SIXTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
']3 Jill 15 P5 :49 
SENATE 
Senate Bill No. 741 
INTRODUCED BY SEN. JINGGOY EJERCITOESTRADA 
EXPLANATORY NOTE 
This bill amends certain provisions of Presidential Decree No. 1464, 
otherwise known as the Tariff and Customs Code of the Philippines, as 
amended. 
Government transparency is crucial to gain the public's trust, and to bring 
investors into the country. In trade, this entails availability and accessibility of 
shipping documents, as well as visibility at all times in the transporting of goods. 
Under the proposed bill, an Audit and Transparency Group under the 
Bureau of Customs, headed by a Deputy Commissioner, would regularly inspect 
and report on the bureau's operational processes, collection and financial 
reporting, fiscal and personnel performance, system efficiency, internal control, 
information and communication flow, fraudulent and illegal practices and other 
related areas. On the basis of these inspections and reports, the Audit and 
Transparency Deputy Commissioner can initiate investigations of fraud and other 
graft and corrupt practices in the bureau, and shall recommend to the Office of 
the Ombudsman the filing of any cases against personnel and officers involved. 
Aside from this, each vessel engaged in foreign trade shall need an 
electronic copy of its cargo and passenger manifest transmitted to the Bureau of 
Customs at least six hours prior to the vessel's arrival in the port of entry; for 
aircraft, the electronic copy must be submitted an hour before arrival. 
In addition, a valuation library comprising Customs records shall be made 
readily available to the public. These, and other amendments, which among 
others raises penalties, will lift the standards of Customs inspection of port 
arrivals. 
There must be increased vigilance against smuggling, which deprives the 
government of billions annually, without unnecessarily shunning traders through 
bureaucratic red tape. This bill strikes a fair balance. In view of the foregoing, 
immediate approval of this bill is earnestly sought. 
Senator 


.§tll7!ti' 
SIXTEENTH CONGRESS OF THE REPUBLIC) 
(~th;f tlf t~t' ;b-nl r\;'H~ 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 7 41 
'13 
JUL 15 
IJ 5 :49 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA·· 
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 PURPOSE 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1 . Short Title. - This Act shall be known and cited as the 
"Anti-Smuggling Act of 2013". 
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 Officials of the Bureau of Customs. - The 
Bureau of Customs shall have one chief and FIVE [four] assistance 
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 (5) 
AUDIT AND TRANSPARENCY GROUP, who shall each 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 COMMISSION. 
"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 
appointment. " 
SEC. 3. Section 607 of the Tariff and Customs Code of the Philippines 
(TCCP), as amended, is hereby further amended to read as follow: 


"SEC. 607. Annual Report of Commissioner. - The annual report 
of the Commissioner to the President shall, among other things, 
contain a compilation of the (a) quantity and value of the articles 
imported into the Philippines and the corresponding amount of 
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 tax-free imports, and (0 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 
preceeding year. THE DEPUTY COMMISSIONER FOR AUDIT 
AND TRANSPARENCY SHALL REGULARLY FURNISH [C] copies 
of such annual report [shall be furnished regularly] to the 
Department of Finance, Tariff Commission, NEDA, 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." 
follows: 
SEC. 4. Sec. 609 of the 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 Central Bank of the Philippines, the Tariff 
Commission, AND THE NATIONAL STATISTICS OFFICE (NSO). 
BOTH ELECTRONIC AND PAPER COPIES of each of all customs 
imporU 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. Authority of the Collector 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, fees, taxes, and other charges is 
less than FIVE THOUSAND PESOS, and he may dispense with the 
seizure of articles of less than FIVE THOUSAND PESOS 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: 
"PART 3. -AUDIT, TRANSPARENCY AND ACCOUNTABILITY 
"SEC. 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 OPERATIONS OF THE 
BUREAU AND ITS ATTACHED AGENCIES. 
"SEC. 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 FO THE COMMISSIONER. 
"SEC. 715. ON THE BASIS 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. 
"SEC. 
716. 
IN 
THE 
CONDUCT 
OF 
ITS AUDIT 
AND 
INVESTIGATIONS, THE DEPUTY COMMISSIONER OF 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 MAY BE HELD 
LIABLE FOR CONTEMPT. 


"SEC. 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 known as SECTION 1001-A is hereby 
inserted after Section 1001 of the TCCP, as amended, which shall read as 
follows: 
"SEC. 1001-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 AIRCRAFT, THE 
MANIFEST SHALL BE TRANSMITTED TO THE BUREAU OF 
CUSTOMS AT LEAST ONE (1) HOUR PRIOR TO THE 
AIRCRAFTS 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. Manifest 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 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 transshipment to another port, may 
be unladed 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 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 no 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 ofthe TCCP, as amended, which shall read as follows: 
"SEC. 1401·A. VALUATION LIBRARY. - THE COMMISSION 
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 Officer Tasked to Examine, 
Classic, 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 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 under 3604 of this 
Code." 
SEC. 12. Section 1801 of the TCCP, as amended, is hereby further 
amended to read as follows: 
"SEC. 1801. Abandonment, Ends and Effects of - An imported 
article is deemed abandoned under any of the following 
circumstances: 


a. When the owner, importer, consignee of the imported article 
expressly signifies in writing to the Collector of Customs his 
intention to abandon: 
b. When the owner, importer, consignee, or interested party after 
due notice, fails to file an entry within thirty 9300 days, which shall 
not be extendible, form the date of discharge of the last package 
from the vessel or aircraft, or having filed such entry, fails to claim 
his importation within fifteen (15) days, which shall not likewise be 
extendible, from the date of posting of the notice to claim such 
importation; 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 10 ARTICLES SHALL BE AUTOMATICALLY 
SUBJECT TO AUCTION AND SHALL IN NO CASE BE SUBJECT 
TO SETTLEMENT OR COMP~OMISE. 
"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. 
"Nothing in this section shall be construed as relieving the owner or 
importer from any criminal liability which may arise from any 
violation of law committed in connection with the importation of the 
abandoned article. 
"Any official or employee of the Bureau of Customs or of other 
government agencies who, having knowledge of the existence of 
an abandoned article or having control or custody of such 
abandoned article, fails to report to the Collector within twenty-four 
(24) hours from the time the article is deemed abandoned shall be 
punished with the penalties prescribed in Paragraph 1, Section 
3604 of this Code (RA 7651,June 4,1993)." 
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 Collector, 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. 
"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 25 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 
BEEN 
CLOSED 
DUE 
TO 
ITS 
NONCOMPLIANCE 
WITH 
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 SHAL 
BE STORED THEREIN AT ANY GIVEN TIME. OTHERWISE, THE 
APPLICATION SHALL NOT BE GRANTED, AND AN AUTHORITY 
ALREADY GRANTED SHALL BE REVOKED. . 
"THESE REQUIREMENTS SHALL LIKEWISE EXTEND TO 
REGISTERED 
LOCATORS 
OPERATING 
UNDER 
THE 
CHARTERS 
OF 
THE 
PHILIPPINE 
ECONOMIC 
ZONE 
AUTHORITY, THE SUBIC BAY METROPOLITAN AUTHORITY, 
AND OTHER FREEPORTS AND ECOZONES." 
SEC. 17. A new section to be known as SECTION 1903-A is hereby 4 
inserted after Section 1903 of the 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 MAY 
BE CONDUCTED BY THE DEPUTY COMMISSIONER OR AN 
INDEPENDENT AUDIT MAY BE MADE UPON THE INSTANCE 
OF THE PETITIONING PARTY IN COORDINATION WITH THE 
DEPUTY COMMISSIONER." 
SEC. 18. Section 1904 of the 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 other charges shall have been determined, 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 this Code and for the payment of any 
duties, taxes and other charges to which the articles shall be then 
subject and upon compliance with all legal requirements regarding 
their importation." 
SEC. 19. Section 1905 of the 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. 
Where the dutiable article is stored in such premises, the same 
must be removed at the risk and expense of the operator and the 
premises shall not be relinquished, nor discontinuance of its use 
authorized, until a careful examination of the account of the 
warehouse shall have been made. Discontinuance of any 
warehouse shall be effective upon official notice and approval 
thereof by the Collector." 
SEC. 20. Section 1906 of the TCCP, as amended, is hereby further 
amended to read 
"SEC. 1906. Entry of Articles for Warehousing. - The entry of 
articles for warehousing shall be in the required number of copies in 
the prescribed form, and shall be verified as in the entry of the 
articles for consumption. No warehousing entry shall be accepted 
for any article if from the entry, supporting documents and/or 
information such article is imported contrary to any law. THE 
CUSTOMS 
OFFICER 
MAKING 
THE 
ENTRY 
SHALL 
BE 
RESPONSIBLE FOR TRANSMITTING A 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. 
L1QUIDA TlON 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: 
"SEC. 
2001. 
Establishment 
Qf 
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 Secretariat 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, 
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 SUBIC 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. Exemption 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 for exports and deliver such 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 THIRTY (30) DAYS 
from date of such transfer or conveyance into the bonded 
manufacturing warehouse, which period may for sufficient reasons 
be further extended for not more than THIRTY (30) DAYS by the 
Commissioner. Materials not used in the manufacture of articles for 
exportation within the prescribed period shall pay the corresponding 
duties: Provided, further, That the operation of embroidery and 
apparel firms shall continue to be governed by Republic Act 
Numbered Thirty One hundred and thirty-seven." 
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 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 
FINALL Y: 
THAT 
BONDED 
SMELTING 
WAREHOUSES SHALL LIKEWISE BE SUBJECT TO THE 
PROVISIONS UNDER TITLE V, PART 1 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, 
Misclassification, 
and 
Misdeclaration in Entry. When the dutiable value of the imported 
articles shall be sol declared and entered that the duties based on 
the declaration of the importer on the face of the entry would be 
less by ten percent (10%) than should be legally collected, or when 
the imported articles shall be so described and entered that the 
duties based on the importer's description on the face of the entry 
would be less by ten percent (10%) than should be legally collected 
based on the tariff classification, of when the dutiable weight, 
measurement or quantity of imported articles is found upon 
examination to exceed by ten percent (10%) or more than the 
entered weight, measurement or quantity, a surcharge shall be 
collected from the importer in an amount of not less than the 
difference between the full duty and the estimated duty based upon 
the declaration of the importer, nor 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! 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 2601 above provided, 
property subject to sale by the customs authorities shall be sold at 
public auction within FIFTEEN (15) DAYS after ten (10) days notice 
of such sale shall have been PUBLISHED IN AT LEAST (2) 


NEWSPAPERS OF GENERAL CIRCULATION, 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 into 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 THEREOF and imprisonment of not less 
than six months and one day nor more than four 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 FIVE THOUSAND PESOS but does not exceed 
fifty thousand pesos; 
"2. A fine IN AN AMOUNT EQUAL TO THE APPRAISED VALUE 
PLUS FIFTY PERCENT THEREOF and imprisonment of not less 
than FOUR YEARS and one day nor more than eight years, if the 
appraised value, to be determined in the manner prescribed under 
this Code, including duties and taxes, of the article unlawfully 
imported is more than FIFTY thousand pesos but does not exceed 
one hundred fifty thousand pesos; 
"3. A FINE IN THE AMOUNT EQUAL TO THE APPRAISED 
VALUE PLUS FIFTY PERCENT THEREOF AND IMPRISONMENT 
OF NOT LESS THAN EIGHT YEARS AND ONE DAY NOR MORE 
THAN TWELVE 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 BUT DOES NOT EXCEED TWO HUNDRED 
FIFTY THOUSAND PESOS; 
"4. A FINE IN THE AMOUNT EQUAL TO THE APPRAISED 
VALUE PLUS FIFTY PERCENT THEREOF AND IMPRISONMENT 
OF NOT LESS THAN TWELVE YEARS AND ONE DAY NOR 
MORE THAN FIFTEEN 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 BUT DOES NOT EXCEED FIVE HUNDRED 
THOUSAND PESOS; 
"5. A FINE IN THE AMOUNT EQUAL TO THE APPRAISED 
VALUE PLUS FIFTY PERCENT THEREOF AND IMPRISONMENT 
OF NOT LESS THAN FIFTEEN YEARS AND ONE DAY NOR 
MORE THAN TWENTY 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 
FIVE 
HUNDRED 
THOUSAND PESOS BUT DOES NOT EXCEED ONE MILLION 
PESOS; 
"6. A FINE IN THE AMOUNT EQUAL TO THE APPRAISED 
VALUE 
PLUS 
FIFTY 
PERCENT 
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. 
"The penalty of prison 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. 
"When, upon trial for violation of this section, the defendant is 
shown to have had possession of the article in question, 
possession shall be 
deemed sufficient evidence to authorize 
conviction unless the defendant shall explain the possession to the 
satisfaction of the court: Provided, however, That payment of the 
tax due after apprehension shall not constitute a valid defence in 
any prosecution under this section." 
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 BUT NOT 
MORE THAN ONE MILLION PESOS AND IMPRISONMENT OF 
NOT LESS THAN EIGHT YEARS BUT NOT MORE THAN 
TWELVE 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 BUT NOT MORE THAN 
ONE MILLION PESOS AND IMPRISONMENT OF NOT LESS 
THAN EIGHT YEARS BUT NOT MORE THAN TWELVE YEARS 
and perpetual disqualification to hold public office, to vote and to 
participate in any public office election" 
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 BUT NOT MORE THAN 
ONE MILLION PESOS AND IMPRISONMENT OF NOT LESS 
THAN EIGHT YEARS BUT NOT MORE THAN TWELVE 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 purporting to be a 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 BUT NOT MORE THAN ONE 
MILLION PESOS AND IMPRISONMENT OF NOT LESS THAN 
EIGHT YEARS BUT NOT MORE THAN TWELVE 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 provisions 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 Clause.- This Act shall take effect fifteen (15) days 
after its publication in at least two (2) national papers of general circulation. 
Approved,