DUTIABLE INSURANCE

Dutiable Value: (CMO 22-2007)

Dutiable Freight and
Insurance (CMO 22-2007)
(Guidelines in the Determination of the cost of insurance
and freight charges as components of Dutiable Value)
1 DUTIABLE INSURANCE (CMO 22-2007) Refers to cost of
insurance taken to cover against risk for damage/loss
while transporting goods from origin to destination

“
FORMULAS:
A. FOR CIF/CIP TERMS: 1. GENERAL CARGO: DANGEROUS CARGO:
▫ INSURANCE IS TAKEN ABROAD BY THE SELLER
FOB = CIF - FRT FOB = CIF - FRT
▫ INSURANCE TAKEN BY SELLER IS NORMALLY AT A MINIMAL COST, 1.02 1.04
UNLESS THE BUYER WOULD REQUIRE GREATER SECURITY, AS
AGREED BETWEEN TWO PARTIES.

a. If the terms of sale are CIF/CIP, the amount of the actual 2. INS = .02 X FOB INS = .04 X FOB
insurance premium shall be used in the assessment.

b. If such amount is lower than 2% of the FOB value for the

general cargo and 4% of the FOB value for dangerous /
inflammable goods, the same shall be subject to further
verification by the BOC. 3 4

SAY THAT: SAY THAT:

Shipment with following SHOULD IT BE GENERAL CARGO: Shipment with following SHOULD IT BE GENERAL CARGO:
data: data:
INS = COST X 0.02 CIF - $ 25,000 INS = COST X 0.02
INS = $ 19,800 X 0.02 FRT - $ 2,000 INS = $ 22,100 X 0.02
CIF- $ 21,000
INS = $ 396 INS - $ 900 INS = $ 442
FRT - $ 1,000
INS - $ 200
DERIVE FOR COST?
SHOULD IT BE DANGEROUS CARGO: SHOULD IT BE DANGEROUS CARGO:
DERIVE FOR COST?
CIF - $ 25,000
INS = COST X 0.04 INS = COST X 0.04
LESS: - $2,900 (FRT + INS)
CIF - $ 21,000 INS = $ 19,800 X 0.04 INS = $ 22,100 X 0.04
COST - $ 22,100
LESS: - $ 1,200 (FRT + INS) INS = $ 792 INS = $ 884
COST - $ 19,800

INSURANCE BASE PER INVOICE OF $ 200.00 IS LOWER THAN INSURANCE BASE PER INVOICE OF $ 900.00 IS HIGHER THAN THE
INSURANCE BASE PER COST FOR BOTH GENERAL AND INSURANCE BASE PER COST FOR BOTH GENERAL AND
DANGEROUS CARGO, THEREFORE IT REQUIRES FURTHER DANGEROUS CARGO, THEREFORE IT WILL BE USED AS THE
VERIFICATION BY THE BUREAU. 5 DUTIABLE INSURANCE. 6
 SAY THAT: B. SHIPMENT
COVERED BY
Shipment with following LIP If a shipment covered by a local or domestic insurance, the
data:
amount of insurance premium actually paid may be
CIF - $ 35,000
FRT - $ 1,300 (LOCAL accepted for assessment purposes (if equivalent or higher
INS - $ 600
INSURANCE than 2% or 4% for general and dangerous cargo,
----- PREMIUM) respectively.
CIF - $ 25,000
FRT- $ 1,000 LIP - are insurance taken in the Philippines by the
INS - $ 7,000 importer/buyer.

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TREATMENT FOR LOCAL INSURANCE PREMIUM Say that (LIP) is with Cert and O.R.:
If the local insurance premium is
lower than 2% of the FOB value for
▫ If with CERT. and O.R. general cargo or 4% of the FOB value
Shipment with following data:

for dangerous cargo / flammable CFR - $ 18,000

Dut. INS = Local INS Prem. (P) goods, then a certification from the LIP - P 25,000
ROE - P 50/$ 1
E/R (PHP to USD) insurance company indicating actual
premium paid shall be presented to INSURANCE PER LIP?
BOC together with the original official
▫ If NO CERT. AND/OR O.R. receipt. A copy of that O.R. shall be LIP - P 25,000
ROE __/ P 50
1. INS1 = Loc. Prem. (USD) certified as a true copy by the INS - $ 500
2. INS2 = 2% OR 4% of FOB Dut. concerned Customs Appraiser who
shall attach the same to the original
working copy of the entry If LIP is with Certificate and Official
> INS = (Whichever is higher)
Receipt, it will be your dutiable
insurance regardless if it is higher or
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lower than the insurance based per cost.

SAY THAT: SAY THAT:

Shipment with following SHOULD IT BE GENERAL CARGO: Shipment with following
data:
data:
INS = COST X 0.02
• FOB - $ 18,000 INS = $ 18,000 X 0.02
LIP - P 25,000 INS = $ 360 • FOB - $ 20,000
ROE - P 50/$ 1 LIP - P 25,000
LIP - $ 500 VS. COST - $ 360 ROE - P 50/$ 1
DUTIABLE INSURANCE = $ 500
INSURANCE PER LIP?
APPLICATION: WHICHEVER IS HIGHER ---
LIP - P 25,000
ROE / P 50 SHOULD IT BE DANGEROUS CARGO: CFR- $ 27,000
INS - $ 500 FRT- $ 900
INS = COST X 0.04 LIP - P 42,000
INS = $ 18,000 X 0.04 ROE - P 50/$ 1
INS = $ 720
LIP - $ 500 VS. COST - $ 720
DUTIABLE INSURANCE = $ 720
APPLICATION: WHICHEVER IS HIGHER 11 12
 C. Importation not covered by any local insurance, the
amount of insurance premium in the entry may be
accepted, provided that if such amount is lower than 2% or
4% of the FOB value for general and dangerous cargoes
respectively, the same shall be subject to verification by the
BOC.
D. For direct importation by the government, the original
copy of the Marine Open policy issued by the GSIS together
with true copy shall be presented to the BOC (ATT: Import
Assessment Service) certified by the latter. The bureau
shall apply the actual GSIS insurance premium rate

For General Cargoes: For Dangerous Cargo: Dut. INS = INS Premium/GSIS (P)
Dut. INS = 2% X FOB Dut. INS = 4% X FOB E/R (PhP to USD)

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GSIS INSURANCE: GSIS INSURANCE:

CFR - $ 25,000 CFR - $ 45,000

INS = P 10,000
INS/GSIS - P 10,000 INS/GSIS - P 12,000
P 50
ROE - P 50/$ 1 ROE - P 50/$ 1
INS = $ 200

DUTIABLE INSURANCE IS $ 200.00 SINCE IT IS AN

IMPORTATION BY GOVERNMENT WITH GSIS
INSURANCE

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BY SEA SHIPMENTS
Dutiable Value: A. Shall be the freight charges indicated in the B/L
Dutiable Freight
(CMO 22-2007)

 Refers to the charges paid for the

transport of the cargo from port of origin
2 EXW - $ 20,000
FRT/BL - $ 2,500
DUTIABLE FRT IS
$ 2,500 AS PER BL

to port of destination. FCA - $ 18,000 DUTIABLE FRT IS

 Main Carriage. FRT/BL - $ 1,700 $ 1,700 AS PER BL

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BY SEA Freight per entry treatment:
SHIPMENTS
B. If no freight charge is indicated in the B/L and/or Shipment with following data:
invoice, then the declared freight charge on the entry may FOB - $ 30,000
be considered, provided that said amount is not lower that FCA - $ 22,000 Frt/entry - $ 1,000
Frt/entry - $ 1,500 GCR - $ 1,500
70% of the Conference Rate otherwise a Certification from GCR - $ 2,000
the carrier or Official Receipt as to the actual freight
charges paid must be presented to BOC. FRT PER GCR: FRT PER GCR:
FRT = GCR X 0.7 FRT = GCR X 0.7
FRT = $ 2,000 X 0.7 FRT = $ 1,500 X 0.7
 Dut. FRT = FRT/Entry vs. 70% of GCR FRT = $ 1,400 FRT = $ 1,050
 (WHICHEVER IS HIGHER)
Frt/entry - $ 1,500 VS. 0.7GCR - $ 1,400 Frt/entry - $ 1,000 VS. 0.7GCR - $ 1,050
DUTIABLE FREIGHT = $ 1,500 DUTIABLE FREIGHT = $ 1,050
APPLICATION: WHICHEVER IS HIGHER APPLICATION: WHICHEVER IS HIGHER
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Freight per entry treatment: BY SEA

SHIPMENTS
Shipment with following data: C. In case of bulk shipments, the certified copy of Charter
1. FCA - $ 30,000 3. FCA - $ 48,000 Party documents of freight Contract and stowage Plan
Frt/entry - $ 3,000 Frt/entry - $ 3,300 shall be presented to show the actual freight charges, all of
GCR - $ 3,000
GCR - $ 3,500
which shall be attached to the working copy of the entry.

 Dut. FRT = FRT per Charter Party Contract

2. FOB - $ 42,000 4. FOB - $ 57,000
Frt/entry - $ 2,200 Frt/entry - $ 4,000
The Freight per Charter
GCR - $ 4,500 75% GCR - $ 4,500 FAS - $ 25,000 Party will be used as the
FRT/Charter Party - $ 4,000 Dutiable Freight in case
when the entire vessel is
rented.

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BY SEA
SHIPMENTS D. For bulk/ general cargo shipments made by the National FOB : $ 25,000
Food Authority (NFA), the actual freight charges may be FRT : $ 3,000
accepted provided that it is not lower than 10% of the CFR
value of the commodity. COMPUTE FOR CFR = FOB + FRT
= ($ 25,000 + $ 3,000)
CFR = $ 28,000 X 0.10 = $ 2,800
 Dut. FRT = Actual FRT VS. 10% of CFR
 (whichever is higher)
ACTUAL FRT : $ 3,000 VS. 0.1CFR - $ 2,800
DUTIABLE FRT = $ 3,000
APPLICATION: WHICHEVER IS HIGHER

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 COMPUTE FOR DUTIABLE FRT
BY SEA
1. FOB : $ 37,000 SHIPMENTS
E. In case of the refrigerated shipments, a certification
FRT : $ 4,500
from shipping lines as to the freight paid must be
presented for Customs verification.
2. FOB : $ 26,000
FRT : $ 2,000

 Dut. FRT = FRT/BL (w/ Certificate from Shipping Lines)

3. FOB : $ 32,000
FRT : $ 4,000

4. FOB : $ 16,000
FRT : $ 1,000
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BY SEA
•ARBITRARY
SHIPMENTS In the absence of a shipping lines certification, the following freight charges Shipment coming from Hong Kong:
may be used as reference: shipments coming from China in reefer vans, should FREIGHTS • USD 1,600.00 per 40’ reefer van
not be lower than the following freight charges: FOR REEFER • USD 800.00 per 20’ reefer van
SHIPMENT
•ARBITRARY FREIGHTS FOR REEFER SHIPMENT Shipment coming from Singapore:
PLUS: BAF TOTAL AMOUNT
PORT OF ORIGIN 1 X 20’ 1 X 40’ 1 X 20’ ft - $ 900.00 70.00/20’ $ 970.00/20’
1 x 40’ ft - $1,850.00 140.00/40’ $ 1,990.00/40’

 Guangzhou 1,300.00 1,700.00 Shipments coming from Los Angeles, USA:

 Xiamen 1,500.00 1,800.00 • 1 X 20’ ft - $ 3,050.00
 Shanghai 1,800.00 3,200.00 • 1 X 40’ ft - $ 6,100.00

 Dalian 1,350.00 1,680.00

Dut. FRT = FRT/BL VS. Reefer Rates/CMO 22-2007, whichever is higher
(if no certification from S.L. as to actual freight paid)
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BY AIR a. The freight charges shall be on the amount indicated

BY AIR FCA : $ 37,000 IATA - $ 6,500 X .70 = $ 4, 550
SHIPMENTS: in the Air Waybill.
SHIPMENTS: FRT/ ENTRY : $ 4,500
IATA FRT - $6,500
b. If no freight charge is indicated in the air waybill
and/or invoice, then the declared freight charge in COMPUTE;
the entry may be considered. If the declared freight
charge is lower than 70% of the AITA freight rate, a 1. FCA : $ 39,000
FRT/ ENTRY : $ 5,500
certification from the carrier/forwarder and/or
IATA FRT - $8,500
official receipt, as to the actual freight charges paid,
must be presented to the BOC.
2. FCA : $ 47,000
FRT/ ENTRY : $ 6,500
• Dut. FRT = FRT/Entry VS. 70% OF IATA freight
IATA FRT - $9,000
(whichever is higher)

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