\ 
SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S, B. No. 442, 
; 
"-
Sl'n.),tl' 
tlil(f,;, "I I~" ,)i,,'rr.l.r~ 
'13 
JUL -4 A 8 :17 
Introduced by Senator FRANCIS G. ESCuD~O . 
EXPLANATORY NOTE 
This piece of legislation principally seeks to address the perennial problem of 
smuggling in the Bureau of Customs (BOC) by amending the pertinent provisions of the 
Tariff and Customs Code or Presidential Decree No. 1464. 
This bill prescribes a new set of stringent requirements for surety companies and 
bonded warehouses doing business in the BOC Surety companies are given the 
threshold amount of 30% of the total due and demandable bonds as the minimum 
liability in the BOC with which it ~an no longer issue bonds in favor of the BOC and be 
subjected to cancellation of its permit or license. 
In the case of bonded warehouses entities and locators, which include even those 
operating under the charter of the Philippine Economic Zone Authority (PEZA), the 
,Subic Bay Metropolitan Authority (SBMA), and other freeports and ecofones, their 
paid-up capital and 'net assets are to be made equivalent to the value of goods of 
unliquidated entries stored in their respective warehouses. 
I 
Customs officials tasked to examine and appraised the value of goods is to be 
mandated to certify such under oath. Moreover, a valuation library, updated at all 
times, is to be used as reference and basis for examination and appraisal. 
Lastly, smuggling is made a graver offense in this proposed legislation by 
applying graduated penalties depending on the form of smuggling committed and the 
value of the goods concerned. It provides as maximum the penalty of life imprisonment 
for smuggling if the value of the goods unlawfully imported exceeds Php1,000,000.00. 
In the light of the foregoing, and if only to establish an effective, system of ' 
addressing smuggling arid corruption in the BOC, immediate passage of this bill is 
sincerely sought. 
FRANCIS G. ESCUDERO 


SIXTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) . 
SENATE 
S. B. No. 442 
'13 
JUL -4 
1\ 8 :17 
Introduced by Senator FRANCIS G. ESCUD~RO . 
AN ACT 
AMENDING 
CERTAIN 
PROVISIONS 
OF PRESIDENTIAL DECREE 
NO. 1464, 
OTHERWISE KNOWN AS 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. 
1 
SECTION 1. Short Title. - This Act shall be known and cited as the "Anti-Smuggling 
2 Act." 
3 
SEC. 2. Section 201, Title II, Part 1 of the Tariff and Customs Code of the 
4 Philippines, as amended, is hereby further amended to read as follows: 
5 
"Sec. 201. Basis of Dutiable Value. - (A) Method One. - Transaction Value. - The 
6 
dutiable value of an imported article subject to an ad valorem rate of duty shall be 
7 
the transaction value, which shall be the price actually paid or payable for the 
8 
goods when sold for export to the Philippines, adjusted by adding:-
9 
(1) The following to the extent that they are incurred by the buyer but are not 
10 
included in the price actually paid or payable for the imported goods: 
11 
(a) Commissions and brokerage fees (except buying commissions); 
12 
(b) Cost of container~; 
13 
(c) The cost of packing, whether for labour or materials; 
1 


1 
(d) The value, apportioned as appropriate, of the following goods and 
2 
services: materials, components, parts and similar items incorporated in the 
3 
imported goods; tools; dies; moulds and similar items used in the production of 
4 
imported goods; materials consumed in the production of the imported goods; 
5 
and engineering, development, artwork, design work and plans and sketches 
6 
undertaken elsewhere than in the Philippines and necessary for the production 
7 
of imported goods, where such goods and services are supplied directly or 
8 
indirectly by the buyer free of charge or at a reduced cost for use in connection 
9 
with the production alld sale for export of the imported goods; 
10 
(e) The amount of royalties and license fees related to the goods being valued 
11 
that the buyer must pay, either directly or indirectly, as a condition of sale of the 
12 
goods to the buye~. 
13 
(2) The value of any part of the proceeds of any subsequent resale, disposal or 
14 
use of the imported goods that accrues directly or indirectly to the seller; 
15 
(3) The cost of transport of the imported goods from the port of exportation 
16 
to the port of entry in the Philippines; 
17 
(4) Loading, unloading and handling charges associated with the transport of 
18 
the imported goods from the country of exportation to the port of entry in the 
19 
Philippines; and 
20 
. (5) The cost of insurance. 
21 
All additions to the price actually paid or payable shall be made only on the 
22 
basis of objective and quantifiable data. 
23 
No additions shall be made to the price actually paid or payable in 
24 
determining the customs value except as provided in this Section: Provided, That 
2 


I 
Method, One shall not be used in determining the dutiable value of imported 
2 
I 
goods if: 
I 
3 
(a) There are restrictions as to the disposition or use of the goods by the buyer 
4 
other than restrictions which: 
5 
(i) Are imposed or required by law or by Philippine authorities; 
6 
(ii) Limit the geographical area in which the goods may be resold; or 
7 
(iii) Do not substantially affect the value of the goods, 
8 
(b) The sale or price is subject to some condition or consideration for which a 
9 
value cannot be determined with respect to the goods being valued; 
10 
(c) Part of the proceeds of any subsequent resale, disposal or use of the goods 
11 
by the buyer will accrue directly or indirectly to the seller, unless an appropriate 
12 
adjustment can be made in accordance with the provisions hereof; or 
13 
(d) The buyer and the seller are related to one another, and such relationship 
14 
influenced the price of the goods. Such persons shall be deemed related if: 
15 
(i) They are officers or directors of one another's businesses; 
16 
(ii) They are legally recognized partners in business; 
17 
(iii) There exists an employer-employee relationship between them; 
18 
(iv) Any person directly or indirectly owns, controls or holds five percent 
19 
(5%) or more of the outstanding voting stock or shares of both seller and buyer; 
20 
I 
(v) One of them directly or indirectly controls the other; 
21 
(vi) Both of them are directly or indirectly controlled by a third person; 
22 
(vii) Together they directly or indirectly control a third person; or 
23 
(viii) They are members of the same family, including those related by 
24 
affinity or consanguinity up to the fourth civil degree. 
3 


1 
Persons who are associated in business with one another in that one is the 
2 
sole agent, sole' distributor or sole concessionaire, however described, of the 
3 
other shall be deemed to be related for the purposes of this Act if they fall within 
4 
any of the eight (8) cases above. 
5 
(B) Method Two. - Transaction Value of Identical Goods. - Where the dutiable 
6 
value cannot be determined under method one, the dutiable value shall be the 
~ 
7 
transaction value of identical goods sold for export to the Philippines, and 
8 
exported at or about the same time as the goods being valued. "Identical goods" 
9 
shall mean goods which are the same in all respects, including physical 
, 
I 
, 
' 
10 
characteristics, quality and reputation. Minor differences in appearanc~s shall 
11 
not preclude goods otherwise conforming to the definition from being regarded 
12 
as identical. 
13 
(C) Method Three, - Transaction Value of Similar Goods. - Where the dutiable 
14 
value cannot be determined under the preceding method, the dutiable value 
15 
shall be the transaction value of similar goods sold for export to the Philippines 
16 
and exported at or about the same time as the goods being valued. "Similar 
17 
goods" shall mean goods which, although not alike in all respects, have like 
18 
characteristics and like component materials which enable them to perform the 
19 
same functions and to be commercially interchangeable. T,he quality of the 
20 
goods, their reputation and the existence of a trademark shall be among the 
, 21 
factors to be considered in determining whether goods are similar. 
22 
If the dutiable value still cannot be determined through the successive 
23 
application of the two immediately preceding methods, the dutiable value shall 
24 
be determined under method four or, when the dutiable value still cannot be 
25 
determined under that method, under rriethod five, except that, at the request of 
4 


1 
the importer, the order of application of methods four and five shall be reversed: 
2 
Provided, however, That if the Commissioner of Customs deems that he will 
3 
experience real difficulties in determining the dutiable value using method five, 
4 
the Commissioner of Customs may refuse such a request in which event the 
5 
dutiable value shall be determined under method four, if it can be so 
6 
determined. 
7 
(D) Method Four. - Deductive Value. - The dutiable value of the imported 
8 
goods under this method shall be the deductive value which shall be based on 
9 
the unit price at which the imported goods or identical or similar imported 
10 
goods are sold in the Philippines, in the same condition as when imported, in the 
11 
greatest aggregate quantity, at or about the time of the importation of the goods 
12 
being valued, to persons not related to the persons from whom they buy such 
13 
goods, subject to deductions for the following: 
14 
(1) Either the commissions usually paid or agreed to be paid or the additions 
15 
usually made for profit and general expenses in connection with sales in such 
16 
country of imported goods of the same class or kind; 
17 
(2) The usual ~osts o{transport and insurance and associated costs ircurred 
18 
within the Philippines; [and] 
19 
(3) Where appropriate, the costs and charges referred to in subsection (A) (3), 
20 
(4) and (5); and 
21 
(4) The customs duties and other national taxes payable in the Philippines by 
22 
reason of the importation or sale of the goods. 
23 
If neither the imported goods nor identical nor similar imported goods are 
24 
sold at or about the time of importation of the goods being valued in the 
25 
Philippines in the conditions as imported, the customs value shall, subject to the 
5 


1 
conditions set forth in the preceding paragraph hereof, be based on the unit price 
2 
at which the imported goods or identical or similar imported goods sold in the 
3 
Philippines in the condition as imported at the earliest date after the importation 
4 
of the goods being valued but before the expiration of ninety (90) days after such 
5 
importation. 
6 
If neither the imported goods nor identical nor similar imported goods are 
7 
sold in the Philippines in the condition as imported, then, if the impbrter so 
I 
8 
requests, the 'dutiable value shall be based on the unit price at which the 
9 
imported goods, after further processing, are sold in the greatest aggregate 
10 
quantity to persons in the Philippines who are not related to the persons from 
11 
whom they buy such goods, subject to allowance for the value added by such 
12 
processing and deductions provided under Subsections (D) (1), (2), (3) and (4) 
13 
hereof. 
14 
(E) Method Five. - Computed Value. - The dutiable value under ,this method 
15 
shall be the computed value which shall be the sum of: 
16 
(1) The cost or the value of materials and fabrication or other processing 
17 
employed in producing the imported goods; 
18 
(2) The amount for profit and general expenses equal to that usually reflected 
19 
in the sale of goods of the same class or kind as the goods being valued which 
20 
are made by producers in the country of exportation for export to the 
21 
Philippines; 
22 
(3) The freight, insurance fees and other transportation expenses for the 
23 
importation of the goods; 
24 
(4) Any assist, if its value is not included under paragraph (1) hereof; and 
6 


1 
(5) The cost of containers and packing, if their values are not included under 
2 
paragraph (1) hereof. 
3 
The Bureau of Customs shall not require or compel any person not residing 
4 
in the Philippines to produce for examination, or to allow access to, any account 
5 
or other record for the purpose of determining a computed value. However, 
6 
information supplied by the producer of the goods for the purposes of 
7 
determining the customs value may be verified in another country with the 
8 
agreement of the producer and provided they will give sufficient advance notice 
9 
to the government of the country in question and the latter does not object to the 
10 
investigation. 
11 
(F) Method Six. - Fallback Value. - If the dutiable value cannot be determined 
12 
under the preceding methods described above, it shall be determined by using 
13 
other reasonable means and on the basis of data available in the Philippines. 
14 
If the importer so requests, the importer shall be informed in writing of the 
. 
I 
15 
dutiable value determined under Method Six and the method used to determine 
I 
16 
such value. 
17 
No dutiable value shall be determined under Method Six on the basis of: 
18 
(1) The selling price in the Philippines of goods produced in the Philippines; 
19 
(2) A system that provides for the acceptance for customs purposes of the 
20 
higher of two alternative values; 
21 
(3) The price of goods in the domestic market of the country of exportation; 
22 
(4) The cost of production, other than computed values, that have been 
23 
determined for identical or similar goods in accordance with Method Five 
24 
hereof; 
25 
(5) The price of goods for export to a country other than the Philippines; 
7 


1 
(6) Minimum customs values; or 
2 
(7) Arbitrary or fictitious values. 
3 
"If in the course of determining the dutiable value of the imported goods, it 
4 
becomes necessary to delay the final deterrrrination of such dutiable va~ue, the 
5 
importer shall nevertheless be able to secure the release of the importedl goods 
6 
upon filing of a sufficient guarantee in the form of a LETTER OF CREDIT/surety 
7 
bond, a deposit, cash, or some other appropriate instrument in an amount 
8 
equivalent to the imposable duties and taxes [on] FOR WHICH the imported 
9 
. goods [in question] may be liable: Provided, however, That goods, the importation 
10 
of which is prohibited by law, shall not be released under any circumstances 
11 
whatsoever: 
PROVIDED, FURTHER, THAT SURETY BONDS FROM A 
12 
SURETY COMPANY WHICH HAS AN OUTSTANDING LIABILITY OF 
13 
THIRTY PERCENT 
(30%) 
OR MORE OF THE TOTAL DUE AND 
14 
DEMANDABLE BONDS ISSUED IN FAVOR OF THE BUREAU OF CUSTOMS, 
15 
AT ANY TIME, SHALL NOT BE ACCEPTABLE AS GUARANTEE FOR THE 
16 
RELEASE OF THE IMPORTED GOODS: PROVIDED, FURTHERMORE, THAT 
17 
THE PERMIT OR LICENSE OF THE SURETY COMPANY WHICH HAS AN 
18 
OUTSTANDING LIABILITY OF THIRTY PERCENT (30%) OR MORE OF THE 
19 
TOTAL DUE AND DEMANDABLE BONDS, AT ANY TIME, WITH THE 
20 
BUREAU OF CUSTOMS, TO ISSUE SURETY BOND FOR CUSTOMS 
21 
PURPOSES, SHALL BE CANCELLED: PROVIDED, FINALLY, THAT ANY 
22 
SURETY COMPANY SHALL BE ELIGIBLE TO ISSUE CUSTOMS 1URETY 
, 
, 
23 
BOND ONLY AFTER DETERMINATION OF GOOD STANDING BY THE 
24 
INSURANCE COMMISSION. 
8 


1 
liTHE BUREAU OF CUSTOMS SHALL ACCEPT GUARANTEES IN THE 
2 
FORM OF SURETY BONDS EXCLUSIVELY ISSUED BY SURETY COMPANIES, 
3 
INCLUDING THE GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), 
4 
WHO ARE MEMBERS OF A BUREAU OF CUSTOMS' APPROVED 
5 
CONSORTIUM. 
6 
"Nothing in this Section shall be construed as restricting or calling into 
7 
question the right of the Collector of Customs to satisfy himself as to the truth or 
8 
accuracy of any statement, document or declaration presented for customs 
9 
valuation purposes. When a declaration has been presented and where the 
10 
customs administration· has reason to doubt the truth or accuracy of the 
11 
particulars or of documents produced in support of this declaration, the customs 
12 
administration may ask the importer to provide further explanation, iI~cluding 
, 
I 
13 
documents or·other evidence, that the declared value represents the total amount 
14 
actually paid or payable for the imported goods, adjusted in accordance with the 
15 
provisions of Subsection (A) hereof. 
16 
"If, after receiving further information, or in the absence of a response, the 
17 
customs administration still has reasonable doubts about the truth or accuracy of 
18 
the declared value, it may, without prejudice to an importer's right to appeal 
19 
pursu.ant to Article 11 of the World Trade Organization Agreement on customs 
20 
valuation, be deemed that the customs value of the imported goods cannot be 
21 
determined under Method One. Before taking a final decision, the Collector of 
22 
Customs shall communicate to the importer, in writing if requested, his grounds 
23 
for doubting the truth or accuracy of the particulars or documents produced and 
24 
give the importer a reasonable opportunity to respond. When a final decision is 
9 


1 
made, the customs administration shall communicate to the importer in writing 
2 
its decision and the grounds therefor." 
3 
SEC. 3. Section 607 of the Tariff and Customs Code of the Philippines, as amended, is 
4 hereby further amended to read as follows: 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
"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 article~ 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, [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 Jr before 
I 
December 30, of each year. 
"For more scientific preparation of the annual report, the Commissioner shall 
cause the computerization of the data contained in the liquidated entries filed 
with the Bureau of Customs." 
10 


----------------------------
1 
SEC. 4. Section 609 of the Tariff and Customs Code of the Philippines, as amended, is 
2 hereby further amended to read as follows: 
3 
"SEC. 609. Commissioner to Furnish Copies of Collectors' Liquidated Duplicates. -
4 
The Commissioner shall regularly furnish the NATIONAL ECONOMIC AND 
5 
DEVELOPMENT AUTHORITY, the [Central Bank of the Philippines] BANGKO 
6 
SENTRAL NG PILIPINAS, the Tariff Commission, AND THE NATIONAL 
7 
STATISTICS OFFICE, BOTH ELECTRONIC AND PAPER COPIES of each of all 
8 
customs import! export entries as filed with the Bureau of Customs. The Tariff 
9 
Commission or its duly authorized agents shall have access to and the ,right to 
. 
I 
10 
copy all the customs liquidated import entries and other documents appended 
11 
thereto as finally filed in the Commission on Audit. ,~ 
12 
SEC. 5. Section 701 of the Tariff and Customs Code of the Philippines, as amended, 
13 is hereby further amended to read as follows: 
14 
"SEC. 701. 
Collection 
Districts 
and 
Ports 
of Entry 
Thereof 
-
For 
15 
administrative purposes, the Philippines shall be divided into as many collection 
16 
districts as necessary, the respective limits of which may be changed from time 
17 
to time by the Commissioner of Customs upon approval of the Secretary of 
18 
Finance. The principal ports, of entry for the respective collection districts shall 
19 
be Manila, Ninoy Aquino International Airport, Cebu, Iloilo, Davao, Tacloban, 
20 
GENERAL SANTOS, Zamboanga, Cagayan de Oro, Surigao, Legaspi, Batangas, 
21 
San Fernando, Subic and Manila International Container Port." 
22 
SEC. 6. Section 709 of the Tariff and Customs Code of the Philippines, as amended, is 
23 hereby further amended to read as follows: 
24 
"SEC. 709. Authority of the Collector to Remit Duties. - A Collector shall [have 
25 
discretionary authority to] remit the assessment and collection of customs duties, 
11 


-----------
1 
taxes and other charges when the aggregate amount of such duties, taxes, and 
2 
other charges is [less than ten] FIVE HUNDRED pesos (P500.00) OR MORE, and 
3 
he may dispense with the seizure of articles of less than [ten] FIVE HUNDRED 
4 
pesos (P500.00) in value except in cases of prohibited importations or the 
5 
habitual or the intentional violation of the tariff and customs laws." 
6 
SEC. 7. A new section to be known as Section 1001-A is hereby inserted after Section 
7 1001 of the Tariff and Customs Code of the Philippines, as amended, which shall read as 
8 follows: 
9 
"SEC. 
100l-A. 
TRANSMISSION 
OF 
ELECTRONIC 
COPY 
OF 
10 
MANIFEST/STOWAGE PLAN PRIOR TO ARRIVAL - AN ELECTRONIC COPY 
11 
. OF THE CARGO AND PASSENGER MANIFEST AS WELL AS THE STOWAGE 
12 
PLAN OF THE VESSEL ENGAGED IN FOREIGN TRADE SHALL BE 
13 
TRANSMITTED TO THE BUREAU OF CUSTOMS AT LEAST TWELVE (12) 
14 
HOURS FOR OCEAN GOING VESSELS AND TWO (2) HOURS FROM 
15 
DEPARTURE FOR AIRLINES PRIOR TO THEIR ARRIVAL IN THE PORT OF 
16 
ENTRY: PROVIDED, THAT IF THE VESSEL IS AN AIRCRAFT, THE 
17 
. MANIFEST SHAI;L BE ELECTRONICALLY TRANSMITTED TO THE BPREAU 
18 
OF CUSTOMS, 
DEPARTMENT OF TRADE AND INDUSTRY! AND 
19 ' 
DEPARTMENT OF AGRICULTURE AT LEAST ONE (1) HOUR PRIOR TO THE 
20 
AIRCRAFT'S ARRIVAL IN THE PORT OF ENTRY." 
21 
SEC. 8. 
Section 1005 of the Tariff and Customs Code of the Philippines, as amended, is 
22 hereby further amended to read as follows: 
23 
"SEC. 1005. Manifest Required of Vessel from Foreign Port. - Every vessel from a 
24 
foreign port must have on board a complete manifest of all her cargo. 
12 


"All of the cargo intended to be landed at a port in the Philippines must be 
2 
described in separate manifests for each port of call therein. Each manifest shall 
3 
include the port of departure and the port of delivery with the marks, numbers, 
4 
quantity and deSCription of the packages and the names of the consignees 
5 
thereof. 
Every vessel from a foreign port must have on board complete 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
manifests of passengers and their baggage, in the prescribed form, setting forth 
their destination and all particulars required by immigration laws, anh every 
I 
such vessel shall have prepared for presentation to the proper customs official 
upon arrival in ports of the Philippines a complete list of all sea stores then on 
board. If the vessel does not carry cargo or passengers, the manifest must show 
that no cargo or passenger, as the case may be, is carried from the port of 
departure to the port of destination in the Philippines. 
"A TRUE AND COMPLETE COPY OF THE CARGO MANIFEST AND BILL 
OF LADING SHALL BE SENT IN ADVANCE TO THE BUREAU OF CUSTOMS 
AND THE PHILIPPINE PORTS AUTHORITY WITHIN TWENTY-FOUR 
HOURS (24) HOURS AFTER RECEIPT THEREOF BY THE MASTER OF THE 
VESSEL. 
"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 discrepJncy has 
I 
13 


been committed in the preparation of the manifest, without any fraudulent 
2 
intent, discovery of which would not have been made until after examination 
3 
has been completed." 
4 
SEC. 9. 
Section 1007 of the Tariff and Customs Code of the Philippines, as 
5 amended, is 
6 hereby further amended to read as follows: 
7 
"SEC. 1007. Manifest for Commission on Audit and Collector. - Papers to be 
8 
Deposited with Consul. - Immediately after the arrival of a vessel from a foreign 
9 
port, the master shall deliver or mail to the Chairman, Commission on Audit, 
10 
Manila, a copy of the cargo manifest properly indorsed by the boarding officer, 
11 
and UPON ARRIVAL, he shall present to the Collector the original copy of the 
12 
cargo manifest and, for inspection, the ship's register or other document in lieu 
13 
thereof, together with the clearance and other papers granted to the vessel at the 
14 
port of departure for the Philippines. 
15 
"WITHIN THREE DAYS FROM RECEIPT OF THE CARGO MAj'JIFEST 
16 
FROM THE MASTER OF THE VESSEL, THE COLLECTOR SHALL POST 
17 
COPIES THEREOF AT A CUSTOMS BULLETIN BOARD FOR TWO 
18 
CONSECUTIVE WEEKS." 
19 
SEC. 10. Section 1008 of the Tariff and Customs Code of the Philippines, as amended, is 
20 hereby further amended to read as follows: 
21 
"SEC. 1008. Transit Cargo AND FOREIGN TRANSHIPMENT OF GOODS. -
22 
When transit cargo from a foreign port or other local ports is forwarded from the 
23 
port of importation separate manifest, in triplicate, shall be presented by each 
24 
carrier. 
14 


1 
"WITHIN FIVE DAYS FROM THE ACTUAL DISCHARGE OF A VESSEL, 
2 
BUT IN ANY CASE NOT LATER THAN FIFTEEN (15) DAYS FROM THE 
3 
DATE OF THE VESSEL'S DEPARTURE FROM THE PHILIPPINES, THE PARTY 
4 
WHO APPLIED FOR FOREIGN TRANSSHIPMENT OF GOODS SUBJ~CT TO 
5 
EXCISE TAX .OR MORE THAN TWENTY PERCENT (20%), SUCH AS THE 
6 
SHIPPING COMPANY OR AGENT, TRANSSHIPMENT OPERATOR OR THE 
7 
OWNER OF THE GOODS SHALL SUBMIT TO THE BUREAU OF CUSTOMS 
8 
AND/OR TO THE BUREAU OF INTERNAL REVENUE, A CERTIFICATE OF 
9 
DISCHARGE 
FROM 
THE 
FOREIGN 
PORT 
OF 
DISCHARGE 
OR 
10 
DESTINATION. THE CERTIFICATE OF DISCHARGE SHALL CERTIFY THAT 
11 
THE EXCISABLE GOODS TRANSSHIPPED FROM THE PHILIPPINES WERE 
12 
DISCHARGED AT THE PORT OF DESTINATION AND RECEIVED BY THE 
l3 
CONSIGNEE NAMED IN THE MANIFEST. 
THE CERTIFICATE OF 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
DISCHARGE SHALL BE ISSUED BY THE CUSTOMS OR PORT OFFICIALS AT 
THE FOREIGN PORT OF DESTINATION: PROVIDED, THAT IF THE SAID 
CERTIFICATE 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. THE CERTIFICATE OF DISCHARGE TO BE SUBMITTED TO THE 
BUREAU OF CUSTOMS AND/OR BUREAU OF INTERNAL REVENUE 
SHALL BE ACCOMPANIED BY A COpy OF THE INWARD FOREIGN 
MANIFEST SUBMITTED TO, RECEIVED BY, AND PROPERLY STAMfED BY 
THE CUSTOMS AUTHORITIES AT THE PORT OF DESTINATION. 
'~FAILURE TO SUBMIT THE CERTIFICATE OF DISCHARGE AND THE 
INWARD FOREIGN MANIFEST AS REQUIRED HEREINABOVE SHALL 
15 


1 
CONSTITUTE PRIMA FACIE PROOF THAT THE EXCISABLE GOODS AS 
2 
MENTIONED HEREIN THAT THE GOODS ALLEGEDLY TRANSSHIPPED 
3 
WERE IN FACT DIVERTED TO THE PHILIPPINES, WITHOUT THE 
4 
CORRESPONDING PAYMENT OF DUTIES AND TAXES WHICH SHALL BE 
5 
IMMEDIATELY COLLECTED AND PAID BY THE PARTY(IES) WHICH 
6 
FAILED TO SUBMIT THE CERTIFICATE OF DISCHARGE. 
THEREAFTER 
7 
AND UNTIL THE REQUIRED CERTIFICATE OF DISCHARGE AND THE 
8 
INWARD FOREIGN MANIFEST SHALL HAVE BEEN SUBMITTED, ALL 
9 
SUBSEQUENT TRANSSHIPMENT OF GOODS TO AND _ FROM THE 
10 
PHILIPPINES BY THE SAID PARTY(IES) WITHOUT THE PAYMENT OF 
11 
DUTIES AND TAXES SHALL BE DISALLOWED. THE SUBMISSION OF THE 
12 
CERTIFICATE OJ: DISCHARGE IS REQUIRED ONLY FOR TRANSS:EHPPED 
I 
13 
GOODS SUBJECT TO EXCISE TAX OF MORE THAN TWENTY PERCENT 
14 
(20%) IN ADDITION TO THE PAYMENT OF TAXES AND DUTIES IF SUCH 
15 
GOODS ENTER THE DOMESTIC MARKET." 
16 
SEC. 11. Section 1204 of the Tariff and Customs Code of the Philippines, as amended, 
17 is hereby further amended to 'read as follows: 
18 
"SEC 1204. 
Liability of Importer for Duties. -"Unless relieved by laws or 
19 
regulations, the liability for duties, taxes, fees and other charges attaching on 
20 
importation constitutes a personal debt from the importer to the government 
21 
which can be discharged only by payment in full of all duties, taxes, fees and 
22 
other charges legally accruing. It constitutes a lien upon the articles imported 
23 
which may be enforced while such articles are in custody or subject to the 
24 
control of the government." 
16 


1 
SEC. 12. Section 1210 of the Tariff and Customs Code of the Philippines, as amended, is 
2 hereby further amended to read as follows: 
! 
3 
"SEC. 1210. Disposition of Imported Articles Remaining on Vessel After Time for 
4 
Unlading. - Imported articles remaining on board any vessel after the expiration 
5 
of the said period for discharge and not reported for transshipment to another 
6 
port, may be unladen by customs authorities and stored at the vessel's expense. 
7 
"Unless prevented by causes beyond the vessel's control, such as port 
8 
congestion, strikes, riots, or civil commotions, failure of vessel's gear, bad 
9 
weather, and similar causes, articles so stored shall be entered within [thirty] 
10 
FORTY FIVE ([30]45) days, which shall not be extendible, from the date of 
11 
discharge of the last package from the vessel or aircraft and shall be claimed 
12 
within [fifteen] FORTY FIVE ([15]45) days, which shall likewise not be 
13 
extendible from the date of posting of the notice to claim in conspicuous places 
14 
in the Bureau of Customs. If not entered or not claimed, it shall be disposed of in 
15 
accordance with the provisions of this Code." 
16 
SEC.13. A new section, to be known as Section 1212 is hereby inserted in the Tariff and 
17 Customs Code of the Philippines, as amended, to read as follows: 
18 
"SEC. 1212. IMPORT 
PERMlTjIMPORT 
AUTHORITY 
FOR 
19 
AGRICULTURAL PRODUCTS. - IMPORTED AGRICULTURAL PRODUCTS 
. 
I 
20 
MUST BE COVERED BY A VALID IMPORT OR QUARANTINE PERMIT 
, 
21 
ISSUED BY THE DEPARTMENT OF AGRICULTURE OR ITS CONCERNED 
22 
BUREAU PRIOR TO IMPORTATION INTO THE PHILIPPINES, OTHERWISE, 
23 
THE SAME AGRICULTURAL PRODUCTS MUST BE SHIPPED BACK TO THE 
24 
COUTNRY OF ORIGIN BY THE IMPORTER OR CONSIGNEE THROUGH THE 
25 
SAME CARRIER THAT LOADED/TRANSPORTED OR BROUGHT IN THE 
17 


1 
PRODUCT THAT WAS ISSUED BY AN IMPORT ENTRY OR IMPORT 
2 
AUTHORITY AFTER ENTRY INTO THE PHILIPPINES WHEN SUCH IMPORT 
3 
PERMIT/ AUTHORITY IS REQUIRED PRIOR TO IMPORTATION OF SUBJECT 
4 
AGRICULTURAL PRODUCT, SHALL BE CONSIDERED AS SMUGGLED 
5 
ARTICLE AND SHALL BE DISPOSED OF IN THE MANNER PROVIDED FOR 
6 
IN SECTION 2602 OF THIS CODE." 
7 
SEC. 14. Section 1302 of the Tariff and Customs Code of the Philippines, as amended, is 
8 hereby further amended to read as follows: 
9 
10 
11 
12 
l3 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
"SEC. 1302. Import Entries. - All imported articles, except importations 
admitted free of duty under Subsection "k", Section one hundred and fivl! of this 
Code, shall be subject to a formal or informal entry. Articles of a commercial 
nature intended for sale, barter or hire, the dutiable value of which is Two 
thousand pesos (P2,000.00) or less, and personal and household effects or 
articles, not in commercial quantity, imported in passenger's baggage, mail or 
otherwise, for personal use, shall be cleared on an informal entry whenever 
duty, tax or other charges are collectible. 
The Commissioner may, upon instruction of the Secretary of Finance, for the 
protection of domestic industry or of the revenue, require a formal entry, 
regardless of value, whatever be the purpose and nature of the importation. 
"A formal entry may be for immediate consumption, or under irrevocable 
domestic letter of credit, bank guarantee or bond for: 
"(a) Placing the article in customs bonded warehouse; 
"(b) Constructive warehousing and immediate transportation to other ports 
of the Philippines upon proper examination and appraisal; or 
"(c) Constructive warehousing and immediate exportation. 
18 


1 
"FOR PURPOSES HERETO, ALL WAREHOUSING ENTRIES SHALL 
2 
EXPLICITLY AND CLEARLY INDICATE THE NAME OF THE WAREHOUSE 
3 
WHERE THE IMPORTED ARTICLES WILL BE PLACED OR DEPOSITED, AND 
4 
THE NAME OF THE IMPORTER OR CONSIGNEE. 
5 
"Import entries under irrevocable domestic letter of credit, bank guarantee or 
6 
bond shall be subject to the provisions of Title V, Book II of this Code. 
7 
"All importations entered under formal entry shall be covered by a letter of 
8 
credit or any other verifiable document evidencing payment." (R.A. 91,35, April 
9 
27,2001) 
10 
SEC. 15. Section 1313 of the Tariff and Customs Code of the Philippines, as amended, is 
11 hereby further amended to read as follows: 
12 
"SEC. 1313. Information Furnished on Classification and Value. -
13 
a. As to classification OF AN ARTICLE AND TRADE FACILITATION -
14 
[When an article imported or intended to be imported is not specifically 
15 
classified in this Code, the interested party, importer or foreign exporter may 
16 
submit to the Tariff Commission a sample together with a full description of its 
17 
component materials and uses, and request it in writing to indicate the heading 
. 
. 
18 
under which the article is or shall be dutiable, and the Tariff Commissihn shall 
19 
comply with such requests within thirty days from receipt thereof if it is satisfied 
20 
that the application is made in good faith, in which case classification of the 
21 
article in question upon the particular importation involved shall be made 
22 
according to the headihg indicated by the Tariff Commission: Provided, however, 
23 
That such rulings of the Tariff Commission on commodity classification, shall be 
24 
binding upon the Bureau of Customs, unless the Secretary shall rule otherwise.] 
25 
IMPORTERS, EXPORTERS OR ANY INTERESTED PARTY SHALL REQUEST 
19 


1 
THE TARIFF COMMISSION IN WRITING, BEFORE OR AFTER THE ARRIVAL 
2 
OF THE GOODS OR COMMODITY SUBJECT OF IMPORTATION FOR AN 
3 
OFFICIAL TARIFF CLASSIFICATION RULING UPON SUBMISSION OF A 
4 
SAMPLE 
TOGETHER 
WITH 
THE 
BROCHURE 
AND· PERTINENT 
5 
TECHNICAL INFORMATION SHEETS/DATA. THE TARIFF COMMISSION 
6 
SHALL COMPLY WITH SUCH A REQUEST WITHIN THIRTY (30) DAYS 
I 
7 
FROM RECEIPT HEREOF. THE RULING SHALL BE BINDING WITH THE 
. 
I 
8 
BUREAU OF CUSTOMS, UNLESS THE SECRETARY OF FINANCE SHALL 
9 
RULE OTHERWISE. ANY TARIFF CLASSIFICATION RULING/S AS MAY BE 
10 
ISSUED BY THE COMMISSION SHALL REMAIN VALID AND EFFECTIVE, 
11 
UNLESS SUCH TARIFF CLASSIFICATION RULING/S ARE AMENDED BY 
12 
THE COMMISSION SO AS TO CORRECT ERRORS IN THE CLASSIFICATION 
13 
OF AN ARTICLE OR IN CASES OF AMENDMENT TO THE ASEAN 
14 
HARMONIZED TARIFF NOMENCLATURE (AHTN), OR FOR ANY OTHER 
15 
REASON AS THE COMMISSION MAY SEE FIT." 
16 
"ANY PETITIONING PARTY WHO IS AGGRIEVED BY, OR IS NOT 
17 
SATISFIED WITH THE RESULT ON ANY TARIFF CLASSIFICATUION 
18 
RULING AS ISSUED BY THE TARIFF COMMISSION, MAY FILE A VERIFIED 
19 
APPEAL WITHIN THIRTY (30) DAYS FROM RECEIPT OF SUCH TARIFF 
20 
CLASSIFICATION RULING OF THE TARIFF COMMISSION BASED ON THE 
21 
SOLE GROUND OF NEW OR ADDITIONAL INFORMATION OF THE 
22 
PRODUCT UNDER CONSIDERATION. 
AN APPEAL FEE OF ONE 
23 
THOUSAND PESOS (PI,OOO.OO) SHALL LIKEWISE BE REQUIRED TO BE PAID 
24 
BY THE APPEALING PARTY, WITHOUT THE PAYMENT OF WHICH HIS OR 
. 
. 
I 
HER APPEAL WOULD BE DISMISSED OUTRIGHT BY THE COMMISSION." 
25 
I 
20 


1 
SEC. 16. Section 1401 of the Tariff and Customs Code of the Philippines as amended, is 
2 hereby further amended to read as follows: 
3 
"SEC. 1401. Conditions for Examination. -
For the protection of government 
4 
revenue and public interest and to prevent the entry into the country of 
5 
smuggled or contraband goods, the Commissioner shall, in consultation with the 
6 
Oversight Committee and subject to the approval of the Secretary of Finance, 
7 
promulgate the rules and regulations that shall prescribe the procedure in 
8 
accordance with which examination shall be undertaken on the importation and 
9 
the required quantity or percentage thereof: Provided, That the imported articles 
10 
shall in any case be subject to the regular physical examination when: 
11 
#(1) The government surveyor's seal on the container has been tampered with 
12 
or broken or the container shows signs of having been opened or having its 
13 
identity changed; 
14 
#(2) The container is leaking or damaged; 
15 
#(3) The number, weight and nature of packages indicated in the ~ustoms 
16 
entry declaration and supporting documents differ from that in the manifest; 
17 
"(4) The shipment is covered by alert/hold orders issued pursuant to existing 
18 
orders; 
19 
"(5) The importer disagrees with the findings as contained in the government 
20 
surveyor's report; or 
21 
#(6) The articles are imported through air freight where the Commissioner or 
22 
Collector has knowledge that there is a variance between the declared and true 
23 
quantity, measurement, weight, and tariff classification." 
24 
#(7) THE PRODUCT DESCRIPTION OF THE. SHIPMENT IS NOT IN 
25 
ACCORDANCE WITH THE EXISTING HARMONIZED SYSTEMS CODE." 
21 


1 
SEC. 17. A new section to be known as Section 1401-A is hereby inserted after Section 
2 1401 of the Tariff and Customs Code of the Philippines, as amended, which shall read as 
3 follows: 
4 
"SEC. 1401-A VALUATION LIBRARY. - THE COMMISSIONER pHALL 
5 
ENSURE THAT THERE SHALL BE A VALUATION LIBRARY, WHICH SHALL 
6 
BE KEPT UP TO DATE AND MAINTAINED USING THE BEST AVAILABLE 
7 
TECHNOLOGY. THE VALUATION LIBRARY SHALL BE MADE READILY 
8 
AVAILABLE TO THE PUBLIC AS AUTHORIZED BY THE BUREAU OF 
9 
CUSTOMS." 
10 
SEC. 18. Section 1403 df the Tariff and Customs Code of the Philippines, as amended, is 
11 hereby further amended to' read as follows: 
12 
"Sec. 1403. Duties of Customs Officer Tasked to Examine, Classify and Appraise 
13 
Imported Articles. - The customs officer tasked to examine, classify, and appraise 
14 
imported articles shall determine whether the packages designated for 
15 
examination and their tontents are in accordance with the declaration in the 
16 
entry, invoice and other pertinent documents and shall make a return in such a 
17 
manner to indicate whether the articles have been truly and correctly declared in 
18 
the entry as regard their quantity, measurement, weight, and tariff classification 
19 
and not imported contrary to law. THE CUSTOMS OFFICER SHALL USE THE 
20 
VALUATION LIBRARY AS A REFERENCE ONLY IN CLASSIFIYING AND 
21 
APPRAISING THE IMPORTED ARTICLES. 
22 
"Likewise, the customs officer shall determine the unit of quantity itt which 
23 
they are usually bought and sold . and appraise the imported arficles in 
24 
accordance with Section 201 of this Code. 
22 


------------- ------------------------
1 
"Failure on the part of the customs officer to comply with his duties shall 
2 
subject him to penalties prescribed under 3604 of this Code. (RA 7650, April 06, 
3 
1993." 
4 
SEC. 19. Section 1704(d) of the Tariff and Customs Code of the Philippines, as amended, 
5 is hereby further amended to read as follows: 
6 
"SEC. 1704. Abatement or Refund of Duties on Articles Lost or Destroyed After 
7 
Arrival. - A Collector may abate or refund the amount of duties accruing or paid, 
8 
and may likewise make a corresponding allowance on the irrevocable domestic 
9 
letter of credit, bank guarantee, or the entry bond or other document, upon 
10 
satisfactory proof of injury, destruction, or loss by theft, fire or other causes of 
11 
any article as follows: 
12 
"a. While witl)in the limits of any port of entry prior to unladini under 
13 
customs supervisions; 
14 
"b. While remaining in customs custody after unlading; 
15 
"c. While in transit under irrevocable domestic letter of credit, bank 
16 
guarantee or bond with formal entry in accordance with section one thousand 
17 
three hundred two from the port of entry to any port in the Philippines; 
18 
"d. While released under irrevocable domestic letter of credit, bank guarantee 
19 
or bond for export except in case of loss by theft: 
PROVIDED, THAT NO 
20 
ABATEMENT OR REFUND SHALL BE MADE WHEN THE THEFT OCCURS 
21 
IN BONDED WAREHOUSES OUTSIDE OF THE CUSTOMS ZONE." 
22 
SEC. 20. Section 1801 of the Tariff and Customs Code of the Philippines, as amended, 
23 is hereby further amended to read as follows: 
24 
"SEC. 1801. Abandonment, Kinds and Effects of - An imported article is 
25 
deemed abandoned under any of the following circumstances: 
23 


1 
Jla. When the owner, importer, consignee of the imported article expressly 
I 
2 
signifies in writing to the Collector of Customs his intention to abandon; dr 
i 
3 
JIb. When the owner, importer, consignee or interested party after due notice, 
4 
fails to file an entry within thirty (30) days, which shall not be extendible, from 
5 
the date of discharge of the last package from the vessel or aircraft, or having 
6 
filed such entry, fails to claim his importation within fifteen (15) days, which 
7 
shall not likewise be extendible, from the date of posting of the notice to claim 
8 
such importation. 
9 
JI ALL 
SHIPPING 
LINES, 
SHIPPING 
COMPANIES, 
FREIGHT 
10 
FORWARDERS, CONSOLIDATORS, BREAK BULK AGENTS AND THEIR 
11 
AGENTS AND SUB-AGENTS ARE REQUIRED TO STATE IN BOLD, 
12 
PROMINENT AND COMPREHENSIBLE CHARACTERS THE PHRASE 
13 
'CUSTOMS LAW REQUIRES THE FILING OF ENTRY WITHIN THIRTY (30) 
14 
DAYS FROM THE DATE OF DISCHARGE OF THE LAST PACKAGE FROM 
15 
THE VESSEL, OTHERWISE, THE CARGO MAY BE DEEMED ABANDONED 
16 
AND TO BE FORFEITED IN FAVOR OF THE GOVERNMENT AND SHALL BE 
17 
DISPOSED OF IN ACCORDANCE WITH THIS CODE' IN EACH AND EVERY 
18 
NOTICE OF ARRIVAL TO THE OWNERS, IMPORTERS, CONSIGNEES OR 
19 
OTHER INTERESTED PARTIES. THE SAME SHALL SERVE TO SATISFY THE 
i 
20 
DUE NOTICE REC2UIREMENT REFERRED TO IN PARAGRAPH (B) HEREOF, 
I 
21 
IN WHICH CASE THE OWNER, IMPORTER OR CONSIGNEE OF THE 
22 
IMPORTATION SHALL HAVE A PERIOD OF THIRTY (30) DAYS, WHICH 
23 
SHALL NOT BE EXTENDIBLE, FROM THE DATE OF DISCHARGE OF THE 
24 
LAST PACKAGE FROM THE VESSEL WITHIN WHICH TO FILE THE 
25 
APPROPRIATE ENTRY. FAILURE ON THE PART OF THE SHIPPING LINES, 
24 


1 
SHIPPING COMPANIES, FREIGHT FORWARDERS, CONSOLIDATORS, 
2 
BREAK BULK AGENTS AND THEIR AGENTS AND SUB-AGENTS TO 
3 
COMPLY HEREWITH SHALL CONSTITUTE A GROUND FOR THE 
4 
SUSPENSION OF THEIR LICENSES OR AUTHORITY TO ENGAGE IN THEIR 
5 
RESPECTIVE LINE OF ACTIVITIES IN THE IMPORTATION OPERATIONS OR 
6 
WHEN THERE IS A WRITTEN DENIAL OF· OWNERSHIP FROM THE 
7 
PERSON INDICATED ON THE MANIFEST OR BILL OF LADING AS THE 
8 
OWNER, IMPORTER, OR CONSIGNEE OF THE IMPORTED ARTICLE. 
9 
"NON-COMPLIANCE WITH THE PROVISIONS OF THIS SECTION SHALL 
, 
I 
10 
CONSTITUTE 
A GROUND FOR THE IMPOSITION OF FINES 
IN 
11 
PROGRESSIVE SUCCESSION. 
12 
"Any person who abandons an article or who fails to claim his importation as 
13 
provided for in the preceding paragraph shall be deemed to have renounced all 
14 
his interests and property rights therein, (RA 7651, June 4,1993)." 
15 
SEC. 21. Section 1802 of the Tariff and Customs Code of the Philippines, as amended, is 
16 hereby further amended to read as follows: 
17 
"SEC. 1802. Abandonment of Imported Articles. - An abandoned article shall 
18 
ipso facto be deemed the property of the Government. ALL ABANDONED 
19 
ARTICLES SHALL BE AUTOMATICALLY SUBJECT TO AUCTION AND 
20 
SHALL IN NO CASE BE SUBJECT TO SETTLEMENT OR COMPROMISE. 
21 
"AN 
UPDATED 
LISTING 
OF 
ALL 
ABANDONED 
SHIPMENTS 
22 
SCHEDULED FOR AUCTION SHALL BE POSTED ON THE OFFICIAL 
23 
WEBSITE OF THE BUREAU OF CUSTOMS AND AT THE MAIN ENTRANCE 
24 
OF CUSTOMS HOUSES. 
25 


----------
-
1 
"Nothing in this section shall be construed as relieving the owner or importer 
2 
from any criminal liability which may arise from any violation of law committed 
3 
in connection with the importation of abandoned article. 
4 
" Any official or employee of the Bureau of Customs or of other government 
5 
agencies who, having knowledge of the existence of an abandoned article or 
6 
having control or custody of such abandoned article, fails to report to the 
7 
Collector within twenty-four (24) hours from the time the article is deemed 
8 
abandoned shall be punished with the penalties prescribed in Paragraph 1, 
9 
Section 3604 of this Code." (RA 7651, June 4, 1993) 
10 
SEC. 22. Section 1901 of the Tariff and Customs Code of the Philippines, as amended, is 
11 hereby further amended to read as follows: 
'12 
"SEC. 1901. Establishment and Supervision of Warehouses. - When the business 
13 
of the port requires such facilities, the Collector, subject to the approval of the 
14 
Commissioner, shall designate and establish INDUSTRY SPECIFIC warehouses 
15 
for use as public and private bonded warehouses, sheds or yards, or for o~er 
16 
special purposes. ALL SUCH WAREHOUSES SHALL BE ACCREDITED BY AN 
17 
ACCREDITATION COMMITTEE WHICH SHALL BE COMPOSED d>F THE 
, , 
' 
I 
18 
SECRETARY OF TRADE AND INDUSTRY, AS CHAIR THEREOF, AND ONE 
19 
REPRESENTATIVE EACH FROM THE INDUSTRY ASSOCIATION OR 
20 
INDUSTRY SECTOR AFFECTED, AND THE INDUSTRY ASSOCIATION 
21 
SOUGHT TO BE SERVICED BY THE CUSTOMS BONDED WAREHOUSE 
22 
SUBJECT TO THE FINAL APPROVAL OF THE BUREAU OF CUSTOMS. 
23 
"All such warehouses and premises shall be subject to the supervision of the 
24 
Collector, who shall impose such conditions as may be deemed necessary for the 
25 
protection of the revenue and of the articles stored therein. THE CUSTOMS 
26 


COLLECTOR SHALL CONDUCT SPOT CHECKS AND PERIODIC AUDITS TO 
2 
ENSURE THAT APPLICABLE CUSTOMS LAWS AND REGULATIONS ARE 
3 
COMPLIED WITH BY BONDED FACILITIES." 
4 
SEC. 23. Section 1902 of the Tariff and Customs Code of the Philippines, as amended, is 
5 hereby further amended to read as follows: 
6 
"SEC. 1902. Responsibility of Operators. -
The operators of bonded 
. 
\ 
7 
warehouses in case of loss of the imported articles stored shall be liable for the 
I 
8 
payment of duties and taxes due thereon. 
9 
"The government assumes no legal responsibility in respect to the 
10 
. safekeeping of articles stored in any customs warehouses, sheds, yards or 
1 
11 
premises. 
12 
"THE OPERATORS OF THE BONDED WAREHOUSES SHALL, FOR 
13 
LEGITIMATE PURPOSES, MAKE AVAILABLE AN INVENTORY OF ALL 
14 
ARTICLES STORED THEREIN. FAILURE TO DO SO IS A MANDATORY 
15 
GROUND FOR THE REVOCATION OF LICENSE TO OPERATE A BONDED 
16 
WAREHOUSE." 
17 
SEC. 24. Section 1903 of the Tariff and Customs Code of the Philippines, as amended, is 
18 hereby further amended to read as follows: 
19 
"SEC. 1903. Bonded WareJwuses. - Application for the establishment of bonded 
20 
warehouses must be made in writing and filed with the Collector, describing the 
21 
premises, the location, and capacity of the same, the purpose for which the 
22 
building is to be used, AND THE INDUSTRY TO WHICH IT BELONGS. THE 
23 
APPLICATION SHALL LIKEWISE BE ACCOMPANIED BY VERIFIED COPIES 
24 
OF DOCUMENTS INDICATING THE OWNERSHIP AND THE FINANCIAL 
25 
CAPACITY OF nIE BONDED WAREHOUSE. 
27 


1 
"Upon receipt of such application, the Collector shall cause an examination of 
2 
the premises, with reference particularly to its location, construction and means 
3 
provided for the safekeeping of articles. THE COLLECTOR SHALL LIKEWISE 
4 
DETERMINE 
THE 
OWNERSHIP 
OF 
THE 
APPLICANT 
BONDED 
5 
WAREHOUSE OR TO VERIFY OWNERS OF A BONDED WAREHOUSE 
6 
. WHICH HAD BEEN CLOSED DUE TO ITS NON-COMPLIANCE WITH 
7 
CUSTOMS LAWS and REGULATIONS WHICH HAS ANY INTEREST 
8 
THEREIN. 
[i]I£ THE APPLICATION IS found satisfactory, [he] THE 
9 
COLLECTOR may, authorize its establishment, and accept a bond for its 
10 
operation and maintenance. The operator of such bonded warehouse shall pay 
11 
an annual supervision fee in an amount to be fixed by the Commissioner. The 
, 
12 
bonded warehouse officers and other employees thereof shall be regular customs 
13 
employees who shall be appointed in accordance with the Civil Service Law, 
14 
rules and regulations. 
15 
"THE PAID-UP CAPITAL AND NET ASSETS OF THE B9NDED 
16 
WAREHOUSE SHALL BE SET AT AN AMOUNT DETERMINED BY THE 
17 
COMMISSIONER AS SUFFICIENT TO COVER THE DUTIES AND TAXES OF 
18 
IMPORT ENTRIES ENTERED INTO THE BONDED WAREHOUSE THAT ARE 
19 
DUE AND DEMANDABLE, OTHERWISE, THE APPLICATION SHALL NOT 
20 
BE GRANTED." 
21 
"SEC. 1903-A. REGULAR AUDIT OF BONDED WAREHOUSE. -
A 
22 
REGULAR 
AUDIT 
OF 
ALL 
BONDED 
WAREHOUSES 
SHALL 
BE 
23 
CONDUCTED BY THE COLLECTOR, WHICH AUDIT SHALL BE SUBJECT 
24 
TO AUTOMATIC REVIEW BY THE COMMISSIONER, UPON PETITION OF 
25 
AN INTERESTED PARTY. A SECOND AUDIT MAY BE CONDUCTED BY 
28 


1 
THE DEPUTY COMMISSIONER OR AN INDEPENDENT AUDIT MAY BE 
2 
MADE 
UPON 
INSTANCE 
OF 
THE 
PETITIONING 
PARTY 
IN 
3 
COORDINATION WITH THE COMMISSIONER." 
4 
SEC. 25. Section 1905 of the Tariff and Customs Code of the Philippinesj as amended, is 
. . 
. 
5 hereby further aD,1ended to read as follows: 
6 
"SEC. 1905. Discontinuance of Warehouses. - The use of any warehouse may be 
7 
discontinued by the Collector at any time when conditions so warrant, or in the 
8 
case of a private warehouse, upon receipt of written request to that effect from 
9 
the operator thereof of the premises, provided all the requirements of the law 
10 
and regulations have been complied with by said operator. A LEGITIMATE 
11 
INDUSTRY GROUP MAY FILE A COMPLAINT IN WRITING WITH THE 
12 
COMMISSIONER 
OF 
CUSTOMS 
FOR 
THE 
COLLECTOR 
THE 
13 
DISCONTINUANCE OF THE BONDED WAREHOUSE ON GROUNDS OF 
14 
NON-COMPLIANCE 
WITH 
THE 
REQUIREMENTS 
OF 
LAW 
AND 
15 
REGULATIONS. When the dutiable article is stored in such premises, the same 
16 
must be removed at the risk and expense of the operator and the premises shall 
17 
not be relinqUished, nor discontinuance of its use authorized, until a careful 
18 
examination of the account of the warehouse shall have been made. 
19 
Discontinuance of any warehouse shall be effective upon official notice and 
20 
approval thereof by the Collector." 
21 
SEC. 26. Section 1907 of the Tariff and Customs Code of the Philippines, as amended, is 
22 hereby further amended to read as follows: 
23 
"SEC. 1907. Withdrawal of Articles from Bonded Warehouse. - Articles bntered 
24 
under irrevocable domestic letter of credit[,j OR bank guarantee or bond may be 
25 
withdrawn at any time for consumption, for transportation to another port, for 
29 


1 
exportation or for delivery on board a vessel or aircraft engaged in foreign trade 
2 
for use on board such vessel or aircraft as sea stores or aircraft stores after 
3 
liquidation of the entry: PROVIDED, THAT PROOF IS SHOWN THAT THE 
4 
ORDER TO IMPORT THE SUBJECT ARTICLES HAS BEEN CANCELLED: 
5 
PROVIDED, FURTHER, THAT THE ARTICLES TO BE WITHDRAWN DO NOT 
6 
AMOUNT TO MORE THAN FIFTY PERCENT (50%) OF THE TOTAL 
7 
INVENTORY OF THE BONDED WAREHOUSE. The withdrawal must be made 
8 
ONLY BY THE IMPORTER OF THE ARTICLES BEING WITHDRAWN OR BY 
9 
A REPRESENTATIVE [by a person or firm duly authorized by the former,] 
10 
whose authority must appear in writing upon the face of the withdrawal entry." 
11 
SEC. 27. Section 1908 of the Tariff and Customs Code of the Philippines, as amended, 
12 is hereby further amended to read as follows: 
I 
13 
"SEC. 1908. Limit to Period of Storage in Bonded Warehouse. - Articles duly 
14 
entered for warehousing may remain in bonded warehouses for a maximum 
15 
period of one year, EXTENDIBLE FOR ANOTHER THREE (3) MONTHS from 
16 
the time of [arrival] RECEIPT OF THE WAREHOUSE at the port of entry. 
17 
Articles not withdrawn at the expiration of the prescribed period shall be [sold at 
18 
public auction by the Collector] DEEMED ABANDONED AND SUBJECT TO 
19 
DISPOSITION IN ACCORDANCE WITH THE PROVISIONS OF THIS CODE. 
20 
THE BUREAU OF CUSTOMS SHALL ACCREDIT SPECIFIC INDUSTRIES 
21 
REQUIRING LONGER PERIOD OF STORAGE." 
22 
"A DAILY RECORD OF ALL ENTRIES LIQUIDATED SHALL BE POSTED 
23 
IN A CONSPICUOUS PLACE IN THE MAIN ENTRANCE OF THE CUSTOMS 
24 
HOUSE, STATING THE NAME OF THE VESSEL OR AIRCRAFT, THE PORT 
25 
FROM WHICH SHE ARRIVED, THE DATE OF HER ARRIVAL, THE NAME OF 
30 


1 
2 
3 
4 
5 
6 
7 
8 
9 
THE IMPORTER, AND THE SERIAL NUMBER OF THE DATE OF ENTRY. 
THE COLLECTOR MUST ALSO KEEP A DAILY RECORD O~ ALL 
I 
ADDITIONAL DUTIES, TAXES AND OTHER CHARGES FOUND UPON 
LIQUIDATION, 
AND SHALL PROMPTLY SEND 
NOTICE TO THE 
INTERESTED PARTIES." 
liTHE LIQUIDATION OF WAREHOUSING ENTRIES SHALL BE MADE 
NOT MORE THAN THREE (3) MONTHS FROM THE TIME OF RECEIPT OF 
THE WAREHOUSE." 
SEC. 28. A new section to be known as Section 1910 is hereby inserted in Part I, Title V, 
10 Book II of the Tariff and Customs Code of the Philippines, as amended, to read as follows: 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
I/SEC. 1910. 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: 
I/(A) BREAKING OF CUSTOMS SEALS OR UNAUTHORIZED REMOVAL 
OF ARTICLES FROM BONDED WAREHOUSES; 
"(B) SUBMISSION OF INCORRECT OR FALSE INFORMATION BY THE 
BONDED WAREHOUSE; 
I/(C) WAREHOUSING OF THE FOLLOWING SHIPMENTS: 
1/1. FINISHED ARTICLES. - FINISHED ARTICLES, AS USED Ik THIS 
I 
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. 
31 


1 
"2. ARTICLES NOT DECLARED IN THE IMPORT ENTRIES OR IN 
2 
EXCESS OF THE VOLUME AND QUANTITY ALLOWED UNDER THE 
3 
LICENSE OF THE CUSTOMS BONDED WAREHOUSE PROVIDED THAT THE 
4 
RESTRICTION IN VOLUME AND QAUNTITY SHALL NOT APPLY TO 
5 
EXPORTERS OPERATING UNDER CUSTOMS BONDED MANUFACTURING 
6 
WAREHOUSES. 
-
7 
"3. PROHIBITED ARTICLES AND REGULATED ARTICLES WITHOUT 
8 
THE CORRESPONDING CLEARANCE AND/OR IMPORT AUTHORITY 
9 
DULY ISSUED BY A COMPETENT AUTHORITY. 
10 
"(D) UNAUTHORIZED TRANSFERS FROM THE CUSTOMS ZqNE OF 
11 
WAREHOUSING ARTICLES IMPORTED BY THE BONDED WAREHOUSE. 
12 
"(E) UNAUTHORIZED WITHDRAWAL FROM A BONDED WAREHOUSE 
13 
WITHOUT PAYMENT OF DUTIES AND TAXES. 
14 
"(F) FAILURE TO LIQUIDATE IMPORTED ARTICLES WITHDRAWN 
15 
FROM THE BONDED WAREHOUSE WITHIN SIX (6) MONTHS, EXTENDIBLE 
16 
FOR ANOTHER THREE (3) MONTHS, FROM THE TIME OF RECEIPT OF THE 
17 
CUSTOMS BONDED WAREHOUSE. 
18 
"(G) FAILURE TO PAY DUTIES AND TAXES ON THE REMAINING (NOT 
19 
EXPORTED) IMPORTED MATERIALS WITHIN THIRTY (30) DAYS FROM 
20 
LAPSE OF THE PERIOD FOR RE-EXPORTATION. 
21 
"IMPORTATIONS MADE IN VIOLATION OF THE ABOVE PROVISIONS 
22 
IN THIS SECTION SHALL IPSO FACTO BE FORFEITED IN FAVOR OF THE 
23 
GOVERNMENT TO BE DISPOSED OF PURSUANT TO THE PROVISIONS OF 
24 
THIS CODE PROVIDED DUE PROCESS IS FOLLOWED. 
32 
-------


1 
"THE BUREAU OF CUSTOMS SHALL APPROVE INDUSTRIES SEEKING 
2 
EXEMPTION FROM THE COVERAGE OF ANY OF THE ABOVE MENTIONED 
3 
PROVISIONS." 
4 
SEC. 29. 'A new section to be known as Section 1911 is hereby inserted in Part 1, Title V, 
5 Book II of the Tariff and Customs Code of the Philippines, as amended, to read as follows: 
6 
"SEC. 1911. VERIFICATION OF RECORDS KEPT IN CUSTOMS BONDED 
7 
WAREHOUSES. -
A CAREFUL ACCOUNT SHALL BE KEPT BY THE 
8 
COLLECTOR 
OF 
ALL 
ARTICLES 
DELIVERED 
TO 
ANY 
BONDED 
9 
WAREHOUSE, AND A SWORN MONTHLY RETURN, DULY VERIFIED BY 
10 
THE CUSTOMS OFFICIAL IN CHARGE, SHALL BE MADE BY THE BONDED 
11 
WAREHOUSE CONTAINING A DETAILED STATEMENT OF ALL IMPORTED 
12 
ARTICLES STORED THEREIN. 
13 
" ALL 
DOCUMENTS, 
BOOKS 
AND 
RECORDS 
OF 
ACCOUNTS 
14 
CONCERNING THE OPERATION OF ANY BONDED WAREHOUSE SHALL, 
15 
UPON DEMAND OF THE SECRETARY OF FINANCE, BE MADE AVAILABLE 
16 
TO THE COLLECTOR OR HIS REPRESENTATIVE, FOR PURPOSES OF 
17 
EXAMINATION AND/OR AUDIT." 
18 
SEC. 30. Section 2001 of the Tariff and Customs Code of the Philippin'es, a s amended, 
19 is hereby further amended to read as follows: 
20 
"SEC. 2001. Establishment of Bonded Manufacturing Warehouses. - All articles 
21 
manufactured in whole or in part of imported materials, and intended for 
22 
exportation without being charged with DUTIES AND TAXES [duty], shall, in 
23 
order to be so manufactured and exported, be made and manufactured in 
24 
manufacturing warehouses under such rules and regulations as the 
25 
Commissioner of Customs with the approval of the Secretary of Finance, shall 
33 


1 
prescribe: Provided, That the manufacturer of such articles shall first file a 
2 
satisfactory bond for the faithful observance of all laws, rules and ,regulations 
3 
applicable thereto." 
4 
SEC. 31. Section 2002 of the Tariff and Customs Code of the Philippines, as amended, is 
5 hereby further amended to read as follows: 
6 
7 
8 
9 
10 . 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
"SEC. 2002. Exemption from Duty. -
a. Whenever articles manufactured in any bonded manufacturing wa;ehouse 
I 
established under the provisions of the preceding section shall be exported 
directly therefrom or shall be duly laden for immediate exportation under the 
supervision of the proper official, such articles shall be exempt from duty. 
b. Any imported material used in the manufacture of such articles, and any 
package, covering, brand and label used in putting up the same may, under the 
regulation prescribed by the Commissioner, with the approval of the Secretary of 
Finance, be conveyed without the payment of DUTIES AND TAXES [duty] into 
any bonded manufacturing warehouse, and imported articles may, under the 
aforesaid regulations, be transferred without the payment of [duty] DUTIES 
AND TAXES from any bonded warehouse into any bonded manufacturing 
warehouse, or to duly accredited sub-contractors of manufacturers who shall 
process the same into finished products for exports and deliver such finished 
products back to the 'bonded manufacturing warehouse, therefrom to be 
exported; but this privilege shall not be held to apply to implements, machinery 
or apparatus to be used in the construction or repair of, any bonded 
manufacturing warehouse: PROVIDED, HOWEVER, THAT THE IMPORTED 
MATERIAL 
TRANSFERRED 
OR 
CONVEYED 
INTO 
ANY 
WAREHOUSE OR DIRECTLY INTO ANY MANUFACTURING 
34 
BONDED 
B~NDED 


1 
WAREHOUSE, PRIOR TO ITS UNLOADING, SO AS NOT TO BE SUBJECT TO 
2 
THE PAYMENT OF DUTY, SHALL BE SO MARKED, INDICATED AND 
3 
IDENTIFIED WITH THE LETTERS "CBW" PRINTED BOLDLY, LEGIBLY, 
4 
INDELIBLY, AND PERMANENTLY ON THE COVERING OF THE PACKAGE 
5 
OR SACK OF THE IMPORTED MATERIAL, SUBJECT TO THE LIMITATIONS 
6 
MENTIONED IN SUBPARAGRAPHS A, B, C, D AND H OF PARAGRAPH 3, 
7 
SECTION 303 OF THIS CODE: Provided, [however} FURTHER, That the materials 
8 
transferred or conveyed into any bonded manufacturing warehouse shall be 
9 
used in the manufacture of articles for exportation within a period of [nine (9) 
10 
months] THIRTY (30) DAYS from date of such transfer or conveyance into the 
11 
bonded manufacturing warehouse, which period may for sufficient reasons be 
-
12 
further extended for not more than [three (3) months] THIRTY (30) DAYS by the 
13 
Commissioner. Materials not used in the manufacture of articles for exportation 
14 
within the prescribed period shall pay the corresponding duties: Provided, 
. 
. 
I 
15 
[further} FINALLY, That the operation of embroidery and apparel firqts shall 
16 
continue to be governed by Republic Act Numbered Thirty-one hundred and 
17 
thirty-seven." 
18 
SEC. 32. Section 2003 of the Tariff and Customs Code of the Philippines, as amended, 
19 is hereby further amended to read as follows: 
20 
"SEC. 2003. Procedure for Withdrawal. - Articles received into such bonded 
21 
manufacturing warehouse or articles manufactured therein may be withdrawn 
22 
or removed therefrom for direct shipment and for immediate exportation in 
23 
bond under the supervision of the proper customs officer, who shall certify to 
24 
such shipment and exportation, or lading for immediate exportation as the case 
25 
may be, describing the articles by their mark or otherwise, the quantity, the date 
35 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
. 12 
13 
14 
15 
16 
of exportation, in the name of the vessel or aircraft: Provided, That the waste and 
by-products incident to the process of manufacture in said bonded warehouse 
may be withdrawn for domestic consumption upon payment of duty equal to 
the duty which w~uld be assessed and collected pursuant to law if such 'taste or 
by-products were imported from a foreign country: 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 THE PROVISIONS OF THIS CODE." 
SEC. 33. Section 2005 of the Tariff and Customs Code of the Philippines, as amended, 
17 is hereby further amended to read as follows: 
18 
"SEC. 2005. Bonded Smelting Warehouses. - The plants of manufacturers 
19 
engaged in smelting or refining, or both, of ores and crude metals, may, upon the 
20 
filing of CASH bonds, be designated as bonded smelting warehouses. Ores or 
21 
crude metals may be removed from the vessel or aircraft in which imported, or 
22 
from a bonded warehouse, into a bonded smelting warehouse withfJUt the 
, 
, 
23 
payment of'duties thereon, and there smelted or refined, or both, togetl\er with 
24 
ores or crude metals of home or foreign productions: Provided, That THE CASH 
25 
BOND SHALL BE IN a sum equal in amount to the regular duties which would 
36 


1 
have been payable on such ores and crude metals if entered for consumption at 
2 
the time of their importation, and the several charges against such bond shall be 
3 
cancelled upon the exportation or delivery to bonded manufacturing warehouse 
4 
established under section twenty hundred and one hereof of a quantity of the 
5 
same kind of metal equal to the quantity of metal contained in such ores or crude 
6 
metals, due allowance being made of the smelter wastage as ascertained from 
7 
time by the Commissioner: Provided, further, That the said metals so producible 
8 
or any portion thereof, may be withdrawn for RE-EXPORTATION UPON 
9 
PROOF THAT THE ORDER TO IMPORT THE SUBJECT METALS HAS BEEN 
10 
CANCELLED AND THAT THE METALS TO BE WITHDRAWN DO NOT 
11 
AMOUNT TO MORE THAN FIFTY PERCENT (50%) OF THE TOTAL 
12 
INVENTORY OF,THE BONDED SMELTING WAREHOUSE: ProvidedJfurther, 
I 
13 
That on the ai:rival of the ores or crude metals at such establishments they shall 
14 
be sampled and assayed according to commercial methods under the 
15 
supervision of proper government officials: Provided, further, 
That all labor 
16 
performed and services rendered pursuant to this section shall be under the. 
17 
supervision of the proper customs official and at the expenses of the 
18 
manufacturer: Provided, further, That all regulations for carrying out the 
19 
provisions of this section shall be prescribed by the Commissioner with the 
20 
approval of the department head: Provided, FURTHER, That the several charges 
21 
against the bond of any 'smelting warehouse established under the provisions of 
22 
this section may be cancelled upon the exportation or transfer to a bonded 
23 
manufacturing warehouse from any bonded smelting warehouse established 
24 
under this section of' a quantity of the same kind of metal, in excess of that 
25 
covered by open bonds, equal to the amount of metal producible from the 
37 


1 
smelting or refining, or both, of the dutiable metal contained in the imported 
, 
I 
2 
ores or crude metals, due allowance being made of the smelter was~age as 
, 
3 
ascertained from time to time by the Commissioner with the approval of the 
4 
department head: 
PROVIDED, 
FINALLY, THAT BONDED SMELTING 
5 
WAREHOUSES SHALL LIKEWISE BE SUBJECT TO THE PROVISIONS UNDER 
6 
TITLE V, PART 1 OF THIS CODE, AS AMENDED." 
7 
SEC. 34. A new section, to be known as Section 2006 is hereby inserted in the Tariff and 
8 Customs Code of the Philippines, as amended, to read as follows: 
9 
"SEc' 2006, PRIOR APPROVAL OF THE BOARD OF INVESTMENT -
10 
NOTWITHSTANDING THE PROVISIONS CONTAINED IN SECTION 1901 TO 
11 
1909 AS WELL AS SECTION 2001 TO 2006, ALL CUSTOMS BONDED 
12 
WAREHOUSE SHALL BE MANUFACTURING AND INDUSTRY SPECIFIC, 
13 
THE BUREAU OF CUSTOMS SHALL SO DESIGNATE THE SAME ONLY 
14 
UPON THE PROPER RECOMMENDATION AND ENDORSEMENT BY THE 
15 
BOARD OF INVESTMENT: PROVIDED, FURTHER, THAT BEFORE THE 
16 
BOARD 
OF 
INVESTMENT 
ISSUES 
THE 
CORRESPONDING 
17 
RECOMMENDATION AND ENDORSEMENT, THE LOCAL INDUSTRY 
18 
CONCERNED SHALL BE PROPERLY CONSULTED: PROVIDED, FINALLY, 
19 
THAT FAILURE TO COMPLY WITH THE FOREGOING PROVISION SHALL 
, 
I 
20 
CAUSE THE CANCELLATION OF THE ACCREDITATION OF THF SAID 
21 
CUSTOMS BONDED WAREHOUSE." 
22 
SEC. 35. A new section to be known as Section 2007 is hereby inserted in the Tariff and 
23 Customs Code of the Philippines, as amended, to read as follows: 
24 
"SEc' 2007, 
BUREAU OF CUSTOMS AND BUREAU OF INTERNAL 
25 
REVENUE DIRECT RECORD LINKAGE, -
TO ASSURE THE PROPER 
38 


I 
COORDINATION OF THEIR RESPECTIVE AUDIT AS WELL AS IN THE 
2 
INVESTIGATION AND PROSECUTION OF TAX AND DUTY RELATED 
3 
CASES, A REAL-TIME LINKAGE VIA COMPUTER OF THE RECORDS OF 
4 
BOTH THE BUREAU OF CUSTOMS AND THE BUREAU OF INTERNAL 
5 
REVENUE SHALL BE IMMEDIATELY MADE." 
6 
SEC. 36. Section 2317 of the Tariff and Customs Code of the Philippines, as amended, 
7 is hereby further amended to read as follows: 
8 
9 
10 
11 
12 
13 
14 
IS 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
"SEC. 2317. Government's Right of Compulsory Acquisition. - In order to 
protect the gover~entrevenues against the undervaluation of goods s~bject to 
ad valorem duly, the Commissioner of Customs may acquire imported goods 
under question for a price equal to their declared customs value plus any duties 
already paid on the goods, payment for which shall be made within ten (10) 
working days from' issuance of a warrant signed by the Commissioner of 
Customs for the acquisition of such goods. 
"ANY INDUSTRY 
ASSOCIATION OR INDUSTRY 
SECTOR MAY 
LIKEWISE POST A LETTER OF CREDIT, SURETY BOND OR SOME: OTHER 
APPROPRIATE INSTRUMENT IN FAVOR OF THE BUREAU OF CUSTOMS IN 
THE AMOUNT EQUAL TO TWO HUNDRED PERCENT (200%) OF THE 
DECLARED CUSTOMS VALUE OF THE GOODS UNDER QUESTION, 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 TI-JE ACQUISITION OF SUCH GOODS: PROVIDED, THAT 
39 


1 
THE PROVISIONS OF SECTION 201 OF THIS CODE SHALL APPLY IN THE 
2 
CASE OF SURETY BONDS AND SURETY COMPANIES. 
3 
"An importer who is dissatisfied with a decision of the Commissioner of 
4 
Customs pertaining to this section may, within twe:t;lty (20) working days after 
5 
the date on which notice of the decision is given, appeal to the Secretary of 
6 
Finance and thereafter if still dissatisfied, to the Court of Tax Appeals as 
7 
provided for in Section 2402 of the Tariff and Customs Code of the Philippines, 
8 
as amended. 
9 
"Where no appeal is made by the importer, or upon reaffirmation of the 
10 
Commissioner's decision during the appeals process, the Bureau of Customs or 
11 
its agent shall sell the acquired goods pursuant to existing laws and regulations. 
12 
IN CASES WHERE COMPULSORY ACQUISITION WAS INITIATED BY THE 
13 
INDUSTRY ASSOCIATION OR INDUSTRY SECTOR, THE COMMISSIONER 
14 
SHALL CLAIM ON THE LETTER OF CREDIT, 
SURETY~ BOND OR 
15 
WHATEVER INSTRUMENT POSTED OR USED FOR THE PURPOSE AND 
16 
THEREUPON RELEASE THE ACQUIRED ARTICLES TO THE INDUSTRY 
17 
ASSOCIATION. OR 
INDUSTRY 
SECTOR 
WHICH 
POSTEn! 
THE 
18 
INSTRUMENT. 
19 
"Nothing in this Section limits or affects any other powers of the Bureau of 
20 
Customs with respect to the disposition of the goods or any liability of the 
21 
importer or any other person with respect to an offense committed in the 
22 
importation of the goods." 
23 
SEC. 37. A new section to be known as Section 2401 is hereby inserted in the Tariff and 
24 Customs Code of the Philippines, as amended, to read as follows: 
40 


1 
2 
3 
4 
5 
6 
7 
8 
"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] INVESTIGATED, PROSECUTED AND HANDLED EXCLUSIVELY 
by [customs officers] LAWYERS OF THE BUREAU OF CUSTOMS, [but] AND 
no civil or crimimil action for the recovery of duties or the enforcemen~ of any 
I 
fine, penalty or forfeiture under this Code shall be filed jn court without the 
9 
approval of the Commissioner. 
FOR THIS PURPOSE, THE BUREAU OF 
10 
CUSTOMS SHALL BE PRIMARILY AND EXCLUSIVELY RESPONSIBLE FOR 
11 
THE CONDUCT OF PRELIMINARY INVESTIGATION AND PROSECUTION 
12 
OF CUSTOMS-RELATED CASES, AS WELL AS THE PROSECUTION AND 
13 
DEFENSE OF CUSTOMS-RELATED CIVIL CASES, TO THE EXCLUSION OF 
14 
ALL OTHER GOVERNMENT AGENCIES INVOLVED THEREIN. 
THE 
15 
BUREAU OF CUSTOMS SHALL HAVE EXCLUSIVE AUTHORITY TO FILE 
16 
ANY CRIMINAL OR CIVIL CASE DIRECTLY WITH THE PROPER COURT 
17 
FOR PROSECUTION OF VIOLATORS OF THE TARIFF AND CUSTOMS 
18 
CODE, AND THE COLLECTION, RECOVERY OR ENFORCEMENT OF ANY 
19 
FINE, PENALTY OR FORFEITURE UNDER THE CODE." 
20 
SEC. 3S. Section 2503 of the Tariff and Customs Code of the Philippines, as amended, . 
21 is hereby further amended t~ read as follows: 
22 
"SEC. 2503. 
Undervaluation, Misclassification and Misdeclaration in Entry. -
23 
When the dutiable vallie of the imported articles shall be so declared and entered 
24 
that the duties, based on the declaration of the importer on the face of the entry 
25 
d 
' 
I 
woul be less by ten percent (10%) than should be legally collected, or when the 
I 
41 


1 
imported articles shall be so described and entered that the duties based on the 
2 
importer's description on the face of the entry would be less by ten percent (10%) 
3 
than should be legally collected based on the tariff classification, or when the 
4 
dutiable weight, measurement or quantity of imported articles is found upon 
5 
examination to exceed by ten percent (10%) or more than the entered weight, 
6 
measurement or quantity, a surcharge shall be collected from the importer in an 
7 
amount of not less than the difference between the full duty and the estimated 
8 
duty based upon the declaration of the importer, nor more than twice of such 
9 
difference: 
Provided, 
That 
an 
undervaluation, 
MISCLASSIFICATION, 
10 
misdeclaration in weight, measurement or quantity of more than thirty percent 
11 
(30%) between the vallie, weight, measurement or quantity declared in the entry, 
12 
and the actual value, weight, quantity, or measurement shall constitute a prima 
13 
facie evidence of fraud penalized under Section 2530 AND SECTION 3602 of this 
14 
Code: 
Provided, 
further, 
That 
any 
UNDERVALUED, 
misdiclared, 
15 
MISCLASSIFIED 
or 
undeclared 
imported 
articles/items 
found, upon 
16 
examination shall ipso facto be forfeited in favor of the Government to be 
17 
disposed of pursuant to the provisions of this Code: 
PROVIDED, 
18 
FURTHERMORE, THAT THE LICENSE, PERMIT AND THE BUSINESS NAME 
19 
OF THE SUBJECT IMPORTER MAY BE REVOKED AFTER DUE PROCESS. 
20 
"When 
the 
undervaluation, 
misdescription, 
misclassification 
or 
21 
misdeclaration in the import entry is intentional, the importer shall be subject to 
22 
penal provisions under Section 3602 of this Code." 
23 
SEC. 39. 
A new section to be known as Section 2503-A is hereby inserted in Part 4, 
24 Title VI, Book II of the Tariff and Customs Code of the Philippines, as amended, to read 
25 as follows: 
42 


1 
"SEC. 2503-A. 
NON-IMPOSITION OF SURCHARGE. 
EXEMPTION 
2 
FROM THE SURCHARGE SHALL BE ALLOWED ONLY IN CASES WHEN 
3 
THE DECLARED OR ENTERED CLASSIFICATION IS BASED ON RULINGS 
4 
BY THE TARIFF. COMMISSION AND THE BUREAU OF CUSTOfv1S AS 
5 
APPROVED 
BY THE DEPARTMENT OF FINANCE PURSUANT TO 
6 
SUBSECTION (A) OF SECTION 1313 OF THIS CODE: PROVIDED, THAT THE 
7 
DESCRIPTION 
OF 
THE 
ARTICLE 
IS 
FOUND 
CORRECT 
UPON 
8 
EXAMINATION: PROVIDED, FINALLY, THAT BASED ON THE RESULT OF 
9 
THE EXAMINATION, THE ARTICLE IS FOUND ESSENTIALLY THE SAME 
10 
AS THAT DESCRIBED IN THE RULING. II 
11 
SEC. 40. Section 2601 of the Tariff and Customs Code of the Philippines, as amended, 
12 is hereby further amended to read as follows: 
13 
"SEC. 2601. Property Subject to [Sale} DISPOSITION. - Property in customs 
14 
custody shall be subject to [sale] DISPOSITION under the conditions hereinafter 
15 
provided: 
16 
"a. Abandoned articles; 
17 
lib. Articles entered under warehousing entry not withdrawn nor the duties 
18 
and taxes paid thereon within the period prescribed under Sections 1908 of this 
19 
Code; 
20 
"C. Seized property, other than contraband, after liability to sale shall have 
21 
been established by proper administrative [or judicial] proceedings in 
22 
conformity with the provision of this Code; and 
23 
lid. Any article subject to a valid lien for customs duties, taxes 'or other 
24 
charges collectible by the Bureau of Customs, after the expiration of the period 
25 
allowed for the satisfaction of the same." 
43 


- - - ------ ------
1 
SEC. 41. Section 2602 of the Tariff and Customs Code of the Philippines, as amended, 
2 is hereby further amended to read as follows: 
3 
"SEC. 2602. 
[Place of Sale or Other Disposition of Property] MODES OF 
4 
DISPOSITION OF PROPERTY UNDER CUSTOMS CUSTODY. -
Property 
5 
within the purview of this part of this Code shall be [sold, or otherwise disposed 
6 
of, upon the order of the Collector of the port where the property is found, 
7 
unless the Commissioner shall direct its conveyance for such purpose to some 
8 
other port.] DISPOSED OF THROUGH THE FOLLOWING MODES OF 
9 
DISPOSITION: 
10 
"(A) WHEN SUBJECT PROPERTY HAS EXPORT POTENTIAL, THE SAME 
11 
SHALL BE EXPORTED THROUGH A GOVERNMENT ENTITY WHICH 
12 
SHALL BE DESIGNATED TO PERFORM SAID TASK; 
I 
13 
"(B) 
WHEN THE PROPERTY IS NOT EXPORTED, AND UPON 
14 
RECOMMENDATION OF THE COMMISSIONER OF CUSTOMS, THE 
15 
SECRETARY OF FINANCE MAY AUTHORIZE THE OFFICIAL USE OF THE 
16 
ARTICLES TO PROMOTE THE INTENSIVE COLLECTION OF TAXES 
17 
AND/OR TO HELP PREVENT OR SUPPRESS SMUGGLING AND OTHER 
18 
FRAUDS UPON THE CUSTOMS; 
19 
"(C) WHEN THE ARTICLE IS NOT SUITABLE FOR EXPORTATION OR 
20 
FOR USE AGAINST SMUGGLING OR OTHER FRAUDS UPON CUSTOMS, 
21 
THEN IT MAY BE CHANNELED TO THE OFFICIAL USE OF OTHER OFFICES 
22 
OF THE NATIONAL GOVERNMENT; AND 
23 
"(D) IF THE ARTICLE IS SUITABLE FOR SHELTER OR CONSISTS OF 
24 
FOODSTUFFS OR CLOTHING MATERIALS, THEN THAT ARTICLE MAY BE 
25 
GIVEN TO THE APPROPRIATE GOVERNMENT AGENCY: PROVIDED, 
44 


1 
THAT THIS AGENCY USES THIS ONLY FOR OFFICIAL PURPOSE, OR FOR 
2 
CHARITY. 
I 
3 
"THE COST OF EXPORTATION OF SUBJECT PROPERTY UNDER THIS 
4 
SECTION, INCLUDING ALL ATTENDANT COSTS THERETO, SHALL BE 
5 
SHOULDERED BY THE IMPORTER/CONSIGNEE WHO UNLAWFULLY 
6 
BROUGHT IN THE IMPORTED ARTICLE, AND/OR THE BROKER THEREOF, 
7 
AS THE CASE MAY BE; WHEN BOTH THE IMPORTER/CONSIGNEE WHO 
8 
UNLAWFULLY BROUGHT IN THE IMPORTED ARTICLE AND THE BROKER 
9 
CAN NOT BE LOCATED THEN THE GOVERNMENT ENTITY WHICH IS 
10 
DESIGNATED TO EXPORT SUBJECT PROPERTY SHALL SHOULDER THE 
11 
COST OF EXPORTATION: PROVIDED, THAT ARTICLES TO BE EXPORTED 
12 
UNDER THIS SECTION SHALL BE TRANSFERRED BY THE BUREAU OF 
13 
CUSTOMS TO THE GOVERNMENT ENTITY THAT IS MANDATED TO 
14 
EXPORT THE ARTICLES WITHIN FIFTEEN (15) DAYS FROM THE TIME THE 
15 
FORFEITURE HAS BECOME FINAL AND EXECUTORY: 
PROVIDED, 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
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 bTHER 
. 
I 
CHARGES INCIDENTAL TO THE UPKEEP AND TRANSPORTATION OF 
SUBJECT ARTICLE SHALL BE BORNE BY THE RECIPIENT GOVERNMENT 
AGENCY: PROVIDED, FINALLY, THAT IF SUBJECT ARTICLE CANNOT BE 
EXPORTED THROUGH THE GOVERNMENT ENTITY DESIGNATED FOR 
THE PURPOSE OR IS NOT SUITABLE EITHER FOR OFFICIAL USE OR 
45 


1 
CHARITY, THE SAME SHALL BE BURNED OR DESTROYED IN SUCH 
2 
MANNER AS THE CASE MAY REQUIRE AS TO RENDER THEM 
3 
ABSOLUTELY WORTHLESS, IN THE PRESENCE OF A REPRESENTATIVE 
4 
EACH FROM THE COMMISSION ON AUDIT, THE DEPARTMENT OF 
5 
JUSTICE, THE BUREAU OF CUSTOMS, AND FROM THE PRIVATE SECTOR." 
6 
SEC. 42. Section 2603 of the Tariff and Customs Code of the Philippines, as amended, 
7 is hereby further amended to read as follows: 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
"SEC. 2603. [Mode of Sale] DISPOSITION OF PROCEEDS IN CASE OF 
EXPORTATION. - [In the absence 0lf any special provision, subject\ to the 
provisions of, Section 2601 above provided, property subject to sale I 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 EXPORTATION OF ARTICLES WITHIN THE 
PURVIEW OF THISP ART OF THIS CODE: 
"(A) EXPORTATION EXPENSES INCURRED BY THE GOVERNMENT 
ENTITY DESIGNATED FOR THE PURPOSE; 
"(B) TAXES AND OTHER CHARGES, AS THE CASE MAY BE, DUE THE 
GOVERNMENT; 
"(C) STORAGE CHARGES; 
"(D) ARRASTRE CHARGES; AND 
"(E) FREIGHT, LIGHTERAGE AND OTHER EXPENSES INCIDENTAL TO 
THE EXPORTATION." 
46 


1 
SEC. 43. 
Section 2604 of the Tariff and Customs Code of the Philippines, as 
2 amended, is hereby further amended to read as follows: 
3 
JJSEC. 2604. [Disqualification to Participate in Auction Sale} DISPOSITION OF 
4 
SURPLUS FROM THE PROCEEDS OF EXPORTATION OF PROPERTY WITHIN 
5 
THE PURVIEW OF THIS PART OF THIS CODE. - [No customs official or 
6 
employee shall be allowed to bid directly or indirectly, in any customs auction.] 
7 
ANY SURPLUS REMAINING AFTER THE SATISFACTION OF ALL LAWFUL 
8 
CHARGES AS PROVIDED FOR IN SECTION 2603 OF THIS CODE SHALL BE 
9 
DEPOSITED IN A SPECIAL TRUST FUND WHICH SHALL BE USED SOLELY 
10 
FOR THE PURPOSE OF FINANCING THE COMPULSORY ACQUISITION OF 
11 
IMPORTED GOODS BY THE GOVERNMENT AS PROVIDED FOR IN 
12 
SECTION 2317 OF THIS CODE." 
13 
SEC. 44. Section 2607 of the Tariff and Customs Code of the Philippines, as amended, 
14 is hereby further amended. to read as follows: 
15 
JJSEC. 2607. Disposition of Articles Liable to Deterioration. - Perishable articles 
16 
shall be deposited in any appropriate bonded warehouse; and, if not 
17 
immediately entered for export or for transportation from the vessel or aircraft in 
. 
. 
18 
which imported or entered for consumption and the duties and the ta~es paid 
19 
thereon, such articles SHALL [may] be sold at auction [,after such public notice, 
20 
not exceeding three days,] as the necessities of the case permit. 
21 
JJWhen seizure shall be made of property which, in the opinion of the 
22 
Collector, is liable to perish or be wasted or to depreciate greatly in value by 
23 
keeping, or which cannot be kept without great disproportionate expense, 
24 
whether such property consists of live animals or of any article, the appraiser 
47 


1 
shall so certify his appraisal, the Collector SHALL [may] proceed to advertise 
2 
and sell the same at auction, upon notice as he shall deem to be reasonable. 
3 
"The same disposition SHALL [may] be made of any warehoused article 
4 
when in the opinion of the Collector it is likely that the cost of depreciation, 
5 
damage, leakage or other causes, may so reduce its value as to be insufficient to 
6 
pay the duties, taxes and other charges thereon, if it should be permitted to be so 
7 
kept and be subjected to sale in the usual course. 
. 
I 
8 
"PROVIDED, THAT IN ALL CASES INVOLVING ARTICLES LIABLE TO 
9 
DETERIORATION, 
THE 
DETERMINATION 
THEREON 
SHALL 
BE 
10 
EXCLUSIVE TO THE COLLECTOR AND SHALL BE FINAL ON THE MATTER: 
11 
PROVIDED, FURTHER, THAT THE AUCTION SALE SHALL BE HELD NOT 
12 
LATER THAN TWO (2) DAYS AFTER THE PUBLIC NOTICE SET BY THE 
13 
COLLECTOR." 
14 
SEC. 45. Section 2610 of the Tariff and Customs Code of the Philippines, as amended, 
15 is hereby further amended to read as follows: 
16 
"SEC. 2610. Disposition of Unsold Articles for Want of Bidders. - Articles subject 
17 
to sale at public auction by customs authorities shall be sold at a price not less 
18 
than the wholesale value price in the domestic market of these or similar articles 
19 
in the usual wholesale quantities and in the ordinary course of trade as 
20 
determined in accordance with section twenty-three hundred and five of this 
21 
code. 
22 
"When any article remains unsold in at least two public biddings for want of 
23 
bidders or for lack of an acceptable bid, and the article is perishable and/ or 
24 
suitable for official use, then the Collector shall report the matter immediately to 
25 
the Commissioner of Customs who SHALL [may, subject to the approvll of the 
I 
48 


1 
Secretary of Finance,] authorize the official use of that article by the Bureau of 
2 
Customs to promote the intensive collection of taxes and/or to help prevent or 
3 
suppress smuggling and other frauds upon the Customs, and if the article is not 
4 
suitable for such use, then it ~ay be channeled to the official use of other offices 
5 
of the National Government AS THE COMMISSIONER OF CUSTOMS MAY 
6 
DETERMINE. 
If the article is suitable for shelter or consists of foodstuffs, 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
clothing materials or medicines then that article shall be given to government 
charitable institutions through the Department of Social WELFARE [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 abive, the 
Collector shall report the matter immediately to the Commissioner who pHALL 
[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. 46. Section 2612 'of the Tariff and Customs Code of the Philippines, as amended, 
21 is hereby further amended to read as follows: 
22 
"SEC. 2612. Disposition of Smuggled Articles. -
23 
"Smuggled articles, after liability to seizure or forfeiture shall have been 
24 
established by proper administrative [or judicial] proceedings in conformity 
25 
with the provisions of this Code, shall be disposed of as provided for in section 
49 


1 
twenty-six hundred and ten: PROVIDED, THAT SENSITIVE ARTICLES SO 
2 
CONSIDERED BY THE PHILIPPINES UNDER LAWS, REGULATIONS OR 
3 
EXISTING 
INTERNATIONAL 
AGREEMENTS 
SHALL 
BE 
DISPOSED 
4 
5 
6 
7 
8 
9 
10 
11 
12 
ACCORDING TO, THE RECOMMENDATIONS, RULES OR ORDERS pET BY 
THE APPROPRIATE REGULATORY AGENCY: Provided, FURTHER, That 
articles whose importation is prohibited under Section One hundred two sub-
paragraphs b, c, d, e and j shall upon order to the Collector in writing, be burned 
or destroyed, in such manner as the case may require as to render then 
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. 47. Section 35i3, Book II, Title VII, Part II of the Tariff and Customs Code of 
13 the Philippines, is hereby amended to read as follows: 
14 
"SEC. 3513. Reward to Persons Instrumental in the Discovery and Seizure of or 
15 
Recovery of Revenue on Smuggled Goods and Successful Prosecution of Offenders. -
16 
The provisions of general and special laws to the contrary notwithstanding, a 
17 
cash reward equivalent to twenty per centum (20%) of the [fair market value of] 
18 
REVENUE RECOVERED FROM the [smuggled and] SEIZED OR confiscated 
19 
goods shall be given to the officers and men and informers who are instrumental 
20 
in the discovery and seizure of such goods [in accordance with the rules and 
21 
regulations to be issued by the Secretary of Finance.]: PROVIDED, THAT IN 
22 
CASE OF SUCCE~SFUL PROSECUTION OF SMUGGLERS OR SEIZU~E AND 
23 
FORFEITURE, CASES, THE AMOUNT EQUIVALENT TO TEN PER CENTUM 
24 
(10%) THEREOF SHALL BE GIVEN TO BUREAU OF CUSTOMS LAWYER/S 
25 
WHO ACTIVELY PROSECUTED THE CASE THAT RESULTED IN THE 
50 


1 
RECOVERY OF REVENUE, SURCHARGES, AND FEES, OR IMPOSITION OF 
2 
FINE OR PENALTY OR OFFER OF COMPROMISE BY THE OFFENDER, OR 
3 
CONVICTION OF THE OFFENDER: PROVIDED, FURTHER, THAT IN CASE 
4 
OF CONVICTION, WHERE THE PENALTY IS INCAPABLE OF PECUNIARY 
5 
ESTIMATION, THE AMOUNT OF REWARD SHALL BE EQUIVALENT TO 
6 
TWENTY PER CENTUM (20%) OF THE CIVIL LIABILITY INCLUDING FINES, 
7 
PENALTIES AND SURCHARGES IMPOSED BY THE COURT: PROVIDED, 
8 
FINALLY, THAT WHERE NO CIVIL LIABILITY IS AWARDED BY THE 
9 
COURT, THE SUM OF P250,OOO.00 ORP500,OOO.00 SHALL BE GRANTED 
10 
WHERE THE CASE IS RESOLVED WITH FINALITY IN THE TRIAL COURT 
11 
OR THE APPELLATE COURTS, RESPECTIVELY." 
12 
SEC. 48. Section· 3519 of the Tariff and Customs Code of the bhilippines, as 
I 
13 amended, is hereby further amended to read as follows: 
14 
"SEC. 3519. Words and Phrases Defined. - As used in this Code: 
15 
"Foreign Port" means a port or place outside the jurisdiction of the 
16 
Philippines. 
17 
"FOREIGN TRANSSHIPMENT" SHALL REFER TO THE TRANSPORT OF 
18 
GOODS FROM A FOREIGN COUNTRY INTO THE PHILIPPINES FOR 
19 
SHIPMENT TO A FOREIGN DESTINATION WITHOUT INTRODUCING THE 
20 
SAME INTO THE PHILIPPINE CUSTOMS TERRITORY. 
21 
"Port of Entry" is a domestic port open to both foreign and coastwise trade. 
22 
The term includes principal ports of entry and subports of entry. A "principal 
23 
port of entry" is the chief port of entry of the collection district wherein it is 
24 
situated and is the permanent station of the Collector of such port. Subports of 
25 
entry are under the administrative jurisdiction of the Collector of the principal 
51 


1 
port of entry of the district. Whenever the term "Port of Entry" is used herein, it 
i 
2 
shall include" airport of entry". 
3 
"Coastwise ports" are such domestic ports as are open to coastwise trade only. 
4 
These include all ports, harbors and places not ports of entry. 
5 
"Vessels" includes every sort of boat, craft or other artificial contrivance used, 
6 
or capable 
of being used, as a means of transportation on water. 
7 
"Aircraft" includes any weight-carrying devise or structure for the navigation 
8 
of the air. 
9 
"Bill of Lading" includes airway bill of lading. 
10 
"Articles", when used with reference to importation or exportation, includes 
11 
goods merchandise and in general anything that may be made the subject of 
12 
importation or exportation. 
13 
"Transit cargo" is article arriving at any port from another port or place noted 
14 
in the carrier's manifest and destined for 'transshipment to another local port or to 
15 
a foreign port. 
16 
"Seized property" means any property seized or held for the satisfaction of 
17 
any administrative fine or for the enforcement of any forfeiture under the Tariff 
18 
and Customs Code. 
19 
"Tariff and customs laws" includes not only the provisions of this Code and 
I 
20 
regulations pursuant thereto but all other laws and regulations which ar~ subject 
21 
to enforcement by the Bureau of Customs or otherwise within its jurisdiction. 
22 
"Taxes" includes all taxes, fees and charges imposed by the Bureau of 
23 
Customs and the Bureau of Internal Revenue. 
24 
"Secretary" or "Department Head" refers, unless otherwise specified, to the 
25 
Secretary of Finance. 
52 


1 
"Commission" refers to the Tariff Commission. 
2 
"Person" whether singular or plural refers to an individual, 
3 
corporation, partnership, association, company or any other kind of organization. 
4 
"Dutiable value" refers to the value defined in section two hundred one. 
5 ' 
"Bulk cargo" refers to products in a mass of one commodity not packaged, 
6 
bundled, bottled or otherwise packed. 
7 
"Smuggling" is an act of any person who shall fraudulently import or bring 
8 
into the Philippines, or assist in so doing, any article, contrary to law or shall 
9 
receive, conceal, buy, sell or in any manner facilitate the transP9rtation, 
, 
, 
10 
concealment, or sale of such article after importation, knowing the same Ito have 
11 
been imported contrary to law. It includes the exportation of articles in a manner 
12 
contrary to law. Articles subject to this paragraph shall be known as smuggled 
13 
articles: PROVIDED, THAT THE ACT OF RECEIVING ARTICLES THAT ARE 
14 
SUPPOSED TO BE EXPORTED BUT ARE SUBSEQUENTLY RETURNED AND 
15 
REJECTED BY THE IMPORTING COUNTRY SHALL NOT BE CONSIDERED 
16 
SMUGGLING." 
17 
"TECHNICAL SMUGGLING" IS AN ACT OF ANY PERSON WHO MAKES 
18 
OR ATTEMPTS TO MAKE ENTRY OF IMPORTED OR EXPORTED ARTICLE BY 
19 
MEANS OF ANY FALSE OR FRAUDULENT INVOICE, DECLARATION, 
20 
AFFIDAVIT, LETTER, PAPER OR BY ANY MEANS OF ANY FALSE 
21 
STATEMENT, WRITTEN OR VERBAL, OR BY ANY MEANS OF ANY FALSE OR 
22 
FRAUDULENT PRACTICE WHATSOEVER, OR EFFECTS ANY ENTRY OF 
23 
GOODS, WARES OR MERCHANDISE, AT LESS THAN THE TRUE WEIGHT OR 
24 
MEASURES THEREOF OR UPON' A FALSE CLASSIFICATION AS TO 
25 
QUALITY OR VALUE, OR BY THE PAYMENT OF LESS THAN THE AMOUNT 
53 


1 
LEGALLY DUE, OR FILES ANY FALSE OR FRAUDULENT ENTRY OR CLAIM 
2 
FOR THE PAYMENT OF DRAWBACK OR REFUND OF DUTIES UPON THE 
3 
EXPORTATION OF MERCHANDISE, OR MAKES OR FILES ANY AFFIDAVIT, 
4 
ABSTRACT, RECORD, CERTIFICATE OR OTHER DOCUMENT, WITH A VIEW 
5 
TO SECURING THE PAYMENT TO HIMSELF OR OTHERS OF ANY 
6 
DRAWBACK, 
ALLOWANCE, 
OR 
REFUND 
OF 
DUTIES 
ON 
THE 
7 
EXPORTATION OF MERCHANDISE, GREATER THAN THAT LEGALLY DUE 
8 
THEREON, OR WHO SHALL BE GUILTY OF ANY ACT OF OMISSION SHALL, 
9 
FOR EACH OFFENSE, BE PUNISHABLE UNDER THIS CODE." 
10 
"Contrabands" are articles of prohibited importation or exportation. 
11 
"Duly Registered" as used in this Act, refers to a person, natural or juridical, 
12 
which is registered with the proper government agencies, such as the [Bureau of 
13 
Commerce] DEPARTMENT OF TRADE AND INUDSTRY, Securities and 
14 
Exchange Commission, [NACIDA], Board of Investments, DEPARTMENT OF 
15 
AGRICULTURE, [Export Incentives Board or Oil Commission] DEPARTMENT 
16 
OF ENERGY as now or may hereafter be required by law. (RA 9135, April 27, 
17 
2001) 
I 
18 
SEC. 53. Section 3601 of the Tariff and Customs Code of the Philippines, as amended, is 
19 hereby further amended to read as follows: 
20 
"SEC. 3601. 
[Unlawful Importation] SMUGGLING. -
(A) Any person who 
21 
shall fraudulently import or bring into the Philippines, or assist in so doing, any 
22 
article, contrary to law, SHALL BE GUILTY OF SMUGGLING AND SHALL BE 
23 
PUNISHABLE AS HEREIN PROVIDED, (B) 
[or] ANY PERSON WHO shall 
24 
receive, conceal, buy, sell, or in any manner facilitate the transportation, 
25 
concealment, or sale of such article after importation, knowing the same to have 
54 
, 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
been imported contrary to law, shall be DEEMED guilty of smuggling and shall 
LIKEWISE be [punished with] PUNISHABLE AS HEREIN PROVIDED, AND 
(C) ANY IMPORTATION OF ARTICLES THAT DO NOT PASS THROUGH 
THE PORTS OF ENTRY SHALL BE CONSIDERED AS UNLAWFUL 
IMPORTATION PUNISHABLE UNDER SECTION 3601 OF THIS CODE, 
SHALL BE CONSIDERED AS ILLEGALLY IMPORTED AND SHALL BE 
DISPOSED OF IN THE MANNER AS PROVIDED FOR IN SECTION J602 OF 
I 
THIS CODE: 
"1. A fine [of not less than] IN AN AMOUNT EQUAL TO THE APPRAISED 
VALUE PLUS fifty [pesos nor more than two hundred pesos] PERCENT (50%) 
THEREOF and imprisonment of not less than [five] SIX MONTHS AND ONE 
day[s] nor more than [four years] TWENTY DAYS, if the appraised value, to be 
determined in the manner prescribed under this Code, including duties and 
taxes, of the article unlawfully imported EXCEEDS FIVE THOUSAND PESOS 
(P5,000.00) BUT does not exceed [twenty-five] FIFTY THOUSAND pesos 
(P50,000.00); 
"2. A fine [of not less than eight hundred pesos nor more than five thousand 
pesos] IN AN AMOUNT EQUAL TO THE APPRAISED VALUE PLUS FIFTY 
PERCENT (50%) THEREOF and imprisonment of not less than [six months] 
FOUR YEARS and one day nor more than [four] EIGHT years, if the appraised 
value, to be determined in the manner prescribed under this Code, including 
22 
duties and taxes, of the article unlawfully imported [exceeds twenty-five] 
IS 
23 
MORE THAN FIFTY THOUSAND pesos (P50,000.00) but does not exceed ONE 
24 
HUNDRED fifty thousand pesos (P150,000.OO); 
55 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
1/3. A fine [of not less than six thousand pesos nor more than eight thousand 
pesos] IN AN AMOUNT EQUAL TO THE APPRAISED VALUE PLUS FIFTY 
PERCENT (SO%) THEREOF and imprisonment of not less than [five] EIGHT 
years and one day nor more than [eight] TWELVE 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] EXCEEDS ONE 
HUNDRED fifty thousand pesos (PlSO,OOO.OO) but does not exceed [one] TWO 
hundred fifty thousand pesos (p2S0,000.00)i 
1/4. A fine [of not less than eight thousand pesos nor more than ten thousand 
pesos] IN AN AMOUNT EQUAL TO THE APPRAISED VALUE PLUS FIFTY 
PERCENT (50%) THEREOF and imprisonment of not less than [eight] TWELVE 
years and one day nor more than [twelve] FIFTEEN years, if the apprl'\ised value, 
to be determined in the'manner prescribed under this Code, including duties 
and taxes, of the article unlawfully imported exceeds [one] TWO hundjed fifty 
. 
, 
thousand pesos (P250,000.00) BUT DOES NOT EXCEED FIVE HUNDRED 
THOUSAND PESOS (PSOO,OOO.OO); 
I/S. A FINE IN AN AMOUNT EQUAL TO THE APPRAISED VALUE PLUS 
FIFTY PERCENT (SO%) THEREOF AND IMPRISONMENT OF NOT LESS 
THAN FIFTEEN YEARS AND ONE DAY NOR MORE THAN TWENTY 
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 FIVE 
HUNDRED THOUSAND PESOS (PSOO,OOO.OO) BUT DOES NOT EXCEED ONE 
MILLION PESOS (Pl,OOO,OOO.OO); 
56 


1 
"6. A FINE IN AN AMOUNT EQUAL TO THE APPRAISED VALUE PLUS 
2 
FIFTY PERCENT (50%) THEREOF AND 
LIFE IMPRISONMENT, IF THE 
3 
APPRAISED VALUE, TO BE DETERMINED IN THE MANNER PRESCRIBED 
4 
UNDER THIS CODE, INCLUDING DUTIES AND TAXES, OF THE A~TICLE 
5 
UNLAWFULLY IMPORTED EXCEEDS ONE MILLION PESOS (Pl,OOO,OOO.OO); 
6 
"7. The penalty of prision mayor TO RECLUSION TEMPORAL shall be 
7 
imposed when the crime of serious physical injuries shall have been committed 
8 
and the penalty of reclusion perpetua to death shall be imposed when the crime of 
9 
homicide shall have been committed by reason or on the occasion of the 
10 
unlawful importation. 
11 
"In applying the above scale of penalties, if the offender is an alien and the 
12 
prescribed penalty is not death, he shall be deported after serving the sentence 
13 
without further proceedings for deportation. If the offender is a government 
14 
official or employee, the penalty shall be a maximum as hereinabove prescribed 
15 
and the offender shall suffer an additional penalty of perpetual disqualification 
16 
from public office, to vote and to participate in any public election. HE SHALL 
17 
ALSO LOSE ALL THE BENEFITS DUE HIM AS A RESULT OF HIS SERVICE IN 
18 
THE GOVERNMENT, INCLUDING THE FORFEITURE OF HIS SEPARATION 
19 
AND RETIREMENT BENEFITS. 
20 
"When, upon trial for violation of this section, the defendant is shown to 
21 
have had possession of the article in question, possession shall be deemed 
22 
sufficient evidencEC to authorize conviction unless the defendant shall exrllain the 
23 
possession to the satisfaction of the court: Provided, however, That payme~t of the 
24 
tax due after apprehension shall not constitute a valid defense in any 
25 
prosecution under this section." 
57 


1 
SEC. 54. Section 3602 of the Tariff and Customs Code of the Philippines, as amended, 
2 is hereby further amended to read as follows: 
3 
"SEC. 3602. 
Various Fraudulent Practices Against Customs Revenue. - Any 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
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 vahle, 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, I record, 
J 
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 
58 


1 
UNLAWFULLY 
IMPORTED 
DOES 
NOT 
EXCEED 
ONE 
HUNDRED 
I 
2 
THOUSAND PESOS (PIOO,OOO.OO); 
3 
"2. A FINE OF NOT LESS THAN FIVE HUNDRED THOUSAND PESOS 
4 
(P500,OOO.OO) NOR MORE THAN EIGHT HUNDRED THOUSAND PESOS 
5 
(P800,OOO.OO) 
AND IMPRISONMENT OF PRISION MAYOR, 
IF THE 
6 
DIFFERENCE BETWEEN THE VALUE, WEIGHT, MEASUREMENT OR 
7 
QUANTITY DECLARED IN THE ENTRY AND THE TRUE AND ACTUAL 
8 
VALUE, WEIGHT, QUANTITY OR MEASUREMENT OF THE ARTICLE 
9 
UNLAWFULLY IMPORTED EXCEEDS ONE HUNDRED THOUSAND PESOS 
10 
(PIOO,OOO.OO) BUT DOES NOT EXCEED ONE MILLION PESOS (PI,OOO,OOO.OO); 
11 
"3. A FINE OF NOT LESS THAN EIGHT HUNDRED THOUSAND PESOS 
12 
(P800,OOO.OO) NOR MORE THAN ONE MILLION PESOS (PI,OOO,OOO.OO) AND 
13 
IMPRISONMENT OF RECLUSION TEMPORAL, IF THE DIFFERENCE 
14 
BETWEEN THE VALUE, WEIGHT, MEASUREMENT OR QUANTITY 
15 
DECLARED IN. THE ENTRY AND THE TRUE AND ACTUAL VALUE, 
16 
WEIGHT, QUANTITY OR MEASUREMENT OF THE ARTICLE UNLAWFULLY 
. 
17 
IMPORTED EXCEEDS ONE MILLION PESOS (PI,OOO,OOO.OO) BUT DOES NOT 
18 
EXCEED FIVE MILLION PESOS (P5,OOO,OOO.OO); 
19 
"4. A FINE OF NOT LESS THAN ONE MILLION PESOS (PI,OOq,OOO.OO) 
, 
I 
20 
NOR . MORE 
THAN 
TWO 
MILLION 
PESOS 
(P2,OOO,OOO.OO) I AND 
21 
IMPRISONMENT OF RECLUSION PERPETUA, IF THE DIFFERENCE 
22 
BETWEEN THE VALUE, WEIGHT, MEASUREMENT OR QUANTITY 
23 
DECLARED IN THE ENTRY AND THE TRUE AND ACTUAL VALUE, 
24 
WEIGHT, QUANTITY OR MEASUREMENT OF THE ARTICLE UNLAWFULLY 
25 
IMPORTED EXCEEDS FIVE MILLION PESOS (P5,OOO,OOO.OO). 
59 


1 
"IN APPLYING THE ABOVE SCALE OF PENALTIES, IF THE OFFENDER 
2 
IS AN ALIEN, HE SHALL BE DEPORTED AFTER SERVING THE SENTENCE 
3 
WITHOUT FURTHER PROCEEDINGS FOR DEPORTATION. 
IF THE 
4 
OFFENDER IS A GOVERNMENT OFFICIAL OR EMPLOYEE, THE PENALTY 
5 
IN ITS MAXIMUM PERIOD SHALL BE IMPOSED IN ADDITION TO THE 
6 
PENALTY OF PERPETUAL DISQUALIFICATION FROM PUBLIC OFFICE, TO 
7 
VOTE AND TO PARTICIPATE IN ANY PUBLIC ELECTION. 
IF THE 
8 
OFFENDER FAILS TO PAY THE FINE, HE SHALL SUFFER SUBSIDIARY 
9 
IMPRISONMENT. HE SHALL ALSO LOSE ALL THE BENEFITS DUE IfIIM AS 
. 
. 
10 
A RESULT OF HIS SERVICE IN THE GOVERNMENT, INCLUDING THE 
11 
FORFEITURE OF HIS SEPARATION AND RETIREMENT BENEFITS." 
12 
SEC. 55. Section 3603 of the Tariff and Customs Code of the Philippines, as amended, 
13 is hereby further amended to read as follows: 
14 
"SEC. 3603.. Failure to Report Fraud. - Any master, pilot in command or other 
15 
officer, owner or agent of any vessel or aircraft trading with or within the 
16 
Philippines and any employee of the Bureau of Customs who, having 
17 
cognizance of any fraud on the customs revenue, shall fail to report all 
18 
information relative thereto to the Collector as by law required, shall be 
19 
punished by a fine of not [more] LESS than [five] ONE HUNDRED thousand 
20 
pesos (PIOO,OOO.OO) 
BUT NOT MORE THAN ONE MILLION PESOS 
21 
(PI,OOO,OOO.OO) and imprisonment [for] OF not [more] LESS than .[one] EIGHT 
22 
yearS BUT NOT MORE THAN TWELVE YEARS. If the offender is an alien, he 
23 
shall be deported after serving the sentence. If the offender is a public official or 
24 
employee, he shall suffer additional penalty of perpetual disqualification to hold 
25 
public office, to vote and to participate in any election. HE SHALL ALSO LOSE 
60 


1 
ALL THE BENEFITS DUE HIM AS A RESULT OF HIS SERVICE IN THE 
2 
GOVERNMENT, INCLUDING THE FORFEITURE OF HIS SEPARATION AND 
3 
RETIREMENT BENEFITS." 
4 
SEC. 56. 
Section 3604 of tlle Tariff and Customs Code of the Philippines, as 
5 amended, is hereby further amended to read as follows: 
6 
"SEC. 3604. Statutory Offenses of Officials and Employees. - Every official, agent 
7 
or employee of the Bureau or any agency of the government charged with the 
8 
enforcement of the provisions of this Code, who is guilty of any delinquency 
, ' 
9 
herein below indicated shall be punished with a fine of not less than [five] ONE 
10 
HUNDRED thousand pesos (PlOO,OOO.OO) [nor] BUT NOT more than [Fifty 
11 
thousand] ONE MILLION pesos (Pl,OOO,OOO.OO) and imprisonment [for] OF not 
12 
less than [one] EIGHT yearS [nor] BUT NOT more than [ten] TWELVE years and 
13 
perpetual disqualification to hold public office, to vote and to participate in any 
14 
public office election. HE SHALL ALSO LOSE ALL THE BENEFITS DUE HIM 
15 
AS A RESULT OF HIS SERVICE IN THE GOVERNMENT, INCLUDING THE 
16 
FORFEITURE OF HIS SEPARATION AND RETIREMENT BENEFITS: 
17 
"(a) Those guilty of extortion or willful oppression under color of law) 
I 
18 
"(b) 
Those, who knowingly demand other or greater sums than are 
19 
authorized by law or receive any fee, compensation, or reward except as by law 
20 
prescribed, for the performance of any duty; 
21 
"(c) Those who willfully neglect to, give receipts, as required by law for any 
22 
sum collection in the performance of duty, or who willfully neglect to perform 
23 
any of the duties enjc;>ined by law; 
24 
"(d) Those who conspire or collude with another or others to defraud the 
25 
customs revenue or otherwise violate the law; 
61 


1 
"(e) Those who willfully make opportunity for any person to defraud the 
2 
customs revenue or who do or fail to do any act with intent to enable any person 
3 
to defraud said revenue; 
4 
"(f) Those who negligently or designedly permit the violation-of the law by 
5 
any other person; 
6 
"(g) Those who make or sign any false entry or entries in any book, or make 
, 
I 
7 
or sign any false certificate or return in any case where the law requires the 
" 
I 
8 
making by them of such entry, certificate or return; 
9 
"(h) Those who, having knowledge or information of a violation of the Tariff 
10 
and Customs Law or any fraud committed on the revenue collectible by the 
11 
Bureau, fail to report such knowledge or information to their superior official or 
12 
to report as otherwise required by law; 
13 
"(i) Those who, without the authority of law, demand or accept or attempt to 
14 
collect directly or indirectly as payment of otherwise, any sum of money or other 
15 
thing of value for the compromise, adjustment, or settlement of any charge or 
16 
complaint for any violation or alleged violation of law; or 
17 
"(j) Those who, without authority of law, disclose confidential information 
18 
gained during any investigation or audit, or use such information for personal 
19 
gain or to the detriment of the government, the Bureau or third parties" (R.A. 
20 
9135, April 27, 2001) , 
21 
SEC. 57. 
Section 3605 of the Tariff and Customs Code of the Philippines, as 
22 amended, is hereby further' amended to read as follows: 
23 
"SEC. 3605. Concealment or Destruction of Evidence of Fraud, - Any person who 
24 
willfully conceals or destroys any invoice, book or paper relating to any article 
, 
I 
liable to duty after an iilspection thereof has been demanded by the Collector of 
, 
I 
25 
62 


I 
any collection district or at any time conceals or destroys any such invoice, book 
2 
or paper for the purpose of suppressing any evidence of fraud therein contained, 
3 
shall be punished with a fine of not [more] LESS than [five] ONE HUNDRED 
4 . 
thousand pesos (PlOO,OOO.OO) BUT NOT MORE THAN ONE MILLION PESOS 
5 
(Pl,OOO,OOO.OO) and imprisonment [for] OF NOT LESS THAN EIGHT YEARS 
6 
BUT not more than [two] TWELVE years." 
7 
SEC. 58. 
Section 3606 of the Tariff and Customs Code of the Philippines, as amended, 
8 is hereby further amended to read as follows: 
9 
"SEC. 3606. Affixing Seals. - Any person who, without authority affixes or 
10 
attaches a customs seal; fastening, or mark or any seal, fastening or mark 
II 
purporting to be a customs seal, fastening or mark to any vessel, vehicle on land, 
12 
sea or air, warehouse, or package, shall be punished with a fine of not LESS 
13 
THAN ONE HUNDRED THOUSAND PESOS (PlOO,OOO.OO) BUT NOT more 
14 
than [twenty th~usand] ONE MILLION pesos (Pl,OOO,Ooo.OO) [01 AND 
15 
imprisonment of not [more] LESS than [five] EIGHT years[, or both] BWT NOT 
16 
MORE THAN TWELVE YEARS. If the offender is an alien, he shall be deported 
17 
after serving the sentence. If he is a public official or employee, he shall suffer an 
18 
additional penalty ~f perpetual disqualification to hold public office, to vote and 
19 
participate in any election. HE SHALL ALSO LOSE ALL THE BENEFITS DUE 
20 
HIM AS A RESULT OF HIS SERVICE IN THE GOVERNMENT, INCLUDING 
21 
THE FORFEITURE OF HIS SEPARATION AND RETIREMENT BENEFITS." 
22 
SEC. 59. 
Section 3610 of the Tariff and Customs Code of the Philippines, as 
23 amended, is hereby further amended to read as follows: 
24 
"SEC. 3610. Failure to Keep Importation Records and Give Full Access to Customs 
25 
Officers. - Any person who fails to keep all the records of importations and/ or 
63 


1 
books of accounts, business and computer systems and all custoIIlS commercial 
2 
data in the manner prescribed in Part 2, Section 3514 of this Title shall be 
3 
punished with a fine of not less than [One] TWO hundred thousand pesos (P 
4 
[1]200,000.00) but. not more than [Two] FIVE hundred thousand pbos (P 
5 
[2]500,000.00) -and[/or] imprisonment of not less than [two] FOUR ([2]~) years 
6 
and one day but not more than [six] EIGHT ([6]8) years. This penalty shall 
7 
likewise be imposed against importers/brokers who deny an authorized 
8 
customs officer full and free access to such records, books of accounts, business 
9 
and computer systems, and all customs commercial data including payment 
10 
records. This is withbut prejudice to the administrative sanctions that the Bureau 
11 
of Customs may impose against contumacious importers under existing laws 
12 
and regulations including the authority to hold delivery or release of their 
13 
imported articles." 
14 
SEC. 60. Section 3612' of the Tariff and Customs Code of the Philippines, as amended, 
15 is hereby further amended' to read as follows: 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
"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 (P~O,OOO.OO) BUT 
NOT more than one HUNDRED thousand pesos (P100,OOO.OO) [or] AND by 
imprisonment for not LESS THAN TWO YEARS AND ONE DAY BUT NOT 
more than [one] fIVE yearS[, or both]. If the offender is an alien, he khall be 
. 
I 
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. HE SHALL ALSO LOSE ALL 
64 


1 
THE BENEFITS DUE HIM AS A RESULT OF HIS SERVICE IN THE 
2 
GOVERNMENT, INCLUDING THE FORFEITURE OF HIS SEPARATION AND 
3 
RETIREMENT BENEFITS." 
4 
SEC. 61. A new section to be known as Section 3613 is hereby inserted to the Tariff 
5 and Customs Cqde of the Philippines, as amended, to read as follows: 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
"SEC. 3613. SUMMARY PROCEDURE FOR SEIZURE AND FORFEITURE. -
NOTWITHSTANDING THE PROVISIONS OF TITLE VI OF THIS CODE, 
ARTICLES WHICH ARE FRAUDULENTLY IMPORTED OR BROUGHT INTO 
THE 
PHILIPPINES 
WITHOUT 
BEING 
ENTERED 
THROUGH 
THE 
CUSTOMSHOUSE, OR WITHOUT PAYMENT OF THE CORRECT AND 
APPLICABLE 
DUTIES, 
TAXES, 
FEES 
AND 
CHARGES 
SHALL 
BE 
SUMMARILY SEIZED AND FORFEITED IN FAVOR OF THE GOVER~MENT· 
I 
WHEN WARRANTED OR DETERMINED IN THE SEIZURE PROCEEDINGS. 
SUBJECT TO THE PROVISIONS OF SECTIONS 2530 AND 2531 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. 
65 


1 
"THE OWNER OR OPERATOR OF ANY SEIZED VESSEL OR AIRCRAFT 
i 
2 
UNDER THIS SECTION SHALL BE BLACKLISTED FROM OPER,ATING 
3 
AND/OR FROM ENGAGING IN TRADE IN THE PHILIPPINES." 
4 
SEC. 
62. 
Transitory Provision. - All existing customs bonded warehouses 
5 established under Section 1901 of the Tariff and Customs Code of the Philippines, as amended, 
6 shall have one year from approval of the law to convert themselves to manufacturing customs 
7 bonded warehouses under Section 2001 of the Code or register themselves in special economic 
8 zones or freeports. After the lapse of the one year period, any importation by these customs 
9 bonded warehouses shall be treated as regular importations to be covered by ordinary 
10 consumption entries only, unless such customs bonded warehouse in the meantime has 
11 transferred to a special economic zone or PEZA zone, which in such case the said importation 
12 shall be treated as a PEZA shipment. 
13 
SEC. 63. Separability Clause. - If any provision of this Act is subsequently declared 
14 unconstitutional, the validity of the remaining provisions hereof shall remain in full force and 
15 effect. 
16 
SEC. 64. 
Rules and Regulations. - The Secretary of Finance shall, upon the 
17 recommendation of the Commissioner of Customs and meaningful consultation of the local 
18 industry, promulgate the necessary rules and regulations for the effective implementation of 
19 this Act. 
20 
SEC. 65. 
Repealing Clause. -
All laws, decrees, executive orfers, rules and 
21 regulations and other issuances or parts thereof which are inconsistent with this Act are 
22 hereby repealed or modified accordingly. 
23 
The proviSion of this Act, not those of Republic Act No. 2338, shall govern the giving of 
24 reward cases covered by the former. 
66 


1 
SEC. 66. Effectivity; - This Act shall take effect fifteen (15) days after its publication 
2 in any two,(2) newspapers of general circulation, 
Approved, 
67