Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

"3245

House Bill No.

Introduced by REP. LEX ANTHONY CRIS A, COLADA

EXPLANATORY NOTE

Republic Act No. 10863 otherwise known as the Customs Modernization and
Tariff Act (CMTA)was enacted barely three (3) years. Despite the passage of such
important piece of legislation that aimed to modernize, simplify, harmonize, make the
customs processes transparent, and enhance the trade facilitation in the Philippines,
CMTA still needs to be improved particularly on the other third parties involved in the
entire customs process.

This bill has the following key features;

A.

Providing for the classification system for third parties which shall be used in
the assessment of the capabilities to import, export, move store or clear
goods;

Requiring for the acquisition of the services of a private auction house to
undertake public auctions to minimize collusion between employees of the
Bureau and favored bidders to the disadvantage of the government;

. Establishing the pre-shipment inspection of cargoes dependent upon risk-

based parameters as determined by the Bureau and other competent
authorities;

. Requiring common carriers to declare the value of imported goods from a

foreign port in shipping and airline documents, and prohibit fraudulent
alteration of the manifest, bill of lading, airway bill and similar documents;
Ensuring effective control and management of Customs Bonded Warehouses
(CBW) and Customs Freight Warehouses (CFW) based on appropriate
business requirements;

. Defining the authority of district collectors in processing tariff classification

cases;
Simplifying the issuance and conduct of alert orders and warrants of seizure;
and



8. Requiring the presentation of certain documents by vessels coming from
foreign ports in order to facilitate trade security and avoid smuggling.

In view of the foregoing, passage of this bill is caregtfonsit

LEX ANTHONY CRIS A. COLADA
Party-list, AAMBIS-OWA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manita

NINETEENTH CONGRESS
First Regular Session

Z
HOUSE BILL NO. 3245

introduced by Representative Lex Anthony Cris A. Colada

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
DER REPUBLIC ACT NO. 10863, OTHERWISE KNOWN AS THE
CUSTOMS MODERNIZATION AND TARIFF ACT

440-A ALL

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

Congress assembled:
SECTION 1. Section 102 of RA No. 10863 is hereby amended to read as follows:
“SEC. 102. Definition of Terms. - As used in this Act:

XXX

ligq) Tentative Release refers to a case where the assessment is disputed and

pending review, an importer may put up a cash bond equivalent to the duties and taxes

due on goods before the importer can obtain the release of said goods:]
[0] (QQ) Transit refers to the customs procedure under which goods. in [its]

inal form, are transported under customs control from one customs 9 office to

another, or to a free zone;


{{ss)] (RR) Transshipment refers to the customs procedure under which goods

are transferred under customs control from the importing means of transport to
the

exporting means of transport within the area of one customs office, which is
the office 13 of both importation and exportation:
[ti] (SS) Traveler refers to any person who temporarily enters the territory of

a country in which he or she does not normally reside (non-resident), or who
leaves

that territory, and any person who leaves the territory of a country in which he
or she

normally resides (departing resident) or who returns to that territory (returning
18 resident); and
K(uu)] (TT) Third Party refers to any person who deals directly with the

Bureau, for and on behalf of another person, WHICH MAY ALSO
INCLUDE

IMPORTERS, EXPORTERS, LOGISTICS PROVIDE!
CARRIERS,

AIRLINES, SHIPPING LINES, SHIPPING AGENTS, FORWARDERS,
CONSOLIDATORS, AND WAREHOUSE OPERATORS, IF SUCH
PERSONS 1 OR ENTITIES TRANSACT WITH THE BUREAU ON
MATTERS relating to

the importation, exportation, movement or storage of goods.

SEC. 2. Section 104 of RA No. 10863 is hereby amended to read as follows:

“SEC. 104, When Duty and Tax are Due on Imported Goods. ~ Except as

otherwise provided for in this Act or in other laws, all goods, when imported
into the

Philippines, shall be subject to duty upon importation, including goods

previously 7 exported from the Philippines:


Unpaid duties, taxes and other charges shail incur legal interest of twenty

percent (20%) per annum computed from the date of final assessment under
Scetion

429 of this Act OR UPON RECEIPT OF THE DEMAND TO PAY

DEFICIENCIES IN DUTIES — AND TAXES ISSUED
BY THE

COMMISSIONER IN CASE OF POST CLEARANCE AUDIT, when
payment

becomes due and demandable. The legal interest shall likewise accrue on any
fine or

penalty imposed
Upon payment of the duties, taxes and other charges, the Bureau shall issue
the necessary receipt or document as proof of such payment.

SEC. 3. Section 119 (b) of RA No. 10863 is hereby amended to read as
follows:

“SEC. 119. Restricted Importation, and Exportation — Except when

authorized by law or regulation, the importation and exportation of the
following

res

ted goods are prohibited:
(a) xxx

(b) Roulette wheels|,}; gambling outfits],J; [loaded dice, marked cards,]

machines, 23 apparatus or mechanical devices used in gambling; or the
distribution of money,
cigars, cigarettes or other goods when such distribution is dependent on chance,

including jackpot and pinball machines or similar contrivances, or parts thereof,


SEC. 4. Section 201 of RA No. 10863 is hereby amended to read as follows:
“SEC. 201. Powers and Functions of the Commissioner.— The

Commissioner shall have the following powers and functions:

{a) XX XD
(b) xxx:
{c) XXX

(d) Review and decide disputed assessments and other matters

related thereto, subject to [review by the Sect of Finance and] the

exclusive appellate jurisdiction of the Court of Tax Appeals (CTA):
{e) XXX
() Assignment or reassignment of any customs officer subject to
the approval of the Secretary of Finance: [Provided, That District Collectors
and other customs officers that perform assessment functions shall not remain
in the same area of assignment for more than three (3) years;] PROVIDED,
THAT THE MOVEMENT OF A CUSTOMS OFFICER WITH SALARY
GRADE 24 AND ABOVE OR
THOSE DESIGNATED AS DIVISION CHIEF SHALL BE BASED ON

T COLLECTION PERFORMANCE;

. Section 209 of RA No. 10863 is hereby amended to read as follows:
“SEC. 209. Assignment of Customs Officers and Employees to other Duties.
‘The Commissioner{, with the approval of the Secretary of Finance,] may assign any
employee of the bureau to any port, service, division or office of the Bureau within the
Bureau's staffing patter or organizational structure, or may assign any employee

other duties, SUBJECT TO SECTION 201 (F) OF THIS ACT: Provided, That


such assignment shall not affect the employee's tenure of office nor result in a change

of status. demotion in rank Jand’] or [salary deduction] REDUCTION IN SALARY:

PROVIDED FURTHER, THAT DISTRICT COLLECTORS AND.

OTHER CUSTOMS OFFICERS PERFORMING ASSESSMENT FUNCTIONS

SHALL REMAIN IN THE SAME AREA OF ASSIGNMENT FOR A
MINIMUM PERIOD OF SIX (6) MONTHS FROM THE DATE OF

ASSUMPTION, CONSISTENT WITH SECTION 3 OF REPUBLIC ACT NO.

S THE ATTRITION ACT OF 2005, AND A

9335, OTHERWISE KNOW
MAXIMUM PERIOD OF THREE (3) YEARS, EXCEPT FOR DUE CAUSE,
SUCH AS VIOLATION OF ANTI-GRAFT AND CORRUPT PRACTICES
AND OTHER RELEVANT LAWS.”

SEC. 6. Section 307 of RA No. 10863 is hereby amended to read as follows:

“SEC, 307. Temporary Storage of Goods.— Subject to the rules and
regulations to be issued by the Secretary of Finance, the Commissioner shall establish
a system for temporary storage of imports prior to THE LODGMENT OF goods
declaration fin cases of abandoned or overstaying goods}.”

SEC. 7. Section 402 of RA No. 10863 is hereby amended to read as follows:

“SEC. 402. Goods Declaration for Consumption— All goods declaration for
consumption shall be cleared through a formal entry process except for the following
goods which shall be cleared through an informal entry process

(a) xxx; and

(b) Personal and household effects or goods, not in commercial quantity

limported in a passenger's bi


SEC. 8. Section 407 of RA No. 10863 is hereby amended to read as follows:
“SEC. 407. Goods Declaration and Period of Filing. —
XXX
XXX

Goods declaration {must] SHALL be lodged within fifieen (15) days from the

raft AND THE

date of discharge of the last package from the vessel or a

CORRESPONDING DUTIES, TAXES, AND OTHER CHARGES SHALL BE
PAID UPON LODGEMENT, [The period to file the goods declaration may, upon
request, be extended on valid grounds for another fifteen (15) days: Provided, That the
request is made before the expiration of the original period within which to file the
goods declaration: Provided. However, That the} THE period of the lodgement of the
goods declaration may be adjusted by the Commissioner.”
SEC. 9. Section 423 (2) of RA No. 10863 is hereby amended to read as follows
“SEC. 423. Determination of the De Minimis Value — No duties and taxes

shall be collected on goods with an FOB or FCA value of ten thousand pesos

(P10,000.00) or below. The Secretary of Finan (CREASE

shall adjust] MAY
OR DECREASE the de minimis value as provided herein, every three (3) years after
the effectivity of this Act. [The value herein stated shall be adjusted to its present
value using the CPI, as published by the PSA].

SEC. 10. §

ion 427 of RA No. 10863 is hereby amended to read as follows:
“SEC. 427. Readjustment of Appraisal, Classification or Return, - Such
appraisal, classification or return. as finally passed upon and approved or
modified by the District Collector, shall not be altered or modified in any
‘manner, except

(I) xxx


(2) Within fifteen (15) days after such payment, upon request for reappraisal
or reclassification addressed to the Commissioner by the District Collector.
if the appraisal or classification is [deemed to be low] INCORRECT;

(3) xxx"


SEC. 11, Section 431 of RA No. 10863 is hereby amended to read as follows:

“SEC. 431, Release of Goods after Payment of Duties and Taxes. — Goods

declared shall be released when duties and taxes and other [lawful] char

AS FINALLY ASSESSED BY THE BUREAU have been paid or secured and all
the pertinent laws. rules and regulations have been complied with
we
SEC. 12. A new Scction 440-A in RA No. 10863 is hereby inserted to read as 9 follows:
SEC. 440-A. PRE-SHIPMENT INSPECTION. — THE. BUREAU SHALL
ESTABLISH AND IMPLEMENT A PRE-SHIPMENT INSPECTION OF

CONTAINERIZED CARGOES: PROVIDED, THAT THE PRE-SHIPMENT.

INSPECTION SHALL. DEPEND ON RISK PARAMETERS AS
DETERMINED. BY THE BUREAU AND OTHER COMPETENT
AUTHORITIES: | PROVIDED FURTHER, THAT PRE-SHIPMENT

INSPECTION SHALL NOT BE USED FOR CLASSIFICATION AND VALUATION
PURPOSES PURSUANT TO SECTION 5 OF THE WORLD

TRADE ORGANIZATION (WTO) AGREEMENT ON TRADE
FACILITATION.
THE RULES AND RE: ATIONS SHALL BE ISSUED BY THF. BUREAU

CONSULTATION WITH THE CONCERNED SECTORS AND APPROVED
BY THE SECRETARY OF FINANCE.

SEC. 13. Section 709 of RA No. 10863 is hereby repealed.
SEC. 14. Section 800 (g) of RA No. 10863 is hereby amended to read as follows
“SEC. 800. Conditionally Tax and/or Duty-Exempt Importation. ~X x x

(a) Xxx


(b) xxx

(c) xxx

(d) xxx

(e) xxx

(f) ) xxx

(g) [Residents of the Philippines,] OFWs or other Filipinos while residing

abroad or upon their return to the Philippines shall be allowed to bring in or
send to

their families or relatives in the Philippines balikbayan boxes which shall be

exempt 9 from applicable duties and taxes imposed under the NIRC of 1997, as amended:
Provided, That balikbayan boxes shall contain personal and household effects only

and shall neither be in commercial quantities nor intended for barter, sale or for hire and that
the FCA value of which shall not exceed one hundred fifty thousand pesos

(P150,000.00); Provided, Further, That every three (3) years after the effectivity of

this Act, the Secretary of Finance shall adjust the amount herein stated to its present value
using the CPI as published by the PSA; Provided, Finally, That [residents of the
Philippines,] OFWs or other Filipinos WHILE RESIDING ABROAD can only avail of
this privilege up to [three times] A MAXIMUM FCA VALUE OF THREE HUNDRED
THOUSAND PESOS (PHP300,000.00) in a calendar year. Any amount in excess of the
allowable non-dutiable value shall be subject to the applicable duties and taxes;

1) xxx.”

SEC. 15. Section 802 of RA No. 10863 is hereby amended to read as
follows:

“SEC. 802. Types of Customs Bonded Warehouses (CBWs)— Xx x
Manufacturing customs bonded warehouse may be of the following types; (a)

misecllancous customs bonded warchousc; (b) customs common bonded warehouse:


for] (c) industry-specific bonded warehouse: OR (D) GARMENTS AND.
TEXTILES BONDED WAREHOUSE.

Xxx
SEC. 16, Scction 806 of RA No. 10863 is hereby amended to read as follows,

“SEC. 806. Customs Control Over CBWs and CFWs.— The Bureau shall, for
customs purposes, exercise control over. direct and manage CBWs and CFWs
pursuant to Section 303 of this Act and [likewise] over the goods thereat pursuant to
Scetion 301 of this Act.|:| THE BUREAU SHALL MAINTAIN THE NUMBER
OF OFF-DOCK CONTAINER YARD OR CONTAINER FREIGHT STATION
(CY/CFS) AND CBWS OPERATING IN A PORT TO A NUMBER
CONSISTENT WITH THE BUSINESS REQUIREMENT OF THE PORT.
THE UTILIZATION RATE, SERVICES PROVIDED, AND FACILITIES OF
THE EXISTING OFF-DOCK CY/CFS SHALL BE CONSIDERED IN THE
APPLICATION AND RENEWAL FOR AUTHORITY TO OPERATE AN
OFF-DOCK CY/CFS: Provided, That the Bureau shall not be liable for any loss or
damage of the goods stored for safekeeping in any CBW, CFW, yard or premises.”
SEC. 17, Section 900 of RA No, 10863 is hereby amended to read as fullows

“SEC. 900, Basis of Duty Drawback. (A) XXX

(B) xxx

(C)XXX

(I) Xxx

(2) Xxx

(3) xxx

(4) The exportation shall be made within one (1) year after the importation of

materials used, and THE claim of refund or tax credit shall be fited


within [six (6) months] ONE (1) YEAR from the date of exportation;

and

(5) xxx"

SEC. 18. Section 1100 of RA No. 10863 is hereby amended to read as follows:
“SEC. 1100. Classification Ruling— An importer or exporter may file a

written application for an advance ruling on the tariff classification of goods with the
Commission. The Commission shall render a ruling within thirty (30) days from
receipt of a properly documented application.
When a declared tariff classification of goods, WHICH IS not THE subject of a
pending application for advance ruling, is in dispute AND THE

DISTRICT COLLECTOR DETERMINES THAT IT INVOLVES A HIGHLY

TECHNICAL QUESTION OF TARIFF CLASSIFICATION, [the importe
exporter, or] the Bureau shall submit the matter to the Commission for a ruling,
without prejudice to the application of Section 1106 of this Act on “protest”:
Provided, That such rulings of the Commission on commodity

classification shall be binding upon the Bureau, unless the Seeretary of Finance [shall]

tules otherwise,

FOR THIS PURPOSE, TARIFF CLASSIFICATION SHALL BE
CONSIDERED AS A HIGHLY TECHNICAL QUESTION WHEN THE
GOODS ARE CLASSIFIABLE UNDER MORE THAN ONE ASEAN
HARMONIZED TARIFF NOMENCLATURE (AHTN) CHAPTER, HEADING,
OR SUBHEADING; OR THE PRODUCT DESCRIPTION IS NOT PROVIDED
UNDER ANY AHTN HEADING OR SUBHEADING.”

SEC. 19, Section [111 of RA No. 10863 is hereby amended to read as follows:


“SEC. 1114, Alert Orders, — Alert orders are written orders issued by customs
officers as authorized by the Commissioner on the basis of derogatory information

ult

regarding possible noncompliance with this Act. An alert order will r


in the suspension of the process

ny of the goods declaration and the conduct of [physical or

nonintrusive} inspection of the goods within forty-eight (48) hours trom

issuance of the order: PROVIDED, THAT THE TERMINAL OPERATORS SHALL

ENSURE THAT THE INSPECTION IS SCHEDULED AND CONDUCTED WITHIN

THE SAID PERIOD. Within forty-eight (48) hours or, in the case of perishable goods,
within owenty-tour (24) hours from inspection, the alerting officer shall recommend the
continuance of processing of goods in case ofa negative finding, or issuance of a warrant of
seizure and detention if'a discrepancy between the declaration and actual goods is found. The
Bureau's information system shall immediately reflect the imposition or lifting of an alert
order,

XXX

(a) xxx

(b)xxx

(c)Xxx

(djxxx

XXX

An alert order may be issued [only after lodgement of the goods declaration and} prior to the
release of goods from customs custody. Under no circumstances shall the suspension of the
processing of goods declaration be allowed except through an alert order issued by a
authorized customs oft

XXX
SEC. 20. Section 1117 of RA No. 10863 is hereby amended to read as follows:

“SEC. M17, Warrant of Seizure or Order of Release. — The District


Collector shall have the authority to issue a warrant of seizure of the goods upon

determination of the exi

ce of probable cause and in case of nonexistence thereof,

[the issuance of the order of release) RECOMMEND THE LIFTING OF THE,


ALERT ORDER. In case the District Collector issued an order of release.|

RECOMMENDS THE LIFTING OF THE ALERT ORDER, the District

Collector shall immediately transmit all the records to the Commissioner, who shall

automatically review THE LIFTING OF THE ALERT ORDER within forty-eight

(48) hours, or IN CASE OF PERISHABLE GOODS, within twenty-four (24)

hours, |, in case of perishable goods.] When no decision is made by the Commissioner

within the prescribed period, the imported goods shall be deemed lifted,
The ORDER TO RELEASE flifiing of the alert order] shall be issued by the
District Collector only upon the affirmation of [the] THIS decision [of the District
Collector] by the Commissioner. or after the lapse of the period of review by the
Commissioner, whichever is earlier.”
SEC, 21. Section 1118 of RA No. 10863 is hereby amended to read as follows:
SEC. 118. Sule of Perishable Goods During Forfeiture Proceedings. ~
[Upon motion of the importer of the perishable goods, the] PERISHABLE goods
may be sold at a public auction during the pendeney of the forfeiture proceedings. The
proceeds of the auction shall be held in escrow until the final resolution of the

proceedings.”

SEC. 22. Section 1129 of RA No. 10863 is hereby amended to read as follows’
“SEC. 1129. Abandonment, Kinds and Effects of. - Imported goods are deemed

abandoned under any of the following circumstances:

(a) xX x; oF

Is to

{b) When the owner, importer, consignee, or interested party after due notic
Itile] LODGE the goods declaration AND PAY THE DUTIES AND TAXES

BASED ON SELF-ASSESSMENT within the prescribed period in


Section 407 of this Act: Provided, That the term goods declaration shall include

provisional or incomplete goods declaration deemed valid by the Bureau as provided
in Scetion 403 of this Act. For this purpose, it is the duty of the District Collector to
post a list of all packages discharged and their consignees, whether electronically or
physically in the District Office, or send a notice to the consignee within five (5) days

from the date of discharge: or

(c) Having [filed] LODGED such goods declaration AND PAID THE DUTIES

AND TAXES BASED ON SELF-ASSESSMENT, the owner, importer,
consignee or interested party after due notice. fails to pay the [assessed]

READJUSTED duties, taxes and other charges thereon. or. if the OWNER,
IMPORTER, CONSIGNEE, OR INTERESTED PARTY OF THE regulated
goods [failed] FAILS to comply with Section 117 of this Act[,| within fifteen (15)
days from the date of final assessment: Provided, That if such regulated goods are the
subject of an alert order and the assessed duties. taxes and other charges thereof are
not paid within fifteen (15) days from notification by the Bureau of the resolution of
the alert order, the same shall also be deemed abandoned: or

[(d) Having paid the assessed duties, taxes and other charges, the owner, importer or
consignee or interested party after due notice. fails to claim the goods within thirty
(30) days from payment, For this purpose, the arrastre or warehouse operator shall
report the unclaimed goods to the District Collector for disposition pursuant to the
provisions of this Act: orl

{(e)] (D) When the owner or importer fails to claim goods in customs bonded
warehouses within the prescribed period.

XXX.



SEC. 23. Section 1131 of RA No. 10863 is hereby amended to read as follows:

SEC. 1131. Authority of the Commissioner to [Make] Compromise. ~

[Subject to the approval of the Sceretary of Finance, The Commi

+ may
compromise any CIVIL OR administrative case arising under this Act involving the

imposition of fines and surcharges. including those arising from the conduct of a post

nce audit, unless otherwise specified by law

Cases involving forfeiture proceedings shall, however, not be subject to any
compromise UNLESS APPROVED BY THE COURT, ON APPEAL.
PROVIDED, THAT ANY COMPROMISE INVOLVING THE IMPOSITION
OF FINES AND SURCHARGES AMOUNTING TO TEN MILLION PESOS
(PHP10,000,000.00) AND ABOVE SHALL BE SUBJECT TO THE APPROVAL.
OF THE SECRETARY OF FINANCE.”
SEC. 24, Section 1135 of RA No. 10863 is hereby amended to read as follows

“SEC. 1135. Supervision and Control over Criminal and Civil

Proceedings. — Civil and eriminal actions and proceedings instituted on behalf of the
Government under the authority of this Act or other laws enforced by the Bureau shall
be brought in the name of the |g|Government of the Philippines and shall be
prosecuted and handled by the Bureau with the assistance of the Department of Justice
(DOJ) OR OFFICE OF THE SOLICITOR GENERAL (OSG): Provided

That the determination of the existence of probable cause and the subsequent filing of

any criminal for civil] case with the proper court against violators of this Act shall

exclusively belong to the DOJ: Provided, however, That no civil or criminal action

for the recovery of duties or the enforcement of any fine, penalty, forfeiture funder]


OR ANY VIOLATION OF ‘this Act shall be tiled in court without the approval of
the Commissioner.”

SEC. 25,

tion 1138 of RA No. 10863 is hereby amended to read as follows:

inal case tor violation

“SEC. 1138. Fraud Investigation and Prosecution, — No crin
of this [title] ACT shall be instituted without the approval of the Commissioner.
[pursuant to the provisions of this Act.|

XXX.


SEC. 26. Section 1141 of RA No, 10863 is hereby amended to read as follows:

BC. M41. Mode of Disposition. ~x x x
XXX

THE BUREAU MAY ENGAGE PRIVATE SERVICE PROVIDERS TO

CONDUCT PUBLIC AUCTIONS PURSUANT TO SECTION 1513 OF TH
ACT: PROVIDED, THAT THE SERVICE PROVIDER ENGAGED SHALL.
BE RESPONSIBLE FOR UNDERTAKING ALL THE PUBLIC AUCTIONS
OF THE BUREAU: PROVIDED FURTHER, THAT ACTIVITIES OF THE
SERVICE PROVIDER SHALL BE LIMITED TO NON-SOVEREIGN AND
ANCILLARY FUNCTIONS OF THE BUREAU: PROVIDED FINALLY,
THAT THE BUREAU SHALL RETAIN JURISDICTIONAL CONTROL AND

AS THE OPERATIONS OF

SUPERVISION OVER THESE GOODS AS WEI
THE SERVICE PROVIDER SO CONTRACTED.”

SEC. 27. Section 1147 (a) of RA No. 10863 is hereby amended to read as follows
“SEC. 1147. Disposition of Restricted Goods.— Restricted goods as

described in Section 119 of this Act shall be disposed as follows:

firearms and

(a) Dynamite, gunpowder, ammunitions and other explosive
weapons of war, and parts thereof shall be turned over to the [AFP]

PHILIPPINE NATIONAL POLICE (PNP);

(b) x x x;

(c) XXX:

(d) xxx;

(e) Xxx;

(f) xxx.”


SEC. 28, Section 1204 of RA No. 10863 is hereby amended to read as follows:
“SEC. 1204. Manifest Required of Vessel from Foreign Port. — Every vessel
from a foreign port must have on board a complete manifest of all its cargoes.

All cargoes intended to be landed at a port in the Philippines must be described

in separate manifests for each port of call. Each manifest shall include the port of
departure and the port of delivery with the marks, numbers, quantity, and description
of the packages and the ULTIMATE consignees COVERED BY THE BILL OF
LADING OR AIRWAY BILL. Every vessel from a foreign port must have on

board complete manifests of passengers and baggage, in the prescribed form, setting

ation laws, Every vessel

forth the destination and all particulars required by imm
shail present to the proper customs officers upon arrival in ports of the
Philippines a complete list of all sea stores then on board. If the vessel does not carry
[cargo] CARGOES or passengers. the manifest must show that no cargo or passenger
is carried from the port of departure to the port of destination in the Philippines.

IN ADDITION, A VESSEL OR AIRCRAFT FROM A FOREIGN
PORT MUST DECLARE IN THE INWARD CARGO MANIFEST. BILL OF
LADING OR AIRWAY BILL THE VALUE OF THE ARTICLES OR GOODS

AS THEY APPEAR IN THE COMMERCIAL INVOICE OR LETTER OF

CREDIT, OR BOTH. THE VALUE STATED THEREIN MAY BE THE
BASIS FOR RISK ASSESSMENT.
A true and complete copy of the cargo manifest shall be electronically sent in

advance by the shipping company, NVOCC, freight forwarder, cargo consolidator, or

their agents within the cut-off period as may be determined by the Bureau before the

arrival of the carrying vessel at the port of entry


Upon arrival of the carrying vessel. the shipping company, NVOCC, freight
forwarder, cargo consolidator, or their agents shall provide two (2) hard copies of the
cargo manifest to the Bureau in case the port of entry is either the Port of Manila
(PoM) or the Manila International Container Port (MICP), and one (1) copy in the

case of the other ports of entry

A cargo manifest shall in no case be changed or altered after entry of vessel,
except by means of an amendment, under oath, by the master, consignee or agent
thereof. which shall be attached to the original manifest: Provided, That after the
invoice and/or goods declaration covering an importation have been received and
recorded in the office of the appraiser, 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, the
discovery of which would not have been made until after examination of the
importation has been completed.”
SEC. 29, Section 1226 of RA No. 10863 is hereby amended to read as follows’
“SEC 1226. Supervision and Regulation of Third Parties. — Third parties
transacting with the Bureau on behalf of importers and consignees shall be treated

with the Bureau]

equally

as true importers or consignees|.Thitd parties transactin

AND shall LIKEWISE be liable for acts committed in violation of this Act and

related laws.

A. [Upon the recommendation of the] THE Commissioner, WITH THE
APPROVAL OF the Secretary of Finance, shail issue rules and regulations to
govern and regulate the conduct of all third partics dealing directly with the

Bureau in relation to the importation, exportation, movement, storage and



clearance of goods for and on behalf of another person. The rules and regulations
shall provide for specific conditions when third parties may or may not directly

transact with the Bureau WHICH SHALL

INCLUDE A RISK

MANAGEMENT SYST

1 FOR THIRD PARTIES, TAKID

3 INTO

ACCOUNT THEIR CAPITALIZATION, VOLUME OF TRANSACTIONS,


TRACK RECORD, AND ANY OTHER FACTOR AFFECTING THEIR

CAPABILITY TO IMPORT, EXPORT, MOVE, STORE OR CLEAR
GOODS. jshai) provide a written notice in case such third parties are, for valid
reasons, barred from transacting with the Bureau]

B. THE BUREAU SHALL CREATE A COMMITTEE COMPOSED OF
REPRESENTATIVES FROM THE BUREAU OF CUSTOMS AND THE
DEPARTMENTS OF FINANCE, TRADE AND INDUSTRY,
TRANSPORTATION, AND THE NATIONAL ECONOMIC AND

DEVELOPMENT AUTHORIT

, AND OTHER GOVERNMENT

‘CIES REGULATING THIRD PARTIES THAT TRANSACT WITH
THE BUREAU, THE COMMITTEE, WHICH SHALL BE CHAIRED BY

THE SECRETARY OF FINANCE, SHALL PRESCRIBE

D
REGULATE RATES AND OTHER CHARGES FOR THE SERVICES
RENDERED BY THESE THIRD PARTIES IN ACCORDANCE WITH
‘THE TRADE FACILITATION PLANS AND PROGRAMS OF THE
COUNTRY.

‘Third party is defined under Section 102 [(uu)] (TT) of this Act. [For purposes

of this section, third parties may also refer to logistics providers, importer

exporters,

carriers, airlines. shipping tin

Shipping agents, forwarders. consolidators. port and
terminal operators, and warehouse operators, if such persons or entities transacted
with the Bureau.]”

SEC. 30, Section 1400 of RA No. 10863 is hereby amended to read as follows:

“Ss!

. 1400, Misdeclaration, Misclassification, Undervaluation in Goods

Declaration — Misdeclaration as to quantity, quality. description, weight, or


measurement of the goods, or misclassitication through insufficient or wri

ng

description of the goods or use of wrong tariff heading resulting to a discrepancy in



duty and tax to be paid between what is legally determined upon assessment and
what is declared, shall be subject to a surcharge equivalent to two hundred fifty percent
(250%) of the duty and tax due. No surcharge shall be imposed when the

discrepancy in duty AND TAX is less than ten percent (10%). or when the declared tariff?

heading is rejected in a formal customs dispute settlement process involving [difficult or] A

highly technical question of tariff classification, or when the tariff classification declaration

relied on an official government ruling.”

SEC. 31. Section 1505 of RA No. 10863 is hereby amended to read as follows:

“SEC. 1505. Authority of Official to Administer Oaths and Take Testimony. - 11

‘The Commissioner, District Collectors and their deputies, and other customs
officers

especially deputized by the COMMISSIONER OR TH

District Collector shall

have authority to administer oaths and take testimony in conneetion with any matter
within the jurisdiction of the Bureau and, in connection therewith, ISSUE
SUBPOENA DUCES TECUM REQUIRING THE PRODUCTION [may require
the production] of relevant papers, documents, books and records in accordance with
Jaw."

SEC. 32. Section 1512 of RA No. 10863 is hereby amended to read as follows:
“SEC. 1512. Reward 10 Persons Instrumental in the Actual Collection of Additional

Revenues Arising from the Discovery of Violations of this Act. — A cash reward equivalent to
twenty percent (20%) OR TEN MILLION PESOS,

(PHP 10,000,000.00), WHICHEVER IS LOWER, of the actual proceeds trom the 23 sale
of smuggled goods and confiscated goods or actual collection of auditional revenues shall be

given to the [customs and] non-customs informers or whistleblowers who are instrumental in

the collection of additional revenues arising from the di

covery of violations of this Act in
accordance with the rules and regulations to be issued by the Secretary of Finance:

PROVIDED, THAT THE


NON-CUSTOMS, INFORMERS OR WHISTLEBLOWERS ARE
NOT

RELATED TO ANY CUSTOMS OFFICER OR EMPLOYEE WITHIN THE 4
FOURTH CIVIL DEGREE OF CONSAGUINITY OR AFFINITY.”

SEC. 33. Implementing Rules and Regulations. - ‘The Secretary of Finance
shall,

upon the recommendation of the Commissioner of Customs, promulgate the necessary rules 7
and regulations for the effective implementation of this Act.

SEC. 34. Separability Clause. - If any provision of this Act shall be held
unconstitutional or invalid, the other provisions not otherwise affected shall remain in full 10
force and effect.

SEC. 35. Repealing Clause. - All laws, decrees, executive orders, rules and
regulations or parts thereof which are contrary to or inconsistent with this Act are hereby 13
repealed, amended or modified accordingly.

SEC. 36. Effectivity. - This Act shall take effect fifteen (15) days afer its
publication either in the Official Gazette or in a newspaper of general circulation

Approved,