SIXTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
FIRST REGULAR SESSION 
) 
SENATE 168 
S.B. No. ___ 
_ 
Introduced by Senator Sergio Osmena III 
EXPLANATORY NOTE 
'13 
JUL -1 
P 4 :01 
The International Convention on the Simplification and Harmonization of 
Customs Procedures, more popularly known as the Revised Kyoto Convention (RKC) 
was formulated under the stewardship of the World Trade Organization (WTO) and the 
World Customs Organization (WCO) to enable Customs administrations worldwide to 
cope with the demands of modern international trade and commerce. 
It is accepted 
worldwide as the blueprint for Customs modernization. 
On May 25, 2010, the Philippine government formally deposited with the World 
Customs Organization in Brussels 
its Articles of Accession to the Revised Kyoto 
Convention (RKC). As the 70th contracting party (out of 85 members) and third ASEAN 
country to accede to the RKC, the Philippines sent a resounding signal to the rest of 
the world of· its 
commitment to the modernization of its Customs systems and 
procedures in support of international trade and global economic integration. 
This bill addresses the need to update the prevailing Tariff and Customs Code of 
the Philippines, (TCCP) which was codified in 1978, 
and stands in the way of 
reforming and modernizing the Bureau of Customs. Its provisions are aligned with the 
standards and recommended practices of the Revised Kyoto Convention. If passed, it 
will establish a just, transparent and predictable system of entitlements and obligations 
within the trade community, enable the full automation of Customs procedures, 
strengthen its risk management system, and enhance trade facilitation for the legitimate 
trade community without prejudice to revenue collection, enforcement, and protection 
from the entry of banned, prohibited and dangerous substances and articles. 
For the longest time, the Bureau of Customs had earned the reputation of being 
one of the most corrupt agencies of the national government. Cleaning up the bureau 
will be one of the most herculean tasks of the present administration, and the passage 
of this bill will enable numerous reforms in that direction. 


In view of the foregoing, early passage of this bill is urgently recommended. 
/1. ~rV 
SERGIO OSMENA III 
Senator 


SIXTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES) 
First Regular Session 
) 
SENATE 
S.B. No. 1G8 
Introduced by Senator Sergio Osmei\a III 
Stmdt 
~Ht;{' (If tlJ!; ~rn'fh'lr\l. 
'13 
JUL -1 
P4.:01 
Ri:n:w 1':1' BV;-? i .. 
AN ACT TO PRESCRIBE THE "CUSTOMS AND TARIFF MODERNIZATION 
ACT OF 2013" AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled. 
1 
TITLE 1. PRELIMINARY PROVISIONS 
2 
CHAPTER 1. SHORT TITLE 
3 
. SECTION 100. Short Title. This Act shall be known as the "Customs and 
4 
Tariff Modernization Act of 201:1'. 
5 
CHAPTER 2. GENERAL AND COMMON PROVISIONS 
6 
SEC. 101. Declaration of Policy. It is the declared policy of the State to 
7 
promote and secure international trade, protect government revenue, and 
8 
modernize customs and tariff administration by: 
9 
a) 
Developing and implementing programs aimed at continuously 
10 
improving customs systems and processes; 
11 
b) 
Adopting customs policies, rules, and procedures that are clear, 
12 
transparent, and consistent with international agreements and customs best 
13 
practices; 


1 
c) 
Establishing a regime of informed compliance for customs 
2 
stakeholders by providing easy access to all public information, not otherwise 
3 
confidential and for customs use only, regarding Customs laws, rules and 
4 
regulations, administrative policies and guidelines, procedures and practices 
5 
that would enable them to fulfill their obligation to exercise due diligence in 
6 
dealing with customs; 
7 
d) 
Consulting and cooperating, 
wherever appropriate, with other 
8 
government agencies, and the private sector in customs policy development 
9 
and implementation; 
10 
e) 
Providing parties aggrieved by customs action and/or decision with 
11 
administrative and judicial appellate remedy; 
12 
f) 
Utilizing modern techniques in customs administration such as risk 
13 
management and post clearance-based controls, and maximizing the use of 
14 
information and communication technology in carrying out the mandate of 
15 
customs. 
16 
SEC. 102. Definition of Terms. As used in this Code: 
17 
"ADMISSION" refers to the act of bringing imported articles into free zone or 
16 
non-customs territory directly or through transit. 
19 
"Airway Bill (AWB)" is a transport document for airfreight used by airlines 
20 
and international freight forwarders. The holder or consignee of the bill has the 
21 
right to claim delivery of the goods when they arrive at the port of destination. It 
22 
is a contract of carriage that includes carrier conditions, such as limits of liability 
23 
and claims procedures. In addition, it contains transport instructions to airlines 
24 
and carriers, a description of the article, and applicable transportation charges. 
25 
"Appeal" means the act by which a person who is aggrieved by ANY ACT, 
26 
deciSion, ORDER or omission of Customs, seeks redress before the Bureau of 
27 
Customs, the Secretary of Finance, or competent court, as the case may be. 
2 


1 
"Articles" when used with reference to importation or exportation, includes 
2 
goods, wares and merchandise and in general anything that may be made the 
3 
subject of importation or exportation. 
4 
"Assessment" means the process of determining the amount of duties and 
5 
taxes and other charges due on imported articles. 
6 
"Bill of Lading (B/L)" is a transport document for ocean freight issued by 
7 
shipping lines, carriers AND INTERNATIONAL FREIGHT FORWARDERS OR 
8 
NON VESSEL OPERATING COMMON CARRIER. The holder or consignee of 
9 
the bill has the right to claim delivery of the goods when they arrive at the port of 
10 
destination. It is a contract of carriage that includes carrier conditions, such as 
11 
limits of liability and claims procedures. In addition, it contains transport 
12 
instructions to shipping lines and carriers, a description of the article, and 
13 
applicable transportation charges. 
14 
"Breakbulk;' is non-containerized cargo which is grouped or consolidated 
15 
for shipment and broken down or sub-divided INTO UNITIZED CARGO, SUCH 
16 
AS IN PALLETS, OR PACKED IN BAGS OR BOXES. 
17 
"Carrier" means the person actually transporting goods or in charge of or 
18 
responsible for the operation of the means of transport. 
19 
"Checking the GOODS declaration" means the action taken by customs to 
20 
satiSfy themselves that the GOODS declaration is correctly made out and that 
21 
the supporting documents required fulfill the prescribed conditions for lodgment. 
22 
"Clearance" means the accomplishment of the customs formalities 
23 
necessary to allow goods to enter for home use, warehousing, transit or 
24 
transshipment, or to be exported or placed under another customs procedure. 
25 
"Coastwise ports" are such domestic ports as are open to coastwise trade 
26 
only. These include all ports, harbors, and places not ports of entry. 
27 
"Constructive import/export" shail refer to the movement of imported 
28 
goods to and from free zone and customs territory. 
3 


1 
"CUSTOMS" SHALL MEAN THE BUREAU OF CUSTOMS. 
2 
"Customs AND TARIFF law" includes not only the provisions of this Act 
3 
and regulations pursuant thereto but all other laws and regulations which are 
4 
subject to enforcement by the Bureau of Customs or otherwise within its 
5 
jurisdiction. 
6 
"Customs office" means any customs administrative unit competent to 
7 
perform all or any of the functions enumerated UNDER THE CUSTOMS AND 
8 
TARIFF LAWS. 
9 
"Domestic Port" means a port within the Philippine jurisdiction. 
10 
"Foreign Port" means a port or place outside the jurisdiction of the 
11 
Philippines. 
12 
"Goods declaration" means a statement made in the manner prescribed by 
13 
the Customs, by which the persons concerned indicate the Customs procedure 
14 
to be applied to the imported goods and furnish the particulars which Customs 
15 
require for its application. 
16 
"Importation" means the act of bringing in of articles from a foreign territory 
17 
into the Philippine jurisdiction, whether for home use, warehousing, OR 
18 
ADMISSION TO FREE ZONE. However, entry of imported articles into freeport 
19 
zone shall be termed "admission" to distinguish it from imported articles brought 
20 
into the customs territory. 
21 
"International Freight Forwarder" refers to persons responsible for the 
22 
assembly and consolidation of shipments into single lot, and assuming, in most 
23 
cases, the full responsibility for the international transport of such shipment from 
24 
point of receipt to the point of destination. 
25 
"Non-Vessel Operating Common Carrier" (NOVCC) means a person, 
26 
including an international freight forwarder, providing point-to-point international 
27 
transport of shipments without operating or owing the means of transport or 
28 
equipment. An NVOCC deals with the shipper and issues its own transport 
4 


1 
document (e.g. B/L or AWB) even though it commonly subcontracts the different 
2 
stages of transport to vessel, aircraft, and truck operators. 
3 
"Port of Entry" is a domestic port open to both foreign and coastwise trade. 
4 
The term includes principal ports of entry and subports of entry. A "principal port 
5 
of entry" is the chief port of entry of the collection district wherein it is situated 
6 
and is the permanent station of the Collector of such port. Subports of entry are 
7 
under the administrative jurisdiction of the Collector of the principal port of entry 
8 
of the district. Whenever the term "Port of Entry" is used herein, it shall include 
9 
"airport of entry". 
10 
"Release of goods" means the action by Customs to permit goods 
11 
undergoing clearance to be placed at the disposal of the PERSON 
12 
CONCERNED. 
13 
"Refund" means the return, in whole or in part, of duties and taxes paid on 
14 
goods. 
15 
"Remission" means the reduction or dimunition, in whole or in part, of 
16 
duties and taxes where payment has not been made; the term remission is 
17 
synonymous with abatement. 
18 
"Security" REFERS TO ANY FORM OF GUARANTY, E.G., SURETY 
19 
BOND, CASH BOND, STANDBY LETTER OF CREDIT, IRREVOCABLE 
20 
LETTER OF CREDIT, which ensures the satisfaction of an obligation to 
21 
Customs. 
22 
"Smuggling" is an act of any person who shall fraudulently import or bring 
23 
into the Philippines, or assist in so doing, any article, contrary to law or 
24 
KNOWING THE ARTICLE TO HAVE BEEN IMPORTED CONTRARY TO LAW 
25 
shall receive, conceal, buy, sell, DISPOSE or in any manner, facilitate the 
26 
transportation, concealment, PURCHASE, sale OR DISPOSITION of such article 
27 
after importation. It includes the exportation of articles in a manner contrary to 
28 
law. Articles subject to this paragraph shall be known as smuggled article. 
5 


1 
"Taxes" includes all taxes, fees and charges imposed by THE NATIONAL 
2 
INTERNAL REVENUE CODE and collected by the Bureau of Customs. 
3 
"Transit" means the customs procedure under which goods are transported 
4 
under customs control from one customs office to another or to a free zone. 
5 
"Transshipment" means the customs procedure under which goods are 
6 
transferred under customs control from the importing means of transport to the 
7 
exporting means of transport within the area of one customs office which is the 
8 
office of both importation and exportation. 
9 
SEC. 103. 
When Importation Begins and Deemed Terminated. 
10 
Importation begins when the carrying vessel or aircraft enters the jurisdiction of 
11 
the Philippines with intention to unlade therein. Importation is deemed terminated 
12 
upon payment of duties, taxes and other charges due upon the articles, or 
13 
secured to be paid, at a port of entry and the legal permit for withdrawal shall 
14 
have been granted, or in case said articles are free of duties, taxes and other 
15 
charges, until they have legally left the jurisdiction of the customs. 
16 
SEC. 104. COMPETENT CUSTOMS OFFICES. FOR ADMINISTRATIVE 
17 
PURPOSES, THE PHILIPPINES SHALL BE DIVIDED INTO AS MANY 
18 
COLLECTION DISTRICTS AS NECESSARY, THE RESPECTIVE LIMITS OF 
19 
WHICH MAY BE CHANGED FROM TIME TO TIME BY THE COMMISSIONER 
20 
OF CUSTOMS UPON THE APPROVAL OF THE SECRETARY OF FINANCE. 
21 
THE LOCATION, STAFF COMPETENCIES AND BUSINESS HOURS OF 
22 
THESE OFFICES SHALL TAKE INTO ACCOUNT THE PARTICULAR 
23 
REQUIREMENTS OF TRADE. 
24 
SEC. 105. 
Owner of Imported Articles. All articles Imported into the 
25 
Philippines shall be held to be the property of the person to whom the same are 
26 
consigned and the holder of a bill of lading OR AIRWAY BILL duly endorsed by 
6 


1 
the consignee therein named, or, if consigned to order, by the consignor, shall be 
2 
deemed the consignee thereof. 
3 
The underwriters of abandoned articles and the salvors of articles saved 
4 
from wreck at sea, a coast or in any area of the Philippines may be regarded as 
5 
the consignees. 
6 
. SEC. 106. Liability of Importer for Duties AND TAXES. Unless relieved 
7 
by laws or regulations, the liability for duties, taxes, fees and other charges 
8 
attaching on importation constitutes a personal debt due from the importer to the 
9 
government which can be discharged only by payment in full of all duties, taxes, 
10 
fees and other charges legally accruing. It also constitutes a lien upon the articles 
11 
imported which may be enforced while such articles are in custody or subject to 
12 
the control of the government. 
13 
SEC. 107. Importations by the Government. Except those provided for in 
14 
Section 800 of this ACT, all importations by the Government for its own use or 
15 
that of its subordinate branches or instrumentalities, or corporations, agencies or 
16 
instrumentalities owned or controlled by the government shall be subject to the 
17 
duties, taxes, fees and other charges provided for in this ACT. 
18 
SEC. 108. DECLARANT. A DECLARANT IS A PERSON WHO MAKES 
19 
AND SUBMITS TO CUSTOMS GOODS DECLARATION OR IN WHOSE NAME 
20, 
SUCH DECLARATION IS MADE. 
ANY PERSON HAVING THE RIGHT TO 
21 
DISPOSE OF THE GOODS SHALL BE ENTITLED TO DIRECTLY ACT AS 
22 
DECLARANT. HOWEVER, WHEN HE AUTHORIZES AN AGENT TO MAKE 
23 
THE DECLARATION IN HIS BEHALF, HE CAN ONLY DO SO THROUGH AN 
24 
ACCREDITED 
CUSTOMS 
BROKER 
EXCEPT 
IN 
CASE 
WHEN 
THE 
25 
DECLARANT IS A JURIDICAL PERSON IN WHICH CASE IT MAYAUTHORIZE 
26 
ITS EMPLOYEE OR OFFICER TO MAKE THE DECLARATION IN BEHALF OF 
27 
THE JURIDICAL PERSON. 
7 


1 
SEC. 109. 
RIGHTS AND RESPONSIBILITIES OF THE DECLARANT. 
2 
THE PERSON HAVING THE RIGHT TO DISPOSE SHALL BE RESPONSIBLE 
3 
FOR 
THE 
ACCURACY 
OF 
THE 
INFORMATION 
IN 
THE 
GOODS 
4 
DECLARATION MADE DIRECTLY OR THROUGH AN AGENT AND SHALL BE 
5 
LIABLE FOR THE DUTIES, TAXES AND OTHER CHARGES DUE ON THE 
6 
IMPORTED ARTICLE. 
7 
THE 
DECLARANT 
SHALL 
SIGN 
THE 
GOODS 
DECLARATION 
8 
PERSONALLY OR THROUGH AN EMPLOYEE OR OFFICER IN CASE OF 
9 
JURIDICAL PERSON OR EVEN WHEN 
ASSISTED BY A LICENSED 
10 
CUSTOMS 
BROKER WHO 
SHALL 
LIKEWISE 
SIGN 
SAID 
GOODS 
11 
DECLARATION. THE DECLARATION SHALL BE UNDER OATH UNDER THE 
12 ' PENALTIES OF FALSIFICATION OR PERJURY THAT THE STATEMENTS 
13 
CONTAINED IN THE GOODS DECLARATION ARE TRUE AND CORRECT. 
14 
SUCH STATEMENTS UNDER OATH SHALL CONSTITUTE A PRIMA FACIE 
15 
EVIDENCE OF KNOWLEDGE OR CONSENT OF THE VIOLATION OF ANY 
16 
APPLICABLE PROVISIONS OF THIS ACT WHEN THE IMPORTATION IS 
17 
FOUND TO BE UNLAWFUL. 
18 
BEFORE FILING OF THE GOODS DECLARATION, THE DECLARANT 
19 
MAY, UPON REQUEST IN WRITING, AND FOR SUCH JUSTIFIABLE 
20 
REASONS AND UNDER SUCH CONDITIONS AS THE COMMISSIONER OF 
21 
CUSTOMS SHALL DETERMINE, BE ALLOWED TO INSPECT THE GOODS 
22 
AND TO DRAW SAMPLES FROM THE IMPORTATION. THERE SHALL BE NO 
23 
NEED FOR A SEPARATE DECLARATION FOR THE SAMPLES WITHDRAWN 
24 
UNDER CUSTOMS SUPERVISION PROVIDED, THAT SUCH SAMPLES ARE 
25 
INCLUDED 
IN THE GOODS DECLARATION FOR THE PARTICULAR 
26 
CONSIGNMENT CONCERNED. 
27 
SEC. 110. GOODS DECLARATION. 
28 
(1) GOODS DECLARATION FORMAT AND CONTENTS 
8 


1 
THE FORMAT OF THE GOODS DECLARATION SHALL CONFORM 
2 
TO INTERNATIONAL STANDARDS. 
3 
THE DATA REQUIRED IN THE GOODS DECLARATION SHALL 
4 
BE LIMITED TO ONLY SUCH PARTICULARS AS ARE DEEMED 
5 
NECESSARY FOR THE ASSESSMENT AND COLLECTION OF DUTIES 
6 
AND TAXES, THE COMPILATION OF STATISTICS AND COMPLIANCE 
7 
WITH CUSTOMS AND TARIFF LAWS. 
8 
WHERE 
THE 
DECLARANT 
DOES 
NOT 
HAVE 
ALL 
THE 
9 
INFORMATION REQUIRED TO MAKE THE GOODS DECLARATION, A 
10 
PROVISIONAL OR INCOMPLETE GOODS DECLARATION SHALL, FOR 
11 
CERTAIN CASES AND FOR REASONS DEEMED VALID BY CUSTOMS, 
12 
BE ALLOWED TO BE LODGED, PROVIDED THAT IT CONTAINS THE 
13 
PARTICULARS DEEMED NECESSARY BY THE CUSTOMS FORTHE 
14 
ACCEPTANCE OF THE ENTRY FILED AND THAT THE DECLARANT 
15 
UNDERTAKES TO COMPLETE IT WITHIN A REASONABLE PERIOD 
16 
OF TIME AS SPECIFIED BY REGULATIONS. 
17 
IF CUSTOMS ACCEPTS A 
PROVISIONAL OR INCOMPLETE 
18 
GOODS 
DECLARATION, 
THE 
TARIFF 
TREATMENT 
TO 
BE 
19 
ACCORDED TO THE GOODS SHALL NOT BE DIFFERENT FROM 
20 
THAT WHICH WOULD HAVE BEEN ACCORDED HAD A COMPLETE 
21 
AND CORRECT GOODS DECLARATION BEEN LODGED IN THE FIRST 
22 
INSTANCE. 
23, 
THE RELEASE OF THE GOODS SHALL NOT BE DELAYED 
24 
PROVIDED THAT ANY SECURITY REQUIRED HAS BEEN FURNISHED 
25 
TO ENSURE COLLECTION OF ANY APPLICABLE DUTIES AND 
26 
TAXES. 
27 
CUSTOMS 
SHALL 
REQUIRE 
THE 
LODGEMENT 
OF 
THE 
28 
ORIGINAL GOODS DECLARATION AND ONLY THE MINIMUM 
9 


1 
NUMBER OF COPIES AS ARE NECESSARY. 
2 
(2) DOCUMENTS SUPPORTING THE GOODS DECLARATION 
3 
IN SUPPORT OF THE GOODS DECLARATION, CUSTOMS SHALL 
4 
ONLY 
REQUIRE 
DOCUMENTS 
NECESSARY 
FOR 
CUSTOMS 
5 
CONTROL AND TO ENSURE THAT ALL REQUIREMENTS OF THE 
6 
LAW HAVE BEEN COMPLIED WITH. 
7 
WHERE CERTAIN SUPPORTING DOCUMENTS CANNOT BE 
8 
LODGED WITH THE GOODS DECLARATION FOR REASONS DEEMED 
9 
VALID BY THE CUSTOMS, THEY SHALL ALLOW PRODUCTION OF 
10 
THOSE 
DOCUMENTS 
WITHIN 
A 
REASONABLE 
PERIOD 
AS 
11 
SPECIFIED BY REGULATION. 
12 
CUSTOMS SHALL PERMIT THE LODGEMENT OF SUPPORTING 
13 
DOCUMENTS BY ELECTRONIC MEANS. 
14 
CUSTOMS SHALL NOT REQUIRE A TRANSLATION OF THE 
15 
PARTICULARS OF SUPPORTING DOCUMENTS EXCEPT WHEN 
16 
NECESSARY 
TO 
PERMIT 
PROCESSING 
OF 
THE 
GOODS 
17 
DECLARATION. 
18 
SEC. 111. LODGEMENT AND REGISTRATION. CUSTOMS SHALL 
19 
PERMIT THE 
LODGING OF THE 
GOODS DECLARATION AT ANY 
20 
DESIGNATED CUSTOMS OFFICE. 
21 
GOODS DECLARATION SHALL BE LODGED DURING THE HOURS 
22 
DESIGNATED BY THE CUSTOMS. 
23 
CUSTOMS SHALL MAKE PROVISION UNDER SUCH TERMS AND 
24 
CONDITIONS AS THE COMMISSIONER OF CUSTOMS MAY ESTABLISH FOR 
25 
THE FILING OF GOODS DECLARATION AND SUPPORTING DOCUMENTS 
26 
PRIOR TO THE ARRIVAL OF THE GOODS. 
27 
CUSTOMS SHALL FOR VALID REASON, PERMIT THE DECLARANT 
28 
TO AMEND THE GOODS DECLARATION THAT HAS ALREADY BEEN 
10 


1 
LODGED, PROVIDED THAT WHEN THE REQUEST IS RECEIVED THEY 
2 
HAVE NOT BEGUN TO CHECK THE GOODS DECLARATION OR TO 
3 
EXAMINE THE GOODS. 
4 
SEC. 112. SPECIAL PROCEDURES FOR AUTHORIZED PERSONS. FOR 
5 
AUTHORIZED PERSONS WHO MEET THE CRITERIA SET DOWN BY 
6' CUSTOMS, 
INCLUDING 
HAVING 
AN 
APPROPRIATE 
RECORD 
OF 
7 
COMPLIANCE WITH CUSTOMS REQUIREMENTS AND A SATISFACTORY 
8 
SYSTEM FOR MANAGING THEIR COMMERCIAL RECORDS, CUSTOMS 
9 
SHALL PROVIDE FOR: 
10 
(1) 
RELEASE OF THE GOODS ON THE PROVISION OF THE 
11 
MINIMUM INFORMATION NECESSARY TO IDENTIFY THE GOODS 
12 
AND PERMIT THE SUBSEQUENT COMPLETION OF THE FINAL 
13 
GOODS DECLARATION; 
14 
CLEARANCE 
OF THE GOODS AT THE 
DECLARANT'S 
15 
PREMISES OR ANOTHER PLACE AUTHORIZED BY THE CUSTOMS; 
16 
AND, IN ADDITION, TO THE EXTENT POSSIBLE, OTHER SPECIAL 
17 
PROCEDURES SUCH AS: 
18 
(2) 
ALLOWING A SINGLE GOODS DECLARATION FOR ALL 
19 
IMPORTS OR EXPORTS IN A GIVEN PERIOD WHERE GOODS ARE 
20 
IMPORTED OR EXPORTED FREQUENTLY BY THE SAME PERSON; 
21 
USE 
OF 
THE 
AUTHORIZED 
PERSONS' 
COMMERCIAL 
22 
RECORDS TO SELF-ASSESS THEIR DUTY AND TAX LIABILITY AND, 
23 
WHERE APPROPRIATE, TO ENSURE COMPLIANCE WITH OTHER 
24 
CUSTOMS REQUIREMENTS; 
25 
ALLOWING THE LODGEMENT OF GOODS DECLARATION BY 
26 
MEANS OF AN ENTRY IN THE RECORDS OF THE AUTHORIZED 
27 
PERSON 
TO 
BE 
SUPPORTED 
SUBSEQUENTLY 
BY 
A 
28 
SUPPLEMENTARY GOODS DECLARATION. 
11 


1 
THIS SECTION SHALL BE IMPLEMENTED WITHIN FIVE (5) YEARS 
2 
FROM THE ENACTMENT OF THIS ACT. 
3 
SEC. 113. EXAMINATION OF THE GOODS. 
4 
(1) 
TIME REQUIRED FOR EXAMINATION OF GOODS. WHEN 
5 
THE EXAMINATION OF GOODS IS REQUIRED BY CUSTOMS, SUCH 
6 
EXAMINATION SHALL TAKE PLACE AS SOON AS POSSIBLE AFTER 
7 
THE GOODS DECLARATION HAS BEEN LODGED. 
8 
WHEN SCHEDULING EXAMINATIONS, PRIORITY SHALL BE 
9 
GIVEN TO THE EXAMINATION OF LIVE ANIMALS AND PERISHABLE 
10 
GOODS AND TO OTHER GOODS WHICH CUSTOMS CONSIDER AS 
11 
URGENTLY NEEDING EXAMINATION. 
12 
CUSTOMS AND OTHER AGENCIES CONCERNED SHALL COME 
13 
OUT WITH A SYSTEM OF COORDINATION AND JOINT EXAMINATION 
14 
OF GOODS WHICH MUST BE INSPECTED BY THE LATTER UNDER 
15 
EXISTING LEGISLATION. 
16 
(2) 
PRESENCE OF THE DECLARANT AT EXAMINATION OF 
17', 
GOODS. AS A GENERAL RULE, CUSTOMS MAY EXAMINE GOODS 
18 
WITHOUT 
THE 
PRESENCE 
OF 
THE 
DECLARANT 
OR 
AN 
19 
AUTHORIZED REPRESENTATIVE. HOWEVER, IF THE DECLARANT 
20 
SO REQUESTS, HE OR AN AUTHORIZED REPRESENTATIVE SHALL 
21 
BE ALLOWED TO BE PRESENT UNLESS SERIOUS, EXCEPTIONAL 
22 
CIRCUMSTANCES EXIST TO BAR THEIR PRESENCE. 
23 
IF CUSTOMS DEEM IT USEFUL, THEY SHALL REQUIRE THE 
24 
DECLARANT TO BE PRESENT OR TO BE REPRESENTED AT THE 
25 
EXAMINATION OF THE GOODS TO GIVE THEM ANY ASSISTANCE 
26 
NECESSARY TO FACILITATE THE EXAMINATION. 
27 
(3) 
SAMPLING BY THE CUSTOMS. SAMPLES SHALL BE 
28 
TAKEN ONLY WHERE DEEMED NECESSARY BY CUSTOMS TO 
12 


1 
ESTABLISH THE TARIFF DESCRIPTION AND/OR VALUE OF GOODS 
2 
DECLARED OR TO ENSURE COMPLIANCE WITH CUSTOMS AND 
3 
RELATED LAWS. SAMPLES DRAWN SHALL BE AS SMALL AS 
4 
POSSIBLE. 
5 
SEC. 114. 
ERRORS IN GOODS DECLARATION. 
CUSTOMS SHALL 
6 
NOT IMPOSE SUBSTANTIAL PENALTIES FOR ERRORS WHERE THEY ARE 
7 
SATISFIED THAT SUCH ERRORS ARE INADVERTENT AND THAT THERE 
8 
HAS BEEN NO FRAUDULENT INTENT OR GROSS NEGLIGENCE IN THE 
9 \ COMMISSION THEREOF. WHERE THEY CONSIDER IT NECESSARY TO 
10 
DISCOURAGE A REPETITION OF SUCH ERRORS, A PENALTY MAY BE 
11 
IMPOSED BUT SHALL BE NO GREATER THAN IS NECESSARY FOR THIS 
12 
PURPOSE. 
13 
SEC. 115. 
RELEASE OF GOODS. GOODS DECLARED SHALL BE 
14 
RELEASED AS SOON AS DUTIES AND TAXES AND OTHER LAWFUL 
15 
CHARGES HAVE BEEN PAID OR SECURED TO BE PAID ANDIOR 
16 
OTHERWISE ALL THE PERTINENT LAWS, RULES AND REGULATIONS 
17 
HAVE BEEN COMPLIED WITH. 
18 
WHEN CUSTOMS DECIDE THAT THEY REQUIRE LABORATORY 
19 
ANALYSIS OF SAMPLES, DETAILED TECHNICAL DOCUMENTS OR EXPERT 
20 
ADVICE, THEY SHALL RELEASE THE GOODS BEFORE THE RESULTS OF 
21 
SUCH EXAMINATION ARE KNOWN, PROVIDED THAT ANY SECURITY 
22 
REQUIRED HAS BEEN FURNISHED AND PROVIDED THEY ARE SATISFIED 
23 
THAT 
THE 
GOODS 
ARE 
NOT 
SUBJECT 
TO 
PROHIBITIONS 
OR 
24 
RESTRICTIONS. 
25 
SEC. 116. 
ABANDONMENT OR DESTRUCTION OF GOODS. WHEN 
26 
GOODS HAVE NOT YET BEEN RELEASED FOR CONSUMPTION OR WHEN 
27 
THEY HAVE BEEN PLACED UNDER ANOTHER CUSTOMS PROCEDURE, 
13 


1 i AND PROVIDED THAT NO OFFENCE HAS BEEN DETECTED, THE PERSON 
2 
CONCERNED SHALL NOT BE REQUIRED TO PAY THE DUTIES AND TAXES 
3 
OR SHALL BE ENTITLED TO REFUND THEREOF: 
4 
(1) 
WHEN, 
AT 
HIS 
REQUEST, 
SUCH 
GOODS 
ARE 
5 
ABANDONED OR DESTROYED OR RENDERED COMMERCIALLY 
6 
VALUELESS UNDER CUSTOMS CONTROL, AS CUSTOMS MAY 
7 
DECIDE. ANY COSTS INVOLVED SHALL BE BORNE BY THE PERSON 
8 
CONCERNED; 
9 
(2) 
WHEN 
SUCH 
GOODS 
ARE 
DESTROYED 
OR 
10 
IRRECOVERABLY LOST BY ACCIDENT OR FORCE MAJEURE, 
11 
PROVIDED 
THAT 
SUCH 
DESTRUCTION 
OR 
LOSS 
IS 
DULY 
12 
ESTABLISHED TO THE SATISFACTION OF CUSTOMS; 
13 
(3) 
ON SHORTAGES DUE TO THE NATURE OF THE GOODS 
14 
WHEN SUCH SHORTAGES ARE DULY ESTABLISHED TO THE 
15 
SATISFACTION OF CUSTOMS. 
16 
ANY WASTE OR SCRAP REMAINING AFTER DESTRUCTION 
17 
SHALL BE LIABLE, IF TAKEN INTO CONSUMPTION, TO THE DUTIES AND 
18 
TAXES THAT WOULD BE APPLICABLE TO SUCH WASTE OR SCRAP 
19 
IMPORTED IN THAT STATE. 
20 
SEe. 117. DISPOSITION OF ABANDONED GOODS. WHEN CUSTOMS 
, 
21 
SELL GOODS WHICH HAVE NOT BEEN DECLARED WITHIN THE TIME 
22 
ALLOWED OR COULD NOT BE RELEASED ALTHOUGH NO OFFENCE HAS 
23 
BEEN DISCOVERED, THE PROCEEDS OF THE SALE, AFTER DEDUCTION 
24 
OF ANY DUTIES AND TAXES AND ALL OTHER CHARGES AND EXPENSES 
25 
INCURRED, SHALL BE MADE OVER TO THOSE PERSONS ENTITLED TO 
26 
RECEIVE THEM OR, WHEN THIS IS NOT POSSIBLE, HELD AT THEIR 
27 
DISPOSAL FOR A SPECIFIED PERIOD. 
14 


1 
SEC. 118. 
When Duty and Tax is Due on Imported Article. All articles, 
2 
when imported from any foreign country into the Philippines, shall be subject to 
3 
duty upon each importation, even though previously exported from the 
4 
Philippines, except as otherwise specifically provided for in this ACT or in other 
5 
laws. 
6 
DUTIES, TAXES AND OTHER CHARGES SHALL BE PAID PRIOR TO 
7 
RELEASE FROM CUSTOMS CUSTODY OR PRIOR TO ENTRY INTO THE 
8 
CUSTOMS TERRITORY IN CASE OF WITHDRAWAL FROM FREE ZONES OR 
9 
FROM CBWs. HOWEVER, FOR CERTAIN HIGHLY COMPLIANT AND LOW 
10 
RISK IMPORTERS OR EXPORTERS AS DETERMINED BY REGULATION, 
11 
THE BUREAU SHALL ALLOW THE DEFERRED PAYMENT OF DUTIES AND 
12 
I TAXES FOR A PERIOD OF NOT LESS THAN 14 DAYS BUT NOT EXCEEDING 
13 
THIRTY (30) DAYS. 
14 
UNPAID DUTIES, TAXES AND ANY OTHER CHARGES, SHALL BE 
15 
SUBJECT TO THE LEGAL INTEREST OF TWENTY PERCENT (20% )PER 
16 
ANNUM COMPUTED FROM THE EXPIRATION OF THE DUE DATE OR IN 
17 
CASE OF GOODS ADMITTED INTO FREE ZONES, FROM THE TIME THE 
18 
ASSESSMENT 
IS 
MADE 
AFTER 
GOODS 
ENTER 
THE 
CUSTOMS 
19 
TERRITORY. THE LEGAL INTEREST SHALL BE IMPOSED IN ADDITION TO 
20 
ANY APPLICABLE FINE OR PENALTY. 
21 
WHEN DUTIES, TAXES AND OTHER CHARGES ARE PAID, THE 
22 
BUREAU 
SHALL 
ISSUE 
THE 
NECESSARY 
RECEIPT 
OR 
23 
ACKNOWLEDGEMENT AS PROOF OF SUCH PAYMENT. 
24 
IN CASE OF DEFERRED PAYMENT, CUSTOMS SHALL HAVE 3 YEARS 
25 
WITHIN WHICH IT MAY TAKE LEGAL ACTION TO COLLECT DUTIES AND 
26 
TAXES NOT PAID BY THE DUE DATE. 
27 
SEC. 119. Effective Date of Rate of Import Duty. Imported articles shall 
28 
be subject to the rate or rates of import duty OF THE APPLICABLE TARIFF 
15 


1 
HEADING at the time ,of entry or UPON withdrawal from the warehouse for 
2 
consumption, 
3 
On article abandoned or forfeited to, or seized by, the government, and then 
4 
sold at public auction, the rates of duty and the tariff in force on the date of the 
5 
auction shall apply: Provided, That duty based on the weight, volume and 
6 
quantity of articles shall be levied and collected on the weight, volume and 
7 
quantity at the time of their entry into the warehouse or the date of abandonment, 
6 
forfeiture and/or seizure. 
9 
SEC. 120. Treatment of Importation. 
Imported articles shall be deemed 
10 
"entered" in the Philippines for consumption when the specified entry form is 
11 
properly filed and accepted, together with any related documents required by the 
12 
provisions of this ACT and/or regulations to be filed with such form at the time of 
13 
entry, at the port or station by the customs official designated to receive such 
14 
entry papers and any duties, taxes, fees and/or other lawful charges required to 
15 
be paid at the time of making such entry have been paid or secured to be paid 
16 
with the customs official designated to receive such monies, provided that the 
17 
article has previously arrived within the limits of the port of entry. 
16 
Imported articles shall be deemed "withdrawn" from warehouse in the 
19 
Philippines for consumption when the specified form is properly filed and 
20 
accepted, together with any related documents required by any provisions of this 
21 
ACT and/or regulations to be filed with such form at the time of withdrawal, by the 
22 
customs official designated to receive the withdrawal entry and any duties, taxes, 
23 
fees and/or other lawful charges HAVE BEEN PAID with the customs official 
24 
designated to receive such payment. 
25 
SEC. 121. DEFERRED PAYMENT FOR GOVERNMENT IMPORTATION. 
26 
THE GOVERNMENT OR ANY OF ITS INSTRUMENTALITIES OR AGENCIES 
27 
MAY AVAIL OF DEFERRED PAYMENT FOR ITS IMPORTATIONS UNDER 
16 


1 
SUCH TERMS AND CONDITIONS THAT SHALL BE DETERMINED BY 
2 
REGULATION TO BE JOINTLY ISSUED BY THE DEPARTMENT OF FINANCE 
3 
AND THE DEPARTMENT OF BUDGET MANAGEMENT. 
4 
SEC. 122. 
REFUND OF DUTIES AND TAXES. REFUND SHALL BE 
5 
GRANTED WHERE IT IS ESTABLISHED THAT DUTIES AND TAXES HAVE 
6 
BEEN 
OVERCHARGED AS 
A RESULT OF 
AN 
ERROR 
IN 
THEIR 
7 
ASSESSMENT. 
8 
WHERE PERMISSION IS GIVEN BY THE CUSTOMS FOR GOODS 
9 
ORIGINALLY DECLARED FOR A CUSTOMS PROCEDURE WITH PAYMENT 
10 
OF DUTIES AND TAXES TO BE PLACED UNDER ANOTHER CUSTOMS 
11 
PROCEDURE, REFUND SHALL BE MADE OF ANY DUTIES AND TAXES 
12 
CHARGED IN EXCESS OF THE AMOUNT DUE UNDER THE NEW 
13 
PROCEDURE SUBJECT TO SUCH REGULATION ISSUED FOR THE 
14 
PURPOSE. 
15 
REFUND SHALL NOT BE GRANTED IF THE AMOUNT INVOLVED IS 
16 
LESS THAN FIVE THOUSAND PESOS. HOWEVER, THE SECRETARY OF 
17 
FINANCE IN CONSULTATION WITH THE COMMISSIONER, MAY CHANGE 
18 
THE MINIMUM AMOUNT SPECIFIED IN THIS ACT TAKING INTO ACCOUNT 
19 
SUCH FACTORS AS INFLATION OR DEFLATION. 
20 
SEC. 123. SECURITY. CUSTOMS REGULATION SHALL PROVIDE THE 
21 
FORMS 
AND AMOUNT OF 
SECURITY THAT ARE 
REQUIRED TO 
22 
GUARANTEE THE PAYMENT OF DUTIES AND TAXES AND OTHER 
23 
OBLIGATIONS PROVIDED FOR IN THIS ACT. 
24 
UNLESS THE FORM OF THE SECURITY IS FIXED IN THIS ACT, ANY 
25 
PERSON REQUIRED TO PROVIDE SECURITY SHALL BE ALLOWED TO 
26 
CHOOSE ANY FORM OF SECURITY PROVIDED THAT IT IS ACCEPTABLE 
27 
TO CUSTOMS. 
17 


CUSTOMS SHALL NOT REQUIRE SECURITY WHEN THEY ARE 
2 
SATISFIED THAT AN OBLIGATION TO THE CUSTOMS WILL BE FULFILLED. 
3 
WHEN SECURITY IS REQUIRED TO ENSURE THAT THE OBLIGATIONS 
4 
ARISING FROM A CUSTOMS PROCEDURE WILL BE FULFILLED, THE 
5 
CUSTOMS SHALL ACCEPT A GENERAL SECURITY, IN PARTICULAR FROM 
6 
DECLARANTS WHO REGULARLY DECLARE GOODS AT DIFFERENT 
7 
OFFICES IN THE CUSTOMS TERRITORY UNDER SUCH TERMS AND 
8 
CONDITIONS AS THE COMMISSIONER MAY DETERMINE. 
9 
WHERE SECURITY IS REQUIRED, THE AMOUNT OF SECURITY TO BE 
10 
PROVIDED SHALL BE AS LOW AS POSSIBLE AND, IN RESPECT OF THE 
11 
PAYMENT OF DUTIES AND TAXES, SHALL NOT EXCEED THE AMOUNT 
12 
POTENTIALLY CHARGEABLE. 
13 
WHERE 
SECURITY 
HAS 
BEEN 
FURNISHED, 
IT 
SHALL 
BE 
14 
DISCHARGED AS SOON AS POSSIBLE AFTER THE CUSTOMS ARE 
15 . SATISFIED THAT THE OBLIGATIONS UNDER WHICH THE SECURITY WAS 
16 
REQUIRED HAVE BEEN DULY FULFILLED 
17 
SEC. 124. CUSTOMS CONTROL. ALL GOODS, INCLUDING MEANS OF 
18 
TRANSPORT, WHICH ENTER OR LEAVE THE CUSTOMS TERRITORY, 
19 
REGARDLESS OF WHETHER THEY ARE LIABLE TO DUTIES AND TAXES, 
20 
SHALL BE SUBJECT TO CUSTOMS CONTROL WHICH SHALL BE LIMITED 
21 
TO THAT NECESSARY TO ENSURE COMPLIANCE WITH CUSTOMS AND 
22 
RELATED LAWS. 
23 
IN THE APPLICATION OF CUSTOMS CONTROL, THE CUSTOMS SHALL 
24 
USE AUDIT-BASED CONTROLS AND RISK MANAGEMENT SYSTEMS AND 
25 
ADOPT A COMPLIANCE MEASUREMENT STRATEGY TO SUPPORT RISK 
26 
MANAGEMENT. 
18 


1 
CUSTOMS SHALL SEEK TO COOPERATE WITH OTHER CUSTOMS 
2 
ADMINISTRATIONS AND AIM AT CONCLUDING MUTUAL ADMINISTRATIVE 
3 
ASSISTANCE AGREEMENTS TO ENHANCE CUSTOMS CONTROL. 
4 
CUSTOMS SHALL CONSULT AND COOPERATE 
WITH OTHER 
5 
GOVERNMENT REGULATORY AGENCIES, INCLUDING FREE AND SPECIAL 
6 
ECONOMIC ZONE AUTHORITIES, AND THE CUSTOMS STAKEHOLDERS IN 
7 
GENERAL TO ENHANCE CUSTOMS CONTROL. 
s 
CUSTOMS SHALL EVALUATE TRADERS' COMMERCIAL SYSTEMS 
9 
WHERE THOSE SYSTEMS HAVE AN IMPACT ON CUSTOMS OPERATIONS 
10 
TO ENSURE COMPLIANCE WITH CUSTOMS REQUIREMENTS. 
11 
SEC. 125. 
APPLICATION OF INFORM A TlON AND COMMUNICATION 
12 
TECHNOLOGY. 
CUSTOMS 
SHALL 
APPLY 
INFORMATION 
AND 
13 
COMMUNICATION TECHNOLOGY TO ENHANCE CUSTOMS CONTROL AND 
14 
SUPPORT A COST-EFFECTIVE AND EFFICIENT CUSTOMS OPERATIONS 
15 
GEARED TOWARDS A PAPERLESS CUSTOMS ENVIRONMENT USING 
16 
INTERNATIONALLY ACCEPTED STANDARDS. 
17 
THE 
INTRODUCTION OF 
INFORMATION AND 
COMMUNICATION 
18 
TECHNOLOGY SHALL BE CARRIED OUT IN CONSULTATION WITH ALL 
19 
RELEVANT PARTIES DIRECTLY AFFECTED, TO THE GREATEST EXTENT 
20 
POSSIBLE. 
21 
SEC. 126. 
RELA TIONSHIP BETWEEN CUSTOMS AND THIRD 
22 
PARTIES. 
PERSONS CONCERNED SHALL HAVE THE CHOICE OF 
23 
TRANSACTING BUSINESS WITH CUSTOMS EITHER DIRECTLY OR BY 
24 
DESIGNATING A THIRD PARTY TO ACT ON THEIR BEHALF. 
25 
THE CUSTOMS TRANSACTIONS WHERE THE PERSON CONCERNED 
26 
ELECTS TO DO BUSINESS ON HIS OWN ACCOUNT SHALL NOT BE 
27 
TREATED LESS FAVOURABLY OR BE SUBJECT TO MORE STRINGENT 
19 


1 
REQUIREMENTS THAN THOSE CUSTOMS TRANSACTIONS WHICH ARE 
2 
HANDLED FOR THE PERSON CONCERNED BY A THIRD PARTY. 
3 
A PERSON DESIGNATED AS A THIRD PARTY SHALL HAVE THE SAME 
4 
RIGHTS AS THE PERSON WHO DESIGNATED HIM IN THOSE MATTERS 
5 
RELATED TO TRANSACTING BUSINESS WITH CUSTOMS. 
6 
SEC. 127. INFORMATION OF GENERAL APPLICATION. TO FOSTER 
7 
AN INFORMED COMPLIANCE REGIME, CUSTOMS SHALL ENSURE THAT 
8 
ALL 
RELEVANT 
AND 
AVAILABLE 
INFORMATION 
OF 
GENERAL 
9' APPLICATION 
PERTAINING TO 
CUSTOMS 
LAW, 
NOT 
OTHERWISE 
10 
CONFIDENTIAL OR FOR CUSTOMS USE ONLY IS READILY ACCESSIBLE 
11 
TO ANY INTERESTED PERSON FOR LEGITIMATE USE. 
12 
WHEN INFORMATION THAT HAS BEEN MADE AVAILABLE MUST BE 
13 
AMENDED DUE TO CHANGES IN CUSTOMS LAW, ADMINISTRATIVE 
14 
ARRANGEMENTS OR REQUIREMENTS, CUSTOMS SHALL, AS FAR AS MAY 
15 
BE FEASIBLE, MAKE THE REVISED INFORMATION READILY AVAILABLE 
16 
SUFFICIENTLY IN ADVANCE OF THE ENTRY INTO FORCE OF THE 
17 
CHANGES TO ENABLE INTERESTED PERSONS TO TAKE ACCOUNT OF 
18 
THEM, UNLESS ADVANCE NOTICE IS PRECLUDED. 
19 
SEC. 128. 
INFORMATION OF A SPECIFIC NATURE. SUBJECT TO 
20 
REGULATION ISSUED FOR THE PURPOSE, CUSTOMS SHALL PROVIDE 
21 
INFORMATION AS MAY BE AVAILABLE AND IS NOT OTHERWISE 
22 
CONFIDENTIAL OR FOR CUSTOMS USE ONLY, RELATING TO A SPECIFIC 
23 
MATTER AS REQUESTED BY AN INTERESTED PERSON FOR LEGITIMATE 
24 
USE. 
25 
CUSTOMS MAY REQUIRE THE PAYMENT OF A REASONABLE FEE IN 
26 
PROVIDING 
SUCH 
INFORMATION 
OF 
A 
SPECIFIC 
NATURE 
TO 
27 
INTERESTED PARTIES. 
20