SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodrig
Representative Maximo B. Rodriguez, Jr.

House Bill No. 1348
EXPLANATORY NOTE

This bill was originally introduced as House Bill Nos. 3776 and 3927 by
the undersigned Rufus B. Rodriguez during the Fourteenth Congress. It was
approved by the Committee on Ways and Means and Committee on
Appropriations as substitute House Bill No. 6995 under Committee Report No.
2503, dated November 18, 2009. It was approved on 2” reading on
December 15, 2009 and 3” reading on January 26, 2010. It was transmitted
to the Senate on January 28, 2010 where it was not acted upon.

One of the major economic problems of the country is smuggling. The
government is losing a huge amount of revenue because of illegal entry of
imported goods and services in our local market. Moreover, this activity
affects the other components of the economy including the rate of
employment

This proposed “Anti-Smuggling Act” seeks to amend certain provisions
of the Tariff and Customs Code to squarely address the problem on
smuggling. Hopefully, this will serve as an instrument to arrest the said
problem which, because of its extensive occurrence in the system, has
already somehow become institutionalized,

Considering the foregoing, the early passage of this proposed measure
is earnestly solicited

RUFUS B. RO! Wes

B. “onlevee, JR.



SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
FIRST REGULAR SESSION

HOUSE OF REPRESENTATIVES
34
Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

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 the House of Representatives of the
Congress of the Philippines in session assembled:

SECTION 1. Short Title. - This Act shall be known and cited as the
“Anti-Smuggling Act of 2013”.

SEC. 2. Section 201, Title II, 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. —
Rect

“if in the course of determining the dutiable value of the
imported goods, it becomes necessary to delay the final
determination of such dutiable value, the importer shall
nevertheless be able to secure the release of the imported
goods upon 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 RECOMMENDATION 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 Philippines and the corresponding
amount of customs duties, taxes and other charges assessed
and collected on imported articles itemized in accordance with
the tariff headings and subheadings as appearing in the
liquidated customs entries provided for in this Code, (b)
percentage collection of the peso value of imports, (c) quantity
and value of conditionally-free importations, (d) customs
valuation over and above letters of credit opened, (e) quantity
and value of tax-free imports, and (f) the quantity and value of
articles exported from the Philippines as well as the taxes and
other charges assessed and collected on them for the preceding
year. Copies of such annual report shall be furnished regularly
to the Department of Finance, Tariff Commission, NATIONAL
ECONOMIC AND DEVELOPMENT AUTHORITY (NEDA),
[Central Bank of the Philippines] BANGKO SENTRAL NG
PILIPINAS, Board of Investments, Department of Budget AND
MANAGEMENT, and other economic agencies of the
government, on or before December 30, of each year.

XXX.

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 NATIONAL ECONOMIC AND
DEVELOPMENT AUTHORITY (NEDA), the BANGKO
SENTRAL NG PILIPINAS (BSP) [Central Bank of the
Philippines], the Tariff Commission, AND THE NATIONAL
STATISTICS OFFICE (NSO) [a copy] BOTH ELECTRONIC
AND PAPER COPIES of each of all customs imporvexport
entries as filed with the Bureau of Customs. The Tariff
Commission or its duly authorized agents shall have access to
and the right to copy all the customs liquidated import entries
and other documents appended thereto as finally filed in the
Commission on Audit.


SEC. 5. Section 701 of the Tariff and Customs Code of the Philippines,
‘as amended, is hereby further amended to read as follows:

“Sec. 701. Collection Districts and Ports of Entry
Thereof. ~ For administrative purposes, the Philippines shall be
divided into as many collection districts as necessary, the
respective limits of which may be changed from time to time by
the Commissioner of Customs upon approval of the Secretary of
Finance. The principal ports of entry for the respective collection
districts shall be Manila, Ninoy Aquino International Airport,
Cebu, Iloilo, Davao, Tacloban, 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 |, Book II —
Customs Law, of the 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 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. —xx x."

“All of the cargo intended x x x.”

“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 discrepancy
has been committed in the preparation of the manifest, without
any fraudulent intent, discovery of which would not have been
made until after examination has been completed. PRIOR TO
RELEASE OF THE CARGO, THE VERACITY OF THE
AMENDMENT SHALL BE EXAMINED BY THE
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 as follows:

“SEC. 1007. Manifest 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 manifest properly indorsed by the boarding
officer, and WITHIN TWENTY-FOUR (24) HOURS AFTER
ARRIVAL, he shall present to the Collector the original copy of
the cargo manifest and, for inspection, the ship's register or
other document in lieu thereof, together with the clearance and
other papers granted to the vessel at the port of departure for
the Philippines.”

“WITHIN THREE (3) DAYS FROM RECEIPT 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 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:

“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 follows.

“SECTION 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
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. — Imported
articles remaining x x x

“Unless prevented by causes beyond the vessel's control,
such as port congestion, strikes, riots or civil commotions, failure
of vessel's gear, bad weather, and similar causes, articles so
stored shall be entered within FIFTEEN (16) {thirty (30)] 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 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 PERMIT/IMPORT AUTHORITY
FOR AGRICULTURAL PRODUCTS. - \MPORTED
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 DEPARTMENT OF AGRICULTURE
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/CONSIGNEE 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 IN 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. - xx x

“The Commissioner may, x x x.

“A formal entry may be x x x:

“(a) xxx;

*(b) xxx; oF

“() 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, which shall 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
SEC. 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 a return in such a manner to indicate
whether the articles have been truly and correctly declared in
the entry as regard their quantity, measurement, weight, and
tariff classification and not imported contrary to law. 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] sample 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 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.”


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 dutiable value of any
article. Persons so employed shall be paid compensation in an
amount to be determined by the Commissioner, not exceeding
fifty pesos (P50.00) 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
DEPARTMENT OF AGRICULTURE, 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:

“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
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 all 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 x x x

“a. When the owner, importer x x x ; or

*b. When the owner, importer, consignee or interested
party after due notice, fails to file an entry x x x. ALL SHIPPING
LINES, SHIPPING COMPANIES, FREIGHT FORWARDERS,
CONSOLIDATORS, BREAK BULK AGENTS AND THEIR
AGENTS AND — SUB-AGENTS AND _ ARRASTRE
CONTRACTORS ARE REQUIRED TO STATE IN BOLD,
PROMINENT AND COMPREHENSIBLE CHARACTERS THE
PHRASE ‘CUSTOMS LAW REQUIRES THE FILING OF
ENTRY WITHIN THIRTY (30) DAYS, WHICH SHALL NOT BE
EXTENDIBLE, FROM THE DATE OF DISCHARGE OF THE
LAST PACKAGE FROM THE VESSEL, OTHERWISE, THE
CARGO MAY BE DEEMED ABANDONED AND TO BE
FORFEITED IN FAVOR OF THE GOVERNMENT AND SHALL
BE DISPOSED OF IN ACCORDANCE WITH THIS CODE’ IN
EACH AND EVERY NOTICE OF ARRIVAL TO THE OWNERS,
IMPORTERS, CONSIGNEES OR OTHER INTERESTED
PARTIES. THE SAME SHALL SERVE TO SATISFY THE DUE


NOTICE REQUIREMENT REFERRED TO IN PARAGRAPH (b)
HEREOF, IN WHICH CASE THE OWNER, IMPORTER OR
CONSIGNEE OF THE IMPORTATION SHALL HAVE A
PERIOD OF THIRTY (30) DAYS, WHICH SHALL NOT BE
EXTENDIBLE, FROM 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 _ SUB-AGENTS 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.

“Any person who abandons x x x.”

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.”

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, of 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
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. 24. A new section to be known as Section 1901-A is hereby
inserted after Section 1901 of the Tariff and Customs Code of the Philippines,
as amended, to read as follows:

SEC, 1901-A. CLASSIFICATION OF CUSTOMS
BONDED WAREHOUSES. - CUSTOMS BONDED
WAREHOUSES SHALL BE CLASSIFIED AS FOLLOWS:

1.CUSTOMS, BONDED MANUFACTURING
WAREHOUSE-
1.1GARMENT TEXTILE BONDED

MANUFACTURING WAREHOUSE - A BONDED
WAREHOUSE WHICH IS AUTHORIZED TO
RECEIVE AND STORE WITHOUT PAYMENT OF
DUTIES AND TAXES FOR IMPORTED GARMENTS
AND TEXTILES, RAW MATERIALS INCLUDING
PACKING AND ACCESSORIES FOR PROCESSING
INTO FINISHED PRODUCTS FOR EXPORTATION
WITHIN SPECIFIED PERIOD.

1.2MISCELLANEOUS BONDED MANUFACTURING.
WAREHOUSE - A BONDED WAREHOUSE WHICH
IS AUTHORIZED TO RECEIVE AND STORE
WITHOUT PAYMENT OF DUTIES AND TAXES FOR
IMPORTED MATERIALS, EXCEPT GARMENTS
AND TEXTILES, INCLUDING
PACKING/PACKAGING ACCESSORIES, AND
INTERMEDIATE PRODUCTS FOR THE PURPOSE
OF PROCESSING INTO FINISHED PRODUCTS
FOR EXPORTATION WITHIN SPECIFIED PERIOD.

1.3COMMON, BONDED MANUFACTURING
WAREHOUSE — A BONDED WAREHOUSE WHICH
IS AUTHORIZED TO IMPORT, RECEIVE AND
STORE IMPORTED MATERIALS, ACCESSORIES,
AND INTERMEDIATE PRODUCTS, INCLUDING
PACKING/ PACKAGING, FOR THE ACCOUNT OF


THE EXPORTING MEMBERS, WITHOUT PAYMENT
OF DUTIES AND TAXES ON THE CONDITION
THAT THESE MATERIALS, ACCESSORIES AND
INTERMEDIATE PRODUCTS SHALL BE
MANUFACTURED INTO FINISHED PRODUCTS
FOR EXPORTATION WITHIN SPECIFIED PERIOD.

2.CUSTOMS. BONDED INDUSTRY-SPECIFIC
WAREHOUSE - A BONDED WAREHOUSE WHICH IS
AUTHORIZED TO IMPORT UNDER ITS NAME AND
ACCOUNT, DIRECTLY OR INDIRECTLY, UNDER
BOND, BY DIRECT PURCHASE, OR ON
CONSIGNMENT BASIS, FOR SALE OR TRANSFER TO
ITS CUSTOMERS IN THE INDUSTRY, SUCH
MATERIALS AND SUPPLIES, AS MAY BE REQUIRED
IN THE MANUFACTURE, ASSEMBLY, TESTING, OR
PACKAGING OF GOODS INTENDED FOR EXPORT OR
FOR REPACKING AND DISTRIBUTION TO FOREIGN
MARKET.

3.MULTINATIONAL, REGIONAL BONDED
WAREHOUSE — A WAREHOUSE OPERATED BY A
MULTINATIONAL COMPANY HAVING ITS REGIONAL
OR AREA HEADQUARTERS IN THE PHILIPPINES
PURSUANT TO E.0. 226. IT IS LICENSED BY THE
BOARD OF INVESTMENTS AND ACCREDITED BY
THE ACCREDITATION COMMITTEE AS PROVIDED IN
SECTION 1901 OF THIS CODE TO SERVE AS SUPPLY
DEPOT FOR THE STORAGE, DEPOSIT, AND
SAFEKEEPING OF SPARE PARTS OR
MANUFACTURED COMPONENTS, AND RAW
MATERIALS, INCLUDING ANY PACKAGES,
COVERING, BRANDS AND LABELS, AND
WAREHOUSE EQUIPMENT AS MAY BE ALLOWED BY
THE DEPARTMENT OF TRADE AND INDUSTRY FOR
USE EXCLUSIVELY ON THE STORED GOODS WHICH
ARE TO BE RE-EXPORTED DIRECTLY THEREFROM
UNDER THE SUPERVISION OF THE COLLECTOR OF
CUSTOMS FOR DISTRIBUTION TO ITS ASIA-PACIFIC.
MARKETS.”

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
Tespect 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
1S 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 the 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 BEEN CLOSED DUE TO ITS
NON-COMPLIANCE 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 private warehouse, upon receipt of written
Tequest 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 NON-COMPLIANCE WITH THE
REQUIREMENTS OF LAW AND REGULATIONS. Where the
dutiable article is stored in such premises, the same must be
Temoved 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 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 OR bank guarantee or bond may be withdrawn at any
time for consumption, for transportation to another port, for
exportation or for delivery on board a vessel or aircraft engaged
in 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. 29. 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 SECTION
2602 OF THIS CODE. PROVIDED, HOWEVER, EMBROIDERY
AND SHIPBUILDING INDUSTRIES MAY STORE THEIR
IMPORTS IN THE CUSTOMS BONDED WAREHOUSE FOR A
PERIOD OF TWENTY-FOUR (24) MONTHS.”

SEC. 30. A new Section to be known as Section 1910 is hereby
inserted in Part 4, Title V, Book I! of the Tariff and Customs Code of the
Philippines, as amended, which shall read as follows:

“SEC. 1910. VERIFICATION OF RECORDS KEPT IN
CUSTOMS BONDED WAREHOUSES. - A CAREFUL
ACCOUNT SHALL BE KEPT BY THE COLLECTOR OF ALL
ARTICLES DELIVERED TO ANY BONDED WAREHOUSE,
AND A SWORN MONTHLY RETURN, DULY VERIFIED BY
THE 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. 31. 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 Il OF THIS CODE:
PROVIDED, FINALLY, THAT THESE REQUIREMENTS SHALL
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. 32. Section 2002 of the Tariff and Customs Code of the
Philippines, as amended, is hereby further amended to read as follows:

“SEC. 2002. Exemption from Duty. -
“a. xxx.

“b. Any imported material used in the manufacture of
such articles, x x x: 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. 33. Section 2003 of the Tariff and Customs Code of the
Philippines, as amended, is hereby further amended to read as follows:
Section 2008 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 x x x:
Provided, further, That all waste materials may be [disposed]
DESTROYED under government supervision. All labor
performed and services rendered under these provisions shall
be under the supervision of a proper customs official and at the
expense of the manufacturer.

“VIOLATION OF THE FOREGOING PROVISION SHALL
BE DEEMED AS SMUGGLING WHICH SHALL BE


PUNISHABLE UNDER SECTIONS 3601 AND 3602 OF THIS
CODE.

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

SEC. 34. 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.0.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 PERCENTUM (20%) NOR MORE THAN
EIGHTY PERCENTUM (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 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 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. 35. 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 therefor.
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 THE PRESCRIBED PERIOD
SHALL BE LIABLE UNDER SECTION 3604 OF THIS CODE.”

SEC. 36. 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 or
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. 37. 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 the
government revenues against the undervaluation of goods x x x.

“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.

“An importer who is dissatisfied x x x.

“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.”

“Nothing in this Section limits x x x.”

SEC. 38. 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 THE 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. 39. 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 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 ipso 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 penal provisions
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
BUT 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 |S.
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: PROVIDED, THAT ANY UNDECLARED
ARTICLES/ITEMS SHALL IPSO 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 SECTIONS 3602 OF THIS CODE
AGAINST THE IMPORTER AND/OR OTHER PERSON OR
PERSONS WHO PARTICIPATED IN THE FRAUDULENT ACT.”

SEC. 40. A new Section to 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 which shall 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. 41. 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) THE MODES OF DISPOSITION AS
provided FOR IN SECTION 2602 HEREOF: x x x.”

SEC. 42. 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 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
AND/OR TO HELP PREVENT OR SUPPRESS SMUGGLING
AND OTHER 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;

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

“Sec. 2603. [Mode of Sale] DISPOSITION OF
PROCEEDS IN CASE OF 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;


(8) TAXES AND OTHER CHARGES DUE THE
GOVERNMENT;

(C) STORAGE CHARGES;
(D) ARRASTRE CHARGES;

(E) FREIGHT, LIGHTERAGE AND OTHER EXPENSES
INCIDENTAL TO THE EXPORTATION;

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

“Sec. 2612. Disposition of Smuggled Articles. —
Smuggled articles, after liability to seizure or forfeiture shall have
been established by proper administrative [or judicial]
proceedings in conformity with the provisions of this Code, shall
be disposed of as provided for in Section 2602 hereof: Provided,
That articles whose importation is prohibited under Section One
Hundred One sub-paragraphs b, ¢, d, e, and j shall upon order
to the Collector in writing, be bumed 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. 45. 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:

“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. 46. 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. — x x x:
XxX,

“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 x x x.”

“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.”

SEC. 47. 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.

“4. A fine of not less than [fifty] TWENTY THOUSAND
pesos (P20,000.00) nor more than [two hundred] ONE
HUNDRED THOUSAND pesos (P 100,000.00) __and
imprisonment of not less than [five days] TWO YEARS AND
ONE 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 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 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
days 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 [one hundred fifty thousand pesos]
ONE MILLION PESOS (P1,000,000.00) BUT NOT MORE THAN
FIFTY MILLION PESOS (P50,000,000.00);


“6. 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 (P50,000,000.00), 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),

*[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.”

OK

SEC. 48. Section 3602 of the Tariff and Customs Code of the
Philippines as amended, is hereby further amended to read as follows:

“Sec, 3602. Various Fraudulent Practices Against
Customs Revenue. — Any person who makes or attempts to
make entry of imported or exported article by means of any false
or fraudulent invoice, declaration, affidavit, letter, paper or by
any means of any false statement, written or verbal, or by any
means of any false or fraudulent practice whatsoever, or
[knowingly] effects any entry of goods, wares or merchandise, at
less than the true weight 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 merchandise, greater than that legally due
thereon, or who shall be guilty of any [willful] act of omission
shall, for each offense, BE GUILTY OF TECHNICAL
SMUGGLING AND SHALL be [punished in accordance with the
penalties prescribed in the preceding section] PUNISHABLE AS
FOLLOWS

“1, 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 CORRECIONAL, 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);

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

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

“4. A FINE OF NOT LESS THAN ONE MILLION PESOS
(P1,000,000.00) NOR MORE THAN TWO MILLION PESOS
(P2,000,000.00) AND IMPRISONMENT OF RECLUSION
PERPETUA, IF THE DIFFERENCE BETWEEN THE VALUE,
WEIGHT, MEASUREMENT, OR QUANTITY DECLARED IN
THE ENTRY AND THE TRUE AND ACTUAL VALUE, 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 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. 49. A new Section to be known as Section 3602-A is hereby
inserted in Part 1, Title V, Book II of the Tariff and Customs Code of the
Philippines, as amended, which shall 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:

4 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.

“(0) 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.

“(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.

“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. 50. 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 YEARS AND ONE DAY BUT NOT
more than [one year] FIVE 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. 51. Section 3604 of the Tariff and Customs Code of the
Philippines, as amended, is hereby further amended to read as follows:

“Sec. 3604. Statutory Offenses of Officials and
Employees. — Every official, agent or employee of the Bureau
or any 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 with a 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 YEARS AND ONE DAY nor more than ten] FIFTEEN
(15) years and perpetual disqualification to hold public office, to
vote and to participate in any public 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:

XXX.

SEC. 52. Section 3605 of the Tariff and Customs Code of the
Philippines, as amended, is hereby further amended to read as follows:

“Sec. 3605. Concealment or Destruction of Evidence
of Fraud. — Any person who [willfully] conceals or destroys any
invoice, book or paper relating to any article liable to duty after
an inspection thereof has been demanded by the Collector of
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 YEARS AND ONE DAY BUT [of] not more
than [two] FIVE (5) years.”

SEC. 53. 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) [or] AND imprisonment of not LESS THAN TWO
YEARS AND ONE 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. 54, — 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 importers/brokers who deny an authorized customs
officer full and free access to such records, books of accounts,
business and computer systems, and all customs commercial
data including payment records. This is without prejudice to the
administrative sanctions that the Bureau of Customs may
impose against contumacious importers under existing laws and
regulations including the authority to hold delivery or release of
their imported articles.”

SEC. 55. 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) [or] AND_ by imprisonment for not LESS
THAN TWO YEARS AND ONE 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. 56. 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 IN
TO THE PHILIPPINES WITHOUT BEING ENTERED
THROUGH THE CUSTOMSHOUSE, OR WITHOUT PAYMENT
OF THE CORRECT AND APPLICABLE DUTIES, TAXES,
FEES AND CHARGES SHALL BE SUMMARILY SEIZED AND
FORFEITED IN FAVOR OF THE GOVERNMENT WHEN
WARRANTED OR DETERMINED IN THE SEIZURE
PROCEEDINGS. SUBJECT TO THE PROVISIONS OF
SECTIONS 2530 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 OPERATING AND/OR FROM
ENGAGING IN TRADE IN THE PHILIPPINES.”

SEC. 57. A new title to be known as Title VIII, 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, which shall read as follows:

“TITLE Vill - 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:

“1. TO ENCOURAGE GREATER PRIVATE SECTOR
PARTICIPATION IN THE ADMINISTRATION OF CUSTOMS
Laws;

“2. TO IMPROVE CUSTOMER SERVICE IN ORDER TO.
ENHANCE COMPLIANCE TO TAX AND DUTY LAWS, RULES.
AND REGULATIONS;

“3. TO REMOVE BOTTLENECKS AND ADDRESS
LEAKAGES THAT IMPACT BUSINESS COMPETITIVENESS;

“4. TO PROTECT CONSUMER RIGHTS; AND.

“5. 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.

“THE HEADS OF OTHER EXECUTIVE 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. 58. 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. 59. Separability Clause. - If any provision of this Act is
subsequently declared unconstitutional, the validity of the remaining
provisions hereof shall remain in full force and effect.

SEC. 60. Repealing Clause. - Sections 2604, 2605, 2606, 2607, and
2610 of the Tariff and Customs Code of the Philippines, as amended, are
hereby repealed. All laws, decrees, executive orders, rules and regulations
and other issuances or parts thereof which are inconsistent with this Act are
hereby repealed or modified accordingly,

SEC. 61. 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,