Module No.

1 CUSTOMS CLEARANCE

LODGEMENT = electronic registration of the goods with the bureau. FILLING = manual registration of the goods with bureau.

TWO KINDS OF CONSIGNEE

1. NOMINAL CONSIGNEE - The term “OWNER” would not include a “NOMINAL CONSIGNEE” who effectively possesses no other right, title or interest in the goods except as he possessed
under a BL, AWB or other pertinent shipping documents.
2. ULTIMATE CONSIGNEE - A person who possesses the power to use or to dispose of the goods covered by the BL, AWB or other transport document.

GENERAL RULE: GOVERNMENT NOT EXEMPT FROM CUSTOMS DUTIES, TAXES, FEES AND OTHER CHARGES

1. Except those provided for in SECTION 800 of the CMTA

2. All importations by the government for its own use.
a. Or that of its subordinate branches
b. Or instrumentalities , or corporations , agencies
c. Or instrumentalities owned or controlled by the government

SALIENT PROVISIONS OF CAO 8-2007/CMO 27-2007 WHICH IMPLEMNTS THE CAO - Goods expressed in general terms to avoid proper classification or valuation shall be subject to 100%
examination and are to be considered in a status of continuing alert, subject to the following::

i. All items listed as expressed in general terms or its subsequent updates issued by the Commissioner of Customs shall be established as a separate selectivity parameter for RED CHANNEL
in the Selectivity Module of e2m Customs System.
ii. Entries containing containerized generally described goods shall be subject to the Commissioners special stop.
iii. For Bulk Shipments, generally described goods shall not be allowed special permits to discharge until full payment of correct duties and taxes are made.

PENALTIES FOR FAILURE TO DESCRIBE GOODS IN SPECIFIC TERMS

i. Habitual violators or those persisting to declare their importation in a general manner shall be penalized in the following manner:
a. FIRST OFFENSE: Warning
b. SECOND OFFENSE: Suspension of Accreditation for 6 Months
c. THIRD OFFENSE: Cancellation of Accreditation and black listing as an importer.
ii. Licensed Customs Brokers will be treated in the above manner as importers and their licenses recommended to be cancelled.
iii. Good faith is not a defense. Both importers and customs brokers shall exercise utmost diligence in declaring goods for the purposes of customs clearan

MODES OF PAYMENT FOR IMPORTS

A. LETTER OF CREDIT (L/C) - A letter issued by a bank to another bank (typically in a different country) to serve as a guarantee for payments made to a specified person under specified conditions.
COMMOM TERMS IN L/C TRANSACTIONS: UCP 600
1. ADVISING BANK (BANK IN PH - The bank that advices the credit at the request of the issuing bank.
2. APPLICANT (IMPORTER) -The party on whose request the credit is issued.
3. BENEFICIARY (EXPORTER) - The party in whose favour a credit is issued.
4. COMPLYING PRESENTATION - A presentation that is in accordance with the terms and conditions of the L/C.
5. CONFIRMATION - Definite undertaking of the confirming bank, in addition to that of the issuing bank, to honor or negotiate a complying presentation. Confirming bank means the bank that adds its
confirmation to a credit upon the issuing bank’s authorization or request.
6. HONOR
a. to pay at sight if the credit is available by sight payment;
b. to incur a deferred payment undertaking and pay at maturity if the credit is available by deferred payment;
c. a accept a bill of exchange drawn by the beneficiary and pay at maturity if the credit is available by acceptance.
7. ISSUING BANK - The bank that issues a credit at the request of the applicant.
8. NEGOTIATION - The act of advancing or agreeing to advance funds to the beneficiary.
9. NOMINATED BANK - The bank with which the credit is available or any bank in case of a credit available with any bank.
10. PRESENTATION - Either the delivery of documents under a credit to the issuing bank or nominated bank.
B. DOCUMENTS AGAINST PAYMENT (D/P) - AAB’s shall advise the importer of the receipt of complete original documents and effect the release of said documents to the importer upon receipt of
payment.
C. DOCUMENTS AGAINST ACCEPTANCE (D/A) - The original shipping documents are released to the importer by the AAB at the instance of the seller’s bank upon the importer’s acceptance of the
seller’s bill of exchange obligating the importer pay for the shipment at some future date.
D. DIRECT REMITTANCE (DR) - Bank may service within 29 calendar days after B/L date applications for direct remittance of import payments upon presentation of the complete original shipping
documents and import clearance in case of regulated goods.
E. ADVACE PAYMENT
F. OPEN ACCOUNT (O/A) - Shipping documents are sent directly to the buyer upon the importer’s promise to pay at some future date D/A OR O/A must be payable at least 30 days after the B/L date.

OTHER FOREIGN ARRANGEMENTS WHICH ARE ALLOWED WITHOUT NEED FOR BSP PRIOR APPROVAL

 SELF-FUNDED/ NO DOLLAR IMPORTS-These are imports funded by importer’s own foreign currency deposit accounts or those sent by suppliers abroad for which no payment in foreign exchange will
be made whether immediate or potential.
 IMPORTATIONS ON CONSIGNMENT BASIS - Importations by export producers of raw materials from foreign suppliers abroad for the manufacture of goods for export to the party that supplied
the raw materials. Includes equipment and spare parts consigned to the local manufacturer for eventual re-export to the consignor. The equipment shall only be used to manufacture products for export.
EXAMINATION OF SAMPLES - Customs officers shall see to it that representative samples taken during examination shall be properly receipted for and retained within a reasonable period of time.

FORWARDING OF CARGO REMAINS OF WRECKED VESSELS OR AIRCRAFT-When vessels or aircrafts are wrecked within the Philippines, the original owners or consignees of the cargo, or by its
underwriters, in ease of abandonment, may seek approval from the Bureau to forward the goods saved from the wreck to the ports of destination without going through the customs office in the district in
which the goods were cast ashore or unloaded. Upon approval, the goods may be forwarded with particular manifests and duly certified by a customs officer in charge of the goods.

The owner of the vessel or aircraft may be permitted to export the remains of the wreck upon proper examination and inspection. The remains of a wrecked vessel shall include not only its hull and rigging, but
also all sea stores, goods and equipment, such as sails, ropes and chain anchors.

DERELICTS AND GOODS FROM ABANDONED WRECKED - Derelicts and all goods recovered from sea or from abandoned wrecks shall be under the jurisdiction of the port where the goods arrive, and shall
be retained in the custody of the Bureau. If not claimed by the owner, underwriter or salvor, the same shall be deemed as property of the government. When such goods are brought into port by lighters or
other craft, each vessel shall submit a manifest of their respective cargo. The customs officer nearest the scene of the wreck shall take charge of the goods saved and shall give immediate notice to the
District Collector or the nearest customs office. In order to prevent any attempt to commit fraud, the District Collector shall be represented at the salvage of the cargo by customs officers who shall examine
and receive the inventory made on the cargo. Derelicts and goods salvaged from foreign vessels or aircrafts recovered from sea or wreck are prima facie dutiable and may be entered for consumption or

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warehousing. 1.) If claimed to be of Philippine production, and consequently conditionally duty-free, proof must be submitted as in ordinary cases of re importation of goods. Foreign goods landed from a vessel
or aircraft in distress is dutiable if sold or disposed of in the Philippines. Before any goods taken from a recent wreck are admitted to the customs territory, the same shall be appraised, and the owner or
importer shall have the same right to appeal as in ordinary importation.

2.) No part of a Philippine vessel or aircraft or its equipment, wrecked either in Philippine or foreign waters, shall be subject to duty.

Module No. 2 CUSTOMS CLEARANCE

EXAMINATION OF GOODS - Examination of goods, when required by the Bureau, shall be conducted immediately after the goods declaration has been lodged. Priority in the examination shall be given to
live animals, perishable goods and other goods requiring immediate examination.

Whenever necessary, a system of coordination and joint examination of goods shall be established by the Bureau and other regulatory agencies under existing laws and regulations.

As a general rule, the Bureau may examine the goods in the presence of the declarant or an authorized representative. Examination of the goods in the absence of the declarant or authorized representative
may be allowed in exceptional circumstance and for valid and justifiable grounds, as may be defined by regulations promulgated by the Secretary of Finance, upon recommendation of the Commissioner . The
Bureau may require the declarant to be present or to be represented at the examination o£ the goods or to render any assistance necessary to facilitate the examination.

The Bureau shall take samples of the goods only when needed to establish the tariff description and value of goods declared, or to ensure compliance with this Act. Samples drawn shall be as minimal as possible.

NON-INTRUSIVE EXAMINATION- Pursuant to the internationally accepted standards, the Bureau may adopt non-intrusive examination of the goods such as the use of x-ray machines.

- Container Security fee rates fixed under EO 6335 S.2007

- Mandatory whether containers subjected to x-ray or not
- Mandatory whether Alert Orders proves to be negative or positive.
 X-ray examination mandatory to all containerized cargoes bound to CBW. (Commissioners Memorandum dated September 11, 2017)

GOODS DECLARATION TAGGED RED: X-ray examination only to those suspicious image shall be physically examined

IMPORTATION OF BELOW 25 CONTAINERS: Square Root Rule applies.

AVOVE 25 CONTAINERS: 30% of total number of containers. The Commissioner shall randomly pick which container shall be subject to examination.

CONDITIONS FOR EXAMINATION- Pursuant to internationally accepted standards, the Bureau may adopt nonintrusive examination of goods, such as the use of x-ray machines.

Physical examination of the goods shall be conducted when:

a. It is directed by the Commissioner on account of a derogatory information;

b. The goods are subject to an Alert Order issued by competent authority;
c. The goods are electronically selected for physical examination;
d. There are issues and controversies surrounding the goods declaration and the import clearance process; or
e. The importer or declarant requests for the examination of the goods.

The Commissioner may exempt from physical examination the goods of authorized economic operators or of those provided for under any existing trade facilitation program of the Bureau.

Physical examination, when required, shall be conducted in an expeditious manner.

DUTIES OF CUSTOMS OFFICER TASKED TO EXAMINE THE IMPORTED GOODS

In the examination, classification, and valuation of the goods, the customs officer shall:

a. Determine whether the packages for examination and their contents are in accordance with the goods declaration, invoice and other pertinent documents;
b. Take samples of the imported goods for examination or laboratory analysis when necessary;
c. Issue a receipt for a sample taken and retained during examination; and
d. Report whether the goods have been correctly declared as to value, quantity, measurement, weight, tariff classification and not imported contrary to law.

Failure on the part of the customs officer to perform the above duties shall be penalized according to Section 1431 of Title XIV of this Act.

CUSTOMS EXPENSES CONSTITUTNG CHARGES ON GOODS - The cost of examination shall be for the account of the importer or exporter, subject to proper accounting and documentation. All
expenses incurred by the Bureau for the handling or storage of goods and other necessary operations shall be chargeable against the goods, and shall constitute a lien thereon.

Module No. 3 CUSTOMS CLEARANCE

DETERMINATION OF DE MINIMIS VALUE- No duties and taxes shall be collected on goods with an FOB or FCA value of ten thousand pesos (₱10,000.00) or below. The Secretary of Finance shall
adjust the de minimis value as provided herein, every three (3) years after the effectivity of this Act. The value herein stated shall be adjusted to its present value using the CONSUMERS PRICE
INDEX (CPI), as published by the PHILIPPINE STATISTICS OFFICE (PSA).

RULES ON DE MINIMIS - Any imported goods which exceeds the de minimis value shall be dutiable and subject to tax for the full dutiable amount.

1. Covers all importations for consumptions entered through various modes such as postal, passenger baggage, consolidated shipments, express consignments and on-board courier by sea or air.
2. Wines, spirits and tobacco by air or sea or bought from an establishment other than DFP, shall be subject to excise tax regardless of value.
a. 200 cigarettes or 50 cigars
b. 2 liters of wine or 1 liter of spirits
Brought in by passengers shall not be subject to duty and tax, provided they fall within the de minimis value.
3. Allowable limits carried by a passenger bought at DFP, and within the de minimis value shall be exempted from duties and taxes. Goods in excess of allowable limits shall be subject to excise tax,
whether they fall under the de minimis value or not;
4. Shipments through air express, shall continue to be subject to mandatory x-ray scanning. District Collector shall evaluate the risk and recommend to the Commissioner, any adjustments on the
examination parameters;
5. No Duties and Taxes shall be collected on the importation of books with the de minimis value regardless of the quantity. If exceeding de minimis value and in commercial quantity secure Tax
Exempt Certificate (TEC) otherwise, any quantity in excess of the allowable limits shall be subject to duties and taxes.
6. Shipment covered by 1MBL or MAWB but with several house BL or AWB with single or multiple invoices with the same consignee and shipper is considered as single consignment an d subject to
duties and taxes should the total value exceed the de minimis value.

GENERAL RELAEASE RULES

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 1. De minimis importation shall, as far as practicable, be subject to a non-intrusive examination on a random basis based on existing selectivity scheme used by the BOC.

2. The customs examiner, may based on internationally accepted customs administration risk management principles, physically inspect the imported goods.

COMMON RELEASE PROCEDURES

General Rule: Accept the de minimis value declared by sender, passenger, recipient , or importer.

DUTY OF CUSTOMS OFFICER TASKED TO ASSESS IMPORTED GOODS - For purposes of assessing duties and taxes on imported goods, the customs officer shall classify, value, and determine the duties
and taxes to be paid. The customs officer shall prepare and submit an assessment report as established under this Act.

TENTATIVE ASSESSMENT OF GOODS SUBJECT TO DISPUTE SETTLEMENT- Assessment shall be deemed tentative if the duties and taxes initially assessed are disputed by the importer. 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. The District Collector may allow the release of the imported goods under tentative assessment upon the posting of sufficient security to cover the applicable duties and taxes equivalent to the amount
that is disputed.

TENTATIVE ASSESSMENT OF PROVISIONAL GOODS DECLARATION - Assessment of a provisional goods declaration shall be deemed tentative and such assessment shall be completed upon final
readjustment and submission by the declarant of the additional information or documentation required to complete the declaration within the period provided in Section 403 of this Act.

READJUSTMENT OF APPRAISAL, CLASSIFICATION OR RETURN -Such appraisal, classification or return, as finally passed upon and approved or modified by the District Collector, shall not be altered or
modified in any manner, except:

1. Within one (1) year after payment of the duties, upon statement of error in conformity with Section 912 of this Act, as approved by the District Collector;
2. Within fifteen (15) days after such payment, upon request for reappraisal or reclassification addressed to the Commissioner by the District Collector, if the appraisal or classification is deemed to be
low;
3. Upon request for reappraisal and/or reclassification, in the form of a timely protest addressed to the District Collector by the interested party if the latter should be dissatisfied with the appraisal or
return; or
4. Upon demand by the Commissioner after the completion of compliance audit in accordance with the provisions of this Act.

ASSESSMENT ON DUTY LESS THAN THE ENTERED VALUE - Duty shall not be assessed in any case upon an amount less than the entered value, unless by direction of the Commissioner in cases when the
importer certifies at the 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.

FINAL ASSESSMENT - Assessment shall be deemed final fifteen (15) days after receipt of the notice of assessment by the importer or consignee.

PERIOD OF LIMITATION - In the absence of fraud and when the goods have been finally assessed and released, the assessment shall be conclusive upon all parties three (3) years from the date of final
payment of duties and taxes, or upon completion of the post clearance audit.

RELEASE OF GOODS AFTER PAYMENT OF DUTIES AND TAXES - Goods declared shall be released when duties and taxes and other lawful charges have been paid or secured and all the pertinent laws,
rules and regulations have been complied with. When the Bureau requires laboratory analysis of samples, detailed technical documents or expert advice, it may release the goods before the results of such
examination are known after posting of sufficient security by the declarant.

RELEASE OF GOODS TO THE HOLDER OF THE BILL OF LADING OR AIRWAY BILL- Any customs officer who releases goods to the consignee or lawful holder of the bill oflading or airway bill shall not
be liable for any defect or irregularity in its negotiation unless the customs officer has notice of the defect or irregularity.

RELEASE OF GOODS WITHOUT THE PRODUCTION OF BILL OF LADING OR AIRWAY BILL- NO customs officer shall release goods to any person without the submission of the bill of lading or airway
bill covering the goods, except on written order of the carrier or agent of the vessel or aircraft, in which case neither the government nor the customs officer shall be held liable for any damage arising from
wrongful release of the goods: Provided, That when the release of goods is made against such written order, the customs officer shall require the submission of a copy of the bill

RELEASE OF GOODS UPON ORDER OF THE IMPORTER - An importer may issue a written authorization for the release of goods stored in a bonded warehouse to another person. Such authorization shall
not relieve the importer from liability for the duties, taxes and other charges due on the goods unless the person to whom the release was authorized assumes such liability.

WITHHOLDING RELEASE PENDING SATISFACTION OF LIEN - When the District Collector is duly notified through a lawful order of a competent court of a lien for freight, lighterage or general average
upon any imported goods, the District Collector shall withhold the release of the goods unless the claim has been paid or secured. In case of disagreement, the District Collector may release the goods after
payment of the freight and lighterage due on the quantity or weight landed as actually determined.

FINE OR SURCHARGE ON GOODS - Goods subject to any fine or surcharge shall be released only after the payment of the fine or surcharge.