CUSTOMS BONDED

WAREHOUSES (CBWs)
CUSTOMS BONDED WAREHOUSE (CBW) DEFINED

 A Customs Bonded Warehouse is basically defined as a

warehouse licensed by the Bureau of Customs where
 Imported articles (raw materials, semi-finished materials,
components and packaging materials)
 stored without the payment of duties and taxes provided
the finished products are re-exported within the prescribed
period of time and/or
 if withdrawn for local consumption, payment of duties,
taxes and other charges shall be required.
RELEVANT LAWS, RULES
AND REGULATIONS ON
WAREHOUSING
RELEVANT LAWS, RULES AND REGULATIONS
ON WAREHOUSING
Warehousing in general
Sections 801 – 813, CMTA
Free Zones

Sections 814-817, CMTA

Stores

Sections 818-821, CMTA

 DEFINITION OF TERMS
ACESSORIES- refer to articles which are neither raw materials nor supplies
which enhance the finished product to be exported.
AUTHORITY TO OPERATE- is the authority given by the Bureau allowing
persons, natural or juridical, to establish and operate a CBW.
AUTHORITY TO TRANSFER- is a document issued by the District Collector to a
CBW allowing transfer or sale of imported raw materials, semi-finished
products, or finished products to another CBW, member, client-exporter,
subcontractor, or Freeport Zone locator for subsequent export.
CERTIFICATE OF AUTHORITY- is a document issued by the Bureau to persons,
natural or juridical, duly authorized to operate a CBW.
CERTIFICATE OF IDENTIFICATION- is a document certifying that the finished
products to be exported is from a particular warehousing entry, and also to
determine whether or not a particular entry is partially or fully consumed.
CERTIFICATE OF INSPECTION AND LOADING (CIL) – is a document issued by
the Bureau certifying the conduct of inspection over the cargo for export and
its actual loading on the exporting carrier.
DIVERSION - is an act of bringing bonded articles to some place other than its
intended destination without prior authority from the Bureau.
EXPORTATION - refers to the act, documentation, and process of bringing
goods out of Philippine territory.
CLIENT EXPORTER- is a natural or juridical person with facility
established for the manufacture of products utilizing imported duty
and tax-free raw materials or components sourced from ICBW
subject to the condition that finished products shall be exported
within the period prescribed by existing laws and regulations.
CUSTOMS PREMISES– shall include customs offices, facilities,
warehouses, ports, airports, wharves, infrastructure and other
premises over which the Bureau shall have exclusive control,
direction, and management for customs purposes.
CUSTOMS TERRITORY- refers to areas in the Philippines where
customs and tariff laws may be enforced.
CONSTRUCTIVE EXPORTATION- involves the sale or any other mode
of conveyance and delivery of raw materials, finished, or semi-
finished products from a CBW to a Customs Manufacturing Bonded
Warehouse (CMBW), PEZA/Economic Zone, Freeport.
CONSTRUCTIVE IMPORTATION- - involves the sale or any other mode
of conveyance and delivery of raw materials, finished, or semi-
finished products from a CMBW, PEZA/Economic Zone, Freeport to a
CBW.
ENTRY - refers to the act, documentation, and process of bringing
imported goods into the customs territory, including goods coming
from the free zones.
EXTENSION WAREHOUSE– a separate CBW facility granted by the
Bureau to an already duly authorized CBW operator to optimize
capacity and efficiency in manufacturing operations.
 DEFINITION OF TERMS
Free Zone - refers to special economic zones registered with the Philippine
Economic Zone Authority (PEZA) under Republic Act No. 7916, as amended,
duly chartered or legislated special economic zones and freeports such as
Clark Freeport Zone; Poro Point Freeport Zone; John Hay Special Economic
Zone and Subic Bay Freeport Zone under Republic Act No. 7227, as
amended by Republic Act No. 9400; the Aurora Special Economic Zone
under Republic Act No. 9490, as amended; the Cagayan Special Economic
Zone and Freeport under Republic Act No. 7922; the Zamboanga City
Special Economic Zone under Republic Act No. 7903; the Freeport Area of
Bataan under Republic Act No. 9728; and such other freeports as
established or may be created by law.
FORMULA OF MANUFACTURE- refers to the formula of conversion issued by
the duly authorized government institution to the CBW operator,
determining the raw material usage and wastages of a particular finished
product for export and subsequent liquidation
GOODS - refers to articles, wares, merchandise and any other items which
are subject of importation or exportation.
GOODS DECLARATION- refers to a statement made in the manner
prescribed by the Bureau and other appropriate agencies, by which the
persons concerned indicate the procedure to be observed in the application
for the entry or admission of imported goods and the particulars of which
the customs administration shall require.
IMPORTATION- refers to the act of bringing in of goods from a foreign
territory into Philippine territory, whether for consumption, warehousing,
or admission
Licensed Member – a natural or juridical person licensed by the BOC
alone, or jointly with the Garments and Textile Import Service (GTIS) for
Garments and Textile Import Service for garments industry, to be a
member of a CCBW.
LICENSED SUBCONTRACTOR - is a person or company licensed by the
Bureau, and GTIS in case of garments, to undertake or perform, for a
definite period, certain manufacturing operations or activities incidental
to the manufacture of bonded raw materials into finished products in
behalf of a licensed CBW in cases where the latter’s facilities are
insufficient to address its immediate requirements or due to lack of
material time to meet export commitments.
LICENSED CLIENT/ END USER- is a natural or Juridical person licensed by
the BOC to be a client/end –user of ICBW.
LIQUIDATION OF RAW MATERIALS- is the process of accounting the
usage of bonded raw materials, including wastages, in the manufacture
of finished products for export as against the importation by CBWs of
raw materials using the formula of manufacture
CERTIFICATE OF IMPORTER ACCREDITATION -refers to the document
issued by the Bureau to entity registered as importer in the Bureau’s
existing Client Profile Registration System (CPRS) and recognized to
electronically lodge goods declaration.
and regulations.
PERISHABLE GOODS- refers to goods liable to perish or goods that
depreciate greatly in value while stored or which cannot be kept without
great disproportionate expense.
 DEFINITION OF TERMS
Physical Security - refers to a system to secure and monitor premises, storage and
production areas of CBWs including the safety of personnel.

Security - refers to any form of guaranty, such as a surety bond, cash bond, standby
letter of credit or irrevocable letter of credit, which ensures the satisfaction of an
obligation to the Bureau.

Transfer Note - is a document that accompanies the transfer or transit of bonded

imported articles to a PEZA or Freeport locator or to another CBW and serves as proof
of delivery or receipt of the articles at its intended destination duly acknowledged on
its face by the Collector of Customs or his duly authorized representative. It is also
commonly referred to as a “boat note”.

Unauthorized Withdrawal - refers to the act of removing, transferring or disposing of

goods stored in CBWs without proper authority or in violation of warehousing rules and
regulations.

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Establishment and Supervision of Warehouses
(SECTION 801,CMTA)

 Establishment of Customs Warehouses. When the business of the port and trade
requires such facilities, the District Collector, subject to the approval of the
Commissioner, shall designate and establish customs warehouses for the storage of
imported goods or for other special purposes.

 Supervision and Control over Customs Warehouses. All warehouses and facilities,
including their expansion, extensions and additional facilities and extending to the
warehouses and facilities of duly authorized members, client-exporters and sub-
contractors of CBW, shall be subject to the supervision and control of the District
Collector for the protection of government revenue, and of the goods stored therein.
In cases where the client-exporter of ICBW or sub-contractor of CBMW is also a
locator in Free Zones , the exercise of supervision and control shall be made in
coordination with the government agency concerned.
Establishment and Supervision of Warehouses
(SECTION 801,CMTA)

Goods manufactured in whole or in part of imported materials, and intended for exportation,
may be made and manufactured in a bonded manufacturing warehouse subject to the following
conditions;

a) The manufacturer shall file sufficient security for the faithful observance of all laws, rules and
regulations applicable thereto;
b) The application for the establishment of bonded warehouses must be made in writing and filed with the
customs officer, describing the premises, the location, and capacity of the same, and the purpose for
which the building is to be used, pursuant to Section 804 of this Act;
c) From the receipt of the application, the customs officer shall examine the premises, evaluate its
location, construction, and means provided for the safekeeping of the goods;
d) The customs officer may authorize the establishment of the customs bonded warehouse, and accept a
bond for its operation and maintenance if the applicant was compliant with the prescribed
requirements; and
e) The operator of the bonded warehouse shall pay an annual supervision fee in an amount to be fixed by
the Commissioner.
 Types of Customs Bonded Warehouse (CBW).
( SECTION 802, CMTA)

Customs Bonded Manufacturing Warehouse (CBMW). It is a warehouse facility established for

the manufacture of products utilizing raw materials or components that are imported duty and
tax-free conditioned on the exportation of the finished products within the period prescribed
herein or withdrawal for domestic consumption upon payment of duties and taxes. A CBMW shall
include:
A. Miscellaneous Customs Bonded Warehouse. Is a warehouse facility licensed by the BOC to import,
receive and store raw materials, accessories and packing materials, except garments and textile, for
manufacture into finished products for export .
B. Customs Common Bonded Warehouse. Is a warehouse facility licensed by the BOC alone, or
jointly with GTIS for garments industry, to import, receive and store raw materials, accessories,
spare parts, supplies and packing materials for the account of its accredited members for
manufacture into finished products for export.
C. Industry-Specific Customs Bonded Warehouse. It is a warehouse facility duly licensed by the BOC
to import under bond and under its name and account raw materials (except fibers, yarns, fabrics
and accessories for the manufacture of garments) for storage and subsequent sale and transfer to
the following where these shall be manufactured into export products: (Licensed client exporter;
Customs Bonded Manufacturing Warehouse; or PEZA or Freeport locator.
Types of Customs Bonded Warehouse (CBW).
( SECTION 802,CMTA)

Bonded Non-Manufacturing Warehouse (BNMW).

It is a facility where goods are stored duty- and tax-free conditioned on the eventual
withdrawal of the goods for consumption, or for export, or for transit, or for any other
clearance regime, within the period prescribed herein, such as:
A. Public Bonded Warehouse. Is a warehouse facility licensed by the BOC, to receive and
store general cargoes for exportation, transfer to another custom bonded warehouse,
PEZA or Freeport registered enterprise, or for local consumption, in the same state when
the cargoes were imported. Articles for local consumption shall only be withdrawn upon
payment of the assessed duties and taxes and other charges due thereon.
B. Private Bonded Warehouse. Is a warehouse facility licensed by the BOC, to import,
receive and store articles for its production intended for domestic consumption,
withdrawal of which shall be made only upon payment of duties and taxes and other
charges due thereon.
C. Other Customs facilities.
Types of Customs Bonded Warehouse (CBW).
( SECTION 802,CMTA)

Other Classification of Warehouses:

 Private Warehouse
 General Bonded Warehouse
 Customs Bonded Warehouse
a) Ordinary Customs Bonded Warehouse (CBW)
b) Airlines Customs Bonded Warehouse
c) Customs Common Bonded Warehouse
d) Garments/Textile Manufacturing Bonded Warehouse
e) Industry-Specific Customs Bonded Warehouse
f) Miscellaneous Manufacturing Bonded Warehouse
g) Multinational Regional Bonded Warehouse
h) Private Bonded Warehouse
i) Public Bonded Warehouse
j) Warehouses operated by the Duty Free Philippines Corporation.
Types of Customs facilities and Warehouses
( SECTION 803,CMTA)

Customs facilities and warehouses shall include:

 Container yard;
 Container freight station;
 Seaport warehouses; and
 Airport warehouses.

NOTE: Subject to consultation with the NEDA and the DTI, and based
on prevailing economic circumstances, the Secretary of Finance may,
upon the recommendation of the Commissioner, create or dissolve
certain types of warehouses.
Application for Operation of a Customs Warehouse
( SECTION 804,CMTA)

 Application for the establishment of CBW and CFW shall be filed

with the District Collector where the CBW or CFW is located,
describing the premises, location, capacity and purpose thereof.
 Upon receipt of such application, the District Collector shall
examine the premises of such proposed warehouse, particularly its
location, construction and storage facilities.
  The District Collector, with the approval of the Commissioner,
may authorize the establishment of customs warehouses, and
accept the required security for its operation and maintenance.
 The operator of such CBW and CFW shall pay an annual supervision
fee, as determined by the Commissioner.
Responsibility of Operators
(SECTION 805,CMTA)
 The operator of a CBW or CFW shall comply with the customs
requirements on establishment, security, suitability and management,
including stock-keeping and accounting of the goods, of the CBW or
CFW.
 Upon lawful demand, the operator of a CBW or CFW shall allow
authorized representatives of the Bureau access to the premises at a
reasonable time and to all documents, books and records of accounts
pertaining to the operations of the CBW or CFW.
 The government has no legal responsibility in the safekeeping of
articles stored in any customs warehouse or premises
Responsibility of Operators
(SECTION 805,CMTA)

 In the case of loss of the goods stored in a CBW or CPW due to

operator's gross negligence or wilful misconduct, the operator shall be
liable for the payment of duties and taxes due thereof.

 The government assumes no legal responsibility over the safekeeping

of goods stored in any customs warehouse, yard or premises.