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2022 CDCP TUTORIAL – DAY 1

IMPORTATION AND EXPORTATION BASICS IN RELATION TO SECS. 116 to 119, CMTA
Prof. JERALD D. SOLLANO, CB, MCA

WHAT IS IMPORTATION?
Legal Definition per Customs Modernization and Tariff Act (CMTA):
Importation- refers to the act of bringing in of goods from a foreign territory into Philippine Territory whether for consumption,
warehousing, or admission as defined in this Act. ( Sec. 102 (z) )

ELEMENTS OF IMPORTATION
1. Subject/Object - Goods
2. Persons involved - Importer and Exporter
3. Place involved - Philippine Port and Foreign Port
4. Causal Relation/Purpose - Goods subject of importation was purchased by importer for his consumption from a
foreign supplier abroad by virtue of a commercial transaction

CONCEPT OF GOODS
Goods - refer to articles, wares, merchandise and any other items which are subject of importation and exportation.
(Sec. 102(x), CMTA)
It encompasses all tangible and movable properties known to mankind excluding immovables. It likewise include all
movables regardless of its composition (solid, liquid, gas).

Properties Not Considered as Goods:

1. Human Beings (RA 9208, as amended by 10364 - Expanded Anti-Trafficking in Persons Act of 2012):
Trafficking in Persons – refers to the recruitment, obtaining, hiring, providing, offering, transportation, transfer,
maintaining, harboring, or receipt of persons with or without the victim’s consent or knowledge, within or across national
borders by means of threat, or use of force, or other forms of coercion, abduction, fraud, deception, abuse of power or of
position, taking advantage of the vulnerability of the person, or, the giving or receiving of payments or benefits to achieve
the consent of a person having control over another person for the purpose of exploitation which includes at a minimum,
the exploitation or the prostitution of others or other forms of sexual exploitation, forced labor or services, slavery, servitude
or the removal or sale of organs.
NOTE: ONCE DEAD, A PERSON IS CONSIDERED GOODS

2. Forces of Nature (i.e, Electricity, Sunlight, Wind) except the devices for its production and storage (Electric Cables, Solar
Panels, Wind Turbines)
NOTE: Liquids and Gases considered goods

3. Money - “Money in the country where it is current, is both a measure of value and a medium of exchange, while in other
countries it is a commodity bought and sold in the market, and its value fluctuates in the market like that of other
commodities. xxx The Philippine peso bills when attempted to be exported, as in the present case, may be deemed to have
been taken out of domestic circulation as legal tender and treated as commodity.” (Commissioner of Customs v.
Capistrano. G.R. No. L-11075, June 30, 1960)

FREE IMPORTATION AND EXPORTATION (Sec. 116, CMTA)

Unless otherwise provided by law or regulation, all goods may be freely imported or exported from the Philippines without
need for import and export permits, clearances or licenses
Examples: Steel Storage Rack, Home Furnitures, Yarns, Textile Fabrics

REGULATED IMPORTATION AND EXPORTATION (Sec. 117, CMTA)

Goods which are subject to regulation shall be imported or exported after securing the necessary goods declaration or export
declaration, clearances, licenses and other requirements prior to importation or exportation.
Examples: Raw, Unprocessed Fruits require permits and clearances from Bureau of Plant Industry (BPI) under PD 1433.
Processed Food Products are regulated by Food and Drug Administration (FDA) under RA 9711.

REGULATED IMPORTATION AND EXPORTATION (Sec. 117, CMTA)

CMO 9-2015 (Customs Regulated Imports List)

Rules on applying CMO 9-2015

1. All importers of any product in the Regulated Import List must provide the required import permits when filing import entries
with the Bureau of Customs.
Importers and brokers are strongly urged to acquire the necessary import permits for products in the Regulated Imports List
prior to the scheduled arrival of their imports in the Philippines. Failure to present it shall not be considered grounds for
extension of the periods after which a shipment shall be deemed abandoned, nor be accepted as a justification for lifting of
abandonment.

Prof. JERALD D. SOLLANO, CB, MCA

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 PEDREZA CUSTOMS & TARIFF WEBINARS
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2. All Bureau of Customs assessment and operations staff processing consumption, warehousing and transshipment entries
containing any product in the Regulated Import List, including those destined for PEZA Zones and Freeports, must verify
whether the required import permits were issued and submitted to the BOC, prior to their final assessment. In case of
transshipments, the permits must be obtained, and a copy provided to the BOC prior to transshipment from the Port of
Discharge.

3. No BOC Official shall require the submission of import permits for any product which is not in the Regulated Imports List. To
do so is a grave offense and will be dealt with under CMO 25-2010.

4. If any BOC Staff believes that a product which is not in the Regulated Imports List shall be regulated, he or she shall:
a. Inform the Office of the Commissioner, by email including the following information:
a.1. Description of imported product which is not in the Regulated Imports List;
a.2. Specific legal basis for requiring import permit (cite the law or executive issuance, including the specific section
which applies to the product);
a.3. Regulating Agency from which a permit should be acquired.
b. Wait for the inclusion of the product in future versions of the Regulated Imports List before requiring import permits
for it.

Latest Updates on the List was released by the BOC on February 2019 in their website. This time the arrangement is different
from the first one wherein the basis of regulation is also indicated in its corresponding tariff headings.

It is also published under the Philippine National Trade Repository (PNTR) website and make its utilization mandatory per
Unnumbered Memorandum of Commissioner dated January 15, 2019.

RESTRICTED IMPORTATION AND EXPORTATION (Sec. 119, CMTA)

As distinguished from Regulated Importation/Exportation:

1) Restricted goods shall be imported/exported only when specifically authorized by law while regulated goods is
allowed to be imported subject to certain limitations which is more lenient and less stringent than the former type of
goods (to protect interest of the domestic industry);

2) Violation of law authorizing restricted goods to be imported/exported shall be deemed prohibited and be subjected to
criminal liability and penalties while absence of import permits/clearances for regulated goods does not make the
importation/exportation unlawful which may be rectified by securing the necessary permits/clearances and it may be
legally redeemed by the original importer/exporter thereafter;

3) Nature of Goods and Purpose of Importation may be considered in categorizing it whether restricted or regulated. Good
faith may be invoked as a defense in failure to secure import permits/clearances for regulated goods while it cannot be
invoked in failure to secure permits/clearances for restricted goods.

THINGS TO CONSIDER:
• What is the law authorizing the importation/exportation of such goods;
• What is/are the criminal liability/ies and penalties that may be imposed upon violation thereof;

a. Dynamite, gunpowder, ammunitions and other explosives, firearms and weapons of war, or parts thereof;
RA 10591 Comprehensive Firearms and Ammunition Regulation Act:
Agency responsible: PNP-FEO under Sec. 14.
Penalties: Sec. 32
a. Dynamite, gunpowder, ammunitions and other explosives, firearms and weapons of war, or parts thereof;
RA 9516 Amending Certain Provisions of PD 1866
Agency responsible: PNP-FEO under Secs. 4-C and 4-D.
Penalties: Secs. 3 and 3-A
a. Dynamite, gunpowder, ammunitions and other explosives, firearms and weapons of war, or parts thereof;
RA 10697 Strategic Trade Management Act (STMA)
Agency responsible: STMO under Sec. 14. Strategic Goods defined under Sec. 5
Penalties: Sec. 19
b. Roulette wheels, gambling outfits, loaded dice, marked cards, machines, apparatus, or mechanical devices used in
gambling or the distribution of money, cigars, cigarettes or other goods when such distribution is dependent on
chance, including jackpot and pinball machines or similar contrivances, or parts thereof;
PD 1869, as amended by RA9487 PAGCOR Charter;

Prof. JERALD D. SOLLANO, CB, MCA

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 PEDREZA CUSTOMS & TARIFF WEBINARS
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Agency responsible: PAGCOR under Sec.8

No penalty provided for under the law.
c. Lottery and sweepstakes tickets, except advertisements thereof and list of drawings therein;
RA 1169, as amended by Batas Pambansa, Blg. 42 and PD 1157
Agency Responsible: PCSO under Sec. 1
Penalty: Sec. 8
d. Marijuana, opium, poppies, coca leaves, heroin or other narcotics or synthetic drugs which are or may hereafter be
declared habit forming by the President of the Philippines, or any compound, manufactured salt, derivative, or
preparation thereof,except when imported by the Government of the Philippines or any person duly authorized by
the Dangerous Drugs Board, for medicinal purposes;
e. Opium pipes and parts thereof, of whatever material;
Subsections d and e
RA 9165 Comprehensive Dangerous Drugs Act of 2002;
j. Dangerous Drugs. – Include those listed in the Schedules annexed to the 1961 Single Convention on Narcotic
Drugs, as amended by the 1972 Protocol, and in the Schedules annexed to the 1971 Single Convention on
Psychotropic Substances as enumerated in the attached annex which is an integral part of this Act.
h. Controlled Precursors and Essential Chemicals. – Include those listed in Tables I and II of the 1988 UN Convention
Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances as enumerated in the attached annex, which
is an integral part of this Act.
RA 9165 Comprehensive Dangerous Drugs Act of 2002;
Agency responsible: DDB thru PDEA under Secs. 77 and 82
Penalties: Sec. 4
f. Any other goods whose importation or exportation are restricted
RA 9147 - Wildlife Resources Conservation and Protection Act
Agency Responsible: Biodiversity Management Bureau (BMB) of DENR under Sec. 11
Penalties: Secs. 27 and 28
RA 6969 Toxic Substances and Hazardous and Nuclear Waste Control Act of 1990
Agency responsible: Environmental Management Bureau (EMB) under DENR, Secs. 3 and 8
Penalties: Secs. 13 and 14

As distinguished from Restricted Importation/Exportation - Jurisprudence:

“Section 102, when examined, shows that it prohibits the importation of two categories of articles, namely those which are
absolutely prohibited, for example, those enumerated in paragraphs b, c, d, f, h, and j, and those articles which are qualifiedly
prohibited, that is, those that may be imported subject to certain conditions or limitations, for example, those enumerated in
paragraphs a and i.” (Commissioner of Customs v. CTA and Dichoco, G.R.No. L-33471, Jan. 31, 1972)

The importation and exportation of the following goods are prohibited:

a. Written or printed goods in any form containing any matter advocating or inciting treason, rebellion, insurrection,
sedition against the Government of the Philippines, or forcible resistance to any law of the Philippines, or written or
printed goods containing any threat to take the life of, or inflict bodily harm upon any person in the Philippines;
b. Goods, instruments, drugs and substances designed, intended or adapted for producing unlawful abortion, or any
printed matter which advertises, describes or gives direct or indirect information where, how or by whom unlawful
abortion is committed;
c. Written or printed goods, negatives or cinematographic films, photographs, engravings, lithographs, objects,
paintings, drawings, or other representation of an obscene or immoral character;
d. Any goods manufactured in whole or in part of gold, silver or other precious metals of alloys and the stamp, brand or
mark does not indicate the actual fineness of quality of metals or alloys;
e. Any adulterated or misbranded food or goods for human consumption or any adulterated or misbranded drug in
violation of relevant laws and regulations;
f. Infringing goods as defined under the Intellectual Property Code and related laws;
g. All other goods or parts thereof, which importation and exportation are explicitly prohibited by law or rules and
regulations issued by competent authority;

RA 4653 AN ACT TO SAFEGUARD THE HEALTH OF THE PEOPLE AND MAINTAIN THE DIGNITY OF THE NATION BY
DECLARING IT A NATIONAL POLICY TO PROHIBIT THE COMMERCIAL IMPORTATION OF TEXTILE ARTICLES
COMMONLY KNOWN AS USED CLOTHING AND RAGS.

Prof. JERALD D. SOLLANO, CB, MCA

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 PEDREZA CUSTOMS & TARIFF WEBINARS
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SECTION 1. It shall be unlawful for any person, association or corporation to introduce into any point in the
Philippines textile articles commonly known as used clothing and rags, except when these are imported under
Subsections “i”, “j”, “k”, “l”, “n”, and “v” of Section 105 of Republic Act Numbered Nineteen hundred and thirty-
seven.

Letter of Instruction (LOI) NO. 1086, Series of 1980

b) Used Tires –
ii) Beginning January 1, 1981 to December 31, 1981, a maximum $750,000.00 final phase-out foreign exchange allocation
shall be allowed for traditional importers of used tires, pro-rata, based on their respective imports in the 1979-1980 import
period, provided, that effective January 1, 1982, the importation of used tires shall no longer be allowed.
Executive Order No. 156. Series of 2002, as amended by Executive Order 877, Series of 2010

Article 2. Prohibition of Used Vehicles Importation

Section 3. Used motor vehicles.
3.1 The importation into the country, inclusive of the Freeport, of all types of used motor vehicles is prohibited

CONCEPT OF PERSONS INVOLVED IN IMPORTATION

A Person who bring in goods from foreign country is known as “IMPORTER.”
In CMTA, an importer is also the consignee appearing in the transport documents (e.g. Bill of Lading/Airway Bill) or the
claimant in case of Seizure/Forfeiture Proceedings.
A person who imports the goods from foreign country may be a natural (A Named Individual) or juridical person (Partnership,
Corporation, Cooperative).
Hence, an importer is deemed owner of such imported goods. (Sec. 404, CMTA)

Foreign Exporter - refers to one whose name appears on documentation attesting to the export of the product to the
Philippines regardless of the manufacturer’s name in the invoice. (Sec. 102 (v), CMTA)
Points to Consider:
1) There must be an exporting country which is the origin of the goods;
2) The goods must be for export to the Philippines;
3) The goods are imported into the Philippines

When Importation Begins?

Importation begins when the carrying vessel or aircraft enters the Philippine Territory with the intention to unlade therein. (Sec.
103, CMTA)
Sec. 103 contemplates ACTUAL IMPORTATION into the Philippines as distinguished from TRANSSHIPMENT, which is not
considered an importation into the Philippines.
CAUSAL RELATIONS/PURPOSES OF IMPORTATION
Sec. 401, CMTA. Importations Subject to Goods Declaration
Unless otherwise provided for in this Act, all imported goods shall be subject to the lodgment of a goods declaration. A goods
declaration may be for consumption, for customs bonded warehousing, for admission, for conditional importation, or
for customs transit.
Sec. 400, CMTA Goods to be imported through Customs Office.
All goods imported into the Philippines shall be entered through a Customs Office at a port of entry, or may be admitted to
or removed from a free zone as defined in this act, as the case may be
Entry- refers to act, documentation, and process of bringing imported goods into the customs territory, including
goods coming from free zones. (Sec. 102 (r), CMTA)

WHAT IS EXPORTATION?
Exportation- refers to act, documentation and process of bringing the goods out of Philippine territory. (Sec. 102 (s), CMTA)
It must refer to ACTUAL EXPORTATION as against CONSTRUCTIVE EXPORTATION.

Prof. JERALD D. SOLLANO, CB, MCA

Page 4 of 5
 PEDREZA CUSTOMS & TARIFF WEBINARS
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Actual or Outright Exportation- refers to a Customs Procedure applicable to goods which, being in free circulation, leave the
Philippine territory and are intended to remain permanently outside it. (Sec. 102 (b), CMTA)
A person who ships out goods is called the EXPORTER, sometimes referred to as SHIPPER, SUPPLIER.

CLASSIFICATIONS OF EXPORTABLE COMMODITIES

BSP Circular 794, s. 2013 in relation to Secs. 116 to 119, CMTA:
SECTION 16. CLASSIFICATION OF EXPORTS
1. Freely Exportable Commodities. These are commodities the exportation of which is neither regulated nor prohibited. They
may be effected without prior approval of or clearance from any government agency.
EXAMPLES: FURNITURES, EMPTY GLASS BOTTLES.
2. Regulated Commodities. — These are commodities the exportation of which requires clearances/permits from appropriate
government agencies. The list of these products and the appropriate government agencies/offices is shown in Appendix 5.
EXAMPLES: FRESH FISH PRODUCTS, FRESH FRUITS.

3. Prohibited Exports. — These are commodities the exportation or sale of which is prohibited/penalized by law.
EXAMPLES: EXOTIC WILDLIFE SPECIES DEFINED UNDER APPENDIX I OF CITES, STALACTITES AND STALAGMITES.

LIST OF REGULATED EXPORTS

Updated List of Regulated and Prohibited Goods is circularized under CMC 44-2019.
Exporters/Authorized Representatives/Customs Brokers must be aware with this list the same as that of CRIL to
avoid inconvenience and delay in the loading of goods.

Prof. JERALD D. SOLLANO, CB, MCA

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