Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

THIRTEENTH CONGRESS,

First Regular Session

102

H. No.

Introduced by Hon. Juan Edgardo “Sonny” M. Angara

EXPLANATORY NOTE

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

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

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

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

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

JUAN EDGARDO “S M. ANGARA


‘THIRTEENTH CONGRESS OF THE REPUBLIC }
OF THE PHILIPPINES }
First Regular Session }
HOUSE OF REPRESENTATIVES

102

H.No.

Introduced by Rep. Juan Edgardo “Sonny” M. Angara

AN ACT
RATIONALIZING THE FORFEITURE AND DISPOSITION OF PROPERTY SEIZED
BY THE BUREAU OF CUSTOMS, AMENDING FOR THE PURPOSE CERTAIN
SECTIONS OF THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS
AMENDED

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

SECTION 1. 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 in customs custody shall be
subject to sale under the conditions hereinafter provided:

“a, Abandoned articles;

“b, Articles entered under warehousing entry not withdrawn nor the duties and
taxes paid thereon within the period prescribed under Sections 1908 of this Code;

“c, Seized property, other than contraband, after liability to sale shall have been
established by proper administrative [or judicial] proceedings in conformity with the
provision of this Code; and

“d. Any article subject to a valid lien for customs duties, taxes or other charges
collectible by the Bureau of Customs, after the expiration of the period allowed for the
satisfaction of the same.”

SEC. 2. Section 2604 of the Tariff and Customs Code of the Philippines, as amended, is
hereby further amended to read as follows:

“See. 2604. Disqualification to Participate in Auction Sale. ~ No Customs official
or employee; THE OWNERS, OR OTHER AGENTS, OF THE PROPERTY SUBJECT

TO SALE; AND, THE IMPORTER OR CONSIGNEE OF THE PROPERTY SUBJECT

TO SALE; THE OWNERS, OR THEIR


AGENTS, OF THE VESSEL OR AIRCRAFT SUBJECT TO SALE shall be

allowed to bid directly or indirectly in any customs auction.”

SEC 3. Section 2607 of the Tariff and Customs Code of the Philippines, as
amended, is hereby further amended to read as follows:

“Section. 2607. Disposition of Articles Liable to Deterioration. -
Perishable articles shall be deposited in any appropriate bonded warehouse; and,
if not immediately entered for export or for transportation from the vessel or
aircraft in which imported or entered for consumption and the duties and the taxes
paid thereon, such articles SHALL [ may ] be sold at auction | , afer such public
notice, not exceeding three days, | as the necessities of the case permil.

“When seizure shall be made of property which, in the opinion of the
Collector, is liable to perish or be wasted or to depreciate greatly in value by
keeping, or which cannot be kept without great disproportionate expense, whether
such property consists of live animals or of any article, the appraiser shall so
certify his appraisal, the Collector SHALL | may ] proceed to advertise and sell
the same at auction, upon notice as he shall deem to be reasonable.

“The same disposition SHALL | may } be made of any warchoused article

ion,
damage, leakage or other causes, may so reduce its value as to be insuflicient to
pay the duties, taxes and other charges thereon, if it should be permitted to be so

when in the opinion of the Collector it is likely that the cost of deprecit

kept and be subjected to sale in the usual course.

“PROVIDED, THAT IN ALL CASES INVOLVING ARTICLES
LIABLE TO DETERIORATION, THE DETERMINATION THEREON SHALL
BE EXCLUSIVE TO THE COLLECTOR AND SHALL BE FINAL ON ‘THE
MATTER; PROVIDED FURTHER, THAT THE AUCTION SALE SHALL BE
HELD NOT LATER THAN TWO (2) DAYS AFTER THE PUBLIC NOTICE
SET BY THE COLLECTOR.”

SEC. 4. Section 2610 of the Tariff and Customs Code of the Philippines, as
amended, is hereby further amended to read as follows:
“Section. 2610. Disposition of Unsold Articles for Want of Bidders.
Articles subject to sale at public auction by customs authorities shall be sold at a
price not less than the wholesale value price in the domestic market of these or
similar articles in the usual wholesale quantities and in the ordinary course of
trade as determined in accordance with section twenty-three hundred and five of
this code.


“When any article remains unsold in at least two public biddings for want
of bidders or for lack of an acceptable bid, and the article is perishable and/or
suitable for official use, then the Collector shall report the matter immediately to
the Commissioner of Customs who SHALL | may, subject to the approval of the
Secretary of Finance, } authorize the official use of that article by the Bureau of
Customs to promote the intensive collection of taxes and/or to help prevent or
suppress smuggling and other frauds upon the Customs, and if the article is not
suitable for such use, then it may be channeled to the official use of other offices
of the National Government AS THE COMMISSIONER OF CUSTOMS MAY
DETERMINE. If the article is suitable for shelter or consists of foodstulls,
clothing materials or medicines then that article shall be given to government
charitable institutions through the Department of Social WORK | Services | and
Development. AGRICULTURAL PRODUCTS SHALL BE GIVEN ‘TO THE
DEPARTMENT OF AGRICULTURE FOR PROPER DISPOSITION.

“If the article offered for sale is not suitable either for official use or
charity, then the same may be re-exported as government property, through the
Department of Trade AND INDUSTRY or any other government entity through
barter or sale. If the article cannot be disposed of as provided above, the Collector
shall report the matter immediately to the Commissioner who SHALL { may,
subject to the approval of the Secretary of Finance ] dispose of the article to the
best advantage of the government in a negotiated private sale which shall be
consummated in the presence of a representative of the Commission of Audit., in
the manner provide for by this Code.”

\ SEC. 5. Section 2612 of the Tariff and Customs Code of the Philippines, as
| amended, is herby further amended to read as follows:

“Section 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 2610: Provided, ‘That acticles
whose importation is prohibited under Section 102, sub-paragraphs b, ¢, d, ¢ and j
shall, upon order to the Collector in writing, be burned or destroyed, in such
manner as the case may require as to render them absolutely worthless, in the
presence of a representative each from the Commission on Audit, [ Ministry ]
Department of Justice, Bureau of Customs, and if possible, any representative of

the private sector.”


SEC. 6. A new section, to be referred to herealer as Section 3613[A), is hereby

inserted to the Tariff and Customs Code of the Philippines, the said new section to read

as follo

reason,

ws:

“SECTION. 3613[A]. SUMMARY PROCEDURE FOR SEIZURE AND
FORFEITURE. - NOTWITHSTANDING THE PROVISIONS OF TITLE VI OF
THIS CODE, PROPERTY WICH ARE IMPORTED OR BROUGIIT IN TO
THE PHILIPPINES WITHOUT THE NECESSARY PERMIT AND/OR
PAYMENT OF THE RELEVANT AND APPLICABLE TAXES, fF AND
CHARGES , SHALL BE SUMMARILY SEI ZED AND FORIEITED IN
FAVOR OF THE GOVERNMENT. ANY VE: SEL OR AIRCRAFT USED TO
BRING IN SAID IMPORTED GOODS INTO TIE PIILIPPINES SIIALL
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 SUPREME COURT, SITALL ISSUE ANY
TEMPORARY RESTRAINING ORDER OR ANY INJUNCTIVE R
AGAINST THE SEIZURE, FORFEITURE OR SALE OF ANY OF THE
GOODS OR 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. 7. Separability Clause. - \f any part or parts of this Act should, for any
be held to be invalid or unconstitutional, the remaining parts thereof shall remain

in full force and effect.

SEC. 8. Repealing Clause. — All laws, decrees, executive orders, rules and

regulations and other issuances inconsistent with this Act are hereby repealed or modified

accordis

date of |

ingly.

SEC. 9. Effectivity. — This Act shall take effect after fifteen (15) days from the

Publication in at least two (2) newspapers of general circulation,

Approved,