Republic of the Philippines
HOUSE OF THE REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 7

Introduced by: HON. ERIC OWEN SINGSON, JR.

EXPLANATROY NOTE.

Unlawful importation or smuggling is grossly inimical to national interest. It creates
market distortion, and plunders and devastates our economy. It is a scourge that afflicts the very
foundation of nationhood since the state is always dependent on taxes and other impositions, like
import duties, to enable government fulfill its mandate of service to its constituency.

Smuggling has been characterized as the worst form of economic pillage. It deprives
government of substantial revenue which would have been used to uplift the standards of living
and the well being of the nation, The incidence of wanton smuggling is reported regularly in the
national dailies. Cases of smuggling of vehicles, consumer goods like sugar, rice, meat and
vegetable products and other dutiable articles occupy the pages of newspapers. Hence, it has
been argued that the government should make the fight against smuggling a national priority in
the same way that it has done so in its anti-kidnapping and anti-drug campaigns not only to shore
up government revenues but likewise to protect local industries that are adversely affected by
unabated smuggling.

The government has instituted certain measures in order to thwart this malady like the
creation of a task force to go after smugglers. Still, it is believed that more steps have to be
undertaken to really curb or defeat this act of terrorism to the economy.

This piece of legislation is one of those components that will further reinforce the anti-
smuggling effort of the government. Basically, it proposes to drastically upgrade the penalties
that can be imposed against those involved in unlawful importation and other intrinsic acts that
abet smuggling. The existing penalty provisions in the Tariff and Customs Code of the
Philippines are still lifted from Republic Act No. 1937 which took effect in 1957 and are thus
already outmoded and insignificant that they become impotent in deterring smuggling.

ince
\GSON,3R.

‘The approval of this Bill is therefore earnestly sought.



Republic of the Philippines -
HOUSE OF THE REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

HouSEBILLNO.___1 71

Introduced by: HON. ERIC OWEN SINGSON, JR.

AN ACT
FURTHER STRENGTHENING THE ANTI-SMUGGLING MECHANISM, AMENDING
FOR THE PURPOSE CERTAIN PROVISIONS OF PRESIDENTIAL DECREE NO.
1464, OTHERWISE KNOWN AS THE TARIFF AND CUSTOMS CODE OF THE
PHILIPPINES, AS AMENDED, AND FOR OTHER PURPOSES _

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

SECTION |. Short Title. ~ This Act shall be known and cited as the “Anti-Smuggling Act of 2010”

SECTION 2. Section 201, Title Il, Part 1 of the Tariff and Customs Code of the Philippines, as amended,
further amended by amending the third and second to the last paragraphs and the
follows:

hereby
st paragraph thereof to read as.

“SEC. 201. Basis of Dutiable Value. — x x x “x x x “If in the course of determining the dutiable
value of imported goods, it becomes necessary to delay the final determination of such dutiable value, the
importer shall nevertheless be able to secure the release of the imported goods upon the filing of a
sufficient guarantee in the form of a LETTER OF CREDIT, surety bond, a deposit, cash or some other
‘appropriate instrument in an amount equivalent to the imposable duties and taxes fon] FOR WHICH the
imported goods [in question conditioned upon the payment of customs duties and taxes for which the
imported goods] may be liable: Provided, however, That goods, the importation of which is prohibited by
law shall not be released under any circumstance whatsoever|.|: PROVIDED, FURTHER, THAT,
REFERENCE INFORMATION OBTAINED FROM A VALUE DATA BASE APPROVED BY
THE COMMISSIONER, INCLUDING REVISION ORDERS, SHALL BE USED TO TEST THE
TRUTHFULNESS AND ACCURACY OF A GIVEN VALUE DECLARATION. A VALUE
DECLARATION WHICH FALLS OUTSIDE OF THE VALUE RANGE OF REVISION ORDERS
SHALL TRIGGER A VALUATION QUERY ON THE APPLICABILITY OF THE METHOD OF
VALUATION USED BY THE IMPORTER, IN WHICH CASE THE APPLICABILITY AND
APPROPRIATENESS OF THE METHOD OF VALUATION EMPLOYED BY THE IMPORTER
SHALL BE REVIEWED BY THE VALUATION AND CLASSIFICATION REVIEW
COMMITTEE (VCRC) WHICH, THEREAFTER, SHALL ENDORSE ITS FINDINGS AND
RECOMMENDATIONS TO THE COMMISSIONER OF CUSTOMS. FOR PURPOSES OF THIS
SECTION, A REVISION ORDER, WHICH SHALL BE PUBLISHED IN A NEWSPAPER OF
GENERAL CIRCULATION AND PERIODICALLY UPDATED IN THE BUREAU OF CUSTOMS
WEBSITE AND POSTED IN THE BULLETIN BOARD OF THE BUREAU, SHALL REFER TO
THE DOCUMENT WHICH INDICATES THE LATEST VALUE(S) OF PRODUCT(S)
APPLICABLE AND EFFECTIVE WITHIN THE PERIOD OF NINETY (90) DAYS FROM DATE
OF ITS ISSUANCE BY THE BUREAU OF CUSTOMS, AFTER CONSULTATION WITH
INDUSTRY REPRESENTATIVES. “Nothing in this Section shall be construed as restricting or calling
into question the right of the Collector of Customs to satisfy himself as to the truth or accuracy of any
statement, document or declaration presented for customs valuation purposes. When a declaration has been
resented and where the {customs administration] VCRC has reason to doubt the truth or accuracy of the
Particulars or of documents produced in support of this declaration, the [customs administration] VCRC
may ask the importer to provide further explanation, including documents or other evidence, that the
declared value represents the total amount actually paid or payable for the imported goods, adjusted in
accordance with the provisions of Subsection (A) hereof. “If, after receiving further information, or in the
absence of a response, the [customs administration] VCRC still has reasonable doubts about the truth or
accuracy of the declared value, it may, without prejudice to an importer’s right to appeal pursuant to Article
11 of the World Trade Organization Agreement on customs valuation, be deemed that the customs value of
the imported goods cannot be determined under Method One. Before taking a final decision, the Collector
of Customs shall communicate to the importer, in writing if requested, his grounds for doubting the truth or



accuracy of the particulars or documents produced and give the importer a reasonable opportunity to
respond. When a final decision is made, the [customs administration] DISTRICT COLLECTOR shall
communicate to the importer in writing, COPY FURNISHED THE MEMBERS OF THE VCRC, [its]
THE decision and the grounds therefor.”

SECTION 3. Section 607 of the Tariff and Customs Code of the Philippines, as amended, is hereby further amended
to read as follows:
“See. 607. Annual Report of Commissioner. ~The annual report of the Commissioner to the
President shall, among other things, contain a compilation of the (a) quantity and value of the articles
imported into the Philippines and the corresponding amount of custom duties, taxes and other charges
assessed and collected on imported articles itemized in accordance with the tariff headings and subheadings
as appearing in the liquidated customs entries provided for in this Code, (b) percentage collection of the
peso value of imports, (c) quantity and value of conditionally-free importations, (d) customs valuation over
and above letters of credit opened, (e) quantity and value of tax-free imports, and (f) the quantity and value
of articles exported from the Philippines as well as the taxes and other charges assessed and collected on
them for the preceding year. Copies of such annual report shall be furnished regularly to the Department of
Finance, Tariff Commission, NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY
(NEDA), [Central Bank of the Philippines] BANGKO SENTRAL NG PILIPINAS (BSP), Board of
Investments, Department of Budget AND MANAGEMENT, and other economic agencies of the
government, on or before December 30, of each year. “xx x.”

SECTION 4, Section 609 of the Tariff and Customs Code of the Philippines, as amended, is hereby further amended
to read as follows:
“SEC. 609. Commissioner to Furnish Copies of Collectors’ Liguidated Duplicates. ~ The
Commissioner shall regularly furnish the NEDA, the [Central Bank of the Philippines] BSP, the Tariff
Commission, AND THE NATIONAL STATISTICS OFFICE (NSO) [a copy] BOTH ELECTRONIC
AND PAPER COPIES of each of all customs importexport entries as filed with the Bureau of Customs,
‘The Tariff Commission or its duly authorized agents shall have access to and the right to copy all the
‘customs liquidated import entries and other documents appended thereto as finally filed in the Commission
on Audit.”

SECTION 5. Section 701 of the Tariff and Customs Code of the Philippines, as amended,
to read as follows:

“Sec. 701. Collection Districts and Ports of Entry Thereof. ~ For administrative purpos

Philippines shall be divided into as many collection districts as necessary, the respective limits of which

may be changed from time to time by the Commissioner of Customs upon approval of the Secretary of

Finance. The principal ports of entry for the respective collection districts shall be Manila, Ninoy Aquino

International Airport, Cebu, Iloilo, Davao, Tacloban, Zamboanga, Cagayan de Oro, Surigao, Legaspi,

Batangas, San Femando, Subic, CLARK INTERNATIONAL AIRPORT, [and] Manila International

Container Port[.], AND SUCH OTHER PORTS THAT MAY BE CREATED PURSUANT TO THIS
CODE.”

hereby further amended

SECTION 6. A new Part 3 shall be inserted under Title 1, Book I ~ Customs Law, of the Tariff and Customs Code
of the Philippines, as amended, and under which new Sections 801, 802, 803 and 804 are further inserted, which
shall read as follows:

PART 3

AUDIT, TRANSPARENCY AND ACCOUNTABILITY.

SEC. 801, IN ORDER TO INSTILL TRANSPARENCY AND ACCOUNTABILITY IN
THE OPERATIONS OF THE BUREAU OF CUSTOMS, THE COMMISSIONER OF CUSTOMS
SHALL CONDUCT, ON AN ANNUAL BASIS, A BUREAU-WIDE AUDIT WHICH AIMS TO
EXAMINE AND EVALUATE THE ADEQUACY AND EFFECTIVENESS OF INTERNAL
CONTROL AND THE QUALITY OF PERFORMANCE IN THE BUREAU OF CUSTOMS. “THE
BUREAU-WIDE AUDIT SHALL COVER, AMONG OTHERS, THE OPERATIONAL
PROCESSES, COLLECTION AND FINANCIAL REPORTING, FISCAL AND PERSONNEL
PERFORMANCE SYSTEM EFFICIENCY, INTERNAL CONTROL, INFORMATION AND
COMMUNICATION FLOW, FRAUDULENT AND ILLEGAL PRACTICES, AND SUCH OTHER
AREAS AS MAY BE NECESSARY FOR THE EFFECTIVE OPERATION OF THE ENTIRE
BUREAU.”

“SEC. 802. AN INTERNAL CONTROL OFFICE, WHICH SHALL BE ATTACHED TO
THE OFFICE OF THE COMMISSIONER OF CUSTOMS, IS HEREIN CREATED TO ASSIST
THE COMMISSIONER IN THE CONDUCT OF A BUREAU-WIDE AUDIT PURSUANT TO
REPUBLIC ACT NO. 3456, REPUBLIC ACT NO. 4177, ADMINISTRATIVE ORDER NO. 278
AND ADMINISTRATIVE ORDER NO. 70. “THE ANNUAL APPROPRIATIONS FOR THE
BUREAU OF CUSTOMS SHALL PROVIDE AN ITEM OF EXPENSE FOR THE BUREAU-WIDE
AUDIT AS CONTEMPLATED IN THIS ACT.”



“SEC. 803. ON THE BASIS OF THE INTERNAL AUDIT ACTIVITIES CONDUCTED,
THE INTERNAL CONTROL OFFICE SHALL SUBMIT TO THE COMMISSIONER A
WRITTEN REPORT CONTAINING THE IDENTIFIED PROBLEMS AND DEFICIENCIES IN
THE BUREAU AS WELL AS ITS RECOMMENDED POLICIES/CORRECTIVE- MEASURES.
SUCH REPORT SHALL BE PROMPTLY ACTED UPON BY THE COMMISSIONER WHO
SHALL INSTITUTE THE NECESSARY IMPROVEMENT TO ADDRESS PERFORMANCE AND
OPERATIONAL GAPS, UNLESS THERE IS REASONABLE DOUBT ON ITS VALIDITY.”

“SEC. 804. THE COMMISSIONER SHALL FURNISH THE SECRETARY OF FINANCE,
THRU THE INTERNAL AUDIT OFFICE IN THE DEPARTMENT OF FINANCE, A COPY OF
THE INTERNAL AUDIT REPORT AND ACTIONS TAKEN.”

SECTION 7. Section 1005 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“SEC. 1005. Manifest Required of Vessel From Foreign Port. ~ x x x. “x x x “A TRUE AND
COMPLETE COPY OF THE CARGO MANIFEST AND BILL OF LADING, TOGETHER WITH
‘THE STOWAGE PLAN OF THE VESSEL ENGAGED IN FOREIGN TRADE, SHALL BE
ELECTRONICALLY SENT IN ADVANCE BY THE VESSEL TO THE BUREAU OF CUSTOMS
AND THE PHILIPPINE PORTS AUTHORITY AT LEAST TWELVE (12) HOURS FOR OCEAN
GOING VESSELS AND TWO (2) HOURS FOR AIRLINES FROM DEPARTURE PRIOR TO
THEIR ARRIVAL IN THE PORT OF ENTRY: PROVIDED, THAT IF THE VESSEL IS AN
AIRCRAFT THE MANIFEST SHALL BE ELECTRONICALLY TRANSMITTED TO THE
BUREAU OF CUSTOMS AT LEAST ONE (1) HOUR PRIOR TO THE AIRCRAFT’S ARRIVAL
IN THE PORT OF ENTRY: PROVIDED, FURTHER, THAT, THE BUREAU OF CUSTOMS
SHALL FURNISH THE DEPARTMENT OF AGRICULTURE WITH THE ELECTRONICALLY
SENT CARGO MANIFEST AND BILL OF LADING, UPON RECEIPT THEREOF, IN THE CASE
OF AGRICULTURAL IMPORTATIONS. “A cargo manifest shall in no case be changed or altered
after entry of the vessel, except by means of an amendment by the master, consignee ot agent thereof,
under oath, and attached to the original manifest: Provided, however, That after the invoice and/or entry
covering an importation have been received and recorded {in the office of the eppraiser,] EITHER
MANUALLY OR ELECTRONICALLY IN THE BUREAU OF CUSTOMS OR HAD BEEN
LOGGED IN ITS COMPUTER SYSTEM, no amendment of the manifest shall be allowed, except when
it is obvious that a clerical error or any other discrepancy has been committed in the preparation of the
‘manifest, without any fraudulent intent, discovery of which would not have been made until after
‘examination of the importation has been completed. PRIOR TO RELEASE OF THE CARGO, THE
VERACITY OF THE AMENDMENT SHALL BE EXAMINED BY THE COMMISSIONER OF
CUSTOMS FOR THE PURPOSE OF INVOKING PENAL PROVISION UNDER SECTIONS 2503
AND 3602 OF THIS CODE.”

SECTION 8. Section 1007 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“SEC. 1007. Manifests for Commission on Audit and Collector. ~ Papers to be Deposited with
Consul. ~ Immediately after the arrival of a vessel from a foreign port, the master shall deliver ot mail to
the Chairman, Commission on Audit, Manila, a copy of the cargo manifests properly endorsed by the
boarding officer, and {the master shall immediately] WITHIN TWENTY-FOUR (24) HOURS AFTER
ARRIVAL, HE SHALL present to the Collector the original copy of the cargo manifests [properly
endorsed by the boarding officer,] and, for inspection, the ship’s register or other documents in lieu thereof,
together with the clearance and other papers granted to the vessel at the port of departure for the
Philippines. “WITHIN THREE @) DAYS FROM RECEIPT THEREOF, THE COLLECTOR

SHALL PUBLISH IN THE BUREAU OF CUSTOMS WEBSITE THE CARGO MANIFEST FOR
TWO (2) CONSECUTIVE WEEKS.”

SECTION 9. Section 1008 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“See. 1008. Transit Cargo AND FOREIGN TRANSHIPMENT OF GOODS. ~ When transit
cargo from aforeign port or other local ports is forwarded from the port of importation, separate manifest,
in triplicate, shall be presented by each carrier. “TRANSHIPPED GOODS MUST REMAIN AT ALL
TIME IN THE PORT OF ARRIVAL AND SHALL NOT BE TRANSFERRED OR
TRANSPORTED TO ANY OTHER PHILIPPINE PORT OF ENTRY PRIOR TO THE
TRANSPORT THEREOF TO THE FOREIGN PORT OF DESTINATION AS INDICATED IN
THE CARGO MANIFEST. WHEN THE SHIPMENT IS UNLOADED IN OR TRANSFERRED TO
ANY OTHER PORT OF ENTRY OTHER THAN IN THE PORT OF ARRIVAL BEFORE
TRANSPORTING THE SAME TO THE FOREIGN PORT OF DESTINATION, IT SHALL BE
CONSIDERED AS HAVING BEEN INTRODUCED INTO THE PHILIPPINE CUSTOMS
TERRITORY SUBJECT TO APPLICABLE DUTIES AND TAXES. “THE PARTY WHO
APPLIED FOR FOREIGN TRANSHIPMENT SUCH AS THE SHIPPING COMPANY OR
AGENT, TRANSHIPMENT OPERATOR OR THE OWNER OF THE GOODS SHALL SUBMIT
TO THE BUREAU OF CUSTOMS AND/OR TO THE BUREAU OF INTERNAL REVENUE
WITHIN THE PRESCRIBED PERIOD OF SIX (6) MONTHS ANY OFFICIAL DOCUMENT


SATISFACTORILY SHOWING THAT THE TRANSHIPPED GOODS HAD ACTUALLY
ARRIVED AND HAD BEEN UNLOADED IN THE FOREIGN PORT OF DESTINATION AND
THAT THE SAME HAD BEEN RECEIVED BY THE CONSIGNEE NAMED IN THE MANIFEST:
PROVIDED, THAT IF THE SAID OFFICIAL DOCUMENT IS IN A FOREIGN LANGUAGE
OTHER THAN ENGLISH, IT SHALL BE ACCOMPANIED BY AN ENGLISH TRANSLATION
DULY AUTHENTICATED BY A PHILIPPINE COMMERCIAL ATTACHE OR CONSUL.
“FAILURE TO SUBMIT THE OFFICIAL DOCUMENT AS REQUIRED HEREINABOVE SHALL
CONSTITUTE PRIMA FACIE PROOF THAT THE GOODS ALLEGEDLY TRANSHIPPED
WERE IN FACT DIVERTED TO THE PHILIPPINES, WITHOUT THE CORRESPONDING
PAYMENT OF DUTIES AND TAXES WHICH SHALL BE IMMEDIATELY COLLECTED AND
PAID BY THE PARTY(IES) WHICH FAILED TO SUBMIT THE REQUIRED OFFICIAL
DOCUMENT. THEREAFTER AND UNTIL THE REQUIRED OFFICIAL DOCUMENT SHALL
HAVE BEEN SUBMITTED, ALL SUBSEQUENT TRANSHIPMENT OF GOODS TO AND FROM
THE PHILIPPINES BY THE SAID PARTY(IES) WITHOUT THE PAYMENT OF DUTIES AND
TAXES SHALL BE DISALLOWED.”

SECTION 10. Section 1025 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:
“Sec. 1025. Export Product to Conform to Standard Grades AND MARKING OF PACKAGES
FOR EXPORT. ~ A Collector shall not permit products for which standard grades have been established
by the government to be laden aboard a vessel clearing for a foreign port, unless the shipment conforms to
the requirements of law relative to the shipment of such products. “PACKAGES CONTAINING
GOODS FOR EXPORT SHALL BE LABELED IN ACCORDANCE WITH LAWS AND
REGULATIONS. PACKAGES THAT DO NOT COMPLY WITH THE REQUIRED MARKINGS
MAY BE DENIED EXPORT PERMITS.”

SECTION 11. A new section to be known as Section 1203-A is hereby inserted after Section 1203 of the Tariff and
Customs Code of the Philippines, as amended, to read as follows:
“SEC. 1203-A, PUBLICATION OF ACCREDITED IMPORTERS AND BROKERS. — ANY
PROVISION OF LAW TO THE CONTRARY NOTWITHSTANDING, THE SECRETARY OF
FINANCE, THROUGH THE COMMI: ONER OF CUSTOMS HEREBY MANDATED TO
CAUSE THE PUBLICATION OF THE OF IMPORTERS AND BROKERS ACCREDITED
BY THE BUREAU OF CUSTOMS WITHIN NINETY (90) DAYS FROM THE DAY OF
APPROVAL OF THE APPLICATION FOR ACCREDITATION OR RENEWAL OF THE
ACCREDITATION, AS THE CASE MAY BE: PROVIDED, THAT THE BUREAU OF CUSTOMS
SHALL POST THE LIST OF ACCREDITED IMPORTERS AND BROKERS IN ITS WEBSITE
ANNUALLY AND SHALL REGULARLY UPDATE SAID LIST: PROVIDED, FURTHER, THAT
OTHER INFORMATION ON THE ACCREDITED IMPORTERS AND BROKERS, OTHER
THAN THOSE PUBLISHED IN THE WEBSITE AND NOT OTHERWISE CONFIDENTIAL,
MAY BE MADE AVAILABLE UPON OFFICIAL REQUEST FROM THE COMMISSIONER OF
‘CUSTOM: HE AMOUNT NECESSARY FOR THE PUBLICATION OF THE LIST OF
IMPORTERS AND BROKERS SHALL BE CHARGED TO THE APPROPRIATIONS OF THE
BUREAU OF CUSTOMS UNDER THE CURRENT GENERAL APPROPRIATIONS ACT.
THEREAFTER, SUCH SUM AS MAY BE NEEDED FOR ITS CONTINUED IMPLEMENTATION
SHALL BE CHARGEABLE TO THE FUND COLLECTED BY THE BUREAU FROM THE
APPLICATION AND RENEWAL FEES OF THE IMPORTERS AND BROKERS.”

ECTION 12, Section 1204 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
‘amended to read as follows:

“See. 1204. Liability of Importer for Duties. - Unless relieved by laws or regulations, the liability
for duties, taxes, fees and other charges attaching on importation constitutes a personal debt due [from]
AND DEMANDABLE AGAINST the importer [to] IN FAVOR OF the government. which can be
discharged only by payment in full of all duties, taxes, fees and other charges legally accruing. It also
constitutes a lien upon the articles imported which may be enforced while such articles are in custody or
subject to the control of the govemment, “IN CASE THE IMPORTED ARTICLE IS FOUND IN THE
CUSTODY OR POSSESSION OF A TRANSFEREE OR BUYER IN GOOD FAITH, THE
GUARANTEE IN THE FORM OF A LETTER OF CREDIT, SURETY BOND, A DEPOSIT,
CASH, OR SOME OTHER APPROPRIATE INSTRUMENT IN AN AMOUNT EQUIVALENT TO
THE IMPOSABLE DUTIES AND TAXES OF THE IMPORTED ARTICLES AS MENTIONED IN
SECTION 201 OF THIS CODE, FILED BY THE IMPORTER SHALL BE APPLIED FOR ANY
TAX DEFICIENCY, DUTIES, FEES, INTEREST AND OTHER CHARGES THAT MAY BE
FINALLY DETERMINED BY THE BUREAU AGAINST THE IMPORTED ARTICLE.”

SECTION 13. Section 1210 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“SEC. 1210. Disposition of Imported Articles Remaining on Vessel After Time for Unlading. ~x x

x “Unless prevented by causes beyond the vessels control, stch as port congestion, strikes, riots or civil

commotions, failures of vessel's gear, bad weather, and similar causes, articles so stored shall be entered


within [thirty (30)] FIFTEEN (15) days, 13 which shall not be extendible, from the date of discharge of the
last package from the vessel or aircraft and shall be claimed within fifteen (15) days, which shall not
likewise be extendible from the date of posting of the notice to claim in conspicuous places in the Bureau
of Customs. If not entered or not claimed, it shall be disposed of in accordance with the provisions of this
Code.”

SECTION 14, A new section to be known as Section 1212 is hereby inserted in the Tariff and Customs Code of the
Philippines, as amended, to read as follows:
“SEC. 1212. IMPORT PERMIT/MPORT AUTHORITY FOR AGRICULTURAL
PRODUCTS. ~ IMPORTED AGRICULTURAL PRODUCTS MUST BE COVERED BY A VALID
IMPORT OR QUARANTINE PERMIT ISSUED BY THE DEPARTMENT OF AGRICULTURE
(DA) OR ITS CONCERNED BUREAU PRIOR TO IMPORTATION INTO THE PHILIPPINES.
NO AGRICULTURAL PRODUCTS MUST BE ACCEPTED FOR LOADING AND/OR
TRANSPORT BY A VESSEL OR AIRCRAFT INTO THE COUNTRY IF THESE
AGRICULTURAL PRODUCTS HAVE NOT BEEN AUTHORIZED THROUGH AN IMPORT OR
QUARANTINE PERMIT ISSUED BY THE DA OR ITS CONCERNED AGENCIES PRIOR TO
SHIPMENT. IF AND WHEN AGRICULTURAL PRODUCTS WERE LOADED, TRANSPORTED
AND BROUGHT INTO THE COUNTRY WITHOUT THE PRIORLY ISSUED IMPORT OR
QUARANTINE PERMIT, THE SAME MUST NOT BE UNLOADED FROM THE VESSEL OR
AIRCRAFT TO ANY PHILIPPINE PORT OF ENTRY AND MUST BE SHIPPED BACK TO THE
COUNTRY OF ORIGIN BY THE IMPORTER/CONSIGNEE THROUGH THE SAME CARRIER
THAT LOADED/TRANSPORTED, BROUGHT IN THE PRODUCTS: PROVIDED, THAT, ANY
IMPORTER WHO IMPORTED ANY AGRICULTURAL PRODUCT WITHOUT ANY PRIORLY
ISSUED IMPORT OR QUARANTINE PERMIT FOR THE PURPOSE SHALL BE PUNISHABLE
AS PROVIDED FOR UNDER SECTION 3601 OF THIS CODE.”

SECTION 15. Section 1302 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:
“Sec. 1302. Import Entries. — x x x. “The Commissioner may, x x x. “A formal entry may be x x
x: “(@) XX x; “(b) XX X; oF “(c) x x x“FOR PURPOSES HERETO, ALL IMPORT ENTRIES SHALL
EXPLICITLY AND CLEARLY INDICATE THE NAME OF THE CUSTOMS BONDED
WAREHOUSE WHERE THE IMPORTED ARTICLES WILL BE PLACED OR DEPOSITED,
AND THE NAME OF THE IMPORTER OR CONSIGNEE. “Import eniries under imevocable x x x.
“All importations entered under formal entry shall be covered by a letter of credit or any other verifiable
document evidencing payment OF THE DUTIES, TAXES AND OTHER CHARGES DUE
THEREON.

SECTION 16. A new section to be known as Section 1401-A is hereby inserted after Section 1401 of the Tariff and
Customs Code of the Philippines, as amended, to read as follows:
“SEC. 1401-4. VALUATION LIBRARY. — THE COMMISSIONER SHALL ENSURE
THAT THERE SHALL BE A VALUATION LIBRARY WHICH SHALL PRIMARILY SERVE AS
REFERENCE AND SOURCE OF INFORMATION IN THE VALUATION AND APPRAISAL OF
IMPORTED ARTICLES. THE VALUATION LIBRARY SHALL BE KEPT UPDATED WITH
THE VALUES OF IMPORTED PRODUCTS AS CONTAINED IN THE LATEST REVISION
ORDERS AND MAINTAINED USING THE BEST AVAILABLE TECHNOLOGY AND SHALL
BE MADE READILY AVAILABLE TO THE PUBLIC. VIOLATION HEREOF SHALL BE
PUNISHABLE AS PROVIDED UNDER SECTION 3612 OF THIS CODE.”

"TION 17, Section 1403 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“SEC, 1403. Duties of Customs Officer Tasked to Examine, Classify, and Appraise Imported
Articles, ~ The customs officer tasked to examine, classify, and appraise imported articles shall determine
whether the packages designated for examination and their contents are in accordance with the declaration
in the entry, invoice and other pertinent documents and shall make return in such a manner as to indicate
whether the articles have been truly and correctly declared in the entry as regard their quantity,
measurement, weight, and tariff classification and not imported contrary to law. SUBJECT TO THE
GUIDELINES TO BE ISSUED BY THE COMMISSIONER WITH THE APPROVAL OF THE
SECRETARY OF FINANCE, THE CUSTOMS OFFICER [He] shall TAKE A REPRESENTATIVE
[submit] samples OF THE IMPORTED ARTICLE IN THE PRESENCE OF THE IMPORTER,
CONSIGNEE OR THEIR REPRESENTATIVES to SUBMIT (o [the] CUSTOMS laboratory OR TO
THE LABORATORY OF THE APPROPRIATE GOVERNMENT REGULATORY AGENCY for
analysis when feasible to do so and when such analysis is necessary for the proper classification, appraisal,
and/or admission into the Philippines of imported articles. THE CUSTOMS OFFICER SHALL TAKE
INTO ACCOUNT THE RESULT OF THE ANALYSIS IN THE CLASSIFICATION, APPRAISAL
AND/OR ADMISSION INTO THE PHILIPPINES OF THE IMPORTED ARTICLE. “THE
CUSTOMS OFFICER SHALL CERTIFY UNDER OATH IN THE RETURN THAT HE USED

THE VALUATION LIBRARY IN THE VALUATION AND APPRAISAL OF THE IMPORTED
ARTICLES. “x x x.”



SECTION 18. Section 1409 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 1409. [Employment and Compensation of Persons 10 Assist in Appraisal or Classification of
Articles.| VALUATION AND CLASSIFICATION REVIEW COMMITTEE (VCRC). ~ |When necessary,
the Collector may request two disinterested persons versed in the matter to assist the appraiser in appraising
or ascertaining the value of any article, Persons so employed shall be paid compensation in an amount, to
be determined by the Commissioner, not exceeding fifty pesos for each day of “such service.]
VALUATION AND CLASSIFICATION ISSUES SHALL BE COURSED THROUGH A
VALUATION AND CLASSIFICATION REVIEW COMMITTEE (VCRC) DIRECTLY UNDER
THE CHAIRMANSHIP OF THE RESPECTIVE DISTRICT COLLECTOR OF
CUSTOMS.“*FROM AMONG THE MEMBERS OF THE VCRC, ONE (1) MEMBER SHALL
COME FROM THE TARIFF COMMISSION WHO SHALL BE A PERMANENT MEMBER, ONE
(1) MEMBER FROM AMONG THE RECOMMENDEES OF THE DEPARTMENT OF TRADE
AND INDUSTRY AND THE DA, AS THE CASE MAY BE, AND ANOTHER ONE (1) MEMBER
SHALL COME FROM THE PRIVATE SECTOR REPRESENTING THE INDUSTRY SECTOR
AFFECTED. “SUBJECT TO THE GUIDELINES TO BE ISSUED BY THE COMMISSIONER
DULY APPROVED BY THE SECRETARY OF FINANCE, THE VCRC SHALL REQUEST
CONCERNED INDUSTRY ASSOCIATIONS TO NOMINATE AN INDUSTRY COMMODITY
EXPERT WHO WILL ASSIST THE VCRC IN CLASSIFYING, APPRAISING OR
ASCERTAINING THE VALUE OF AN IMPORTED ARTICLE AT NO COST TO THE BUREAU,
IN ORDER FOR SUCH PERSONS TO EFFECTIVELY ASSIST THE VCRC, THE INDUSTRY
COMMODITY EXPERT SHALL BE FURNISHED DURING THE IMPORTATION OF A
PARTICULAR ARTICLE WITH A COPY OF THE IMPORT ENTRY AND DECLARATION
AND HE SHALL BE ALLOWED TO OBSERVE THE PHYSICAL EXAMINATION AND THE,
TAKING OF SAMPLE OF THE IMPORTED ARTICLE.”

SECTION 19. A new section shall be added in the Tariff and Customs Code of the Philippines, as amended, to be
designated as Section 1410, to read as follows:

“SEC. 1410, AUTHORITY OF THE BUREAU TO EXAMINE THE ENTRY AND EXIT OF
IMPORTED ARTICLES IN THE FREEPORTS. ~ THE BUREAU, IN COORDINATION WITH
THE APPROPRIATE GOVERNMENT AGENCIES SUCH AS, BUT NOT LIMITED TO, THE
DEPARTMENTS OF TRADE AND INDUSTRY, AGRICULTURE, TRANSPORTATION AND
COMMUNICATIONS, AND HEALTH SHALL HAVE THE AUTHORITY TO EXAMINE THE
ENTRY AND EXIT OF IMPORTED ARTICLES IN THE FREEPORTS FOR THE PURPOSE OF
DETERMINING: (A) THE QUANTITY AND DESCRIPTION OF SUBJECT IMPORTED
ARTICLES, AND (B) THE COMPLIANCE WITH THE SANITARY AND AGRICULTURAL
REQUIREMENTS

SECTION 20. Section 1603 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“SEC. 1603. Finality of Liquidation. ~ When articles have been entered and passed free of duty or
final adjustments of duties made, with subsequent delivery, such entry and passage free of duty or
settlements of duties will, ater the expiration of {three (3) years] ONE (1) YEAR from the date of the final
payment of duties, in the absence of fraud or protest or compliance audit pursuant to the provisions of this

Code, be final and conclusive upon all parties, unless the liquidation of the import entry was merely
tentative.”

SECTION 21. Section 1801 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows

“SEC. 1801. Abandonment, Kinds and Effects of. - An imported article is deemed abandoned

under any of the following circumstances: “x x x “(b) When the owner, importer, consignee or interested

party after due notice, fails to file an entry within thirty (30) days, which shall not be extendible, from the

date of discharge of the last package from the vessel or aircraft, or having filed such entry, fails to claim his
importation within fifteen (15) days, which shall not likewise be extendible, from the date of posting of the

notice to claim such importation. ALL SHIPPING LINES, SHIPPING COMPANIES, FREIGHT
FORWARDERS, CONSOLIDATORS,BREAK BULK AGENTS AND THEIR AGENTS AND
SUBAGENTS AND ARRASTRE CONTRACTORS ARE REQUIRED TO STATE IN BOLD,
PROMINENT AND COMPREHENSIBLE CHARACTERS THE PHRASE ‘CUSTOMS LAW
REQUIRES THE FILING OF ENTRY WITHIN THIRTY (30) DAYS, WHICH SHALL NOT BE
EXTENDIBLE, FROM THE DATE OF DISCHARGE OF THE LAST PACKAGE FROM THE
VESSEL, OTHERWISE, THE CARGO MAY BE DEEMED ABANDONED AND TO BE
ORFEITED IN FAVOR OF THE GOVERNMENT AND SHALL BE DISPOSED OF IN
ACCORDANCE WITH THIS CODE” IN EACH AND EVERY NOTICE OF ARRIVAL TO THE
OWNERS, IMPORTERS, CONSIGNEES OR OTHER INTERESTED PARTIES. THE SAME
SHALL SERVE TO SATISFY THE DUE NOTICE REQUIREMENT REFERRED TO IN
PARAGRAPH (B) HEREOF, IN WHICH CASE THE OWNER, IMPORTER OR CONSIGNEE OF

THE IMPORTATION SHALL HAVE A PERIOD OF THIRTY (30) DAYS, WHICH SHALL NOT



BE EXTENDIBLE, FROM RECEIPT OF THE NOTICE OF ARRIVAL WITHIN WHICH TO
FILE THE APPROPRIATE ENTRY. FAILURE ON THE PART OF THE SHIPPING LINES,
SHIPPING COMPANIES, FREIGHT FORWARDERS, CONSOLIDATORS, BREAK BULK
AGENTS AND THEIR AGENTS AND SUBAGENTS AND ARRASTRE CONTRACTORS TO
COMPLY HEREWITH SHALL CONSTITUTE A GROUND FOR THE SUSPENSION OF THEIR
LICENSES OR AUTHORITY TO ENGAGE IN THEIR RESPECTIVE LINE O F ACTIVITIES IN
THE IMPORTATION OPERATIONS. “x x x.”

SECTION 22. Section 1802 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:
“SEC. 1802. Abandonment of Imported Articles. ~ An abandoned article shall ipso facto be
deemed the property of the Government and shall be disposed of in accordance with the provisions of this
Code. AN UPDATED LISTING OF ALL ABANDONED SHIPMENTS SHALL BE POSTED ON
THE OFFICIAL WEBSITE OF THE BUREAU. “x xx.”

SECTION 23 Section 1901 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
‘amended to read as follows:

“SEC. 1901 Establishment, {and Supervision AND ACCREDITATION of Warehouses. ~ When
the business of the port requires such facilities, the Collector, subject to the approval of the Commissioner,
shall designate and establish warehouses for use as public and private bonded warehouses, sheds or yards,
or for other special purposes. ALL SUCH WAREHOUSES SHALL BE ACCREDITED BY AN
ACCREDITATION COMMITTEE WHICH SHALL BE CHAIRED BY THE SECRETARY OF
TRADE AND INDUSTRY AND CO-CHAIRED BY THE SECRETARY OF FINANCE, AND TO
BE COMPOSED OF THE COMMISSIONER OF CUSTOMS, THE GOVERNOR OF THE
BANGKO SENTRAL NG PILIPINAS, THE COMMISSIONER OF THE INSURANCE
COMMISSION, OR THEIR DULY DESIGNATED REPRESENTATIVES, AS MEMBERS
THEREOF. “REPRESENTATIVES FROM OTHER CONCERNED GOVERNMENT AGENCIES
AND THE AFFECTED INDUSTRY ASSOCIATIONS OR SECTORS SHALL BE INVITED AS
‘THE COMMITTEE DEEMS NECESSARY TO ASSIST IT IN ITS DELIBERATIONS. “All such
warehouses and premises shall be subject to the supervision of the Collector, who shall impose such
conditions as may be deemed necessary for the protection of the revenue and of the articles stored therein,
THE CUSTOMS COLLECTOR SHALL CONDUCT SPOT CHECKS AND PERIODIC AUDITS
‘TO ENSURE THAT APPLICABLE CUSTOMS LAWS AND REGULATIONS ARE FOLLOWED
BY BONDED FACILITIES.

SECTION 24. A new section to be known as Section 1901-A is hereby inserted after Section 1901 of the Tariff and
Customs Code of the Philippines, as amended, to read as follows:
“SEC, 1901-A. CLASSIFICATION OF CUSTOMS BONDED WAREHOUSES. ~ CUSTOMS

BONDED WAREHOUSES SHALL BE CLASSIFIED AS FOLLOWS:

“(A) CUSTOMS BONDED MANUFACTURING WAREHOUSE ~

“(@) GARMENT — TEXTILE BONDED — MANUFACTURING

WAREHOUSE ~ A BONDED WAREHOUSE WHICH IS AUTHORIZED TO

RECEIVE AND STORE WITHOUT PAYMENT OF DUTIES AND TAXES FOR

IMPORTED GARMENTS AND TEXTILES, RAW MATERIALS INCLUDING

PACKING AND ACCESSORIES FOR PROCESSING INTO FINISHED

PRODUCTS FOR EXPORTATION WITHIN SPECIFIED PERIOD.
) MISCELLANEOUS BONDED MANUFACTURING WAREHOUSE
= A BONDED WAREHOUSE WHICH IS AUTHORIZED O RECEIVE AND
STORE WITHOUT PAYMENT OF DUTIES AND TAXES FOR IMPORTED
MATERIALS, EXCEPT GARMENTS AND TEXTILES, INCLUDING
PACKING/PACKAGING ACCESSORIES, AND INTERMEDIATE PRODUCTS
FOR THE PURPOSE OF PROCESSING INTO FINISHED PRODUCTS FOR
EXPORTATION WITHIN SPECIFIED PERIOD.

“@) COMMON BONDED MANUFACTURING WAREHOUSE - A
BONDED WAREHOUSE WHICH IS AUTHORIZED TO IMPORT, RECEIVE
AND STORE IMPORTED MATERIALS, ACCESSORIES, AND
INTERMEDIATE PRODUCTS, INCLUDING PACKING/PACKAGING, FOR
THE ACCOUNT OF THE EXPORTING MEMBERS, WITHOUT PAYMENT OF
DUTIES AND TAXES ON THE CONDITION THAT THESE MATERIALS,
ACCESSORIES AND INTERMEDIATE PRODUCTS SHALL BE
MANUFACTURED INTO FINISHED PRODUCTS FOR EXPORTATION
WITHIN SPECIFIED PERIOD.

“(B) CUSTOMS BONDED INDUSTRY-SPECIFIC WAREHOUSE - A BONDED
WAREHOUSE WHICH IS AUTHORIZED TO IMPORT UNDER ITS NAME
AND ACCOUNT, DIRECTLY OR INDIRECTLY, UNDER BOND, BY DIRECT
PURCHASE, OR ON CONSIGNMENT BASIS, FOR SALE OR TRANSFER TO
ITS CUSTOMERS IN THE INDUSTRY, SUCH MATERIALS AND SUPPLIES,


AS MAY BE REQUIRED IN THE MANUFACTURE, ASSEMBLY, TESTING,
OR PACKAGING OF GOODS INTENDED FOR EXPORT OR FOR
REPACKING AND DISTRIBUTION TO FOREIGN MARKET.

“(C) MULTINATIONAL REGIONAL BONDED WAREHOUSE - A BONDED
WAREHOUSE OPERATED BY A MULTINATIONAL COMPANY HAVING ITS
REGIONAL OR AREA HEADQUARTERS IN THE PHILIPPINES PURSUANT
TO EXECUTIVE ORDER NO. 226. IT IS LICENSED BY THE BOARD OF
INVESTMENTS AND ACCREDITED BY THE ACCREDITATION
COMMITTEE AS PROVIDED IN SECTION 1901 OF THIS CODE TO SERVE
AS SUPPLY DEPOT FOR THE STORAGE, DEPOSIT, AND SAFEKEEPING OF
SPARE PARTS OR MANUFACTURED COMPONENTS, AND RAW
MATERIALS, INCLUDING ANY PACKAGES, COVERING, BRANDS AND
LABELS, AND WAREHOUSE EQUIPMENT AS MAY BE ALLOWED BY THE
DEPARTMENT OF TRADE AND INDUSTRY FOR USE EXCLUSIVELY ON
THE STORED GOODS WHICH ARE TO BE RE-EXPORTED DIRECTLY
THEREFROM UNDER THE SUPERVISION OF THE CUSTOMS COLLECTOR
FOR DISTRIBUTION TO ITS ASIA-PACIFIC MARKETS.”

SECTION 25. Section 1902 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“SEC. 1902. Responsibility of Operators. ~ The operators of bonded warehouse in case of loss of
the imported articles stored shall be liable for the payment of duties and taxes due thereon. “The
government assumes no legal responsibility in respect to the safekeeping of articles stored in any customs
warehouse, sheds, yards or premises. “THE OPERATORS OF THE BONDED WAREHOUSES
SHALL MAKE AVAILABLE TO THE CONCERNED GOVERNMENT REGULATORY
AGENCIES AN INVENTORY OF ALL ARTICLES STORED THEREIN. FAILURE TO DO SO IS
‘A MANDATORY GROUND FOR THE REVOCATION OF LICENSE TO OPERATE A BONDED
WAREHOUSE.”

SECTION 26. Section 1903 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“SEC. 1903. Bonded Warehouses. ~ Application for the establishment of bonded warehouses must
be made in writing and filed with the [Collector] ACCREDITATION COMMITTEE AS PROVIDED
IN SECTION 1901 HEREOF, describing the premises, the location, and capacity of the same, [and] the
purpose for which the building is to be used.], AND THE INDUSTRY THAT IT SERVES. “Upon
receipt of such application, the [Collector] ACCREDITATION COMMITTEE shall cause an
examination of the premises, with reference particularly to its location, construction and means provided
for the safekeeping of articles. THE COMMITTEE SHALL LIKEWISE DETERMINE THE
OWNERSHIP OF THE APPLICANT BONDED WAREHOUSE TO VERIFY IF ANY OWNER OR
OWNERS OF A BONDED WAREHOUSE WHICH HAD BEEN CLOSED DUE TO ITS
NONCOMPLIANCE WITH CUSTOMS LAWS AND REGULATIONS HAVE ANY INTEREST
‘THEREIN, [and if] IF THE APPLICATION IS found satisfactory, [he] THE COMMITTEE may
authorize its establishment, and [accept] CAUSE THE ACCEPTANCE OF a bond for its operation and
maintenance. The operator of such bonded warehouse shall pay an annual supervision fee in an amount to
be fixed by the Commissioner. The bonded warehouse officers and other employees thereof shall be regular
customs employees who shall be appointed in accordance with the Civil Service Law, rules and regulations
“THE PAID-UP CAPITAL AND NETWORTH OF THE BONDED WAREHOUSE SHALL BE SET
AT AN AMOUNT AS DETERMINED BY THE COMMITTEE AS SUFFICIENT TO COVER THE
TAXES AND DUTIES OF UNLIQUIDATED ENTRIES WHICH SHALL BE STORED THEREIN
AT ANY GIVEN TIME. OTHERWISE, THE APPLICATION SHALL NOT BE GRANTED, AND
AN AUTHORITY ALREADY GRANTED SHALL BE REVOKED. “THESE REQUIREMENTS
SHALL LIKEWISE EXTEND TO REGISTERED LOCATORS OPERATING UNDER THE
CHARTERS OF THE PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA), THE SUBIC BAY

METROPOLITAN AUTHORITY (SBMA), AND OTHER FREEPORTS AND ECONOMIC
ZONES.”

SECTION 27. Section 1905 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“SEC. 1905. Discontinuance of Warehouses. ~ The use of any warehouse may be discontinued by
the [Collector] ACCREDITATION COMMITTEE AS PROVIDED FOR IN SECTION 1901 HEREOF at any
time when conditions so warrant, or, in case of a private warehouse upon receipt of written request to that effect
from the operator thereof of the premises, provided all the requirements of the law and regulations have been
complied with by said operator. A LEGITIMATE INDUSTRY GROUP MAY LIKEWISE RECOMMEND TO.
THE COMMITTEE THE DISCONTINUANCE OF THE BONDED WAREHOUSE ON GROUNDS OF
NONCOMPLIANCE WITH THE REQUIREMENTS OF LAW AND REGULATIONS. Where the dutiable
article is stored in such premises, the same must be removed at the risk and expense of the operator and the premises



shall not be relinquished, nor discontinuance of its use authorized, until a careful examination of the account of the
warehouse shall have been made. Discontinuance of any warehouse shall be effective upon official notice and
approval thereof by the [Collector] ACCREDITATION COMMITTEE.”

SECTION 28. Section 1906 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“SEC. 1906. Entry of Articles for Warehousing. ~The entry of articles for warehousing shall be in
the required number of copies in the prescribed form, and shall be verified as in the entry of articles for
consumption. No warehousing entry shall be accepted for any article if from the entry, supporting
documents and/or information such article is imported contrary to any law. THE CUSTOMS OFFICER
RECEIVING THE ENTRY SHALL BE RESPONSIBLE FOR TRANSMITTING A COPY OF THE
SAME TO THE DEPUTY COMMISSIONER FOR AUDIT AND TRANSPARENCY.”

SECTION 29. Section 1907 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
‘amended to read as follows:

“Sec. 1907. Withdrawal of Articles from Bonded Warehouse. ~ Articles entered under irrevocable
domestic letter of credit [,]OR bank guarantee or bond may be withdrawn at any time for consumption, for
transportation to another port, for exportation or for delivery on board a vessel or aircraft engaged in
foreign trade for use on board such vessel or aircraft as sea stores or aircraft stores after liquidation of the
entry. The withdrawal must be made [by a person or firm duly authorized by the former,] ONLY BY THE
IMPORTER OF THE ARTICLES TO BE WITHDRAWN OR BY A REPRESENTATIVE whose
authority must appear in writing upon the face of the withdrawal entry.”

SECTION 30. Section 1908 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

‘SEC. 1908. Limit 10 Period of Storage in Bonded Warehouse. ~ Articles duly entered for
warehousing may remain in bonded warehouses for a maximum period of fone year] SIX (6) MONTHS.
AND EXTENDIBLE FOR ANOTHER THREE (3) MONTHS from the time of [arrival at the port of
entry] RECEIPT OF THE WAREHOUSE. Articles not withdrawn at the expiration of the prescribed
period shall be [sold at public auction by the Collector.| DEEMED ABANDONED AND SUBJECT TO
OSITION IN ACCORDANCE WITH SECTION 2602 OF THIS CODE: PROVIDED,

IMPORTS IN THE CUSTOMS BONDED WAREHOUSE FOR A PERIOD OF TWENTY-FOUR
(24) MONTHS.”

:CTION 31. A new section to be known as Section 1910 is hereby inserted in Part 1, Title V, Book II of the Tariff
and Customs Code of the Philippines, as amended, to read as fol

SEC. 1910. VERIFICATION OF RECORDS KEPT IN CUSTOMS BONDED
WAREHOUSES. ~ A CAREFUL ACCOUNT SHALL BE KEPT BY THE COLLECTOR OF ALL
ARTICLES DELIVERED TO ANY BONDED WAREHOUSE, AND A SWORN MONTHLY
RETURN, DULY VERIFIED BY THE CUSTOMS OFFICIAL IN CHARGE, SHALL BE MADE
BY THE BONDED WAREHOUSE CONTAINING A DETAILED STATEMENT OF ALL
IMPORTED ARTICLES STORED THEREIN. “ALL DOCUMENTS, BOOKS AND RECORDS OF
ACCOUNTS CONCERNING THE OPERATION OF ANY BONDED WAREHOUSE SHALL,
UPON DEMAND BY THE SECRETARY OF TRADE AND INDUSTRY OR THE SECRETARY
OF FINANCE, BE MADE AVAILABLE TO THE COLLECTOR OR HIS REPRESENTATIVE OR
TO ANY LEGITIMATE INDUSTRY ASSOCIATION OR INDUSTRY SECTOR AFFECTED AND
THE INDUSTRY SECTOR SOUGHT TO BE SERVICED BY THE BONDED WAREHOUSE, FOR
PURPOSES OF EXAMINATION AND/OR AUDIT.’

SECTION 32. Section 2001 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
‘amended to read as follows:

“SEC. 2001. Establishment of Bonded Manufacturing Warehouses. — All articles manufactured in
whole or in part of imported materials, and intended for exportation without being charged with duty, shall,
in order to be so manufactured and exported, be made and manufactured in bonded_manufacturing
warehouses under such rules and regulations as the Commissioner of Customs, with the approval of the
Secretary of Finance, shall prescribe: Provided, ‘That the manufacturer of such articles shall first file a
satisfactory bond for the faithful observance of all laws, rules and regulations applicable thereto].:
PROVIDED, FURTHER, THAT BONDED MANUFACTURING WAREHOUSES SHALL
LIKEWISE BE SUBJECT TO THE PROVISIONS UNDER TITLE V, BOOK II OF THIS CODE:
PROVIDED, FINALLY, THAT THESE REQUIREMENTS SHALL EXTEND TO REGISTERED
LOCATORS OPERATING UNDER THE CHARTERS OF THE PEZA, THE SBMA, AND OTHER
FREEPORTS AND ECONOMIC ZONES.”

SECTION 33. Section 2002 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“SEC. 2002. Exemption from Duty. —“x x x“b. Any imported material used in the manufacture of
such articles, and any package, covering, brand and label used in putting up the same may, under the



regulation prescribed by the Commissioner, with the approval of the Secretary of Finance, be conveyed
‘without the payment of duty into any bonded manufacturing warehouse, and imported articles may, under
the aforesaid regulations, be transferred without the payment of duty from any bonded warehouse into any
bonded manufacturing warehouse, or to duly accredited sub-contractors of manufacturers who shall process
the same into finished products for exports and deliver such finished products back 10 the bonded
manufacturing warehouse, therefrom to be exported; but this privilege shall not be held to apply to
implements, machinery or apparatus to be used in the construction or repair of any bonded manufacturing
warehouse: Provided, however, That the materials transferred or conveyed into any bonded manufacturing
warehouse shall be used in the manufacture of articles for exportation within a period of [nine (9) months}
THIRTY (30) DAYS from date of such transfer or conveyance into the bonded manufacturing warchouse,
which period may for sufficient reasons be further extended for not more than [three (3) months) THIRTY
(30) DAYS by the Commissioner. Materials not used in the manufacture of articles for exportation within
the prescribed period shall pay the corresponding duties: Provided, further, That the operation of
embroidery and apparel firms shall continue to be govemed by Republic Act Numbered Thirty-one
hhundred and thirty-seven.”

SECTION 34. Section 2003 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 2003. Procedure for Withdrawal. ~ Articles received into such bonded manufacturing
warehouse or articles manufactured therein may be withdrawn or removed there from for direct shipment
and for immediate exportation in bond under the supervision of the proper customs officer, who shall
certify to such shipment and exportation, or lading for immediate exportation as the case may be,
describing the articles by their mark or otherwise, the quantity, the date of exportation, in the name of the
vessel or aircraft: Provided, That the waste and by-products incident to the process of manufacture in said
bonded warehouse may be withdrawn for domestic consumption upon payment of duty equal to the duty
which would be assessed and collected pursuant to law as if such waste or by-products were imported from
a foreign country: Provided, further, That all waste materials may be disposed under government
supervision. All labor performed and services rendered under these provisions shall be under the
supervision of the proper customs officer and at the expense of the manufacturer. “VIOLATION OF THE
FOREGOING PROVISION SHALL BE DEEMED AS SMUGGLING WHICH SHALL BE
PUNISHABLE UNDER SECTIONS 3601 AND 3602 OF THIS CODE. “THE ARTICLES SUBJECT
OF THE VIOLATION SHALL JPSO FACTO BE FORFEITED IN FAVOR OF THE
GOVERNMENT TO BE DISPOSED OF PURSUANT TO SECTION 2602 OF THIS CODE.”

SECTION 35. Section 2307 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Section 2307. [Settlement of Case by Payment of Fine or Redemption of Forfeited Property.|
SETTLEMENT OF SEIZURE CASE BY PAYMENT OF FINE AND THE LOCAL INDUSTRY
MARKET VALUE OF THE SEIZED ARTICLE. — (Subject to approval of the Commissioner, the district
collector may, while the case is still pending, except when there is fraud, accept the settlement of any
seizure case provided that the owner, importer, exporter, or consignee or his agent shall offer to pay to the
collector a fine imposed by him upon the property, or in case of forfeiture, the owner, exporter, importer or
consignee or his agent shall offer to pay for the domestic market value of the seized article, The
Commissioner may accept the settlement of any seizure case on appeal in the same manner. “[Upon
payment of the fine as determined by the district collector which shall be in amount not less than twenty
percentum (20%) nor more than eighty percentum (80%) of the landed cost of the seized imported article or
the F.O.B. value of the seized article for export, or payment of the domestic market value, the property
shall be forthwith released and all liabilities which may or might attach to the property by virtue of the
offence which was the occasion of the seizure and all liability which might have been incurred under any
cash deposit or bond given by the owner or agent in respect to such property shall thereupon be deemed to
be discharged.| “|Settlement of any seizure case by payment of the fine or redemption of forfeited property
shall not be allowed in any case where the importation is absolutely prohibited or where the release of the
property would be contrary to law.] SUBJECT TO APPROVAL OF THE COMMISSIONER, THE
DISTRICT COLLECTOR MAY, AFTER THE IMPLEMENTATION OF THE WARRANT OF
SEIZURE BUT PRIOR TO THE FINAL JUDGMENT ON THE FORFEITURE CASE, EXCEPT
WHEN THERE IS FRAUD, ACCEPT THE SETTLEMENT OF ANY SEIZURE CASE:
PROVIDED, THAT THE OWNER, IMPORTER, EXPORTER, BROKER, OR CONSIGNEE OR
HIS AGENT SHALL OFFER TO PAY TO THE DISTRICT COLLECTOR A FINE IMPOSED BY
HIM UPON THE PROPERTY AND THE LOCAL INDUSTRY MARKET VALUE OF THE
SEIZED ARTICLE. “UPON PAYMENT OF THE LOCAL INDUSTRY MARKET VALUE AND
THE FINE AS DETERMINED BY THE DISTRICT COLLECTOR WHICH SHALL BE IN
AMOUNT NOT LESS THAN TWENTY PER CENTUM (20%) NOR MORE THAN EIGHTY PER
CENTUM (80%) OF THE LANDED COST OF THE SEIZED ARTICLE, THE PROPERTY
SHALL BE FORTHWITH RELEASED AND ALL LIABILITIES WHICH MAY OR MIGHT
ATTACH TO THE PROPERTY BY VIRTUE OF THE OFFENSE WHICH WAS THE OCCASION
OF THE SEIZURE AND ALL LIABILITY WHICH MIGHT HAVE BEEN INCURRED UNDER
ANY CASH DEPOSIT OR BOND GIVEN BY THE OWNER OR AGENT IN RESPECT TO SUCH
PROPERTY SHALL THEREUPON BE DEEMED TO BE DISCHARGED. “SETTLEMENT OF



ANY SEIZURE CASE BY PAYMENT OF THE FINE AND THE LOCAL INDUSTRY MARKET
VALUE OF THE SEIZED ARTICLE SHALL NOT BE ALLOWED IN ANY CASE WHERE THE
IMPORTATION IS ABSOLUTELY PROHIBITED OR WHERE THE RELEASE OF THE
PROPERTY WOULD BE CONTRARY TO LAW.”

SECTION 36. Section 2308 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
‘amended to read as follows:

“SEC. 2308. Protest and Payment Upon Protest in Civil Matters, - When a ruling or decision of
the Collector is made whereby liability for duties, taxes, fees or other charges are determined, except the
fixing of fines in seizure cases, the party adversely affected OR THE INDUSTRY ASSOCIATION OR
INDUSTRY SECTOR AFFECTED BY ADVERSE RULING may protest such ruling or decision by
presenting to the Collector at the time when payment of the amount claimed to be due the government is
made, or within [fifteen (15)] THIRTY (30) days thereafter, a written protest setting forth his objection to
the ruling or decision in question, together with the reasons therefore. No protest shall be considered unless
payment of the amount due after final liquidation has first been made and the corresponding docket fee, as
provided for in Section 3301. THE COLLECTOR SHALL RENDER HIS DECISION UPON THE
PROTEST FILED WITHIN A PERIOD OF SIXTY (60) DAYS FROM RECEIPT OF THE
WRITTEN PROTEST: PROVIDED, THAT, WHEN THE RULING OR DECISION OF THE
COLLECTOR IS ADVERSE TO THE PROTESTING PARTY, IT MAY FILE AN APPEAL
WITHIN FIFTEEN (15) DAYS UPON RECEIPT OF THE DECISION OR RULING OF THE
COLLECTOR, WITH THE COMMISSIONER WHO SHALL RENDER A DECISION ON THE
APPEAL WITHIN THIRTY (30) DAYS FROM RECEIPT OF THE APPEAL: PROVIDED,
FURTHER, THAT, WHEN THE COLLECTOR FAILS TO RENDER A RULING OR DECISION
WITHIN THE PRESCRIBED PERIOD, THE PROTEST SHALL AUTOMATICALLY BE
ELEVATED TO THE COMMISSIONER WHO SHALL RENDER A DECISION WITHIN SIXTY
(60) DAYS FROM THE DATE OF EXPIRATION OF THE PERIOD WITHIN WHICH THE
COLLECTOR SHOULD HAVE RENDERED HIS DECISION OR RULING: PROVIDED,
FURTHERMORE, THAT, WHEN THE RULING OR DECISION OF THE COLLECTOR IS
ADVERSE TO THE GOVERNMENT IT SHALL BE SUBJECT TO THE PROVISIONS OF
SECTION 2313 OF THIS CODE: PROVIDED, FINALLY, THAT FAILURE TO RENDER A
DECISION OR RULING WITHIN THE PRESCRIBED PERIOD SHALL BE LIABLE UNDER
SECTION 3604 OF THIS CODE.

SECTION 37. Section 2316 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

1. 2316. Authority of Commissioner to make Compromise. ~ Subject to the approval of the
Secretary of Finance, the Commissioner of Customs may compromise any case arising under this Code or
other laws or part of laws enforced by the Bureau of Customs involving the imposition of fines, surcharges
and forfeitures unless otherwise specified by law{.]: PROVIDED, THAT THE COMMISSIONER
SHALL NOT ALLOW ANY COMPROMISE INVOLVING TAX DEFICIENCY FOR THOSE
‘CASES FALLING UNDER SECTION 1603: PROVIDED, FURTHER, THAT THE COMPROMISE

MAY BE AVAILED PRIOR TO THE RECEIPT OF THE AUDIT NOTIFICATION LETTER BY
THE IMPORTER.

SECTION 38. Section 2317 of the Tariff and Customs Code of the Ph
amended to read as follows:

“Sec. 2317. Government's Right of Compulsory Acquisition AND PRIVATE SECTOR
PARTICIPATION IN THE COMPULSORY ACQUISITION, ~ In order to protect government revenues
against the undervaluation of goods subject to ad valorem duty, the Commissioner of Customs may acquire
imported goods under question for a price equal to their declared customs value plus any duties already
paid on the goods, payment for which shall be made within ten (10) working days from issuance of a
‘warrant signed by the Commissioner of Customs for the acquisition of such goods. “ANY INDUSTRY
ASSOCIATION OR INDUSTRY SECTOR MAY LIKEWISE POST A LETTER OF CREDIT,
SURETY BOND OR SOME OTHER APPROPRIATE INSTRUMENT IN FAVOR OF THE
BUREAU IN THE AMOUNT EQUAL TO THE DECLARED CUSTOMS VALUE OF THE
IMPORTED ARTICLES PLUS ANY DUTIES, TAXES, FEES OR OTHER CHARGES WHICH
HAVE ALREADY BEEN PAID THEREON, IN WHICH CASE THE COMMISSIONER OF
CUSTOMS SHALL ACQUIRE SUCH IMPORTED GOODS, PAYMENT FOR WHICH SHALL
BE MADE WITHIN TEN (10) WORKING DAYS FROM THE ISSUANCE OF A WARRANT
SIGNED BY THE COMMISSIONER OF CUSTOMS FOR THE ACQUISITION OF SUCH
GOODS: PROVIDED, THAT THE PROVISIONS OF SECTION 201 OF THIS CODE SHALL
APPLY IN THE CASE OF SURETY BONDS AND SURETY COMPANIES. “x x x “Where no appeal
is made by the importer, or upon reaffirmation of the commissioner’s decision during the appeals process,
the Bureau of Customs or its agent shall [sell] DISPOSE OF the acquired goods [pursuant to existing laws
‘and regulations.| IN THE MANNER AS PROVIDED FOR IN THIS CODE: PROVIDED, THAT, IN
CASES WHERE COMPULSORY ACQUISITION WAS INITIATED BY THE INDUSTRY
ASSOCIATION OR INDUSTRY SECTOR, THE COMMISSIONER SHALL CLAIM ON THE
LETTER OF CREDIT, SURETY BOND OR WHATEVER INSTRUMENT POSTED OR USED

eS, as amended, is hereby further



FOR THE PURPOSE, AND THEREUPON RELEASE THE ACQUIRED ARTICLES TO THE
INDUSTRY ASSOCIATION OR INDUSTRY SECTOR WHICH POSTED THE INSTRUMENT.
pax”

SECTION 39, Section 2401 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“SEC. 2401. Supervision and Control Over Criminal and Civil Proceedings. ~ Civil and criminal
actions and proceedings instituted in behalf of the government under the authority of this Code or other law
enforeed by the Bureau shall be brought in the name of the government of the Philippines and shall be
[conducted] PROSECUTED AND HANDLED by customs [officers] LAWYERS WITH THE
ASSISTANCE OF THE DEPARTMENT OF JUSTICE: PROVIDED, THAT, THE
DETERMINATION OF THE EXISTENCE OF PROBABLE CAUSE AND THE SUBSEQUENT
FILING OF ANY CRIMINAL OR CIVIL CASE WITH THE PROPER COURT AGAINST
VIOLATORS OF THIS CODE SHALL EXCLUSIVELY BELONG TO THE DEPARTMENT OF
JUSTICE: PROVIDED, FURTHER, THAT [but] no civil or criminal action for the recovery of duties or
the enforcement of any fine, penalty or forfeiture under this Code shall be filed in court without the
approval of the Commissioner.”

SECTION 40. Section 2503 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 2503. [Undervaluation, Misclassification and Misdeclaration in _Entry|
MISDECLARATION, MISCLASSIFICATION, AND UNDERVALUATION IN GOODS
DECLARATION. ~ {When the dutiable value of the imported articles shall be so declared and entered that
the duties, based on the declaration of the importer on the face of the entry would be less by ten percent
(10%) than should be legally collected, or when the imported articles shall be so described and entered that
the duties based on the importer’s description on the face of the entry would be less by ten percent (10%)
than should be legally collected based on the tariff classification, or when the dutiable weight, measurement
‘or quantity of imported articles is found upon examination to exceed by ten percent (10%) or more than the
entered weight, measurement or quantity, a surcharge shall be collected from the importer in an amount of
not less than the difference between the full duty and the estimated duty based upon the declaration of the
importer, nor mote than twice of such difference: Provided, That an undervaluation, misdeclaration in
weight, measurement or quantity of more than thirty percent (30%) between the value, weight,
measurement or quantity declared in the entry, and the actual value, weight, quantity, or measurement shall
constitute a prima facie evidence of fraud penalized under Section 2530 of this Code: Provided, further,
‘That any misdeclared or undeclared imported articles/items found upon examination shall jpso facto be
forfeited in favor of the Government to be disposed of pursuant to the provisions of this Code.| “| When the
undervaluation, misdescription, misclassification or misdeclaration in the import entry is intentional, the
importer shall be subject to the penal provision under Section 3602 of this Code. “MISDECLARATION
AS TO QUANTITY, OR WEIGHT, OR MEASUREMENT OF THE IMPORTED ARTICLE,
OCCURS WHEN THERE IS DISCREPANCY OF TEN PERCENT (10%) OR MORE BUT NOT
EXCEEDING THIRTY PERCENT (30%) IN DUTY BETWEEN WHAT IS FOUND UPON
EXAMINATION AND WHAT IS DECLARED. IN CASE OF SUCH MISDECLARATION, A
SURCHARGE EQUIVALENT TO TWO HUNDRED PERCENT (200%) OF THE DIFFERENCE,
BETWEEN THE FULL DUTY AS FOUND AND THAT AS DECLARED SHALL BE IMPOSED.
NO SURCHARGE SHALL BE IMPOSED WHEN THE DISCREPANCY IN DUTY IS LESS THAN
TEN PERCENT (10%), “MISCLASSIFICATION OCCURS WHEN AN INCORRECT TARIFF
HEADING IS USED RESULTING IN A DISCREPANCY IN DUTY BY TEN PERCENT (10%) OR
MORE BUT NOT EXCEEDING THIRTY PERCENT (30%). IN - CASE OF
MISCLASSIFICATION, A SURCHARGE EQUIVALENT TO TWO HUNDRED PERCENT
(200%) OF THE DIFFERENCE BETWEEN THE FULL DUTY AS FOUND UPON
EXAMINATION AND THAT AS DECLARED SHALL BE IMPOSED. NO SURCHARGE SHALL.
BE IMPOSED WHEN THE DISCREPANCY IN DUTY IS LESS THAN TEN PERCENT (10%);
OR WHEN THE DECLARED TARIFF HEADING IS REJECTED IN A FORMAL CUSTOMS
DISPUTE SETTLEMENT PROCESS INVOLVING DIFFICULT OR HIGHLY TECHNICAL
QUESTION OF TARIFF CLASSIFICATION; OR WHEN THE TARIFF CLASSIFICATION
DECLARATION RELIED ON AN OFFICIAL GOVERNMENT RULING OR INFORMATION. “A
DISCREPANCY IN MISDECLARATION OR IN MISCLASSIFICATION MENTIONED ABOVE
OR A DISCREPANCY OF MORE THAN THIRTY PERCENT (30%) SHALL CARRY A
PRESUMPTION OF FRAUD AND SHALL BE PENALIZED UNDER SECTION 2530 AND
SECTION 3602 OF THIS CODE: PROVIDED, THAT ANY UNDECLARED ARTICLESITEMS
SHALL PSO FACTO BE FORFEITED IN FAVOR OF THE GOVERNMENT TO BE DISPOSED
OF PURSUANT TO THE PROVISIONS OF THIS CODE. “FAILURE OF THE IMPORTER TO
OVERCOME THE PRESUMPTION OF FRAUD SHALL SUBJECT THE IMPORTED ARTICLE
TO SEIZURE AND FORFEITURE PROCEEDINGS REGARDLESS OF THE AMOUNT OF THE
DISCREPANCY WITHOUT PREJUDICE TO THE APPLICATION OF PENAL PROVISIONS AS
PROVIDED IN THIS CODE AGAINST THE IMPORTER AND/OR OTHER PERSON OR
PERSONS WHO PARTICIPATED IN THE FRAUDULENT ACT. “THERE IS.
UNDERVALUATION WHEN: (A) THE CUSTOMS VALUE DECLARATION IN THE IMPORT



ENTRY FAILS TO DISCLOSE IN FULL THE PRICE ACTUALLY PAID OR PAYABLE FOR
THE IMPORTED ARTICLES; OR, (B) WHEN IT USES AN INCORRECT VALUATION
METHOD OR OTHERWISE HAS NOT PROPERLY OBSERVED THE VALUATION RULES
UNDER THE TRANSACTION VALUE SYSTEM, RESULTING IN DISCREPANCY IN DUTY
BETWEEN THE CORRECT TRANSACTION VALUE UNDER THE APPLICABLE METHOD
AND THAT AS DECLARED. “WHEN THE UNDERVALUATION IS ESTABLISHED WITHOUT
NEED TO GO THROUGH THE FORMAL DISPUTE SETTLEMENT PROCESS REQUIRED
UNDER THE TRANSACTION VALUE SYSTEM PROVIDED FOR IN THIS CODE, A
SURCHARGE SHALL BE IMPOSED IN AN AMOUNT EQUAL TO TWO HUNDRED PERCENT
(200%) OF THE DIFFERENCE BETWEEN THE FULL DUTY AS PSTABLISHED AND THAT
AS DECLARED. NO SURCHARGE SHALL BE IMPOSED WHEN THE DISCREPANCY IN
DUTY IS LESS THAN TEN PERCENT (10%); OR WHEN THE DECLARED VALUE IS
REJECTED AS A RESULT OF AN OFFICIAL RULING OR DECISION UNDER THE CUSTOMS
DISPUTE SETTLEMENT PROCESS INVOLVING DIFFICULT OR HIGHLY TECHNICAL
QUESTION RELATING TO THE APPLICATION OF CUSTOMS VALUATION RULES; OR
THE VALUE DECLARATION RELIED UPON AN OFFICIAL GOVERNMENT RULING OR
INFORMATION. “WHEN THE UNDERVALUATION IS ATTENDED WITH FRAUD, SUCH AS
WHEN A FALSE INVOICE OR FAKE OR ALTERED DOCUMENT SUPPORTING THE.
DECLARED CUSTOMS VALUE IS SUBMITTED, OR OTHERWISE A FALSE STATEMENT
OR INFORMATION IS MADE AND IS UNCOVERED AT THE TIME CUSTOMS STILL HAS
PHYSICAL CUSTODY OF OR CONTROL OVER THE IMPORTED ARTICLES, THE SAME,
SHALL FORTHWITH BE SUBJECT TO SEIZURE AND FORFEITURE PROCEEDING
WITHOUT PREJUDICE TO THE APPLICATION OF THE PENAL PROVISONS UNDER
SECTION 3602 OF THIS CODE AGAINST THE IMPORTER AND/OR OTHER PERSON OR
PERSONS WHO PARTICIPATED IN THE FRAUDULENT ACT.

SEC. 41. A new section to be known as Section 2503-A is hereby inserted in Part 4, Title VI, Book II of the Tariff
and Customs Code of the Philippines, as amended, to read as follows:
“SEC. 2503-A. NON-IMPOSITION OF SURCHARGE, - EXEMPTION FROM THE
SURCHARGE SHALL BE ALLOWED ONLY IN CASES WHEN SLARE
ENTERED CLASSIFICATION IS BASED ON RULINGS BY THE TARIFF COMM
PURSUANT TO SUBSECTION (A) OF SECTION 1313 OF THIS CODE: PROVIDED, THAT THE
DESCRIPTION OF THE ARTICLE IS FOUND CORRECT UPON EXAMINATION: PROVIDED,
FURTHER, THAT BASED ON THE RESULT OF THE EXAMINATION, THE ARTICLE IS
FOUND TO BE ESSENTIALLY THE SAME AS THAT DESCRIBED IN THE RUIN

SECTION 42. Section 2601 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
‘amended to read as follows:

“Sec. 2601. [Property Subject to Sale| PROPERTY UNDER CUSTOMS CUSTODY SUBJECT
TO DISPOSITION. ~ Property in customs custody THAT shall be subject to [sale under the conditions
hereinafter] THE MODES OF DISPOSITION AS provided FOR IN SECTION 2602 HEREOF:
“x x x."SEC. 43, Section 2602 of the Tariff and Customs Code of the Philippines, as amended, is hereby
further amended to read as follows:

“Sec, 2602. [Place of Sale or Other Disposition of Property.| MODES OF DISPOSITION OF
PROPERTY UNDER CUSTOMS CUSTODY. ~ Property within the purview of this Part of this Code shall
be {sold, or otherwise disposed of, upon the order of the Collector of the port where the property in
question is found, unless the Commissioner shall direct its conveyance for such purpose to some other
port.| DISPOSED OF THROUGH THE FOLLOWING MODES OF DISPOSITION:

“(A) WHEN SUBJECT PROPERTY HAS EXPORT POTENTIAL; THE SAME.
SHALL BE RE-EXPORTED THROUGH A GOVERNMENT ENTITY WHICH SHALL.
BE DESIGNATED TO PERFORM SAID TASK:

“(B) WHEN THE PROPERTY IS NOT RE-EXPORTED, AND UPON
RECOMMENDATION OF THE COMMISSIONER OF CUSTOMS, THE SECRETARY
OF FINANCE MAY AUTHORIZE THE OFFICIAL USE OF THE ARTICLES TO
PROMOTE THE INTENSIVE COLLECTION OF TAXES AND/OR TO HELP PREVENT
OR SUPPRESS SMUGGLING AND OTHER FRAUDS UPON THE CUSTOMS;

“(C) WHEN THE ARTICLE IS NOT SUITABLE FOR RE-EXPORTATION OR
FOR USE AGAINST SMUGGLING OR OTHER FRAUDS UPON CUSTOMS, THEN IT
MAY BE CHANNELED FOR THE OFFICIAL USE OF OTHER OFFICES OF THE
NATIONAL GOVERNMENT;

“(D) IF THE ARTICLE IS SUITABLE FOR SHELTER OR CONSISTS OF
FOODSTUFFS OR CLOTHING MATERIALS THEN THAT ARTICLE SHALL BE
GIVEN TO THE DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT, OR
TO THE DEPARTMENT OF HEALTH IN THE CASE OF MEDICINES; AND “(E) IF
SUBJECT ARTICLE CANNOT BE RE-EXPORTED THROUGH THE GOVERNMENT
ENTITY DESIGNATED FOR THE PURPOSE OR IS NOT SUITABLE EITHER FOR
OFFICIAL USE OR CHARITY, THE SAME SHALL BE BURNED OR DESTROYED IN
SUCH MANNER AS THE CASE MAY REQUIRE AS TO RENDER IT ABSOLUTELY



WORTHLESS, IN THE PRESENCE OF REPRESENTATIVES FROM THE
COMMISSION ON AUDIT, THE DEPARTMENT OF JUSTICE, THE BUREAU OF
CUSTOMS AND THE PRIVATE SECTOR. “THE COST OF RE-EXPORTATION OF
SUBJECT PROPERTY UNDER THIS SECTION, INCLUDING ALL ATTENDANT
COSTS THERETO, SHALL BE SHOULDERED BY THE IMPORTER/CONSIGNEE
WHO UNLAWFULLY BROUGHT IN THE IMPORTED ARTICLE, AND/OR THE
BROKER THEREOF, AS THE CASE MAY BE; WHEN BOTH THE
IMPORTER/CONSIGNEE WHO UNLAWFULLY BROUGHT IN THE ARTICLE AND
THE BROKER COULD NOT BE LOCATED THEN THE GOVERNMENT ENTITY
WHICH IS DESIGNATED TO RE-EXPORT SUBJECT PROPERTY SHALL SHOULDER
THE COST OF RE-EXPORTATION: PROVIDED, THAT ARTICLES TO BE RE-
EXPORTED UNDER THIS SECTION SHALL BE TRANSFERRED BY THE BUREAU
OF CUSTOMS TO THE GOVERNMENT ENTITY THAT IS MANDATED TO RE-
EXPORT THE ARTICLES WITHIN FIFTEEN (15) DAYS FROM THE TIME THE
FORFEITURE HAS BECOME FINAL AND EXECUTORY: PROVIDED, FURTHER,
THAT ARTICLES THAT ARE CHANNELED OR AUTHORIZED FOR OFFICIAL USE.
OR FOR CHARITABLE PURPOSES BY GOVERNMENT ENTITIES SHALL NOT BE
SOLD NOR EXCHANGED IN ANY MANNER WHATSOEVER FOR OTHER
ARTICLES: PROVIDED, FURTHERMORE, THAT THE COST OF HANDLING, ST
ORAGE, TRANSPORTATION, AND OTHER CHARGES INCIDENTAL TO THE
UPKEEP AND TRANSPORTATION OF SUBJECT ARTICLE SHALL BE BORNE BY
‘THE RECIPIENT GOVERNMENT AGENCY.”

SECTION 44, Section 2603 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:
2603. [Mode of Sale| DISPOSITION OF PROCEEDS IN CASE OF RE-
EXPORTATION. {In the absence of any special provision, subject to the provisions of Section 2601 above
provided, property subject to sale by the customs authorities shall be sold at public auction within thirty
(30) days after ten (10) days notice of such sale shall have been conspicuously posted at the port and such
‘other advertisement as may appear to the Collector to be advisable in the particular case.| THE
FOLLOWING CHARGES SHALL BE PAID FROM THE PROCEEDS OF THE — RE-
EXPORTATION OF ARTICLES WITHIN THE PURVIEW OF THIS CODE:
“(A) RE-EXPORTATION EXPENSES INCURRED BY THE GOVERNMENT
ENTITY DESIGNATED FOR THE PURPOS!
“(B) TAXES AND OTHER CHARGES DUE THE GOVERNMENT;
“(©) STORAGE CHARGES;
“(D) ARRASTRE CHARGES;
“(E) FREIGHT, LIGHTERAGE AND OTHER EXPENSES INCIDENTAL TO
‘THE EXPORTATION; AND
“(F) ANY SURPLUS REMA\ AFTER THE SATISFACTION OF ALL
LAWFUL CHARGES AS PROVIDED HEREIN SHALL BE DEPOSITED IN A SPECIAL
TRUST FUND WHICH SHALL BE USED SOLELY FOR THE PURPOSE OF
FINANCING THE COMPULSORY ACQUISITION OF IMPORTED GOODS BY THE
GOVERNMENT AS PROVIDED FOR IN SECTION 2317 OF THIS CODE.”

SECTION 45. Section 2612 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“See. 2612. Disposition of Smuggled Articles. — Smuggled articles, after liability to seizure or
forfeiture shall have been established by proper administrative [or judicial] proceedings in conformity with
the provisions of this Code, shall be disposed of as provided for in [s|Section twenty-six hundred and two]
2602 HEREOF: Provided, That articles whose importation is prohibited under Section One Hundred
[Two] ONE sub-paragraphs b, c, d, ¢ and j shall, upon order to the Collector in writing, be burned or
destroyed, in such manner as the case may require as to render them absolutely worthless, in the presence
of a representative each from the Commission on Audit, [Ministry] DEPARTMENT of Justice, Bureau of
Customs, and if possible, any representative of the private sector.”

SECTION 46. A new section to be known as Section 3504-A is hereby inserted after Section 3504 of the Tariff and
Customs Code of the Philippines, as amended, to read as follows:

“SECTION 3504-A. SURETY BONDS AND ELIGIBILITY OFSURETY COMPANIES. ~

SURETY BONDS FROM A SURETY COMPANY WHICH HAS AN OUTSTANDING LIABILITY

OF THIRTY PERCENT (30%) OR MORE OF THE TOTAL DUE AND DEMANDABLE BONDS

ISSUED IN FAVOR OF THE BUREAU OF CUSTOMS, AT ANY TIME, SHALL NOT BE

ACCEPTABLE AS GUARANTEE FOR THE RELEASE OF THE IMPORTED GOODS:

PROVIDED, THAT, THE PERMIT OR LICENSE OF THE SURETY COMPA NY WHICH HAS

AN OUTSTANDING LIABILITY OF THIRTY PERCENT (30%) OR MORE OF THE TOTAL

DUE AND DEMANDABLE BONDS, AT ANY TIME, WITH THE BUREAU OF CUSTOMS, TO

ISSUE CUSTOMS SURETY BOND FOR CUSTOMS PURPOSES, SHALL BE CANCELLED:

PROVIDED, FINALLY, THAT ANY SURETY COMPANY SHALL BE ELIGIBLE TO ISSUE



CUSTOMS SURETY BOND ONLY AFTER DETERMINATION OF GOOD STANDING, WHICH
SHALL BE BASED ON A MEASURABLE PERFORMANCE RECORD IN THE CASE OF
EXISTING SURETY COMPANIES AND FINANCIAL CAPACITY IN THE CASE OF NEW
SURETY COMPANIES, BY THE INSURANCE COMMISSION IN CONSULTATION WITH THE
BUREAU OF CUSTOMS

SECTION 47. Section 3519 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows: .

“Sec. 3519. Words and Phrases Defined. ~ As used in this Code: “x x x“ ‘FOREIGN
TRANSHIPMENT? SHALL REFER TO THE TRANSPORT OF GOODS FROM A FOREIGN
COUNTRY INTO ANY PORT OR PORTS OF THE PHILIPPINES FOR SHIPMENT TO A
FOREIGN DESTINATION WITHOUT INTRODUCING THE SAME INTO THE PHILIPPINE
CUSTOMS TERRITORY. “x x x“ ‘Smuggling’ is an act of any person who shall fraudulently import or
bring into the Philippines, or assist in so doing, any article, contrary to law or shall receive, conceal, buy,
sell or in any manner facilitate the transportation, concealment, of sale of such article after importation,
knowing the same to have been imported contrary to law. It includes the exportation of articles in a manner
contrary to law. Articles subject to this paragraph shall be known as smuggled articles|.|: PROVIDED,
HOWEVER, THAT THE ACT OF RECEIVING ARTICLES THAT ARE SUPPOSED TO BE
EXPORTED BUT ARE SUBSEQUENTLY RETURNED AND REJECTED BY THE IMPORTING
COUNTRY SHALL NOT BE CONSIDERED SMUGGLING. “x x x.”

SECTION 48. Section 3601 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec, 3601. Unlawful Importation. — Any person who shall fraudulently import or bring into the
Philippines, or assist in so doing, any article, contrary to law, SHALL BE GUILTY OF SMUGGLING
AND SHALL BE PUNISHABLE AS HEREIN PROVIDED. ANY PERSON [or] WHO shall receive,
conceal, buy, sell, or in any manner facilitate the transportation, concealment, o sale of such
UNLAWFULLY IMPORTED article [after importation, knowing the same to have been imported
contrary to law}, shall be DEEMED guilty of smuggling and shall LIKEWISE be [punished with]
PUNISHABLE AS HEREIN PROVIDED:

“1, A fine of not less than [fifty] TWENTY THOUSAND pesos (P20,000.00) nor more than [two
hundred] ONE HUNDRED THOUSAND pesos (P100,000.00) and imprisonment of not'less than [five
days] TWO (2) YEARS AND ONE (1) DAY nor more than [twenty days} SIX (6) YEARS; if the
appraised value, to be determined in the manner prescribed under this Code, including duties and taxes, of
the article unlawfully imported does not exceed [twenty-five] TWO HUNDRED THOUSAND pesos
(P200,000.00);,

“2, A fine of not less than [eight hundred] ONE HUNDRED FIFTY THOUSAND pesos
(P150,000.00) nor more than {five thousand] THREE HUNDRED THOUSAND pesos (P300,000.00) and
imprisonment of not less than [six months] SEVEN (7) YEARS and one (1) day nor more than {four] TEN
(10) years, if the appraised value, to be determined in the manner prescribed under this Code, including
duties and taxes, of the article unlawfully imported exceeds [twenty-five] TWO HUNDRED
THOUSAND pesos (P200,000.00) but does not exceed [fifty] SIX HUNDRED thousand pesos
(600,000.00);

“3, A fine of not less than [six] FOUR HUNDRED thousand pesos (P400,000.00) nor more than
[eight thousand] SIX HUNDRED THOUSAND (P600,000.00) and imprisonment of not less than [five]
ELEVEN (11) years and one (1) day nor more than {eight} FIFTEEN (15) years, if the appraised value, to
be determined in the manner prescribed under this Code, including duties and taxes, of the article
unlawfully imported is more than [fifty] SIX HUNDRED thousand pesos (P600,000.00) but does not
exceed [one hundred fifty thousand] ONE MILLION pesos (P1,000,000.00); *

4. A fine of not tess than [eight thousand] EIGHT HUNDRED THOUSAND. pesos
(P800,000.00) nor more than {ten thousand] TEN MILLION pesos (P10,000,000.00) and imprisonment
not less than feight] SIXTEEN (16) years and one (1) day nor more than [twelve] TWENTY (20) years, if
the appraised value to be determined in the manner prescribed under this Code, including duties and taxes
of the article unlawfully imported exceeds fone hundred fifty thousand pesos] ONE MILLION PESOS
(P1,000,000.00) BUT NOT MORE THAN FIFTY MILLION PESOS (PS0,000,000.00)

“S. IF THE APPRAISED VALUE, TO BE DETERMINED IN THE MANNER

PRESCRIBED UNDER THIS CODE, OF THE ARTICLE UNLAWFULLY IMPORTED,
INCLUDING DUTIES AND TAXES, EXCEEDS FIFTY MILLION PESOS (P50,000,000.00) OR, IF
THE AGGREGATE AMOUNT OF THE APPRAISED VALUES OF THE UNLAWFULLY
IMPORTED ARTICLES, INCLUDING DUTIES AND TAXES, RESULTING FROM ACTS OF
UNLAWFUL IMPORTATION COMMITTED IN MORE THAN ONE INSTANCE, EXCEEDS
FIFTY MILLION PESOS (P50,000,000.00), THE SAME SHALL BE DEEMED AS HEINOUS
CRIME AND SHALL BE PUNISHABLE WITH A PENALTY OF RECLUSION PERPETUA AND
A FINE OF NOT LESS THAN TWELVE MILLION PESOS (P12,000,000.00) BUT NOT MORE
THAN FIFTY MILLION PESOS (P30,000,000.00); AND “[5] 6. The penalty of prision mayor shall be
imposed when the crime of serious physical injuries shall have been committed and the penalty of rectusion
Perpetua {to death| shall be imposed when the crime of homicide shall have been committed by reason or
‘on the occasion of the unlawful importation. “In applying the above scale of penalties, if the offender is an



alien [and the prescribed penalty is not death], he shall be deported after serving the sentence without
further proceedings for deportation. If the offender is a government official or employee, the penalty [shall
be the maximum as hereinabove prescribed and the offender shall suffer an additional] WHICH IS THE
NEXT HIGHER IN DEGREE SHALL BE IMPOSED IN ADDITION TO THE penalty of perpetual
isqualification from public office, to vote and to participate in any public election. IF THE OFFENDER
FAILS TO PAY THE FINE, HE SHALL SUFFER SUBSIDIARY IMPRISONMENT. “x x x.”

SECTION 49. Section 3602 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 3602. Various Fraudulent Practices Against Customs Revenue. — Any person who makes or
attempts to make any entry of imported or exported article by means of any false or fraudulent invoice,
declaration, affidavit, letter, paper or by any means of any false statement, written or verbal, or by any
means of any false or fraudulent practice whatsoever, or [knowingly] effects any entry of goods, wares or
merchandise, at less than the true weight or measures thereof or upon a false classification as to quality or
value, or by the payment of less than the amount legally due, or {knowingly and willfully] files any false or
fraudulent entry or claim for the payment of drawback or refund of duties upon the exportation of
merchandise, or makes or files any affidavit abstract, record, certificate or other document, with a view to
securing the payment to himself or others of any drawback, allowance, or refund of duties on the
exportation of merchandise, greater than that legally due thereon, or who shall be guilty of any [willful] act
‘or omission shall, for each offence, BE GUILTY OF TECHNICAL SMUGGLING AND SHALL be
punished in accordance with the penalties prescribed in the preceding section,] PUNISHABLE AS
FOLLOWS:

‘(A) A FINE OF NOT LESS THAN THREE HUNDRED THOUSAND PESOS
(P300,000.00) NOR MORE THAN FIVE HUNDRED THOUSAND PESOS (P500,000.00)
AND IMPRISONMENT OF PRISION CORRECCIONAL, IF THE DIFFERENCE
BETWEEN THE VALUE, WEIGHT, MEASUREMENT, OR QUANTITY DECLARED IN
THE ENTRY AND THE TRUE AND ACTUAL VALUE, WEIGHT, QUANTITY, OR
MEASUREMENT OF THE ARTICLE UNLAWFULLY IMPORTED DOES NOT
EXCEED ONE HUNDRED THOUSAND PESOS (P100,000.00); *

(B) A FINE OF NOT LESS THAN FIVE HUNDRED THOUSAND PESO
(P500,000.00) NOR MORE THAN EIGHT HUNDRED THOUSAND PESOS (P800,000.00)
AND IMPRISONMENT OF PRISION MAYOR, IF THE DIFFERENCE BETWEEN THE
VALUE, WEIGHT, MEASUREMENT, OR QUANTITY DECLARED IN THE ENTRY
AND THE TRUE AND ACTUAL VALUE, WEIGHT, QUANTITY, OR MEASUREMENT
OF THE ARTICLE UNLAWFULLY IMPORTED EXCEEDS ONE HUNDRED
THOUSAND PESOS (P100,000.00) BUT DORS NOT EXCEED ONE MILLION PESOS
(P1,000,000.00);

(©) A FINE OF NOT LESS THAN EIGHT HUNDRED THOUSAND PESOS
(P800,000.00) NOR MORE THAN ONE MILLION PESOS (P1,000,000.00) AND
IMPRISONMENT OF RECLUSION TEMPORAL, IF THE DIFFERENCE BETWEEN
THE VALUE, WEIGHT, MEASUREMENT, OR QUANTITY DECLARED IN THE
ENTRY AND THE TRUE AND ACTUAL VALUE, WEIGHT, QUANTITY, OR
MEASUREMENT OF THE ARTICLE UNLAWFULLY IMPORTED EXCEEDS ONE
MILLION PESOS (P1,000,000.00) BUT DOES NOT EXCEED FIVE MILLION PESOS
(P5,000,000.00); AND

“(D) A FINE OF NOT LESS THAN ONE MILLION PESOS (P1,000,000.00) NOR
MORE THAN TWO MILLION PESOS (P2,000,000.00) AND IMPRISONMENT OF
RECLUSION PERPETUA, IF THE DIFFERENCE BETWEEN THE VALUE, WEIGHT,
MEASUREMENT, OR QUANTITY DECLARED IN THE ENTRY AND THE TRUE AND
ACTUAL VALUE, WEIGHT, QUANTITY, OR MEASUREMENT OF THE ARTICLE
UNLAWFULLY IMPORTED EXCEEDS FIVE MILLION PESOS (P5,000,000.00). “IN
APPLYING THE ABOVE SCALE OF PENALTIES, IF THE OFFENDER IS AN ALIEN,
HE SHALL BE DEPORTED AFTER SERVING THE SENTENCE WITHOUT FURTHER
PROCEEDINGS FOR DEPORTATION. IF THE OFFENDER IS A GOVERNMENT
OFFICIAL OR EMPLOYEE, THE PENALTY NEXT HIGHER IN DEGREE SHALL BE
IMPOSED IN ADDITION TO THE PENALTY OF PERPETUAL DISQUALIFICATION
FROM PUBLIC OFFICE, TO VOTE AND TO PARTICIPATE IN ANY PUBLIC
ELECTION. IF THE OFFENDER FAILS TO PAY THE FINE, HE SHALL SURFER
SUBSIDIARY IMPRISONMENT. HE SHALL ALSO LOSE ALL THE BENEFITS DUE
HIM FOR HIS SERVICE IN THE GOVERNMENT, INCLUDING THE FORFEITURE
OF HIS SEPARATION AND RETIREMENT BENEFITS.”

SECTION 50. A new section to be known as Section 3602-A is hereby inserted in Part 1, Title V, Book II of the
Tariff and Customs Code of the Philippines, as amended, to read as follows:

“SEC. 3602-4. WAREHOUSING ACTS DEEMED AS SMUGGLING PUNISHABLE UNDER

SECTIONS 3601 AND 3602 OF THIS CODE. - THE FOLLOWING SHALL BE DEEMED AS

ACTS OF SMUGGLING WHICH SHALL BE PUNISHABLE UNDER SECTIONS 3601 AND 3602
OF THIS CODE:


“(A) BREAKING OF CUSTOMS SEALS OR UNAUTHORIZED REMOVAL OF
ARTICLES FROM BONDED WAREHOUSES;

“(B) SUBMISSION OF INCORRECT OR FALSE INFORMATION BY THE BONDED
WAREHOUSE;

“(©) WAREHOUSING OF THE FOLLOWING SHIPMENTS:

“(1) FINISHED ARTICLES, WITHOUT EXCEPTION. — FINISHED ARTICLES,

AS USED IN THIS SECTION, SHALL REFER TO SCIENTIFICALLY OR

TECHNOLOGICALLY PROCESSED ARTICLES IN FINAL STATE SUCH THAT NO

OTHER PRODUCT CAN BE MANUFACTURED THEREFROM UNLESS ITS

PRINCIPAL CHARACTER IS FIRST DESTROYED.

“@) ARTICLES NOT DECLARED IN THE IMPORT ENTRIES OR IN EXCESS

OF THE VOLUME AND QUANTITY ALLOWED UNDER THE LICENSE OF THE.

CUSTOMS BONDED WAREHOUSE. “(G) PROHIBITED ARTICLES, AND

REGULATED ARTICLES WITHOUT THE CORRESPONDING CLEARANCE AND/OR

IMPORT AUTHORITY DULY ISSUED BY A COMPETENT AUTHORITY.

“() UNAUTHORIZED TRANSFERS FROM THE CUSTOMS ZONE OF
WAREHOUSING ARTICLES IMPORTED BY THE BONDED WAREHOUSE.

“(E) UNAUTHORIZED WITHDRAWAL FROM A BONDED WAREHOUSE WITHOUT
PAYMENT OF DUTIES AND TAXES. “(F) FAILURE TO LIQUIDATE IMPORTED ARTICLES
WHICH WERE WITHDRAWN FROM THE BONDED WAREHOUSE WITHIN THIRTY (30)
DAYS FROM ISSUANCE BY THE BUREAU OF THE CERTIFICATE OF LOADING IN A
VESSEL DESTINED TO A FOREIGN PORT; AND

“G) FAILURE TO PAY DUTIES AND TAXES ON THE REMAINING IMPORTED
MATERIALS WHICH ARE NOT EXPORTED WITHIN THIRTY (30) DAYS FROM LAPSE OF
‘THE PERIOD FOR RE-EXPORTATION. “IMPORTATIONS MADE IN VIOLATION OF THE
ABOVE PROVISIONS IN THIS SECTION SHALL /PSO FACTO BE FORFEITED IN FAVOR OF
THE GOVERNMENT TO BE DISPOSED OF PURSUANT TO SECTION 2602 OF THIS CODE.”

SECTION 51. Section 3603 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec, 3603. Failure (0 Report Fraud. — Any master, pilot in command or other officer, owner or
agent of any vessel or aircraft trading with or within the Philippines and any employee of the Bureau of
Customs who, having cognizance of any fraud on the customs revenue, shall fal to report all information
relative thereto to the Collector as by law required, shall be punished by a fine of not LESS THAN FIFTY
THOUSAND PESOS (P50,000.00) BUT NOT more than [five] TWO HUNDRED thousand pesos
(P200,000.00) and imprisonment for not LESS THAN TWO (2) YEARS AND ONE (1) DAY BUT NOT
more than [one year] FIVE (5) YEARS. If the offender is an alien, he shall be deported after serving the
sentence. If the offender is a public official or employee, he shall suffer additional penalty of perpetual
disqualification to hold public office, to vote and to participate in any election. HE SHALL ALSO LOSE
ALL THE BENEFITS DUE HIM FOR HIS SERVICE IN THE GOVERNMENT, INCLUDING
‘THE FORFEITURE OF HIS SEPARATION AND RETIREMENT BENEFITS.”

SECTION 52. Section 3604 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:
“Sec. 3604. Statutory Offenses of Officials and Employees. ~ Every official, agent or employee of
the Bureau or of any other agency of the government charged with the enforcement of the provisions of this
Code, who is guilty of any delinquency herein below indicated shall be punished with a fine of not less than
[Five] ONE HUNDRED thousand pesos (P100,000.00) nor more than [Fifty] FIVE HUNDRED thousand
pesos (P500,000.00) and imprisonment for not less than [one year] TEN (10) YEARS AND ONE (1)
DAY nor more than [ten] FIFTEEN (15) years and perpetual disqualification to hold public office, to vote
and to participate in any public clection|:]. HE SHALL ALSO LOSE ALL THE BENEFITS DUE HIM
FOR HIS SERVICE IN THE GOVERNMENT, INCLUDING THE FORFEITUREOF HIS
SEPARATION AND RETIREMENT BENEFITS: “x x x”

SECTION 53. Section 3605 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
‘amended to read as follows:

“Sec, 3605. Concealment or Destruction of Evidence of Fraud. — Any person who [willfully]
conceals or destroys any invoice, book or paper relating to any article liable to duty after an inspection
thereof has been demanded by the Collector of any collection district or at any time conceals or destroys
any such invoice, book or paper for the purpose of suppressing any evidence of fraud therein contained,
shall be punished with a fine of NOT LESS THAN TWENTY THOUSAND PESOS (P20,000.00) BUT
‘not more than [five] ONE HUNDRED thousand pesos (P100,000.00) and imprisonment for NOT LESS
‘THAN TWO (2) YEARS AND ONE (1) DAY BUT not more than [wo] FIVE (8) years.”

SECTION 54. Section 3606 of the Tariff and Customs Code of the Philippines, as amended,
amended to read as follows:

“Sec. 3606. Affixing Seals. — Any person who, without authority affixes or attaches a customs seal,

fastening, or mark or any seal, fastening or mark purporting to be a customs seal, fastening or mark to any

hereby further



vessel, vehicle on land, sea or air, warehouse, or package, shall be punished with a fine of not LESS
‘THAN TWENTY THOUSAND PESOS (P20,000.00) BUT NOT more than {twenty] ONE HUNDRED
thousand pesos (P100,000.00) [or] AND imprisonment of not LESS THAN TWO (2) YEARS AND ONE
(J) DAY BUT NOT more than [five] SEVEN (7) years[, or both]. If the offender is an alien, he shall be
deported after serving the sentence; and if he is a public official or employee, he shall suffer an additional
penalty of perpetual disqualification to hold public office, to vote and participate in any election.”

SECTION 55. Section 3610 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
‘amended to read as follows:
“Sec. 3610. Failure to Keep Importation Records and Give Full Access to Customs Officers. ~
Any person who fails to keep all the records of importations and/or books of accounts, business and
computer systems and all customs commercial data in the manner prescribed in Part 2, Section 3514 of this,
Title shall be punished with a fine of not less than [One hundred thousand pesos (P100,000.00)] TWO
HUNDRED THOUSAND PESOS (P200,000.00) but not more than [Two hundred thousand pesos
(P200,000.00)| FIVE HUNDRED THOUSAND PESOS (P500,000.00) [and/or] AND imprisonment of
not less than {two (2)] FOUR (4) years and one day but not more than [six (6)] EIGHT (8) years. This
penalty shall likewise be imposed against the importers’brokers who deny an authorized customs officer
full and free access to such records, books of accounts, business and computer systems, and all customs
commercial data including payment records. This is without prejudice to the Administrative sanctions that
the Bureau of Customs may impose against contumacious importers under existing laws and regulations
including the authority to hold delivery or release of their imported articles.”

SECTION 56. Section 3612 of the Tariff and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:

“Sec. 3612. Violations of Tariff and Customs Laws and Regulations in General. — Any person who
violates a provision of this Code or regulations pursuant thereto, for which delinquency no specific penalty
is provided, shall be punished by a fine of not LESS THAN TWENTY THOUSAND PESOS
(20,000.00) BUT NOT more than One HUNDRED thousand pesos (P100,000.00) [or] AND by
imprisonment for not LESS THAN TWO (2) YEARS AND ONE (1) DAY BUT NOT more than Jone
year] FIVE (5) YEARS|, or both]. If the offender is an alien, he shall be deported after serving the
Sentence and if the offender is a public official or employee, he shall suffer disqualification to hold public
office, to vote and participate in any public election for ten years.”

SECTION 57. A new section to be known as Section 3613 is hereby inserted to the Tari
Philippines, as amended, to read as follows:
“SEC. 3613. SUMMARY PROCEDURE FOR SEIZURE AND FORFEITURE. —
NOTWITHSTANDING THE PROVISIONS OF TITLE VI OF THIS CODE, ARTICLES WHICH
ARE FRAUDULENTLY IMPORTED OR BROUGHT INTO THE PHILIPPINES WITHOUT
BEING ENTERED THROUGH THE CUSTOMSHOUSE, OR WITHOUT PAYMENT OF THE
CORRECT AND APPLICABLE DUTIES, TAXES, FEES AND CHARGES SHALL BE
SUMMARILY SEIZED AND FORFEITED IN FAVOR OF THE GOVERNMENT WHEN
WARRANTED OR DETERMINED IN THE SEIZURE PROCEEDINGS. SUBJECT TO THE
PROVISIONS OF SECTION 2530 OF THIS CODE, ANY VESSEL OR AIRCRAFT WHICH IS
LEASED TO FRAUDULENTLY BRING IN SAID IMPORTED ARTICLES INTO THE
PHILIPPINES SHALL LIKEWISE BE SUBJECT TO SUMMARY SEIZURE AND FORFEITURE.
“THE DECISION OF THE SECRETARY OF FINANCE, UPON THE RECOMMENDATION OF
THE COMMISSIONER OF CUSTOMS, UNDER THIS SECTION, SHALL BE FINAL AND
UNAPPEALABLE. “NO COURT, EXCEPT THE COURT OF TAX APPEALS AND THE
SUPREME COURT, SHALL ISSUE ANY TEMPORARY RESTRAINING ORDER OR ANY
INJUNCTIVE RELIEF AGAINST THE SEIZURE, FORFEITURE OR DISPOSITION OF THE
SUBJECT ARTICLES COVERED BY THIS SECTION. “THE OWNER OR OPERATOR OF ANY
SEIZED VESSEL OR AIRCRAFT UNDER THIS SECTION SHALL BE BLACKLISTED FROM
OPERATING AND/OR FROM ENGAGING IN TRADE IN THE PHILIPPINES.”

‘and Customs Code of the

SECTION 58. A new title to be known as Title VIII, with heading entitled “Ports Transparency Alliance”, and under
which Sections 3614, 3615, 3616, 3617, 3618, 3619 and 3620 are inserted in the Tariff and Customs Code of the
Philippines, as amended, to read as follows:
ITLE VIII
“PORTS TRANSPARENCY ALLIANCE
“SEC. 3614. PORTS TRANSPARENCY ALLIANCE. — PUBLIC-PRIVATE SECTOR
PARTNERSHIP FOR THE EFFICIENT CUSTOMS ADMINISTRATION IS HEREBY
INSTITUTIONALIZED THROUGH THE CREATION OF THE PORTS TRANSPARENCY
ALLIANCE OR “PORTAL” UNDER THE DIRECTION AND LEADERSHIP OF THE
SECRETARY OF FINANCE.”
“SEC. 3615. POWERS AND FUNCTIONS OF PORTAL. ~ THE PORTS TRANSPARENCY
ALLIANCE OR PORTAL SHALL HAVE THE FOLLOWING POWERS AND FUNCTIONS:
“(A) TO ENCOURAGE GREATER PRIVATE SECTOR PARTICIPATION IN
THE ADMINISTRATION OF CUSTOMS LAWS;



“(B) TO IMPROVE CUSTOMER SERVICE IN ORDER TO ENHANCE

COMPLIANCE TO TAX AND DUTY LAWS, RULES AND REGULATIONS;

“(©€) TO REMOVE BOTTLENECKS AND ADDRESS LEAKAGES THAT

IMPACT BUSINESS COMPETITIVENESS;

“(D) TO PROTECT CONSUMER RIGHTS; AND
“(E) TO PERFORM SUCH OTHER FUNCTIONS AS MAY BE NECESSARY TO

CARRY OUT ITS MANDATE.”

“SEC. 3616. COMPOSITION OF THE PORTAL. - THE PORTAL SHALL BE CHAIRED
BY THE SECRETARY OF FINANCE OR BY AN UNDERSECRETARY WHO IS DULY
DESIGNATED TO REPRESENT THE SECRETARY WHEN HE IS UNAVAILABLE, IT SHALL
BE CO-CHAIRED BY THE COMMISSIONER OF CUSTOMS. “ITS MEMBERSHIP SHALL.
INCLUDE REPRESENTATIVES OF VARIOUS DOMESTIC INDUSTRIES, INDUSTRY
ASSOCIATIONS OR CHAMBERS, TAXPAYER ASSOCIATIONS AND CONSUMER GROUPS,
AS DETERMINED THROUGH A DEPARTMENT ORDER TO BE ISSUED BY THE.
SECRETARY OF FINANCE. “THE TWO (2) CO-CHAIRPERSONS OF THE CONGRESSIONAL
OVERSIGHT COMMITTEE ON THE TAX REFORM PROGRAM, OR THEIR DULY
DESIGNATED REPRESENTATIVES, SHALL ALSO BE MEMBERS OF THE PORTAL. “THE
HEADS OF OTHER DEPARTMENTS OF THE GOVERNMENT MAY BE INVITED IN THE
PORTAL MEETINGS AS RESOURCE PERSONS ON ISSUES CONCERNING THEIR
RESPECTIVE OFFICES.”

“SEC, 3617. MEETINGS. ~ THE PORTAL SHALL MEET AT LEAST ONCE A MONTH,
OR AS OFTEN AS NECESSARY AT THE CALL OF THE CHAIRPERSON OR A MAJORITY
OF THE MEMBERS, IN ORDER TO THRESH OUT VARIOUS ISSUES, PROPOSALS AND
PROBLEMS CONCERNING CUSTOMS. A MAJORITY OF THE MEMBERS OF THE PORTAL
SHALL CONSTITUTE A QUORUM TO DO BUSINESS. THE MEETING SHALL BE PRESIDED
BY THE CHAIRPERSON, OR IN HIS ABSENCE, BY HIS/HER DULY DESIGNATED
UNDERSECRETARY.”

“SEC, 3618. FUNDING. ~ THE ANNUAL APPROPRIATIONS FOR THE DEPARTMENT
OF FINANCE AND THE BUREAU OF CUSTOMS SHALL PROVIDE AN ITEM OF EXPENSE,
FOR THE INSTITUTIONALIZATION OF THE PORTAL.”

“SEC, 3619. ASSISTANCE FROM OTHER GOVERNMENT AGENCIES. - THE PORTAL
MAY REQUEST ANY DEPARTMENT, BUREAU, OFFICE, AGENCY, OR ANY
INSTRUMENTALITY OF THE GOVERNMENT FOR SUCH ASSISTANCE AS MAY BE
NEEDED IN THE PERFORMANCE OF ITS FUNCTIONS.”

“SEC. 3620. ANNUAL REPORT. ~ THE PORTAL SHALL, WITHIN NINETY (90) DAYS
AFTER THE END OF EVERY FISCAL YEAR, SUBMIT TO THE PRESIDENT AND TO.
CONGRESS AN ANNUAL REPORT ON ITS COMPLIANCE WITH, OR ACCOMPLISHMENTS
OF, ITS POWERS, DUTIES AND FUNCTIONS, TOGETHER WITH ITS PLANS AND
RECOMMENDATIONS TO IMPROVE AND DEVELOP ITS CAPABILITY TO ENFORCE ITS.
MANDATE.”

SECTION 59. Rules and Regulations. ~ The Secretary of Finance shall, upon the recommendation of the

‘Commissioner of Customs, promulgate the necessary rules and regulations for the effective implementation of this,
Act.

SECTION 60. Separability Clause. ~ If any provision of this Act is subsequently declared unconstitutional, the
validity of the remaining provisions hereof shall remain in full force and effect.

SECTION 61. Repealing Clause. ~ Sections 2604, 2605, 2606, 2607, and 2610 of the Tariff and Customs Code of
the Philippines, as amended, are hereby repealed. All laws, decrees, executive orders, rules and regulations and

other issuances or parts thereof which are inconsistent with this Act are hereby

repealed or modified accordingly.

SECTION 62. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the Official Gazette or
in any two (2) newspapers of general circulation, whichever date comes earlier.

Approved,