" 
SIXTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
;~b6 
S,No, __ _ 
Introduced by Senator Ralph G, Recto 
Explanatory Note 
" ~ 
,Cl 
JUL -4 mQ :20 
The centerpiece of President Benigno Aquino Ill's platform of governance is curbing 
corruption in all levels of government, particularly in revenue-generating arms of the State such 
as the Bureau ofInternal Revenue (BIR) and the Bureau of Customs (BOC), 
Experts who cooperated with The Arangkada Philippines Project stated that the BOC 
remains a corrupt agency involved in technical smuggling, leading to tens of billions in VAT and 
other revenue losses, [I] 
At the Arangkada Philippines Forum held on February 26, 2013, former Finance 
Secretary Roberto de Ocampo said that the total value of smuggled commodities in the 
Philippines is estimated at almost $20 Billion annually, [2] 
The business sector considers smuggling as a major concern because it weakens the 
domestic market for manufacturers and for importers who pay duties and taxes, Experts said that 
for as long as smuggling provides better profits than manufacturing, the economy will be one of 
traders and smugglers rather than manufacturers, 
This bill therefore seeks to address the smuggling problem in the country by amending 
pertinent provisions of presidential Decree No, 1464 or the Tariff and Customs Code. 
Aptly entitled "Anti-Smuggling Act of 2013," this proposed legislation aims to make 
smuggling a much more serious offense by imposing a maximum penalty oflife imprisonment if 
the amount of goods smuggled into the country exceeds PI million, plus a fine in an amount 
equal to the appraised value plus fifty percent thereof. Graduated penalties are also imposed 
depending on the value of the goods illegally imported. 
This bill also empowers the Commission on Audit (COA) to ensure transparency and 
accountability in the BOC by conducting a post-entry audit on the operational processes, 
collection and financial reporting, fiscal and personnel performance, system efficiency, internal 
control, information and communication flow, and fraudulent and illegal practices upon the 
recommendation of the Bureau or petition duly made by the local industry, 
Under this bill, the COA, in the conduct of its audit and investigations, is also given the 
authority to issue subpoenas duces tecum and ad testificandum or require the production of 
documents and require Bureau personnel to respond to its inquiries. Any person who shall refuse 
to abide by the subpoena issued by COA may be held liable for contempt. 
1 The Arangkada Philippines Project (TAPP). The American Chamber of Commerce of the Philippines, Inc. (AmCham). "2013 
Arangkada Philippines Second Anniversary forum: Assessment of Year 2012" 
2 Rappler, Cai Ordinario. "PH loses $20-B to smuggling each year, 26 February 2013" htto:l/www.rappler.comibusinessI22623-
%E2%80%98ph-Ioses-$20-b-to-smuggling-each-year%E2%80%99 
(Accessed on 20 March 2013) 


This piece of legislation also updated the list of acts that constitute smuggling and 
expanded the definition of technical smuggling to include other acts not otherwise defined and 
punished under present laws. 
Other amendments include an array of new stringent requirements for surety companies 
and bonded warehouses doing business in the BOC, as well as the creation of a valuation library 
which is to be updated at all times and be made available for public viewing. 
Smuggling and corruption in the BOC continue to deny government coffers of the much-
needed revenues, hence, the immediate passage of this bill now becomes imperative. 
(njma 


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SIXTEENTH CONGRESS OF THE 
) 
J;}11;'f llt ii;,;~ 
; dMt,t 
I 
REPUBLIC OF THE PHILIPPINES) 
First Regular Session 
) 
'13 
JU~ -4 
1\10 :19 
SENATE 
S. No. 
Introduced by Senator Ralph G. Recto 
",,' 
AN ACT 
INSTITUTING REFORMS IN THE BUREAU OF CUSTOMS, INCREASING 
PENALTIES FOR SMUGGLING AND FOR OTHER PURPOSES, THEREBY 
AMENDING 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. 
SECTION 1. Short Title. - This Act shall be known and cited as the "Anti-Smuggling 
Act of2013." 
SEC. 2. Section 201, Title II, Part 1 of the Tariff and Customs Code of the Philippines, 
as amended, is hereby further amended to read as follows: 
"Sec. 201. Basis of Dutiable Value. - (A) Method One. - Transaction Value. - The 
dutiable value of an imported article subject to an ad valorem rate of duty shall be the 
transaction value, which shall be the price actually paid or payable for the goods when 
sold for export to the Philippines, adjusted by adding: 
(1) The following to the extent that they are incurred by the buyer 
but are not included in the price actually paid or payable for the imported 
goods: 
( a) Commissions and brokerage fees (except buying 
I 
commissions); 
(b) Cost of containers; 
(c) The cost of packing, whether for labour or materials; 
(d) 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 
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charge or at a reduced cost for use in connection with the 
production and sale for export of the imported goods; 
(e) 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 snbsequent 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 
tr~nsport of the imported goods from the country of exportatiop 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 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: 
(i) 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; 
(c) 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 
(d) 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 
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(i) They are officers or directors of one another's 
businesses; 
(ii) They are legally recognized partners 
III 
business; 
(iii) 
There 
exists 
an 
employer-employee 
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. 
Persons who are associated in business with one 
another in that one is the sale agent, sale distributor or sale 
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. 
THE TRANSACTION VALUE OF IMPORTED GOODS AB9VE SHALL 
BE ACCEPTED PROVIDED THAT: 
1) 
THE SALE IS IN THE ORDINARY COURSE OF TRADE 
UNDER FULLY COMPETITIVE CONDITIONS; 
2) 
THE SALE DOES NOT INVOLVE ANY ABNORMAL 
DISCOUNT OR REDUCTION FROM THE ORDINARY COMPETITIVE 
PRlCE; 
3) 
THE SALE DOES NOT INVOLVE SPECIAL DISCOUNTS 
LIMITED TO EXCLUSIVE AGENTS; AND 
4) 
OBJECTIVE AND QUANTIFIABLE DATA EXIST WITH 
REGARD TO THE ADmSTMENTS REQUIRED TO BE MADE, UNDER 
THE PROVISIONS OF SECTION 201 ABOVE, TO THE TRANSACTION 
VALUE. 
"(B) Method Two. - Transaction Value of Identical Goods. - x x x 
"(C) Method Three. - Transaction Value o/Similar Goods. - x x x 
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"(D) Method Four. - Deductive Value. - x x x 
"(1)xxx 
"(2) The usual costs of transport and Illsurance and associated costs 
incurred within the Philippines; [and] 
"(3) x x x 
"(4)xxx 
"x x x." 
"(E) Method Five. - Computed Value. - x x x 
, 
(F) Method Six. - Fallback Value. - If the dutiable value cannot bel determined 
I 
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 III 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; 
(5) The price of goods for export to a country other than the Philippines; 
(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 circ~mstances whatsoever: 
PROVIDED, FURTHER, Tl-IAr SURETY 
BONDS FROM A SURETY COMPANY WHICH HAS AN OUTSTANDING 
, 
I 
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 
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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. 
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 purposes. 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 id accordance 
with the provisions of Subsection (A) hereof. 
I 
"REFERENCE INFORMATION OBTAINED FROM A VALUE DATA BASE 
APPROVED BY THE COMMISSIONER OF CUSTOMS, INCLUDING REVISION 
ORDERS, SHALL BE USED TO TEST THE TRUTHFULNESS AND ACCURACY 
OF A GIVEN VALUE DECLARATION. A VALUE DECLARATION WHICH FALLS 
OUTSIDE OF THE VALUE RANGE OF REVISION ORDERS SHALL TRIGGER A 
VALUATION QUERY ON THE APPLICABILITY OF THE METHOD OF 
VALUATION USED BY THE IMPORTER, IN WHICH CASE THE VALUATION 
ISSUE SHALL BE DECIDED BY THE VALUATION AND CLASSIFICATION 
REVIEW 
COMMITTEE 
(VCRC) 
ON 
THE 
APPROPRIATE 
METHOD 
OF 
VALUATION PRESCRIBED UNDER THIS SECTION. FOR PURPOSES OF THIS 
SECTION, A 'REVISION ORDER' SHALL REFER TO THE DOCUMENT WHICH 
INDICATES THE LATEST VALUES OF A PRODUCT(S), WHICH SHALL BE 
APPLICABLE AND EFFECTIVE WITHIN THE PERIOD OF NINETY (90) DAYS 
FROM DATE OF ITS ISSUANCE BY THE BUREAU OF CUSTOMS, AFTER 
CONSULTATION WITH INDUSTRY REPRESENTATIVES. THESE REFERENCE 
INFORMATION SHALL BE IMMEDIATELY PUBLISHED BY THE BUREAU OF 
CUSTOMS IN ITS WEBSITE. 
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"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 II of the World Trade Organization Agreement on customs valuation, be deemed 
that the customs 'value of the imported goods cannot be determined under Method One. 
Before taking a final decision, the Collector of Customs shall communicate to the 
importer, in writing if requested, his grounds for doubting the truth or accuracy of the 
particulars or documents produced and give the importer a reasonable opportunity to 
respond. When a final decision is made, the customs administration 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, as amended, is 
hereby further amended to read as follows: 
"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, 
BANOKO SENTRAL NO PILIPINAS [Central Bank of the Philippines], Board of 
Investments, Department of Budget AND MANAGEMENT, and other economic 
agencies of the government, on or before December 30, of each year. 
"F or more scientific preparation of the armual report, the Commissioner shall 
cause the computerization of the data contained in the liquidated entries filed with the 
Bureau of Customs." . 
SEC. 4. Section 609 of the Tariff And Customs Code Of The Philippines, asl amended, is 
hereby further amended to read as follows: 
"SEC. 609. Commissioner to Furnish Copies of Collectors' Liquidated 
Duplicates. - The Commissioner shaH regularly furnish the NATIONAL ECONOMIC 
AND DEVELOPMENT AUTHORITY, the BANOKO SENTRAL NG PILIPINAS 
[Central Bank of the Philippines], 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 
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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, 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 Collectot shall [have 
discretionary authority to] remit the assessment and collection of customs !luties, 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 Part 3 shall be inserted after Section 712 of the Tariff and Customs Code 
of the Philippines, as amended, which shall read as follows: 
"PART 3. - AUDIT, TRANSPARENCY AND ACCOUNTABILITY 
"SEC. 713. UPON THE RECOMMENDATION BY THE BUREAU OF 
CUSTOMS OR PETITION DULY MADE BY THE LOCAL INDUSTRY, THE 
COMMISSION ON AUDIT (COA) SHALL CONDUCT THE CORRESPONDING 
POST ENTRY AUDIT ON THE OPERATIONAL PROCESSES, COLLECTION AND 
FINANCIAL REPORTING, FISCAL AND PERSONNEL PERFORMANCE, SYSTEM 
EFFICIENCY, INTERNAL CONTROL, INFORMATION AND COMMUNICATION 
FLOW, FRAUDULENT AND ILLEGAL PRACTICES, AND SUCH OTHER AREAS 
AS MAY BE NECESSARY FOR THE EFFECTIVE OPERATION OF THE BUREAU 
OF CUSTOMS AND ITS ATTACHED AGENCIES. 
PROVIDED, 
THAT THE PRIVATE AUDITING FIRM 
SHALL BE 
DISQUALIFIED FROM CONDUCTING A POST ENTRY ON IMPORTERS WHERE 
ITS CLIENT HAS DIRECT OR INDIRECT BUSINESS INTEREST ON THE 
ARTICLES OR PRODUCTS SUBJECT MATTER OF THE AUDIT: 
PROVIDED, 
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FURTHER, THAT THE FEES TO BE PAID TO THE PRIVATE AUDIT~G FIRMS 
SHALL BE.oN CONTINGENT BASIS EQUIVALENT TO 20% OF IT'S/POSITIVE 
FINDINGS. 
IN THE CONDUCT OF ITS AUDIT AND INVESTIGATIONS, THE 
COMMISSION ON AUDIT SHALL HAVE THE AUTHORITY TO REQUIRE THE 
PRODUCTION OF DOCUMENTS AND REQUIRE BUREAU PERSONNEL TO 
RESPOND TO ITS INQUIRIES. FOR THIS PURPOSE, IT MAY ISSUE SUBPOENA 
DUCES TECUM AND AD TESTIFICANDUM. ANY PERSON WHO SHALL REFUSE 
TO ABIDE BY THE SUBPOENA SO ISSUED MAYBE HELD LIABLE FOR 
CONTEMPT." 
"SEC. 714. ON THE BASIS OF THE AUDIT CONDUCTED PURSUANT TO 
THE PRECEDING SECTIONS, THE RECOMMENDATIONS MADE BY THE COA 
SHALL HAVE PERSUASIVE WEIGHT AND SHALL BE PROMPTLY ACTED 
UPON BY THE COMMISSIONER WHO SHALL LIKEWISE HAVE THE 
AUTHORITY TO ORDER THE CONDUCT OF INVESTIGATIONS FOR THE 
PURPOSE OF INITIATING PROSECUTION OF FRAUD AND OTHER GRAFT AND 
CORRUPT PRACTICES IN THE BUREAU, AND SHALL RECOMMEND TO THE 
OMBUDSMAN THE FILING OF APPROPRIATE CRIMINAL CASES AGAINST 
THE ERRING PERSONNEL, AND TO IMPOSE ADMINISTRATIVE SANCTIONS." 
"SEC. 715. THE COMMISSION ON AUDIT SHALL SUBMIT AN ANNUAL 
REPORT TO THE COMMISSIONER, THE SECRETARY OF FINANCE, THE 
OFFICE OF THE PRESIDENT, AND THE CONGRESS, STATING THE RESULT OF 
ITS INSPECTIONS AND AUDITS. THE REPORT SHALL CONTAIN ALL THE 
NECESSARY 
DATA WHICH LED 
TO 
ITS 
RECOMMENDATIONS 
AND 
FINDINGS, AND SHALL BE MADE AVAILABLE TO THE PUBLIC THROUGH 
ELECTRONIC AND NON-ELECTRONIC MEANS, UNLESS NON-DISCLOSURE IS 
WARRANTED BY NATIONAL SECURITY." 
I 
SEC. 8. A new section to be known as Section 100I-A is hereby inserted ~fter Section 
1001 of the Tariff and Customs Code of the Philippines, as amended, which shall read as 
follows: 
"SEC. 
IDOl-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 STOW AGE PLAN 
OF THE VESSEL ENGAGED IN FOREIGN TRADE SHALL BE TRANSMITTED TO 
THE BUREAU OF CUSTOMS, DEPARTMENT OF TRADE AND INDUSTRY AND 
DEPARTMENT OF AGRICULTURE 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, 
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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 (I) HOUR PRIOR TO THE AIRCRAFT'S 
ARRIVAL IN THE PORT OF ENTRY." 
SEC. 9. 
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 o/Vesseljrom Foreign Port. -_ Every vessel from 
a 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 dep~rture and the port of delivery with the marks, numbers, ~uantity and 
description ~f the packages and the names of the consignees thereof. Every 'Jessel from a 
foreign port must have on board complete manifests of passengers and their baggage, in 
the prescribed fonn, 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 UPON ARRIVAL TO THE BUREAU OF CUSTOMS 
AND THE PHILIPPINE PORTS AUTHORITY WITHIN FORTY-EIGHT (48) 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 andlor 
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 been committed in the preparation of the manifest, without any 
fraudulent intent, discovery of which would not have been made until after examination 
has been completed. PRIOR TO RELEASE OF THE CARGO, THE VERACITY OF 
THE AMENDMENT SHALL BE EXAMINED BY THE COLLECTOR OF CUSTOMS 
FOR THE PURPOSE OF INVOKING PENAL PROVISION UNDER SECTIONS 2503 
AND 3602 OF THIS CODE." 
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SEC. to. 
Section 1007 of the Tariff and Customs Code of the Philippines, as 
amended, is hereby further amended to read as follows: 
"SEC. 1007. Manifest for Commission on Audit and Collector. - Papers to be 
Deposited with Consul. - Immediately after the arrival of a vessel fTOm a foreign port, 
the master shall deliver or mail to the Chairman, Commission On Audit, Manila, a copy 
of the cargo manifest properly indorsed by the boarding officer, and UPON ARRIVAL, 
he shalI present to the Collector the original copy of the cargo manifest and, for 
inspection, the ship's register or other document in lieu thereof, together with the 
clearance and other papers granted to the vessel at the port of departure for the 
Philippines. 
"WITHIN THREE (3) DAYS FROM RECEIPT OF THE CARGO MANIFEST 
FROM THE MASTER OF THE VESSEL, THE COLLECTOR SHALL POST COPIES 
THEREOF AT A CUSTOMS BULLETIN BOARD FOR TWO (2) CONSECUTIVE 
WEEKS." 
SEC. 11. Section 1008 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby further amended to read as follows: 
"SEC. 1008. Transit Cargo AND FOREIGN TRANSHIPMENT OF GOODS.-
When transit cargo from a foreign port or other local ports is forwarded from the port of 
importation separate manifest, in triplicate, shall be presented by each carrier. 
"WITHIN FIVE (5) 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 APPLIEI? FOR FOREIGN TRANSSHIPMENT SUCH AS THEI SHIPPING 
COMPANY OR AGENT, TRANSSHIPMENT OPERATOR OR THE 9WNER OF 
THE GOODS. SHALL SUBMIT TO THE BUREAU OF CUSTOMS ANDIOR 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 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 ANDIOR BUREAU OF INTERNAL REVENUE SHALL BE 
ACCOMP ANIED BY A COpy OF THE INWARD FOREIGN MANIFEST 
Page 10 of43 


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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 
CONSTITUTE PRIMA FACIE PROOF THAT THE GOODS 
ALLEGEDLY 
TRANSSHIPPED WERE IN FACT DIVERTED TO THE PHILIPPINES, WITHOUT 
THE CORRESPONDING PAYMENT OF DUTIES AND TAXES WHICH SHALL BE 
IMMEDIATELY COLLECTED AND PAID BY THE PARTY(IES) WHICfH FAILED 
TO SUBMIT TIlE CERTIFICATE OF DISCHARGE. THEREAFTER AND UNTIL 
I 
THE REQUIRED CERTIFICATE OF DISCHARGE AND THE INWARD FOREIGN 
MANIFEST 
SHALL 
HAVE 
BEEN 
SUBMITTED, 
ALL 
SUBSEQUENT 
TRANSSHIPMENT OF GOODS TO AND FROM THE PHILIPPINES BY THE SAID 
PARTY(IES) WITHOUT THE PAYMENT OF DUTIES AND TAXES SHALL BE 
DISALLOWED. THE SUBMISSION OF THE CERTIFICATE OF DISCHARGE IS 
REQUIRED ONLY FOR TRANSSHIPPED GOODS SUBJECT TO EXCISE TAX OF 
MORE THAN TWENTY PERCENT (20%) IN ADDITION TO THE PAYMENT OF 
TAXES AND DUTIES IF SUCH GOODS ENTER THE DOMESTIC MARKET." 
SEC. 12. Section 1 024 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby further amended to read as follows: 
"SEC 1204. 
Liability of Importer for Duties. - Unless relieved by laws or 
regulations, the liability for duties, taxes, fees and other charges attaching on importation 
constitutes a personal debt from the importer to the government which can be discharged 
only by payment in full of all duties, taxes, fees and other charges legally accruing. It 
constitutes a lien upon the articles imported which may be enforced while such articles 
are in custody or subject to the control of the government. AS USED IN THIS CODE, 
OTHER CHARGES SHALL INCLUDE LIENS OF GOVERNMENT REGULATORY 
AGENCIES." 
SEC. 13. Section 1025 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby further amended to read as follows: 
"SEC. 1025. Export Product to Conform to Standard Grades AND EXPORT 
MARKING REQUIREMENTS. - A Collector shall not permit products for which standard 
grades OR "EXPORT ONLY" OR "FOR EXPORT" MARKING REQUIREMENTS 
have been established by the government THROUGH LAWS OR REGULATIONS to be 
laden aboard a .vessel clearing for a foreign port, unless the shipment co~forms to the 
requirements of law OR REGULATION relative to the shipment of such products: 
I 
PROVIDED, HOWEVER, THAT EXPORT OF PRODUCTS MARKED "NOT FOR 
EXPORT" SHALL BE PROHIBITED, AND THAT LABELS 
OR MARKS 
Page 11 of43 


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INDICATING "PLACE OF SALE" OF THE PRODUCT OR "NOT FOR EXPORT" 
MARKINGS SHALL NOT BE CHANGED, TAMPERED OR CONCEALED. 
"GOODS INTENDED FOR EXPORT WHICH DO NOT COMPLY WITH 
STANDARD GRADES, EXPORT MARKING REQUIREMENTS, OR WHOSE "NOT 
FOR EXPORT" OR "PLACE OF SALE" LABELS HAVE BEEN CHANGED, 
TAMPERED OR CONCEALED SHALL BE DISPOSED OF IN ACCORDANCE 
WITH THIS CODE, EXCEPT THROUGH EXPORTATION." 
SEC. 14. Section 1210 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby further amended to read as follows: 
"SEC. 1210. Disposition o/Imported Articles Remaining on Vessel After Time/or 
Unlading. - Imported articles remaining on board any vessel after the expiration of the 
said period for discharge and not reported for transshipment to another port, may be 
unladen by customs authorities and stored at the vessel's expense. 
"Unless prevented by causes beyond the vessel's control, such as port congestion, 
strikes, riots, or civil commotions, failure of vessel's gear, bad weather, and similar 
causes, articles so stored shall be entered within [thirty] FIFTEEN ([30]15) days, which 
shall not be extendible, from the date of discharge of the last package from the vessel or 
aircraft and shall be claimed within fifteen (15) days, which shall likewise not be 
extendible from the date of posting of the notice to claim in conspicuous flaces in the 
Bureau of Customs. If not entered or not claimed, it shall be disposed of in accordance 
with the provisions of this Code." 
I 
SEC. 15. A new section, to be known as Section 1212 is hereby inserted in the Tariff 
and Customs Code of the Philippines, as amended, to read as follows: 
"SEC. 1212. IMPORT PERMIT/IMPORT AUTHORITY FOR AGRICULTURAL 
PRODUCTS. - IMPORTED AGRICULTURAL PRODUCTS MUST BE COVERED 
BY A VALID IMPORT OR QUARANTINE PERMIT ISSUED BY THE 
DEPARTMENT OF AGRICULTURE OR ITS CONCERNED BUREAU PRIOR TO 
28 
IMPORTATION INTO THE PHILIPPINES. 
NO AGRICULTURAL PRODUCTS 
29 
MUST BE ACCEPTED FOR LOADING AND/OR TRANSPORT BY A VESSEL OR 
30 
AIRCRAFT INTO THE COUNTRY IF THESE AGRICULTURAL PRODUCTS HAVE 
31 
NOT BEEN AUTHORIZED THROUGH AN IMPORT PERMIT OR IMPORT 
32 
AUTHORITY ISSUED BY THE DEPARTMENT OF AGRICULTURE PRIOR TO 
33 
SHIPMENT. 
THE SAME AGRICULTURAL PRODUCTS MUST BE SHIPPED 
34 
BACK TO THE COUNTRY OF ORIGIN BY THE IMPORTER! CONSIGNEE 
35 
THROUGH THE SAME 
CARRIER THAT 
LOADED/TRANSPORTED, 
OR 
36 
BROUGHT IN THE PRODUCTS: 
PROVIDED, 
THAT ANY IMPORTED 
37 
AGRICULTURAL PRODUCT THAT WAS ISSUED AN IMPORT PERMIT OR 
38 
IMPORT AUTHORITY AFTER ENTRY INTO THE PHILIPPINES, WHEN SUCH 
Page 12 of43 


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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. 16. Section 1302 of the Tariff and Customs Code of the Philippines, is amended, 
is hereby further amended to read as follows: 
I 
"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 subj ect 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 
"(c) Constructive warehousing and immediate exportation. 
"FOR PURPOSES HERETO, ALL IMPORT 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 shall be subject to the provisions of Title V, Book II ofthis 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. 17. Secti6n 1313 of the Tariff and Customs Code of the Philippines, las amended, 
is hereby further amended to read as follows: 
I 
"SEC. 1313. 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 id not specifically classified 
in this Code, the interested party, importer or foreign exporter may submit to the 
Tariff Comfnission a sample together with a full description of its component 
materials arid uses, and request it in writing to indicate the heading under which 
Page 13 of 43 


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the article is or shall be dutiable, and the Tariff Commission shall comply with 
such requests within thirty days from receipt thereof if it is 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 ARRN AL 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, mkESS 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." 
SEC. 18. Section 1401 of the Tariff and Customs Code of the Philippines as amended, is 
hereby further amended to read as follows: 
"SEC. 1401. Conditions for Examination. -
x x x 
"(1)xxx 
"x x x 
"(5) The importer disagrees with the findings as contained in the government 
surveyor's report; 
"(6) The articles are imported through air freight where the Commissioner or 
Collector has knowledge that there is a variance between the declared and trne quantity, 
measurement, weight, and tariff classification; OR 
"(7) THE PRODUCT DESCRIPTION OF THE SHIPMENT IS NOT IN 
ACCORDANCE WITH THE EXISTING HARMONIZED SYSTEMS CODE." 
Page 14 of 43 


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SEC. 19. A new, section to be known as Section l40l-A is hereby inserted a:fter Section 
2 
1401 of the Tariff and Customs Code of the Philippines, as amended, which shall read as 
3 
follows: 
4 
"SEC. 1401-A. VALUATION LIBRARY -
THE COMMISSIONER SHALL 
5 
ENSURE THAT THERE SHALL BE A VALUATION LIBRARY, WHICH SHALL BE 
6 
KEPT UP TO DATE AND MAINTAINED USING THE BEST AVAILABLE 
7 
TECHNOLOGY. THE VALUATION LIBRARY SHALL BE MADE READILY 
8 
AVAILABLE TO THE PUBLIC." 
9 
SEC. 20. Section 1403 of the Tariff and Customs Code of the Philippines, as amended, 
10 
is hereby further amended to read as follows: 
11 
"Sec. 1403. Duties of Customs Officer Tasked to Examine, Classijj; and Appraise 
12 
Imported Articles. -
The customs officer tasked to examine, classifY, and appraise 
13 
imported articles shall determine whether the packages designated for examination and 
14 
their contents are in accordance with the declaration in the entry, invoice and other 
15 
pertinent documents and shall make· a return iu such a manner to indicate whether the 
16 
articles have been truly and correctly declared in the entry as regard their quantity, 
17 
measurement, weight, and tariff classification and not imported contrary to law. 
18 
SUBJECT TO THE GUIDELINES TO BE ISSUED BY THE COMMISSIONER WITH 
19 
THE APPROVAL'OF THE SECRETARY OF FINANCE, THE CUSTOMS OFFICER 
20 
[He] shall TAKE A REPRESENTATIVE [submit] sample 
OF THE IMPORTED 
21 
ARTICLE IN THE PRESENCE OF THE IMPORTER, CONSIGNEE OR THEIR 
22 
REPRESENTATIVES to BE SUBMITTED TO the CUSTOMS laboratory OR TO THE 
23 
LABORATORY 
OF 
THE 
APPROPRIATE 
GOVERNMENT-
REGULATORY 
24 
AGENCY for analysis when feasible to do so [and] OR when such analysis is necessary 
25 
for the proper classification, appraisal and/or admission into the Philippines of imported 
26 
articles. THE CUSTOMS OFFICER SHALL TAKE INTO ACCOUNT THE RESULT 
27 
OF 
THE ANALYSIS 
IN 
THE 
CLASSIFICATION, 
APPRAISAD 
AND/OR 
28 
ADMISSION INTO THE PHILIPPINES OF THE IMPORTED ARTICLE. , 
29 
"Likewise, the customs officer shall determine the unit of quantity in which they 
30 
are usually bought and sold and appraise the imported articles in accordance with Section 
31 
201 of this Code. 
32 
Failure on the part of the customs officer to comply with his duties shall subject 
33 
him to penalties prescribed under 3604 of this Code." (RA 7650, April 06, 1993) 
34 
SEC. 21. 
Section l704( d) of the Tariff and Customs Code of the Philippines, as 
35 
amended, is hereby further amended to read as follows: 
36 
"SEC. 1704. Abatement or Refund of Duties on Articles Lost or Destroyed After 
37 
Arrival. - x x x 
38 
"a. x x x 
Page 15 of 43 


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"x x x 
2 
"d. 
While released under irrevocable domestic letter of credit, bank 
3 
guarantee or bond for export except in case of loss by theft: PROVIDED THAT 
4 
ABATEMENT SHALL BE ALLOWED UPON PROOF OF LOSS DUE TO 
5 
FORCE MAJEURE OR ACTS OF GOD DULY SUPPORTED WITH PROPER 
6 
DOCUMENTS AND SWORN STATEMENTS." 
7 
SEC. 22. Section 1801 of the Tariff and Customs Code of the Philippines, as amended, 
8 
is hereby further amended to read as follows: 
9 
"SEC. 1801. Abandonment, Kinds and Effects of -
An imported article is 
10 
deemed abandoned under any ofthe following circumstances: 
11 
"a. 
When the owner, importer, consignee of the imported article 
12 
expressly signifies in writing to the Collector of Customs his Intention to 
13 
abandon; or 
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. "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 AND ARRASTRE CONTRACTORS 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 
TBE 
SHIPPING 
LINES, 
SHIPPING 
COMPANIES, I FREIGHT 
Page 16 of43 


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FORWARDERS, CONSOLIDATORS, BREAK BULK AGENTS AND THEIR 
2 
AGENTS AND SUB-AGENTS AND ARRASTRE CONTRACTORS TO 
3 
COMPLY HEREWITH SHALL CONSTITUTE A GROUND FOR THE 
4 
SUSPENSION OF THEIR LICENSES OR AUTHORITY TO ENGAGE IN 
5 
THEIR RESPECTIVE LINE OF ACTIVITIES IN THE IMPORTATION 
6 
OPERATIONS 
OR WHEN 
THERE 
IS 
A 
WRITTEN 
DENIAL OF 
7 
OWNERSHIP FROM THE PERSON INDICATED ON THE MANIFEST OR 
8 
BILL OF LADING AS THE OWNER, IMPORTER, OR CONSIGNEE OF THE 
9 
IMPORTED ARTICLE. 
10 
"Any person who abandons an article or who fails to claim his importation 
11 
as provided for in the preceding paragraph shall be deemed to have renounced all 
12 
his interests and property rights therein." (R.A. 7651, June 4, 1993) 
13 
SEC. 23. Section 1802 of the Tariff and Customs Code of the Philippines, as amended, is 
14 
hereby further amended to read as follows: 
15 
"SEC. 1802. Abandonment 0/ Imported Articles. - An abandoned article shall ipso 
16 
facto be deemed the property of the Government. ALL ABANDONED ARTICLES 
17 
SHALL BE AUTOMATICALLY SUBJECT TO AUCTION AND SHALL IN NO 
18 
CASE BE SUBJECT TO SETTLEMENT OR COMPROMISE. 
19 
"AN 
UPDATED 
LISTING 
OF 
ALL 
ABANDONED 
SHIPMENTS 
20 
SCHEDULED FOR AUCTION SHALL BE POSTED ON THE OFFICIAL WEBSITE 
21 
OF THE BUREAU OF CUSTOMS AND AT THE MAIN ENTRANCE OF CUSTOMS 
22 
HOUSES. 
23 
"Nothin~ in this section shall be construed as relieving the ownerl or importer 
24 
from any criminal liability which may arise from any violation of law qommitted in 
25 
connection with the importation of abandoned article. 
26 
"Any official or employee of the Bureau of Customs or of other government 
27 
agencies who, having knowledge of the existence of an abandoned article or having 
28 
control or custody of such abandoned article, fails to report to the Collector within 
29 
twenty-four (24) hours from the time the article is deemed abandoned shall be punished 
30 
with the penalties prescribed in Paragraph I, Section 3604 of this Code." (RA 7651, June 
31 
4, 1993) 
32 
SEC. 24. Section 1901 of the Tariff and Customs Code of the Philippines, as amended, 
33 
is hereby futiher amended to read as follows: 
34 
"SEC. 1901. Establishment and Supervision a/Warehouses. - When the business 
35 
of the port requires such facilities, the Collector, subject to the approval of the 
36 
Commissioner, shall designate and establish INDUSTRY SPECIFIC warehouses for use 
37 
as public and private bonded warehouses, sheds or yards, or for other special purposes. 
38 
ALL SUCH WAREHOUSES SHALL BE ACCREDITED BY AN ACCREDITATION 
Page 17 of43 


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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. 
"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 I CUSTOMS 
COLLECTOR SHALL CONDUCT SPOT CHECKS AND PERIODIC AUDITS TO 
I 
ENSURE tHAT APPLICABLE CUSTOMS LAWS AND REGULATIONS ARE 
COMPLIED WITH BY BONDED FACILITIES." 
SEC. 25. Section 1902 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby further amended to read as follows: 
"SEC. 1902. Responsibility of Operators. - The operators of bonded 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. 26. Section 1903 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby further amended to read as follows: 
"SEC. 1903. Bonded Warehouses. - Application for the establishment of bonded 
warehouses must be made in writing and filed with the Collector, 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. 
"Upon receipt of such application, the Collector shall cause an examination of the 
premises, with r.eference particularly to its location, construction and means!provided for 
the safekeeping of articles. THE COLLECTOR SHALL LIKEWISE DETE~MINE THE 
OWNERSHIP OF THE APPLICANT BONDED WAREHOUSE OR TO VERIFY IF 
OWNERS OF A BONDED WAREHOUSE WHICH HAD BEEN CLOSED DUE TO 
ITS NON-COMPLIANCE WITH CUSTOMS LAWS and REGULATIONS WHICH 
Page 18 of43 


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HAVE ANY INTEREST THEREIN. [i]If 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 TAX AND DUTIES OF 
GOODS OF UNLIQUIDATED ENTRIES WHICH SHALL BE STORED THEREIN 
AT ANY GIVEN TIME. OTHERWISE, THE APPLICATION SHALL NOT BE 
GRANTED, AND AN AUTHORITY ALREADY GRANTED SHALL BE REVOKED. 
"THESE REQUIREMENTS SHALL LIKEWISE EXTEND TO REGISTERED 
LOCATORS OPERATING 
UNDER 
THE 
CHARTERS OF THE PHILIPPINE 
ECONOMIC ZONE AUTHORITY, THE SUBIC BAY METROPOLITAN AUTHORITY, 
AND OTHER FREEPORTS AND ECOZONES. " 
SEC. 27. Section 1904 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby amended to read as follows: 
"SEC. 1 :04. Irrevocable Domestic Letter of Credit or Bank G¥arantee [or 
Warehousi~g Bond]. - After articles declared in the entry for warehousin,g shall have 
been examined and the duties, taxes and other charges shall have been determined, the 
Collector shall require from the importer an irrevocable domestic letter of credit OR bank 
guarantee [or bond] equivalent to the amount of such duties, taxes and other charges 
conditioned upon the withdrawal of articles within the period prescribed by Section 
nineteen hundred and eight of this Code and for payment of any duties, taxes and other 
charges to which the articles shall be then subject and upon compliance with all legal 
requirements regarding their importation." 
SEC. 28. Section 1905 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby further amended to read as follows: 
"SEC. 1905. Discontinuance of Warehouses. - The use of any warehouse may be 
discontinued by the Collector at any time when conditions so warrant, or in the case of a 
private warehouse, upon receipt of written request to that effect from the operator thereof 
of the premises, provided all the requirements of the law and regulations have been 
complied with by said operator. A LEGITIMATE INDUSTRY GROUP MAY 
LIKEWISE RECOMMEND TO THE COLLECTOR THE DISCONTINUANCE OF 
THE BONDED WAREHOUSE ON GROUNDS OF NON-COMPLIANCE WITH THE 
REQUIREMENTS OF LAW AND REGULATIONS. When the dutiable article is stored 
in slIch premises, the same must be removed at the risk and expense of the operator and 
Page 19 of43 


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the premises shall not be relinquished, nor discontinuance of its use-authorized, until a 
careful examination of the account of the warehouse shall have been made. 
Discontinuance of any warehouse shall be effective upon official notice and approval 
thereof by the Collector." 
SEC. 29. Section 1906 of the Tariff and Customs Code of the Philippines, 1s amended, 
is hereby further amended to read as follows: 
"SEC. 1906. Entry of Articles for Warehousing. - The entry of articles for 
warehousing shall be in the required number of copies in the prescribed form, and shall 
be verified as in the entry of the articles for consumption. No warehousing entry shall be 
accepted for any article if from the entry, supporting documents and/or information such 
article is imported contrary to any law. THE CUSTOMS OFFICER MAKING THE 
ENTRY SHALL BE RESPONSIBLE FOR TRANSMITTING A COPY OF THE SAME 
TO THE DEPUTY COMMISSIONER FOR AUDIT AND TRANSPARENCY." 
SEC. 30. Section 1907 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby further amended to read as follows: 
"SEC. 1907. 
Withdrawal of Articlesfrom Bonded Warehouse. - Articles entered 
under irrevocable domestic letter of credit OR bank guarantee [or bond] may be 
withdrawn at any time for consumption, for transportation to another port, for exportation 
or for delivery on board a vessel or aircraft engaged in foreigu 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. 31. 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. -lrticles duly 
I 
entered for 'warehousing may remain in bonded warehouses for a maximum period of 
[one year] SIX (6) MONTHS, EXTENDIBLE FOR ANOTHER THREE (3) MONTHS 
from the time of RECEIPT OF THE WAREHOUSE. Articles not withdrawn at the 
expiration of the prescribed period shall be DEEMED ABANDONED AND SUBJECT 
TO DISPOSITION IN ACCORDANCE WITH THE PROVISIONS OF THIS CODE. 
EMBROIDERY 
AND 
SHIPBUILDING 
INDUSTRIES 
MAY STORE THEIR 
Page 20 of43 


1 
IMPORTS IN THE CUSTOMS BONDED WAREHOUSE FOR A PERIOD OF 
2 
TWENTY-FOUR (24) MONTHS. 
3 
"A DAILY RECORD OF ALL ENTRIES LIQUIDATED SHALL BE POSTED 
4 
IN A CONSPICUOUS PLACE IN THE MAIN ENTRANCE OF THE CUSTOMS 
5 
HOUSE, STATING THE NAME OF THE VESSEL OR AIRCRAFT, THE PORT 
6 
FROM WHICH SHE ARRIVED, THE DATE OF HER ARRIVAL, THE NAME OF 
7 
THE IMPORTER, AND THE SERIAL NUMBER OF THE DATE OF ENTRY. THE 
8 
COLLECTOR MUST ALSO KEEP A DAILY RECORD OF ALL ADDITIONAL 
9 
DUTIES, TAXES AND OTHER CHARGES FOUND UPON LIQUIDATION, AND 
10 
SHALL PROMPTLY SEND NOTICE TO THE INTERESTED PARTIES. 
11 
THE LIQUIDATION OF WAREHOUSING ENTRIES SHALL BE MADE NOT 
12 
MORE THAN THREE (3) MONTHS FROM THE TIME OF RECEIPT OF THE 
13 
WAREHOUSE." 
14 
SEC. 32. 
A new section to be known as Section 1910 is hereby inserted in Part 1, 
15 
Title V, Book II of th~ Tariff and Customs Code of the Philippines, as amende4, to read as 
16 
follows: 
I 
17 
"SEC. 1910. ACTS DEEMED AS SMUGGLING PUNISHABLE UNDER 
18 
SECTIONS 360] AND 3602 OF THIS CODE. - THE FOLLOWING SHALL BE 
19 
DEEMED AS ACTS OF SMUGGLING WHICH SHALL BE PUNISHABLE UNDER 
20 
SECTIONS 3601 AND 3602 OF THIS CODE: 
21 
"(A) BREAKING OF CUSTOMS SEALS OR UNAUTHORIZED 
22 
REMOVAL OF ARTICLES FROM BONDED WAREHOUSES; 
23 
"(B) SUBMISSION OF INCORRECT OR FALSE INFORMATION BY 
24 
THE BONDED WAREHOUSE; 
25 
"(C) WAREHOUSING OF THE FOLLOWING SHIPMENTS: 
26 
"1. FINISHED ARTICLES, EXCEPT IN THE TEXTILE AND 
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GARMENTS 
INDUSTRIES 
AND 
SEMI-CONDUCTOR 
AND 
ELECTRONICS INDUSTRIES. - FINISHED ARTICLES, AS USED IN 
THIS 
SECTION, 
SHALL 
REFER TO 
SCIENTIFICALLY 
OR 
TECHNOLOGICALLY PROCESSED ARTICLES IN FINAL STATE 
SUCH THAT NO OTHER PRODUCT CAN BE MANUFACTURED 
THEREFROM UNLESS ITS PRINCIPAL CHARACTER IS FIRST 
DESTROYED. 
"2. ARTICLES NOT DECLARED IN THE IMPORT ENTRIES 
OR IN EXCESS OF THE VOLUME AND QUANTITY ALLOWED 
UNDER THE LICENSE OF THE CUSTOMS BONDED WAREHOUSE. 
Page 21 of 43 


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"3. PROHIBITED ARTICLES AND REGULATED!ARTICLES 
WITHOUT THE CORRESPONDING CLEARANCE AND/OR IMPORT 
. AUTHORITY DULY ISSUED BY A COMPETENT AUTHORITY. 
"(D) UNAUTHORIZED TRANSFERS FROM THE CUSTOMS ZONE 
OF 
WAREHOUSING 
ARTICLES 
IMPORTED 
BY 
THE 
BONDED 
WAREHOUSE. 
"(E) 
UNAUTHORIZED 
WITHDRAWAL 
FROM 
A 
BONDED 
WAREHOUSE WITHOUT PAYMENT OF DUTIES AND TAXES. 
"(F) EXCEPT FOR THE GARMENTS AND THE SHIPBUIDING 
INDUSTRIES, 
FAILURE 
TO 
LIQUIDATE 
IMPORTED 
ARTICLES 
WITHDRAWN FROM THE BONDED WAREHOUSE WITHIN SIX (6) 
MONTHS, EXTENDIBLE FOR ANOTHER THREE (3) MONTHS, FROM 
ISSUANCE BY THE BUREAU OF THE CERTIFICATE OF LOADING IN A 
VESSEL DESTINED TO A FOREIGN PORT." 
"(G)'F AlLURE 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 TI-IIS CODE." 
SEC. 33. A new section to be known as Section 1911 is hereby inserted in Part 1, Title 
V, Book II ofthe Tariff and Customs Code of the Philippines, as amended, to-read as follows: 
"SEC. 1911. VERIFICATION OF RECORDS KEPT IN CUSTOMS BONDED 
WAREHOUSES. -
A CAREFUL ACCOUNT SHALL BE KEPT BY THE 
COLLECTOR OF ALL ARTICLES DELIVERED TO ANY BONDED WAREHOUSE, 
AND A SWORN MONTHLY RETURN, DULY VERIFIED BY THE I CUSTOMS 
OFFICIAL. IN CHARGE, SHALL BE MADE BY THE BONDED WAREHOUSE 
CONTAINING A DETAILED STATEMENT OF ALL IMPORTED ARTICLES 
STORED THEREIN. 
"ALL 
DOCUMENTS, 
BOOKS 
AND 
RECORDS 
OF 
ACCOUNTS 
CONCERNING THE OPERATION OF ANY BONDED WAREHOUSE SHALL, 
UPON DEMAND OF THE SECRETARY OF FINANCE, BE MADE AVAILABLE TO 
THE 
COLLECTOR 
OR 
HIS 
REPRESENTATIVE 
OR 
THE 
INDUSTRY 
ASSOCIATION OR INDUSTRY SECTOR AFFECTED AND SOUGHT TO BE 
SERVICED 
BY 
THE 
BONDED 
WAREHOUSE, 
FOR 
PURPOSES 
OF 
EXAMINATION AND/OR AUDIT." 
Page 22 of43 


1 
SEC. 34. Section 2001 of the Tariff and Customs Code of the Philippines, as amended, 
2 
is hereby further amended to read as follows: 
3 
"SEC. 2001. Establishment of Bonded Manufacturing Warehouses. - All articles 
4 
manufactured in whole or in part of imported materials, and intended for exportation 
5 
without being charged with duty, shall, in order to be so manufactured and exported, be 
6 
made and manufactured in manufacturing warehouses under such rules and regulations as 
7 
the Commissioner of Customs with the approval of the Secretary of Finance, shall 
8 
prescribe: Provided, That the manufacturer of such articles shall first file a satisfactory 
9 
bond for the faithful observance of all laws, rules and regulations applicable thereto: 
10 
PROVIDED, FURTHER, THAT BONDED MANUFACTURING WAREHOUSES 
11 
SHALL LIKEWISE BE SUBJECT TO THE PROVISIONS UNDER TITLE V, PART I 
12 
OF THIS 
CqDE, AS AMENDED: 
PROVIDED, 
FINALLY, 
THf~T THESE 
13 
REQUIREMENTS SHALL EXTEND TO REGISTERED LOCATORS O,PERATING 
14 
UNDER THE CHARTERS OF THE PHILIPPINE ECONOMIC ZONE AUTHORITY 
15 
(PEZA), THE SUBIC BAY METROPOLITAN AUTHORITY (SBMA), AND OTHER 
16 
FREEPORTS AND ECOZONES." 
17 
SEC. 35. Section 2002 of the Tariff and Customs Code of the Philippines, as amended, is 
18 
hereby further amended to read as follows: 
19 
"SEC. 2002. Exemptionfrom Duty. -
20 
"a. x x x 
21 
"b. Any imported material used in the manufacture of such articles, and any 
22 
package, covering, brand and label used in putting up the same may, 'under the regulation 
23 
prescribed by the Commissioner, with the approval of the Secretary of Finance, be 
24 
conveyed without the payment of duty into any bonded manufacturing warehouse, and 
25 
imported articles may, under the aforesaid regulations, be transferred without the 
26 
payment of duty from any bonded warehouse 
into any 
bonded manufacturing 
27 
warehouse, or to duly accredited sub-contractors of manufacturers who shall process the 
28 
same into finished products for exports and deliver such finished products back to the 
29 
bonded manufacturing warehouse, therefrom to be exported; but this privilege shall not 
30 
be held to apply to implements, machinery or apparatus to be used in the construction or 
31 
repair of any bonded manufacturing warehouse: PROVIDED, HOWEVER, THAT THE 
32 
IMPORTED MATERIAL TRANSFERRED OR CONVEYED INTO ANY BONDED 
33 
WAREHOUSE OR DIRECTLY INTO ANY MANUFACTURING BONDED 
34 
WAREHOUSE, PRIOR TO ITS UNLOADING, SO AS NOT TO' BE SUBJECT TO 
35 
THE PAYMENT OF DUTY, SHALL BE SO MARKED, INDICATED AND 
36 
IDENTIFIED WITH THE LETTERS "CBW" PRINTED BOLDLY, LEGIBLY, 
37 
INDELIBLY, AND PERMANENTLY ON THE COVERING OF THE PACKAGE OR 
38 
SACK OF THE IMPORTED MATERIAL, SUBJECT TO THE LIrl.-rITATIONS 
Page 23 of43 


1 
MENTIONED IN SUBPARAGRAPHS 
A, B, C, D AND H OF PARAGRAPH 3, 
2 
SECTION 303 OF THIS CODE: Provided, [however] FURTHER, That the materials 
3 
transferred or conveyed into any bonded manufacturing warehouse shall be used in the 
4 
manufacture of articles for exportation within a period of [nine (9) months] THIRTY (30) 
5 
DAYS from date of such transfer or conveyance into the bonded manufacturing 
6 
warehouse, which period may for sufficient reasons be further extended for not more than 
7 
[three (3) months] THIRTY (30) DAYS by the Commissioner. Materials not used in the 
8 
manufacture of articles for exportation within the prescribed period shall pay the 
9 
corresponding duties REFUNDABLE UPON PROOF OF LIQUIDATION OF THE 
10 
IMPORTED ARTICLES AFTER EXPORTATION: Provided, ffurther] FINALLY, That 
11 
the operation of embroidery and apparel firms shall continue to be governed by Republic 
12 
Act Numbered Thirty-one hundred and thirty-seven." 
13 
SEC. 36. Section 2003 of the Tariff and Customs Code of the Philippines, as amended, 
14 
is hereby further amended to read as follows: 
15 
"SEC. 2003. Procedure for Withdrawal. - Articles received into such bonded 
16 
manufacturing warehouse or articles manufactured therein may be withdrawn or removed 
17 
therefrom for direct shipment and for immediate exportation in bond under the 
18 
supervision of the proper customs officer, who shall certify to such shipment and 
19 
exportation, or lading for immediate exportation as the case may' be, describing the 
20 
articles by their mark or otherwise, the quantity, the date of exportation, in the name of 
21 
the vessel or aircraft: Provided, That the waste and by-products incident to the process of 
22 
manufacture in said bonded warehouse may be withdrawn for domestic consumption 
23 
upon payment of duty equal to the duty which would be assessed and colleqted pursuant 
, 
. 
24 
to law if such waste or by-products were imported from a foreign countlJf: Provided, 
25 
further, That all waste materials may be [disposed] DESTROYED uuder government 
26 
supervision. All labor performed and services rendered under these provisions shall be 
27 
under the supervision of a proper customs official and at the expense of the manufacturer. 
28 
"VIOLATION OF TI-IE FOREGOING PROVISION SHALL BE DEEMED AS 
29 
SMUGGLING WHICH SHALL BE PUNISHABLE UNDER SECTIONS 3601 AND 
30 
3602 OF THIS CODE. 
31 
"THE ARTICLES SUBJECT OF THE VIOLATION SHALL IPSO FACTO BE 
32 
FORFEITED IN FAVOR OF THE GOVERNMENT TO BE DISPOSED OF 
33 
PURSUANT TO THE PROVISIONS OF THIS CODE." 
34 
SEC. 37. Section 2005 of the Tariff and Customs Code of the Philippines, as amended, is 
35 
hereby further amended to read as follows: 
36 
"SEC. 2005. Bonded Smelting Warehouses. -
The plants of manufacturers 
37 
engaged in smelting or refining, or both, of ores and crude metals, may, upon the filing of 
38 
CASH bonds, be designated as bonded smelting warehouses. Ores or crude metals may 
Page 240f 43 


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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 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 qurntity of the 
same kind of metal equal to the quantity of metal contained in such ores or crude metals, 
I 
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, further, 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 warehouse from any bonded smelting warehouse 
established under this section of a quantity of the same kind of metal, in excess of that 
covered by open bonds, equal to the amount of metal producible from the 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 department head: PROVIDED, FINALLY, THAT 
BONDED SMELTING WAREHOUSES SHALL LIKEWISE BE SUBJECT TO THE 
PROVISIONS UNDER TITLE V, PART I OF THIS CODE, AS AMENDED." 
SEC. 38. 
A new section to be known as Section 2007 is hereby inserted in the Tariff 
34 
and Customs Code of the Philippines, as amended, to read as follows: 
35 
36 
37 
38 
"SEC. 2007. 
BUREAU OF CUSTOMS AND BUREAU OF, INTERNAL 
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 
Page 25 of43 


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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. 39. 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 
P AID THEREON, IN WHICH CASE THE COMMISSIONER OF CUSTOMS SHALL 
ACQUIRE SUC,H IMPORTED GOODS, PAYMENT FOR WHICH SHAL1 
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 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 Customs 
pertaining to this section may, within twenty (20) working days after the date on which 
notice of the decision is given, appeal to the Secretary of Finance and thereafter if still 
dissatisfied, to the Court of Tax Appeals as provided for in Section 2402 of the Tariff and 
Customs Code ofthe Philippines, as amended. 
"Where no appeal is made by the importer, ot upon reaffilmation of the 
Commissioner's decision during the appeals process, the Bureau of Customs or its agent 
shall sell the acquired goods pursuant to existing laws and regulations. 
IN CASES 
WHERE COMPULSORY ACQUISITION WAS INITIATED BY THE INDUSTRY 
ASSOCIATION OR INDUSTRY SECTOR, THE COMMISSIONER SHALL CLAIM 
ON THE LETTER OF CREDIT, SURETY BOND OR WHATEVER INSTRUMENT 
POSTED OR USED FOR THE PURPOSE AND THEREUPON RELEASE THE 
ACQUIRED ARTICLES TO THE INDUSTRY ASSOCIATION OR INDUSTRY 
SECTOR WHICH POSTED THE INSTRUMENT. 
Page 26 of43 


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"Nothing in this Section limits or affects any other powers- of the Bureau of 
Customs with respect to the disposition of the goods or any liability of the importer or 
any other person with respect to an offense committed in the importation of the goods." 
SEC. 40. Sectio.n 2401 of the Tariff and Customs Code of the Philippines, fS amended, 
is hereby further amended to read as follows: 
. 
I 
"SEC. 2401. Supervision and Control Over Criminal and Civil Proceedings. -
Civil and criminal actions and proceedings instituted in behalf of the government under 
the authority of this Code or other law enforced by the Bureau shall be brought in the 
name of the government [of the Philippines) and shall be [conducted) INVESTIGATED, 
PROSECUTED AND HANDLED EXCLUSIVELY by [customs officers) LAWYERS 
OF THE BUREAU OF CUSTOMS, [but) AND no civil or criminal action for the 
recovery of duties or the enforcement of any fine, penalty or forfeiture under this Code 
shall be filed in court without the approval of the Commissioner. FOR THIS PURPOSE, 
THE BUREAU OF CUSTOMS SHALL BE PRIMARILY AND EXCLUSIVELY 
RESPONSIBLE FOR THE CONDUCT OF PRELIMINARY INVESTIGATION AND 
PROSECUTION 
OF 
CUSTOMS-RELATED 
CASES, 
AS 
WELL 
AS 
THE 
PROSECUTION AND DEFENSE OF CUSTOMS-RELATED CIVIL CASES, TO THE 
EXCLUSION OF ALL OTHER GOVERNMENT AGENCIES INVOLVED THEREIN. 
THE BUREAU OF CUSTOMS SHALL HAVE EXCLUSIVE AUTHORITY TO FILE 
ANY CRIMINAL OR CIVIL CASE DIRECTLY WITH THE PROPER COURT FOR 
PROSECUTION OF VIOLATORS OF THE TARIFF AND CUSTOMS CODE, AND 
THE COLLECTION, RECOVERY OR ENFORCEMENT OF ANY FINE, PENALTY 
OR FORFEITURE UNDER THE CODE." 
SEC. 41. Section 2503 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby further amended to read as follows: 
"SEC. 2503. Undervaluation, Misclassification and Misdeclaration in Entry. -
When the dutiable value of the imported articles shall be so declared and entered that the 
duties, based on the declaration of the importer on the face of the entry would be less by 
ten percent (10%) than should be legally collected, or when the imported articles shall be 
so described and entered that the duties based on the importer's description 9n the face of 
the entry would be less by ten percent (10%) than should be legally collected based on 
the tariff classification, or when the dutiable weight, measurement or quantity of 
imported articles is found upon examination to exceed by ten percent (10%) or more than 
the entered weight, measurement or quantity, a surcharge shall be collected from the 
importer in an amount of not less than the difference between the full duty and the 
estimated duty based upon the declaration of the importer, nor more than twice of such 
difference: Provided, That an undervaluation, MISCLASSIFICATION, misdeclaration in 
weight, measurement or quantity of more than thirty percent (30%) between the value, 
Page 27 of43 


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weight, measurement or quantity declared in the entry, and the actual value, weight, 
quantity, or measurement shall constitute a prima facie evidence of fraud penalized under 
Section 2530 AND SECTION 3602 of this Code: Provided, further, That any 
UNDERVALUED, misdeclared, MIS CLASSIFIED or undeclared imported articles/items 
found upon examination shall ipso Jacto be forfeited in favor of the Government to be 
disposed of pursuant to the provisions of this Code: PROVIDED, FURTHERMORE, 
THAT THE LICENSE, PERMIT AND THE BUSINESS NAME OF THE SUBJECT 
IMPORTER MAY BE REVOKED AFTER DUE PROCESS. 
"When the undervaluation, misdescription, misclassification or misdeclaration in 
the import entry is intentional, the importer shall be subject to penal provisions under 
Section 3602 ofthis Code." 
SEC. 42. A new section to be known as Section 2503-A is hereby inserted in Part 4, 
Title VI, Book II of the Tariff and Customs Code of the Philippines, as amended, to read as 
follows: 
THE 
"SEC. 2503-A. NON-IMPOSITION OF SURCHARGE. - EXEMPTION FROM 
SURCHA:RGE SHALL BE ALLOWED ONLY IN CASES vYHEN THE 
DECLARED OR ENTERED CLASSIFICATION IS BASED ON RULINGS BY THE 
TARIFF COMMISSION PURSUANT TO SUBSECTION (A) OF SECTION 1313 OF 
THIS CODE: 
PROVIDED, THAT THE DESCRIPTION OF THE ARTICLE IS 
FOUND CORRECT UPON EXAMINATION: PROVIDED, FINALLY, THAT BASED 
ON THE RESULT OF THE EXAMINATION, THE ARTICLE IS FOUND 
ESSENTIALLY THE SAME AS THAT DESCRIBED IN THE RULING." 
"SEC. 43. 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 ofthe same." 
Page 28 of43 


1 
SEC. 44. Sectio,n 2602 of the Tariff and Customs Code of the Philippines, ~s amended, 
2 
is hereby further amended to read as follows: 
I 
3 
"SEC. ·2602. [Place of Sale or Other Disposition of Property] MODES OF 
4 
DISPOSITION OF PROPERTY UNDER CUSTOMS CUSTODY. - Property within the 
5 
purview of this part of this Code shall be [sold, or otherwise disposed of, upon the order 
6 
of the Collector of the port where the property is found, unless the Commissioner shall 
7 
direct its conveyance for such purpose to some other port.] DISPOSED OF THROUGH 
8 
THE FOLLOWING MODES OF DISPOSITION: 
9 
"(A) WHEN SUBJECT PROPERTY HAS EXPORT POTENTIAL, THE SAME 
10 
SHALL BE EXPORTED THROUGH A GOVERNMENT ENTITY WHICH SHALL 
11 
BE DESIGNATED TO PERFORM SAID TASK; 
12 
"(B) WHEN THE PROPERTY IS 
NOT EXPORTED, 
AND UPON 
13 
RECOMMENDATION 
OF 
THE 
COMMISSIONER 
OF 
CUSTOMS, 
THE 
14 
SECRETARY OF FINANCE MAY AUTHORIZE THE OFFICIAL USE OF THE 
15 
ARTICLES TO PROMOTE THE INTENSIVE COLLECTION OF TAXES AND/OR 
16 
TO HELP PREVENT OR SUPPRESS SMUGGLING AND OTHER FRAUDS UPON 
17 
THE CUSTOMS; 
18 
"(C) WHEN THE ARTICLE IS NOT SUITABLE FOR EXPORTATION OR 
19 
FOR USE AGAINST SMUGGLING OR OTHER FRAUDS UPON CUSTOMS, THEN 
20 
IT MAY BE CHANNELED TO THE OFFICIAL USE OF OTHER OFFICES OF THE 
21 
NATIONAL GOVERNMENT; AND 
22 
"(D) IF THE ARTICLE IS SUITABLE FOR SHELTER OR CONSISTS OF 
23 
FOODSTUFFS OR CLOTHING MATERIALS, THEN THAT ARTICLE MAY BE 
24 
GIVEN TO THE APPROPRIATE GOVERNMENT AGENCY: PROVIDED, THAT 
25 
THIS AGENCY USES THIS ONLY FOR OFFICIAL PURPOSE, OR FOR CHARITY. 
26 
"THE COST OF EXPORTATION OF SUBJECT PROPERTY UNDER THIS 
, 
27 
SECTION, IN9LUDING ALL ATTENDANT COSTS THERETO, );>HALL BE 
28 
SHOULDERED 
BY 
THE 
IMPORTER/CONSIGNEE 
WHO 
UNlJ-AWFULLY 
29 
BROUGHT IN THE IMPORTED ARTICLE, AND/OR THE BROKER THEREOF, AS 
30 
THE CASE MAY BE; WHEN BOTH THE IMPORTER/CONSIGNEE WHO 
31 
UNLAWFULLY BROUGHT IN THE IMPORTED ARTICLE AND THE BROKER 
32 
CAN NOT BE LOCATED THEN THE GOVERNMENT ENTITY WHICH IS 
33 
DESIGNATED TO EXPORT SUBJECT PROPERTY SHALL SHOULDER THE COST 
34 
OF EXPORTATION: PROVIDED, THAT ARTICLES TO BE EXPORTED UNDER 
35 
THIS SECTION SHALL BE TRANSFERRED BY THE BUREAU OF CUSTOMS TO 
36 
THE GOVERNMENT ENTITY THAT IS MANDATED TO EXPORT THE 
37 
ARTICLES WITHIN FIFTEEN (15) DAYS FROM THE TIME THE FORFEITURE. 
38 
HAS BECOME FINAL AND EXECUTORY: 
PROVIDED, FURTHER, THAT 
Page 29 of43 


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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 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 REPRESr:NTATIVE 
EACH FROM THE COMMISSION ON AUDIT, THE DEPARTMENT OF JUSTICE, 
. 
I 
THE BUREAU OF CUSTOMS, AND FROM THE PRIVATE SECTOR." 
SEC. 45. 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) FREIGHT, LIGHTERAGE AND OTHER EXPENSES INCIDENTAL TO 
THE EXPORTATION." 
SEC. 46. Section 2604 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby further amended to read as follows: 
"SEC. 2604. 
[Disqualification to PartiCipate in Auction Sale] DISPOSITION 
OF SURPLUS FROM THE PROCEEDS OF EXPORTATION OF PROPERTY WITHIN 
, 
I 
I 
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THE PURVIEW OF THIS PART OF THIS CODE. - [No customs official or employee 
2 
shaH be allowed to bid directly or indirectly, in any customs auction.] ANY SURPLUS 
3 
REMAINING AFTER THE SATISFACTION OF ALL LAWFUL CHARGES AS 
4 
PROVIDED FOR IN SECTION 2603 OF THIS CODE SHALL BE DEPOSITED IN A 
5 
SPECIAL TRUST FUND WHICH SHALL BE USED SOLELY FOR THE PURPOSE 
6 
OF FINANCING THE COMPULSORY ACQUISITION OF IMPORTED GOODS BY 
7 
THE GOVERNMENT AS PROVIDED FOR IN SECTION 2317 OF TI-IIS CODE." 
8 
SEC. 47. Section 2607 of the Tariff and Customs Code of the Philippines, as amended, is 
9 
hereby further amended to read as follows: 
10 
"SEC. 2607. Disposition of Articles Liable to Deterioration. - Perishable articles 
11 
shall be deposited in any appropriate bonded warehouse; and, if not immediately entered 
12 
for export or for transportation from the vessel Or aircraft in which imported or entered 
13 
for consumption and the duties and the taxes paid thereon, such articles SHALL [may] be 
14 
sold at auction [,after such public notice, not exceeding three days,] as the necessities of 
15 
the case penn it. 
16 
"When seizure shall be made of property which, in the opinion of the Collector, is 
17 
liable to perish or be wasted or to depreciate greatly in value by keeping, or which cannot 
18 
be kept without great disproportionate expense, whether such property consists of live 
19 
animals or of any article, the appraiser shall so certify his appraisal, the Collector SHALL 
20 
[may] proceed to advertise and sell the same at auction, upon notice as he shall deem to 
21 
be reasonable. 
22 
"The same disposition SHALL [may] be made of any warehoused article when in 
23 
the opinion of tl).e Collector it is likely that the cost of depreciation, damag¢, leakage or 
24 
other causes, may so reduce its value as to be insufficient to pay the duti"s, taxes and 
25 
other charges . thereon, if it should be pennitted to be so kept and be subjected to sale in 
26 
the usual course. 
27 
"PROVIDED, THAT IN ALL CASES INVOLVING ARTICLES LIABLE TO 
28 
DETERIORATION, THE DETERMINATION THEREON SHALL BE EXCLUSIVE 
29 
TO THE COLLECTOR AND SHALL BE FINAL ON THE MATTER: PROVIDED, 
30 
FURTHER, THAT THE AUCTION SALE SHALL BE HELD NOT LATER THAN 
31 
TWO (2) DAYS AFTER THE PUBLIC NOTICE SET BY THE COLLECTOR." 
32 
SEC. 48. Section 2610 of the Tariff and Customs Code of the Philippines, as amended, 
33 
is hereby further amended to read as follows: 
34 
"SEC. 2610. Disposition of Unsold Articles of Want of Bidders. - Articles subject 
35 
to sale at public auction by customs authorities shall be sold at a price not less than the 
36 
wholesale value price in the domestic market of these or similar articles in the usual 
37 
wholesale quantities and in the ordinary course oftrade as detennined in accordance with 
38 
section twenty-three hundred and five ofthis code. 
Page 31 of 43 


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"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 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 Governmeft AS THE 
COMMISSIONER OF CUSTOMS MAY DETERMINE. If the article is suitable for 
I 
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. 49. Section 2612 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby further amended to read as follows: 
"SEC. 2612. Disposition of Smuggled Articles.-
"Smuggled articles, after liability to seizure or forfeiture shall have been 
established by proper administrative [or judicial1 proceedings in conformity with 
the provisions of this Code, shall be disposed of as provided for in section 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 importations is prohibited under Section One hundred two 
sub-para~raphs b, c, d, e and j shall upon order to the Collector i~ writing, be 
burned or destroyed, in such manner as the case may require as to render then 
. 
I 
absolutely worthless, in the presence of a representative each from the 
Commission on Audit, Ministry of Justice, Bureau of Customs, and if possible, 
any representative of the private sector. 
Page 32 of43 


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SEC. 50. Section 3513, Book II, Title VII, Part II ofP.D. 1464, otherwise known as 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 mles 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 LAWYERIS WHO ACTIVELY PROSECUTED THE CASE 
THAT RESULTED IN THE RECOVERY OF REVENUE, SURCHARGES, AND 
FEES, 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 CENTUM (20%) OF THE CIVIL rIABILITY 
INCLUDING FINES, PENALTIES AND SURCHARGES IMPOSED BY THE 
COURT: PROVIDED, FINALLY, THAT WHERE NO CIVIL LIA~ILITY 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. 51. 
Section 3519 of the Tariff and Customs Code of the Philippines, as 
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 port of entry of the district. Whenever the 
term "Port of Entry" is used herein, it shall include "airport of entry". 
Page 33 of 43 


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"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 nhvigation of 
the air. 
I 
"Bill of Lading" includes airway bill oflading. 
"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 catTier's manifest and destined for transshipment to another local port or to a foreign 
port. 
"Seized property" means any property seized or held for the satisfaction of any 
administrative fine or for the enforcement of any forfeiture tinder 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 ofIntemal Revenue. 
"Secretary" or "Department head" refers, unless otherwise specified, to the 
Secretary of Finance. 
"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, br assist in so doing, any article, contrary to law or shall recJive, 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." 
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"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, WRITTEN 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 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 THgREON, 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 DEPARTMENT 
OF TRADE AND INDUSTRY [Bureau of Commerce], Securities and Exchange 
Commission, [NACIDA], Board ofInvestments, DEPARTMENT OF ENERGY[Export 
Incentives Board or Oil Commission] as now or may hereafter be required by law." (RA 
9135, April 27, 2001) 
SEC. 52. Section 3601 of the Tariff and Customs Code'ofthe Philippines, as amended, is 
hereby further amended to read as follows: 
"SEC. 360l. 
[Unlawful Importation] SMUGGLING. ~ 
(1) Any person who 
29 
shaH fraudulently import or bring into the Philippines, or assist in so doing, any article, 
30 
contrary to law, SHALL BE GUILTY OF SMUGGLING AND SHALL BE 
31 
PUNISHABLE AS HEREIN PROVIDED, (2) ANY PERSON [or] WHO shaH receive, 
32 
conceal, buy, sell, or in any manner facilitate the transportation, concealment, or sale of 
33 
such article after importation, knowing the same to have been imported contrary to law, 
34 
shaH be DEEMED guilty of smuggling and shall LIKEWISE be [punished with] 
35 
PUNISHABLE AS HEREIN PROVIDED, (3) ANY IMPORTATION OF ARTICLES 
36 
THAT DO NOT PASS THROUGH THE PORTS OF ENTRY SHALL BE 
37 
CONSIDERED AS UNLAWFUL IMPORTATION PUNISHABLE UNDER SECTION 
38 
3601 OF THIS CODE, AND (4) ANY IMPORTATION WHICH rs NOT COVERED 
Page 35 of43 


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BY A LETTER OF CREDIT AND/OR PERMIT FROM THE BANGKO SENTRAL NG 
2 
PILIPINAS TO IMPORT SAID PRODUCT, SHALL BE CONSIDERED AS 
3 
ILLEGALLY IMPORTED AND SHALL BE DISPOSED OF IN THE MANNER AS 
4 
PROVIDED FOR IN SECTION 2602 OF THIS CODE. 
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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 
[live] SIX 
MONTHS AND ONE day[s] nor more than [four years] TWENTY YEARS, if 
the appraised value, to be detel111ined in the manner prescribed under this Code, 
including duties and taxes, of the 31iicle unlawfully imported EXCEEDS FIVE 
THOUSAND PESOS (P5,000.00) BUT does not exceed [twenty-five] FIFTY 
THOUSAND pesos (P50,000.00); 
2. A fine'[ofno! 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 detelmined in the manner prescribed under this Code, including 
duties and taxes, of the article unlawfully impOlied [exceeds twenty-five] 
IS 
MORE THAN FIFTY THOUSAND pesos (P50,000.00) but does not exceed 
ONE HUNDRED fifty thousand pesos (1'150,000.00); 
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 dnties and 
taxes, of the article unlawfully imported [is more than] EXCEEDS ONE 
HUNDRED fifty thousand pesos (PI50,000.00) but does not excecd [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, ofthe article unlawfully imported exceeds [one] TWO 
hundred fifty thousand pesos (1'250,000.00) 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 
Page 36 of 43 


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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 (PI,OOO,OOO.OO); 
6. A FINE IN AN AMOUNT EQUAL TO THE APPRAISED VALUE 
PLUS FIFTY PERCENT (50%) THEREOF AND LIFE IMllRISONMENT, 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 (~I,OOO,OOO.OO); 
7. The penalty of prison [mayor] TO RECLUSION TEMPO¥L 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 
and 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 shall 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." 
SEC. 53. Section 3602 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby further amended to read as follows: 
"SEC. 3602. 
Various Fraudulent Practices Against Customs Revenue. - Any 
person who makes or attempts to make entry of imported or exported-article by means of 
any false or fraudulent invoice, declaration, affidavit, letter, paper or by any means of any 
false statement, written or verbal, or by any means of any false or fraudulent practice 
whatsoever, or [knowingly] effects any entry of goods, wares or merchandise, at less than 
the true weight <)r measures thereof or upon a false classification as to qualitt or value, or 
Page 37 of43 


1 
by the payment of less than the amount legally due, or [knowingly and willfully] files any 
2 
false or fraudulent entry or claim for the payment of drawback or refund of duties upon 
3 
the exportation of merchandise, or makes or files any affidavit, abstract, record, 
4 
certificate or other document, with a view to securing the payment to himself or others of 
5 
any drawback, allowance, or refund of duties on the exportation of merchandise, greater 
6 
than that legally due thereon, or who shall be guilty of any [willful] act of omission shall, 
7 
for each offense, BE GUILTY OF TECHNICAL SMUGGLING AND SHALL be 
8 
[punished in accordance with the penalties prescrihed in the preceding section] 
9 
PUNISHABLE AS FOLLOWS: 
10 
"I. 
A FINE OF NOT LESS THAN THREE HUNDRED THOUSAND 
11 
PESOS (P300,OOO.OO) NOR MORE THAN FIVE HUNDRED THOUSAND 
12 
PESOS (P500,OOO.OO) AND IMPRISONMENT OF PRlSION CORRECIONAL, 
13 
IF THE DIFFERENCE BETWEEN THE VALUE, WEIGHT, MEASUREMENT 
14 
OR QUANTITY DECLARED IN THE ENTRY AND THE TRUE AND 
15 
ACTUAL VALUE, WEIGHT, QUANTITY OR MEASUREMENT OF THE 
16 
ARTICLE UNLAWFULLY IMPORTED 
DOES 
NOT EXCEED ONE 
17 
HUNDRED THOUSAND PESOS (PIOO,OOO.OO); 
18 
"2. 
A FINE OF NOT LESS THAN FIVE HUNDRED THOUSAND 
19 
PESOS (P500,OOO.OO) NOR MORE THAN EIGHT HUNDRED THOUSAND 
20 
PESOS (P800,OOO.OO) AND IMPRISONMENT OF PRISION MAYOR, IF THE 
21 
DIFFERENCE BETWEEN THE VALUE, WEIGHT, MEASUREMENT OR 
22 
QUANTITY DECLARED IN THE ENTRY AND THE TRUE AND ACTUAL 
23 
VALUE,. WEIGHT, QUANTITY OR MEASUREMENT OF THJ:t ARTICLE 
24 
UNLAWFULLY IMPORTED EXCEEDS ONE HUNDRED TfIOUSAND 
25 
PESOS (PIOO,OOO.OO) BUT DOES NOT EXCEED ONE MILLION PESOS 
26 
(PI,OOO,OOO.OO); 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
"3. 
A FINE OF NOT LESS THAN EIGHT HUNDRED THOUSAND 
PESOS 
(P800,OOO.OO) 
NOR MORE 
THAN 
ONE 
MILLION 
PESOS 
(Pl,OOO,OOO.OO) 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 
(Pl,OOO,OOO.OO) 
BUT DOES NOT EXCEED FIVE MILLION 
(PS,OOO,OOO.OO); 
PESOS 
PESOS 
"4. 
A FINE OF NOT LESS THAN ONE MILLION PESOS 
(Pl,OOO,OOO.OO) NOR MORE THAN TWO MILLION PESOS (P2,OOO,OOO.OO) 
AND IMPRISONMENT OF RECLUSION PERPETUA, IF THE DIFFERENCE 
Page 38 of43 


1 
BETWEEN THE VALUE, WEIGHT, MEASUREMENT OR QUANTITY 
2 
DECLARED IN THE ENTRY AND THE TRUE AND ACTUAL VALUE, 
3 
WEIGHT, 
QUANTITY 
OR 
MEASUREMENT 
OF 
THE 
ARTICLE 
4 
UNLAWFULLY 
IMPORTED 
EXCEEDS 
FIVE 
MILLION 
PESOS 
5 
(P5,OOO,OOO.OO). 
5 
"IN APPLYING THE ABOVE SCALE OF PENALTIES, IF THE OFFENDER 
7 
IS AN ALIEN, HE SHALL BE DEPORTED AFTER SERVING THE SENTENCE 
8 
WITHOUT FURTHER PROCEEDINGS FOR DEPORTATION. IF THE ?FFENDER 
9 
IS A GOVERNMENT OFFICIAL OR EMPLOYEE, THE PENALTY IN ITS 
, 
I 
10 
MAXIMUM PERIOD SHALL BE IMPOSED IN ADDITION TO THE PENALTY OF 
11 
PERPETUAL DISQUALIFICATION FROM PUBLIC OFFICE, TO VOTE AND TO 
12 
PARTICIPATE IN ANY PUBLIC ELECTION. IF THE OFFENDER FAILS TO PAY 
13 
THE FINE, HE SHALL SUFFER SUBSIDIARY IMPRISONMENT. 
HE SHALL 
14 
ALSO LOSE ALL THE BENEFITS DUE HIM AS A RESULT OF HIS SERVICE IN 
15 
THE GOVERNMENT, INCLUDING THE FORFEITURE OF HIS SEPARATION 
16 
AND RETIREMENT BENEFITS." 
17 
SEC. 54. Section 3603 of the Tariff and Customs Code of the Philippines, as amended, 
18 
is hereby further amended to read as follows: 
19 
"SEC. 3603. Failure to Report Fraud. - Any master, pilot in command or other 
20 
officer, owner or agent of any vessel or aircraft trading with or within the Philippines and 
21 
any employee of the Bureau of Customs who, having cognizance of any fraud on the 
22 
customs revenue, shall fail to report all information relative thereto to the Collector as by 
23 
law required, shall be punished by a fine of not [more] LESS than [five] ONE 
24 
HUNDRED thousand pesos (PIOO,OOO.OO) BUT NOT MORE THAN ONE MILLION 
25 
PESOS (PI,OOO,OOO.OO) and imprisonment [for] OF not [more] LESS than [one] EIGHT 
26 
yearS BUT NOT MORE THAN TWELVE YEARS. If the offender is an alien, he shall 
27 
be deported after serving the sentence. If the offender is a public official or employee, he 
28 
shall suffer additional penalty of perpetual disqualification to hold public office, to vote 
29 
and to participate in any election. HE SHALL ALSO LOSE ALL THE BENEFITS DUE 
30 
HIM AS A RESULT OF HIS SERVICE IN THE GOVERNMENT,·INCLUDING THE 
31 
FORFEITURE OF HIS SEP ARA TION AND RETIREMENT BENEFITS." 
32 
SEC. 55. Section 3604 of the Tariff and Customs Code of the Philippines, as amended, 
33 
is hereby further amended to read as follows: 
34 
"SEC. 3,604. Statutory Offenses of Officials and Employees. - Etery official, 
35 
agent or e!p.ployee of the Bureau or any agency of the government charged with the 
36 
enforcement of the provisions of this Code, who is guilty of any delinquency herein 
37 
below indicated shall be punished with a fine of not less than [five] ONE HUNDRED 
38 
thousand pesos (PlOO,OOO.OO) [nor] BUT NOT more than [Fifty thousand] ONE 
Page 39 of43 


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2 
3 
4 
5 
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8 
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23 
24 
25 
26 
27 
28 
-. 
29 
30 
31 
32 
33 
34 
35 
MILLION pesos (Pl,OOO,OOO.OO) 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 LOSE ALL 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 or receive any fee, compensation, or reward except as by law 
prescribed, for the performance of any duty; 
"(c) Thos 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 duties enjoined by law; 
"(d) Those who conspire or collude with another or others to defraud the 
customs revenue or otherwise violate the law; 
"(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 violatio,n 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 oflaw, 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 violation or alleged violation oflaw; or 
"CD Those who, without authority oflaw, 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) 
Page 40 of43 


1 
SEC. 56. Section 3605 of the Tariff and Customs Code of the Philippines, as amended, 
2 
is hereby further amended to read as follows: 
3 
"SEC. 3605. Concealment or Destruction of Evidence of Fraud. - Any person 
4 
who willfully conceals or destroys any invoice, book or paper relating to any article liable 
5 
to duty after an inspection thereof has been demanded by the Collector of aJy collection 
6 
district or at any time conceals or destroys any such invoice, book or paper for the 
7 
purpose of suppressing any evidence of fraud therein contained, shall be punished with a 
8 
fine of not [more) LESS than [five] ONE HUNDRED thousand pesos (PIOO,OOO.OO) 
9 
BUT NOT MORE THAN ONE MILLION PESOS (P1,000,000.00) and imprisonment 
10 
[for] OF NOT LESS THAN EIGHT YEARS BUT not more than [two] TWELVE years." 
11 
SEC. 57. 
Section 3606 of the Tariff and Customs Code of the Philippines, as 
12 
amended, is hereby further amended to read as follows: 
13 
"SEC. 3606. Affixing Seals. - Any person who, without authority affixes or 
14 
attaches a customs seal, fastening, or markor any seal, fastening or mark purporting to be 
15 
a customs seal, fastening or mark to any vessel, vehicle on land, sea or air, warehouse, or 
16 
package, shall be punished with a fine of not LESS THAN ONE HUNDRED 
17 
THOUSAND PESOS (PIOO,OOO.OO) BUT NOT more than [twenty thousand) ONE 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
MILLION pesos (Pl,OOO,OOO.OO) [or] AND imprisonment of not [more] LESS than [five] 
EIGHT years[, or both] BUT NOT MORE THAN TWELVE YEARS. Ifthe offender is 
an alien, he shall be deported after serving the sentence. If he is a public official or 
employee, he shall suffer an additional penalty of perpetual disqualification to hold 
public office, to vote and participate in any 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." 
SEC. 58. Section 3610 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby further amended to read as follows: 
"SEC. 3610. Failure to Keep Importation Records and Give Full Access to 
Customs Officers. - Any person who fails to keep all the records of importations and/or 
books of accou~ts, business and computer systems and all customs commrrcial 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 [lor) 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 importerslbrokers 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 
Page 41 of43 


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3 
4 
5 
6 
7 
8 
9 
10 
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13 
14 
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~ 16 
17 
18 
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20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
against contumacious importers under existing laws and regulations including the 
authority to hold delivery or release oftheir imported articles." 
SEC. 59. Section 3612 of the Tariff and Customs Code of the Philippines, as amended, 
is hereby further amended to read as follows: 
"SEC. 3612. Violations of TarifJand 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, shaH be punished by a fine of not 
LESS THAN TWENTY THOUSAND PESOS (P20,000.00) BUT NOT more than one 
HUNDRED thousand pesos (PIOO,OOO.OO) [or] 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 public official 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 THE BENEFITS DUE HIM AS A RESULT OF HIS SERVICE IN THE 
GOVERNMENT, INCLUDING THE FORFEITURE OF HIS SEPARATION AND 
RETIREMENT BENEFITS. " 
I 
SEC. 60. A new section to be known as Section 3613 is hereby inserted to t1ie Tariff and 
Customs Code of the Philippines, as amended, to read as follows: 
"SEC. 3613. SUMMARY PROCEDURE FOR SEIZURE AND FORFEITURE.-
NOTWITHSTANDING THE PROVISIONS OF TITLE VI OF THIS CODE, 
ARTICLES WHICH ARE FRAUDULENTLY IMPORTED OR BROUGHT INTO THE 
PHILIPPINES WITHOUT BEING ENTERED THROUGH THE CUSTOMSHOUSE, 
OR WITHOUT PAYMENT OF THE CORRECT AND APPLICABLE DUTIES, 
TAXES, FEES AND CHARGES SHALL BE SUMMARILY SEIZED AND 
FORFEITED IN FAVOR OF THE GOVERNMENT WHEN WARRANTED OR 
DETERMINED IN 
THE SEIZURE PROCEEDINGS. 
SUBJECT TO 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. 
"THE DECISION OF THE SECRETARY OF FINANCE, UPON THE 
RECOMMENDATION OF THE COMMISSIONER OF CUSTOMS, UNDER THIS 
SECTION SHALL BE FINAL AND UNAPPEALABLE. 
"NO COURT, EXCEPT THE COURT OF TAX APPEALS AND THE 
SUPREME COURT, SHALL ISSUE ANY TEMPORARY RESTRAINING ORDER 
OR ANY INJUNCTIVE RELIEF AGAINST THE SEIZURE, FORFEITURE OR 
DISPOSITION OF THE SUBJECT ARTICLES COVERED BY THIS SECTION. 
Page 42 of43 


1 
"THE 0\VNER OR OPERATOR OF ANY SEIZED VESSEL OR ,j\IRCRAFT 
2 
UNDER THIS SECTION SHALL BE BLACKLISTED FROM OPERATINO AND/OR 
3 
FROM ENGAGING IN TRADE IN THE PHILIPPINES." 
4 
SEC. 61. Transitory Provision. - All existing customs bonded warehouses established 
5 
under Section 1901 of the Tariff and Customs Code of the Philippines, as amended, shall have 
6 
one year from approval of the law to convert themselves to manufacturing customs bonded 
7 
warehouses under Section 2001 of the Code or register themselves in special economic zones or 
8 
freeports. After the lapse of the one year period, any importation by these customs bonded 
9 
warehouses shall be treated as regular importations to be covered by ordinary consumption 
10 
entries only, unless such customs bonded warehouse in the meantime has transferred to a special 
11 
economic zone or PEZA zone, which in such case the said importation shaH be treated as a 
12 
PEZA shipment. 
13 
SEC. 62. Implementing Rules and Regulations. - The Secretary of Finance shall, upon 
14 
the recommendation of the Commissioner of Customs and meaningful consultation of the local 
15 
industry, promulgate the necessary rules and regulations for the effective implementation of this 
16 
Act. 
17 
SEC. 63. Separability Clause. - If any provision of this Act is subsequently declared 
18 
unconstitutional, the validity of the remaining provisions hereof shall remain in full force and 
19 
effect. 
20 
SEC. 64. Repealing Clause. - All laws, decrees, executive orders, rules and regulations 
21 
and other issuances or parts thereof which are inconsistent with this Act are hereby repealed or 
22 
modified accordingly. 
23 
The provision of this Act, not those of Republic Act No. 2338, shall govern the giving of 
24 
reward cases covered by the former. 
25 
SEC. 67. Effectivity. - This Act shall take effect fifteen (15) days from the date of 
26 
publication in the Official Gazette or in at least two (2) newspapers of general circulation. 
Approved, 
I 
Page 43 of 43 
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