I
.
 
THIRTEENTH CONGRESS OF THE REPUBLIC 
First Regular Session 
OF THE PHILIPPINES 
S E N A T E  
S.No. 10 
, ' 
Introduced by Senator Edgardo J. 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 
adqinistrative 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 recomme dation 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 s bject goods as well as the aircraft or vessel used in transporting the 
Administrative s mmary proceedings appear to be the most effective vehicle to curb 
smuggling. Judicial int 
~ rvention should be invoked only at the level of the Supreme Court, 
same. 
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 smuiggling. 
Smugglers themselves should not be allowed to profit from their own violation of our 
customs laws. They should be barred from involvement in auction sales of the very items or 
goods they brought in fraudulently. 
In view of the foregoing, immediate passage of this bill is earnestly requested. 
EDGARDO J. ANGARA 


L. I , 
THIRTEENTH CONGRESS OF THE REPUBLIC 
1 
.. 
OF THE PHILIPPINES 
First Regular Session 
S E N A T E  
‘ 
&No. 1058-3 
Introduced by Senator Edgardo J. 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 engcted by the Senate and the House of Representatives ofthe 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: 
“Sec. 2604. Disqualijkation 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 Tarif€ and Customs Code of the Philippines, as 
amended, is hereby further amended to read as follows: 
“Section. 2607. Disposition of Articles Liable fo Deterioraadion. - 
Perishable articles shall be deposited in any appropriate bonded warehouse; and, 
if not immediately entered for export or for transportation fkom 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 [ , after such public 
notice, not exceeding three days, ] as the necessities of the case permit. 
“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 warehoused article 
when in the opinion of the Collector it is likely that the cost of depreciation, 
damage, leakage or other causes, may so reduce its value as to be insuflkieiit to 
pay the duties, taxes and other charges thereon, if it should be permitted to be so 
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 Tarif€ 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 liundred 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 eauds 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 fooclslufEs, 
clothing materials or medicines then that article shall be given to goveriiinent 
charitable institutions through the Department of Social WORK Services j 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 articlc 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 Philippincs, 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 f or judicial ] proceedings in conformity with the provisions o f  this 
Code, shall be disposed of as provided for in Section 26 10: Provided, That articles 
whose importation is prohibited under Section 102, sub-paragraphs b, c, d, c 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 fiom the Commission on Audit, [ Mitiistry ] 
Department of Justice, Bureau of Customs, and ifpossible, any representative of 
the private sector.’’ 


SEC. 6. A new section, to be referred to hereafter as Section 3613[A], is hereby 
inserted to the Tariff and Customs Code of the Philippines, the said new section to read 
as follows: 
“SECTION. 361 3[A]. SUMMARY PROCEDURE FOR SEIZURE AND 
FORFEITURE. - NOTWITHSTANDING THE PROVISIONS OF TITLE VI OF 
THIS CODE, PROPERTY WHICH ARE IMPORTED OR BROUGHT IN TO 
THE PHILIPPINES WITHOUT THE NECESSARY PERMIT AND/OR 
PAYMENT OF THE RELEVANT AND APPLICABLE TAXES, FEES AND 
CHARGES , SHALL BE SUMMARILY SEIZED AND FORFEITED IN 
FAVOR OF THE GOVERNMENT. ANY VESSEL OR AIRCRAFT USED TO 
BRING IN SAID IMPORTED GOODS 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 SUPREME COURT, SHALL ISSUE ANY 
TEMPORARY RESTRAINING ORDER OR ANY INJUNCTIVE RELIEF 
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. - If any part or parts of this Act should, €or any 
reason, be held to be invalid or unconstitutional, the remaining parts thereof shall remain 
in full force and effect. 
SEC. 8. Repealing Clause. - AU laws, decrees, executive orders, rules and 
regulations and other issuances inconsistent with this Act are hereby repealed or modified 
accordingly. 
SEC. 9. Effectivity. - This Act shall take effect after fifteen (15) days from the 
date of publication in at least two (2) newspapers of general circulation. 
Approved,