Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

are 572
H. B. No.

Introduced by HONORABLE JUAN EDGARDO “SONNY” M. ANGARA

EXPLANATORY NOTE

Efforts of the Government to suppress smuggling and other frauds upon the customs
have been stymied by the indiscriminate issuance of temporary restraining orders and injunctive
reliefs by judicial authorities. While the provisions of the Tariff and Customs Code on
administrative proceedings leading to forfeiture and disposition of smuggled goods and the
instruments used for smuggling seem fairly adequate, the provisions allowing judicial
intervention have oftentimes rendered ineffective the serious efforts to go after the smugglers,
the goods fraudulently imported, and the instruments of smuggling.

The disposition and forfeiture of goods seized by the Bureau of Customs will be
strengthened under this bill. To expedite the disposition of these goods, the Secretary of
Finance, upon recommendation of the Commissioner of Customs, is empowered to summarily
seize and sell the same. Moreover, no temporary restraining order shall lie against the seizure
and disposition of the subject goods as well as the aircraft or vessel used in transporting the
same.

‘Administrative summary proceedings appear to be the most effective vehicle to curb
smuggling, Judicial intervention should be invoked only at the level of the Supreme Court, doing
away with the present state of the law where even Regional Trial Courts can stop the sale of
forfeited smuggled property or even allow the posting of bonds for those whose vessels or
aircraft were used in smuggling.

Smugglers themselves should not be allowed to profit from their own violation of our
customs laws. They should be barred from involvement in auction sales of the very items or
goods they brought in fraudulently.

In view of the foregoing, immediate passage of this bill is earnestly requested.

a’

FONE cae

~ JUAN EDGARDO “SONNY” M. ANGARA
Representative
Lone District, Province of Aurora


FIFTEENTH CONGRESS OF THE
REPUBLIC OF THE PHILIPPINES.
First Regular Session

)
)
)

Introduced by Honorable JUAN EDGARDO “SONNY” M. ANGARA

AN ACT
FURTHER STRENGTHENING THE ANTI-SMUGGLING MECHANISM, AMENDING
FOR THE PURPOSE CERTAIN PROVISIONS OF PRESIDENTIAL DECREE NO.
1464, OTHERWISE KNOWN AS THE TARIFF AND CUSTOMS CODE OF THE
PHILIPPINES, AS AMENDED AND FOR OTHER PURPOSES.

Be it enacted by the Senate and 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 of 2010.”

SEC. 2, Section 201, Title Il, Part 1 of the Tariff and Customs Code of the Philippines,
as amended, is hereby further amended by amending the third and second to the last
paragraphs and the last paragraph thereof to read as follows:

“SEC. 201. Basis of Dutiable Value. - x x x

ee

“if in the course of determining the dutiable value of 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 the 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 conditioned upon the payment of customs duties and taxes for
which the imported goods] may be liable: Provided, however, That goods, the
importation of which is prohibited by law shall not be released under any
circumstance whatsoever[]: PROVIDED, FURTHER, THAT, REFERENCE
INFORMATION OBTAINED FROM A VALUE DATA BASE APPROVED BY
THE COMMISSIONER, 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 APPLICABILITY AND


APPROPRIATENESS OF THE METHOD OF VALUATION EMPLOYED BY
THE IMPORTER SHALL BE REVIEWED BY THE VALUATION AND
CLASSIFICATION REVIEW COMMITTEE (VCRC) WHICH, THEREAFTER,
SHALL ENDORSE ITS FINDINGS AND RECOMMENDATIONS TO THE
COMMISSIONER OF CUSTOMS. FOR PURPOSES OF THIS SECTION, A
REVISION ORDER, WHICH SHALL BE PUBLISHED IN A NEWSPAPER OF
GENERAL CIRCULATION AND PERIODICALLY UPDATED IN THE BUREAU
OF CUSTOMS WEBSITE AND POSTED IN THE BULLETIN BOARD OF THE
BUREAU, SHALL REFER TO THE DOCUMENT WHICH INDICATES THE
LATEST VALUE(S) OF PRODUCT(S) 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.

“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] VCRC has reason to doubt the truth or accuracy of the
particulars or of documents produced in support of this declaration, the [customs
administration] VCRC may ask the importer to provide further explanation,
including documents or other evidence, that the declared value represents the
total amount actually paid or payable for the imported goods, adjusted in
accordance with the provisions of Subsection (A) hereof.

“If, after receiving further information, or in the absence of a response, the
[customs administration] VCRC still has reasonable doubts about the truth or
accuracy of the declared value, it may, without prejudice to an importer's right to
appeal pursuant to Article 11 of the World Trade Organization Agreement on
customs valuation, be deemed that the customs value of the imported goods
cannot be determined under Method One. Before taking a final decision, the
Collector of Customs shall communicate to the importer, in writing if requested,
his grounds for doubting the truth or accuracy of the particulars or documents
produced and give the importer a reasonable opportunity to respond, When a
final decision is made, the [customs administration] DISTRICT COLLECTOR
shall communicate to the importer in writing, COPY FURNISHED THE
MEMBERS OF THE VCRC, [its] THE 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

2


Philippines and the corresponding amount of custom 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 (NEDA), [Central Bank of the
Philippines] BANGKO SENTRAL NG PILIPINAS (BSP), Board of Investments,
Department of Budget AND MANAGEMENT, and other economic agencies of
the government, on or before December 30, of each year.
Seonac?

SEC. 4. Section 609 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

"SEC. 609. Commissioner to Furnish Copies of Collectors’ Liquidated
Duplicates. - The Commissioner shall regularly furnish the NEDA, the [Central
Bank of the Philippines] BSP, the Tariff Commission, AND THE NATIONAL
STATISTICS OFFICE (NSO) [a copy] BOTH ELECTRONIC AND PAPER
COPIES of each of all customs import/export entries as filed with the Bureau of
Customs. The Tariff Commission or its duly authorized agents shall have access
to and the right to copy all the customs liquidated import entries and other
documents appended thereto as finally filed in the Commission on Audit.”

SEC.§. 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, CLARK INTERNATIONAL AIRPORT, [and] Manila
International Container Port], AND SUCH OTHER PORTS THAT MAY BE
CREATED PURSUANT TO THIS CODE.”

SEC.6. A new Part 3 shall be inserted under Title 1, Book Il — Customs Law, of the
3


Tariff and Customs Code of the Philippines, as amended, and under which new Sections 801,
802, 803 and 804 are further inserted, which shall read as follows:

“PART 3
“AUDIT, TRANSPARENCY AND ACCOUNTABILITY

"SEC.801. IN ORDER TO INSTILL TRANSPARENCY AND
ACCOUNTABILITY IN THE OPERATIONS OF THE BUREAU OF CUSTOMS,
THE COMMISSIONER OF CUSTOMS SHALL CONDUCT, ON AN ANNUAL
BASIS, A BUREAU-WIDE AUDIT WHICH AIMS TO EXAMINE AND
EVALUATE THE ADEQUACY AND EFFECTIVENESS OF INTERNAL
CONTROL AND THE QUALITY OF PERFORMANCE IN THE BUREAU OF
CUSTOMS.

“THE BUREAU-WIDE AUDIT SHALL COVER, AMONG OTHERS, 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
ENTIRE BUREAU.”

“SEC. 802. AN INTERNAL CONTROL OFFICE, WHICH SHALL BE
ATTACHED TO THE OFFICE OF THE COMMISSIONER OF CUSTOMS, IS
HEREIN CREATED TO ASSIST THE COMMISSIONER IN THE CONDUCT OF
A BUREAU-WIDE AUDIT PURSUANT TO REPUBLIC ACT NO. 3456,
REPUBLIC ACT NO. 4177, ADMINISTRATIVE ORDER NO. 278 AND
ADMINISTRATIVE ORDER NO. 70.

“THE ANNUAL APPROPRIATIONS FOR THE BUREAU OF CUSTOMS
SHALL PROVIDE AN ITEM OF EXPENSE FOR THE BUREAU-WIDE AUDIT
AS CONTEMPLATED IN THIS ACT.”

“SEC. 803. ON THE BASIS OF THE INTERNAL AUDIT ACTIVITIES
CONDUCTED, THE INTERNAL CONTROL OFFICE SHALL SUBMIT TO THE
COMMISSIONER A WRITTEN REPORT CONTAINING THE IDENTIFIED
PROBLEMS AND DEFICIENCIES IN THE BUREAU AS WELL AS ITS
RECOMMENDED POLICIES/CORRECTIVE MEASURES. SUCH REPORT
SHALL BE PROMPTLY ACTED UPON BY THE COMMISSIONER WHO
SHALL INSTITUTE THE NECESSARY IMPROVEMENT TO ADDRESS
PERFORMANCE AND OPERATIONAL GAPS, UNLESS THERE IS
REASONABLE DOUBT ON ITS VALIDITY.”

“SEC. 804. THE COMMISSIONER SHALL FURNISH THE
4


SECRETARY OF FINANCE, THRU THE INTERNAL AUDIT OFFICE IN THE
DEPARTMENT OF FINANCE, A COPY OF THE INTERNAL AUDIT REPORT
AND ACTIONS TAKEN.”

SEC. 7. Section 1005 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

“SEC. 1005. Manifest Required of Vessel From Foreign Port. - x x x.
Seow

“A TRUE AND COMPLETE COPY OF THE CARGO MANIFEST AND
BILL OF LADING, TOGETHER WITH THE STOWAGE PLAN OF THE VESSEL
ENGAGED IN FOREIGN TRADE, SHALL BE ELECTRONICALLY SENT IN
ADVANCE BY THE VESSEL TO THE BUREAU OF CUSTOMS AND THE
PHILIPPINE PORTS AUTHORITY AT LEAST TWELVE (12) HOURS FOR
OCEAN GOING VESSELS AND TWO (2) HOURS FOR AIRLINES FROM
DEPARTURE PRIOR TO THEIR ARRIVAL IN THE PORT OF ENTRY:
PROVIDED, THAT IF THE VESSEL IS AN AIRCRAFT THE MANIFEST SHALL
BE ELECTRONICALLY TRANSMITTED TO THE BUREAU OF CUSTOMS AT
LEAST ONE (1) HOUR PRIOR TO THE AIRCRAFT'S ARRIVAL IN THE PORT
OF ENTRY: PROVIDED, FURTHER, THAT, THE BUREAU OF CUSTOMS
SHALL FURNISH THE DEPARTMENT OF AGRICULTURE WITH THE
ELECTRONICALLY SENT CARGO MANIFEST AND BILL OF LADING, UPON
RECEIPT THEREOF, IN THE CASE OF AGRICULTURAL IMPORTATIONS.

“A cargo manifest shall in no case be changed or altered after entry of the
vessel, except by means of an amendment by the master, consignee or agent
thereof, under oath, and attached to the original manifest: Provided, however,
That after the invoice and/or entry covering an importation have been received
and recorded [in the office of the appraiser] EITHER MANUALLY OR
ELECTRONICALLY IN THE BUREAU OF CUSTOMS OR HAD BEEN
LOGGED IN ITS COMPUTER SYSTEM, no amendment of the manifest shall be
allowed, except when it is obvious that a clerical error or any other 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 of
the importation has been completed. PRIOR TO RELEASE OF THE CARGO,
THE VERACITY OF THE AMENDMENT SHALL BE EXAMINED BY THE
COMMISSIONER OF CUSTOMS FOR THE PURPOSE OF INVOKING PENAL
PROVISION UNDER SECTIONS 2503 AND 3602 OF THIS CODE.”

SEC. 8. Section 1007 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:


“SEC. 1007. Manifests for Commission on Audit and Collector. — Papers
to be Deposited with Consul. — Immediately after the arrival of a vessel from a
foreign port, the master shall deliver or mail to the Chairman, Commission on
Audit, Manila, a copy of the cargo manifests properly endorsed by the boarding
officer, and [the master shall immediately] WITHIN TWENTY-FOUR (24)
HOURS AFTER ARRIVAL, HE SHALL present to the Collector the original copy
of the cargo manifests [properly endorsed by the boarding officer] and, for
inspection, the ship's register or other documents 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 THEREOF, THE
COLLECTOR SHALL PUBLISH IN THE BUREAU OF CUSTOMS WEBSITE
THE CARGO MANIFEST FOR TWO (2) CONSECUTIVE WEEKS.”

SEC. 9. 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.

“TRANSHIPPED GOODS MUST REMAIN AT ALL TIME IN THE PORT
OF ARRIVAL AND SHALL NOT BE TRANSFERRED OR TRANSPORTED TO
ANY OTHER PHILIPPINE PORT OF ENTRY PRIOR TO THE TRANSPORT
THEREOF TO THE FOREIGN PORT OF DESTINATION AS INDICATED IN
THE CARGO MANIFEST. WHEN THE SHIPMENT IS UNLOADED IN OR
TRANSFERRED TO ANY OTHER PORT OF ENTRY OTHER THAN IN THE
PORT OF ARRIVAL BEFORE TRANSPORTING THE SAME TO THE
FOREIGN PORT OF DESTINATION, IT SHALL BE CONSIDERED AS HAVING
BEEN INTRODUCED INTO THE PHILIPPINE CUSTOMS TERRITORY
SUBJECT TO APPLICABLE DUTIES AND TAXES.

“THE PARTY WHO APPLIED FOR FOREIGN TRANSHIPMENT SUCH
AS THE SHIPPING COMPANY OR AGENT, TRANSHIPMENT OPERATOR OR
THE OWNER OF THE GOODS SHALL SUBMIT TO THE BUREAU OF
CUSTOMS AND/OR TO THE BUREAU OF INTERNAL REVENUE WITHIN THE
PRESCRIBED PERIOD OF SIX (6) MONTHS ANY OFFICIAL DOCUMENT
SATISFACTORILY SHOWING THAT THE TRANSHIPPED GOODS HAD
ACTUALLY ARRIVED AND HAD BEEN UNLOADED IN THE FOREIGN PORT
OF DESTINATION AND THAT THE SAME HAD BEEN RECEIVED BY THE
CONSIGNEE NAMED IN THE MANIFEST: PROVIDED, THAT IF THE SAID
OFFICIAL DOCUMENT IS IN A FOREIGN LANGUAGE OTHER THAN
ENGLISH, IT SHALL BE ACCOMPANIED BY AN ENGLISH TRANSLATION
DULY AUTHENTICATED BY A PHILIPPINE COMMERCIAL ATTACHE OR

6


CONSUL.

“FAILURE TO SUBMIT THE OFFICIAL DOCUMENT AS REQUIRED
HEREINABOVE SHALL CONSTITUTE PRIMA FACIE PROOF THAT THE
GOODS ALLEGEDLY TRANSHIPPED 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) WHICH FAILED TO SUBMIT THE REQUIRED OFFICIAL
DOCUMENT. THEREAFTER AND UNTIL THE REQUIRED OFFICIAL
DOCUMENT SHALL HAVE BEEN SUBMITTED, ALL SUBSEQUENT
TRANSHIPMENT OF GOODS TO AND FROM THE PHILIPPINES BY THE
SAID PARTY(IES) WITHOUT THE PAYMENT OF DUTIES AND TAXES
SHALL BE DISALLOWED.”

SEC. 10. Section 1025 of the Tariff and Customs Code of the Philippines, as amended,

is hereby further amended to read as follows:

follows’

“Sec. 1025. Export Product to Conform to Standard Grades AND
MARKING OF PACKAGES FOR EXPORT. - A Collector shall not permit
products for which standard grades have been established by the government to
be laden aboard a vessel clearing for a foreign port, unless the shipment
conforms to the requirements of law relative to the shipment of such products.

“PACKAGES CONTAINING GOODS FOR EXPORT SHALL BE
LABELED IN ACCORDANCE WITH LAWS AND REGULATIONS. PACKAGES
THAT DO NOT COMPLY WITH THE REQUIRED MARKINGS MAY BE DENIED
EXPORT PERMITS.”

SEC. 11. A new section to be known as Section 1203-A is hereby inserted after
Section 1203 of the Tariff and Customs Code of the Philippines, as amended, to read as

“SEC. 1203-A. PUBLICATION OF ACCREDITED IMPORTERS AND
BROKERS. - ANY PROVISION OF LAW TO THE CONTRARY
NOTWITHSTANDING, THE SECRETARY OF FINANCE, THROUGH THE
COMMISSIONER OF CUSTOMS, IS HEREBY MANDATED TO CAUSE THE
PUBLICATION OF THE LIST OF IMPORTERS AND BROKERS ACCREDITED
BY THE BUREAU OF CUSTOMS WITHIN NINETY (90) DAYS FROM THE DAY
OF APPROVAL OF THE APPLICATION FOR ACCREDITATION OR
RENEWAL OF THE ACCREDITATION, AS THE CASE MAY BE: PROVIDED,
THAT THE BUREAU OF CUSTOMS SHALL POST THE LIST OF
ACCREDITED IMPORTERS AND BROKERS IN ITS WEBSITE ANNUALLY
AND SHALL REGULARLY UPDATE SAID LIST: PROVIDED, FURTHER,
THAT OTHER INFORMATION ON THE ACCREDITED IMPORTERS AND
BROKERS, OTHER THAN THOSE PUBLISHED IN THE WEBSITE AND NOT

7


OTHERWISE CONFIDENTIAL, MAY BE MADE AVAILABLE UPON OFFICIAL
REQUEST FROM THE COMMISSIONER OF CUSTOMS.

“THE AMOUNT NECESSARY FOR THE PUBLICATION OF THE LIST
OF IMPORTERS AND BROKERS SHALL BE CHARGED TO THE
APPROPRIATIONS OF THE BUREAU OF CUSTOMS UNDER THE CURRENT
GENERAL APPROPRIATIONS ACT. THEREAFTER, SUCH SUM AS MAY BE
NEEDED FOR ITS CONTINUED IMPLEMENTATION SHALL BE
CHARGEABLE TO THE FUND COLLECTED BY THE BUREAU FROM THE
APPLICATION AND RENEWAL FEES OF THE IMPORTERS AND BROKERS.”

SEC. 12. Section 1204 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 due [from] AND DEMANDABLE
AGAINST the importer [to] IN FAVOR OF the government which can be
discharged only by payment in full of all duties, taxes, fees and other charges
legally accruing. It also 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.

“IN CASE THE IMPORTED ARTICLE IS FOUND IN THE CUSTODY OR
POSSESSION OF A TRANSFEREE OR BUYER IN GOOD FAITH, THE
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 OF THE
IMPORTED ARTICLES AS MENTIONED IN SECTION 201 OF THIS CODE,
FILED BY THE IMPORTER SHALL BE APPLIED FOR ANY TAX DEFICIENCY,
DUTIES, FEES, INTEREST AND OTHER CHARGES THAT MAY BE FINALLY
DETERMINED BY THE BUREAU AGAINST THE IMPORTED ARTICLE.”

SEC. 13. Section 1210 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

“SEC. 1210. Disposition of Imported Articles Remaining on Vessel After
Time for Unlading. — x x x

“Unless prevented by causes beyond the vessel's control, such as port
congestion, strikes, riots or civil commotions, failures of vessel's gear, bad
weather, and similar causes, articles so stored shall be entered within [thirty (30)]
FIFTEEN (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 not likewise be extendible from the date of posting of the

8


notice to claim in conspicuous places in the Bureau of Customs. If not entered or
not claimed, it shall be disposed of in accordance with the provisions of this
Code.”

SEC. 14. 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 PERMITIMPORT AUTHORITY FOR
AGRICULTURAL PRODUCTS. - IMPORTED AGRICULTURAL PRODUCTS
MUST BE COVERED BY A VALID IMPORT OR QUARANTINE PERMIT
ISSUED BY THE DEPARTMENT OF AGRICULTURE (DA) OR ITS
CONCERNED BUREAU PRIOR TO IMPORTATION INTO THE PHILIPPINES.
NO AGRICULTURAL PRODUCTS MUST BE ACCEPTED FOR LOADING
AND/OR TRANSPORT BY A VESSEL OR AIRCRAFT INTO THE COUNTRY IF
THESE AGRICULTURAL PRODUCTS HAVE NOT BEEN AUTHORIZED
THROUGH AN IMPORT OR QUARANTINE PERMIT ISSUED BY THE DA OR
ITS CONCERNED AGENCIES PRIOR TO SHIPMENT. IF AND WHEN
AGRICULTURAL PRODUCTS WERE LOADED, TRANSPORTED AND
BROUGHT INTO THE COUNTRY WITHOUT THE PRIORLY ISSUED IMPORT
OR QUARANTINE PERMIT, THE SAME MUST NOT BE UNLOADED FROM
THE VESSEL OR AIRCRAFT TO ANY PHILIPPINE PORT OF ENTRY AND
MUST BE SHIPPED BACK TO THE COUNTRY OF ORIGIN BY THE
IMPORTER/ICONSIGNEE THROUGH THE SAME CARRIER THAT
LOADED/TRANSPORTED, BROUGHT IN THE PRODUCTS: PROVIDED,
THAT, ANY IMPORTER WHO IMPORTED ANY AGRICULTURAL PRODUCT
WITHOUT ANY PRIORLY ISSUED IMPORT OR QUARANTINE PERMIT FOR
THE PURPOSE SHALL BE PUNISHABLE AS PROVIDED FOR UNDER
SECTION 3601 OF THIS CODE.”

SEC. 15. Section 1302 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:
"Sec. 1302. Import Entries. — xxx
“The Commissioner may, x x x
“A formal entry may be x x x:
“ay xxx;
“(b) x xx; or
“(e) xxx.
“FOR PURPOSES HERETO, ALL IMPORT ENTRIES SHALL
EXPLICITLY AND CLEARLY INDICATE THE NAME OF THE CUSTOMS
BONDED WAREHOUSE WHERE THE IMPORTED ARTICLES WILL BE
PLACED OR DEPOSITED, AND THE NAME OF THE IMPORTER OR
CONSIGNEE.


“Import entries under irrevocable x x x.

“All importations entered under formal entry shall be covered by a letter of
credit or any other verifiable document evidencing payment OF THE DUTIES,
TAXES AND OTHER CHARGES DUE THEREON.”

SEC. 16. A new section to be known as Section 1401-A is hereby inserted after
Section 1401 of the Tariff and Customs Code of the Philippines, as amended, to read as
follows:

“SEC. 1401-A. VALUATION LIBRARY. - THE COMMISSIONER
SHALL ENSURE THAT THERE SHALL BE A VALUATION LIBRARY WHICH
SHALL PRIMARILY SERVE AS REFERENCE AND SOURCE OF
INFORMATION IN THE VALUATION AND APPRAISAL OF IMPORTED
ARTICLES. THE VALUATION LIBRARY SHALL BE KEPT UPDATED WITH
THE VALUES OF IMPORTED PRODUCTS AS CONTAINED IN THE LATEST
REVISION ORDERS AND MAINTAINED USING THE BEST AVAILABLE
TECHNOLOGY AND SHALL BE MADE READILY AVAILABLE TO THE
PUBLIC. VIOLATION HEREOF SHALL BE PUNISHABLE AS PROVIDED
UNDER SECTION 3612 OF THIS CODE.”

SEC. 17. Section 1403 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

“SEC. 1403. Duties of Customs Officer Tasked to Examine, Classify,
and Appraise Imported Articles. - The customs officer tasked to examine,
classify, and appraise imported articles shall determine whether the packages
designated for examination and their contents are in accordance with the
declaration in the entry, invoice and other pertinent documents and shall make
return in such a manner as to indicate whether the articles have been truly and
correctly declared in the entry as regard their quantity, measurement, weight, and
tariff classification and not imported contrary to law. SUBJECT TO THE
GUIDELINES TO BE ISSUED BY THE COMMISSIONER WITH THE
APPROVAL OF THE SECRETARY OF FINANCE, THE CUSTOMS OFFICER
[He] shall TAKE A REPRESENTATIVE [submit] samples OF THE IMPORTED
ARTICLE IN THE PRESENCE OF THE IMPORTER, CONSIGNEE OR THEIR
REPRESENTATIVES to SUBMIT to [the] CUSTOMS laboratory OR TO THE
LABORATORY OF THE APPROPRIATE GOVERNMENT REGULATORY
AGENCY for analysis when feasible to do so and when such analysis is
necessary for the proper classification, appraisal, and/or admission into the
Philippines of imported articles. THE CUSTOMS OFFICER SHALL TAKE INTO
ACCOUNT THE RESULT OF THE ANALYSIS IN THE CLASSIFICATION,
APPRAISAL AND/OR ADMISSION INTO THE PHILIPPINES OF THE

10


IMPORTED ARTICLE.

“THE CUSTOMS OFFICER SHALL CERTIFY UNDER OATH IN THE
RETURN THAT HE USED THE VALUATION LIBRARY IN THE VALUATION
AND APPRAISAL OF THE IMPORTED ARTICLES.

SOK

SEC. 18. Section 1409 of the Tariff and Customs Code of the Philippines, as
amended, is hereby further amended to read as follows:

“Sec. 1409. [Employment and Compensation of Persons to Assist in
Appraisal or Classification of Articles] VALUATION AND CLASSIFICATION
REVIEW COMMITTEE (VCRC). ~ [When necessary, the Collector may request
two disinterested persons versed in the matter to assist the appraiser in
appraising or ascertaining the value of any article. Persons so employed shall be
paid compensation in an amount, to be determined by the Commissioner, not
exceeding fifty pesos for each day of such service.) VALUATION AND
CLASSIFICATION ISSUES SHALL BE COURSED THROUGH A VALUATION
AND CLASSIFICATION REVIEW COMMITTEE (VCRC) DIRECTLY UNDER
THE CHAIRMANSHIP OF THE RESPECTIVE DISTRICT COLLECTOR OF
CUSTOMS.

“FROM AMONG THE MEMBERS OF THE VCRC, ONE (1) MEMBER
SHALL COME FROM THE TARIFF COMMISSION WHO SHALL BE A
PERMANENT MEMBER, ONE (1) MEMBER FROM AMONG THE
RECOMMENDEES OF THE DEPARTMENT OF TRADE AND INDUSTRY AND
THE DA, AS THE CASE MAY BE, AND ANOTHER ONE (1) MEMBER SHALL
COME FROM THE PRIVATE SECTOR REPRESENTING THE INDUSTRY
SECTOR AFFECTED.

“SUBJECT TO THE GUIDELINES TO BE ISSUED BY THE
COMMISSIONER DULY APPROVED BY THE SECRETARY OF FINANCE,
THE VCRC SHALL REQUEST CONCERNED INDUSTRY ASSOCIATIONS TO
NOMINATE AN INDUSTRY.COMMODITY EXPERT WHO WILL ASSIST THE
VCRC IN CLASSIFYING, APPRAISING OR ASCERTAINING THE VALUE OF
AN IMPORTED ARTICLE AT NO COST TO THE BUREAU. IN ORDER FOR
SUCH PERSONS TO EFFECTIVELY ASSIST THE VCRC, THE INDUSTRY
COMMODITY EXPERT SHALL BE FURNISHED DURING THE IMPORTATION
OF A PARTICULAR ARTICLE WITH A COPY OF THE IMPORT ENTRY AND
DECLARATION AND HE SHALL BE ALLOWED TO OBSERVE THE
PHYSICAL EXAMINATION AND THE TAKING OF SAMPLE OF THE
IMPORTED ARTICLE.”

SEC. 19. A new section shall be added in the Tariff and Customs Code of the
Philippines, as amended, to be designated as Section 1410, to read as follows:

"1


“SEC. 1410. AUTHORITY OF THE BUREAU TO EXAMINE THE
ENTRY AND EXIT OF IMPORTED ARTICLES IN THE FREEPORTS. - THE
BUREAU, IN COORDINATION WITH THE APPROPRIATE GOVERNMENT
AGENCIES SUCH AS, BUT NOT LIMITED TO, THE DEPARTMENTS OF
TRADE AND INDUSTRY, AGRICULTURE, TRANSPORTATION AND
COMMUNICATIONS, AND HEALTH SHALL HAVE THE AUTHORITY TO
EXAMINE THE ENTRY AND EXIT OF IMPORTED ARTICLES IN THE
FREEPORTS FOR THE PURPOSE OF DETERMINING: (A) THE QUANTITY
AND DESCRIPTION OF SUBJECT IMPORTED ARTICLES, AND (B) THE
COMPLIANCE WITH THE SANITARY AND AGRICULTURAL
REQUIREMENTS.”

SEC. 20. Section 1603 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

"SEC. 1603. Finality of Liquidation. - When articles have been entered
and passed free of duty or final adjustments of duties made, with subsequent
delivery, such entry and passage free of duty or settlements of duties will, after
the expiration of [three (3) years] ONE (1) YEAR from the date of the final
payment of duties, in the absence of fraud or protest or compliance audit
pursuant to the provisions of this Code, be final and conclusive upon alll parties,
unless the liquidation of the import entry was merely tentative.”

SEC. 21. Section 1801 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

“SEC, 1801. Abandonment, Kinds and Effects of. - An imported article
is deemed abandoned under any of the following circumstances:

xx

“(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 SUBAGENTS 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, WHICH SHALL NOT BE EXTENDIBLE,
FROM THE DATE OF DISCHARGE OF THE LAST PACKAGE FROM THE

12


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 RECEIPT OF THE NOTICE OF
ARRIVAL WITHIN WHICH TO FILE THE APPROPRIATE ENTRY. FAILURE
ON THE PART OF THE SHIPPING LINES, SHIPPING COMPANIES, FREIGHT
FORWARDERS, CONSOLIDATORS, BREAK BULK AGENTS AND THEIR
AGENTS AND SUBAGENTS AND ARRASTRE CONTRACTORS TO COMPLY
HEREWITH SHALL CONSTITUTE A GROUND FOR THE SUSPENSION OF
THEIR LICENSES OR AUTHORITY TO ENGAGE IN THEIR RESPECTIVE
LINE OF ACTIVITIES IN THE IMPORTATION OPERATIONS.

eK"

SEC. 22. Section 1802 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

“SEC. 1802. Abandonment of Imported Articles. - An abandoned article
shall ipso facto be deemed the property of the Government and shall be
disposed of in accordance with the provisions of this Code. AN UPDATED
LISTING OF ALL ABANDONED SHIPMENTS SHALL BE POSTED ON THE
OFFICIAL WEBSITE OF THE BUREAU.

Oxx"

SEC. 23 Section’ 1901 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

“SEC. 1901 Establishment, [and] Supervision AND ACCREDITATION
of Warehouses. — When the business of the port requires such facilities, the
Collector, subject to the approval of the Commissioner, shall designate and
establish warehouses for use as public and private bonded warehouses, sheds
or yards, or for other special purposes. ALL SUCH WAREHOUSES SHALL BE
ACCREDITED BY AN ACCREDITATION COMMITTEE WHICH SHALL BE
CHAIRED BY THE SECRETARY OF TRADE AND INDUSTRY AND CO-
CHAIRED BY THE SECRETARY OF FINANCE, AND TO BE COMPOSED OF
THE COMMISSIONER OF CUSTOMS, THE GOVERNOR OF THE BANGKO
SENTRAL NG PILIPINAS, THE COMMISSIONER OF THE INSURANCE
COMMISSION, OR THEIR DULY DESIGNATED REPRESENTATIVES, AS

13


MEMBERS THEREOF.

“REPRESENTATIVES FROM OTHER CONCERNED GOVERNMENT
AGENCIES AND THE AFFECTED INDUSTRY ASSOCIATIONS OR SECTORS
SHALL BE INVITED AS THE COMMITTEE DEEMS NECESSARY TO ASSIST
IT IN ITS DELIBERATIONS.

“All such warehouses and premises shall be subject to the supervision of
the Collector, who shall impose such conditions as may be deemed necessary
for the protection of the revenue and of the articles stored therein. THE
CUSTOMS COLLECTOR SHALL CONDUCT SPOT CHECKS AND PERIODIC.
AUDITS TO ENSURE THAT APPLICABLE CUSTOMS LAWS AND
REGULATIONS ARE FOLLOWED 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
warehouse 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 warehouse, sheds, yards or
premises.

‘THE OPERATORS OF THE BONDED WAREHOUSES SHALL MAKE
AVAILABLE TO THE CONCERNED GOVERNMENT REGULATORY
AGENCIES 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]
ACCREDITATION COMMITTEE AS PROVIDED IN SECTION 1901 HEREOF,
describing the premises, the location, and capacity of the same, [and] the
purpose for which the building is to be used[.], AND THE INDUSTRY THAT IT
SERVES.

“Upon receipt of such application, the [Collector] ACCREDITATION
COMMITTEE shall cause an examination of the premises, with reference
particularly to its location, construction and means provided for the safekeeping
of articles. THE COMMITTEE SHALL LIKEWISE DETERMINE THE
OWNERSHIP OF THE APPLICANT BONDED WAREHOUSE TO VERIFY IF
ANY OWNER OR OWNERS OF A BONDED WAREHOUSE WHICH HAD

14


BEEN CLOSED DUE TO ITS NONCOMPLIANCE WITH CUSTOMS LAWS
AND REGULATIONS HAVE ANY INTEREST THEREIN. [and if] IF THE
APPLICATION IS found satisfactory, [he] THE COMMITTEE may authorize its
establishment, and [accept] CAUSE THE ACCEPTANCE OF 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 NETWORTH OF THE BONDED
WAREHOUSE SHALL BE SET AT AN AMOUNT AS DETERMINED BY THE
COMMITTEE AS SUFFICIENT TO COVER THE TAXES AND DUTIES 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 (PEZA), THE SUBIC BAY
METROPOLITAN AUTHORITY (SBMA), AND OTHER FREEPORTS AND
ECONOMIC ZONES."

SEC. 27. 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] ACCREDITATION
COMMITTEE AS PROVIDED FOR IN SECTION 1901 HEREOF at any time
when conditions so warrant, or, in 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 COMMITTEE THE DISCONTINUANCE OF THE BONDED
WAREHOUSE ON GROUNDS OF NONCOMPLIANCE WITH THE
REQUIREMENTS OF LAW AND REGULATIONS. Where the dutiable article is
stored in such premises, the same must be removed at the risk and expense of
the operator and 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] ACCREDITATION
COMMITTEE.”

SEC. 28. Section 1906 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

15


“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 articles for consumption. No warehousing
entry shall be accepted for any article if from the entry, supporting documents
andior information such article is imported contrary to any law. THE CUSTOMS
OFFICER RECEIVING THE ENTRY SHALL BE RESPONSIBLE FOR
TRANSMITTING A COPY OF THE SAME TO THE DEPUTY COMMISSIONER
FOR AUDIT AND TRANSPARENCY.”

SEC. 29, 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 Articles from Bonded Warehouse. —
Articles entered under irrevocable domestic letter of credit [JOR 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 foreign trade for use on board such vessel or aircraft as sea stores or aircraft
stores after liquidation of the entry. The withdrawal must be made [by a person
or firm duly authorized by the former] ONLY BY THE IMPORTER OF THE
ARTICLES TO BE WITHDRAWN OR BY A REPRESENTATIVE whose

authority must appear in writing upon the face of the withdrawal entry.”

SEC. 30. Section 1908 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

“SEC. 1908. Limit to Period of Storage in Bonded Warehouse. - Articles
duly entered for warehousing may remain in bonded warehouses for a maximum
period of [one year] SIX (6) MONTHS AND EXTENDIBLE FOR ANOTHER
THREE (3) MONTHS from the time of [arrival at the port of entry] RECEIPT OF
THE WAREHOUSE. Articles not withdrawn at the expiration of the prescribed
period shall be [sold at public auction by the Collector] DEEMED ABANDONED
AND SUBJECT TO DISPOSITION IN ACCORDANCE WITH SECTION 2602
OF THIS CODE: PROVIDED, HOWEVER, THAT EMBROIDERY AND
SHIPBUILDING INDUSTRIES MAY STORE THEIR IMPORTS IN THE
CUSTOMS BONDED WAREHOUSE FOR A PERIOD OF TWENTY-FOUR (24)
MONTHS.”

SEC. 31. Anew section to be known as Section 1910 is hereby inserted in Part 1, Title
V, Book II of the Tariff and Customs Code of the Philippines, as amended, to read as follows’

“SEC. 1910. VERIFICATION OF RECORDS KEPT IN CUSTOMS
BONDED WAREHOUSES. — A CAREFUL ACCOUNT SHALL BE KEPT BY

16


THE COLLECTOR OF ALL ARTICLES DELIVERED TO ANY BONDED
WAREHOUSE, AND A SWORN MONTHLY RETURN, DULY VERIFIED BY
THE 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 BY THE SECRETARY OF TRADE AND INDUSTRY OR THE
SECRETARY OF FINANCE, BE MADE AVAILABLE TO THE COLLECTOR OR
HIS REPRESENTATIVE OR TO ANY LEGITIMATE INDUSTRY ASSOCIATION
OR INDUSTRY SECTOR AFFECTED AND THE INDUSTRY SECTOR
SOUGHT TO BE SERVICED BY THE BONDED WAREHOUSE, FOR
PURPOSES OF EXAMINATION AND/OR AUDIT.”

SEC. 32. Section 2001 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

“SEC. 2001, Establishment of Bonded Manufacturing Warehouses. — All
articles manufactured in whole or in part of imported materials, and intended for
exportation without being charged with duty, shall, in order to be so
Manufactured and exported, be made and manufactured in bonded
Manufacturing warehouses under such rules and regulations as the
Commissioner of Customs, with the approval of the Secretary of Finance, shall
Prescribe: Provided, That the manufacturer of such articles shall first file a
Satisfactory bond for the faithful observance of all laws, rules and regulations
applicable —thereto[]:__ PROVIDED, FURTHER, THAT BONDED
MANUFACTURING WAREHOUSES SHALL LIKEWISE BE SUBJECT TO THE
PROVISIONS UNDER TITLE V, BOOK II OF THIS CODE: PROVIDED,
FINALLY, THAT THESE REQUIREMENTS SHALL EXTEND TO REGISTERED
LOCATORS OPERATING UNDER THE CHARTERS OF THE PEZA, THE
SBMA, AND OTHER FREEPORTS AND ECONOMIC ZONES."

SEC. 33. Section 2002 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read ag follows:

“SEC. 2002. Exemption from Duty. —

‘x x

“b. Any imported material used in the manufacture of such articles,
and any package, covering, brand and label used in putting up the same may,
under the regulation prescribed by the Commissioner, with the approval of the
Secretary of Finance, be conveyed without the payment of duty into any bonded
manufacturing warehouse, and imported articles may, under the aforesaid

7


regulations, be transferred without the payment of duty from any bonded
warehouse into any bonded manufacturing warehouse, or to duly accredited sub-
conctractors of manufacturers who shall process the same into finished products
for exports and deliver such finished products back to the bonded manufacturing
warehouse, therefrom to be exported; but this privilege shall not be held to apply
to implements, machinery or apparatus to be used in the construction or repair of
any bonded manufacturing warehouse: Provided, however, That the materials
transferred or conveyed into any bonded manufacturing warehouse shall be used
in the manufacture of articles for exportation within a period of [nine (9) months]
THIRTY (30) DAYS from date of such transfer or conveyance into the bonded
manufacturing warehouse, which period may for sufficient reasons be further
extended for not more than [three (3) months] THIRTY (30) DAYS by the
Commissioner. Materials not used in the manufacture of articles for exportation
within the prescribed period shall pay the corresponding duties: Provided, further,
That the operation of embroidery and apparel firms shall continue to be governed
by Republic Act Numbered Thirty-one hundred and thirty-seven.”

SEC. 34. Section 2003 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

“Sec. 2003. Procedure for Withdrawal. - Articles received into such
bonded manufacturing warehouse or articles manufactured therein may be
withdrawn or removed therefrom for direct shipment and for immediate
exportation in bond under the super

jon of the proper customs officer, who
shall certify to such shipment and exportation, or lading for immediate exportation
as the case may be, describing the articles by their mark or otherwise, the
quantity, the date of exportation, in the name of the vessel or aircraft: Provided,
That the waste and _ by-products incident to the process of manufacture in said
bonded warehouse may be withdrawn for domestic consumption upon payment
of duty equal to the duty which would be assessed and collected pursuant to law
as if such waste or by-products were imported from a foreign country: Provided,
further, That all waste materials may be disposed under government supervision
All labor performed and services rendered under these provisions shall be under
the supervision of the proper customs officer and at the expense of the
manufacturer.

“VIOLATION OF THE FOREGOING PROVISION SHALL BE DEEMED
AS SMUGGLING WHICH SHALL BE PUNISHABLE UNDER SECTIONS 3601
AND 3602 OF THIS CODE.

“THE ARTICLES SUBJECT OF THE VIOLATION SHALL IPSO FACTO
BE FORFEITED IN FAVOR OF THE GOVERNMENT TO BE DISPOSED OF
PURSUANT TO SECTION 2602 OF THIS CODE.”

18


SEC. 35, Section 2307 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

“Section 2307. [Settlement of Case by Payment of Fine or Redemption of
Forfeited Property.) SETTLEMENT OF SEIZURE CASE BY PAYMENT OF FINE
AND THE LOCAL INDUSTRY MARKET VALUE OF THE SEIZED ARTICLE. —
[Subject to approval of the Commissioner, the district collector may, while the
case is still pending, except when there is fraud, accept the settlement of any
seizure case provided that the owner, importer, exporter, or consignee or his
agent shall offer to pay to the collector a fine imposed by him upon the property,
or in case of forfeiture, the owner, exporter, importer or consignee or his agent
shall offer to pay for the domestic market value of the seized article. The
Commissioner may accept the settlement of any seizure case on appeal in the
same manner]

“[Upon payment of the fine as determined by the district collector which
shall be in amount not less than twenty percentum (20%) nor more than eighty
percentum (80%) of the landed cost of the seized imported article or the F.O.B.
value of the seized article for export, or payment of the domestic market value,
the property shall be forthwith released and all liabilities which may or might
attach to the property by virtue of the offence which was the occasion of the
seizure and all liability which might have been incurred under any cash deposit or
bond given by the owner or agent in respect to such property shall thereupon be
deemed to be discharged]

“{Settlement of any seizure case by payment of the fine or redemption of
forfeited property shall not be allowed in any case where the importation is
absolutely prohibited or where the release of the property would be contrary to
law.] SUBJECT TO APPROVAL OF THE COMMISSIONER, THE DISTRICT
COLLECTOR MAY, AFTER THE IMPLEMENTATION OF THE WARRANT OF
SEIZURE BUT PRIOR TO THE FINAL JUDGMENT ON THE FORFEITURE
CASE, EXCEPT WHEN THERE IS FRAUD, ACCEPT THE SETTLEMENT OF
ANY SEIZURE CASE: PROVIDED, THAT THE OWNER, IMPORTER,
EXPORTER, BROKER, OR CONSIGNEE OR HIS AGENT SHALL OFFER TO
PAY TO THE DISTRICT COLLECTOR A FINE IMPOSED BY HIM UPON THE
PROPERTY AND THE LOCAL INDUSTRY MARKET VALUE OF THE SEIZED
ARTICLE. :

“UPON PAYMENT OF THE LOCAL INDUSTRY MARKET VALUE AND
THE FINE AS DETERMINED BY THE DISTRICT COLLECTOR WHICH SHALL
BE IN AMOUNT NOT LESS THAN TWENTY PER CENTUM (20%) NOR MORE
THAN EIGHTY PER CENTUM (80%) OF THE LANDED COST OF
THE SEIZED ARTICLE, THE PROPERTY SHALL BE FORTHWITH
RELEASED AND ALL LIABILITIES WHICH MAY OR MIGHT ATTACH TO THE
PROPERTY BY VIRTUE OF THE OFFENSE WHICH WAS THE OCCASION OF

19


THE SEIZURE AND ALL LIABILITY WHICH MIGHT HAVE BEEN INCURRED
UNDER ANY CASH DEPOSIT OR BOND GIVEN BY THE OWNER OR AGENT
IN RESPECT TO SUCH PROPERTY SHALL THEREUPON BE DEEMED TO
BE DISCHARGED.

“SETTLEMENT OF ANY SEIZURE CASE BY PAYMENT OF THE FINE
AND THE LOCAL INDUSTRY MARKET VALUE OF THE SEIZED ARTICLE
SHALL NOT BE ALLOWED IN ANY CASE WHERE THE IMPORTATION IS
ABSOLUTELY PROHIBITED OR WHERE THE RELEASE OF THE
PROPERTY WOULD BE CONTRARY TO LAW.”

SEC. 36. Section 2308 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

"SEC. 2308. Protest and Payment Upon Protest in Civil Matters. —
When a ruling or decision of the Collector is made whereby liability for duties,
taxes, fees or other charges are determined, except the fixing of fines in seizure
cases, the party adversely affected OR THE INDUSTRY ASSOCIATION OR
INDUSTRY SECTOR AFFECTED BY ADVERSE RULING may protest such
ruling or decision by presenting to the Collector at the time when payment of the
amount claimed to be due the government is made, or within [fifteen (15)]
THIRTY (30) days thereafter, a written protest setting forth his objection to the
ruling or decision in question, together with the reasons therefore. No protest
shall be considered unless payment of the amount due after final liquidation has
first been made and the corresponding docket fee, as provided for in Section
3301. THE COLLECTOR SHALL RENDER HIS DECISION UPON THE
PROTEST FILED WITHIN A PERIOD OF SIXTY (60) DAYS FROM RECEIPT
OF THE WRITTEN PROTEST: PROVIDED, THAT, WHEN THE RULING OR
DECISION OF THE COLLECTOR IS ADVERSE TO THE PROTESTING
PARTY, IT MAY FILE AN APPEAL WITHIN FIFTEEN (15) DAYS UPON
RECEIPT OF THE DECISION OR RULING OF THE COLLECTOR, WITH THE
COMMISSIONER WHO SHALL RENDER A DECISION ON THE APPEAL
WITHIN THIRTY (30) DAYS FROM RECEIPT OF THE APPEAL: PROVIDED,
FURTHER, THAT, WHEN THE COLLECTOR FAILS TO RENDER A RULING
OR DECISION WITHIN THE PRESCRIBED PERIOD, THE PROTEST SHALL
AUTOMATICALLY BE ELEVATED TO THE COMMISSIONER WHO SHALL
RENDER A DECISION WITHIN SIXTY (60) DAYS FROM THE DATE OF
EXPIRATION OF THE PERIOD WITHIN WHICH THE COLLECTOR SHOULD
HAVE RENDERED HIS DECISION OR RULING: PROVIDED,
FURTHERMORE, THAT, WHEN THE RULING OR DECISION OF THE
COLLECTOR IS ADVERSE TO THE GOVERNMENT IT SHALL BE SUBJECT
TO THE PROVISIONS OF SECTION 2313 OF THIS CODE: PROVIDED,
FINALLY, THAT FAILURE TO RENDER A DECISION OR RULING WITHIN

20


THE PRESCRIBED PERIOD SHALL BE LIABLE UNDER SECTION 3604 OF
THIS CODE.”

SEC. 37. Section 2316 of the Tariff and Customs Code of the Philippines, as amended,

is hereby further amended to read as follows:

“Sec, 2316. Authority of Commissioner to make Compromise. ~
Subject to the approval of.the Secretary of Finance, the Commissioner of
Customs may compromise any case arising under this Code or other laws or part
of laws enforced by the Bureau of Customs involving the imposition of fines,
surcharges and forfeitures unless otherwise specified by law[]: PROVIDED,
THAT THE COMMISSIONER SHALL NOT ALLOW ANY COMPROMISE
INVOLVING TAX DEFICIENCY FOR THOSE CASES FALLING UNDER
SECTION 1603: PROVIDED, FURTHER, THAT THE COMPROMISE MAY BE
AVAILED PRIOR TO THE RECEIPT OF THE AUDIT NOTIFICATION LETTER
BY THE IMPORTER.”

SEC. 38. 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 AND
PRIVATE SECTOR PARTICIPATION IN THE COMPULSORY ACQUISITION. -
In order to protect 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 IN THE AMOUNT
EQUAL TO THE DECLARED CUSTOMS VALUE OF THE IMPORTED
ARTICLES PLUS ANY DUTIES, TAXES, FEES OR OTHER CHARGES WHICH
HAVE ALREADY BEEN PAID THEREON, IN WHICH CASE THE
COMMISSIONER OF CUSTOMS SHALL ACQUIRE SUCH IMPORTED
GOODS, PAYMENT FOR WHICH SHALL BE MADE WITHIN TEN (10)
WORKING DAYS FROM THE ISSUANCE OF A WARRANT SIGNED BY THE
COMMISSIONER OF CUSTOMS FOR THE ACQUISITION OF SUCH GOODS:
PROVIDED, THAT THE PROVISIONS OF SECTION 201 OF THIS CODE
SHALL APPLY IN THE CASE OF SURETY BONDS AND SURETY
COMPANIES.

“xXx

2


“Where no appeal is made by the importer, or upon reaffirmation of the
commissioner's decision during the appeals process, the Bureau of Customs or
its agent shall [sell] DISPOSE OF the acquired goods [pursuant to existing laws
and regulations] IN THE MANNER AS PROVIDED FOR IN THIS CODE:
PROVIDED, THAT, 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.

Xxx."

SEC. 39. Section 2401 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

“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] PROSECUTED AND HANDLED by customs [officers]
LAWYERS WITH THE ASSISTANCE OF THE DEPARTMENT OF JUSTICE:
PROVIDED, THAT, THE ‘DETERMINATION OF THE EXISTENCE OF
PROBABLE CAUSE AND THE SUBSEQUENT FILING OF ANY CRIMINAL OR
CIVIL CASE WITH THE PROPER COURT AGAINST VIOLATORS OF THIS.
CODE SHALL EXCLUSIVELY BELONG TO THE DEPARTMENT OF JUSTICE:
PROVIDED, FURTHER, THAT [but] 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.”

SEC. 40. 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] MISDECLARATION, MISCLASSIFICATION, AND UNDERVALUATION
IN GOODS DECLARATION. - [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 on 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

22


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,
misdeclaration in weight, measurement or quantity of more than thirty percent
(30%) between the value, 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 of this Code: Provided,
further, That any misdeclared or undeclared imported articles/items found upon
examination shall jpso facto be forfeited in favor of the Government to be
disposed of pursuant to the provisions of this Code.]

"[When the undervaluation, misdescription, misclassification or
misdeclaration in the import entry is intentional, the importer shall be subject to
the penal provision under Section 3602 of this Code.]

“MISDECLARATION AS TO QUANTITY, OR WEIGHT, OR
MEASUREMENT OF THE IMPORTED ARTICLE OCCURS WHEN THERE IS
DISCREPANCY OF TEN PERCENT (10%) OR MORE BUT NOT EXCEEDING
THIRTY PERCENT (30%) IN DUTY BETWEEN WHAT IS FOUND UPON
EXAMINATION AND WHAT IS DECLARED. IN CASE OF SUCH
MISDECLARATION, A SURCHARGE EQUIVALENT TO TWO HUNDRED
PERCENT (200%) OF THE DIFFERENCE BETWEEN THE FULL DUTY AS
FOUND AND THAT AS DECLARED SHALL BE IMPOSED. NO SURCHARGE
SHALL BE IMPOSED WHEN THE DISCREPANCY IN DUTY IS LESS THAN
TEN PERCENT (10%).

“MISCLASSIFICATION OCCURS WHEN AN INCORRECT TARIFF
HEADING IS USED RESULTING IN A DISCREPANCY IN DUTY BY TEN
PERCENT (10%) OR MORE SUT NOT EXCEEDING THIRTY PERCENT (30%).
IN CASE OF MISCLASSIFICATION, A SURCHARGE EQUIVALENT TO TWO
HUNDRED PERCENT (200%) OF THE DIFFERENCE BETWEEN THE FULL
DUTY AS FOUND UPON EXAMINATION AND THAT AS DECLARED SHALL
BE IMPOSED. NO SURCHARGE SHALL BE IMPOSED WHEN THE
DISCREPANCY IN DUTY IS LESS THAN TEN PERCENT (10%); OR WHEN
THE DECLARED TARIFF HEADING IS REJECTED IN A FORMAL CUSTOMS
DISPUTE SETTLEMENT PROCESS INVOLVING DIFFICULT OR HIGHLY
TECHNICAL QUESTION OF TARIFF CLASSIFICATION; OR WHEN THE
TARIFF CLASSIFICATION DECLARATION RELIED ON AN OFFICIAL
GOVERNMENT RULING OR INFORMATION.

“A DISCREPANCY IN MISDECLARATION OR IN MISCLASSIFICATION
MENTIONED ABOVE OR A DISCREPANCY OF MORE THAN THIRTY
PERCENT (30%) SHALL CARRY A PRESUMPTION OF FRAUD AND SHALL
BE PENALIZED UNDER SECTION 2530 AND SECTION 3602 OF THIS CODE:

23


PROVIDED, THAT ANY UNDECLARED ARTICLES/ITEMS SHALL /PSO
FACTO BE FORFEITED IN FAVOR OF THE GOVERNMENT TO BE
DISPOSED OF PURSUANT TO THE PROVISIONS OF THIS CODE.

“FAILURE OF THE IMPORTER TO OVERCOME THE PRESUMPTION
OF FRAUD SHALL SUBJECT THE IMPORTED ARTICLE TO SEIZURE AND
FORFEITURE PROCEEDINGS REGARDLESS OF THE AMOUNT OF THE
DISCREPANCY WITHOUT PREJUDICE TO THE APPLICATION OF PENAL
PROVISIONS AS PROVIDED IN THIS CODE AGAINST THE IMPORTER
AND/OR OTHER PERSON OR PERSONS WHO PARTICIPATED IN THE
FRAUDULENT ACT.

“THERE IS UNDERVALUATION WHEN: (A) THE CUSTOMS VALUE
DECLARATION IN THE IMPORT ENTRY FAILS TO DISCLOSE IN FULL THE
PRICE ACTUALLY PAID OR PAYABLE FOR THE IMPORTED ARTICLES;
OR, (B) WHEN IT USES AN INCORRECT VALUATION METHOD OR
OTHERWISE HAS NOT PROPERLY OBSERVED THE VALUATION RULES
UNDER THE TRANSACTION VALUE SYSTEM, RESULTING IN
DISCREPANCY IN DUTY BETWEEN THE CORRECT TRANSACTION VALUE
UNDER THE APPLICABLE METHOD AND THAT AS DECLARED.

“WHEN THE UNDERVALUATION IS ESTABLISHED WITHOUT NEED
TO GO THROUGH THE FORMAL DISPUTE SETTLEMENT PROCESS
REQUIRED UNDER THE TRANSACTION VALUE SYSTEM PROVIDED FOR
IN THIS CODE, A SURCHARGE SHALL BE IMPOSED IN AN AMOUNT
EQUAL TO TWO HUNDRED PERCENT (200%) OF THE DIFFERENCE
BETWEEN THE FULL DUTY AS ESTABLISHED AND THAT AS DECLARED.
NO SURCHARGE SHALL BE IMPOSED WHEN THE DISCREPANCY IN DUTY
IS LESS THAN TEN PERCENT (10%); OR WHEN THE DECLARED VALUE IS
REJECTED AS A RESULT OF AN OFFICIAL RULING OR DECISION UNDER
THE CUSTOMS DISPUTE SETTLEMENT PROCESS INVOLVING DIFFICULT
OR HIGHLY TECHNICAL QUESTION RELATING TO THE APPLICATION OF
CUSTOMS VALUATION RULES; OR THE VALUE DECLARATION RELIED
UPON AN OFFICIAL GOVERNMENT RULING OR INFORMATION.

"WHEN THE UNDERVALUATION IS ATTENDED WITH FRAUD, SUCH
AS WHEN A FALSE INVOICE OR FAKE OR ALTERED DOCUMENT
SUPPORTING THE DECLARED CUSTOMS VALUE IS SUBMITTED, OR
OTHERWISE A FALSE STATEMENT OR INFORMATION IS MADE AND IS.
UNCOVERED AT THE TIME CUSTOMS STILL HAS PHYSICAL CUSTODY OF
OR CONTROL OVER THE IMPORTED ARTICLES, THE SAME SHALL
FORTHWITH BE SUBJECT TO SEIZURE AND FORFEITURE PROCEEDINGS,
WITHOUT PREJUDICE TO THE APPLICATION OF THE PENAL PROVISIONS
UNDER SECTION 3602 OF THIS CODE AGAINST THE IMPORTER AND/OR
OTHER PERSON OR PERSONS WHO PARTICIPATED IN THE
FRAUDULENT ACT.”

24


SEC. 41. 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:

“SEC. 2503-A. NON-IMPOSITION OF SURCHARGE. — EXEMPTION
FROM THE SURCHARGE SHALL BE ALLOWED ONLY IN CASES WHEN
THE DECLARED OR ENTERED CLASSIFICATION IS BASED ON RULINGS
BY THE TARIFF COMMISSION PURSUANT TO SUBSECTION (A) OF
SECTION 1313 OF THIS CODE: PROVIDED, THAT THE DESCRIPTION OF
THE ARTICLE IS FOUND CORRECT UPON EXAMINATION: PROVIDED,
FURTHER, THAT BASED ON THE RESULT OF THE EXAMINATION, THE
ARTICLE IS FOUND TO BE ESSENTIALLY THE SAME AS THAT
DESCRIBED IN THE RULING.”

SEC. 42. 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] PROPERTY UNDER
CUSTOMS CUSTODY SUBJECT TO DISPOSITION. - Property in customs
custody THAT shall be subject to [sale under the conditions hereinafter] THE
MODES OF DISPOSITION AS provided FOR IN SECTION 2602 HEREOF:

xx."

SEC. 43. Section 2602 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

“Sec. 2602. [Place of Sale or Other Disposition of Property.) MODES
OF DISPOSITION OF PROPERTY UNDER CUSTOMS CUSTODY. ~ Property
within the purview of this Part of this Code shall be [sold, or otherwise disposed
of, upon the order of the Collector of the port where the property in question is
found, unless the Commissioner shall direct its conveyance for such purpose to
some other port.] DISPOSED OF THROUGH THE FOLLOWING MODES OF
DISPOSITION:

“(A) WHEN SUBJECT PROPERTY HAS EXPORT POTENTIAL, THE
SAME SHALL BE RE-EXPORTED THROUGH A GOVERNMENT ENTITY
WHICH SHALL BE DESIGNATED TO PERFORM SAID TASK;

“(B) WHEN THE PROPERTY IS NOT RE-EXPORTED, AND UPON
RECOMMENDATION OF THE COMMISSIONER OF CUSTOMS, THE
SECRETARY OF FINANCE MAY AUTHORIZE THE OFFICIAL USE OF THE
ARTICLES TO PROMOTE THE INTENSIVE COLLECTION OF TAXES
ANDIOR TO HELP PREVENT OR SUPPRESS SMUGGLING AND OTHER

25


FRAUDS UPON THE CUSTOMS;

*(C) WHEN THE ARTICLE IS NOT SUITABLE FOR RE-
EXPORTATION OR FOR USE AGAINST SMUGGLING OR OTHER FRAUDS.
UPON CUSTOMS, THEN IT MAY BE CHANNELED FOR THE OFFICIAL USE
OF OTHER OFFICES OF THE NATIONAL GOVERNMENT;

“(D) IF THE ARTICLE IS SUITABLE FOR SHELTER OR CONSISTS
OF FOODSTUFFS OR CLOTHING MATERIALS THEN THAT ARTICLE SHALL
BE GIVEN TO THE DEPARTMENT OF SOCIAL WELFARE AND
DEVELOPMENT, OR TO THE DEPARTMENT OF HEALTH IN THE CASE OF
MEDICINES; AND

“(E) IF SUBJECT ARTICLE CANNOT BE RE-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 IT ABSOLUTELY WORTHLESS, IN
THE PRESENCE OF REPRESENTATIVES FROM THE COMMISSION ON
AUDIT, THE DEPARTMENT OF JUSTICE, THE BUREAU OF CUSTOMS AND
THE PRIVATE SECTOR.

“THE COST OF RE-EXPORTATION OF SUBJECT PROPERTY UNDER
THIS SECTION, INCLUDING ALL ATTENDANT COSTS THERETO, SHALL
BE SHOULDERED BY THE IMPORTER/CONSIGNEE WHO UNLAWFULLY
BROUGHT IN THE IMPORTED ARTICLE, AND/OR THE BROKER THEREOF,
AS THE CASE MAY BE; WHEN BOTH THE IMPORTER/CONSIGNEE WHO
UNLAWFULLY BROUGHT IN THE ARTICLE AND THE BROKER COULD NOT
BE LOCATED THEN THE GOVERNMENT ENTITY WHICH IS DESIGNATED.
TO RE-EXPORT SUBJECT PROPERTY SHALL SHOULDER THE COST OF
RE-EXPORTATION: PROVIDED, THAT ARTICLES TO BE RE-EXPORTED
UNDER THIS SECTION SHALL BE TRANSFERRED BY THE BUREAU OF
CUSTOMS TO THE GOVERNMENT ENTITY THAT IS MANDATED TO RE-
EXPORT THE ARTICLES WITHIN FIFTEEN (15) DAYS FROM THE TIME THE
FORFEITURE HAS BECOME FINAL AND EXECUTORY: PROVIDED,
FURTHER, THAT ARTICLES THAT ARE CHANNELED OR AUTHORIZED
FOR OFFICIAL USE OR FOR CHARITABLE PURPOSES BY GOVERNMENT
ENTITIES SHALL NOT BE SOLD NOR EXCHANGED IN ANY MANNER
WHATSOEVER FOR OTHER ARTICLES: PROVIDED, FURTHERMORE, THAT
THE COST OF HANDLING, STORAGE, TRANSPORTATION, AND OTHER
CHARGES INCIDENTAL TO THE UPKEEP AND TRANSPORTATION OF
SUBJECT ARTICLE SHALL BE BORNE BY THE RECIPIENT GOVERNMENT
AGENCY.”

SEC. 44. Section 2603 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

26


"Sec. 2603. [Mode of Sale] DISPOSITION OF PROCEEDS IN CASE
OF RE-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 RE-EXPORTATION OF ARTICLES WITHIN THE
PURVIEW OF THIS CODE:

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

“(B) TAXES AND OTHER CHARGES DUE THE GOVERNMENT;

‘(C) STORAGE CHARGES;

“(D) ARRASTRE CHARGES;

“(€) FREIGHT, LIGHTERAGE AND OTHER EXPENSES INCIDENTAL
TO THE EXPORTATION: AND

“(F) ANY SURPLUS REMAINING AFTER THE SATISFACTION OF
ALL LAWFUL CHARGES AS PROVIDED HEREIN SHALL BE DEPOSITED IN
A SPECIAL TRUST FUND WHICH SHALL BE USED SOLELY FOR THE
PURPOSE OF FINANCING THE COMPULSORY ACQUISITION OF
IMPORTED GOODS BY THE GOVERNMENT AS PROVIDED FOR IN
SECTION 2317 OF THIS CODE.”

SEC. 45. Section 2612 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

“Seo. 2612. Disposition of Smuggled Articles. - Smuggled articles,
after liability to seizure or forfeiture shall have been established by proper
administrative [or judicial] proceedings in conformity with the provisions of this
Code, shall be disposed of as provided for in [s]Section [twenty-six hundred and
two] 2602 HEREOF: Provided, That articles whose importation is prohibited
under Section One Hundred [Two] ONE sub-paragraphs b, c, d, e and j shall,
upon order to the Collector in writing, be burned or destroyed, in such manner as
the case may require as to render them absolutely worthless, in the presence of
a representative each from the Commission on Audit, [Ministry] DEPARTMENT
of Justice, Bureau of Customs, and if possible, any representative of the private
sector.”

SEC. 46. A new section to be known as Section 3504-A is hereby inserted after
Section 3504 of the Tariff and Customs Code of the Philippines, as amended, to read as
follows:

27


“SECTION 3504-A. SURETY BONDS AND ELIGIBILITY OF SURETY
COMPANIES, - SURETY BONDS FROM A SURETY COMPANY WHICH HAS
AN OUTSTANDING LIABILITY OF THIRTY PERCENT (30%) OR MORE OF
THE TOTAL DUE AND DEMANDABLE BONDS ISSUED IN FAVOR OF THE
BUREAU OF CUSTOMS, AT ANY TIME, SHALL NOT BE ACCEPTABLE AS.
GUARANTEE FOR THE RELEASE OF THE IMPORTED GOODS: PROVIDED,
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 CUSTOMS 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,
WHICH SHALL BE BASED ON A MEASURABLE PERFORMANCE RECORD
IN THE CASE OF EXISTING SURETY COMPANIES AND FINANCIAL
CAPACITY IN THE CASE OF NEW SURETY COMPANIES, BY THE
INSURANCE COMMISSION IN CONSULTATION WITH THE BUREAU OF
CUSTOMS.”

SEC. 47. 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:

“XX

‘FOREIGN TRANSHIPMENT’ SHALL REFER TO THE TRANSPORT
OF GOODS FROM A FOREIGN COUNTRY INTO ANY PORT OR PORTS OF
THE PHILIPPINES FOR SHIPMENT TO A FOREIGN DESTINATION WITHOUT
INTRODUCING THE SAME INTO THE PHILIPPINE CUSTOMS TERRITORY.

“XXX

“ ‘Smuggling’ is an act of any person who shall fraudulently import or
bring into the Philippines, or assist in so doing, any article, contrary to law or shall
receive, conceal, buy, sell or in any manner facilitate the transportation,
concealment, or sale of such article after importation, knowing the same to have
been imported contrary to law. It includes the exportation of articles in a manner
contrary to law. Articles subject to this paragraph shall be known as smuggled
articles[]: PROVIDED, HOWEVER, 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.

xx!

28


SEC. 48. Section 3601 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

"Sec. 3601. Unlawful Importation. — Any person who shall fraudulently
import or bring into the Philippines, or assist in so doing, any article, contrary to
law, SHALL BE GUILTY OF SMUGGLING AND SHALL BE PUNISHABLE AS
HEREIN PROVIDED. ANY PERSON [or] WHO shall receive, conceal, buy, sell,
or in any manner facilitate the transportation, concealment, or sale of such
UNLAWFULLY IMPORTED article [after importation, knowing the same to have
been imported contrary to law], shall be DEEMED guilty of smuggling and shall
LIKEWISE be [punished with] PUNISHABLE AS HEREIN PROVIDED

“1. A fine of not less than [fifty] TWENTY THOUSAND pesos
(P20,000.00) nor more than {two hundred] ONE HUNDRED THOUSAND pesos
(P100,000.00) and imprisonment of not less than [five days] TWO (2) YEARS
AND ONE (1) DAY nor more than [twenty days] SIX (6) YEARS; if the appraised
value, to be determined in the manner prescribed under this Code, including
duties and taxes, of the article unlawfully imported does not exceed [twenty-five]
TWO HUNDRED THOUSAND pesos (P200,000.00);

"2. A fine of not less than [eight hundred] ONE HUNDRED FIFTY
THOUSAND pesos (P150,000.00) nor more than [five thousand] THREE
HUNDRED THOUSAND pesos (P300,000.00) and imprisonment of not less than
[six months] SEVEN (7) YEARS and one (1) day nor more than [four] TEN (10)
years, if the appraised value, to be determined in the manner prescribed under
this Code, including duties and taxes, of the article unlawfully imported exceeds
[twenty-five] TWO HUNDRED THOUSAND pesos (P200,000.00) but does not
exceed [fifty] SIX HUNDRED thousand pesos (P600,000.00);

“3. A fine of not less than [six] FOUR HUNDRED thousand pesos
(P400,000.00) nor more than [eight thousand] SIX HUNDRED THOUSAND
(P600,000.00) and imprisonment of not less than [five] ELEVEN (11) years and
one (1) day nor more than [eight] FIFTEEN (15) years, if the appraised value, to
be determined in the manner prescribed under this Code, including duties and
taxes, of the article unlawfully imported is more than [fifty] SIX HUNDRED
thousand pesos (P600,000.00) but does not exceed [one hundred fifty thousand]
ONE MILLION pesos (P1,000,000.00);

“4. A fine of not less than [eight thousand] EIGHT HUNDRED
THOUSAND pesos (P800,000.00) nor more than ten thousand] TEN MILLION
pesos (P10,000,000.00) and imprisonment not less than [eight] SIXTEEN (16)
years and one (1) day nor more than [twelve] TWENTY (20) 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 fone
hundred fifty thousand pesos] ONE MILLION PESOS (P1,000,000.00) BUT
NOT MORE THAN FIFTY MILLION PESOS (P50,000,000.00);

29


“5. IF THE APPRAISED VALUE, TO BE DETERMINED IN THE
MANNER PRESCRIBED UNDER THIS CODE, OF THE ARTICLE
UNLAWFULLY IMPORTED, INCLUDING DUTIES AND TAXES, EXCEEDS
FIFTY MILLION PESOS (P50,000,000.00) OR, IF THE AGGREGATE AMOUNT
OF THE APPRAISED VALUES OF THE UNLAWFULLY IMPORTED
ARTICLES, INCLUDING DUTIES AND TAXES, RESULTING FROM ACTS OF
UNLAWFUL IMPORTATION COMMITTED IN MORE THAN ONE INSTANCE,
EXCEEDS FIFTY MILLION PESOS (PS0,000,000.00), THE SAME SHALL BE
DEEMED AS HEINOUS CRIME AND SHALL BE PUNISHABLE WITH A
PENALTY OF RECLUSION PERPETUA AND A FINE OF NOT LESS THAN
TWELVE MILLION PESOS (P12,000,000.00) BUT NOT MORE THAN FIFTY
MILLION PESOS (P50,000,000.00); AND

[5] 6. The penalty of prision mayor 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 the maximum as
hereinabove prescribed and the offender shall suffer an additional] WHICH IS
THE NEXT HIGHER IN DEGREE SHALL BE IMPOSED IN ADDITION TO THE
penalty of perpetual disqualification from public office, to vote and to participate
in any public election. IF THE OFFENDER FAILS TO PAY THE FINE, HE
SHALL SUFFER SUBSIDIARY IMPRISONMENT.

“xX

SEC. 49. 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 any 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 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 [knowingly and willfully] 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

30


merchandise, greater than that legally due thereon, or who shall be guilty of any
[willful] act or omission shall, for each offence, BE GUILTY OF TECHNICAL
SMUGGLING AND SHALL be [punished in accordance with the penalties
prescribed in the preceding section.] PUNISHABLE AS FOLLOWS:

“(A) A FINE OF NOT LESS THAN THREE HUNDRED THOUSAND
PESOS (P300,000.00) NOR MORE THAN FIVE HUNDRED THOUSAND
PESOS (P500,000.00) AND IMPRISONMENT OF PRISION CORRECCIONAL,
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 DOES NOT EXCEED ONE HUNDRED
THOUSAND PESOS (P100,000.00);

“(B) A FINE OF NOT LESS THAN FIVE HUNDRED THOUSAND
PESOS (PS00,000.00) NOR MORE THAN EIGHT HUNDRED THOUSAND
PESOS (P800,000.00) AND IMPRISONMENT OF PRISION MAYOR, IF THE
DIFFERENCE BETWEEN THE VALUE, WEIGHT, MEASUREMENT, OR
QUANTITY DECLARED IN THE ENTRY AND THE TRUE AND ACTUAL
VALUE, WEIGHT, QUANTITY, OR MEASUREMENT OF THE ARTICLE
UNLAWFULLY IMPORTED EXCEEDS ONE HUNDRED THOUSAND PESOS.
(P100,000.00) BUT DOES NOT EXCEED ONE MILLION PESOS
(P1,000,000.00);

“(C) A FINE OF NOT LESS THAN EIGHT HUNDRED THOUSAND
PESOS (P800,000.00) NOR MORE THAN ONE MILLION PESOS
(P1,000,000.00) AND IMPRISONMENT OF RECLUSION TEMPORAL, IF THE
DIFFERENCE BETWEEN THE VALUE, WEIGHT, MEASUREMENT, OR
QUANTITY DECLARED IN THE ENTRY AND THE TRUE AND ACTUAL
VALUE, WEIGHT, QUANTITY, OR MEASUREMENT OF THE ARTICLE
UNLAWFULLY IMPORTED EXCEEDS ONE MILLION PESOS (P1,000,000.00)
BUT DOES NOT EXCEED FIVE MILLION PESOS (P5,000,000.00); AND

“(D) A FINE OF NOT LESS THAN ONE MILLION PESOS
(P1,000,000.00) NOR MORE THAN TWO MILLION PESOS (P2,000,000.00)
AND IMPRISONMENT OF RECLUSION PERPETUA, IF THE DIFFERENCE
BETWEEN THE VALUE, WEIGHT, MEASUREMENT, OR QUANTITY
DECLARED IN THE ENTRY AND THE TRUE AND ACTUAL VALUE, WEIGHT,
QUANTITY, OR MEASUREMENT OF THE ARTICLE UNLAWFULLY
IMPORTED EXCEEDS FIVE MILLION PESOS (P5,000,000.00).

“IN APPLYING THE ABOVE SCALE OF PENALTIES, IF THE
OFFENDER IS AN ALIEN, HE SHALL BE DEPORTED AFTER SERVING THE
SENTENCE WITHOUT FURTHER PROCEEDINGS FOR DEPORTATION: IF
THE OFFENDER IS A GOVERNMENT OFFICIAL OR EMPLOYEE, THE
PENALTY NEXT HIGHER IN DEGREE SHALL BE IMPOSED IN ADDITION TO
THE PENALTY OF PERPETUAL DISQUALIFICATION FROM PUBLIC

31


OFFICE, TO VOTE AND TO PARTICIPATE IN ANY PUBLIC ELECTION. IF
THE OFFENDER FAILS TO PAY THE FINE, HE SHALL SUFFER
SUBSIDIARY IMPRISONMENT. HE SHALL ALSO LOSE ALL THE BENEFITS
DUE HIM FOR HIS SERVICE IN THE GOVERNMENT, INCLUDING THE
FORFEITURE OF HIS SEPARATION AND RETIREMENT BENEFITS.”

‘SEC. 50. A new section to be known as Section 3602-A is hereby inserted in Part 1,
Title V, Book Il of the Tariff and Customs Code of the Philippines, as amended, to read as
follows’

“SEC. 3602-A. WAREHOUSING ACTS DEEMED AS SMUGGLING
PUNISHABLE UNDER SECTIONS 3601 AND 3602 OF THIS CODE. ~ THE
FOLLOWING SHALL BE DEEMED AS ACTS OF SMUGGLING WHICH
SHALL BE PUNISHABLE UNDER SECTIONS 3601 AND 3602 OF THIS
CODE:

“(A) BREAKING OF CUSTOMS SEALS OR UNAUTHORIZED
REMOVAL OF ARTICLES FROM BONDED WAREHOUSES;

“(B) SUBMISSION OF INCORRECT OR FALSE INFORMATION BY
THE BONDED WAREHOUSE;

“(C) WAREHOUSING OF THE FOLLOWING SHIPMENTS:

“(1) FINISHED ARTICLES, WITHOUT EXCEPTION. ~ 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.

“(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) FAILURE TO LIQUIDATE IMPORTED ARTICLES WHICH WERE
WITHDRAWN FROM THE BONDED WAREHOUSE WITHIN THIRTY (30)
DAYS FROM ISSUANCE BY THE BUREAU OF THE CERTIFICATE OF
LOADING IN A VESSEL DESTINED TO A FOREIGN PORT; AND

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

32


‘IMPORTATIONS MADE IN VIOLATION OF THE ABOVE PROVISIONS
IN THIS SECTION SHALL /PSO FACTO BE FORFEITED IN FAVOR OF THE
GOVERNMENT TO BE DISPOSED OF PURSUANT TO SECTION 2602 OF
THIS CODE.”

SEC. 51. Section 3603 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows’

“Sec, 3603. Failure to Report Fraud. — Any master, pilot in command or
other officer, owner or agent of any vessel or aircraft trading with or within the
Philippines and any employee of the Bureau of Customs who, having cognizance
of any fraud on the customs revenue, shall fail to report all information relative
thereto to the Collector as by law required, shall be punished by a fine of not
LESS THAN FIFTY THOUSAND PESOS (P50,000.00) BUT NOT more than
[five] TWO HUNDRED thousand pesos (P200,000.00) and imprisonment for not
LESS THAN TWO (2) YEARS AND ONE (1) DAY BUT NOT more than [one
year] FIVE (5) YEARS. If the offender is an alien, he shall be deported after
serving the sentence. If the offender is a public official or employee, he shall
suffer additional penalty of perpetual disqualification to hold public office, to vote
and to participate in any election. HE SHALL ALSO LOSE ALL THE BENEFITS
DUE HIM FOR HIS SERVICE IN THE GOVERNMENT, INCLUDING THE
FORFEITURE OF HIS SEPARATION AND RETIREMENT BENEFITS.”

SEC. 52. Section 3604 of the Tariff and Customs Code of the Philippines, as
amended, is hereby further amended to read as follows

“Sec. 3604. Statutory Offenses of Officials and Employees. - Every
official, agent or employee of the Bureau or of any other agency of the
government charged with the enforcement of the provisions of this Code, who is
guilty of any delinquency herein below indicated shall be punished witha fine of
not less than [Five] ONE HUNDRED thousand pesos (P100,000.00) nor more
than [Fifty] FIVE HUNDRED thousand pesos (P500,000.00) and imprisonment
for not less than [one year] TEN (10) YEARS AND ONE (1) DAY nor more than
[ten] FIFTEEN (15) years and perpetual disqualification to hold public office, to
vote and to participate in any public electionf]. HE SHALL ALSO LOSE ALL
THE BENEFITS DUE HIM FOR HIS SERVICE IN THE GOVERNMENT,
INCLUDING THE FORFEITURE OF HIS SEPARATION AND RETIREMENT
BENEFITS:

xxx"

SEC. 53. Section 3605 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

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“Sec. 3605. Concealment or Destruction of Evidence of Fraud, — Any
person who [willfully] conceals or destroys any invoice, book or paper relating to
any article liable to duty after an inspection thereof has been demanded by the
Collector of any collection district or at any time conceals or destroys any such
invoice, book or paper for the purpose of suppressing any evidence of fraud
therein contained, shall be punished with a fine of NOT LESS THAN TWENTY
THOUSAND PESOS (P20,000.00) BUT not more than [five] ONE HUNDRED
thousand pesos (P100,000.00) and imprisonment for NOT LESS THAN TWO (2)
YEARS AND ONE (1) DAY BUT not more than [two] FIVE (5) years.”

SEC. 54. Section 3606 of the Tariff and Customs Code of the Philippines, as amended,
is hereby further amended to read as follows:

"Sec. 3606. Affixing Seals. ~ Any person who, without authority affixes
or attaches a customs seal, fastening, or mark or any seal, fastening or mark
purporting to be a customs seal, fastening or mark to any vessel, vehicle on land,
sea or air, warehouse, or package, shall be punished with a fine of not LESS
THAN TWENTY THOUSAND PESOS (P20,000.00) BUT NOT more than
[twenty] ONE HUNDRED thousand pesos (P100,000.00) for] AND imprisonment
of not LESS THAN TWO (2) YEARS AND ONE (1) DAY BUT NOT more than
[five] SEVEN (7) years[, or both]. If the offender is an alien, he shall be deported
after serving the sentence; and 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.”

SEC. 55. 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 accounts, business and computer systems and all
customs commercial data in the manner prescribed in Part 2, Section 3514 of
this Title shall be punished with a fine of not less than [One hundred thousand
pesos (P100,000.00)] TWO HUNDRED THOUSAND PESOS (P200,000.00) but
not more than [Two hundred thousand pesos (P200,000.00)] FIVE HUNDRED
THOUSAND PESOS (P500,000.00) [and/or] AND imprisonment of not less than
[two (2)] FOUR (4) years and one day but not more than [six (6)] EIGHT (8)
years. This penalty shall likewise be imposed against the importers/brokers who
deny an authorized customs officer full and free access to such records, books of
accounts, business and computer systems, and all customs commercial data
including payment records. This is without prejudice to the administrative

sanctions that the Bureau of Customs may impose against contumacious

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importers under existing laws and regulations including the authority to hold
delivery or release of their imported articles.”

SEC. 56. 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 Tariff and Customs Laws and Regulations in
General. - Any person who violates a provision of this Code or regulations
pursuant thereto, for which delinquency no specific penalty is provided, shall be
punished by a fine of not LESS THAN TWENTY THOUSAND PESOS
(P20,000.00) BUT NOT more than One HUNDRED thousand pesos
(P100,000.00) for] AND by imprisonment for not LESS THAN TWO (2) YEARS
AND ONE (1) DAY BUT NOT more than [one year] FIVE (5) 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.”

SEC. 57. A new section to be known as Section 3613 is hereby inserted to the 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 SECTION 2530 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.

“THE OWNER OR OPERATOR OF ANY SEIZED VESSEL OR
AIRCRAFT UNDER THIS SECTION SHALL BE BLACKLISTED FROM

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OPERATING AND/OR FROM ENGAGING IN TRADE IN THE PHILIPPINES.”

SEC. 58, A new title to be known as Title Vill, with heading entitled "Ports
Transparency Alliance", and under which Sections 3614, 3615, 3616, 3617, 3618, 3619 and
3620 are inserted in the Tariff and Customs Code of the Philippines, as amended, to read as
follows:

“TITLE VII
“PORTS TRANSPARENCY ALLIANCE

"SEC. 3614. PORTS TRANSPARENCY ALLIANCE. - PUBLIC-
PRIVATE SECTOR PARTNERSHIP FOR THE EFFICIENT CUSTOMS
ADMINISTRATION IS HEREBY INSTITUTIONALIZED THROUGH THE
CREATION OF THE PORTS TRANSPARENCY ALLIANCE OR “PORTAL”
UNDER THE DIRECTION AND LEADERSHIP OF THE SECRETARY OF
FINANCE.”

"SEC. 3615. POWERS AND FUNCTIONS OF PORTAL. —- THE
PORTS TRANSPARENCY ALLIANCE OR PORTAL SHALL HAVE THE
FOLLOWING POWERS AND FUNCTIONS:

“(A) TO ENCOURAGE GREATER PRIVATE SECTOR PARTICIPATION
IN THE ADMINISTRATION OF CUSTOMS LAWS;

“(B) TO IMPROVE CUSTOMER SERVICE IN ORDER TO ENHANCE
COMPLIANCE TO TAX AND DUTY LAWS, RULES AND REGULATIONS;

"(C) TO REMOVE BOTTLENECKS AND ADDRESS LEAKAGES THAT
IMPACT BUSINESS COMPETITIVENESS;

“(D) TO PROTECT CONSUMER RIGHTS; AND

“(E)TO PERFORM SUCH OTHER FUNCTIONS AS MAY BE
NECESSARY TO CARRY OUT ITS MANDATE.”

“SEC. 3616. COMPOSITION OF THE PORTAL. - THE PORTAL SHALL
BE CHAIRED BY THE SECRETARY OF FINANCE OR BY AN
UNDERSECRETARY WHO IS DULY DESIGNATED TO REPRESENT THE
SECRETARY WHEN HE IS UNAVAILABLE. IT SHALL BE CO-CHAIRED BY
THE COMMISSIONER OF CUSTOMS.

“ITS MEMBERSHIP SHALL INCLUDE REPRESENTATIVES OF
VARIOUS DOMESTIC INDUSTRIES, INDUSTRY ASSOCIATIONS OR
CHAMBERS, TAXPAYER ASSOCIATIONS AND CONSUMER GROUPS, AS
DETERMINED THROUGH A DEPARTMENT ORDER TO BE ISSUED BY THE
SECRETARY OF FINANCE.

“THE TWO (2) CO-CHAIRPERSONS OF THE CONGRESSIONAL
OVERSIGHT COMMITTEE ON THE TAX REFORM PROGRAM, OR THEIR
DULY DESIGNATED REPRESENTATIVES, SHALL ALSO BE MEMBERS OF
THE PORTAL.

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“THE HEADS OF OTHER DEPARTMENTS OF THE GOVERNMENT
MAY BE INVITED IN THE PORTAL MEETINGS AS RESOURCE PERSONS
ON ISSUES CONCERNING THEIR RESPECTIVE OFFICES.”

“SEC. 3617. MEETINGS. — THE PORTAL SHALL MEET AT LEAST
ONCE A MONTH, OR AS OFTEN AS NECESSARY AT THE CALL OF THE
CHAIRPERSON OR A MAJORITY OF THE MEMBERS, IN ORDER TO
THRESH OUT VARIOUS ISSUES, PROPOSALS AND PROBLEMS
CONCERNING CUSTOMS. A MAJORITY OF THE MEMBERS OF THE
PORTAL SHALL CONSTITUTE A QUORUM TO DO BUSINESS, THE
MEETING SHALL BE PRESIDED BY THE CHAIRPERSON, OR IN HIS
ABSENCE, BY HIS/HER DULY DESIGNATED UNDERSECRETARY.”

“SEC. 3618. FUNDING. - THE ANNUAL APPROPRIATIONS FOR
THE DEPARTMENT OF FINANCE AND THE BUREAU OF CUSTOMS SHALL
PROVIDE AN ITEM OF EXPENSE FOR THE INSTITUTIONALIZATION OF
THE PORTAL."

“SEC. 3619. ASSISTANCE FROM OTHER GOVERNMENT
AGENCIES. - THE PORTAL MAY REQUEST ANY DEPARTMENT, BUREAU,
OFFICE, AGENCY, OR ANY INSTRUMENTALITY OF THE GOVERNMENT

FOR SUCH ASSISTANCE AS MAY BE NEEDED IN THE PERFORMANCE OF
ITS FUNCTIONS.”

“SEC. 3620. ANNUAL REPORT. - THE PORTAL SHALL, WITHIN
NINETY (90) DAYS AFTER THE END OF EVERY FISCAL YEAR, SUBMIT TO
THE PRESIDENT AND TO CONGRESS AN ANNUAL REPORT ON ITS
COMPLIANCE WITH, OR ACCOMPLISHMENTS OF, ITS POWERS, DUTIES
AND FUNCTIONS, TOGETHER WITH ITS PLANS AND RECOMMENDATIONS.
TO IMPROVE AND DEVELOP ITS CAPABILITY TO ENFORCE ITS
MANDATE.”

SEC. 59. Rules and Regulations. The Secretary of Finance shall, upon the

recommendation of the Commissioner of Customs, promulgate the necessary rules and

regulations for the effective implementation of this Act.

SEC. 60. Separability Clause. If any provision of this Act is subsequently declared

unconstitutional, the validity of the remaining provisions hereof shall remain in full force and

SEC. 61. Repealing Clause. Sections 2604, 2605, 2606, 2607, and 2610 of the Tariff

and Customs Code of the Philippines, as amended, are hereby repealed. Alll laws, decrees,

37


executive orders, rules and regulations and other issuances or parts thereof which are
inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 62. Effectivity. This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in any two (2) newspapers of general circulation, whichever date comes
earlier.

Approved,