TARIFF AND CUSTOMS ‘SAN EDA LAW CENTRALIZED BAR OPERATIONS ~ MEMORY AID 2019) 1 SSS Note: This subject is excluded from the coverage of the 2019 Bar Examinations. GENERAL PRINCIPLES Tariff and Customs Laws include: 1. Provisions of the Customs Modemization and Tariff Act (CMTA) (RA. No. 10863) and regulations issued pursuant thereto; and 2. Other laws and regulations subject to the enforcement by the Bureau of Customs (BOC) or otherwise within its jurisdiction (R.A. No. 10863, Sec. 204). Policy Reforms under R.A. No. 10863 1. Application of Information and Communications Technology (Sec. 109); ‘Types of Importation (Secs. 115-120); Goods declaration for consumption and provisional goods declaration (Secs. 402-403); 4, Non-intrusive examination of goods (Sec. 420); 5._ Increase in de minimis value to P10, 000 or below (Sec. 423); 6. Returning OFWs may bring in personal effects and household effects with FCA value of P150, 000 (Sec. 800 (9); 7. Increase of tax exemption on Balikbayan boxes with FCA value of P150, 000 up to 3 times in a calendar year for personal and household effects only (Sec. 800 (g)); 8. Conditionally exempts personal and household effects, including 1 motor car of DFA employees, members of Philippine diplomatic missions including civil or military attachés or any AFP military personnel (Sec. 800 (aa)); 9. Gross negligence is no longer considered-as degree of culpability, only negligence and fraud 41. Administrative remedy of distraint of persona) property and levy on real property (Sec. 1134), 42. Steeper penalties for crimes and other offenses | (Secs. 1400-1430); and 43. New treatment for Authorized Economic | Operators (AEOs). Tariff Tariff is a list or schedule of articles on which a duty is imposed upon the importation into the country, with the rales at which they are severally taxed, Derivatively, it refers to the system of imposing duties or taxes on the importation of foreign merchandise (Black's Law Dictionary, 6” Edition). , Tariff can also mean the duties imposed on the articles which are payable to the government (INGLES, Tax Made Less Taxing: A Reviewer with Codals and Cases (2018), p. 587) [hereinafter INGLES]. Kinds of Tari 1. Export Tariff - tariff based on the gross free-on- board (FOB) value at the prevailing rate of exchange at the time of shipment is levied, assessed and collected on traditional export products (P.D. No. 230); and 2. Import Tariff — duty levied upon articles when imported from any country upon each importation, even though previously exported from the Philippines, except as otherwise specifically provided for under the tariff and customs code or special laws (R.A. No. 10863, Sec. 104). Customs Duties The name given to taxes on the importation and exportation of commodities; the tariff or tax assessed upon merchandise imported from, or exported to, a (Sec. 1005); foreign country (Nestle PHL irt of Appeals, G.R. 410. Administrative remedy of issuance of alert orders” No. 994714, gb 6 2001). cou (Sec. 1111); scant ee EXECUTIVE COMMITTEE SUBJECT COMMITTEE MEMBERS ADVISERS MARY CYRIELL C.SUMANOUL MARIA CARISSA C. GUINTO LIANE MAE D. ENRIQUEZ, Justice JAPAR B. DIMAAMPAO, Overall Chairperson, ERICA Subject Chair, SHENA ANISHA M. HADJI HASSAN, Atty. NICASIO.C, CABANEIRO, MAE .C. VISTA Chairperson for GLADDYSP. BAYLON Assistant MARY EVIELYN N. MATEO, CPA, and Alty. DANTE 0. ‘Academics, BEN REL E. Subject Chair, ANGELICA MARIE SHERRYDANE C. DELACRUZ, CPA, BARBERO Chairperson for Hotel MARIE C. MANUEL Subject REYES, ALYSSA R. ZARRAGA, Operations JHELSEA LOUISE B. Electronic Data Processing, TAGMA ESTHER V. DIMAANO Vice Chairperson for REINA G. FABREGAS General GARABILES, — MAREANE Secretariat, EARL JUSTIN. M. Principle, ATHENAI FRANCES MABEL A. CHAVEZ, JEWEL YAMBA Vice Chairperon for. QUINTON and CARLOTAN. JOICE G. DAYTIA, MIKKAELA Operations, MA. ANGELICA B, VILLAROMAN Income Tax, S. MONES, ANDREA PATRICIA DE LEON Vice Chairperson for APOLLOJULIUSS.STAMARIA D. DAQUIAL, ._ALFRED- Finance, ARRA OLMAYA J. Transfer Tex, JELLYN C. FRANCIS P. GALLEGOS, JOY BADANGAN Vice Chairperson CLEMENTE. Value-Added Tax, CRISTEL G. _GAYONA, {or Audit, ORDAN N.CHAVEZ MIGUIEL A. DB ALVA Tar MARIONE NICOLE P. Vice Chairperson for EDP. HANZ Administration, Enforcement, BUGARIN, and KATRINA ANN DARRYL DTU Vice and Remedies and ATHENAL 'S:PRADO. ‘Chairperson for Logistics, and FRANCES R. QUINTON: Real DOHN ALFRED E: AQUILIZAN Property and Local Tax Vice Chairperson Membership,SAN BEDA LAW CENTRALIZED aus zon nic zones registered with the PE; sp ecg spec econo: cones cqanered nd such olher freeports as 1007 may be created by law (RA. No 4 id goers, 102 (W)): nerwise provided by law, goods admit zx Maal ot be Subject to duty and tax 10863, Sec. 815). eh imposition mets es 21 imposed for both revenue. sea a regulatory purposes (INGLES, 587); sieeaying of customs duties on imported goods Trekave. in some measure the effec of jocal industries ~ where such local 5 of I ecting persis actually exist and are. producing fmparable goods (Garcia v. Executive Seortary, GR. No. 101273, July 3, 1992) pMINISTRATION OF TARIFF AND CusTOMS LAWS au of Customs (BOC) Officials: (CDC) Customs Commissioner, A least 4 but not more than 6 Deputy ‘Commissioners; and 17 District Collectors (R.A. No. 10863, Secs. 200 ‘and 206). ctions of the BOC: Assessment and collection of customs revenues from imported goods and other dues, fees, charges, fines and penalties accruing under jonization of customs Simplification and harm goods in procedures to facilitate movement of Prevention and suppression of smuggling and ational trade aciltation and security of inter .d compliance nd commerce through an informe TARIFF AND R OPA ‘pola SAN BEDA LAW CENTRAL wend ima set on cone ‘and prevention of entry of contraband: devel of compensation studies, and Pesan and ‘recommendation to the tee of a competitive compensation and ied reration system to attract and retain highly Ere Personnel, while ensuring that the fi ‘sustainable; 0 ce Se 0. Brercise of exclusive original jurisdiction over inforcement of CMTA and ail other laws. rules cron eas cooese win (RA. No. 10863, Sec. 202). Powers and Functions of the Commissioner: 1. Exclusive and original jurisdiction to interpret the provisions of R.A. No. 10863, in collaboration with other relevant government agencies, subject to review by the Secretary of Finance; 2. Exercise any customs power, duties and functions, directly or indirectly, 3. Review any action or decision of any customs officer performed pursuant to the provisions of RA No. 10863; 4. Review and decide disputed assessments and other matiers related thereto, subject to review by the Secretary of Finance and exclusive appellate jurisdiction of CTA; 5, Delegate the powers vested under CMTA to any customs officer with the rank equivalent to division chief or higher, except for the following powers and functions: a. Promulgation of rules and regulations; b. Issuance, revocation or modification of rulings; and ¢. Compromise oF obligations; 6. Assignment or reassignment any customs “officer subject to the approval of the Secretary of Finance: Provided, That District Collectors and biher customs officers that perform assessment functions shall not remain in the same area of assignment for more than 3 years; and 7. Perform all other duties and functions as may be retessary for the effective implementation of FEA. No, 10863 and other customs: related laws (RA No, 10863, Sec. 201). abatement customs ties of District Collector: (EPCE - ADSO) Duties are Entry of all Imported goods at the customs office: 2, Brevent importation and exporaion of protibited goods; 3. Ensue ‘ecal compliance of regulated goods En acta the low of legitimate trade: Tassify and value imported goods; fd collect duties, taxes and other 5s Gharges on imported goods; amine, (ZED BAR OPERATIONS | 407 oot bin > a a. Fs = rs Kd eSTARIFF AND CUSTOMS 1 BED LAW CENTRALIZED BAR OPERATIONS = MEMORY AD 2010 : he process of determining the Authority to Require As: = Assess 98 due_on 1 D&T and other charges Mrpoted and exported goods (R.A. No. 10863, See. 102 (N). se imported goods; 0 Sean and other customs fraud; no thal may be Other necessary duties thi . ae the Commissioner (R.A. No. 10863, Sec. 210) ‘of Police Authority Parsons Exercising Police Authority The following persons are authorized to effect search, seizure and arrest 1. Officials of the BOC, District Collectors, Deputy Distnct Collectors, police officers, " agents, inspectors and guards of the BOC; Officers and members of the AFP, when ‘authonzed by the Commissioner; and Officials of the BIR on all cases falling within the regular performance of their duties, when payment of internal revenue taxes is involved (RA. No, 10863, Sec, 214) Note: All officers authorized by the Commissioner to ‘exercise police authority shall at all times coordinate with the Commissioner. For this purpose, mission orders shall clearly indicate the specific ‘name carrying out the mission and the tasks to be carried out (RA, No. 10863, Sec. 214) ‘Any person exercising police authority has the power and duty to geize any vessel, aircraft, cargo, goods, ‘animal or any other movable property when the same is subject to forfeiture or when they are subject of a fine imposed (R.A. No. 10863, Sec. 216) There is no confct between the provisions of the Tarif and Customs Code and R.A. No. 6975 (DILG Act of 1990), as amended, The jurisdiction of the Commissioner of Customs is clearly with regard to Customs duties. Should the PNP suspect anything, it Should coordinate with the BOC and obtain writen authority from the Collector of Customs in order to Conduct searches, seizures and arrests (Boao People, G.R. No, 180597, November 7, 2008) Place Where Authority May be Exercised A persons exercising police authorily. shall only the ne Powers within customs premises and withic, fits of the authority granted by ine Commissioner (R.A. No. 10863, Sec. 216), Note: The BOC shall for customs Custer Conta, direction “and management et ice wotiees. facities, “warehouses, Ports, nme cena: infrastructure and other protec inthe Customs Districts (R.A. No. 10663, Soe 303) Purposes have stance a ‘Any person exercising police authorty morRatiog the assistance of and request informayray ond Philippine National Police (PNP), the are aan the natlona aw enforcement agencies, when a tir lo fect any search, seizure or arrest spss duty ol any pol offcsr and cher natn enforcers to give such laws assistance a 2 10863, Sec. 216). . Authority to Enter Propertie The authority, at any time, to enter, pass throu search any land, enclosure, warehouse building or structure not principally house (R.A. No. 10863, Sec. 219) ga Authority to Search 1, Dwelling House ~ A dweling house may bg entered and searched only upon warrant issucy by @ Judge of @ competent court, the swer, application showing probable cause ary Particularly describing the place to be searchey and the goods to be seized (RA. No. 10863, See 220). 2. Vessels or aircrafts and persons or goods conveyed therein — Any person exercising Police authority may board, inspect, search and examine a vessel or aircraft and any container, trunk, package, box or envelope found on board, ‘and physically search and examine any person thereon (R.A; No, 10863, Sec. 221) 3. Vehicles, other carriers, persons and animals = Upon reasonable cause, any person exercising Police authority may open and examine any box, trunk, envelope, or other container for determining the presence of dutiable or Prohibited goods (R.A. No. 10863, Sec. 222). Persons arriving from foreign countries — Upon reasonable cause, travelers arriving from foreign countries may be subjected to search and Getention by the customs officers (RA. No. 10863, Sec. 223) Visitorial Power The power of the BOC to demand evidence of Payments of duties and taxes on imported products openly for sale or kept in storage. In case of failure to Present evidence within 15 days, the goods may be Seized and subjected to forfeiture proceedings (R.A. No. 10863, Sec. 224) Who may Exercise the Visitorial Power of the BOC: (Comcol.on 1. The Commissioner of Customs; 2. The Collector of Customs: and 3. Any’ Other customs Officers with por authorization issued by the Commissioner of Gustoms (Customs Memorandum Order No. 10+ 2006, Sec. 3) hereinafter C.M.O.). 406 | 2019 SAN BEDA.LAW CENTRALIZED BAR ‘OPERATIONSro vstoral Power May be Exercised: re foreign articles are Openly x) ce ay forsale: OF Sere foreign aicles are Kept in * fe py PA a valid search warrant is needed in 1 bul 2 a payeting house (CMO. No, 10-2006, o see on Exercise of Visitorial Power: cA) cl ance of Letter of Authority (LOA) signed by 1 ESGommissoner ‘of Customs himself; . LOA is not required if the . gone of Customs himself exercises the \sital Power: | me Yisting Officer shall enter the premises 1 goods are suspected to be re the smuggled ed in the presence oF (LA2BR’) Sr ye Lawful occupant oF & pry persn in possession ofthe premises o > FTiner absence, any 2 witnesses, who are regents of the same localty or Berangay Wrciats or Any Representative from the puiding or other Responsible oficers 5, neniory taking — if the owner, ‘occupant, or son in possession of the premises cannot parr evidence of payment of duties, the Visiting Steer shall eonduct an inventory ofthe foreign orges. An inventory receipt shall be Issued Py the Visiting Officer; 4 The owner of the goods or his representalve Te chat a Certification as to the conduct of the inventory of the goods ‘and to show proof of ‘onnership of the same; 5. The Inventory Report shall Collector of Customs throug! the issuance of Warrant of Seizure an¢ (ws); The visting officer shall witness the Delivery 2 the circumstances warrant, of the things seized fe the custody of the collector ‘of customs, eee ‘over the place; i ‘goods where WSD is not isst th heabeald offer by the owner to pay the duties, te Ving Officer shall Gompute 1 dutiable ia 1 of the goods and assess the duties and ‘ts payable thereon and eon isting Officer is duty bound to Adopt all (esonable measures necessary implement 1A (C.M.O. No. 10-2006, See. 5) be forwarded to the Jn the Law Division for id Detention which ued on account ® roc crneains When Goods Seized in the Exercise pyar nspect and Visit irate proceedings the intersted Pay shall sant opportunity to prove ot show 00d f duties Set. goods andthe payment 0 2019 SAN BEDA LAW CEt TARIFF AND ‘SAN BEDA LAW CENTRALIZED RAR ope CUSTOMS RATIONS - MEMORY AID 2019 2 eae the warrant of seizure has been issued but a sequent documents resend evidencing Proper payment are found tobe authentic and n order, the akc Collector sal, witin 15 eye FeLi ecto ein quash or recall shall cause eat the immediate release of @, Subject to clearance by yy the Commissioner b. Provided, the release thereof shall not be contrary to law (R.A. No. 10863, Sec. 224). Jurisdiction of the Bureau of Customs The BOC shall have the right of i police authority over: aaa 4. All seas within the juris (RA. No. 10863, Sec. 300): a. Terttorial sea — 12 nautical miles baseline (UNCLOS, Art. 3); and . Contiguous zone ~ additional 12, nauti imiles beyond the territorial sea (UNCLOS, Art. 33 (2) 2. Exclusive Economic Zone ( mies from the baseline (UNC 3. All coasts, ports, airports, hart and inland waters whether navigable or the sea (RA. No. 10863, Sec. 300). jay Freeport (SBF) as 2 of the Philippines from the (EEZ) - 200 nautical LOS, Art. 57); and bors, bays, rivers: riot from The treatment of the Subic B: Taparate customs tritory cannot completely divest see Sovemment of its right to intervene inthe treravons and management of the SBF, especialy Sen patent violations of the customs and {ax [ave wi ceovered, After all, Sec. 300 ofthe CMTA vaste areiusive original jurisdiction in the BOC over seizure er gure cases inthe enforcement ofthe tri arty customs laws (Agriex Co. Ltd. v. Commissioner ae roms, GR. No. 158150, September 10, 2014) ‘The exclusive jurisdiction of the Collector of Custons a abe interfered with by regular courts even UPOH {ro allegation of ownership, (Commissions? of Gustoms v. Court of Appeals, G-R. Nos. 111202-05, January 31, 2006). poctrine of Hot Pursuit in Customs ‘Administration + ho Bureau shall pursue imported goods subject to re re during its transport by land, water and <0 and Shall exercise jurisdiction as may be necessary for the Sfective enforcement of CMTA (R.A. No- 710863, Sec: 300). ote: When a vessel or airraft becomes subject to Notere, a pursuit of such vessel oF acral which Se ath the terol waters OF ar Space Tet begere beyond the same, and the vessel oF aircraft Gray be seized in the high seas OF international air Space (RA. No, 10863, Sec. 300) NTRALIZED BAR OPERATIONS | 409 BIN TheTARIFF AND CUSTOMS ‘SAN BEDA LAW CENTRALIZED BAR OPERATIONS = MEMORY AID 2019 TARIFF COMMISSION Officials: 4 Chairperson; ant Res (2) Commissioners (R.A. No. 10863, Sec. 1600). Note: All officials of the Tariff Commission are appointed by the President (R.A. No. 10863, Sec. 1600). Qualifications: 1. Must be a natural bom citizen of the Philippines 2. Of good moral character and proven integrity 3. Possess the necessary qualifications requisite for developing expert knowledge if tariff and trade. related matters by: Experience; and b, Academic training (R.A. No. 10863, Sec 1600). Functions of the Tariff Commission: (ASAR-PAR-CoD) 1. Adjudicate cases on application of trade Temedies against imports; 2. Study the impact of tarif on national com welfare; 3. Administer the Phil tarif nomenclatures; Policies and programs petiiveness and consumer ippine tariff schedules and 4. Issue advance Rulings on tariff classification of imported goods and render rulings on disputes ver tariff classification of goods; 5. Provide the President and Congress with independent analysis, information and technical support; 8. Analyze the nature and composition, and the Classification of goods; 7. Review the trade agreements for negotiation and trade agreements entered into by the Philippines and make recommendations, if necessary. 8. Conduct public consultations and public hearings; and 8 Depulize of delegate its function of rendering Tulings on disputes over tariff classification of Goods (RA. No. 10863, Sec. 1603) ‘The Composition of Congressional Customs and Tariff Oversight Committ 1 Chairpersons of the Commitee on Ways and Means _of - the Senate’ and House “of Representatives; and 4 additional mem! IS SAN BEDA LAW CENTRAL Functions of the Congressional Committee, in ald of Legislation: (MRI) 1. Monitor and ensure the proper implementation of RA. No. 10863; 2. Review the collection performance of the 80g, and 3. Review the Implementation of the programs of the BOC (R.A. No, 10863, Sec. 1700) Oversight Concept of Goods for Customs Duty Goods refer to articles, wares, merchandise ang any ater items which are subject of importation n exportation (R.A. No. 10863, Sec. 102 (x), Examples: 1. US Dollars fall within the meaning of the term “merchandise” (Commissioner o F Customs , Capistrano, G.R. No, L-11075, June 30, 1960) and Note: Philippine peso bills come within the concept of "merchandise," as this term is understood in Seo 1363 (f) of the Revised Administrative Code. The Prilipine peso bills when attempted to be exported, as in the cited case, may be deemed to have been taken out of domestic circulation as legal tender and treated as commodity (Commissioner of Customs v. Capistrano, G.R. No. L-11075, June 30, 1960), 2. Checks and money orders are included within the Phrase "in general anything that may be the Subject of importation or exportation’ (Bastida v, Gommissioner of Customs, G.R. No. L-24011, October 24, 1970) Kinds of Goods 1. Goods Subject to Duty or Dutiable Importations AN goods, when imported into the Philippines, shall. b Subject to duty upon importation, including goods previously exported from the Philippines, except as. otherwise specifically provided for in R.A. No. 10863 or in ather laws (RA. No, 10863, Sec. 104) Note: They become dutiable from the entry of the vessel or aircraft in to the Philippine jurisdiction 90).? tention to unload (INGLES. supra at ). ZED BAR OPERATIONS(-—— TARIFF AND CUSTOMS SAN BEDA LAW c ENTRALIZED BAR OPERATIONS - NEM is — MEMORY AID 2019 4 Importations/t /Exporta fe whose importation and opens strictly prohibited (R.A. No. 10863. ‘portation are Restrict ee nalExpotation 118). on Be importation and oocts soMtpited except when authorized ae Fagulation (R.A. No. 10863, Sec. rae law or note: There is a presum iption that all goods tte a aioe without the need for import or export vert, ‘clearances or licenses unless otherwise provided for in laws and i or or regulations (R.A. No. 10863, See 4, De Minimis Importation This pertai nthe dutiable value of which does not ex i value Secretary every 3 Order No. 02-20 5. Conditionally-Free Importations Goods which 26 exempt ft uti rescribed fiance wil inthe regulations (RA. No. tionsiExportations Wjguiation which shall be imported OF nly after securing the ' jectarations: iearances. licenses and ments (RA: NO 10863, SeC:1 "1 12, 14. 15. 10. 18, Table 1 - Kinds of Goods or At Ce ue Written or printed goods in any form inciting Treason, rebellion, insurrection, sedition, or Threat to take life oF inflict bodily injury upon any person; Obscene or immoral articles; Any goods manufactured in whole or in part of gold, silver or other precious Metals or alloys thereof, the stamps, brands or marks of which do not indicate the actual fineness of quality of said metals or alloys; Articles used for producing Unlawful Abortion; ‘Any Adulterated or Misbranded food or drug in violation of the provisions of the "Food and Drugs Act” or any other relevant laws and regulations; Infringing Goods as defined Under the Intellectual Property Code; and All Other goods or parts thereof, which importation and exportation are explicitly prohibited by law or rules and regulations issued by competent authority (R.A. No, 10863, Sec. 118); Used clothing and rags (R.A No. 4653); Toy firearms and explosives (Letters of instructions No. 1264); Hazardous wastes (R.A. No. 6969); Polychlorinated Biphenyis (DENR A.. No. 01); All used motorcycle parts, except engine (E.0. No. 156); Right hand drive vehicles (R.A, No, 8506); Live Piranha (Fisheries A.O, No. 126); Live Shrimps and prawns of all stages (Fisheries A.O. No 207). TARIFF AN ‘aN BEDA LAW CENTRALIZED BAR OPERA Except when authorized by law or regulation, the importation and ‘exportation of the following restricted goods are prohibited: 1 Ti) CT kde baler st) Gambling devices or the distribution of money, cigars, cigarettes or other goods when such distribution is dependent on chance, including jackpot and pinball machines or similar contrivances, or parts thereof; Eirearms and weapons of war or parts thereof, Lottery and sweepstakes tickets, advertisements thereof, and lists of drawings therein; ‘Opium pipes and parts thereof, of whatever material; Any Other goods whose importation and exportation are restricted; and Narcotics or synthetic Drugs; Except: when imported by a. The Government of the Philippines; or b. Any person duly authorized by the Dangerous Drugs Board for medicinal purposes only (R.A. No. 10863, Sec. 119), D CUSTOMS TeMoRy AD 2019 ticles CePA a 4, Those provided under the MTA; 2. Those Granted to govey agencies, GOCCs wi, "=" agreements with foreign countries; 3. Those given to Internationa institutions entitled to exemption by agreement or special laws; and 4, Those that may be granteg the President upon NEDA’s recommendation (R.A. No, 10863, Sec. 800), Note: The restriction to import or export of the above stated goods shall include the restriction on their transit (R.A. No. 10863, Sec. 119)TARIFF AND CUSTOMS ‘SAN BEDA LAW CENT BEOA LAW CENTRALIZED BAR OPERATIONS - MEMORY AID 2019 Table 2 - Specific Articles under Conditionally Free Importations Re-Exportation Period (Cee eae alces od er alee Maun eu a a Pion ead oducts caught by _|1. They are imported in such vessels. 12. They have not been landed in any ral atic It Mappine-reaistored vessels foreign territory or, if so landed, that they have been landed solely for transshipment without having been advanced in condition. 1. Not available locally; 6 months from the date of 2. Certificate of Identification; ‘acceptance of the goods. _| Geciaration, extendible for another 6 months ors ariel I; wipment for use in the [2 Ealage of vessels or acrafts | > 3. Re-export Bond; and To be re-exported within the 4. prescribed period (not exceeding 6 original period. Proof satisfactory to the Bureau: 7 Cost of repairs, excluding the ‘goods used, made| 1. that adequate facilities for such repairs are not afforded in the NA value of the in foreign countries upon vessels or aircraft Philippines; or documented, registered oF ficensed in the Philippines | 2, that such vessels or aircrafts, while in the regular course of their voyage Or flight, were compelled by stress of weather or other casualty to put intoa foreign port to make such repairs in order to secure the safely, SCaworthiness, or airworthiness of the vessels OF aircrafts to enable them to reach their port of destination. To be re-exported upon compl | Philippines for repair, | processing or | |. Re-exportBond phies or prizes, NIA months from the expiration of the ae lelion of [6 months from, accept rods declaration, non- extendible {_______" [4. Goods brought into the | the repair, processing oF reconditioning Ee al fance of jierecenctiontey pat Bote |5. Medals, badges, cups. and | Must be bestowed as troy Jor those received or accepted as cp See | other small goods honorary distinction ese Py Pe a & 2 FS) fa) a a Ps z E PS6 7 z a. Personal and household effects belonging to returning residents Returning residents - rationals who have stayed in ‘a foreign country for a period of at least 6 months (R.A No, 10863, Sec. 600). b. Home appliances and other durables of returning OFWs Balikbayan boxes of OFWs TARIFF AND CUSTOMS TeMorY Ao 2019) {GAN REDA LAW CENTRALIZED BAR OPERATIONS = MEMOR ficate of Identification 2 Coeur re exed such motor vehicles, watercrafts, animals, ts, etc. 3, The personal and household effects ‘must accompany the returning resident on their return or within 6 months after the owner's return; 4, It must not be in commercial quantities 5. It must not be intended for barter, sale, or hire; 6. Limited to FOBIFCA value of: >P350k- at least 10-yr stay ina foreign country >P250k- at least S-yr stay ina foreign country >P150k- less than 5-yr stay ina foreign country Excess of the above threshold shall be subject to corresponding duties and taxes. 4, Limited to one of every kind; 2. Once in a given calendar year; 3. Accompanying them on their return or within 60 days after their return; 4. Upon presentation oftheir original passport at the port of entry; 5. Limited to FCA value not exceeding 150k; and 6. Excess shall be subject to appropriate duties and taxes. Balikbayan Box - shall fefer to a corrugated box or other container or receptacle Lup to a maximum volume of 200,000 gross cubic Centimeters (C.A.0. No. 01- 2018, Sec. 3.1) OFW - Holders of valid Passports issued by the DFA and certified by the DOLE or the POEA for overseas employment purposes. They Cover all Flipinos, working in a foreign country under employment contracts, regardless oftheir Professions, skills or employment status in a foreign country 1. Shall contain personal and household effects only; 2. Not in commercial quantities; 3: Not intended for barter, sale or for ire 4. Limited to FCA value not 150k; 5. Can only be availed up to three 3 times in a calendar year; 6. Excess shall be subject to ‘appropriate duties and taxes, t exceeding | Note: Batkbayan boxes of OFWs shal Sot be subject to random or arbitrary Physical inspection Instead, they shall lundergo mandatory X-Ray scanning (CMO. No. 27-2015, Sec. 3.1) | NIAae TARIFF AND CUSTOMS ‘SV BEDA LAW CENTRALIZED BAR OPERATIONS ~ MEMORY AID 3019 | coed ox 70. Goods use public entertainment, | ravelers 7 aries of foursts and », Personal and household ts and vehicles belonging tf foreign wuitants and experts tnired by, service 10, ,.or rendering the government, st Sei ther staff or personnel any familes accompanying |_th Prof ‘and implem articles of per 1. Must be necessary and appropriate for the wear and use of such persons according to the nature of the joumey, their comfort and convenience; 2. Shall not apply to goods intended for ‘other persons 3. Not intended for barter, sale or hire 4. Written Commitment or Re-export Bond; and 5, Re-exportation 41, Written Commitment or Re-export Bond; 2, Necessary and suitable to the profession, rank or position of the person importing said items; 3. For their own use; 4, Not for barter, sale or hire; and 5. 5, Must accompany such persons, OF artving within a reasonable time acceptance of the goods declaration, extendible for another 3 months: 3 months from the expiration of term or contract, extent for another 3 months em _ fessional instrumenis ents and other sons coming tO Stine nthe Philippines sd exclusively for display inpublic expositions. exhibition, competition for prizes, and devices for projecting pictures Technical and scientitic films — Tia. Arles brought By foreign film producers ». Photographic and cinematographic films, underdeveloped, exposed outside the Philippines by 7, In quantiles and of the class suitable to the profession, rank or position of the persons importing said items; 2. For their own use; Not for barter or sale: 4. Must accompany such persons, oF arriving within a reasonable time; Luxury items are not covered: and Satisfactory evidence that such persons are actually coming to settle in the Philippines and that the goods are brought from their former place of abode._ a “11. Certificate of Identification 2, Re-export Bond 3, Re-export |. Must be imported by technical, cultural and scientific institutions Not to be exhibited for profit 7, 3. Ifexhibited for profit, the proceeds shall be confiscated in addition to other penalties under the —hlust be dreclly and exclusively used for making or recording motion picture films on location in the Philippines; Certificate of Identification; 2. 3, Re-export Bond; and 4, Re-export. ‘Affidavit by the importer that such exposed films are the same films previously exported from the Philippines [3 months from tt date of acceptance of the goods | declaration, extendible for another 3 months NA | hs from the date of ‘3 mont acceptance of the goods declaration, extendible for another 3 months NIA ible al aaa 3 months from the date of 2019 SAN BEDA LAW CENTRALIZED BAR OPERATIONS | 415| tesident Fipino citizens or |__ of foreign governments by producing companies of Philippine registry where the principal actors and artists employed for the production | are Filipinos. 12. Importations for the official Use of foreign embassies, legations and other agencies 13. Imported goods for donation | tothe needy TARIF ‘say nea LAW F AND CU NTRALZEO BAR OPERATIONS = MEM Cerificate of Identification just be donated to or for the account ofthe Philippine jovernment; oF 2. Must be imported by a dul ; registered relief organization, not ‘operated for profit, with certification from either DSWD, DepEd or DOH, as the case may be. 1 STOMS joRv A10 2019) 14. Containers, holders and Certificate of identification, 6 months from the date of the purpose of introducing new goods in the Philippine market b. Commercial samples (except those that are not readily and easily identifiable a in the case of precious and semi-precious stones, Cut or uncut, and jewelry get with precious or semi- precious stones) value; 2. Stamped as "samples" or “models ‘ot adapted for practical use 3. Imported only once ina sufficient | quantity sufcient by a person duly registered and identified to be engaged in that rade, . Certificate of Author | Con thority to Import by 5. In adalton to medicines, imy Permit from OOH, PO li 50k 2° FCA value not exceeding 2. Re-export Bond: 3. Re-export, 1 other similar receptacles 2. Re-export Bond; and eae Of the goods capable of being re-used _| 3. Re-export. NA 15. Supplies and provisions of _| 1. Must be necessary for the aircrafts and vessels reasonable requirements of the vessel or aircraft in its voyage or flight outside the Philippines; and 2. Any surplus or excess of such vessel or aircraft supplies arriving from | foreign ports or airports shall be | \ dutiable 16. Goods salvaged from Must be recovered aftera period of2| NIA vessels years from the date of fling the marine protest or the time when the vessel was wrecked or abandoned 17. Coffins or urns containing | 1. Excludes vehicles; NA | human remains, bones or | 2. Limited to FCA value not exceeding ashes, used personal and 150k. | househoid effects (not merchandise) of the deceased person | 18. a. Samples and Models for_| 1. Unsaleable or of no ‘commercial | NIA 3 months from the date of acceptance of the goods declaration, non-extendible ie ios aTARIFF AND CUSTOMS SAN BFA LAW CENTRALIZED RAN OMERATIONS ~aNEMoM xs, except race horses, 1 a Import Permit rom Bureau of Anima hi mit from Bureau of An Ad pints for scientif Industry (BA) or Bureau of Plant | | erimental propagation or | Industry, as the case may be, preeding, andfor other | 2. Certificate of Pedigree from BA | |, zoological and fet submited to the Dt | atonal defense puBoEeS | the aida of oor ratoc that such animal i the animal ‘described in said certificate of record and pedigree; 3. Certfication by NEDA that such aninalspans are nacossery for a | ___economic development. | eonomie, technical, Di sation. [NA aceerene wea 'ePED certification iS iosophical, historical and tural books or ilications, and religious Books tke Bibles, missals, rayer BOOKS, the Koran, radith and other religious books of similar nature and | extracts therefrom, hymnal | and hymns for religious uses |, [a1 Pilippine goods previously | 7. Must have been retumed without | NIK exported from the having been advanced in value, or Philippines improved in condition; | 2. No drawback ot bounty has been | allowed; and | 3. Certificate of Identification | Aireraft, equipment and 1. Not locally available in reasonable _| NIA | machinery, spare parts, ‘quantity, quality and price; and | ‘commissary and catering 2. Necessary or incidental to the proper | supplies, aviation gas, fuel ‘operation ofthe scheduled airine and oil, whether crude or importing the same. refined except when directly or indirectly used for domestic operations, and such other goods or supplies imported by and for the use | ofscheduled airines operating under congressional franchise | 23. Machineries, equipment 1. DENR Certification; NIA tools for production, plans to | 2. Not locally available in reasonable | convert mineral ores into | quantity, quality and price and are saleable form, spare parts, necessary or incidental in the proper supplies, materials, ‘operation of the mine; and aircrafts accessories, explosives, | __imported by agro-industrial chemicals, and | companies; and transportation and 3. Tobe used by them in their ‘communications facilities | agriculture and industrial operations. imported by and for the use | or actives, spare parts and of new mines and old mines | accessories thereof, when certified which resume operations, to1as such by the Secretary ofthe Department of Agriculture (DA) or the Secretary of the Department of Trade and Industry (DTI), as the case may be. 2019 SAN BEDA LAW CENTRALIZED BAR OPERATIONS | 417USTOMS = cys MEMORY AID 2019 FF AND ceNTPAui70 BAR OPERA TARI 7 an : | 24. Spare parts of vessels or | Proof satisfactory to the ee po be | Shera of foreign reaistry | Collector that such sPar f | Shgaged inforeign trade | ubized to secure Me SAT, ep | when brought into the seaworthiness OF Ce re | Philippines exclusively as vessel or aircraft, to e ri replacements or for the | continue its voyage oF flig! emergency repair | = ———eE——EEE |G Goods exported rom the | 1 Have not substantially advances Wi | ir repair, value, | procesing or 2 Save rempoted ni Feconditoning |? Stal form and in the same state, the | 3. n case it advanced in value, ‘additional value shall be subject to | the appropriate duties and taxes. | tara — [TR mute ee | cama Determination of the Dutiable | Valle goods shall be valued in accordance with inorisions of Sec. 701 of RA. No. 10863 (i... we Pejon Vale) whenever the | conions Tare wherein are fliled (R.A. No, 10863, Sec of 7001) nee the customs value cannat be, determined Wer we. provsions of Sec. 7O1, i is 10 be urrrined by proceeding sequentially through the ‘s under which the customs value folowing method: ape determined (R.A, No. 10863, Sec. 700 (2). Method 1: Transaction Value Method 2: Transaction Value of Identical Goods Method 3: Transaction value of Similar Goods Method 4: Deductive Value Method 5: Computed Value Method 6: Fallback Value (RA. No. 10863, Secs. 701-706) Except as provided in Sec. 704 of R.A. No. 10863, it is only when the customs value cannot be determined Under the provisions of a particular method that the provisions of the Sec. 701 in the sequence can be used (RA. No. 10863, Sec. 700) Specie Duty - computed based on he dab welgh of goods (R.A. No 1937, Sec 202) Nis based Go he wight or volume capa and other physical measurement (Commissioner of internal Revenue v. Plipinas Shell Petroleum, G.R. No. 188497, February 19, 2014). Weights may either be: 1. Gross — weight of the same, together with the weight of all containers, packages. holders and packing, of any kind, in which sald articles are Contained, held or packed at the time of importation (R.A. No. 1937, Sec. 202 (A)): 2. Legal - weight of the same, together with the weight of the immediate containers, holders ‘hdior packing in which such articles are usually contained, held or pacl Importation and/or, when imported in ial packages, atthe time of their sale to the public provided, that _when usual retail quantiies, shicles are packed in a single container, ine atight ofthe latter shall be included in the legal weight (RA. No. 1997, Sec. 202 (B)); or 3, Net - actual weight of the articles a Irporatin, excluding the weight of the impwediate and all other containers, holders OF packing (R.A. No. 1937, Sec. 202 (C)). 2. Special Duties 2 eee mport duties imposed on specific Kinds of imported articles under certain conditions (National Tax Research Center (2016), Guide to Philippine Taxes. Retrieved from hitp:/www.ntrc.gov.ph) a. Antidumping Duty X special duty imposed on the importation of 2 product, commodity or article of commerce into Ine Phippines at less than its normal value when destined for domestic consumption in the exporting between the export country, which is the difference price and the normal value of such product, Commodity or aticle (R.A. No. 8752, Sec. 3 (S)(1)) foreign producers sell their products to an importer in the domestic market at prices lower than in their own national markets, or at prices below cost of production, the sale or importation of which injures or threatens to injure @ domestic industry producing like or comparable products or retards the establishment of a potential industry (R.A. No. 6752, Sec. 3 (S)) Dumping — occurs when Requisites for the Imposition of Anti-dumping Duty: (ELDIR) 4. Where a product, commodity or article of ‘commerce: a. Is Exported or Philippines; b. Atan export price Less than its normal value in the ordinary course of trade; and c. When Destined for consumption in exporting country, and introduced into the ee eas GEMA | AWN CENTRALIZED BAR OPERATIONS | 419. Bia NLU cel2. Such exportation 2. Is causing oris threatening to cause material Injury to a domestic industry; oF , Material Retards the establishment of domestic industry producing the like product (RA. No. 8752, Sec. 3(A)). Note: The provisions of RA. No. 8752, otherwise known as the “Anti-Dumping Act of 1999”, are adopted by R.A. No. 10863 (RA. No. 10863, Sec. 714), Amount of Duty: ‘Antidumping Duty = Normal Value - Export Price (RA. No. 8752, Sec. 3 (A)). The amount of the anti-dumping duty shall not exceed the margin of dumping. However, it may be less than the. margin if such lesser duty will be adequate to remove the injury to the domestic industry (R.A. No. 8752, Sec. 3(A)) Imposing Authority: 1. Secretary of Trade and Industry - non agricultural products; or 2. Secretary of Agriculture — agricultural products 3. Tariff Commission - The decision of whether or not to impose anti-dumping duty is the prerogative of the Tariff Commission when it is found that a. The price of the imported articles is deliberately or continually fixed at less than the fair market value or cost of production; and b. The importation would cause or likely cause an injury to local industries engaged in the manufacture or production of the same or similar articles or prevents their establishment (R.A. No. 8752, Sec. 3 (A)) b. Countervailing Duty A special duty imposed whenever any article of commerce is granted directly or indirectly by the government in the country of origin or exportation, any kind or form of specific subsidy upon the Production, manufacture or exportation of such Product, commodity or article and the importation of Such subsidized product or article has caused or threatens to cause material injury to a domestic industry or has materially retarded the growth or Prevenls the establishment of a domestic industry (RA. No. 8751, Sec. 1). Subsidy - any specific assistance (e.g, financial Contribution, income or price support schemes) Gitectly or indirectly provided by the government of the Country of export or origin in respect of the Froduct imported into the Philippines (Joint Administrative Order No. 02-00, Sec. 2 (S) [hereinafter J.A.O). ;MORY AIO 2019 ble Subsidies - Subsidies which setiece effect to the interests of other States q® save oy Goeste ns) aga’ in Subsils and Countrvaing Measures, PaO 3 (1). actionable Subsidies ~ Refers to supe Merri ta eouteraling atone ce they are considered to be of particular value ana tobe discouraged or because they are considreg have no, or at most minimal, rade-distorting eye ‘or production effects (J.A.O. No. 02-00, Sec. 2 (ki). Prohibited subsidies ~ Except as provideg ‘Agreement of Agriculture, the following su shall be prohibited: 4. Subsidies contingent upon export performancg and 2. Subsidies contingent upon the use of domestic ‘over imported goods (Agreement on Supsi ii and Countervaiing Measures, Parti, Art (39° in the bsidies Kinds of Specific Subsidy: (BS?) 4. Bounty — cash award paid to an exporter o¢ manufacturer, 2. Subsidy — financial incentives not in the form of direct or cash award to encourage manufacturers ‘exporters; and 3. Subvention - any assistance other than a bounty or subsidy given by the government for the manufacture andlor exportation of an artic (P.D. No. 1464, Sec. 302), Amount of Duty: Equivalent to the bounty, subsidy or subvention (P.D. No. 1464, Sec. 302) Requisites for the Countervailing Duty: (LI) 1. The Levy of an excise or inland tax on local goods of the same or similar class as the articles ‘imported or the grant of subsidy to the foreign exporter by his government; and 2, The importation is likely to Injure materially established local industries or prevent their establishment (P.D. No. 1464, Sec. 302) Imposition of the Imposing Authority: 1. Secretary of Trade and Industry - nom agricultural products; or Secretary of Agriculture ~ agricultural products. Tariff Commission - The decision of whether or not to impose anti-dumping duty is the Prerogative of the Tariff Commission (R.A. No. 8751, Sec. 1) 2 3 Duration and Review of Countervailing Duty General Rule: Any imposition of countervailing dul Shall remain in force only as long as and tothe extent necessary (R.A. No. 8751, Sec. 1 (P)) 420 | 2019 SAN BEDA LAW CENTRALIZED aap OPERATIONSver ne need ots continued postion may be ened by the Commission when warranted, motu wig of uPOn direction of the Secretary. Any gon party may ao petion to Secretary sey te conimues ,Iioeiion of the em yervalling duty, provided, that at least 6 months wniejapsed since |e imposition and upon a ission OF positive information substantiating the sit tor review (RA. No. 8751, Sec. 1(P)). caters Any COUNT duty shall be erated on @ Jat® MO! later than 5 years from the tert ts imposition (Or from the date of the most gate review if that review has covered both cetjzation and material injury), unless the sibission nas determined 1 & review initiated at ot as pror tothe termination date upon the wagon of the Secrelaly upon a duly petatiated request BY OF 7 behalf of the domestic vosiry, that the termination of the countervailing tel fad tothe continuation recurrence yw subsicization and material inlury (RA. No, of @7st, Sec. 1 (P)). ¢. Marking Duty fditional customs duties imposed on foreign articles (orits container i the article itself cannot be marked) fot marked in any official language of the Philippines met in a conspicuous place as legibly, indelibly and permanently in such manner, as 10 indicate to an imate purchaser in the Philipine® the name of auntry of origin of the article (R.A. No. 10863, Sec. 710) Purpose: To prevent deception of the consumers INGLES, supra at 594) ‘Amount of Duty: Five (5%) ad valore™ ofthe articles aren hall be deemed to have accrued 2 the time of importation (R.A. No. 10863, Sec. 710 (C)) The failure or refusal of the owner OF importer to mark the articles as herein required within & period of 30 days after due notice shall constitute as an act of seundonment of said articles (RA. No 10863, Sec. 710 (E)). Imposing Authority: Commissioner of Customs (RA. No. 40863, Sec. 710 (A)). Exceptions to Marking Duty: (prco-PUKA20) Seog article cannot be marked Prior importation to the Philippines except al 40 expense + smemically prohibitive ofits importation: 2. The article is Incapable of being marked; 3. The article cannot be marked prior 10 importation to the Philippines without Injury: 4. The article is of a Crude substance: TARIFF AND CUSTOMS ‘SAN BEDA LAW EDA (AW CENTRALIZED BAR OPERATIONS ~ MEMORY 10) The marking of the contai tainer of such Iason a onde. Bech ete be Procansed in he Philippines by he importer or for his own account and not for Qu the purpose ‘of concealing the origin of such 7. Such article is for the Use Use of the importes wen dad erase ints pated robe or 8. The oltate purchaser, by the character of the atticle, must necessarily Know th origin of such article; cee 9. Such article cannot be marked After importation ‘except at an expense economically prohibitive, and the failure to mark the article before importation was not due to any purpose of the importer, producer, seller, or shipper to avoid compliance; and 40. Such article was produced more than 20 years prior to its importation into the Philippines (R.A No. 10863, Sec. 710 (A)(3)). In these situations, the immediate container or such father container(s) of the article shall be the one Subject to marking (R.A.No.10863, Sec. 710 (b)). 4. Discriminatory Duty & duty imposed upon articles of a foreign county which discriminates against Philippine ‘commerce in Such a manner to piace it at @ disadvantage SSmpared with the commerce of anciher foreign country (INGLES, supra at 596) Imposition Diccriminatory duty is imposed whenever the Precident shall find as a fact that such country (I) 1. imposes, directly or indirectly, | upot any Philippine product unreasonable charge, Geaction, regulation, of limitation which. not equally enforced upon like articles of other foreign countries; of 2. Discriminates in fact against the commerce of the Philippines, as to place the Philippines at Fieepantage compared with the commerce Of any foreign country (RA. No. 10863, Sec..714 ( ‘Amount of Duty: Not exceeding 100% ad valorem tipon the goods (R.A. No. 10863, Sec. 714 (A)) Imposing Authority: The President through 2 proclamation (R.A. No. 10863) ‘Any proclamation issued under Sec. 714 of RA No. ny Pimay, subject to the discretion of the President, extend to: ore whole of any foreign country OF Jy subdivsion(s) thereof (R.A. No, 10869, Sec 714 (C)).a 1 aftr the imposition of discriminatory dues, he foreign county mainisined or increased is discrimination against commerce ofthe Philippines, the President is authorized to exclude the product of ‘Such country from importation into the Philippines by virtue of a further proclamation (R.A. No, 10863 Sec. 714 (8) hall be Articles imported in violation of this provision st forfeited in favor of the Government (R.A. No. 10863, Sec, 714 (0). ©. Safeguard Safeguard Mensues trode remedy measures adopted by the government to provide affected domestic industries relief against imports (R.A. No. 8800, Sec. 2) General Safeguard Measures ~ imposed against import the products at issue are being imported in Such increased quantities, either absolute or relative todomestc production, and under such conditions as. to cause or threaten to cause serious injury to the ‘domestic industry (R.A. No. 8600, Sec. 5). Special Safeguard Measures — imposed against importations of agricultural products whose quantitative import estricions were converted (tarified) into ordinary customs duties and 2gricutural products designated with the symbol “SSG" in the GATT Schedule of Concessions (R.A No, 8800, Sec. 21 Purpose of imposition To promote the competitiveness “of domestic Industries and producers based on sound industrial and the efficient use of human, natural and technical resources (R.A. No. 8800, Sec. 2) ‘Two Types of Safeguard Duties 1. General safeguard measure 2. Special safeguard measure General Safeguard Measure (R.A. No. 8800 known 8 Safeguard Measures Act of 2000, Sec. 5) ‘Amount of Duty: 1. Provisional Duty — The tariff in 100, Sec. 8 2. Definitive Duty — @. An increase in, or imy TARIFF AND 5 OPE ‘SAN BEDA LAW CENTRALIZED BAR CUSTOMS rows ~ MEMORY AID 2019, eof MOTE BPPFOPHAtE agus & esa including into the proyig,M@Nt "Vision of trade; and fe. Any combination of action descritey in subparagraph (a) to (4) (R.A. No, Bg qq, Seq 13). Authority: "agricultural product; or 2. Secretary of Agriculture ~ agricultural pros (RA. No. 8800, Sec. 4 (N)) on. Special Safeguard Measure for, Agricutyy ts ie a duly imposed on an agrcutuat consistent with Philippine international obligations, when: 4. Cumulative impor volume in 2 given joa, exceeds its rigger volume subject tg ‘ga conditions stated in Sec. 23 of R.A. No. 8ago\"® but not concurrently; and 2. Actual cash insurance, freight (CAF) impor pcg is less than its trigger price subject to me conditions stated in Sec. 24 of RA No, sang (RA. No. 8800, Sec. 21). Product, treaty Imposing Authority: Secretary of Agricutue through the Secretary of Finance (R.A. No. agp Sec. 21), FLEXIBLE CLAUSE Basis: The Congress maj President to fix within Such limitations and tariff rates, import ani Wharfage dues, an, framework of the the Government ( ¥y, by law, authorize the specified limits, and subject to restrictions as it may impose, 1d export quotas, tonnage and 1d other duties or imposts within the fational development program of (CONST. Art. VI, Sec. 28, Par. 2) Under the Flexible ‘empowered to: 1. Increase, reduck rates of import changes in the cl Clause, the President is ©, oF remove, existing protective duties including the necessary lassification: Condition: The increased rate shall not exceed 100% ad valorem. theimperted poise eat" oF 8ny yon 2st import quota or ban import of any . Adecrease in or the imposition ofa tarif-rate Commodity whenever necessary. and quota on the product. & A mediicaton or imposton of any ‘MP0se addtional ‘uty on all imports, when {he product into the Philippines, 422 | 2019 SAN BEDA Law CENTRALIZED BAR OPERATIONSTARIFF AND CUSTOMS SAN BEDA LAW CENTRALIZED BAR OPERATIONS - MEMORY AID 2019 Condition: Additional duty shall not exceed 10% ad valorem (R.A. No. 10863, Sec. 1608 (A)). Requisites for the Exercise of the Power: (IR- CPR) 1. In the Interest of general welfare, and national security; and 2, Recommendation of NEDA 3. Before submission of the recommendation of NEDA, the Tariff Commission shall Conduct an investigation. Public hearing by the Tariff Commission shall be held, wherein interested parties shall be afforded reasonable opportunity to be present, produce evidence, and be heard. 5. The Report of the Commission shall be submitted to NEDA within 30 days after the termination of the public hearing (R.A. No. 10863, Sec. 1608 (7 Exception: Recommendation: of NEDA is not required in the imposition of additional duty not exceeding 10% ad valorem (R.A. No. 10863, Sec. 1608 (B)). Effectivity of Order Issued by the President 4. Foran increase, reduction, or rernoval of existing protective rates and. the imposition of import quotas or bani — 30 days after promulgation; and 2. Imposition of additional duty not exceeding 10% ad valorem — at the discretion of the President (RA. No. 10863, Sec. 1608 (C))Imported | Goods enjoying a | Imported TARIFF AND CU toms Duties Table 3 - Comparison of Cus! USTOMS 1, General — = g00ds sold | subsidy in the | goods not hat products Philippines yo” below its exporting country | property eed imported in |investigation 2 normal pind jinst Philippine] increased | the Tarife value | pods quantities Commission an, | 2. Special - recommendation | Volume of J of NEDA | imports exceeds a base trigger level or price falls below a trigger price level Protect local industries from _ | Prevent Protect the Protect domestic | Protect the ‘undue competition possible national interest industries and interest of ‘deceptions producers from | national increased imports | economy, general welfare and national security Export | Amount of 5% ad Notexceeding | 1. General | The additional price- | subsidy valorem 100% ad valorem | — increase, duty shall not Normal either ad exceed 10% ag price valorem or —_| valorem rd specific, or both, sufficient to redress or Prevent injury to the domestic industry 2. Special — a. Volume Test b. Price Test Note: See discussions aboveCe dumping may file with the Actae petition for the review within 30 days from his receipt of notice of the assailed decision. But such petition for review with the CTA shall not stop oF suspend the imposition of the duty. Seusty. 5 Indus re, Tarif Commission TARIFF AND CUSTOMS ‘SAN BEDA LAW CENT NTRALIZED BAR OPERATIONS MEMORY AID 3019 Cad Ld Sc al Co Pe eed aa ea (RA. No. 10863; R.A. No. 8752; R.A. No. 8800; RA. No. 751) of Trade and ConnriReaioriak o raaty of ener rer | President 1 Serra 7 Presksend Trade and Industry: Secretary of Agriculture 2. Special - Secretary of Agriculture: [Any interested ‘Any interested | None party who is party who is adversely adversely affected by the affected by the Gepartment order ruling of the of the Secretary Secretary in ‘on the imposition Feel of the in countervailing a safeguard oy aay mayo we renin CTA 8 the a “ ‘tition for review patton to revow of such order etn "30 days within 30 30 from receipt from his receipt thereot. But the ‘of notice thereof. fling of such But such pellton petition for review for review with With the CTA the CTA shall not pe stop or suspend Say S100, the imposition: Of igpend oF the duty. otherwise toll the imposition oF collection of the ‘appropriate tari duties oF ‘doption of other appropriate safeguard measures, a5 tne case may be. je 2 z co) nA 2 [) fay zMETHODS OF DETERMINING DUTIABLE VALUE Dutiable Vatue The proper valuation of imported goods upon which the appropriate customs duty is imposed. Methods of Determining Dutiable Value: Method 1: Transaction Value Method 2: Transaction Value of Identical Goods: Method 3: Transaction value of Similar Goods Method 4: Deductive Value Method 5: Computed Value Method 6: Fallback Value (R.A. No. 10863, Sec. 700). ‘Sequential Rule: The above-mentioned methods are sequentially applied, Exception: Methods 4 and 5 may be reversed at the request of the importer unless the Commissioner of Customs deems that he will experience real difficulties in the use of Method 5, the Commissioner may reject the request (C.A.O. No. 04-2004, Sec. I (0(4)) METHOD ONE: Transaction Value System The transaction value uses the price actually paid or payable for the goods when sold for export to the Philippines at arm’s length transaction including the following 1. To the extent incurred by the buyer but not included in price actually paid: ‘a. Commission and brokerage fees: b. Cost of container; c. Cost of packing; 4. Assists; and e. Royalties and license fees. 2. Value of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues directly or indirectly to the seller; Transportation cost; Loading, unloading and handling charges; and Cost of insurance (R.A. No. 10863, Sec. 701). Method 1 shall not be used in determining the dutiable value of imported goods if: 1. There are restrictions as to the disposition or use of the goods by the buyer other than restrictions which: a. Are imposed or required by law or by the Philippine Authorities; b. Limit the geographical area in which the ‘goods may be sold; or ¢. Do not substantially affect the value of the goods. 2. The sale or price is subject to some condition or consideration for which a value cannot be TARIFF AND CUSTOMS ‘SAN REDA LAW CENTRALIZED BAR OPERATIONS, ‘MEMORY AID 2019 determined with respect to the valued: ~~ 80008 being 3. Part of the proceeds of any subse, dsposal oF use Of the goods by the payee accrue directly or indirectly to the sete, Ml an appropriate adjustment can be made, ars 4, The buyer and seller ar related to one ant, and such relationship influenced the price of 2 goods (C.A.0. No. 04-2004, Sec. 11 (a) "the Persons Deemed to be Related if: (OREO. -BTF) 1. They are Officers or directors of one ancihe business; = 2. They are legally Recognized partners business; 3, They are in Employer-employee relationship. 4, Any person directly or indirectly Owns, contro or holds 5% or more of the outstanding vor slock or shares or both of the seller and buyer 5. One (1) of them directly or indirectly controls the other; 6. Both of them are directly or indirectly controtieg bya third person; 7. Together they directly or indirectly control a third Berson; or 8, They are members of the same Family (R.A, No, 10863, Sec. 701) in Reason for the Use of Transaction Value: To comply with the Philippine treaty commitments under World Trade Organization Valuation ‘Agreement (C.M.O. No. 16-2010). METHOD TWO: Transaction Value of Identical Goods ‘The dutiable value shall be the transaction value of identical goods sold for export to the Philippines and exported at or about the same time as the goods being valued (R.A. No. 10863, Sec. 702). Identical Goods 1, The same in all respects including physical characteristics, quality, and reputation; 2. Produced in the same country as the goods being valued; and 3. Produced by the producer of the goods being valued (C.A.O. No. 04-2004, Sec. (0) The term “identical goods” does not include, as the case maybe, goods which incorporate or reflect engineering, development, artwork, design work, and plans and sketches for which no adjustment has been made because such elements were undertaken inthe Philippines and is provided by the buyer to the Producer of the goods free of charge or at a reduce cost (R.A. No. 10863, Sec. 702). |fmore than one transaction value of identical 90048 are found, the lowest value shall be used determine the customs value (R.A. No. 10662 2). 426 | 2019 SAN BEDA LAW CENTRALIZED BAR OPERATIONS7 ———____—_ TARIFF AND CUSTOMS SAN BEDA LAW CENTRALIZED BAP OPERATIONS - MEMORY AID 09 nor differences in appearances shall not precludé wig otherwise conforming to the dfton from peing regarded as identical (C.A.O. No. 04-2004, feo. 1 (C)(2) meTHOD THREE: Transaction Value of Similar Goods ore dutiable value shall be the transaction value of Tinlar goods sold for export to the Philippines and Sfporied at or about the same time as the goods being valued (R.A. No, 10863, Sec. 703) similar Goods Goods which, although not alike in all respects + Have like characteristics and like ‘component materials; 2, Are capable of performing the same functions as the goods being valued; 3, Are commercially interchangeable with the goods being valued; 4, Are produced in the same country of the goods being valued; and 5, Are produced by the producer of the goods being valued (C.A.0. No. 04-2004, Sec. I! (D)(2)). in applying this method, the transaction value of rir goods in a sale al the same commercial level Shy in substantially the same quantity as the goods being valued shall be used to determine the dutiable value. Where no such sale is found, the transaction Value of similar goods sold at a different ‘commercial Walel andlor in the different quantities, adjusted to take account of differences attributable to commercial sel andor to quantity, shal be used, provided that sich adjustments can be made on the basis of Semonstrated evidence which clearly establishes the reasonableness and accuracy of the adjustment, ‘nether the adjustinent leads to an increase oF & eT te MO) Goes Implementation of Article Vil Of the General ‘Agreement on Tariffs and Trade 1994, Art. 3) METHOD FOUR: Deductive Value Wha deductive value shall be based on the unit price TP eunich the imported goods or identical Or similar imported goods are sold in the Phiipres, in the earns condition as when imported, in the greatest aggregate quantity, at or about the time of the importation of the goods being valued. fo persons not mjpted to the persons from whom they Duy such goods, subject to deductions for the following: (C2AT) got ner the Commissions usually paid or agreed to be paid or the additions usually made for profit B® f general expenses in connection with sales in ane country ofimported goods ofthe same class or kind; 9, Tho usual Costs of transport, loading, unloading Tg handling charges, and cost of insurance; 3. The usual costs of transport and insurance and ‘Associated costs incurred within the Philippines, os e Phil 4. Customs duties and other national Taxes payable in the Philippines by reason of the importation or sale of the goods (R.A. No, 10863, Sec. 704). The term “unit price at which the imported goods are sold in the greatest aggregate quantity means the price at which the greatest number of units is sold in sales to persons who are not related to the persons from whom they buy such goods at the first ‘commercial level after importation at which such sales take place (CLEMENT KEY, Principles of Valuation: Export and Import, p. 30) Example 1: Two (2) sales occur. In the 1 sale, 500 units are sold ata price of P95 each. In the 2% sale, 400 units are sold at a price of P90 each. In this example, the greatest number of units sold at a particular price is $60, therefore, the unit price in the greatest aggregate quantity is P95. Example 2: Goods are sold from a price list which grants favorable unit prices for purchases made in larger quantities. | 1Osales of 5 |65 units 5 sales of 3 units 5 sales of 11 |55 units: 4-40 units |100 41-25 units |95 Over 25 |90 1 sale of 30 |80 units units 1 sale of 50 units METHOD FIVE: Computed Value The computed value is the amount or price when all THe components of the article are added uP (RA No. 10863, Sec. 705). The dutiable value under this method shall be the sum of: (C2A7F) 4. The Cost or the value: of materials and fede sPeier processing employed 1 ‘producing the imported goods:Note: The “cost or value” referred in this method is to be determined on the basis of information relating to the production of the goods being valued supplied by cr on behalf of the producer. It is to be based upon the commercial accounts of the producer, provided that such accounts are consistent with the Generally Accepted Accounting Principles (GAAP) applied in the country where the goods are produced (WTO Agreement on Implementation of Article VII of the GATT 1994, Notes to Articie 6) 2 The Gost of containers and packing, if their values are not included under No. 1 hereof; 3. The Amount for profit and general expenses equal to that usually reflected in the sale of goods of the same class or kind as the goods being valued which are made by producers in the country of exportation for export to the Philippines; Any Assist, if its value is not included under No. 1 hereof; and 5. The Freight, insurance fees and other transportation expenses for the importation of the goods (R.A.'No. 10863, Sec. 705). METHOD SIX: Fallback Value The dutiable value shall be determined by using reasonable means consistent with the principles and general provisions of the Agreement on Tariffs and Trade of 1994 and of Article Vil of GATT of 1994 and on the basis of data available in the country of importation (R.A. No. 10863, Sec. 706). If the importer so requests, he shall be informed in writing of the dutiable value determined under Method Six and the method used to determine such value (R.A. No. 10863, Sec. 706). Prohibited Methods of Valuation under Method Six No dutiable value shall be determined under Method 6 on the basis of: (SeSy-PriCo-PriMA) 1. The Selling price in the Philippines of goods produced in the Philippines; 2. A System that provides for the acceptance for ‘customs purposes of the higher of two alternative values; 3. The Price of goods in the domestic market of the country of exportation; The Cost of production, other than computed values, that have been determined for identical or similar goods in accordance with Method Five hereof, 5. The Price of goods for ex than the Philippines: Minimum customs values; or Asbitrary or fictitious values Sec. 706). port to a country other (RA. No. 10863, TARIFF AND CUSTOMS SAW BEDA UAW CENTRALIZED BAR OPERATIONS ~ MEMORY AID 2019 IMPORTATION IN GENERAL Importation Refers tothe act of bringing in of goods from a fore territory into Philippine territory, whee" consumption, warehousing or admission (ps 10863, Sec. 102 (2)). No. ‘When Importation Begins Importation begins when the carrying vessel or aircraft enters the Philippine tertory ‘wath. 4 intention to unload therein (R.A, No. 10663, gt 103). “Intent” being a state of mind, i rarely suscepti direct proof, but must ordinaly be inferred fom yo facts and therefore can only be proved by unguondt® expressions, conduct and circumstances sores (Feeder International Line v. Court of Appeals, G No. 94262, May 31, 1991). When Importation is Deemed Terminated: 1, In case of dutiable goods - upon payment of dulies, taxes, and other charges due upon the articles or secured to be paid at a port of entry, and the legal permit for withdrawal shall have been granted; or 2. Incase of duty-free goods - unt they have legally left the jurisdiction of the BOC (R.A. No. 10863, See. 103). Note: Tariff and customs laws are applied only after importation has begun but before it is terminated (RA. No. 1937, Sec, 1202). 4s long as the importation has not been terminated the imported goods remain under the jurisdiction of the BOC (Papa v. Mago, G.R. No. L-27360, February 28, 1968), Persons Who May Act as Declarant ‘A declarant may be a consignee or a person who has the right to dispose of the goods. The declarant shall lodge a goods declaration with the Bureau and may be: 4. The importer, being the holder of the bill of lading: 2. The exporter, being the owner of the goods to be shipped out; ; 3. A customs broker acting under the authorily of the importer or from a holder of the bill, or 4 A person duly empowered to act as eon oI attorney-in-fact for each holder (RA. No. 108 Sec. 106) 428 | 2019 SAN BEDA LAW CENTRALIZED BAR OPERATIONS.Zur Note: IN case the consi ‘ign tne dh 10 dispose of he geno ninay eluhorizs & respon eae nerson, to sign the goods sy atation as deri" ® Compan mahal A Nor ogee Tog) Sarant on iy, Owner of Imported Articles. 4. Consignee: can (chug) 2. Holder of the bil of tain consignee named thereing aly endorsed — 3. Holder of the bit of lading, it consign orto byt '€ Consignor. ane to order, 4 The Underwriters of agen 5. Salvors (RA. No. 10863 Seo. 40g a Requirement to Issue Proot of P; Upon Payment of the duties, taxes avment te Bureau shal esue he cen cares document as proof of such 3 doximent Ch payment (R.A. No 10863, Note: Under current . issues ment of Di ties (SSDT) as proof of payment (R o. No. 025-1932 Applicable Rate of Duty Imported goods s Applicable Rate of from Free Zone Territory Duty rate at the time of withdrawal shall be applicable on the goods originally admitt fed, whether withdrawn in'ts original or advanced form (R.A. No. 10863, See 108) Duty for Goods Withdrawn for Introduction to Customs Rates of Dut Auction . In case of goods sold at customs public auction, the duty rates al the date of the auction shall apply for Purposes of implementing Sec. 1143 (RA No. 10863, Sec. 105). 'y for Goods Sold at Customs Public stomhouse Entry paige into the Philippines, whether All arti duly oF Not, shall be entered through a eublect tal ata port of entry (R.A. No. 10863, Sec custom 400). mhouse” means: (FSP) “Entry nis Filed at the customhouse; 4. The do Submission and acceptance of the The Subm : document re of passing goods through the 3, The BrO0e8e chevron PHL, ing” Me custom! Commissioner f August 11, 2098) “YM, GR No 178759, Port of &; coast eet pono ade. The term ipo OPEN 10 foreign ang Principal Por Slide ae of Entry ~ under the administrative thong © Collector of the Principal port of © distict (R.A. No. 10863, Sec. 102), Note: Whenever th ‘ Shall include tof ame ort of ent 102 (hy) a is used, it airport of entry: (RA, No soa Sec. Imporr CLEARANCE AND Formatitigs Preparation of import entry. Declaration of correct weight or value; Payment of duties; and Keeping of records, oeenag kind of packages, weight, desori iptions, quantities of the goods and destination (C.M. 0. No. 06-2078), Import Entry [tis a declaration to the Bureau of Customs showing Particulars of the imported articles that will enable the Customs authorities to determine the correct duties and internal revenue taxes due on the importation. It is also known as Import Entry and Internal Revenue Dectaration (IERD) (C.M.O. No. 01-1996). ds Declaration Sitenant made in the manner prescribed by the Bureau and other appropriate agencies, by which te Persons concemed indicate the procedure to ‘observed in the application for the entry or admission Of imported goods and the particulars of whic ‘customs administration shall require (RA. No. 10863, Sec. 102(¥)). Importations Subject to Goods Declaration Al imported goods shall be subject he dare of a goods declaration, unless pihoreles ‘goods declaration may be for: (CWATARIFF AND CUSTOMS SAN BEDA (AW CENTRALIZED BAR OPERATIONS - MEMORY AID 2010 4. Consumption; 2, Warehousing - for goods intended for warehousing in customs-bonded warehouses (CBW); 3. Admission — refers to the act of bringing imported ‘goods directly or through transit into a free zone; 4. Conditional importation - goods conditionally Telieved, totally or partially, from payment of import duties and taxes; such goods must be imported for a specific purpose and must be intended for re-exportation within a specified period and without having undergone any substantial change except due to normal depreciation; and 5. Customs Transit - goods, which in its original form, are transported under customs control from ‘one customs office to another, or to a free zone (RA. No, 10863, Sec. 401). ‘The kind of declaration used when the declarant does ‘Rot have all the information or supporting documents required to complete the goods declaration (A.A. No. 10863, Sec. 403). Requisites: 1. Such declaration contains the necessary information required by the Bureau; and 2, The declarant undertakes to complete the information or submit the supporting documents, within 45 days from the filing of the provisional goods declaration, extendible for another 45 days (R.A. No. 10863, Sec. 403). Notes: ‘ 1. The duty treatment of the goods under Provisional goods declaration shall not be different from those with complete declaration, Goods under provisional goods declaration may be released upon posting of any required security equivalent to the amount of the applicable duties and taxes (R.A. No. 10863, Sec. 403). Contents of Goods Declaration: (VOID-CP?) 1. Value as set forth in a proper invoice; 2. Such Other information as may be necessary; 3. Names of the Importing vessel or aircraft 4. Nature and correct commodity Description of the articles contained therein; Names of the Consignee; Port of departure, port of destination and date of arrival; and) 7. Numbers and marks of Packages or the quantity, if in bulk (R.A. No. 10863, Sec. 411) Kinds of Import Entry: (Fl) 4. Formal Entry; and 2. Informal Entry. General Rule: All goods declaration for consumption shall be cleared through a formal entry process (RA. No. 10863, Sec. 402) Note: ilimportations entered through a formal eney process shall be covered: 1. Whon there is sale ~ a latter of creator any Verifable commercial document evidencing payment; or 2 When there is no sale for export ~ any commercial document indicating the commercig| value of the goods (R.A, No, 10863, Sec. 402) Exception: Except for the following goods which shall be cleared through an informal entry process. 1. Goods of a commercial nature with Free on Board (FOB) or Free Carrier At (FCA) less than 50, 000; and 2. Personal and household effects or goods, not in ‘commercial quantity, imported in passenger's baggage, or mail (R.A. No. 10863, Sec. 402) Formal Entry v. Informal Entry All importations entered There is no such through, a formal entry | requirement in an process shall be informal entry process. covered by a letter of credit or any verifiable ‘commercial document evidencing payment or in cases where there is no sale for export, by any commercial document indicating the commercial value of the goods, As a tule, all goods declaration for ‘consumption shall be cleared through a formal entry process. pecaton aia Applies only to the following: @. Goods of a commercial nature with Free on Board or Free Carrier ‘Arrangement (FCA) value of less than 50, 000; or b. Personal or household effects or goods, not in commercial quantity, imported in passenger's baggage or mail [See rancid (RA No. 10863, Sec. 402) 430 | 2019 SAN BEDA LAW CENTRALIZED BAR OPERATIONS ————————TARIFF AND on of the Import Entry ar “gral be based on self-assessment, re orter and the customs broker shall m ne Lie and correct declaration of the Specinabend oe particulars of the importation on the IERD and andi Botemental Declaration on Valuation (SDV) ve munich. declaration shall be under oath and i omrbed by the importer and the customs broker fare anotaty PUDIIC OF a customs officer authorized betginister such oath under the pain of prosecution wer (C-M.O. No. 37-2001, Sec. IV (A)2)) inthe case of SDV, the customs broker shall sign to Mest to the authenticity of the signature of the importer (C.M.O. No. 37-2001, Sec. IV (A) (2). Where Import Entry Filed by Person Other Than the Importer The importer shall himself be required to declare under oath and under the penalties of falsification or perjury that the declarations and statements contained in the entry are true and correct (R.A. No. 10863, Sec. 107). The declarant shall be responsible for the accuracy of the goods declaration and for the payment of all duties, taxes and other charges due on the imported goods. The licensed customs broker shall likewise be responsible for the accuracy of the goods declaration but shall not be responsible for the payment of duties, taxes and other charges due on the imported goods (R.A. No. 10863, Sec. 107). Note: The declarant shall sign the goods deciaration, even when assisted by a licensed customs broker, who shall likewise sign the goods deciaralion (R.A. No. 10863, Sec. 107) Lodgement of Goods Declaration so. Ledgement refers to the registration of & Os qeowration with the Bureau (R.A. No. 10863, Sec. 102 (dd)), : 1 be i Jodgment: Goods declaration must ee in ‘8 days from the date of discharge of ri lodge wii mn he vessel or arnt (RA No 10863, Sec. 407) fod to file the goods declaration may, JO mtended on valid grounds or ‘provided, that the request is made ine original period within before tne ope <_< ™ com Wich on, Provided, however, ha the period ofthe deter of the goods deciaration may be adjusted toda mmissoner (RA No, 10863, Sec. 407) Note: The peri upon request, ‘another 15 days: SAN BEDA LAW CENTRALIZED BAR ope} Relief Consignment ids such materials for shane, mean government entities for free distribution to or use CUSTOMS RATIONS = MEMORY sip 2019 for '@, equipment and shelter, donated or instiutions and accredited eve, ited private Calamities shall be tated and entered aac Consignment. Upon dectarat tion of the clearance of such goods wil be am (R.A. No. 10863, Sec. 120), red as relief te of calamity, fatter of priority Tex treatment Relief consignment imported duri stato of calamity and intended for a specie calamity area for the use of the calamity victims therein, shall be exempt from duti No. 10863, Sec. 121). ee Declaration of Correct Weight or Value Please refer to the discussion on methods of determining dutiable value of imported goods above y for Payment of Duties 1. It constitutes as a personal debt due from the importer to the government which can be discharged only by payment in full of all duties, tenes, (gos and ‘other charges legally accruing; ani 2. Itconstitutes as a lien upon the articles imported which may be enforced while such articles are in custody or subject to the control of the government (R.A. No. 10863, Sec. 405). The importer is the person primarily liable for the payment of any duties on the imported goods or articles. Therefore, his liability constitutes a lien on the article which the government may choose to enforce while the imported articles are either in its custody or under its control (Pilipinas Shell Petroleum Corp. v. Republic, G.R. No. 161953, March 6, 2008). Importations (except conditionally tax and/or duty- exempt importation) by the government for its own use or that of its subordinate branches or instrumentalities, or corporations, agencies or instrumentalities owned or controlled by the government, shall he subject to the duties, taxes, fees and other charges prescribed (R.A. No. 10863, Sec. 406). Failure to Pay Correct Duties and Taxes on Imported Goods ‘Ater, being subjected to postentry audit and examination, any person who is found to have incurred deficiencies in duties and taxes paid for imported goods, shall be penalized according to te Daogrees of culpabilty (R.A. No. 10863, Sec. 1008). Two Degrees of Culpability: Te Negligence — when a deficiency results from 2° Menger’ failure, through an act(s) of omission oretymmission, to exercise reasonable care and Competence to ensure that a statement made Is Correct (R.A. No. 10863, Sec. 1008 (A)). are 3 I 2 F = FA < iTARIFF AN Penalty: Fine equivalent to 125% of the revenue loss (RA. No, 10863, Sec. 1005 (A)). 2. Fraud - when the material false statement or act in connection with the transaction was committed or omitted knowingly, voluntarily and intentionally, as established by clear and convincing evidence (R.A. No. 10863, Sec. 1005 (8). Penalty: 2. Fine equivalent to 6 of the revenue loss; and b. Imprisonment of not less than 2 years but not ‘more than 8 years (R.A. No. 10863, Sec. 1005) Assessment and Payment of Duties and Taxes Assessment refers to the process of determining the ‘amount of duties and taxes and other charges due on imported and exported goods (R.A. No. 10863, Sec. 102 (F)).. When Assessment Deemed Tentative Assessment shall be deemed tentative if the duties and taxes initially assessed are disputed by the importer (R.A. No, 10863, Sec. 428). Note: The assessment shall be completed upon final readjustment based on the tariff ruling in case of, Classification dispute, or the final resolution of the protest case involving valuation, rules of origin, and other customs issues (R.A. No. 10863, Sec. 425) When Assessment of Duty Less Than the Entered (Declared) Value of the Goods Duty may be assessed upon an amount less than the centered value: 1. In cases when the importer certfes atthe time of entry that the entered value is higher than the dutiable value and that the goods are so entered in order to meet increases made by the appraiser in similar cases then pending re-appraisement; and The lower assessment shall be allowed only when the importer’s contention is sustained by a final decision and shall appear that such action of the importer was taken in good faith after due diligence and inquiry (R.A. No. 10863, Sec. 428). When Assessment Deemed Final Assessment shall be deemed final 15 days after receipt of the notice of assessment by the importer or consignee (R.A. No. 10863, Sec. 429). Note: in the absence of fraud and when the goods hhave been finally assessed and released. the assessment shall be conclusive upon all parties 3 years from the date of final payment of duties. and taxes, or upon completion of the post clearanc: (RA. No. 10863, Sec. 430) — W CENTRALIZED BAR OF D CUSTOMS RATIONS ~ MEMORY AID 2019 id Duties and 7, al Interest on Unpaid axes legal interest of 20% per annum computed trom gi date of final assessment when payment peor © dye and demandable (R.A. No, 10863, Se. ipq hall ikewise a Note: The legal interests! ee fine or penalty imposed (R.A. No. 10863, Sena surcharge for Failure to Pay For failure to pay duties and taxes of an assessing, within 15 days from the date of final assessment Surcharge of 10% of the total assessed amount 2 balance thereof shall be added and collected surcharge shall increase t0 25% if the delinquency lasts for more than 1 year (R.A. No. 10863, 0°! 1425). Summary of the Assessment and Clearance Procedure 4. Within 7 days from the date of discharge of the last package from the vessel or aircraf, the declarant must lodge the goods declaration wit its selected Value-Added Service Provider (VASP) (C.M.O. No. 18-2019). Note: The period of the lodgement of the goods declaration has now been shortened to 7 days from the original 15-day period pursuant to the power of the Commissioner to adjust such period under the CMTA (R.A. No. 10863, Sec. 407, CMO. No. 18-2019). The printout of the Goods dectaration (presently called Import Entry and intemal Revenue Declaration) must be filed with the BOC together with supporting documents such as commercial invoicelletter of credit, packing list, proof of Payment, sales, contract, import permit, import Clearance, etc. (R.A. No. 10863) Note: The declarant may amend the goods declaration that has already been lodged. I, a the time of importation, an importer does not have all the information or supporting documents Fequired to complete a goods declaration, he CMTA allows the lodging of a Provisional Goods Declaration (PCD), For purposes of assessing duties and tayes o° imported goods, the customs officer shal classify, value, and determine the duties 2m taxes to be paid after its examination, he stl issue an Assessment Notice (R.A. No. 10663) The importer has a period of 15 days trom 228 of Assessment Notice within which 10 P8Y Gorresponding duties and taxes throug '¢ Authorized Agent Bank (AAB). In effect. also the period within which the importer 492 | 2019 SAN BEDA LAW CENTRALIZED BaR OPERATIONS ,contest the assessment issued by the BOC. Elements of Smuggling: (CRK) Otherwise, the assessment will be deemed final 1, The merchandise must have been fraudulently or after the lapse of the 15-day period (R.A. No knowingly imported Gontrary to law; 10863, Sec. 429). 2. The defendant, if he is not the importer himself, : must have Received, concealed, bought, sold or Note: The failure to pay duties and taxes within in any manner facilitated the transportation, the 15-day period shall result in the imposition of concealment or sale of the merchandise; and interest from the date of final assessment and 3. The defendant must be shown to have surcharge based on the total assessed amount Knowledge that the merchandise had been or balance thereon, illegally imported (Rimorin, Sr. v. People, G.R. : No. 146481, April 30, 2003). 4. After payment of duties and taxes, the importer will then have a non-extendible period of 30 days If the defendant, however is shown to have had to claim the goods from customs custody (R.A. possession of the illegally imported merchandise, No. 10863). without satisfactory explanation, _ such possession shall be sufficient to authorize Notes: conviction (Rimorin, Sr. v. People, G.R. No. a. For tentative assessment (assessments 146481, April 30, 2003). which are contested by the importer), the District Collector may allow the release ofthe Outright Smuggling imported goods upon the posting of sufficient An act of any person who shall import goods into the security to cover the applicable duties and country: taxes equivalent to the amount that is 1. Without complete customs —_ prescribed disputed (Proposed Guideline on Entry importation documents; or Lodgement and Cargo Clearance 4.10). 2. Without being cleared by customs or other b. Goods under Provisional Goods Declaration regulatory government agencies (RA. No. may be released upon posting of a security 10863, Sec. 102 (ff). ‘equivalent to the amount ascertained to be the applicable duties and taxes (Proposed Purpose of Outright Smuggling: To evade the Guideline on Entry Lodgement and Cargo payment of prescribed taxes, duties and other Clearance 4.10). government charges (R.A. No. 10863, Sec. 102 (f)) Keeping of Records Technical Smuggling All importers ate required to keep relevant An act of importing goods into the country by means importation documents, at their principal place of of fraudulent, falsified or erroneous declaration of business, fora period of 3 years from the date of final goods to its nature, kind, quality, quantity or weight payment of duties and taxes or customs clearance, _reduce of avoid payment of prescribed taxes, duties peyine case may be, Economic zone locators are and other charges (R.A. No. 10863, See. 102 (pp) likewise required to keep records of imported goods : & Wthdrawn from the zones and brought into the Types of Technical Smuggling 4 customs territory (R.A. No. 10863, Sec. 1003) 1. Misdeclaration 6 Misdeclaration is committed when the a discrepancy pertains to quantity, quality, iF description, weight, or measurement of the i= CRIMES AND OTHER 0) FENSES imported goods (R.A. No. 10863, Sec. 1400). Pas 2. Misclassification ne Misclassification exists when insufficient or firm in wrong description of the goods or use of wrong rd en ‘ony person who shall: (FART) {arf heading was declared resulting in a ik {fraudulently import or export or bring into or discrepancy (R.A. No. 10863, Sec. 1400). Eravige of the Philipines any goods contrary 03, Undervaluation (FIV) fee Undervaluation is committed when 2. Assist in so doing: a. The declared value fails to disclose in Eull the 2 Beteive, conceal, Buy, selh or in any manner price actually paid or payable or any dutiable facilitate the transportation, concealment or sale adjustment to the price; or ae cli goods after importation; or b. An Incorrect valuation method is see. & of sue fecieal smugging (R.A. No, 10862 othe “Valuation. rules are, nat BroPer 4. Soe. 102 (n0) observed (R.A. No. 10863, S#°- aneImposition of Surcharge 1. Incase of misdeclaration and misclassification — ‘Surcharge of 250% of the duty and tax due. Note: No surcharge shall be imposed when: a. discrepancy in duty is less than 10%; or b. the declared tariff heading is rejected in a formal customs dispute settlement process; or the tariff classification declaration relied on an official government ruling, 2. In case of undervaluation — a surcharge of 250% of the duty and tax due. Note: No surcharge shall be imposed when: . discrepancy in duty is less than 10%; or b. the declared value is rejected as a result of an official ruling or decision under the customs dispute settlement process (R.A. ‘No. 10863, Sec. 1400). Effect of Intentional/Fraudulent Misdeclaration, Misclassification, or Undervaluation Misdeclaration, misclassification, or undervaluation is intentional or fraudulent when: 1. A false or altered document is submitted: or 2. A false statement or information are knowingly made (R.A. No. 10863, Sec. 1400). Note: A discrepancy in duty and tax to be paid between what is legally determined and what is declared amounting to more than 30% shall Constitute a prima facie evidence. of fraud, A Surcharge shall be imposed equivalent to 500% of the duty and tax due, and that the goods shall be subject. to seizure regardless of the amount of the discrepancy without prejudice to the application of fines or penalties for unlawful importation against the importer and other person or persons who wilfully Participated in the fraudulent act (R.A. No. 10863, Sec. 1400). « Contraband Goods of prohibited importations or exportations (RA. No. 10863, Sec. 1401). It may also refer to articles imported or exported in violation of taritf and ustoms laws (P.D. No. 99 (1)). Contraband is also iin ‘as smuggled goods (R.A. No, 10863, Sec. 107 (on)) Evidence for Conviction Mere possession of the arti TARIFF AND CUSTOMS ‘SAN BEDA LAW CENTRALIZED BAR OPERATIONS ~ MEMORY AID 2019 hension Payment of the tax due after appret is nota valid defense (Rodriguez v. Court of Appeals, 5, No. 115218, September 18, 1995). Things Subject to Confiscation in Smuggling Cases: 41. Any article which is removed contrary to law from any public or private warehouse under customs supervision or released irregularly from custome custody (Carrara Marble PHL, Ing Commissioner of Customs, G.R. No. 129699, September 1, 1999). 2. Anything that was used for smuggling is subject to confiscation, like the vessel, plane, etc (Llamado v. Commissioner of Customs, G.R. No, L-28809, May 16, 1983). Note: Common carriers that are not privately chartered cannot be confiscated (R.A. No. 10663, Sec. 1113 (k)).Yodaration (See. 1400): ere of Refusal of party 2. Fai evidence or submit uments fr WEessment (SEC. 1402) rate to Declare paaaage (Seo. 140) 4. ureutnrized withdrawal gimposted goods from fonded warehouse (Sec. 1422); g, Faire to Pay duties, taxes and other charges (sec. 1425); and ¢. Breach of security (Sec 1426). (RA No, 10863). TARIFF A\ SAN EDA LAW CENTRALIZED nan of Pt Al 10. " 12. 13. 14, 16. 16. Fra Ue eae ND CU: MEMORY AD 2019 Departure before Tas seacraft, or aircraft (Boe ear O cuss females eee of boarding officer (Sec. Unlawful boardi seca ng or eving vent or Inloading of cargo befor Se eee artval at port of Unloading of cargo at improper time or place after arrival (Sec. 1409); Failure to Exhibit or deposit documents (Sec. 1410); Bringing of unmanifested Arms, explosives ‘or war equipment (Sec. 1411): Failure to supply advance and requisite manifest (Sec. 1412); Disappearance of manifested goods (Sec. 1413}, Disorepaney between actual and declared weight of manifested goods (Sec. 1414); Discrepancy with the Master's or Pilot's-in- Command report (Sec. 1415); False Statement of vessel's or aircraft's destination (Sec. 1417): Breaking of Seal placed by customs officers (Sec. 1419); Breaking of lock or fastening placed by customs officers (Sec. 1420); Removal, breakage, and alteration of marks (Sec. 1421); and ‘Diner offenses by the owner or operator of aa vessel, aitcraft oF tain: 2 Mor anchoring at any dock, pie. what fuay, or bulkhead ater than 2 port of entry: b, For dumping of garbage of 1OPS Over tho sides of the vessel within 3 mies from the nearest coastline: «, For dumping or causing to spread Feige ol, kerosene, or gasoline if Me fy ora the pers within 3 mies fom the nearest coastine: 4, Fer loading gasoline or ary other ot gum products at 2 place OMe! pet tnal designated by the reauatee oe, For causing the emission and 900 of For jul gas, fumes ane chemicets «. partransporing hazardous Woe For pacive waste and ae fox {USTOMS 4 5. 429). a substances (See. 1 2019 SAN BE! Gonigreced CE duc Offenses Technical and outight smuggling (See. 1401): Eniry of imported or exported article by means of any false or fraudulent document, statement or practice (Sec. 1403); Filing any false or fraudulent claim forthe payment of drawback or refund of duties (Sec. 1403), Failure to report fraud (Sec. 1416): Afixing seals purporting to be a customs seal to any vessel, aircraft, vehicle, warehouse oF package (Sec. 1478); Removing or repacking of goods in warehouse (Sec. 1423); Removing goods from customs custody (Sec 1423) Failure to keep importation records and full access to customs officers (Sec. 1427); and Concealment or destruction of evidence of fraud (Sec. 1428) pa LAW CENTRALIZED BAR OPERATIONS | 435Go 1. 2. g SAN BEDA oO DISPOSITION OF - PROPERTY ds subject to disposition: (AGFL) Abandoned goods; tered under war ehousing entry but not Goods en withdrawn, OF those whose duties and taxes have not been paid within the period prescribed by law; Forfeited goods, other than prohibited, restricted and regulated goods; after liability have been i inistrative Or tablished by the proper administ judicial proceedings in conformity with CMTA provisions: an | 443 LAW CENTRALIZED BAR OPERATIONSdi 4. Goods subject to a valid Lien for customs duties, tars. and ther chovgs,eatece ye ‘Bureau, afier the expiration of the period allowed for payment thereof (R.A. No. 10863, Sec. 1139). Place of Disposition of Goods Upon the order of the District Collector, goods may be sold or otherwise disposed of at the port where the goods are located, unless the Commissioner shall Girect its transfer to another port (R.A. No. 10863, Sec. 1140). Mode of Disposition (DDS) The goods subject to disposition may be: 3, Donated to another government agency; 2. Declared for official use of the Bureau, after approval of the SOF; 3. Sold ata public auction within 30 days after a 10- day notice posted at a public place at the port ted_and published ‘ewspaper of general Gieulation (R.A. No, 10863, Sec. 1141). Disqualification to Participate in Auction Sale No customs officer or employee, relatives within the fourth degree. affinity shall be allowed to bid dir any customs auction (R.A. No. 1 of consanguinity or recly of indirectly, in 0863, Sec. 1142) Disposition of Proceeds The following expenses and obii from the proceeds of the sale i (CT-GEaF) 1. Gustoms duties, except in the case of forféted goods; 2. Taxes and other charges due the government; 3. Government storage charges: 4 Expenses for the appraisal, advertisement, and Sale of auctioned goods; 5. Arrastre “and private ' storage charges and demurrage charges; and Ereight, lightera igations shall be paid in the order provided: No. 10863, Sec. 1143), Disposition of Perishable Goods 1. Perishable goods when certied as Such by the Bureau, may be sold at a public auction within 5, days, after a 3-day notice (RA. No, 10863, Sec. 1144), Perishable goods shall include 9004s liable to perish or be wasted, or those that Without great disproportionate SxPense (R.A. No. 10863, Sec. 1144), {he Bureau shall proceed to adva te same at auction upon notice deemed to be reasonable (RA No, 1144), tise and sell @s shall be 10863, Sec. 444 | 2019 SAN BEDA Law CENTRALIZED Bap anc... TARIFF AND CUSTOMS SAN BEDA LAW CENTRALIZED BAR OPERATIONS ~ MEMORY AID 2019 ition of Goods injurious to Publig Pe ender fil custody of the Bureau. hie . opinion of the District Collector are injure pub neat shal be sized (2 a 1145) 3 2, The Dist Colectr shal, the materi disposable under the provisions Felating tg ba and drugs, appoint 3 members to cad Sard te examine the goods (RA, fg ala 3c. 1148) , 3, ‘The ‘Boos shal bo composed gy 5 Tepresertave from eer the DOH ory! apropiate government agency cing Me concerned, and 2 representatives, Boe SU ‘No. 10863, Sec. 1145). 4, Ifthe goods are found to be inj heath, the Board hal report this tothe Geek Gaotecor, who shall order its destucton gt appropfate manner of order its re-export (RA No. 10863, Sec 1145) Portaton 5 The Distiller shat! mmecaay coordinate ‘with the health and quaran, offcers a the pot of entry forthe disposing goods injuiousto public heath (LA. No. tops Sec. 1148) lth i WUFIOUS 10 pubie Floor Price of Goods Sol Goods subject to sale at ata price not less than adjusted for normal Sec. 1149) Id at Public Auction Public auction shall be soig the landed cost of the goods depreciation (R.A. No. 10863, Disposition of Unsold Goods for Want ain unsold after at biddings either due to the lack of bid lack of an acceptable bid 1. May be donate of Bidders, least 2 pubic iders or for the z 2 g s z, 8 government property; of Sold through h a negotiated sale (R.A. No. 10863, Sec. 1149). in the presenc Of a representative of the omission o} n Audit (R.A. No, 10863, Sec. 1149). eisPesition of smuggled Goods Smuggled goods, when forfeited, shall be disposed nthe same manner as that ef Tegulated goods (RA No, 10863, Sec, 1150).TARIFF AND CUSTOMS ‘SN BEDA LAW CENTRALIZED RAR OPERATIONS —MEMCRY AD Procedure in Customs Protests Filing of Goods declaration Ruling or decision of the District Colle C ctor oF Customs Of involving goods wih valvalon, ules of origi, and other customs U Filing of protet to the Commissioner a the ime when payment ofthe amount Jue the government is made, of within 15 days thereafter. U ‘Samples are presented upon demand by the Commissioner. When the protests in proper form, te Commissioner shall ender 8 fecision within 30 days from receipt of the protest. 0 0 IF THE PROTEST IS DENIED IF THE PROTEST IS SUSTAINED, IN WHOLE OR IN PART J ‘Appeal to the CTA Division within '30 days from receipt ofthe ‘Commissioner's adverse decision ‘by means of a petition for review under Rule 43 of the Rules of Court ‘The appropriate order shall be made, and the entry reassessed, if necessary. ‘An adverse decision of the CTA Division may be the subject of a motion for reconsideration or new: trial fled with the same Division that rendered the decision within 15 days from receipt of the adverse decision, "An adverse decision by the Division on the motion for reconsideration or for new trial shall elevated by means of a petition for review directed to the CTA En Banc within 15 days from receipt of the ‘adverse decision within 15 days from receipt of the adverse decision. "An adverse decision of the CTA En Banc may be subject of a petition for review on certiorar filed ‘with the Supreme Court under. Rule 45 of the Rules of Court filed within 15 days from receipt of the adverse decision extendible for 30 days. 2019 SAN BEDA LAW CENTRALIZED BAR OPERATIONS | 445 TARIFF AND CUSTOMS.