I.

Cases of Illicit Trade

In 2018, the Bureau of Internal Revenue, through its STRIKE Team which oversees
enforcement of tax laws and regulations against illicit activities, 1 confiscated 5,227
master cases of cigarettes, as well as, cigar-making, packaging and filter-making
machines. They also seized counterfeit stamp tax and other materials used for the illicit
trade of tobacco products.2
On January 22, 2019, unregistered cigarette-making machines worth PhP 200 million
were confiscated in Global Aseana Park, a warehouse in Pampanga. 3 The machine can
produce an up to 4 million counterfeit cigarette sticks per day 4 using imported raw
materials. Initial investigation and inspection were conducted. Thereafter, a warrant of
seizure and detention was issued by the District Collector of the Port of Clark and the
BIR assessed the revenue liability for the counterfeit items confiscated. 5
On October 8, 2020, it was reported that PhP 96 million pesos of illegally imported
cigarettes was seized in the port of Davao. 6 Warrants of seizure and detention were
issued by the District Collector of the Bureau of Customs in Davao for violation of
Sections 117 and 1400 of the Customs Modernization and Tariff Act (CMTA), and
Executive Order No. 245. 7 The illicit cigarettes, found in 40-foot container vans, 8 were
originally declared to contain plastic cups and fabrics. 9 Upon inspection, the
misdeclaration was discovered when the containers were found filled with 3,628 boxes
of illicit cigarettes instead.10 The port in Davao has been the subject of prior inspections
which resulted in the confiscation of illicit tobacco items. To name the most recent
incidents, in July 2020, PhP 24 million worth of illicit cigarettes were declared as tissue
papers11 and, in September 2020, a few days prior to the October 2020 inspection, a
raid resulted in the seizure of Php 26 million worth of smuggled cigarette brands. 12
1
BIR, “Seized cigarette-making equipment, machines destructed.” Philippine Information Agency, 19 January 2019,
available at https://pia.gov.ph/news/articles/1017311.
2
BIR, Seized Cigarette Making Equipment and Machines Destructed, 18 January 2019, BIR Media Release available
at https://www.bir.gov.ph/images/bir_files/PRDestructionOfUnregisteredMachines.pdf
3
Arcellaz, Princess Clea. “Illegal cigarette machines seized.” Sun Star Pampanga, 25 January 2019, available at
https://www.sunstar.com.ph/article/1784486/Pampanga/Local-News/Illegal-cigarette-machines-seized
4
Id.
5
Id.
6
Gonzales, Cathrine. “BOC-Port of Davao seizes P96M worth of illegally imported cigarettes.” Inquirer, 08 October
2020, available at https://newsinfo.inquirer.net/1345047/boc-port-of-davao-confiscates-p96m-worth-of-illegally-
imported-cigarettes#ixzz6d43zCndY.
7
Bureau of Customs. “BOC Davao seizes hot cigarettes worth P96.6M.” Philippine Information Agency, 08 October
2020, available at https://pia.gov.ph/news/articles/1055490
8
Id.
9
Almonte, Liza. “P97M in illicit cigarettes nabbed at Davao port.” PortCalls Asia, 08 October 2020, available at
https://www.portcalls.com/p97m-in-illicit-cigarettes-nabbed-at-davao-port/.
10
Supra note 1.
11
De Guzman, Robie.
“Smuggled cigarettes worth P107 million seized at Port of Davao.” UNTV Web, 22 July 2020, available at
https://www.untvweb.com/news/smuggled-cigarettes-worth-p107-million-seized-at-port-of-davao/.
12
Supra note 2.
It was published in the Philippine Star that on 1 May 2020, law enforcement in
Valenzuela City raided a warehouse located in Barangay Lawang Bato where they
confiscated 280 master cases (140,000 packs) of assorted counterfeit cigarettes. To
conduct the inspection, a Letter of Authority to search the premises was presented 13 by
the Bureau of Customs and the Philippine National Police when it raided JIA Plastic
Marketing warehouse, now sealed off and temporarily closed. 14 Estimated to cost PhP
200 million,15 the counterfeit cigarettes confiscated have been surrendered for
determination of payment of duties and taxes of imported goods. 16

13
“Valenzuela Police Seizes Imported Fraudulent Cigarettes And Other Merchandise.” Philippine National Police
National Capital Region Police Office, 01 May 2020, available at https://www.ncrpo.pnp.gov.ph/valenzuela-police-
seizes-imported-fraudulent-cigarettes-and-other-merchandise/
14
“P200-M worth of fake cigarettes seized in Valenzuela.” Philippine Daily Inquirer, 02 May 2020, available at
https://newsinfo.inquirer.net/1268240/p200m-worth-of-fake-cigarettes-seized-in-valenzuela#ixzz6d4BVee6Y.
15
Id.
16
Supra note 13