THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES } 
Second Regular Session 
SENATE 
-"r 
INTRODUCED BY HON. MANNY VILLAR 
EXPLANATORY NOTE 
Smuggling of commodities, especially agricultural produce is on the rise. The 
past years have shown the Philippines turn into a net importer of rice, sugar, beef, corn 
and other farm-related products. Considering the large demand for these commodities, 
smuggling has become a very lucrative practice, which may be the reason for its 
rampant occurrence. 
The national government has been criticized for its lack of political will in 
implementing harsher penalties and stringent measures to curb smuggling. In the case 
of agricultural commodities, there are no specific provisions in our Tariff and Customs 
code in dealing with these kinds of smuggled goods and whatever provisions exist in the 
Code does not effectively prevent smuggling. In fact, there have been numerous reports 
dealing with "captured" smuggled products being released to anyone, including the 
smuggler himself, after paying a minimal fine andlor penalties and other duties. This 
situation in effect condones smuggling of agricultural produce and therefore must be 
rectified. 
The enactment of this bill is earnestly sought. 
MANNYVILL R J 


THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES } 
Second Regular Session 
r_c? 
SENATE 
INTRODUCED BY HON. MANNY VILLAR 
AN ACT PROVIDING FOR THE DISPOSITION OF SMUGGLED AGRICULTURAL 
GOODS, AMENDING FOR THIS PURPOSE CERTAIN PROVISIONS OF TARIFF 
AND CUSTOMS CODE, AS AMENDED 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled. 
SECTION 1. Section 2601 of the Tariff and Customs Code, as amended is 
hereby amended to read as follows: 
"Section 2601 Property Subject to Sale. - Property in customs custody shall be subject 
to sale under the conditions hereinafter provided: 
a. Abandoned articles. 
b. Bonded articles entered under warehousing entry not withdrawn nor the duties and 
taxes paid thereon within the period prescribed by law. 
c. Articles for which import entry has been filed but have not been claimed within fifteen 
days thereafter: Provided, That in justifiable cases, or when public interest so requires, 
the Collector may, in his discretion, grant an extension of not more than fifteen days. 
d. Seized property, other than contraband, after liability to sale shall have been 
established by proper administrative or judicial proceedings in conformity with the 
provisions of this Code. 
e. Any article subject to a valid lien for customs duties taxes or other charges collectible 
by the Bureau of Customs, after the expiration of the period allowed for the satisfaction 
of the same. 
f. ANY AGRICULTURAL PRODUCT COVERED BY SCHEDULES I AND II OF THIS 
CODE SUBJECT TO FOREEITURE IN FAVOR OF THE GOVERNMENT, PROVIDED 
THAT IN ALL SUCH CASE INVOLVING SAID AGRICULTURAL PRODUCTS, THE 
NATIONAL GOVERNMENT AGENCY CONCERNED THROUGH THE DEPARTMENT 
OF AGRICULTURE AND FOOD OR ANY OF ITS ATTACHED AGENCIES SHALL BE 
GIVEN THE AUTHORITY TO DISPOSE OF THE SAME THROUGH LOCAL 
INTEREST OF THE GENERAL PUBLIC AND THE LOCAL PRODUCERS. THE 
BUREAU OF CUSTOMS SHALL TRANSFER CUSTODY OF THE SAME TO THE 
NATIONAL GOVERNMENT AGENCY CONCERENED WITHIN FIFTEEN DAYS FROM 
THE TIME OF THE FORFEITURE HAS BECOME FINAL AND EXECUTORY." 
DISPOSITION OR RE-EXPORTATION, WHICHEVER SHALL BE TO THE BEST 
SECTION 2. Section 2602 of the Tariff and Customs Code, as amended is 
hereby amended to read as follows: 
"Sec. 2602. Place of Sale or Other Disposition of Property. - Property within the purview 
of this Part of this Code shall be sold, or otherwise disposed of, upon the order of the 
Collector of the port where the property in question is found, unless the Commissioner 


shall direct its conveyance for such purpose to some other port, SUBJECT TO THE 
NEXT PRECED!NG PARAGRAPH." 
SECTION 3. Section 2603 of the Tariff and Customs Code, as amended is 
hereby amended to read as follows: 
"Sec. 2603. Mode of Sale. - In the absence of any special provision, property subject to 
sale by the customs authorities shall be sold at public auction after ten days' notice 
conspicuously posted at the port and such other advertisement as may appear to the 
Collector to be advisable in the particular case, SUBJECT TO THE PROVISIONS OF 
SECTION 2601 (F)". 
SECTION 4. Section 2605 of the Tariff and Customs Code as amended is hereby 
amended to read as follows: 
"Sec. 2605. Disposition of Proceeds. The following charges shall be paid from the 
proceeds of the sale in the order named: 
a. Expenses of appraisal, advertisement and sale. 
b. . Duties except in the case of abandoned and forfeited articles. 
c. Taxes and other charges due the Government. 
d. Government storage charges. 
e. Arrastre and private storage charges. 
f. Freight, lighterage or general average, on the voyage of importation, of which due 
notice shall have been given to the Collector. 
g. THE REMAINDER, IN CASE OF DISPOSITION OF AGRICULTURAL PRODUCTS 
BY 
THE 
CONCERNED 
NATIONAL GOVERNMENT AGENCY, 
SHALL 
BE 
DISTRIBUTED AS FOLLOWS: 
a. TEN PERCENT .SHALL BE GIVEN TO THE EXPORTER, IN CASE THE GOODS 
b. TWENTY-FIVE PERCENT TO THE APPREHENDING GOVERNMENT AGENCY TO 
BE DISTRIBUTED AS INCENTIVE. 
c. THE BALANCE SHALL BE USED BY THE NATIONAL GOVERNMENT FOR THE 
FOLLOWING PURPOSES, NAMELY: 
a. TWENTY-FIVE PERCENT TO FINANCE THE COMPETIVE ENHANCEMENT FUND 
OF THE CONCERNED NATIONAL GOVERNMENT AGENCY TO BE USED TO 
FURTHER DEVELOP THE AGRICULTURAL SECTOR CONCERNED. 
b. FORTY PERCENT TO THE NATIONAL GOVERNMENT. 
ARE TO BE RE-EXPORTED. 
SECTION 5. The Department of Agriculture and Food and the Department of 
Finance are directed to implement this Act within ONE HUNDRED AND EIGHTY (180) 
days from the passage of this Act by jointly promulgating the implementing Rules and 
Guidelines. 
SECTION 6. All laws, acts, decrees, executive orders and ordinances 
inconsistent with the provisions of this Act shall be considered modified, amended or 
repealed accordingly. 
national newspapers or general circulation. 
SECTION 7. This Act shall take effect FIFTEEN days after publication in two 
Approved,