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CUSTOMS MODERNIZATION AND TARIFF

ACT This is a very new law and there is no available
R.A. NO. 10863 textbook that which has an in depth discussion
about it. There is one available though, the
OUTLINE author is Abelardo T. Domondon. But the book
is mainly codal provisions and with a few notes
1. Customs Modernization and Tariff Act (RA which say what provision was amended or
10863) repealed.
2. Function of the Bureau of Customs
3. Customs Duties Now, around 80% of TCCP, more or less, was
a. Definition re-enacted in the new law with a few
i. Tariff modifications. So essentially, most principles
ii. Customs Duties and jurisprudence in customs law are still
b. Kinds applicable in the advent of the CMTA.
i. Regular
1. Ad valorem In fact, the repealing and saving clauses of
2. Specific CMTA would reveal that there are some
3. Mixed or compound provisions in the TCCP and its rules and
ii. Special regulations not inconsistent with the CMTA
1. Anti-dumping remain to be valid.
2. Countervailing
3. Marking Q: Do we need to compare the TCCP and
4. Discrimnatory CMTA each time?
c. Flexible Tariff Clause A: I don’t think so, because again, most of the
i. Sec. 28 (2), Art. VI, 1987 provisions in TCCP are re-enacted in the CMTA.
Consti There are only minor changes which are
ii. Codal introduced.
iii. Southerncross Cement v.
Cement Manufacturers GR BUREAU OF CUSTOMS
158540, 3 Aug 2005
4. Import Procedures Q: What government agency is tasked to
a. When does CMTA apply enforce and implement customs law?
i. Importation (CODAL) A: It’s the Bureau of Customs (BOC).
1. When does
importation begin The BOC is headed by a Commissioner. He
2. When does shall be assisted by at least 4 but not more than
importation end 6 deputy commissioners (Sec. 200, CMTA).
Feeder International Unlike before, under the TCCP, there are only 4
v. CA GR 94262, 31 deputy commissioners. Both the Commissioner
May 1991 and the deputies are presidential appointees.
ii. Exportation Also, there is a requirement that majority of the
Deputy Commissioners should come from the
b. Jurisdiction of Collector ranks of BOC (Sec. 200, CMTA).
c. Clearance procedure
i. Entry and Declaration Power and Functions of the BOC
ii. Period for entry
The power and functions of the BOC is found in
Sec. 202 of CMTA:
CUSTOMS MODERNIZATION AND TARIFF
ACT (CMTA) Section 202. Functions of the Bureau.— The
RA NO 10863 Bureau shall exercise the following duties and
functions:
CMTA is the new tariffs and customs law now. It
was approved on 30 May 2016. Previously it (a) Assessment and collection of customs
was PD 1464 as amended and it was called revenues from imported goods and other dues,
Tariff and Customs Code in the Philippines. fees, charges, fines and penalties accruing
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under this Act; original jurisdiction over forfeiture cases under

this act.
(b) Simplification and harmonization of customs
procedures to facilitate movement of goods in Power and Functions of COC
international trade;
The important official in the BOC is the COC. He
(c) Border control to prevent entry of smuggled is the highest official in the BOC and practically
goods; wields all the powers attached to the office. The
powers and functions of the COC are found in
(d) Prevention and suppression of smuggling Sec. 201 and Sec. 204.
and other customs fraud;
To summarize, the COC has:
(e) Facilitation and security of international trade 1. The power to interpret the provisions of
and commerce through an informed compliance the CTMA;
program; 2. The power to enforce the CTMA and
related laws, rules and regulations;
(f) Supervision and control over the entrance 3. Power to review the action and decision
and clearance of vessels and aircraft engaged in of customs officers including disputed
foreign commerce; assessments subject to review by the
SOF and exclusive appellate jurisdiction
(g) Supervision and control over the handling of of the CTA;
foreign mails arriving in the Philippines for the 4. Delegate powers;
purpose of collecting revenues and preventing 5. Assign or reassign customs officers;
the entry of contraband; and,
6. Promulgate rules and regulations
(h) Supervision and control on all import and subject to the approval of the SOF.
export cargoes, landed or stored in piers,
airports, terminal facilities, including container Section 201. Powers and Functions of the
yards and freight stations for the protection of Commissioner.— The Commissioner shall have
government revenue and prevention of entry of the following powers and functions:
contraband;
(a) Exclusive and original jurisdiction to interpret
(i) Conduct a compensation study with the end the provisions of this Act, in collaboration with
view of developing and recommending to the other relevant government agencies, subject to
President a competitive compensation and review by the Secretary of Finance;
remuneration system to attract and retain highly
qualified personnel, while ensuring that the (b) Exercise any customs power, duties and
Bureau remains financially sound and functions, directly or indirectly;
sustainable;
(c) Review any action or decision of any
(j) Exercise of exclusive original jurisdiction over customs officer performed pursuant to the
forfeiture cases under this Act; and provisions of this Act;

(k) Enforcement of this Act and all other laws, (d) Review and decide disputed assessments
rules and regulations related to customs and other matters related thereto, subject to
administration. review by the Secretary of Finance and
exclusive appellate jurisdiction of the Court of
So basically, the enforcement of the CMTA and Tax Appeals (CTA);
other laws, rules and regulations related to
customs administration is lodged with the BOC – (e) Delegate the powers vested under this Act to
from assessment and collection of taxes, any customs officer with the rank equivalent to
penalties, fines, and charges, to facilitation and division chief or higher, except for the following
control of international trade, imports and powers and functions:
exports, ports and boarders, compensation
study for its personnel, and of course, exclusive (1) Promulgation of rules and
regulations;
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(2) Issuance, revocation or modification There are essentially two types of ports of entry:
of rulings; and 1. Principal ports of entry; and,
2. Subports of entry.
(3) Compromise or abate of customs
obligations. Principal ports of entry are listed in Sec. 207 of
CMTA. They are as follows:
(f) Assignment or reassignment of any customs
officer subject to the approval of the Secretary of 1. Aparri,
Finance; Provided, That District Collectors and 2. San Fernando,
other customs officers that perform assessment 3. Manila, Manila International Container
functions shall not remain in the same area of Port,
assignment for more than three (8) years; and 4. Ninoy Aquino
5. International Airport,
(g) Perform all other duties and functions as may 6. Subic, Clark,
be necessary for the effective implementation of 7. Batangas,
this Act and other customs related laws. 8. Legaspi,
9. Iloilo,
Section 204. Promulgation of Rules and 10. Cebu,
Regulations.— The Commissioner, subject to 11. Tacloban,
the approval of the Secretary of Finance, shall 12. Surigao, Cagayan de Oro,
promulgate rules and regulations for the 13. Zamboanga,
enforcement of this Act. The Commissioner shall 14. Davao,
regularly prepare and publish an updated 15. Limay, and,
customs manual, and the rules, regulations and 16. Such other ports that may be created
decisions of the Bureau. The Commissioner pursuant to this Act
shall furnish the Congress of the Philippines, the
NEDA and the Tariff Commission with electronic The District Collector is assigned at principal
copies of department orders, administrative ports. The deputies may be assigned to other
orders, circulars, and rules and regulations types of ports of entry.
promulgated pursuant to this Act.
Section 207. Ports of Entry.— All ports of entry
CUSTOMS DISTRICTS AND PORTS OF shall be under the supervision and control of a
ENTRY Customs District. A District Collector shall be
assigned in the principal ports of entry while a
For facilitation and efficiency of implementing Deputy District Collector may be assigned to
customs law, the Philippines is divided into other types of ports of entry.
Customs Districts Each district shall be
supervised by 1 District Collector. He will be The principal ports of entry shall he located in
assisted by deputy district collectors (Sec. 206, Aparri, San Fernando, Manila, Manila
CMTA). The Customs Districts shall supervise International Container Port, Ninoy Aquino
and control ports of entry under its jurisdiction International Airport, Subic, Clark, Batangas,
(Sec. 207, CMTA). Legaspi, Iloilo, Cebu, Tacloban, Surigao,
Cagayan de Oro, Zamboanga, Davao, Limay
Q: What is a port of entry? and such other ports that may be created
A: Port of Entry refers to a domestic port open to pursuant to this Act.
both domestic and international trade, including
principal ports of entry and subports of entry. A For the effective enforcement of the Bureau's
principal port of entry is the chief port of entry of functions and without hampering business and
the Customs District wherein it is situated and is commercial operations of the ports, sea ports
the permanent station of the District Collector of and airport authorities and private ports and
such port. Subports of entry are under the airport operators shall provide suitable areas for
administrative jurisdiction of the District Collector examination, and for other customs equipment
of the principal port of entry of the Customs free of charge within a definite period of time, as
District. Port of entry as used in this Act shall agreed with private port and airport operations, if
include airport of entry (Sec. 102, (hh), CMTA). any.
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initiated litigation within the customs district and

Duties of the District Collector all other district transactions (Sec. 213, CMTA).

Q: What are the duties of the District Collector? WHEN DO CMTA AND OTHER CUSTOMS
A: Sec. 210: LAW APPLY

Section 210. Duties of the District Collector.— We have to know when should the CMTA and
The District Collector shall have the following other customs laws apply because this will have
duties in their assigned Customs District: an impact on the jurisdiction of the BOC and
other law enforcement agencies tasked by law
(1) Ensure entry of all imported goods at the to enforce customs law. So the first thing that we
customs office; have to ask is “when do the CMTA and other
customs law apply?”
(2) Prevent importation and exportation of
prohibited goods; The general answer is that CMTA and other
customs laws apply only when there is
(3) Ensure legal compliance of regulated goods importation or exportation. Without these two,
and facilitate the flow of legitimate trade; there is no CMTA or customs law to talk about.

(4) Examine, classify and value imported goods; Q: What is importation?

A: Importation refers to the act of bringing in of
(5) Assess and collect duties, taxes and other goods from a foreign territory into Philippine
charges on imported goods; territory, whether for consumption, warehousing,
or admission as defined in this Act (Sec. 102 (z),
(6) Hold and dispose imported goods in CMTA).
accordance with this Act;
Q: What about exportation?
(7) Prevent smuggling and other customs fraud; A: Exportation refers to the act, documentation,
and and process of bringing goods out of Philippine
territory (Section 102 (s), CMTA).
(8) Perform other necessary duties that may be
assigned by the Commissioner for the effective When Importation Begins and Ends
implementation of this Act. Subject to the
supervision and control of the District Collector, It is not enough for us to define importation. It’s
the duties and functions of the District Collector simple to understand. Goods are from abroad.
may be delegated to the Deputy District We want to transport them here in RP. That’s
Collector. The Deputy District Collector assigned basically importation.
to a sub-port shall be under the supervision and
control of the District Collector of the But if you notice, there is a time frame for
corresponding principal port. importation of goods. The goods are from
abroad, then they will be in transit, and then the
In essence, the district collector has supervision vessel or the plane enters the Philippine territory
and control over the ports of entry within his and then docks or lands at a Philippine port.
jurisdiction. He has the power to enforce all Then the goods are taken out whether
customs laws, rules, and regulations within the permanently or temporary.
scope of his territorial jurisdiction.
Under the given scenario, when will the BOC
He has the duty to ensure entry of all imported start to have jurisdiction over the goods? If the
goods, examine, classify, value imported goods, goods are already in the Philippines and
and assess and collect taxes due on importation unloaded, does that mean the BOC loses
and exportation. jurisdiction over such goods? Now, we need to
further define the concept of importation
So basically, he is like the mini COC. Only that, because, again, it has something to do with the
his territorial coverage is limited. Of course, he jurisdiction of the BOC over the imported goods.
has to make regular reports to the
Commissioner which includes any probable or Q: When does importation begin?
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A: Section 103: In this case, this intent is established. Violation

of customs law is considered as indicative of the
Section 103. When Importation Begins and intent which constitutes the commencement of
Deemed Terminated.— Importation begins when importation. In this case, there were no shipping
the carrying vessel or aircraft enters the documents for the cargo. Also, the vessel did
Philippine territory with the intention to unload not even notify Iloilo port or the Customs
therein. authorities.

Feeder International Line v. CA Q: When does importation end?

GR 94262, 31 May 1991 A: Sec. 103 further says:

Facts: Sec. 103. xxx xxx Importation is deemed

There is a foreign vessel (Honduras) operated terminated when:
and owned by Feeder International Shipping
Lines carrying gas oil and fuel oil. Then the (a) The duties, taxes and other charges due
vessel anchored somewhere in Iloilo without upon the goods have been paid or secured to be
informing the customs authorities. Their paid at the port of entry unless the goods are
anchoring only came to the knowledge of the free from duties, taxes and other charges and
authorities because of a civilian informant. legal permit for withdrawal has been granted; or

This was investigated by the customs and then (b) In case the goods are deemed free of duties,
the customs team found out that the vessel did taxes and other charges, the goods have legally
not have on board the required ship and left the jurisdiction of the Bureau.
shipping documents except for a clearance from
the Singapore port authorities clearing the There are two scenarios here:
vessel for Zamboanga. Because of which, the 1. If the goods imported are subject to
vessel and its cargo were held and a warrant of duties and taxes; and,
seizure and detention over the same was 2. If the goods imported are free of duties
issued. Thereafter, the forfeiture proceedings and taxes.
ensued and the collector of customs found
Feeder International guilty of illegal importation If the goods imported are subject to duties and
and ordered the forfeiture of the vessel including taxes, the importation is deemed to be
its cargo. terminated when:
1. The duties and other charges have been
This was appealed and all through out, Feeder paid or secured to be paid at the port of
lost. Then this case came to the SC. entry; AND,
2. The legal permit for withdrawal has
Issue: been granted.
Whether or not there is illegal importation. To
determine whether or not there is illegal If the goods are free of duties and taxes,
importation, we must first determine whether or importation is deemed terminated when the
not there is importation to begin with. goods have legally left the jurisdiction of the
Bureau.
According to Feeder, there is no importation to
begin with because Feeder did not even unload Secretary of Finance v. Oro Maura Shipping
its cargo. In fact, the vessel merely anchored Lines
somewhere and that’s it. GR No. 156946, 16 Jul 2009

Held: Facts:
The SC said still, there is illegal importation. The subject of importation here is a ship – a
Importation begins when the vessel or aircraft vessel – MV Haruna. The DOF allowed
enters the Philippine jurisdiction with the temporary registration of the ship and its tax and
intention to unload therein. Actual unloading is duty-free release to Glory Shipping lines. Then
not a requirement because mere intent is The BOC required Glory Shipping to post a bond
enough. equal to 150% of the duties and taxes. Glory
Shipping posted the bond.
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importation is merely a continuation of that

Eventually, MV Haruna arrived at Mactan Port original process.
was duly entered thereat.
EXERCISE OF POLICE AUTHORITY
Now, Glory Shipping’s bond expired. It also did
not comply with its letter of guaranty. It also did Q: Who are the persons or what are the offices
not pay the duties and taxes due on the vessel which may exercise police authority for the
despite repeated demands by the port of enforcement of CTMA?
Mactan. A: You have Sec. 214.

In the meantime, Glory shipping sold Haruna to Section 214. Persons Exercising Police
Oro Maura Shipping without notifying the Authority.— For the effective implementation of
Collector. this Act, the following persons are authorized to
effect search, seizure, and arrest:
Now, this same boat was then again entered in
the port of Manila and the duties and taxes (a) Officials of the Bureau, District Collectors,
assessed by Manila Port have been paid. Deputy District Collectors, police officers,
agents, inspectors and guards of the Bureau;
When Mactan Port Collector discovered this, it
sent a demand letter against Oro Maura for (b) Upon authorization of the Commissioner,
unpaid customs duties. Then an order of officers and members of the Armed Forces of
forfeiture was issued by Mactan Port Collector. the Philippines (AFP) and national law
enforcement agencies; and
In other words, there was an unpaid assessment
in Cebu for the vessel, but there was a paid (c) Officials of the BIR on all cases falling within
assessment in Manila for the same vessel. the regular performance of their duties, when
payment of internal revenue taxes is involved.
In this case, the government lost from the CTA
to the CA. Then the government appealed to the All officers authorized by the Commissioner to
court. exercise police authority shall at all times
coordinate with the Commissioner.
Issue:
Was the importation of MV Haruna terminated? Goods seized by deputized officers pursuant to
this section shall be physically turned-over
Held: immediately to the Bureau, unless provided
The SC said, the importation has not been under existing laws, rules and regulations.
terminated.
For this purpose, mission orders shall clearly
For termination, it is required that the duties and indicate the specific name carrying out the
other charges have been paid and the legal mission and the tasks to be carried out.
permit for withdrawal has been granted. The
payment must have to be payment in full in Subject to the approval of the Secretary of
order for an importation to be deemed Finance, the Commissioner shall define the
terminated. For as long as the importation has scope, areas covered, procedures and
not been completed, the imported item remains conditions governing the exercise of such police
under the jurisdiction of the BOC. authority including custody and responsibility for
the seized goods. The rules and regulations to
In this case, there was an original but this effect shall be furnished to the concerned
incomplete importation by Glory Shipping Lines. government agencies and personnel for
In this case, the duties and taxes for the guidance and compliance.
importation in Mactan have not been paid. This
is even if there was already payment made in All seizures pursuant to this section must be
Manila for the assessment made by the Manila effected in accordance with the provisions on
Port Collector. The importation that was the conduct of seizure proceedings provided for
originally started with Glory Shipping was never in Chapters 3 and 4 of Title XI of this Act.
completed and terminated that the present
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Q: Where can such authority be exercised? storage of goods, it shall not be considered as a
A: Section 215. dwelling house for purposes of this Act.

Section 215. Place Where Authority May be Under Section 219, any person exercising police
Exercised.— All persons exercising police authority may, at any time, enter, pass through,
authority as described in the preceding section and search any land, enclosure, warehouse,
shall, only exercise powers within customs store, building or structure. The main condition is
premises as provided for in Section 303 of this that the building is not principally used as a
Act, and within the limits of the authority granted dwelling house.
by the Commissioner, Port and airport
authorities in all ports of entry shall provide Q: What if there is a security personnel or
authorized customs officers with unhampered employee living in the said building?
access to all premises within their administrative A: It doesn’t matter. It shall not be considered as
jurisdiction. a dwelling house for purposes of this act.
You have to read this in conjuction with Sec.
303. Comparing this with the TCCP, the CMTA
removed the term “and his family”. In the TCCP,
Section 303. Control Over Premises Used for the provision says something like this – a
Customs Purposes.— The Bureau shall, for building used for storage does not become a
customs purposes, have exclusive control, dwelling house because a person employed as
direction and management of customs offices, watchman or his family stays in the premises.
facilities, warehouses, ports, airports, wharves,
infrastructure and other premises in the Q: Does this mean that if the family is already
Customs Districts, in all cases without prejudice living in the building, the place can now be
to the general police powers of the local considered as a dwelling house?
government units (LGUs), the Philippine Coast
Guard and of law enforcement agencies in the For dwelling houses, the rule is different:
exercise of their respective functions.
Section 220. Authority to Search Dwelling
Then you have the power of seizure of the House.— A dwelling house may be entered and
persons exercising police authority under CMTA. searched only upon warrant issued by a Judge
of a competent court, the sworn application
Section 216, Exercise of Power of Seizure.— thereon showing probable cause and particularly
Any person exercising police authority under this describing the place to be searched and the
Act has the power and duty to seize any vessel, goods to be seized.
aircraft, cargo, goods, animal or any other
movable property when the same is subject to For the search of dwelling house, it is mandatory
forfeiture or when they are subject of a fine that there must be a search warrant issued by a
imposed under this Act. judge upon sworn application showing probable
cause and particularly describing the place to be
Q: What about the authority to enter premises? searched and goods to be seized. So, the
If you remember your constitutional law, one of normal process for search warrant application
the exceptions in warrantless searches is must be taken.
searches by customs authority.
A: That exception is found in Section 219 and Apart from that, you also have Sec. 221 on
220 of the CMTA. search of vessels, aircrafts, and persons, or
goods conveyed therein. You also have Sec.
Section 219. Authority to Enter Properties.— 222 on authority to search vehicles, other
Any person exercising police authority may, at carriers, persons, and animals. You also have
any time, enter, pass through, and search any Section 223 pertaining to authority to search
land, enclosure, warehouse, store, building or persons arriving from foreign countries. And you
structure not principally used as a dwelling also have the power to inspect and visit – this
house. involves demand of evidence of payment of
When a security personnel or any other duties and taxes on imported goods openly for
employee lives in the warehouse, store, or any sale or kept in storage.
building, structure or enclosure that is used for
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Section 224. Power to Inspect and Visit.— The conveyance. It is not limited to ships or planes. It
Commissioner or any customs officer who is also involves conveyance by land.
authorized in writing by the Commissioner, may
demand evidence of payment of duties and The BOC is given the authority to pursue
taxes on imported goods openly for sale or kept imported goods subject to seizure during its
in storage. In the event that the interested party transport by land, water or air. Such imported
fails to produce such evidence within fifteen (15) goods are within the jurisdiction of the BOC.
days, the goods may be seized and subjected to
forfeiture proceedings: Provided, That during the Also incorporated in the section is the doctrine of
proceedings, the interested party shall be given hot pursuit. When a vessel or aircraft becomes a
the opportunity to prove or show the source of subject of seizure for violation of the CMTA, a
the goods and the payment of duties and taxes pursuit of such vessel or aircraft which began in
thereon: Provided, Further, That when the the territory of RP may continue even the pursuit
warrant of seizure has been issued but is already beyond the territory. The vessel or
subsequent documents presented evidencing aircraft may be seized in the high seas or
proper payment are found to be authentic and in international air space.
order, the District Collector shall, within fifteen
(15) days from the receipt of the motion to quash CUSTOMS CONTROL
or recall the warrant, cause the immediate
release of the goods seized, subject to The jurisdiction of the BOC is not limited to
clearance by the Commissioner: Provided, vessels. The jurisdiction is also over the goods.
Finally, That the release thereof shall not be This is affirmed by Sec. 301 of CMTA which
contrary to law. provides:

Section 301. Customs Control Over Goods.—

CUSTOMS JURISDICTION All goods, including means of transport, entering
or leaving the customs territory, regardless of
Customs jurisdiction has something to do with whether they are liable to duties and taxes, shall
the territorial coverage of the Customs. It be subject to customs control to ensure
includes the application of laws and pursuit of compliance with this Act.
goods subject to seizure.
xxx xxx xxx
Section 300. Customs Jurisdiction.— For the
effective implementation of this Act, the Bureau
shall exercise jurisdiction over all seas within IMPORTATION
Philippine territory and all coasts, ports, airports,
harbors, bays, rivers and inland waters whether Let us start with importation. As mentioned
navigable or not from the sea and any means of earlier, importation begins when the vessel or
conveyance. aircraft enters RP territory with the intention to
unload therein.
The Bureau shall pursue imported goods subject
to seizure during its transport by land, water and Now, upon arriving at the port, the first thing that
air and shall exercise jurisdiction as may be will be done is entry. The goods imported will be
necessary for the effective enforcement of this declared and entered through a customs office
Act. When a vessel or aircraft becomes subject at a port of entry. This is under Section 400.
to seizure for violation of this Act, a pursuit of
such vessel or aircraft which began within the Section 400. Goods to be Imported through
territorial waters or air space may continue Customs Office.— All goods imported into the
beyond the same, and the vessel or aircraft may Philippines shall be entered through a customs
be seized in the high seas or international air office at a port of entry, or may be admitted to or
space. removed from a free zone as defined in this Act,
as the case may be.
The jurisdiction of the BOC practically covers all
seas within the Philippine territory. It covers all Q: Which comes first, declaration or entry?
coasts, ports, and inland waters whether A: The declaration comes first. When the goods
navigable or not. It also includes any means of arrives, the declarant declares the goods
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imported and enters the declaration at the port advertises, describes or gives direct or indirect
of entry. information where, how or by whom unlawful
abortion is committed;
Section 115. Treatment of Importation.—
Imported goods shall be deemed “entered” in (c) Written or printed goods, negatives or
the Philippines for consumption when the goods cinematographic films, photographs, engravings,
declaration is electronically lodged, together with lithographs, objects, paintings, drawings or other
any required supporting documents, with the representation of an obscene or immoral
pertinent customs office. character;

Types of Importation (d) Any goods manufactured in whole or in part

of gold, silver or other precious metals or alloys
Q: What are the different types of importation? and the stamp, brand or mark does not Indicate
A: You have the following: the actual fineness of quality of the metals or
alloys;
1. Free Importation (and Exportation)
(e) Any adulterated or misbranded food or goods
Section 116. Free Importation and for human consumption or any adulterated or
Exportation.— Unless otherwise provided by law misbranded drug in violation of relevant laws
or regulation, all goods may be freely imported and regulations;
into and exported from the Philippines without (f) Infringing goods as defined under the
need for import and export permits, clearances Intellectual Property Code and related laws; and
or licenses.
(g) All other goods or parts thereof which
2. Regulated Importation (and Exportation) importation and exportation are explicitly
prohibited by law or rules and regulations issued
Section 117. Regulated Importation and by the competent authority.
Exportation.— Goods which are subject to
regulation shall be imported or exported only 4. Restricted Importation (and Exportation)
after securing the necessary goods declaration
or export declaration, clearances, licenses, and Section 119. Restricted Importation, and
any other requirements, prior to importation or Exportation.— Except when authorized by law or
exportation. In case of importation, submission regulation, the importation and exportation of the
of requirements after arrival of the goods but following restricted goods are prohibited:
prior to release from customs custody shall be
allowed but only in cases provided for by (a) Dynamite, gunpowder, ammunitions and
governing laws or regulations. other explosives, firearms and weapons of war,
or parts thereof;
3. Prohibited Importation (and Exportation)
(b) Roulette wheels, gambling outfits, loaded
Section 118. Prohibited Importation and dice, marked cards, machines, apparatus or
Exportation.— The importation and exportation mechanical devices used in gambling or the
of the following goods are prohibited: distribution of money, cigars, cigarettes or other
goods when such distribution is dependent on
(a) Written or printed goods in any form chance, including jackpot and pinball machines
containing any matter advocating or inciting or similar contrivances, or parts thereof;
treason, rebellion, insurrection, sedition against
the government of the Philippines, or forcible (c) Lottery and sweepstakes tickets, except
resistance to any law of the Philippines, or advertisements thereof and lists of drawings
written or printed goods containing any threat to therein;
take the life of, or inflict bodily harm upon any
person in the Philippines; (d) Marijuana, opium, poppies, coca leaves,
heroin or other narcotics or synthetic drugs
(b) Goods, instruments, drugs and substances which are or may hereafter be declared habit
designed, intended or adapted for producing forming by the President of the Philippines, or
unlawful abortion, or any printed matter which any compound, manufactured salt, derivative, or
 Page 10 of 39

preparation thereof, except when imported by practices.

the government of the Philippines or any person
duly authorized by the Dangerous Drugs Board, Q: What are the rights and responsibility of the
for medicinal purposes; declarant?
A: You have Sec. 107:
(e) Opium pipes or parts thereof, of whatever
material; and Section 107. Rights and Responsibilities of the
Declarant.— The declarant shall be responsible
(f) Any other goods whose importation and for the accuracy of the goods declaration and for
exportation are restricted. the payment of all duties, taxes and other
charges due on the imported goods. The
The restriction to import or export the above licensed customs broker shall likewise be
stated goods shall include the restriction on their responsible for the accuracy of the goods
transit. declaration but shall not be responsible for the
payment of duties, taxes and other charges due
Declaration on the imported goods.

Q: Who makes the declaration? The declarant shall sign the goods declaration,
A: The declarant. This is found in Section 106 of even when assisted by a licensed customs
CMTA: broker, who shall likewise sign the goods
declaration.
Section 106. Declarant.— A declarant may be a
consignee or a person who has the right to Q: What are the goods that need to be
dispose of the goods. The declarant shall lodge declared?
a goods declaration with the Bureau and may A: Under Sec. 401, unless otherwise provided in
be: CMTA, all imported goods shall be subject to the
lodgement of a goods declaration. A goods
(a) The importer, being the holder of the bill of declaration may be for consumption, for customs
lading; or bonded warehousing, for admission, for
conditional importation, or for customs transit.
(b) The exporter, being the owner of the goods
to be shipped out; or The declarant declares the goods. After the
declaration comes the entry. The declarant then
(c) A customs broker acting under the authority enters the declaration either manually or
of the importer or from a holder of the bill; or electronically. The entire process is what you
call as “entry”.
(d) A person duly empowered to act as agent or
attorney-in-fact for each holder. “Entry” refers to the act, documentation and
process of bringing imported goods into the
In case the consignee or the person who has the customs territory, including goods coming from
right to dispose of the goods is a juridical free zones (Sec. 101 (r), CMTA).
person, it may authorize a responsible officer of
the company to sign the goods declaration as The act of filing the declaration before the BOC
declarant on its behalf. is called “Lodgment.” “Lodgment refers to the
registration of goods declaration with the Bureau
The goods declaration submitted to the Bureau (Sec. 102 (dd), CMTA)
shall be processed by the declarant or by a
licensed customs broker; Provided, That for Q: What are the types of entry?
importations, a transition period of two (2) years A: There are two types of entry: (1) formal entry;
from the effectivity of this Act is hereby provided and (3) informal entry.
during which subparagraph (d) of this section
shall not be implemented by the Bureau: A formal entry is one filed by the customs
Provided, Further, That after two (2) years from broker. If the entry is filed by the customs
the effectivity of this Act, subparagraph (d) of examiner or appraiser, it is called an informal
this section shall take into effect consistent with entry.
international standards and customs best
 Page 11 of 39

Now, under Section 402, all goods declaration salvors of goods saved from wreck at sea,
for consumption shall be cleared through a coast, or in any area of the Philippines, may be
formal entry process except for the following regarded as the consignees.
goods which shall be cleared through an
informal entry process: This is important because the importer is the
one liable for the duties, taxes, fees and charges
a. Goods of commercial nature with FOB attached to importation. In fact, it is a personal
or FCA at a value of less than debt due and demandable against the importer
50,000.00; and, against the government. This is under Sec. 405:
b. Personal and household effects or
goods, not in commercial quantity, Section 405. Liability of Importer for Duties and
imported in a passenger’s baggage or Taxes.— Unless relieved by laws or regulations,
mail. the liability for duties, taxes, fees, and other
charges attached to importation constitutes a
Q: Now, there are some occasions that the personal debt due and demandable against the
declarant has no sufficient knowledge of the importer in favor of the government and shall be
goods imported. What is the remedy? discharged only upon payment of duties, taxes,
A: It is possible that he will avail of provisional fees and other charges. It also constitutes alien
goods declaration. on the imported goods which may be enforced
while such goods are under customs' custody.
Section 403. Provisional Goods Declaration.—
Where the declarant does not have all the Q: When should the goods declaration be filed?
information or supporting documents required to A: Sec. 407:
complete the goods declaration, the lodging of a
provisional goods declaration may be allowed: Section 407. Goods Declaration and Period of
Provided, That it substantially contains the Filing.— xxx xxx xxx
necessary information required by the Bureau
and the declarant undertakes to complete the Goods declaration must be lodged within fifteen
information or submit the supporting documents (15) days from the date of discharge of the last
within forty-five (45) days from the filing of the package from the vessel or aircraft. The period
provisional goods declaration, which period may to file the goods declaration may, upon request,
be extended by the Bureau for another forty-five be extended on valid grounds for another fifteen
(45) days for valid reasons. (15) days: Provided, That the request is made
before the expiration of the original period within
If the Bureau accepts a provisional goods which to file the goods declaration: Provided,
declaration, the duty treatment of the goods However, That the period of the lodgement of
shall not be different from that of goods with the goods declaration may be adjusted by the
complete declaration. Commissioner.

Goods under a provisional goods declaration Q: What are the contents and the statements
may be released upon posting of any required that should be included in the goods
security equivalent to the amount ascertained to declaration?
be the applicable duties and taxes. A: You have Sec. 411 and Sec. 412:

Q: Who is the deemed the owner of imported Section 411. Contents of Goods Declaration.—
goods? Goods declaration shall contain the names of
A: Section 404. the consignee, importing vessel or aircraft, port
of departure, port of destination and date of
Section 404. Owner of Imported Goods.— All arrival, the number and marks of packages, or
goods imported into the Philippines shall be the quantity, if in bulk, the nature and correct
deemed to be the property of the consignee or commodity description of the goods contained
the holder of the bill of lading, airway bill or other therein, its value as set forth in a proper invoice,
equivalent transport document if duly endorsed and such other information as may be required
by the consignee therein, or, if consigned to by rules and regulations. Where the declarant
order, duly endorsed by the consignor. The does not have all the information required to
underwriters of abandoned goods and the make the goods declaration, a provisional or
 Page 12 of 39

incomplete goods declaration shall, for certain As a general rule the BOC may examine the
cases and for reasons deemed valid by the goods in the presence of declarant or his
Bureau, be allowed to be lodged: Provided, That authorized representative. However,
it contains the particulars deemed necessary by examination of the goods in the absence of the
the Bureau for the acceptance of the entry filed declarant or his representative may be allowed
and that the declarant undertakes to complete it in exceptional circumstance. These
within forty-five (45) days from the filing of the circumstances will be defined by the IRR (Sec.
provisional goods declaration in accordance with 419, CMTA).
Section 403 of this Act.
If the declarant or his representative does not
Section 412. Statements to be Provided in the appear, the BOC may require the declarant to
Goods Declaration.— No entry of imported be present or be represented at the examination
goods shall be allowed unless the goods of goods (Sec. 419, CMTA).
declaration has been lodged with the Bureau.
The goods declaration shall, under penalties of Q: What about taking samples? Is the BOC
falsification or perjury, contain the following allowed to do that?
statements: A: Yes, the BOC is allowed but only when
needed to establish the description and value of
(a) The invoice and goods declaration contain the goods declared or to ensure compliance.
an accurate and faithful account of the prices The samples shall be as minimal as possible
paid or payable for the goods, and other (Sec. 419, CMTA).
adjustments to the price actually paid or
payable, and that nothing has been omitted By virtue of the amendment, the law now allows
therefrom or concealed whereby the government nonintrusive examination of goods such as the
of the Republic of the Philippines might be use of x-ray machines. As per international
defrauded of any part of the duties and taxes standards, the examination shall be as
lawfully due on the goods; and nonintrusive as possible (Section 420, CMTA).

(b) To the best of the declarant's information and However, this does not prevent the BOC from
belief, all the invoices and bills of lading or employing physical examination when:
airway bills relating to the goods are the only 1. It is directed by the COC on account of
ones in existence relating to the importation in derogatory information;
question, and that these documents are in the
same state as when they were received by the 2. The goods are subject to an Alert Order;
declarant, and the declaration thereon are in all
respects genuine and true. 3. The goods are electronically selected for
physical exam;
Goods declaration shall be submitted 4. There are issues and controversies
electronically pursuant to Republic Act No. 8792, surrounding the goods declaration and
otherwise known as the “Electronic Commerce import clearance process; or,
Act of 2000”. Such declarations when printed
and certified by a competent customs officer as 5. The importer or declarant requests for
a faithful reproduction of the electronic examination of goods (Sec. 420,
submission shall be considered as actionable CMTA).
documents for purposes of prosecuting a
declarant if the declarations are found to be Assessment
fraudulent.
After examination is the assessment.
Examination of Goods Assessment is the process of determining the
After the entry, there will be an examination of amount of duties and taxes and other charges
goods. Priority in the examination is given to due on imported and exported goods (Sec. 102
perishable goods, live animals, and other goods (e), CMTA).
requiring immediate examination (Sec. 419,
CMTA). Q: Who has the task of making such
assessment?
 Page 13 of 39

A: Initially, it is lodged with the customs officer. Q: Can the district collector modify or alter the
He shall classify, value, and determine the appraisal, classification, or return?
duties and taxes to be paid. A: As a general rule no, except on 4 instances.
This is under Sec. 427:
Q: Can the importer dispute such assessment?
A: Yes, the importer may do so. But this does Section 427. Readjustment of Appraisal,
not prevent the customs officer in proceeding Classification or Return.— Such appraisal,
with the assessment anyway. You call this as classification or return, as finally passed upon
“tentative assessment”. and approved or modified by the District
Collector, shall not be altered or modified in any
Section 425. Tentative Assessment of Goods manner, except:
Subject to Dispute Settlement.— Assessment
shall be deemed tentative if the duties and taxes (1) Within one (1) year after payment of the
initially assessed are disputed by the importer. duties, upon statement of error in conformity
The assessment shall be completed upon final with Section 912 of this Act, as approved by the
readjustment based on the tariff ruling in case of District Collector;
classification dispute, or the final resolution of
the protest case involving valuation, rules of (2) Within fifteen (15) days after such payment,
origin, and other customs issues. upon request for reappraisal or reclassification
addressed to the Commissioner by the District
The District Collector may allow the release of Collector, if the appraisal or classification is
the imported goods under tentative assessment deemed to be low;
upon the posting of sufficient security to cover
the applicable duties and taxes equivalent to the (3) Upon request for reappraisal and/or
amount that is disputed. reclassification, in the form of a timely protest
addressed to the District Collector by the
Under Sec. 425, a tentative assessment shall be interested party if the latter should be
is completed: dissatisfied with the appraisal or return; or

1. Upon final readjustment based on the (4) Upon demand by the Commissioner after the
tariff ruling in case of classification completion of compliance audit in accordance
dispute; or, with the provisions of this Act.

2. The final resolution of the protest case Q: When does an assessment become final?
involving valuation, rules of origin, and A: Assessment shall be deemed final fifteen (15)
other customs issues. days after receipt of notice of assessment by the
importer or consignee (Sec. 430, CMTA).
Tentative assessment may also arise from
provisional goods declaration. This means that after 15 days, the assessment
becomes final and the importer now is required
Section 426. Tentative Assessment of to pay the duties, taxes, and charges in the
Provisional Goods Declaration.— Assessment of assessment.
a provisional goods declaration shall be deemed
tentative and such assessment shall be Q: What is the prescriptive period for the
completed upon final readjustment and assessment?
submission by the declarant of the additional A: Section 430.
information or documentation required to
complete the declaration within the period Section 430. Period of Limitation.— In the
provided in Section 403 of this Act. absence of fraud and when the goods have
been finally assessed and released, the
Now, in case of a dispute in the assessment, the assessment shall be conclusive upon all parties
assessment may still be adjusted by the district three (3) years from the date of final payment of
collector. The adjustment may be in the duties and taxes, or upon completion of the post
classification of the imported goods, or the clearance audit.
appraisal of the goods, or the return itself.
 Page 14 of 39

So, the assessment shall become conclusive Satisfaction of Lien.— When the District
upon all parties 3 years: Collector is duly notified through a lawful order
1. From the date of final payment of duties of a competent court of a lien for freight,
and taxes, or lighterage or general average upon any
2. Upon completion of the post clearance imported goods, the District Collector shall
audit. withhold the release of the goods unless the
claim has been paid or secured. In case of
After the payment of the final assessment, the disagreement, the District Collector may release
BOC is not precluded from demanding further the goods after payment of the freight and
payment of the duties and taxes. In fact, the law lighterage due on the quantity or weight landed
mandates the BOC to conduct a post clearance as actually determined.
audit:

Section 1000. Audit and Examination of EXPORTATION

Records.— Within three (3) years from the date
of final payment of duties and taxes or customs In exportation, what is needed is an export
clearance, as the case may be, the Bureau may declaration. All goods exported from RP,
conduct an audit examination, inspection, whether subject to export duty or not, shall be
verification, and investigation of records declared through an export declaration. It may
pertaining to any goods declaration, which shall be signed electronically or otherwise by the
include statements, declarations, documents, party making the declaration.
and electronically generated or machine
readable data, for the purpose of ascertaining CUSTOMS TRANSIT AND TRANSSHIPMENT
the correctness of the goods declaration and
determining the liability of the importer for duties, There are two exceptions to the rule that
taxes and other charges, including any fine or importation begins when the vessel enters to RP
penalty, to ensure compliance with this Act. territories with intention to unload therein. They
are:
Q: Now, what happens after the duties and 1. Customs Transit; and,
taxes have already been paid? 2. Customs Transhipment.
A: The goods declared shall be released after
compliance with all pertinent laws, rules, and Customs Transit
regulations.
In the instances covered under customs transit,
Section 431. Release of Goods after Payment the goods are exempt from importation taxes
of Duties and Taxes.— Goods declared shall be and duties mainly because there is no
released when duties and taxes and other lawful importation at all.
charges have been paid or secured and all the
pertinent laws, rules and regulations have been The situation contemplated here is the customs
complied with. procedure under which goods, in its original
When the Bureau requires laboratory analysis of form, is transported under customs control from
samples, detailed technical documents or expert one customs office to another, or to a free zone
advice, it may release the goods before the (Sec. 102 (rr), CTMA).
results of such examination are known after
posting of sufficient security by the declarant. There is no importation at all because it involves
just a transfer of the goods from one office to
Q: Upon payment of the duties and taxes, can another.
the BOC withhold the release of the imported
goods? Section 601. Duty and Tax on Goods Intended
A: As a general rule, no. Bayad na eh. This is for Transit.— Transit goods admitted for storage
especially true if all the documentations have in a customs bonded warehouse, or for outright
already been filed and completed and the full exportation at the port of destination or inland
amount of duties and taxes has been paid. One customs office, and goods intended for transit
exception though is Section 435: covered by Republic Act No. 10668, otherwise
known as “An Act Allowing Foreign Vessels to
Section 435. Withholding Release Pending Transport and Co-Load Foreign Cargoes for
 Page 15 of 39

Domestic Transshipment and for Other pesos (₱50,000.00). Such security shall ensure
Purposes”, shall not be subject to the payment the complete and immediate delivery of goods to
of duties and taxes at the port of entry: Provided, the customs officer at the port of destination and
That any conditions and security required by the the payment of pertinent customs charges and
Bureau are complied with. expenses and other transfer costs. The amount
of the security may be adjusted by the
Goods for consumption and other goods Commissioner, upon approval of the Secretary
intended for customs transit not covered by the of Finance.
immediately preceding paragraph shall he
subject to the payment of duties and taxes at the Going back to Sec. 601, these procedures need
port of discharge. to be followed. The goods must be presented
intact and in due course at the customs office of
destination. Failure to comply with the rules may
Q: When does customs transit happen? subject the goods to the corresponding duties
A: Sec. 600: and taxes.

Section 600. Customs Transit in the Customs The party responsible for the compliance of the
Territory.— Customs transit within the customs obligations imposed on customs transit shall
territory shall be allowed for goods except ensure that the goods are presented intact and
those intended for consumption, to be in due course at the customs office of
transported as follows: destination. Failure to comply with the
aforementioned obligations or likewise failure to
(a) From port of entry to another port of entry as follow a prescribed itinerary or period for delivery
exit point for outright exportation; of the goods may immediately subject the goods
to the corresponding duties, taxes and other
(b) From port of entry to another port of entry or applicable fines, penalties, and surcharges.
inland customs office;
Customs Transshipment
(c) From inland customs office to a port of entry
as exit point for outright exportation; and Section 603 provides that goods admitted for
transshipment shall not e subject to the payment
(d) From one port of entry or inland customs of tax.
office to another port of entry or inland customs
office. Section 603. Customs Transshipment.— Goods
admitted for transshipment shall not be subject
Q: What are basically required for customs to the payment of duties and taxes: Provided,
transit? That the goods declaration for customs
A: Of course there must be a transit permit: transshipment particularly indicates such nature
of the goods, duly supported by commercial or
Sec. 601. xxx xxx xxx transport documents or evidence as required by
the Bureau.
A transit permit is required for goods transported
under customs transit. However, transfer of Goods for transshipment must be exported from
goods in customs transit from one means of the Philippines within thirty (30) days from arrival
transport to another shall be allowed; Provided, thereof. The Commissioner may allow an
That any customs seal or fastening is not broken extension of such period after the establishment
or tampered. of valid reasons.

And there must be a carrier’s security to be Q: What does “transshipment” mean?

posted by the imported. A: Transshipment refers to the customs
procedure under which goods are transferred
Section 602. Carrier's Security.— Carriers that under customs control from the importing means
transport imported goods that shall be placed of transport to the exporting means of transport
under customs transit from a port of entry to within the area of one Customs office, which is
other ports, shall post a general transportation the office of both importation and exportation.
security amounting to at least fifty thousand
 Page 16 of 39

IMPORT DUTY AND TAX 4. Deductive Value – Method Four - Where the
dutiable value cannot be determined under
Valuation of Imported Goods the preceding method, the dutiable value
shall be the deductive value unless
Part of the assessment of duties and taxes is the otherwise requested by the importer as
valuation of the goods imported or exported. provided in Section 700 hereof. The
Under CMTA, pretty much like the TCCP, there deductive value which shall be based on the
must have to be a basis of valuation. There are unit price at which the imported goods or
several methods for valuation of imported goods identical or similar imported goods are sold
but we will not discuss them in detail: in the Philippines, in the same condition as
when imported, in the greatest aggregate
1. Transaction Value System – Method One – quantity, at or about the time of the
Transaction value shall be the price actually importation of the goods being valued, to
paid or payable for the goods when sold for persons not related to the persons from
export to the Philippines adjusted in whom they buy such goods, subject to
accordance with the provisions of CMTA deductions allowed under the CTMA (Sec.
(Sec. 701, CMTA). 704, CMTA).

2. Transaction Value of Identical Goods – 5. Computed Value – Method Five - Where the
Method Two – Where the dutiable value dutiable value cannot be determined under
cannot be determined under method one, the preceding method, the dutiable value
the dutiable value shall be the transaction shall be the computed value of the sum of:
value of identical goods sold for export to
the Philippines and exported at or about the (1) The cost or the value of materials and
same time as the goods being valued (Sec. fabrication or other processing employed in
702, CMTA). producing the imported goods;

Q: What do we mean by “identical goods”? (2) The amount for profit and general
A: This refers to goods which are the same expenses equal to that usually reflected in
in all respects, including physical the sale of goods of the same class or kind
characteristics, quality, and reputation. as the goods being valued which are made
Minor differences in appearance shall not by producers in the country of exportation
preclude goods otherwise conforming to the for export to the Philippines;
definition from being regarded as identical.
(3) The freight, insurance fees and other
3. Transaction Value of Similar Goods – transportation expenses for the importation
Method Three - here the dutiable value of the goods;
cannot be determined under the preceding
method, the dutiable value shall be the (4) Any assist, if its value is not included
transaction value of similar goods sold for under paragraph (1) hereof; and
export to the Philippines and exported at or
about the same time as the goods being (5) The cost of containers and packing, if
valued (Sec. 703, CMTA). their values are not included under
paragraph (1) hereof (Sec. 705, CMTA).
Q: What do we mean by “similar goods”?
A: “Similar goods” refer to goods which, 6. Fallback Value – Method Six – If the dutiable
although not alike in all respects, have like value cannot be determined under the
characteristics and similar component preceding methods described above, it shall
materials which enable them to perform the be determined by using other reasonable
same functions and to be commercially means and on the basis of data available in
interchangeable. The quality of the goods, the Philippines (Sec. 706, CMTA).
its reputation and the existence of a
trademark shall be among the factors to be These valuations methods are sequential in
considered in determining whether goods application. But an exception is Deducted Value
are similar. and Computed Value. The importer may request
from the BOC that in case the transaction values
 Page 17 of 39

cannot be determined, the BOC computes the Sec. 709. xxx xxx xxx
goods’ value under Computed Value first rather
than the Deducted Value (Sec. 700). An importer who is dissatisfied with a decision of
the Commissioner pertaining to this section may,
within twenty (20) working days after the date on
SPECIAL DUTIES AND TRADE REMEDY which notice of the decision is given, appeal to
MEASURES the Secretary of Finance, and thereafter if still
dissatisfied, to the CTA as provided for in
These are the measures that may be taken by Section 1136 of this Act.
the government to protect domestic industry.
Let’s discuss them one by one. Q: How shall the challenge be done?
A: The importer shall file an appeal with the
Government’s Right of Compulsory SOF.
Acquisition
Q: When should the appeal be made?
Section 709. Government's Right of A: The appeal should be made within 20 working
Compulsory Acquisition.— In order to protect days after receipt of the notice of the decision for
government revenues against undervaluation of compulsory acquisition of the goods.
goods, the Commissioner may, motu proprio or
upon the recommendation of the District Q: What happens when there is no appeal
Collector, acquire imported goods under made?
question for a price equal to their declared A: Well, the government acquires the imported
customs value plus any duties already paid on goods. Also, the government may sell the
the goods, payment for which shall be made acquired goods pursuant to existing laws and
within ten (10) working days from issuance of a regulations or dispose it in any manner pursuant
warrant signed by the Commissioner for the to existing laws.
acquisition of such goods.
Take note of the last paragraph:
Let’s dissect.
Nothing in this section limits or affects any other
Q: What is the ground for the government to powers of the Bureau with respect to the
exercise its right of compulsory acquisition? disposition of the goods or any liability of the
A: The acquisition is necessary to protect importer or any other person with respect to an
government revenues against undervaluation of offense committed in the importation of the
goods. goods.

Take note that this right may be exercised by the The succeeding items deal with the Special
BOC motu proprio or upon the recommendation Tariffs composing of:
of the District Collector. 1. Marking duty;
2. Anti-dumping Duty;
Q: How is it done? 3. Safeguard Duty;
A: The government will issue a warrant for the 4. Countervailing Duty; and,
acquisition of goods. The warrant shall be 5. Discriminatory Duty.
signed by the COC. The warrant shall state that
the government intends to acquire imported Marking of Imported Goods and Containers
goods under question for a price equal to their and Marking Duty
declared customs value plus any duties already
paid on the goods. One of importation is the proper marking of (1)
goods and (2) the containers.
Q: When will the government pay the importer?
A: Payment shall be made within 10 working Under Section 710, except as provided by the
days from issuance of a warrant. CMTA, all goods of foreign origin imported into
the RP or their containers shall be
Q: Can the importer challenge this? conspicuously marked in any official language of
A: Yes. the Philippines. The marking must indicate the
name of the country of origin of the goods.
 Page 18 of 39

failure to mark. It’s 5% of the dutiable

Exceptions for marking: value of the goods.

1. Goods are incapable of being marked; 2. Release shall be withheld until proper
marking has been done.
2. Goods cannot be marked prior to
shipment to the RP without injury; 3. If after having been ordered to properly
marked the goods, within 30 days after
3. Goods cannot be marked prior to due notice, such refusal shall constitute
shipment to the RP, except at an an act of ABANDONMENT of goods.
expense economically prohibitive of The disposition of abandoned goods will
their importation; then be taken by the BOC.

4. The marking of a container of such Anti-dumping Duty

goods will reasonably indicate the origin
of such goods; Section 711 CMTA adopted the Anti-Dumping
Act of 1999 (RA 8752).
5. Goods are crude substances;
6. Goods are imported for use by importer Q: What is “Anti-dumping Duty?”
and not intended for sale in their A: Anti-dumping duty is a special duty imposed
imported or any other form; on the importation of a product, commodity, or
article of commerce in the Philippines:
7. Goods are to be processed in the
Philippines by the importer or for the  At less than its normal value when
importer's account other than for the destined for domestic consumption in
purpose of concealing the origin of such the exporting country;
goods and in such manner that any
mark contemplated by this section  Which importation is causing or is
would necessarily be obliterated, threatening to cause:
destroyed, or permanently concealed;
o material injury to a domestic
8. An ultimate purchaser, by reason of the industry, or
character of such goods or by reason of
the circumstances of their importation, o materially retards the
must necessarily know the country of establishment of a domestic
origin of such goods even though they industry producing like product
are not marked to indicate their origin;
In simple terms, anti-dumping duty is imposed
9. Such goods were produced more than on underpriced articles. The under pricing is
twenty (20) years prior to their causing, or is threatening to cause material
importation into the Philippines; or, injury to a domestic industry.
Q: How much is the anti-dumping duty?
10. Such goods cannot be marked after A: It is the difference between the export price
importation except at an expense which and the normal value of such article.
is economically prohibitive, and the
failure to mark the goods before Q: Who imposes anti-dumping duties?
importation was not due to any purpose A: Different agencies are involved:
of the importer, producer, seller or 1. Secretary of Trade and Industry for non-
shipper to avoid compliance with this agri products;
section. 2. Secretary of Agriculture in case of agri
products; and,
Q: What are the effects for failure to mark? 3. Tariff Commission.
A: The effects are:
1. Imposition of a MARKING DUTY - The There will be a written application submitted.
importer shall be subjected to affine for And then there will be a formal investigation.
Then there will be a determination by the Tariff
 Page 19 of 39

Commission whether or not the grounds for the Sec. 5. Conditions for the Application of General
imposition of Anti-dumping Duty exist. Safeguard Measures. – The Secretary shall
apply a general safeguard measure upon a
But even if there is a finding that there are positive final determination of the Commission
grounds present, the decision of whether or not that a product is being imported into the country
to impose a definitive anti-dumping duty remains in production, as to be a substantial cause of
the prerogative of the Tariff Commission. serious injury or threat thereof to the domestic
industry; however, in case of non-agricultural
The duration of the definitive anti-dumping duty products, the Secretary shall first establish that
shall not exceed 5 years from the date of its the application of such safeguard measures will
imposition unless the tariff commission has be in the public interest.
determined in a review that such duty is no
longer necessary. Q: What is the remedy of any interested party?
A: It’s pretty much the same with the anti-
Q: What is the remedy of the aggrieved party? dumping duty.
A: Any interest party may file with the CTA a
petition for review within 30 days from receipt of A petition for review within 30 days from receipt
the notice of the final ruling. of the ruling may be filed before the CTA.

Q: What is the meaning of “interested party” The petition shall not stop or suspend the
here? collection of the safeguard measure without
A: This can be the importer or this can even be prejudice to the CTA’s authority to issue an
the Secretary of Trade and Industry or the injunction in proper cases.
Secretary of Agriculture, as the case may be
(Southern Cross v. Philippine Cement Countervailing Duty
Manufacturers, GR 158540, 8 July 2004).
Countervailing duty is the additional customs
Take note that the filing of such petition for duties imposed on any product, commodity or
review shall not in any way stop, suspend, or article of commerce:
otherwise hold the imposition or collection, of the
anti-dumping duty. This is of course without  Which is granted directly in indirectly
prejudice on the CTA’s authority to issue an by the government in the country of
injunction in proper cases on the ground that the origin or exportation
collection of such duty would jeopardize the ,
interest of the government or the taxpayer.  Any kind or form of specific subsidy
upon the production, manufacture,
Safeguard Duty or exportation of such product,
commodity, or article, and,
Section 712 adopted RA 8800, the Safeguard
Measures Act.  The importation of the subsidized
product has cause or threatens to
These are emergency measures, including cause
tariffs, to protect domestic industries and
producers from increased imports which inflict or o material injury to a domestic
could inflict serious injury on them. industry, or

Q: Who has the authority to impose such o has materially retarded the
safeguard measures? growth or prevents the
A: It is the SA for agri products, STI for non-agri establishment of a domestic
products, and only upon a positive final industry.
determination of the TC.
In effect, the imported article is so cheap
Section 5 of RA 8800 provides for the conditions because of the subsidy provided by the foreign
for the application of general safeguard government that its importation in the Philippines
measures: would materially affect local industries. To
 Page 20 of 39

counter such act, a countervailing duty is A: It is when the President finds for a fact that
imposed on such article. such foreign country:

Q: What is the amount of the countervailing (1) Imposes, directly or indirectly, up on the
duty? disposition or transportation in transit or through
A: It is equivalent to the bounty, subsidy, or reexportation from such country of any goods
subvention. wholly or in part the growth or product of the
Philippines, any unreasonable charge,
Q: Who are the imposing authorities? exaction, regulation or limitation which is not
A: STI and SA but the final decision remains equally enforced upon the like goods of
with the TC. every foreign country; or

Q: What is the remedy of any interested party (2) Discriminates in fact against the commerce
affected? of the Philippines, directly or indirectly, by law or
A: Still the same – petition for review with the administrative regulation or practice, by or in
CTA within 30 days after receipt of notice of respect to any customs, tonnage, or port
such imposition. duty, fee, charge, exaction, classification,
regulation, condition, restriction or
Again, the filing of the petition shall not stop or prohibition, in such manner as to place the
suspend the imposition and collection of the duty commerce of the Philippines at a
without prejudice to the CTA’s authority to issue disadvantage compared with the commerce of
injunction in proper cases. any foreign country.

Discriminatory Duty
Q: What are the effects if after the imposition of
This is under Sec. 714 of the CMTA: discriminatory duty, the foreign country involves
continues to maintain or increases such
Section 714. Discrimination by Foreign discriminatory practices?
Countries.— Without prejudice to the Philippine A: Then the president may do the following:
commitment in any ratified international
agreements or treaty, the following recourse Section 714. xxx xxx xxx
shall be applicable in case of discrimination by
foreign countries: (b) If at any time the President shall find it to be
a fact that any foreign country has not only
(a) When the President finds that the public discriminated against the commerce of the
interest will be served thereby, the President Philippines, as aforesaid, but has, after the
shall, by proclamation, specify and declare new issuance of a proclamation as authorized in
or additional duties in an amount not exceeding subsection (a) of this section, maintained or
one hundred percent (100%) ad valorem upon increased its said discrimination against the
goods wholly or in part the growth or product of, commerce of the Philippines, the President is
or imported in a vessel of any foreign country hereby authorized, if deemed consistent with the
whenever the President shall find as a fact that interests of the Philippines and of public interest,
such country: to issue a further proclamation directing that
Q: What do we mean by “discriminatory duty”? such product of said country or such goods
A: In essence, discriminatory duty is imposed imported in their vessels be excluded hom
upon articles wholly or in part of the growth or importation into the Philippines.
product of or imported in any vessel of, any
foreign country which discriminates or places (c) Any proclamation issued by the President
undue disadvantage on Philippine products under this section shall, if the President deems it
exported to such foreign country. consistent with the interest of the Philippines,
extend to the whole of any foreign country or
Q: Who imposes discriminatory duty? may be confined to any subdivision or
A: It is the President of the Philippines. subdivisions thereof; Provided, That the
President may, whenever the public interest
Q: What are the grounds? requires, suspend, revoke, supplement or
amend any such proclamation.
 Page 21 of 39

be exempt from the payment of import duties

(d) All goods imported contrary to the provisions upon compliance with the formalities
of this section shall be forfeited to the prescribed in the regulations which shall be
government of the Philippines and shall be liable promulgated by the Commissioner with the
to be seized, prosecuted and condemned in like approval of the Secretary of Finance: Provided,
manner and under the same regulations, That goods sold, bartered, hired or used for
restrictions, and provisions as may from time to purposes other than what they were intended for
time he established for the recovery, collection, and without prior payment of the duty, tax or
distribution, and remission or forfeiture to the other charges which would have been due and
government by the tariff and customs laws. payable at the time of entry if the goods had
Whenever the provision of this section shall be been entered without the benefit of this section,
applicable to importations into the Philippines of shall be subject to forfeiture and the importation
goods wholly or in part the growth or product of shall constitute a fraudulent practice against
any foreign country, it shall be applicable customs laws: Provided, However, That a sale
thereto, whether such goods are imported pursuant to a judicial order or in liquidation of the
directly or indirectly. estate of a deceased person shall not be subject
to the preceding proviso, without prejudice to the
(e) It shall be the duty of the Commission to payment of duties, taxes and other charges;
ascertain and at all times be informed whether Provided, Further, That the President may,
any of the discriminations against the commerce upon the recommendation of the Secretary
of the Philippines enumerated in subsections (a) of Finance, suspend, disallow or completely
and (b) of this section are practiced by any withdraw, in whole or in part, any conditionally
country; and if and when such discriminatory free importation under this section:
acts are disclosed, it shall be the duty of the
Commission to bring the matter to the attention (a) Aquatic products such as fishes,
of the President, and to recommend measures crustaceans, mollusks, marine animals,
to address such discriminatory acts. seaweeds, fish oil, roe, caught or gathered by
fishing vessels of Philippine registry; Provided,
(f) The Secretary of Finance shall make such That they are imported in such vessels or in
rules and regulations as are necessary for the crafts attached thereto; Provided, However, That
execution of a proclamation that the President they have not been landed in any foreign
may issue in accordance with the provisions of territory or, if so landed, that they have been
this section. landed solely for transshipment without having
been advanced in condition;
To summarize:
(b) Equipment for use in the salvage of vessels
1. The President can issue a proclamation or aircrafts, not available locally, upon
directing that such product of the said identification and the giving of a security in an
country be excluded from importation in amount equal to one hundred percent (100%) of
the RP, consistent with public interest. the ascertained duties, taxes and other charges
thereon, conditioned for the exportation thereof
2. This proclamation, whenever the or payment of corresponding duties, taxes and
president deems that public interest other charges within six (6) months from the
requires it, may be suspended, revoked, date of acceptance of the goods declaration;
supplemented, or amended. Provided, That the Bureau may extend the time
for exportation or payment of duties, taxes and
3. All articles imported, even with the other charges for a term not exceeding six (6)
proclamation, shall be forfeited to the months from the expiration of the original period;
GRP and shall be liable to be seized,
prosecuted, and condemned. (c) Cost of repairs, excluding the value of the
goods used, made in foreign countries upon
CONDITIONALLY TAX AND/OR DUTY vessels or aircraft documented, registered or
EXEMPT IMPORTATION licensed in the Philippines, upon proof
satisfactory to the Bureau: (1) that adequate
Section 800. Conditionally Tax and/or Duty- facilities for such repairs are not afforded in the
Exempt Importation.— The following goods shall Philippines; or (2) that such vessels or aircrafts,
 Page 22 of 39

while in the regular course of their voyage or (2) It is not intended for barter, sale or for
flight, were compelled by stress of weather or hire; and
other casualty to put into a foreign port to make (3) Limited to the FCA or FOB value of:
such repairs in order to secure the safety, (i) Three hundred fifty thousand
seaworthiness, or airworthiness of the vessels or pesos (₱350,000.00) for those
aircrafts to enable them to reach their port of who have stayed in a foreign
destination; country for at least ten (10) years
and have not availed of this
(d) Goods brought into the Philippines for repair, privilege within ten (10) years prior
processing or reconditioning to be reexported to returning resident's arrival;
upon completion of the repair, processing or
reconditioning: Provided, That the Bureau shall (ii) Two hundred fifty thousand pesos
require security equal to one hundred percent (₱250,000.00) for those who have
(100%) of the duties, taxes and other charges stayed in a foreign country for a
thereon, conditioned for the exportation thereof period of at least five (5) but not
or payment of the corresponding duties, taxes more than ten (10) years and have
and other charges within six (6) months from the not availed of this privilege within
date of acceptance of the goods declaration; five (5) years prior to returning
resident's arrival; or,
(e) Medals, badges, cups, and other small
goods bestowed as trophies or prizes, or those (iii) One hundred fifty thousand pesos
received or accepted as honorary distinction; (₱150,000.00) for those who have
stayed in a foreign country for a
(f) Personal and household effects belonging to period of less than five (5) years and
returning residents including household have not availed of this privilege
appliances, jewelry, precious stones, and other within six (6) months prior to
goods of luxury which were formally declared returning resident's arrival.
and listed before departure and identified under
oath before the District Collector when exported Any amount in excess of the above-stated
from the Philippines by such returning residents threshold shall be subject to the corresponding
upon their departure therefrom or during their duties and taxes under this Act.
stay abroad; personal and household effects
including wearing apparel, goods of personal Every three (3) years after the effectivity of this
adornment, toilet goods, instruments related to Act, the Secretary of Finance shall adjust the
one's profession and analogous personal or amount herein stated to its present value using
household effects, excluding luxury items, the CPI as published by the PSA.
vehicles, watercrafts, aircrafts and animals
purchased in foreign countries by residents of In addition to the privileges granted under the
the Philippines which were necessary, immediately preceding paragraph, returning
appropriate, and normally used for their comfort Overseas Filipino Workers (OPWs) shall have
and convenience during their stay abroad, the privilege to bring in, tax and duty-free, home
accompanying them on their return, or arriving appliances and other durables, limited to one
within a reasonable time which, barring of every kind once in a given calendar year
unforeseen and fortuitous events, in no case accompanying them on their return, or
shall exceed sixty (60) days after the owner's arriving within a reasonable time which,
return. barring unforeseen and fortuitous events, in no
case shall exceed sixty (60) days after every
For purposes of this section, the phrase returning OFW's return upon presentation of
“returning residents” shall refer to nationals who their original passport at the port of entry:
have stayed in a foreign country for a period of Provided, That any amount in excess of FCA
at least six (6) months. Returning residents shall value of one hundred fifty thousand pesos
have tax and duty exemption on personal and (₱150,000.00) for personal and household
household effects: Provided, That: effects or of the number of duty-free appliances
as provided for under this section, shall be
(1) It shall not be in commercial subject to the corresponding taxes and duties;
quantities; Provided, Further, That every three (3) years
 Page 23 of 39

after the effectivity of this Act, the Secretary of Bureau may require either a written commitment
Finance shall adjust the amount herein stated to or a security in an amount equal to one hundred
its present value using the CPI as published by percent (100%) of the ascertained duties, taxes
the PSA; and other charges thereon, conditioned for the
exportation thereof or payment of the
(g) Residents of the Philippines, OPWs or other corresponding duties, taxes and other charges
Filipinos while residing abroad or upon their within three (3) months from the date of
return to the Philippines shall be allowed to bring acceptance of the goods declaration: Provided,
in or send to their families or relatives in the Further, That the Bureau may extend the time
Philippines balikbayan boxes which shall be for exportation or payment of duties, taxes and
exempt from applicable duties and taxes other charges for a term not exceeding three (3)
imposed under the NIRC of 1997, as amended: months from the expiration of the original period.
Provided, That balikbayan boxes shall contain
personal and household effects only and shall Personal and household effects and vehicles
neither be in commercial quantities nor intended belonging to foreign consultants and experts
for barter, sale or for hire and that the FCA value hired by, or rendering service to, the
of which shall not exceed one hundred fifty government, and their staff or personnel and
thousand pesos (₱150,000.00); Provided, families accompanying them or arriving within a
Further, That every three (3) years after the reasonable time before or after their arrival in
effectivity of this Act, the Secretary of Finance the Philippines, in quantities and of the kind
shall adjust the amount herein stated to its necessary and suitable to the profession, rank or
present value using the CPI as published by the position of the person importing said items, for
PSA; Provided, Finally, That residents of the their own use and not for barter, sale or hire:
Philippines, OFWs or other Filipinos can only Provided, That the Bureau may require either a
avail of this privilege up to three (3) times in a written commitment or a security in an amount
calendar year. Any amount in excess of the equal to one hundred percent (100%) of the
allowable non-dutiable value shall be subject to ascertained duties, taxes and other charges
the applicable duties and taxes; thereon, upon the goods classified under this
subsection; conditioned for the exportation
(1) For purposes of this Act, OFWs referto thereof or payment of the corresponding duties,
Holders of valid passports duly issued by taxes and other charges within three (3) months
the Department of Foreign Affairs (DFA) after the expiration of their term or contract;
and certified by the Department of Labor Provided, However, That the Bureau may
and Employment (DOLE) or the Philippine extend the time for exportation or payment of
Overseas Employment Administration duties, taxes and other charges for a term not
(POEA) for overseas employment exceeding three (3) months from the expiration
purposes. They cover all Filipinos, working of the original period;
in a foreign country under employment
contracts, regardless of their professions, (i) Professional instruments and implements,
skills or employment status in a foreign tools of trade, occupation or employment,
country; and (2) Calendar Year refers to wearing apparel, domestic animals, and
the period from January 1 to December personal and household effects belonging to
31. persons coming to settle in the Philippines or
Filipinos or their families and descendants who
(h) Wearing apparel, goods of personal are now residents or citizens of other countries,
adornment, toilet goods, portable tools and such parties hereinafter referred to as overseas
instruments, theatrical costumes and similar Filipinos, in quantities and of the class suitable
effects accompanying travelers, or tourists, or to the profession, rank or position of the persons
arriving within a reasonable time before or after importing said items, for their own use and not
their arrival in the Philippines, which are for barter or sale, accompanying such persons,
necessary and appropriate for the wear and use or arriving within a reasonable time: Provided,
of such persons according to the nature of the That the Bureau may, upon the production of
journey, their comfort and convenience; satisfactory evidence that such persons are
Provided, That this exemption shall not apply to actually coming to settle in the Philippines and
goods intended for other persons or for barter, that the goods are brought from their former
sale or hire: Provided, However, That the place of abode, exempt such goods from the
 Page 24 of 39

payment of duties and taxes; Provided, Further, photographic camera or other photographic and
That vehicles, vessels, aircrafts, machineries sound recording apparatus by which the film is
and other similar goods for use in manufacture, made;
shall not fall within this classification and shall
therefore be subject to duties, taxes and other (l) Importations for the official use of foreign
charges; embassies, legations and other agencies of
foreign governments: Provided, That those
(j) Goods used exclusively for public foreign countries accord like privileges to
entertainment, and for display in public corresponding agencies of the Philippines.
expositions, or for exhibition or competition for Goods imported for the personal or family use of
prizes, and devices for projecting pictures and members and attaches of foreign embassies,
parts and appurtenances thereof, upon legations, consular officers and other
identification, examination, and appraisal and representatives of foreign governments;
the giving of a security in an amount equal to Provided, However, That such privilege shall be
one hundred percent (100%) of the ascertained accorded under special agreements between
duties, taxes and other charges thereon, the Philippines and the countries which they
conditione d for exportation thereof or payment represent: Provided, Further, That the privilege
of the corresponding duties, taxes and other may be granted only upon specific instructions
charges within three (3) months from the date of of the Secretary of Finance pursuant to an
acceptance of the goods declaration: Provided, official request of the DFA on behalf of members
That the Bureau may extend the time for or attaches of foreign embassies, legations,
exportation or payment of duties, taxes and consular officers and other representatives of
other charges for a term not exceeding three (3) foreign governments;
months from the expiration of the original period;
and technical and scientific films when imported (m) Imported goods donated to or, for the
by technical, cultural and scientific institutions, account of the Philippine government or any
and not to be exhibited for profit: Provided, duly registered relief organization, not operated
Further, That if any of the films is exhibited for for profit, for free distribution among the needy,
profit, the proceeds therefrom, shall be subject upon certification by theDSWD or the
to confiscation, in addition to the penalty Department of Education (DepED), or the
providedamder this Act; Department of Health (DOH), as the case may
be;
(k) Goods brought by foreign film producers
directly and exclusively used for making or (n) Containers, holders and other similar
recording motion picture films on location in the receptacles of any material including kraft paper
Philippines, upon their identification, bags for locally manufactured cement for export,
examination and appraisal and the giving of a including corrugated boxes for bananas,
security in an amount equal to one hundred mangoes, pineapples and other fresh fruits for
percent (100%) of the ascertained duties, taxes export, except other containers made of paper,
and other charges thereon, conditioned for paperboard and textile fabrics, which are of such
exportation thereof or payment of the character as to be readily identifiable and/or
corresponding duties, taxes and other charges reusable for shipment or transportation of goods
within three (3) months from the date of shall be delivered to the importer thereof upon
acceptance of the goods declaration, unless identification, examination and appraisal and the
extended by the District Collector for another giving of a security in an amount equal to one
three (3) months; photographic and hundred percent (100%) of the ascertained
cinematographic films, underdeveloped, duties, taxes and other charges thereon, within
exposed outside the Philippines by resident six (6) months from the date of acceptance of
Filipino citizens or by producing companies of the goods declaration;
Philippine registry where the principal actors and
artists employed for the production are Filipinos, (o) Supplies which are necessary for the
upon affidavit by the importer and identification reasonable requirements of the vessel or aircraft
that such exposed films are the same films in its voyage or flight outside the Philippines,
previously exported from the Philippines. As including goods transferred from a bonded
used in this paragraph, the terms “actors” and warehouse in any Customs District to any vessel
“artists” include the persons operating the or aircraft engagedin foreign trade, for use or
 Page 25 of 39

consumption of the passengers or its crew on stones, the value of any single importation of
board such vessel or aircraft as sea or air which does not exceed FCA value of fifty
stores; or goods purchased abroad for sale on thousand pesos (₱50,000.00) upon the giving of
board a vessel or aircraft as saloon stores or air a security in an amount equal to the ascertained
store supplies; Provided, That any surplus or duties, taxes and other charges thereon,
excess of such vessel or aircraft supplies conditioned for the exportation of said samples
arriving from foreign ports or airports shall be within three (3) months from the date of the
dutiable; acceptance of the goods declaration or in default
thereof, the payment of the corresponding
(p) Goods and salvage from vessels recovered duties, taxes and other charges: Provided, That
after a period of two (2) years from the date of if the FCA value of any single consignment of
filing the marine protest or the time when the such commercial samples exceeds fifty
vessel was wrecked or abandoned, or parts of a thousand pesos (₱50,000.00), the importer
foreign vessel or its equipment, wrecked or thereof may select any portion of the same not
abandoned in Philippine waters or elsewhere: exceeding the FCA value of fifty thousand pesos
Provided, That goods and salvage recovered (₱50,000,00) for entry under the provision of this
within the said period of two (2) years shall be subsection, and the excess of the consignment
dutiable; may be entered in bond, or for consumption, as
the importer may elect: Provided, Further, That
(q) Coffins or urns containing human remains, every three (3) years after the effectivity of this
bones or ashes, used personal and household Act, the Secretary of Finance shall adjust the
effects (not merchandise) of the deceased amount herein stated to its present value using
person, except vehicles, the FCA value of which the CPI as published by the PSA.
does not exceed one hundred fifty thousand
pesos (₱150,000.00), upon identification as (s) Animals, except race horses, and plants for
such: Provided, That every three (3) years after scientific, experimental propagation or breeding,
the effectivity of this Act, the value herein stated andfor other botanical, zoological and national
shall be adjusted to its present value using the defense purposes: Provided, That no live trees,
CPI as published by the PSA; shoots, plants, moss and bulbs, tubers and
seeds for propagation purposes may be
(r) Samples of the kind, in such quantity and of imported under this section, except by order of
such dimension or construction as to render the government or other duly authorized
them unsaleable or of no commercial value; institutions; Provided, However, That the free
models not adapted for practical use; and entry of animals for breeding purposes shall be
samples of medicines, properly marked “sample- restricted to animals of recognized breed, duly
sale punishable by law”, for the purpose of registered in the record or registry established
introducing new goods in the Philippine market for that breed, and certified as such by the
and imported only once in a quantity sufficient Bureau of Animal Industry (BAI): Provided,
for such purpose by a person duly registered Further, That the certification of such record,
and identified to be engaged in that trade: and pedigree of such animal duly authenticated
Provided, That importations under this by the proper custodian of such record or
subsection shall be previously authorized by the registry, shall be submitted to the District
Secretary of Finance: Provided, However, That Collector, together with the affidavit of the owner
importation of sample medicines shall have or importer that such animal is the animal
been previously authorized by the Secretary of described in said certificate of record and
Health, and that such samples are new pedigree: Provided, Finally, That the animals
medicines not available in the Philippines: and plants are certified by the NEDA as
Provided, Further, That samples not previously necessary for economic development;
authorized or properly marked in accordance
with this section shall be levied the (t) Economic, technical, vocational, scientific,
corresponding tariff duty. philosophical, historical and cultural books or
publications, and religious books like Bibles,
Commercial samples, except those that are not missals, prayer books, the Koran, Ahadith and
readily and easily identifiable as in the case of other religious books of similar nature and
precious and semi-precious stones, cut or uncut, extracts therefrom, hymnal and hymns for
and jewelry set with precious or semi-precious religious uses; Provided, That those which may
 Page 26 of 39

have already been imported but are yet to be necessary or incidental to the proper operation
released by the Bureau at the effectivity of this of the scheduled airline importing the same;
Act may still enjoy the privilege herein provided
upon certification by the DepED that such (w) Machineries, equipment, tools for
imported books and/or publications are for production, plans to convert mineral ores into
economic, technical, vocational, scientific, saleable form, spare parts, supplies, materials,
philosophical, historical or cultural purposes or accessories, explosives, chemicals, and
that the same are educational, scientific or transportation and communications facilities
cultural materials covere d by the International imported by and for the use of new mines and
Agreement on Importation of Educational old mines which resume operations, when
Scientific and Cultural Materials (XAESCM) certified to as such by the Secretary of the
signed by the President of the Philippines on Department of Environment and Natural
August 2, 1952, or other agreements binding Eesources (DENE), upon the recommendation
upon the Philippines. Educational, scientific and of the Director of Mines and Geosciences
cultural materials covered by international Bureau, for a period ending five (5) years from
agreements or commitments binding upon the the first date of actual commercial production of
Philippine government so certified by the saleable mineral products: Provided, That such
DepED. goods are not locally available in reasonable
quantity, quality and price and are necessary or
(u) Philippine goods previously exported from incidental in the proper operation of the mine;
the Philippines and returned without having and aircrafts imported by agro-industrial
been advanced in value, or improved in companies to be used by them in their
condition by any process of manufacturing or agriculture and industrial operations or activities,
other means, and upon which no drawback or spare parts and accessories thereof, when
bounty has been allowed, including instruments certified to as such by the Secretary of the
and implements, tools of trade, machinery and Department of Agriculture (DA) or the Secretary
equipment, used abroad by Filipino citizens in of the Department of Trade and Industry (DTI),
the pursuit of their business, occupation or as the case may be;
profession; and foreign goods previously
imported when returned after haiffif been (x) Spare parts of vessels or aircraft of foreign
exported and loaned for use temporarily abroad registry engaged in foreign trade when brought
solely for exhibition, testing and into the Philippines exclusively as replacements
experimentation, for scientific or educational or for the emergency repair thereof, upon proof
purposes; and foreign containers previously satisfactory to the District Collector that such
imported which have been used in packing spare parts shaft he utilized to secure the safety,
exported Philippine goods and returned empty if seaworthiness or airworthiness of the vessel or
imported by or for the account of the person or aircraft, to enable it to continue its voyage or
institution who exported them from the flight;
Philippines and not for sale, barter or hire
subject to identification: Provided, That (y) Goods exported from the Philippines for
Philippine goods falling under this subsection repair, processing or reconditioning without
upon which drawback or bounty have been having been substantially advanced in value,
allowed shall, upon reimportation thereof, be and subsequently reimported in its original form
subject to a duty under this subsection equal to and in the same state: Provided, That in case
the amount of such drawback or bounty; the reimported goods advanced in value,
whether or not in their original state, the value
(v) Aircraft, equipment and machinery, spare added shall be subject to the applicable duty
parts, commissary and catering supplies, rate of the tariff heading of the reimported
aviation gas, fuel and oil, whether crude or goods; and
refined except when directly or indirectly used
for domestic operations, and such other goods (z) Trailer chassis when imported by shipping
or supplies imported by and for the use of companies for their exclusive use in handling
scheduled airlines operating under containerized cargo, upon posting a security in
congressional franchise: Provided, That such an amount equal to one hundred percent (100%)
goods or supplies are not locally available in of the ascertained duties, taxes and other
reasonable quantity, quality and price and are charges due thereon, to cover aperiod of one (1)
 Page 27 of 39

year from the date of acceptance of the entry, whatsoever from the payment of duties except
which period, for meritorious reasons, may be as provided for in this Act; those granted to
extended by the Commissioner from year to government agencies, instrumentalities or
year, subject to the following conditions: government-owned or -controlled corporations
(GOCCs) with existing contracts, commitments,
(1) That they shall be properly identified agreements, or obligations with foreign countries
and registered with the Land requiring such exemption; those granted to
Transportation Office (LTO); international institutions, associations or
organizations entitled to exemption pursuant to
(2) That they shall be subject to customs agreements or special laws; and those that may
supervision fee to be fixed by the be granted by the President upon prior
District Collector and subject to the recommendation of the NEDA in the interest of
approval of the Commissioner; national economic development.

(3) That they shall be deposited in the This is a very long provision. We will discuss
customs territory when not in use; and only a few.

(4) That upon the expiration of the period Personal and Household Effects Belonging
prescribed above, duties and taxes shall to Returning Residents (f)
be paid unless otherwise reexported.
This is for returning residents.
(aa) Any officer or employee of the DEA,
including any attache, civil or military or member “Returning residents” shall refer to nationals who
of the staff assigned to a Philippine diplomatic have stayed in a foreign country for a period of
mission abroad by the Department or any similar at least 6 months.
officer or employee of other departments
assigned to any Philippine consular office 1. Luxuries - Household appliance, jewelry,
abroad, or any AFP military personnel accorded precious stones, and other goods of luxury.
assimilated diplomatic rank or on duty abroad
who is returning from a regular assignment This should formally be declared and listed
abroad, for reassignment to the home office, or before departure and identified under oath
who dies, resigns, or is retired from the service, before the district collector when these items are
after the approval of this Act, shall be exempt exported with the Philippines. In other words,
from the payment of all duties and taxes on these luxuries should have been exported in the
personal and household effects, including one Philippines and the returning residents brought
(1) motor car which must have been ordered or them back.
purchased prior to the receipt by the mission or
consulate of the order of recall, and which must 2. Personal and household effects belonging to
be registered in the name of the officer or returning residents excluding luxury items,
employee: Provided, That this exemption shall vehicles, crafts, and animals purchased in
apply only to the value of the motor car and to foreign countries for comfort and convenience.
the aggregate assessed value of the personal
and household effects, the latter not to exceed On both instances above, the goods should
thirty percent (30%) of the total amount received have accompanied the returning residents or
by the officer or employee in salary and arrived in the Philippines within 60 days except
allowances during the latest assignment abroad, of the late arrival was due to unforeseen and
but not to exceed four (4) years: Provided, fortuitous events.
However, That this exemption shall not be
availed of more than once every four (4) years: Q: What are the other conditions for free
Provided, Further, That the officer or employee importations of these goods by returning
concerned must have served abroad for not less residents?
than two (2) years. A: They are:
1. It shall not be in commercial quantities;
The provisions of general and special laws, to 2. Not intended for barter, sale, or hire,
the contrary notwithstanding, including those 3. Limited value of:
granting franchises, there shall be no exemption
 Page 28 of 39

a. 300K for those who have stayed which shall be exempt from duties and taxes
for at least 10 years and not imposed under NIRC.
availed of this privilege within 10
years prior to return; Q: What are the requirements for tax exemption
b. 250K for those who have stayed of balikbayan boxes?
in a foreign country for at least 5 1. The boxes shall contain personal and
but not more than 10 years household effects only and shall neither
without having availed of be in commercial quantities nor intended
privilege within 5 years prior to for sale, barter, or hire;
returning. 2. The FCA value does not exceed
c. 150k for those staying in a P150,000;
foreign country for a period less 3. The Phil. Residents, OFWs or other
than 5 years. Filipinos can only avail of the privilege
up to 3x in a calendar year.
Any amount in excess of the values shall be
subject to duties and taxes. Any amount in excess shall be subject to duties
and taxes.
OFWS
OFWs for purposes of this exemption, refer to
For OFWs, there are two situations here: holders of DFA passports certified by the DOLE
1. Importation of Home Appliances and or POEA for overseas employment purposes.
other durables (Section 800 (f), CMTA);
and, REFUND AND ABATEMENT
2. Balikbayan boxes (Sec. 800 (g),
CMTA). Q: When should a tax refund be granted?
A: Sec. 903:
Home Appliance and other Durables
Section 903. Refund of Duties and Taxes.—
Q: What are the requirements? Refund shall be granted where it is established
A: The requirements are as follows: that duties and taxes have been overcharged
as a result of an error in the assessment or
1. The goods involved are home goods declaration.
appliances and other durables;
2. Limited to one of every kind; Where permission is given by the Bureau for
3. Once in a given calendar year goods originally declared for a customs
4. The goods accompanied them upon procedure with payment of duties and taxes to
arrival or arrived within a reasonable be placed under another customs procedure, a
time not exceeding 60 days except for refund shall be made of any duties and taxes
reason of unforeseen or fortuitous charged in excess of the amount due under the
events new procedure, subject to such regulation
5. The amount shall not exceed P150,000 issued for the purpose.
6. Presentation of passport at the port of
entry. A refund shall not be granted if the amount of
duties and taxes involved is less than five
Balikbayan Boxes thousand pesos (₱5,000.00); Provided, That the
Secretary of Finance, in consultation with the
Q: Who are the persons who may avail of this Commissioner, may adjust the minimum amount
tax exemption? specified in this Act, taking into account the CPI
A: They are: as published by the PSA.
1. Residents of the Philippines;
2. OFWs; or Q: What about abatement?
3. Other Filipinos while residing abroad or A: Section 904.
upon their return to the Philippines.
Section 904. Abatement of Duties and Taxes.—
They are allowed to bring in or send to their When goods have not yet been released for
families or relatives Philippine balikbayan boxes consumption or have been placed under another
 Page 29 of 39

customs procedure, provided that no other Q: Where should the claim for refund be filed?
offense or violation has been committed, the A: It must e filed before the BOC.
declarant shall neither be required to pay the
duties and taxes nor be entitled to refund thereof Q: When should it be made, within 12 months
in any of the following cases: from the date of payment of duties and taxes.

(a) When, at the request of the declarant, the Q: What if the BOC denies the claim for refund
goods are abandoned, or as determined by the or abatement?
Bureau, the goods are destroyed or rendered A: The law says:
commercially valueless while under customs
control. Any cost herein incurred shall be borne Sec. 913. xxx xxx xxx
by the declarant;
(3rd paragraph) The importer may file an appeal
(b) When goods are destroyed or of a denial of a claim for refund or abatement,
irrecoverably lost by accident or force whether it is a full or partial denial, with the
majeure, the remaining waste or scrap after Commissioner within thirty (30) days from the
destruction, if taken into consumption, shall be date of the receipt of the denial. The
subject to the duties and taxes that would be Commissioner shall render a decision within
applicable on such waste or scrap if imported in thirty (30) days from the receipt of all the
same state; and necessary documents supporting the
application. Within thirty (30) days from receipt
(c) When there are shortages due to the nature of the decision of the Commissioner, the case
of the goods. may also be appealed to the CTA.

Q: Are these the only grounds for abatement So, the importer may file an appeal of a denial of
and refund? a claim for refund or abatement within 30 days
A: Not really. There are other grounds for from receipt of such denial. A full or partial
abatement: denial may be appealed to the COC.

1. Sec. 905 – Damage incurred during the The COC shall render a decision within 30 days
voyage. As a rule, abatement due to from receipt of all the necessary documents
damage incurred during the voyage is supporting the application.
not allowed, unless otherwise provided
in CMTA. The succeeding sections Within 30 days from receipt of the decision of
provides for such exceptions. the COC, the case may be appealed to the CTA
2. Sec. 906 – Missing Package; through a petition for review.
3. Sec. 907 – Deficiency in Contents of
Packages;
4. Sec. 908 – Goods Lost or Destroyed Sec. 913. xxx xxx xxx
After Arrival;
5. Sec. 909. – Defective Goods; and, If as a result of the refund of duties, a
6. Sec. 910. – Dead or Injured Animals. corresponding refund of internal revenue taxes
7. Sect. 912. – Correction of Errors. on the same importation becomes due, the
Bureau shall cause the refund of internal
Q: What is the proceedure covering the claims revenue taxes in favor of the importer after
for refund of duties and taxes under CTMA? issuance of a certification from the
A: Let’s see Sec. 913: Commissioner of Internal Revenue, when
applicable.
Section 913. Claims for Refund.— All claims
and application for refund of duties and taxes xxx xxx
shall be made in writing and filed with the
Bureau within twelve (12) months from the date Notwithstanding the provisions in the preceding
of payment of duties and taxes. paragraphs, the filing of claims for refund of
national internal revenue taxes shall be
Let’s dissect. governed by the provisions provided under the
NTRC of 1997, as amended.
 Page 30 of 39

as may be required by rules and regulations.

ADMINISTRATIVE AND JUDICIAL When the valuation method of goods not subject
PROCEDURE of an application for advance valuation ruling or
the declared customs value is in dispute, the
The taxpayer may request for an advanced matter shall be resolved in accordance with
ruling. The advanced ruling may be in the form Section 1106 of this Act on “protest”.
of:
The application for a valuation ruling shall be
1. Classification ruling (Sec. 1100); filed with the the BOC.
2. Valuation ruling (Sec. 1101); and,
3. Rules of origin Sec. 1102. Rules of Origin

An application for an advance ruling shall cover Section 1102. Ruling on the Rules of Origin.—
only one (1) product or item. It shall be filed at An importer or exporter may file a written
least 90 days before importation or exportation application for a ruling on whether the goods
of the item, as the case may be (Sec. 1103, qualify as originating under the rules of origin of
CMTA). the applicable preferential trade agreement. The
application for an advance ruling on origin shall
Classification Ruling be filed with the Commissioner who shall act on
the application within thirty (30) days from
Section 1100. Classification Ruling.— An receipt of the application and supporting
importer or exporter may file a written documents as may be required by rules and
application for an advance ruling on the tariff regulations.
classification of goods with the Tariff
Commission. The Commission shall render a When the declared origin of the goods, not
ruling within thirty (30) days from receipt of a subject of a request for advance ruling on origin,
properly documented application. is in dispute, the matter shall be resolved in
accordance with Section 1106 of this Act on
When a declared tariff classification of goods, “protest”.
not subject of a pending application for advance
ruling, is in dispute, the importer, exporter, or the Appeals by Aggreived Party of Advanced
Bureau shall submit the matter to the Ruling
Commission for a ruling, without prejudice to the
application of Section 1106 of this Act on Section 1104. Administrative and Judicial
“protest”: Provided, That such rulings of the Appeals.— An aggrieved party may, within thirty
Commission on commodity classification shall (30) days from receipt of an adverse ruling or
be binding upon the Bureau, unless the decision, appeal the same to the CTA without
Secretary of Finance shall rule otherwise. prejudice to the authority of the Secretary of
Finance to review decisions adverse to the
Take note that classification rulings are filed government in accordance with Sections 1127
before the Tariff Commission. and 1128 of this Act, as the case may be.

Valuation Ruling The advance ruling on the rules of origin shall be

filed at the BOC.
Section 1101. Valuation Ruling.— An importer
or exporter may file a written application for an PROTEST
advance valuation ruling on the proper
application of a specific method on customs Section 1106. Protest.— When, a ruling or
valuation of specific goods as prescribed in Title decision of the District Collector or customs
VII, Chapter 1 of this Act. officer involving goods with valuation, rules of
origin, and other customs issues is made,
The application for a valuation ruling shall be except the fixing of fines in seizure cases, the
filed with the Commissioner who shall issue a party adversely affected may appeal by way of
ruling within thirty (30) days from submission of protest against such ruling or decision by
the application form and supporting documents presenting to the Commissioner at the time
 Page 31 of 39

when payment of the amount claimed to be due A: Then the procedure in appeal under Sec. 114
the government is made, or within fifteen (15) in relation to Sec. 1126 should be followed:
days thereafter, a written protest setting forth the
objection to the ruling or decision in question Section 114. Right of Appeal, Forms and
and the reasons therefore. Ground.— Any party adversely affected by a
decision or omission of the Bureau pertaining to
Subject to the approval of the Secretary of an importation, exportation, or any other legal
Finance, the Commissioner shall provide such claim shall have the right to appeal within fifteen
rules and regulations as to the requirement for (15) days from receipt of the questioned
payment or nonpayment of the disputed amount decision or order.
and in case of nonpayment, the release of the
importation under protest upon posting of An appeal in writing shall be filed within the
sufficient security. period prescribed in this Act or by regulation and
shall specify the grounds thereof.
Q: When can the taxpayer protest?
A: The taxpayer may protest a ruling or decision The Bureau may allow a reasonable time for the
of the district collector or customs officer submission of supporting evidence to tbe
involving goods for: appeal.
1. Valuation,
2. Rules of origin, and
3. Other customs issues Section 1126. Appeal to the Commissioner.—
In forfeiture cases, the person aggrieved by the
Protest is not available in fixing of fines in decision of a District Collector may, within fifteen
seizure cases. (15) days or five (5) days in case of perishable
goods, from receipt of the decision, file a written
Q: When should the protest be filed? notice of appeal, together with the required
A: The protest shall be filed with the appeal fee to the District Collector, furnishing a
Commissioner (District Collector) at the time copy to the Commissioner. The District Collector
when payment of the amount claimed to be due shall immediately transmit all the records of the
to the government is made, or within 15 days proceedings to the Commissioner, who shall
thereafter. review and decide on the appeal within thirty
(30) days from receipt of the records, or fifteen
From the provision, it is required that: (15) days in the case of perishable goods:
1. There is a payment of duties and taxes Provided, That if within thirty (30) days, no
under protest; and, dedsion is rendered, the decision of the District
2. The protest must be filed at the time of Collector under appeal shall be deemed
payment or within 15 days after affirmed. An appeal filed beyond the period
payment. herein prescribed shall be dismissed.

The written protest must set forth the objection Appeals to protest cases shall be governed
to the ruling or decision in questions and there by Section 114 of this Act.
reasons therefor.
The decision of the Commissioner may be
Protest is an exclusive remedy in protestable served through the recognized modes of service
cases. This is clear under Sec. 1107 of CMTA: under existing law.

Section 1107. Protest Exclusive Remedy in In other words, after the protest with the COC, if
Protestable Case.— In all cases subject to the decision is adverse, the taxpayer has 15
protest, the interested party who desires to have days from receipt of the decision within which to
the action of the District Collector reviewed, shall file an appeal with the CTA. The CTA has
file a protest as provided in Section 1106 of this exclusive appellate jurisdiction over the
Act, otherwise the action of the District Collector decisions of the COC in cases involving liability
shall be final and conclusive. for customs duties, fees or other money
charges, seizure, detention or release of
Q: What if the decision of the district collector is property affected, fines, forfeitures or other
adverse? penalties in relation thereto, or other matters
 Page 32 of 39

arising under the Customs Law or other laws A: The law says:
administered by the Bureau of Customs.
An alert order may be issued only after
ALERT ORDERS lodgement of the goods declaration and prior
to the release of goods from customs custody.
Q: What are alert orders? Under no circumstances shall the suspension of
A: Section 1111: the processing of goods declaration be allowed
except through an alert order issued by an
Section 1111. Alert Orders.— Alert orders are authorized customs officer.
written orders issued by customs officers as
authorized by the Commissioner on the basis of It’s after lodgement of the goods declaration and
derogatory information regarding possible prior to the release of such goods. An alert order
noncompliance with this Act. may suspend the processing the goods
declaration so long as the alert order is issued
Q: What is a “derogatory information”? by an authorized customs officer.
A: These are violations of CMTA that are
possibly committed by the importer or exporter. The costs of the physical inspection shall be
borne by the Bureau: Provided, That such cost
But take note that derogatory information, to be shall be reimbursed by the owner prior to the
within the meaning of an alert order, should release of the goods if the physical inspection
have some sort of basis and must be specific. It results in the assessment of additional duties or
must not merely be based on general taxes or the issuance of a warrant of seizure.
allegations.
The Commissioner shall be notified of the
Derogatory information shall indicate the recommendation by the alerting officer within
violations and other necessary specifics thereof. twenty-four (24) hours from the issuance of the
For this purpose, the following shall not be alert order. Alert orders shall be dated and
considered derogatory information: assigned a unique reference number in series
which shall be the basis for reporting to and
(a) General allegations of misclassification monitoring by the Commissioner and the
without providing the appropriate tariff heading Secretary of Finance.
and duty of the shipment to be alerted;
The Bureau shall create a central clearing house
(b) General allegations of misclassification for alert orders and shall submit reports quarterly
without providing the appropriate tariff heading on the status thereof.
and duty of the shipment to be alerted;
Section 1112. Alert Orders on Perishable
(c) General allegations of over-quantity without Goods.— When the subject of the alert order are
indicating the source of information supporting perishable goods, the Bureau shall attach to the
the allegation; recommendation a certificate stating that the
goods are perishable.
(d) General allegations of misdeclaration in the
entry without indicating the suspected actual
contents thereof; and SEIZURE AND FORFEITURE

(e) General allegations of importations contrary Q: What are the properties subject to seizure
to law without indicating the specific law or rule and forfeiture?
to be violated. A: Sec. 1113:

No alert order shall be issued on account of Section 1113. Property Subject to Seizure and
allegations of undervaluation unless said Forfeiture.— Property that shall be subject to
undervaluation is caused by the submission to seizure and forfeiture include:
customs of forged or spurious invoice or other
commercial documents. (a) Any vehicle, vessel or aircraft, including
cargo, which shall be used unlawfully in the
Q: When is an alert order issued? importation or exportation of goods or in
 Page 33 of 39

conveying or transporting smuggled goods in found upon examination to contain goods not
commercial quantities into or from any Philippine specified in the invoice or goods declaration
port or place. The mere carrying or holding on including all other packages purportedly
board of smuggled goods in commercial containing imported goods similar to those
quantities shall subject such vehicle, vessel, declared in the invoice or goods declaration to
aircraft, or any other craft to forfeiture: Provided, be the contents of the misdeclared package;
That the vehicle, vessel, aircraft or any other
craft is not used as a common carrier which has (j) Boxes, cases, trunks, envelopes, and other
been chartered or leased for purposes of containers of whatever character used as
conveying or transporting persons or cargo; receptacle or as device to conceal goods which
are subject to forfeiture under this Act or which
(b) Any vessel engaging in the coastwise trade are so designed as to conceal the character of
which shaft have on board goods of foreign such goods;
growth, produce, or manufacture in excess of
the amount necessary for sea stores, without (k) Any conveyance actually used for the
such goods having been properly entered or transport of goods subject to forfeiture under tbis
legally imported; Act, with its equipage or trappings, and any
vehicle similarly used, together with its
(c) Any vessel or aircraft into which shall be equipment and appurtenances. The mere
transferred cargo unloaded contrary to law prior conveyance of smuggled goods by such
to the arrival of the importing vessel or aircraft at transport vehicle shall be sufficient cause for the
the port of destination; outright seizure and confiscation of such
(d) Any part of the cargo, stores, or supplies of a transport vehicle but the forfeiture shall not be
vessel or aircraft arriving from a foreign port effected if it is established that the owner of the
which is unloaded before arrival at the vessel’s means of conveyance used as aforesaid, is
or aircraft’s port of destination and without engaged as common carrier and not chartered
authority from the customs officer; but such or leased, or that the agent in charge thereof at
cargo, ship, or aircraft stores and supplies shall the time, has no knowledge of the unlawful act;
not be forfeited if such unloading was due to and
accident, stress of weather, or other necessity
and is subsequently approved by the District (l) Goods sought to be imported or exported:
Collector;
(1) Without going through a customs
(e) Goods which are fraudulently concealed in or office, whether the act was
removed contrary to law from any public or consummated, frustrated, or
private warehouse, container yard, or container attempted;
freight station under customs supervision;
(2) Found in the baggage of a person
(f) Goods, the importation or exportation of arriving from abroad and undeclared
which are effected or attempted contrary to law, by such person;
or any goods of prohibited importation or
exportation, and all other goods which, in the (3) Through a false declaration or affidavit
opinion of the District Collector, have been used, executed by the owner, importer,
are or were entered to be used as instruments in exporter, or consignee concerning the
the importation or the exportation of the former; importation of such goods;

(g) Unmanifested goods found on any vessel or (4) On the strength of a false invoice or
aircraft if manifest therefor is required; other document executed by the
owner, importer, exporter, or
(h) Sea stores or aircraft stores adjudged by the consignee concerning the importation
District Collector to be excessive, when the or exportation of such goods; or
duties and taxes assessed by the District
Collector thereon are not paid or secured (5) Through any other practice or device
forthwith upon assessment of the same; contrary to law by means of which
such goods entered through a customs
(i) Any package of imported goods which is office to the prejudice of the
 Page 34 of 39

government. authority to issue a warrant of seizure of the

goods upon determination of the existence of
Now, vehicles, vessels, or aircraft shall not be probable cause and in case of nonexistence
effected if it is established that the owner thereof thereof, the issuance of order of release. In case
or the agent in charge of the means of the District Collector issued an order of release,
conveyance has no knowledge of or the District Collector shall immediately transmit
participation of the unlawful act. all the records to the Commissioner who shall
automatically review within forty-eight (48)
But the law provides for prima facie presumption hours, or within twenty-four (24) hours in case of
against the vehicle, vessel, or aircraft under the perishable goods. When no decision is made by
following circumstances: the Commissioner within the prescribed period,
the imported goods shall be deemed released.
1. If the conveyance has been used for
smuggling before; The lifting of the alert order shall he issued by
the District Collector only upon the affirmation of
2. If the owner is not in the business for the decision of the District Collector by the
which the conveyance is generally used; Commissioner, or after the lapse of the period of
and, review by the Commissioner, whichever is
earlier.
3. If the owner is not in a financial position
to own such conveyance. The District Collector has the authority.

Q: What is there requirement?

Forfeiture shall be effected only when and while A: There must be a determination of the
the goods are in the custody or within the existence of probable cause. If there is none,
jurisdiction of customs officers, or in the order of release shall be issued.
possession or custody of or subject to the
control of the importer, exporter, original owner, Q: What happens if the District Collector issues
consignee, agent of another person effecting the an order of release?
importation, entry or exportation in question, or A: There will be an automatic review by the
in the possession or custody of or subject to the COC. That’s why the DC should immediately
control of persons who shall receive, conceal, transmit the records to the COC within 48 hours
buy, sell, or transport the same, or aid in any of (or 24 hours in case of perishable goods. When
such acts, with knowledge that the goods were COC does not issue any ruling with the
imported, or were the subject of an attempt at prescribed period (30 days or 10 days if
importation or exportation contrary to law (Sec. perishable), the provisions says “deemed
1115, CMTA). released.”

Q: When should be the order of release or Perishable goods may also be solved during
warrant of seizure be issued? forfeiture proceedings under Section 1118.
A: Sec. 1116.
Then you have Service of Warrant of Seizure in
Section 1116. Seizure or Release of Goods.— Sec. 1119:
The District Collector shall issue an order of
release or a warrant of seizure within five (5) Section 1119. Service of Warrant of Seizure.—
days, or two (2) days in case of perishable The District Collector shall cause the service of
goods, upon the recommendation of the alerting warrant of seizure to the owner or importer of
officer or any other customs officer. The District the goods or the authorized representative
Collector shall immediately make a report of thereof. The owner or importer shall be given, an
such seizure or release to the Commissioner. opportunity to be heard during the forfeiture
proceedings.
Q: Who has the authority to issue a warrant of
seizure? For the purpose of serving the warrant, the
A: Sec. 1117. importer, consignee, or person holding the bill of
Section 1117. Warrant of Seizure or Order of lading or airway bill shall be deemed the “owner”
Release.— The District Collector shall have the of the goods. For the same purpose, “authorized
 Page 35 of 39

representative” shall include any agent of the duties and taxes to be paid between what is
owner and if the owner or the agent is unknown, determined and what is declared amounts to
any person having possession of the goods at more than thirty percent (30%).
the time of the seizure.
In case of settlement by payment of fine, the
Service of warrant to an unknown owner shall be owner, importer, exporter, or consignee or agent
effected by posting the warrant for fifteen (15) shall offer to pay a fine equivalent to thirty
days in a public place at the concerned district, percent (30%) of the landed cost of the seized
and by electronic or printed publication. goods. In case of settlement by redemption, the
owner, importer, exporter, or consignee or agent
shall offer to pay the redeemed value equivalent
Q: What if the owner is unknown? to one hundred percent (100%) of the landed
A: Section 1121: cost.

Section 1121. Proceedings in Case of Property Upon payment of the fine or payment of the
Belonging to Unknown Parties.— If, within redeemed value, the goods shall be released
fifteen (15) days after service of warrant, no and all liabilities which may attach to the goods
owner or agent can he found or appears before shall be discharged without prejudice to the filing
the District Collector, the seized goods shall be of administrative or criminal case.
forfeited ipso facto in favor of the government to
be disposed of in accordance with this Act. Settlement of any seizure case by payment of
the fine or redemption of forfeited goods shall
Q: Who has the burden of proof in forfeiture not be allowed when there is fraud, or where the
proceedings? importation is prohibited or the release of the
A: Sec. 1123: goods is contrary to law.
Q: When will a decision in forfeiture case be
Section 1123. Burden of Proof in Forfeiture rendered?
Proceedings.— In all proceedings for the A: The collector shall issue an Order for hearing
forfeiture of any vehicle, vessel, aircraft, or within 15 days (5 days perishable) from
goods under this Act, the burden of proof shall issuance of warrant.
be borne by the claimant.
The DC shall render a decision within 30 days
Q: Can there be settlement pending seizure upon termination of the hearing (10 days in case
case? of perishable goods).
A: Yes, by payment of the fine or redemption of
the forfeited goods. under Section 1124. Take The decision shall include a declaration of
note though that in the following cases, forfeiture, the imposition of a fine, or such other
settlement of any seizure case is not allowed: action that may be proper.
1. There is fraud involved (discrepancy of
taxes and duties to be paid between APPEAL IN FORFEITURE CASES
what was determined and what is
declared exceeds 30%); The procedure in appeal in forfeiture cases is
2. Where the importation is prohibited; found in Sec. 1126:
3. Release of goods is contrary to law.
Section 1126. Appeal to the Commissioner.—
Section 1124. Settlement of Pending Seizure In forfeiture cases, the person aggrieved by the
Case by Payment of Fine or Redemption of decision of a District Collector may, within fifteen
Forfeited Goods.— Subject to the approval of (15) days or five (5) days in case of perishable
the Commissioner, the District Collector may goods, from receipt of the decision, file a written
allow the settlement by payment of fine or the notice of appeal, together with the required
redemption of forfeited goods, during the course appeal fee to the District Collector, furnishing a
of the forfeiture proceeding. However, the copy to the Commissioner. The District Collector
Commissioner may accept the settlement by shall immediately transmit all the records of the
redemption of any forfeiture case on appeal. No proceedings to the Commissioner, who shall
settlement by payment of fine shall be allowed review and decide on the appeal within thirty
when there is fraud or when the discrepancy in (30) days from receipt of the records, or fifteen
 Page 36 of 39

(15) days in the case of perishable goods:

Provided, That if within thirty (30) days, no You also have the auto-review by the SOF in
dedsionis rendered, the decision of the District other cases under Section 1128:
Collector under appeal shall be deemed
affirmed. An appeal filed beyond the period Section 1128. Automatic Review by the
herein prescribed shall be dismissed. Secretary of Finance in Other Cases.— In cases
not involving protest or forfeiture, the
Appeals to protest cases shall be governed by Commissioner shall automatically review any
Section 114 of this Act. decision by the District Collector that is adverse
to the government. The records of the case shall
The decision of the Commissioner may be be elevated to the Commissioner within five (5)
served through the recognized modes of service days from the promulgation of the decision.
under existing law.
Automatic Review The Commissioner shall decide on the
automatic review within thirty (30) days from
There are also cases of automatic review in receipt of the records, or within ten (10) days in
forfeiture cases: the case of perishable goods. When no
decision is rendered within the prescribed
Auto-review by Commissioner from any period or when any decision rendered by the
Decision of the District Collector Commissioner is adverse to the government,
the records of the case under review shall be
Section 1127. Automatic Review in Forfeiture automatically elevated within five (5) days for the
Cases.— The Commissioner shall automatically review of the Secretary of Finance.
review any decision by the District Collector
adverse to the government. The entire records The decision issued by the Secretary of
of the case shall be elevated within five (5) days Finance, whether or not a decision was
from the promulgation of the decision. rendered by the Commissioner within thirty (30)
days from receipt of the records, or within ten
The Commissioner shall decide on the (10) days in the case of perishable goods, shall
automatic review within thirty (30) days, or within be final upon the Bureau.
ten (10) days in the case of perishable goods,
from receipt of the records.
ABANDONMENT
Q: Now, what happens if the COC does not
decide within 30 days or in case the decision is Now, there this concept of abandonment:
adverse to the government?
A: Under the same Section 1127, there will be Abandonment in customs practice is the
an auto-elevation for review to the SOF: renunciation by an importer of all his interests
and property rights in the imported article.
When no decision is rendered within the
prescribed period or when a decision adverse There are 2 kinds of abandonment:
to the government is rendered by the 1. Express abandonment;
Commissioner involving goods with FOB or 2. Implied abandonment.
FCA value of ten million pesos
(₱10,000,000.00) or more, the records of the Section 1129. Abandonment, Kinds and Effects
decision of the Commissioner, or of the District of.— Imported goods are deemed abandoned
Collector under review, as the case may be, under any of the following circumstances;
shall be automatically elevated within five (5)
days for review by the Secretary of Finance. (a) When the owner, importer, or consignee of
the imported goods expressly signifies in writing
The decision issued by the Secretary of to the District Collector the intention to abandon
Finance, whether or not a decision was the same; or
rendered by the Commissioner within thirty (30)
days, or within ten (10) days in the case of (b) When the owner, importer, consignee, or
perishable goods, from receipt of the records, interested party after due notice, falls to file the
shall be final upon the Bureau. goods declaration within the prescribed period in
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Section 407 of this Act; Provided, That the term Abandoned Goods.— Expressly abandoned
goods declaration shall include provisional or goods under paragraph (a) of Section 1129 of
incomplete goods declaration deemed valid by this Act shall ipso facto be deemed the property
the Bureau as provided in Section 403 of this of the government and shall be disposed of in
Act. For this purpose, it is the duty of the District accordance with the provisions of this Act.
Collector to post a list of all packages
discharged and their consignees, whether If the Bureau has not disposed of the
electronically or physically in the District Office, abandoned goods, theowner or importer of
or send a notice to the consignee within five (5) goods impliedly abandoned may, at any time
days from the date of discharge; or within thirty (30) days after the lapse of the
prescribed period to file the declaration, reclaim
(c) Having filed such goods declaration, the the goods provided that all legal requirements
owner, importer, consignee or interested party have been complied with and the corresponding
after due notice, fails to pay the assessed duties, taxes and other charges, without
duties, taxes and other charges thereon, or, if prejudice to charges and fees due to the port or
the regulated goods failed to comply with terminal operator, as well as expenses incurred
Section 117 of this Act, within fifteen (15) days have been paid before the release of the goods
from the date of final assessment: Provided, from customs custody.
That if such regulated goods are subject of an
alert order and the assessed duties, taxes and When the Bureau sells goods which have been
other charges thereof are not paid within fifteen impliedly abandoned, although no offense has
(15) days from notification by the Bureau of the been discovered, the proceeds of the sale, after
resolution of the alert order, the same shall also deduction of any duty and tax and all other
be deemed abandoned; or charges and expenses incurred as provided in
Section 1143 of this Act, shall be turned over to
(d) Having paid the assessed duties, taxes and those persons entitled to receive them or, when
other charges, the owner, importer or consignee this is not possible, held at their disposal for a
or interested party after due notice, fails to claim specified period. After the lapse of the specified
the goods within thirty (30) days from payment. period, the balance shall be transferred to the
For this purpose, the arrastre or warehouse forfeiture fund as provided in Section 1151 of
operator shall report the unclaimed goods to the this Act.
District Collector for disposition pursuant to the
provisions of this Act; or
CIVIL REMEDIES FOR COLLECTION OF
(e) When the owner or importer fails to claim DUTIES AND TAXES
goods in customs bonded warehouses within the
prescribed period. Section 1132. Remedies for the Collection of
The due notice requirement under this section Duties, Taxes, Fines, Surcharges, Interests, and
may be provided by the Bureau through Other Charges.— The civil remedies for the
electronic notice or personal service; Provided, collection of import duties, taxes, fees, or
That for non-regular importers, notification shall charges resulting from the conduct of a post
be by registered mail or personal service. For clearance audit shall be obtained by:
tins purpose, the accreditation of importers,
exporters, and other third parties shall indude (a) Distraint of goods, chattels, or effects, and
provision for mandatory receipt of electronic other personal property of whatever character,
notices. including stocks and other securities, debts,
credits, bank accounts, and interest in and rights
The first case is an express abandonment. to personal property, and by levy upon real
There is an actual renunciation of the right over property and interest in rights to real property;
the imported goods. The rest of the cases are and
implied abandonment.
(b) Civil or criminal action.
Q: What is the treatment of abandoned goods?
A: Section 1130: Either or both of these remedies may be
pursued at the discretion of the Bureau;
Section 1130. Treatment and Disposition of Provided, That the remedies of distraint and levy
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shall not be allowed when the amount of duties the distraint and the cost of the subsequent sale.
and taxes involved is not more than ten
thousand pesos (₱10,000.00). The officer serving the warrant of distraint shall
The Bureau shall advance the amounts needed make or cause to be made an account of the
to defray costs of collection by means of civil or goods, chattels, effects, or other personal
criminal action, including the preservation or property distrained, a copy of which, signed by
transportation of personal property distrained the said officer, shall he left either with the
and the advertisement and sale thereof as well owner or person from whose possession such
as of real property and improvements thereon. goods, chattels, or effects or other personal
property were taken, or at the dwelling or other
Section 1133. Constructive Distraint of the place of business of such person and with
Property.— To safeguard the interest of the someone of suitable age and discretion, to
government, the Commissioner may place under which list shall be added a statement of the sum
constructive distraint the property of a delinquent demanded and note of the time and place of
importer who, in the opinion of the sale.
Commissioner, is retiring from any business
subject to duty and tax, or is intending to leave Stocks and other securities shall be distrained
the Philippines, or to remove the property by serving a copy of the warrant of distraint upon
therefrom, or to hide or conceal the property, or the importer and upon the president, manager,
to perform any act tending to obstruct the treasurer, or other responsible officer of the
proceedings for collecting the duty and tax due, corporation, company or association, which
or which may be due. issued the said stocks or securities.
The constructive distraint of personal property
shall be effected by requiring the importer or any Debts and credits shall be distrained by leaving
person in possession or control of such property with the person owing the debts or having in
to sign a receipt covering the property, to his/her possession or under his/her control such
obligate to preserve the distrained property on credits, or with his/her agent, a copy of the
the state and condition at the time of the warrant of distraint. The warrant of distraint shall
government's seizure of the same, and not to be sufficient authority to the person owing the
dispose of the same in any manner whatsoever, debts or having in his possession or under his
without the express authority of the control any credits belonging to the importer to
Commissioner. pay to the Commissioner the amount of such
debts of credits.
In case the importer or the person in possession Bank accounts shall be garnished by serving a
and control of the property sought to be placed warrant of garnishment upon the importer and
under constructive distraint refuses or fails to upon the president, manager, treasurer, or other
sign the receipt herein referred to, the customs responsible officer of the bank Upon the receipt
officer effecting the constructive distraint shall of the warrant of garnishment, the bank shall
proceed to prepare a list of such property and, in turn over to the Commissioner so much of the
the presence of two (2) witnesses, leave a copy bank accounts as may be sufficient to satisfy the
thereof in the premises where the property claim of the government.
distrained is located, after which the said
property shall be deemed to have been placed A report on the distraint shall, within ten (10)
under constructive distraint. days from receipt of the warrant, be submitted
by the Commissioner to the Secretary of
Section 1134. Summary Remedies.— Finance: Provided, That the Commissioner shall
(A) Distraint of Personal Property.— Upon have the power to lift such order of distraint
failure of the person owing any delinquent duty, subject to the rules and regulations promulgated
tax and other charges to pay at the time pursuant to this Act.
required, the Commissioner shall seize and
distraint the goods, chattels or effects, and the (B) Levy on Real Property.— After the expiration
personal property, including stocks and other of the period within which to pay the duty, tax
securities, debts, credits, hank accounts, and and other charges as prescribed in this section,
interests in and rights to personal property of real property may be levied upon, before,
such persons, in sufficient quantity to satisfy the simultaneously, or after the distraint of personal
duty, tax or other charge and the expenses of property belonging to the importer. To this end,
 Page 39 of 39

the Commissioner or the duly authorized approval of the Commissioner.

representative shall prepare a duly
authenticated certificate showing the name of Section 1136. Review by the CTA.— Unless
the importer and the amounts of the duty and tax otherwise provided in this Act or by any other
and penalty due. The certificate shall operate law, the party aggrieved by the ruling or
with the force of a legal execution throughout the decisions of the Commissioner may appeal to
Philippines. the CTA, in the manner and within the period
prescribed by law and regulations. Decisions of
The levy shall be effected by writing upon the the Secretary of Finance when required by this
certificate a description of the property on which Act, may likewise be appealed to the CTA.
levy is made. At the same time, written notice of
the levy shall be mailed to or served upon the Unless an appeal is made to the CTA in the
register of deeds of the province or city where manner and within the period prescribed by law
the property is located and upon the importer, or and regulations, the ruling or decision of the
if the latter is not in the Philippines, upon the Commissioner or the Secretary of Finance shall
agent or the manager of the business from be final and executory.
which the liability arose, or if there be none, to
the occupant of the property in question. Section 1137. Exclusive Jurisdiction of the
Bureau.— Jurisdiction over imported goods and
In case the warrant of levy on real property is goods for exportation shall be exclusive to the
not issued before or simultaneously with the Bureau, or the Secretary of Finance, when
warrant of distraint on personal property, and the under review by the latter, subject to the
personal property of the importer is not sufficient proceedings described in this title.
to satisfy the duty and tax due, the Except for the CTA, no court may issue any
Commissioner or a duly authorized order or decision until all the remedies for
representative shall, within thirty (30) days after administrative appeal have been exhausted.
execution of the distraint, proceed with the levy
on the real property of the importer. Section 1138. Fraud Investigation and
Prosecution.— No criminal case for violation of
Within ten (10) days after receipt of the warrant, this title shall be instituted without the approval
a report on any levy shall be submitted by the of the Commissioner pursuant to the provisions
levying officer to the Commissioner; Provided, of this Act.
That the Commissioner may lift such warrants of
levy issued, subject to the rules and regulations The Bureau shall have the power to investigate
promulgated pursuant to this Act. andinstitute smuggling cases committed within
its jurisdiction; Provided, That in case of inquest,
the same may be instituted by the apprehending
JUDICIAL PROCEEDINGS customs officer.

Section 1135. Supervision and Control over

Criminal and Civil Proceedings.— Civil and
criminal actions and proceedings instituted on
behalf of the Government under the authority of
this Act or other laws enforced by the Bureau
shall be brought in the name of the government
of the Philippines and shall be prosecuted and
handled by the Bureau with the assistance of the
Department of Justice (DOJ): Provided, That the
determination of the existence of probable cause
and the subsequent filing of any criminal or civil
case with the proper court against violators of
this Act shall exclusively belong to the DOJ:
Provided, However, That no civil or criminal
action for the recovery of duties or the
enforcement of any fine, penalty or forfeiture
under this Act shall be filed in court without the