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SIXTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
Third Regular Session 
) 
'\5 
SEP 28 P 1 :2 
SENATE 
S. No . .....21)68 
(in substitution of SB Nos. 168,442,456,741,882,2348,2373 and 2913 
taking into consideration P.S. Res. Nos. 444,1339,1533,1534,1536,1537, 
1538,1539,1549 and 1581) 
Prepared by the Committee on Ways and Means with Senators Osmefia III, 
Escudero, Recto, Ejercito-Estrada, Poe, Aquino IV, Defensor-Santiago, A.P. 
Cayetano, Binay, JV Ejercito and Angara as authors 
AN ACT 
MODERNIZING THE CUSTOMS AND TARIFF ADMINISTRATION 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 100. 
TITLE I 
PRELIMINARY PROVISIONS 
CHAPTER 1 
SHORT TITLE 
Short Title. 
-
This Act shall be known as the 
6 
"Customs Modernization and Tariff Act (CMTA)." 
7 
CHAPTER 2 
8 
GENERAL AND COMMON PROVISIONS 
9 
SEC. 101. 
Declaration of Policy. - It is hereby declared the policy of 
10 
the State to protect and enhance government revenue, institute fair and 
11 
transparent customs and tariff management that will efficiently facilitate 
12 
international trade, protect and enhance government revenue, prevent and curtail 
13 
any form of customs fraud and illegal acts, and modernize customs and tariff 
14 
administration. Towards this end, the State shall: 
15 
(a) Develop and implement programs for the continuous enhancement of 
16 
customs systems and processes that will harmonize customs procedures; 


(b) Adopt clear and transparent customs rules, regulations, policies and 
2 
procedures, consistent with international standards and customs best practices; 
3 
(c) Establish a regime of transparency of and accessibility to customs 
4 
information, customs laws, rules, regulations, administrative policies, procedures 
5 
and practices, in order to ensure informed, and diligent compliance with customs 
6 
practices and procedures by stakeholders; 
7 
(d) Consult, coordinate and cooperate with other government agencies 
8 
and the private sector in implementing and developing customs policy; 
9 
(e) Provide a fair and expeditious administrative and judicial appellate 
10 
remedy for customs related grievances and matters; 
11 
(f) Employ modern practices in customs administration and utilize 
12 
information and communications technology in the implementation of customs 
13 
functions; and 
14 
g) Reform Tax Administration by hiring and maintaining competent and 
IS 
professional customs officials and personnel to enforce the Customs and Tariff 
16 
Law. 
17 
SEC. 102. 
Definition of Terms. - As used in this Act: 
18 
(a) Abatement refers to the reduction or diminution, in whole or in part, of 
19 
duties and taxes where payment has not been made. 
20 
(b) Actual or Outright Exportation refers to the customs procedure 
21 
applicable to goods which, being in free circulation, leave the Philippine territory 
22 
and are intended to remain permanently outside it; 
23 
(c) Admission refers to the act of bringing imported goods directly or 
24 
through transit into a free zone; 
25 
(d) Airway Bill (AWB) refers to a transport document for airfreight used by 
26 
airlines and international freight forwarders which specify the holder or consignee 
27 
of the bill who has the right to claim delivery of the goods when they arrive at the 
28 
port of destination. It is a contract of carriage that includes carrier conditions, 
29 
such as limits of liability and claims procedures. In addition, it contains transport 
2 


instructions to airlines and carriers, a description of the goods, and applicable 
2 
transportation charges; 
3 
(e) Appeal refers to the remedy by which a person who is aggrieved or 
4 
adversely affected by any action, decision, order, or omission of the Bureau, 
5 
seeks redress before the Bureau, the Secretary of Finance, or competent court, 
6 
as the case may be; 
7 
(f) Assessment refers to the process of determining the amount of duties 
8 
and taxes and other charges due on imported and exported goods; 
9 
(g) Authorized Economic Operator (AEO) refers to the importer, exporter, 
10 
customs broker, forwarder, freight forwarder, transport provider, and any other 
II 
entity duly accredited by the Bureau based on the World Customs Organization 
12 
(WCO) Framework of Standards to Secure and Facilitate Global Trade, the 
13 
Revised Kyoto Convention (RKC), the WCO Supply Chain Management 
14 
Guidelines and the various national best practices to promote trade facilitation 
15 
and to provide a seamless movement of goods across borders through secure 
16 
international trade supply chains with the use of risk management and modern 
17 
technology; 
18 
(h) Bill of Lading (BIL) refers to a transport document issued by shipping 
19 
lines, carriers and international freight forwarders or non-vessel operating 
20 
common carrier for water-borne freight. The holder or consignee of the bill has 
21 
the right to claim delivery of the goods at the port of destination. It is a contract 
22 
of carriage that includes carrier conditions, such as limits of liability and claims 
23 
procedures. In addition, it contains transport instructions to shipping lines and 
24 
carriers, a description of the goods, and applicable transportation charges; 
25 
(i) Bureau refers to the Bureau of Customs; 
26 
(j) Carrier refers to the person actually transporting goods or in charge of 
27 
or responsible for the operation of the means of transport such as airlines, 
28 
shipping lines, freight forwarders, cargo consolidators, non-vessel operating 
29 
common carriers and other international transport operators; 
3 


(k) Clearance refers to the completion of customs and other govemment 
2 
formalities necessary to allow goods to enter for consumption, warehousing, 
3 
transit or transshipment, or to be exported or placed under another customs 
4 
procedure; 
5 
(I) Commission refers to the Tariff Commission. 
6 
(m)Conditional Importation refers to the customs procedure known under 
7 
the Revised Kyoto Convention (RKC) as temporary admission in which certain 
8 
goods can be brought into a customs territory conditionally relieved totally or 
9 
partially from payment of import duties and taxes; such goods must be imported 
10 
for a specific purpose and must be intended for re-exportation within a specified 
11 
period and without having undergone any change except normal depreciation 
12 
due to the use made of them. 
13 
(n) Constructive Import or Export refers to the movement of imported or 
14 
exported goods to and from a free zone and customs territory; 
15 
(0) Customs Broker refers to any person who is a bona fide holder of a 
16 
valid Certificate of Registration/Professional Identification Card issued by the 
17 
Professional Regulatory Board and Professional Regulation Commission 
18 
pursuant to Republic Act No. 9280, otherwise known as the "Customs Broker Act 
19 
of 2004;" 
20 
(p) Customs Office refers to any customs administrative unit that is 
21 
competent and authorized to perform all or any of the functions enumerated 
22 
under customs and tariff laws; 
23 
(q) Customs Officer, as distinguished from a clerk or employee, refers to a 
24 
person whose duty, not being clerical or manual in nature, involves the exercise 
25 
of discretion in performing the function of the Bureau. It mayalso refer to an 
26 
employee authorized to perform a specific function of the Bureau as provided in 
27 
this Act; 
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(r) Customs Territory refers to areas in the Philippines where customs 
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and tariff laws may be enforced. 
4 


(s) Entry refers to the act, documentation and process of bringing 
2 
imported goods into the customs territory, including goods coming from free 
3 
zones; 
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(t) Export Declaration refers to the act, documentation, and process of 
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bringing goods out of Philippine territory; 
6 
(u) Flexible 
Clause 
refers 
to the 
power of the 
President upon 
7 
recommendation of the NEDA (1) to increase, reduce or remove existing 
8 
protective tariff rates of import duty, but in no case be higher than 100% ad 
9 
valorem, (2) to establish import quota or to ban importation of any commodity as 
10 
maybe necessary, (3) to impose additional duty on all import not exceeding 10% 
11 
ad valorem whenever necessary. 
12 
(v) Foreign Exporter refers to one whose name appears on documentation 
13 
attesting to the export of the product to the Philippines regardless of the 
14 
manufacturer's name in the invoice. 
15 
(w)Free Zone refers to special economic zones registered with the 
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Philippine Economic Zone Authority (PEZA) under Republic Act No. 7916, as 
17 
amended, duly chartered or legislated freeports Special Economic Zones and 
18 
Freeports such as Clark Freeport Zone, Poro Point Freeport Zone, John Hay 
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Special Economic Zone and Subic Bay Freeport Zone under Republic Act No. 
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7227 as amended by Republic Act No. 9400, the Aurora Special Economic Zone 
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under Republic Act No. 9490, the Cagayan Special Economic Zone and Freeport 
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under Republic Act No. 7922, the Zamboanga City Special Economic Zone 
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under Republic Act No. 7903, and Freeport Area of Bataan under Republic Act 
24 
No. 9728 and such other freeports as established or maybe created by law; 
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(x) Goods refer to articles, wares, merchandise and any other items which 
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are subject of importation or exportation; 
27 
(y) Goods declaration refers to a statement made in the manner 
28 
prescribed by the Bureau and other appropriate agencies, by which the persons 
29 
concerned indicates the procedure to be observed in the application for the entry 
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or admission of imported or exported goods and the particulars of which the 
2 
customs administration shall require; 
3 
(z) Importation refers to the act of bringing in of goods from a foreign 
4 
territory into Philippine territory, whether for consumption, warehousing, or 
5 
admission as defined in this Act. 
6 
(aa) Freight Forwarder refers to a local entity that acts as a cargo 
7 
intermediary and facilitates transport of goods on behalf of its client without 
8 
assuming the role of a carrier, which can also perform other forwarding services, 
9 
such as booking cargo space, negotiating freight rates, preparing documents, 
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advancing 
freight 
payments, 
providing 
packing/crating, 
trucking 
and 
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warehousing, engaging as an agent/representative of a foreign non-vessel 
12 
operating as a common carrier/cargo consolidator named in a master bill of 
13 
lading as consignee of a consolidated shipment, and other related undertakings. 
14 
(bb) Jurisdictional Waters refers to the power and rights of the Bureau of 
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Customs in exercising supervision and police authority over all seas within the 
16 
jurisdiction of the Philippine territory and over all coasts, ports, airports, harbors, 
17 
bays, rivers and inland waters whether navigable or not from the sea. 
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(cc) Lodgement refers to the registration of a goods declaration with the 
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Bureau; 
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(dd) Non-Vessel Operating Common Carrier (NVOCC) refers to an entity, 
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which mayor may nol own or operate a vessel that provides a point-Io-point 
22 
service which may include several modes of transport and/or undertakes group 
23 
age of less container load (LCL) shipments and issues the corresponding 
24 
transport document; 
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(ee) Outright Smuggling refers to an act of importing goods into the 
26 
country without complete customs prescribed importation documents, or without 
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being cleared by customs or other regulatory government agencies, for the 
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purpose of evading payment of prescribed taxes, duties and other government 
29 
charges. 
6 


(ff) Perishable Goods refers to goods liable to perish or goods that 
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depreciate greatly in value while stored or which cannot be kept without great 
3 
disproportionate expense, which may be proceeded to, advertised and sold at 
4 
auction upon notice if deemed reasonable; 
5 
(gg) Port of Entry refers to a domestic port open to both domestic and 
6 
international trade, including principal ports of entry and subports of entry. A 
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principal port of entry is the chief port of entry of the Customs District wherein it is 
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situated and is the permanent station of the District Officer of such port. Subports 
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of entry are under the administrative jurisdiction of the District Officer of the 
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principal port of entry of the Customs District. Port of entry as used in this Act 
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shall include airport of entry; 
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(hh) Port of Discharge, also called port of unloading, refers to a place 
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where a vessel, ship, aircraft or train unloads its shipments, from where they will 
14 
be dispatched to their respective consignees; 
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(ii) Re-exportation means exportation of goods which have been imported; 
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(jj) Release of goods refers to the action by the Bureau to permit goods 
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undergoing clearance to be placed at the disposal of the party concerned; 
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(kk) Refund refers to the return, in whole or in part, of duties and taxes 
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paid on goods; 
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(II) Security refers to any form of guaranty, such as a surety bond, cash 
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bond, standby letter of credit or irrevocable letter of credit, which ensures the 
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satisfaction of an obligation to the Bureau; 
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(mm) Smuggling refers to the fraudulent act of importing any goods into 
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the Philippines, or the act of assisting in receiving, concealing, buying, selling, 
25 
disposing or transporting such goods, with full knowledge that the same has 
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been fraudulently imported, or the fraudulent exportation of goods. Goods 
27 
referred to under this definition shall be known as smuggled goods; 
7 


(nn) Taxes refer to all taxes, fees and charges imposed under this Act and 
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the National Internal Revenue Code (NIRC), as amended, and collected by the 
3 
Bureau; 
4 
(00) Technical Smuggling refers to the act of importing goods into the 
5 
country by means of fraudulent, falsified or erroneous declaration of the goods to 
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its nature, kind, quality, quantity or weight, for the purpose of reducing or 
7 
avoiding payment of prescribed taxes, duties and other charges; 
8 
(pp) Tentative Release refers to a case where the assessment is disputed 
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and pending review importer may put up a cash bond equivalent to the duties 
10 
and taxes and obtain release of the goods. 
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(qq) Transit refers to the customs procedure under which goods, in its 
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original form, are transported under customs control from one customs office to 
13 
another, or to a free zone; 
14 
(rr) Transshipment refers to the customs procedure under which goods 
15 
are transferred under customs control from the importing means of transport to 
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the exporting means of transport within the area of one Customs office, which is 
17 
the office of both importation and exportation; 
18 
(ss) Travelers refers to any person who temporarily enters the territory of 
19 
a country in which he or she does not normally resides (non-resident), or who 
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leaves that territory, 
and any person who leaves the territory of a country in 
21 
which he or she normally resides (departing resident) or who returns to that 
22 
territory (returning resident); 
23 
(U) Third Party refers to any person who deals directly with the Bureau, for 
24 
and on behalf of another person, relating to the importation, exportation, 
25 
movement or storage of goods. 
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SEC. 103. 
When Importation Begins and Deemed Terminated. -
27 
Importation begins when the carrying vessel or aircraft enters the Philippine 
28 
territory with the intention to unload therein. Importation is deemed terminated 
29 
when: 
8 


· (a) 
the duties, taxes and other charges due upon the goods have been 
2 
paid or secured to be paid at the port of entry unless the goods are free from 
3 
duties, taxes and other charges and legal permit for withdrawal has been 
4 
granted; or 
5 
(b) 
in case 
the goods are deemed free of duties, taxes and other 
6 
charges, the goods have legally left the jurisdiction of the Bureau. 
7 
SEC. 104. When Duty and Tax is Due on Imported Goods. - Except as 
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otherwise provided for in this Act or in other laws, all goods, when imported into 
9 
the Philippines, shall be subject to duty upon importation, including goods 
10 
previously exported from the Philippines. 
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Duties, taxes and other charges shall be paid prior to release of goods 
12 
from customs custody which shall not in any case exceed fifteen (15) days from 
13 
receipt of notice of final assessment. In case of withdrawal from the free zone of 
14 
goods intended for consumption in the customs territory, duties, taxes, and other 
15 
charges shall be paid prior to entry of the goods into the customs territory. In the 
16 
case of highly compliant and low-risk importers or exporters, the Bureau may 
17 
allow the deferred payment of duties and taxes for a period of not less than 
18 
fourteen (14) days but not exceeding thirty (30) days. The government or any of 
19 
its instrumentalities or agencies may avail of the deferred payment system for its 
20 
importations, subject to the terms and conditions specified by the corresponding 
21 
rules and regulation to be jointly issued by the Department of Finance (DOF) and 
22 
the Department of Budget and Management (DBM). 
23 
Unpaid duties, taxes and other charges, shall incur legal interest of twenty 
24 
percent (20%) per annum computed from the date of final assessment under 
25 
Section 429, when payment becomes due and demandable. The legal interest 
26 
shall likewise accrue on any fine or penalty imposed. 
27 
Upon payment of the duties, taxes and other charges, the Bureau shall 
28 
issue the necessary receipt or document as proof of such payrnent. 
9 


In case of deferred payment, the Bureau may initiate legal action for the 
2 
collection of unpaid duties, taxes and other charges within three (3) years from 
3 
its due date. 
4 
SEC. 105. 
Effective Date of Rate of Import Duty. - Imported goods 
5 
shall be subject to the import duty rates under the applicable tariff heading that 
6 
are effective at the date of importation or upon withdrawal from the warehouse 
7 
for consumption. In case of withdrawal from free zones for introduction to the 
8 
customs territory, the duty rate at the time of withdrawal shall be applicable on 
9 
the goods originally admitted, whether withdrawn in its original or advanced form. 
10 
In case of goods sold at customs public auction, the duty rates at the date 
11 
of the auction shall apply for purposes of implementing Section 1142 (a). 
12 
SEC. 106. Declarant. - A declarant may be a consignee or a person who 
13 
has the right to dispose of the goods. The declarant shall lodge a goods 
14 
declaration with the Bureau and may be: 
15 
(a) the importer, being the holder of the bill of lading; or 
16 
(b) the exporter, being the owner of the goods to be shipped out; or 
17 
(c) a customs broker acting under the authority of the importer or from a 
18 
holder of the bill. 
19 
In case the consignee or the person who has the right to dispose of the 
20 
goods is a juridical person, it may authorize a responsible officer of the company 
21 
to sign the goods declaration as declarant in its behalf. 
22 
The import declarations submitted to the Bureau shall be processed by 
23 
the declarant or by a licensed customs broker: Provided, That in case of export, 
24 
the export declaration shall be signed by the exporter or, at his option, delegate 
25 
the signing and processing of the document to his designated customs broker or 
26 
authorized representative as provided in RA 9280, as amended. 
27 
SEC. 107. Rights and Responsibilities of the Declarant. -
The 
28 
declarant shall be responsible for the accuracy of the goods declaration and for 
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the payment of all duties, taxes, and other charges due on the imported goods. 
\0 


The licensed customs broker shall likewise be responsible for the accuracy of the 
2 
goods declaration but shall not be responsible for the payment of duties, taxes 
3 
and other charges due on the imported goods. 
4 
The declarant shall sign the goods declaration, even when aSSisted by a 
5 
licensed customs broker, who shall likewise sign the goods declaration. 
6 
SEC. 108. 
Penalties for Errors in Goods Declaration. - The Bureau 
7 
shall not impose substantial penalties for errors when such errors are inadvertent 
8 
and there was no fraudulent intent or gross negligence in the Commission 
9 
thereof: Provided, That, in order to discourage repetition of such errors, a penalty 
10 
may be imposed but shall not be excessive. 
11 
SEC. 109. 
Application 
of 
Information 
and 
Communications 
12 
Technology. -
In accordance with international standards, the Bureau shall 
13 
utilize information and communications technology to enhance customs control 
14 
and to support a cost-effective and efficient customs operations geared towards 
15 
a paperless customs environment. 
16 
The security of date and communication shall be in a manner that is 
17 
consistent with applicable local and internationally accepted standards on 
18 
information security. 
19 
The Bureau shall likewise include as part of its systems and processes, a 
20 
disaster preparedness and recovery plan to ensure business continuity by 
21 
maintaining its uptime goal for its electronic and online services. 
22 
For purposes of customs procedures, electronic documents, permits, 
23 
licenses or certificates shall be acceptable and shall have the legal effect, validity 
24 
or enforceability as any other document or legal writing: Provided, That when the 
25 
prescribed requirements are duly complied with, the Bureau shall: 
26 
(a) recognize the authenticity and reliability of electronic documents; 
27 
(b) submit approval in the form of electronic date messages or electronic 
28 
documents; and 
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(c) require a d/or accept payments and issue receipts acknowledging 
2 
such payments thro gh systems using electronic date messages or electronic 
3 
documents. 
4 
The introducti n and implementation of information and communications 
5 
technology shall be undertaken with due consultation with directly affected 
6 
parties and stakehol 
7 
SEC. 110. 
elationship Between the Bureau and Third Parties. 
8 
Parties may transa t business with the Bureau either directly or through a 
9 
designated third part to act on their behalf. 
10 
The customs transactions directly transacted by a party shall not be 
II 
treated less favorabl or be subject to more stringent requirements than those 
12 
transacted through a deSignated third party. 
13 
A designated hird party shall have the same rights and obligations as the 
14 
designating party wh n transacting business with the Bureau. 
15 
Subject to t e provisions of existing laws, treaties, convention and 
16 
international agree ents, the Secretary of Finance shall make the necessary 
17 
guidelines for the de ined relationship of the Bureau and third parties. 
18 
SEC. 111. 
formation of General Application. - All laws, decisions, 
19 
rulings, circulars, m moranda and orders shall be published in accordance with 
20 
law. 
21 
To foster an i formed compliance regime, the Bureau shall ensure that all 
22 
relevant and available information of general application pertaining to customs 
23 
operations and pro edures which are not confidential or intended for the 
24 
Bureau's internal us only, shall be readily accessible to any interested person. 
25 
Any new i formation, 
amendment or changes 
to 
customs 
law, 
26 
administrative proce ures or requirements, shall, as far as practicable, be made 
27 
readily available pri r to its effective date of implementation unless advance 
28 
notice is precluded. 
12 


SEC. 112. 
Information of a Specific Nature. 
-
The Bureau shall 
2 
provide information. not otherwise confidential or for the Bureau's internal use 
3 
only, relating to a specific matter as may be requested by an interested party for 
4 
legitimate use. 
5 
The Bureau may require the payment of a reasonable fee in providing 
6 
such information. the requested information shall be released within reasonable 
7 
time from filing of the request and payment of the fee. 
8 
SEC. 113. Decision and Ruling. - The Bureau shall, consistent with 
9 
Section 1502 of this Act. issue binding and advance decision and ruling at the 
10 
request of an interested party on matters pertaining to importation or exportation 
11 
of goods. 
12 
Upon written request of the interested party, the Bureau shall notify the 
13 
party of its decision in writing within a period specified in this Act or by regulation. 
14 
Should the decision be adverse to the requesting interested party. the reasons 
15 
thereof shall be indicated and the party shall be advised of the party's right of 
16 
appeal. 
17 
The ruling and decision shall be issued by the Bureau within 30 days from 
18 
the submission of the necessary documents and information. 
19 
SEC. 114. 
Right of Appeal, Forms and Ground. 
-
Any party 
20 
adversely affected by a decision or omission of the Bureau pertaining to an 
21 
importation, exportation, or any other legal claim shall have the right of appeal 
22 
within thirty (30) days from receipt of the questioned decision or order. 
23 
An appeal in writing shall be filed within the period prescribed in this Act or 
24 
by regulation and shall specify the grounds thereof. 
25 
The Bureau may allow a reasonable time for the submission of supporting 
26 
evidence to the appeal. 
13 


2 
CHAPTER 3 
TYPES OF IMPORTATION 
3 
SEC. 115. 
Treatment of Importation. 
-
Imported goods shall be 
4 
deemed "entered" in the Philippines for consumption when the goods declaration 
5 
is electronically lodged, together with any required supporting documents, with 
6 
the pertinent customs office. 
7 
SEC. 116. 
Free Importation and Exportation. -
Unless otherwise 
8 
provided by law or regulation, all goods may be freely imported into and exported 
9 
from the Philippines without need for import and export permits, clearances or 
10 
licenses. 
11 
SEC. 117. Regulated Importation and Exportation. - Goods which are 
12 
subject to regulation shall be imported or exported only after securing the 
13 
necessary import or export permits, clearances, licenses, and any other 
14 
requirements, prior to importation or exportation. In case of importation, 
15 
submission of requirements after arrival of the goods but prior to release from 
16 
customs custody, shall only be allowed only in cases provided for by governing 
17 
laws or regulations. 
18 
SEC. 118. 
Prohibited 
Importation 
and 
Exportation. 
The 
19 
importation and exportation of the following goods are prohibited: 
20 
(a) 
Written or printed goods in any form containing any matter 
21 
advocating or inciting treason, rebellion, insurrection, sedition against the 
22 
government of the Philippines, or forcible resistance to any law of the Philippines, 
23 
or written or printed goods containing any threat to take the life of, or inflict bodily 
24 
harm upon any person in the Philippines; 
25 
(b) Goods, instruments, drugs and substances designed, intended or 
26 
adapted for producing unlawfUl abortion, or any printed matter which advertises, 
27 
describes or gives direct or indirect information where, how or by whom unlawful 
28 
abortion is committed; 
14 


(c) Written or printed goods, 
negatives or cinematographic film, 
2 
photographs, engravings, lithographs, objects, paintings, drawings or other 
3 
representation of an obscene or immoral character; 
4 
(d) Any goods manufactured in whole or in part of gold, silver or other 
5 
precious metals or alloys and the stamp, brand or mark does not indicate the 
6 
actual fineness of quality of the metals or alloys; 
7 
(e) Any adulterated or misbranded food or goods for human consumption 
8 
or any adulterated or misbranded drug in violation of relevant laws and 
9 
regulations; 
10 
(f) Infringing goods as defined under the intellectual property code and 
11 
related laws; and 
12 
(g) All other goods or parts thereof, which importation and exportation are 
13 
explicitly prohibited by law or rules and regulations issued by the competent 
14 
authority. 
15 
SEC. 119. Restricted Importation and Exportation. - Except when 
16 
authorized by law or regulation, the importation and exportation of the following 
17 
restricted goods are prohibited: 
18 
(a) Dynamite, gunpowder, ammunitions and other explosives, firearms 
19 
and weapons of war, or parts thereof; 
20 
(b) Roulette wheels, gambling outfits, 
loaded dice, marked cards, 
21 
machines, apparatus or mechanical devices used in gambling or the distribution 
22 
of money, Cigars, Cigarettes or other goods when such distribution is dependent 
23 
on chance, including jackpot and pinball machines or similar contrivances, or 
24 
parts thereof; 
25 
(c) Lottery and sweepstakes tickets, except advertisements thereof and 
26 
lists of drawings therein. 
27 
(d) Marijuana, opium, poppies, coca leaves, heroin or other narcotics or 
28 
synthetic drugs which are or may hereafter be declared habit forming by the 
29 
President of the Philippines, or any compound, manufactured salt, derivative, or 
15 


preparation thereof, except when imported by the government of the Philippines 
2 
or any person duly authorized by the Dangerous Drugs Board, for medicinal 
3 
purposes; 
4 
(e) Opium pipes or parts thereof, of whatever material; and 
5 
(f) Any other goods which importation and exportation are restricted. 
6 
The restriction to import or export the above stated goods shall include the 
7 
restriction on their transshipment. 
8 
CHAPTER 4 
9 
RELIEF CONSIGNMENT 
10 
SEC. 120. 
Relief Consignment. 
-
Goods such as food, medicine, 
11 
equipment and materials for shelter, donated or leased to government institutions 
12 
and accredited private entities for free distribution to or use of victims of 
\3 
calamities shall be treated and entered as relief consignment. 
14 
Upon declaration of a state of calamity, clearance of relief consignment 
15 
shall be a matter of priority and subject to a simplified customs procedure. the 
16 
Bureau shall provide for: 
17 
(a) Lodging of a simplified goods declaration or of a provisional or 
18 
incomplete goods declaration subject to completion of the declaration within a 
19 
specified period; 
20 
(b) Lodging, registering and checking of the goods declaration and 
21 
supporting documents prior to the arrival of the goods, and their release upon 
22 
arrival; 
23 
(c) Clearance beyond the designated hours of business or away from 
24 
customs offices and waiver of any corresponding charges; and 
25 
(d) Examination 
and/or 
sampling 
of 
goods 
only 
in 
exceptional 
26 
circumstances. 
27 
The DOF and the Department of Social Welfare and Development 
28 
(DSWD) shall jointly issue the rules and regulations for the implementation of this 
29 
provision. 
16 


SEC.121. Duty And Tax Treatment. - Relief consignment, as defined in 
2 
Section 120, imported during a state of calamity and intended for a specific 
3 
calamity area for the use of the calamity victims therein, shall be exempt from 
4 
duties and taxes. 
5 
TITLE II 
6 
BUREAU OF CUSTOMS 
7 
CHAPTER 1 
8 
GENERAL ADMINISTRATION 
9 
SEC. 200. 
Chief Officials of the Bureau. 
The Bureau shall be 
10 
headed by a Commissioner and shall be assisted by as many Deputy 
II 
Commissioners as may be necessary. The Commissioner and the Deputy 
12 
Commissioners shall be appointed by the President of the Philippines. 
13 
SEC. 201. 
Powers and Functions of the Commissioner. - The 
14 
Commissioner shall have the following powers and functions: 
15 
(a) Exclusive and original jurisdiction to interpret the provisions of this Act, 
16 
subject to review by the Secretary of Finance; 
17 
(b) Exercise any customs power, duties and functions, directly or 
18 
indirectly; 
19 
(c) Review any action or decision of any customs officer performed 
20 
pursuant to the provisions of this Act; 
21 
(d) Review and decide disputed assessments and other matters related 
22 
thereto, subject to the exclusive appellate jurisdiction of the Court of Tax Appeals 
23 
(CTA); 
24 
(e) Delegate the powers vested under this Act to any subordinate official 
25 
with the rank equivalent to division chief or higher, except for the following 
26 
powers and functions: 
27 
i. Promulgation of rules and regulations; 
28 
ii. Issuance, revocation or modification of rulings; and 
29 
iii. Compromising or abating customs obligations. 
17 


(f) Assign or reassign any customs officer subject to the approval of the 
2 
Secretary of Finance: Provided, That District Officers and other customs officers 
3 
that perform assessment functions shall not remain in the same area of 
4 
assignment for more than three (3) years; and 
5 
(g) Perform all other duties and functions as may be necessary for the 
6 
effective implementation of this Act and other customs related laws. 
7 
SEC. 202. 
Functions of the Bureau. - The Bureau shall exercise the 
8 
following duties and functions: 
9 
(a) Assessment and collection of customs revenues from imported goods 
10 
and other dues, fees, charges, fines and penalties accruing under this Act; 
11 
(b) Simplification and harmonization of customs procedures to facilitate 
12 
movement of goods in international trade; Border control to prevent entry of 
\3 
smuggled goods; 
14 
(c) Prevention and suppression of smuggling and other customs fraud; 
15 
(d) Facilitation and security of international trade and commerce through 
16 
an informed compliance program; 
17 
(e) Supervision and control over the entrance and clearance of vessels 
18 
and aircraft engaged in foreign commerce; 
19 
(f) Supervision and control over the handling of foreign mails arriving in 
20 
the Philippines for the purpose of collecting revenues and prevent the entry of 
21 
contraband; 
22 
(g) Supervision and control on all import and export cargoes, landed or 
23 
stored in piers, airports, terminal facilities, including container yards and freight 
24 
stations; 
25 
(h) Exercise of exclusive original jurisdiction over forfeiture cases under 
26 
this Act; and 
27 
(i) 
Enforcement of this Act and all other laws, rules and regulations 
28 
relating to tariff and customs administration. 
18 


SEC. 203. 
Annual Report of the Commissioner. - The Commissioner 
2 
shall submit to the President, the Congress of the Philippines and the National 
3 
Economic and Development Authority (NEDA) an annual report on the 
4 
performance of the Bureau, on or before March 31 of the following year. 
5 
SEC. 204. 
Promulgation 
of Rules 
and 
Regulations. 
The 
6 
Commissioner, subject to the approval of the Secretary of Finance, shall 
7 
promulgate rules and regulations for the enforcement of this Act. The 
8 
Commissioner shall regularly prepare and publish an updated customs manual, 
9 
and the rules, regulations and decisions of the Bureau. The Commissioner shall 
10 
furnish the Congress of the Philippines, NEDA and the Tariff Commission with 
11 
electronic copies of department orders, administrative orders, circulars, and rules 
12 
and regUlations promulgated pursuant to this Act. 
13 
SEC. 205. 
Copies of Goods Declaration. -The Commissioner shall 
14 
regularly furnish the NEDA, the Philippine Statistics Authority (PSA), the Bureau 
15 
of Internal Revenue (BIR) and the Tariff CommiSSion electronic copies of all 
16 
customs goods declaration processed and cleared by the Bureau. 
17 
Upon request, the Tariff Commission shall have access to, and the right to 
18 
be furnished with copies of liquidated goods declaration and other dOGuments 
19 
supporting the goods declaration as finally filed in the COA. 
20 
For this purpose, the Bureau shall maintain electronic records of goods 
21 
declaration and other documents supporting the declaration 
22 
CHAPTER 2 
23 
CUSTOMS DISTRICTS AND PORTS OF ENTRY 
24 
SEC. 206. Customs Districts. 
-
For administrative purposes, the 
25 
Philippines shall be divided into as many Customs Districts as necessary, the 
26 
respective limits of which may be changed from time to time by the 
27 
Commissioner, with the approval of the Secretary of Finance. 
28 
Each Customs District shall be supervised by one (1) District Officer, 
29 
assisted by as many Deputy District Officers as may be necessary. The choice of 
19 


the location of a District Office, its business hours and the staffing pattern 
2 
thereof, shall be based on the particular requirements of each district. 
3 
SEC. 207. Ports of Entry. 
-
All ports of entry shall be under the 
4 
supervision and control of a Customs District. A District Officer shall be assigned 
5 
in the principal ports of entry while a Deputy District Officer may be assigned in 
6 
other types of ports of entry. 
7 
The principal ports of entry shall be located in Aparri, San Fernando. 
8 
Manila, Manila International Container Port, Ninoy Aquino International Airport, 
9 
Subic, Clark, Batangas, Legaspi, Iloilo, Cebu, Tacloban, Surigao, Cagayan de 
10 
Oro, Zamboanga, Davao, Limay and such other ports created pursuant to this 
11 
Act. 
q 
For the effective enforcement of Bureau functions. sea port and airport 
13 
authorities and private port and airport operators shall provide suitable facilities 
14 
for examination areas and for other customs equipment free of charge. 
15 
SEC. 208. 
Power of the President to Open and Close Any Port. 
16 
Upon the recommendation of the Secretary of Finance, the President may open 
17 
or close any port of entry. Upon closure of a port of entry, the existing personnel 
18 
shall be reassigned by the CommiSSioner, subject to the approval of the 
19 
Secretary of Finance. 
20 
SEC. 209. 
Assignment of Customs Officers and Employees to 
21 
Other Duties. 
The Commissioner, with the approval of the Secretary of 
22 
Finance, may assign any employee of the Bureau to any port, service, division or 
23 
office of the Bureau within the Bureau's staffing pattern or organizational 
24 
structure, or be assigned other duties: Provided, That such assignment shall not 
25 
affect the employees' tenure of office nor result to change of status, demotion in 
26 
rank and/or salary deduction. 
27 
SEC. 210. Duties of the District Officer.-The District Officer shall have 
28 
the following duties in their assigned Customs District: 
29 
(1) ensure entry of all imported goods at the customs office; 
20 


(2) prevent importation and exportation of prohibited goods; 
2 
(3) ensure legal compliance of regulated goods and facilitate the flow of 
3 
legitimate trade; 
4 
(4) value and classify imported goods; 
5 
(5) assess and collect duties, taxes and other charges on imported goods; 
6 
(6) hold and dispose imported goods in accordance with this Act; 
7 
(7) prevent smuggling and other customs fraud; and 
8 
(8) perform other necessary duties that may be assigned by the 
9 
Commissioner for the effective implementation of this Act 
10 
Subject to the supervision and control of the District Officer, the duties and 
11 
functions of the District Officer may be delegated to the Deputy District Officer. 
12 
The Deputy District Officer assigned to a sub-port shall be under the supervision 
13 
and control of the District Officer of the corresponding principal port. 
14 
SEC. 211. 
Authority of the District Officer to Hold the Delivery or 
15 
Release of Imported Goods. - Except for government importation, the District 
16 
Officer shall hold the delivery of imported or consigned goods to an importer with 
17 
an outstanding and demandable account with the Bureau. Upon due notice to the 
18 
importer, the District Officer may sell the goods or any portion thereof to cover 
19 
the payment of the outstanding account However, the importer may settle the 
20 
overdue obligation prior to the sale. The goods shall be released and delivered to 
21 
the importer only after payment of the duties, taxes, and other charges. 
22 
SEC. 212. 
Temporary Succession of Deputy District Officer to 
23 
Position of Acting District Officer. -
In the absence or disability of a District 
24 
Officer or, in case of a vacancy, the Deputy District Officer shall temporarily 
25 
discharge the duties of the District Officer. Should there be no Deputy District 
26 
Officer, the District Officer shall deSignate, in writing, a senior ranking officer to 
27 
temporarily perform the duties of the District Officer. In case there are two or 
28 
more senior ranking officers with equal length of service, a drawing of lots shall 
21 


be undertaken. The District Officer shall report the designation to the 
2 
Commissioner within twenty-four (24) hours after the designation. 
3 
SEC. 213. 
Records to be Kept by Customs Officers. -
District 
4 
Officers. Deputy District Officers, and customs officers acting in such capacities 
5 
must maintain permanent records of official transactions and turn-over all records 
6 
and official papers to their respective successors or other authorized officials. 
7 
The records shall be made available for inspection by other authorized officials of 
8 
the Bureau. 
9 
If required, the District Officer shall affix on all documents and records 
10 
requiring authentication the official dry seal of the Bureau. 
11 
SEC. 214. 
Reports of the District Officer to the Commissioner. -
12 
The District Officer shall report to the Commissioner any probable or initiated 
13 
litigation within the Customs District and shall submit regular monthly reports on 
14 
all district transactions. 
15 
CHAPTER 3 
16 
EXERCISE OF POLICE AUTHORITY 
17 
SEC. 215. 
Persons Exercising Police Authority. - For the effective 
18 
implementation of this Act, the following persons are authorized to effect search, 
19 
seizure, and arrest: 
20 
(a) Officials of the Bureau, District Officers, Deputy District Officers, police 
21 
officers, agents, inspectors and guards of the Bureau; 
22 
(b) Officers and members of the Armed Forces of the Philippines (AFP) 
23 
and national law enforcement agencies; 
24 
(c) Officials of the BIR on all cases falling within the regular performance 
25 
of their duties, when payment of internal revenue taxes is involved; and 
26 
All officers authorized by the Commissioner to exercise police authority 
27 
shall at all times coordinate with the Commissioner. 
22 


Goods/articles seized by deputized officers pursuant to this Section shall 
2 
be physically turned-over immediately to the Bureau, unless provided under 
3 
existing laws, rules and regulations. 
4 
For this purpose, mission orders shall clearly indicate the specific name 
5 
carrying out the mission and the tasks to be carried out. 
6 
Subject to the approval of the Secretary of Finance, the Commissioner 
7 
shall define the scope, areas covered, procedures and conditions governing the 
8 
exercise of such police authority including custody and responsibility for the 
9 
seized goods. The rules and regulations to this effect shall be furnished the 
10 
concerned government agencies and personnel for guidance and compliance. 
11 
All seizures pursuant to this Section must be effected in accordance with 
12 
the provisions on the conduct of seizure proceedings provided for in Chapters 3 
13 
and 4 of Title XI of this Act. 
14 
SEC. 216. 
Place Where Authority May be Exercised. - All persons 
15 
conferred with powers in the preceding section may exercise the same at any 
16 
place within the jurisdiction of the Bureau of Customs. 
17 
The Bureau of Customs shall exercise police authority in all areas defined 
18 
in Section 300 of this Act. Port authorities shall provide authorized customs 
19 
officials with unhampered access to all premises of the customs zone within their 
20 
administrative jurisdiction. 
21 
The Bureau of Customs may exercise oversight police authority in 
22 
economic or free port zone subject to proper coordination with the governing 
23 
authority of the zone. For this purpose, to ensure consistency and harmony in 
24 
the formulation and implementation of customs poliCies affecting the zone, the 
25 
Commissioner of Customs shall sit as an ex-officio member of the board of 
26 
directors of all economic or freeport zone authorities. 
27 
SEC. 217. 
Exercise of Power of Seizure. -
Any person exercising 
28 
police authority under this Act has the power and duty to seize any vessel, 
23 


aircraft, cargo, goods, animal or any other movable property when the same is 
2 
. subject to forfeiture or when they are subject of a fine imposed under this Act. 
3 
SEC. 218. 
Duty of Officer to Disclose Official Character. - For the 
4 
proper exercise of police authority, any authorized person shall disclose the 
5 
nature of the authority upon being questioned at the time of exercise thereof shall 
6 
exhibit the corresponding written authority issued by the Commissioner. 
7 
SEC. 219. 
Authority to Require Assistance and Information. - Any 
8 
person exercising police authority may demand the assistance of and request 
9 
information from the Philippine National Police (PNP), Armed Forces of the 
10 
Philippines (AFP) and other national law enforcement agency, when necessary 
11 
to effect any search, seizure or arrest. It shall be the duty of any police officer 
12 
and other national law enforcers to give such lawful assistance. 
13 
SEC. 220. 
Authority to Enter Properties. 
-
Any person exercising 
14 
pOlice authority may at any time enter, pass through, and search any land, 
15 
enclosure, warehouse, store, building or structure not principally used as a 
16 
dwelling or house . 
.. 
17 
When a security personnel or any other employee lives in the warehouse, 
18 
store, or any building, structure or enclosure that is used for storage of goods, it 
19 
shall not be considered as a dwelling or house for purposes of this Act. 
20 
SEC. 221. Authority to Search Dwelling House. - A dwelling or house 
21 
may be entered and searched only upon warrant issued by a Judge of the Court 
22 
or such other responsible officers as may be authorized, the sworn application 
23 
thereon showing probable cause and particularly describing the place to be 
24 
searched and things to be seized. 
25 
SEC. 222. 
Authority to Search Vessels or Aircrafts and Persons or 
26 
Goods Conveyed Therein. -
Any person exercising police authority under this 
27 
Act may board, inspect, search and examine a vessel or aircraft and any 
28 
container, trunk, package, box or envelope found on board, and physically 
29 
search and examine any person thereon. In case of any probable violation of this 
24 


Act, the person exercising police authority may seize the goods, vessel, aircraft, 
2 
or any part thereof. 
3 
Such power to search includes removal of any false bottom, partition, 
4 
bulkhead, or any other obstruction for the purpose of uncovering any concealed 
5 
dutiable or forfeitable goods. 
6 
The proceeding herein authorized shall not give rise to any claim for 
7 
damage caused to the goods, vessel or aircraft, unless there is gross negligence 
8 
or abuse of authority in the exercise thereof. 
9 
SEC. 223. 
Authority to Search Vehicles, Other Carriers, Persons 
10 
and Animals. - Upon reasonable cause, any person exercising police authority 
11 
may open and examine any box, trunk, envelope, or other container for purposes 
12 
of determining the presence of dutiable or prohibited goods. This authority 
13 
includes the search of receptacles used for the transport of human remains and 
14 
dead animals. Such authority likewise includes the power to stop, search and 
15 
examine any vehicle or carrier, person or animals suspected of holding or 
16 
conveying dutiable or prohibited goods. 
17 
SEC. 224. 
Authority to Search Persons Arriving From Foreign 
18 
Countries. 
-
Travelers arriving from foreign countries may be subjected to 
19 
search and detention by the customs officers. The dignity of the person under 
20 
search and detention shall be respected at all times. 
21 
SEC. 225. 
Power to Inspect and Visit. - The Commissioner or any 
22 
customs officer who is authorized in writing by the Commissioner, may demand 
23 
evidence of payment of duties and taxes on imported goods openly for sale or 
24 
kept in storage. In the event that the interested party fails to produce such 
25 
evidence within fifteen (15) days, the goods may be seized and subjected to 
26 
forfeiture proceedings: Provided, That during the proceedings the interested 
27 
party shall be given the opportunity to prove or show the source of the goods and 
28 
the payment of duties and taxes thereon: Provided, further, That when the 
29 
warrant of seizure has been issued but subsequent documents presented 
25 


evidencing proper payment are found to be authentic and in order, the District 
2 
Officer shall, within fifteen (15) days from the receipt of the motion to quash or 
3 
recall the warrant, shall cause the immediate release of the goods seized, 
4 
subject to clearance by the Commissioner: 
Provided, furthermore, That the 
5 
release thereof shall not be contrary to law. 
6 
7 
8 
9 
10 
TITLE III 
CUSTOMS JURISDICTION AND CUSTOMS CONTROL 
CHAPTER 1 
CUSTOMS JURISDICTION 
SEC. 300. 
Customs Jurisdiction. -
For the effective implementation 
II 
of this Act, the Bureau shall exercise jurisdiction over all seas within Philippine 
12 
territory and all coasts, ports, airports, harbors, bays, rivers and inland waters 
13 
whether navigable or not from the sea and any means of conveyance. 
14 
The Bureau shall pursue imported goods subject to seizure during its 
15 
transport by land, water and air and shall exercise jurisdiction as may be 
16 
necessary for the effective enforcement of this Act. When a vessel or aircraft 
17 
becomes subject to seizure for violation of this Act, a pursuit of such vessel or 
18 
aircraft which began within the territorial waters or air space may continue 
19 
beyond the same, and the vessel or aircraft may be seized in the high seas or 
20 
international air space. 
21 
CHAPTER 2 
22 
CUSTOMS CONTROL 
23 
SEC. 301. 
Customs Control Over Goods. 
-
All goods, including 
24 
means of transport, entering or leaving the customs territory, regardless of 
25 
whether they are liable to duties and taxes, shall be subject to customs control to 
26 
ensure compliance with this Act. 
27 
In the application of customs control, the Bureau shall use audit-based 
28 
controls and risk management systems and adopt a compliance measurement 
29 
strategy to support risk management. 
26 


The Bureau shall seek to cooperate and conclude mutual administrative 
2 
assistance agreements with other customs administrations to enhance customs 
3 
control. 
The Bureau shall consult, coordinate, and cooperate with other 
4 
government regulatory agencies, free zones authorities, and the customs 
5 
stakeholders in general to enhance customs control. 
6 
SEC. 302. Enforcement of Port Regulation of Bureau of Quarantine. -
7 
Customs officials and employees shall cooperate with the quarantine authorities 
8 
in the enforcement of the port quarantine regulations promulgated by the Bureau 
9 
of Quarantine and shall give effect to the same in so far as connected with 
10 
matters of shipping and navigation. 
11 
SEC. 303. 
Control Over Premises Used for Customs Purposes. 
12 
The Bureau shall, for customs purposes, have exclusive control, direction and 
13 
management of customs offices, facilities, warehouses, ports, airports, wharves, 
14 
and other premises in the Customs Districts, in all cases without prejudice to the 
15 
general police powers of the local government units (LGUs), the Philippine Coast 
16 
Guard and of law enforcement agencies in the exercise of their respective 
17 
functions. 
18 
SEC. 304. 
Power of the President to Subject Premises to Customs 
19 
Jurisdiction. 
-
The President may, by executive order, declare any public 
20 
wharf, landing place, street or land, in any port of entry under the jurisdiction of 
21 
the Bureau as may be necessary, for customs purposes. 
22 
SEC. 305. 
Trespass or Obstruction of Customs Premises. -
No 
23 
person shall enter or obstruct a customs office, warehouse, port, airport, wharf, 
24 
or other premises under the control of the Bureau without prior authority, 
25 
including the streets or alleys where these facilities are located. 
26 
SEC. 306. 
Special Surveillance for the Protection of Customs 
27 
Revenue and Prevention of Smuggling. 
The 
Bureau shall conduct 
28 
surveillance on vessels or aircrafts entering Philippine territory and on imported 
29 
goods entering the customs office: Provided, That the function of the Philippine 
27 


Coast Guard to prevent and suppress the illegal entry of these goods, smuggling 
2 
and other forms of customs fraud and violations of maritime law and its proper 
3 
surveillance of vessels entering and/or leaving Philippine territory as provided in 
4 
Republic Act No. 9993,otherwise known as the "Philippine Coast Guard Law of 
5 
2009," shall continue to be in force. 
6 
SEC. 307. 
Temporary Storage Of Goods. - Subject to the rules and 
7 
regulations to be issued by the Secretary of Finance, the Commissioner shall 
8 
establish a system for temporary storage of imports prior to goods declaration. 
9 
TITLE IV 
10 
IMPORT CLEARANCE AND FORMALITIES 
11 
CHAPTER 1 
12 
GOODS DECLARATION 
13 
SEC. 400. 
Goods to be Imported through Customs Office. 
-
All 
14 
goods imported into the Philippines shall be entered through a customs office at 
15 
a port of entry, or may be admitted to or removed from a free zone as defined in 
16 
this Act, as the case may be. 
17 
SEC. 401. 
Importations Subject to Goods Declaration. 
-
Unless 
18 
otherwise provided for in this Act, all imported goods shall be subject to the 
19 
lodgement of a goods declaration. A goods declaration may be for consumption, 
20 
for customs bonded warehousing, for admission, for conditional importation, or 
21 
for customs transit. 
22 
SEC. 402. Goods Declaration for Consumption. - All goods declaration 
23 
for consumption shall be cleared through a formal entry process except for the 
24 
following goods which shall be cleared through an informal entry process: 
25 
(a) Goods of a commercial nature with free on board (FOB) or free carrier 
26 
at (FCA) value of less than Fifty Thousand Pesos (P50,OOO.OO); and 
27 
(b) Personal and household effects or goods, not in commercial quantity, 
28 
imported in a passenger's baggage or mail. 
28 


The Commissioner may adjust the value of goods of commercial nature 
2 
that shall be cleared through an informal entry process. 
3 
All importations entered through a formal entry process shall be covered 
4 
by a letter of credit or any verifiable commercial document evidencing payment 
5 
or in cases where there is no sale for export, by any commercial document 
6 
indicating the commercial value of the goods. 
7 
SEC. 403. Provisional Goods Declaration. - Where the declarant does 
8 
not have all the information or supporting documents required to complete the 
9 
goods declaration, the lodging of a provisional goods declaration may be 
10 
allowed: Provided, that it substantially contains the necessary information 
11 
required by the Bureau and the declarant undertakes to complete the information 
12 
or submit the supporting documents within forty-five (45) days from the filing of 
13 
the provisional goods declaration, which period may be extended by the bureau 
14 
for another forty-five (45) days for valid reasons. 
15 
If the Bureau accepts a provisional goods declaration, the duty treatment 
16 
of the goods shall not be different from that of goods with complete declaration. 
17 
Goods under a provisional goods declaration may be released upon 
18 
posting of any security required equivalent to the amount that is disputed to 
19 
ensure collection of applicable duties and taxes. 
20 
SEC. 404. 
Owner of Imported Goods. -
All goods imported into the 
21 
Philippines shall be deemed to be the property of the consignee or the holder of 
22 
the bill of lading, airway bill or other equivalent transport document if duly 
23 
endorsed by the consignee therein, or, if consigned to order, duly endorsed by 
24 
the consignor. The underwriters of abandoned goods and the salvors of goods 
25 
saved from wreck at sea, coast, or any area of the Philippines, may be regarded 
26 
as the consignees. 
27 
SEC. 405. 
Liability of Importer for Duties and Taxes. - The liability 
28 
for duties, taxes, fees, and other charges attached to importation constitutes a 
29 
personal debt due and demandable against the importer in favor of the 
29 


government and shall be discharged only upon payment of duties, taxes, fees, 
2 
and other charges. It also constitutes a lien on the imported goods which may be 
3 
enforced while such goods are under customs' custody. 
4 
SEC. 406. 
Importations by the Government. - Except those provided 
5 
for in Section 800 of this Act, all importations by the government for its own use 
6 
or that of its subordinate branches or instrumentalities, or corporations, agencies 
7 
or instrurnentalities owned or controlled by the government. shall be subject to 
8 
the duties, taxes, fees, and other charges under this Act. 
9 
SEC. 407. 
Goods Declaration and Period of Filing. 
-
As far as 
10 
practicable, the format of the goods declaration shall conform with international 
11 
standards. The data required in the goods declaration shall be limited to such 
12 
particulars that are deerned necessary for the assessment and collection of 
13 
duties and taxes, the compilation of statistics and compliance with this Act. The 
14 
Bureau shall require the electronic lodgement of the goods declaration. 
15 
The Bureau shall only require supporting documents necessary for 
16 
customs control to ensure that all requirements of the law have been complied 
17 
with. Translation of supporting documents shall not be required except when 
18 
necessary. 
19 
Goods declaration must be lodged within fifteen (15) days from the date of 
20 
discharge of the last package from the vessel or aircraft. The period to file the 
21 
goods declaration may, upon request, be extended on valid grounds for another 
22 
fifteen (15) days: Provided, That the request is made before the expiration of the 
23 
original period within which to file the goods declaration: Provided, however, That 
24 
the period of the lodgement of the goods declaration may be adjusted by the 
25 
Commissioner. 
26 
SEC. 408. 
Lodgement and Amendment Goods Declaration. - The 
27 
Bureau shall permit the electronic lodging of the goods declaration at any 
28 
designated customs office. The Bureau shall, for valid reason and under terms 
29 
and conditions provided by regulation, permit the declarant to amend the goods 
30 


declaration that has already been lodged: Provided, that the request to amend 
2 
the goods declaration, together with the intended amendments, must be received 
3 
prior to final assessment or examination of the goods. 
4 
SEC. 409. Advance Lodgement and Clearance. - The Bureau may 
5 
provide for the lodgement and clearance of goods declaration and supporting 
6 
documents prior to the arrival of the goods under such terms and conditions as 
7 
may be provided by rules and regulations to be promulgated under this Act. 
8 
SEC. 410. 
Entry of Goods in Part for Consumption and in Part for 
9 
Warehousing. - Goods declaration covered by one bill of lading or airway bill 
10 
over goods which are meant in part for consumption and in part for warehousing 
11 
may be both entered simultaneously for release at the port of entry. 
12 
SEC. 411. 
Contents of Goods Declaration.- Goods declarations shall 
\3 
contain the names of the consignee, importing vessel or aircraft, port of 
14 
departure, port of destination and date of arrival, the number and marks of 
15 
packages, or the quantity, if in bulk, the nature and correct commodity 
16 
description of the goods contained therein, its value as set forth in a proper 
17 
invoice, and such other information as may be required by rules and regulation. 
18 
SEC. 412. 
Statements to be Provided in the Goods Declaration. 
-
19 
No entry of imported goods shall be allowed unless the goods declaration has 
20 
been lodged with the Bureau. The goods declaration shall, under penalties of 
21 
falsification or perjury, contain the following statements: 
22 
(a) The invoice and goods declaration contain an accurate and faithful 
23 
account of the prices paid or payable for the goods, and other adjustments to the 
24 
price actually paid or payable, and that nothing has been omitted therefrom or 
25 
concealed whereby the government of the Republic of the Philippines might be 
26 
defrauded of any part of the duties and taxes lawfully due on the goods; and 
27 
(b) To the best of the declarant's information and belief, all the invoices 
28 
and bills of lading or airway bills relating to the goods are the only ones in 
29 
existence relating to the importation in question, band that these documents are 
31 


in the same state as when they were received by the declarant, and the 
2 
declaration thereon are in all respects genuine and true. 
3 
Goods declaration shall be submitted electronically pursuant to Republic 
4 
Act No. 8792 otherwise known as the Electronic Commerce Act of 2000. Such 
5 
declarations when printed and certified by a competent customs officer as a 
6 
faithful reproduction of the electronic submission shall be considered as 
7 
actionable documents for purposes of prosecuting a declarant if the declarations 
8 
are found to be fraudulent. 
9 
SEC. 413. 
Description of Goods. -
Under such terms and conditions 
10 
prescribed under the rules and regulations, the description of the goods in the 
II 
goods declaration must be sufficient and specific in detail to enable the goods to 
12 
be identified for valuation, statistical purposes, to be classified to the appropriate 
13 
tariff heading and subheading in the currency of the invoice, and in such other 
14 
particulars necessary for the proper assessment and collection of duties and 
IS 
taxes. The quantity and values of each of the several classes of goods shall be 
16 
separately declared according to their respective headings or subheadings and 
17 
the totals of each heading or subheading shall be duly shown. 
18 
SEC. 414. Commercial and Non-commercial Invoice. -
Commercial 
19 
invoice of imported goods shall contain the following: 
20 
(a) the agreed price paid or to be paid for the goods; 
21 
(b) the adjustments to the price paid or to be paid as defined in Section 
22 
701 (1) of this Act, if not yet included in the invoice; 
23 
(c) the names of the buyer, seller, and the time and place of sale; 
24 
(d) the port of entry; 
25 
(e) a sufficient description to enable the accurate identification of goods 
26 
for tariff classification, customs valuation, and statistical purposes, indicating the 
27 
correct commodity description, in customary term or commercial designation, 
28 
the grade or quality, numbers, marks or symbols under which they are sold by 
32 


the seller or manufacturer, together with the marks and number of packages in 
2 
which the goods are packed; 
3 
(f) the quantities in the weights or measures of the goods shipped; and 
4 
(g) any other fact deemed necessary for the proper examination, customs 
5 
valuation, and tariff classification of the goods as may be prescribed by rules and 
6 
regulation 
7 
To the extent possible, the above requirements shall also apply to goods 
8 
imported not covered by sale, such as goods on consignment or lease, samples, 
9 
or donations, covered by a consignment, pro-forma invoice, or other non-
10 
commercial invoice. 
11 
SEC. 415. 
Mode of Payment and Terms of Trade. 
-
Subject to 
12 
existing laws and rules on foreign currency exchange. the intemationally 
13 
accepted standards and practices on the mode of payment or remittance 
14 
covering import and export transactions, including standards developed by 
15 
intemational trading bodies such as the International Chamber of Commerce 
16 
(ICC) on trading terms (incoterms) and on international letters of credit such as 
17 
the Uniform Customs and Practice for Documentary Credits (UCP). shall be 
18 
recognized. 
19 
SEC. 416. Examination of Samples. - Customs officers shall see to it 
20 
that representative samples taken during examination shall be properly receipted 
21 
for and retained within a reasonable period of time. The quantity and value of 
22 
the samples taken shall be noted in the specified box of the import entry or 
23 
electronic form. Such samples shall be duly labeled as will definitely identify them 
24 
with the importation for which they are taken. 
25 
SEC. 417. 
Forwarding of Cargo and Remains of Wrecked Vessel or 
26 
Aircraft. -
When vessels or aircrafts are wrecked within the Philippines. the 
27 
original owners or consignees of the cargo, or by its underwriters. in case of 
28 
abandonment, may seek approval from the Bureau to forward the goods saved 
29 
from the wreck to the ports of destination without going through the customs 
33 


office in the district in which the goods were cast ashore or unloaded. Upon 
2 
approval, the goods may be forwarded with particular manifests and duly certified 
3 
by a customs officer in charge of the goods. 
4 
The owner of the vessel or aircraft may be permitted to export the remains 
5 
of the wreck upon proper examination and inspection. The remains of a wrecked 
6 
vessel shall include not only its' hull and rigging, but also all sea stores, goods 
7 
and eqUipment, such as sails, ropes and chain anchors. 
8 
SEC. 418. Derelicts and Goods from Abandoned Wrecks. 
9 
Derelicts and all goods recovered from sea or from abandoned wrecks shall be 
10 
under the jurisdiction of the port where the goods arrive, and shall be retained in 
II 
the custody of the Bureau. If not claimed by the owner, underwriter or salvor, the 
12 
same shall be deemed as property of the government. 
13 
When such goods are brought into port by lighters or other craft, each 
14 
vessel shall submit a manifest of their respective cargo. 
15 
The customs officer nearest the scene of the wreck shall take charge of 
16 
the goods saved and shall give immediate notice to the District Officer or the 
17 
nearest customs office. 
18 
In order to prevent any attempt to commit fraud, the District Officer shall 
19 
be represented at the salvage of the cargo by customs officers who shall 
20 
examine and receive the inventory made on the cargo. 
21 
Derelicts and goods salvaged from foreign vessels or aircrafts recovered 
22 
from sea or wreck are prima facie dutiable and may be entered for consumption 
23 
or warehousing. If claimed to be of Philippine production, and consequently 
24 
conditionally duty-free, proof must be submitted as in ordinary cases of re-
25 
importation of goods. Foreign goods landed from a vessel or aircraft in distress 
26 
is dutiable if sold or disposed of in the Philippines. 
27 
Before any goods taken from a recent wreck are admitted to the customs 
28 
territory, the same shall be appraised, and the owner or importer shall have the 
29 
same right to appeal as in ordinary importation. 
34 


No part of a Philippine vessel or aircraft or its equipment, wrecked either 
2 
in Philippine or foreign waters, shall be subject to duty. 
3 
CHAPTER 2 
4 
EXAMINATION OF GOODS 
5 
SEC. 419. 
Examination of Goods. -
Examination of goods, when 
6 
required by the Bureau, shall be conducted immediately after the goods 
7 
declaration has been lodged. Priority in the examination shall be given to live 
8 
animals, perishable goods and other goods requiring immediate examination. 
9 
Whenever necessary, a system of coordination and joint examination of 
10 
goods shall be established by the Bureau and other regulatory agencies under 
11 
existing laws and regulations. 
12 
As a general rule, the Bureau may examine the goods in the presence of 
13 
the declarant or an authorized representative. Examination of the goods in the 
14 
absence of the declarant or authorized representative may be allowed in 
15 
exceptional circumstance and for valid and justifiable grounds. The Bureau may 
16 
require the declarant to be present or to be represented at the examination of the 
17 
goods or to render any assistance necessary to facilitate the examination. 
18 
The Bureau shall take samples of the goods only when needed to 
19 
establish the tariff description and value of goods declared, or to ensure 
20 
compliance with this Act. Samples drawn shall be as minimal as possible. 
21 
SEC. 420. 
Conditions for Examination. - Pursuant to intemationally 
22 
accepted standards, the Bureau may adopt non-intrusive examination of goods, 
23 
such as the use of x-ray machines. 
24 
Physical examination of the goods shall be conducted when: 
25 
(a) 
it is directed by the Commissioner on account of a derogatory 
26 
information; 
27 
(b) the goods are subject to an Alert Order issued by competent authority; 
28 
(c) the goods are electronically selected for physical examination; 
35 


(d) there are issues and controversies surrounding the goods declaration 
2 
and the import clearance process; or 
3 
(e) the importer or declarant requests for the examination of the goods. 
4 
The Commissioner may exempt from physical examination the goods of 
5 
authorized economic operators or of those provided for under any existing trade 
6 
facilitation program of the Bureau. 
7 
Physical 
examination, when 
required, 
shall 
be conducted 
in 
an 
8 
expeditious manner. 
9 
SEC. 421. 
Duties of Customs Officer Tasked to Examine the 
10 
Imported Goods. 
-
In the examination, classification, and valuation of the 
11 
goods, the customs officer shall: 
12 
(a) determine whether the packages for examination and their contents 
13 
are in accordance with the goods declaration, invoice and other pertinent 
14 
documents; 
15 
(b) take samples of the imported goods for examination or laboratory 
16 
analysis when necessary; 
17 
(c) issue a receipt for a sample taken and retained during examination; 
18 
(d) report whether the goods have been correctly declared as to quantity, 
19 
measurement, weight, tariff classification and not imported contrary to law. 
20 
Failure on the part of the customs officer to perform the above duties shall 
21 
be penalized according to Section 1431 of Title XIV of this Act. 
22 
SEC. 422. 
Customs Expenses Constituting Charges on Goods. 
23 
The cost of examination shall be for the account of the importer or exporter. All 
24 
expenses incurred by the Bureau for the handling or storage of goods and other 
25 
necessary operations shall be chargeable against the goods, and shall constitute 
26 
a lien thereon. 
36 


CHAPTER 3 
2 
ASSESSMENT AND RELEASE 
3 
SEC. 423. Determination of the De Minimis Value. -
No duties and 
4 
taxes shall be collected on goods with an FOB or FCA value of Ten Thousand 
5 
Pesos (P10,000.00) or below. The Secretary of Finance, upon recommendation 
6 
of the Commissioner shall review and adjust the de minimis value as provided 
7 
herein, every three (3) years after the effectivity of this Act. 
The value 
8 
hereinstated shall be adjusted to its present value using the Consumer Price 
9 
Index (CPI), as published by the Philippine Statistics Authority (PSA). 
10 
SEC. 424. 
Duty of Customs Officer Task to Assess Imported 
11 
Goods. - For purposes of assessing duties and taxes on imported goods, the 
12 
customs officer shall classify, value, and determine the duties and taxes to be 
13 
paid. The customs officer shall prepare and submit an assessment report as 
14 
established under this Act. 
15 
SEC. 425. 
Tentative Assessment of Goods Subject to Dispute 
16 
Settlement. - Assessment shall be deemed tentative if the duties and taxes 
17 
initially assessed are disputed by the importer. The assessment shall be 
18 
completed upon final readjustment based on the tariff ruling in case of 
19 
classification dispute, or the final resolution of the protest case involving 
20 
valuation, rules of origin, and other customs issues. 
21 
The District Officer may allow the release of importation under tentative 
22 
assessment upon the posting of sufficient security to cover the applicable duties 
23 
and taxes equivalent to the amount that is disputed. 
24 
SEC. 426. Tentative Assessment of Provisional Goods Declaration. -
25 
Assessment of a provisional goods declaration shall be deemed tentative and 
26 
such assessment shall be completed upon final readjustment upon submission 
27 
by the declarant of the additional information or documentation required to 
28 
complete the declaration within the period provided in Section 403. 
37 


SEC. 427. Readjustment of Appraisal, Classification or Return. -
2 
Such appraisal, classification return as finally passed upon and approved or 
3 
modified by the district officer shall not be altered or modified in any manner, 
4 
except: 
5 
(a) Within one year after payment of the duties, upon statement of error in 
6 
conformity with Section 912 as approved by the District Officer; 
7 
(b) Within fifteen (15) days after such payment upon request for 
8 
reappraisal or reclassification addressed to the commissioner by the District 
9 
Officer, if the appraisal or classification is deemed to be low; 
10 
(c) Upon request for reappraisal and/or reclassification, in the form of a 
11 
timely protest addressed to the district officer by the interested party if the lalter 
12 
should be dissatisfied with the appraisal or return; 
13 
(d) Upon demand by the Commissioner after the completion of 
14 
compliance audit in accordance with the provisions of this Act. 
15 
SEC. 428. Assessment of Duty on Less Than Entered Value. -
Duty 
16 
shall not be assessed in any case upon an amount less than the entered value, 
17 
unless by direction of the commissioner in cases when the importer certifies at the 
18 
time of entry that the entered value is higher than the dutiable value and that the 
19 
goods are so entered in order to meet increases made by the appraiser in similar 
20 
cases then pending re-appraisement; and the lower assessment shall be allowed 
21 
only when the importer's contention is sustained by the final decision, and shall 
22 
appear that such action of the importer was taken in good faith after due 
23 
diligence and inquiry. 
24 
SEC. 429, Final Assessment. - Assessment shall be deemed final fifteen 
25 
(15) days after receipt of the notice of assessment by the importer or consignee. 
26 
SEC. 430. 
Period of Limitation. -
In the absence of fraud and when 
27 
the goods have been finally assessed and released, the assessment shall be 
28 
conclusive upon all parties three (3) years from the date of final payment of 
29 
duties, or upon completion of the post clearance audit. 
38 


SEC. 431. 
Release of Goods after Payment of Duties and Taxes. -
2 
Goods declared shall be released when duties and taxes and other lawful 
3 
charges have been paid or secured and all the pertinent laws, rules and 
4 
regulations have been complied with. 
5 
When the Bureau requires laboratory analysis of samples, detailed 
6 
technical 'documents or expert advice, it may release the goods before the 
7 
results of such examination are known after posting of sufficient security by the 
8 
declarant. 
9 
SEC. 432. 
Release of Goods to the Holder of Bill of Lading or 
10 
Airway Bill. 
- Any customs officer who releases goods to the consignee or 
11 
lawful holder of the bill of lading or airway bill shall not be liable for any defect or 
12 
irregularity in its negotiation unless the customs officer has notice of the defect or 
13 
irregularity. 
14 
SEC. 433. 
Release of Goods Without Production of Bill of Lading 
15 
or Airway Bill. 
No customs officer shall release goods to any person without 
16 
the submission of the bill of lading or airway bill covering the goods, except on 
17 
written order of the carrier or agent of the vessel or aircraft, in which case neither 
18 
the govemment nor the customs officer shall be held liable for any damage 
19 
arising from wrongful release of the goods: Provided, That when the release of 
20 
goods is made against such written order, the customs officer shall require the 
21 
submission of a copy of the bill. 
22 
SEC. 434. 
Release of Goods Upon Order of Importer. 
-
An 
23 
importer may issue a written authorization for the release of goods stored in a 
24 
bonded warehouse to another person. Such authorization shall not relieve the 
25 
importer from liability for the duties, taxes and other charges due on the goods 
26 
unless the person to whom the release was authorized assumes such liability. 
27 
SEC. 435. 
Withholding Release Pending Satisfaction of Lien. 
28 
When the District Officer is duly notified through a lawfUl order of a competent 
29 
court of a lien for freight, lighterage or general average upon any imported 
39 


goods, the District Officer shall withhold the release of the goods unless the 
2 
claim has been paid or secured. In case of disagreement, the district officer may 
3 
release the goods after payment of the freight and lighterage due on the quantity 
4 
or weight landed as actually determined. 
5 
SEC. 436. 
Fine or Surcharge on Goods. - Goods subject to any fine 
6 
or surcharge shall be released only after the payment of the fine or surcharge. 
7 
CHAPTER 4 
8 
SPECIAL PROCEDURES 
9 
SEC. 437. 
Traveler And Passenger Baggage. 
-
The Bureau shall 
10 
provide simplified customs procedure for traveler and baggage processing based 
lIon international agreements and customs best practices. 
12 
Travelers shall be permitted to export goods for commercial purposes, 
13 
subject to compliance with the necessary export formalities and payment of 
14 
export duties, taxes, and charges, if any. 
15 
SEC. 438. 
Postal Item Or Mail. -
Postal item or mail shall include 
16 
letter-post and parcels, as described in international practices and agreements, 
17 
such as the Acts of the Universal Postal Union (AUPU), currently in force. 
18 
A simplified procedure shall be used in the clearance of postal item or 
19 
mail, including the collection of the applicable duties and taxes on such items or 
20 
goods. 
21 
When all the information required by the customs are available in the 
22 
special declaration form for postal items as provided in the AUPU or similar 
23 
international agreements, the special declaration form and supporting documents 
24 
shall be the goods declaration. However, a separate goods declaration shall be 
25 
required for the following: 
26 
(a) Goods whose value fall within the level that the Commissioner has 
27 
determined to be taxable and thus must be covered by a goods declaration; 
28 
(b) Prohibited and regulated goods; 
29 
(c) Goods the exportation of which must be certified; and 
40 


(d) Imported goods under a customs procedure other than for 
2 
consumption. 
3 
SEC. 439. 
Express Shipment. - The Bureau shall provide simplified 
4 
customs procedures based on international standards and customs best 
5 
practices for air shipments considered as time-sensitive and requiring pre-arrival 
6 
clearance. Express shipments of accredited air express cargo operators may be 
7 
released prior to the payment of the duty. tax. and other charges upon posting of 
8 
a sufficient security. 
9 
TITLE V 
10 
EXPORT CLEARANCE AND FORMALITIES 
II 
CHAPTER 1 
12 
EXPORT CLEARANCE AND DECLARATION 
13 
SEC. 500. 
Export Goods Declaration. - All goods exported from the 
14 
Philippines, whether subject to export duty or not, shall be declared through a 
IS 
competent cust.oms office through an export goods declaration. duly signed 
16 
electronically or otherwise by the party making the declaration. 
17 
The description of the goods in the export declaration must contain 
18 
sufficient and specific information for statistical purposes and as well as for the 
19 
proper valuation and classification of the goods. 
20 
SEC. 501. 
Export Product to Conform to Standard Grades. 
-
If 
21 
applicable, products shall conform to export standard grades established by the 
22 
government. The packaging of the said goods shall likewise be labeled and 
23 
marked in accordance with related laws and regulations. Export permits may not 
24 
be granted for goods violating the aforementioned requirements. 
25 
SEC. 502. Lodgement and Processing of Export Declaration. The 
26 
Bureau of Customs shall promulgate rules and regulations to allow manual and 
27 
electronic lodgement and processing of the export declaration. 
28 
SEC. 503. Rules of Origin. -
Pursuant to the applicable rules of origin, 
29 
the Bureau or any other designated government agency may determine the 
41 


origin of goods for export and, if appropriate, issue the corresponding certificates 
2 
of origin. However, the exporter may adopt a self-certification system, provided 
3 
that it is duly accredited by the Bureau or any other authorized government 
4 
agencies. 
5 
TITLE VI 
6 
CUSTOMS TRANSIT AND TRANSSHIPMENT 
7 
CHAPTER 1 
8 
CUSTOMS TRANSIT 
9 
SEC. 600. Customs Transit in the Customs Territory. 
-
Customs 
10 
transit within the customs territory shall be allowed for goods except those 
11 
intended for consumption, to be transported as follows: 
12 
(a) from port of entry to another port of entry as exit point for outright 
13 
exportation; 
14 
(b) from port of entry to another port of entry or inland customs office; 
15 
(c) from inland customs office to a port of entry as exit point for outright 
16 
exportation; and 
17 
(d) from one port of entry or inland customs office to another port of entry 
18 
or inland customs office. 
19 
A transit permit is required for goods transported under customs transit. 
20 
However, transfer of goods in customs transit from one means of transport to 
21 
another shall be allowed: Provided, That any customs seal or fastening is not 
22 
broken or tampered. 
23 
The party responsible for the compliance of the obligations imposed on 
24 
customs transit shall ensure that the goods are presented intact and in due 
25 
course at the customs office of destination. Failure to comply with the 
26 
aforementioned obligations or likewise failure to follow a prescribed itinerary or 
27 
period for delivery of the goods may immediately subject the goods to the 
28 
corresponding duties, taxes, and other applicable, fines, 
penalties, and 
29 
surcharges. 
42 


SEC. 601. 
Duty and Tax on Goods Intended for Transit. -
Transit 
2 
goods admitted for storage in a customs bonded warehouse, or for outright 
3 
exportation at the port of destination or inland customs office, shall not be subject 
4 
to the payment of duties and taxes at the port of discharge: Provided, That any 
5 
conditions and security required by the Bureau are complied with. 
6 
Goods for consumption and intended for customs transit shall be subject 
7 
to payment of duties and taxes at the port of arrival. 
8 
SEC. 602. 
Carrier's Security. - Carriers that transport imported goods' 
9 
that shall be placed under customs transit from a port of arrival to other ports, 
10 
shall post a general transportation security, amounting to at least Fifty thousand 
11 
pesos (PSO,OOO.OO). Such security shall ensure the complete and immediate 
12 
delivery of goods to the customs officer at the port of destination and the 
13 
payment of pertinent customs charges and expenses and other transfer costs. 
14 
The amount of the security may be adjusted by the Commissioner, upon 
15 
approval of the Secretary of Finance. 
16 
CHAPTER 2 
17 
CUSTOMS TRANSSHIPMENT 
18 
SEC. 603. Entry for Transit to Another Port. -
Articles entered for 
19 
transit to other ports of the Philippines may be transported under sufficient 
20 
security, upon proper examination as may be necessary and consigned to the 
21 
collector at the port of destination, who will allow entry to be made at his port 
22 
Articles received at any port from another port of the Philippines on a 
23 
transit permit may be entered at the port of delivery either for consumption or 
24 
warehousing. Articles entered into free zones as defined in Title VIII, Chapter 3 
25 
of this Act shall be covered by a transit permit upon admission into free zones. 
26 
SEC. 604. 
Customs 
Transshipment. 
Goods 
admitted 
for 
27 
transshipment shall not be subject to the payment of duties and taxes: Provided, 
28 
That the goods declaration for customs transshipment particularly indicates such 
43 


nature of the goods, duly supported by commercial or transport documents or 
2 
evidence as required by the Bureau. 
3 
Goods for transshipment must be exported from the Philippines within 
4 
thirty (30) days from arrival thereof. The Commissioner may allow an extension 
5 
of such period after the establishment of valid reasons. 
6 
SEC. 605. Goods Entered for Immediate Re-Exportation. - Where an 
7 
intent of re-exportation of the goods is shown by the bill of lading, invoice, 
8 
manifest, or other satisfactory evidence, the whole or a part of a bill comprising 
9 
not less than one package may be entered for immediate re-exportation under 
10 
security. The District Officer shall designate the vessel or aircraft in which the 
11 
goods are loaded constructively as a warehouse to facilitate the direct transfer of 
12 
the goods to the exporting vessel or aircraft. 
13 
Unless it shall appear by the bill of lading, invoice, manifest, or other 
14 
satisfactory evidence, that goods arriving in the Philippines are destined for 
15 
transshipment, no exportation thereof will be permitted except under entry for 
16 
immediate re-exportation under sufficient security in an amount equal to the 
17 
ascertained duties, taxes and other charges. 
18 
Upon the re-exportation of the goods, and the production of proof of 
19 
landing beyond the limits of the Philippines, the security shall be released. 
20 
TITLE VII 
21 
IMPORT DUTY AND TAX 
22 
CHAPTER 1 
23 
BASIS OF VALUATION 
24 
SEC. 700. 
Sequential Application of Valuation Methods. - Imported 
25 
goods shall be valued in accordance with the provisions of Section 701 
26 
whenever the conditions prescribed therein are fulfilled. 
27 
Where the customs value cannot be determined under the provisions of 
28 
Section 701, it is to be determined by proceeding sequentially through the 
29 
succeeding Sections to the first such Section under which the customs value can 
44 


be determined. except as provided in Section 704, it is only when the customs 
2 
value cannot be determined under the provisions of a particular section that the 
3 
provisions of the next section in the sequence can be used. 
4 
If the importer does not request that the order of Sections 704 and 705 be 
5 
reversed, the normal order of the sequence is to be followed. If the importer so 
6 
request but it is impossible to determine the customs value under Section 705, 
7 
the customs value shall be determined under Section 704. 
8 
When the customs value cannot be determined under Sections 701 
9 
through 705, it may be determined under Section 706. 
10 
SEC. 701. Transaction Value System-Method One. -
The transaction 
11 
value shall be the price actually paid or payable for the goods when sold for 
12 
export to the Philippines adjusted in accordance with the provisions of this 
13 
Section: Provided, That: 
14 
(a) There are no restrictions as to the disposition or use of the goods by 
15 
the buyer other than restrictions which: 
16 
(i) are imposed or required by law or by Philippine authorities; 
17 
(ii) limit the geographical area in which the goods may be resold; or 
18 
(iii) do not substantially affect the value of the goods; 
19 
(b) The sale or price is not subject to some condition or consideration for 
20 
which a value cannot be determined with respect to the goods being valued; 
21 
(c) The buyer and the seller are not related, or where the buyer and seller 
22 
are related, that the transaction value is acceptable for customs purposes under 
23 
the provisions hereof. 
24 
For purposes of this Act, persons shall be deemed related only if: 
25 
(i) they are officers or directors of one another's business; 
26 
(ii) they are legally recognized partners in business; 
27 
(iii) there exists an employer-employee relationship between them; 
28 
(iv) any person directly or indirectly owns, controls or holds five percent 
29 
(5%) or more of the outstanding voting stock or shares of both seller and buyer; 
45 


(v) one of them directly or indirectly controls the other; 
2 
(vi) both of them are directly or indirectly controlled by a third person; 
3 
(vii) together they directly or indirectly control a third person; or 
4 
(viii) they are members of the same family, including those related by 
5 
affinity or consanguinity up to the fourth civil degree. 
6 
Persons who are associated in business with one another in that one is 
7 
the sole agent, sole distributor or sole concessionaire, however described, of the 
8 
other shall be deemed to be related for the purposes of this Act if they fall within 
9 
any of the eight (8) cases cited in the preceding paragraph. 
10 
In a sale between related persons, the transaction value shall be accepted 
11 
as basis for customs valuation whenever the importer demonstrates that such 
12 
value closely approximates one of the following occurring at or about the same 
13 
time: 
14 
(a) the transaction value in sales to unrelated buyers of identical or similar 
15 
goods for export to the same country of importation; 
16 
(b) the customs value of identical or similar goods as determined under 
17 
provisions of Section 704; or 
18 
(c) the customs value of identical or similar goods are determined under 
19 
the provisions of Section 705. 
20 
In determining the transaction value, the following shall be added to the 
21 
price actually paid or payable for the imported goods: 
22 
(1) To the extent that they are incurred by the buyer but are not included 
23 
in the price actually paid or payable for the imported goods: 
24 
(a) commissions and brokerage fees except buying commissions; 
25 
(b) cost of containers; 
26 
(c) cost of packing, whether for labor or materials; 
27 
(d) value, apportioned as appropriate, of the following goods and services: 
28 
materials, components, parts and similar items incorporated in the imported 
29 
goods; tools; dies; moulds and similar items used in the production of imported 
46 


goods; materials consumed in the production of the imported goods; and 
2 
engineering, development, artwork, design work and plans and sketches 
3 
undertaken elsewhere than in the Philippines and necessary for the production of 
4 
imported goods, where such goods and services are supplied directly or 
5 
indirectly by the buyer free of charge or at a reduced cost for use in connection 
6 
with the production and sale for export of the imported goods; and 
7 
(e) amount of royalties and license fees related to the goods being valued 
8 
that the buyer must pay either directly or indirectly, as a condition of sale of the 
9 
goods to the buyer. 
10 
(2) value of any part of the proceeds of any subsequent resale, disposal or 
11 
use of the imported goods that accrues directly or indirectly to the seller; 
12 
(3) cost of transport of the imported goods from the port of exportation to 
13 
the port of entry in the Philippines; 
14 
(4) loading, unloading and handling charges associated with the transport 
15 
of the imported goods from the country of exportation to the port of entry in the 
16 
Philippines; and 
17 
(5) cost of insurance. 
18 
All additions to the price actually paid or payable shall be made only on 
19 
the basis of objective and quantifiable data. 
20 
SEC. 702. 
Transaction Value of Identical Goods - Method Two. 
21 
Where the dutiable value cannot be determined under method one, the dutiable 
22 
value shall be the transaction value of identical goods sold for export to the 
23 
Philippines and exported at or about the same time as the goods being valued. 
24 
"Identical goods" mean goods which are the same in all respects, including 
25 
physical characteristics, quality and reputation. Minor differences in appearances 
26 
shall not preclude goods otherwise conforming to the definition from being 
27 
regarded as identical. 
47 


If, in applying this section, more than one transaction value of identical 
2 
goods are found, the lowest such value shall be used to determine the customs 
3 
value. 
4 
SEC. 703. 
Transaction Value of Similar Goods - Method Three. -
5 
Where the dutiable value cannot be determined under the preceding method, the 
6 
dutiable value shall be the transaction value of similar goods sold for export to 
7 
the Philippines and exported at or about the same time as the goods being 
8 
valued. "Similar goods" mean goods which, although not alike in all respects, 
9 
have like characteristics and similar component materials which enable them to 
10 
perform the same functions and to be commercially interchangeable. The quality 
11 
of the goods, its reputation and the existence of a trademark shall be among the 
12 
factors to be considered in determining whether goods are similar. 
13 
If, in applying this Section, more than one transaction value of identical 
14 
goods are found, the lowest such value shall be used to determine the customs 
15 
value. 
16 
SEC. 704. 
Deductive Value -
Method Four. -
Where the dutiable 
17 
value cannot be determined under the preceding method, the dutiable value shall 
18 
be the deductive value unless otherwise requested by the importer as provided in 
19 
Section 700. The deductive value which shall be based on the unit price at which 
20 
the imported goods or identical or similar imported goods are sold in the 
21 
Philippines, in the same condition as when imported, in the greatest aggregate 
22 
quantity, at or about the time of the importation of the goods being valued, to 
23 
persons not related to the persons from whom they buy such goods, subject to 
24 
deductions for the following: 
25 
(1) either the commissions usually paid or agreed to be paid or the 
26 
additions usually made for profit and general expenses in connection with sales 
27 
in such country of imported goods of the same class or kind; 
28 
(2) the usual costs of transport and insurance and associated costs 
29 
incurred within the Philippines; 
48 


(3) where appropriate, the costs of: (i) transport of the imported goods 
2 
from the port of exportation to the port of entry in the Philippines; (ii) loading, 
3 
unloading and handling charges asspciated with the transport of the imported 
4 
goods from the country of exportation to the port of entry in the Philippines; and 
5 
(iii) insurance; and 
6 
(4) the customs duties and other national taxes payable in the Philippines 
7 
by reason of the importation or sale of the goods. 
8 
If neither the imported goods nor identical nor similar imported goods are 
9 
sold at or about the time of importation of the goods being valued in the 
10 
Philippines in the conditions they were imported, the customs value shall, subject 
11 
to the conditions set forth in the preceding paragraph, be based on the unit price 
12 
at which the imported goods or identical or similar imported goods sold in the 
13 
Philippines in the condition they were imported and at the earliest date after the 
14 
importation of the goods being valued, but before the expiration of ninety (90) 
15 
days after such importation. 
16 
If neither the imported goods nor identical nor similar imported goods are 
17 
sold in the Philippines in the condition as imported, then, if the importer so 
18 
requests, the dutiable value shall be based on the unit price at which the 
19 
imported goods, after further processing, are sold in the greatest aggregate 
20 
quantity to persons in the Philippines who are not related to the persons from 
21 
whom they buy such goods, subject to allowance for the value added by such 
22 
processing and deductions provided under subsections (1), (2), (3) and (4) 
23 
hereof. 
24 
SEC. 705. 
Computed Value -
Method Five. -
Where the dutiable 
25 
value cannot be determined under the preceding method, the dutiable value shall 
26 
be the computed value of the sum of: 
27 
(1) the cost or the value of materials and fabrication or other processing 
28 
employed in producing the imported goods; 
49 


(2) the amount for profit and general expenses equal to that usually 
2 
reflected in the sale of goods of the same class or kind as the goods being 
3 
valued which are made by producers in the country of exportation for export to 
4 
the Philippines; 
5 
(3) the freight, insurance fees and other transportation expenses for the 
6 
importation of the goods; 
7 
(4) any assist, if its value is not included under paragraph (1) hereof; and 
8 
(5) the cost of containers and packing, if their values are not included 
9 
under paragraph (1) hereof. 
10 
The Bureau shall not require or compel any person not residing in the 
11 
Philippines to produce for examination, or to allow access to, any account or 
12 
other record for the purpose of determining a computed value. However, 
13 
information supplied by the producer of the goods for the purposes of 
14 
determining the customs value may be verified in another country with the 
15 
agreement of the producer and provided said producer will give sufficient 
16 
advance notice to the government of the country in question and the latter does 
17 
not object to the investigation. 
18 
SEC. 706. 
Fallback Value - Method Six. - If the dutiable value cannot 
19 
be determined under the preceding methods described above, it shall be 
20 
determined by using other reasonable means and on the basis of data available 
21 
in the Philippines. If the importer so requests, the importer shall be informed in 
22 
writing of the dutiable value determined under method six and the method used 
23 
to determine such value. 
24 
No dutiable value shall be determined under method six on the basis of: 
25 
(1) the selling price in the Philippines of goods produced in the 
26 
Philippines; 
27 
(2) a system that provides for the acceptance for customs purposes of the 
28 
higher of two alternative values; 
29 
(3) the price of goods in the domestic market of the country of exportation; 
50 


(4) the cost of production, other than computed values, that have been 
2 
determined for identical or similar goods in accordance with method five hereof; 
3 
(5) the price of goods for export to a country other than the Philippines; 
4 
(6) minimum customs values; or 
5 
(7) arbitrary or fictitious values. 
6 
SEC. 707. Ascertainment of the Accuracy of the Declared Value. -
7 
Nothing in this section shall be construed as restricting or calling into question 
8 
the right of the Bureau to ascertain the truth or accuracy of any statement, 
9 
document or declaration presented for customs valuation purposes. When a 
10 
declaration has been presented and when the Bureau has reason to doubt the 
11 
truth or accuracy of the particulars or of documents produced in support of such 
12 
declaration, it may ask the importer to provide further explanation, including 
13 
documents or other evidence, that the declared value represents the total 
14 
amount actually paid or payable for the imported goods, adjusted in accordance 
15 
with the provisions of Section 701. 
16 
If, after receiving further information, or in the absence of a response, the 
17 
Bureau still has reasonable doubts about the truth or accuracy of the declared 
18 
value, it may deem that the customs value of the imported goods cannot be 
19 
determined under method one, without prejudice to an importer's right to appeal 
20 
pursuant to Section 1101 of this Act. Before taking a final decision, the District 
21 
Officer shall communicate to the importer, in writing if requested, the grounds for 
22 
doubting the truth or accuracy of the particulars or documents produced and give 
23 
the importer a reasonable opportunity to respond. When a final decision is made, 
24 
the Bureau shall communicate its decision and the grounds therefor in writing. 
25 
SEC. 708. Exchange Rate.- For the assessment and collection of import 
26 
duty upon imported goods and for other purposes, the value and prices thereof 
27 
quoted in foreign currency shall be converted into the currency of the Philippines 
28 
at the current rate of exchange or value specified or published, from time to time, 
29 
by the Bangko Sentral ng Pilipinas (BSP). 
51 


CHAPTER 2 
2 
SPECIAL DUTIES AND TRADE REMEDY MEASURES 
3 
SEC. 709. 
Marking of 
Imported 
Goods 
and Containers. 
4 
(A) Marking of Goods. -
Except as hereinafter provided, all goods of foreign 
5 
origin imported into the Philippines or their containers, as provided in subsection 
6 
(b) hereof shall be conspicuously marked in any official language of the 
7 
Philippines as legibly, indelibly and permanently as the nature of the goods or 
8 
container will permit and in such manner as to indicate to an ultimate purchaser 
9 
in the Philippines the name of the country of origin of the goods. Pursuant 
10 
thereto, the Commissioner shall, with the approval of the Secretary of Finance: 
11 
(1) determine the character of words and phrases or abbreviation thereof 
12 
which shall be acceptable as indicating the country of origin and prescribe any 
13 
reasonable method of marking, whether by printing, stenciling, stamping, 
14 
branding, labeling or by any other reasonable method, and in a conspicuous 
15 
place on the goods or container where the marking shall appear; 
16 
(2) require the addition of other words or symbols which may be 
17 
appropriate to prevent deception or mistake as to the origin of the goods or as to 
18 
the origin of any other goods with which such imported goods is usually 
19 
combined subsequent to importation but before delivery to an ultimate purchaser; 
20 
and 
21 
(3) authorize the exception of any goods from the requirements of marking 
22 
if: 
23 
(i) 
such goods are incapable of being marked; 
24 
(ii) 
such goods cannot be marked prior to shipment to the Philippines 
25 
without injury; 
26 
(iii) 
such goods cannot be marked prior to shipment to the Philippines, 
27 
except at an expense economically prohibitive of their importation; 
28 
(iv) the marking of a container of such goods will reasonably indicate the 
29 
origin of such goods; 
52 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
(v) 
such goods are crude substances; 
(vi) such goods are imported for use by the importer and not intended for 
sale in their imported or any other form; 
(vii) such goods are to be processed in the Philippines by the importer or 
for the importer's account other than for the purpose of concealing 
the origin of such goods and in such manner that any mark 
contemplated by this section would necessarily be obliterated, 
destroyed, or permanently concealed; 
(viii) an ultimate purchaser, by reason of the character of such goods or 
by reason of the circumstances of their importation, must necessarily 
know the country of origin of such goods even though they are not 
marked to indicate their origin; 
(ix) such goods were produced more than twenty (20) years prior to their 
importation into the Philippines; or 
(x) 
such goods cannot be marked after importation except at an expense 
16 
which is economically prohibitive, and the failure to mark the goods 
17 
before importation was not due to any purpose of the importer, 
18 
producer, seller or shipper to avoid compliance with this section, 
19 
(b) Marking of Containers. -
Whenever goods are exempt under 
20 
paragraph (3) of subsection (a) of this Section from the requirements of marking, 
21 
the immediate container, if any, of such goods, or such other container or 
22 
containers of such goods, shall be marked in such manner as to indicate to an 
23 
ultimate purchaser in the Philippines the name of the country of origin of such 
24 
goods in any official language of the Philippines, subject to all provisions of this 
25 
Section, including the same exceptions as are applicable to goods under 
26 
paragraph (3) of subsection (a). 
27 
(c) Fine for Failure to Mark. - If at the time of importation any good or its 
28 
container, as provided in subsection (b) hereof, is not marked in accordance with 
29 
the requirements of this Section, there shall be levied, collected, and paid upon 
53 


such good a marking duty of five percent (5%) of dutiable value, which shall be 
2 
deemed to have accrued at the time of importation. 
3 
(d) Release Withheld Until Marked. - No imported goods held in customs 
4 
custody for inspection, examination, or assessment shall be released until such 
5 
goods or their containers shall have been marked in accordance with the 
6 
requirements of this Section and until the amount of duty estimated to be payable 
7 
under subsection (c) of this Section shall have been deposited. 
8 
(e) The failure or refusal of the owner or importer to mark the goods as 
9 
herein required within a period of thirty (30) days after due notice shall constitute 
10 
as an act of abandonment of said goods and their disposition shall be governed 
11 
by the provisions of this Act relative to abandonment of imported goods. 
12 
SEC. 710. 
Dumping Duty. -
13 
The provisions of Republic Act No. 8752, otherwise known as the "Anti-
14 
Dumping Act of 1999", including its rules and regulations are hereby adopted. 
15 
SEC. 711. 
Safeguard Duty. -
16 
The provisions of Republic Act No. 8800 otherwise known as the 
17 
"Safeguard Measures Act", including its rules and regulations are hereby 
18 
adopted. 
19 
SEC. 712. Countervailing Duty.-
20 
The provisions of Republic Act No. 8751, otherwise known as "An Act 
21 
Strengthening the Mechanisms for the Imposition of Countervailing Duties on 
22 
Imported Subsidized Products, Commodities or Articles of Commerce in Order to 
23 
Protect Domestic Industries from Unfair Trade Competition, Amending for the 
24 
Purpose Section 302, Part 2, Title II, Book I of Presidential Decree No. 1464, 
25 
otherwise known as the Tariff and Customs Code of the Philippines, as 
26 
Amended", including its rules and regulations are hereby adopted. 
27 
SEC. 713. 
Discrimination by Foreign Countries. - Without prejudice 
28 
to the Philippine commitment in any ratified international agreements or treaty, 
54 


the following recourse shall be applicable in case of discrimination by foreign 
2 
countries: 
3 
a) When the President finds that the public interest will be served thereby, 
4 
the President shall, by proclamation, specify and declare new or additional duties 
5 
in an amount not exceeding one hundred percent (100%) ad valorem upon 
6 
goods wholly or in part the growth or product of, or imported in a vessel of any 
7 
foreign country whenever the President shall find as a fact that such country: 
8 
(1) imposes, directly or indirectly, upon the disposition or transportation in 
9 
transit or through re-exportation from such country of any goods wholly or in part 
10 
the growth or product of the Philippines, any unreasonable charge, exaction, 
11 
regulation or limitation which is not equally enforced upon the like goods of every 
12 
foreign country; or 
13 
(2) discriminates in fact against the commerce of the Philippines, directly 
14 
or indirectly, by law or administrative regulation or practice, by or in respect to 
15 
any customs, tonnage, or port duty, fee, charge, exaction, classification, 
16 
regulation, condition, restriction or prohibition, in such manner as to place the 
17 
commerce of the Philippines at a disadvantage compared with the commerce of 
18 
any foreign country. 
19 
(b) If at any time the President shall find it to be a fact that any foreign 
20 
country has not only discriminated against the commerce of the Philippines, as 
21 
aforesaid, but has, after the issuance of a proclamation as authorized in 
22 
subsection (a) of this section, maintained or increased its said discrimination 
23 
against the commerce of the Philippines, the President is hereby authorized, if 
24 
deemed consistent with the interests of the Philippines and of public interest, to 
25 
issue a further proclamation directing that such product of said country or such 
26 
goods imported in their vessels be excluded from importation into the Philippines. 
27 
(c) Any proclamation issued by the President under this section shall, if 
28 
the President deems it consistent with the interest of the Philippines, extend to 
29 
the whole of any foreign country or may be confined to any subdivision or 
55 


subdivisions thereof: Provided, That, 
the President may, whenever the public 
2 
interests require, suspend, revoke, supplement or amend any such proclamation. 
3 
(d) All goods imported contrary to the provisions of this section shall be 
4 
forfeited to the government of the Philippines and shall be liable to be seized, 
5 
prosecuted and condemned in like manner and under the same regulations, 
6 
restrictions, and provisions as may from time to time be established for the 
7 
recovery, collection, distribution, and remission or forfeiture to the government by 
8 
the tariff and customs laws. Whenever the provision of this section shall be 
9 
applicable to importations into the Philippines of goods wholly or in part the 
10 
growth or product of any foreign country, it shall be applicable thereto, whether 
11 
such goods are imported directly or indirectly. 
12 
(e) It shall be the duty of the Commission to ascertain and at all times be 
13 
informed whether any of the discriminations against the commerce of the 
14 
Philippines enumerated in subsections (a) and (b) of this section are practiced by 
15 
any country; and if and when such discriminatory acts are disclosed, it shall be 
16 
the duty of the Commission to bring the matter to the attention of the President, 
17 
and to recommend measures to address such discriminatory acts. 
18 
(f) The Secretary of Finance shall make such rules and regulations as are 
19 
necessary for the execution of a proclamation that the President may issue in 
20 
accordance with the provisions of this section. 
21 
TITLE VIII 
22 
TAX AND DUTY DEFERMENT, PREFERENCE AND EXEMPTION 
23 
CHAPTER 1 
24 
CONDITIONALLY-FREE AND DUTY-EXEMPT IMPORTATION 
25 
SEC. 800. 
Conditionally-Free and Duty-Exempt Importation. -
The 
26 
following goods shall be exempt from the payment of import duties upon 
27 
compliance with the formalities prescribed in the regulations which shall be 
28 
promulgated by the Commissioner with the approval of the Secretary of Finance: 
29 
Provided, That goods sold, bartered, hired or used for purposes other than what 
56 


they were intended for and without prior payment of the duty, tax or other 
2 
charges which would have been due and payable at the time of entry if the goods 
3 
had been entered without the benefit of this section, shall be subject to forfeiture 
4 
and the importation shall constitute a fraudulent practice against customs laws: 
5 
Provided, however, That a sale pursuant to a judicial order or in liquidation of the 
6 
estate of a deceased person shall not be subject to the preceding proviso, 
7 
without prejudice to the payment of duties, taxes and other charges: Provided, 
8 
further, That the President may upon the recommendation of the Secretary of 
9 
Finance, suspend, disallow or completely withdraw, in whole or in part, any 
10 
conditionally free importation under this section: 
11 
(a) Aquatic products such as fishes, crustaceans, mollusks, marine 
12 
animals, seaweeds, fish oil, roe, caught or gathered by fishing vessels of 
13 
Philippine registry: Provided, That they are imported in such vessels or in crafts 
14 
attached thereto: Provided, however, That they have not been landed in any 
15 
foreign territory or, if so landed, that they have been landed solely for 
16 
transshipment without having been advanced in condition; 
17 
(b) Equipment for use in the salvage of vessels or aircrafts, not available 
18 
locally, upon identification and the giving of a security in an amount equal to one 
19 
hundred percent (100%) the ascertained duties, taxes and other charges 
20 
thereon, conditioned for the exportation thereof or payment of corresponding 
21 
duties, taxes and other charges within six (6) months from the date of 
22 
acceptance of the goods declaration: Provided, That the District Officer may 
23 
extend the time for exportation or payment of duties, taxes and other charges for 
24 
a term not exceeding six (6) months from the expiration of the original period; 
25 
(c) Cost of repairs, excluding the value of the goods used, made in foreign 
26 
countries upon vessels or aircraft documented, registered or licensed in the 
27 
Philippines, upon proof satisfactory to the District Officer: (1) that adequate 
28 
facilities for such repairs are not afforded in the Philippines; or (2) that such 
29 
vessels or aircrafts, while in the regular course of their voyage or flight, were 
57 


compelled by stress of weather or other casualty to put into a foreign port to 
2 
make such repairs in order to secure the safety, seaworthiness, or airworthiness 
3 
of the vessels or aircrafts to enable them to reach their port of destination; 
4 
(d) Goods brought into the Philippines for repair, processing or 
5 
reconditioning to be re-exported upon completion of the' repair, processing or 
6 
reconditioning: Provided, That the District Officer shall require security equal to 
7 
one hundred percent (100%) of the duties, taxes, and other charges thereon, 
8 
conditioned for the exportation thereof or payment of the corresponding duties, 
9 
taxes, and other charges within six (6) months from the date of acceptance of the 
10 
goods declaration; 
11 
(e) Medals, badges, cups, and other small goods bestowed as trophies or 
12 
prizes, or those received or accepted as honorary distinction; 
13 
(f) Personal and household effects belonging to residents of the 
14 
Philippines returning from abroad including used household appliances, jewelry, 
15 
precious stones, and other goods of luxury which were formally declared and 
16 
listed before departure and identified under oath before the District Officer when 
17 
exported from the Philippines by such returning residents upon their departure 
18 
therefrom or during their stay abroad; personal and household effects including 
19 
wearing apparel, goods of personal adornment except lUxury items, toilet goods, 
20 
instruments related to one's profession and analogous personal or household 
21 
effects, excluding vehicles, watercrafts, aircrafts and animals purchased in 
22 
foreign countries by residents of the Philippines which were necessary, 
23 
appropriate, and normally used for their comfort and convenience during their 
24 
stay abroad, accompanying them on their return, or arriving within a reasonable 
25 
time which, barring unforeseen and fortuitous events, in no case shall exceed 
26 
sixty (60) days after the owner's return: Provided, That the personal and 
27 
household effects shall neither be in commercial quantities nor intended for 
28 
barter, sale or for hire and that the total dutiable value of which shall not exceed 
29 
Three hundred fifty thousand pesos (P350,OOO.00): Provided, however, That the 
58 


returning resident has not previously availed of the privilege under this section 
2 
within three hundred sixty-five (365) days prior to returning resident's arrival: 
3 
Provided, further, That any amount in excess of Three hundred fifty thousand 
4 
pesos (P350,000.00) shall be subject to the corresponding duties and taxes 
5 
under this Act. For purposes of this Section. the phrase "returning residents" 
6 
refers to Filipino nationals who have stayed in a foreign country for a period of at 
7 
least ten (10) years: Provided, however, That for returning residents who have 
8 
stayed in a foreign country for a period of at least five (5) years. tlie personal and 
9 
household effects shall not exceed Two hundred fifty thousand pesos 
10 
(P250.000.00) and has not availed of the privilege under this Section within three 
11 
hundred sixty-five (365) days: Provided, finally, That the Secretary of Finance. 
12 
upon the recommendation of the Commissioner shall review and adjust the value 
13 
as provided herein every three (3) years after the effectivity of this Act and shall 
14 
be adjusted to its present value using the Consumer Price Index (CPI) as 
15 
published by the Philippine Statistics Authority (PSA). Any amount in excess of 
16 
the allowable non-dutiable value shaft be subject to the corresponding duties and 
17 
taxes under this Act; 
18 
In addition to the privileges granted under the immediately preceding 
19 
paragraph. returning Overseas Filipino Workers (OFWs) shall have the privilege 
20 
to bring in. tax and duty free. home appliances and other durables. limited to one 
21 
of every kind once in a given calendar year accompanying them on their return. 
22 
or arriving within a reasonable time which. barring unforeseen and fortuitous 
23 
events. in no case shall exceed Sixty (60) days after every returning OFW's 
24 
return upon presentation of their original passport at the port of entry: Provided, 
25 
That any amount in excess of One Hundred thousand fifty pesos (P150,000.00) 
26 
for personal and household effects or of the number of duty-free appliances as 
27 
provided for under this section. shall be subject to the corresponding duties 
28 
provided under this Act: Provided, further, That every three (3) years after the 
29 
effectivity of this Act, the Secretary of Finance. upon recommendation of the 
59 


Commissioner shall review the amount hereinstated and shall be adjusted to its 
2 
present value using the Consumer Price Index (CPI) as published by the 
3 
Philippine Statistics Authority (PSA); 
4 
(f-1) Residents of the Philippines, Overseas Filipino Workers (OFWs) or 
5 
other Filipinos while residing abroad or in their return to the Philippines shall be 
6 
allowed to bring in or send to their families or relatives in the Philippines 
7 
balikbayan boxes which shall be exempt from duties and taxes imposed under 
8 
the Tariff and Customs Code of the Philippines (TCCP) and the National Internal 
9 
Revenue Code (NIRC) of 1997, as amended: Provided, That balikbayan boxes 
10 
shall contain personal and household effects only and shall neither be in 
11 
commercial quantities nor intended for barter, sale or for hire and that the total 
12 
dutiable value of which shall not exceed One hundred fifty thousand pesos 
13 
(P150,OOO.OO): Provided, further, every three (3) years after the effectivity of this 
14 
Act, the Secretary of Finance, upon recommendation of the Commissioner, shall 
15 
review the value herein stated and shall adjust its present value using the 
16 
Consumer Price Index, as published by the Philippine Statistics Authority (PSA): 
17 
Provided, finally, That residents of the Philippines or OFWs can only avail this 
18 
privilege up to three (3) times in a calendar year. Any amount in excess of the 
19 
allowable non-dutiable value shall be subject to the corresponding duties and 
20 
taxes under this Act; 
21 
(1) Overseas Filipino Workers refers to holders of valid passports duly 
22 
issued by the Department of Foreign Affairs (DFA) and certified by the 
23 
Department of Labor and Employment (DOLE) or the Philippine Overseas 
24 
Employment Agency (POEA) for overseas employment purposes. They cover all 
25 
nationals working in a foreign country under employment contracts including 
26 
Middle East contract workers, entertainers, domestic helpers, regardless of their 
27 
employment status in the foreign country; and 
28 
(2) Calendar Year refers to the period from January 1 to December 31; 
60 


(g) Wearing apparel, goods of personal adornment, toilet goods, portable 
2 
tools and 
instrument, theatrical costumes and similar effects accompanying 
3 
travelers, or tourists, or arriving within a reasonable time before or after their 
4 
arrival in the Philippines, which are necessary and appropriate for the wear and 
5 
use of such persons according to the nature of the journey, their comfort and 
6 
convenience: Provided, That this,exemption shall not apply to goods intended for 
7 
other persons or for barter, sale or hire: Provided, however, That the District 
8 
Officer may require either a written commitment or a security in an amount equal 
9 
to one hundred percent (100%) the ascertained duties, taxes and other charges 
10 
conditioned for the exportation thereof or payment of the corresponding duties, 
11 
taxes and other charges within three (3) months from the date of acceptance of 
12 
the goods declaration: Provided, further, That the District Officer may extend the 
13 
time for exportation or payment of duties, taxes and other charges for a term not 
14 
exceeding three (3) months from the expiration of the original period. 
15 
Personal and household effects and vehicles belonging to foreign 
16 
consultants and experts hired by, or rendering service to, the government, and 
17 
their staff or personnel and families accompanying them or arriving within a 
18 
reasonable time before or after their arrival in the Philippines, in quantities and of 
19 
the kind necessary and suitable to the profession, rank or position of the person 
20 
importing them, for their own use and not for barter, sale or hire: Provided, That 
21 
the District Officer may require either a written commitment or a security in an 
22 
amount equal to one hundred percent (100%) the ascertained duties, taxes and 
23 
other charges upon the goods classified under this subsection; conditioned for 
24 
the exportation thereof or payment of the corresponding duties, taxes and other 
25 
charges within three (3) months after the expiration of their term or contract: 
26 
Provided, however, That the District Officer may extend the time for exportation 
27 
or payment of duties, taxes and other charges for a term not exceeding three (3) 
28 
months from the expiration of the original period; 
61 


(h) Professional instruments and implements, tools of trade, occupation or 
2 
employment, wearing apparel, domestic animals, and personal and household 
3 
effects belonging to persons coming to settle in the Philippines or Filipinos or 
4 
their families and descendants who are now residents or citizens of other 
5 
countries, such parties hereinafter referred to as overseas Filipinos, in quantities 
6 
and of the class suitable to the profeSSion, rank or position of the persons 
7 
importing them, for their own use and not for barter or sale, accompanying such 
8 
persons, or arriving within a reasonable time. The District Officer may, upon the 
9 
production of satisfactory evidence that such persons are actually coming to 
10 
settle in the Philippines and that the goods are brought from their former place of 
11 
abode, exempt such goods from the payment of customs duties and taxes: 
12 
Provided, That vehicles, vessels, aircrafts, machineries and other similar goods 
13 
for use in manufacture, shall not fall within this classification and shall therefore 
14 
be subject to customs duties, taxes and other charges; 
15 
(i) Goods used exclusively for public entertainment, and for display in 
16 
public expositions, or for exhibition or competition for prizes, and devices for 
17 
projecting pictures and parts and appurtenances thereof, upon identification, 
18 
examination, and appraisal and the giving of a security in an amount equal to 
19 
one hundred percent (100%) of the ascertained duties, taxes and other charges 
20 
thereon, conditioned for exportation thereof or payment of the corresponding 
21 
duties, taxes and other charges within three (3) months from the date of 
22 
acceptance of the goods declaration: Provided, That the District Officer may 
23 
extend the time for exportation or payment of duties, taxes and other charges for 
24 
a term not exceeding three (3) months from the expiration of the original period; 
25 
and technical and scientific films when imported by technical, cultural and 
26 
scientific institutions, and not to be exhibited for profit: Provided, further, That if 
27 
any of the films is exhibited for profit, the proceeds therefrom shall be subject to 
28 
confiscation, in addition to the penalty provided under this Act; 
62 


(j) Goods brought by foreign film producers directly and exclusively used 
2 
for making or recording motion picture films on location in the Philippines, upon 
3 
their identification, examination and appraisal and the giving of a security in an 
4 
amount equal to one hundred percent (100%) of the ascertained duties, taxes, 
5 
and other charges thereon, conditioned for exportation thereof or payment of the 
6 
corresponding duties, taxes, and other charges within three (3) months from the 
7 
date of acceptance of the goods declaration, unless extended by the District 
8 
Officer for another three (3) months; photographic and cinematographic films, 
9 
underdeveloped, exposed outside the Philippines by resident Filipino citizens or 
10 
by producing companies of Philippine registry where the principal actors and 
11 
artists employed for the production are Filipinos, upon affidavit by the importer 
12 
and identification that such exposed films are the same films previously exported 
13 
from the Philippines. As used in this paragraph, the terms '"actors'" and '"artists" 
14 
include the persons operating the photographic camera or other photographic 
15 
and sound recording apparatus by which the film is made; 
16 
(k) Importations for the official use of foreign embassies, legations and 
17 
other agencies of foreign govemments: Provided, That those foreign countries 
18 
accord like privileges to corresponding agencies of the Philippines. Goods 
19 
imported for the personal or family use of the members and attaches of foreign 
20 
embassies, legations, consular officers and other representatives of foreign 
21 
governrnents: Provided, however, That such privilege shall be accorded under 
22 
special agreements between the Philippines and the countries which they 
23 
represent: Provided, further, That the privilege may be granted only upon specific 
24 
instructions of the Secretary of Finance pursuant to an official request of the DFA 
25 
on behalf of members or attaches of foreign embassies, legations, or consular 
26 
officers and other representatives of foreign governments. 
27 
(I) 
Imported goods donated to or, for the account of the Philippine 
28 
government or any duly registered relief organization, not operated for profit, for 
63 


free distribution among the needy, upon certification by the DSWD or the 
2 
Department of Education (DepED), as the case may be; 
3 
(m) 
Containers, holders and other similar receptacles of any material 
4 
including kraft paper bags for locally manufactured cement for export, including 
5 
corrugated boxes for bananas, mangoes, pineapples and other fresh fruits for 
6 
export, except other containers made of paper, paperboard and textile fabrics, 
7 
which are of such character as to be readily identifiable and/or reusable for 
8 
shipment or transportation of goods shall be delivered to the importer thereof 
9 
upon identification, examination and appraisal and the giving of a security in an 
10 
amount equal to one hundred percent (100%) of the ascertained duties, taxes 
11 
and other charges within six (6) months from the date of acceptance of the goods 
12 
declaration; 
13 
(n) Supplies which are necessary for the reasonable requirements of the 
14 
vessel or aircraft in its voyage or flight outside the Philippines, including goods 
15 
transferred from a bonded warehouse in any Customs District to any vessel or 
16 
aircraft engaged in foreign trade, for use or consumption of the passengers or its 
17 
crew on board such vessel or aircraft as sea or air stores; or goods purchased 
18 
abroad for sale on board a vessel or aircraft as saloon stores or air store 
19 
supplies: Provided, That any surplus or excess of such vessel or aircraft supplies 
20 
arriving from foreign ports or airports shall be dutiable; 
21 
(0) Goods and salvage from vessels recovered after a period of two (2) 
22 
years from the date of filing the marine protest or the time when the vessel was 
23 
wrecked or abandoned, or parts of a foreign vessel or its equipment, wrecked or 
24 
abandoned in Philippine waters or elsewhere: Provided, That goods and salvage 
25 
recovered within the said period of two (2) years shall be dutiable; 
26 
(p) 
Coffins or urns containing human remains, bones or ashes, used 
27 
personal and household effects (not merchandise) of the deceased person, 
28 
except vehicles, the dutiable value of which does not exceed One hundred 
29 
thousand pesos (P100,000.00), upon identification as such: 
Provided, That 
64 


every three (3) years after the effectivity of this Act, the value herein stated shall 
2 
be adjusted to its present value using the CPI, as published by the PSA; 
3 
(q) 
Samples of the kind, in such quantity and of such dimension or 
4 
construction as to render them unsaleable or of no commercial value; models not 
5 
adapted for practical use; and samples of medicines, properly marked "sample-
6 
sale punishable by law", for the purpose of introducing new goods in the 
7 
Philippine market and imported only once in a quantity sufficient for such 
8 
purpose by a person duly registered and identified to be engaged in that trade: 
9 
Provided, That importations under this subsection shall be previously authorized 
10 
by the Secretary of Finance: Provided, however, That importation of sample 
11 
medicines shall have been previously authorized by the Secretary of Health, and 
12 
that such samples are new medicines not available in the Philippines: Provided, 
13 
further, That samples not previously authorized or properly marked in 
14 
accordance with this section shall be levied the corresponding tariff duty. 
15 
Commercial samples, except those that are not readily and easily 
16 
identifiable as in the case of precious and semi-precious stones, cut or uncut, 
17 
and jewelry set with precious or semi-precious stones, the value of any single 
18 
importation of which does not exceed Fifty thousand pesos (P50,OOO.OO) upon 
19 
the giving of a security in an amount equal to the ascertained duties, taxes and 
20 
other charges thereon, conditioned for the exportation of said samples within 
21 
three (3) months from the date of the acceptance of the goods declaration or in 
22 
default thereof, the payment of the corresponding duties, taxes and other 
23 
charges: Provided, That If the value of any single conSignment of such 
24 
commercial samples exceeds Fifty thousand pesos (P50,OOO.OO), the importer 
25 
thereof may select any portion of same not exceeding in value of Fifty thousand 
26 
pesos (P50,OOO.OO) for entry under the provision of this subsection, and the 
27 
excess of the consignment may be entered in bond, or for consumption, as the 
28 
importer may elect; 
65 


(r) Animals, except race horses, and plants for scientific, experimental 
2 
propagation or breeding, 
and for other botanical, zoological and national 
3 
defense purposes: Provided, That no live trees, shoots, plants, moss and bulbs, 
4 
tubers and seeds for propagation purposes may be imported unde~ this section, 
5 
except by order of the government or other duly authorized institutions: Provided, 
6 
however, That the free entry of animals for breeding purposes shall be restricted 
7 
to animals of recognized breed, duly registered in the record or registry 
8 
established for that breed, and certified as such by the Bureau of Animal Industry 
9 
(BAI): Provided, further, That the certification of such record, and pedigree of 
10 
such animal duly authenticated by the proper custodian of such record or 
11 
registry, shall be submitted to the District Officer, together with the affidavit of the 
12 
owner or importer that such animal is the animal described in said certificate of 
13 
record and pedigree: Provided, finally, That the animals and plants are certified 
14 
by the NEDA as necessary for economic development; 
15 
(s) EconomiC, technical, vocational, scientific, philosophical, historical and 
16 
cultural books or publications, and religious books like bibles, missals, prayer 
17 
books, the Koran, Ahadith and other religious books of similar nature and 
18 
extracts therefrom, hymnal and hymns for religious uses: Provided, That those 
19 
which may have already been imported but are yet to be released by the Bureau 
20 
at the effectivity of this Act may still enjoy the privilege herein provided upon 
21 
certification by the DepED that such imported books and/or publications are for 
22 
economic, technical, vocational, scientific, philosophical, historical or cultural 
23 
purposes or that the same are educational, scientific or cultural materials 
24 
covered by the International Agreement on Importation of Educational Scientific 
25 
and Cultural Materials (JAESCM) signed by the President of the Philippines on 
26 
August 2, 1952, or other agreements binding upon the Philippines. Educational, 
27 
scientific and cultural materials covered by international agreements or 
28 
commitments binding upon the Philippine government so certified by the DepED. 
66 


(t) Philippine goods previously exported from the Philippines and returned 
2 
without having been advanced in value or improved in condition by any process 
3 
of manufacturing or other means, and upon which no drawback or bounty has 
4 
been allowed, including instruments and implements, tools of trade, machinery 
5 
and equipment, used abroad by Filipino citizens in the pursuit of their business, 
6 
occupation or profession; and foreign goods previously imported when returned 
7 
after having been exported and loaned for use temporarily abroad solely for 
8 
exhibition, testing and experimentation, for scientific or educational purposes; 
9 
and foreign containers previously imported which have been used in packing 
10 
exported Philippine goods and returned empty if imported by or for the account of 
II 
the person or institution who exported them from the Philippines and not for sale, 
12 
barter or hire subject to identification: Provided, That Philippine goods falling 
13 
under this subsection upon which drawback or bounty have been allowed shall, 
14 
upon re-importation thereof, be subject to a duty under this subsection equal to 
15 
the amount of such drawback or bounty; 
16 
(u) 
Aircraft, equipment and machinery, spare parts commissary and 
17 
catering supplies, aviation gas, fuel and oil, whether crude or refined except 
18 
when directly or indirectly used for domestic operations, and such other goods or 
19 
supplies imported by and for the use of scheduled airlines .operating under 
20 
congressional franchise: Provided, That such goods or supplies are not locally 
21 
available in reasonable quantity, quality and price and are necessary or 
22 
incidental to the proper operation of the scheduled airline importing the same; 
23 
(v) Machineries, equipment, tools for production, plans to convert mineral 
24 
ores into saleable form, spare parts, supplies, materials, accessories, explosives, 
25 
chemicals, and transportation and communications facilities imported by and for 
26 
the use of new mines and old mines which resume operations, when certified to 
27 
as such by the Secretary of the Department of Environment and Natural 
28 
Resources, upon the recommendation of the Director of Mines and Geosciences 
29 
Bureau, for a period ending five (5) years from the first date of actual commercial 
67 


production of saleable mineral products: Provided, That such goods are not 
2 
locally available in reasonable quantity, quality and price and are necessary or 
3 
incidental in the proper operation of the mine; and aircrafts imported by agro-
4 
industrial companies to be used by them in their agriculture and industrial 
5 
operations or activities, spare parts and accessories thereof, when certified to as 
6 
such by the Secretary of the Department of Agriculture (DA) or the Secretary of 
7 
the Department of Trade and Industry (DTI), as the case may be; 
8 
(w) Spare parts of vessels or aircraft of foreign registry engaged in foreign 
9 
trade when brought into the Philippines exclusively as replacements or for the 
10 
emergency repair thereof, upon proof satisfactory to the District Officer that such 
11 
spare parts shall be utilized to secure the safety. seaworthiness or airworthiness 
12 
of the vessel or aircraft, to enable it to continue its voyage or flight; 
13 
(x) 
Goods exported from the Philippines for repair, processing or 
14 
reconditioning without having been advanced in value, and subsequently 
15 
reimported in its original form and in the same state: Provided, That in case the 
16 
reimported goods advanced in value, whether or not in their original state, the 
17 
value added shall be subject to the applicable duty rate of the tariff heading of 
18 
the reimported goods; and 
19 
(y) 
Trailer chassis when imported by shipping companies for their 
20 
exclusive use in handling containerized cargo, upon posting a security in an 
21 
amount equal to one hundred percent (100%) the ascertained duties, taxes and 
22 
other charges due thereon to cover a period of one (1) year from the date of 
23 
acceptance of the entry, which period, for meritorious reasons, may be extended 
24 
by the Commissioner from year to year, subject to the following conditions: 
25 
(1) That they shall be properly identified and registered with the Land 
26 
Transportation Office (L TO); 
27 
(2) That they shall be subject to customs supervision fee to be fixed by the 
28 
District Officer and subject to the approval of the Commissioner; 
29 
(3) That they shall be deposited in the customs zone when not in use; and 
68 


(4) That upon the expiration of the period prescribed above, duties and 
2 
taxes shall be paid unless otherwise re-exported. 
3 
(z) Any officer or employee of the DFA, including any attache, civil or 
4 
military or member of the staff aSSigned to a Philippine diplomatic mission abroad 
5 
by the Department or any similar officer or employee of other departments 
6 
assigned to any Philippine consular office abroad, or any AFP military personnel 
7 
accorded assimilated diplomatic rank or on duty abroad who is returning from a 
8 
regular assignment abroad, for reassignment to the home office, or who dies, 
9 
reSigns, or is retired from the service, after the approval of this Act, shall be 
10 
exempt from the payment of all duties and taxes on personal and household 
11 
effects, including one (1) rnotor car which must have been ordered or purchased 
12 
prior to the receipt by the mission or consulate of the order of recall, and which 
13 
must be registered in the name of the officer or ernployee: Provided, That this 
14 
exemption shall apply only to the value of the motor car and to the aggregate 
15 
assessed value of the personal and household effects, the latter not to exceed 
16 
thirty percent (30%) of the total amount received by the officer or employee in 
17 
salary and allowances during the latest assignment abroad, but not to exceed 
18 
four (4) years: Provided, however, That this exemption shall not be availed of 
19 
more than once every four (4) years: Provided, further, That the officer or 
20 
employee concerned must have served abroad for not less than two (2) years. 
21 
The 
provisions 
of general 
and 
special 
laws, 
to 
the 
contrary 
22 
notwithstanding, 
including those granting franchises, there, shall be no 
23 
exemption whatsoever from the payment of customs duties except as provided 
24 
for in this Act; those granted to government agencies, instrumentalities or 
25 
government-owned 
or 
-controlled 
corporations 
with 
existing 
cont[acts, 
26 
commitments, agreements, or obligations with foreign countries requiring such 
27 
exemption; 
those 
granted 
to 
international 
institutions, 
associations 
or 
28 
organizations entitled to exemption pursuant to agreements or special laws; and 
69 


those that may be granted by the President upon prior recommendation of the 
2 
NEDA in the interest of national economic development. 
3 
Upon the recommendation of the Commissioner, the Secretary of Finance 
4 
may adjust the amount subject to exemption from duties provided in paragraphs 
5 
(f), (p), and (q) of this Section. 
6 
CHAPTER 2 
7 
CUSTOMS WAREHOUSES 
8 
SEC. 801. 
Establishment and Supervision of Customs Bonded 
9 
Warehouses. -
When the business of the port requires such facilities, the 
10 
District Officer subject to the approval of the Commissioner shall designate and 
11 
establish warehouses for use as public and private bonded warehouses, yards, 
12 
or for other special purposes. All such warehouses and premises shall be subject 
13 
to the supervision of the District Officer, who shall impose such conditions as 
14 
may be deemed necessary for the protection of the revenue and of the goods 
15 
stored therein. 
16 
SEC. 802. 
Types of Customs Bonded Warehouses (CBWs). 
17 
Customs bonded warehouses maybe classified as either manufacturing or non-
18 
manufacturing. 
19 
Manufacturing customs bonded warehouse maybe of the following types: 
20 
a) miscellaneous customs bonded warehouse; or b) customs common bonded 
21 
warehouse. 
22 
Non-manufacturing customs bonded warehouse include: a) public bonded 
23 
warehouse; 
b) 
private 
bonded 
warehouse; 
c) 
industry-specific 
bonded 
24 
warehouse; or, d) other customs facilities. 
25 
SEC. 803. Types of Customs Facilities and Warehouses (CFWS). -
26 
customs facilities and warehouses shall include: 
27 
(a) container yard; 
28 
(b) container freight station; 
29 
(c) seaport warehouses; and 
70 


(d) airport warehouses. 
2 
Subject to consultation with the NEDA and the DTI, and based on 
3 
prevailing economic circumstances, the Secretary of Finance may, upon the 
4 
recommendation of the Commissioner, create or dissolve certain types of 
5 
warehouses. 
6 
SEC. 804. 
Application for Operation of a Customs Warehouse. -
7 
Application for the establishment of CBW and CFW shall be filed with the District 
8 
Officer where the CBW or CFW is located, describing the premises, location, 
9 
capacity and purpose thereof. 
10 
Upon receipt of such application, the District Officer shall examine the 
II 
premises of such proposed warehouse, particularly its location, construction and 
12 
storage facilities. The District Officer with the approval of the Commissioner may 
13 
authorize the establishment of customs warehouses, and accept the required 
14 
security for its operation and maintenance. The operator of such CBW and CFW 
15 
shall pay an annual supervision fee, as determined by the Commissioner. 
16 
SEC. 805. 
Responsibility of Operators. - The operator of a CBW or 
17 
CFW shall comply with the customs requirements on establishment, security, 
18 
suitability and management, including stock-keeping and accounting of the 
19 
goods, of the CBW or CFW. 
20 
The operator of a CBW or CFW shall allow authorized representatives of 
21 
the Bureau access to the premises at any time, and to all documents, books and 
22 
records of accounts pertaining to the operations of the CBW or CFW. 
23 
In case of loss of the goods stored in a CBW or CFW, the operator shall 
24 
be liable for the payment of duties and taxes due thereof. The government 
25 
assumes no legal responsibility over the safekeeping of goods stored in any 
26 
customs warehouse, yard or premises. 
27 
SEC. 806. Customs Control Over CBWs and CFWs. -
The Bureau 
28 
shall, for customs purposes, exercise control over, direct and manage CBWs and 
71 


CFWs pursuant to Section 302 and likewise over the goods thereat pursuant to 
2 
Section 301 of this Act. 
3 
SEC. 807. 
Discontinuance of caw and CFW. - The use of any CBW 
4 
and CFW may be discontinued by the District Officer when conditions so warrant, 
5 
or upon receipt of a written request from the operator thereof: Provided, That all 
6 
the requirements of the law and regulations have been complied with by said 
7 
operator. Where dutiable goods are stored in such premises, the same must be 
8 
removed at the risk and expense of the operator: Provided, however, That the 
9 
premises shall not be relinquished, and its use shall not be discontinued until 
10 
after a careful examination of the account of the warehouse shall have been 
11 
made. Discontinuance of the use of any warehouse shall be effective upon 
12 
approval thereof by the District Officer who shall, within ten (10) days, inform the 
13 
Commissioner of such action in writing. 
14 
Notice of discontinuance made by the operator shall not result in the 
15 
discharge from any duties, taxes, fees and other charges imposed on dutiable 
16 
goods in said warehouse. 
17 
SEC. 808. 
Warehousing Security on Goods Stored in caws. - For 
18 
goods declared in the entry for warehousing in CBWS, the District Officer shall 
19 
require the importer to post a sufficient security equivalent to the computed 
20 
duties, taxes and other charges, conditioned upon the withdrawal of the goods 
21 
within the period prescribed by Section 8110f this Act or the payment of duties, 
22 
taxes and other charges and compliance with all importation requirements. 
23 
SEC. 809. Withdrawal of Goods from caws. - Imported goods shall be 
24 
withdrawn from the CBWs when the necessary withdrawal permit has been filed, 
25 
together with any related document required by any provision of this Act and 
26 
other regulations. 
27 
Goods entered under sufficient security as provided in Section 1507 may 
28 
be withdrawn at any time for consumption, for transit, or for exportation. The 
72 


withdrawal must be made by the CBW operator or its duly authorized 
2 
representative. 
3 
SEC. 810. Release of Goods from CFWs. -
imported goods shall be 
4 
released when the goods declaration is electronically lodged, together with any 
5 
related document required by any provision of this Act and other regulations. All 
6 
goods entered into the CFWs shall be subject to the filing of a goods declaration 
7 
within the period specified under Section 407 of this Act. 
8 
SEC. 811. 
Period of Storage in CBWs. 
-
Goods entered for 
9 
warehousing may remain in a CBW for a maximum period of one (1) year from 
10 
the time of its arrival thereat. For perishable goods, the storage period shall be 
11 
three (3) months from the date of arrival, extendible for valid reasons, and upon 
12 
written request, to another three (3) months. Goods not withdrawn at the 
13 
expiration of the prescribed period shall be deemed as property of the 
14 
government and shall be disposed of in accordance with this Act. 
15 
The Commissioner shall, in consultation with the Secretary of Trade and 
16 
Industry, establish a reasonable storage period limit beyond one (1) year for 
17 
bonded goods for manufacturing and intended for export, the processing into 
18 
finished products of which requires a longer period based on industry standard 
19 
and practice, subject to the approval of the Secretary of Finance. 
20 
SEC. 812. 
Exemption from Duty of Goods in CBWs. - Goods duly 
21 
entered for warehousing in CBWs shall be exempt from duty and tax within the 
22 
allowed period for storage unless withdrawn for consumption, exportation or 
23 
transit to a Freeport/PEZA-registered enterprise or another CBW, in which case, 
24 
such withdrawal will be subject to the applicable rules and regulations on the 
25 
liquidation of the warehousing entry. 
26 
SEC. 813. 
Records To Be Kept By CBW Operators. - An account 
27 
shall be kept by the Bureau of all goods delivered to a CBW, and a report shall 
28 
be made by the CBW operator containing a detailed statement of all imported 
73 


goods entered and withdrawn from the CBW. The Bureau shall specify the 
2 
format of the report and may require electronic submission. 
3 
All documents, books, and records of accounts concerning the operation 
4 
of any CBW shall, upon demand, be made available to the District Officer or the 
5 
representative of the District Officer for examination or audit. For record 
6 
purposes, all documents shall be kept for three (3) years. 
7 
CHAPTER 3 
8 
FREE ZONES 
9 
SEC. 814. When Goods Are Admitted And Withdrawn. - Imported 
10 
goods shall be admitted into a free zone when the goods declaration, together 
II 
with required documents, as required by existing laws and regulations, are 
12 
electronically lodged with the Bureau and other relevant government authorities 
13 
at the time of admission. 
14 
Imported goods shall be withdrawn from the free zone for entry to the 
15 
customs territory when the goods declaration is electronically lodged, together 
16 
with required documents at the time of the withdrawal from the free zone. 
17 
SEC. 815. 
Exemption from Duty of Goods in Free Zones. - Unless 
18 
otherwise provided by law and in accordance with the respective laws, rules and 
19 
regulations of the free zone authorities, goods admitted into a free zone shall not 
20 
be subject to duty and tax. 
21 
SEC. 816. Movement of Goods into and from Free Zones. - The entry 
22 
of goods into a free zone, whether directly or through the customs territory, shall 
23 
be covered by the necessary goods declaration for admission or transit. 
24 
Withdrawal from the free zone into the customs territory shall be covered by the 
25 
necessary goods declaration for consumption or warehousing. 
26 
Transfer of goods from one free zone into another free zone shall likewise 
27 
be covered by the necessary transit permit. 
28 
The implementing rules and regulations on the transit of goods admitted 
29 
into, exported from, withdrawn into the customs territory, and moved between 
74 


free zones shall be formulated and issued jOintly by the Bureau and the free zone 
2 
authorities. 
3 
SEC. 
817. 
Coordination With Free Zone Authority. -
To ensure 
4 
compliance with customs laws and regulations, the Bureau shall coordinate with 
5 
the governing authority of the zone. For this purpose, to ensure consistency and 
6 
harmony in the formulation and implementation of customs poliCies affecting the 
7 
free zone, the Commissioner shall sit as an ex officio member of the Board of 
8 
Directors of all free zone authorities. 
9 
CHAPTER 4 
10 
STORES 
11 
SEC. 818. 
Stores for Consumption. -
Stores for consumption shall 
12 
include: 
13 
(a) Goods intended for use by the passengers and the crew on board 
14 
vessels aircrafts, or trains, whether or not sold; and 
15 
(b) 
Goods necessary for the operation and maintenance of vessels, 
16 
aircraft or trains including fuel and lubricants but excluding spare parts and 
17 
equipment which are either on board upon arrival or are taken on board during 
18 
the stay in the customs territory of vessels, aircrafts or trains used, or intended to 
19 
be used, in international traffic for the transport of persons for remuneration or for 
20 
the industrial or commercial transport of goods, whether or not for remuneration. 
21 
SEC. 819. Stores to be Taken Away. - For purposes of this Chapter, 
22 
"stores to be taken away" means goods for sale to the passengers and the crew 
23 
of vessels, aircrafts or trains with a view to being landed, which are either on 
24 
board upon arrival or are taken on board during the stay in the customs territory 
25 
of vessels, aircrafts or trains used, or intended to be used, in international traffic 
26 
for the transport of persons for remuneration or for the industrial or commercial 
27 
transport of goods, whether or not for remuneration. 
28 
SEC. 820. Exemption from Duties and Taxes of Stores. -
Customs 
29 
treatment of stores should apply uniformly, regardless of the country of 
75 


registration or ownership of vessels, aircraft or trains. stores which are carried in 
2 
a vessel, aircraft or train arriving in the customs territory shall be exempted from 
3 
import duties and taxes provided that they remain on board. Stores for 
4 
consumption by the passengers and the crew imported as provisions on 
5 
international express vessels, aircrafts or trains shall be exempted from import 
6 
duties and taxes: Provided, That: 
7 
(a) 
such goods are purchased only in the countries crossed by the 
8 
international vessels and aircrafts in question; and 
9 
(b) 
any duties and taxes chargeable on such goods in the country where 
10 
they were purchased are paid. 
11 
Stores necessary for the operation and maintenance of vessels, aircrafts 
12 
or trains which are on board these means of transport shall be exempted from 
13 
import duties and taxes: 
Provided, further, That they remain on board while 
14 
these means of transport are in the customs territory. The Bureau shall allow the 
15 
issue of stores for use on board during the stay of a vessel in the customs 
16 
territory in such quantities as the customs authority deems reasonable with due 
17 
regard to the number of the passengers and the crew and to the length of the 
18 
stay of the vessel in the customs territory. The Bureau should allow the issue of. 
19 
stores for use on board by the crew while the vessel is undergoing repairs in a 
20 
dock or shipyard: 
Provided, finally, That the duration of stay in a dock or 
21 
shipyard is considered to be reasonable. 
22 
When an aircraft is to land at one or more airports in the customs territory, 
23 
the Bureau should allow the issuance of stores for consumption on board both 
24 
during the stay of the aircraft at such intermediate airports and during its flight 
25 
between such airports. 
26 
The Bureau shall require a carrier to take appropriate measures to prevent 
27 
any unauthorized use of the stores including sealing of the stores, when 
28 
necessary. It shall require the removal of stores from the vessel, aircraft, or trains 
76 


for storage elsewhere during its stay in the customs territory only when the 
2 
bureau considers it necessary. 
3 
Vessels, aircrafts, or trains which depart for an ultimate foreign destination 
4 
shall be entitled to take on board, exempted from duties and taxes, the following: 
5 
(1) stores in such quantities as the bureau deems reasonable with due 
6 
regard to the number of the passengers and the crew, to the length of the voyage 
7 
or flight, and to any quantity of such stores already on board; and 
8 
(2) stores necessary for the operation and maintenance of a vessel, 
9 
aircraft or train, in such quantities as are deemed reasonable for operation and 
10 
maintenance during the voyage or flight, after due regard of the quantity of such 
11 
stores already on board. 
12 
Replenishment of stores that are exempted from duties and taxes shall be 
13 
allowed for vessels, aircrafts, or trains which have arrived in the customs 
14 
territory, and which need to replenish their stores for the journey to their final 
15 
destination in the customs territory, subject to the same conditions provided in 
16 
this Chapter. 
17 
SEC. 821. 
Goods Declaration for Stores. -
When a declaration 
18 
concerning stores on board vessels arriving in the customs territory is required 
19 
by the Bureau, the information required shall be kept to the minimum and as may 
20 
be necessary for customs control. 
21 
The quantities of stores which are supplied to vessels during its stay in the 
22 
customs territory should be recorded on the required goods declaration 
23 
concerning stores. 
24 
The Bureau shall not require the presentation of a separate declaration of 
25 
remaining stores on board an aircraft. No separate declaration concerning stores 
26 
should be required upon departure of vessels from the customs territory. When a 
27 
declaration is required concerning stores taken on board the vessels or aircrafts 
28 
upon departure from the customs territory, the information required shall be kept 
29 
to the minimum as may be necessary for customs control. 
77 


When a vessel, aircraft or train arrives in the customs territory, stores on 
2 
board shall: 
3 
(a) be cleared for consumption or placed under another customs 
4 
procedure, subject to compliance with the conditions and formalities applicable in 
5 
each case; or 
6 
(b) subject to 
prior authorization by the bureau, 
be transferred 
7 
respectively to other vessel, aircraft or train assigned to an international route. 
8 
TITLE IX DUTY DRAWBACK AND REFUND 
9 
CHAPTER 1 DUTY DRAWBACK 
10 
11 
12 
13 
14 
IS 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
SEC. 900. 
Basis of Duty Drawback. - (a) On Fuel Used for Propulsion 
of Vessels. -
On all fuel imported into the Philippines used for propulsion of 
vessels engaged in trade with foreign countries, or in the coastwise trade, a 
refund or tax credit shall be allowed not exceeding ninety-nine percent (99%) of 
the duty imposed by law upon such fuel, which shall be paid or credited ~nder 
such rules and regulations as may be prescribed. by the Commissioner with the 
approval of the Secretary of Finance. 
(b) On Petroleum Oils and Oils Obtained from Bituminous Minerals, 
" 
Crude, Eventually Used for Generation of Electric Power and for the Manufacture 
" 
of City Gas. -
On petroleum oils and oils obtained from bituminous matj'lrials, 
crude oil imported by nonelectric utilities, sold directly or indirectly, in the same 
form or after processing, to electric utilities for the generation of electric power 
and for the manufacture of city gas, a refund or tax credit shall be allowed not 
exceeding fifty percent (50%) of the duty imposed by law upon such oils, which 
shall be paid or credited under such rules and regulations as may be prescribed 
by the Commissioner with the approval of the Secretary of Finance. 
(c) 
On Goods Made from Imported Materials. 
-
Upon exportation of 
27 
goods manufactured or produced in the Philippines, including the packing, 
28 
covering, putting up, marking or labeling thereof either in whole or in part of the 
29 
imported materials for which duties have been paid, a refund or tax credit shall 
78 


be allowed for the duties paid on the imported materials so used including the 
2 
packing, covering, putting up, marking or labeling thereof, subject to the following 
3 
conditions: 
4 
(1) the actual use of the imported materials in the production of 
5 
manufacture of the goods exported with their quantity, value, and amount of 
6 
duties paid thereon, should be established satisfactorily; 
7 
(2) the duties refunded or credited shall not exceed one hundred percent 
8 
(100%) of duties paid on the imported materials used; 
9 
(3) 
there is no determination by the NEDA of the requirement for 
10 
certification on non-availability of locally-produced or manufactured competitive 
II 
substitutes for the imported materials used at the time of importation; 
12 
(4) 
the exportation shall be made within one (1) year after the 
13 
importation of materials used and claim of refund or tax credit shall be filed within 
14 
six (6) months from the date of exportation; and 
15 
(5) 
When two or more products result from the use of the same imported 
16 
materials, an apportionment shall be made on its equitable baSis. 
17 
SEC. 901. Payment of Drawbacks. -
Eligible claims for refund or tax 
18 
credit shall be paid or granted by the Bureau to claimants within sixty (60) days 
19 
after receipt of properly accomplished claims: Provided, That a registered 
20 
enterprise under Republic Act No. 5186, otherwise known as the Investment 
21 
Incentives Act, or Republic Act No. 6135, otherwise known as the Export 
22 
Incentives Act of 1970, which has previously enjoyed tax credits based on 
23 
customs duties paid on imported raw materials and supplies, shall not be entitled 
24 
to a drawback under this Section with respect to the same importation 
, 
25 
subsequently processed and re-exported. 
26 
The Secretary of Finance may, upon the recommendation of the 
27 
Commissioner, promulgate rules and regulations allowing partial payments of 
28 
drawbacks pursuant to this Section. 
79 
Ii' 


SEC. 902. 
Prescription of Drawback Claim. - A claim and application 
2 
for a drawback shall prescribe if it is not filed within one (1) year from the date of 
3 
importation in case of Section 900 paragraphs (a) and (b) and within one (1) year 
4 
from the date of exportation in the case of Section 900 paragraph (c), subject to 
5 
such rules and regulations as may be issued by the Commissioner, upon 
6 
approval of the Secretary of Finance. 
7 
CHAPTER 2 
8 
REFUND AND ABATEMENT 
9 
SEC. 903. 
Refund of Duties And Taxes. -
Refund shall be granted 
10 
where it is established that duties and taxes have been overcharged as a result 
11 
of an error in the assessment or goods declaration. 
12 
Where permission is given by the Bureau for goods originally declared for 
13 
a customs procedure with payment of duties and taxes to be placed under 
14 
another customs procedure, a refund shall be made of any duties and taxes 
15 
charged in excess of the amount due under the new procedure, subject to such 
16 
regulation issued for the purpose. 
17 
A refund shall not be granted if the amount of duties and taxes involved is 
18 
less than ~ive Thousand Pesos (P5,OOO.00): Provided, That the Secretary of 
.-
19 
Finance, in consultation with the Commissioner, may 
adjust the minimum 
20 
amount specified in this Act, taking into account the CPI as published by the 
21 
PSA. 
22 
SEC. 904. Abatement of Duties and Taxes. - When goods have not yet 
23 
been released for consumption or have been placed under another customs 
24 
procedure, provided that no other offense or violation has been committed, the 
25 
declarant shall neither be required to pay the duties and taxes nor be entitled to 
26 
refund thereof in any of the following cases: 
27 
(a) When, at the request of the declarant, the goods are abandoned, or 
28 
as determined by the Bureau, the goods are destroyed or rendered commercially 
80 


valueless while under customs control. Any cost herein incurred shall be borne 
2 
by the declarant; 
3 
(b) When goods are destroyed or irrecoverably lost by accident or force 
4 
majeure. The remaining waste or scrap after destruction, if taken into 
5 
consumption, shall be subject to the duties and taxes that would be applicable on 
6 
such waste or scrap if imported in same state; and 
7 
(c) When there are shortages due to the nature of the goods. 
8 
SEC. 905. 
Abatement for Damage Incurred During Voyage. 
9 
Except as otherwise provided, no abatement of duties shall be made on account 
10 
of damage incurred or deterioration suffered during the voyage of importation; 
11 
and duties will be assessed on the actual quantity imported as determined by the 
12 
customs officers concerned. 
13 
SEC. 906. 
Abatement or Refund of Duty on Missing Package. -
14 
When any package or packages appearing on the manifest or bill of lading are 
IS 
missing, an abatement or refund of the duty shall be made if it is certified by the 
16 
importer or consignee, under pain of penalty for falsification or perjury, and upon 
17 
production of proof satisfactory to the Bureau, that the package or packages in 
18 
question have not been unlawfully imported into the Philippines. 
19 
SEC, 907. 
Abatement or Refund for Deficiency in Contents of 
20 
Packages. -
If, upon opening of any package, a deficiency in the quantity of the 
21 
goods is found to exist based upon the invoice, such deficiency shall be certified, 
22 
under pain of penalty for falsification or perjury, by the customs officers 
23 
concerned and upon the production of proof showing that the shortage occurred 
24 
before the arrival of the goods in the Philippines. Upon sufficient proof thereof, 
25 
the proper abatement Of refund of the duty shall be made. 
26 
SEC. 908. 
Abatement or Refund of Duties on Goods Lost or 
27 
Destroyed After Arrival. -
The Bureau may abate or refund the amount of 
28 
duties accruing or paid on any goods that have been lost due to injury, theft, 
81 


destruction through fire or through any other causes, upon satisfactory proof of 
2 
the same, under any of the following circumstances: 
3 
(a) while within the territory of any port of entry, prior to unloading under 
4 
the Bureau's supervision; 
5 
(b) 
while remaining in customs custody after unloading; 
6 
(c) 
while in transit from the port of entry to any port in the Philippines; 
7 
and 
8 
(d) while released under sufficient security for export except in case of 
9 
loss by theft. 
10 
SEC. 909. 
Abatement and Refund of Defective Goods. -
Under 
11 
conditions to be set by the Commissioner, and with the approval of the Secretary 
12 
of Finance, an abatement and refund shall be granted 011 imported or exported 
13 
goods which are found defective or otherwise not in accordance with the agreed 
14 
specifications at the time of importation or exportation and are returned either to 
15 
the supplier or to another person designated by the supplier, subject to the 
16 
following conditions: 
17 
(a) the goods have not been worked, repaired, or used in the country of 
18 
importation, and are re-exported within a reasonable time; and 
19 
(b) the goods have not been worked, repaired, or used in the country to 
20 
which they were exported, and are re-imported within a reasonable time. 
21 
Use of the goods shall, however, not hinder the refund if such use was 
22 
indispensable to discover the defects or other circumstances which caused the 
23 
re-exportation or re-importation of the goods. 
24 
As an alternative to re-exportation or re-importation, the goods may be 
25 
expressly abandoned or destroyed or rendered commercially valueless under 
26 
customs control as the Bureau may decide. In such case, the importer shall not 
27 
be entitled to an abatement or a refund if it does not defray the costs of such 
28 
abandonment, destruction, or rendition. 
82 


SEC. 910. 
Abatement of Duty on Dead or Injured Animals. - Where 
2 
it is certified, under pain of penalty for falsification or perjury, and upon 
3 
production of proof satisfactory to the Bureau that an animal subject of 
4 
importation dies or suffers injury before arrival, or while in customs custody, the 
5 
duty due thereon shall be abated provided that its carcass on board or in 
6 
customs custody is removed in the manner required by the Bureau and at the 
7 
expense of the importer. 
8 
SEC. 911. Investigation Required in 
Case of Abatements and 
9 
Refunds. - The customs officer concerned shall, in all cases of abatement or 
10 
refund of duties, submit an examination report as to any fact discovered which 
11 
indicates any discrepancy and cause the corresponding adjustment on the goods 
12 
declaration: Provided, That no abatement or refund of duties, taxes, and other 
13 
charges shall be allowed on goods lost or destroyed in bonded public or private 
14 
warehouses outside the customs zone. 
15 
SEC. 912. Refund AriSing from Correction of Errors.-
Manifest 
16 
clerical errors made on an invoice or entry, errors in return of weight, measure 
17 
and gauge, when duly certified to under penalties of falsification or perjury by the 
18 
surveyor or examining officer when there are such officers at the port, and errors 
19 
in the distribution of charges on invoices not involving any question of law and 
20 
certified to under penalties of falsification or perjury by the examining customs 
21 
officer, may be corrected in the computation of duties, if such errors are 
22 
discovered before the payments of duties, or if discovered within one (1) year 
23 
after release from customs custody of imported goods upon written request and 
24 
notice of error from the importer, or upon statement of error certified by the 
25 
District Officer. 
26 
For the purpose of correcting errors specified in the next preceding 
27 
paragraph, the Bureau is authorized to make refunds within the statutory time 
28 
limit. 
83 


SEC. 913. 
Claims for Refund. - All claims and application for refund 
2 
of duties shall be made in writing and forwarded to the Bureau within six (6) 
3 
months from the date of payment of duties and taxes . 
.1 
If, as a result of the refund of customs duties, a corresponding refund of 
5 
intemal revenue taxes on the same importation becomes due, the Bureau shall 
6 
cause the refund of internal revenue taxes in favor of the importer after issuance 
7 
of a certification from the Commissioner of Internal Revenue, when applicable. 
8. 
The importer may file an appeal of a denial of a claim for refund or 
9 
abatement, whether it is a full or partial denial, with the Commissioner within 
10 
thirty (30) days from the date of the receipt of the denial. The Commissioner shall 
11 
render a decision within thirty (30) days from the receipt of all the necessary 
12 
documents supporting the application. Within thirty (30) days from receipt of the 
13 
decision of the Commissioner, the case may also be appealed to the Court of 
14 
Tax Appeals (CTA). 
15 
TITLE X 
16 
POST CLEARANCE AUDIT 
17 
SEC. 1000. Audit and Examination of Records. -
Within three (3) 
18 
years from the date of final payment of duties and taxes or customs clearance, 
19 
as the case may be, the Bureau may conduct an audit examination, inspection, 
20 
verification, and investigation of records pertaining to any goods declaration, 
21 
which shall include statements, declarations, documents, and electronically 
22 
generated or machine readable data, for the purpose of ascertaining the 
23 
correctness of the goods declaration and determining the liability of the importer 
24 
for duties, taxes, and other charges, including any fine or penalty, to ensure 
25 
compliance with this Act. 
26 
SEC. 1001. Scope of the Audit. -
The audit of importers shall be 
27 
conducted when firms are selected by a computer-aided risk management 
28 
system, the parameters of which are to be based on objective and quantifiable 
84 


data, subject to the approval of Secretary of Finance uponirecommendation of 
" 
2 
the Commissioner. The criteria for selecting firms to be audited shall include: 
3 
a. relative magnitude of customs revenue to be generated from the firm: 
4 
b. the rates of duties of the firm's imports; 
5 
c. the compliance track records of the firm; and 
6 
d. an assessment of the risk to revenue of the firm's import activities. 
7 
SEC. 1002. Access to Records. - Any authorized officer of the Bureau 
8 
shall be given by the importer and customs broker full and free access to the 
9 
premises where the records are kept to conduct audit examination, inspection, 
10 
verification, and investigation of those records relevant to such investigation or 
11 
inquiry. 
12 
A copy of any document certified by or on behalf of the importer is 
13 
admissible in evidence in all courts as if it were the original copy. 
14 
A customs officer is not entitled to enter the premises under this Section 
15 
unless, before so doing, the officer produces to the person occupying or 
16 
apparently in charge of the premises written evidence of the fact of being duly 
17 
authorized. 
The person occupying or apparently in charge of the premises 
18 
entered by an officer shall provide the officer with all reasonable facilities and 
19 
. assistance for the effective exercise of the officer's authority under this Section. 
20 
Unless otherwise provided herein or in other provisions of law, the Bureau 
21 
may, in case of disobedience, invoke the aid of the proper regional trial court 
22 
within whose jurisdiction the matter falls. The court may punish contumacy or 
23 
refusal as contempt. In addition, the fact that the importer or customs broker 
24 
denies the authorized customs officer full and free access to importation records 
25 
during the conduct of a post clearance audit shall create a presumption of 
26 
inaccuracy in the transaction value declared for their imported goods and 
27 
constitute grounds for the bureau to conduct a re-assessment of such goods. 
28 
In addition, the imposition of the appropriate criminal sanctions provided 
29 
under this Act and other administrative sanctions may be concurrently invoked 
85 


against contumacious importers, including the suspension of the delivery or 
2 
release of their imported goods. 
3 
SEC. 1003. Requirement to Keep Records. -
(a) All importers are 
4 
required to keep at their principal place of business, in the manner prescribed by 
5 
regulations to be issued by the Commissioner and for a period of three (3) years 
6 
from the date of final payment of duties and taxes or customs clearance, as the 
7 
case may be, all records pertaining to the ordinary course of business and to any 
8 
activity or information contained in the records required by this Title in connection 
9 
with any such activity; 
10 
(b) For purposes of the post clearance audit and Section 1005, the term 
11 
importer shall include the following: 
12 
(1) Importer-of-record or consignee, owner or declarant, or a party who: 
13 
(i) imports goods into the Philippines or withdraws such goods into the 
14 
Philippine customs territory for consumption or warehousing; 
15 
files a claim for 
refund or drawback; or transports or stores 
16 
such goods carried or held under security; or 
17 
(ii) knowingly causes the importation or transportation or storage of 
18 
imported goods referred to above, or the filing of refund or 
19 
drawback claim. 
20 
(2) An agent of any party described in paragraph (1); or 
21 
(3) A person whose activities require the.filing of a goods declaration. 
22 
(c) A person ordering imported goods from a local importer or supplier in a 
23 
domestic transaction shall be exempted from requirements imposed by this 
24 
Section unless: 
25 
(1) the terms and conditions of the importation are controlled by the 
26 
person placing the order; or 
27 
(2) the circumstances and nature of the relationship between the person 
28 
placing the order and the importer or supplier are such that the former 
86 


may be considered as the beneficial or true owner of the imported 
2 
goods; or 
3 
(3) the person placing the order had prior knowledge that they will be used 
4 
in the manufacture or production of the imported goods. 
5 
All customs brokers and all other parties engaged in customs clearance 
6 
and processing are required to keep at principal place of business, in the manner 
7 
prescribed by regulations to be issued by the Commissioner and for a period of 
8 
three (3) years from the date of filing of the goods declaration, copies of the 
9 
abovementioned records covering the transactions handled. 
10 
Locators or persons authorized to bring imported goods into free zones, 
11 
such as the special economic zones and free ports, are required to keep subject-
12 
records of all its activities, including in whole or in part, records on imported 
13 
goods withdrawn from said zones into the customs territory. 
14 
SEC.1004. 
Power of the Commissioner to Obtain Information and 
15 
Issue Summons. -
For the effective implementation of the post clearance audit 
16 
functions of the Bureau, the Commissioner is hereby authorized to: 
17 
(a) obtain on a regular basis from any person, in addition to the person 
18 
who is the subject of a post clearance audit or investigation, or from any office or 
19 
officer of the national and local govemments, govemment agencies and 
20 
instrumentalities, 
including the Bangko Sentral 
ng Pilipinas (BSP) and 
21 
government-owned or -controlled corporations (GOCCs), any information such 
22 
as costs and volume of production, receipts or sales and gross incomes of 
23 
taxpayers, and the names, addresses, and financial statements of corporations, 
24 
regional operating headquarters of multinational companies, joint accounts, 
25 
associations, jOint ventures or consortia and registered partnerships, and their 
26 
members, whose business operations or activities are directly or indirectly 
27 
involved in the importation or exportation of imported goods or products 
28 
manufactured from imported component materials; 
87 


(b) summon the person liable for duties and taxes or required to file an 
2 
entry, or any officer or employee of such person, or any person having 
3 
possession, custody, or care of the books of accounts and other accounting 
4 
records containing entries relating to the business of the person liable for duties 
5 
and taxes, or any other person, to appear before the Commissioner or the duly 
6 
authorized representative at a time and place specified in the summons and to 
7 
produce such books, papers, records, or other data, and to give testimony; 
8 
(c) take such testimony of the person concemed, under oath, as may be 
9 
relevant or material to such inquiry; or 
10 
(d) obtain information from banks or other financial institutions on 
I I 
commercial documents and records pertaining specifically to payments relevant 
12 
to import transaction. 
13 
The provisions of the foregoing paragraphs notwithstanding, nothing in 
14 
this Section shall be construed as granting the Commissioner the authority to 
15 
inquire into bank deposits of persons or entities mentioned in this Title. 
16 
SEC. 1005. Failure to Pay Correct Duties and Taxes on Imported 
17 
Goods. - Any person who, after being subjected to post clearance audit and 
18 
examination as provided in Section 1000, is found to have incurred deficiencies 
19 
in duties and taxes paid for imported goods, shall be penalized according to two 
20 
(2) degrees of culpability subject to any mitigating, aggravating, or extraordinary 
21 
factors that are clearly established by 
available evidence as described 
22 
hereunder: 
23 
(a) Negligence. -
When a deficiency results from an offender's failure, 
24 
through an act or acts of omission or commission, to exercise reasonable care 
25 
and competence in ensuring that a statement made is correct, the offender shall 
26 
be charged for committing negligence, and, if found guilty shall be penalized with 
27 
a fine equivalent to one hundred twenty five percent (125%) of the revenue loss; 
28 
(b) Fraud. - When the material false statement or act in connection with 
29 
the transaction was committed or omitted knowingly, voluntarily and intentionally, 
88 


as established by clear and convincing evidence, the offender who is charged for 
2 
committing fraud 
and is found guilty thereof, 
shall be penalized with a fine 
3 
equivalent to six (6)times of the revenue loss and/or imprisonment of not less 
4 
than two (2) years, but not more than eight (8) years. 
5 
The decision of the Commissioner, upon proper hearing, to impose 
6 
penalties as prescribed in this section may be appealed in accordance with 
7 
Section 1104. 
8 
SEC. 1006. Records to be Kept by the Bureau. -
The Bureau shall 
9 
keep a database of importer and broker profiles which shall include a record of 
10 
audit results and the following information and papers: 
11 
(a) Articles of Incorporation; 
12 
(b) The company structure, which shall include but not be limited to 
13 
incorporators and board of directors, key officers, and organizational structure: 
14 
(c) Key importations; 
15 
(d) Privileges enjoyed; 
16 
(e) Penalties; and 
17 
(f) Risk categories. 
18 
The Bureau shall furnish the BIR and the DOF a copy of the final audit 
19 
results within thirty (30) days from the issuance thereof. 
20 
TITLE XI 
21 
ADMINISTRATIVE AND JUDICIAL PROCEDURES 
22 
CHAPTER1 
23 
ADVANCE RULING AND DISPUTE SETTLEMENT 
.24 
SEC. 1100. Classification Ruling. -
An importer or exporter may file 
25 
a written application for an advance ruling on the tariff classification of goods with 
26 
the Tariff Commission. The Tariff Commission shall render a ruling within thirty 
27 
(30) days from receipt of a properly documented application. 
28 
When a declared tariff classification of goods, not subject of a pending 
29 
application for advance rUling, is in dispute, the importer, exporter, or the Bureau 
89 


shall submit the matter to the Tariff Commission for a ruling, without prejudice to 
2 
the application of Section 1106 of this Act on "protest": Provided, that such 
3 
rulings of the Tariff Commission on commodity classification shall be binding 
4 
upon the Bureau, unless the Secretary of Finance shall rule otherwise. 
5 
SEC. 1101. Valuation Ruling. - An importer or exporter may file a written 
6 
application for an advance valuation ruling on the proper application of a specific 
7 
method on customs valuation of specific goods as prescribed in Title VII, Chapter 
8 
1 of this Act. 
9 
The application for a valuation ruling shall be filed with the Commissioner 
10 
who shall issue a ruling within thirty (30) days from submission of the application 
11 
form and supporting documents as may be required by rules and regulations. 
12 
When the valuation method of goods not subject of an application for 
13 
advance valuation ruling or the declared customs value is in dispute, the matter 
14 
shall be resolved in accordance with Section 1106 of this Act on "protest". 
15 
SEC. 1102. Ruling on the Rules of Origin. -
An importer or exporter 
16 
may file a written application for a ruling on whether the goods qualify as 
17 
originating under the rules of origin of the applicable preferential trade 
18 
agreement. The application for an advance ruling on origin shall be filed with the 
19 
Commissioner who shall act on the application within thirty (30) days from receipt 
20 
of the application and supporting documents as may be required by rules and 
21 
regulation. 
22 
When the declared origin of the goods, not subject of a request for 
23 
advance ruling on origin, is in dispute, the matter shall be resolved in accordance 
24 
with Section 1106 of this Act on "protest". 
25 
SEC. 1103. Conditions for Application and Effect of Advance Ruling. 
26 
-
An application for an advance ruling shall cover only one (1) product or item. 
27 
the application for advance ruling shall be filed at least ninety (90) days before 
28 
the importation or exportation of the product or item, as the case may be. 
90 


SEC. 1104. Administrative and Judicial Appeals. -
An aggrieved party 
2 
may, within thirty (30) days from receipt of an adverse ruling or decision, appeal 
3 
the same to the CTA without prejudice to the authority of the Secretary of 
4 
Finance to review decisions adverse to the government in accordance with 
5 
Section 1128 of this Act. 
6 
SEC. 1105. Implementing Rules and Regulations. - The Secretary of 
7 
Finance, upon the recommendation of the Bureau and the Tariff Commission, 
8 
shall promulgate rules and regUlations to implement the preceding provisions on 
9 
advance ruling. 
10 
CHAPTER 2 
11 
PROTEST 
12 
SEC. 1106. Protest. - When a ruling or decision of the District Officer 
13 
or customs officer 
involving goods with valuation, rules of origin, and other 
14 
customs issues is made, except the fixing of fines in seizure cases, the party 
15 
adversely affected may appeal by way of protest against such ruling or decision 
16 
by presenting to the Commissioner at the time when payment of the amount 
17 
claimed to be due the government is made, or within fifteen (15) days thereafter, 
18 
a written protest setting forth the objection to the ruling or deCision in question 
19 
with the reasons therefore. 
20 
Subject to the approval of the Secretary of Finance, the Commissioner 
21 
shall provide such rules and regulations as to the requirement for payment or 
22 
non- payment of the disputed amount and in case of non-payment, the release of 
23 
the importation under protest upon posting of sufficient guarantee. 
24 
SEC. 1107. Protest Exclusive Remedy in Protestable Case. -
In all 
25 
cases subject to protest, the interested party who desires to have the action of 
26 
the District Officer reviewed, shall file a protest as provided in Section 1106, 
27 
otherwise the action of the District Officer shall be final and conclusive. 
28 
SEC. 1108. Form and Scope of Protest. - A protest shall be filed in 
29 
accordance with the prescribed rules and regulations promulgated under this 
91 


Section. It shall point out the particular decision or ruling of the District Officer for 
2 
which protest is being made, and shall indicate the particular ground or grounds 
3 
upon which the protesting party bases the claim for relief. The scope of a protest 
4 
shall be limited to the particular goods subject of a goods declaration, but any 
5 
number of issues 
may be raised in a protest with reference to the goods 
6 
declaration constituting the subject matter of the protest. 
7 
SEC. 1109. Samples to be Furnished by Protesting Parties. - If the 
8 
nature of the goods permit, importers filing protests involving questions of fact 
9 
must, upon demand, present to the Commissioner samples of the goods which 
10 
are the subject matter of the protest. The samples of the goods shall be verified 
11 
by the customs officer who made the classification against which the protests are 
12 
filed. 
13 
SEC. 1110. Decision in Protest. -
When a protest is filed in proper 
14 
form, the Commissioner shall render a decision within thirty (30) days from 
15 
receipt of the protest. In case the protest is sustained, in whole or in part, the 
16 
appropriate order shall be made, and the entry reassessed, if necessary. 
17 
CHAPTER 3 
18 
ALERT ORDERS 
19 
SEC. 1111. Alert Orders. -
Alert orders are written orders issued by 
20 
customs officers as authorized by the Commissioner on the basis of derogatory 
21 
information regarding possible non-compliance with this Act. An alert order will 
22 
result in the suspension of the processing of the goods declaration and the 
23 
conduct of physical or non-intrusive inspection of the goods within forty-eight (48) 
24 
hours from issuance of the order. Within forty-eight (48) hours or, in the case of 
25 
perishable goods, within twenty-four (24) hours from inspection, the alerting 
26 
officer shall recommend the issuance of a warrant of seizure and detention or the 
27 
suspension of processing of the release of the goods by the District Officer 
28 
concerned. 
92 


Derogatory information shall indicate the violations and other necessary 
2 
specifics thereof. For this purpose, the following shall not be considered 
3 
derogatory information: 
4 
(a) 
General allegations of undervaluation; 
5 
(b) 
General allegations of misclassification without providing the 
6 
appropriate tariff heading and duty of the shipment to be alerted; 
7 
(c) 
General allegations of over-quantity without indicating the source of 
8 
information supporting the allegation; 
9 
(d) General allegations of misdeclaration in the entry without indicating the 
10 
suspected actual contents thereof; and general allegations of importations 
11 
contrary to law without indicating the specific law or rule to be violated. 
12 
No alert order shall be issued on account of allegations of undervaluation 
13 
unless said undervaluation is caused by the submission to customs of forged or 
14 
spurious invoice or other. commercial documents. 
15 
An alert order may be issued only after lodgement of the goods 
16 
declaration and prior to the release of goods from customs custody. Under no 
17 
circumstances shall the suspension of the processing of goods declaration be 
18 
allowed except through an alert order issued by an authorized customs officer. 
19 
The costs of the physical inspection shall be borne by the Bureau: 
20 
Provided, That such cost shall be reimbursed by the owner prior to the release of 
21 
the goods if the physical inspection results to the assessment of additional duties 
22 
or taxes or the issuance of a warrant of seizure. 
23 
The Commissioner shall be notified of the recommendation by the alerting 
24 
officer within twenty-four (24) hours from the issuance of the alert order. Alert 
25 
orders shall be dated and assigned a unique reference number in series which 
26 
shall be the basis for reporting to and monitoring by the Commissioner and the 
27 
Secretary of Finance. 
28 
The Bureau shall create a central clearing house for alert orders and shall 
29 
submit reports quarterly on the status thereof. 
93 


SEC. 1112. Alert Orders on Perishable Goods. - When the subject of 
2 
the alert order are perishable goods, the Bureau shall attach to the 
3 
recommendation a certificate stating that the goods are perishable. 
4 
CHAPTER 4 
5 
SEIZURE AND FORFEITURE 
6 
SEC. 1113. Property Subject to Seizure and Forfeiture. -
Property 
7 
that shall be sUbject to seizure and forfeiture inclUde: 
8 
(a) Any vehicle, vessel or aircraft, including cargo, which shall be used 
9 
unlawfully in the importation or exportation of goods or in conveying or 
10 
transporting smuggled goods in commercial quantities into or from any Philippine 
11 
port or place. The mere ca~rying or holding on board of smuggled goods in 
12 
commercial quantities shall subject such vehicle, vessel, aircraft, or any other 
13 
craft to forfeiture: Provided, That the vehicle, vessel, or aircraft or any other craft 
14 
is not used as a common carrier which has been chartered or leased for 
15 
purposes of conveying or transporting persons or cargo; 
16 
(b) Any vessel engaging in the coastwise trade which shall have on board 
17 
goods of foreign growth, produce, or manufacture in excess of the amount 
18 
necessary for sea stores, without such goods having been properly entered or 
19 
legally imported; 
20 
(c) Any vessel or aircraft into which shall be transferred cargo unloaded 
21 
contrary to law prior to the arrival of the importing vessel or aircraft at the port of 
22 
destination; 
23 
(d) Any part of the cargo, stores, or supplies of a vessel or aircraft arriving 
24 
from a foreign port which is unloaded before arrival at the vessel's or aircraft's 
25 
port of destination and without authority from the customs officer; but such cargo, 
26 
ship, or aircraft stores and supplies shall not be forfeited if such unloading was 
27 
due to accident, stress of weather, or other necessity and is subsequently 
28 
approved by the District Officer; 
94 


(e) Goods which are fraudulently concealed in or removed contrary to law 
2 
from any public or private warehouse, container yard, or container freight station 
3 
under customs supervision; 
4 
(f) Goods the importation or exportation of which are effected or attempted 
5 
contrary to law, or any goods of prohibited importation or exportation, and all 
6 
other goods which, in the opinion of the District Officer, have been used, are or 
7 
were entered to be used as instruments in the importation or the exportation of 
8 
the former; 
9 
(g) Unmanifested goods found on any vessel or aircraft if manifest 
10 
therefor is required; 
II 
(h) Sea stores or aircraft stores adjudged by the District Officer to be 
12 
excessive, when the duties and taxes assessed by the District Officer thereon 
13 
are not paid or secured forthwith upon assessment of the same; 
14 
(i) Any package of imported goods which is found upon examination to 
15 
contain goods not specified in the invoice or goods declaration including all other 
16 
packages purportedly containing imported goods similar to those declared in the 
17 
invoice or goods declaration to be the contents of the misdeclared package: 
18 
(j) Boxes, cases, trunks, envelopes, and other containers of whatever 
19 
character used as receptacle or as device to conceal goods which are subject to 
20 
forfeiture under this Act or which are so designed as to conceal the character of 
21 
such goods; 
22 
(k) Any conveyance actually used for the transport of goods subject to 
23 
forfeiture under this Act, with its equipage or trappings, and any vehicle similarly 
24 
used, together with its equipment and appurtenances. The mere conveyance of 
25 
smuggled goods by such transport vehicle shall be sufficient cause for the 
26 
outright seizure and confiscation of such transport vehicle but the forfeiture shall 
27 
not be effected if it is established that the owner of the means of conveyance 
28 
used as aforesaid, is engaged as common carrier and not chartered or leased, or 
95 


that the agent in charge thereof at the time, has no knowledge of the unlawful 
2 
act; and 
3 
(I) Goods sought to be imported or exported: 
4 
(1) without gOing through a customs office, whether the act was 
5 
consummated, frustrated, or attempted; 
6 
(2) found in the baggage of a person arriving from abroad and undeclared 
7 
by such person; 
8 
(3) through a false declaration or affidavit executed by the owner, 
9 
importer, exporter, or consignee concerning the irnportation of such 
10 
goods; 
J1 
(4) on the strength of a false invoice or other document executed by the 
12 
owner, importer, exporter, or consignee concerning the importation or 
13 
exportation of such goods; or 
14 
(5) through any other practice or device contrary to law by means of which 
15 
such goods entered through a customs office to the prejudice of the 
16 
government. 
17 
SEC. 1114. Properties Not Subject to Forfeiture in the Absence of 
18 
Prima Facie Evidence. - The forfeiture of the vehicle, vessel, or aircraft shall 
19 
not be effected if it is established that the owner thereof or the agent in charge of 
20 
the means of conveyance used as aforesaid has no knowledge of or participation 
21 
in the unlawful act: Provided, That a prima facie presumption shall exist against 
22 
the vehicle, vessel, or aircraft under any of the following circumstances: 
23 
(a) If the conveyance has been used for smuggling before; 
24 
(b) If the owner is not in the business for which the conveyance is 
25 
generally used; and 
26 
(c) 
If the owner is not financially in a position to own such conveyance. 
27 
SEC. 1115. Conditions Affecting Forfeiture of Goods. 
The 
28 
forfeiture shall be effected only when and while the goods are in the custody or 
29 
within the jurisdiction of customs officers, or in the possession or custody of or 
96 


subject to the control of the importer, exporter, original owner, consignee, agent 
2 
of another person effecting the importation, entry or exportation in question, or in 
3 
the possession or custody of or subject to the control of persons who shall 
4 
receive, conceal, buy, sell, or transport the same, or aid in any such acts, with 
5 
knowledge that the goods were imported, or were the subject of an attempt at 
6 
importation or exportation contrary to law. 
7 
SEC. 1116. Seizure or Release of Goods. - The District Officer shall 
8 
issue an order of release or a warrant of seizure within five (5) days, or two (2) 
9 
days in case of perishable goods, upon the recommendation of the alerting 
10 
officer or any other customs officer. The District Officer shall immediately make a 
11 
report of such seizure or release to the Commissioner. 
12 
SEC. 1117. Warrant of Seizure. -
The District Officer shall have the 
13 
authority to issue a warrant of seizure of the goods upon determination of 
14 
probable cause as provided for in this Act. The Bureau's Legal Service, through 
15 
the Prosecution and Litigation Division (PLD), may also determine the existence 
16 
of probable cause for the issuance of warrant of seizure. The District Officer shall 
17 
submit to the PLD within twenty-four (24) hours the relevant report and 
18 
documents which support the basis of its action. The PLD shall submit its 
19 
findings and recommendations to the Director of the Legal Service within three 
20 
(3) days of receipt of such report, or within twenty-four (24) hours in the case of 
21 
perishable goods. On the basis thereof, the D;irector of the Legal Service shall 
22 
immediately recommend to the District Officer for the issuance or non-issuance 
23 
of a warrant of seizure. 
24 
Prior to the final resolution of forfeitUre proceedings, the District Officer 
25 
may, with prior notice to the Commissioner and upon motion by the importer or 
26 
consignee, allow the release of seized goods under cash bond or sufficient 
27 
security equivalent to the landed cost of the goods and any fine, expenses, and 
28 
costs which may be ladjudged, subject to the following: 
97 


(1) There is no prima facie evidence of fraud in the importation of the 
2 
goods; 
3 
(2) The goods shall not be released when the importation is prohibited by 
4 
law; and 
5 
(3) The release of the goods under this Section shall not be construed as 
6 
relieving the owner or importer from any criminal liability which may arise from 
7 
any violation of this Act or other laws. 
8 
Sec. 1118. Sale of Perishable Goods during Forfeiture Proceedings. -
9 
upon motion of the importer of the perishable goods, the goods may be sold at a 
10 
public auction during the pendency of the forfeiture proceedings. The proceeds 
11 
of the auction shall be held in escrow until the final resolution of the proceedings. 
12 
SEC. 1119. Service of Warrant of Seizure. - The District Officer shall 
13 
cause the service of the warrant of seizure to the owner or importer of the goods 
14 
or the authorized representative thereof. The owner or importer shall be given an 
15 
opportunity to be heard during the forfeiture proceedings. 
16 
For the purpose of serving the warrant, the importer, consignee, or person 
17 
holding the bill of lading or airway bill shall be deemed the "owner" of the goods. 
18 
For the same purpose, "authorized representative" shall include any agent of the 
19 
owner and if the owner or the agent is unknown, any person having possession 
20 
of the goods at the time of the seizure. 
21 
Service of warrant to an unknown owner shall be effected by posting the 
22 
warrant for fifteen (15) days in a public place at the concerned district, and by 
23 
electronic or printed publication. 
24 
SEC. 1120. Description, Classification and Valuation of Seized 
25 
Goods. - The District Officer shall cause the preparation of a list and particular 
26 
description, classification, and valuation of the goods seized and valuation of 
27 
identical or similar goods. 
28 
SEC. 1121. Proceedings in Case of Property Belonging to Unknown 
29 
Parties. - If, within fifteen (15) days after service of warrant, no owner or agent 
98 


· 1 
can be found or appears before the District Officer, the seized goods shall be 
2 
forfeited ipso facto in favor of the government to be disposed of in accordance 
3 
with this Act. 
4 
SEC. 1122. Seizure of Vessel or Aircraft for Delinquency of Owner or 
5 
Officer. 
-
When the owner, agent, master, pilot in command or other 
6 
responsible officer of any vessel or aircraft becomes liable for any violation of 
7 
this Act, the vessel or aircraft may be seized and subjected to forfeiture 
8 
proceedings for the settlement of any fine or penalty for which such person is 
9 
liable. In determining whether or not to seize a vessel or aircraft, the Bureau shall 
10 
take into account the amount of fine or penalty in relation to the commercial 
11 
impact that may be caused to international trade by the seizure or detention as 
12 
well as the value of the vessel or aircraft. 
13 
SEC. 1123. Burden of Proof in Forfeiture Proceedings. -
In all 
14 
proceedings for the forfeiture of any vehicle, vessel, aircraft, or goods under this 
15 
Act, the burden of proof shall be borne by the claimant. 
16 
SEC. 1124. Settlement of Pending Seizure Case by Payment of Fine 
17 
or Redemption of Forfeited Goods. 
Subject to the approval of the 
18 
Commissioner, the District Officer may allow the settlement by payment of fine or 
19 
the redemption of forfeited goods, during the course of the forfeiture proceeding. 
20 
However, the Commissioner may accept the settlement by redemption of any 
21 
forfeiture case on appeal. No settlement by payment of fine shall be allowed 
22 
when there Is fraud or when the discrepancy in duty and tax to be paid between 
23 
what is determined and what is declared amounts to more than thirty percent 
24 
(30%). 
25 
In case of settlement by payment of fine, the owner, importer, exporter, or 
26 
consignee or agent shall offer to pay a fine equivalent to thirty percent (30%) of 
27 
the landed cost of the seized goods. In case of settlement by redemption, the 
28 
owner, importer, exporter, or consignee or agent shall offer to pay the redeemed 
99 


value equivalent to one hundred percent (100%) of the landed cost or the 
2 
domestic value, whichever is higher. 
3 
Upon payment of the fine or payment of the redeemed value, the goods 
4 
shall be released and all liabilities which may attach to the goods shall be 
5 
discharged without prejudice to the filing of administrative or criminal case. 
6 
Settlement of any seizure case by payment of the fine or redemption of 
7 
forfeited goods shall not be allowed when there is fraud, or where the importation 
8 
is prohibited or the release of the goods is contrary to law. 
9 
SEC. 1125. Decision in Forfeiture Cases. - In forfeiture cases, the 
10 
District Officer shall issue an order for hearing within fifteen (15) days, or five (5) 
11 
days in case of perishable goods, from issuance of the warrant and hear the 
12 
matter thus presented. The District Officer shall render a decision within thirty 
13 
(30) days upon termination of the hearing, or within ten (10) days in case of 
14 
perishable goods. The decision shall include a declaration of forfeiture, the 
15 
imposition of a fine or such other action as may be proper. 
16 
CHAPTER 5 
17 
APPEAL IN PROTEST AND FORFEITURE CASES 
18 
SEC. 1126. Appeal to the Commissioner. -
In forfeiture cases, the 
19 
person aggrieved by the deciSion of a District Officer may, within fifteen (15) days 
20 
or five (5) days in case of perishable goods, from receipt of the decision, file a 
21 
written notice of appeal to the District Officer with a copy furnished to the 
22 
Commissioner of his intention to appeal the action or decision of the District 
23 
Officer together with the payment of the required appeal fee. The District Officer 
24 
shall 
immediately transmit all the records of the proceedings to the 
25 
Commissioner, who shall review and decide on the appeal within thirty (30) days 
26 
from receipt of the records, or fifteen (15) days in the case of perishable goods. 
27 
Provided, That if within thirty (30) days, no decision is rendered, the decision of 
28 
the District Officer under appeal shall be deemed affirmed. 
An appeal filed 
29 
beyond the period herein prescribed shall be dismissed. 
100 


The decision of the Commissioner may be served by through the 
2 
recognized modes of service under existing law. 
3 
SEC. 1127. Automatic Review in Forfeiture Cases. - The Commissioner 
4 
shall automatically review any decision by the District Officer adverse to the 
5 
government. The entire records of the case shall be elevated within five (5) days 
6 
from the promulgation of the decision. The Commissioner shall decide on the 
7 
automatic review within thirty (30) days, or within ten (10) days in the case of 
8 
perishable goods, from receipt of the records. When no decision is rendered 
9 
within the prescribed period or when a decision adverse to the government is 
10 
rendered by the Commissioner involving goods with FOB or FCA value of Ten 
11 
Million Pesos (P10,000,000.00) or more, the records on the decision of the 
12 
Commissioner, or of the District Officer under review, as the case may be, shall 
13 
be automatically elevated within five (5) days for review by the Secretary of 
14 
Finance. The decision issued by the Secretary of Finance, whether or not a 
15 
decision was rendered by the Commissioner within thirty (30) days, or within ten 
16 
(10) days in the case of perishable goods, from receipt of the records, shall be 
17 
final upon the Bureau. 
18 
SEC. 1128. Automatic Review by the Secretary of Finance in Other 
19 
Cases. -
In cases not involving protest or forfeiture, the Commissioner shall 
20 
automatically review any decision by the District Officer that is adverse to the 
21 
government. The records of the case shall be elevated to the Commissioner 
22 
within five (5) days from the promulgation of the decision. The Commissioner 
23 
shall decide on the automatic review within thirty (30) days from receipt of the 
24 
records, or within ten (10) days in the case of perishable goods. 
When no 
25 
deCision is rendered within the prescribed period or when any decision rendered 
26 
by the Commissioner is adverse to the government, the records of the case 
27 
under review shall be automatically elevated within five (5) days for the review of 
28 
the secretary of finance. The decision issued by the Secretary of Finance, 
29 
whether or not a deciSion was rendered by the Commissioner within thirty (30) 
101 


2 
3 
4 
5 
6 
7 
8 
9 
days from receipt of the records, or within ten (10) days in the case of perishable, 
shall be final upon the Bureau. 
CHAPTER 6 
ABANDONMENT 
SEC. 1129. Abandonment, Kinds and Effects of. -
Imported goods 
are deemed abandoned under any of the following circumstances: 
(a) When the owner, importer, or consignee of the imported goods 
expressly signifies in writing to the District Officer the intention to a8~ndon the 
same; or 
10 
(b) 
When the owner, importer, consignee, or interested party after due 
11 
notice, fails to file an entry within the prescribed period in Section 407: Provided, 
12 
That the term entry shall include provisional or incomplete goods declaration 
13 
deemed valid by the Bureau as provided in Section 403 of this Act. For this 
14 
purpose, it is the duty of the District Officer to post a list of all packages 
15 
discharged and their consignees, whether electronically or physically in the 
16 
District Office, or send a notice to the consignee within five (5) days from the 
17 
date of discharge; or 
18 
(c) 
Having filed such entry, an owner, importer, consignee or interested 
19 
party after due notice, fails to pay the assessed duties, taxes and other charges 
20 
thereon, or, if the regulated goods failed to comply with Section 117, within 
21 
fifteen (15) days from the date of final assessment: Provided, That if such 
22 
regulated goods are subject of an Alert Order and the assessed duties, taxes, 
23 
and other charges thereof are not paid within fifteen (15) days from notification 
24 
by the Bureau of the resolution of the Alert Order, the same shall also be 
25 
deemed abandoned; or 
26 
(d) 
Having paid the assessed duties, taxes, and other charges, the 
27 
owner, importer or consignee or interested party after due notice, fails to claim 
28 
the goods within thirty (30) days. For this purpose, the arrastre or warehouse 
102 


operator shall report the unclaimed goods to the District Officer for disposition 
2 
pursuant to the provisions of this Act. 
3 
The due notice requirement under this Section may be provided by the 
4 
Bureau through electronic notice or personal service: Provided, That for non-
s 
regular importers, notification shall be by registered mail or personal service. For 
6 
this purpose, the accreditation of importers, exporters, and other third parties 
7 
shall include provision for mandatory receipt of electronic notices. 
8 
SEC. 1130. Treatment and Disposition of Abandoned Goods. 
9 
Expressly abandoned goods under paragraph (a) of Section 1129 shall ipso facto 
10 
be deemed the property of the government and shall be disposed of in 
II 
accordance with the provisions of this Act. 
12 
If the Bureau has not disposed of the abandoned goods, the owner or 
13 
importer of goods impliedly abandoned may, at any time within thirty (30) days 
14 
after the lapse of the prescribed period to file the declaration, reclaim the goods 
15 
provided that all legal requirements have been complied with and the 
16 
corresponding duties, taxes, and other charges as well as expenses incurred 
17 
have been paid before the release of the goods from customs custody. 
18 
When the Bureau sells goods which have been impliedly abandoned, 
19 
although no offense has been discovered, the proceeds of the sale, after 
20 
deduction of any duty and tax and all other charges and expenses incurred as 
21 
provided in Section 1143, shall be turned over to those persons entitled to 
22 
receive them or, when this is not pOSSible, held at their disposal for a specified 
23 
period. After the lapse of the specified period, the balance shall be transferred to 
24 
the forfeiture fund as provided in Section 1151. 
25 
CHAPTER 7 
26 
OTHER ADMINISTRATIVE PROCEEDINGS 
27 
SEC. 1131. Authority of the Commissioner to Make Compromise. 
28 
Subject to the approval of the Secretary of Finance, the Commissioner may 
29 
compromise any administrative case ariSing under this Act involving the 
103 


imposition of fines and surcharges, including those arising, from the conduct of a 
2 
post clearance audit, unless otherwise specified by law. 
3 
Cases involving forfeiture proceedings shall however not be subject to any 
4 
compromise. 
5 
CHAPTER 8 
6 
CIVIL REMEDIES FOR THE COLLECTION OF DUTIES AND TAXES 
7 
SEC. 1132. Remedies for the Collection of Duties, Taxes, Fines, 
8 
Surcharges, Interests, and other Charges. 
-
The civil remedies for the 
9 
collection of import duties, taxes, fees, or charges resulting from the conduct of a 
10 
post clearance audit shall be obtained by: 
11 
(a) distraint of goods, chattels, or effects, and other personal property of 
12 
whatever character, including stocks and other securities, debts, credits, bank 
13 
accounts, and interest in and rights to personal property, and by levy upon real 
14 
property and interest in rights to real property; and 
15 
(b) by civil or criminal action. 
16 
Either or both of these remedies may be pursued at the discretion of the 
17 
bureau: Provided, That the remedies of distraint and levy shall not be allowed 
18 
when the amount of duties and taxes involved is not more than Ten Thousand 
19 
Pesos (P1 0,000.00). 
20 
The Bureau shall advance the amounts needed to defray costs of 
21 
collection by means of civil or criminal action, including the preservation or 
22 
transportation of personal property distrained and the advertisement and sale 
23 
thereof, as well as of real property and improvements thereon. 
24 
SEC. 1133. Constructive Distraint of the Property. -
To safeguard 
25 
the interest of the government, the Commissioner may place under constructive 
26 
distraint the property of a delinquent importer who, in the opinion of the 
27 
commissioner, is retiring from any business subject to duty and tax, or is 
28 
intending to leave the Philippines, or to remove the property therefrom, or to hide 
104 


or conceal the property, or to perform any act tending to obstruct the proceedings 
2 
for collecting the duty arid tax due, or which may be due. 
3 
The constructive distraint of personal property shall be effected by 
4 
requiring the importer or any person in possession or control of such property to 
5 
sign a receipt covering the property, to obligate to preserve the distrained 
6 
property on the state and condition at the time of the government's seizure of the 
7 
same, and not to dispose of the same in any manner whatsoever, without the 
8 
express authority of the Cornmissioner. 
9 
In case the importer or the person in possession and control of the 
10 
property sought to be placed under constructive distraint refuses or fails to sign 
11 
the receipt herein referred to, the Customs Officer effecting the constructive 
12 
distraint shall proceed to prepare a list of such property and, in the presence of 
13 
two (2) witnesses, leave a copy thereof in the prernises where the property 
14 
distrained is located, after which the said property shall be deerned to have been 
15 
placed under constructive distraint. 
16 
SEC. 1134. Summary Remedies. - (a) Distraint of Personal Property. -
17 
upon the failure of the person owing any delinquent duty, tax, and other charges 
18 
to pay at the time required, the Cornmissioner shall seize and distraint the goods, 
19 
chattels or effects, and the personal property, including stocks and other 
20 
securities, debts, credits, bank accounts, and interests in and rights to personal 
21 
property of such persons, in sufficient quantity to satisfy the duty, tax, or other 
22 
charge and the expenses of the distraint and the cost of the subsequent sale. 
23 
A report on the distraint shall, within ten (10) days frorn receipt of the 
24 
warrant, be submitted by the Cornrnissioner to the Secretary of Finance: 
25 
Provided, That the Commissioner shall have the power to lift such order of 
26 
distraint subject to the rules and regulations promulgated pursuant to this Act. 
27 
(b) 
Levy on Real Property. -
After the expiration of the period within 
28 
which to pay the duty, tax, and other charges as prescribed in this Section, real 
29 
property may be levied upon, before, simultaneously, or after the distraint of 
105 


personal property belonging to the importer. To this end, the Commissioner or 
2 
the duly authorized representative shall prepare a duly authenticated certificate 
3 
showing the name of the importer and the amounts of the duty and tax and 
4 
penalty due. The certificate shall operate with the force of a legal execution 
5 
throughout the Philippines. 
6 
The levy shall be effected by writing upon the certificate a description of 
7 
the property on which levy is made. At the same time, written notice of the levy 
8 
shall be mailed to or served upon the Register of Deeds for the province or city 
9 
where the property is located and upon the importer, or if the latter is not in the 
10 
Philippines, upon the agent or the manager of the business from which the 
11 
liability arose, or if there be none, to the occupant of the property in question. 
12 
In case the warrant of levy on real property is not issued before or 
13 
simultaneously with the warrant of distraint on personal property, and the 
14 
personal property of the importer is not sufficient to satisfy the duty and tax due, 
15 
the Commissioner or a duly authorized representative shall, within thirty (30) 
16 
days after execution of the distraint, proceed with the levy on the real property of 
17 
the importer. 
18 
Within ten (10) days after receipt of the warrant, a report on any levy shall 
19 
be submitted by the levying officer to the Commissioner: Provided, That the 
20 
Commissioner may lift such warrants of levy issued, subject to the rules and 
21 
regulations promulgated pursuant this Act. 
22 
CHAPTER 9 
23 
JUDICIAL PROCEEDINGS 
24 
SEC. 1135. Supervision and Control over Criminal and Civil 
25 
Proceedings. -
Civil and criminal actions and proceedings instituted on behalf 
26 
of the government under the authority of this Act or other laws enforced by the 
27 
Bureau shall be brought in the name of the government of the Philippines and 
28 
shall be prosecuted and handled by the Bureau with the assistance of the 
29 
Department of Justice (DOJ): Provided, That, the determination of the existence 
106 


of probable cause and the subsequent filing of any criminal or civil case with the 
2 
proper court against violators of this Act shall exclusively belong to the DOJ: 
3 
Provided, however, That no civil or criminal action for the recovery of duties or 
4 
the enforcement of any fine, penalty or forfeiture under this Act shall be filed in 
5 
court without the approval of the Commissioner. 
6 
SEC. 1136. Review by CTA. - Unless otherwise provided in this Act or 
7 
by any other law, the party al1Qrieved by the ruling or decision of the 
8 
Commissioner may appeal to the- CTA, in the manner and within the period 
9 
prescribed by law and regulations. Decisions of the Secretary of Finance when 
10 
required by this Act, may likewise be appealed to the CTA. 
11 
Unless an appeal is made to the CTA in the manner and within the period 
12 
prescribed by law and regulations, the ruling or decision of the Commissioner or 
13 
the Secretary of Finance shall be final and executory. 
14 
SEC. 1137. Exclusive Jurisdiction of the Bureau. - Jurisdiction over 
15 
imported goods and goods for exportation shall be exclusive to the Bureau, or 
16 
the Secretary of Finance, when under review by the latter, subject to the 
17 
proceedings described in this Title. 
18 
Except for the CTA, no court may issue any order or decision until all the 
19 
remedies for administrative appeal have been exhausted. 
20 
SEC. 1138. Fraud Investigation and Prosecution. - No criminal case 
21 
for violation of this Title shall be instituted without the 
approval of the 
22 
Commissioner pursuant to the prOVisions of this Act. 
23 
The Bureau shall have the power to investigate and institute smuggling 
24 
cases committed within its jurisdiGtion: Provided, That in case of inquest, the 
25 
same may be instituted by the apprehending custom offices. 
107 


CHAPTER 10 
2 
3 
DISPOSITION OF PROPERTY IN CUSTOMS CUSTODY 
SEC. 1139. Goods Subject to Disposition. 
Goods in customs 
4 
custody that are in the following conditions and status shall be subject to 
5 
disposition: 
6 
(a) 
abandoned goods; 
7 
(b) 
goods entered under warehousing entry but not withdrawn, or those 
8 
whose duties and taxes have not been paid within the period described under 
9 
Section 811 of this Act; 
10 
(c) 
forfeited goods, other than prohibited goods; and 
11 
(d) 
goods subject to a valid lien for customs duties, taxes and other 
12 
charges collectible by the Bureau, after the expiration of the period allowed for 
13 
payment thereof. 
14 
SEC. 1140. Place of Disposition of Goods. -
Upon the order of the 
IS 
District Officer, goods may be sold or otherwise disposed of at the port where the 
16 
goods are located, unless the Commissioner shall direct its transfer to another 
17 
port. 
18 
SEC. 1141. Mode of Disposition. -
The goods subject to disposition 
19 
may be donated to another government agency or declared for official use of the 
20 
Bureau, after approval of the Secretary of Finance, or sold at a public auction 
21 
within thirty (30) days after a ten(10) day notice posted at a public place at the 
22 
port where the goods are located and published electronically or in a newspaper 
23 
of general circulation. 
24 
For purposes of donating the goods as above described, goods suitable 
25 
for shelter or consisting of foodstuffs, clothing materials or medicines may be 
26 
donated to the DSWD. 
27 
SEC. 1142. Disqualification to Participate in Auction Sale. -
No 
28 
customs officer or employee shall be allowed to bid directly or indirectly, in any 
29 
customs auction. 
108 


SEC. 1143. Disposition of Proceeds. - The following expenses and 
2 
obligations shall be paid from the proceeds of the sale in the order provided: 
3 
(a) customs duties, except in the case of forfeited goods; 
4 
(b) taxes and other charges due the government; 
5 
(c) government storage charges; 
6 
(d) expenses for the appraisal, advertisement. and sale of auctioned 
7 
goods; 
8 
(e) arrastre and private storage charges and dernurrage charges; and 
9 
(f) freight. lighterage or general 'average. on the voyage of importation, of 
10 
which due notice shall have been given to (he District Officer. 
11 
The Commissioner is authorized to determine the maximum charges to be 
12 
recovered by private entities concerned under subsections (e) and (f) of this 
13 
Section. 
14 
SEC. 1144. Disposition of Perishable Goods. -
Perishable goods as 
15 
defined under this Act when certified as such by the Bureau. may be sold at a 
16 
public auction within five (5) days. after a three (3) day notice. 
17 
For this purpose. perishable goods shall include goods liable to perish or 
18 
be wasted. or those that depreciate greatly in value while stored, or which cannot 
19 
be kept without great disproportionate expense. The Bureau shall proceed to 
20 
advertise and sell the same at auction upon notice as shall be deemed to be 
21 
reasonable. 
22 
SEC. 1145. Disposition of Goods Injurious to Public Health. 
23 
Goods in the custody of the Bureau which, in the opinion of the District Office 
24 
rare injurious to public health. shall be seized. The District Officer shall. if the 
25 
matter is not disposable under the provisions relating to food and drugs. appoint 
26 
three (3) members to constitute a Board to examine the goods. The Board shall 
27 
be composed of one (1) representative from either the Department of Health 
28 
(DOH) or other appropriate government agency or the local government unit 
29 
(LGU) concerned. and two (2) representatives from the Bureau. If the goods are 
109 


found to be injurious to public health, the Board shall report this to the District 
2 
Officer, who shall order its destruction in an appropriate manner or order its re-
3 
exportation in accordance with this Act. 
4 
The District Officer shall immediately coordinate with the health and 
5 
quarantine officers at the port of entry for the disposition of goods injurious to 
6 
public health. 
7 
SEC. 1146. Disposition of Prohibited Goods. -
Prohibited goods as 
8 
provided in Section 118 except paragraph (d) thereof and goods suitable for 
9 
shelter, foodstuffs, clothing materials or medicines shall be destroyed in a 
10 
manner as the District Officer deems appropriate. 
11 
SEC. 1147. Disposition of Restricted Goods. - Restricted goods as 
12 
described in Section 119 shall be disposed as follows: 
13 
(a) Dynamite, gunpowder, ammunitions and other explosives, firearms 
14 
and weapons of war, and parts thereof shall be turned over to the Armed Forces 
15 
of the Philippines (AFP); 
16 
(b) Roulette wheels, gambling outfits, loaded dice, marked cards, 
17 
machines, apparatus or mechanical devices used in gambling or the distribution 
18 
of money, cigars, cigarettes, or other goods when such distribution is dependent 
19 
on chance, including jackpot and pinball machines or similar contrivances, or 
20 
parts thereof shall be turned over to Philippine Amusement Gaming Corporation 
21 
(PAGCOR); 
22 
(c) Lottery and sweepstakes tickets, except advertisements thereof, and 
23 
lists of drawings therein shall be destroyed. 
24 
(d) Marijuana, opium, poppies, coca leaves, heroin, or other narcotics or 
25 
synthetic drugs which are or may hereafter be declared habit forming by the 
26 
President of the Philippines, or any compound, manufactured salt, derivative, or 
27 
preparation thereof, shall be turned over to the Dangerous Drugs Board; 
28 
(e) Opium pipes and parts thereof, of whatever material, shall be turned 
29 
over to the Dangerous Drugs Board; and 
110 


(f) All other restricted goods which are highly dangerous to be kept or 
2 
handled shall be destroyed. Otherwise, the restricted goods shall be turned over 
3 
to the proper government agency for appropriate handling. 
4 
SEC. 1148. Disposition of Regulated Goods. -
Regulated goods shall 
5 
be disposed of in a manner to be determined by the appropriate regulatory 
6 
agency. In the event that the regulatory agency allows the disposition of the 
7 
regulated goods with commercial value and capable of legitimate use, these shall 
8 
be disposed of in accordance with Section 1140. 
9 
SEC. 1149. Disposition of Unsold Goods for Want of Bidders. 
10 
Goods subject to sale at public auction by the Bureau shall be sold at a price not 
11 
less than the landed cost of the goods adjusted for normal depreciation. 
12 
Goods which remain unsold after at least two (2) public biddings either 
13 
due to the lack of bidders or for the lack of an acceptable bid, may be donated to 
14 
another government agency or declared for official use of the Bureau. If the 
15 
goods are not suitable either for official use or donation, these may be subject to 
16 
re-export as government property or sold through a negotiated sale. In case of 
17 
negotiated sale, the same shall be subject to the approval of the Secretary of 
18 
Finance and executed in the presence of a representative of the Commission on 
19 
Audit (COA). For purposes of donating the goods as above described goods 
20 
suitable for shelter or consisting of food stuffs, clothing materials or medicines 
21 
may be donated to the Department of Social Welfare and Development (DSWD). 
22 
SEC. 1150. Disposition of Smuggled Goods. 
-
Smuggled goods, 
23 
when forfeited, shall be disposed of as provided in Section 1148 of this Act. 
24 
SEC. 1151. Forfeiture Fund. - All proceeds from public auction sales 
25 
after deduction of the charges as provided in Section 1143 shall be deposited in 
26 
an account to be known as forfeiture fund. 
27 
The Fund shall be in the name of and shall be managed by the Bureau 
28 
which is hereby authorized, subject to the usual government accounting rules 
29 
and regulations, to utilize it for the following purposes: 
III 


(a) to outsource, subject to the rules on government procurement 
2 
established by law, the management of the inventory, safekeeping, maintenance 
3 
and sale of goods enumerated in Section 1138 of this Act to private service 
4 
providers: 
Provided, That the Bureau shall retain jurisdictional control and 
5 
supervision over these goods as well as the operations of the service provider so 
6 
contracted; 
7 
(b) to facilitate customs abandonment and forfeiture proceedings and the 
8 
disposition of goods under Section 1138, particularly those to be disposed of 
9 
other than through public sale; 
10 
(c) to enhance customs intelligence and enforcement capability to prevent 
11 
smuggling; and 
12 
(d) to support the modernization program and other operational efficiency 
13 
and trade facilitation initiatives of the Bureau. 
14 
The OOF and the OBM shall, upon the recommendation of the Bureau, 
IS 
issue a joint regulation to implement the provisions of this Section. 
16 
TITLE XII 
17 
THIRD PARTIES 
18 
CHAPTER 1 
19 
CUSTOMS SERVICE PROVIDERS 
20 
SEC. 1200. Customs Service Providers. -
Except customs brokers, 
21 
upon the recommendation of the Commissioner, the Secretary of Finance shall 
22 
issue the necessary rules and regulations for the registration and the 
23 
accreditation of other customs service providers to ensure compliance with this 
24 
Act and the rules and regulations that shall be promulgated to implement it. 
25 
SEC. 1200-A. Services of Customs Brokers. -
For the first three (3) 
26 
years upon the effectivity of this Act, import entry shall be signed by a customs 
27 
broker and the conSignee/owner/importer under oath based on the covering 
28 
document submitted by the importer as provided in RA 9280 as amended: 
29 
Provided, That after three years, the President, upon recommendation of the 
112 


Secretary of Finance shall review the need for the mandatory services of 
2 
customs broker consistent with international standards and customs best 
3 
practices. 
4 
CHAPTER 2 
5 
CARRIERS, VESSELS, AND AIRCRAFTS 
6 
SEC. 1201. Ports Open to Vessels and Aircrafts Engaged in Foreign 
7 
Trade. - Vessels and aircrafts engaged in foreign trade shall visit designated 
8 
ports of entry only except as otherwise especially allowed by law. Every vessel or 
9 
aircraft arriving within a Customs District of the Philippines from a foreign port 
10 
shall dock at the designated port of entry and shall be subject to the authority of 
11 
the District Officer of the port while within its jurisdiction. 
12 
SEC. 1202. Control of Customs Officer Over Boarding or Leaving of 
13 
Incoming Vessel and Over Other Vessel Approaching the Former. -
Upon 
14 
the arrival in port of any vessel engaged in foreign trade, it shall be unlawful for 
15 
any person, except the pilot, consul, quarantine officers, customs officers, or 
16 
other duly authorized persons, to board or leave the vessel without permission of 
, 
17 
the customs officer concerned. It shall likewise be unlawful for any tugboat, 
18 
rowboat, or other craft to go alongside such vessel and for any person so 
19 
authorized to board the vessel to take any unauthorized person to board the 
20 
same, or allow loitering near or alongside such vessel. Unauthorized tugboats 
21 
and other vessels shall keep away from such vessel engaged in foreign trade at 
22 
a distance of not less than fifty (50) meters. 
23 
SEC. 1203. Documents to be Produced by the Master Upon Entry of 
24 
Vessel. - Upon entry of a vessel engaged in foreign trade, the master thereof 
25 
shall present the following certified documents to the customs boarding officers: 
26 
(a) the vessel's general declaration; 
27 
(b) the original manifest of all cargoes destined for the port, to be returned 
28 
with the endorsement of the boarding officers; 
113 


1 
(C) three (3) copies of the original manifest, one of which, upon 
2 
certification by the boarding officer as to the correctness of the copy, shall be 
3 
returned to the master; 
4 
(d) a copy of the cargo stowage plan; 
5 
(e) two (2) copies of the store list; 
6 
(f) one (1) copy of the passengers list; 
7 
(g) one (1) copy of the crew list; 
8 
(h) the original copy of all through cargo manifest, for deposit with the 
9 
customs officer who has jurisdiction over the vessel while in port; 
10 
(i) the passengers manifest containing the names of all aliens, in 
11 
conformity with the requirements of the immigration laws in force in the 
12 
Philippines; 
13 
(j) one (1) copy of the original duplicate of fully accomplished bill of 
14 
. ·Iadl,ng; 
15 
(k) the shipping goods and register of the vessel of Philippine registry; and 
16 
(I) such other related documents. 
17 
SEC. 1204. Manifest Required of Vessel from Foreign Port. - Every 
18 
vessel from a foreign port must have on board a complete manifest of all its 
19 
cargoes. 
20. 
All cargoes intended to be landed at a port in the Philippines must be 
21 
described in separate manifests for each port of call. Each manifest shall include 
22 
the port of departure and the port of delivery with the marks, numbers, quantity, 
23 
and description of the packages and the names of the consignees. Every vessel 
24 
from a foreign port must have on board complete manifests of passengers and 
25 
baggage, in the prescribed form, setting forth the destination and all particulars 
26 
required by immigration laws. Every vessel shall present to the proper customs 
27 
officers upon arrival in ports of the Philippines a complete list of all sea stores 
28 
then on board. If the vessel does not carry cargo or passengers, the manifest 
114 


must show that no cargo or passenger is carried from the port of departure to the 
2 
port of destination in the Philippines. 
3 
A true and complete copy of the cargo manifest shall be electronically sent 
4 
in advance by the shipping company, NVOCC, freight forwarder, cargo 
5 
consolidator, or their agents within the cut-off period as may be determined by 
6 
the Bureau before the arrival of the carrying vessel at the port of entry. Upon 
7 
arrival of the carrying vessel, the shipping company, NVOCC, freight forwarder, 
8 
cargo consolidator, or their agents shall provide two (2) hard copies of the cargo 
9 
manifest to the Bureau in case the port of entry is either the Port of Manila (PoM) 
10 
or the Manila International Container Port (MICP), and one (1) copy only in the 
11 
case of the other ports of entry. 
12 
A cargo manifest shall in no case be changed or altered after entry of 
13 
vessel, except by means of an amendment, under oath, 
by the master, 
14 
consignee or agent thereof, which shall be attached to the original manifest: 
15 
Provided, That after the invoice and/or entry covering an importation has been 
16 
received and recorded in the office of the appraiser, no amendment of the 
17 
manifest shall be allowed, except when it is obvious that a clerical error or any 
18 
other discrepancy has been committed in the preparation of the manifest, without 
19 
any fraudulent intent, the discovery of which would not have been made until 
20 
after examination of the importation has been completed. 
21 
SEC. 1205. Translation of Manifest. -
The cargo manifest and each 
22 
copy thereof shall be accompanied by a translation in English, if originally written 
23 
in another language. 
24 
SEC. 1206. Manifests for the Commission on Audit and District 
25 
Officer. - Upon arrival of a vessel from a foreign port, the Bureau shall provide 
26 
electronic copies of the manifest to the Chairperson of the COA. The master 
27 
shall immediately present to the District Officer the original copy of the cargo 
28 
manifest properly endorsed by the boarding officer, and for inspection, the ship's 
115 


register, or other documents in lieu thereof, together with the clearance and other 
2 
papers granted to the vessel at the port of departure for the Philippines. 
3 
SEC. 1207. Production of Philippine Crew. -
The master of a 
4 
Philippine vessel returning from abroad shall produce the entire crew listed in the 
5 
vessel's shipping crew manifest. If any member is missing, the master shall 
6 
produce proof satisfactory to the District Officer that the member has died, or 
7 
absconded, has been forcibly impressed into another service, or has been 
8 
discharged. In case of discharge in a foreign country, the master shall produce a 
9 
certificate from the conSUl, vice conSUl, or consular agent of the Philippines there 
10 
residing, showing that such discharge was effected with the consent of the 
11 
aforesaid representative of the Philippines. 
12 
SEC. 1208. Record of Arrival and Entry of Vessels and Aircraft. - A 
13 
record shall be made and kept open to public inspection in every CUii'toms 
14 
District of the date of arrival and entry of all vessels and aircraft. 
15 
SEC. 1209. Arrest of Vessel or Aircraft Departing Before Entry 
16 
Made. - When a vessel or aircraft arriving within the limits of a Customs District 
17 
from a foreign port departs or attempts to depart before entry shall have been 
18 
made, not being thereunto compelled by stress of weather, duress of enemies, or 
19 
other necessity, the District Officer of the port may cause the arrest and bring 
20 
back such vessel or aircraft to the most convenient port with assistance of other 
21 
concerned agenCies. 
22 
SEC. 1210. Discharge of Ballast. 
-
When not brought to port as 
23 
goods, ballast of no commercial value may be discharged upon permit granted 
24 
by the District Officer for the purpose. 
25 
SEC. 1211. Time of Unloading Cargo. 
Unloading of cargo from a 
26 
vessel or aircraft from a foreign port during official nonworking hours shall be 
27 
allowed subject to payment of service fees by shipping lines, airlines, or other 
28 
interested parties at rates prescribed by the Commissioner. 
116 


SEC. 1212. Entrance of Vessel through Necessity. - When a vessel 
2 
from a foreign port is compelled, by stress of weather or other necessity to put 
3 
into any other port than that of its destination, the master within twenty-four (24) 
4 
hours after its arrival, shall make a protest under oath setting forth the causes or 
5 
circumstances of such necessity. This protest, if not made before the District 
6 
Officer, must be produced and lodged with the District Officer. 
7 
Within the same time, the master shall make a report to the District Officer 
8 
if any part of the cargo was unloaded from necessity or lost by casualty before 
9 
arrival, and produce sufficient proof to the District Officer of such necessity or 
10 
casualty before the latter who shall give the approval thereto and the unloading 
II 
shall be deemed to have been lawfully effected. 
12 
SEC. 1213. Unloading of Vessel in Port from Necessity. 
-
If a 
13 
situation arises where the unloading of the vessel is required pending sojourn in 
14 
port, the District Officer shall, upon sufficient proof of the necessity, grant a 
IS 
permit therefore, and the goods shall be unloaded and stored under the 
16 
supervision of customs officers. 
17 
At the request of the master of the vessel or the owner thereof, the District 
18 
Officer may grant permission to enter the port and pay duties, taxes, and other 
19 
charges on, and dispose of, such part of the cargo as may be perishable in 
20 
nature or as may be necessary to defray the expenses attending the vessel. 
21 
Upon departure, the cargo, or a part thereof, may be reloaded on board 
22 
the vessel, and the vessel may proceed with the same to its destination, subject 
23 
only to the charge for storing and safekeeping of the goods and the fees for 
24 
entrance and clearance. No port charges shall be collected on vessels entering 
25 
through stress of weather, duress or other urgent necessities. 
26 
SEC. 1214. Entry 
and 
Clearance 
of 
Vessels 
of a 
Foreign 
27 
Government. - The entry and clearance of transport or supply ship of a foreign 
28 
government shall be in accordance with the agreement by and between the 
29 
Philippines and the foreign government. 
117 


SEC. 1215. Clearance of Vessel for Foreign Port. 
Before a 
2 
clearance shall be granted to any vessel bound to a foreign port, the master or 
3 
the agent thereof shall present to the District Officer the following properly 
4 
authenticated documents: 
5 
(a) a bill of health from the quarantine officer or officer of the public health 
6 
service in the port; 
7 
(b) three (3) copies of the manifest of export cargo, one of which, upon 
8 
certification by the customs officer as to the correctness of the copy, shall be 
9 
returned to the master; 
10 
(c) two (2) copies of the passengers list, showing alien and other 
II 
passengers; 
12 
(d) the register and shipping goods, if the vessel is of Philippine registry; 
13 
(e) clearance issued by the last port of entry; and 
14 
(f) a certificate from the Philippine Postal Corporation to the effect that it 
15 
received timely notice of the sailing of the vessel: Provided, That the District 
16 
Officer shall not permit any vessel to sail for a foreign port if the master or agent 
17 
thereof refuses to receive bags of mail delivered to the same by the Philippine 
18 
Postal Corporation for transport upon reasonable compensation. In case the 
19 
Postmaster General and the master or agent do not come to an agreement 
20 
concerning the amount of the compensation to be paid for the carriage of the 
21 
mail, the matter shall be submitted for decision to a Board of Referees to be 
22 
composed of three (3) members appointed, respectively, by the Philippine Postal 
23 
Corporation, the agency of the company to which the vessel concerned belongs, 
24 
and the Bureau, who shall fix a reasonable rate of compensation. 
25 
SEC. 1216. Detention of Warlike Vessel Containing Arms and 
26 
Munitions. -
District Officers shall report to the proper authorities or detain any 
27 
vessel of commercial registry manifestly built for warlike purposes and about to 
28 
depart from the Philippines with a cargo consisting principally of arms and 
29 
munitions of war, when the number of men shipped on board or other 
118 


circumstances render it probable that such vessel is intended to be employed by 
2 
the owner or owners to cruise or commit hostilities upon the subjects, citizens, or 
3 
property of any foreign principality or state, or of any colony, District, or people 
4 
with whom the Philippines is at peace, until the decision of the President of the 
5 
Philippines is rendered thereon, or until the owner or owners shall give a 
6 
security, in double the value of the vessel and cargo, that it will not be so 
7 
employed, if in the discretion of the District Officer such security will prevent the 
8 
violation of the provisions of this Section. 
9 
SEC. 1217. Oath of Master of Departing Vessel. - The master of a 
10 
departing vessel shall state under oath that: 
11 
(a) All cargoes conveyed on the vessel, destined for the Philippines, have 
12 
been duly discharged or accounted for; 
13 
(b) A true copy of the outgoing cargo manifest has been furnished to the 
14 
Bureau; 
15 
(c) No letters or packets, not enclosed in properly stamped envelope 
16 
sufficient to cover postage, have been received or will be conveyed, except those 
17 
relating to the vessel; and that all mails placed on board the vessel before its last 
18 
clearance from the Philippines have been delivered at the proper foreign port; 
19 
and 
20 
(d) If clearing without passenger, the vessel will not carry upon the 
21 
instant voyage, from the Philippine port, any passenger of any class, or other 
22 
person not entered upon the ship's declaration. 
23 
SEC. 1218. Extension of Time for Clearance. -At the time of 
24 
clearance, the master of a departing vessel shall be required to indicate the time 
25 
of intended departure, and if the vessel should remain in port forty-eight (48) 
26 
hours after the time indicated, the master shall report to the District Officer for an 
27 
extension of time of departure, and without such extension the original clearance 
28 
shall be nullified. 
119 


SEC. 1219. Advance Notice of Aircraft Arrival. -
(a) Nonscheduled 
2 
Arrivals. -
Before an aircraft comes into any area in the Philippines from any 
3 
place outside thereof, a timely notice of the intended flight shall be furnished to 
4 
the District Officer or other customs officer-in-charge at or nearest the intended 
5 
place of first landing, and to the quarantine and immigration officers-in-charge at 
6 
or nearest such place of landing. If dependable facilities for giving notice are not 
7 
available before departure, the use of any radio equipment shall be appropriate 
8 
as long as it will result in the giving of adequate and timely notice of the aircraft's 
9 
approach, otherwise landing shall be made at a place equipped with navigational 
10 
facilities. If, upon landing in any area, the government officers have not arrived, 
II 
the 
pilot-in-command shall hold the aircraft and any baggage and goods 
12 
thereon intact and keep the passengers and crew members in a segregated 
13 
place until the inspecting officers arrive. 
14 
(b) 
Scheduled Arrivals. - Such advance notice will not be required in 
15 
the case of an airline arriving in accordance with the regular schedule filed with 
16 
the District Officer for the Customs District in which the place of first landing area 
17 
is situated, and also with the quarantine and immigration officers in charge of 
18 
such place. 
19 
SEC. 1220. Landing at International Airport of Entry. -
Except in 
20 
case of emergency or forced landings, aircraft arriving in the Philippines from any 
21 
foreign port or place shall make the first landing at an international airport of 
22 
entry, unless permission to land elsewhere other than at an international airport 
23 
of entry is first obtained from the Commissioner. In such cases, the owner, 
24 
operator, or person in charge of the aircraft shall pay the expenses incurred in 
25 
inspecting the aircraft, goods, passerigers, and baggage carried thereon, and 
26 
such aircraft shall be subject to the authority of the District Officer at the airport 
27 
while within its jurisdiction. 
28 
Should an emergency or forced landing be made by an aircraft coming 
29 
into the Philippines at a place outside the jurisdiction of the latter, the pilot-in-
120 


command shall not allow goods, baggage, passenger, or crew member to be 
2 
removed or to depart from the landing place without permission of a customs 
I 
3 
officer, unless such removal or departure is necessary for purposes of safety, 
4 
communication with customs officers, or preservation of life, health, or property. 
5 
As soon as practicable, the pilot-in-command, or a member of the crew-in-
6 
charge, or the owner of the aircraft, shall communicate with the customs officer 
7 
at the intended place of first landing or at the nearest international airport or other 
8 
customs port of entry in the area and make a full report of the circumstances of 
9 
the flight and of the emergency or forced landing. 
10 
SEC. 1221. Report of Arrival and Entry of Aircraft. 
-
The pilot-in-
11 
command of any aircraft arriving from a foreign port or place shall immediately 
12 
report its arrival to the District Officer at the airport of entry or to the customs 
13 
officer detailed to meet the aircraft at the place of first landing. Upon arrival, such 
14 
aircraft shall be boarded by a quarantine officer, and after pratique or health 
15 
clearance is granted, shall be boarded by a customs officer; subsequently no 
16 
person shall be permitted to board or leave the aircraft without the permisSion of 
17 
the customs officer. The pilot-in-command or any other authorized agent of the 
18 
owner or operator of the aircraft shall make the necessary entry. No such aircraft 
19 
shall, without previous permission from the District Officer, depart from the place 
20 
of first landing or discharge goods, passengers, or baggage. 
21 
SEC. 1222. Documents Required in Making Entry for Aircraft. - (a) 
22 
For the purpose of making entry, there shall be presented to the boarding 
23 
customs officer four (4) copies of a general declaration which shall contain the 
24 
following data, unless any Of such data is otherwise presented on a separate 
25 
Official form: 
26 
(1) Name of owner or operator of aircraft, registration marks and 
27 
nationality of aircraft, and flight number of identification; 
28 
(2) POints of clearance and entry, and date of arrival; . 
29 
(3) Health and customs clearance at the last airport of departure; 
121 


(4) Itinerary of aircraft, including information as to airport of origin and 
2 
departure dates; 
3 
(5) Names and nationality of crew members; 
4 
(6) Passengers manifest showing places of embarkation and destination; 
5 
(7) Cargo manifest showing information as to airway bill number, the 
6 
number of packages related to each airway bill number, nature of goods, 
7 
destination, and gross weight, together with a copy of each airway bill securely 
8 
attached thereto; 
9 
(8) Store list; and 
10 
(9) And such other documents as may be required by the Bureau. 
II 
(b) The general declaration shall be written in English and duly signed by 
12 
the pilot-in-command or operator of the aircraft, or the authorized agent. The 
13 
section on Health, however, shall be signed only by the pilot-in-command or 
14 
when necessary, by a crew member when the general declaration itself has been 
15 
signed by a non-crew member. If the aircraft does not carry cargoes or 
16 
passengers, such facts must be shown in the manifest. 
17 
(c) A cargo manifest shall in no case be changed or altered after entry of 
18 
the aircraft, except by means of an amendment by the pilot-in-command or 
19 
authorized agent thereof, under oath, and attached to the original manifest: 
20 
Provided, That after the invoice and/or entry covering an importation have been 
21 
received and recorded in the office of the appraiser, no amendment shall be 
22 
allowed except when It is obvious that a clerical error or any other discrepancy 
23 
has been committed without any fraudulent intent in the preparation of the 
24 
manifest, the discovery of which could not have been made until after complete 
25 
examination of the importation. 
26 
SEC. 1223. Manifest for the Commission on Audit(COA) and District 
27 
Officer. - Upon arrival of an aircraft from a foreign port, the Bureau shall provide 
28 
electronic copies of the manifest to the Chairperson of the COA. The master 
29 
shall immediately present to the District Officer the original copy of the cargo 
122 


manifests properly endorsed by the boarding officer, and for inspection, the 
2 
aircraft's register or other documents in lieu thereof, together with the clearance 
3 
and other papers granted to the aircraft at the port of departure for the 
4 
Philippines. 
5 
SEC, 1224. Clearance of Aircraft for Foreign Port. - (a) Any aircraft 
6 
bound to a foreign port shall, before departure, be granted clearance by the 
7 
Commissioner at an airport of entry where such aircraft has been authorized to 
8 
make its landing; and 
9 
(b) 
Before clearance shall be granted to an aircraft bound to a foreign 
10 
port, there shall be presented to the District Officer or to the customs officer 
11 
detailed at the place of departure four (4) copies of a general declaration signed 
12 
by the pilot-in-command or authorized agent of an aircraft which shall contain the 
13 
following data: 
14 
(1) name of owner or operator ,of aircraft, registration marks and 
15 
nationality of aircraft, and flight number of identification; 
16 
(2) port of clearance, data thereof and destination; 
17 
(3) health and customs clearance; 
18 
(4) itinerary of aircraft, including information as to airport of destination 
19 
and departure date; 
20 
(5) names and nationality of crew members; 
21 
(6) passengers manifest showing places of destination; 
22 
(7) export cargo manifest showing information as to airway bill number, 
23 
the number of packages related to each airway bill number, nature of 
24 
goods, destination, and gross weight, together with a copy of each 
2S 
airway bill securely attached thereto; and 
26 
(8) store list showing stores loaded. 
27 
SEC. 1225. Oath of Person in Charge of Departing Aircraft. - The 
28 
pilot-in-command or authorized agent of such departing aircraft shall also state 
29 
under oath to the effect that: 
123 


(a) all cargoes conveyed on the aircraft destined to the Philippines have 
2 
been duly discharged and accounted for; and 
3 
(b) the aircraft has not received nor will convey any letter or packet not 
4 
enclosed in properly stamped envelope sufficient to cover postage, except those 
5 
relating to the cargo of the aircraft, and that there was delivery to the proper 
6 
foreign port of all mails placed on board said aircraft before clearance from the 
7 
Philippines. 
8 
If an aircraft is cleared to depart without passengers, the aircraft shall not 
9 
carry any passenger thereon. 
10 
A record shall be made and kept open to public inspection in every 
11 
customs office at an airport of entry of the dates of arrival and entry of all aircraft. 
12 
CHAPTER 3 
13 
OTHER THIRD PARTIES 
14 
SEC. 1226. Supervision and Regulation of Third Parties. -
Third 
15 
parties transacting with the Bureau in behalf of importers and consignees shall 
16 
be treated equally as true importers or consignees. 
17 
Third parties transacting with the Bureau shall be liable for acts committed 
18 
in violation of this Act and related laws. 
19 
Upon the recommendation of the Commissioner, the Secretary of Finance 
20 
shall issue rules and regulations to govern and regulate the conduct of all third 
21 
parties dealing directly with the Bureau in relation to the importation, exportation, 
22 
movement, storage and clearance of goods for and in behalf of another person. 
23 
The rules and regulations shall provide for specific conditions when third parties 
24 
mayor may not directly transact with customs and shall provide a written notice 
25 
in case such third parties are, for valid reasons, barred from transacting with the 
26 
Bureau. For purposes of this Section, third parties refer to logistics providers, 
27 
importers, 
exporters, 
carriers, 
airlines, 
shipping 
lines, 
shipping 
agents, 
28 
forwarders, consolidators, port and terminal operators, and warehouse operators. 
124 


CHAPTER 4 
2 
AUTHORIZED ECONOMIC OPERATORS (AEO) 
3 
SEC. 1227. Treatment of AEOS. -
The Bureau shall promulgate the 
4 
necessary procedures and requirements for the compliance of authorized 
5 
economic operators (AEOs). For AEOs who have displayed diligence in 
6 
complying with the rules and the submission of official customs requirements, 
7 
and have satisfactorily managed their commercial records, the Bureau shall 
8 
extend the following incentives: 
9 
(a) release of the goods upon provision of the minimum information 
10 
necessary to identify the goods and permit the subsequent completion of the final 
II 
goods declaration; 
12 
(b) grant of clearance of the goods at the declarant"s premises or another 
13 
place authorized by the Bureau; and 
14 
(c) other special procedures such as: 
15 
(i) allowing a single goods declaration for all imports or exports in a 
16 
given period where goods are imported or exported frequently by 
17 
the same person; 
18 
(ii) use of commercial records to self-assess their duty and tax liability 
19 
and, where appropriate, to ensure compliance with other customs 
20 
requirements; and 
21 
(iii) allowing the lodgement of goods declaration by means of an entry 
22 
in the records by the authorized person to be supported 
23 
subsequently by a supplementary goods declaration. 
24 
SEC. 1228. Trade Facility For AEO. - The Secretary of Finance shall, 
25 
upon the recommendation of the Commissioner, issue the necessary rules: 
26 
(a) To supervise and regulate the conduct and operations of the AEOs, 
27 
consistent with international best practices, the World Customs Organization 
28 
(WCO) framework of standards to secure and facilitate global trade, and other 
29 
international conventions and agreements; and 
125 


(b) To develop trade facilitation programs for AEOs and other authorized 
2 
persons consistent with international best practices and international conventions 
3 
and agreemer)ts,!,. 
4 
TITLE XIII 
5 
CUSTOMS FEES AND CHARGES 
6 
SEC. 1300, Customs Dues, Fees and Charges. 
-
For services 
7 
rendered and documents issued by the Bureau, dues, fees, and charges shall be 
8 
collected as may be provided under existing regulations issued by the Secretary 
9 
of Finance, upon the recommendation of the Commissioner. 
10 
SEC. 1301. General Provision on the Authority to Increase or 
11 
Decrease Dues, Fees and Charges. -The Secretary of Finance may, upon the 
12 
recommendation of the Commissioner, increase or decrease the dues, fees, and 
13 
charges collectible by the Bureau to protect the interest of the government. 
14 
TITLE XIV 
15 
OFFENSES AND PENALTIES 
16 
CHAPTER 1 
17 
CRIMES AND OTHER OFFENSES 
18 
SEC. 1400. Misdeclaration, 
Misclassification, 
Undervaluation 
in 
19 
Goods Declaration. - Misdeclaration as to quantity, quality, description, weight, 
20 
or measurement of the goods, or misclassification through insufficient or wrong 
21 
description of the goods or used of wrong tariff heading resulting in a 
\ 
22 
discrepancy in duty and tax to be paid between what is legally determined upon 
23 
assessment and what is declared, shall be subject to a surcharge equivalent to 
24 
two hundred fifty percent (250%) of the duty and tax due. No surcharge shall be 
25 
imposed when the discrepancy in duty is less than ten percent (10%), or when 
26 
the declared tariff heading is rejected in a formal customs dispute settlement 
27 
process involving difficult or highly technical question of tariff classification, or 
28 
when the tariff classification declaration relied on an official government ruling. 
126 


! 
I) , 
There is undervaluation when (a) the declared value failS to disclose in full 
2 
the price actually paid or payable or any dutiable adjustment to the price actually 
3 
paid or payable; or (b) when an incorrect valuation method is used or the 
4 
valuation rules are not properly observed. resulting in a discrepancy in duty and 
5 
tax to be paid between what is legally determined as the correct value against 
6 
the declared value. When the undervaluation is established without need to go 
7 
through the formal dispute settlement process provided for in this Act. a 
8 
surcharge shall be imposed equivalent to two hundred fifty percent (250%) of the 
9 
duty and tax due. No surcharge shall be imposed when the discrepancy in duty 
10 
is less than ten percent (10%). or the declared value is rejected as a result of an 
11 
official ruling or decision under the customs dispute settlement process involving 
12 
difficult or highly technical question relating to the application of customs 
13 
valuation rules. 
14 
A discrepancy in duty and tax to be paid between what· is legally 
15 
determined and what is declared amounting to more than thirty percent (30%) 
16 
shall constitute a probable cause for issuance of a warrant of seizure and 
17 
distraint. 
18 
When the misdeclaration. misclassification or undervaluation is intentional 
19 
or fraudulent. such as when a false or altered document is submitted or when 
20 
false statements or information are knowingly made, a surcharge shall be 
21 
imposed equivalent to five hundred percent (500%) of the duty and tax due and 
22 
that the goods shall be subject to seizure regardless of the amount of the 
23 
discrepancy without prejudice to the application of fine!> or penalties provided 
24 
under Section 1401 of this Act against the importer and other person or persons 
25 
who willfully participated in the fraudulent act. 
26 
SEC. 1401. Unlawful Importation or Exportation. -
Any person who 
27 
shall fraudulently import or export or bring into or outside of the Philippines any 
28 
goods, or assist in so doing, contrary to law, or shall receive, conceal, buy, sell, 
29 
or in any manner facilitate the transportation. concealment, or sale of such goods 
127 


after importation, or shall commit technical smuggling as defined in this Act shall 
2 
be penalized by: 
3 
a. imprisonment of not less than thirty (30) days and one (1) day but not 
4 
more than six (6) months or a fine of not less than Twenty five thousand pesos 
5 
(P25,OOO.00) but not more than Seventy five thousand pesos (P75,OOO.00), or 
6 
both, if the value to be determined in the manner prescribed under this Act, 
7 
including duties and taxes, of the goods unlawfully imported does not exceed 
8 
Two hundred fifty thousand pesos (P250,OOO.00); 
9 
b. imprisonment of not less than six (6) months and one (1) day but not 
10 
more than one (1) year, or a fine of not less than Seventy five thousand pesos 
11 
(P75,OOO.00) 
but 
not 
more 
than 
One 
hundred 
fifty 
thousand 
pesos 
12 
(P150,OOO.00),or both, if the value of the goods unlawfully imported, to be 
13 
determined in the manner prescribed under this Act, including duties and taxes, 
14 
exceeds Two hundred fifty thousand pesos (P250,OOO.00) but not more than Five 
15 
hundred thousand pesos (P500,OOO.00); 
16 
c. 
imprisonment of not less than one (1) year and one (1) day but not 
17 
more than three (3) years, or a fine of not less than One hundred fifty thousand 
18 
pesos (P150,OOO.00) but not more than Three hundred thousand pesos 
19 
(P300,OOO.00), or both, if the appraised value of the goods unlawfully imported, 
20 
to be determined in the manner prescribed under this Act, including duties and 
21 
taxes, exceeds Five hundred thousand pesos (P500,OOO.00) but not more than 
22 
One million pesos (P1,OOO,OOO.00); 
23 
d. imprisonment of not less than three (3) years and one (1) day but not 
24 
more than six (6) years, or a fine of not less than Three hundred thousand pesos 
25 
(P300,OOO.00) but not more than One million five hundred thousand pesos 
26 
(P1,500,OOO.00),or both, if the appraised value of the goods unlawfully imported, 
27 
to be determined in the manner prescribed under this Act, including duties and 
28 
taxes, exceeds One million pesos (P1,OOO,OOO.00) but not more than Five million 
29 
pesos (P5,OOO,OOO.00); 
128 


e. imprisonment of not less than six (6) years and one (1) day but not 
2 
more than twelve (12) years, or a fine of not less than One million five hundred 
3 
thousand pesos (P1,500,OOO.OO) but not more than Fifteen million pesos 
4 
(P15,OOO,OOO.00), or both, if the appraised value of the goods unlawfully 
5 
imported, to be determined in the manner prescribed under this Act, including 
6 
duties and taxes, exceeds Five million pesos (P5,OOO,OOO.00) but not more than 
7 
Fifty million pesos (P50,OOO,OOO.00); 
8 
f. imprisonment of not less than twelve (12) years and one (1) day but not 
9 
more than twenty (20) years, or a fine of not less than Fifteen million pesos 
10 
(P15,OOO,OOO.00) but not more than Fifty million pesos (P50,OOO,OOO.00), or 
11 
both, if the appraised value of the goods unlawfully imported, to be determined 
12 
in the manner prescribed under this Act, including duties and taxes, exceeds Fifty 
13 
million pesos (P50,OOO,OOO.OO) but not more than Two hundred million pesos 
14 
(P200,OOO,000.00). 
15 
g. If the appraised value of the goods unlawfully imported to be 
16 
determined in the manner prescribed under this Act, including duties and taxes, 
17 
exceeds Two hundred million pesos (P200,000,000.00) or if the aggregate 
18 
amount of the appraised values of goods which are the subject of unlawful 
19 
importation committed in more than one instance, including duties and taxes, 
20 
exceeds Two hundred million pesos (P200,OOO,000.00), the same shall be 
21 
deemed as a heinous crime and shall be punishable with a penalty of reclusion 
22 
perpetua and a fine of not less than Fifty million pesos (P50,OOO,000.00); and 
23 
h. The penalty of priszon mayor shall be imposed when the crime of 
24 
serious physical injuries shall have been committed, and the penalty of reclusion 
25 
perpetua shall be imposed when the crime of homicide shall have been 
26 
committed by reason or on the occasion of the unlawful importation. 
27 
In applying the above scale of penalties, an offender who is an alien shall 
28 
be deported without further proceedings after serving the sentence. If the 
29 
offender is a public officer or employee, the penalty which is the next higher in 
129 


degree shall be imposed in addition to the penalty of perpetual disqualification 
2 
from public office, and disqualification to vote and to participate in any public 
3 
election. If the offender fails to pay the fine, subsidiary imprisonment shall be 
4 
served. 
5 
When, upon trial for violation of this Section, the defendant is shown to 
6 
have had possession of the goods in question, possession shall be deemed 
7 
sufficient evidence to authorize conviction unless the defendant shall explain the 
8 
possession to the satisfaction of the court: Provided, That each act of unlawful 
9 
importation or exportation shall be deemed as a separate offense: Provided, 
10 
however, That payment of the tax due after apprehension shall not constitute a 
II 
valid defense in any prosecution under this Section: Provided, further, That 
12 
outright smuggling shall also be punishable under this Section: Provided, finally, 
13 
That the rights and privileges provided in this Act for the importers, consignees, 
14 
exporters, service providers, third parties and other third parties who committed 
IS 
this offense shall be revoked. 
16 
SEC. 1402. Failure or Refusal of Party to Give Evidence or Submit 
17 
Documents for Assessment. -
When the owner, importer or consignee of any 
18 
imported goods, or the agent of either, fails or refuses, upon lawful demand in 
19 
writing by any customs officer to appear, lawfully depose, or submit to 
20 
examination or to answer any material question or refuses to produce records, 
21 
accounts or invoices in possession pertaining to the value, classification or 
22 
disposition of the goods in question and deemed material in assessing the same, 
23 
the District Officer shall assess a surcharge of twenty percent (20%) on the 
24 
dutiable value of the goods which is the subject of the importation. 
25 
SEC. 1403. Other Fraudulent Practices Against Customs Revenue. 
26 
- Any person who makes or attempts to make any entry of imported or exported 
27 
goods by means of any false or fraudulent statement, document or practice or 
28 
knowingly and willfully files any false or fraudulent claim for payment of drawback 
130 


1· 
or refund of duties shall, for each act, be punished in accordance with the 
2 
penalties prescribed in Section 1401. 
3 
SEC. 1404. Failure to Declare Baggage. - Whenever dutiable goods 
4 
are not declared by any person arriving within the Philippines, such goods shall 
5 
be seized and the person may obtain release of such goods, if not imported 
6 
contrary to any law upon payment of a surcharge equivalent to thirty percent 
7 
(30%) of the landed cost of such goods, in addition to all duties, taxes and other 
8 
charges due. Nothing in this Section shall preclude the filing of criminal action 
9 
against the offender. 
10 
SEC. 1405. Vessel, 
Seacraft, 
or 
Aircraft 
Departing 
Before 
11 
Undergoing Customs Formalities. - Any vessel, seacraft, or aircraft arriving 
12 
within the limits of a Customs District from a foreign port which departs before 
13 
undergoing customs formalities, without being compelled to do so by stress of 
14 
weather, pursuit or duress of enemies, or other necessity, shall be liable for a 
15 
fine of not less than One hundred thousand pesos (P100,000.00) but not more 
16 
than Three hundred thousand pesos (P300,000.00). 
17 
SEC. 1406. Obstruction to Boarding Officer. - If the master or pilot-
18 
in-command or any member of the complement of any vessel or aircraft arriving 
19 
at the Philippine port obstructs or hinders any officer from lawfully going on board 
20 
such vessel or aircraft for the purpose of enforcing this Act, or intentionally 
21 
causes any officer to be so obstructed or hindered, the vessel or aircraft shall be 
22 
liable to a fine of not less than One hundred thousand pesos (P100,000.00) but 
23 
not more than Three hundred thousand pesos (P300,000.00). 
24 
SEC. 1407. Unlawful Boarding or Leaving of Vessel or Aircraft. - If 
25 
upon arrival at the Philippine port, any master of a vessel or pilot-in-command of 
26 
an aircraft engaged in a foreign trade permits any person to board or leave the 
27 
vessel or aircraft without the permission of the customs officer-in-char@e, the 
28 
owner or operator of such vessel or aircraft shall be liable for a fine of not less 
131 


than One hundred thousand pesos (P100,000.00) but not more than Three 
2 
hundred thousand pesos (P300,000.00). 
3 
SEC. 1408. Unloading of Cargo Before Arrival at Port of Entry. -
If, 
4 
upon the arrival within the limits of any Customs District of the Philippines of any 
5 
vessel or aircraft engaged in foreign trade, the master or pilot-in-command 
6 
thereof permits any part of the cargo to be unloaded before arrival at the port of 
7 
entry, and without authority from a proper customs officer, the owner, operator, 
8 
or agent of such vessel or aircraft shall be liable for a fine of not less Five 
9 
hundred thousand pesos (P500,000.00) but not more than Two Million pesos 
10 
(P2,000,000.00): Provided, That no fine shall accrue upon satisfactory proof to 
11 
the proper District Officer that the unloading was rendered necessary by stress of 
12 
weather, accident or other necessity: Provided, however, That the fine imposed 
13 
herein shall be without prejudice to the application of fines or penalties provided 
14 
under Section 1500 of this Act. 
15 
SEC. 1409. Unloading of Cargo at Improper Time or Place After 
16 
Arrival. - The owner or operator of any vessel or aircraft from which cargo is 
17 
discharged upon arrival in the Philippines at a time or place other than that 
18 
deSignated by the District Officer, shall be fined not less One hundred thousand 
19 
pesos (P100,000.00) but not more than Three hundred thousand pesos 
20 
(P300,000.00): Provided, That no fine shall accrue upon satisfactory proof to the 
21 
proper District Officer that the unloading was rendered necessary by stress of 
22 
weather, accident or other necessity. 
23 
SEC. 1410. Failure to Exhibit or Deposit Documents. -
When the 
24 
master of a vessel or pilot-in-command of an aircraft engaged in foreign trade 
25 
fails to submit to the District Officer at the time of entry of the vessel or aircraft 
26 
the register or other documents in lieu thereof, together with the clearance and 
27 
other documents granted by the customs officers to the vessel or aircraft at the 
28 
last foreign port of departure, or fails to exhibit any certificate or other documents 
29 
required to be then exhibited, the owner or operator of such vessel or aircraft 
132 


shall be liable for a fine of not less than One hundred thousand pesos 
2 
(P100,OOO.00) but not more than Three hundred thousand pesos (P300,OOO.OO). 
3 
SEC. 1411. Bringing of Unmanifested Arms, Explosives or War 
4 
Equipment. - The owner, operator, or agent of a vessel or aircraft arriving at a 
5 
port in the Philippines bearing cargo consisting of 
firearms, gunpowder, 
6 
cartridges, dynamite or any other explosives, munitions or equipment of war not 
7 
contained in the manifest of the vessel or aircraft, or which are concealed on 
8 
board, shall be fined not less than Five hundred thousand pesos (P500,OOO.00) 
9 
but not more than One Million pesos (P1,OOO,OOO.00). 
10 
SEC. 1412. Failure to Supply Advance and Requisite Manifests. 
II 
The failure to transmit the electronic manifest within the time as may be 
12 
prescribed by the Bureau prior to arrival of the carrying vessel or aircraft at the 
13 
port of entry shall make the owner, operator, or agent of the vessel or aircraft be 
14 
liable for a fine of not less than One hundred thousand pesos (P100,OOO.00) but 
15 
not more than Three hundred thousand pesos (P300,OOO.00). 
16 
If the transit time from port of origin to port of entry is at least seventy-two 
17 
(72) hours, the shipping or forwarding agent of the carrier or the vessel who fails 
18 
to submit the manifest at least twenty-four (24) hours before entry shall likewise 
19 
be liable for a fine of not less than One hundred thousand pesos (P100,OOO.00) 
20 
but not more than Three hundred thousand pesos (P300,OOO.00). 
21 
SEC. 1413. Disappearance of Manifested Goods. 
-
When any 
22 
package or goods mentioned in the manifest meant to be unloaded at the port of 
23 
destination is not unloaded upon the arrival of the vessel or aircraft, its agent 
24 
shall be liable for a fine of not less than One hundred Thousand Pesos 
25 
(P100,000.00) but not more than Three hundred thousand pesos (P300,OOO.00) 
26 
unless the disappearance of the package or the goods in question was not due 
27 
to the negligence of the master of the vessel or pilot-in-command of an aircraft 
28 
and is explained to the satisfaction of the District Officer. 
133 


The owner, operator, or agent of a vessel or aircraft shall be liable for the 
2 
payment of the same fine when a package or goods listed in the manifest does 
3 
not tally materially in character or otherwise with the description thereof in the 
4 
manifest. 
5 
SEC. 1414. Discrepancy between Actual and Declared Weight of 
6 
Manifested Goods. -
If the gross weight of goods or package described in the 
7 
manifest or bill of lading exceeds the declared weight by more than ten percent 
8 
(10%), and such discrepancy was due to the negligence of the master or pilot-in-
9 
command, the owner or employee of the vessel or aircraft shall be liable to for a 
10 
fine of not more than twenty percent (20%) of the value of the package or goods 
II 
in respect to which the deficiency exists, may be imposed upon the owner, 
12 
operator or agent of the importing vessel or aircraft. 
13 
SEC. 1415. Discrepancy with the Master's or Pi/ot's-in-Command 
14 
Report. -
When a vessel or aircraft arriving from a foreign port is compelled by 
15 
necessity to unload in another port other than the port of entry and permission is 
16 
granted by the District Officer for the unloading of the vessel or aircraft or the 
17 
delivery of any part of the cargo and it shall be found that there is discrepancy 
18 
between the cargo unloaded 
and the report of the master or the pilot-in-
19 
command and such 
discrepancy is not satisfactorily explained, the owner, 
~ 
20 
operator or agent of the vessel or aircraft shall be liable for a fine of not less than 
21 
One hundred thousand pesos (P100,000.00) but not less than Three hundred 
22 
thousand pesos (P300,OOO.OO). 
23 
SEC. 1416. Failure to Report Fraud. -
A master, pilot-in-command or 
24 
other officer, owner or agent of any vessel or aircraft trading with or within the 
25 
Philippines who has knowledge of the commission of fraud that shall result in the 
26 
loss or diminution of customs revenue but fails to report all information relative 
27 
thereto to the District Officer shall be penalized with imprisonment of not less six 
28 
(6) months and one (1) day but not more than one (1) year and shall be liable for 
29 
a fine of not less than One hundred thousand pesos (P100,000.00) but not more 
134 


than Three hundred thousand pesos (P300,OOO.OO). 
If the offender is a 
2 
foreigner, the offender shall be deported after serving the sentence. 
If the 
3 
offender is a public officer or employee, the offender shall suffer additional 
4 
penalty of perpetual disqualification to hold public office, to vote and to 
5 
participate in any election. All the benefits due from service in the govemment, 
6 
including the separation and retirement benefits, shall be forfeited. 
7 
SEC. 1417. False Statement of Vessel's or Aircraft's Destination. 
8 
When the master or pilot-in-command of a vessel or aircraft loaded with goods 
9 
shall make a false statement as to the next destination of such vessel or aircraft 
10 
when that information is required by a customs officer, the owner or operator of 
11 
such vessel or aircraft shall be liable for a fine of not less than One hundred 
12 
thousand pesos (P100,OOO.OO) but not more than Three hundred thousand 
13 
pesos (P300,OOO.OO). The arrival of a vessel or aircraft at a different port other 
14 
than the one it had been originally authorized and cleared for without having 
IS 
been impelled to do so by necessity, shall be prima facie proof that the original 
16 
statement of the actual destination of the vessel or aircraft was false. 
17 
SEC. 1418. Affixing Seals. -
Any person who, without authority affixes 
18 
or attaches a customs seal, fastening, or any mark, or fastening purporting to be 
19 
a customs seal, to any vessel, aircraft, vehicle, warehouse, or package, shall be 
20 
penalized with imprisonment of not less than six (6) months and one (1) day but 
21 
not more than one (1) year, and shall be liable for a fine of not less than One 
22 
hundred thousand pesos (P100,OOO.OO) but not more than Three hundred 
23 
thousand pesos (P300,OOO.OO). If the offender is an alien, the offender shall be 
24 
deported after serving the sentence. If the offender is a public officer or 
25 
employee, the offender shall suffer an additional penalty of perpetual 
26 
disqualification to hold public office and disqualification from exercising the right 
27 
to vote and to participate in any election. 
28 
SEC. 1419. Breaking of Seal Placed by Customs Officers. -
If any 
29 
seal placed by a customs officer upon any vessel or aircraft or compartment 
135 


thereof, or upon any box, trunk or other package of goods on board is broken, 
2 
the owner, operator, or agent of the vessel or aircraft shall be liable for a fine of 
3 
not less than One hundred thousand pesos (P100,000.00) but not more than 
4 
Three hundred thousand pesos (P300,000.00) for each broken or destroyed 
5 
seal. 
6 
SEC. 1420. Breaking of Lock or Fastening Placed by Customs 
7 
Officers. -
If any lock or other fastening device placed by a customs officer 
8 
upon any hatch door, or other means of communication in the hold of a vessel or 
9 
aircraft, or other part thereof for the security of the same during the night time, is 
10 
unlawfully opened, broken or removed, or if any of the goods contained in the 
11 
hold or in the other compartments so secured is clandestinely abstracted and 
12 
landed, the owner, operator, or agent of the vessel or aircraft shall be liable for a 
13 
fine of not less than One hundred thousand pesos (P100,000.00) but not more 
14 
than Three hundred thousand pesos (P300,000.00). 
15 
SEC. 1421. Removal, Breakage, and Alteration of Marks. 
-
Any 
16 
person who without authority, Willfully removes, breaks, injures, or defaces or 
17 
alters any customs seal or other fastening or mark placed upon any vessel, 
18 
vehicles, on land, sea or air, warehouse or package containing merchandise or 
19 
baggage in bond or in customs custody, shall be punished with the penalty 
20 
prescribed in Section 1420 hereof. 
21 
SEC. 1422. Unauthorized Withdrawal of Imported Goods from 
22 
Bonded. Warehouse. - Any person who causes the unauthorized withdrawal of 
23 
imported goods stored from a CBW shall be liable for payment of a surcharge of 
24 
fifty percent (50%) of duties, taxes, customs fees, and charges, found to be due 
25 
and unpaid. The amount of surcharge shall be added to the duties, taxes, and 
26 
charges dues on the goods withdrawn. If the delinquency lasts for more than 
27 
one (1) year, the surcharge shall be increased by twenty-five percent (25%) of 
28 
the unpaid duties and taxes annually: Provided, That, where the withdrawal is 
29 
attended with fraud, such as when a fake or altered withdrawal permit is 
136 


2 
3 
4 
5 
6 
7 
8 
9 
10 
\ 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
submitted, the warehouse operator shall be held liable under the pertinent 
provisions of this Act, without prejudice to the suspension or revocation of the 
warehousing privileges granted by the Bureau pursuant to this Act. 
SEC. 1423. Removing or Repacking Goods in Warehouse. 
Any 
person who fraudulently conceals, removes, or repacks merchandise in any 
warehouse or fraudulently alters, defaces, or obliterates any mark or numbers 
placed upon packages deposited in such warehouse, or shall aid or abet any 
such acts, shall be punished with the penalties prescribed in Section 1418hereof. 
Merchandise so concealed, removed, or repacked, or packages upon 
which marks, numbers or the values thereof have been so altered, defaced, or 
obliterated shall be forfeited in favor of the government. 
SEC. 1424. Removing Goods from Customs Custody. - Any person 
who enters any warehouse, or any vehicle loaded with or containing 
merchandise with intent to unlawfully remove therefrom any merchandise or 
baggage in such vessels, vehicle or warehouse or otherwise in customs custody 
~ 
or control, or any person who receives or transports any merchandise or 
baggage unlawfully removed from any such vessel, vehicle or warehouse, or 
shall aid or abet such removal, shall suffer the penalties provided in Section 1401 
hereof. 
SEC. 1425. Failure to Pay Duties, Taxes and Other Charges. -
For 
failure to pay the duties, taxes and other charges of an assessment within fifteen 
(15) days from date of final assessment, a surcharge of ten percent (10%) of the 
total assessed amount or balance thereon shall be added and collected, which 
surcharge shall be increased to twenty-five percent (25%) if the delinquency lasts 
for more than one (1) year. 
SEC. 1426. Breach of Security. - Upon breach of security required to 
be filed under this Act, the District Officer, subject to the approval of the 
C()mmissioner, may accept in satisfaction thereof a smaller sum than that 
mentioned in the penalty clause of the security, but in no case less than the 
137 


amount necessary to indemnify the government for the damage occasioned by 
2 
such breach. 
3 
SEC. 1427. Failure to Keep Importation Records and Full Access to 
4 
Customs Officers. -Any person who fails to keep all the records of importations 
5 
or books of accounts, business and computer systems . and all customs 
6 
commercial data in the manner prescribed in this Act, shall be punished with 
7 
imprisonment of not less than three (3) years and one (1) day but not more than 
8 
six (6) years and/or a fine of One million pesos (P1,000,000.00). This penalty 
9 
shall likewise be imposed against importers and brokers who deny an authorized 
10 
customs officer full and free access to such records, books of accounts, business 
II 
and computer systems, and all customs commercial data including payment 
12 
records, without prejudice to the imposition of the administrative sanctions by the 
13 
Bureau against contumacious importers, including the authority to hold delivery 
14 
or release of their imported goods. 
15 
SEC. 1428. Concealment or Destruction of Evidence of Fraud. 
16 
Any person who willfully conceals or destroys any invoice, book, or document 
17 
relating to any goods liable to duty after an inspection thereof has been 
18 
demanded by the District Officer or at any time conceals or des~roys any such 
19 
invoice, book, or document for the purpose of suppressing any evidence of fraud 
20 
therein contained, shall be penalized with imprisonment of not less than three (3) 
21 
years and one (1) day but not more than six (6) years and shall be liable for a 
22 
fine of not less than Three hundred thousand pesos (P300,000.00) but not more 
23 
than One million pesos (P1 ,000,000.00. 
24 
SEC. 1429. Other Offenses. 
The owner or operator of a vessel, 
25 
aircraft or train shall be liable for a fine for the following acts: 
26 
(a) for anchoring at any dock, pier, wharf, quay, or bulkhead other than a 
27 
port of entry, a fine of not less than Five hundred thousand pesos (P500,000.00) 
28 
but not more than One million pesos (P1 ,000,000.00) for overseas vessels; 
138 


(b) for dumping of garbage or slops over the sides of the vessel within 
2 
three (3) miles from the nearest coastline, a fine of not less than One million 
3 
pesos (P1,OOO,OOO.00) but not more than Ten million pesos (P10,OOO,000.00); 
4 
(c) for dumping or causing to spread crude oil, kerosene, or gasoline in 
5 
the bay or at the piers within three (3) miles from the nearest coastline, a fine of 
6 
not less than One million pesos (P1,OOO,000.00) but not more than Ten million 
7 
pesos (P1 O,OOO,OOO.OO)for each offense; 
8 
(d) for loading gasoline or any other petroleum products at a place other 
9 
than that deSignated by the regulations, a fine of not less than Five hundred 
10 
thousand 
pesos (P500,OOO.00) but not more than One million 
pesos 
11 
(P1,OOO,OOO.00) for each offense; 
12 
(e) for causing the emission and spread of harmful gas, fumes and 
13 
chemicals, a fine of not less than One million pesos (P1,OOO,OOO.00) but not 
14 
more than Ten million pesos (P1 0,000,000.00) for each offense; and 
15 
(f) for transporting hazardous waste, radioactive waste and other toxic 
16 
substances as provided under the Basel Convention and Republic Act No. 6969 
17 
otherwise known as the "Toxic Substances and Hazardous and Nuclear Wastes 
18 
Control Act of 1990", forfeiture of the vessel in favor of the government. 
19 
The fines imposed herein shall be without prejudice to the application of 
20 
fines or penalties provided under special laws and regulations. 
21 
SEC. 1430. Violations of this Act and Rules and Regulations in 
22 
General. - Any person who violates any other provision of this Act or the rules 
23 
and regulations issued pursuant thereto, shall be penalized with imprisonment of 
24 
not less than thirty (30) days and one (1) day but not more than one (1) year, or 
25 
be liable for a fine of not less than One hundred thousand pesos (P100,OOO.00) 
26 
but not more than Three hundred thousand pesos (P300,OOO.00), or both. If the 
27 
offender is an alien, the offender shall be deported after serving the sentence. If 
28 
the offender is a public officer or employee, the offender shall be disqualified 
139 


from holding public office, from exercising the right to vote and to participate in 
2 
any public election for ten (10) years. 
3 
CHAPTER 2 
4 
PENALTIES IMPOSED UPON BUREAU EMPLOYEES 
5 
SEC. 1431. Statutory Offenses of Officers and Employees. -
Every 
6 
officer, agent, or employee of the Bureau or of any other agency of the 
7 
govemment charged with the enforcement of the provisions of this Act, who shall 
8 
be found guilty of any delinquency as described below shall be penalized with 
9 
imprisonment of not less than six (6) years and one (1) day but not more than 
10 
twelve (12) years, and perpetual disqualification to hold public office, from 
11 
exercising the right to vote and to participate in any public election and a fine of 
12 
not less than Five hundred thousand pesos (P500,OOO.00), but not more than 
13 
One million pesos (P1,OOO,OOO.00): 
14 
(a) extortion or willful oppression under color of law; 
15 
(b) knowingly demanding other or greater sums that are authorized by law 
16 
or receive any fee, compensation, or reward except as by law prescribed, for the 
17 
performance of any duty; 
18 
(c) willfully neglecting to give receipts, as required by law, for any sum 
19 
collected in the performance of duty, or who willfully neglect to perform any of the 
20 
duties enjoined by law; 
21 
(d) conspiring or colluding with another or others to defraud the customs 
22 
revenue or otherwise violate the law; 
23 
(e) providing an opportunity for any person to defraud the government of 
24 
customs revenue or failing to do any act with the intent to enable any person to 
25 
defraud the government of customs revenue; 
26 
(f) negligently or deSignedly permitting the violation of the law by any 
27 
other person; 
140 


(g) making or signing for any false entry or entries in any book, making or 
2 
signing any false certificate or return in any case where the law requires the 
3 
making by them of such entry certificate or return; 
4 
(h) failing to report knowledge or information to their superior officer about 
5 
an act or acts of fraud committed in revenue collection as required by law; 
6 
(i) demanding or accepting or attempting, without authority, to collect 
7 
directly or indirectly as payment or otherwise, any sum of money or other thing of 
8 
value for the compromise, adjustment. or settlement of any charge or complaint 
9 
for any violation or alleged violation of law; 
10 
0) unlawfully disclosing confidential information gained during any 
11 
investigation or audit, or using such information for personal gain or to the 
12 
detriment of the government, the Bureau, or third parties. 
13 
All the benefits due from service in the government, including separation 
14 
and retirement benefits, of an officer, agent, or employee of the Bureau or of any 
15 
other agency of the government charged with the enforcement of the provisions 
16 
of this Act found guilty of the foregoing violations shall be forfeited. 
17 
SEC. 1432. Failure to Report Fraud. - Any employee of the Bureau 
18 
who has knowledge of any fraud committed against the government pertaining to 
19 
customs revenue, and who fails to report all information relative thereto to the 
20 
District Officer, shall be penalized with imprisonment of not less than six (6) 
21 
years and one (1) day but not more than twelve (12) years and a fine of not less 
22 
than Five hundred thousand pesos (P500,OOO.OO) but not more than One million 
23 
pesos (P1,OOO,OOO.OO). 
The offender shall suffer the additional penalty of 
24 
perpetual disqualification to hold public office, to vote and to participate in any 
25 
election. All the benefits of the offender due from service in the government, 
26 
including separation and retirement benefits, shall be forfeited. 
27 
SEC. 1433. Liability for Other Offenses. - The fines and penalties 
28 
imposed in this Chapter shall be without prejudice to the application of fines or 
29 
penalties provided under Chapter 1 of this Title and special laws and regulations. 
141 


TITLE XV 
2 
MISCELLANEOUS PROVISIONS 
3 
SEC. 1500. Information, Decisions, and Rulings. -The Bureau shall 
4 
ensure that all information of general application pertaining to customs, including 
5 
revisions or amendments thereto, shall be available to the general public. 
6 
SEC. 1501. Period to Issue Ruling. -
The issuing authority shall act on 
7 
the application for ruling within thirty (30) days from receipt of the application and 
8 
supporting documents as may be required by regulation. Within three (3) days 
9 
from issuance of a ruling, the issuing authority shall notify the requesting party of 
10 
such ruling. 
II 
SEC. 1502. Publication and Confidentiality of Certain Information in 
12 
Ruling. - The Bureau and the Tariff Commission shall regularly publish its rulings 
13 
in a manner accessible to the public. For this purpose, each application for ruling 
14 
shall be assigned a title and unique ruling number for easy reference. 
The 
15 
publication shall contain information on the goods involved, the body or gist of 
16 
the ruling, particularly the grounds relied upon to support the ruling, but shall 
17 
exclude the name of the requesting party and other information which by their 
18 
very nature are confidential, including those which the requesting party indicated 
19 
in its application as confidential in nature. Except in the context of judicial 
20 
proceedings, any disclosure of confidential information under this section shall 
21 
not be made except upon the written consent of the beneficiary of the advance 
22 
ruling. 
23 
SEC. 1503. Duty of District Officer to Report Rulings to the 
24 
Commissioner. - When any new or unsettled question shall be determined by 
25 
a District Officer, and if the matter is not otherwise appealed for review in the 
26 
ordinary course, the District Officer shall notify the Commissioner of the decision 
27 
and submit an adequate statement of the facts involved. 
28 
SEC. 1504. Application of Established Ruling or Decision. - A ruling 
29 
or decision of the Commissioner which determines the construction or application 
142 


of any provision of law imposing customs duties and taxes, and which changes 
2 
any existing established valuation, classification, rules of origin and other 
3 
customs rules, interpretation or practice shall not take effect until thirty (30) days 
4 
after public notice shall have been given in the form of a published decision. 
5 
When the ruling or decision favors the taxpayers, it shall become effective 
6 
immediately. 
7 
SEC. 1505. Authority of Official to Administer Oaths and Take 
8 
Testimony. - The Commissioner, District Officers and their deputies, and other 
9 
customs employees especially deputized by the District Officer shall have 
10 
authority to administer oaths and take testimony in connection with any matter 
11 
within the jurisdiction of the Bureau and, in connection therewith, may require the 
12 
production of relevant papers, documents, books and records in accordance with 
13 
law. 
14 
SEC. 1506. General Security. -
In cases where securities are required 
15 
to be given under the provisions of the customs and tariff laws, the District 
16 
Officer, instead of requiring separate special security where transactions of a 
17 
particular party are numerous, may accept general security extending over such 
18 
periods of time and covering such transactions of the party in question as may be 
19 
satisfactory to the District Officer. 
$ 
20 
SEC. 1507. Security. 
The Bureau shall prescribe the forms and 
21 
amount of security required to guarantee the payment of duties and taxes and 
22 
other obligations provided for in this Act. 
23 
Any party required to provide security shall have the option to choose from 
24 
any form of security prescribed by the Bureau. The Bureau may not reqUire 
25 
security if satisfied that an obligation to the Bureau will be fulfilled, but shall 
26 
require and accept a general security from declarants who regularly declare 
27 
goods at different offices in the customs territory under such terms and 
28 
conditions as may be determined by the Commissioner. 
143 


The required amount of security shall be the lowest possible and shall not 
2 
exceed the amount of imposable duties, taxes, and charges. 
3 
When the obligation under which the security was required has been 
4 
satisfied, the security shall be discharged immediately. 
5 
SEC. 1508. Customs Service Fees. -
Customs personnel may be 
6 
assigned by a District Officer to render overtime work and other customs 
7 
services and shall be paid for such services by the Bureau according to service 
8 
fees fixed by the Commissioner and approved by the Secretary of Finance. The 
9 
Bureau may charge additional customs service fees, when applicable subject to 
10 
the rates prescribed under existing rUles and regulations. 
11 
SEC. 1509. Testimony in Writing. - When testimony is taken in any 
12 
,proceeding or matter under the authority of the Bureau, either party may require 
13 
that the testimony shall be made in writing, and when so taken, the written 
14 
testimony shall be filed in the Office of the District Officer and to be preserved for 
15 
use or reference until final decision. 
16 
SEC. 1510. District Officer Not Liable in Respect to Ruling in 
17 
Customs Cases. - Every District Officer or other officials of the Bureau shall not 
18 
be in any way personally liable on account of any official ruling or decision as to 
19 
which the person claiming to be aggrieved has the right to obtain either an 
20 
administrative or judicial review. Except for misdelivery of goods, a District 
21 
Officer may not, in the absence of abuse of authority, be liable to any person for 
22 
any loss occasioned either by the official act or the acts of the subordinates. 
23 
SEC. 1511. Interest Prohibited to be Held by Customs Employees. 
24 
Any person employed under the authority of the government in the assessment 
25 
of duties, taxes, fees, and other charges in connection with imports or exports, 
26 
shall not own, either in whole or in part, any vessel or aircraft or act as attorney, 
27 
agent or consignee for the owner of any vessel or aircraft or of any cargo loaded 
28 
on board the vessel or aircraft; and shall not import or be involved, directly or 
29 
indirectly, in the importation of any goods for sale into the Philippines. 
144 


SEC. 1512. Reward to Persons Instrumental in the Actual Collection 
2 
of Additional Revenues AriSing from the Discovery of Violations of this Act. 
3 
- A cash reward equivalent to twenty percent (20%) of the actual proceeds from 
4 
the sale of smuggled goods and confiscated goods or actual collection of 
5 
additional revenues shall be given to the customs and non-customs informers or 
6 
whistleblowers who are instrumental in the collection of additional revenues 
7 
arising from the discovery of violations of this Act in accordance with the rules 
8 
and regulations to be issued by the Secretary of Finance. 
9 
SEC. 1513. Outsourcing of Non-Sovereign Customs Functions to 
10 
Private Entities. -
Subject to the approval of the Secretary of Finance, the 
11 
Bureau may outsource any of its non-sovereign and ancillary function to a 
12 
qualified and competent private entity in accordance with government rules on 
13 
service procurement. 
14 
SEC. 1514. International Standards and Best Practices. 
The 
15 
Bureau may adopt international standards and best practices in custorns 
16 
administration laid down by international agreement or convention pertaining to 
17 
trade facilitation, supply chain security, and related matters, whether or not the 
18 
Philippines is Signatory to such international agreement or convention. 
19 
TITLE XVI 
20 
TARIFF ADMINISTRATION AND POLICY 
21 
CHAPTER 1 
22 
TARIFF COMMISSION 
23 
SEC. 1600. Chief 
Officials 
of 
the 
Tariff 
Commission 
and 
24 
Qualifications. -The officials of the Tariff Cornmission shall consist of a 
25 
Chairperson and two (2) Commissioners to be appointed by the President of the 
26 
Philippines. The Chairperson and the Commissioners shall be natural-born 
27 
citizens of the Philippines, of good moral character and proven integrity, and 
28 
who, by experience and academic training possess the necessary qualifications 
29 
requisite for developing expert knowledge of tariff problems. During their terms of 
145 


office, the Chairperson and the Commissioners shall not engage in the practice 
2 
of any profeSSion, or intervene directly or indirectly in the management or control 
3 
of any private enterprise which may, in any way, be affected by the functions of 
4 
their office. They shall not be, directly or indirectly, finanCially interested in any 
5 
contract with the government, or any subdivision or instrumentality thereof. 
6 
SEC. 1601. Appointment and 
Compensation 
of Officials 
and 
7 
Employees. 
-All employees of the Commission shall be appointed by the 
8 
Chairperson in accordance with the Civil Service Law except as the private 
9 
secretaries to the offices of the Chairperson, Commissioners and Executive 
10 
Director. 
11 
SEC. 1602. Official Seal. - The Commission is authorized to adopt an 
12 
official seal. 
13 
SEC. 1603. Functions of the Commission. -
The Commission shall 
14 
exercise the functions to investigate the following: 
15 
(a) the administration of, and the fiscal and industrial effects of, this Act 
16 
and other related laws of this country currently in force or to be enacted; 
17 
(b) the relation between the rates of duty on raw materials and finished or 
18 
partly finished products; 
19 
(c) the effects of ad valorem and specific duties and of compound specific 
20 
and ad valorem duties; 
21 
(d) all 
questions 
relative 
to 
the 
arrangement of schedules and 
22 
classification of goods in the several Sections in this Act; 
23 
(e) the tariff relations between the Philippines and foreign countries, 
24 
commercial treaties, preferential prOVisions, economic alliances, the effect of 
25 
export bounties and preferential transportation rates; 
26 
(f) the volume of importations compared with domestic production and 
27 
consumption; 
146 


(g) conditions, causes and effects relating to competition of foreign 
2 
industries with those of the Philippines', including dumping and cost of 
3 
production; 
4 
(h) the operation and implementation of this Act, including their relation to 
5 
the national revenues, their effect upon the industries and labor of the country, 
6 
and to submit reports of its investigations as herein provided; and 
7 
(i) the nature and composition, and the classification of goods according to 
8 
tariff commodity classification and heading number for customs revenue and 
9 
other related purposes which information shall be furnished 
the NEDA, the 
10 
Board of Investments (BOI), the BSP, and the Secretary of Finance. 
11 
SEC. 1604. Assistance to the President and Congress of the 
12 
Philippines. 
-
In order to provide the President and the Congress with the 
13 
necessary information and assistance regarding matters relating to tariff and 
14 
tariff-related concerns, it shall be the duty of the Commission to: 
15 
(a) ascertain conversion costs and costs of production in the principal 
16 
growing, producing, or manufacturing centers of the Philippines, whenever 
17 
practicable; 
18 
(b) ascertain conversion costs and costs of production in the principal 
19 
growing, producing, or manufacturing centers of foreign countries of goods 
20 
imported into the Philippines whenever such conversion costs or costs of 
21 
production are necessary for comparison with those in the Philippines; 
22 
(c) select and describe representative goods imported into the Philippines 
23 
similar to, or comparable with, those locally produced; select and describe goods 
24 
of the Philippines Similar to, or comparable with, such imported goods; and 
25 
obtain and file samples of goods so selected whenever advisable; 
26 
(d) ascertain import costs of such representative goods so selected; 
27 
(e) ascertain the selling prices of the grower, producer, or manufacturer in 
28 
the principal growing, producing, or manufacturing centers of the Philippines, of 
29 
local goods and, in addition, to ascertain all other facts which will show the 
147 


difference in, or which affect competition between, goods of the Philippines and 
2 
those imported in the principal markets of the Philippines; 
3 
(f) ascertain conversion costs and costs of production including effects of 
4 
tariff modifications or import restrictions on prices in the principal growing, 
5 
producing, or manufacturing centers of the Philippines, whenever practicable; 
6 
and 
7 
(g) submit annual reports of these to the President and the Congress of 
8 
the Philippines, a copy of which shall be furnished the NEDA, the BSP, the DOF, 
9 
and the BOI. 
10 
SEC. 1605. Reports of the Commission. 
-
The Commission shall 
11 
place at the disposal of the President and any Member of the Congress of the 
12 
Philippines all information at its command. It shall conduct such investigation 
13 
and submit reports as may be required by the President and the Congress of the 
14 
Philippines. It shall likewise report to the President and Congress on the first 
15 
Monday of December of each year and hereafter, a statement of methods 
16 
adopted and a summary of all reports made during the year. 
17 
The Commission or its duly authorized representative shall have access to 
18 
any document, paper or record, pertinert to the subject matter under 
19 
investigation, in the possession of any person, firm, co-partnership, corporation, 
20 
or association engaged in the production, importation, or distribution of goods 
21 
under investigation, and shall have power to summon witnesses, take testimony, 
22 
administer oaths, and to issue subpoena duces tecum requiring the production of 
23 
books, papers, or documents relating to the matter under investigation. The 
24 
Commission may also request the views, recommendations, and assistance of 
25 
any government office, agency, or instrumentality who shall be expected to 
26 
cooperate fully with the Commission. 
27 
SEC. 1606. Sworn and Verified Statements. - The Commission rnay 
28 
order the taking of sworn statements at any stage of any proceeding or 
148 


investigation before it. The swom statements must be made before a person 
2 
authorized to administer oaths. 
3 
The Commission is authorized to require any importer, grower, producer, 
4 
manufacturer or seller to file with the Commission a statement, under oath, giving 
5 
the selling prices in the Philippines of goods imported, grown, produced, 
6 
fabricated or manufactured by such person. 
7 
SEC. 1607. Implementing Rules and Regulations. - The Commission 
8 
shall promulgate and adopt such rules and regulations as may be necessary to 
9 
carry out the provisions of this Act. 
10 
CHAPTER 2 
11 
FLEXIBLE TARIFF 
12 
SEC. 1608. Flexible Clause. -
(a) In the interest of the general welfare 
13 
and national security, and subject to the limitations prescribed under this Act, the 
14 
President, upon the recommendation of NEDA, is hereby empowered to: 
15 
(1) increase, reduce, or remove existing protective rates of import duty 
16 
including any necessary change in classification. The existing rates may be 
17 
increased or decreased to any level, in one or several stages, but in no case 
18 
shall the increased rate of import duty be higher than a maximum of one hundred 
19 
percent (100%) ad valorem; 
20 
(2) establish import quotas or ban imports of any commodity, as may be 
21 
necessary; and 
22 
(3) impose an additional duty on all imports not exceeding ten percent 
23 
(10%) ad valorem whenever necessary: 
Provided, 
That upon 
periodic 
24 
investigations by the Tariff Commission and recommendation of the NEDA, the 
25 
President may cause a gradual reduction of protection levels granted in Section 
26 
1611 of this Act, including those subsequently granted pursuant to this Section. 
27 
(b) Before any recommendation is submitted to the President by the 
28 
NEDA pursuant to the provisions of this Section, except in the imposition of an 
29 
additional duty not exceeding ten percent (10%) ad valorem, the Commission 
149 


shall conduct an investigation and shall hold public hearings wherein interested 
2 
parties shall be afforded reasonable opportunity to be present, to produce 
3 
evidence and to be heard. The Commission shall also hear the views and 
4 
recommendations of any government office, agency, or instrumentality. The 
5 
Commission shall submit its findings and recommendations to the NEDA within 
6 
thirty (30) days after the termination of the public hearings. 
7 
(c) The power of the President to increase or decrease rates of import 
8 
duty within the limits fixed in subsection (a) shall include the authority to modify 
9 
the form of duty. In modifying the form of duty, the corresponding ad valorem or 
10 
specific equivalents of the duty with respect to imports from the principal 
II 
competing foreign country for the most recent representative period shall be 
12 
used as basiS. 
13 
(d) Any order issued by the President pursuant to the provisions of this 
14 
Section shall take effect thirty (30) days after promulgation, except in the 
15 
imposition of additional duty not exceeding ten percent (10%) ad valorem which 
16 
shall take effect at the discretion of the President. 
17 
(e) The power delegated to the President as provided for in this Section 
18 
shall be exercised only when Congress is not in session. 
19 
(f) The power herein delegated may be withdrawn or terminated by 
20 
Congress through a joint resolution. 
21 
The NEDA shall promulgate rules and regulations necessary to carry out 
22 
the provisions of this Section. 
23 
SEC. 1609. Promotion of Foreign Trade. -
(a) For the purpose of 
24 
expanding foreign markets for Philippine products as a means of aSSisting in the 
25 
economic development of the country, in overcoming domestic unemployment, in 
26 
increasing the purchasing power of the Philippine peso, and in establishing and 
27 
maintaining better relations between the Philippines and other countries, the 
28 
President, shall, from time to time: 
150 


(1) 
enter 
into 
trade 
agreements 
with 
foreign 
governments 
or 
2 
instrumentalities thereof; and 
3 
(2) modify import duties, including any necessary change in classification 
4 
and other import restrictions as are required or appropriate to carry out and 
5 
promote foreign trade with other countries: Provided, That in modifying import 
6 
duties or fixing import quota, the requirements prescribed in subsection (a) of 
7 
Section 1608 shall be observed: Provided, however, That any modification in 
8 
import duties and the fixing of import quotas pursuant to the agreement on 
9 
ASEAN Trade in Goods Agreement (ATIGA) and other trade agreements, shall 
10 
not be subject to the limitations of aforesaid subsection (a) of Section 1608. 
11 
(b) The duties and other import restrictions as modified in subsection (a) 
12 
of this Section, shall apply to goods which are the growth, produce, or 
13 
manufacture of the specific country, whether imported directly or indirectly, with 
14 
which the Philippines has entered into a trade agreement: Provided, That the 
15 
President may suspend the application of any concession to goods which are the 
16 
growth, produce, or manufactured product of the specific country because of acts 
17 
or policies which tend to defeat the purposes set in this Section,'!including the 
18 
operations of international cartels; and the duties and other import restrictions as 
19 
negotiated shall be in force and effect from and after such time as specified in 
20 
the order. 
21 
(c) Nothing in this Section shall be construed to give any authority to 
22 
cancel or reduce in any manner the indebtedness of any foreign country to the 
23 
Philippines or any claim of the Philippines against any foreign country. 
24 
(d) Before any trade agreement is concluded with any foreign government 
25 
or instrumentality thereof, reasonable public notice of the intention to negotiate 
26 
an agreement with such government or instrumentality shall be given in order 
27 
that interested persons may have an opportunity to present their views to the 
28 
Commission. The Commission shall seek information and advice from the 
151 


Department of Agriculture (DA), the DENR, the DTI, the DOT, the BSP, the DFA, 
2 
the BOI, and from such other sources as it may deem appropriate. 
3 
(e) In adVising the President, on a trade agreement entered into by the 
4 
Philippines, the following shall be observed: 
5 
(1) The Commission shall determine whether or not the domestic industry 
6 
has suffered or is being threatened with injury and whether or not the wholesale 
7 
prices at which the domestic products are sold are reasonable, taking into 
8 
account the cost of raw materials, labor, overhead, a fair return on investment, 
9 
and the overall efficiency of the industry. 
10 
(2) The NEDA shall evaluate the report of the Commission and submit 
11 
recommendations to the President. 
12 
(3) Upon receipt of the report of the findings and recommendations of the 
13 
NEDA, the President may prescribe adjustments in the rates of import duties, 
14 
withdraw, modify or suspend, in whole or in part, any concession under any trade 
15 
agreement, establish import quota, or institute such other import restrictions as 
16 
the NEDA recommends to be necessary in order to fully protect domestic 
17 
industry and the consumers, subject to the condition that the wholesale prices of 
18 
the domestic products shall be reduced to, or maintained at, the level 
19 
recommended by the NEDA unless, for good cause shown, an increase thereof, 
20 
as recommended by the NEDA, is authorized by the President. Should increases 
21 
be made without such authority, the NEDA shall immediately notify the President 
22 
who shall allow the importation of competing products in such quantities as to 
23 
protect the public from the unauthorized increase in wholesale prices. 
24 
(f) This Section shall not prevent the effectivity of any executive 
25 
agreement or any future preferential trade agreement with any foreign country. 
26 
(g) 
The NEDA and the Commission shall promulgate such reasonable 
27 
procedures, rules and regulations as they may deem necessary to execute their 
28 
respective functions under this Section. 
152 


CHAPTER 3 
2 
TARIFF NOMENCLATURE AND RATE OF DUTY 
3 
SEC. 1610. General Rules for the Interpretation (GRI). -
The 
4 
classification of goods and its tariff nomenclature as provided pursuant to this Act 
5 
shall be govemed by the following principles: 
6 
(1 )The titles of Sections, Chapters and Sub-Chapters are provided for 
7 
ease of reference only; for legal purposes, classification shall be determined 
8 
according to the terms of the headings and any relative Section or Chapter Notes 
9 
and, provided such headings or Notes do not otherwise require, according to the 
10 
following provisions: 
II 
(2) (a) Any reference in a heading to an article shall be taken to include a 
12 
reference to that article incomplete or unfinished: Provided, That, as presented, 
13 
the incomplete or unfinished article has the essential character of the complete 
14 
or finished article. 
It shall also be taken to include a reference to that article 
IS 
complete or finished (or falling to be classified as complete or finished by virtue 
16 
of this Rule), presented unassembled or disassembled. 
17 
(b) Any reference in a heading to a material or substance shall be taken to 
18 
include a reference to mixtures or combinations of that material or substance 
19 
with other materials or substances. Any reference to goods of a given material or 
20 
substance shall be taken to include a reference to goods consisting wholly or 
21 
partly of such material or substance. The classification of goods consisting of 
22 
more than one material or substance shall be according to the principles of Rule 
23 
3. 
24 
(3) When by application of Rule 2(b) or for any other reason, goods are, 
25 
prima facie, classifiable under two or more headings, classification shall be 
26 
effected as follows: 
27 
(a) The heading which provides the most specific description shall be 
28 
preferred to headings providing a more general description. However, 
29 
when two or more headings each refer to part only of the materials or 
153 


substances contained in mixed or composite goods or to part only of 
2 
the items in a set put up for retail sale, those headings are to be 
3 
regarded as equally specific in relation to those goods, even if one of 
4 
them gives a more complete or precise description of the goods. 
5 
(b) Mixtures, composite goods consisting of different materials or made up 
6 
of different components, and goods put up in sets for retail sale, which 
7 
cannot be classified by reference to 3(a), shall be classified as if they 
8 
consisted of their essential character, insofar as this criterion is 
9 
applicable. 
10 
(c) When goods cannot be classified by reference to 3(a) or 3(b), they 
11 
shall be classified under the heading which occurs last in numerical 
12 
order among those which equally merit consideration; 
13 
(4) Goods which cannot be classified in accordance with the above Rules 
14 
shall be classified under the heading appropriate to the goods to which they are 
15 
most akin. 
16 
(5) In addition to the foregoing provisions, the following Rules shall apply 
17 
in respect of the goods referred to therein: 
18 
(a) Camera cases, musical instrument cases, gun cases, drawing 
19 
instrument cases, necklace cases and similar containers, specially 
20 
shaped or fitted to contain a specific article or set of articles, suitable 
21 
for long-term use and presented with the articles for which they are 
22 
intended, shall be classified with such articles when of a kind normally 
23 
sold therewith. The Rule does not, however, apply to containers which 
24 
give the whole its essential character; 
25 
(b) Subject to the provisions of Rule 5(a), packing materials and packing 
26 
containers presented with the goods therein shall be classified with the 
27 
goods if they are of a kind normally used for packing such goods. 
28 
However, this provision does not apply when such packing materials or 
29 
packing containers are clearly suitable for repetitive use. 
154 


(6) For legal purposes, the classification of goods in the subheadings of a 
2 
heading shall be determined according to the terms of those subheadings and 
3 
any related Subheading Notes and, mutatis mutandis, to the above Rules, on the 
4 
understanding that only subheadings at the same level are comparable. For the 
5 
purposes of the Rule, the relative Section and Chapter Notes also apply, unless 
6 
the context otherwise requires. 
7 
SEC. 1611. Tariff Nomenclature and Rates of Import Duty. -
The 
8 
provisions of Section 104 of Presidential Decree No. 1464, otherwise known as 
9 
the Tariff and Customs Code of the Philippines of 1978, as amended, specifically 
10 
providing for the tariff sections, chapters, headings and subheadings and the 
11 
rates of import duty, shall still apply. There shall be levied, collected and paid 
12 
upon all imported goods the rates of duty indicated thereon except as otherwise 
13 
specifically provided for in this Act: Provided, That the maximum rate shall not 
14 
exceed one hundred percent (100%) ad valorem. 
15 
a. The rates of duty provided or subsequently fixed pursuant to Sections 
16 
1608 and 1609 of this Act shall be subject to periodic investigation by the Tariff 
17 
Commission and may be revised by the President, upon the recommendation of 
18 
the NEDA. 
19 
b. The rates of duty provided shall apply to all products, whether imported 
20 
directly or indirectly, of all foreign countries, which do not discriminate against 
21 
Philippine export products. An additional one hundred percent (100%) across-
22 
the-board duty shall be levied on the products of any foreign country which 
23 
discriminates against Philippine export products. 
24 
SEC. 1612. Tariff Nomenclature and Rates of Export Duty. -
The 
25 
prOVisions of Section 514 of Presidential Decree No. 1464, otherwise known as 
26 
the Tariff and Customs Code of 1978, as amended, specifically providing for the 
27 
export products subject to duty and rates, shall still apply. 
155 


TITLE XVII 
2 
CONGRESSIONAL OVERSIGHT COMMITTEE 
3 
SEC. 1700. Congressional 
Oversight 
Committee. 
The 
4 
Congressional Customs and Tariff Oversight Committee, herein referred to as 
5 
the Committee, is hereby constituted in accordance with the provisions of this 
6 
Act. The Committee shall be composed of the Chairpersons of the Committee on 
7 
Ways and Means of the Senate and House of Representatives and four (4) 
8 
additional members from each House, to be designated by the Senate President 
9 
and the Speaker of the House of Representatives, respectively. The Committee 
10 
shall, among others, in aid of legislation: 
11 
(a) monitor and ensure the proper implementation of this Act; 
12 
(b) review the collection performance of the Bureau; and 
\3 
(c) review the implementation of the programs of the Bureau. 
14 
In furtherance of the hereinabove cited objectives, the Committee shall 
• 
15 
require the Bureau to submit all pertinent information which includes: 
16 
(1) industry audits; 
17 
(2) collection performance data; and 
18 
(3) status report on criminal actions initiated against persons. 
19 
TITLE XVIII 
20 
FINAL PROVISIONS 
21 
SEC. 1800. Implementing Rules and Regulations. -
The Secretary of 
22 
Finance shall, upon the recommendation of the Commissioner, promulgate the 
23 
necessary rules and regulations for the effective implementation of this Act. 
24 
SEC. 1801. Transitory Provisions. 
-
All 
suits, 
proceedings, 
or 
25 
prosecutions whether civil or criminal, for causes arising or acts done or 
26 
committed prior to the effectivity of this Act, shall be commenced and prosecuted 
27 
within the same time in the same manner and with the same effect as if this Act 
28 
had not been enacted and all rights acquired, offenses committed, and penalties 
156 


or forfeitures or liabilities waived prior to the said effectivity shall not be affected 
2 
thereby. 
3 
SEC. 1802. Repealing Clause. -Except for Section 104 on Rates of 
4 
Import Duty and Section 514 on Export Products Subject to Duty and Rates 
5 
which shall remain valid and effective and shall supplement this Act, all other 
6 
Sections of Presidential Decree No. 1464, otherwise known as the Tariff and 
7 
Customs Code of the Philippines of 1978, as amended, and Presidential Decree 
8 
No. 1853 which require any applicant for letter of credit covering imports to 
9 
deposit the full amount of duties due on the importation, are hereby expressly 
10 
repealed. All other laws, acts, presidential decrees, executive orders, rules and 
11 
regulations or parts thereof inconsistent with the provisions of this Act are hereby 
12 
expressly repealed, amended or modified accordingly. 
13 
SEC. 1803. Separability Clause. 
-
If any proVision of this Act is 
14 
declared invalid or unconstitutional, the remaining provisions or parts shall 
15 
remain in full force and effect. 
16 
SEC. 1804. Effectivity Date. 
-
This Act shall take effect fifteen (15) 
17 
days after its publication in the Official Gazette or in two (2) newspapers of 
18 
general circulation. 
Approved, 
157