 SHALL BE GRANTED
WHERE THE CASE IS RESOLVED WITH FINALITY IN THE TRIAL COURT

OR THE APPELLATE COURTS, RESPECTIVELY.”

SEC. 48, Section 3519 of the Tariff and Customs Code of the Philippines,

amended, is hereby further amended to read as follows:

“SEC. 3519. Words and Phrases Defined. - As used in this Code:

“Foreign Port” means a port or place outside the jurisdiction of the
Philippines.

“FOREIGN TRANSSHIPMENT” SHALL REFER TO THE TRANSPORT OF
GOODS FROM A FOREIGN COUNTRY INTO THE PHILIPPINES FOR
SHIPMENT TO A FOREIGN DESTINATION WITHOUT INTRODUCING THE
SAME INTO THE PHILIPPINE CUSTOMS TERRITORY.

“Port of Entry” is a domestic port open to both foreign and coastwise trade.
The term includes principal ports of entry and subports of entry. A “principal
port of entry” is the chief port of entry of the collection district wherein it is
situated and is the permanent station of the Collector of such port. Subports of

entry are under the administrative jurisdiction of the Collector of the principal

51

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6

10

i

12

14

15

16

7

18

19

port of entry of the district, Whenever the term “Port of Entry” is used herein, it
shall include “airport of entry”.

“Coastwise ports” are such domestic ports as are open to coastwise trade only.
‘These include all ports, harbors and places not ports of entry.

“Vessels” includes every sort of boat, craft or other artificial contrivance used,
or capable of being used, as a means of transportation on water.

“Aircraft” includes any weight-carrying devise or structure for the navigation
of the air.

“Bill of Lading” includes airway bill of lading.

“Articles”, when used with reference to importation or exportation, includes
goods merchandise and in general anything that may be made the subject of
importation or exportation.

“Transit cargo” is article arriving at any port from another port or place noted
in the carrier’s manifest and destined for transshipment to another local port or to

a foreign port.

ed property” means any property seized or held for the satisfaction of
any administrative fine or for the enforcement of any forfeiture under the Tariff
and Customs Code.

“Tariff and customs laws” includes not only the provisions of this Code and
regulations pursuant thereto but all other laws and regulations which are subject
to enforcement by the Bureau of Customs or otherwise within its jurisdiction.

“Taxes” includes all taxes, fees and charges imposed by the Bureau of
Customs and the Bureau of Internal Revenue.

“Secretary” or “Department Head” refers, unless otherwise specified, to the

Secretary of Finarce.

52


20

21

22

px;

24

25

“Commission” refers to the Tariff Commission.

“Person” whether singular or plural refers to an individual,
corporation, partnership, association, company or any other kind of organization.

“Dutiable value” refers to the value defined in section two hundred one.

“Bulk cargo” refers to products in a mass of one commodity not packaged,
bundled, bottled or otherwise packed.

“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, or sale of such article after importation, knowing the same to have
been imported contrary to law. It includes the exportation of articles in a manner
contrary to law. Articles subject to this paragraph shall be known as smuggled
articles: PROVIDED, THAT THE ACT OF RECEIVING ARTICLES THAT ARE
SUPPOSED TO BE EXPORTED BUT ARE SUBSEQUENTLY RETURNED AND
REJECTED BY THE IMPORTING COUNTRY SHALL NOT BE CONSIDERED
SMUGGLING.”

“TECHNICAL SMUGGLING” IS AN ACT OF ANY PERSON WHO MAKES
OR ATTEMPTS TO MAKE 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, WRITIEN OR VERBAL, OR BY ANY MEANS OF ANY FALSE OR
FRAUDULENT PRACTICE WHATSOEVER, OR 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

3


1

3

6

7

LEGALLY DUE, OR 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 ACT OF OMISSION SHALL,
FOR EACH OFFENSE , BE PUNISHABLE UNDER THIS CODE.”

“Contrabands" are articles of prohibited importation or exportation.

“Duly Registered” as used in this Act, refers to a person, natural or juridical,
which is registered with the proper government agencies, such as the [Bureau of
Commerce] DEPARTMENT OF TRADE AND INUDSTRY, Securities and
Exchange Commission, [NACIDA], Board of Investments, DEPARTMENT OF
AGRICULTURE, [Export Incentives Board or Oil Commission] DEPARTMENT
OF ENERGY as now or may hereafter be required by law. (RA 9136, April 27,
2001)

SEC. 53. Section 3601 of the Tariff and Customs Code of the Philippines, as amended, is

19 hereby further amended to read as follows:

20

“SEC. 3601. [Unlawful Importation] SMUGGLING. - (A) 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, (B) [or] ANY PERSON WHO shall
receive, conceal, buy, sell, or in any manner facilitate the transportation,

concealment, or sile of such 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, AND
(C) ANY IMPORTATION OF ARTICLES THAT DO NOT PASS THROUGH
THE PORTS OF ENTRY SHALL BE CONSIDERED AS UNLAWFUL
IMPORTATION PUNISHABLE UNDER SECTION 3601 OF THIS CODE,
SHALL BE CONSIDERED AS ILLEGALLY IMPORTED AND SHALL BE
DISPOSED OF IN THE MANNER AS PROVIDED FOR IN SECTION 2602 OF
THIS CODE:

“1, A fine [of not less than] IN AN AMOUNT EQUAL TO THE APPRAISED

VALUE PLUS fifty [pesos nor more than two hundred pesos] PERCENT (50%)

THEREOF and imprisonment of not less than [five] SIX MONTHS AND ONE
day[s] nor more than [four years] TWENTY DAYS, if the appraised value, to be
determined in the manner prescribed under this Code, including duties and

taxes, of the article unlawfully imported EXCEEDS FIVE THOUSAND PESOS

(P5,000.00) BUT does not exceed [twenty-five] FIFTY THOUSAND pesos
(P50,000.00);

“2. A fine [of not less than eight hundred pesos nor more than five thousand
pesos] IN AN AMOUNT EQUAL TO THE APPRAISED VALUE PLUS FIFTY
PERCENT (50%) THEREOF and imprisonment of not less than [six months]
FOUR YEARS and one day nor more than [four] EIGHT years, if the appraised
value, to be determined in the manner prescribed under this Code, including
duties and taxes, of the article unlawfully imported [exceeds twenty-five] IS

MORE THAN FIFTY THOUSAND pesos (P50,000.00) but does not exceed ONE

HUNDRED fifty thousand pesos (P150,000.00);


”

“3, A fine [of not less than six thousand pesos nor more than eight thousand
pesos] IN AN AMOUNT EQUAL TO THE APPRAISED VALUE PLUS FIFTY
PERCENT (50%) THEREOF and imprisonment of not less than [five] EIGHT
years and one day nor more than [eight] TWELVE years, if the appraised value,
to be determined in the manner prescribed under this Code, including duties
and taxes, of the article unlawfully imported [is more than] EXCEEDS ONE
HUNDRED fifty thousand pesos (P150,000.00) but does not exceed [one] TWO
hundred fifty thousand pesos (P250,000.00);

“4, A fine [of not less than eight thousand pesos nor more than ten thousand
pesos] IN AN AMOUNT EQUAL TO THE APPRAISED VALUE PLUS FIFTY
PERCENT (50%) THEREOF and imprisonment of not less than [eight] TWELVE
years and one day nor more than [twelve] FIFTEEN years, if the appraised value,
to be determined in the manner prescribed under this Code, including duties
and taxes, of the article unlawfully imported exceeds [one] TWO hundred fifty
thousand pesos (P250,000.00) BUT DOES NOT EXCEED FIVE HUNDRED
THOUSAND PESOS (P500,000.00);

“5, A FINE IN AN AMOUNT EQUAL TO THE APPRAISED VALUE PLUS
FIFTY PERCENT (50%) THEREOF AND IMPRISONMENT OF NOT LESS
THAN FIFTEEN YEARS AND ONE DAY NOR MORE THAN TWENTY
YEARS, IF THE APPRAISED VALUE, TO BE DETERMINED IN THE
MANNER PRESCRIBED UNDER THIS CODE, INCLUDING DUTIES AND
TAXES, OF THE ARTICLE UNLAWFULLY IMPORTED EXCEEDS FIVE
HUNDRED THOUSAND PESOS (P500,000.00) BUT DOES NOT EXCEED ONE

MILLION PESOS (P1000,000.00);


20

21

22

“6, A FINE IN AN AMOUNT EQUAL TO THE APPRAISED VALUE PLUS
FIFTY PERCENT (50%) THEREOF AND LIFE IMPRISONMENT, IF THE
APPRAISED VALUE, TO BE DETERMINED IN THE MANNER PRESCRIBED
UNDER THIS CODE, INCLUDING DUTIES AND TAXES, OF THE ARTICLE
UNLAWFULLY IMPORTED EXCEEDS ONE MILLION PESOS (P1,000,000.00);

“7. The penalty of prision mayor TO RECLUSION TEMPORAL shall be
imposed when the crime of serious physical injuries shall have been committed
and the penalty of reclusion perpetua to death shall be imposed when the crime of
homicide shall have been committed by reason or on the occasion of the
unlawful importation.

“In applying the above scale of penalties, if the offender is an alien and the
prescribed penalty is not death, he shall be deported after serving the sentence
without further proceedings for deportation. If the offender is a government
official or employee, the penalty shall be a maximum as hereinabove prescribed
and the offender shall suffer an additional penalty of perpetual disqualification
from public office, to vote and to participate in any public election. HE SHALL
ALSO LOSE ALL THE BENEFITS DUE HIM AS A RESULT OF HIS SERVICE IN
THE GOVERNMENT, INCLUDING THE FORFEITURE OF HIS SEPARATION
AND RETIREMENT BENEFITS.

“When, upon trial for violation of this section, the defendant is shown to
have had possession of the article in question, possession shail be deemed
sufficient evidence to authorize conviction unless the defendant shall explain the
possession to the satisfaction of the court: Provided, however, That payment of the
tax due after apprehension shall not constitute a valid defense in any

prosecution under this section.”


J SEC. 54. Section 3602 of the Tariff and Customs Code of the Philippines, as amended,

2 is hereby further amended to read as follows:

3 “SEC. 3602. Various Fraudulent Practices Against Customs Revenue. - Any
4 person who makes or attempts to make entry of imported or exported article by
5 means of any false or fraudulent invoice, declaration, affidavit, letter, paper or
6 by any means of any false statement, written or verbal, or by any means of any
7 false or fraudulent practice whatsoever, or [knowingly] effects any entry of
8 goods, wares or merchandise, at less than the true weight or measures thereof or
9 upon a false classification as to quality or value, or by the payment of less than
10 the amount legally due, or [knowingly and willfully] files any false or fraudulent

i entry or claim for the payment of drawback or refund of duties upon the

12 exportation of merchandise, or makes or files any affidavit, abstract, record,
13 certificate or other document, with a view to securing the payment to himself or
4 others of any drawback, allowance, or refund of duties on the exportation of
Is merchandise, greater than that legally due thereon, or who shall be guilty of any
16 [willful] act of omission shall, for each offense, BE GUILTY OF TECHNICAL

17 SMUGGLING AND SHALL be [punished in accordance with the penalties
18 prescribed in the preceding section] PUNISHABLE AS FOLLOWS:

19 “1. A FINE OF NOT LESS THAN THREE HUNDRED THOUSAND PESOS
20 (P300,000.00) NOR MORE THAN FIVE HUNDRED THOUSAND PESOS
21 (P500,000,00) AND IMPRISONMENT OF PRISION CORRECIONAL, IF THE
22 DIFFERENCE BETWEEN THE VALUE, WEIGHT, MEASUREMENT OR
23 QUANTITY DECLARED IN THE ENTRY AND THE TRUE AND ACTUAL

24 VALUE, WEIGHT, QUANTITY OR MEASUREMENT OF THE ARTICLE


21

22

23

24

UNLAWFULLY IMPORTED DOES NOT EXCEED ONE HUNDRED.
THOUSAND PESOS (P100,000.00);

“2. A FINE OF NOT LESS THAN FIVE HUNDRED THOUSAND PESOS
(P500,000.00) NOR MORE THAN EIGHT HUNDRED THOUSAND PESOS
(P800,000,00) AND IMPRISONMENT OF PRISION MA YOR, 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);

“3, 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);

“4, 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,
WEIGET, QUANTITY OR MEASUREMENT OF THE ARTICLE UNLAWFULLY

IMPORTED EXCEEDS FIVE MILLION PESOS (P5,000,000.00).


23

24

25

“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
IN ITS MAXIMUM PERIOD 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 AS
A RESULT OF HIS SERVICE IN THE GOVERNMENT, INCLUDING THE

FORFEITURE OF HIS SEPARATION AND RETIREMENT BENEFITS.”

SEC. 55. Section 3603 of the Tariff and Customs Code of the Philippines, as amended,

is hereby further amended to read as follows:

“SEC. 3603. Failure to Report Fraud. - Any master, pilot in command or other
officer, owner or agent of any vessel or aircraft trading with or within the
Philippines and any employee of the Bureau of Customs who, having
cognizance of any fraud on the customs revenue, shall fail to report all
information relative thereto to the Collector as by law required, shall be
punished by a fine of not [more] LESS than [five] ONE HUNDRED thousand
pesos (P100,000.00) BUT NOT MORE THAN ONE MILLION PESOS
(P1,000,000.00) and imprisonment [for] OF not [more] LESS than [one] EIGHT
yearS BUT NOT MORE THAN TWELVE YEARS, If the offender is an alien, he
shall be deported after serving the sentence. If the offender is a public official or
employee, he shall sufferadditional penalty of perpetual disqualification to hold

public office, to vote anc to participate in any election. HE SHALL ALSO LOSE

60


ALL THE BENEFITS DUE HIM AS A RESULT OF HIS SERVICE IN TE 1B
GOVERNMENT, INCLUDING THE FORFEITURE OF HIS SEPARATION AND.

RETIREMENT BENEFITS.”

SEC. 56, 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 any 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] BUT NOT more than [Fifty
thousand] ONE MILLION pesos (P1,000,000.00) and imprisonment [for] OF not
less than [one] EIGHT yearS [nor] BUT NOT more than [ten] TWELVE years and

perpetual disqualification to hold public office, to vote and to participate in any

public office election. HE SHALL ALSO LOS

LL THE BENEFITS DUE HIM
AS A RESULT OF HIS SERVICE IN THE GOVERNMENT, INCLUDING THE
FORFEITURE OF HIS SEPARATION AND RETIREMENT BENEFITS:

“a) Those guilty of extortion or willful oppression under color of law;

“(b) Those who knowingly demand other or greater sums than are
authorized by law of receive any fee, compensation, or reward except as by law
pideeribedtarthepetonnanse ncany ai

“(c) Those who willfully neglect to give receipts, as required by law for any
sum collection in the performance of duty, or who willfully neglect to perform
any of the dutiesenjoined by law;

4(d) Those who conspire or collude with another or others to defraud the

customs revenueor otherwise violate the law;

61


“(e) Those who willfully make opportunity for any person to defraud the
customs revenue or who do or fail to do any act with intent to enable any person
to defraud said revenue;

“(f) Those who negligently or designedly permit the violation of the law by
any other person;

“(g) Those who make or sign any false entry or entries in any book, or make
or sign any false certificate or return in any case where the law requires the
making by them of such entry, certificate or return;

“(h) Those who, having knowledge or information of a violation of the Tariff
and Customs Law or any fraud committed on the revenue collectible by the
Bureau, fail to report such knowledge or information to their superior official or
to report as otherwise required by law;

“(i) Those who, without the authority of law, demand or accept or attempt to
collect directly or indirectly as payment of otherwise, any sum of money or other
thing of value for the compromise, adjustment, or settlement of any charge or
complaint for any iolatOn OE alleged violation of law; or

“j) Those who, without authority of law, disclose confidential information
gained during any investigation or audit, or use such information for personal
gain or to the detriment of the government, the Bureau or third parties” (R.A.
9135, April 27, 2001)

SEC, 57. Section 3605 of the Tariff and Customs Code of the Philippines,

amended, is hereby further amended to read as follows:

“SEC. 3605. Concealment or Destruction of Evidence of Fraud. - Any person who
willfully conceals or destroys any invoice, book or paper relating to any article

liable to duty after an inspection thereof has been demanded by the Collector of

62


1 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 [more] LESS than [five] ONE HUNDRED

4 thousand pesos (P100,000.00) BUT NOT MORE THAN ONE MILLION PESOS.

5 (P1,000,000.00) and imprisonment [for] OF NOT LESS THAN EIGHT YEARS
6 BUT not more than [two] TWELVE years.”
7 SEC. 58. Section 3606 of the Tariff and Customs Code of the Philippines, as amended,

8 is hereby further amended to read as follows:

9 "SEC. 3606. Affixing Seals. - Any person who, without authority affixes or
10 attaches a customs seal, fastening, or mark or any seal, fastening or mark
ul purporting to be a customs seal, fastening or mark to any vessel, vehicle on land,
12 sea or air, warehouse, of package, shall be punished with a fine of not LESS
13 THAN ONE HUNDRED THOUSAND PESOS (P100,000.00) BUT NOT more
14 than [twenty thousand] ONE MILLION pesos (P1,000,000.00) [or] AND
15 imprisonment of not [more] LESS than [five] EIGHT years[, or both] BUT NOT
16 MORE THAN TWELVE YEARS. If the offender is an alien, he shall be deported
7 after serving, the sentence. If he is a public official or employee, he shall suffer an
18 additional penalty of perpetual disqualification to hold public office, to vote and
19 participate in any election HE SHALL ALSO LOSE ALL THE BENEFITS DUE
20 HIM AS A RESULT OF HIS SERVICE IN THE GOVERNMENT, INCLUDING
21 THE FORFEITURE OF HIS SEPARATION AND RETIREMENT BENEFITS.”

22 SEC. 59. Section 3610 of the Tariff and Customs Code of the Philippines, as
23 amended, is hereby further amended to read as follows:

24 “SEC. 3610, Feilure to Keep Importation Records and Give Full Access to Customs

25 Officers. - Any person who fails to keep all the records of importations and/or

63


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] TWO hundred thousand pesos (P
[1]200,000.00) but not more than [Two] FIVE hundred thousand pesos (P
[2]500,000.00) and{/or] imprisonment of not less than [two] FOUR ([2]4) years
and one day but not more than [six] EIGHT ({6]8) years. This penalty shall
likewise be imposed against 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,”

SEC. 60. Section 3612 of the Tariff and Customs Code of the Philippines, as amended,

is hereby further amended to read as foilo’
“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 (P100,000.00) for] AND by
imprisonment for not LESS THAN TWO YEARS AND ONE DAY BUT NOT
more than [one] FIVE yearS[, or both]. If the offender is an alien, he shall be
deported after serving the sentence and if the offender is a pubblic-oificial or
employee, he shall suffer disqualification to hold public office, to vote and

participate in any public election for ten years. HE SHALL ALSO LOSE ALL

64


20

21

22

24

25

and

THE BENEFITS DUE HIM AS A RESULT OF HIS SERVICE IN THE
GOVERNMENT, INCLUDING THE FORFEITURE OF HIS SEPARATION AND
RETIREMENT BENEFITS.”

SEC. 61. A new section to be known as Section 3613 is hereby inserted to the Tariff
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 THE PROVISIONS OF SECTIONS 2530 AND 2531 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.

ION OF THE SECRETARY OF FINANCE, UPON THE

“THE DECI
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.

65


a

x

ea

©

20

2

22

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

SEC. 62. Transitory Provision. - All existing customs bonded warehouses
established under Section 1901 of the Tariff and Customs Code of the Philippines, as amended,
shall have one year from approval of the law to convert themselves to manufacturing customs
bonded warehouses under Section 2001 of the Code or register themselves in special economic
zones or freeports. After the lapse of the one year period, any importation by these customs
bonded warehouses shall be treated as regular importations to be covered by ordinary
consumption entries only, unless such customs bonded warehouse in the meantime has
transferred to a special economic zone or PEZA zone, which in such case the said importation
shall be treated as a PEZA shipment.

SEC. 63. Separability Clause. - If any provision of this Act is subsequently declared
unconstitutional, the validity of the remaining provisions hereof shall remain in full force and
effect.

SEC. 64, Rules and Regulations. - The Secretary of Finance shall, upon the
recommendation of the Commissioner of Customs and meaningful consultation of the local
industry, promulgate the necessary rules and regulations for the effective implementation of
this Act.

SEC. 65. Repealing Clause. - 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.

The provision of this Act, not those of Republic Act No. 2338, shall govern the giving of

reward cases covered by the former.


SEC. 66. Effectivity. - This Act shall take effect fifteen (15) days after its publication
in any two (2) newspapers of general circulation.

Approved,

67