Republic of the Philippines
HOUSE 0F REPRESENTATIVES
Quezon City, Metro Manila
NINETEENTH CONGRESS
First Regular Session
House Bill No. 80!8
Introduced by Rept.esentative Midy N. Cue
Lone District, Quirino
RECEIVED
PATE LmdiAL2EL
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AN ACT AMENDING SECTIONS 102, I 04,119(b), 201, 209, 307, 402, 407, 423, 427, 431,
800(g), 802, 806, 900,1100,1111.1117,1118,1129,1131,1135,1138.1141,1147(a),1204,1226,
1400,1505 AND 1512: REPEALING SEC. 709: AND ADDING SHCTI0N 440-A ALL UNDER
REPUBLIC ACT NO. 10863, OTHERWISE KNOWN AS THE CUSTOMS
MODHRNIZATI0N AND TARIFF ACT
EXPLANATORY NOTE
Republic Act No.  10863 otherwise known as the Customs Modernization and Tariff Act (CMTA)was
enacted barely three (3) years. Despite its passage, the CMTA still needs to be improved paticularly
on the other third parties involved in the entire customs process. In a world that is getting smaller due
to  digital  technologies  and  online  commerce,  the  commitment toward  equality,  equity,  efficiency,
transparency, and fairness must always be promoted and protected.  If the Philippine economy must
become robust and competitive, then it must be ready to modemize and improve its trade practices.
Such an expectation includes significant reforms in customs-related policies, practices, systems, and
transactions.
With the goal of improving trade facilitation and assisting the government in revenue collection, this
proposed bill contains the following key provisions:
1.    Providing  a classification system for third parties  which  shall  be used  in the  assessm€mt of
their capabilities to import, export, move store or clear goods;
2.    Requiring the acquisition of the services of a private auction house to undertake BOC |]ublic
auctions   to   minimize   collusion   between   BOC   employees   and   favored   bidders   to   the
disadvantage of the government;
3.    Establishing a pre-shipment inspection  of cargoes dependent upon risk-based parameters as
determined by the Bureau and other competent authorities;
4.    Requiring common carriers to declare the value of imported goods and articles from a fcireign
port  in  shipping  and  airline  documents,  and  prohibit  fraudulent  alteration  of  the  cargo
manifest, bill of lading and airway bill;
5.    Ensuring  effective  control  and  management  of Customs  Bonded  Warehouses  (CBW)  and
Customs Freight Warehouses (CFW) based on appropriate business requirements;
6.    Defining the authority of district collectors in processing tariff classification cases;
7.    Simplifying the issuance and conduct of alert orders and warrants of seizure; and
8.    Requiring  the  presentation  of certain  documents  by  vessels  coming  from  foreign  ports  in
order to facilitate trade security and avoid smuggling.


This   measure   previously   passed   the   third   reading   in  the   l8th   Congress.   It   was   proposed   by
Representatives Sharon S. Garin, Rozzano Rufmo 8. Biazon, Joey Sarte Salceda, Jose L. Atienza Jr.,
Rodante D. Marcoleta, Rose Marie "Baby" J. Arenas, Evelina G. Escudero, Ferdinand L. Hemandez,
Strike  8.  Revilla,  Rufus  8.  Rodriguez,  Deogracias  Victor  "DV"  8.  Savellano,  Kristine  Singson-
Meehan, Tyrone D. Agabas, Christopher V.P. De Venecia, Stella Luz A. Quimbo, Carlos Isagani T.
Zarate,  Elenita Milagros  "Eileen"  Ermita-Buhain, Loma P. Bautista-Bandigan, Luis N. Campos, Jr.,
Junie E.  Cua, Luisa Lloren Cuaresma, Paul Ruiz Daza, Rudys Caesar G.  Farifias I,  Vincent Franco
"Duke"  D.  Frasco,  Greg  G.  Gasataya,  Ed  Christoper  S.  Go,  Ruwel,  Peter  Gonzaga,  Sandro  L.
Gonzalez,  Teodorico  Haresco,  Jr.,  Romeo  M.  Jalosjos,  Jr.,  Jocelyn  Sy  Limkaichong,  Corazon  T.
Nufiez-Malanyaon,  Romeo  S.  Momo,  Sr.,  Manuel  T.  Sagarbarria,  David  "Jay-Jay"  C.  Suarez3,  Jose
Antonio   "Kuya"   Sy-Aivarado,  Alfred  Vargas,   Micaela  S.  Violngo,  Manuel  F.   Zubiri,  Antonio
"Tonypet"  T.  Albano,  Angelo  Marcos  Barba,  Alfel M.  Bascug,  Jose  Francisco  "Kiko"  8.  Benitez,
Ph.D.,  Gabriel  H.  Bordado,  Jr.,  Femando  T.  Cabredo,  Carl  Nicolas  C.  Cari,  Sergio  C.  Dagooc,
Maximo  Y.  Dalog,  Jr.,  Alfred  C.  Delos  Santos,  Abdullah  D.  Dimaporo,  Mohamad  Khalid  Q.
Dimaporo, Faustino "Inno" A. Dy V, Faustino Michael Carlos T. Dy Ill, Jocelyn F. Fortuno, Ramon
"Mom-Mom"  V.  Guico  Ill,  DPM,  Eduardo  "Eddie"  R.  Gullas,  Godofredo  N.  Guya,  Ann  K.  IIofer,
Cesar "Jawo"  L.  Jimenez, Jr., Glona G Labadlabad, Maricel G. Natividad-Nagafio,  Pablo C. Ortega,
Joy Myra S.  Tambunting, Alyssa Sheena P. Tan, John Reynald M.  Tiangco, Diego `INonoy" C. Ty,
Samantha Louise Vargas Alfonso, Rosanna "Ria" V.  Vergara, Leonardo L.  Babasa, Jr., Michael T.
Defensor,  Sandra  Y.  Eriguel,  M.D.,  Jonathan  Keith  T.  Flores,  Ferdinand  R.  Galte,  Mark  0.  Go,
Virgilio  S.  Lacson,  Florida  "Rida"  P.  Robes,  Estrellita  8.  Suansing.  Cheryl  P.  Deloso-Moritalla,
Janette L. Garin, Jericho Jonas 8. Nograles, Jose Gay G. Padiemos, Roman T. Romulo, Manuel Jose
"Mannix"  M.  Dalipe, Amie 8.  Fuentebella,  Angelina "Helen" D.L.  Tan, Jumel Anthony I.  ESpino,
Pablo John F.  Garcia,  Sonny "SL" L. I,agon, Ramon C. Nolasco Jr., Jesus "Bong" C.  Suntay, Janice
Z.  Salimbangon,  Johnny  Ty  Pimentel,  Weslie  Gatchalian,  Horacio  P.  Suansing  Jr.,  Joaquin  M.
Chipeco Jr., Jose Pingping I. Tejada and Shirlyn L. Bafias-Nograles as principal authors thereof.
In view of the foregoing, approval of this measure is earnestly sought.
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Republic of the philippines
HOUSE 0F REPRESENTATIVES
Quezon City, Metro Manila
NINETEENTH CONGRESS
First Regular Session
HouseBi||No.8048
Introduced by Representative Midy N. Cua
Lone Distrtet, Quirino
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AN ACT AMENDING SECTIONS 102,104,I l9(b), 201, 209, 307, 402, 407, 423, 427, 431,
800(g), 802, 806, 900,1100,1111,1117,1118,1129,1131,1135,1138,1141,1147(a),1204,1226,
i4oO, 1505 AND i5i2: REPEALING sEc. 709: ANI) ADDING SECTION 44o-A ALL uNDnR
REPUBLIC ACT NO. 10863, OTHERWISE KNOWN AS THE CUSTOMS
MODERNIZATION AND TARIFF ACT
Be it erracted by the Senate and House Of Representatives Of the Philippines in Congress assembled:
SI]CTI0N 1. Section  102 of RA No.10863 is hereby amended to read as follows:
"SEC.102. De¢#j/z.ow o/Terms. -As used in this Act:
„x x x."
[(qq) re#/ar!.ve Re/ecrse refers to a case where the assessment is disputed and pending
review,  an importer may put up  cash bond equivalent to the duties and taxes due on goods
before the importer can obtain the release of said goods;]
[(rr)I  (QQ)  rrcz#sJ./  refers  to  the  customs  procedure  under  which  goods,  in  [its]
THHIR  original  form,  are  transported  under  customs  control  from  one  customs  office  to
another, or to a free zone;]
[(ss)]  (RR)  rrtz73Ssfejz)rme#f  refers  to  the  customs  procedure  under  which  goods  are
transferred  under  customs  control  from  the  importing  means  of transport  to  the  exporting
means  of  transport  within  the  area  of  one  customs  office,  which  is  the  office  of  both
importation and exportation;
[(tt)]  (SS)  Traveler  refers  to  any  person  who  temporarily  enters  the  territory  of a
country  in  which  he  or  she  does  not  normally  reside  (non-resident),  or  who  leaves  that
territory,  and any person who  leaves the territory of a country in which he or she normally
resides (departing resident) or who returns to that territory (returning resident); and
[(uu)] (TT) Third Party refers to any person who deals directly with the Bureau, for
and   on   behalf  of  another  person,   WHICH   I\IAY   ALSO   INCLUDE   IMPORTERS.
EXPORTERS,    LOGISTICS    PROVIDERS,    CARRIERS,    AIRLINES,    SHIPPING
LINHS,      SHIPPING      AGENTS,      FORWARDERS,      CONSOLIDATORS,      AND
WAREHOUSE   0PHRATORS,   IF   SUCH   PERSONS   0R   ENTITIHS   TRANSACT
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WITH THE BUREAU 0N MATTERS relating to the importation, exportation, movement
01  storage of goods.
SEC. 2. Section 104 of RA No.10863 is hereby amended to read as follows:
C`SE:C.104. When Duty and Tax are Due on Imported Goods. -Except as othe:r`^hse
provided for in this Act or in other laws, all goods, when imported into the Philippines, shall
be subject to duty upon importation, including goods previously exported from the Philippines
Unpaid  duties,  taxes  and other charges  shall  incur  legal  interest   of twenty  percent
(20%) per annum computed from the date of final assessment under Section 429 of this Act
OR UPON RECEIPT OF THE DEMAND T0 PAY DEFICIENCIES IN DUTIES AND
TAXIS  ISSUED  BY  THE  COMMISSIONER  IN  CASE  0F  POST  CLEARANCE
AUDIT, when payment becomes due and demandable. The legal interest shall likewise accrue
any fine or penalty imposed.
Upon  payment  of the  duties,  taxes  and  other  charges,  the  Bureau  shall  issue  the
neeessary receipt or document as proof of such payment."
SHC. 3. Section 119 (b) of RA No.  10863 is hereby amended to read as follows:
"SEC.  1+9.  Restricted   Importation,  and Exportation. - Except when anithorized by
law  or  regulation,  the  importation  and  exportation  of the  following  restricted  goods  are
prohibited:
(a)          "x x x"
(b)          Roulette    wheels[,];    gambling   outfits[,];    [loaded    dice,    marked    cards,]
machines, apparatus or mechanical  devices used  in gambling;  or the distribution of money,
cigars,  cigarettes  or other goods when  such  distribution  is  dependent  on  chance,  including
jackpot and pinball machines similar contrivances, or parts thereof;
`k x x."
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"SEC.  201.  Powers  czJcd F##c/!.o#s  o/ ffoe  Co"mi.ssj.o#er -The  Commissioner shall
have the following powers and functions:
"(a) x x x;
"(b) x x x;
"(c) x x x;
"(d) Review and decide disputed assessments and other matters related thereto, subject
to [review by the Secretary of Finance and] the exclusive appellate jurisdiction of the Cout of
Tax Appeals (CTA);
"(e) x x x;
"(I) Assignment or reassignment of any customs officer subject to the approval of the
Secretary  of Finance:  [Provided,  That  District  Collectors  and  other  customs  officers  that
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perform assessment functions shall not remain in the same area of assignment for more than
three (3) years;]  PROVIDED. THAT THE  MOVEMHNT OF A CUSTOMS  OFFICER
wlTH sALARy GRADE 24  AND ABOvE OR THOsE DEslGNATED As DlvrsloN
CHIEF     SHALL      BE     BASED     0N     REVENUE     TARGET     COLLECTION
PERFORMANCE:
"(8) x x x."
SEC. 5. Section 209 of RA No.  10863 is hereby amended to read as follows:
"SIHC. Zfy). Assignment  Of Customs  Officers  and  Employees  to  other  Duties.  -The
Commissioner[, with the approval of the Secretary of Finance,] may assign any employee of
the bureau to any port, service, division or office of the Bureau within the Bureau's staffing
pattern or organizational structure, or may assign any employee other duties, SUBJECT T0
SECTION  201  (F)  OF  THIS  ACT:  P7iov!.c7ed,  That  such  assignment  shall  not  affect  the
employee's tenure of office nor result in a change of status, demotion in rank [an{M or [salary
deduction] REDUCTION IN SALARY:
PROVIDED  FURTHER,  THAT  DISTRICT  COLLHCTORS  AND  OTHER
CUSTOMS    OFFICERS    PHRFORMING    ASSESSMENT    FUNCTIONS    SHALL
RHMAIN IN THE SAME AREA OF AsslGNMENT FOR A MINIMUM pnRIOD OF
SIX  (6)  MONTHS  FROM  THE  DATH  OF  ASSUMPTION,  CONSISTENT  WITH
SHCTION  3   0F  REPUBLIC   ACT   NO.   9335,  OTHERWISH   KNOWN   AS  THE
ATTRITION ACT 0F 2005, AND A MAXIMUM PERIOD OF THREE (3) YEARS,
EXCEPT   FOR   DUE   CAUSE,   SUCH   AS   VIOLATION   OF   ANTI-GRAFT   AND
CORRUPT PRACTICES AND OTHER RELEVANT LAWS.''
SEC. 6. Section 307 of RA No.  10863 is hereby amended to read as follows:
"SEC. 307. remporcny S/orczge o/Goods. - Subject to the rules and regulations to be
issued by the Secretary of Finance, the Commissioner shall establish a system fctr temporary
storage of imports prior to THE LODGMENT 0F goods declaration [in cases of abandoned
or overstaying goods] . "
SHC. 7. Section 402 of RA No.10863 is hereby amended to read as follows:
"SEC.   402.   Goods   Dec/orcr/i.o#  /or   C'o;aswmpfz.o#.-   All   goods   declaration   for
consumption shall be cleared through a formal entry process except for the foll{twing goods
which shall be cleared through an infomal entry process:
"(a) x x x; and
"(b) Personal and household effects or goods, not in commercial quantity [imported in
a passenger's baggage or mail].
`kxx
6k x x."
SEC. 8. Section 407 of RA No.  10863 is hereby amended to read as follows:
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"She. 4M . Goods Declaration and Period Of Filing. -
(kxx
ckxx
"Goods declaration [must] SHALL be lodged within fifteen (15) days from the date of
discharge  of the  last package  from the vessel or aircraft AND  THE  CORRnspoNDING
DUTIES, TAXES, AND OTHER CHARGES SHALL BE PAID UPON LODGHMENT.
[The period to file the goods declaration may, upon request, be extended on valid grounds for
another  fifteen  (15)  days:  Provided,  That  the  request  is  made  before  the  expiration  of the
original period within which to file the goods declaration: Provided, However, That the] THE
period of the lodgement of the goods declaration may be adjusted by the Commissioner."
SEC. 9. Section 423 (2) of RA No.10863 is hereby amended to read as follows:
"SHC.  423.  De/e7`rmz.72cr/I.o#  a//fee  De "i.#z.mz.s  7rcz/efe.-No  duties  and  taxes  shall  be
collected on goods with an FOB or FCA value of ten thousand pesos (Plo,000.00) or below.
The Secretary of Finance [shall adjust] MAY INCREASE 0R DECREASH the cJe "z.#jwis
value as provided herein,  every three  (3) years  after the  effectivity  of this Act.  [The  value
herein stated shall be adjusted to its present value using the Cpl, as published by the PSA]."
23        SEC.10. Section 427 ofRA No.10863 is hereby amended to read as follows:
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"SEC.  421.  Readiuslment  Of Appraisal,  Classification  or  Return.  -Sue:,h a;ppraisal,
classification  return,   as  finally  passed  upon  and  approved  or  modified  by   the  District
Collector, shall not be altered or modified in any manner, except:
(I)           xxx;
(2)          Within fifteen (I 5) days after such payment, upon request for reappraisal or
reclassiflcation  addressed to the Commissioner by the District Collector,  if the  appraisal  or
classification is [deemed to be low] INCORRECT;
(3)           xxx;
(4)          x x x."
39       SEC.11. Section 43l ofRA No.10863 isherebyamendedtoread as follows:
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"SEC. 431. Release Of Goods  after Payment Of Duties and Tares. -Goods dech[red
shall be released when duties and taxes and other [lawful] charges AS FINALLY ASSESSED
BY THE BUREAU have been paid or secured and all the pertinent laws, rules an(I regulations
have been complied with.
`* x x."
48       SEC.12. A new section 440-A in RA No.10863 is hereby inserted to read as follows:
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•`SEC.   440-A.   PRE-SHIPMENT   INSPECTION.   -   THE   BURE^`U   SHALL
ESTABLISH     AND     IMPLEMENT     A     PRE-SHIPMENT     INSPHCTI0N     0F
CoNTAINnRIZED     cARGOEs:     pRopTDED,     THAT     THH     PRE-SHlpMHNT
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INSPECTION  SHALL  DEPHND  0N  RISK  PARAMETERS  AS  DETERMINED  BY
THE    BUREAu    AND    OTHER    CoMPETFNT    AUTHORITIES:     PRorTDED
FC/R7HER,  THAT  PRE-SHIPMENT  INSPECTION  SHALL  NOT  BE  USED  FOR
CLASSIFICATION AND VALUATION PURPOSES PURSUANT T0 SECTION 5 0F
THE   WORLD   TRADE   oRGANlzATloN   OvTo)   AGRnEMENT   oN   TRADE
FACILITATION.
``THE RULES AND REGULATIONS SHALL BE ISSUED BY THF. BUREAU
UPON  CONSULTATION  WITH  THE  CONCERNHD  SECTORS  AND  APPROVED
BY THE SECRETARY 0F FINANCE."
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12        SEC.13. Section 709 ofRANo.10863 isherebyrepealed.
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14       SEC.14. Section 800 (g) ofRA No.10863 is hereby amended to read as follows:
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"SH;C. &an. Conditionally Tar and/or Duty-Exempt Importation. -x x x
(a)          x x x;
(b)          xxx;
(c)          x x x;
(d)          x xx;
(e)          xxx;
(I)           xxx;
(g)          [Residents of the philippines,] OFWs or other Filipinos while residing abroad
or upon their return to the Philippines shall be allowed to bring in or send to their families or
relatives  in the  Philippines balikbayan boxes  which shall  be  exempt  from  applicable  duties
and taxes  imposed  under the NIRC  of 1997,  as amended: Provi.cJed, That balikbayan  boxes
shall   contain   personal   and  household   effects  only  and  shall  neither  be   in   commercial
quantities nor intended for barter, sale or for hire and that the FCA value of which shall not
exceed one hundred   fifty thousand pesos (P150,000.00); Provz.cJec7,  Fzjrffecr, That every three
(3) years  after the  effectivity  of this Act.  the  Secretary  of Finance  shall  adjust the amount
herein stated to  its present value  using the CPI as published by the PSA; Prow.c7ed,  Fz.#cr//I/,
That [residents of the Philippines,] OFWs or other Filipinos WHILE RESIDING ABROAD
can only avail of this privilege up to [three times] A MAXIMUM FCA VALUE 0F TIIREE
HUNDRED  THOUSAND  PHSOS  (PHreoo,000.00)  in  a  calendar  year.  Any  amount  in
excess of the allowable non-dutiable value shall be subject to the applicable duties and taxes;
1)                xxx."
46       SEC.15. Section 802 ofRA No.10863 is hereby amended to read as follows:
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"SEC.  802.  Types of Customs Bonded  Warehouses (CBWs).  - x x x.  Manufacturing
customs bonded warehouse may be of the following types; (a) miscellaneous customs bonded
warehouse;   a)   customs   common   bonded  warehouse;   [or]   (c)   industry-specific   bonded
warehouse; OR (D) GARMFNTS AND TEXTILES BONDED WAREHOUSH.
`* x x."
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2       SEC.16. Section 806 ofRA No.10863 is hereby amended to read as follows:
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"SEC. 806. Cws/oms Co#tro/ Over C'Bwrs cz7acJ CFwr;F.  - The Bureau shall,  for customs
purposes, exercise control over, direct and manage CBWs and CFWs pursuant to Section 303
of this Act and [likewise] over the goods thereat pursuant to Section 301  of this Act.[:] THE
BUREAU SHALL MAINTAIN THE NUMBER OF OFF-DOCK CONTAINER YARD
0R CONTAINER FREIGHT  STATION  (CY/CFS) AND CBWS  0PFRATING  IN A
PORT TO A NUMBER CONSISTENT WITH THE BUSINHSS REQUIREMENT OF
THE PORT. THE UTILIZATION RATE, SERVICHS PROVIDED, AND FACILITIES
0F  THE   EXISTING   OFF-DOCK  CY/CFS   SHALL  BE   CONSIDEREI)   IN   THE
APPLICATION AND RENEWAL FOR AUTHORITY T0 OPERATE AN OFF-DOCK
CY/CFS: Provjc7ed. That the Bureau shall not be liable for any loss or damage of the goods
stored for safekeeping in any CBW, CFW, yard or premises."
16       SEC.17. Section 900 ofRA No.10863 is hereby amended to read as follows:
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"SEC. 900. Basis Of Duty Drawback. (AL) x x x
(a) x x x
(C) x x x
(1)x x x
(2)x x x
(3) x x x
(4) The exportation shall be made within one (1) year after the importation of
materials used, and THE claim of refund or tax credit shall be filed within
six 6) months] ONE ( I ) YEAR from the date Of exportation; and
(5) x x x"
36       SEC.18. Section  ll00  ofRANo.10863 ishereby amended toread as follows:
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"SEC.   1100.   C/crss;/iccr/r.o#   Rw/r.ng.   An   importer   or   exporter   may   fi]e   a   written
application for an advance ruling on the tariff classification of goods with the Commission.
The  Commission  shall  render  a  ruling  within  thirty  (30)  days  from  receipt  of a  properly
documented app I ication.
"When  a declared tariff classification   of goods,  WHICH IS not THE  subject of a
pending application for advance ruling, is in dispute AND THE DISTRICT COLLECTOR
DETERMINES  THAT  IT  INVOLVES  A  HIGHLY  TECHNICAL  QUHSTION  OF
TARIFF CLASSIFICATION, [the importer, exporter, or the Bureau shall submit the matter
to the Commission for a ruling, without prejudice to the application of Section  1106 of this
Act on "protest": Provz.c7ed, That such rulings of the Commission on commodity classification
shall be binding upon the Bureau, unless the Secretary of Finance [shall] rules otherwise.
"FOR     THIS      PURPOSE,      TARIFF      CLASSIFICATION      SHALL      BE
CoNSIDnRHD As A HIGHLY TECHNlcAL QUESTloN WHHN THE GooDs ARE
CLASSIFIABLE   UNDER  MORE   THAN   ONE   ASIAN   HARMONIZED   TARIFF
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NOMENCLATURE  (AHTN)  CHARTER,  HEADING,  OR  SUBHEADING:  OR  THE
PRODUCT DESCRIPTION IS NOT PROVIDED UNDER ANY AHTN IIEADING OR
SUBHEADING."
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"SEC.1111. 4/er/ C»ic7e7.a.  -Alert orders are written orders  issued by customs  officers
as authorized by the Commissioner on the basis of derogatory information regarding possible
noncompliance with this Act. An alert order will result in the suspension of the processing of
the  goods  declaration  and the  conduct of [physical  or  nonintrusive]  inspection  of the  goods
within   forty-eight   (48)   hours   from   issuance   of  the   order:   PROP7DED,   THAT   THE
TERMINAL OPERATORS  SHALL ENSURE THAT THE INSPECTION  IS  SCHEDULED
AND CONDUCTED WITHIN THE SAID PERIOD.  Within forty-eight (48) hours or,  in the
case of perishable goods,  within twenty-four (24) hours from  inspection, the alerting officer
shall  recommend  the  continuance  of processing  of goods  in  case  of a  negative  finding,  or
issuance  of a  warrant of seizure and  detention  if a discrepancy  between the declaration  and
actual   goods   is   found.   The   Bureau's   information   system   shall   immediately   reflect   the
imposition or lifting of an alert order.
XXX
(a)  x x x
(b)  x x x
(c)  xxx
(d)  x x x
XXX
"An alert order may be issued [only after lodgement of the goods declaration and] prior
to the release of goods from customs custody.  Under no circumstances shall the suspension of
the  processing  of goods  declaration  be  allowed  except through  an  alert  order  issued  by  an
authorized customs officer.
x x x.„
38
39        SEC.20. Section  ll l7 ofRANo.10863  is herebyamendedtoreadas follows:
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"SEC.1117.  Wo7~rcm/  a/ Scz.z"rc  or  Orc7cr  a/ Rc/cczsc.  -The  District  Collector  shall
have  the  authority  to  issue  a  warrant  of  seizure  of the  goods  upon  determination  of the
existence of probable cause and in case of nonexistence thereof,  [the  issuance of the order of
release]  RECOMMEND THE LIFTING 0F TIRE ALERT ORDER.  In case the District
Collector [issued an order of release,] RECOMMENDS THE LIFTING OF THE ALERT
ORDER,   the    District    Colleetor    shall    immediately   transmit    all    the    records    to   the
Commissioner, who shall automatically review THE LIFTING 0F THE ALERT ORDER
within forty-eight (48) hours, or IN CASE 0F PHRISHABLE GOODS, within twenty-four
(24)  hours.  [,in  case  of perishable  goods]  When  no  decision  is  made  by  the  Commissioner
within the prescribed period, the imported goods shall be deemed lifted.
"The ORDER TO RELEASE  [lifting of the alert order]  shall be issued by the District
Collector only upon the affirmation of [the]  THIS decision  [of the District Collector]  by the
9


Commissioner,  or after the lapse of the period of review by the Commissioner,  whichever is
earlier."
3
4        SEC.21. Section  lll8 ofRANo.10863  is herebyamendedtoreadas follows:
5
6                                  C.SiELC.Ills. Sale of perishable Goods During Forf eiture proceedings. -r:Upon mofron
7                      of the  importer of the  perishable  goods,  the]  PERISHABLE  goods  may  be  sold  at  public
8                       auction  during the pendency of the forfeiture proceedings.  The proceeds of the auction  shall
9                        be held in escrow until the final resolution of the proceedings."
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1]         SHC. 22. Section  I l29 ofRANo.10863  isherebyamendedtoreadas follows:
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"SHC.   1129.  Abandonment,   Kinds   and  Effects   Of  -  Imported   goods   are  deermed
abandoned under any of the following circumstances:
(a)    xxx;or
(b)    When the owner,  importer, consignee, or interested party after due notice, fails to [file]
LODGE the goods declaration AND PAY THE DUTIES AND TAXES BASED 0N
SELF-ASSESSMENT   within   the   prescribed   period   in   Section   407   of  this   Act:
Prtjv/.c7ec7.   That  the  term  goods  declaration  shall   include  provisional  or  incomplete
goods  declaration deemed  valid  by the  Bureau as provided  in Section 403  of this  Act.
For this  purpose,  it  is  the  duty  of the  District  Collector  to  post a  list  of all  packages
discharged  and  their  consignees,  whether  eleetronjcally  or  physically  in  the  District
Office, or send a notice to the consignee within five (5) days from the date of discharge;
Or
(c)    Having  [filed]  LODGED  such  goods  declaration  AND  PAID  THE  DUTIES  AND
TAXES   BASED   0N   SELF-ASSESSMENT,   the   owner,   importer,   consignee   or
interested  party  after  due  notice,  fails  to  pay  the  [assessed]  READJUSTED  duties,
taxes and other charges thereon, or, if the OWNER, IITORTER, CONSIGNHE, OR
INTERESTED  PARTY  0F THE  regulated  goods  [failed]  FAILS  to  comply  with
Section  117  of this  Act[,]  within  fifteen  (15)  days  from   the date of final  assessment:
Provided, That if such regulated goods are the subject of an alert order and the assessed
duties,  taxes  and  other  charges  thereof  are  not  paid  within  fifteen  (15)  days  from
notification  by the  Bureau  of the  resolution  of the alert  order,  the  same  shall  also be
deemed abandoned; or
[(d)  Having  paid  the  assessed  duties,  taxes  and  other  charges,  the  owner,   importer  or
consignee or interested party after due notice, fails to claim the goods within thirty (30)
days from payment. For this purpose, the arrastre or warehouse operator shall report the
unclaimed  goods to the  District Collector for disposition pursuant to the provisions of
this Act; or]
[(e)]  (D) When the  owner or  importer fails to claim  goods  in  customs bonded  warehouses
within the prescribed period.
47
48        SEC. 23. Seetion  ll3l  ofRANo.10863  is herebyamendedtoreadas follows:
49
•CSIE:C.1131. Authority of the Commissioner to  [Make]  Compromise. -Tshoiect to the
approval  of the Secretary of Finance,]  The Commissioner may compromise any CIVIL 0R
administrative  case  arising  under  this  Act  involving the  imposition  of fines  and  surcharges,
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including those arising from the conduct of a post clearance audit,  unless otherwise specified
by law.
"Cases   involving   forfeiture   proceedings   shall,   however,   not   be   subject   to   any
compromise  UNLESS  APPROVHD   BY  THE   COURT,  ON  APPHAL.  PROP7DED,
THAT  AI`nr  CoMPROMISE  INVoLVING  TIIE  IMpoSITloN  oF  FINEs  AND
SURCHARGES AMOUNTING T0 TEN MILLION PESOS 0HP 10,000,000.00) AND
ABOVE  SHALL  BE  SUBJECT  T0  THE  APPROVAL  0F  THE  SECRETARY  OF
FINANCE."
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11         SEC.24. Section  ll35 ofRANo.10863  isherebyamendedtoreadas follows:
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CcsiEC. \13S. Supervision and Control over Criminal and Civil Proceedings. -C.rv.it and
criminal actions and proceedings  instituted on behalf of the Government under the authority
of  this  Act  or  other  laws  enforced  by  the  Bureau  shall  be  brought  in  the  name  of the
[g]Govemment of the Philippines and shall be prosecuted and handled by the Bureau with the
assistance  of  the  Department  of  Justice  (DOJ)  OR  OFFICE   OF  THE   SOLICITOR
GHNERAL (OSG): Provi.c7ec7, That the determination of the existence of probable cause and
the subsequent filing of any criminal  [or civil] case with the proper court against violators of
this  Act  shall  exclusively  belong  to  the  DOJ:  Provided,  however,  That  no  civil  or  criminal
action for the recovery of duties of the enforcement of any fine, penalty, forfeiture [under] OR
ANY   VIOLATION  0F  this   Act   shall   be  filed   in   court  without  the  approval   of  the
Commissioner."
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25        SEC.25. Section  I l38 ofRANo.10863  is herebyamendedtoreadas follows:
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27                                       "SEC.1138.  FrcrzfcJ /#ves/7.gc7/7.o#  c7Jzc7 Prosecw//.o7i.  -No criminal  case for violation of
28                        this  [title] ACT shall be instituted without the approval of the commissioner.  [pursuant to the
29                        provisions of this Act.]
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31                                          "xxx.„
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33        SEC.26. Section  I l4l  ofRANo.10863  is herebyamendedtoreadas follows:
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"SEC.1141. Mode of Disposition. -x x x.
"x x x.
"THE   BUREAU   MAY   HNGAGE   PRIVATE   SHRVICE   PROVIDERS   T0
CONDUCT  PUBLIC  AUCTIONS  PURSUANT  T0  SECTION  1513  0F  THIS  ACT:
PROPTDED,     THAT     THE     SERVICE     PROVIDER     ENGAGED     SHALL     BE
RESPONSIBLE  FOR  UNDHRTAKING  ALL  THE  PUBLIC  AUCTI0NS  OF  THE
BUREAu:   PROITDED      FLrRrfrEj{,   THAT   ACTIVITIEs   oF   THE   sERvlcE
PROVIDER   SHALL   BE   LIMITEI)   T0   NON-SOVEREIGN   AND   ANCILLARY
FUNCTIONS    0F  THE  BUREAU:  PROVIDED  FINALLY,  THAT  THE  BUREAU
SHALL   RETAIN   JURISDICTIONAL   CONTROL   AND   SUPERVISION   OVER
THESE GOODS AS WELL AS THE OPERATIONS OF THE SERVICE PROVIDER
SO CONTRACTED."
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50        SEC. 27. Section  I l47 (a) ofRANo.10863  is hereby amended to read as follows:
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"SEC.   1147.   D/.spas/./z.oH   o/ Jig.T/rz.c/ec7  GoocJLs.   -Restricted   goods   as   described   in
Section  119 of this Act shall be disposed as follows:
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(a)              Dynamite,   gunpowder,   ammunitions   and   other   explosives,   firearms   and
weapons   of  war,   and   parts   thereof  shall   be  turned   over  to  the   [AFP]   PHILIPPINE
NATIONAL POLICE q'NP);
(b)              xx x;
(c)              xxx;
(d)              x x x;
(e)              x x x;
(f)              x x x;
15
16        SEC. 28. Section  l204 ofRANo.10863  is herebyamendedtoread as follows:
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"SEC.  1204.  Manifest  Required  of Vessel  from  Foreign  Port.  - Every  vessel  from  a
foreign port must have on board a complete manifest of all its cargoes.
"All  cargoes  intended  to  be  landed  at  a  port  in  the  Philippines  must  be  described  in
separate manifests for each port of call.  Each manifest shall  include the port of departure and
the port of delivery  with the marks,  numbers,  quantity,  and description  of the packages  and
the  ULTIMATE  consignees  COVERED  BY  THE  BILL  0F  LADING  0R  AIRWAY
BILL. Every vessel from a foreign port must have on board complete manifests of passengers
and baggage,  in the prescribed form,  setting forth the destination and all particulars required
by immigration laws.  Every vessel shall present to the proper customs officers upon arrival in
ports of the Philippines a complete list of all sea stores then on board.  If the vessel does carry
[cargo]  CARGOES  or  passengers,  the  manifest  must  show  that  no  cargo  or  passenger  is
carried from the port of departure to the port of destination in the Philippines.
"IN ADDITION, A VESSEL 0R AIRCRAFT FROM A FOREIGN PORT MUST
DECLARE IN THE INWARD CARGO MANIFEST, BILL OF LADING 0R AIRWAY
BILL TIIE  VALUE  OF THE ARTICLES  0R GOODS AS THEY APPEAR IN THE
COMMERCIAL INVOICE 0R LETTER 0F
CREDIT, OR BOTH. THE VALUH STATED   TIIEREIN MAY BE TIIE BASIS
FOR RISKI ASSESSMENT.
"A true and complete copy of the cargo manifest shall be electronically sent in advance
by  the  shipping  company,  NVOCC.  freight  forwarder,  cargo  consolidator,  or  their  agents
within  the  cut-off period  as  may  be  determined  by  the  Bureau  before  the  arrival  of the
carrying vessel at the port of entry.
"Upon arrival of the carrying vessel, the shipping company, NVOCC, freight forwarder.
cargo consolidator,  or their agents shall provide two (2) hard copies of the cargo manifest to
the  Bureau   in  case  the  port  of  entry   is  either  the  Port  of  Manila  (PoM)  or  the  Manila
International Container Port (MICP), and one ( I ) copy in the case of the other ports of entry.
"A cargo manifest shall in no case be changed or altered after entry of vessel, except by
means of an amendment, under oath, by the master, consignee or agent thereof, which shall be
attached  to  the  original  manifest:  Prov7.c7ec7,  That  after  the  invoice  and/or  goods  declaration
covering  an  importation  have  been  received  and  recorded  in  the  office  of the  appraiser,  no
amendment of the manifest shall be allowed, except when it is obvious that a clerical error or
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any  other  discrepancy  has  been  committed  in  the  preparation  of the  manifest,  without  any
fraudulent intent, the discovery of which would not have been made until after examination of
the importation has been completed."
4
5        SHC. 29. Section  ll26 ofRANo.10863  is hereby amendedtoreadas follows:
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"SEC  1226. Sz/pervj.s'/.o# c7#cJ Regz//cr/z.o72 a/ 7lfr/.rc7 Pc7r//.cs. - Third parties transacting with
the Bureau on behalf of importers and consignees shall be treated equally as true importers or
consignees[.Third parties transacting  with the  Bureau]  AND  shall  LIKEWISE  be  liable  for
acts committed in violation of this Act and related laws.
A.  [Upon  the  recommendation  of the]  THE  Commissioner,  WITH  THE  APPROVAL
0F the Secretary of Finance, shall issue rules and regulations to govern and regulate the
conduct   of  all   third   parties   dealing   directly   with   the   Bureau   in   relation   to   the
importation,  exportation,  movement, storage and clearance of goods for and on behalf
of another person. The rules and regulations shall provide for specific conditions when
third  parties  may  or  may  not  directly  transact  with  the  Bureau  WHICH  SHALL
INCLUDE   A   RISK   MANAGEMENT   SYSTEM   FOR   THIRD   PARTIES,
TAKING    INTO   ACCOUNT    THEIR   CAPITALIZATION,   VOLUItffl    OF
TRANSACTloNS,    TRACK    RECoRD,    AND    Ar`ry    OTHER    FACTOR
AFFECTING  THEIR CAPABILITY TO IMPORT,  EXPORT, MOVE,  STORE
0R CLEAR GOODS.  [shall provide a written notice in case such third parties are, for
valid reasons, barred from transacting with the Bureau]
B.  THE    BUREAU    SHALL    CREATE    A    COMMITTEE    COIVIPOSED    0F
REPRESENTATIVES   FROM   THE   BUREAU   0F   CUSTOMS   AND   THE
D E PART ME NT S        0F        FINAN C E ,        TRADE        AND        INDU STRY,
TRANSPORTATION,      AND       THE       NATIONAL       ECONOMIC       ANI)
DEVELOPMENT  AUTHORITY,  AND  OTHER  GOVERNMENT  AGENCIES
REGULATING  THIRD  PARTIES  THAT  TRANSACT  WITH  THE  BUREAU.
THE COMMITTEE, WHICH SHALL BE CHAIRED BY THE SECRETARY OF
FINANCE,   SHALL  PRESCRIBE   AND   REGULATE   RATES  AND   OTHER
CHARGES FOR THE  SHRVICES RENDERED BY THESE  THIRD PARTIES
IN   ACCORDANCE   WITH   TIIE   TRADE   FACILITATION   PLANS   AND
PROGRAMS 0F THE COUNTRY.
Third party  is  defined  under  Section  102  [(uu)]  (TT) of this  Act.  [For purposes  of this
section,  third  parties  may  also  refer  to  logistics  providers,   importers,  exporters,  carriers,
airlines,   shipping   lines,   shipping   agents,   forwarders,   consolidators,   port   and   terminal
operators, and warehouse operators, if such persons or entities transacted with the Bureau.]"
41
42        SHC. 30. Section  1400 ofRANo.10863  is hereby amended to read as follows:
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•CSEic. 1400. Misdeclaration,  Misclassifica[ion,  Undervaluation in Goods Declaration. -
Misdeclaration  as  to quantity,  quality,  description,  weight,  or measurement  of the  goods,  or
misclassification through insufficient or wrong description of the goods or use of wrong tariff
heading  resulting  to  a  discrepancy  in  duty  and  tax  to  be  paid  between   what  is   legally
determined upon assessment and what is declared, shall be subject to a surcharge equivalent to
two  hundred  fifty  percent  (250%)  of the  duty  and  tax  due.  No  surcharge  shall  be  imposed
when the discrepancy in duty AND TAX is less than ten percent (10%), or when the declared
tariff heading  is  rejected  in  a  formal  customs  dispute  settlement  process  involving  [difficult
or]   A   highly  technical   question   of  tariff  classification.   or   when   the  tariff  classification
declaration relied on an official government ruling."
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„x x x."
3
4        SHC. 31. Section  l505 ofRANo.10863 is hereby amended to read as follows:
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"SrfLC.  150S.  Authority  Of  Offiicial  to  Administer  Oaths  and  Take  Testimony.  -  The
Commissioner,  District  Collectors  and  their  deputies,  and  other  customs  ofricers  especially
deputized  by  the  COMMISSIONER  0R  THE  District  Collector  shall  have  authority  to
administer oaths and take testimony  in connection with any matter within the jurisdiction of
the    Bureau    and,    in   connection   therewith,    ISSUE    SUBPOENA   DUCES    TECUM
REQUIRING  THE   PRODUCTION   [may  require  the  production]   of  relevant  papers,
documents, books and records in accordance with law."
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14        SEC. 32. Section  l512 ofRANo.10863  is hereby amendedto read as follows:
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CCS>Ejc.  1ST2..  Reward  to  Persons  Instrumental  in  the  Actual  Collecti()n  Of Additional
Revenues Arising from the  Discovery Of Violations Of this Act. -  A cash rowaird equ.ivalerit to
twenty percent (20%) OR TEN MILLION PESOS Q'HP  10,000,000.00), WHICHEVER
IS LOWER, of the actual proceeds from the sale of smuggled goods and confiscated goods or
actual  collection  of additional  revenues  shall  be  given  to  the  [customs  and]  non-customs
informers  or  whistleblowers  who  are  instrumental  in  the  collection  of additional  revenues
arising  from   the   discovery   of  violations   of  this   Act   in   accordance   with  the  rules   and
regulations  to  be  issued  by  the  Secretary  of  Finance:  PROP7DED,  THAT  THE  NON-
CUSTOMS INFORMERS OR Wrr±[STLEBLOWERS ARE NOT RELATED T0 ANY
CUSTOMS OFFICER 0R EMPLOYEE WITHIN THE FOURTH CIVIL DEGREE 0F
CONSAGUINITY 0R AFFINITY."
27
28        SEC.   33.   J#cp/eme#/!.#g   Jt#/cs   a73c7  Reg#/c7/i.o#s.   -   The   Secretary   of  Finance   shall,   upon   the
29       recommendation of the commissioner of customs, promulgate the necessary rules and regulations for
30        the effective implementation of this Act.
31
32        SEC.  34.  Sapcrrc7bz.//ty C'/c}z#c.  -lf any  provision  of this  Act  is  held  unconstitutjonal  or  invalid,  all
33        other provisions not affected thereby shall remain valid.
34
35        SEC.  35.  Repea/z.7®g  C/flwsc.  -  All  laws,  deerees,  executive  orders,  rules  and  regulations  or  parts
36       thereof, which are inconsistent with this Act, are hereby repealed, amended or modified accordingly.
37
38        SEC. 36. EjTj/ec/j.w./);. -This Act shall take effect fifteen (15) days after  its publication  in the Oj7jJ}c7.c7/
39        Gc}zc//c or in a newspaper of general circulation.
40
41
Approved,
14