MIDTERM

REVIEWER
ABEL 324

Alianza, Godoy, Juanico, Libaton, & Metran

RULES ON IMPORTATION

IMPORT
● It is a commercial activity of buying and bringing in goods from a foreign
country
● Commodities brought from a foreign country.

REPUBLIC ACT NO. 1937

● An act to revise and codify the tariff and customs

laws of the Philippines.

REASONS FOR IMPORTING
● Supply to the domestic market at a cheaper price
● Some products are not available in the local market

IMPORT CLASSIFICATION (DEGREE OF RESTRICTION)

● Freely Importable Commodities (Toys, Shoes, Coloring Materials)

● Regulated Commodities (Liquors, Gadgets, Pharmaceuticals)
● Prohibited Commodities (Guns, Live animals)
ARTICLES ON IMPORTATION

Rules on articles
● All articles, imported to the Philippines, whether subjected to duty or not,
shall be entered through a custom house at a port of entry, regardless of its
nature or ownership.

When importation begins and terminated

● Begins when the carrying vessel or aircraft enter the PH territory
● Deemed to be terminated when duties, taxes and other charges have been
paid
SELECTIVITY SYSTEM
● Determines the selection of examination procedures based on risk criteria
established in the Customs Cargo Clearance System.

- Red Lane

- Yellow Lane

- Blue Lane

- Green Lane
GENERAL RULES OF IMPORTATION

Sec. 1201. Articles to be Imported only through Custom House.

Sec. 1202. Importation begins
Sec. 1203. All articles imported into the Philippines
Sec. 1204. Liability of Importer for Duties.
Sec. 1205. Importations by the Government.
ENTRY OF CUSTOM HOUSE
Sec. 1301. Persons Authorized to Make Import Entry

Sec. 1302. Import Entries

Sec. 1303. Entry of Articles in Part for Consumption and in Part for
Warehousing

Sec. 1304. Declaration of the Import Entry

EXAMINATION AND APPRAISAL OF IMPORTED
ARTICLES

Sec. 1401. Designation of Packages to be Examined

Sec. 1402. Ascertainment of Weight and Quantity

Sec. 1403. Return of Examining Official

DELIVERY OF ARTICLES

Sec. 1501. Delivery of Articles to Holder of Bill of Lading

Sec. 1502. Delivery of Articles Without Production of Bill of Lading

Sec. 1503. Bond upon Delivery of Unexamined Packages

LIQUIDATION OF DUTIES

Sec. 1601. Liquidation and Record of Entries

Sec. 1602. Tentative Liquidation

Sec. 1603. Finality of Liquidation

Sec. 1604. Treatment of Fractions in the Liquidation

 BANKING PROCEDURES

● Manually covers the key functions of

retail banking including demand deposit
transactions, credit card ATM,
Processing teller operations and wire
transfers.
 DOCUMENTARY CREDITS
● Also known as “credoc” or “L/C” ˿Letter of Credit̀.
● Method of payments that protect both the seller (exporter) and the
buyer(importer) in a contract of sale.

IMPORTER EXPORTER
- Insurance of the - Assurance
Shipment - Control
- Respect - On-time payment
- Negotiation - Mobilization
 MODES OF PAYMENT OF IMPORT

● Open Account - An importer takes the delivery

of goods and ensures the supplier to make the
payment at some specific date in the future.
● Consignment purchase - Most beneficial
method of payment for the importer.
● Cash in Advance (Prepayment) - A method in
which an importer pays for the items to be
imported in advance prior to the shipment of
goods.
 MODES OF PAYMENT OF IMPORT

● Down Payment - An importer pays a fraction of the

total amount of the items to be imported in
advance.
● Documentary Collections - An important bank
payment method under, which the sale transaction
is settled by the bank through an exchange
documents.
● Letter of Credit - Most well known method of
payment in international trade. Importer’s bank
guarantees to the supplier that the bank will pay
mentioned amount in the agreement.
 PHILIPPINES METHODS OF PAYMENT

● Cash in advance - Practiced only to a limited

extent due to existing Philippine BSP regulations
on acquiring foreign Currency
● Credit Rating Agency - Philippine Rating
Services Corporation, or PhilRatings, the
pioneer credit rating agency in the Philippines
(since 1985),
● Collection Agencies - In cases of non Payment
or delinquent accounts, the use of collection
agencies may be considered.
 TYPES OF LETTER OF CREDIT
● Commercial - Direct payment method in which
the issuing bank makes the payment to the
beneficiary.
● Traveller - For those going abroad, this letter
will guarantee that issuing banks will honor
drafts made at a certain foreign banks.
● Revolving - Allows a customer to make any
number of draws within a certain limit during a
specific time period.
● Confirmed - Involves a bank other than
issuing bank guaranteeing the letter of credit
 IMPORT ENTRIES

Entry of Imported Owner of Imported

Goods Goods

Liability for Duties and

Taxes
 DOCUMENTARY REQUIREMENTS
Bill of Lading/ Airway Bill
★ Transport document
★ Include contract of
carriage, carriers
conditions, transport
instruction, description of
goods and transportation
charges
SDV
Commercial Document ★ Import permit clearance
★ Authority to release
Evidencing Payment imported goods (ATRIG)
★ Proof of Origin for Free
★ Commercial Invoice Trade Agreements (FTAs)
★ Letter of Credit ★ Load Port Survey (LPS) or
Discharge Port Survey (DPS)
report for bulk or break
Packing List bulk importations
★ Document evidencing
★ Exact Number exemption from duties and
★ What is the Item? taxes
★ Company’s Letterhead Such as Tax Credit
★ Shipper and Certificate (TCC) or Tax
Consignee Debit Memo (TDM).
 FORMAL ENTRY
● Formal Entry is designated for merchandise that must be covered by an entry or
surety bond because its summative total – after all the disparate areas on the official
form are added together – exceeds a certain dollar amount (typically at least $2,500).
● A bond is like an insurance policy that is payable to Customs in the event that the
importer does not comply with import requirements.

DOCUMENTS REQUIRED
★ Import Entry and Internal Revenue
Declaration (IEIRD)
★ Commercial Invoice
★ Packing List
★ Bill of Lading
★ Licenses/Permits/Clearance
★ Temporary Assessment Notice
 2 TYPES OF FORMAL ENTRY
Consumption - Imported goods are deemed “entered” in the Philippines for
consumption when the goods declaration is electronically lodged, together with any
required supporting documents in the BOC (Bureau of Customs) electronic cargo
clearance system portal.

Warehouse - Is a commercial building for storage of goods. Warehouses are used by

manufacturers,Importers, exporters, wholesalers, transport business and customs.

➔ Public Customs Bonded Warehouse

➔ Private Customs Bonded
Warehouse
 ENTRY PROCESSING
STEP 1 : Import Clearance Certificate from the Bureau of Internal Revenue.

STEP 2: Import documents required for shipments to the Philippines

★ Commercial invoice/Pro-forma invoice
★ Bill of Lading or Airway Bill
★ Packing List
★ Applicable special certificates/import clearance/
permit
★ Commercial Invoice of Returned Philippine Goods
and/or Supplemental Declaration on Valuation.
★ Letter of Credit
★ Additional documents for certain imports
 ENTRY PROCESSING
STEP 3: File an entry

STEP 4: Payment of Duties and taxes for ATRIG

STEP 5: Release of cargo upon satisfying all these requirements of, you can now
retrieve your import goods from the Customs.