FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S.B.No. 2704 
) 
) 
) 
'11 
FEB 16 P 3 :16 
Introduced by Senator Ramon Bong Revilla, Jr. 
EXPLANATORY NOTE 
A broadsheet of national circulation reported that the Cebu Auto Dealers Association 
(CADA) is complaining on the alleged smuggling of cars in Cebu. It was reported that CADA 
exposed the disparity on the number of vehicles sold and the number of registered vehicles in the 
province, to wit: the number of registered vehicles in Cebu exceeded by 20,000 units the number 
of cars sold by legitimate car dealers in the province in the year 2006. 
Smuggling has been one of the major economic problems the country is facing. The 
illegal entry of goods in the local market has caused the government to lose huge amounts of 
revenues. 
This proposed bill seeks to address the problem of smuggling through amending certain 
provisions of the Tariff and Customs Code of the Philippines. 
This version of the "Anti-Smuggling Act" has been prepared by the Senate Committees 
on Trade and Commerce and Economic Affairs in the Thirteenth Congress but has failed to 
become a law. This representation trusts the noble intent of the measure and is re-filing the same. 
Strengthening the govermnent's anti-smuggling drive has been identified as one of the 
necessary strategies to generate much needed government revenues. In this regard, passage of 
this bill is earnestly sought. 
REVILLA, JR. 


FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S.B. No. 2704 
'11 
FEB 16 P 3 :16 
RECEiVED BY: ~ 
Introduced by Senator Ramon Bong Revilla, Jr. 
AN ACT 
AMENDING 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 Congress 
assembled: 
SECTION I. Short Title. - This Act shall be known as the "Anti-Smuggling Act of 
2011 ". 
SEC 2. Section 601 of the Tariff and Customs Code of the Philippines (TCCP), as 
amended, is hereby further amended to read as follows: 
"Sec. 601. Chief OjJiczals of the Bureau of Customs. - The Bureau of 
Customs shall have one and FIVE [four] assistant chiefs, to be known 
respectively as the Commissioner of Customs (hereinafter known as the 
Commissioner) and FIVE (5) Deputy Commissioners of Customs, each 
one to head (a) Customs Revenue and Collection Monitoring Group; (b) 
Customs Assessment and Operations Coordinating Group; (c) Intelligence 
and Enforcement Group; (d) Internal Administration Group; AND (E) 
AUDIT AND TRANSPARENCY GROUP, who shall receive an annual 
compensation in accordance with the rates prescribed by existing law. The 
Commissioner AND DEPUTY COMMISSIONER FOR AUDIT AND 
TRANSPARENCY SHALL BE DIRECTLY APPOINTED BY THE 
PRESIDENT. THE OTHER DEPUTY COMMISSIONERS SHALL 
BE APPOINTED BY THE PRESIDENT OF THE PHILIPPINES 
BASED 
ON 
THE 
RECOMMENDATION 
OF 
THE 
COMMISSIONER. " 
"In case of temporary and permanent vacancy, one of the Deputy 
Commissioners shall be designated by the Secretary of Finance to act as a 
Commissioner of Customs, until the incumbent Commissioner reassumes 
his duties or the position is filled by permanent appointment." 
SEC 3. Section 607 of the Tariff and Customs Code of the Philippines (TCCP), as 
amended, is hereby further amended to read as follows: 
"Sec. 607. Annual Report of Commissioner. - The annual report of the 
Commissioner to the President shall, among other things, contain a 
1 


compilation of the (a) quantity and value of the articles imported into the 
Philippines and the corresponding amount of customs duties, taxes and 
other charges assessed and collected on imported articles itemized in 
accordance with the tariff headings and subheadings as appearing in the 
liquidated customs entries provided for in this Code, (b) percentage 
collection of the peso value of imports, (c) quantity and value of 
conditionally-free importations, (d) customs valuation over and above 
letters of credit opened, (e) quantity and value of tax-free imports, and (f) 
the quantity and value of articles exported from the Philippines as well as 
the taxes and other charges assessed and collected on them for the 
preceding year. THE DEPUTY COMMISSIONER FOR AUDIT AND 
TRANSPARENCY SHALL REGULARLY FURNISH copies of such 
annual report [shall be furnished regularly] to the Department of Finance, 
Tariff Commission, NEDA, BANGKO SENTRAL NG PILIPINAS 
[Central Bank of the Philippines], Board of Investments, Department of 
Budget, and other economic agencies of the government, on or before 
December 30 of each year. 
"For more scientific preparation of the annual report, the Commissioner 
shall cause the computerization of the data contained in the liquidated 
entries filed with the Bureau of Customs." 
SEC 4. Section 609 of the Tariff and Customs Code of the Philippines (TCCP), as 
amended, is hereby further amended to read as follows: 
"Sec. 609. Commissioner to Furnish Copies of Collectors' Liquidated 
Duplicates. - The Commissioner shall regularly furnish the NEDA, the 
BANGKO SENTRAL NG PILIPINAS [Central Bank of the 
Philippines], 
the 
Tariff Commission, 
AND 
THE NATIONAL 
STATISTICS OFFICE (NSO), BOTH ELECTRONIC AND PAPER 
COPIES of each of all customs import I export 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. 
COPIES 
OF 
THE 
FOREGOING 
DOCUMENTS 
SHALL 
BE 
MADE 
ACCESSIBLE 
AND 
AVAILABLE TO THE DEPUTY COMMISSIONER FOR AUDIT 
AND TRANSPARENCY AT ALL TIMES." 
SEC 5. Section 709 of the TCCP, as amended, is hereby further amended to read as 
follows: 
"Sec. 709. AuthorifY of the Collecfor to Remit Duties. - A Collector shall 
have discretionary authority to remit the assessment and collection of 
customs duties, taxes, and other charges when the aggregate amount of 
such duties, taxes, and other charges is less than FIVE THOUSAND 
PESOS (PS,OOO.OO), and he may dispense with the seizure of articles of 
less than FIVE THOUSAND PESOS (P5,OOO.OO) in value except in 
cases of prohibited importations of the habitual or the intentional violation 
of the tariff and customs laws. " 
SEC 6. A new part shall be inserted starting with SECTION 713, after Section 712 of the 
TCCP, as amended, which shall read as follows: 
2 


"PART 3. - AUDIT, TRANSPARENCY AND ACCOUNTABILITY. 
"SECTION 713. THE DEPUTY COMMISSIONER FOR AUDIT 
AND TRANSPARENCY SHALL CONDUCT, IN COORDINATION 
WITH THE COMMISSION ON AUDIT, A BUREAU-WIDE AUDIT 
ON 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 
BUREAU 
AND 
ITS 
ATTACHED 
AGENCIES. 
"SECTION 714. THE APPROPRIATIONS FOR THE BUREAU OF 
CUSTOMS SHALL PROVIDE AN ITEM OF EXPENSE FOR 
AUDIT AS CONTEMPLATED UNDER THIS ACT, INCLUDING A 
PROVISION FOR AN INDEPENDENT AUDIT OF THE BUREAU 
BY A QUALIFIED PRIVATE COMPANY OR INSTITUTION, 
WHICH SHALL BE CONDUCTED ANNUALLY, OR IN SUCH 
FREQUENCY AS MAY BE DETERMINED BY THE DEPUTY 
COMMISSIONER FOR AUDIT AND TRANSPARENCY UPON 
APPROVAL OF THE COMMISSIONER. 
"SECTION 715. ON THE BASES OF THE AUDIT CONDUCTED 
PURSUANT TO THE PRECEDING SECTIONS, THE DEPUTY 
COMMISSIONER FOR AUDIT AND TRANSPARENCY SHALL 
HAVE THE AUTHORITY TO FORMULATE AND RECOMMEND 
POLICIES TO THE COMMISSIONER TO ADDRESS THE 
IDENTIFIED PROBLEMS AND DEFICIENCIES. UNLESS THERE 
IS REASONABLE DOUBT ON THE VALIDITY OF THE SAID 
AUDIT, 
THE 
RECOMMENDATIONS 
SHALL 
HAVE 
PERSUASIVE WEIGHT AND SHALL BE PROMPTLY ACTED 
UPON BY THE COMMISSIONER. 
"THE DEPUTY COMMISSIONER SHALL LIKEWISE HAVE 
THE AUTHORITY TO CONDUCT INVESTIGATIONS FOR THE 
PURPOSE OF INITIATING PROSECUTION OF FRAUD AND 
OTHER GRAFT AND CORRUPT PRACTICES IN THE BUREAU, 
AND SHALL RECOMMEND TO THE OMBUDSMAN THE 
FILING OF APPROPRIATE CRIMINAL CASES AGAINST THE 
ERRING PERSONNEL, AND TO THE COMMISSIONER THE 
IMPOSITION OF ADMINISTRATIVE SANCTIONS. 
"SECTION 716. IN THE CONDUCT OF ITS AUDIT . AND 
INVESTIGATIONS, THE DEPUTY COMMISSIONER OR THE 
PRIVATE AUDITOR SHALL HAVE THE AUTHORITY TO 
REQUIRE THE PRODUCTION OF DOCUMENTS AND REQUIRE 
BUREAU PERSONNEL TO RESPOND TO ITS INQUIRIES. FOR 
THIS PURPOSE, IT MAY ISSUE SUBPOENA DUCES TECUM 
AND AD TESTIFICANDUM. ANY PERSON WHO SHALL 
REFUSE TO ABIDE BY THE SUBPOENA SO ISSUED MAYBE 
HELD LIABLE FOR CONTEMPT. 
3 


"SECTION 717. THE DEPUTY COMMISSIONER FOR AUDIT 
AND TRANSPARENCY SHALL SUBMIT AN ANNUAL REPORT 
TO THE COMMISSIONER, THE SECRETARY OF FINANCE, 
THE OFFICE OF THE PRESIDENT, AND THE CONGRESS, 
STATING THE RESULT OF ITS INSPECTIONS AND AUDITS. 
THE REPORT SHALL CONTAIN ALL THE NECESSARY DATA 
WHICH LED TO ITS RECOMMENDATIONS AND FINDINGS, 
AND SHALL BE MADE AVAILABLE TO THE PUBLIC 
THROUGH ELECTRONIC AND NON-ELECTRONIC MEANS, 
UNLESS NON-DISCLOSURE IS WARRANTED BY NATIONAL 
SECURITY." 
SEC 7. A new section to be know as Section 1001-A is hereby inserted after Section 
1001 of the TCCP, as amended, which shall read as follows: 
"SEC. IOOI-A. TRANSMISSION OF ELECTRONIC COPY OF 
MANIFEST PRIOR TO ARRIVAL - AN ELECTRONIC COPY OF 
THE CARGO AND PASSENGER MANIFEST OF THE VESSEL 
ENGAGED IN FOREIGN TRADE SHALL BE TRANSMITTED TO 
THE BUREAU OF CUSTOMS AT LEAST SIX (6) HOURS PRIOR 
TO THE VESSEL'S ARRIVAL IN THE PORT OF ENTRY; 
PROVIDED, THAT IF THE VESSEL IS AN AmCRAFT, THE 
MANIFEST SHALL BE TRANSMITTED TO THE BUREAU OF 
CUSTOMS AT LEAST ONE (1) HOUR PRIOR TO THE 
AmCRAFT'S ARRIVAL IN THE PORT OF ENTRY." 
SEC 8. Section 1007 of the TCCP, 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 or mail to the Chairman, 
Commission on Audit, Manila AND THE DEPUTY COMMISSIONER 
FOR AUDIT AND TRANSPARENCY, a copy of the cargo manifests 
properly endorsed by the boarding officer, and the master shall 
immediately 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." 
SEC 9. Section 1210 of the TCCP, as amended, is hereby further amended to read as 
follows: 
"Sec. 1210. Disposition of Imported Articles Remaining on Vessel After 
Time for Unlading. - Imported articles remaining on board any vessel after 
the expiration of the said period for discharge and not reported for the 
transshipment to another port, may be unladen by customs authorities and 
stored at the vessel's expense." 
"Unless prevented by causes beyond the vessel's control, such as port 
congestion, strikes, riots, or civil commotions, failure of vessel's gear, bad 
weather, and similar causes, articles so stored shall be entered within 
FIFTEEN (15) DAYS, which shall not be extendible from the date of 
4 


discharge of the last package from the vessel or aircraft and shall be 
claimed within fifteen (15) days, which shall likewise not 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." 
SEC 10. A new section to be known as Section 1401-A is hereby inserted after Section 
1401 of the TCCP, as amended, which shall read as follows: 
"Sec. 1401-A. VALUATION LIBRARY. - THE COMMISSIONER 
SHALL ENSURE THAT THERE SHALL BE A VALUATION 
LIBRARY, WHICH SHALL BE KEPT UP TO DATE AND 
MAINTAINED USING THE BEST AVAILABLE TECHNOLOGY. 
THE VALUATION LIBRARY SHALL BE MADE READILY 
AVAILABLE TO THE PUBLIC." 
SEC 11. Section 1403 of the TCCP, as amended, is hereby further amended to read as 
follows: 
"Sec. 1403. Duties of Customs Ofiker 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 a return in such a manner 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. THE CUSTOMS OFFICER SHALL LIKEWISE CERTIFY 
UNDER OATH IN THE RETURN THAT HE USED THE 
VALUATION LIBRARY IN CLASSIFYING AND APPRAISING 
THE IMPORTED ARTICLES. He shall ALSO submit a sample to the 
laboratory 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. 
"Likewise, the customs officer shall determine the unit of quantity in 
which they are usually bought and sold and appraise the imported articles 
in accordance with Section 201 of this Code. 
"Failure on the part of the customs officer to comply with his duties shall 
subject him to the penalties prescribed nnder Section 3604 of this Code." 
SEC 12. Section 1801 of the TCCP, as amended, is hereby further amended to read as 
follows: 
"Sec. 1801. Abandonment; Kmds and Effects. - An imported article is 
deemed abandoned under any of the following circumstances: 
a. When the owner, imported, consignee of the imported article expressly 
signifies in writing to the Collector of Customs his intention to 
abandon; 
h. When the owner, importer, consignee, or interested party after due 
notice, fails to file an entry within thirty (30) days, which shall not be 
extensible, from the date of discharge of the last package from the 
5 


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; OR WHEN THERE IS A WRITTEN DENIAL OF 
OWNERSHIP FROM THE PERSON INDICATED ON THE 
MANIFEST OR BILL OF LADING AS THE OWNER, 
IMPORTER, 
OR 
CONSIGNEE 
OF 
THE 
IMPORTED 
ARTICLE. 
"Any person who abandons an article or who fails to claim his importation 
as provided for in the preceding paragraph shall be deemed to have 
renounced all his interests and property rights therein." 
SEC 13. Section 1802 of the TCCP, 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. ALL 
ABANDONED 
ARTICLES 
SHALL 
BE 
AUTOMATICALLY 
SUBJECT TO AUCTION AND SHALL IN NO CASE BE SUBJECT 
TO SETTLEMENT OR COMPROMISE. 
AN UPDATED LISTING OF ALL ABANDONED SHIPMENTS 
SCHEDULED FOR AUCTION SHALL BE POSTED ON THE 
OFFICIAL WEBSITE OF THE BUREAU OF CUSTOMS AND AT 
THE MAIN ENTRANCE OF CUSTOMS HOUSES. 
xxx 
xxx 
SEC 14. Section 1901 of the TCCP, as amended, is hereby further amended to read as 
follows: 
"Sec. 1901. Establishment and Supervision of Warehouses. - When the 
business of the port requires such facilities, the Collector, subject to the 
approval of the Commissioner, shall designate and establish INDUSTRY-
SPECIFIC warehouses for use as a public and private bonded 
warehouses, sheds or yards, or for other special purposes. 
"All such warehouses and premises shall be subject to the supervision of 
the Collectors, who shall impose such conditions as may be deemed 
necessary for the protection of the revenue and of the articles stored 
therein." 
SEC 15. Section 1902 of the TCCP, as amended, is hereby further amended to read as 
follows: 
"Sec. 1902. Responsibility of Operators. - The operators of bonded 
warehouses in case of loss of the imported articles stored shall be liable 
for the payment of duties and taxes due thereon. 
6 


"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, 
FOR LEGITIMATE PURPOSES, MAKE AVAILABLE TO THE 
PUBLIC 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." 
SEC 16. Section 1903 of the TCCP, 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, 
describing the premises, the location, and capacity of the same, the 
purpose for which the building is to be used, AND THE INDUSTRY TO 
WHICH IT BELONGS. THE APPLICATION SHALL LIKEWISE 
BE ACCOMPANIED BY VERIFIED COPIES OF DOCUMENTS 
INDICATING THE 
OWNERSHIP 
AND 
THE 
FINANCIAL 
CAPACITY OF THE BONDED WAREHOUSE. 
"Upon receipt of such application, the Collector shall cause an 
examination of the premises, with reference particularly to its location, 
construction and means provided for the safekeeping of articles. THE 
COLLECTOR 
SHALL 
LIKEWISE 
DETERMINE 
THE 
OWNERSHIP OF THE APPLICANT BONDED WAREHOUSE TO 
VERIFY OWNERS OF A BONDED WAREHOUSE WHICH HAD 
CUSTOMS LAWS AND REGULATIONS HAS ANY INTEREST 
THEREIN. IF THE APPLICATION IS found satisfactory, THE 
COLLECTOR may authorize its establishment, and accept 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 NET ASSETS OF THE BONDED 
WAREHOUSE SHALL BE SET AT AN AMOUNT DETERMINED 
BY THE COMMISSIONER AS SUFFICIENT TO COVER THE 
VALUE OF GOODS 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 
CHARTERES 
OF 
THE 
PHILIPPINE 
ECONOMIC 
ZONE 
AUTHORITY, THE SUBIC BAY METROPOLITAN AUTHORITY 
AND OTHER FREEPORTS AND ECOZONES." 
7 


SEC 17. A new section to be known as Section 1903-A is hereby inserted after Section 
1903 ofthe TCCP, as amended, which shall read as follows: 
"Sec. 1903-A. REGULAR AUDIT OF BONDED WAREHOUSE. A 
REGULAR AUDIT OF ALL BONDED WAREHOUSES SHALL BE 
CONDUCTED BY THE COLLECTOR, WHICH AUDIT SHALL 
BE SUBJECT TO AUTOMATIC REVIEW BY THE DEPUTY 
COMMISSIONER FOR AUDIT AND TRANSPARENCY. UPON 
PETITION OF AN INTERESTED PARTY, A SECOND AUDIT 
MAYBE CONDUCTED BY THE DEPUTY COMMISSIONER OR 
AN INDEPENDENT AUDIT MAYBE MADE UPON THE 
INSTANCE OF THE PETITIONING PARTY IN COORDINATION 
WITH THE DEPUTY COMMISSIONER." 
SEC 18. Section 1904 of tbe TCCP, as amended, is hereby further amended to read as 
follows: 
"Sec. 1904. Irrevocable Domestic Letter of Credit or Bank Guarantee or 
Warehousing Bond. - After articles declared in the entry for warehousing 
shall have been examined and the duties, taxes, and otber charges shall 
have been detennined, the Collector shall require from the importer an 
irrevocable domestic letter of credit, bank guarantee, or CASH bond 
equivalent to the amount of such duties, taxes and other charges 
conditioned upon the withdrawal of articles within the period prescribed 
in section nineteen hundred and eight of tbis Code and for the payment of 
any duties, taxes and other charges to which the articles shall be then 
subject and upon compliance witb all legal requirements regarding their 
importation. " 
SEC 19. Section 1905 of tbe TCCP, 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 at any time when conditions so 
warrant, or in the 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 
COLLECTOR 
THE 
DISCONTINUANCE OF THE BONDED WAREHOUSE ON 
GROUNDS 
OF 
NON-COMPLIANCE 
WITH 
THE 
REQUIREMENTS OF LAW AND REGULATIONS. x x x" 
SEC 20. Section 1906 of the TCCP, 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 
fonn, and shall be verified as in tbe entry of tbe articles for consumption. 
No warehousing entry shall be accepted for any article if from the entry, 
supporting documents and / or infonnation such article is imported 
contrary to any law. THE CUSTOMS OFFICER MAKING THE 
ENTRY SHALL BE RESPONSmLE FOR TRANSMITTING A 
8 


COPY OF THE SAME TO THE DEPUTY COMMISSIONER FOR 
AUDIT AND TRANSPARENCY. 
SEC 21. Section 1907 of the TCCP, 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 CASH bond may be 
withdrawn at any time for re-exportation; PROVIDED, THAT PROOF 
IS SHOWN THAT THE ORDER TO IMPORT THE SUBJECT 
ARTICLES HAS BEEN CANCELLED; PROVIDED FURTHER, 
THAT THE ARTICLES TO BE WITHDRAWN DO NOT AMOUNT 
TO MORE THAN FIFTY PERCENT (50%) OF THE TOTAL 
INVENTORY OF THE BONDED WAREHOUSE. 
"The withdrawal must be made ONLY BY THE IMPORTER OF THE 
ARTICLES BEING WITHDRAWN OR BY A REPRESENTATIVE 
whose authority must appear in writing upon the face of the withdrawal 
entry." 
SEC 22. Section 1908 of the TCCP, as amended, is hereby further amended to read as 
follows: 
"Sec. 1908. Limit to Period of Storage in Bonded Warehouse. - Articles 
duly entered for warehousing may remain in bonded warehouses for a 
maximum period of THIRTY (30) DAYS from the time of RECEIPT 
OF THE WAREHOUSE. Articles not withdrawn at the expiration of the 
prescribed period shall be DEEMED ABANDONED AND SUBJECT 
TO DISPOSITION IN ACCORDANCE WITH THE PROVISIONS 
OF THIS CODE." 
SEC 23. A new section to be known as Section 1908-A is hereby inserted after Section 
1908 of the TCCP, as amended, which shall read as follows: 
"SEC. 1908-A. LIQUIDATION OF WAREHOUSING ENTRIES. -
THE LIQUIDATION OF WAREHOUSING ENTRIES SHALL BE 
MADE NOT MORE THAN THREE (3) MONTHS FROM THE 
TIME OF RECEIPT OF THE WAREHOUSE. 
"A DAILY RECORD OF ALL ENTRIES LIQUIDATED SHALL BE 
POSTED ON A CONSPICUOUS PLACE IN THE MAIN 
ENTRANCE OF THE CUSTOMS HOUSE, STATING THE NAME 
OF THE VESSEL OR AIRCRAFT, THE PORT FROM WHICH 
SHE ARRIVED, THE DATE OF HER ARRIVAL, THE NAME OF 
THE IMPORTER, AND THE SERIAL NUMBER AND THE DATE 
OF ENTRY. THE COLLECTOR MUST ALSO KEEP A DAILY·· 
RECORD OF ALL ADDITIONAL DUTIES, TAXES AND OTHER 
CHARGES FOUND UPON LIQUIDATION, AND NOTICE SHALL 
PROMPTLY BE SENT TO THE INTERESTED PARTIES." 
SEC 24. Section 2001 of the TCCP, as amended, is hereby further amended to read as 
follows: 
9 


"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 
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, PART 1 OF THIS CODE, AS AMENDED; PROVIDED 
FINALLY, THAT THESE REQUIREMENTS SHALL EXTEND TO 
REGISTERED 
LOCATORS 
OPERATING 
UNDER 
THE 
CHARTERS 
OF 
THE 
PHILIPPINE 
ECONOMIC 
ZONE 
AUTHORITY, THE SUBIe BAY METROPOLITAN AUTHORITY, 
AND OTHER FREEPORTS AND ECOZONES." 
SEC 25. Section 2002 of the TCCP, as amended, is hereby further amended to read as 
follows: 
"Sec. 2002. Exemptionfrom Duty.-
a. xxx 
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 back to the bonded manufacturing warehouse, 
therefrom to be exported; but this privilege shall not be held to apply to 
implements, machinery, or apparatus to be used in the construction or 
repair of any bonded manufacturing warehouse; Provided however, That 
the materials transferred or conveyed into any bonded manufacturing 
warehouse shall be used in the manufacture of articles for exportation 
within a period of THffiTY (30) DAYS from the date of such transfer or 
conveyance into the bonded manufacturing warehouse, which period may 
for sufficient reasons be further extended for not more than THffiTY (30) 
DAYS by the Commissioner. x x x" 
SEC 26. Section 2005 of the TCCP, as amended, is hereby further amended to read as 
follows: 
"Sec. 2005. Bonded Smelting Warehouses. - The plants of manufacturers 
engaged in smelting or refining, or both, of ores and crude metals, may, 
upon the filing of CASH bonds, be designated as bonded smelting 
warehouses. Ores or crude metals may be removed from the vessel or 
aircraft in which imported, or from a bonded warehouse, into a bonded 
smelting warehouse without the payment of duties thereon, and there 
smelted or refined, or both, together with ores or crude metals of home or 
10 


foreign productions; Provided, That the CASH BOND SHALL BE IN a 
sum equal in amount to the regular duties which would have been payable 
on such ores and crude metals if entered for consumption at the time of 
their importation, and the several charges against such bond shall be 
cancelled upon the exportation or delivery to a bonded manufacturing 
warehouse established under Section twenty hundred and one hereof of a 
quantity of the same kind of metal equal to the quantity of metal 
producible from the smelting or refining, or both, of the dutiable metal 
contained in such ores or crude metals, due allowance being made of the 
smelter wastage as ascertained from time to time by the Commissioner; 
Provided further, That the said metals so producible or any portion 
thereof, may be withdrawn for RE-EXPORTATION UPON PROOF 
THAT THE ORDER TO IMPORT THE SUBJECT METALS HAS 
BEEN CANCELLED AND THAT THE METALS TO BE 
WITHDRAWN DO NOT AMOUNT TO MORE THAN FIFTY 
PERCENT (50%) OF THE TOTAL INVENTORY OF THE 
BONDED SMELTING WAREHOUSE; Provided further, That on the 
arrival of the ores or crude metals at such establishments they shall be 
sampled and assayed according to commercial methods under the 
supervision of proper government officials; Provided further, That all 
labor performed and services rendered pursuant to this Section shall be 
under the supervision of the proper customs official and at the expenses of 
the manufacturer; Provided further, That all regulations for carrying out 
the provisions of this Section shall be prescribed by the Commissioner 
with the approval of the department head; Provided FURTHER, That the 
several charges against the bond of any smelting warehouse established 
under the provisions of this Section may be cancelled upon the exportation 
or transfer to a bonded manufacturing warehouse from any other bonded 
smelting warehouse established under this Section of a quantity of the 
same kind of metal, in excess of that covered by open bonds, equal to the 
amount of metal producible from the smelting or refining, or both, of the 
dutiable metal contained in the imported ores or crude metals, due 
allowance being made of the smelter wastage as ascertained from time to 
time by the Commissioner with the approval of the department head; 
PROVIDED 
FINALLY, 
THAT 
BONDED 
SMELTING 
WAREHOUSES SHALL LIKEWISE BE SUBJECT TO THE 
PROVISIONS UNDER TITLE V, PART I OF THIS CODE, AS 
AMENDED." 
SEC 27. Section 2503 of the TCCP, as amended, is hereby further amended to read as 
follows: 
"Sec. 2503. Undervaluation, Misclassijication, and Misdeclaration in 
.Entry. - When the dutiable value of 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, 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 ten percent (lO%) than should be legally collected based on 
the tariff classification, of when the dutiable weight, measurement or 
quantity of imported articles is found upon examination to exceed by ten 
11 


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 more 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 Sections 2530 AND 3602 of this 
Code; Provided further, That any misdeclared or undeclared imported 
article I items found upon examination shall ipso facto be forfeited in 
favor of the Government to be disposed of pursuant to the provisions of 
this Code." 
SEC 28. Section 2603 of the TCCP, as amended, is hereby further amended to read as 
follows: 
"Sec. 2603. Mode of Sale. - In the absence of any special provision, 
subject to the provisions of Section 260 I above provided, property subject 
to sale by the customs authorities shall be sold at public auction within 
FIFTEEN (15) DAYS after ten (IO) days notice of such sale shall have 
been PUBLISHED IN AT LEAST TWO (2) NEWSPAPERS OF 
GENERAL CmCULATION, POSTED ON THE OFFICIAL 
WEBSITE OF THE BUREAU OF CUSTOMS, AND conspicuously 
posted at the FRONT ENTRANCE OF THE CUSTOMS HOUSE." 
SEC 29. Section 3601 of the TCCP, as amended, is hereby further amended to read as 
follows: 
"Sec. 3601. Unlawful Importation. - Any person who shall fraudulently 
import or bring to the Philippines, or assist in so doing, any article, 
contrary to law or receive, conceal, buy, sell, or in any way facilitate the 
transportation, concealment or sale of such article after importation, 
knowing the same to have been imported contrary to law, shall be guilty 
of smuggling and shall be punished with: 
1. A fine IN AN AMOUNT EQUAL TO THE APPRAISED VALUE 
PLUS FIFTY PERCENT (50%) THEREOF and imprisonment of not 
less than six (6) months and one (I) day nor more than four (4) years, if 
the appraised value, to be detennined in the manner prescribed under this 
Code, including duties and taxes, of the article unlawfully imported 
exceeds FIVE THOUSAND PESOS (P5,000.00) but does not exceed 
Fifty Thousand Pesos (PSO,OOO.OO); 
2. A fine IN AN AMOUNT EQUAL TO THE APPRAISED VALUE 
PLUS FIFTY PERCENT (50%) THEREOF and imprisonment of not 
less than FOUR (4) YEARS and one (I) day nor more than eight (8) 
years, if the appraised value, to be detennined in the manner prescribed 
under this Code, induding duties and taxes, of the articles unlawfully 
imported is more than FIFTY Thousand Pesos (PSO,OOO.OO) but does not 
exceed One Hundred Fifty Thousand Pesos (PI 50,000.00); 
3. A FINE IN THE AMOUNT EQUAL TO THE APPRAISED 
VALUE 
PLUS FIFTY PERCENT (50%) THEREOF AND 
12 


IMPRISONMENT OF NOT LESS THAN EIGHT (8) YEARS AND 
ONE (1) DAY NOR MORE THAN TWELVE (12) 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 
ONE 
HUNDRED 
FIFTY 
THOUSAND 
PESOS 
(PISO,OOO.OO) BUT DOES NOT EXCEED TWO HUNDRED FIFTY 
THOUSAND PESOS (P2S0,000.00); 
4. A FINE IN THE AMOUNT EQUAL TO THE APPRAISED 
VALUE 
PLUS 
FIFTY PERCENT 
(SO%) 
THEREOF AND 
IMPRISONMENT OF NOT LESS THAN TWELVE (12) YEARS 
AND ON€ (1) DAY NOR MORE THAN FIFTEEN (IS) 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 TWO HUNDRED FIFTY THOUSAND 
PESOS (P2S0,000.00) BUT DOES NOT EXCEED FIVE HUNDRED 
THOUSAND PESOS (PSOO,OOO.OO); 
5. A FINE IN THE AMOUNT EQUAL TO THE APPRAISED 
VALUE 
PLUS FIFTY PERCENT (SO%) 
THEREOF AND 
IMPRISONMENT OF NOT LESS THAN FIFTEEN (1S) YEARS 
AND ONE (I) DAY NOR MORE THAN TWENTY (20) YEARS, IF 
THE APPRAISED VALUE, TO BE DETERMINED IN THE 
MANNER PRESCRIBED UNDER THIS CODE, INCLUDING 
DUTIES AND TAXES, OF THE ARTICLE UNLA WFULL Y 
IMPORTED EXCEEDS FIVE HUNDRED THOUSAND PESOS 
(PSOO,OOO.OO) BUT DOES NOT EXCEED ONE MILLION PESOS(PI 
,000,000.00); 
6. A FINE IN THE AMOUNT EQUAL TO THE APPRAISED 
VALUE PLUS FIFTY PERCENT (SO%) THEREOF AND LIFE 
IMPRISONMENT, IF THE APPRAISED VALUE, TO BE 
DETERMINED IN THE MANNER PRESCRIBED UNDER THIS 
CODE, INCLUDING DUTIES AND TAXES, OF THE ARTICLE 
UNLAWFULLY IMPORTED EXCEEDS ONE MILLION PESOS 
(pI,OOO,OOO.OO); 
7. The penalty of prision mayor TO RECLUSION TEMPORAL shall 
be imposed when the crime of serious physical injuries shall have been 
committed and the penalty of reclusion 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 of 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 penalty 
of perpetual disqualification from public office, to vote and participate in 
any public election. 
"XXX.II 
13 


SEC 30. Section 3603 of the TCCP, as amended, is hereby further amended to read as 
follows: 
"Sec. 3603. Failure to 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 fail to report 
all information relative thereto to the Collector as by law required, shall be 
punished by a fine of not LESS THAN ONE HUNDRED THOUSAND 
PESOS (PIOO,OOO.OO) BUT NOT MORE THAN ONE MILLION 
PESOS 
(PI,OOO,OOO.OO) AND IMPRISONMENT OF NOT LESS 
THAN EIGHT (8) YEARS BUT NOT MORE THAN TWELVE (12) 
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." 
SEC 31. Section 3604 of the TCCP, 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 ONE HUNDRED THOUSAND PESOS 
(PlOO,OOO.OO) BUT NOT MORE THAN ONE MILLION PESOS 
(Pl,OOO,OOO.OO) AND IMPRISONMENT OF NOT LESS THAN 
EIGHT (8) YEARS BUT NOT MORE THAN TWELVE (12) YEARS 
and perpetual disqualification to hold public office, to vote and to 
participate in any public office election: 
(a) xxx." 
SEC 32. Section 3605 of the TCCP, 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 anytime 
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 ONE HUNDRED THOUSAND PESOS 
(Pl00,OOO.OO) BUT NOT MORE THAN ONE MILLION PESOS 
(Pl,OOO,OOO.OO) AND IMPRISONMENT OF NOT LESS THAN 
EIGHT (8) YEARS BUT NOT MORE THAN TWELVE (12) 
YEARS." 
SEC 33. Section 3606 of the TCCP, as amended, is hereby further 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 
14 


purporting to be customs seal, fastening or mark to any vessel, vehicle on 
land, sea or air, warehouse, or package, shall be punished with a fine of 
not 
LESS 
THAN 
ONE 
HUNDRED 
THOUSAND 
PESOS 
(PIOO,OOO.OO) BUT NOT MORE THAN ONE MILLION PESOS 
(PI,OOO,OOO.OO) AND IMPRISONMENT OF NOT LESS THAN 
EIGHT (8) YEARS BUT NOT MORE THAN TWELVE (12) 
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 an 
additional penalty of perpetual disqualification to hold public office, to 
vote and to participate in any election." 
SEC 34. Separability Clause. Any portion or provision of this Act that may be declared 
unconstitutional or invalid shall not have the effect of nullifYing other portions and 
provisions hereof as long as such remaining portion or provision can still subsist and be 
given effect in their entirety. 
SEC 35. Repealing Clause. All other laws, decrees, executive orders, proclamations and 
administrative regulations, or parts thereof consistent herewith are hereby repealed or 
modified accordingly. 
SEC 36. Effectivity. This Act shall take effect fifteen (15) days after its publication in at 
least two (2) national papers of general circulation. 
Approved, 
15