Customs Proceedings: Seizure and Forfeiture Proceedings and Appeal Process
Customs Proceedings: Seizure and Forfeiture Proceedings and Appeal Process
Customs Proceedings: Seizure and Forfeiture Proceedings and Appeal Process
Customs Proceedings
CAO 10-2020
Section 3. Definition of
Terms.
Common Carrier — shall refer to persons, corporations, firms, or association engaged
in the business of carrying or transporting passengers or goods or both, by land, water
or air, for compensation, offering their services to the public.
Constructive Customs Custody — shall refer to the situation where, falling short of physical
seizure or possession, the Customs Officers and the owner of the goods enter into a written
agreement after the inventory to the effect that the goods, subject of a Letter of Authority
(LOA), shall not be removed or disposed of pending disposition or resolution on the issue of
whether proper payment of duties and taxes has been made.
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Decisions Adverse to the Government — shall refer to the disposition of the main
forfeiture case based on merits, which resolves that there is no violation of the law that
will warrant the Forfeiture of the seized articles, and consequently allows the release of
the articles subject of a Warrant of Seizure and Detention (WSD) without payment of
additional duties and taxes, interests, penalties and/or surcharges.
Deputized Officer — shall refer to officers or members of the Armed Forces of the
Philippines (AFP) or other selected national law enforcement agencies covered by a written
order signed by the Commissioner of Customs authorizing them to assist in the exercise of
customs police authority, particularly the power to search, seize, and arrest in specified
areas outside of customs premises.
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Fraud — shall refer to acts knowingly, voluntarily and intentionally committed or omitted
which prejudice the interest of the government, e.g. submitting fake or spurious document,
making material untruthful statement(s) or committing any other analogous act(s) or
omission(s).
Held Baggage Receipt (HBR) — shall refer to a receipt issued by a customs officer
acknowledging that the baggage is temporarily held in custody by the Bureau for
undeclared dutiable goods and/or declared dutiable goods pending payment of duties and
taxes, verification of documents, or compliance with customs laws, rules and regulations.
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• resulting in deficiency between the duty and tax that should have been paid and the
duty and tax actually paid; and/or
resulting in deficiency between the duty and tax that should have been paid and the duty
and tax actually paid; and/or
There is Misdeclaration as to the Weight of Goods when there is a discrepancy in the actual
weight as declared in the Goods Declaration and the weight as found after physical examination
and weighing of the Goods.
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1. declared value fails to disclose in full the price actually paid or payable; or any
dutiable adjustment to the price actually paid or payable; or
2. when an incorrect valuation method is used; or the valuation rules are not properly
observed;
resulting in a discrepancy in duty and tax to be paid between what is legally determined as
the correct value against the declared value.
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Quashal — shall refer to a recall of a WSD when the ground for the issuance of thereof is
found to be non-existent or ceased to exist.
Seizure — shall refer to the actual or constructive taking or bringing into custody the goods,
things or chattels by virtue of a WSD issued by the Collector of Customs for violation of the
CMTA.
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Warrant of Seizure and Detention (WSD) — shall refer to an order in writing, issued in the
name of the Republic of the Philippines, signed by the District Collector of Customs
directed to the Enforcement and Security Service (ESS) or any Deputized Officer of a
national law enforcement agency, commanding him to seize any properties subject to
Forfeiture pursuant to Section 1113, Chapter 4, Title XI of the CMTA.
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Section 4. General
Provisions.
4.1. Properties Subject to Seizure & Forfeiture.
Goods. e. Unmanifested goods found on any vessel or aircraft, if manifest
therefor is required;
a. Goods which are fraudulently concealed in or removed
contrary to law from any public or private warehouse, f. Goods sought to be imported or exported without going through
container yard, or container freight station under customs a customs office, whether the act was consummated, frustrated, or
supervision; attempted;
b. Goods the importation or exportation is effected or
attempted contrary to law; g. Goods found in the baggage of a person arriving from abroad
c. Goods of prohibited importation or exportation; and undeclared by such person;
d. Goods which, in the opinion of the District Collector, have
been used or were entered to be used as instruments in the h. Goods sought to be imported or exported through a false
importation or exportation of prohibited goods; declaration or affidavit executed by the owner, importer, exporter,
or consignee concerning the importation of goods;
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i. Goods sought to be imported or exported on the strength of a false invoice or other document
executed by the owner, importer, exporter, or consignee concerning the importation or
exportation of such goods;
j. Goods sought to be imported or exported through any other practice or device contrary to law
by means of which such goods entered through a customs office to the prejudice of the
government;
k. Imported goods offered openly for sale or kept in storage, which were discovered in the
exercise of the Commissioner's power to inspect and visit pursuant to Section 224 of CMTA,
when proof of payment of duties and taxes cannot be presented after the lapse of fifteen (15)
days;
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Vehicle, vessel or aircraft. e. Any conveyance actually used for the transport of goods subject to
Forfeiture under the CMTA, with its equipage or trappings, and any
a. Any vehicle, vessel or aircraft, including cargo, which shall be vehicle similarly used, together with its equipment and
used unlawfully in the importation or exportation of goods; appurtenances. The mere conveyance of smuggled goods by such
transport vehicle shall be sufficient cause for outright Seizure; and
b. Any vehicle, vessel or aircraft used in conveying or
transporting smuggled goods in commercial quantities within
the Philippines; f. The vessel or aircraft of the owner, agent, master, pilot-in-command or
other responsible officer what is liable for any fine or penalty for
c. Any vessel engaging in the Coastwise Trade which shall have violation of this Act. In determining whether or not to seize a vessel or
on board goods of foreign growth, produce, or manufacture in aircraft, the Bureau shall take into account the amount of fine or
excess of the amount necessary for sea stores, without such penalty in relation to the commercial impact that because to
goods having been properly entered or legally imported; international trade by the seizure or detention as well as the value of
the vessel or aircraft.
d. Any vessel or aircraft into which shall be transferred cargo
unloaded contrary to law prior to the arrival of the importing
vessel or aircraft at the port of destination;
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b. Boxes, cases, trunks, envelopes, and other containers of whatever character used
as receptacle or as device to conceal goods or are so designed as to conceal the
character of such goods.
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4.2.1. The Forfeiture of goods shall be effected only when any of the following
circumstances exist:
a. The goods are in the custody or within the jurisdiction of customs officers;
b. The goods are in the possession or custody of or subject to the control of the importer,
exporter, original owner, consignee, agent of another person effecting the importation,
entry or exportation in question; or
c. The goods are in the possession or custody of or subject to the control of persons who
shall receive, conceal, buy, sell, transport the same, or aid in any of such acts, with
knowledge that the goods were imported or were subject of an attempt to import or
export contrary to law.
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a. It is a Common Carrier;
b. It has not been chartered for purposes of conveying and transporting persons or cargo. As
used in this CAO, a charter shall refer to a contract by which an entire vessel, aircraft or
vehicle, or some principal part there of, is let by the owner to another person for a specified
time or use which has the effect of transferring the control on both the vessel, aircraft or
vehicle and its crew to the lessee; and
c. The owner or agent at that time of Seizure has no knowledge of and participation in the
unlawful act.
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However, a prima facie presumption against such vehicles, vessel or aircraft shall
exist under any of the following circumstances:
b. If the owner is not in the business for which the conveyance is generally used;
and
The Commissioner or any customs officer who is authorized in writing by the Commissioner, may demand evidence of
payment of duties and taxes on imported goods openly for sale or kept in storage.
Presentation of the Proof of Payment of Duties and Taxes within the fifteen (15) day period. During the said period, the goods
shall be placed under Constructive Customs Custody provided that the same may be released if any of the following documents
are presented and verified:
5.1.1. Proof of payment of correct duties and taxes or proof of exemption from payment of duties and taxes;
5.1.2. Proof of local purchase and payment of correct duties and taxes by the original importer; or
5.1.3. Proof that the goods were locally produced or manufactured.
In the event that the interested party fails to produce such evidence within the said fifteen (15) day period, the goods shall be
seized and subjected to forfeiture proceedings.
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5.2.1. The goods seized may be released to the owner under the following circumstances:
5.3. In all cases, the release of the goods seized pursuant to Section 224
of the CMTA shall be subject to the clearance of the Commissioner,
provided that:
6.2. Partial Seizure of the Shipment. If the offense relates only to a part or portion of
a shipment, only that part shall be seized or detained, provided that the District
Collector is satisfied that the remainder of the shipment was not used, directly or
indirectly, in the commission of the offense.
6.3. Contents of the Warrant of Seizure and Detention. A WSD shall indicate the following
information:
However, the District Collector may, on meritorious circumstances, conduct Summary Proceedings as
maybe deemed necessary for the determination of the existence of probable cause.
If a Release Order is issued for an alerted shipment, the District Collector shall immediately transmit the
records of the case to the Commissioner for clearance and approval.
The Commissioner shall within forty-eight (48) hours or twenty-four(24) hours, if the goods are perishable,
from receipt of the records of the alerted shipment, review the findings of the District Collector.
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When no Decision is made by the Commissioner within the prescribed period, the
alerted imported goods shall be deemed released.
Accordingly, the subject Alert Order shall be lifted by the issuing authority upon the
affirmation of the Commissioner of the Release Order or the lapse of the period to
review.
If the Commissioner issues an Order reversing the Release Order of the District
Collector before the lapse of the period to review, the same shall be referred to the
District Collector for the issuance of the appropriate WSD.
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6.5. Service of Warrant of Seizure and Detention. The District Collector shall immediately direct the
Enforcement and Security Service to serve the WSD within three (3) working days from its issuance:
6.5.1. To the customs warehouseman or wharfinger and the CFW or CBW operator if the goods are
still in customs custody; and
6.5.2. To the owner of the goods or his authorized representative. For the purpose of serving the
WSD, the importer, consignee, named in the bill of lading or airway bill, or possessor shall be deemed
the owner of the goods. If the owner is unknown, with insufficient address, or a foreign entity or
individual, service shall be effected by posting of the WSD by the ESS in the bulletin board of the
concerned collection district office, and by electronic posting through the BOC website, or printed
publication, for fifteen (15) days.
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Notwithstanding the physical and/or constructive turnover of seized goods to the ACDD, the ESS and
ACDD shall jointly secure and safekeep the seized goods.
The District Collector shall immediately cause the inventory and examination of the seized goods.
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9.2. The venue of forfeiture proceedings shall be at the Law Division of the Collection
District which issued the WSD. For Collection Districts without Law Divisions, the venue
shall be at the Office of the District Collector. However, the District Collector may authorize
the conduct of hearing.
9.3. If the subject shipment involved has been sufficiently established to be prohibited, the
same shall be ipso facto forfeited in favor of the government.
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9.4. If, within fifteen (15) calendar days after service of warrant and due notice, no
owner or agent can be found or appears before the District Collector, the seized
goods shall be forfeited ipso facto in favor of the government to be disposed of in
accordance with the CMTA.
10.2. In the event that the pleadings are sent by private courier service, the date of receipt by the Law
Division or Office of the District Collector shall be considered as the date of filing.
10.3. Pleadings filed beyond the reglementary period shall be considered as mere scrap of paper.
10.4. Where WSDs are issued by the District Collector involving the same consignee, commodity and
violation, these cases may be —consolidated. In case where two (2) hearing officers are assigned, the same
shall be consolidated with the lower/lowest docket number.
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10.5. Upon motion, the District Collector, on just and equitable grounds, may allow separate
proceedings for seizure case involving several claimants and several subject matters.
10.6. A lawyer appearing in any forfeiture case must be duly authorized by the claimant. All
pleadings and motions submitted by a lawyer appearing for the claimant must indicate his/her office
address, electronic mail address, Attorney's Roll Number and Professional Tax Receipt (PTR)
Numbers and Mandatory Continuing Legal Education (MCLE) compliance.
10.7. In case the claimant is a juridical entity, it may authorize aresponsible officer of the company to
appear on its behalf.
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10.8. For individual claimants of goods of small value, a licensed customs broker or his authorized
representative may be allowed to appear on his behalf. Goods of small value cover those with value of
less than fifty thousand pesos (Php50,000.00) which are cleared through an informal entry process.
10.9. An attorney-in-fact appearing in any forfeiture case must be duly authorized by the
claimant.10.10. Authorization issued by claimant currently abroad must be duly authenticated by the
appropriate Consular Office.
10.11. A party appearing without proper authorization from the claimant for two (2) successive
hearings shall be considered as in default and authorize the presentation of the evidence ex parte.
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10.13. Notice of Hearing shall be served by personal service or, if not practicable by
reason of distance and lack of personnel to effect personal service, by private courier
service; or posting in the bulletin board of the Law Division or equivalent office of
the concerned Collection District for unknown claimants, within sufficient address
or foreign claimants. Proof of such service shall be attached to the record of the case.
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11.2. The District Collector may conduct a hearing or may designate any lawyer assigned to the
Collection District as a Hearing Officer. If there is no lawyer assigned in the Collection District, the
District Collector shall request for a Hearing Officer from the Legal Service, within two (2) days
from the issuance of the WSD.
11.3. In all cases, the District Collector shall request a Government Prosecutor from the Legal
Service within two (2) days from issuance of the WSD.
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12.2. After termination of the hearing, the Hearing Officer shall require the claimant to submit its verified
Position Paper, within five (5)days from date of last hearing, copy furnished the Government Prosecutor.
12.3. Within five (5) days from receipt of the Position Paper, the Government Prosecutor shall file its Comment,
copy furnished the claimant. The claimant may file a verified Reply within three (3)days from receipt thereof,
copy furnished the Government Prosecutor. After submission of the last pleading the case will be submitted for
resolution.
12.4. The District Collector shall render a Decision within thirty (30) days or ten (10) days in case of Perishable
Goods, upon the submission of the case for resolution.
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13.1. Motion for Postponement, , except if it is based on Acts of God or force majeure;
13.2. Motion for Reconsideration;
13.3. Motion for Extension of Time to File Pleadings;
13.4. Motion to Quash/Recall/Lift/Set-aside or any other similar motion, except as authorized in
Section 14.1 of this CAO;
13.5. Motion to Suspend/Hold in Abeyance Forfeiture Proceedings; and
13.6. Motion to Reopen.
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a. In case of goods seized pursuant to the power of the Commissioner to inspect and visit, the
claimant was able to submit proof as required under Section5.1. of this Order.
b. The District Collector issuing the WSD has no territorial jurisdiction over the seized goods,
without prejudice to the issuance of the WSD by the District Collector having territorial
jurisdiction thereof;
c. When the concerned regulatory agency, in cases of regulated goods, has issued the necessary
clearances or licenses in accordance with its governing laws and regulations.
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14.1.3. Resolution on Motion to Quash. The motion to quash shall be resolved by the District Collector within
fifteen(15) working days from the date of submission of the said matter for resolution.
In case the District Collector allows the Quashal of the WSD, he shall seek clearance from the Commissioner by
transmitting the entire records of the case within two(2) working days from the date of issuance of the order.
The Commissioner shall within thirty (30) working days, or ten (10) working days for Perishable Goods, from
receipt of the entire case records, issue clearance to the order of the District Collector allowing the Quashal of
the WSD.
The order of the District Collector shall be deemed affirmed when no action is made by the Commissioner, after
the lapse of the thirty (30) working days, or ten(10) working days period in case of Perishable Goods. If the
Commissioner timely reverses the order of the District Collector allowing the Quashal of the WSD, the same
shall be remanded to the District Collector for the continuation of the Forfeiture proceedings. The Order of the
District Collector and the Commissioner denying the Motion to Quash shall be considered as Interlocutory
Orders.
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In case of settlement by fine, the owner, importer, exporter, or consignee or agent shall pay the
amount of fine equivalent to thirty percent (30%) of the Total Landed Cost. In case of settlement by
redemption, the owner, importer, exporter, or consignee or agent shall pay the redeemed value
equivalent to one hundred percent (100%) of the Total Landed Cost.
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14.6. Decision of the District Collector. The District Collector shall render a Decision within thirty (30) working
days from the time the case is submitted for decision. The Decision of the District Collector shall include a
declaration of Forfeiture or release, the imposition of a fine or redemption of the goods, or such other action as
may be proper. Copies of the Decision rendered by the District Collector shall be served to all concerned parties
within five (5) working days from the date of issuance. Such service shall preferably be by personal service or, if
not practicable, by registered mail. If the importer is a registered importer of the Bureau of Customs, service
may also be through electronic mail at the given email address of the importer. Proof of such service shall be
attached to the record of the case. Decisions by the District Collector in case an Offer of Settlement was made
shall be subject to clearance and review of the Commissioner. Provided, that the period to resolve shall not run
until the complete records of the case is received by the Office of the Commissioner: Provided, finally that the
same shall not be subject to automatic review of the Secretary of Finance as provided under this CAO.
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16.2. Upon receipt of the Notice of Appeal and Memorandum on Appeal with proof of payment of the
requisite appeal fee, the District Collector shall immediately transmit all the records of the
proceedings to the Appellate Division, Legal Service within five (5)working days, from the receipt of
the appeal. A soft copy of the Decision shall also be sent to the Appellate Division, Legal Service via
electronic mail at [email protected].
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