Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

783
House Bill No.

Introduced by HON. ROZZANO RUFINO B. BIAZON

EXPLANATORY NOTE

bill seeks to provide a classification system for third parties which shall be used in

the assessment of their capability to import, export, move, store or clear goods.

Section 102(uu) of the Customs Modernization and Tariff Act (CMTA) defines a “third
party” as any person who deals directly with the Bureau of Customs, for and on behalf of
another person, relating to the importation, exportation, movement or storage of goods, Section
1226 of the same law also provides that third parties may also refer to logistics providers,
importers, exporters, carriers, airlines, shipping lines, shipping agents, forwarders,
consolidators, port and terminal operators, and warehouse operators, if such persons or entities
transacted with the Bureau.

It was found out during the investigations conducted by the Committee on Ways and
Means and the Committee on Public Order and Safety on the alleged smuggling of high grade
“shabu” through the express lane of the Bureau of Customs (BOC) that “consignees for hire”
are being used by unscrupulous persons and entities to smuggle goods and other illegal
contrabands into the country. These “consignees for hire” more often than not, are small
companies that are used as “dummy companies” by these unscrupulous persons and entities toy
hide their true identities and thus escape prosecution. Under this set-up, these “consignees for
hire”, which, according to the provisions of the CMTA, may be considered as third parties, are
usually smal] companies that may not even have the capability to engage in the import, export,
movement, storage or clearance of goods if their capitalization is used as basis.

‘There is therefore a need to address this problem in order to abate the smuggling of
goods and ensure that proper duties and taxes of goods are collected.

In view of the foregoing, the early passage of this bill is earnestly sought.

wood lets B. sheen

Representative
Lone District, Muntinlupa City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS

First Regular Session

House Bill No, _783

Introduced by HON, ROZZANO RUFINO B, BIAZON

AN ACT
PROVIDING FOR A CLASSIFICATION SYSTEM FOR THIRD PARTIES UNDER
THE CUSTOMS MODERNIZATION AND TARIFF ACT

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

CTION ONE. Section 1226 of Republic Act No. 10863 is hereby amended to read
as follows:

“SEC. 1226. Supervision and Regulation of Third Parties. ~ Third
parties transacting with the Bureau on behalf of importers and consignees shall
be treated equally as true importers or consignees.

Third parties transacting with the Bureau shall be liable for acts
committed in violation of this Act and related laws.

Upon the recommendation of the Commissioner, the Secretary of
Finance shall issue rules and regulations to govern and regulate the conduct of
all third parties dealing directly with the Bureau in relation to the importation,
exportation, movement, storage and clearance of goods for and on behalf of
another person, The rules and regulations shall provide for specific conditions
when third parties may or may not directly transact with the Bureau and shall
provide a written notice in case such third parties are, for valid reasons, barred
from transacting with the Bureau. IT SHALL ALSO PROVIDE A
CLASSIFICATION SYSTEM FOR THIRD PARTIES ACCORDING TO
THEIR CAPITALIZATION AND YOLUME OF TRANSACTIONS
WHICH SHALL BE USED IN THE ASSESSMENT OF THEIR
CAPABILITY TO IMPORT, EXPORT, MOVE, STORE OR CLEAR


GOODS. Third party is defined under Section 102(uu) of this Act, For
purposes of this section, third parties may also refer to logistics providers,
importers, exporters, carriers, airlines, shipping lines, shipping agents,
forwarders, consolidators, port and terminal operators, and warehouse
operators, if such persons or entities transacted with the Bureau.”

Sec. 2. Repealing Clause. — All laws, executive orders, rules and regulations
inconsistent with or contrary to this Act are hereby deemed accordingly repealed or amended.

Sec. 3. Separability Clause. ~ If, for any reason, any section or provision of this Act is
declared unconstitutional or invalid, the other sections or provisions not affected thereby shall
remain in full force and effect.

See. 4, Effectivity. ~ This Act shall take effect after fifteen (1'5) days from its publication
in at least two (2) newspapers of national circulation.

Approved,