REPUBLIC OF THE PHIEIPPINES. DY PARIMENT OF FINANCE BUREAU OF CUSTOMS MANILA 1059 September 06, 2007 CUSTOMS MEMORANDUM ORDER No. 22-207 : TO: All Deputy Commissioners All Collectors of Customs All Division / Section aiid Unit Cl All Importers / Brokers And Others Concemed ef Determination of the Cust of Insurauce and Freight Charees as componeats of Dutiable Value Subject: Section 1: OBJECTIVES: 1A. ‘To consolidate all relevant Customs laws and regulations on Insurance and Freight charges 12. To ensure that proper duties and taxes are ied under te WTO Valuation System as sted by CAO No, 4.2004 im len 13. To guide all concerned partics as to the Veclaration und checking of Insurance and Freight charges Section 2: ADMINISTRATIVE PROVISIONS 2.1. Definition of Terms Kor purposes of this Order, the fallowing definitions are adopted: a. Airway Bill (AWB) ~ a non-negotiable instrument issued by an air caurier or freight forwarder to a shipper, to evidence contract of carnage by air (2 (or-ofne)ypy PT b. Bill of Ladling (BL) — a negotiable instrument that was forged between the shipper and the carrier evidencing receipt of commodities and consti tle of ownership over the said poods c. CFR (Cast and Freight — is the incvlemy used to refer to a foreign trade Wherein the seller must pay only the costs and freight necessary to bring the rods to the named jrat af desti d. CIF (Gost, Insurance and Fr ight) is the incoterm used lo reler lo a foreign trade wherein the seller nust pay the costs-and fieight necessary to bring the goods fo the named port of des¥nalion It differs from CFR in that the seller also has to procure marine insurance against the buyer's risk of loss of ar damage to the goods during the carriage, e. CIP (Carriage and Insurance To) — ig the ineoterm used tu refer. to foreign trade wherein the seller delivers the goeds to the carrier nominated by hin, but the seller must in addition pay the cost of carriage necessary to: bri the goods 10° the named destination Consequently, the seller contracts for ance and pay the insurance premium. £ FOB (Free Qn Boaru) — is the ingutern used 10 refer tw a Fureign trade where the seller is considered to have fullitled his obligation Wo deliver when the goods pass the ship's rail at the named part of shipment. From that moment on, the buyer hus td bear all costs and risks of loss of ur damage to he goods from the said point ‘This term also requires the buyer lo clear the goods for export Otomex House Air Way Dill (AWB) — document issued by the fei forwarderfconsolidator to the individual importer. consigne b IATA (International Air Transport Association) — am ialernational air carrier rate bureau established in 1945 that helped established and é standardized = imongh =the years international airfares. niry and Internal a seven (7) page set of official documents (BC For 236) that is used in the clearance of goods fiom Customs and should contain Ure details of a particular bupott veniry. i IEIRD (Lmport j. Insurance Premium — is the amount paid fo the insurer m consideration of his undertaking, to indemnify the importer or loss of the latter's cargo during the course of {ranspout k. Local Imsurance Premium — is the sunount paid ie focal currency to an 1 located in the Philippines that is applicable only for shipmetits where the . terms agreed upon by the parties ace = CER, FOR, FAS, and other non-CHE. It a must thal 2 certification as to the premium aeiually paid be ‘altached to the entry. 1. Master Airway (MAW) — the shipping document issued by the air caer fo a consolidator/freight forwarder, covering a shipurcnt, which could be consolidated or not uLSAD (Single Adi Document) — a set of dycuments, derived fiom? European Community practive (1988); which is used to process shipments that pass Muough Customs. 3 fA (7-2) gr o