TITLE 1: PRELIMINARY
PROVISIONS export duty).
CHAPTER 1: SHORT
TITLE
SEC. 100. SHORT TITLE
This act shall be known as the
“Customs Modernization and
Tariff Act” or CMTA.
The original title of the bill
passed in Congress (2008) was
named “Customs and Tariff
Modernization Act” or CTMA
but was later revised to avoid
confusion since the term Tariff
refers to Tariff Commission
only and that Customs
Modernization shall only apply
to BoC. Tariff Administration
solely belongs to BoC.
Bureau of Customs: DOF
Tariff Commission: NEDA
Enacted (establish) : May 30
2016
Signed (proposed law) : June 1
2016
Effected (outcome) : June 16
2016 (15 days after it was
published in the Manila
Bulletin)
Basis: Section 1805.
CMTA repealed PD 1464
except on Sections 1611 and
1612 (rates of import and customs procedures and o Consult, Coordinate
processes that will and Cooperate with
harmonize customs other Government
CMTA contains: procedures. agencies and private
18 titles sectors in
43 chapters implementing and
314 sections BoC’s 10 point priority developing customs
program which contains: policy.
CHAPTER 2: GENERAL Implementation of Customs
AND COMMON Modernization Program, Covax Importation Unit
PROVISIONS Intensification of PCA & Post coordinates with the IATF in
Modification Measures, importing, processing and
SEC. 101. DECLARATION OF Simplification of Informal monitoring Covid Vaccines.
POLICY Entry Process.
o Provide fair and
Policy of the State: expeditious
- Protect and enhance o Adopt clear and administrative and
government revenue. transparent customs judicial appellate
- Institute fair and rules, regulations, remedy for customs
transparent customs procedures consistent related grievances and
and tariff management with international matters.
that will facilitate standards and best
international trade. practices. Dispute Settlement and
o Trade Protests under CAO 2-2020.
Facilitation was
added, None in PSA’S Philippine Standards o Employ Modern
PD 1464. of Commodity Classification Practices in Customs
- Prevent and Curtail (PSCC) 2015 integrating Administration and
any form of customs AHTN based on the utilize ICT in the
fraud and illegal acts. Harmonized Commodity implementation of
- Modernize Customs Description and Coding Customs Functions.
and Tariff System (HS) issued by the
Management: World Customs BOC Self-Certification
Organizations (WCO) and process which allows certified
o Develop and Standard International exporters to self-declare their
implement programs Trade Classification (SITC) products through declaration
for continuous by the United Nations without the need of a CO
enhancement of Statistics Division (UNSD). Form D.
 o Institute
Professionalism and
Meritocracy by
attracting and maintain
competent and capable
customs officers and
personnel to enforce
this act.

BoC hiring 200 permanent

personnel nationwide in 2019.
 SECTION 102. DEFINITION
OF TERMS.
1. Abatement – reduction
of duties and taxes
where payment has not
been made whether in
whole or part.
As per CAO 4-2019 (Duty
Drawback, Refund and
Abatement) abatement refers
to the reduction of duties and
taxes payable on account of
loss, damage, shortage, defect
and other circumstances
defined by law.
2. Actual or Outright
Exportation – customs
procedure applicable
to goods in free
circulation which leave
the Philippines with
the intent to stay
permanently outside
it.
Top 5 Philippine Exports as of
2019 are: Gems and other
precious metals, fruits and nuts,
Optical, technical and medical
apparatus, Machinery such as
computers and Electrical
Machinery
3. Admission – bringing
of goods directly into a
free zone or in transit contract for transportation to make a complete declaration
into a free zone. and does not cover provided it is not due to the
merchandise value. declarant’s negligence or
Goods admitted into a free fault and mandatory
zone whether directly or 5. Appeal – remedy by a information and documents
through transit shall not be person aggrieved or are present.
subject to duty and tax. adversely affected by Basis: CMO 7-2020 (Interim
Basis: CAO 11-2019 any Procedures on Goods
(Rules and Regulation on action/decision/order/ Declaration).
the admission, movement omission of the bureau
and withdrawal of goods seeks redress before the 7. Authorized Economic
in Free Zones). bureau, SOF or Operator – importers,
competent court. exporters, customs
4. Airway Bill – transport brokers, freight
document for air freight An Aggrieved importer, forwarders, and other
issued by Airlines or exporter or stakeholder directly entities accredited by
International Freight affected by an adverse the BoC based on
Forwarders which decision of the District Collect WCO Framework to
specify the Holder (or may file a Notice of Appeal Secure and Facilitate
Consignee) of the bill with Memorandum of Appeal Global Trade, RKC,
who has the right to and corresponding appeal fee WCO Supply Chain
claim the goods when within 15 days/5 days from and Management
they arrive at the port receipt of adverse decision Guidelines.
of destination (Imp: (perishable goods).
PH/ Exp: Out PH). It Basis: Section 1126/CAO 10- An interim AEO Office shall
is a contract of 2020 (Seizure and Forfeiture be created in the absence of a
carriage as well as Proceedings and Appeals permanent AEO office to be
contains transport Process). headed by a Division Chief
instructions, and managed by 5 permanent
description of the 6. Assessment – process staff and 5 personnel under
goods and transport of determining the contract of service.
charges. amount of duties and Basis: CMO 9-2020
taxes due on imported (Implementing AEO
An airway bill of lading is goods. program established under
“Non-Negotiable” CAO 5-2017 for importers
instruments that does not A tentative assessment may and exporters).
specify which flight it will be be done for provisional goods
on nor when it will reach the declaration when the declarant 8. Bill of Lading –
destination. It is merely a lacks the documents needed transport document
 issued by Shipping
lines, Carriers, IFF or
NVOCC (water borne
freight). Consignee or
Holder of the B/L has
the right to claim the
goods at the port of
destination. It is a
contract of carriage as
well as contains
transport instructions,
description of the
goods and transport
charges.
Straight/Non-Negotiable B/L –
provides delivery for the
person whose name appears
on it. Exporter is not concerned
if the importer receives the
goods without payment.
Shipper’s Order – works well
for shipments under LC where
conditions have to be met
before goods are released.
Clean Bill of Lading – issued
when shipment received is in
good condition.
On-Board Bill of Lading –
issued when the goods are on
board the vessel then signed
and certified by the master of
the vessel. For LC transactions,
this is required for the exporter
to get paid.
9. Bureau – Bureau of 13. Conditional Importation
Customs – goods can be brought
10. Carrier – person into a customs territory
actually transporting conditionally relieved
the goods or in charge from payment of duties
of the means of and taxes whether in
transport/transport whole or part provided
operation such as that: they are imported
airlines, shipping lines, for a specific purpose,
freight forwarder, cargo subject to re-
consolidators, NVOCC exportation within a
and others. period of time and
without having gone
11. Clearance – completion through substantial
of customs and other change.
government
formalities to allow More commonly known as
goods to enter for “Temporary Admission” under
transit, transshipment, the RKC, Conditionally Tax
consumption, and/or Duty exempt
warehousing, transactions are covered by
exportation or placed CAO 06-2020 (Conditionally
under another customs tax and/or duty-exempt
procedure. importations under Section
800 of the CMTA excluding
Clearance Procedures for: Subsections F and G)
Consumption
Formal (CAO 9-2020) and 14. Customs Broker – any
Informal (CAO 6-2020) person who is a bona
Warehousing (CAO 13-2019) fide holder of
Transit (CAO 15-2019) Certificate of
Transshipment (CAO 12- Registration or
2019) Professional
Exportation (CAO 8-2020) identification Card
issued by the
12. Commission – refers to Professional
Tariff Commission. Regulatory Board and
Professional
Regulatory
Commission
RA 9280 is known as “The
Customs Broker Act of 2004”
15. Customs office – refers
to a Customs
Administrative Unit
that is competent and
authorized to perform
any or all functions
(Section 202) under
customs and tariff laws.
16. Customs Officer –
refers to a person whose
job is not clerical or
manual in nature but
rather involves the
exercise of the
functions of the
bureau (Section 202).
It may also refer to a
person authorized to
perform a specific
function of the
bureau.
Section 202. s. A. may refer to
an Appraiser, Examiner or
District Collector.
Section 202. s. C. Coast Guard
and NAIA.
17. Customs Territory –
areas in the Philippines
where customs and
 Tariff Laws may be but not higher than Basis: CAO 11-2019 (Rules 28. International Freight
enforced. 100% ad valorem duty and Regulations on the Forwarder – person
2. Establish import Admission, Movement and responsible for the
18. Entry – act, quote or ban import Withdrawal of Goods in Free consolidation and
documentation and commodity as may be Zones). assembly of goods into
process of bringing necessary 3. Impose a single lot.
imported goods into additional 10% duty 24. Goods – articles, wares,
customs territories on any imports as may merchandise and other 29. Jurisdictional Control –
including goods from be necessary. items which are subject power and rights of the
free zones. of an importation. bureau of Customs in
EO 123 (modifies the rates of excercising supervision
19. Exportation – act, import duty on certain 25. Goods Declaration – and police authority
documentation and agricultural product under statement prescribed by over all seas within the
process of bringing Section 1611 of RA 10863). the bureau and other Philippines whether
goods outside the government agencies navigable or not from
Philippine Territory. 22. Foreign Exporter – one which a person the sea and over all
whose name appears indicates the procedure coasts, ports, airports,
20. Export Documentation on the document to be observed for the harbors, bays, rivers
– statement prescribed attesting the entry(customs territory) and inland waters.
by the bureau and exportation of the or admission(free zone)
other government product to the as well as the 30. Lodgement – refers to
agencies describing the Philippines regardless particulars required. the registration of
procedure to be of the location of the Goods Declaration with
observed and Manufacturer nor his 26. Importation – the act of the Bureau.
particulars required for name. bringing in imported
the taking out or goods for CMO 7-2020 provides for
causing to be taken out 23. Free Zones – special consumption, interim procedures for
of the exported goods. economic zones warehousing and Provisional Goods
registered with PEZA admission. Declaration.
21. Flexible Clause – power under RA 7916.
of the president (upon 27. Freight Forwarder – 31. NVOCC – entity which
recommendation of A free zone locator is an entity local entity that 1. acts may or may not
NEDA (TC is under duly registered with Free Zone a cargo intermediary operate a vessel that
NEDA) – consult, authorities and is issued a 2. Facilitates transport provides point to point
coordinate and Certificate of Registration of goods without service for LCLs or
cooperate w/ gov’t and/or Tax Exemption that is assuming the role of a provides several mode
agencies) 1. Increase, not expired, revoked, carrier. of transport and issues
decrease or remove suspended or cancelled. corresponding
existing rates of duty transport documents.
 32. Outright Smuggling –
importing goods into
the country without
complete prescribed
customs documents or
without being cleared
by the Bureau or other
government agencies
for the purposes of
evading payment of
duties, taxes and other
charges.

33. Perishable Goods –

goods liable to perish or
greatly depreciate in
value while kept in
storage and cannot be
kept without great
disproportionate
expense which may be
advertised, auctioned
and sold at auction

CAO 3-2020 shall cover the

disposition of seized,
abandoned and forfeited
goods in Customs Territories.