imposition levied on goods that are shipped away to

a foreign country.

REASONS WHY CUSTOMS DUTIES ARE

IMPOSED:
 to earn revenue
 to protect our domestic industries
CUSTOMS LAW
An English term which originally denoted all
“customary” tolls or dues paid by the merchant upon These are rules of conduct or mandate promulgated
his commodities on their way to and from the by competent authority for the common/general
market, not necessarily differentiated by the class of welfare of the people.
goods, for the benefit of the king, lord and local
government of the authority. KINDS OF LAWS
 substantive or philosophical law –
The term then became restricted, in most countries contains the actual language of the law
by the late 18th or early 19th century, to taxes on  procedural or supplemental law – step
importation or exportation of commodities across by step procedure for the interpretation
national boundaries. and implementation of the law.

TARIFF

It denotes the lists of schedules of commodities with WAYS TO INTERPRET LAWS

the duties or charges.  literal – as is (per se)
 contextual – requires deep analysis
A systematic arrangement of customs duties levied
on goods when these cross the border of the political CUSTOMS LAWS
unit
These include not only the provisions of the
CUSTOMS DUTIES CAN BE Customs Modernization and Tariff Act (CMTA) and
IMPOSED IN 2 WAYS: regulations pursuant thereto, but all other laws and
regulations which are subject to enforcement by the
IMPORT DUTY Bureau of Customs (BOC) or otherwise within its
jurisdiction
It is imposed at the time a commodity from a foreign
country enters the country. It is levied either for
revenue or for protection.
COMPONENTS OF CUSTOMS LAWS
TYPES OF IMPORT DUTY  provisions stated in the Customs
 ad valorem duty – duty imposed based Modernization and Tariff Act (CMTA)
on the value of the goods.  rules and regulations promulgated by the
 specific duty – kind of duty imposed Commissioner of Customs with the
on luxury items, such as tobacco, approval of the Secretary of Finance
alcohol, based on quantity, volume or  part of laws administered by the Bureau of
weight, regardless of its market value Customs
or price.
 alternative duty – duty imposed to
offset the disadvantages in imposing
both ad valorem and specific duties.
 compound duty – a combination of
both ad valorem and specific duties

EXPORT DUTY

It is imposed at the time goods leaves the country

bound for a foreign country. Thus, it refers to
 SEC. 100 diligent compliance with customs practices
SHORT TITLE and procedures by stakeholders;
(d) Consult, coordinate and cooperate with
This Act shall be known as the "Customs other government agencies and the private
Modernization and Tariff Act (CMTA). sector in implementing and developing
customs policy;
RA 10863 (e) Provide a fair and expeditious
administrative and judicial appellate
– an Act modernizing the Customs and Tariff remedy for customs related grievances and
Administration matters;
– Otherwise known as the Customs (f) Employ modern practices in customs
Modernization and Tariff Act (CMTA) – administration and utilize information and
Sec. 100, CMTA communications technology in the
– Except the rates of import duty and export implementation of customs functions; and
product subject to duty, it replaces (g) Institute professionalism and meritocracy
Presidential Decree No. 1464, otherwise in customs tax administration by attracting
known as the Tariff and Customs Code of and retaining competent and capable
1978 customs officers and personnel to enforce
– It contains 18 Titles, 43 Chapters, and 314 the provisions of this Act.
Sections.
– This was patterned after the Revised SEC. 102
Kyoto Convention (RKC) to comply with DEFINITION OF TERMS
Philippines’ commitment as a contracting
party. (a) Abatement refers to the reduction or
diminution, in whole or in part, of duties
IMPORTANT DATES TO REMEMBER IN and taxes where payment has not been
THE LIFE OF THE CMTA made
 May 30, 2016 – CMTA was signed
into Law (b) Actual or Outright Exportation  refers to
 June 1, 2016 – CMTA was published the customs procedure applicable to goods
in Manila Bulletin which, being in free circulation, leave the
 June 16, 2016 – Effectivity date of the Philippine territory and are intended to
CMTA remain permanently outside it

(c) Admission refers to the act of bringing

“Sec. 1805. Effectivity of the CMTA. This Act shall imported goods directly or through transit
take effect fifteen (15) days after its publication in into a free zone
the Official Gazette or in a newspaper of general
circulation” (d) Airway Bill (AWB) refers to a transport
document for airfreight used by airlines
SEC. 101 and international freight forwarders which
DECLARATION OF POLICY specify the holder or consignee of the bill
who has the right to claim delivery of the
It is hereby declared the policy of the State to protect goods when they arrive at the port of
and enhance government revenue, institute fair and destination. It is a contract of carriage that
transparent customs and tariff management that will includes carrier conditions, such as limits
efficiently facilitate international trade, prevent and of liability and claims procedures. In
curtail any form of customs fraud and illegal acts, addition, it contains transport instructions
and modernize customs and tariff administration. to airlines and carriers, a description of the
Towards this end, the State shall: goods, and applicable transportation
charges
(a) Develop and implement programs for the
continuous enhancement of customs (e) Appeal refers to the remedy by which a
systems and processes that will harmonize person who is aggrieved or adversely
customs procedures; affected by any action, decision, order, or
(b) Adopt clear and transparent customs rules, omission of the Bureau, seeks redress
regulations, policies and procedures, before the Bureau, the Secretary of
consistent with international standards and Finance, or competent court, as the case
customs best practices; may be;
(c) Establish a regime of transparency of and
accessibility to customs information,
NOTES:
customs laws, rules, regulations,
administrative policies, procedures and If hindi pataas = you have the right to
practices, in order to ensure informed and
appeal
(f) Assessment refers to the process of for a specific purpose and must be
determining the amount of duties and taxes intended for reexportation within a
and other charges due on imported and specified period and without having
exported goods undergone any substantial change except
due to normal depreciation
(g) Authorized Economic Operator
(AEO) refers to the importer, exporter, (n) Customs Broker refers to any person who
customs broker, forwarder, freight is a bona fide holder of a valid Certificate
forwarder, transport provider, and any of Registration/Professional Identification
other entity duly accredited by the Bureau Card issued by the Professional Regulatory
based on the World Customs Organization Board and Professional Regulation
(WCO) Framework of Standards to Secure Commission pursuant to Republic Act No.
and Facilitate Global Trade, the Revised 9280, as amended, otherwise known as the
Kyoto Convention (RKC), the WCO "Customs Brokers Act of 2004”
Supply Chain Management Guidelines and
the various national best practices to (o) Customs Office refers to any customs
promote trade facilitation and to provide a administrative unit that is competent and
seamless movement of goods across authorized to perform all or any of the
borders through secure international trade functions enumerated under customs and
supply chains with the use of risk tariff laws
management and modern technology
(p) Customs Officer, as distinguished from a
(h) Bill of Lading (B/L) refers to a transport clerk or employee, refers to a person
document issued by shipping lines, carriers whose duty, not being clerical or manual
and international freight forwarders or in nature, involves the exercise of
non-vessel operating common carrier for discretion in performing the function of
water-borne freight. The holder or the Bureau. It may also refer to an
consignee of the bill has the right to claim employee authorized to perform a specific
delivery of the goods at the port of function of the Bureau as provided in this
destination. It is a contract of carriage that Act
includes earner conditions, such as limits
of liability and claims procedures. In (q) Customs Territory refers to areas in the
addition, it contains transport instructions Philippines where customs and tariff laws
to shipping lines and carriers, a description may be enforced
of the goods, and applicable transportation
charges (r) Entry refers to the act, documentation and
(i) Bureau refers to the Bureau of Customs process of bringing imported goods into
the customs territory, including goods
(j) Carrier refers to the person actually coming from free zones
transporting goods or in charge of or
responsible for the operation of the means (s) Exportation refers to the act,
of transport such as airlines, shipping documentation, and process of bringing
lines, freight forwarders, cargo goods out of Philippine territory
consolidators, non-vessel operating
common carriers and other international (t) Export Declaration refers to a statement
transport operators made in the manner prescribed by the
Bureau and other appropriate agencies, by
(k) Clearance refers to the completion of which the persons concerned indicate the
customs and other government formalities procedure to be observed for taking out or
necessary to allow goods to enter for causing to be taken out any exported
consumption, warehousing, transit or goods and the particulars of which the
transshipment, or to be exported or placed customs administration shall require
under another customs procedure
(u) Flexible Clause refer to the power of the
(l) Commission refers to the Tariff President upon recommendation of the
Commission National Economic and Development
Authority (NEDA): (1) to increase, reduce
(m) Conditional Importation refers to the or remove existing protective tariff rates of
customs procedure known under the RKC import duty, but in no case shall be higher
as temporary admission in which certain than one hundred percent (100%) ad
goods can be brought into a customs valorem; (2) to establish import quota or to
territory conditionally relieved, totally or ban importation of any commodity as may
partially, from payment of import duties be necessary; and (3) to impose additional
and taxes; such goods must be imported duty on all import not exceeding ten
 percent (10%) ad valorem, whenever consolidated shipment, and other related
necessary undertakings

(v) Foreign Exporter refers to one whose (bb) International Freight Forwarder refers to

name appears on documentation attesting persons responsible for the assembly and
to the export of the product to the consolidation of shipments into single lot,
Philippines regardless of the and assuming, in most cases, the full
manufacturer's name in the invoice responsibility for the international
transport of such shipment from point of
(w) Free Zone refers to special economic receipt to the point of destination
zones registered with the Philippine
Economic Zone Authority (PEZA) under (cc) Jurisdictional Control refers to the power
Republic Act No. 7916, as amended, duly and rights of the Bureau in exercising
chartered or legislated special economic supervision and police authority over all
zones and freeports such as Clark Freeport seas within the jurisdiction of the
Zone; Poro Point Freeport Zone; John Hay Philippine territory and over all coasts,
Special Economic Zone and Subic Bay ports, airports, harbors, bays, rivers and
Freeport Zone under Republic Act No. inland waters whether navigable or not
7227, as amended by Republic Act No. from the sea
9400; the Aurora Special Economic Zone
under Republic Act No. 9490, as amended; (dd) Lodgement refers to the registration, of a
the Cagayan Special Economic Zone and goods declaration with the Bureau
Freeport under Republic Act No. 7922; the
Zamboanga City Special Economic Zone (ee) Non-Vessel Operating Common Carrier
under Republic Act No. 7903; the Freeport (NVOCC) refers to an entity, which may
Area of Bataan under Republic Act No. or may not own or operate a vessel that
9728; and such other freeports as provides a point-to-point service which
established or may be created by law may include several modes of transport
and/or undertakes group age of less
(x) Goods refer to articles, wares, merchandise container load (LCL) shipments and issues
and any other items which are subject of the corresponding transport document
importation or exportation (ff) Outright Smuggling refers to an act of
importing goods into the country without
(y) Goods Declaration refers to a statement
made in the manner prescribed by the NOTES:
Bureau and other appropriate agencies, by
which the persons concerned indicate the  bumibili ng slots sa
procedure to be observed in the cargo/airlines
application for the entry or admission of  vessels only
imported goods and the particulars of
which the customs administration shall complete customs prescribed importation
require documents, or without being cleared by
customs or other regulatory government
(z) Importation refers to the act of bringing in agencies, for the purpose of evading
of goods from a foreign territory into payment of prescribed taxes, duties and
Philippine territory, whether for other government charges
consumption, warehousing, or admission
as defined in this Act (gg) Perishable Good refers to goods liable to
perish or goods that depreciate greatly in
(aa) Freight Forwarder refers to a local entity value while stored or which cannot be kept
that acts as a cargo intermediary and without great disproportionate expense,
facilitates transport of goods on behalf of which may be proceeded to, advertised and
its client without assuming the role of a sold at auction upon notice if deemed
carrier, which can also perform other reasonable
forwarding services, such as booking
cargo space, negotiating freight rates, (hh) NOTES:
preparing documents, advancing freight
payments, providing packing/crating, goods na napapanis, like foods
trucking and warehousing, engaging as an Port of Entry refers to a domestic port open to
agent/representative of a foreign non- both domestic and international trade,
vessel operating as a common including principal ports of entry and
carrier/cargo consolidator named in a subports of entry. A principal port of
master bill of lading as consignee of a entry is the chief port of entry of the
 Customs District wherein it is situated and of fraudulent, falsified or erroneous
is the permanent station of the District declaration of the goods to its nature, kind,
Collector of such port.  Subports of entry quality, quantity or weight, for the purpose
are under the administrative jurisdiction of of reducing or avoiding payment of
the District Collector of the principal port prescribed taxes, duties and other charges
of entry of the Customs District. Port of
entry as used in this Act shall include
airport of entry KINDS OF TECHNICAL SMUGGLING:
 Undervaluation – value
(ii) Port of Discharge, also called Port of  Misdeclaration – description, weight,
Unloading, refers to a place where a details of shipment
vessel, ship, aircraft or train unloads its  Misclassification – tariff rate
shipments, from where they will be
dispatched to their respective consignees (qq) Tentative Release refers to a case where

(jj) Reexportation means exportation of goods NOTES:

which have been imported  Temporary or pansamantala lang

NOTES:
 Naimoport na, Ieexport ulit the assessment is disputed and pending
(kk) (return) review, an importer may put up a cash
bond equivalent to the duties and taxes due
Release of Goods refers to the action by the on goods before the importer can obtain
Bureau to permit goods undergoing the release of said goods
clearance to be placed at the disposal of
the party concerned
(rr) Transit refers to the customs procedure
(ll) Refund refers to the return, in whole or in under which goods, in its original form,
part, of duties and taxes paid on goods are transported under customs control from
one customs office to another, or to a free
zone

(mm) Security refers to any form of (ss) Transshipment refers to the customs

guaranty, such as a surety bond, cash bond, procedure under which goods are
standby letter of credit or irrevocable letter transferred under customs control from the
of credit, which ensures the satisfaction of importing means of transport to the
an obligation to the Bureau exporting means of transport within the
area of one customs office, which is the
(nn) Smuggling refers to the fraudulent act of office of both importation and exportation
importing any goods into the Philippines,
or the act of assisting in receiving, (tt) Traveler refers to any person who
concealing, buying, selling, disposing or
transporting such goods, with full NOTES:
knowledge that the same has been  hindi talaga doon ang tunay na
fraudulently imported, or the fraudulent destination ng goods
exportation of goods. Goods referred to
under this definition shall be known as
smuggled goods. temporarily enters the territory of a
country in which he or she does not
normally resides (non-resident), or who
NOTES: leaves that territory, and any person who
leaves the territory of a country in which
 Outright smuggling – di he or she normally resides (departing
complete documents resident) or who returns to that territory
 Technical smuggling – avoiding (returning resident)
payments
(uu) Third Party refers to any person who deals
(oo) Taxes refer to all taxes, fees and charges directly with the Bureau, for and on behalf
imposed under this Act and the National of another person, relating to the
Internal Revenue Code (NIRC) of 1997, as importation, exportation, movement or
amended, and collected by the Bureau storage of goods

(pp) Technical Smuggling refers to the act of

importing goods into the country by means SEC. 103
 WHEN IMPORTATION BEGINS AND SEC. 105
DEEMED TERMINATED EFFECTIVE DATE OF RATE OF IMPORT
DUTY.
Begins: Importation begins when the carrying vessel
or aircraft enters the Philippine territory with the Imported goods shall be subject to the import duty
intention to unload therein rates under the applicable tariff heading that are
effective at the date of importation or upon
withdrawal from the warehouse for consumption. In
NOTES: case of withdrawal from free zones for introduction
 May intention na mag import in the to the customs territory, the duty rate at the time of
Philippines withdrawal shall be applicable on the goods orig-
nally admitted, whether withdrawn in its original or
Importation is deemed terminated when: advanced form.
(a) The duties, taxes and other charges due
upon the goods have been paid or secured In case of goods sold at customs public auction, the
to be paid at the port of entry unless the duty rates at the date of the auction shall apply for
goods are free from duties, taxes and other purposes of implementing Section 1143 (a) of this
charges and legal permit for withdrawal Act.
has been granted; or
(b) In case the goods are deemed free of NOTES:
duties, taxes and other charges, the goods  Date of Importation (Imported goods
have legally left the jurisdiction of the
for consumption): Imported goods
Bureau shall be subject to the import duty
rates under the applicable tariff
heading that are effective at the date of
SEC. 104
importation; or
WHEN DUTY AND TAX ARE DUE ON
IMPORTED GOODS.  Date of Withdrawal from Freezones to
Customs Territory: Duty rate at the
Except as otherwise provided for in this Act or in time of withdrawal shall be applicable
other laws, all goods, when imported into the on the goods originally admitted,
Philippines, shall be subject to duty upon whether withdrawn in its original or
importation, including goods previously exported advanced form.
from the Philippines.  percentage kung saan tinatimes ang
dutiable value, If nai-times ang
dutiable value, the answer Is called
NOTES: CUSTOMS DUTY
Rule on unpaid duties and taxes:
 After 1 year, additional 20% Interest
of duties and taxes.

Unpaid duties, taxes and other charges shall incur

legal interest of 20% per annum computed from the
date of final assessment under Sec. 429 of the
CMTA, when payment becomes due and
SEC. 106.
demandable. The legal interest shall likewise accrue DECLARANT.
on any fine or penalty imposed.
A Declarant may be a consignee or a person who has
Upon payment of the duties, taxes and other charges, the right to dispose of the goods. The declarant shall
the Bureau shall issue the necessary receipt or lodge a goods declaration with the Bureau and may
document as proof of such payment be:

a) Importer, being the holder of the bill of

NOTES:
lading
 De minimis value - P10,000 below, no
b) Exporter, being the owner of the goods to
duties and taxes, If P10,000 above,
be shipped out
under subject of payment of duties and
c) Customs broker acting under the
taxes
authority of the importer or from a holder
 Conditionally Free Importation - like
of the bill; or
trophies, medals and anything that you
d) Person duly empowered to act as agent o
got from competitions, free and no
attorney-in-fact for each holder
duties and taxes
 Stores in consumption - like goods na
In case the consignee or the person who has the right
ini aadmit from the flight attendants
to dispose of goods is a juridical person, it may
and sa free port zone
authorize a responsible officer of the company to
sign the goods declaration as declarant on its behalf.

The goods declaration submmited to the Bureau

shall be processed by the declarant or by a licensed
customs broker: Provided, That for importations, a
transition period of two (2) years from the effectivity
of this Act is hereby provided during which SEC. 108.
subparagraph (d) of this section shall not be PENALTIES FOR ERRORS IN GOODS
implemented by the Bureau: Provided, futher, that DECLARATION
after two (2) years from the effectivity of this Act,
subparagraph (d) of this section shall take into effect The Bureau shall not impose substantial penalties for
consistent with international standards and customs errors when such errors are inadvertent and there
best practices. was no fraudulent intent or gross negligence in the
commission thereof: Provided, That in order to
discourage repetition of such errors, a penalty may
NOTES: be imposed but shall not be excessive.
Importer is a juridical person: It may authorize a
responsible officer of the company to sign the
goods declaration as declarant on his behalf SEC. 109
APPLICATION OF INFORMATION AND
Who shall process the goods declaration at the COMMUNICATIONS TECHNOLOGY.
BOC?
o Declarant In accordance with international stan-dards, the
o Customs Broker Bureau shall utilize information and communications
o Atty-in-fact (effective June 17, 2018) technology to enhance customs control and to
support a cost-effective and efficient customs
operations geared towards a paperless customs
environment.
SEC. 107 The Bureau shall communicate, exchange and
RIGHTS & RESPONSIBILITIES OF THE process trade- and logistics-related information in
DECLARANT
the national and regional level for the efficient and
prompt clearance of goods and commodities in a
The declarant shall be responsible for the accuracy
technology-neutral and secured infrastructure for
of the goods declaration and for the payment of all
business, industries, and government.
duties, taxes and other charges due on the imported
goods. The licensed customs broker shall likewise be
The security of data and communication shall be in a
responsible for the accuracy of the goods declaration
manner that is consistent with applicable local and
but shall not be responsible for the payment of
internationally accepted standards on information
duties, taxes and other charges due on the imported
security.
goods.
The declarant shall sign the goods declaration, even
The Bureau shall likewise include as part of its
when assisted by a licensed customs broker, who
systems and processes, a disaster preparedness and
shall likewise sign the goods declaration.
recovery plan to ensure business continuity by
maintaining its uptime goal for its electronic and
online services.
NOTES:
Rights of Declarant: For purposes of customs procedures, electronic
a) Lodge; and documents, permits, licenses or certificates shall be
b) Sign goods declaration even when acceptable and shall have the legal effect, validity or
assisted by customs broker enforceability as any other document or legal
Responsibilities of Declarant: writing: Provided, That when the prescribed
a) Accuracy of goods declaration requirements are duly complied with, the Bureau
b) Payment of duties and taxes shall:
Rights of Customs broker:
a) Sign the goods declaration under Sec. a) Recognize the authenticity and reliability
27 of RA 9280 of electronic documents;
Responsibilities of Customs Broker: b) Transmit approval in the form of
a) Accuracy & signing of the goods electronic data messages or electronic
declaration documents; and
b) But not responsible for the payment of c) Require and/or accept payments and issue
duties & taxes receipts acknowledging such payments N
M
ru
B
 through systems using electronic data The Bureau may require the payment of a reasonable
messages or electronic documents. fee in providing such information.

The introduction and implementation of information The requested information shall be released within
and communications technology shall be undertaken reasonable time from the filing of the request and
with due consultation with directly affected parties payment of the required fee.
and stakeholders.
NOTES:
 May right si customs na humingi ng
SEC. 110. payment/fee for the Infos requested
RELATIONSHIP BETWEEN THE BUREAU
AND THIRD PARTIES

Parties may transact business with the Bureau either SEC. 113
directly or through a designated third party to act on DECISION AND RULING
their behalf.
The Bureau shall issue binding and advance ruling at
The customs transactions directly transacted by a the request of an interested party on matters
party shall not be treated less favorably or be subject pertaining to importation and exportation of goods.
to more stringent requirements than those transacted
through a designated third party. Upon written request of the interested party, the
Bureau shall notify the party of its decision in
A designated third party shall have the same rights writing within the period specified in this Act or by
and obligations as the designating party when regulation. Should the decision be adverse to the
transacting business with the Bureau requesting interested party, the reasons thereof shall
be indicted and the party shall be advised of the
Subject to the provisions of existing laws, treaties, party’s right of appeal.
convention and international agreements, the
Secretary of Finance shall make the necessary The ruling and decision shall be issued by the
guidelines for the defined relationship of the Bureau Bureau within 30 days from the submission of the
and third parties. necessary documents and information.

SEC. 111
INFORMATION OF GENERAL
APPLICATION

All laws, decisions, rulings, circulars, memoranda

and orders of the Bureau shall be published in
accordance with law. SEC. 114
RIGHT OF APPEAL, FORMS AND
To foster an informed compliance regime, the GROUND
Bureau shall ensure that all relevant and available
information of general application pertaining to Any party adversely affected by a decision or
customs operations and procedures which are not omission of the Bureau pertaining to an importation,
confidential or intended for the Bureau's internal use exportation or any other legal claim shall have the
only, shall be readily accessible to any interested right to appeal within 15 days from receipt of the
person. questioned decision or order.
An appeal in writing shall be filed within the period
Any new information, amendment or changes in prescribed in this Act or by regulation and shall
customs law, administrative procedures or specify the grounds thereof.
requirements, shall, as far as practicable, be made
readily available prior to its effective date of The Bureau may allow a reasonable time for the
implementation unless advance notice is precluded. submission of supporting evidence to the appeal.

SEC. 112 NOTE: you have the right to appeal If you feel
INFORMATION OF NATURE na mali mali sa desisyon ng customs

The Bureau shall provide information, not otherwise

confidential or for the Bureau's internal use only,
relating to a specific matter as may be requested by
an interested party for legitimate use.