1
Republic of the Philippines 
House of Representatives 
Quezon City, Metro Manila 
Nineteenth Congress 
First Regular Session 
HOUSE BILL NO. _____ 
Introduced by Representative Rudys Caesar G. Fariñas I 
EXPLANATORY NOTE 
This bill seeks to improve the operations of the Bureau of Customs (BOC). 
This measure provides, among others:  
That the BOC shall establish and impose a pre-shipment inspection of 
containerized cargoes, relying on risk parameters as determined by the BOC and 
other competent authorities. Additionally, the BOC must maintain an Off-Dock 
Container Yard or Cargo Freight Station (CY/CFS) and Customs Bonded 
Warehouses (CBWS) operating in a port to a number consistent with the 
business requirement. 
The BOC may engage private service providers to conduct public auctions. The 
service provider shall take all BOC's public auctions and activities limited to non-
sovereign and ancillary functions.  
The BOC Commissioner shall issue rules and regulations to govern and regulate 
the conduct of all third parties dealing directly with the BOC concerning the 
importation, exportation, movement, storage, and clearance of goods for and on 
behalf of another person. A committee composed of representatives from the BOC 
and the Departments of Finance, Trade and Industry, Transportation, and the 
National Economic and Development Authority, and other government agencies 
regulating third parties that transact with the bureau, shall prescribe and 
regulate rates and other charges for services rendered by third parties following 
the trade facilitation plans and programs of the country. 
Hence, this representation seeks the passage of this measure.   
RUDYS CAESAR G. FARIÑAS I 
February 21, 2023
1:50 pm
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 2
Republic of the Philippines 
House of Representatives 
Quezon City, Metro Manila 
Nineteenth Congress 
First Regular Session 
HOUSE BILL NO. _____ 
Introduced by Representative Rudys Caesar G. Fariñas I 
AN ACT  
AMENDING SECTIONS  102, 104, 119(b), 201, 209, 307, 402, 407, 423, 
427, 431, 800(g), 802, 806, 900, 1100, 1111, 1117, 1118, 1129, 1131, 
1135, 1138, 1141, 1147(a), 1204, 1226, 1400, 1505 AND 1512;  
REPEALING SEC. 709; AND ADDING SECTION 440-A  ALL UNDER 
REPUBLIC ACT NO. 10863, OTHERWISE KNOWN AS  THE CUSTOMS 
MODERNIZATION AND TARIFF ACT 
Be it enacted by the Senate and House of Representatives of the Philippines 
in Congress assembled: 
SECTION  1.  Section 102 of RA No. 10863 is hereby amended to read as 
1 
follows: 
2 
“SEC. 102. Definition of Terms. - As used in this Act: 
3 
x x x 
4 
[(qq) Tentative Release refers to a case where the assessment is 
5 
disputed and pending review, an importer may put up a cash bond 
6 
equivalent to the duties and taxes due on goods before the importer can 
7 
obtain the release of said goods;] 
8 
[(rr)] (QQ) Transit refers to the customs procedure under which 
9 
goods, in [its] THEIR original form, are transported under customs control 
10 
from one customs  office to another, or to a free zone; 
11 
[(ss)] (RR) Transshipment refers to the customs procedure under 
12 
which goods are transferred under customs control from the importing 
13 
means of transport to the exporting means of transport within the area of 
14 
one customs office, which is the office of both importation and exportation; 
15 
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[(tt)] (SS) Traveler refers to any person who temporarily enters the 
1 
territory of a country in which he or she does not normally reside (non-
2 
resident), or who leaves that territory, and any person who leaves the 
3 
territory of a country in which he or she normally resides (departing 
4 
resident) or who returns to that territory (returning resident); and 
5 
[(uu)] (TT)  Third Party refers to any person who deals directly with 
6 
the Bureau, for and on behalf of another person, WHICH MAY ALSO 
7 
INCLUDE 
IMPORTERS, 
EXPORTERS, 
LOGISTICS 
PROVIDERS, 
8 
CARRIERS, 
AIRLINES, 
SHIPPING 
LINES, 
SHIPPING 
AGENTS, 
9 
FORWARDERS, CONSOLIDATORS, AND WAREHOUSE OPERATORS,  
10 
IF SUCH PERSONS OR ENTITIES TRANSACT WITH THE BUREAU ON 
11 
MATTERS  relating to the importation, exportation, movement or storage 
12 
of goods.” 
13 
 
14 
SEC. 2.  Section 104 of RA No. 10863 is hereby amended to read as follows: 
15 
“SEC. 104. When Duty and Tax are Due on Imported Goods. – Except 
16 
as otherwise provided for in this Act or in other laws, all goods, when 
17 
imported into the Philippines, shall be subject to duty upon importation, 
18 
including goods previously exported from the Philippines. 
19 
Unpaid duties, taxes and other charges shall incur legal interest of 
20 
twenty percent (20%) per annum computed from the date of final 
21 
assessment under Section 429 of this Act OR UPON RECEIPT OF THE 
22 
DEMAND TO PAY DEFICIENCIES IN DUTIES AND TAXES ISSUED BY 
23 
THE COMMISSIONER IN CASE OF POST CLEARANCE AUDIT, when 
24 
payment becomes due and demandable. The legal interest shall likewise 
25 
accrue on any fine or penalty imposed. 
26 
Upon payment of the duties, taxes and other charges, the Bureau 
27 
shall issue the necessary receipt or document as proof of such payment.” 
28 
 
29 
SEC. 3.  Section 119 (b) of RA No. 10863 is hereby amended to read as 
30 
follows: 
31 
“SEC. 119.  Restricted Importation, and Exportation. – Except when 
32 
authorized by law or regulation, the importation and exportation of the 
33 
following restricted goods are prohibited: 
34 
            (a)      x x x 
35 
 (b)    Roulette wheels[,]; gambling outfits[,]; [loaded dice, marked cards,] 
36 
machines, apparatus or mechanical devices used in gambling;  or the 
37 
distribution of money, cigars, cigarettes or other goods when such 
38 
distribution is dependent on chance, including jackpot and pinball 
39 
machines or similar contrivances, or parts thereof; 
40 
   x x x.” 
41 
 
42 
SEC. 4.   Section 201 of RA No. 10863 is hereby amended to read as 
43 
follows: 
44 
 
“SEC. 201.   Powers and Functions of the Commissioner. – The 
45 
Commissioner shall have the following powers and functions: 
46 
(a)  x x x; 
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4
(b)  x x x; 
1 
(c)  x x x; 
2 
(d) Review and decide disputed assessments and other matters 
3 
related thereto, subject to [review by the Secretary of Finance and] the 
4 
exclusive appellate jurisdiction of the Court of Tax Appeals (CTA); 
5 
(e) x x x 
6 
(f) Assignment or reassignment of any customs officer subject to the 
7 
approval of the Secretary of Finance: [Provided, That District Collectors 
8 
and other customs officers that perform assessment functions shall not 
9 
remain in the same area of assignment for more than three (3) years;] 
10 
PROVIDED, THAT THE MOVEMENT OF A CUSTOMS OFFICER WITH 
11 
SALARY GRADE 24 AND ABOVE OR THOSE DESIGNATED AS 
12 
DIVISION 
CHIEF 
SHALL 
BE 
BASED 
ON 
REVENUE 
TARGET 
13 
COLLECTION PERFORMANCE; 
14 
 (g) x x x.” 
15 
 
16 
SEC. 5.   Section 209 of RA No. 10863 is hereby amended to read as 
17 
follows: 
18 
“SEC. 209. Assignment of Customs Officers and Employees to other 
19 
Duties. – The Commissioner[, with the approval of the Secretary of 
20 
Finance,] may assign any employee of the bureau to any port, service, 
21 
division or office of the Bureau within the Bureau's staffing pattern or 
22 
organizational structure, or may assign any employee other duties, 
23 
SUBJECT TO SECTION 201 (F) OF THIS ACT: Provided, That such 
24 
assignment shall not affect the employee's tenure of office nor result in a 
25 
change of status, demotion in rank [and/] or [salary deduction] 
26 
REDUCTION IN SALARY: 
27 
PROVIDED FURTHER, THAT DISTRICT COLLECTORS AND 
28 
OTHER 
CUSTOMS 
OFFICERS 
PERFORMING 
ASSESSMENT 
29 
FUNCTIONS SHALL REMAIN IN THE SAME AREA OF ASSIGNMENT 
30 
FOR A MINIMUM PERIOD OF SIX (6) MONTHS FROM THE DATE OF 
31 
ASSUMPTION, CONSISTENT WITH SECTION 3 OF REPUBLIC ACT NO. 
32 
9335, OTHERWISE KNOWN AS THE ATTRITION ACT OF 2005, AND A 
33 
MAXIMUM PERIOD OF THREE (3) YEARS, EXCEPT FOR DUE CAUSE, 
34 
SUCH AS VIOLATION OF ANTI-GRAFT AND CORRUPT PRACTICES 
35 
AND OTHER RELEVANT LAWS.” 
36 
 
37 
SEC. 6.   Section 307 of RA No. 10863 is hereby amended to read as 
38 
follows: 
39 
 
“SEC. 307. Temporary Storage of Goods. – Subject to the rules 
40 
and regulations to be issued by the Secretary of Finance, the 
41 
Commissioner shall establish a system for temporary storage of imports 
42 
prior to THE LODGMENT OF goods declaration [in cases of abandoned or 
43 
overstaying goods].” 
44 
 
45 
SEC. 7.   Section 402 of RA No. 10863 is hereby amended to read as 
46 
follows: 
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5
 
“SEC. 402. Goods Declaration for Consumption. – All goods 
1 
declaration for consumption shall be cleared through a formal entry 
2 
process except for the following goods which shall be cleared through an 
3 
informal entry process: 
4 
(a) x x x; and 
5 
            (b) Personal and household effects or goods, not in commercial 
6 
quantity [imported in a passenger’s baggage or mail]. 
7 
x x x 
8 
x x x.” 
9 
 
10 
SEC. 8.   Section 407 of RA No. 10863 is hereby amended to read as 
11 
follows: 
12 
 
“SEC. 407. Goods Declaration and Period of Filing. – 
13 
 
 
 
 
 
x x x  
14 
 
 
 
 
 
x x x 
15 
 
Goods declaration [must] SHALL be lodged within fifteen (15) days 
16 
from the date of discharge of the last package from the vessel or aircraft 
17 
AND THE CORRESPONDING DUTIES, TAXES, AND OTHER CHARGES 
18 
SHALL BE PAID UPON LODGEMENT. [The period to file the goods 
19 
declaration may, upon request, be extended on valid grounds for another 
20 
fifteen (15) days: Provided, That the request is made before the expiration 
21 
of the original period within which to file the goods declaration: Provided, 
22 
However, That the] THE period of the lodgement of the goods declaration 
23 
may be adjusted by the Commissioner.” 
24 
 
25 
SEC. 9.   Section 423 (2) of RA No. 10863 is hereby amended to read as 
26 
follows: 
27 
“SEC. 423. Determination of the De Minimis Value. – No duties and 
28 
taxes shall be collected on goods with an FOB or FCA value of ten thousand 
29 
pesos (₱10,000.00) or below. The Secretary of Finance [shall adjust] MAY 
30 
INCREASE OR DECREASE the de minimis value as provided herein, every 
31 
three (3) years after the effectivity of this Act. [The value herein stated shall 
32 
be adjusted to its present value using the CPI, as published by the PSA].” 
33 
 
34 
SEC. 10.   Section 427 of RA No. 10863 is hereby amended to read as 
35 
follows: 
36 
“SEC. 427.   Readjustment of Appraisal, Classification or Return. – 
37 
Such appraisal, classification or return, as finally passed upon and 
38 
approved or modified by the District Collector, shall not be altered 
39 
or modified in any manner, except:   
 
 
 
 
     
40 
  
41 
(1) x x x 
42 
            (2) Within fifteen (15) days after such payment, upon request for 
43 
reappraisal or reclassification addressed to the Commissioner by the 
44 
District Collector, if the appraisal or classification is [deemed to be low] 
45 
INCORRECT; 
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6
(3) x x x;  
1 
(4) x x x.” 
2 
 
3 
SEC. 11.  Section 431 of RA No. 10863 is hereby amended to read as 
4 
follows: 
5 
 
“SEC. 431. Release of Goods after Payment of Duties and Taxes. – 
6 
Goods declared shall be released when duties and taxes and other [lawful] 
7 
charges                          AS FINALLY ASSESSED BY THE BUREAU have 
8 
been paid or secured and all the pertinent laws, rules and regulations have 
9 
been complied with. 
10 
 
 
 
 
x x x.” 
11 
 
12 
SEC. 12.  A new Section 440-A in RA No. 10863 is hereby inserted to read 
13 
as follows: 
14 
SEC. 440-A.  PRE-SHIPMENT INSPECTION. – THE BUREAU 
15 
SHALL ESTABLISH AND IMPLEMENT A PRE-SHIPMENT INSPECTION 
16 
OF CONTAINERIZED CARGOES: PROVIDED, THAT THE PRE-
17 
SHIPMENT INSPECTION SHALL DEPEND ON RISK PARAMETERS AS  
18 
DETERMINED 
BY 
THE 
BUREAU 
AND 
OTHER 
COMPETENT 
19 
AUTHORITIES: 
PROVIDED 
FURTHER, 
THAT 
PRE-SHIPMENT 
20 
INSPECTION SHALL NOT BE USED FOR CLASSIFICATION AND 
21 
VALUATION PURPOSES PURSUANT TO SECTION  5  OF THE WORLD 
22 
TRADE 
ORGANIZATION 
(WTO) 
AGREEMENT 
ON 
TRADE 
23 
FACILITATION.  
24 
THE RULES AND REGULATIONS SHALL BE ISSUED BY THE 
25 
BUREAU UPON CONSULTATION WITH THE CONCERNED SECTORS 
26 
AND  APPROVED  BY  THE SECRETARY OF FINANCE. 
27 
            
28 
 SEC.  13.   Section 709 of RA No. 10863 is hereby repealed. 
29 
 
30 
SEC.  14. Section 800 (g) of RA No. 10863 is hereby amended to read as 
31 
follows: 
32 
“SEC. 800. Conditionally Tax and/or Duty-Exempt Importation. – x x 
33 
x  
34 
(a)  x x x 
35 
(b)  x x x 
36 
(c)  x x x 
37 
(d)  x x x 
38 
(e)  x x x 
39 
(f )  x x x 
40 
 
(g) [Residents of the Philippines,] OFWs or other Filipinos while 
41 
residing abroad or upon their return to the Philippines shall be allowed to 
42 
bring in or send to their families or relatives in the Philippines balikbayan 
43 
boxes which shall be exempt from applicable duties and taxes imposed 
44 


 
 
 
7
under the NIRC of 1997, as amended: Provided, That balikbayan boxes 
1 
shall contain personal and household effects only and shall neither be in 
2 
commercial quantities nor intended for barter, sale or for hire and that the 
3 
FCA value of which shall not exceed one hundred fifty thousand pesos 
4 
(₱150,000.00); Provided, Further, That every three (3) years after the 
5 
effectivity of this Act, the Secretary of Finance shall adjust the amount 
6 
herein stated to its present value using the CPI as published by the PSA;  
7 
Provided, Finally, That [residents of the Philippines,] OFWs or other 
8 
Filipinos  WHILE RESIDING ABROAD  can only avail of this privilege up 
9 
to [three times] A MAXIMUM  FCA VALUE OF THREE HUNDRED 
10 
THOUSAND PESOS (PHP300,000.00) in a calendar year.  Any amount in 
11 
excess of the allowable non-dutiable value shall be subject to the 
12 
applicable duties and taxes; 
13 
                 1)  x x x.” 
14 
 
15 
SEC. 15.   Section 802 of RA No. 10863 is hereby amended to read as 
16 
follows: 
17 
 
“SEC. 802. Types of Customs Bonded Warehouses (CBWs). – x x 
18 
x. 
19 
Manufacturing customs bonded warehouse may be of the following types; 
20 
(a) miscellaneous customs bonded warehouse; (b) customs common 
21 
bonded warehouse; [or] (c) industry-specific bonded warehouse; OR (D) 
22 
GARMENTS AND TEXTILES BONDED WAREHOUSE. 
23 
                                              x x x.” 
24 
 
25 
SEC. 16.   Section 806 of RA No. 10863 is hereby amended to read as 
26 
follows: 
27 
 
“SEC. 806. Customs Control Over CBWs and CFWs. – The Bureau 
28 
shall, for customs purposes, exercise control over, direct and manage 
29 
CBWs and CFWs pursuant to Section 303 of this Act and [likewise] over 
30 
the goods thereat pursuant to Section 301 of this Act.[:] THE BUREAU 
31 
SHALL MAINTAIN THE NUMBER OF OFF-DOCK CONTAINER YARD OR 
32 
CONTAINER FREIGHT STATION (CY/CFS) AND CBWS OPERATING IN 
33 
A PORT TO A NUMBER CONSISTENT WITH THE  BUSINESS  
34 
REQUIREMENT OF THE PORT. THE UTILIZATION RATE, SERVICES 
35 
PROVIDED, AND FACILITIES OF THE EXISTING OFF-DOCK CY/CFS 
36 
SHALL BE CONSIDERED IN THE  APPLICATION AND RENEWAL FOR 
37 
AUTHORITY TO OPERATE AN OFF-DOCK CY/CFS: Provided, That the 
38 
Bureau shall not be liable for any loss or damage of the goods stored for 
39 
safekeeping in any CBW, CFW, yard or premises.” 
40 
 
41 
SEC. 17.   Section 900 of RA No. 10863 is hereby amended to read as 
42 
follows: 
43 
“SEC. 900. Basis of Duty Drawback. (A)  x x x 
44 
(B) x x x 
45 
(C) x x x 
46 
 
(1) x x x 
47 


 
 
 
8
 
(2) x x x 
1 
 
(3) x x x 
2 
(4) The exportation shall be made within one (1) year after 
3 
the importation of materials used, and THE claim of refund 
4 
or tax  
5 
credit shall be filed within [six (6) months] ONE (1) YEAR  
6 
from the date of exportation; and 
7 
(5)   x x x” 
8 
 
9 
SEC. 18.   Section 1100 of RA No. 10863 is hereby amended to read as 
10 
follows: 
11 
 
“SEC. 1100. Classification Ruling. – An importer or exporter may 
12 
file a written application for an advance ruling on the tariff classification 
13 
of goods with the Commission. The Commission shall render a ruling 
14 
within thirty (30) days from receipt of a properly documented application. 
15 
 
When a declared tariff classification of goods, WHICH IS not THE 
16 
subject of a pending application for advance ruling, is in dispute AND THE 
17 
DISTRICT COLLECTOR DETERMINES THAT IT INVOLVES A HIGHLY 
18 
TECHNICAL QUESTION OF TARIFF CLASSIFICATION, [the importer, 
19 
exporter, or] the Bureau shall submit the matter to the Commission for a 
20 
ruling, without prejudice to the application of Section 1106 of this Act on 
21 
“protest”: Provided, That such rulings of the Commission on commodity 
22 
classification shall be binding upon the Bureau, unless the Secretary of 
23 
Finance [shall] rules otherwise. 
24 
FOR THIS PURPOSE, TARIFF CLASSIFICATION SHALL BE CONSIDERED 
25 
AS A HIGHLY TECHNICAL QUESTION WHEN THE GOODS ARE CLASSIFIABLE 
26 
UNDER MORE THAN ONE ASEAN HARMONIZED TARIFF NOMENCLATURE 
27 
(AHTN) CHAPTER, HEADING, OR SUBHEADING; OR THE PRODUCT 
28 
DESCRIPTION IS NOT PROVIDED UNDER  ANY AHTN HEADING OR 
29 
SUBHEADING.” 
30 
 
31 
SEC. 19.   Section 1111 of RA No. 10863 is hereby amended to read as 
32 
follows: 
33 
 
“SEC. 1111. Alert Orders. – Alert orders are written orders issued 
34 
by customs officers as authorized by the Commissioner on the basis of 
35 
derogatory information regarding possible noncompliance with this Act. 
36 
An alert order will result in the suspension of the processing of the goods 
37 
declaration and the conduct of [physical or nonintrusive] inspection of the 
38 
goods within forty-eight (48) hours from issuance of the order: PROVIDED, 
39 
THAT THE TERMINAL OPERATORS SHALL ENSURE THAT THE 
40 
INSPECTION IS SCHEDULED AND CONDUCTED WITHIN THE SAID 
41 
PERIOD. Within forty-eight (48) hours or, in the case of perishable goods, 
42 
within twenty-four (24) hours from inspection, the alerting officer shall 
43 
recommend the continuance of processing of goods in case of a negative 
44 
finding, or issuance of a warrant of seizure and detention if a discrepancy 
45 
between the declaration and actual goods is found. The Bureau's 
46 
information system shall immediately reflect the imposition or lifting of an 
47 
alert order. 
48 
x x x 
49 


 
 
 
9
 
 
 
(a) x x x 
1 
 
 
 
(b) x x x 
2 
 
 
 
(c) x x x  
3 
 
 
 
(d) x x x 
4 
 
 
 
 
 
 
x  x  x 
5 
An alert order may be issued [only after lodgement of the goods 
6 
declaration and]  prior to the release of goods from customs custody. Under 
7 
no circumstances shall the suspension of the processing of goods 
8 
declaration be allowed except through an alert order issued by an 
9 
authorized customs officer. 
10 
x  x  x.” 
11 
 
12 
SEC. 20.   Section 1117 of RA No. 10863 is hereby amended to read as 
13 
follows: 
14 
“SEC. 1117.  Warrant of  Seizure or Order of Release. – The District 
15 
Collector shall have the authority to issue a warrant of seizure of the goods 
16 
upon determination of the existence of probable cause and in case of 
17 
nonexistence thereof, [the issuance of the order of release] RECOMMEND 
18 
THE LIFTING OF THE ALERT ORDER.  In case the District Collector 
19 
[issued an order of release,] RECOMMENDS THE LIFTING OF THE 
20 
ALERT ORDER, the District Collector shall immediately transmit all the 
21 
records to the Commissioner, who shall automatically review THE 
22 
LIFTING OF THE ALERT ORDER within forty-eight (48) hours, or IN 
23 
CASE OF PERISHABLE GOODS, within twenty-four (24) hours. [, in case 
24 
of perishable goods.] When no decision is made by the Commissioner 
25 
within the prescribed period, the imported goods shall be deemed lifted. 
26 
The ORDER TO RELEASE [lifting of the alert order] shall be issued 
27 
by the District Collector only upon the affirmation of [the] THIS decision 
28 
[of the District Collector] by the Commissioner, or after the lapse of the 
29 
period of review by the Commissioner, whichever is earlier.” 
30 
 
31 
SEC. 21.   Section 1118 of RA No. 10863 is hereby amended to read as 
32 
follows: 
33 
“SEC. 
1118. 
 Sale 
of 
Perishable 
Goods 
During 
Forfeiture 
34 
Proceedings. – [Upon motion of the importer of the perishable goods, the] 
35 
PERISHABLE goods may be sold at a public auction during the pendency 
36 
of the forfeiture proceedings. The proceeds of the auction shall be held in 
37 
escrow until the final resolution of the proceedings.” 
38 
 
39 
SEC. 22.   Section 1129 of RA No. 10863 is hereby amended to read as 
40 
follows: 
41 
 
“SEC. 1129.  Abandonment, Kinds and Effects of. – Imported goods 
42 
are deemed abandoned under any of the following circumstances: 
43 
(a) x x x; or 
44 
 
(b) When the owner, importer, consignee, or interested party after 
45 
due notice, fails to [file] LODGE the goods declaration AND PAY THE 
46 


 
 
 
10
DUTIES AND TAXES BASED ON SELF-ASSESSMENT   within the 
1 
prescribed period in Section 407 of this Act: Provided, That the term goods 
2 
declaration shall include provisional or incomplete goods declaration 
3 
deemed valid by the Bureau as provided in Section 403 of this Act. For this 
4 
purpose, it is the duty of the District Collector to post a list of all packages 
5 
discharged and their consignees, whether electronically or physically in 
6 
the District Office, or send a notice to the consignee within five (5) days 
7 
from the date of discharge; or 
8 
 
(c) Having [filed] LODGED such goods declaration AND PAID THE 
9 
DUTIES AND TAXES BASED ON SELF-ASSESSMENT, the owner, 
10 
importer, consignee or interested party after due notice, fails to pay the 
11 
[assessed] READJUSTED duties, taxes and other charges thereon, or, if 
12 
the OWNER, IMPORTER, CONSIGNEE, OR INTERESTED PARTY OF 
13 
THE regulated goods [failed] FAILS  to comply with Section 117 of this 
14 
Act[,]  within fifteen (15) days from the date of final assessment: Provided, 
15 
That if such regulated goods are the subject of an alert order and the 
16 
assessed duties, taxes and other charges thereof are not paid within fifteen 
17 
(15) days from notification by the Bureau of the resolution of the alert 
18 
order, the same shall also be deemed abandoned; or 
19 
 
[(d) Having paid the assessed duties, taxes and other charges, the 
20 
owner, importer or consignee or interested party after due notice, fails to 
21 
claim the goods within thirty (30) days from payment. For this purpose, 
22 
the arrastre or warehouse operator shall report the unclaimed goods to the 
23 
District Collector for disposition pursuant to the provisions of this Act; or] 
24 
 
[(e)] (D) When the owner or importer fails to claim goods in customs 
25 
bonded warehouses within the prescribed period. 
26 
x x x.” 
27 
SEC. 23.   Section 1131 of RA No. 10863 is hereby amended to read as 
28 
follows: 
29 
“SEC. 1131. Authority of the Commissioner to [Make] Compromise. – 
30 
[Subject to the approval of the Secretary of Finance,] The Commissioner 
31 
may compromise any CIVIL OR administrative case arising under this Act 
32 
involving the imposition of fines and surcharges, including those arising 
33 
from the conduct of a post clearance audit, unless otherwise specified by 
34 
law. 
35 
Cases involving forfeiture proceedings shall, however, not be subject 
36 
to any compromise UNLESS APPROVED BY THE COURT, ON APPEAL. 
37 
PROVIDED, THAT ANY COMPROMISE INVOLVING THE IMPOSITION 
38 
OF FINES AND SURCHARGES AMOUNTING TO TEN MILLION PESOS 
39 
(PHP10,000,000.00) AND ABOVE SHALL BE SUBJECT TO THE 
40 
APPROVAL OF THE SECRETARY OF FINANCE.” 
41 
 
42 
SEC. 24.   Section 1135 of RA No. 10863 is hereby amended to read as 
43 
follows: 
44 
 
“SEC. 1135.  Supervision and Control over Criminal and Civil 
45 
Proceedings. – Civil and criminal actions and proceedings instituted on 
46 
behalf of the Government under the authority of this Act or other laws 
47 
enforced by the Bureau shall be brought in the name of the [g]Government 
48 
of the Philippines  and shall be prosecuted and handled by the Bureau 
49 
with the assistance of the Department of Justice (DOJ) OR OFFICE OF 
50 


 
 
 
11
THE SOLICITOR GENERAL (OSG): Provided, That the determination of 
1 
the existence of probable cause and the subsequent filing of any criminal 
2 
[or civil] case with the proper court against violators of this Act shall 
3 
exclusively belong to the DOJ:  Provided, however, That no civil or criminal 
4 
action for the recovery of duties or the enforcement of any fine, penalty, 
5 
forfeiture [under] OR ANY VIOLATION OF  this Act shall be filed in court 
6 
without the approval of the Commissioner.” 
7 
 
8 
SEC. 25.   Section 1138 of RA No. 10863 is hereby amended to read as 
9 
follows: 
10 
 
“SEC. 1138.   Fraud Investigation and Prosecution. – No criminal 
11 
case for violation of this [title] ACT shall be instituted without the approval 
12 
of the Commissioner. [pursuant to the provisions of this Act.] 
13 
x x x.” 
14 
 
15 
SEC. 26.   Section 1141 of RA No. 10863 is hereby amended to read as 
16 
follows: 
17 
“SEC. 1141. Mode of Disposition. – x x x. 
18 
x x x. 
19 
THE  BUREAU MAY ENGAGE  PRIVATE SERVICE PROVIDERS 
20 
TO CONDUCT PUBLIC AUCTIONS PURSUANT TO SECTION 1513 OF 
21 
THIS ACT:  PROVIDED, THAT THE SERVICE PROVIDER ENGAGED 
22 
SHALL BE RESPONSIBLE FOR UNDERTAKING ALL THE PUBLIC 
23 
AUCTIONS 
OF 
THE 
BUREAU: 
PROVIDED 
FURTHER, 
THAT 
24 
ACTIVITIES OF THE SERVICE PROVIDER SHALL BE LIMITED TO 
25 
NON-SOVEREIGN AND ANCILLARY FUNCTIONS OF THE BUREAU: 
26 
PROVIDED 
FINALLY, 
THAT 
THE 
BUREAU 
SHALL 
RETAIN 
27 
JURISDICTIONAL CONTROL AND SUPERVISION OVER THESE GOODS 
28 
AS WELL AS THE OPERATIONS OF THE SERVICE PROVIDER SO 
29 
CONTRACTED.” 
30 
 
31 
SEC. 27.   Section 1147 (a) of RA No. 10863 is hereby amended to read as 
32 
follows: 
33 
 
“SEC. 1147.  Disposition of Restricted Goods. – Restricted goods 
34 
as described in Section 119 of this Act shall be disposed as follows: 
35 
(a) Dynamite, gunpowder, ammunitions and other explosives, 
36 
firearms and weapons of war, and parts thereof shall be turned over 
37 
to the [AFP] PHILIPPINE NATIONAL POLICE (PNP); 
38 
(b) x x x; 
39 
(c) x x x; 
40 
(d) x x x; 
41 
(e) x x x;  
42 
(f) x x x.” 
43 
 
44 


 
 
 
12
SEC. 28.   Section 1204 of RA No. 10863 is hereby amended to read as 
1 
follows:  
2 
“SEC. 1204.   Manifest Required of Vessel from Foreign Port. – Every    
3 
vessel from a foreign port must have on board a complete manifest of all 
4 
its cargoes. 
5 
All cargoes intended to be landed at a port in the Philippines must 
6 
be described in separate manifests for each port of call. Each manifest 
7 
shall include the port of departure and the port of delivery with the marks, 
8 
numbers, quantity, and description of the packages and the ULTIMATE 
9 
consignees COVERED BY THE BILL OF LADING OR AIRWAY BILL.   
10 
Every vessel from a foreign port must have on board complete manifests 
11 
of passengers and baggage, in the prescribed form, setting forth the 
12 
destination and all particulars required by immigration laws. Every vessel 
13 
shall present to the proper customs officers upon arrival in ports of the 
14 
Philippines a complete list of all sea stores then on board.  If the vessel 
15 
does not carry [cargo] CARGOES or passengers, the manifest must show 
16 
that no cargo or passenger is carried from the port of departure to the port 
17 
of destination in the Philippines. 
18 
IN ADDITION, A VESSEL OR AIRCRAFT FROM A FOREIGN PORT 
19 
MUST DECLARE IN THE INWARD CARGO MANIFEST, BILL OF LADING 
20 
OR AIRWAY BILL THE VALUE OF THE ARTICLES OR GOODS AS THEY 
21 
APPEAR IN THE COMMERCIAL INVOICE OR LETTER OF CREDIT, OR 
22 
BOTH.   THE VALUE STATED THEREIN MAY BE THE BASIS FOR RISK 
23 
ASSESSMENT.  
24 
A true and complete copy of the cargo manifest shall be 
25 
electronically sent in advance by the shipping company, NVOCC, freight 
26 
forwarder, cargo consolidator, or their agents within the cut-off period as 
27 
may be determined by the Bureau before the arrival of the carrying vessel 
28 
at the port of entry.  
29 
Upon arrival of the carrying vessel, the shipping company, NVOCC, 
30 
freight forwarder, cargo consolidator, or their agents shall provide two (2) 
31 
hard copies of the cargo manifest to the Bureau in case the port of entry 
32 
is either the Port of Manila (PoM) or the Manila International Container 
33 
Port (MICP), and one (1) copy in the case of the other ports of entry. 
34 
A cargo manifest shall in no case be changed or altered after entry 
35 
of vessel, except by means of an amendment, under oath, by the master, 
36 
consignee or agent thereof, which shall be attached to the original 
37 
manifest: Provided, That after the invoice and/or goods declaration 
38 
covering an importation have been received and recorded in the office of 
39 
the appraiser, no amendment of the manifest shall be allowed, except 
40 
when it is obvious that a clerical error or any other discrepancy has been 
41 
committed in the preparation of the manifest, without any fraudulent 
42 
intent, the discovery of which would not have been made until after 
43 
examination of the importation has been completed.” 
44 
 
45 
SEC. 29.   Section 1226 of RA No. 10863 is hereby amended to read as 
46 
follows: 
47 
“SEC. 1226. Supervision and Regulation of Third Parties. – Third 
48 
parties transacting with the Bureau on behalf of importers and consignees 
49 
shall be treated equally as true importers or consignees[.Third parties 
50 


 
 
 
13
transacting with the Bureau] AND shall LIKEWISE be liable for acts 
1 
committed in violation of this Act and related laws. 
2 
A. [Upon the recommendation of the] THE Commissioner, WITH THE 
3 
APPROVAL OF the Secretary of Finance, shall issue rules and 
4 
regulations to govern and regulate the conduct of all third parties 
5 
dealing directly with the Bureau in relation to the importation, 
6 
exportation, movement, storage and clearance of goods for and on 
7 
behalf of another person.   The rules and regulations shall provide for 
8 
specific conditions when third parties may or may not directly transact 
9 
with the Bureau WHICH SHALL INCLUDE A RISK MANAGEMENT 
10 
SYSTEM FOR THIRD PARTIES, TAKING INTO ACCOUNT THEIR 
11 
CAPITALIZATION, VOLUME OF TRANSACTIONS, TRACK RECORD, 
12 
AND ANY OTHER FACTOR AFFECTING THEIR CAPABILITY TO 
13 
IMPORT, EXPORT, MOVE, STORE OR CLEAR GOODS. [shall provide 
14 
a written notice in case such third parties are, for valid reasons, barred 
15 
from transacting with the Bureau]  
16 
B. THE BUREAU SHALL CREATE A COMMITTEE COMPOSED OF 
17 
REPRESENTATIVES FROM THE BUREAU OF CUSTOMS AND THE 
18 
DEPARTMENTS 
OF 
FINANCE, 
TRADE 
AND 
INDUSTRY, 
19 
TRANSPORTATION, 
AND 
THE 
NATIONAL 
ECONOMIC 
AND 
20 
DEVELOPMENT 
AUTHORITY, 
AND 
OTHER 
GOVERNMENT 
21 
AGENCIES REGULATING THIRD PARTIES THAT TRANSACT WITH 
22 
THE BUREAU. THE COMMITTEE, WHICH SHALL BE CHAIRED BY 
23 
THE SECRETARY OF  FINANCE,  SHALL PRESCRIBE AND 
24 
REGULATE RATES AND OTHER CHARGES FOR THE SERVICES 
25 
RENDERED BY THESE THIRD PARTIES IN ACCORDANCE WITH 
26 
THE TRADE FACILITATION PLANS AND PROGRAMS OF THE 
27 
COUNTRY.  
28 
Third party is defined under Section 102 [(uu)] (TT) of this Act. [For 
29 
purposes of this section, third parties may also refer to logistics providers, 
30 
importers, exporters, carriers, airlines, shipping lines, shipping agents, 
31 
forwarders, consolidators, port and terminal operators, and warehouse 
32 
operators, if such persons or entities transacted with the Bureau.]” 
33 
 
34 
SEC. 30.   Section 1400 of RA No. 10863 is hereby amended to read as 
35 
follows: 
36 
“SEC. 1400.  Misdeclaration, Misclassification, Undervaluation in 
37 
Goods Declaration. – Misdeclaration as to quantity, quality, description, 
38 
weight, or measurement of the goods, or misclassification through 
39 
insufficient or wrong description of the goods or use of wrong tariff heading 
40 
resulting to a discrepancy in duty and tax to be paid between   what is 
41 
legally determined upon assessment and what is declared, shall be subject 
42 
to a surcharge equivalent to two hundred fifty percent (250%) of the duty 
43 
and tax due. No surcharge shall be imposed when the discrepancy in duty 
44 
AND TAX is less than ten percent (10%), or when the declared tariff 
45 
heading is rejected in a formal customs dispute settlement process 
46 
involving [difficult or]   A highly technical question of tariff classification, 
47 
or when the tariff classification declaration relied on an official government 
48 
ruling.” 
49 
 
 
 
 
x  x  x 
50 
 
51 


 
 
 
14
SEC. 31.   Section 1505 of RA No. 10863 is hereby amended to read as 
1 
follows: 
2 
“SEC. 1505.  Authority of Official to Administer Oaths and Take 
3 
Testimony. – The Commissioner,  District  Collectors and their deputies, 
4 
and other customs officers especially deputized by the COMMISSIONER 
5 
OR THE District Collector shall have authority to administer oaths and 
6 
take testimony in connection with any matter within the jurisdiction of the 
7 
Bureau and, in connection therewith, ISSUE SUBPOENA DUCES TECUM 
8 
REQUIRING THE PRODUCTION [may require the production] of  relevant 
9 
papers, documents, books and records in accordance with law.” 
10 
 
11 
SEC. 32.  Section 1512 of RA No. 10863 is hereby amended to read as 
12 
follows: 
13 
“SEC. 1512. Reward to Persons Instrumental in the Actual Collection 
14 
of Additional Revenues Arising from the Discovery of Violations of this Act. – 
15 
A cash reward equivalent to twenty percent (20%) OR TEN MILLION 
16 
PESOS                     (PHP 10,000,000.00), WHICHEVER IS LOWER, of 
17 
the actual proceeds from the sale of smuggled goods and confiscated goods 
18 
or actual collection of additional revenues shall be given to the [customs 
19 
and] non-customs informers or whistleblowers  who are instrumental in 
20 
the collection of additional revenues arising from the discovery of violations 
21 
of this Act in accordance with the rules and regulations to be issued by 
22 
the Secretary of Finance:  PROVIDED, THAT THE NON-CUSTOMS 
23 
INFORMERS OR WHISTLEBLOWERS ARE NOT RELATED TO ANY 
24 
CUSTOMS OFFICER OR EMPLOYEE WITHIN THE FOURTH CIVIL 
25 
DEGREE OF CONSANGUINITY OR AFFINITY.” 
26 
 
27 
SEC.  33.   Implementing Rules and Regulations. – The Secretary of Finance 
28 
shall, upon the recommendation of the Commissioner of Customs, promulgate 
29 
the necessary rules and regulations for the effective implementation of this Act.  
30 
 
31 
SEC. 34. Separability Clause. – If any provision of this Act shall be held 
32 
unconstitutional or invalid, the other provisions not otherwise affected shall 
33 
remain in full force and effect. 
34 
 
35 
SEC. 35.  Repealing Clause. – All laws, decrees, executive orders, rules and 
36 
regulations or parts thereof which are contrary to or inconsistent with this Act 
37 
are hereby repealed, amended or modified accordingly. 
38 
 
39 
SEC. 36. Effectivity. – This Act shall take effect fifteen (15) days after its    
40 
publication either in the Official Gazette or in a newspaper of general circulation. 
41 
Approved,