CUSTOMS ADMINISTRATIVE ORDER (CAO) NO.

02-2021

CLEARANCE OF GOODS UNDER THE INFORMAL ENTRY PROCESS

Section 1 - Scope:

This CAO applies to all imports cleared through the Informal Entry Process, excluding accompanied baggage, D
e Minimis imports, and relief consignments, which have their specific regulations.

Section 2 - Objectives:

2.1. Identify and separate personal and household effects and qualified non-commercial goods from c
ommercial imports.

2.2. Expedite clearance under the Informal Entry Process while ensuring revenue collection and preve
nting smuggling.

2.3. Establish a uniform procedure for clearance in line with international standards and utilize Inform
ation and Communications Technology (ICT).

Section 3 - Definitions:

3.1. Air Waybill (AWB) - document for airfreight specifying the holder's right to claim goods.

3.2. Bill of Lading (BL) - document for water-borne freight specifying the right to claim goods.

3.3. Bureau - the Bureau of Customs.

3.4. Clearance - completion of customs formalities for goods.

3.5. Commercial Quantity - quantity exceeding normal personal use.

3.6. Conditionally Tax and/or Duty-Exempt Importation - goods exempt upon fulfilling specific requir
ements.

3.7. Formal Entry Process - clearance for commercial goods.

3.8. Free Carrier (FCA) - seller delivers goods at a specified place.

3.9. Free on Board (FOB) - seller delivers goods on board a vessel.

3.10. Goods - articles, wares, merchandise, or import/export items.

3.11. Goods Declaration - statement for importing goods.

3.12. Goods of Commercial Nature - goods for commercial purposes.

3.13. Household Effects - personal use items like furniture, dishes, etc.

3.14. House Airway Bill (HAWB) - airway bill for individual shipments.

3.15. House Bill of Lading (HBL) - bill of lading for individual sea shipments.

3.16. Informal Entry Process - clearance for low-value goods and personal items.

3.17. Lodgement - electronic registration of a goods declaration.

3.18. Non-Commercial Goods - goods not for commercial use.

3.19. Off-dock Customs Facilities and Warehouses (CFW) - customs facilities outside ports.

3.20. Personal Effects - items for personal use.

3.21. Prohibited Goods - goods with explicit import/export bans.

3.22. Provisional Goods Declaration - declaration pending required information/documents.

 3.23. Regulated Goods - subject to regulations and clearances.

3.24. Restricted Goods - prohibited except when authorized.

3.25. Tax Exemption Indorsement (TEI) - endorsement from DOF-RO granting tax exemption.

Section 4 - General Provisions:

4.1. The following types of shipments will go through the Informal Entry Process:

4.1.1. Commercial goods valued under P50,000 (FOB or FCA).

4.1.2. Personal and household items, regardless of duties and taxes.

4.1.3. Conditionally Tax and/or Duty-Exempt Imports (per Section 800 of CMTA):

a. Returning Residents and OFWs (as specified in CAO no. 6-2016).

b. Duty-free Balikbayan Boxes sent to Filipinos Abroad (as outlined in CAO no. 1-2018).

c. Travelers' essentials, like clothing, toiletries, and tools.

d. Personal and household items for foreign consultants, experts, and their families.

e. Items for overseas Filipinos returning to the Philippines.

f. Imports for foreign embassy members and officials (as per DFA, DOF, and Bureau condition
s).

g. Coffins or urns with human remains and used personal items of the deceased, valued unde
r P150,000 (except vehicles).

h. Personal and household items for DFA, consular, and military personnel returning from dut
y abroad.

4.1.4. Imports falling under other Section 800 sub-paragraphs of CMTA are eligible for the Informal En
try Process if their value is under P50,000 (as determined by the Bureau).

4.1.5. Clearance of previously imported diplomatic supplies and tax-exempt items sold to non-privileg
ed buyers will be manually processed by the Informal Entry Division.

4.2. All motor vehicles, motorcycles, and scooters, regardless of the recipient, including those under Section 80
0 of CMTA, will undergo the Formal Entry Process.

Section 5 - Operational Provisions:

5.1. Filing Goods Declaration:

1. Lodge the goods declaration using the Bureau's E2M system.

2. File it at the Informal Entry Division (IED) or similar unit at the port.
3. Declarant follows an online format for submission.
4. If the Informal Entry System isn't available yet, use the Informal Import Declaration and Entry (IIDE) B
C Form No. 177.

5.2. Required Documents:

Goods declaration must be signed, notarized, and submitted to IED. Include these supporting documents:

1. BL/HBL or AWB/HAWB.
2. Commercial invoice or other proof of value.
3. Packing list or a similar itemized document.
4. Gate Pass BC Form No. 201 (for airport, if filing manually).
5. Any other documents needed as per rules and regulations, like import permits or certificates.

5.3. Lodgement Period:

  Lodge goods declaration within 15 calendar days from the last package's discharge from the vessel or
aircraft.
 The Commissioner may adjust this period.
 An extension of 15 calendar days may be granted by the Collector of Customs upon written request a
nd valid grounds.
 Grounds for extension include fraud, accidents, mistakes, negligence, force majeure, technical issues,
and similar circumstances.
 Extension requests must be processed within three working days; otherwise, they are deemed approv
ed.
 No further extensions will be allowed.
 Importers can still lodge a Provisional Goods Declaration if needed.

5.4. Provisional Goods Declaration (PGD):

 PGD allows for trade facilitation and prevents goods from being abandoned.
 A specific code identifies a provisional goods declaration upon lodgement.
 If the declarant doesn't indicate its provisional nature, it's considered complete.
 PGD is allowed in these situations:
 When required permits, clearances, or licenses aren't available at lodgement, but the application has
been filed before the goods leave the origin country or arrive in the Philippines.
 When the Tax Exemption Indorsement (TEI) hasn't been issued but an application has been filed.
 In any other situation where the declarant lacks certain information or documents, as long as it's not
due to the declarant's negligence.

Required documents for PGD include:

1. Pro forma invoice.

2. Duly endorsed BL or AWB (or written order by the carrier or agent if not available).
3. Advanced copies of Certificate of Origin (if applicable).
4. A notarized undertaking by the declarant to submit the required documents within 45 calendar d
ays from PGD lodgement.
 The 45-day period can be extended for another 45 days for valid reasons, with approval from the Coll
ector of Customs, provided the request is made before the original 45-day period expires.
 The reasons for the extension must match the original grounds for PGD, and false information may res
ult in falsification charges.
 Effects of PGD:
 Duty and tax treatment is the same as for fully declared goods.
 Tentative duties, taxes, and charges are adjusted upon the submission of additional information or do
cumentation within 45 days (or extended period) from PGD lodgement.

5.5. Abandonment:

Provisions on abandonment under Chapter 6, Title XI of the CMTA also apply to goods cleared through the Info
rmal Entry Process.

Section 5.6 - Examination:

Goods examination, if required by the Bureau, happens right after lodging the goods declaration. Reasons for P
hysical Examination of Goods:

 Electronically selected for examination.

 Alert Order from the competent authority.
 Controversies with the goods declaration.
 Commissioner's written directive due to derogatory information.
 Importer's request.
 Suspicion from non-intrusive inspection.
 No baggage or pallet x-ray machine at Off-dock CFW.
 Types of Examination under Informal Entry:
  Mandatory physical examination for goods less than Php50,000 in value and other specified shipment
s.
 Mandatory x-ray inspection for all containerized cargo, with physical examination if needed.
 Mandatory x-ray inspection for goods intended for airport or composite warehouses.
 Personal baggage of a diplomatic agent is exempt from inspection, except in special cases.

Section 5.7 - Risk Management Application:

Bureau uses profiling techniques and selectivity parameters for risk management in import determinations.

Section 5.8 - Assessment:

Goods under Informal Entry are assessed based on existing rules.

Section 5.9 - Payment:

Pay customs duties, taxes, and charges through an Authorized Agent Bank (AAB), in-house bank, or the Collecti
on Division of the port.

Follow specific payment procedures depending on the shipment type (sea or air).

Section 5.10 - Release of Shipments:

Once payment is confirmed, the Bureau electronically instructs the terminal facility operator/Off-dock CFW to
release the goods.

In cases without full automation, the Customs Operations Officer V (COO V) verifies payment and marks "Paym
ent Verified" on the BCOR.

COO V forwards the verified BCOR copies to the Chief Informal Entry Division.

Chief Informal Entry Division performs manual write-off for the shipment using specific data.

Manual discharge triggers the electronic release instruction to the terminal facility operator/Off-dock CFW.

Section 6 - Fees and Charges:

The Bureau collects Import Processing fees, Container Security fees, and Documentary Stamp Tax for Informal
Entry goods declaration as per rates set in a separate CAO on Customs Service Fees, Dues, and Charges.

Section 7 - Adjustment of Value:

The Commissioner may propose changing the value threshold for Informal Entry goods, subject to the Finance
Secretary's approval.

Section 8 - ICT-Enabled Customs System:

The Bureau plans to develop or outsource an ICT-enabled customs cargo clearance system for Informal Entry, f
ollowing international standards.

This system aims to facilitate trade by efficiently processing information in a technology-neutral and secure infr
astructure.

Section 9 - Penal Provision:

Anyone using false or fraudulent statements to process imported goods faces penalties under the CMTA and o
ther relevant laws.

Sections 10 and 11 - Repealing and Separability Clauses:

Rules and regulations conflicting with this Order are repealed or modified.

If any part of this CAO is declared unconstitutional or contrary to laws, the remaining parts still apply.

Section 12 - Review:
This CAO will be reviewed every three years and amended if necessary.