FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
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S E N A T E  
S. No* - 
POG 
INTRODUCED BY THE HONORABLE MAR ROXAS 
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. 


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FOURTEEN” CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
INTRODUCED BY HONORABLE h U R  ROXAS 
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 assem bled: 
SECTION 1. Shorr Title. - This Act shall be known and cited as the “Anti-Smuggling 
Act of 2007.” 
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 
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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.” 
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SEC. 3. 
Section 607 of the Tariff and Customs Code of the Philippines (TCCP), as 
amended, is hereby further amended to read as follow: 
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“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 
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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.” 
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follows: 
SEC. 4. Sec. 609 of the TCCP, as amended, is hereby further amended to read as 
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“SEC. 609. Commissioner ro 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 import/ 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 
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Audit. COPIES OF THE FOREGOING DOCUMENTS SHALL BE MADE 
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ACCESSIBLE AND AVAILABLE TO THE DEPUTY COMMISSIONER FOR 
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AUDIT AND TRANSPARENCY AT ALL TIMES.” 
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follows: 
SEC. 5. Section 709 of the TCCP, as amended, is hereby further amended to read as 
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“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, 
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and he may dispense with the seizure of articles of less than FIVE 
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THOUSAND PESOS in value except in cases of prohibited importations of the 
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habitual or the intentional violation of the tariff and customs laws.” 
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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: 
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“PART 3. -AUDIT, TRANSPARENCY AND ACCOUNTABILITY 
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“SEC. 713. 
THE DEPUTY COMMISSIONER FOR AUDIT AND 
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TRANSPARENCY SHALL CONDUCT, IN COORDINATION WITH THE 
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COMMISSION ON AUDIT, 
A BUREAU-WIDE AUDIT ON THE 
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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. 
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“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 
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THROUGH ELECTRONIC AND NON-ELECTRONIC MEANS, UNLESS 
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NON-DISCLOSURE IS WARRANTED BY NATIONAL SECURITY. 
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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: 
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“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.” 
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follows: 
SEC. 8. Section 1007 of the TCCP, as amended, is hereby further amended to read as 
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“SEC. 1007. Manifest for Commission on Audit and Collector. 
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Papers to be Deposited with Consul. - Immediately after the arrival of a 
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vessel from a foreign port, the master shall deliver or mail the Chairman, 
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Commission on Audit, Manila and the DEPUTY COMMISSIONER FOR 
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AUDIT AND TRANSPARENCY, a copy of the cargo manifests properly 
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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.” 
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follows: 
SEC. 9. Section 1210 of the TCCP, as amended, is hereby hrther amended to read as 
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“SEC. 1210. Risposition 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.” 
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SEC. 10. A new section to be known as Section 1401-A is hereby inserted after 
Section 1401 of the TCCP, as amended, which shall read as follows: 
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SEC. 1401-A. VALUATION LIBRARY. - 
THE COMMISSION 
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SHALL ENSURE THAT THERE SHALL BE A VALUATION LIBRARY, 
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WHICH SHALL BE KEPT UP TO DATE AND MAINTAINED USING THE 
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BEST AVAILABLE TECHNOLOGY. THE VALUATION LIBRARY SHALL 
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BE MADE READILY AVAILABLE TO THE PUBLIC. 
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follows: 
SEC. 11. Section 1403 of the TCCP, as amended, is hereby further amended to read as 
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“SEC. 1403. Duties of Customs Officer Tasked to Examine, Classi@, and 
Appraise Imported AflicIes. - The customs oficer 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 
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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.” 
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follows: 
SEC. 12. Section 1801 of the TCCP, as amended, is hereby further amended to read as 
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“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 
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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 TI-IE 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." 
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follows: 
SEC. 13. Section 1802 of the TCCP, as amended, is hereby further amended to read as 
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"SEC. 1802. 
Abandonment of Imported Artides - 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 
COMPROMISE. 
"AN UPDATED LISTING OF ALL ABANDONED SHIPMENTS 
SCHEDULED FOR AUCTION SHALL BE POSTED ON THE OFFICIAL 
WEBSITE OF THE BUREAU OF CUSTOMS AND AT THE MAIN 
ENTRANCE OF CUSTOMS HOUSES. 
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"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)." 
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follows: 
SEC. 14. Section 1901 of the TCCP, as amended, is hereby further amended to read as 
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I' SEC. 1901. Establishment and Supervision of Warehouses. - When 
the 2 business of the port requires such facilities, the Collector, subject to the 
approval of the Commissioner, shall designate and establish INDUSTRY - 
SPECIFIC warehouses 4 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. 
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follows: 
SEC. 15. Section 1902 of the TCCP, as amended, is hereby further amended to read as 
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'I SEC. 1902. Responsibility of Operators. - The operators of bonded 
warehouses in case of loss of the imported articles stored shall be liable for the 
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payment of duties and taxes due thereon. 
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premises. 
"The government assumes no legal responsibility in respect to the 
safekeeping of articles stored in any customs warehouse, sheds, yards, or 
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"THE OPERATORS OF THE BONDED WAREHOUSES SHALL, FOR 
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LEGITIMATE PURPOSES, MAKE AVAILABLE TO THE PUBLIC AN 
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INVENTORY OF ALL ARTICLES STORED THEREIN. FAILURE TO DO SO 
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IS A MANDATORY GROUND FOR THE REVOCATION OF LICENSE TO 
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OPERATE A BONDED WAREHOUSE." 
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follows: 
SEC. 16. Section 1903 of the TCCP, as amended, is hereby further amended to read as 
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'I SEC. 1903. Bonded Warehouses. - Application for the establishment 
of 24 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 10 1 building is to be used, AND THE INDUSTRY 
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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 NON- 
COMPLIANCE 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 fuced 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 
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GRANTED, AND AN AUTHORITY ALREADY GRANTED SHALL BE 
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REVOKED. 
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"THESE 
REQUIREMENTS 
SHALL 
LIKEWISE 
EXTEND 
TO 
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REGISTERED LOCATORS OPERATING UNDER THE CHARTERS OF THE 
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PHILIPPINE 
ECONOMIC ZONE 
AUTHORITY, THE 
SUBIC BAY 
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METROPOLITAN AUTHORITY, 
AND 
OTHER 
FREEPORTS AND 
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ECOZONES." 
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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: 
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'I 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. 
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follows: 
SEC. 18. Section 1904 of the TCCP, as amended, is hereby further amended to read as 
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"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." 
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follows: 
SEC. 19. Section 1905 of the TCCP, as amended, is hereby further amended to read as 
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"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 
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BONDED WAREHOUSE ON GROUNDS OF NON-COMPLIANCE WITH 
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THE REQUIREMENTS OF LAW AND REGULATIONS. Where the dutiable 
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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." 
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as follows: 
SEC. 20. Section 1906 of the TCCP, as amended, is hereby further 15 amended to read 
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"SEC. 1906. Entry of Artjcles for Warehousing. - The entry of articles 
for warehousiiig 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 
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follows: 
SEC. 21. Section 1907 of the TCCP, as amended, is hereby further amended to read as 
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I' 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 ofthe TCCP, as amended, is hereby further amended to read as 
follows: 
I' SEC. 1908. 
Limit to Period of Storage in Bonded T.l/'arehouse. 
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 
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ACCORDANCE WITH THE PROVISIONS OF THIS CODE." 
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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. ~ o a - ~ .  
LIQUIDATION OF WAREHOUSING ENTRIES - THE 
LIQUIDATION OF WAREHOUSING ENTRIES SHALL BE MADE NOT 
MORE THAN THREE (3) MONTHS FROM THE TIME OF RECEIPT OF THE 
WAREHOUSE. "A DAILY RECORD OF ALL ENTRIES LIQUIDATED SHALL 
BE POSTED ON A CONSPICUOUS PLACE IN THE MAIN ENTRANCE OF 
THE CUSTOMS HOUSE, STATING THE NAME OF THE VESSEL OR 
AIRCRAFT, THE PORT FROM WHICH SHE ARRIVED, THE DATE OF HER 
ARRIVAL, THE NAME OF THE IMPORTER, AND THE SERIAL NUMBER 
AND THE DATE OF ENTRY. THE COLLECTOR MUST ALSO KEEP A 
DAILY RECORD OF ALL ADDITIONAL DUTIES, TAXES AND OTHER 
CHARGES FOUND UPON LIQUIDATION, 
AND NOTICE SHALL 
PROMPTLY BE SENT TO THE INTERESTED PARTIES." 
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follows: 
SEC. 24. Section 2001 of the TCCP, as amended, is hereby further amended to read as 
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"SEC. 2001. Establishment of Bonded Manufacturing Warehouses. - 
1s 
All articles manufactured in whole or in part of imported materials, and 
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intended for exportation without being charged with duty, shall, in order to be 
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so manufactured and exported, be made and manufactured in manufacturing 
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warehouses under such rules and regulations as the Commissioner of Customs 
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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." 
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follows: 
SEC. 25. Section 2002 of the TCCP, as amended, is hereby further amended to read as 
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" SEC. 2002. Exemption Duty - 
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a. XML 
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 
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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." 
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follows: 
SEC. 26. Section 2005 of the TCCP, as amended, is hereby further amended to read as 
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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 


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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, hrther, That all labor 
performed and services rendered pursuant to this section shall be under the 
supemision of the proper customs official and at the expenses of the 
manufacturer: Provided, funher, 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 
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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 FINALLI: THAT 
BONDED SMELTING WAREHOUSES SHALL LIKEWISE BE SUBJECT TO 
THE PROVISIONS UNDER TITLE V, PART 1 OF THIS CODE, AS 
AMENDED." 
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follows: 
SEC. 27. Section 2503 of the TCCP, as amended, is hereby further amended to read as 
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"SEC. 2503. Undervaluation, Misclassifcation, and Misdeclaration in 
Entv. 
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 
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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, firrher, 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." 
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follows: 
SEC. 28. Section 2603 of the TCCP, as amended, is hereby further amended to read as 
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" 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 
,
>
 
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conspicuously posted at the FRONT ENTRANCE OF THE CUSTOMS 
HOUSE. " 
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follows: 
SEC. 29. Section 3601 of the TCCP, as amended, is hereby further amended to read as 
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"SEC. 3601. 
Unlawfil Importation. 
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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 
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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; 
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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. 
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7. 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 pezpetua to death shall be 
imposed when the crime of homicide shall have been committed by 
reason or on the occasion of the unlawful importation. 
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"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 
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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." 
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follows: 
SEC. 30. Section 3603 of the TCCP, as amended, is hereby further amended to read as 
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"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. 
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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." 
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follows: 
SEC. 31. Section 3604 of the TCCP, as amended, is hereby further amended to read as 
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"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: 
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follows: 
SEC. 32. Section 3605 of the TCCP, as amended, is hereby further amended to read as 
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'I SEC. 3605. Concealment or Destruction of Evidence of Fraud. 
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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." 
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follows: 
SEC. 33. Section 3606 of the TCCP, as amended, is hereby further amended to read as 
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"SEC. 3606. 
Affmng 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." 
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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 
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effect in their entirety. 
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modified accordingly. 
SEC. 35. Repealing Clause. - All other laws, decrees, executive orders, proclamations 
and administrative regulations, or parts thereof consistent herewith are hereby repealed or 
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SEC. 36. 
Effeccdvjqv Clause. - This Act shall take effect fifteen (15) days after its 
publication in at least two (2) national papers of general circulation. 
Adopted. 
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